09.08.2013, NEWSWIRE, Issue 286

BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 286 – August 9, 2013
NEWS HIGHLIGHTS:
Business
 PM says Parliament approval not needed for Oyu Tolgoi financing;
 Rio Tinto offers new financing to Turquoise Hill, says will not buy more shares;
 Bold not likely to replace McRae as Oyu Tolgoi CEO;
 Turquoise Hill signs additional agreement for Altynalmas Gold;
 ORIX approved as investor of Tenger;
 Local residents announce protest of Areva's uranium exploration;
 TDB Capital launches online trading platform;
 MonFresh expands milk collection network;
 American restaurant Round Table Pizza opens in UB;
 Fulbright to design AUM freshman seminar;
 Top government officials to attend NAMBC Investors Conference;
 Speakers explain new Securities Law;
 Peace Corps presents seminar at AUM English language Institute;
 Centerra swings to Q2 profit as Kyrgyz mine kicks into gear.
Economy
 MNT 1 billion government debt traded on MSE;
 Savings deposits dip 1.9 percent;
 Banks provide MN 581.2 billion in mortgages;
 Mortgage rate cut to boost house sales;
 Premier warns construction companies against poor performance;
 TenGer executive director calls for more accountability to banks;
 Officials on watch for contaminated powder milk;
 Mongolia likely to suffer from OT delays, say experts;
 Mongolia’s economic fairytale faces reality check;
 Mongolian bonds suffer amid frontier correction;
 Preliminary work at new international airport 60 percent complete;
 Earth and air shape Mongolia;
 In Mongolia, the Skyline by the Steppes;
 Breakthrough for the survival of Przewalski’s horse;
 Miners return to hedging as gold prices lose shine;
 Murky data muddy debate on Chinese consumers' strength;
 China, world's biggest material consumer: UN report;
 China bans milk powder from New Zealand over botulism fears.
Politics
 Mongolia to simplify FDI for state-backed firms;
 Mongolia, Luxembourg pledge to open double tax negotiations;
 Mining firm loses licenses for strategic deposit;
 GEC reports on 2013 election campaign spending;
 Reformist sect in MPP appeals to party members;
 President's mother passes at 92;
 2013 Khan Quest launches in Mongolia;

 Caritas Taiwan to donate to Catholic school in Mongolia;
 Mongolian virtuoso spreads some magic in Australia's desert;
 Scholars discuss Central Asian epics in Mongolia;
 Mongolia travels the distance to its magic moment.
ECONOMIC INDICATORS
 MSE Top 20 Index by market Capitalization;
 Foreign-listed Companies with Mongolian Assets;
 Inflation;
 Central bank policy rate;
 Currency rates.
*Click on titles above to link to articles.
SPONSORS
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BUSINESS
PM SAYS PARLIAMENT APPROVAL NOT NEEDED FOR OYU TOLGOI FINANCING
Rio Tinto PLC does not need to seek Mongolian parliamentary approval for a USD 4 billion financing
package to fund development of an underground mine at the Oyu Tolgoi copper project, Prime
Minister Norov Altankhuyag said.
―Parliament has already made the decision and signed their agreement,‖ Prime Minister Norov
Altankhuyag said at a weekly press briefing on Thursday. He added, ―Cabinet doesn't have to be

involved. All issues can be discussed and decided at the board of directors' level.‖
Rio Tinto on Monday put all work on the underground expansion of the Oyu Tolgoi mine on hold,
saying it had been advised that project financing provisionally secured for the project would need
to be approved by Parliament. It expects the process would take some months to work through as
Parliament was on summer recess.
Source: Reuters
RIO TINTO TO PROVIDE NEW FINANCING PACKAGE TO TURQUOISE HILL, SAYS WILL NOT BUY
MORE SHARES
Rio Tinto PLC and Turquoise Hill Resources Ltd. signed an agreement under which Rio Tinto will
provide Turquoise Hill with a financing package to enable it to fund the continuing development of
the Oyu Tolgoi copper-gold mine and, if necessary, to refinance its existing indebtedness to Rio
Tinto by the end of the year.
Rio Tinto agreed to provide a USD 600 million bridge funding facility to Turquoise Hill, maturing 31
December 2013, subject to certain conditions being satisfied. The facility will be used initially to
refinance all amounts outstanding under an existing USD 224 million short-term funding facility
provided by Rio in June 2013, and thereafter for the continued ramp up of phase one of Oyu Tolgoi
development. Rio has agreed to extend the short-term funding facility until 28 August and to permit
funds repaid by Turquoise Hill from the proceeds of the sale of its 50 percent interest in Altynalmas
Gold Ltd. to be redrawn. Rio Tinto has also agreed to waive its option to convert all or part of any
amounts outstanding under the short-term funding facility int Turquoise Hill common shares.
In addition, if Turquoise Hill must raise equity to repay this new bridge facility and the existing USD
1.8 billion interim funding facility provided by Rio Tinto, Rio has agreed to provide a firm stand-by
commitment for a fully underwritten rights offering by Turquoise Hill, subject to certain conditions
being satisfied.
Rio currently owns 50.8 percent of Turquoise Hill shares, along with anti-dilution rights that allow it
to acquire additional securities of Turquoise Hill so as to maintain its proportionate equity interest
in Turquoise Hill. Rio said it has no present intention of acquiring additional securities of Turquoise
Hill.
Source: Rio Tinto PLC
BOLD NOT LIKELY TO REPLACE MCRAE AS OYU TOLGOI CEO
Baatar Bold, Rio Tinto PLC's president of its international copper group, will not likely be tapped in
November to replace Cameron McRae as head the Oyu Tolgoi copper-gold project, according to the
head of Rio Tinto's copper group.
McRae will be making an exit as chief executive of Oyu Tolgoi LLC and country director for Rio Tinto
in Mongolia. The news led to speculation that Rio Tinto might choose a Mongolian to replace him,
with Thomson Reuters reporting that Bold was a likely candidate.
Jean-Sebastian Jacques, chief executive of Rio Tinto's copper group told Oyu Tolgoi employees,
however, that it would be unlikely for Bold to receive the appointment. He said Bold would
continue his work in his current position. He added that a new management team for Oyu Tolgoi
would be decided upon in the near future.
Source: Udriin Sonin
TURQUOISE HILL SIGNS ADDITIONAL AGREEMENT FOR ALTYNALMAS GOLD
Turquoise Hill Resources Ltd. announced on 2 August that, in light of changes in the gold market, it
has entered into an additional agreement with Sumeru Gold BV in connection with the sale of the
company's 50 percent interest in Altynalmas Gold Ltd, which was originally announced on 13
February.
The supplemental agreement reflects a conditionally reduced cash consideration of USD 235 million
instead of the original cash consideration of USD 300 million. A key condition of the revised
transaction structure requires Sumeru Gold to make an advanced payment of USD 235 million to
Turquoise Hill by 9 August ahead of completion of the transaction. Completion of the transaction

remains subject to customary closing conditions including regulatory approvals from Kazakh
authorities.
Altynalmas, a private company, holds 100 percent ownership of the Kyzyl gold project in
northeastern Kazakhstan. The Kyzyl project contains the Bakyrchik and Bolshevik gold deposits.
Turquoise Hill acquired interest in the project in 1996 and acquired its stake in Altynalmas in 2008.
Source: Turquoise Hill Resources Ltd.
ORIX APPROVED AS INVESTOR OF TENGER
The Ministry of Economic Development approved on 2 August TenGer Financial Group's investment
agreement with Japan's ORIX Corp. for 16 percent of Tenger shares.
The approval endorses the entry of a new strategic investor in TenGer. The firm anticipates
regulatory approval from the Bank of Mongolia will follow in due time. The new investment is part
of a lower ownership transformation process at Tenger as some of the existing shareholders of the
group exit by selling their shares to the new investors and as indirect shareholders restructure their
holdings in the group.
TenGer's existing shareholder the International Finance Corporation, the financing arm of the World
Bank, also signed an agreement with TenGer and two advisory agreements with subsidiary XacBank.
The investment agreements will further strengthen XacBank's capacity. As part of restructuring, the
indirect shareholders Mongolyn Alt Corp. and Ronoc are in the process of becoming direct
shareholders.
―The entry of ORIX Corporation of Japan to Mongolia is expected to open more opportunities for
international private investors,‖ said Nyamjav Batbayar, minister of economic development.
Source: Tenger Financial Group
LOCAL RESIDENTS ANNOUNCE PROTEST OF AREVA'S URANIUM EXPLORATION
The citizens of Ulaanbadrak Soum, Dornogobi Aimag have announced their protest of uranium
exploration by France's Areva SA.
Citizens claim the activities by Areva's Mongolia unit, CogeGobi LLC, have resulted in the death of
many livestock and abnormal births at Ulaanbadrakh. They also claim that the government has not
supported its citizens by allowing Areva to continue its operations.
Ulaanbadrakh residents requested to meet with CogeGobi authorities last May to demand they
cease their exploration activities. After repeated delays, said the protesters, they finally met on 31
July along with authorities from the Nuclear Energy Agency. Protesters complained that authorities
talked down to them and that Areva was allowed to continue their work despite their complaints.
Source: InfoMongolia
TDB CAPITAL LAUNCHES ONLINE TRADING PLATFORM
TDB Capital LLC has become a first mover by introducing a service for the trade of Mongolian
securities over the Internet. The service will allow clients to place orders for securities and check
account balances from anywhere on the planet, at any time.
Source: Mongolian Stock Exchange TSE
MONFRESH EXPANDS MILK COLLECTION NETWORK
MonFresh held an opening ceremony for its fifth refrigerated milk receiving center at Bornuur Soum,
Tuv Aimag.
The company was the first in Mongolia to sell milk in tetra packs and in 2011 launched its ―White
Revolution‖ project with the aim to develop its milk delivery supply by collecting dairy from
herders throughout the country. It has thus far established collection centers in Gachuurt,
Basumber, and Bornuur Soums, all of which are in nearby proximity to Ulaanbaatar. The portable
five-to-10-ton coolers are equipped with analysis instruments and can store milk for up to 72 hours.
The dairy firm is now working to establish additional portable centers in Baganuur, Erdene, and
Mungunmorit Soums of Tuv Aimag.
Source: Zuunii Medee

AMERICAN RESTAURANT ROUND TABLE PIZZA OPENS IN UB
American restaurant Round Table Pizza has followed KFC by opening in Mongolia.
Located on one of Ulaanbaatar's busiest commercial streets, the new Round Table had its grand
opening party fittingly on 4 July. Among the many that celebrated the opening was the United
States Ambassador to Mongolia, who celebrated another successful U.S.-Mongolian partnership.
―It took a lot of training and logistics to bring the authentic taste or Round Table Pizza to
Mongolia,‖ noted Director of International Operations Mike Buck, ―but it's worth it when you see so
many satisfied customers.‖
The location is operated by Mongolia International Food Holding, which plans on developing 10
restaurants in Mongolia.
Source: Round Table Pizza
FULBRIGHT TO DESIGN AUM FRESHMAN SEMINAR
The American University of Mongolia (AUM) received approval for funding for its request to the
Fulbright Program for a senior specialist.
Selected was Mark Usher, associate professor and chair of the department of classic at the
University of Vermont (UVM). Was selected as the Fulbright senior specialist to come to Mongolia
this summer and design AUM's freshman seminar. The project will have a crucial role to play in the
successful launch of AUM, as the curriculum he designed will set the tone for AUM's liberal arts
education approach and for the quality of its offerings.
As a classics scholar, Mark Usher knows the history and traditions of liberal education through and
through and has used his experience and knowledge to design a number of successful and popular
cross-disciplinary seminars for first-year students here,‖ said Antonio Cepeda-Benito, dead of the
College of Arts and Sciences at UVM. ―I'm glad Mark's talents have been recognized at the American
University of Mongolia that will challenge, engage, and motivate first-year students.‖
Usher earned his Ph.D. in Classics at the University of Chicago and is an alumnus of UVM. His
research interests include orality studies, Near Eastern influences on classical literature, especially
on Greek literature of the archaic period, and ancient philosophy. He is also interested in the
reception of classical texts in modern works of art, music and literature. He regularly offers courses
in Greek and Latin language and in classical civilization.
He was in Mongolia for several weeks during the Spring 2011 semester, during which he gave
presentations on his research and academic activities to colleagues in the Mongolian National
Academy of Sciences and the National University of Mongolia.
Source: American University of Mongolia
TOP GOVERNMENT OFFICIALS TO ATTEND NAMBC INVESTORS CONFERENCE
Minister of Environment and Green Development Sanjaasuren Oyun and Ulaanbaatar Mayor Erdene
Bat-Uul will be featured speakers at the North American Business Council's (NAMBC's) 16th Annual
Investors Conference, to be held from 24 to 26 September at the Kempinski Khan Palace Hotel in
Ulaanbaatar.
Oyun is the first Mongolian to earn a Ph.D. from Cambridge University in the United Kingdom, is
chairman of the Civil Will-Green Party, and the head of the Zorig Foundation. She has been a
member of parliament without interruption since 1998 and has also served as minister of foreign
affairs. Bat-Uul was elected mayor and governor of Ulaanbaatar in August 2012 by the City Council.
An astrophysicist by profession, he was one of the leaders of Mongolia's 1990 democratic revolution.
He served as chairman of the Democratic Party from 1990 to 1992 and as the party's general
secretary from 1992 to 1996. He served as a member of Parliament from 1996 to 2008.
The investors conference will celebrate the 40th anniversary of Mongolia-Canada diplomatic
relations this year. Full simultaneous interpretation will be provided. This conference is the
longest-running international investors forum in or about Mongolia, held annually in Ulaanbaatar
since 1998.
Source: NAMBC

SPEAKERS EXPLAIN NEW SECURITIES LAW
An overview session on the new Securities Law was held on 4 July.
The event, hosted by the Business Council of Mongolia (BCM) and Mongolian Stock Exchange (MSE)
JSC, had some 90 representatives in attendance to hear speakers introduce the basic clauses of the
law, the concept behind it, and key features. Also discussed were opportunities opening in the
market, new products and services recognized by the law, and the participation of regulatory and
professional organizations. Speech makers pointed out that the new law aimed to protect investor's
interests and rights by imposing stricter liabilities and obligations on market participants. Likewise,
the law provides disclosure requirements for greater transparency.
―By the new law, it becomes possible for dual listing of Mongolian-listed companies abroad as well
as the listing of foreign-listed companies in Mongolia and the issuance of depository receipts where
local companies will have capital raising opportunities from both domestic and foreign markets at
the same time,‖ said one speaker.
Source: Mongolian Stock Exchange JSC
PEACE CORPS PRESENTS SEMINAR AT AUM ENGLISH LANGUAGE INSTITUTE
Two Peace Corps volunteers conducted an all-day seminar on 13 June at the American University of
Mongolia (AUM) English Language Institute as part of their ―Village to City‖ project.
The project was a four-day business field trip to Ulaanbaatar for 10 high school students from
various countryside schools and five of their teachers to learn about business career opportunities
available in the city. The seminar was held on the final day of the four-day project. During the first
three days, participants visited nine organizations to tour their offices as well as to speak with
professionals about their organizations, their specific roles, and their experiences, including the
skills, qualities, and opportunities (both education and professional) that have helped them to
advance their careers.
Source: American University of Mongolia
CENTERRA SWINGS TO Q2 PROFIT AS KYRGYZ MINE KICKS INTO GEAR
Canadian miner Centerra Gold Inc. reported a second-quarter profit of USD 1.6 million, or USD 0.01
a share, compared with a net loss of USD 48.9 million a year earlier, as gold output surged 89
percent year-on-year, boosted in particular by a strong performance at its flagship Kumtor mine, in
Kyrgyzstan.
The company said it produced 99,426 ounces of gold in the quarter ended 30 June, including 72,365
ounces at Kumtor and 27,061 at Boroo, in Mongolia, compared with 52,482 ounces (41,307 ounces
from Kumtor and 11,175 ounces from Boroo) in the second quarter of the previous year. The
increased output helped to offset a 14 percent decline in the realized gold price of USD 1,376
ounces for the quarter.
Revenue climbed 43 percent to USD 128.2 million, compared with USD 89.7 million, despite mining
and processing operations being impacted at Kumtor between 30 May and 1 June, as a result of an
illegal protest that blocked the road leading to the mine, disrupting deliveries. The second-quarter
results includes charges totaling USD 2.8 million, mainly constituted by a charge of USD 2.2 million
for the write-off of certain infrastructure assets at Kumtor that could not be relocated as a result of
the accelerated movement of the central valley waste dump. Movement was reported to have
stabilized following mitigation actions.
The miner lifted its consolidated gold production output for the full year to between 615,000
ounces and 675,000 ounces.
Source: Mining Weekly
ECONOMY
MNT 1 BILLION GOVERNMENT DEBT TRADED ON MSE
Some MNT 1 billion in government bonds traded on the Mongolian Stock Exchange on 24 July.

The bond offering is part of a government initiative to trade long-term government debt on the MSE
to support the domestic currency. Through the debt trading, the government aims to improve
market liquidity and set a benchmark rate for short and long-term debt in the financial market.
Source: Mongolian Stock Exchange JSE
SAVINGS DEPOSITS DIP 1.9 PERCENT
The total amount of savings in deposits in Mongolia fell by 1.9 percent or MNT 98 billion over the
previous month alongside a 15.4 percent gain year-on-year.
A total of MNT 4.041 trillion gains represent a year-on-year increase of 15.4 percent or MNT 673.4
billion for savings. Meanwhile, foreign currency denominated savings accounts continued to
decrease and in 5 August stood at MNT 1.1 trillion. The foreign currency accounts reached their
peak in September 2012 when the equivalent tugrug value reached MNT 1.496 trillion.
Corporate savings accounts denominated in tugrug decreased by 9.9 percent, MNT 65.4 billion from
May of this year. However, this amount increased by 2.6 times or MNT 367.1 billion year-on-year. At
the end of June 2013 locally denominated savings accounts represented 78.2 percent of the total
savings accounts in Mongolia. This represented an increase in market share of 7.7 percent for
locally denominated accounts over the total value of savings deposits in Mongolia.
The weighted average interest rate of locally denominated savings accounts increased by 1.1
percent year-on-year and reached 12.1 percent over the 12 months ending in June of this year.
However, the weighted average interest rate for foreign currency denominated savings accounts
dropped by 0.3 percent to 6.5 percent over the same period.
Source: Mongolian Investment Banking Group
BANKS PROVIDE MN 581.2 BILLION IN MORTGAGES
The Bank of Mongolia reported on 1 August that commercial banks have thus far received request
for a total of MNT 787.3 billion for refinancing mortgages and MNT 244.9 billion for new mortgages.
Banks have converted MNT 408.3 billion of 14,452 mortgages holders to 8 percent. Another MNT
172.9 billion has been granted for 3,310 new mortgages holders at the 8 percent rate.
Source: Cover Mongolia
MORTGAGE RATE CUT TO BOOST HOUSE SALES
Home ownership rates in Mongolia are set to climb in 2013 and beyond as a new state-backed
mortgage scheme has improved access to low-cost loans, though demand for housing could push up
prices if the construction sector cannot keep up a smooth flow of units onto the market.
In mid-June, the Bank of Mongolia introduced a new home loan scheme that reduced interest rates
on mortgages for many applicants by almost 50 percent. For those who qualify for the new scheme,
interest rates will be fixed at 8 percent, with a 1 percent plus-or-minus variable to factor in
inflation, well down on the standard 15 percent rates for mortgages previously applied. To qualify,
buyers need to be in full employment, the repayments must not exceed 45 percent of their monthly
income and the size of the home to be purchased must be less than 80 square meters. Buyers must
also be able to make an up-front payment of 10 to 30 percent of the face value of their property,
and the repayment period cannot exceed 20 years.
The move to lower interest rates could have a major impact on the market, according to Ya.
Purevsuren, vice president for finance and investment at MCS Group. ―People are realizing
mortgages are hard to get,‖ Purevsuren said. ―Mortgages are a huge constraint in this market.‖
To make housing affordable for middle-class buyers, the central bank initially pledged for a grant of
MNT 370 billion. Then, in May, the government announced that an additional MNT 100 billion would
be made available to firms selling cement and reinforcement materials. This scheme could keep the
rise in housing prices in check. Developers at a housing exhibition in April said it would be
―possible‖ to sell homes at a price of less than MNT 1 million per square meter, but they added that
most of their properties were selling for more than MNT 1.3 million per square meter. Prices could
be lower, they noted, if the government were to invest in infrastructure improvements such as
water and sewage pipes, power lines, and heating grids.

Source: Oxford Business Group
PREMIER WARNS CONSTRUCTION COMPANIES AGAINST POOR PERFORMANCE
Prime Minister Norov Altankhuyag warned construction companies that any that are falling short on
their duties will be replaced with those that can do the job better.
Altankhuyag criticized companies for neglecting provisions for road construction. He said one
company in Dornod had already been warned that if it had not finished its work by November
another company would be given the job. Falling behind, the company Nasnii Zam has transfered 64
kilometers of a total of 173 kilometers of road construct to another company in Dornod, said
Altankhuyag. The Prime Minister also said that construction of a road to the provincial capital in Uvs
is underway and is expected to be commissioned by 2015.
In a meeting last Monday the prime minister reported that the Dornod road was 35 percent
complete with six companies performing the work. However, work by two of those companies, he
said, had turned out poor. Another road in Khuvsgul Aimag that was 22 percent complete by the
company Beak Seok has had its contract terminated. The Minister of Roads reported that a road
running between Ulaanbaatar and Bayankhongor had its scheduled completion date postponed from
before Naadam to 24 August due to some technical difficulties.
Additionally, the Ukhaa Khudag-Gashuun Sukhait railway was 32.9 percent complete, he said.
Source: Montsame, Montsame
TENGER EXECUTIVE DIRECTOR CALLS FOR MORE ACCOUNTABILITY TO BANKS
The head of TenGer Financial Group has advised that commercial banks do a better job screening
clients taking out loans in light of the recent downfall of Khadgalamj Bank LLC.
―Banks overestimate the capacity of its borrowers to pay,‖ said Magnai Bold, executive director of
TenGer. ―In actuality borrowers aren't able to pay back their loans. They're deceiving banks by
giving them wrong information and hiding their real circumstances.‖
He pointed out the large difficulty that both banks and borrowers, given the crisis in foreign
markets, falling commodity prices, and inflation. Bold said greater accountability was needed from
banks and the banks should have opportunities to share ideas. He warned that poor decision making
in deciding on loans could be ―destructive‖ to the economy, noting that TenGer has a policy of
removing itself from politics and that it does not push any political party or agenda onto its
employees.
Source: UB Post
OFFICIALS ON WATCH FOR CONTAMINATED POWDER MILK
Officials from customs and the Ministry of Health will be organizing analysis and recall of powder
milk from New Zealand.
Authorities will be inspecting the Fonterra brand of milk powder, which represents 90 percent of
Mongolia's milk powder imports, following news that some 40 tons of milk powder may have been
subject to bacterial contamination. The milk powder has been exported to eight companies
worldwide, including four Chinese companies.
The Ministry of Health, General Agency for Specialized Inspection, and Customs General
Administration received notice from the Ministry of Industry and Agriculture's Agency for Food
Protection Policy that evaluations would be needed as well as a possible recall. Evaluations will
take one week to inspect baby formulas and protein supplements, authorities said.
Mongolia imported USD 24.9 million in milk and dairy production in 2012, including USD 17.5 million
in milk powder.
Source: Unuudur
MONGOLIA LIKELY TO SUFFER FROM OT DELAYS, SAY EXPERTS
Rio Tinto PLC's announcement that parliamentary approval would be needed for the financing
package to fund Oyu Tolgoi's underground mine has reverberated in the share price of Turquoise Hill
Resources Ltd. and likely Mongolia's macro economy, too, experts have said.

Following Rio Tinto's announcement that the USD 4 billion financing package would hinge on
approval from parliament, Rio Tinto-controlled Turquoise Hill Resources, the 66 percent state
holder in the project, saw its stock prices fall some 20 percent on the Toronto Stock Exchange.
Mongolian economists are speculating that the macro economy will be hit as well, with the National
University of Mongolia professor at the School of Economic Studies Ch. Khashchuluun arguing that
Oyu Tolgoi is fulfilling the role the Erdenet mine long held as the main actor over the economy.
―Oyu Tolgoi deposits make up 20 percent of Mongolia's economy and during the project
implementation period, income revenue will be three times more than today's Mongolian GDP.‖ He
added, ―I feel Oyu Tolgoi is greatly significant to attract large foreign investment and end
devaluation of the Mongolian currency.‖
Dambadarjaa ―De Facto‖ Jargalsaikhan, an economist and television host, concurred saying the halt
of operations would likely cost Mongolia USD 1 million a day for a total of USD 60 million if
expansion is delayed until 1 October. It would also have the affect of putting some 1,000 employees
working on the underground out of work and the fall of the tugrug.
―These all have a severe negative impact on Mongolia's economy,‖ Jargalsaikhan said.
Source: Info Mongolia
MONGOLIA’S ECONOMIC FAIRYTALE FACES REALITY CHECK
Mongolia's fairytale economic boom is developing cracks. The failure of the country's fifth-largest
bank and delays in the development of its giant copper mine underscore fears that its growth
potential is built on shaky foundations. Yet greater economic realism may ultimately be welcome.
The surprise insolvency of Khadgalamj Bank, or Savings Bank, which controlled about 8 percent of
Mongolia's banking assets, has rattled the country's economic cheerleaders. The central bank closed
down the lender and transferred its deposits to a state-owned entity after it ran up bad loans worth
USD 109 million—more than twice its capital, according to Fitch Ratings. Some of these loans appear
to have been made to Just Group, controlling corporate shareholder in Savings Bank, despite
regulations designed to limit such exposure.
The failure has raised doubts about the central bank's grip on Mongolia's financial system. Total
bank loans expanded by 40 percent between May 2012 and June 2013, and about 30 percent of
these loans are denominated in foreign currencies. A sustained slide in the Mongolian currency,
which is already down 9 percent against the dollar this year, could leave local borrowers facing a
squeeze.
Optimism about Mongolia's resources and its proximity to China helped the country raise USD 1.5
billion from the international debt market last year. Since then falling commodity prices, China's
slowdown and emerging market selloff have undermined the bullishness. Five-year bonds now trade
at 93 percent of face value. Yet the correction prompts Mongolia to take a more prudent long-term
view of its undoubted commodity wealth, the recent reality check may ultimately prove healthy.
The author Peter Hal Larsen is a Reuters Breakingviews columnist.
Source: Reuters
MONGOLIAN BONDS SUFFER AMID FRONTIER CORRECTION
One day you are hot, the next day you are not—and so it is with Chinggis bonds which have suffered
a sharp market correction in the wake of June's market rout.
Back in November, eyebrows were raised in the emerging markets debt investment community
when Mongolia managed to raise USD 1.5 billion at a price below Spain's borrowing costs. At the
time, many took the sale, which was 10 times subscribed and attracted USD 15 billion in bids—as
yet another sign that investors who were flushed with cash and desperate for yields were jumping
into markets that they did not understand.
Fast forward eight months and the skeptics appear to have been proved right. The USD 500 million
five-year tranche of the issue is now trading at 92.837 cents to the dollar. Priced at the outset at
4.125 percent, yields that investors are demanding to hold the bond have jumped to nearly 6
percent. It's a similar story for the larger 10-year USD 1 billion tranche, which was priced at a yield
of 5.125 percent.

In many ways, the sharp correction in frontier market sovereign and corporate debt should not
come as a surprise. The surge in investor interest for debt from frontier markets has been mainly
driven by hollowed-out returns in the developed and more established emerging markets. But with
the U.S. Federal Reserve expected to begin scaling back its massive bond buying program leading to
higher interest rates, the investment calculation no longer makes sense.
―It's reality reasserting itself back into valuation,‖ said Robert Abad, emerging markets specialist at
Western Asset Management. He added, ―The hunger for yield which spawned new issuance from
places that, in normal credit cycles, wouldn't have had easy access to the international capital
markets ultimately distorted investors' sense of valuation and risk... Relatively unknown issuers with
no 'credit history' accessing the market for USD 1 billion or more at 5-6 per cent yields was surreal
back then and even more so in retrospect.‖
Source: Financial Times
PRELIMINARY WORK AT NEW INTERNATIONAL AIRPORT 60 PERCENT COMPLETE
The earth moving work and other preliminary duties for the site for the new international airport in
Tuv Aimag is due to finish by 1 September.
The preliminary work now 60 percent underway is earth moving, dam construction to protect from
floods, electrical and communication lines, and a temporary structure to house the project's 400
workers. The airport will have a two-lane runway for landing and take-off of planes. Construction of
the foundation of the airport building was slated to begin this week. Work began at Khoshig of
Sergelen Soum, Tuv Aimag began on 25 June.
The new airport is scheduled to open in 2016.
Source: Undesnii Shuudan
EARTH AND AIR SHAPE MONGOLIA
Livestock in Mongolia outnumbers humans 15 to one, and a third of the country's three million
people still rely on animal husbandry for their living. But climate change and record-breaking cold
winters in the past two decades have wiped out whole herds and forced hundreds of thousands of
bereft nomads to flock to Ulaanbaatar in hopes of finding a new start.
Now, 70 percent of the city's residents live in Ulaanbaatar's ger districts while the city struggles to
provide public utilities to a mushrooming population. But Mongolia also has a new hope: Home to
some of the world's largest untapped reserves of copper, gold, rare earth elements, and coal,
Mongolia was the world's fastest-growing economy in 2011. As a consequence, Ulaanbaatar is
becoming more cosmopolitan, while the wealth and potential of huge mines, such as Oyu Tolgoi in
the Gobi Desert, help expand cities, build schools, renovate monasteries, and provide jobs to a new
generation of graduates.
But even as the push and pull of a booming new industry shapes the future of Mongolia, most here
still look to herders as the country's stewards of cultural history and heritage.
Source: Christian Science Monitor
IN MONGOLIA, THE SKYLINE BY THE STEPPES
In September the hills around Ulaanbaatar, the rough and roiling capital of Mongolia, are flecked
with wildflowers. Below them, districts of gers encircle the city. Look beyond the gers, to where
the offices and condominiums rise, and you will see Ulaanbaatar is booming.
In the past decade tourism has increased along with its GDP. In the first half of last year more than
280,000 travelers visited Mongolia, on track to beat by 50 percent the number of annual visitors just
a decade ago. The city of smog, snarled traffic, and 50 Cent blasting from a screen opposite the
State Department Store is the city that Jan Wigsten, the Swedish founder of the tour company
Nomadic Journeys, means when he speaks of a capital in the ―overdrive of transition.‖
The second Ulaanbaatar is the city that was appreciated after days of hitching a way across the
steppe, nights camping in a storm-battered tent, and another stretch riding a half-wild horse
through the mountains that border Siberia. And then there were the endless meals of gristly mutton
eaten around smoky stoves inside herders' gers.

Ulaanbaatar has a variety of cosmopolitan cuisines uniquely fitting to a culture created by
conquering—and uniting—some many disparate corners of the world. Highlights include the Indian
restaurant Hazara and Urlag, a North Korean with a cold dish of glassy buckwheat noodles set afire
with kimchi sauce and roast duck that was delicious.
Also worth seeing is the wondrous array of animals, and how precious the dwindling wildlife that is
left. Although almost 15 percent of the land in protected areas, the mining boom continues to rip
away grassland from the gazelles that graze in the east, dig into the desert home of rare wile
camels and Gobi bears, and eat away at the habitat of reindeer, wolves and the last snow leopards
in the northern mountains. If Mongolia guards its natural treasures as well as it does its cultural
ones it will only grow more popular. And Ulaanbaatar will become an increasingly welcome reprieve
from the rigors of the wilds.
Source: New York Times
BREAKTHROUGH FOR THE SURVIVAL OF PRZEWALSKI’S HORSE
Mongolia's wild horse saw the species' first successful artificial insemination at the Smithsonian
Conservation Biology Institute (SCBI).
A Przewalski's horse female foal was born after a 340-day pregnancy. The success was seen as a
huge breakthrough for the survival of the species.
―It seems reasonable to assume that reproduction for the Przewalski‘s horse would be similar to
domestic horses, but it simply isn't the case,‖ said SCBI reproductive physiologist Budhan
Pukazhenthi. ―After all these years of persevering, I can honestly say I was elated to receive the
call informing me that the foal had been born,‖ she said, later adding, ―This is a major
accomplishment, and we hope our success will stimulate more interest in studying and conserving
endangered equids around the world.
It took seven years to perfect the technique that led to the birth, according to the Smithsonian. It
said artificial insemination is useful as it does not require both animals to be together for a
successful mating. The transport of animals to different locations can be difficult, dangerous, costly
and potentially stressful to the individual. By contrast, the collection of semen can be safely
accomplished under the supervision of veterinary staff and significantly improves the efficiency of
managing small populations of endangered species.
Source: Tree Hugger
MINERS RETURN TO HEDGING AS GOLD PRICES LOSE SHINE
Gold miners have started to protect themselves against more falls in the price of the precious
metal, in a tentative return to the long-shunned practice of hedging. Gold is a major mineral from
Mongolia with the Boroo gold mine being the country's most prominent source.
Hedging by selling future production at fixed prices fell out of favor in the industry as gold rallied
over the past decade. Although major gold miners have yet to return to the practice, several
precious metals bankers said that small and medium-sized gold companies had rushed to hedge in
recent months. The move comes as gold prices tumbled nearly 30 percent since the start of the
year to a low of USD 1,180 a troy ounce in June.
―We're seeing more genuine hedging in gold than we have for some time,‖ said Martyn Whitehead,
Barclays' head of metals and mining sales. Société Générale, one of the main financiers of the
mining industry, said in a recent sales note to clients that miners were ―queuing [up] to bullion
banks to discuss short-term hedging arrangements.
The shift in philosophy towards hedging reflects mining executives' fear that the past months'
rebound in gold prices may be short lived, as well as the recognition that more falls in prices could
push them into losses. Bankers said the hedging had accelerated as prices rallied from their June
low to USD 1,313 last week.
The mining industry has a checkered history of hedging. The practice was most prevalent in the late
1990s, just before gold began a decade-long bull market, while by the time gold prices peaked in
2011, miners had cut their hedging to almost nothing. Several bankers estimated that 50 tons or
more of gold had been hedged so far this year, adding that a number of miners were discussing

more hedging deals. The majority of the recent hedging deals have come from miners in Africa and
Asia, bankers said. Unlike the bumper deals of the 1990s when miners sold forward several years of
production, now producers are largely hedging their production for just the next year or so.
MURKY DATA MUDDY DEBATE ON CHINESE CONSUMERS' STRENGTH
As China's growth slows towards a 20-year low, economists are calling for consumers to shoulder
more of the burden of supporting the world's number-two economy, which also drives the Mongolian
economy as it devours Mongolian resources. But the country's leaders are increasingly saying
Chinese consumers aren't shirking their responsibility—they're just under-counted.
Low household consumption—in 2012 it counted for 35.7 percent of China's gross domestic product
(GDP), compared with close to 70 percent in the United States—is widely seen as a key barrier to
sustainable growth. With consumption's share of GDP falling, according to the official data, China is
driven to rely on investment, often in redundant infrastructure or ill-conceived factory projects, as
a way to support the economy.
The view of Yi Gang, the People's Bank of China's deputy governor, is that the real situation isn't
nearly so bleak. He cites numbers from the University of Pennsylvania showing that, measured in
internationally comparable prices, China's consumption is higher and more stable than the official
data suggests; that is because compared with other countries, China's consumer goods are cheap.
The University of Pennsylvania numbers show the share of household consumption in China's GDP
was 43.8 percent in 2010, the latest year encompassed by their study.
If Yi is right, a resilient China should continue to be a global growth driver, but if wrong a
complacent government holding back from needed reforms risks a sharper slowdown with global
repercussions. The root of the disagreement between China's statistics bureau and its critics: an
official approach to adding up income and consumption that many independent economists regard
as flawed. The government's National Bureau of Statistics calculates consumption through a survey
covering thousands of households across the country. But critics say a distorted sample and difficult
measuring certain types of spending skew the results downward. Difficulty measuring spending by
China's rich is one reason. The survey also fails to capture some household consumption paid for by
firms. For China's massive state sector—which continues to employ millions of workers—firms often
pick up employees' tabs on myriad goods and services.
Source: Wall Street Journal
CHINA, WORLD'S BIGGEST MATERIAL CONSUMER: UN REPORT
China has surged ahead of the rest of the world in material consumption, which has created intense
pressure on the country's environment, according to the U.N. Environment Program, which may lead
to a need to rely on imported resources from nations such as Mongolia.
The UNEP released the report ―Resource Efficiency: Economics and Outlook for China‖ on Friday
during a two-day international forum held in the Ordos in north China's Inner Mongolia Autonomous
Region. According to the report, China has become the world's largest consumer of primary
materials, including minerals, metal ore, fossil fuels and biomass, with domestic material
consumption levels four times that of the United States. From 1970 to 2008, China's per capital
consumption of materials grew from one-third to over one-and-a-half times global average levels.
The report said massive investment in urban infrastructure and manufacturing have caused the
domestic per capital consumption of natural resources to increase at almost twice the rate of the
rest of the Asia-Pacific region. Urbanization and infrastructure have driven the consumption of
minerals for use in construction and metal ore, which increased fossil fuel consumption has
contributed to China's rising carbon dioxide emissions, the report said.
The report said China, as well as other emerging economies, need to make significant investment in
more resource-efficient infrastructure. Although the country is facing serious challenges, it also
remains among the most successful in the world in improving resource efficiency, the report noted.
China
was one of the first countries to embrace the circular economy approach as a new paradigm for

economic and industrial development. In 2009, the circular economy promotion law was
promulgated and put into force in order to improve resource efficiency, protect the environment
and achieve sustainable development. According to another UNEP-backed study released earlier this
year, China invested USD 67 billion in the renewable energy market in 2012, up 22 percent from the
year before, which consolidated its position as the world's dominant renewable energy market
player.
Source: Xinhua
CHINA BANS MILK POWDER FROM NEW ZEALAND OVER BOTULISM FEARS
China has banned imports of milk powder from New Zealand and Australia, New Zealand's trade
minister said on Sunday, after bacteria that can cause botulism was found in some dairy products
and raised safety concerns that threatened a USD 9.4 billion annual dairy volume. Mongolia uses
powder milk from New Zealand for 90 percent of its dairy products, according to the newspaper
Unuudur.
The dairy giant Fonterra, which is based in New Zealand, identified eight companies to which it had
sold contaminated whey protein concentrate that was exported to China, Malaysia, Vietnam,
Thailand and Saudi Arabia, and used in products including infant milk powder. Nearly 90 percent of
China's USD 1.9 billion in milk-powder imports last year originated in New Zealand, and economists
said that a prolonged ban could produce a shortage of dairy products in China, including infant
formula with foreign brands. Australia was caught up in the ban after some of the contaminated
whey protein concentrates were exported there before being sent to China and elsewhere.
―The authorities in China—in my opinion, absolutely appropriately—have stopped all imports of New
Zealand milk powders from Australia and New Zealand,‖ the New Zealand trade minister, Tim
Groser, said.
While there was no official word of a ban form the authorities in China, its consumer watchdog
named four companies that had imported potentially contaminated products from Fonterra, the
world's fourth-largest dairy company. Fonterra, a supplier of wholesale dairy ingredients to
multinational food and beverage companies said that Coca-Cola‘s Chinese subsidiary and animal
feed companies in New Zealand and Australia had also been affected.
The bacteria behind the latest scare, Clostridium botulinum, is often found in soil. The Fonterra
case was caused by a dirty pipe at a processing plant. The bacteria can cause botulism, a
potentially fatal disease that affects the muscles and can cause respiratory problems. Infant
botulism can attack the intestinal system.
Source: New York Times
POLITICS
MONGOLIA TO SIMPLIFY FDI FOR STATE-BACKED FIRMS
The Mongolian government expects to pass a new foreign direct investment law this year to
streamline the approval of investments by foreign state-backed firms, according to a senior official.
Saikhanbileg Chimed, a member of parliament and the chief of the cabinet secretariat, said, under
proposed legislation, investment by foreign state-backed firms in Mongolia's strategic industries
would be vetted by the Ministry of Economic Development.
―The process is quite time consuming now, [and] the new law will simplify and quicken the
process,‖ he said, adding that the industries covered included banking, mining and
telecommunications.
Current law stipulates that foreign state-backed firms buying more than a 49 percent stake in an
asset in the industries need approval from Parliament, he said, which will resume from recess in
October. The proposal to cut red tape comes as the country grapples with slower economic growth,
as commodity prices, especially those of its key exports—coal and copper—fall. The landlocked
nation tightened its vetting of foreign investment in May last year, just before a parliamentary
election that saw a change in government. The move was seen as a populist sop to gain votes amid

a heightening of resource nationalism.
In April this year, Ulaanbaatar revised the law to exempt privately owned foreign firms from the
new restrictions.
Source: South China Morning Post
MONGOLIA, LUXEMBOURG PLEDGE TO OPEN DOUBLE TAX NEGOTIATIONS
Mongolia and Luxembourg's foreign ministers agreed to embark necessitation for new treaties for
double taxation, announced Luxembourg's Foreign Affairs Ministry on 30 July.
Luxembourg Foreign Minister Jean Asselborn met with Mongolian Deputy Prime Minister Terbisdagva
Dendev and Foreign Affairs Minister Luvsanvandan Bold for a bilateral meeting during an official
visit to Mongolia. During the meeting, Asselborn called for a new agreement on double tax to
facilitate better access to investment. The Mongolian ministers agreed to open negotiations as soon
as Parliament adopted a new legal framework for foreign investment.
Source: News.mn
MINING FIRM LOSES LICENSES FOR STRATEGIC DEPOSIT
Authorities have terminated operations at a phosphorite deposit at Burenkhaan, Khuvsgul due to
illegally obtained permissions.
The deposit is included in Mongolia's list of deposits of strategic importance. Talst Margad LLC had
received two mining licenses and six exploration licenses from the Mineral Resources Authority
while D. Batkhuyag was leading the agency.
The licenses termination came from a ruling by the Supreme Court after hearing the case related to
the licenses.
Source: Udriin Sonin
GEC REPORTS ON 2013 ELECTION CAMPAIGN SPENDING
The General Election Committee released a financial report on the 2013 presidential election
revealing details on campaign spending.
The Democratic Party (DP) spent MNT 6.632 billion while the Mongolian People's Party (MPP) spent
MNT 5.086 and the Mongolian People's Revolutionary Party (MPRP) spent MNT 815 million on election
activities, according to the report. Presidential candidates were eligible to receive donations from
citizens and legal bodies. The DP received 6.532 billion compared with MNT 3.23 billion for the MPP
and MNT 795 million for the MPRP. The report also showed that the DP was able to cover all of its
costs through donations while the MPP and MPRP had to spend MNT 1.838 million and MNT 20
million, respectively, from their party funds.
Source: News.mn
REFORMIST SECT IN MPP APPEALS TO PARTY MEMBERS
The Mongolian People's Party ―reform‖ movement held its meeting on 31 July to call for reform
within the party. Reformists appealed to party members that it was time to admit their defeats and
unite under a single purpose of reforming the party.
―Though we haven't been selected by a majority in various elections, party members should focus
on what principles to follow in order to properly advance instead of worrying about the weakening
hopes and trusts of MPP supporters,‖ said a party member [Source does not name the speaker]. He
added, ―It is easy to fix a building with a proper foundation. Likewise, for a bright future of our
home country, members of the MPP should start making reforms.‖
Source: UB Post
PRESIDENT'S MOTHER PASSES AT 92
President Tsakhia Elbegdorj's mother died off illness on 2 August at 11:22 a.m. at 92 years old.
The obituary issued by the President's Office reads: ―Borjoo Khoninkhuu raised eight children with
husband Mongol Tsakhia and was surrounded by 150 grandchildren and great grandchildren. May her
generous fortune stay with her future generations, and may her soul rest in peace.‖

Source: News.mn
2013 KHAN QUEST LAUNCHES IN MONGOLIA
The 2013 Khan Quest annual international military exercises for peace-keeping operations was held
from 3 to 4 August near Ulaanbaatar.
Participating in the exercises for the first time was Tajikistan. ―Almost every country with peace-
keeping units will be participating in the Mongolia exercise,‖ said Lieutenant Colonel Tokhir
Khairulloyev of the Tajik Army. [Mongolia] has a strong reputation and experience in peace-keeping
missions, and to this day its troops are participating in such missions. We're lucky to be able to
learn from the experience of countries like Mongolia and Nepal.‖
Individual participants were Mongolian military professionals working in engineering, medicine, and
construction, in addition to U.S. Armed forces and Rifle Corps and servicemen from Australia,
Canada, France, Germany, the United Kingdom, Japan, India, Indonesia, Nepal, South Korea,
Tajikistan, and Vietnam.
Khan Quest is sponsored by the U.S. Armed Forces and has been hosted annually by the Mongolian
Armed Forces since 2003. It became a multi-national exercise in 2005.
Source: News.mn
CARITAS TAIWAN TO DONATE TO CATHOLIC SCHOOL IN MONGOLIA
A Taiwan charity group is expected to donate 500 sets of second-hand school desks and 30 second-
hand dining-room table sets to a Catholic school in Mongolia, the Ministry of Foreign Affairs
announced on 30 July.
The ministry approved the budget for two 40-foot storage containers to ship the donations. Caritas
Taiwan had scheduled to ship the donations by the end of July, he added.
Since Caritas Taiwan was established in 1969, it has dedicated itself to improving Taiwanese
communities and helping provide health care services to underprivileged families, it said.
Collaborating with the Asia Partnership for Human Development, Caritas Taiwan has been helping in
the development of developing countries in Asia.
Source: China Post
MONGOLIAN VIRTUOSO SPREADS SOME MAGIC IN AUSTRALIA'S DESERT
A Mongolian traditional throat singer has arrived in Australia to share his national music traditions.
Based in Sydney, Bukhu Gangburged is a Master's student of the Music and Dance Conservatory of
Ulaanbaatar, and he'll be in Alice Springs in Australia for a fortnight. Drawn by an interest in
Indigenous culture, Bukhu performs traditional Mongolian folk music, incorporating throat singing
with one of the most important instruments of the Mongol people, the moriin khuur, or horse-head
fiddle. Throat singing, which has its origins in Mongolian shamanism, is said to have special healing
powers, and has even been used on camels that have rejected their babies after difficult births.
―When the pet camel rejects their babies, we play in front of the camel and the camel will start
crying,‖ said Bukhu. ―[She'll say] 'oh yea, this is my baby camel,' and then baby camel survives!‖
Bukhu began his Northern Territory, Australia visit with a trip to some schools at Yulura and also
managed to squeeze in a quick performance at a camel farm near Uluru. Bukhu has performed all
over the world, but this is his first time in the Australian desert. Meg Benson, a Sydney-based music
promoter traveling with Bukhu said there are many parallels between Bukhu's Mongolian culture and
that of Aboriginal Australia.
―Bukhu comes from a culture... where they maintain the stories of their culture through the music
and the stories are told through music,‖ she said.
Source: ABC
SCHOLARS DISCUSS CENTRAL ASIAN EPICS IN MONGOLIA
More than 100 scholars from around the world gathered in Mongolia on Monday for an international
symposium on the central Asian epics. During the three-day event, the experts from Mongolia,
China, Russia, the United States, South Korea, Kazakhstan, Kyrgyzstan, and U.N. Education, Science

and Cultural Organization (UNESCO) will shared their research achievements on mythological and
heroic epics. Mongolian Minister of Culture Tsedevdamba Oyungerel said the symposium was aimed
at preserving the oral traditions.
The Mongolian epic, or Mongol Tuuli, was inscribed on UNESCO's Intangible Cultural Heritage List in
2009. Chao Gejin from the Chinese Academy of Social Sciences briefed his peers on three major
heroic epics in China's ethnic minority communities—Manas, Janggar, and Geser.
Source: China.org
MONGOLIA TRAVELS THE DISTANCE TO ITS MAGIC MOMENT
There are few places on earth as beguiling to visitors as Mongolia. Virtually everything about the
place represents a seeming contradiction and a rare potential. Surrounded by undemocratic Russia
and Communist China and with virtually no legacy of pluralism, Mongolia has nevertheless built an
emerging democracy.
The nation recognizes that responsible exploitation and management of these reserves will make it
a wealthy country able to spread prosperity to its people. All of this is attractive or intriguing, and
indeed Mongolia has served as an unlikely magnet for modern American diplomats, including former
U.S. Secretary of State James Baker, former Secretary of State Hillary Clinton, and Vice President
Joe Biden. Much of this intense diplomatic activity was predicated on supporting Mongolia's ―third
neighbor‖ policy, a determination on the part of Ulaanbaatar to diversify its foreign policy
engagements beyond the occasionally constricting and oppressive interactions with its near
neighbors, Russia and China. Still, after a few false starts and fitful progress, there is a renewed
energy in Washington to take the relationship to the next level.
There is renewed energy for negotiations on a Transparency Agreement in Washington to take the
relationship to the next level. A diverse collection of companies in the mining and extraction
industries have been negotiated in good faith for years with little apparent progress on equitable
and environmentally responsible arrangements that would bring remarkable growth to Mongolia. In
many ways, a stronger and more durable U.S.-Mongolia relationship will be underwritten by the
success and investment of American companies.
Early signals coming out of Ulaanbaatar that re-elected President Tsakhia Elbegdorj and his team of
minsters and senior government officials want to finally move toward stronger ties with the United
States is a welcome turn, but in truth we have much of this before. The United States has made
clear its desire to partner with Mongolia, and underscore that it wants to work with China and
Russia to help unlock the country's potential, so there is no reason to see the proud nation as a
point of strategic competition. Washington stands ready to take the next steps; is Mongolia finally
ready to respond?
The author Kurt Campbell is chairman and chief executive of The Asia Group and on the board of
the Center for a New American Security. From 2009 to 2013 he served as the assistant U.S.
secretary of state for east Asian and Pacific affairs.
NEW MONGOLIAN LAWS
The following law, amendments, addendum and annulment of laws and ratification were published
in the latest weekly Government bulletin. Unless otherwise decided by Parliament, they will take
effect ten (10) days after publication.
Date Law
01.08.2013 Law on Police /revised version/
Amendments to Law on Prevention from crime
Amendments to Law on Fire weapon
Amendments to Law on State special protection
Amendments to Law on Administrative responsibility

Amendments to Law on Fight against alcoholism
Addendum to Law on Court decision execution
Amendments to Law on Forced labour by administrative rule
Amendments to Law on Treasure fund
Amendments to Law on Govenrment Special Fund
Amendments to Law on Driver insurance
Addendum to Law on Children rights protection
Annulment of Law on Police organization of Mongolia
Annulment of Law to inhibit homeless child
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
DISCOVER MONGOLIA, 5-7 SEPTEMBER, ULAANBAATAR
The 11th annual Discover Mongolia international investors' forum will be held from 5 to 7 September
in Ulaanbaatar, Mongolia.
The forum is Mongolia's main venue for the widest international exchange on Mongolia's minerals
developments. Throughout its 10 years of history, the forum has become one of the hallmark events
in Mongolia's minerals exploration and development sector. The primary mission of the forum is to
support the development of the Mongolian mining sector by connecting people, providing
information, building networks, and realizes the importance of mining exploration sector and its
legal environment. It also acts as a bridge between the Mongolian government and private sector
investors through its "Government Hour" sessions.
BCM is a supporting organization again for this year‘s forum. For more information, log on
discovermongoliaforum.com.
___________________________________________
30TH ABA GENERAL MEETING AND CONFERENCE, 12-13 SEPTEMBER, ULAANBAATAR
The 30th Asian Bankers Association (ABA) General Meeting and Conference will be held from 12 to
13 September in Ulaanbaatar at the Blue Sky Hotel and Tower.
This year's conference will focus on the theme ―Asia: Growth Engine of the Global Economy.‖ The
two-day event aims to provide another platform for ABA members and invited experts to discuss
how major developments in the global and regional markets will impact on the Asian banking sector
and to exchange views on measures that the Asian banking sector can undertake to help sustain
growth and enable the Asia-Pacific region to play a catalytic role in the global economic growth and
recovery.
To register, complete the form and send it back to the Professional Conference Organizer c/o fax
+976 11 323581 or email abamongolia@mba.n no later than 20 August 2013. For more information
email nomindari@mba.mn or call +976 9917 7149.
___________________________________________
MINING MONGOLIA AND POWER AND RENEWABLE ENERGY MONGOLIA, 19-21 SEPTEMBER, UB
Mining Mongolia and Power and Renewable Energy Mongolia will be held from 19 to 21 September at
the Buyant-Ukhaa Sports Complex in Ulaanbaatar.
120 companies from 18 countries including pavilions from Australia, Canada, Korea and Germany
will display a wide range of technology, supplies and services for the mining and electric power
generation and transmission sector; on a scale never before seen in Mongolia. Inside and outside
displays, providing a first opportunity for buyers to see technology and learn about new mining and
electric engineering service from industry experts.

BCM is a supporting organization. Register at miningandconstructionmongolia.com or for priority
booking email mongolia@chinaallworld.com.
___________________________________________
MONGOLIAN MINING SUMMIT 2013, 29-31 OCTOBER, PERTH, AUSTRALIA
Mining IQ's Mongolian Mining Summit will be held at from 30 to 31 October at Crown Perth, Western
Australia, Australia.
The Mongolian Mining Summit is the perfect forum to bring together senior level executives from
Mongolia and Australia to further business relationships in the resources sector. Send your senior
executives to attend this summit to meet with CEOs, executive directors, MDs, VP, and GMs, and
heads of investment from Australian organizations interested in entering the Mongolian mining
industry.
Speakers include:
- Graeme Hancock, President and chief representative of Anglo American in Mongolia,
- Dr. Battsengel Gotov, Executive director and CEO of Mongolian Mining Corporation.
- Jim Dwyer, Executive director of the Business Council of Mongolia.
BCM is a supporting organization of this event. Register now and pay only AUD $999 for Mining and
Government Companies—register by 23 August 2013.
To register call +61 2 9229 1000 or email registration@iqpc.com.au.
___________________________________________
MONGOLIA INVESTMENT SUMMIT HONG KONG 2013, 18-20 NOVEMBER, HONG KONG
Bringing the best of Mongolia‘s investment opportunities to Asia‘s leading investment hub.
Featuring a line-up of Government representatives, business leaders and international investors, the
4th Annual Mongolia Investment Summit provides investors and companies seeking to do business in
Mongolia with a thorough update of Mongolia‘s investment and business climate and showcases its
actual investment opportunities. Key sectors covered include Mining and Mining Services,
Infrastructure, Energy, Financial Services, Retail, Real Estate, Construction and Agribusiness.
Mongolian companies and Mongolia-focused funds seeking to meet with investors and potential
business partners, should make attendance at Mongolia Investment Summit Hong Kong 2013 their
number one priority. Click here to download the latest brochure.
BCM is a supporting partner organization. BCM members will enjoy 15% discount; please quote
Priority Code 695BCM15D during registration.
BCM WEBSITES
MONGOLIAN WEBSITE ‘PRESENTATIONS’ AND ‘NEWS’ SECTIONS
The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.
As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the
government website Open-Government.mn are regularly updated.
S. Oyun, Minister of Environment and Green Development, presentation at BCM monthly meeting on
May 27 added to Mongolian website, bcmongolia.org/mn/илтгэлүүд.
- Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн
бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013
The following presentations were added from "Foreign Investment in Mongolia: Challenges, Risks
and Solutions" conference (in Mongolian) on April 19 at the Kempinski Hotel organized by the
Business Council of Mongolia (BCM) and UB Risk Management Consulting:
• Гадаадын хөрөнгө оруулалтын өнөөгийн байдал, хэтийн төлөв, Төв банкны ерөнхий эдийн
засагч С.Болд, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ,
ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4 дүгээр сарын

19
• Шууд хөрөнгө оруулалтын өнөөгийн байдал, тулгамдсан асуудал, шийдвэрлэх арга зам,
Монголын Бизнесийн зөвлөлийн дэд дарга И.Сэр-Од, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ
ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага
хурал, 2013 оны 4 дүгээр сарын 19
• Үнэт цаас, хувьцааны зах зээлийн хөрөнгө оруулалт: эрсдэл, сорилт, цаашдын хандлага,
Монгол банкны Ерөнхийлөгчийн зөвлөх, санхүүгийн тогтвортой байдлын зөвлөлийн ажлын
албаны дарга Д. Ган-Очир, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ,
СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4
дүгээр сарын 19
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', ‘MONGOLIAN BUSINESS NEWS’,
‘PHOTO GALLERY’
On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available:
• Bilguun Ankhbayar, Chief Executive Officer, Mongolian Investment Banking Group LLC,
―MIBG Review‖, at the MSE-BCM Securities Law Overview Session, July 4, 2013
• Robert Rooks, Director, PwC Hong Kong, ―A brief Overview of Custody Services‖, at the MSE-BCM
Securities Law Overview Session, July 4, 2013
• Anthony Woolley, Senior Associate, Hogan Lovells, ―The Revised Securities Market Law‖, at the
MSE-BCM Securities Law Overview Session, July 4, 2013
• B. Saruul, Director General, Securities Department, Financial Regulatory Commission of Mongolia,
―Securities Markets Law – Path to Market Reforms‖, at the MSE-BCM Securities Law Overview
Session, July 4, 2013
• Nick Cousyn, Chief Operating Officer, BDSec JSC, ―Gobi‘s Resort‖ at the BCM Monthly meeting
April 22, 2013
• Brian White, Editor, The Mongolist – ―Analyzing Mongolian Politics from the "Middle Layer" at the
BCM Monthly meeting Apr 22, 2013
• Ch. Otgochuluu, Head of Strategic Policy and Planning Department, Ministry of Mining, ―Brief
introduction on mining policy‖ at the BCM monthly meeting Apr 22, 2013
• S. Bold, Chief Economist, Central Bank, ―The current flow of investment into Mongolia‖, at the
"Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at
the Kempinski Hotel.
• S. Javkhlanbaatar, Foreign Investment Regulations and Registration Department Head, Ministry of
Economic Development of Mongolia, ―About regulation on FDI‖, at the "Foreign Investment in
Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.
• B. Amarsanaa, Academic Secretary of National Legal Institute, ―Legal issues of regulation of
foreign investment‖, at the "Foreign Investment in Mongolia: Challenges, Risks and Solutions"
conference on April 19, 2013 at the Kempinski Hotel.
• D. Gan-Ochir, Head of Financial Stability Council, Advisor to President of Central Bank,
―Investment in stocks and equities in Mongolia: risks, challenges and trends‖, at the "Foreign
Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the
Kempinski Hotel.
• D. Achit-Erdene, CEO, MICC, ―On current state of equities foreign investment‖, at the "Foreign
Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the
Kempinski Hotel.
• Ruth Pulaski, Director Marketing & Development, American University of Mongolia – ―American
University of Mongolia: Integrating a Liberal Education Approach to Learning‖ at the BCM monthly
meeting, March 25, 2013
• B. Bayar, Managing Director, ELC LLC – ―Update on Legal Developments Regarding Foreign
Investment‖ at the BCM monthly meeting, March 25, 2013
• Tony Burchill, Australian Consul-General & Trade Commissioner, Austrade – ―The Business of Being
a Third Neighbor‖ at the BCM monthly meeting, March 25, 2013

Other presentations:
• Dr. Brian Fisher, Managing Director, BAEconomics, "Economic Impact of draft Minerals Law" at the
Kempinski Hotel, March 18, 2013, Ulaanbaatar
• Dr. Ch. Khashchuluun, CEO of UBRM Consulting, ―Mongolia and Mining, The policy evolution:
What's the next?‖ at the Kempinski Hotel, March 18, 2013, Ulaanbaatar
• Martin Pow, Partner, Enterprise Risk Services and Learning Leader, Deloitte Onch LLC, ―Black
Swans: Fact or Fiction,‖ A different risk management philosophy at the BCM Risk Management
Working Group meeting, March 14, 2013
Please note the presentations from each of the BCM monthly meetings.
Securities Markets Law (revised and unofficial translation) by Hogan Lovells /Ulaanbaatar/ LLP, May
24, 2013.
The ―Mongolia Reports‖ section includes the following:
- ―Mongolia Macro Flash‖, Adrienne Lui, Asia Pacific Economics Research, Citigroup Global Markets
Asia Ltd;
-―Selected Macroeconomic Indicators for Mongolia, as of June 2013‖ by International Monetary
Fund;
- ―Polit Barometer April, 2013‖ by Sant Maral Foundation;
- ―Market Update‖ by Mandal General Insurance LLC
- ―Annual Report 2012‖ by International Monetary Fund
- ―Regional Economic Outlook: Asia and Pacific‖, April 2013 by International Monetary Fund;
- ―Highlights of 2012, Mongolia‖ by European Bank for Reconstruction and Development (EBRD);
- ―Official statement of Oyu Tolgoi LLC in relation to information, data and facts related to Oyu
Tolgoi -―2013 discussed during open session of the State Great Khural‖, dated 1 February, 2013‖;
- ―Mongolia Investment Climate Statement‖, by the Economic and Commercial Section of the U.S.
Embassy;
- ―Mongolia Foreign Labor Force Ratio for 2013‖ by Hogan Lovells International LLP;
- ―How Mongolia will perform in 2013?‖ by Mandal Asset Management;
- ―Mongolia Business Owner and CFO Survey result‖ by BDSec JSC;
- ―The fiscal regime for mining - a way forward‖ by IMF Fiscal Affairs Department;
- ―Taxes for Expatriates in Mongolia‖ by PricewaterhouseCoopers.
BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to
Parliament and Government is available for download.
BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business
News‖ before they are all put together each week for Friday's weekly NewsWire.
The ―Photo Gallery‖ contains photos from the 5th Anniversary BCM Gala dinner on November 5.
BCM Football Cup 2013 pictures are posted to the website - http://bcmongolia.org/en/photos/350-
en/album?albumid=200
The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home
page for a consolidated account of the week‘s events.
___________________________________________
SOCIAL NETWORK WITH BCM
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in
the NewsWire with the community.

Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better
business environment in Mongolia today.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
http://twitter.com/#!/bcMongolia.
We have now 1,301 fans on our Facebook fans page, 1,320 connections on LinkedIn network, and
729 followers on Twitter.
Of course for news information, interviews, event photos, and announcements regarding our
organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.
ECONOMIC INDICATORS

INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
June 30, 2013 *8.8% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 7.6% y-o-y, Ulaanbaatar city, June 30, 2013
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50%[source: Mongol Bank]

CURRENCY RATES – AUGUST 8, 2013
Currency Name Currency Rate
US dollar USD 1,563.48
Euro EUR 2,076.22
Japanese yen JPY 16.14
British pound GBP 2,392.44
Hong Kong dollar HKD 201.57
Chinese Yuan CNY 255.49
Russian Ruble RUB 47.37
South Korean won KRW 1.40
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.

09.08.2013, NEWSWIRE, Issue 286

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09.08.2013, NEWSWIRE, Issue 286