The document summarizes news from Mongolia covering business, economic, and political topics. Key points include: - Mongolia is seeking loans from the IMF and other countries totaling $3 billion to help plug its budget deficit amid falling commodity prices and demand. - The number of mining licenses in Mongolia increased by 558 in the last 8 months, with exploration licenses increasing by 31. - Over 61,000 livestock died in 8 western Mongolian provinces due to harsh winter weather conditions. - Moody's is preparing to downgrade Mongolia's credit ratings due to concerns over its deteriorating external payments position and inability to ensure fiscal sustainability.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
info@bcmmongolia.org
Issue 56, February 6, 2009
NEWS HIGHLIGHTS:
Business: Mongolia not to abandon 2007 stand, says Minister; Mongolia seeking loans linked to
mining deals; D.L.Lobb to oversee Peabody’s Mongolian Operations; Rio to sell assets
to Vale for USD1.6 billion; Rise in number of minerals licenses; UB Railway asks
Minister for USD145 million loan; Milk company allowed to resume production;
Mongolia’s first flour factory in 25 years; Mining business forum on February 10;
61,000 head of livestock die in 8 provinces; Eagle TV opens conference center.
Economy: Mongolia looks far and wide for loan to plug budget deficit; Moody's readies to
downgrade Mongolia's ratings; Zambia abolishes 25% windfall mining tax; Nuclear
power plant likely by 2012; Labor union favors less pay for less work, but no job cuts;
Anti-corruption boss says all are equal before the law; Central Bank asks for citizens’
help to end transactions made in USD; Shanghai holds clue to copper glut at LME; Plea
to hike electricity, heating rates; Institute to train 7,000 construction workers this
year; Refinery in country will make petroleum cheaper, says MP; First two assembled
buses on way to Kazakhstan.
Politics: Bayar has surgery in Seoul; President hosts conference on Mongolia in Davos; Mongolia
fares poorly in open access to State budget; Russian President, Prime Minister to visit
Mongolia; Smaller parties breathe fire on Oyu Tolgoi; NGO promises computer for
waste paper; 30% of Ulaanbaatar households have Internet; Project to cover 220 child
laborers.
BUSINESS
MONGOLIA NOT TO ABANDON 2007 STAND, SAYS MINISTER
The special Government meeting on Friday was told that work on the two Tolgoi draft agreements
was still continuing. Minister for Minerals and Energy D.Zorigt said preliminary talks with the
investors were still on, but he hoped the draft on Oyu Tolgoi would be ready before the proposed
special session of Parliament this month. The draft on Tavan Tolgoi would have to wait for the
Spring session.
The Minister refused to share information on the negotiations as they were at a delicate stage. He,
however, hinted that the Mongolian side would not abandon its position indicated in 2007. This
means that Mongolia will not agree to less than 34 percent ownership in Oyu Tolgoi. He would
neither confirm nor deny that this meant “no definite changes have been proposed” in the Oyu
Tolgoi draft. The global crisis has affected both the national economy and the investors, so the
Mongolian side was not keen on revising its stated position in 2007. Mongolia wanted to pay its
share of investment costs by adjusting them against advance payment of taxes, but there could be
some changes on its stand on tax concessions.
About Tavan Tolgoi, he would only say that the Government has hired Deutsche Bank and JP Morgan
to advise it in the talks. Representatives of both investment banks are in Ulaanbaatar and holding
talks with the investors. The next level of negotiations will begin only after everybody’s views on
the preliminaries are ascertained and filed.
Source: Undesnii shuudan
MONGOLIA SEEKING LOANS LINKED TO MINING DEALS
Mongolia is in talks with the International Monetary Fund (IMF) over a loan package of USD60-70
million that could attract investment in its mining sector, the country's president said in Davos.
Mongolia hopes an IMF lending program would give other countries the confidence to lend it up to

2. USD3 billion in return for access to its mining sector. It is negotiating with China, Russia, Japan and
several Gulf countries on USD300 million to USD3 billion in loans that would be linked to large
mining projects, President Enkhbayar said.
The Government aims for that cash to help it plug a budget deficit that is projected to swell to 6.5
percent of GDP this year as falling commodity prices and demand for resources have hit revenues.
Mr. Enkhbayar said, in an interview on the sidelines of the annual meeting of the World Economic
Forum, "The (IMF) team is already in Mongolia, and they are now working with the Ministry of
Finance and the Mongolian Central Bank to improve the budget indicators and maybe even to start
concluding a program between the Mongolian Government and the IMF."
The IMF loan itself would not be a major source of funding, Mr. Enkhbayar noted, while saying, "But
(it) should be a good, responsible institution which would work with the Mongolian Government to
have a specific, concrete program of action and based on that, other possible investors will be
willing to invest a quite significant amount of money."
Although the country holds very little external debt, keeping it somewhat insulated from the
financial crisis, it is very much dependent upon exports of commodities such as coal, copper and
cashmere, whose prices have plummeted. The amount the country ultimately borrows from other
countries, which could also include Qatar, Kuwait and Abu Dhabi, will depend on the terms it is
able to arrange, including what claims to mineral resources they will obtain, Mr. Enkhbayar said.
"We have approached them separately. All of these countries have specific investment interests in
Mongolia. So depending on the project they are trying to invest in, we are discussing a certain
amount of money with each country. That is why the range is so wide," he said.
Source: Reuters.com
D.L.LOBB TO OVERSEE PEABODY’S MONGOLIAN OPERATIONS
Peabody Energy has announced that it has named Mr. Delbert Lee "D.L." Lobb as Senior Vice
President of Mongolian Operations with responsibility for emerging operations in Mongolia. He will
report to Executive Vice President and Chief Operating Officer Eric Ford.
Peabody is pursuing multiple business development opportunities in Mongolia and announced last
week that it has obtained an option to purchase up to a 50 percent interest in a joint venture to
develop Polo Resources Limited's coal and mineral interests in Mongolia.
"D.L. brings extensive global mining experience to Peabody's emerging Mongolian presence," said
Mr. Ford. Mr. Lobb has more than 29 years of mining engineering and operations experience
worldwide. He most recently served as President and Chief Executive Officer of Westmoreland Coal
Company.
Peabody Energy is the world's largest private-sector coal company.
Source: Peabody Energy
RIO TO SELL ASSETS TO VALE FOR USD1.6 BILLION
Rio Tinto will sell potash assets and its Corumba iron ore mine in Brazil for USD1.6 billion to rival
Vale, the global miner said last week, part of a plan to cut debt by US10 billion in 2009. "This
transaction demonstrates the depth and quality of our asset portfolio and our ability to unlock
value for shareholders despite tough credit markets and economic conditions," Mr. Guy Elliott, Rio's
chief financial officer, said in a statement.
Earlier in the week, Rio had said it might need to sell shares to help pay off its debt burden, citing
equity raising as one option under consideration as world commodities markets continue to falter.
Rio announced sweeping plans in December to cut jobs, slash capital spending and expand asset
sales aiming to cut debt after bigger rival BHP Billiton scrapped a USD66 billion takeover bid,
blaming Rio's weighty debt and sliding metals prices.
Source: Reuters.com
RISE IN NUMBER OF MINERALS LICENSES
The number of fresh minerals exploration and exploitation licenses increased by 558 in the last 8
months of 2008. Of these, 1,901 or 21% are exploitation licenses, while the remaining 4,111 are for
exploration ones. The latter number has risen by 31 in the last six months. The total licenses cover
49.4 million hectares, or about 31% of the total territory of Mongolia.

3. The provinces of Tuv, Dornogovi, Umnugovi, Selenge and Khentii account for the most number of
licenses while Govisumber and Orkhon are the two with the fewest. Zavkhan has 35 exploration
licenses for every exploitative one, while that ratio is 1:1.5 in Ulaanbaatar, which makes it the only
place where there are more exploitation licenses than explorative ones. Interestingly, most of the
exploitation licenses granted here are for extraction of construction materials.
Source: Montsame
UB RAILWAY ASKS MINISTER FOR USD145 MILLION IN LOAN
Faced with a loss of MNT28.1 billion in 2008, and an accumulated loss of MNT38.4 billion, the
Ulaanbaatar Railway Company’s administration has asked Transport Minister Kh.Battulga for an
immediate loan of USD145 million on easy terms. It has suggested that international financial
institutions be approached without delay so that railway services can continue in a stable manner.
No reference was made in the request to the money from the Millennium Challenge grant meant for
upgrading the railway or to the reported readiness of a Russian company to invest in it.
Source: www.news.mn
MILK COMPANY ALLOWED TO RESUME PRODUCTION
The closure order on one of the biggest Mongolian producers of milk and milk products, Suu, was
lifted on Monday, with the Professional Monitoring Agency announcing that the company had
rectified all the issues that led to the order five days ago to it to halt operations. It also reassured
consumers that the company’s products are now safe. The agency had charged the company with
installing equipment without permission, and with selling products carrying bacteria. The company
repeatedly rejected all allegations.
Its representatives held a press conference last week to protest against the closure orders which
put its 200 employees and 2,500 herder-suppliers in a difficult position. Refuting the charge that it
should have taken permission before installing new equipment, the company says all the equipment
carried proper certification for technical use, and the agency refused to accept that one certificate
covered all 22 storage devices. The agency had also charged the company with using in their ice
creams ingredients beyond their date of expiry. The company said it had stopped producing ice
cream in November. “We are surprised by the charge leveled against us, as we even sent a request
to the agency to destroy all these ingredients once we stopped production. They did not reply and
now they are making this ridiculous accusation against us,” the officials said. The agency had said
yogurt produced by the company on January 12 had fungus in it. The company says laboratory tests
did not corroborate the charge.
Source: Ardiin Erkh
MONGOLIA’S FIRST FLOUR FACTORY IN 25 YEARS
Genco Group has invested MNT20 billion on a new flour factory that will use Czech technology and
be fully automated. At present, Mongolian flour producing companies supply 30% of the total flour
demand in the country, but the new Mill House factory hopes it will produce enough to raise this
figure to 70%. The company will buy grain from neighboring countries like Russia, China and
Kazakhstan.
This is the first flour factory to be established in Mongolia since one came up in Darkhan in 1984.
The buildings were constructed by the Chinese company which built the Bird Nest Beijing Olympic
Stadium.
Source: Odriin sonin, Onoodor
MINING BUSINESS FORUM ON FEBRUARY 10
The Mineral Resources and Petroleum Authority of Mongolia is joining with the Mining Exchange and
the Mining Chamber to organize a mining business forum on February 10. The theme of the forum
will be “Mining sector and the world financial and economic crisis”, and the participants are
expected to focus on determining ways of protecting the Mongolian mining sector from the crisis.
Detailed information on new Government regulations and on amendments to existing ones will also
be discussed. So will be new mining technology and environment recovery measures.
The organizers have asked Parliament members, officials from the Ministry of Minerals and Energy
and the Ministry of Environment, representatives from the Central Bank, Mongolian Star Melchers
and Mongol Gazar, and professional experts to attend the forum and offer their views and

4. suggestions.
Source: Odriin sonin
61,000 HEAD OF LIVESTOCK DIE IN 8 PROVINCES
Nearly 61,000 head of livestock have died from hunger and cold in eight western provinces. Khovd
province lost more than 15,000 animals, Bayan-Ulgii 12,000, Khuvsgul 9,300, Gobi-Altai nearly
8,000, Bayankhongor 6,000, Uvs 5,000, Zavhan 4,000 and Khentii 1,500. The temperature in several
areas was minus 25 C. during the day and minus 34 C. at night.
Khovd province has been the worst hit this winter. Following a snow storm on January 21-22, roads
have become impassable and most of the pasture land is under thick ice. Provincial authorities are
using two vehicles to clear the roads and transport fodder to herders. Reserve fodder is being
offered at a 50% discount.
Stock raising, one of Mongolia's key industries, has been developing smoothly in recent times but
has been hit by a harsh winter this year.
Source: Ardiin Erkh, www.chinaview.net
EAGLE TV OPENS CONFERENCE CENTER
The Eagle Broadcasting Company has opened an info center, providing equipment and facilities for
press conferences, and meetings of any kind, with seating capacity for 50 people at a time.
Programs arranged here can also be telecast directly on Eagle TV and shown in its later news
programs.
Source: Montsame
ECONOMY
MONGOLIA LOOKS FAR AND WIDE FOR LOAN TO PLUG BUDGET DEFICIT
Finance Minister S.Bayartsogt has expressed the hope that the advantages intrinsic to its being a
small economy would help Mongolia tide over the present economic crisis faster than others. The
Mongolian economy is small, has seasonal fluctuations, and is almost entirely dependent on imports.
All three add up to deepen the crisis. However, the positive aspect of a small economy is that
economic activity is reasonably straightforward, with less uncertainty and unpredictability. Once
the right policy is identified and implemented, recovery will be quick. “We have to be frugal and
make utmost use of local resources and capacity,” he said.
The Government has cast its net wide to get money to plug the budget deficit. It has approached
donor countries, international financial organizations such as the IMF, the World Bank, the ADB, and
also individual countries such as China and Qatar. It is also exploring how much it will get as deposit
money from investors in Oyu Tolgoi and Tavan Tolgoi. It also has plans to issue bonds worth USD1.2
billion in the international market. A last resort will be diverting the budgetary allocation
earmarked for developing small and medium enterprises.
Several meetings have already been held with IMF representatives and the Minister was optimistic
that a loan of USD120 million would be agreed upon. Like all IMF loans, this money will be released
only as capital for programs. This means that the Mongolian Government and the IMF have to agree
on the program(s) as also the governing policy. Organizations such as the World Bank and the ADB,
and donor countries also, give loans to implement programs blessed by the IMF. It is therefore
imperative to convince the IMF about the soundness of Mongolian economic policy. Agreeing with a
questioner from the media that the IMF does not favor deficit budgets and/or “unproductive” social
welfare payments, Mr.Bayartsogt said, “The IMF has suggested some measures, such as reducing
investment and welfare payments, and will send teams working with us on a comprehensive
program based on our own action plan.”
He revealed that the initial reaction of both China and Qatar to a request for USD3 billion loan has
been encouraging but both countries have asked for more time to decide.
Source: en.news.mn
MOODY’S READIES TO DOWNGRADE MONGOLIA’S RATINGS
Moody's Investors Service is set to downgrade Mongolia's ratings and ceilings owing to concerns over

5. the rapid deterioration in the country's external payments position and the inability of the
government to put in place a policy framework which would ensure balance of payments stability
and fiscal sustainability. The Moody's review affects Mongolia's B1 foreign-and local-currency ratings
for government bonds, the Ba2 foreign-currency country ceiling for bonds, the B2 foreign-currency
ceiling for bank deposits, as well as the Baa2 local-currency bank deposit ceiling. Moody's initially
assigned Mongolia's B1 ratings in October 2005; they have been unchanged since that time and with
a stable outlook until now.
Tom Byrne, a Moody's Senior Vice President, has said in a statement released in Singapore that
“the pace of depletion in (Mongolia’s) official foreign exchange reserves has been rapid, owing to
the fall in exports, meager long-term capital inflows, the intensified dollarization of the country's
domestic deposit base, and past adherence to a fixed exchange rate policy." He adds, “The
continued downturn in export performance and the further weakening in confidence in the togrog
could overwhelm the efforts of the authorities to stem the hemorrhage."
Moody's rating review will focus on the ability of the Government to prevent further deterioration in
the country's external payment position and to fashion a program that ensures long-term fiscal and
economic stabilization. This would likely involve an assessment of the robustness of the policy
framework and also of the extent to which possible enhanced external financial assistance could
impart stability.
Source: Moody's Singapore Pte Ltd.
The complete text of the statement can be seen at BCM's website, Articles/Reports on Mongolia.
ZAMBIA ABOLISHES 25% WINDFALL MINING TAX
Zambia, Africa's top copper producer, would abolish a controversial 25 percent windfall tax to
cushion its key copper mining industry from weak prices stemming from the global financial crisis.
Finance Minister Situmbeko Musokotwane said in his budget speech the Government was motivated
by the need to safeguard the country's economic lifeblood. The decision, he said, was taken after
consultation with foreign mining firms, which have complained of higher taxes, high electricity
tariffs and fuel prices, and falling global metals prices.
Zambia depends on copper and cobalt for more than 63 percent of government revenues. Less
copper demand would translate into reduced foreign exchange earnings. "In light of the impact of
the global crisis on the mining sector, I propose to remove the windfall tax and retain the (15
percent) variable tax, which will still capture any windfall gains that may arise in the sector," Mr.
Musokotwane said.
Source: Reuters.com
NUCLEAR POWER PLANT LIKELY BY 2012
Mr. S.Enkhbat, head of the newly established Atomic Energy Agency of Mongolia, has said that
building a small atomic power station plant should not be difficult. “We already have had talks with
the Japanese on the matter and Russian cooperation is also welcome. I guess 2012 would be the
outside limit for Mongolia to have an atomic power station.” He was talking to media on various
issues relating to the recent agreement signed with RosAtom.
According to him the development was nothing new. Actually, an agreement to establish a joint
company was signed two years ago between the Mongolian Ministry of Industry and Trade and
RosAtom. Both countries will benefit from the cooperation in a field where they have earlier
worked together. He said Mongolia favored the Russian interest in cooperating with the Japanese
company Marubeni and would welcome any such tripartite collaboration. However, Mongolia would
prefer to retain 50% ownership and control of deposits in the country, as set out in the minerals
law.
Asked why Mongolia chose the State-owned RosAtom to be its partner when private Russian
companies were also interested in developing the country’s uranium deposits, Mr. Enkhbat said,
“Such considerations did not concern us. We chose a company that is respected, experienced and
open. Our national interests come first, and not whether our partner is a private company or State-
owned.” Asked if it was the Prime Minister who had pitched for RosAtom, Mr. Enkhbat said, “I don’t
think so. As Prime Minister he wanted our opinion on who would be best for us.” South Korea had
expressed interest in collaboration on uranium when President Enkhbayar was there last year, but

6. no formal negotiations were ever held.
He said it was not yet decided if, as earlier, the Russian factory Pri-Argunsk would be used for
processing the uranium mined in Mongolia, but reiterated that “our policy is not to export it in a
raw form”. The country hopes to acquire the technology to turn the ore into “yellow powder”. It
could then be sent to Pri-Argunsk before being brought back to Mongolia as a finished product. The
Atomic Energy Agency chief said 1970 estimates put Mongolian reserves of uranium at 60,000 tons,
but better prospecting is likely to come up with a figure around 1.5 million tons. That would make
Mongolia the fifth largest depository of the metal in the world.
Source: en.news.mn
LABOR UNION FAVORS LESS PAY FOR LESS WORK, BUT NO JOB CUTS
Prospects of job cuts are keeping labor unions busy even as the effects of the economic crisis begin
spreading. Ulaanbaatar Railway has asked for permission to lay off thousands of its staff, and
reports have come that 200 workers at the Khutul cement factory have been declared redundant.
Labor unions are organizing a campaign to protect jobs.
The Mongolian Labor Union (MLU), that has 35 member organizations and more than 2,000 affiliate
unions, accepts that with sales down because of lower consumer spending, many companies are
unable to pay their total work force. However, mass retrenchment cannot be a solution, and it is
working on a plan whereby “every company should devise a policy to retain all staff even if they
have to work less and thus be paid less”.
Source: www.news.mn
ANTI-CORRUPTION BOSS SAYS ALL ARE EQUAL BEFORE THE LAW
Mr. D.Sunduisuren, Vice Director at the Anti-Corruption Authority (ACA), has said the recent
conviction of three men in high positions should reassure the public about the integrity and
impartiality of the ACA. “Everybody is equal before the law,” he asserted. This was important to
remember, he said, as powerful government officials and government administration employees
formed the majority of those against whom corruption charges are leveled.
Mr. Sunduisuren said 58 of the cases they investigated in 2008 resulted in conviction and
imprisonment. Charges against 37 were unsubstantiated, and the cases of 40 others were
transferred to local authorities for further action. No final decision has yet been taken in 17 cases.
The cases investigated involved a total sum of over MNT31 billion. Of this about MNT4.3 billion was
paid back to the state and assets worth MNT6.05 billion were confiscated.
Source: Ardiin Erkh
CENTRAL BANK ASKS FOR PEOPLE’S HELP TO END TRANSACTIONS IN USD
All cash transactions in Mongolia have to be made in the national currency but several trade,
business, and services organizations continue to flout this legal imperative. The Central Bank is
aware that transactions continue to be made in US dollars and is determined to stop the practice. It
has appealed to citizens to call a hotline number 32 70 88 whenever they have information of any
such transaction made in USD. The Central Bank will be strict with violators and may even take
penal action.
Source: www.news.mn
SHANGHAI HOLDS CLUE TO COPPER GLUT AT LME
The highly visible build in surplus copper is acting as the major depressant on prices right now, but
it may be misleading. The November-February period is normally characterized by weak demand.
But something doesn't ring quite true about the scale of the January increase. A possible
explanation is that this stocks build is masking a driver other than underlying supply-demand
dynamics.
There is a strong financial incentive for commercial metal stocks to be transferred to the London
Metal Exchange (LME), a trend that is reinforced by wary lenders insisting funds are guaranteed
against LME warrants as liquid receivables. The LME warehouse system is now accounting for a much
bigger ratio of the overall stocks picture, i.e. we're seeing far more of the surplus than we would in
other less credit-straitened times.
The dramatic build in headline LME stocks is misleading for another reason. This is not a uniformly-
distributed global build. It is one that is heavily concentrated on Europe and the United States.

7. Stocks registered with the Shanghai Futures Exchange (SHFE) actually fell last month by 1,255 tons
and at 16,587 tons they are ultra-low by any historical yardstick. That has ensured that the
Shanghai market remains in backwardation and that it trades at a premium to the LME, keeping
open the arbitrage window for profitable imports. The result has been a flood of copper imports
into China. The rush of metal into China in the closing stages of 2008 has not found its way to SHFE
warehouses. That of course has implications for the global market surplus this year. If it disappears
into stocks build in China, whether commercial or government, fundamental market surplus could
give way to commercial market balance.
Source: Reuters.com
For the full story by Andy Home, Reuters columnist, please visit METALS INSIDER-Copper stocks and
visibility problems, BCM website, Articles/Reports.
PLEA TO HIKE ELECTRICITY, HEATING RATES
Supplying companies have pleaded with the regulatory authorities to raise electricity charges by 25
percent and heating rates by 35 percent. Their case is that following the fall in the exchange rate
of the MNT they now have to pay more for spare parts and all other imported material, as also for
interest on foreign loans.
The power sector ran up MNT15.3 billion in operational losses in the first nine months of 2008, and
the amount is likely to increase when annual computations are made. The total debt of the sector
reached MNT49.8 billion, of which MNT19.6 billion is owed to the coal mines, despite the large
loans power companies have taken from banks to pay for coal. Officials feel external factors are
largely responsible for the predicament of the sector, and point out that if electricity falls, all
other sectors will fall.
Source: Ardiin Erkh
INSTITUTE TO TRAIN 7,000 CONSTRUCTION WORKERS THIS YEAR
Lack of locally available skilled manpower plagues the construction sector, and Minister Kh.Battulga
last week approved the establishment of an institute to train workers. He also asked all related
departments to support the program. With improved training in basic and advanced skills, and in
the use and application of technology, those who come out of the institute will help in the
implementation of the 100,000 Families project of the Government. The aim is to train 7,000
workers in 2009.
Source: www.news.mn
REFINERY IN COUNTRY WILL MAKE PETROLEUM CHEAPER, SAYS MP
The head of the Standing Committee on Security and Foreign Policy, Mr. Z.Enkhbold, has said he
will continue to press for setting up an oil refinery in the country as that would make fuel much
cheaper. The Petro China Daqing Tamsag Mongol Company, which is exploring for oil as well as
drilling it in Tamsag and Dornogov, at present exports 500,000 barrels of oil yearly through two
licensed companies. If more oil is discovered, it might even become possible to meet the entire
domestic demand from the output there.
Source: en.news.mn
FIRST TWO ASSEMBLED BUSES ON WAY TO KAZAKHSTAN
The first two dual buses assembled by the Mongolian Electric Transportation Company (METC) for
Kazakhstan are on their way. The company has been assembling environment-friendly electro-buses
and dual buses and is under contract with Kazakhstan to export a number of the latter for use
there. The buses run on electricity but when there in no power, they can go on fuel for up to 100
kilometers.
The Mongolian Government has budgeted MNT6.3 billion to set up a park where METC would
assemble 50 trolleybuses in the next two years.
Source: Ardiin Erkh

8. POLITICS
BAYAR HAS SURGERY IN SEOUL
Prime Minister S.Bayar underwent surgery in Seoul on Thursday after he had injured a rib when he
fell from a horse on January 31. Initial medical opinion that six weeks’ bed rest will help the injury
heal and that there was no need to send him abroad was revised, and he was taken to Seoul on
Wednesday.
Visiting Olziit near Ulaanbaatar to see Honored Horseman Ganbaatar on Saturday, the Prime
Minister decided on riding a horse and had the accident, according to his spokesman, S.Batbaatar.
The horse shied at a snow-drift, and Mr. Bayar, wearing snow boots that did not fit the stirrup,
could not keep to the saddle.
He is likely to spend 10 days in hospital.
Source: Ardiin Erkh, Montsame, en.news.mn
PRESIDENT HOSTS CONFERENCE ON MONGOLIA IN DAVOS
The President of Lithuania, Prince Andrew of the UK, and the vice president of the World Bank were
among the dignitaries who attended a conference on Mongolia arranged by President Enkhbayar on
the sidelines of the World Economic Forum in Davos. Political and business leaders who attended it
discussed the global economic crisis and how Mongolia could survive it.
Source: www.news.mn
MONGOLIA FARES POORLY IN OPEN ACCESS TO STATE BUDGET
The Open Budget Index 2008 has ranked Mongolia 51st out of 85 countries assessed on the openness
of its state budget. Mongolia's score (36) indicates that its Government provides the public with
minimal information on the State budget and financial activities during the course of the budget
year. This makes it difficult for citizens to hold the Government accountable for its management of
the public's money.
A country's placement within a performance category was determined by averaging the response to
91 questions related to information contained in the eight key budget documents that all countries
should make available to the public. The International Budget Project was established as part of the
Center on Budget and Policy Priorities, a Washington, DC-based non-partisan non-profit research
organization, in 1997 to support civil society organizations around the world interested in
strengthening public budget processes, institutions and outcomes.
In Mongolia, multi-year estimates of aggregate revenues, expenditures or debt are not made public,
thus barring citizens from having a comprehensive picture of the Government's plans for taxing and
spending for the upcoming year. Moreover, it is difficult to track spending, revenue collection and
borrowing during the year. Mongolia publishes its in-year reports but not a mid-year review that
would greatly strengthen public accountability by providing updates on how the budget is being
implemented during the year.
It is also difficult to assess budget performance in Mongolia once the budget year is over. No year-
end report is published, preventing comparisons between what was budgeted and what was actually
spent and collected.
Also, Mongolia does not make its audit report public and does not provide any information on
whether the audit report's recommendations are successfully implemented. Access to the highly
detailed budget information needed to understand the Government's progress in undertaking a
specific project or activity remains limited. Mongolia has not codified the right to access
government information into law.
There are other ways in which Mongolia's budget process could be made more open. Opportunities
for citizen participation in budget debates could be introduced. The independence of Mongolia's
Supreme Audit Institution (SAI) could be improved. For example, the SAI faces some limitations in
its discretion to decide which audits to undertake.
Source: www.openbudgetindex.org
RUSSIAN PRESIDENT, PRIME MINISTER TO VISIT MONGOLIA
Russian President Dmitry Medvedev and Prime Minister Vladimir Putin are expected to visit Mongolia
in summer, the Mongolian President said after a meeting with Mr. Putin in Davos. According to him,

9. Mr. Putin could visit the country in June and Mr. Medvedev could arrive in August. Russian Deputy
Prime Minister Igor Sechin would be in Mongolia in February. Prime Minister Sanjaa Bayar is to pay
an official visit to Russia this spring.
"Our relations are developing at all levels," Mr. Putin said, specially mentioning prospects for
developing mining and railway projects as well as cooperation in the energy and agricultural
sectors. Russian-Mongolian trade exceeded USD1 billion in 2008, while Russian imports grew 61%.
Source: RIA Novosti
SMALLER PARTIES BREATHE FIRE ON OYU TOLGOI
With a possible agreement on the two Tolgoi deposits coming nearer every day, smaller political
parties decided on Monday to remind people that they are still in the business of creating confusion
and spreading disinformation. At a joint meeting they said their lack of representation in
Parliament and in the provincial assemblies did not mean that the nation’s politics was only about
the MPRP and DP.
The Mongolian Democratic Development Party representatives decoupled the economic crisis in
Mongolia from the wider global crisis. They said MNT360-550 billion had been spent by the big
parties on the parliamentary election last year and it was this that had left the commercial banks
with no money to lend to businesses and individuals. That was the root cause of the crisis.
The Traditional United Party of Mongolia said the Chinese Government is now backing the Ivanhoe
Mines-Rio Tinto bid for Oyu Tolgoi as China has bought 37 percent of Rio Tinto shares. The
Government’s decision to hand over mining deposits to foreign companies was a direct violation of
the national Constitution which says all resources below the ground belong to the citizens. Instead
of asserting its sovereign rights over the national property, the Government was busy claiming only
34 percent of it. Any international court would vindicate their stand, they asserted.
Source: Ardiin Erkh
NGO PROMISES COMPUTER FOR WASTE PAPER
A non-governmental organization in Ulaanbaatar has launched a campaign it calls Diligent Pupil to
help students acquire computers. Ten computers are planned to be given to any school whose
students collect 60 tons of waste paper. Any individual student collecting six tons of waste paper
can also claim a computer. Since the campaign aims at cleaning up Ulaanbaatar, the city’s
department of education is cooperating with the NGO. The campaign ends on April 1.
Meanwhile, some six percent of the 180,000 children studying in grades 2-5 in Mongolia have now
been provided with an XO computer under the international OLPC (One Laptop Per Child) project. It
began in schools in the capital last year but now secondary schools in 16 provinces have joined the
project. They have also been given Wi-Fi servers, wireless internet, and trained on how to use XO
Laptops.
Source: www.news.mn, Montsame
30% OF ULAANBAATAR HOUSEHOLDS HAVE INTERNET
There has been a sharp increase in the number of Internet users in Mongolia in the last few years,
with a recent survey revealing that 30 percent of all Ulaanbaatar households have Internet
connection. About 90 percent of them have e-mail accounts, 77 percent surf the Web, and 52
percent use the Internet primarily for information. Of the surfers, 36 percent check on health
matters and 34 percent look for travel news.
Source: Ardiin Erkh
PROJECT TO COVER 220 CHILD LABORERS
The second stage of the International Labor Organization (ILO) project aimed at ending the worst
forms of child labor will cover more than 220 school dropouts in Tov province. Project leaders and
teachers have already been trained in the methodology of preventive action and occupational
guidance. The trainers drew extensively on the experience gained during the first stage of the
project implemented in Ovorkhangai.
Source: Montsame

10. _____________________________________________________________________
SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended January 30, 2008, trading activity on the Mongolian Stock Exchange (MSE)
totaled 2,155,900 shares with 33 companies traded. Total market value of transactions was MNT
375.8 million. Total market capitalization of the 358 stock companies listed on the MSE was MNT
450.3 billion, and decreased by MNT 10.6 billion or 2.3% from the previous week.
The Top-20 Index decreased by 129.15 points or 2.6% compared to the previous week, closing at
4,944.41 points. The MSE Composite Index decreased by 63.82 points or 2.5% compared to the
previous week, closing at 2,456.38 points.
Most active stocks traded were: Remicon (2,003,200 shares), Suu (113,700 shares), HB Oil (7,600
shares), Genco Tur Buro (6,600 shares), and Moningbar (5,500 shares).
Major share price percentage gainers were: Suu (15.0%), Buligaar (15.0%), HB Oil (8.7%), Bayan
Itgelt (5.0%), and Mon.Tsakh.Kholboo (1.9%). Major share price percentage losers were: Mongeo
(27.6%), Zoos Goyol (15.0%), Sor (14.9%), Aduun Chuluun (14.8%), and Khereglee Impex (14.5%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 Avg. 9.0% [source: NSOM]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
* year over year (yoy)

11. CURRENCY RATES – February 5, 2009
Currency name Currency Rate
US dollars US 1421.18
Euro EUR 1847.11
Japanese yen JPY 15.95
British pound GBP 2048.92
Hong Kong dollar HKD 183.29
Chinese yuan CNY 208.00
Russian ruble RUB 39.39
South Korean won KRW 1.03
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.