The document summarizes news from the Business Council of Mongolia newsletter. It highlights several business deals and developments in Mongolia, including Mongolian Energy completing a key road for coal transport, Just Agro introducing global food safety standards, the launch of a new domestic airline called Mongolian Airlines, XacBank receiving funding from FMO to support SME lending, Erdene raising funds for gold exploration, and Noble Group partnering with Aspire Mining to market Mongolian coking coal. It also briefly mentions news related to the Mongolian economy and politics.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 196, December 2, 2011
MONGOLIA INVESTMENT SUMMIT 2011, LONDON, 8-9 DECEMBER
NEWS HIGHLIGHTS:
Business
 Mongolian Energy completes construction of Khushuut Road;
 Just Agro sets precedent for food standards;
 Mongolian Airlines takes flight;
 FMO supports XacBank second tier capital increase;
 Erdene raises USD 1.7 million for exploration;
 Noble and Aspire partner to market Mongolian coking coal;
 Rio invests in higher education;
 MCS fires up 100 energy-efficient stoves on Sukhbaatar Square;
 Modun declares end of 2011 drill season;
 MMJ names Mongolia's top miners;
 President recognizes Erdenet staff for achievements in mining tech;
 Rio poised for M&A in 2012;
 Vale to invest USD 21.4 billion in 2012;
 Rio and Chinalco team up in China for copper exploration;
 Cameco bows out of Hathor competition with Rio;
 Areva diversifies away from uranium for wind energy.
Economy
 Macroeconomic policies “too expansionary,” says IMF;
 S&P gives Mongolia “9” for Banking Sector Country Risk Assessment;
 No depreciation for tugrug planned for 2012, says Mongol Bank;
 Development Bank to issue USD 60 million of bonds;
 GDP to reach USD 100 billion within two decades;
 Mongolia exports coking coal to Xinjiang;
 Mongolia guards itself against another fuel shortage;
 Global behemoths in mining warn of waning demand for commodities;
 Chilean copper production surges;
 Added liquidity to central banks sparks commodities rally;
 Miners look to local suppliers for cost savings;
 Economists sweat China's growth as bank cuts reserve requirements;
 Asia's economic ship takes on water from crisis in West.
Politics
 Parliament quota mandates 20 percent females;
 Parliament makes cuts to 2012 budget;
 Citizens to receive 20 percent of TT shares;

2.  Mongolia deports 17 illegal immigrants;
 Teachers strike with no end in sight;
 President and advisor call for replacement of diplomats abroad;
 HDF allowances pushes further towards Parliament consideration;
 Austria approves USD 40 million loan to Mongolia;
 Could UB see a subway system before 2020;
 MP calls for the distribution of OT stock to populace;
 CPC pledges cooperation with DP;
 Prime Minister denounces MPRP as a pretender;
 MPP unveils new Palace of Independence;
 Microbe fossils discovered in Mongolia.
*Click on titles above to link to articles
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
Mongolian Star Melchers Breakthrough PR
Mongolian Properties Oxford Business Group
BUSINESS
MONGOLIAN ENERGY COMPLETES CONSTRUCTION ON KHUSHUUT ROAD
Mongolian Energy Corporation Limited (MoEnCo) has completed construction on the 311 kilometer
Khushuut Road at the beginning of November. This week after receiving conclusion permission in
writing, the firm began coal shipment exports to China.

3. “The commission of the Khushuut Road indicates a milestone in our coking coal exporting and our team
will continue our efforts in all aspects to expand our Khushuut operations.” said MEC Chief Executive
Officer James Schaeffer Jr.
MoEnCo is the first mining company to successfully construct the longest paved road for coal transport
in Mongolia. Stretching 311 kilometers from Khushuut mine site to Yarang and Takeshensken border
(Xinjiang), the road crosses five sub-provinces of Khovd Aimag. There are 17 bridges and more than 200
waste water pipes built along the road. MEC built the road for a payload of up to 110 tons.
The road should reduce the operating costs to mining operations. What once took eight hours of travel
on a gravel road will now take half the time. The project is the biggest infrastructure development
project for Khovd. In addition to transportation for the community, the road project created hundreds
of jobs for local communities and an income for local governments. The paved road should also
minimize negative environment impact to the area by minimizing the potential dust which is normally
caused by coal transport on gravel roads.
Source: Mongolian Energy Corporation Limited
JUST AGRO SETS PRECEDENT FOR FOOD STANDARDS
Just Agro LLC has introduced global food safety standards for the first time in Mongolia. The company
was checked by SGS Audit for compliance with international food safety standards for Hazard Analysis
Critical Control Point (HACCP) at its meat processing factory on 25 November and passed.
HACCP is used in the food industry to identify potential food safety hazards to prevent their release.
The system is used at all stages of food production and preparation processes, including packaging and
distribution.
Just Agro is a Mongolian meat slaughtering and processing company founded in 2000 as a part of Just
Group. With its 11 “Makh Market” meat factories in 9 provinces, the company produces a variety of
products made from beef, mutton, horse, and goat meat and is currently providing 40 percent of the
country's industrially processed meat supply and 23 percent of the meat export.
Source: BDSec
MONGOLIAN AIRLINES TAKES FLIGHT
The Bodi Group is set to launch its new domestic airline, Mongolian Airline. The airline will operate
domestically to directly compete with Eznis Airways and Aero Mongolia.
The move has been rumored over the past few weeks but is only now being slowly confirmed by Bodi.
Some believe that the airline will begin operations with a single Fokker 50 currently on lease from
Nordic Aviation Capital, which arrived in Ulaanbaatar at Chinggis Khan Airport on 10 November, and
gradually increase its fleet to four aircraft.
Aero Mongolia, a former domestic arm of MIAT before it was sold to the Monnis Group in 2001, also flies
Fokker 50s. Possibly, Mongolian Airlines chose the same type of aircraft to reduce maintenance costs
and the need for a diversified, permanent inventory in Mongolia. The move will return MIAT to the
domestic scene and position Mongolian Airlines as a direct competitor to its old subsidiary company
Aero Mongolia. The domestic flights market has become increasingly more competitive in recent years,
as Eznis now dominates.
Mongolia has some of the most expensive fairs for air travel in the world, not to mention being least
accessible as it suffers from an acute shortage of international flights to capital cities at reasonable
hours. These limitations may hinder economic growth within the country by restricting flights to only
Mongolia's wealthiest class. The rumor is Bodi and MIAT have an agreement, effectively giving Bodi a
foot in the door to make the most of the upcoming privatization of MIAT in coming years to buy up the
company at a bargain.
Source: M.A.D. Investment Solutions
FMO SUPPORTS XACBANK SECOND TIER CAPITAL INCREASE
XacBank signed a USD 15 million, five-year loan agreement with Nederlandse Financierings-Maatschapij
voor Ontwikkelingslanden (FMO) to increase the bank‟s second tier capital and to support the expansion
of its lending to Mongolian small and medium enterprises.
“This long term financing is being provided by FMO after researching XacBank‟s performance, which
signifies the sustainability in development, the success of the bank‟s operations, and the growing
affiliation between the two organizations.

4. FMO is the entrepreneurial development bank of the Netherlands and was founded in 1970 by the Dutch
government, its private sector, employers, and employee organizations. Its aim has been to empower
entrepreneurship in emerging economies to stimulate development. XacBank is one of the major banks
in the country that provides its clients with diversified financial services in its network of over 91
branches across the nation.
Source: XacBank
ERDENE RAISES USD 1.7 MILLION FOR EXPLORATION
Erdene Resource Development Corp. has closed a private placement of USD 1.7 million of nearly 4.3
million shares at USD 0.40 a share with Mongolian investors. The offering was lead by Mongolian
International Capital Corporation (MICC).
“We are tremendously pleased to receive the support of Mongolian shareholders, providing them with
an opportunity to share in the excitement of what we believe is a significant new gold discovery at
Altan Nar,” said Peter Akerley, President and Chief Executive Officer. “This project is an important
addition to our cornerstone Donkin Coal and Zuun Mod Molybdenum-copper projects.”
Exploration expenditures will primarily be directed to the Altan Nar epithermal gold project. Initial
drilling results from this discovery, announced on 12 October, included traces of gold and silver.
Remaining drilling will test targets south from the discovery.
Source: Erdene Resource Development Corp.
NOBLE AND ASPIRE PARTNER TO MARKET MONGOLIAN COKING COAL
International commodities trader Noble Group has formed an alliance with Australia's Aspire Mining to
market Mongolian coking coal, driving Aspire's share up sharply last week.
The alliance giving Noble marketing rights to at least half of the first 5 million tons of coking coal
produce at Aspire's Ovoot mining project marks the latest move by Noble into Mongolia's burgeoning
coal sector.
“The strategic alliance with the Noble Group is an important step for the company as it pushes ahead
with development of the Ovoot coking coal project,” Managing Director David Paull said.
Shares in Aspire galloped more than 12 percent after the partnership was announced to AUD 0.32. The
stock traded as high as AUD 1.14 in April, but has been in near-steady decline ever since. Earlier this
year, Noble partnered with Australia's Xanadu Mines, which is also exploring for minerals in Mongolia
alongside sector behemoths, including Rio Tinto, Xstrata, and Vale.
Noble, which currently owns 8.3 percent of Aspire, is one of the world's largest commodity trading and
logistics companies and moves coal into most major global markets. Aspire in October raised AUD 32.8
million via a discounted placement of new shares to fund exploration at the Ovoot site in Northern
Mongolia.
Aspire's biggest shareholder, SouthGobi Resources, majority held by Ivanhoe Mines, at the time
exercised anti-dilution rights to retain its 19.9 percent stake in Aspire.
Source: Reuters
RIO INVESTS IN HIGHER EDUCATION
Rio Tinto has signed an agreement with the National University of Mongolia to help better develop its
faculty and resources.
“Through this [memorandum of understanding], we will help the university build up its teaching and
research capacity with a speakers series, and support education and training of the Mongolian
workforce with scholarships, internships, and the latest educational resource materials,” said Cameron
McRae, Rio Tinto chief executive officer, and country director to Mongolia.
“In turn, the University will support education initiatives to increase public awareness of responsible
mining and help train our employees by providing short-term courses and other activities.”
Rio sponsored a program to allow Nobel Prize winners to speak at the university. It also worked with
the university's School of Economic Studies on an Economic Impact Assessment for Oyu Tolgoi. Rio has a
few projects in place to expand the opportunities available to Mongolians for higher education and
vocational training, and has spent about MNT 110 billion towards this cause. Rio is responsible for
Mongolia‟s largest vocational programs ever and it has established two major universities in Nalaikh and
Dalanzadgad. The miner is also helping to develop vocational training schools in five of Mongolia's
provincial capitals.

5. McRae concluded his remarks with a few words on the importance Rio places in its relationships with
Mongolia's top universities to develop a well educated populace.
Source: Unuudur
MCS FIRES UP 100 ENERGY-EFFICIENT STOVES ON SUKHBAATAR SQUARE
MCS Group recently displayed 100 stoves during the 372nd anniversary of Ulaanbaatar to demonstrate
their performance to the public. The firm is currently financing the replacement of 70,000 home stoves
for more energy efficient models.
The project is the firm‟s initiative as part of its commitment to the Clean Air Project of the Millennium
Challenge Account of Mongolia with the objective to combat Ulaanbaatar's air pollution problem. The
new stoves will produce 90 percent less smoke than traditional stoves.
Referred to as the “smokeless stove,” it is already in use in more than 20,000 households. Families have
been keen to buy the new stove for its fuel saving benefits.
This year Ulaanbaatar was declared the most polluted city in the world during winter by the World
Health Organization.
Source: MCS Group
MODUN DECLARES END OF 2011 DRILL SEASON
Modun Resource Ltd., formerly TVN Corporation Limited, has completed its 2011 drill season at its
Nuurst coal project.
The drilling program began in July, and after discovering a reportedly significant coal sequence on early
holes, the company shifted its focused to the south western portion of the Nuurst project. During the
five months since acquiring the license for the area, Modun has obtained all approvals necessary to
explore the licensed area, completed the acquisition of the Nuurst license for 100 percent ownership,
obtained foreign investment approval, established an office in Ulaanbaatar, and continued to
undertake negotiations on potential acquisitions of coking and thermal coal projects within Mongolia.
At the site it has mobilized a drilling team that grew as large as 49 people with 4 diamond drill rigs by
early November and completed 7,411 meters of diamond drilling over 26 holes.
The Nuurst Project currently has an exploration target of 200 to 300 million tons of thermal coal.
Modun is on schedule to deliver a maiden JORC reportable Coal Resource in December of this year and
has used its collected data for this aim. The Nuurst coal project is 120 kilometers south of Ulaanbaatar
and six kilometers from existing railways in an area with a number of operating coal mines.
Source: TVN Corporation Limited
MMJ NAMES MONGOLIA'S TOP MINERS
Mongolian Mining Journal (MMJ) awarded its highest honor, the “Grand Prix Award,” to Energy
Resources for its Mining Journal Awards 2011. This is the second time the publication has hosted the
ceremony awarding stars in the mining sector.
MMJ's selection this year focused on the firms who best promoted the mining sector to the public. An
impartial panel of independent and professional jurors selected 270 candidates for six categories. The
winners are Erdenet Mining Corporation for “Best Mining,” Energy Resources for “Most Responsible
Mining,” Peabody Winsway Resources for “Best Eco-mine”, Tavan Talst for “Best Technology,” and
Hunnu Coal for “Best Exploration Company.” The awards for “2011 Top Figure in Mining” and “Best
Supporting Organization” were subject to public vote, with Minister of Mineral Resources and Energy D.
Zorigt and Trade and Development Bank winning respectively.
Mining professionals have said next year's competition will be the closest race yet because of the
opening of Erdenes Tavan Tolgoi, Mongoliin Alt, and Oyu Tolgoi.
Source: Undesnii Shuudan
PRESIDENT RECOGNIZES ERDENET STAFF FOR ACHIEVEMENTS IN MINING TECH
Coinciding with Mongolia's day for observing its independence, the president awarded prizes to
Mongolia's most talented individuals in science and the cultural arts. A special award went to the
management staff of Erdenet Mining Corporation for their contributions to the development of mining
techniques in Mongolia.
President Ts. Elbegdorj awarded Professor O. Batsaikhan of the International Study Institute of the
Science Academy with an award in recognition of his published work in history, including The Last King

6. of Mongolia: Bogdo Jebtsundamba Khutukhtu and Mongolia‟s National Revolution of 1911, The
Independence of Mongolia and the Khagt Trilateral Agreement of Mongolia, China, and Russia in 1915.
Awards also went to Chi. Ganzorig, J. Baatarkhuu, Z. Ganbaatar, and Ts. Tuya, general directors of
Erdenet Mining Corporation, for their geological work in the report “Techniques for Restoration and the
Technology to Enrich Copper and Molybdenum Ore.” Elbegdorj said this report has benefited the
country's economy tremendously.
Read more…
The president also named three of Mongolia's young scholars, who each received a MNT 1 million prize.
The first is D Nyambayar, a teacher, instructor, and researcher at Chiba University in Japan. He
discovered a specialized cell system that could have applications for cancer therapy. S. Enkhtuul, a
chemist at the Chemistry and Technology Institute of Science Academy, received her award for her
work in producing nanomaterial within microbial drops of water. B. Ganbat, a professor at the National
University of Mongolia who has researched 3D imaging and technology, has published in a number of
foreign publications.
Source: Undesnii Shuudan
RIO POISED FOR M&A IN 2012
Rio Tinto is on the lookout for suitable acquisition opportunities in the volatile market, said Chief
Financial Officer Guy Elliot this week. Rio Tinto is widely expected to purchase a majority stake of
Ivanhoe Mines, the Toronto-based miner with 66 percent interest in the Oyu Tolgoi copper and gold
project, and has recently been cleared for the purchase of Hathor Exploration Ltd., the uranium miner.
Speaking from Sydney, Elliot said it was possible that assets, which were not normally available for
purchase, could come on the market during periods of market volatility. “Rio Tinto should be in a
position to take advantage of many such opportunities, subject as always to quality and value.”
Elliot said, however, that the miner's main priority remained to invest in high-quality growth across its
entire portfolio of assets. It has set aside some USD 12 billion in capital expenditure for this year. By
2012, this capital expenditure would increase to some USD 14 billion, which Elliot noted could remain
the benchmark for several years. Elliot noted that Rio had around USD 35 billion of unapproved projects
which the company might consider for development within the next year.
Rio is also taking a phased approach to several of its project approvals, which would allow it to commit
to capital in a risk-measured way to balance its capital expenditure with the market environment and
other potential uses of cash.
Source: Mining Weekly
VALE TO INVEST USD 21.4 BILLION IN 2012
Vale SA announced a USD 21.4 billion investment budget for 2012. Although the figure is lower than last
year's budget of USD 24 billion, that was more than double its budget for 2009. Brazil's Vale is the
world's top iron-ore producer with exploration operations in Mongolia.
The mining company has disbursed only 28 percent of the capital expenditure target for 2011 by the
end of June this year, and pushed back the expected completion of the spend to the first quarter of
2012. At the time Vale admitted that it continued to face challenges in implementing its projects.
These include delays in environmental licensing, project development, and civil engineering projects.
Of the total 2012 budget, USD 12.9 billion will go to investment in projects, USD 2.4 billion for
research and development, and US$ 6.1 billion on sustaining capital. The company expects to produce
312 million tons of iron ore next year, 50 million tons of pellets, 16.6 million tons of coal, 300,000 tons
of nickel and 340,000 tons of copper.
Source: Mining Journal
RIO AND CHINALCO TEAM UP IN CHINA FOR COPPER EXPLORATION
Rio Tinto will begin exploring for copper in China with partner Chinalco to form the joint venture
Chinalco Rio Tinto Exploration (CRTX). Rio and Chinalco signed the official joint venture exploration
agreement in June. Under the agreement, Chinalco holds a 51 percent interest in the JV with Rio
holding the balance. Rio and Chinalco also have JV exploration ventures in Chile and Guinea. In
Mongolia, Rio Tinto is a large investor in the Oyu Tolgoi copper and gold project while Chinalco is the
main buyer of coal from Tavan Tolgoi.
By sourcing its needs internally through arrangements such as CRTX, Beijing hopes to safeguard its

7. supply of commodities. The venture would initially focus on copper exploration, but planned to expand
into coal and potash in the future. The venture will help Chinalco diversify from its current focus on
aluminum
“China is a vast country, rich in minerals and it has the geological pedigree to produce significant
world-class deposits. Exploration work carried out over past decades is a rich source of data and
experience on which to build,” said Rio Tinto Managing Director for China Ian Bauert.
Read more…
Beijing's permission seems to draw a line under the troubled relationship between Rio and China over
the past few years, beginning in 2008 when Chinalco's USD 12 billion spoiled a takeover for Rio by BHP
Billiton. A year later Chinalco agreed to increase its stake in Rio from 12 percent to 18 percent with a
USD 19.5 billion cash injection to help manage its debt burden and continue operations amid slowing
demand for commodities as the financial crisis hit. However, Chairman Jim Leng departed after just a
month in the job as the parties argued over the terms of the agreement. Rio eventually abandoned the
deal for a USD 15 billion rights issue and announced a USD 116 billion iron ore joint venture with BHP in
Australia. The snub enraged China, which is Rio biggest customer, and in 2010 four Rio Tinto staff in
Shanghai were imprisoned on industrial espionage and bribery charges related to iron ore pricing talks.
Source: Mining Weekly, Telegraph
CAMECO BOWS OUT OF HATHOR COMPETITION WITH RIO
Cameco Corp. dropped its hostile pursuit of Hathor Exploration Ltd., clearing the way for Rio Tinto
Ltd.'s planned CAD 654 million (USD 623 million) takeover of the Canadian uranium company. Rio, which
has an indirect stake in the Oyu Tolgoi copper and gold project, has pursued this deal despite supposed
softened demand for uranium since the Fukushima disaster, while Mongolia holds a large supply of
uranium.
Cameco and Rio have been battling it out for Hathor, owner of one of the world's largest undeveloped
uranium deposits. The ball was returned to Cameco's court earlier this month when Rio Tinto
sweetened its offer to CAD 4.70 a share, topping a CAD 4.50-a-share offer from Cameco. Cameco first
made a hostile move on Hathor in late August after it failed to reach an agreement over valuation with
the target's board. Since then, the junior's share price has consistently traded above the offer price of
the latest bid, as the market anticipated a prolonged takeover struggle.
“After careful consideration we cannot justify increasing the price beyond our current offer and,
accordingly, we will let our offer lapse,” said Cameco President and Chief Executive Tim Gitzel in a
statement.
Hathor owns the Roughrider deposit in northern Saskatchewan, which would have offered Cameco
significant cost savings for its nearby Rabbit Lake mill, due to run out of ore to process by the end of
2017. Roughrider could have filled this space. Some speculated a joint venture agreement between Rio
and Cameco to avoid a costly takeover battle was possible. Some believe it could still happen for other
projects in the Athabasca Basin.
Read more…
Shares of Vancouver-based Hathor have consistently traded above the competing offers, and closed
Friday in Toronto at CAD 5.05. Saskatchewan-based Cameco, one of the world's largest uranium
producers, said its decision does not affect its plan to double its annual uranium production to 40
million pounds by 2018.
Last week Rio Tinto received clearance from the Canadian Competition Bureau for its Hathor bid.
Source: Mining Weekly
AREVA DIVERSIFIES AWAY FROM URANIUM FOR WIND ENERGY
Areva SA plans to expand its wind production in Germany. Areva currently operates in Mongolia for its
interests in uranium production, while General Electric and Newcom Group have already announced
plans for a wind farm in Mongolia.
The firm said it is in talks to build 120 wind turbines at two offshore wind farms in Germany. A
company spokesman said the new wind work, which could be valued at around EUR 1.2 billion (USD 1.59
billion), has not yet been definitively signed and depends on the purchaser securing financing for the
deal. Areva declined to identify the potential buyer.
The talks represent a rare bright spot since the nuclear disaster at the Fukushima Daiichi plant in
Japan, which dented demand for the group's key atomic products. In recent years Areva has looked to

8. diversify away from nuclear energy and build up solar, wind, and biomass businesses. In particular it
has bet on booming demand for offshore wind power and has spent heavily on developing a powerful
five-megawatt turbine. Compared to rivals, however, the group is playing catch up, as Siemens AG has
already built wind farms. So far Areva has built just five working turbines.
In the first nine months of this year, Areva earned EUR 109 million from renewable energy projects, up
53 percent compared to a year earlier. While growing fast, the business unit still represents a fraction
of the state-controlled company's revenue, which totaled EUR 5.9 billion for the first nine months of
2011.
Source: Wall Street Journal
ECONOMY
MACROECONOMIC POLICIES “TOO EXPANSIONARY,” SAYS IMF
Mongolia's economic policies are “too expansionary” and are creating inflationary pressures, the
International Monetary Fund (IMF) warned this week, calling for hikes in interest rates.
In an appraisal of Mongolia's booming economy, the IMF welcomed recent monetary policy tightening,
but said it was not enough to contain rising inflationary pressures and economic overheating. Food price
volatility “has disguised” underlying pressures and economic overheating, it said. A rapid acceleration
in bank lending has put Mongolia's financial system “under stress” and the IMF urged authorities to
manage risks pro-actively to prevent problems from building up.
“Mongolia has a bright economic future,” the IMF said, but added: “Success, however, will depend on a
shift in approach in managing the economy. At present, macroeconomic policies are too expansionary.”
Any additional spending in 2011 would fuel more overheating, drive up inflation, and undermine
credibility in the government's fiscal policies, the IMF said. A medium-term budget framework with a
share cut in spending in 2013 would effect a “smoother path of spending.”
The country's state-owned Development Bank posed “significant fiscal risks,” and should not be used
“as a vehicle for off-budget spending.” The IMF also encouraged the Development Bank‟s commercial
use with greater transparency. The bank provides loans for infrastructure development, industry,
energy projects, and roads.
Source: Reuters
S&P GIVES MONGOLIA “9” FOR BANKING SECTOR COUNTRY RISK ASSESSMENT
The credit rater Standard & Poor‟s (S&P) assigned Mongolia a “9” for its Banking Industry Country Risk
Assessment (BICRA), indicating high risk for its banking sector. For individual criteria, Mongolia received
a “9” for economic risk and an “8” for industry risk.
S&P assigned the score of “9”, reporting a “very high risk” for Mongolia's “economic resilience;” a “high
risk” for “economic imbalances;” and an “extremely high” for “credit risk in the economy.”
“Mongolia is a narrowly based, small economy with high reliance on the mining sector, and low income
levels, in our view,” said the report. “These factors make the economy vulnerable to the commodity
cycle. There are also economic risks associated with the high inflation in Mongolia.”
The report said it found short growth in private credit and property prices, despite gains in equity. It
also listed aggressive lending and underwriting standards, volatility in agriculture and mining,
unreliable habits for paying debts, and a shaky rule of law as demonstrated by delays in foreclosures as
weaknesses that reflected poorly on its score.
For industry, it found banking standards falling short of international standards and weakness in
enforcing regulations. It also found problems with transparency in the banking sector. Although banks
seem to be focused on growth, there is not enough innovation for it to amount to anything. The report
shines particular attention on banks' low reliance on funding from outside sources and insufficient
“access to alternative funding sources.”
However, the report acknowledged promising growth opportunities and signs of stabilization in the
economy, making up for some weaknesses. It also described the government as highly supportive
towards the banking sector and commended it for its efforts for maintaining stability.
[For complete report, see BCM website‟s Mongolian Reports section].
Source: Standard & Poor‟s

9. NO DEPRECIATION FOR TUGRUG PLANNED FOR 2012, SAYS MONGOL BANK
Mongol Bank officials said that the currency rate for the tugrug will not be cut next year at a press
conference last week, denying rumors that the rate would be cut twice because of a flood of deposits
denominated in U.S. dollars.
According to the officials, the bank sector had MNT 8.2 trillion worth of total active capital at the end
of October. That is MNT 2.7 trillion more than last year.
Source: News.mn
DEVELOPMENT BANK TO ISSUE USD 60 MILLION OF BONDS
The Development Bank (DB) plans to issue USD 60 million of bonds by the end of the year, said Finance
Minister S. Bayartsogt.
The DB had planned to issue bonds worth USD 20 million on the Singapore Stock Exchange from last
spring, but the bank's managing officials delayed the issue. The government has asked the DB to finance
the USD 55 million “New Railway” railroad building project, but the bank's managing officials delayed
the issue due to instability in the global financial markets.
The rate of the bonds is 7 percent, which the head of the Representative Managing Council B. Batjargal
said is too low. The bank plans to issue more bonds in spring.
Source: News.mn
GDP TO REACH USD 100 BILLION WITHIN TWO DECADES
Mongolia's gross domestic product (GDP) is heading towards USD 100 billion by 2025 compared to USD
7.2 billion this year, reported the Mongolian Stock Exchange (MSE).
According to the World Bank, Mongolia is currently the fastest growing economy in the world with
growth of over 20 percent in just the third quarter. The MSE was the best performing stock market in
the world in 2010 with over 130 percent growth.
“Although little... growth is captured through the MSE at the moment and there are considerable
challenges to liquidity,” said Frontier Securities Chief Investment Strategist Dale Choi. This includes
“small capitalization, thin turnover, [and] underdeveloped corporate governance.”
“[The] fundamentals for robust capital markets are there and government is determined for their
success with impressive programs with the London Stock Exchange (LSE).”
Although a recent downturn still remains, the MSE should still reach over 40 percent growth from last
year. The MSE Top 20 Index was up 4.52 percent in October after two months of decline. The LSE plans
to help reform the MSE to develop the Mongolian capital market, attract new listings, rise to
international standards, and develop a long-term sustainable business model.
Source: Frontier Securities
MONGOLIA EXPORTS COKING COAL TO XINJIANG
Coal transportation between Mongolian and the Xinjiang autonomous region of China has officially
commenced this month. Vehicles from Xinjiang can carry coal from the Khushuut mine and back, while
Mongolian vehicles will be permitted to a market destination in the region that would allow for greater
international trade.
Until recently Mongolia's insufficient capacity for mineral exploitation and processing prevented trade
to the region. However, a 1.6 million deficit in Xinjiang's need for coking coal, an essential ingredient
for steel production, has motivated steel makers in the region to strike a deal. In 2008, the two sides
began to seek trade and economic cooperation in a wider range to shape a development pattern that
enables regional economic advantages to complement each other and boosts industrialization.
In early November the 360-kilometer international highway between Mongolia and Xinjiang that was
located at Tarkshiken Port of Qinghe County in Xinjiang passed inspection, and both sides agreed that
this special coal channel would be a long-term transportation line. Through this highway vehicles can
go to the circular economy demonstration park of overseas resource processing located in Qiaerkutu of
Fuyun Country. By the end of the 12th five-year plan period, the total would be 10 million tons of
coking coal carried from Khushuut mine to Xinjiang.
Source: MENA FN
MONGOLIA GUARDS ITSELF AGAINST ANOTHER FUEL SHORTAGE
Although Russia has said it will cut its fuel exports by 80 percent to help cope with the country's

10. domestic fuel shortage, the chairman of the Mineral Resource and Petroleum Authority has said
Mongolia‟s supply will remain unaffected. Mongolia is still reeling from hikes in petroleum prices from
last summer after Russia cut its supply.
Chairman D. Amarsaikhan said fuel imports will not be affect by the shortage in Russia because
Mongolia signed a long-term contract for fuel imports from Russia last spring. Fuel will continue to be
imported under the terms of that contract, leaving the Mongolia market unaffected, he said.
Amarsaikhan also said Mongolia will receive fuel imports in December to prevent a repeat of last
summer's shortage in next May and June. In addition to Russia, Mongolia receives fuel imports from
China, Kazakhstan, and South Korea.
Apparently, Mongolia's own production will be a future failsafe from any future disruptions. Work has
begun on new oil refineries in Mongolia. Sold Mongol Group is building a refinery in Sainshand and is
investing USD 400 million into the project. Another refinery's foundation has been laid in Darkhan,
while a third will be built in Dornod to supply energy to three provinces. The government plans to
contribute USD 50 million for construction.
Source: News.mn
GLOBAL BEHEMOTHS IN MINING WARN OF WANING DEMAND FOR COMMODITIES
Both Rio Tinto and BHP have given signs that demand may fall in the face of global uncertainty, but
growth is still possible
“For the near term, I am concerned about the general softening of prices when we continue to see cost
escalation and strong currencies in Australia and Canada,” Rio Chief Executive Tom Albanese said. BHP
Billiton Ltd. Chief Executive Marius Kloppers has said customers are finding it harder to access credit,
and trade finance it tightening. The prices of iron ore have fallen 22 percent to USD 140.40 a metric
ton since 7 September. Other commodities, including copper and aluminum, are sharply lower in the
past few months. However, Rio said it continues to sell all it can produce and, like BHP, it intends to
continue investing in its mine capacity. Production rates of Chinese steel mills, the biggest consumers
of iron ore, should not change for some time, said Kloppers.
Both BHP and Rio, two of the world's largest mining companies, remain optimistic on the long-term
demand for their products as industrialization and urbanization continues in emerging economies. The
companies plan to invest billions of dollars for projects concerning iron ore, coal, and other minerals.
The mining industry would need to increase supplies by 100 million tons of ore a year for the next eight
years to meet demand, while Chinese steel production will not peak until about 2030. Other growth
economies such as India should still be on an upward demand trajectory at this point.
Rio's board has so far approved USD 14 billion for projects next year, up from about USD 12 billion this
year, and this figure could grow further. Yet, the price for aluminum remains well below the industry's
marginal cost of production. Rio said it plans to shed 13 aluminum assets and last month planned for
the closure of its Lynemouth smelter in England. BHP, despite a markedly less-optimistic outlook for
commodities markets than even a month ago, has said it expects to weather the downturn.
Source: Wall Street Journal
CHILEAN COPPER PRODUCTION SURGES
The world's top copper producer, Chile's Codelco, said on Friday it produced 1.25 million tons of copper
in the nine months to September, up 3.5 percent from the same period last year. Once production
begins in 2013, Mongolia's Oyu Tolgoi will be a major competitor in copper production.
Adding in 42,000 tons from its stake in the El Abra mine, output during the January-September period
rose to 1.292 million tons. The state run miner said pre-profits rose 37 percent during the period for a
year earlier to USD 5.3 billion. Codelco is having one of its best production years ever and will beat its
1.7 million ton output target for 2011, Chairman Gerardo Jofre said. Molybdenum output totaled 17,000
tons in the same period.
Source: Reuters
ADDED LIQUIDITY TO CENTRAL BANKS SPARKS COMMODITIES RALLY
Industrial metals prices jumped as the world's largest central banks announced a coordinated move to
provide liquidity to the global financial system, with copper briefly hitting the key level of USD 8,000
for the first time in four weeks. Unrefined base metals are Mongolia's major exports, especially copper.
The decision by the central banks of the Eurozone, the United States, the United Kingdom, Japan, and

11. Switzerland to reduce the cost of their swap lines to provide U.S. dollar liquidity came hours after
China's central bank eased its monetary policy, cutting the reserve requirements for its banks for the
first time in almost three years. The Chinese move came just before data was to be released that many
expected would reveal weak industrial activity. China is the world's largest consumer of copper, and
concerns about demand owing to tighter monetary policy had been weighing on metal prices.
Copper reversed earlier losses, with the metal for three-month delivery on the London Metal Exchange
rallying 5.4 percent at USD 7,875 a ton in New York after hitting USD 8,000. Other base metals were
also strong, with aluminum rising 5.6 percent to USD 2,110.50. Other commodities were also higher,
with ICE January Brent, the global oil benchmark, rising 30 cents to USD 110.52 a barrel while Nymex
January West Texas Intermediate rose to USD 100.35 a barrel. Gold prices moved up sharply, with spot
building trade in London at USD 1,744 per troy ounce.
However, analysts cautioned that general sentiment affected by the eurozone crisis is unchanged.
JPMorgan downgraded commodities to “underweight” last month, pointing to policy failures in the
United States and Europe.
Read more…
The correlation of prices moves between commodities and other risky assets had been on the rise,
forecasting higher correlations were “likely to persist as long as macro concerns linger,” said Hussein
Allidina of Morgan Stanley. Morgan Stanley recommended a defensive outlook for 2012, listing gold,
silver and livestock as favorites with base metals and oil as its least favored.
Source: Financial Times
MINERS LOOK TO LOCAL SUPPLIERS FOR COST SAVINGS
A globally increasing awareness of the benefits for countries of increased local content in industry is
being further stimulated by the prospect of a double dip recession. Increased local content is widely
held to result in more jobs and the growth of protection of local economies. However, as solutions
provider Local Content Solutions director Dr. Michael Warner points, the million dollar question on local
content at the moment is whether more stringent local content regulations will stimulate greater
competitiveness in the local supply industry or lead to uncompetitiveness and protectionism.
“For successful local content in supply chains, there needs to be longevity of demand. Only a certain
amount can be done with a spike in capital expenditure, but a lot more can be done if there are
ongoing maintenance and equipment replacement requirements,” Warner explained.
The mining sector has been quite progressive in building up the skills base of local suppliers and
increasing the creation of direct jobs within mining companies. Deloitte Consulting manager Genevieve
de Carcenac believes there will be an increased focus on local content regulation in all developing
economies globally. Such regulations may be positive for any country, as it could boost skills
development, employment growth as well as demand from local suppliers.
“Potentially, mining companies could benefit in the medium to long term on cost and delivery from the
use of local content, because of the logistics and the possibility of shorter distances over which they
materials and equipment are transported, as well as on total cost of ownership and on average yearly
costs about ten years,” said Warner. There would be the expected benefits of lower labor costs;
however, the same level of productivity would need to be achieved.”
Warner believes that the most important factor is how a country's government decides to handle local
content and the implementation of local content regulations. Also, the government must decide the
most significant challenge facing the country, and push that particular aspect, working in conjunction
with local mining companies to determine what is possible and what is not possible.
Source: Mining Weekly
ECONOMISTS SWEAT CHINA'S GROWTH AS BANK CUTS RESERVE REQUIREMENTS
China cut bank-reserve requirements for the first time in nearly three years, suggesting leaders of the
world's second-largest economy see a rising threat from slow global growth. The move is likely a
surprise to economists who expected China to embrace what's known as the reserve requirement ration
by the end of the year. China's growth remains integral to Mongolia's own because China is Mongolia's
number one consumer of coal and base metals.
The People's Bank of China said it will cut the reserve-requirement ration for banks by half a
percentage point, the first such cut since December 2008. The cut essentially frees up banks to lend
additional money. The move suggests the government's policy focus is shifting toward promoting

12. economic growth from controlling inflation, said HSBC China economist Ma Xiaoping. China so far has
been focused on fighting inflation, tightening constraints on the economy while still continuing to seek
steady growth; a scenario that economists call a soft landing. However, some experts are pessimistic
about Beijing's ability to pull off a soft landing amid Europe's continued debt crisis and soft global
economic growth.
“The data for the last few weeks has been bad,” said Mark Williams, China economist at Capital
Economics. “There's growth in property starts, electricity output growth has slowed, the export
numbers for November will be awful and they may have had a sneak preview of that. All of these things
could have triggered a shift in policy.”
There will likely be more such reserve ratio cuts, with one more cut of 0.5 percent coming at soon as
the beginning of next year. However, another economist said it isn't likely that the bank will cut
interest rates in the next six months.
Read more…
Although China's top leaders have hinted that policy will be fine-tuned to support growth, many China
watchers have said the country would be slow in easing credit access as it still is dealing with the
negative effects from a massive stimulus package Beijing unleashed after the 2008 global financial
crisis. Recently, however, inflation has eased while economic growth has continued to slow due to tight
credit at home and slumping demand overseas. In recent months capital flows into China have slowed
amid worries over the global economy, China's slowing growth, and reduced expectations for the yuan.
In October, China recorded its first monthly outflow of foreign currency since 2007.
Source: Wall Street Journal
ASIA‟S ECONOMIC SHIP TAKES ON WATER FROM CRISIS IN WEST
Asia's ability to stay resilient amid the West's economic troubles is slowly waning. Analysts and policy
makers are growing concerned about the painful disruption that could spill into Asia as the situation in
Europe continues to deteriorate and the United States' growth remains subdued.
Exports from Asia have been softening for months as demand in Europe has slowed. Although many
countries depend less on exports than they once did, the sector remains crucial for some economies.
Thus far, the economic pain in Asia light, and much of the region remains on course for strong
economic growth. However, growth is below that of 2010, and will likely ease off further next year.
Indonesia and Australia have lowered interest rates in response to changes in the global economy. Most
other central banks in the region have put off rate increases while fears about growth replace inflation
concerns.
In the financial sector, banks like HSBC, UBS, and Nomura are cutting jobs worldwide and in Asian
financial centers jobs are less numerous. Analysts also fear European banks may reduce lending to
emerging markets as they adjust to tighter capital rules for next year. Companies' ability to raise cash
via the capital market is already crimped. Key indexes in Hong Kong, India, Taiwan are all down about
20 percent since the start of this year. Proceeds from stock market debuts in the Asia-Pacific region
have likewise tumbled to about US 74 billion so far this year, compared with nearly USD 159 billion
during the same period last year.
Despite these troubles, many experts believe that the region as a whole remains relatively well
positioned. Hiring outside the financial sector—especially in retail, consumer goods, and hospitality—
remains dynamic. Unemployment rates across the region are far below those in the West, so consumers
can spend. Rising affluence also has turned populous nations like China, India, and Indonesia into major
markets for goods, making up for losses in the West. Moreover, most Asian economies, except Japan,
do not have sovereign debt like that weighing down Europe and the United States.
Source: New York Times
POLITICS
PARLIAMENT QUOTA MANDATES 20 PERCENT FEMALES
Parliament plans to institute a quota mandating that 20 percent of seat holders be female, said
Democratic Party (DP) leader Ch. Saikhenbileg.
The party recently held a meeting with the working group for the Election Law, regulating the structure
of the election, and quotas concerning sex, political party, and minorities. MPs agreed that 20 percent
of the 76 nominees for Parliament should be women.

13. Representatives from small ethnic groups will have at least as many candidates as the current number
of MPs, and there is a proposal to divide each province into two districts. The bill for the Election Law
will be up for approval at the end of this week.
Source: Zuunii Medee
PARLIAMENT MAKES CUTS TO 2012 BUDGET
Parliament held its second and third discussion on the 2012 Budget proposal, returning it to the
Standing Committee on Budget with a number of resolutions and proposals.
A wide consensus approved the amendments for revision to the wages for magistrates and the Anti
Corruption Authority. Most members agreed, however, that it was not important to decide on a
proposal concerning the wages of civil servants before handing the bill back to the standing committee.
D. Khayankhyarvaa, the head of the standing committee, introduced suggestions to reduce the budget
with smaller operational expenditures and increased investments. Thus far, Parliament has reduced the
budget by MNT 600 million and cut MNT 800 million worth of expenditures, resulting in a budget of MNT
5.8 trillion and expenditures of MNT 6.3 trillion. Parliament has revised its estimate for next year's
budget, lowering it by 11 percent from MNT 18 trillion to MNT 16.1 trillion.
Source: Zuunii Medee
CITIZENS TO RECEIVE 20 PERCENT OF TT SHARES
Last week Parliament approved the proposal to transfer the 10 percent of Tavan Tolgoi stocks devoted
for sale to domestic businesses to citizens. The government will now allocate 20 percent of stock to
citizens for a total of 1,076 shares a head.
The proposal, initiated by MP Ya. Batsuuri and D. Odbayar, has been under contention as businesses
argue that they are more likely to retain their stock, keeping shares in Mongolia, and the Tavan Tolgoi
project needs the capital businesses would have paid.
“Our country has 51,000 companies, 88 percent of which have tax payment problems and are unable to
buy stock,” said Odbayar. “So I suggest that the stock be distributed to citizens.” Batsuuri echoed those
comments, saying that the stocks would likely only fall into the hands of Mongolia's biggest companies.
Although many members strongly argued against the proposal, it received a majority confirmation.
Source: Udriin Sonin
MONGOLIA DEPORTS 17 ILLEGAL IMMIGRANTS
Immigration authorities have cracked down on foreigners staying in the country illegal or breaching
immigration laws. The government has issued millions in fines and deported 17 individuals for their
illegal status. The government has also deported 17 people from China and Korea.
The government has issued fines amounting to approximately MNT 193.6 million upon 133 organizations
and individuals for failing to register with the immigration or hiding illegally with legal citizens and
immigrants. The state budget has accumulated MNT 224.3 million worth of fines. This month the office
carried out 12 sudden inspections into 13 organizations that employ foreigners.
Source: Montsame
TEACHERS STRIKE WITH NO END IN SIGHT
State-employed teachers and school workers began to strike on Monday to oppose a delay in wage
increases.
Strikers are demanding that they receive their wage increase sooner than the government proposed
date of 1 March 2012. They originally had hoped to receive raises on 1 January as stated at the
Trilateral Agreement of Labor and Safety meeting in October. Teachers are expecting a pay raise of
MNT 80,000 at the beginning of the new year, followed by another 23 percent pay raise in March.
Kindergarten teacher went on strike on Monday, while secondary school teachers demonstrated on the
following Wednesday.
The number of students that teachers have is twice as much as standards recommended and teachers
complain their wages are not enough. The current average wage for a teacher is MNT 300,000 a month.
Ganbaatar has rallied workers from other sectors in government as well to garner support for the
cause. He said that if the government does not stand by the Trilateral Agreement, health care workers
and others will strike as well.
Source: Zuunii Medee, News.mn

14. PRESIDENT AND ADVISOR CALL FOR REPLACEMENT OF DIPLOMATS ABROAD
A senior advisor to the President has suggested the recall of a number of Mongolian ambassadors
abroad.
P. Tsagaan proposed to Parliament Speaker D. Demberel that the Ambassadors to Japan, India,
Singapore, Laos, and Cuba be replaced. President Ts. Elbegdorj suggested replacing Mongolian
Ambassador to Japan R. Jigjid with S. Khurelbaatar, Ambassador to India V. Enkhbold with S. Bayaraa,
Ambassador to Singapore P. Gansukh with D. Delgarmaa, Ambassador to Laos T. Batbaatar with O.
Davaasabmuu, and Ambassador to Cuba Ya. Dorligjav with B. Oyundelger.
Source: Montsame
HDF ALLOWANCES PUSHES FURTHER TOWARDS PARLIAMENT CONSIDERATION
The Standing Committee on Budget approved the allowances sponsored by the Human Development
Fund (HDF) to be paid regularly to citizens.
Committee members approved MNT 128,000 to citizens and MNT 1 million to women over 55 years old
and men over 60. Disabled citizens will also receive MNT 1 million.
Following this approval, the motion will next come before other standing committees and eventually
Parliament.
Source: News.mn
AUSTRIA APPROVES USD 40 MILLION SOFT LOAN TO MONGOLIA
Mongolia and Austria have agreed to a financial cooperation deal, which includes a EUR 40 million soft
loan to Mongolia for two years.
Finance Minister S. Bayartsogt and Ambassador Extraordinary Plenipotentiary of Austria to China Martin
Sajdik signed the agreement go obtain money for projects involving infrastructure, local water supplies,
sanitation, traffic safety, railway, education, vocational training, health, social welfare, and others.
In 1991, when Mongolia officially requested from the Austrian government its inclusion to the list of
nations receiving developmental assistance and loans, the Austrian government postponed the request
because of limited capital and the hurdles developing nations in Asia faced at the time. At the fourth
Mongolia-Australia intergovernmental meeting held last year, Austria agreed to finance certain projects
in Mongolia with soft loans. This is the very first contract between the two governments.
Source: Monstame
COULD UB SEE A SUBWAY SYSTEM BY 2020?
Ulaanbaatar Mayor G. Monkbayar met with representatives of Japan's JICA organization and a
consortium of Italian organizations to discuss the possibility of building a metro subway in the capital.
“The survey conducted shows that improving public transport in Ulaanbaatar is becoming an urgent
issue,” said JICA head Nagay.
JICA conducted a survey polling 4,500 families about building a subway system that stretches from the
west intersection to east in the center of the city. The report said that if construction begins in 2014,
the project could be finished as soon as 2020.
The Italian groups ItalFERR, SALCEF, Salini Construtton, and Ansalco STS Group specialize in the
construction of underground railways. The mayor said that the Italian consortium is experienced in
turning similar projects into a reality in large European cities such as Copenhagan, Horvat, and Milan.
The group proposed to renew public transportation with a low cost. They believe it will not cost much
if old infrastructure can be used. Furthermore, the group could possibly expand the old railway system
which currently crosses through the city. The Italian consortium's proposal promises a cheaper price
and earlier date for completion than JICA.
Source: Undesnii Shuudan
MP CALLS FOR DISTRIBUTION OF OT STOCK TO POPULACE
The Minister of Defense and MP L. Bold has called for the distribution of 10 percent of the
Government‟s Oyu Tolgoi shares to Mongolian citizens. Mongolian citizens have already been promised
20 percent of Tavan Tolgoi shares.
Bold said Mongolia's economy cannot depend entirely on raw materials, pointing to fluctuating prices in
copper as evidence that too much dependence on raw materials leads to economic instability. In 1998
copper sold for 1,200 a ton and eventually USD 9,000 a ton in 2009. The MP said the allowances paid to

15. Mongolians comes from revenue generated from the export of its commodities and have made the
population lazy. He also warned against Dutch disease, a syndrome of mismanaged wealth that has
afflicted many nations dependent on their resources.
Political parties should determine polices to ensure that not just a small group of people grow wealthy
while the rest of the country stays poor, he added.
Source: News.mn
CPC PLEDGES COOPERATION WITH DP
A senior official of the Communist Party of China (CPC) pledged Monday to boost ties with the
Mongolian National Democratic Party (DP).
Good neighborly relations and reciprocal cooperation between China and Mongolia are not only in the
fundamental interests of the two nations and their peoples, but also the peace, stability, and
development of the whole of Asia, said He Yong, Deputy Secretary of the CPC Central Commission for
Discipline Inspection. The CPC and the Chinese government attach great importance to the China-
Mongolia relationship, and are willing to enhance exchanges and comprehensive cooperation to set up
their strategic partnership in a sustainable way.
M. Enkhsaikhan, Chairman of the DP, echoed Mr. He's remarks and pledged joint efforts with the
Chinese government to advance the strategic partnership in a lasting, stable, and healthy way.
Source: Xinhuanet
PRIME MINISTER DENOUNCES MPRP AS A PRETENDER
Prime Minister S. Batbold stressed the importance of unity with in the Mongolian People's Party (MPP),
as the party gears up for the 2012 parliamentary elections.
“As of today, the 2008 parliamentary election pledges of our party have been implemented 80
percent,” said Batbold.
Meanwhile, the Prime Minister denied any connections between the MPP and the Mongolian People's
Revolutionary Party (MPRP), a spin off formed five months ago took the original name of the ruling
party.
Former President N. Enkhbayar led the break, taking a number of seat holders in Parliament with him.
“This so-called Mongolian People's Revolutionary Party is a new party... As the party's chairman, I would
like to emphasize that this party has no connection with values of the Mongolian People's Party, its
assets, and its 90-year history,” Batbold said.
The Prime Minister reminded his audience that the election is just seven month's away, but it is clear
that Enkhbayar's party, recently registered by the Supreme Court as Mongolia's 19th political party, is
aiming to confuse people and split votes from the ruling party.
Source: People's Daily Online
MPP UNVEIL NEWS PALACE OF INDEPENDENCE
Mongolian People's Party (MPP) officials officially celebrated the opening of its new headquarters at the
Palace of Independence last week. The ceremony occurred days after a fire threatened to postpone the
building's official opening.
MPP Chairman and Prime Minister S. Batbold opened the ceremonies with a speech. Afterwards, MPP
Secretary General U. Khurelsukh unveiled a bronze image of D. Sukhbaatar. Party officials held a
ribbon-cutting ceremony, and the building was opened to the public. Former President N. Bagabandi lit
a fire in a ceremonial fireplace, while lamas performed a blessing.
The building has over twice as much space as its previous building. It houses a museum, movie theater,
and conference hall with a capacity to hold 800 people.
Source: News.mn
MICROBE FOSSILS DISCOVERED IN MONGOLIA
Some tiny microbe fossils discovered in Mongolia have provided some big clues to the development of
life on earth.
Ancient rock deposits laid down between two massive ice ages reveal the oldest known fossils for two
types of single-celled creatures: Tube-shelled foraminifera and hairy, vase-shaped ciliates. Both closely
resemble microbes living today, but the climate they lived in may have been quite different. Fossils
belonging to foraminifera were found in rocks from Namibia, while ciliates were found in rocks from

16. Mongolia.
The fossils date back more than 100 million years earlier than the oldest foraminifera and ciliates
previously known. However, scientists think these organisms were around much longer, based on
changes accumulated in their DNA since they split from close relatives. Some believe these types of
single-celled creatures have been around for considerably more than 1 billion years, said Tanja Bosak of
the Massachusetts Institute for Technology (MIT).
While this wasn't the first fossil evidence for these amoebas, the nature of their resistant covering was
ambiguous in the earlier fossils. The most recent fossils are the first amoebas to show evidence of
primitive shell building, Bosak said. Life at the time these specimens lives was quite simple, but soon
become more complex. It's possible the arrival of abundant microbes may have had some hand in the
change by helping to bump up the amount of oxygen in the atmosphere.
Source: Fox News
NEW MONGOLIAN LAWS AND REGULATIONS
The following amendments to laws and an exemption were published in the latest weekly Government
bulletin. Unless otherwise decided by Parliament, they will take effect ten (10) days after publication.
Date Amendments to Laws and Exemption
24.11.2011 Amendments to Law on 2011 Budget of Mongolia
Amendments to Law on 2011 Social Insurance Fund budget
Amendments to Law on 2011 Human Development Fund budget
Exemption from State Sign Fee
Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish to access complete versions of the laws and regulations in Mongolian language are
welcome to email the BCM office: info@bcmongolia.org.
___________________________________________________________________________________________________
ANNOUNCEMENTS
RUNGE'S TRAINING COURSE--”MINING FOR NON-MINERS,” 5-6 DECEMBER
Runge, a world class mining consulting, software, and training company, is offering its third “Mining for
Non-Miners” course to be held December 5-6 in Ulaanbaatar. BCM is assisting in the organization of the
training course.
The aim of the course is to provide those from a non-mining background with a comprehensive
introductory understanding of the mining industry. The course duration is two days, with the first day
focused on coal mining, and the second day on metal mining.
The two day course will cost USD 700 per student and will be delivered in Mongolian.
Registration is oversubscribed and concluded. For information, contact saruul@bcmongolia.org, or call
317027.
______________________________________
MONGOLIA INVESTMENT SUMMIT 2011, LONDON, 8-9 DECEMBER
Are you looking for the next frontier market to generate stable returns? Do you find it difficult to
access investment opportunities and forge partnerships in Mongolia? Do you need to be educated about
Mongolia‟s capital markets and the effects of the stock exchange‟s modernization?
Then you should attend the second annual Mongolia Investment Summit 2011, where government
officials, mining companies, Mongolian businesses and European investors are coming together to
discuss the opportunities and risks surrounding investing in Mongolia.
What to expect:
Over 100 investors, government officials and companies operating in Mongolia will come together to
discuss the opportunities that Mongolia holds for foreign investment. With unique networking
opportunities the Mongolia investment Summit is the meeting place for this market.
Mongolia Investment Summit is taking place next week from 8-9 December at the Hilton Tower Bridge
Hotel in London. To find out more please contact Stacey Kelly at stacey.kelly@terrapinn.com.
BCM is a Supporting Organization of the event and BCM members can receive a 15% discount off the

17. conference ticket price. Please use the following link:
https://secure.terrapinn.com/V5/rCalc.aspx?E=4306&C=1448VCRS.
___________________________________________
PRICEWATERHOUSECOOPERS AND IFE - FINANCIAL REPORTING TRAINING, 19-20 DECEMBER
Pricewaterhouse Coopers Audit LLC and the Institute of Finance and Economics (IFE) will hold an
Accounting and Financial Reporting training session on 19, 20, and 21 December. The training will
provide participants with the practical understanding of the requirements under IFRS to enable them to
prepare compliant financial statements.
The training will be highly interactive to allow participants to practice key concepts. Day One will
cover financial statements under the IFRS, critical IFRS disclosure requirements, and producing cash
flow statements; Day Two will teach about accounting for tax and deferred tax, and accounting for
groups; and Day Three will teach key issues to revenue, methods to identify and measuring liabilities,
and asset accounting.
Each day will start from 9:30 A.M. To 12; and from 1 to 5 P.M. Lunch will be provided to all who attend.
Attendance is MNT 800,000 per student. One free placement will be provided for any single company
with four paid students. For more information or to attend, contact Solongo Enebish at
solongo.enebish@mnpwc.com.
___________________________________________
“MM TODAY” ON MNB-TV, FRIDAYS AT 21:15
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
21:15 tonight. Tune in to watch this program that reports stories from today‟s BCM NewsWire.
___________________________________________
“BSPOT” ON B-TV, MONDAY TO FRIDAY AT 21:30
B-TV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every
evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
___________________________________________
POSTINGS ON BCM‟S ENGLISH WEBSITE 'PRESENTATIONS' AND 'MONGOLIA REPORTS' AND BCM‟S
MONGOLIAN WEBSITE „NEWS‟ SECTIONS
As a key component of BCM‟s Mongolian website, „News‟ section, articles from the Government‟s
“Open-Government.mn” site is regularly posted. Also several draft laws, still to be discussed in
Parliament, are posted on BCM‟s English website in the Legislative Working Group section.
On BCM‟s English website - „Resource, Presentations‟ section for your review are several speeches at
Discover Mongolia 2011, speeches from BCM‟s 9 monthly meetings to date in 2011, and the address by
Peter Nicholls, OT‟s VP-Operations, at Global MInES in Sydney on July 4.
Also on BCM‟s English website, „Resource, Mongolia Reports‟ section please note "Blitz and Lead" by
Sant Maral Foundation, August 2011, Z. Batbayar, Deputy Director of the Water Authority, at BCM‟s
Environmental Working Group‟s recent meeting, the Polit Barometer-May 2011 from Sant Maral
Foundation and the U.S. Embassy Mongolia‟s Commercial Section‟s “2011 Mongolia Investment Climate
Statement” - www.bcmongolia.org.
We are now posting some news stories and analyses relevant to Mongolia on the BCM website's
„Mongolian Business News‟ as they come, instead of waiting until Friday to put them all together in the
weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will incorporate
items that are already on the home page, so that it presents a consolidated account of the week‟s
events.
___________________________________________
NETWORK WITH BCM
The Business Council of Mongolia (BCM) is expanding its reach to your favorite social networks. Keep up

18. to date on the latest business deals in Mongolia and how the climate for investment is improving each
day with BCM.
Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events with the
community. Hear breaking news and announcements as they happen when you follow BCM on Twitter
at http://twitter.com/#!/bcmongolia. Connect with BCM on Linked-in to join the diverse group of
professional contacts creating a better business environment in Mongolia today.
Of course for news information, interviews, and announcements regarding our organization, visit the
official BCM website at bcmongolia.org and bcm.mn.
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ECONOMIC INDICATORS

19. 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]
October 31, 2011 *10.9% [source: NSOM]
*Year-over-year (y-o-y)
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]

20. CURRENCY RATES – December 1, 2011
Currency Name Currency Rate
U.S. dollar USD 1,346.48
Euro EUR 1,810.28
Japanese yen JPY 17.19
British pound GBP 2,107.17
Hong Kong dollar HKD 172.18
Chinese yuan CNY 211.41
Russian ruble RUB 43.58
South Korean won KRW 1.17
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.