The document summarizes news from the Business Council of Mongolia newsletter. It discusses ongoing negotiations over an agreement for the Oyu Tolgoi mining project. Parliament agreed to discuss the revised draft agreement but will not vote on it until after Naadam celebrations next week. There is debate around several issues in the draft including Mongolia's ownership stake, the initial agreement period, and selling of gold within Mongolia. Heavy investment in the project is not expected to begin before next spring, even if the agreement is signed this summer, due to the time needed for financing and construction plans.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 77, July 10, 2008
NEWS HIGHLIGHTS:
Business:
 Parliament agrees to discuss OT agreement, but it can only be next week;
 Long OT talks have taught Mongolia much;
 Heavy investment will not begin before next spring;
 MP against parceling out Tavan Tolgoi;
 Supreme Court rules in favor of Gulfside in Erdenetsogt case;
 Khan Bank ready to resume lending in a big way, says CEO Morrow;
 Petro Matad unit wins 2 new PSCs;
 Vitafit introduces new technology;
 Companies donating MNT500 million to set up park;
 German support for mining technology transfer discussed;
 China arrests 4 Rio employees for stealing state secrets, Xinhua says;
 Rio completes USD15.2-billion share sale to cut debt;
 Rio obtains more cash by selling U.S. food packaging unit;
 Ivanhoe hires former Canadian PM Chretien as 'international advisor';
 The slowing of the junior boom;
 China defends M&A policy;
 World Bank presses for new mining laws in Zimbabwe.
Economy:
 Mongolia raises USD75 million from rare debt placement;
 Mongolia‟s own interests must come first;
 NAMBC chief calls on Elbegdorj, urges quick OT agreement;
 Accountability new watchword at Minerals Authority;
 Reform committee chief stresses institutional development;
 MPs want tax relief for SMEs importing machinery;
 Excise duty on petroleum annuled;
 Bayar reviews agriculture program, told harvest will be good;
 Group formed to work on setting up a Development Bank;
 Water activists on hunger strike, demanding discussion of bill;
 Fewer tourists for Naadam;
 Why cannot Mongolia give tourists a better deal?
 Bank analysts see USD rising for some months more;
 Checks reveal defects in windows in buildings under construction.
Politics:
 Parliament has too much authority, Bayar feels;
 Parliament to sit next week, too;
 People‟s trust will give MPRP a resounding victory in 2012, says party leader;
 More soldiers for UN peace keeping duties;
 S. Korean Defense Minister to discuss N. Korea with Mongolia;
 State to build house for ex-president Enkhbayar;
 Amnesty will cover bribery convictions, too;
 Parliament discusses compensation for July 1 losses;

2.  MPs‟ group asks people to speak out on rights abuses after July 1;
 Former USAID Mission Director named new U.S. ambassador;
 No UB Railway train to Beijing and Erlian on July 11,12;
 Ulaanbaatar has 140,000 motor vehicles;
 Mongolia may lose steppes, demand for cashmere partly blamed;
 University of Pittsburgh students in Mongolia Field Studies program.
*Click on titles above to link to articles.
HAPPY NADAAM holiday to all BCM members. No BCM NewsWire issue next week.
BUSINESS
PARLIAMENT AGREES TO DISCUSS OT AGREEMENT, BUT IT CAN ONLY BE NEXT WEEK
After a discussion spanning almost the whole of Thursday, Parliament agreed by 39 votes to 13 to
accept for discussion the revised draft agreement on Oyu Tolgoi. The draft now goes back to the
Standing Committee on the Economy which will review the suggestions made at today‟s session and
then return the draft to Parliament. All this will be after Naadam, and most likely on July 14.
The members who voted against discussing the draft in its present form were from both DP and
MPRP. They and others sought information and clarification from the working group which had
prepared the revised draft. Their reservations extended to several areas. Some wanted a provision
to be included that would allow the Mongolian side to cancel the agreement if the project does not
start in two years, others wanted a similar right to cancellation if the investor side transferred its
shares without proper notification. There was demand for regular audit by an international firm.
Several MPs pressed for Mongolia to borrow money from other sources to pay for its share of the
investment expenses as 34 % shareholder in the project.
Earlier, the Standing Committee on the Economy had decided after a meeting on Tuesday afternoon
to submit the final version of the draft to Parliament. Both the MPRP and the DP groups in
Parliament had earlier announced their acceptance of the provision that the Mongolian Government
would own a 34 percent share in the project. This effectively ended the debate on whether
Mongolia should have stakes in the project or will insist on revenue from taxes and profits only.
Read more…
Any hopes that the draft will be approved before Naadam are now gone. President Elbegdorj had
said on National TV that Parliament should approve the draft before Naadam. However, once
Parliament approves the present document, signing the agreement would only be a matter of time
as all indications are that the suggested changes were discussed with the investors and only those
acceptable to them have been incorporated.
On Tuesday the Standing Committee sought a more reliable estimate of the total reserves of Oyu
Tolgoi but did not get a satisfactory report. The Mining Authority put them at 22 million tons of
copper and 800 tons of gold, but said the copper reserves could turn out to be 20 million tons more.
Some independent experts said Oyu Tolgoi has 38 million tons of copper and 1,000 tons of gold.
Several members of the committee were not happy that the initial agreement would be for 30
years, at the end of which it could be extended. Minerals and Energy Minister D.Zorigt explained
that the investors were firm in rejecting the suggestion that the initial term of the agreement
should be for 15 years, after which the Mongolian share would be raised from 34 percent.
The MPs in the committee wanted to change the provision of the draft that says Ivanhoe Mines
Mongolia Inc. does not have to sell any of the mined gold in Mongolia. They wanted at least a part
to be sold to the Central Bank. The Minister said this could be done only after a processing plant
had been built.
On Wednesday, Ivanhoe issued a statement cautioning that some reports by media and other
sources “include inaccurate or incomplete information on important details” about the status and
provisions of the draft agreement.

3. The draft document is a “comprehensive” agreement that will cover all aspects of the huge
project, including things like infrastructure, power supply and production timelines.
Once Parliamentary approval is received, the partners will need to put financing plans in place for
the mine.
Ivanhoe has said that it expects construction of the mine to take 30 months, once the investment
agreement has received final approval. The company has already begun some preconstruction work,
including sinking of the first vertical shaft. The first stage of construction will involve building an
open pit mine, an ore-processing plant, a power station and the early stage development of an
underground mine. The second stage - completion of the underground mine and expansion of the
processing plant - will be paid for out of operating cash flow remaining after government fees and
taxes.
According to a 2005 study, the Oyu Tolgoi mine could produce more than one-billion pounds of
copper and 330,000 oz of gold a year for at least 35 years. Peak annual production of more than
1.6-billion pounds of copper and 900,000 oz of gold is projected to be reached six years after initial
production begins. Goldman Sachs has estimated that the Oyu Tolgoi project will make a profit of
USD29 million in 2010, of USD105 million in 2011, and of USD89 million in 2012. If a processing plant
is built, the profits will be USD240 million in 2013, USD578 million in 2014, USD2.3 billion in 2018,
and USD3.2 billion in 2019.
Source: Onoodor, Zunii medee, www.miningweekly.com
LONG OT TALKS HAVE TAUGHT MONGOLIA MUCH
The six years of negotiations on the Oyu Tolgoi agreement have taught Mongolia the value of
transparency and the futility of concealment. They have also stressed the importance of asserting
national rights and interests in a nationally united manner. A single voice commands more respect
during a bargain than a fractured chorus. At the same time, they have taught Mongolia to realise
the brutal realities of the world market, where sentiments have no place. It has also gained the
confidence to parley with powerful investors on a footing of equality, giving no quarter, nor
expecting any. Therefore one cannot agree with those who harshly see the past six years as
needless waste of time, nor blame the Mongolian parliament for working too slowly for some. The
investors, too, have been patient, commendably so. All our disappointment of the past years is lit
up by the fact that the two major parties of the country, often at loggerheads, have regularly sat
together to formulate a joint stand on the investment agreement. This consensus to further
national interests has been our biggest achievement. In all our history, have we Mongolians ever
worked together like this?
Read more...
Due credit should be given to the national civil movements, which received a lot of flak but never
gave up their vocal demand that the Oyu Tolgoi agreement must be concluded, and also must be
seen as being concluded, only on terms beneficial to Mongolia. Time and again they drew the
attention of the public to aspects of the agreement that were of doubtful merit. These days
national security is measured by economic security, and only a vigilant citizenry can ensure that
this security is not breached by carelessness, or worse.
Source: www.mongolianminingjournal.com
HEAVY INVESTMENT WILL NOT BEGIN BEFORE NEXT SPRING
An unidentified Government official "who is close to the agreement" has been quoted in the
Mongolia news media as stating that, once Parliament approves the Oyu Tolgoi agreement, the
Government may sign the document before the end of July. However, blogger and Mongolian
businessman Chris de Gruben has cautioned, "Even if, by some miracle, the agreement was to be
signed this summer, it will probably be too late for Ivanhoe and Rio Tinto to start real, large scale
investments and construction at the OT site and building its infrastructure in Ulaanbaatar before
the onset of winter. This means they will have to wait until next spring to start the heavy
investment, thus yet another winter of discontent."
The biggest leverage for the urgency to act on the Oyu Tolgoi agreement is the global financial
recession. Mongolia would have a budget deficit of USD80 million by the end of this year. "In the
meantime, every week brings new multimillion dollar loans to Mongolia while it does not seem the
country has a clear strategy of how it will pay it back," Mr. de Gruben observed. "It is spending
money today that it hopes it will make tomorrow, a flawed strategy which sadly puts Mongolia in a

4. weak negotiating position."
Read more…
Meanwhile, the Oyu Tolgoi impasse has also taken its toll on the Tavan Tolgoi agreement. The
Government has repeatedly said it would deal with the 6.5-million ton coal project only after the
Oyu Tolgoi agreement is resolved. However, members of the Mongolian People's Revolutionary Party
have asked that the two projects be discussed together in Parliament now, to enable Mongolia to
start earning revenue. The country stands to make USD1 billion a year when all five Tavan Tolgoi
coal deposits are mined.
Source: www.mineweb.com
MP AGAINST PARCELING OUT TAVAN TOLGOI
Mr. L.Gantumur, a Democratic Party MP and a member of the Standing Committee on the budget,
feels that the efforts to plug the budget deficit with the help of foreign soft loans and/or aid will
backfire and that it makes more sense to encourage the private sector more actively so that they
can contribute more to the State revenue. He also estimates that whatever the details of the final
agreement with Ivanhoe Mines are, Mongolia stands to get more than 50% of the profits from
operations there.
He also feels the big global mining companies will not be too enthusiastic about any move to divide
Tavan Tolgoi into five different parts, especially if a leading Chinese company gets the license for
one of them, as it can then use transportation facilities in China to its own advantage. This
becomes important as the main market for the Tavan Tolgoi coal has to be China, and whatever is
exported elsewhere would also most likely have to be transported through there. Thus access to
Chinese transportation facilities becomes very important. Things will become easier if we could get
investors to set up processing units also, so that whatever they mine, coal or copper, can be turned
into metallurgical products that would give Mongolia more varied export options.
Source: www.olloo.mn
SUPREME COURT RULES IN FAVOR OF GULFSIDE IN ERDENETSOGT CASE
The Supreme Court of Mongolia has ruled in favor of Gulfside Minerals Ltd. in the suit against the
vendors of the Erdenetsogt property. Gulfside filed a complaint in the Bayangol District Court in
late October 2008 against Russian-Mongolian JV Monrospromugoli LLC for non-compliance with the
terms of a 2007 Agreement of Cooperation relating to the Erdenetsogt mineral exploration license
located in southern Mongolia. The court ruled in February, 2009 in favor of Gulfside and awarded it
a 5% interest in ECM LLC, a Mongolian company that now holds the Erdenetsogt mineral exploration
license 5597X.
After a higher court had dismissed this decision on an appeal by Monrospromugoli, Gulfside took the
case to the Supreme Court which has now ruled that Gulfside is the legal owner of 5% shares of ECM
LLC. Gulfside has instructed its lawyers to take legal steps to transfer the 5% interest in ECM LLC to
Gulfside.
Source: www.gulfsideminerals.com
KHAN BANK READY TO RESUME LENDING IN A BIG WAY, SAYS CEO MORROW
Mr. Peter Morrow, Chief Executive Officer of Khan Bank, sees the economic situation is Mongolia as
“starting to stabilize” and thinks it is a good time for banks to start lending again. “If an economy is
going to grow,” he told The Mongol Messenger in an interview, “it has to have credit for household
needs and business growth,” and Khan Bank, which has “had deposit inflows and finds (itself) with
excess liquidity”, is ready to lend, offering newer and better products, restructuring loans to help
borrowers in temporary distress, and lowering interest rates in a number of areas.
Mr. Morrow said Khan Bank had “made money every month through these difficult times”. Taking
advantage of its good health, the bank, by liberalizing credit, hopes “to set an example for other
banks that have liquidity, and encourage them to also step up and announce increased lending”.
Referring to Moody‟s recent decision to downgrade three Mongolian banks, Mr. Morrow considered it
“inappropriate” of the rating agency to “put these three banks in the same category based on the
country rating”, as that “rating is not related to the performance of the individual banks”. He
reaffirmed that “Khan Bank‟s capital and liquidity continue to grow, and we continue to be
profitable”.
Source: Montsame

5. For the full interview, as reported by MONTSAME, please visit BCM website, Articles/Reports
on Mongolia.
PETRO MATAD UNIT WINS 2 NEW PSCs
Mongolia-focused oil explorer Petro Matad Ltd. has said its unit Central Asian Petroleum Corp Ltd.
has been awarded two new production sharing contracts (PSCs) by the Petroleum Authority of
Mongolia (PAM). The PSCs are for two petroleum blocks in the southern, central part of Mongolia,
approximately 500 km south west of Ulaanbaatar. The petroleum blocks Bogd Block IV and Ongi
Block V adjoin each other and jointly cover an area of approximately 71,000 sq. km.
Source: www.petromatad.com
VITAFIT INTRODUCES NEW TECHNOLOGY
Vitafit, the beverage company, has invested USD10 million on introducing a bottle sterilizing
technology, making Mongolia the third Asian country to adopt this new method. Worldwide, only 33
countries so far have gone in for this new technology. Vitafit has also created 80 new jobs in the
process.
Source: Zuunii Medee
COMPANIES DONATING MNT500 MILLION TO SET UP PARK
Work on the National Park has begun with donations from several companies. Such donation is
expected to reach MNT500 million, in cash or kind. Gatsuurt Company has promised to plant trees
worth MNT100 million, and the Shunkhlai Group will provide some vehicles with free fuel.
Pentatonic Academy has pledged MNT90 million, Tuushin, New Progress, and Polo Resources MNT30
million each, and Anungoo MNT16 million.
Source: www.news.mn
GERMAN SUPPORT FOR MINING TECHNOLOGY TRANSFER DISCUSSED
The Head of the Heavy Industry Policy Authority in the Ministry of Mineral Resources and Energy,
Mr. B. Batkhuu, has said a meeting in Berlin last month to see how Mongolia and Germany could be
partners in the mineral sector resulted in a memorandum of agreement being signed. Even though
this was just a general agreement, it is significant as formalizing the concept of wide-ranging state-
level bilateral cooperation. Until now, there had been no Government involvement in such
cooperation which was discussed, arranged, and conducted between individual companies. All
participants at the meeting agreed that State support would add an additional dimension to the
situation.
Read more...
Another important issue discussed related to soft loans for the mining sector from investment banks
to acquire mining equipment and machinery. It was agreed to study if and what government support
is needed to facilitate the transfer of such technology, at least in the beginning. Significant
progress was also made on setting up programs for capacity building in the mining sector,
particularly training engineers and other specialists. Several Mongolian companies expressed
interest in equipment made by the US-based multinational Bucyrus International and a team from
the company has since visited the mine sites here to study local conditions and see just what
equipment will be appropriate to them.
The 15-member team that Mr. Batkhuu led to the talks included representatives from mining
companies as also Mr. N.Algaa, executive director of the Mongolian National Mining Association.
Germany was represented by a high-power team led by the Minister of Trade and Economy.
Source: www.mongolianminingjournal.com
CHINA ARRESTS 4 RIO EMPLOYEES FOR STEALING STATE SECRETS, XINHUA SAYS
China arrested four employees of the Rio Tinto Group for allegedly stealing China‟s state secrets,
the official Xinhua news agency reported on Thursday, citing the Shanghai state security authority.
The one-paragraph statement came after the Australian Government had yesterday confirmed one
of the Rio employees being held for spying is Mr. Stern Hu, an Australian national and head of Rio‟s
iron ore operations in China. The other Rio workers are all Chinese nationals. The Shanghai office
where the detained staff worked was mainly a sales and marketing operation for Rio. The 21st
Century Business Herald says Mr. Hu‟s job is to sign long-term supply contracts with Chinese major

6. steelmakers for Rio.
London-based Rio last month scrapped a USD19.5 billion investment by Aluminum Corp. of China,
and is deadlocked in iron ore talks with Chinese steelmakers. The detention of the Rio employees is
part of a broader investigation into alleged kickbacks among traders and mills, the Australian
Financial Review has said. However, Australia‟s Foreign Affairs Minister Stephen Smith yesterday
said there was no indication the allegations were business-related. So-called consular access to Mr.
Hu is required to be given by July 11, he said.
Mr. Smith said he saw "no basis" for speculation of business feud payback behind the detentions, but
opposition National Party upper house Senate Leader Barnaby Joyce, who had opposed the Chinalco
bid with a television campaign, said he had no doubt of a link. “Chinalco's failure to buy 18 percent
ownership of Rio would appear to have inspired the arrests," he said.
Rio was “surprised” by the authorities‟ action and is “not aware of any evidence that would support
such an investigation”, London-based spokesman Nick Cobban has said, adding the company has not
been able to contact the workers.
Source: Bloomberg.com, Reuters.com
RIO COMPLETES USD15.2-BILLION SHARE SALE TO CUT DEBT
Rio Tinto Group, the world‟s third largest mining company, last week completed this year‟s second
biggest share sale, reducing the high level of debt that had forced it to consider selling stakes in its
most valuable assets. On July 3 the London-based Rio finished a USD15.2 billion share sale to
existing holders, selling 95 percent of the Australian-traded shares on offer. A day earlier 97
percent of its London-traded shares had been sold in the offer.
Rio scrapped a USD19.5 billion investment proposal from its biggest shareholder Aluminum Corp. of
China last month in favor of raising USD21 billion from a share sale and an iron ore joint venture
with BHP Billiton Ltd. The deals allowed Rio to reduce USD38.9 billion of debt without selling bonds
and stakes in its largest mines, defusing a backlash from politicians and shareholders. Chinalco has
confirmed that it took up its rights in the present share sale.
“Rio has ended up with the best deal they could have done,” said an investment manager. “They
got there in a very convoluted manner unfortunately. It is definitely investment grade again.” Rio
will cut its debt to USD23.2 billion once it receives the USD5.8 billion payment from BHP to create
the 50-50 venture. BHP abandoned its USD66 billion hostile takeover bid for Rio in November, partly
because of Rio‟s high-level of debt.
Source: Bloomberg.com
RIO OBTAINS MORE CASH BY SELLING U.S. FOOD PACKAGING UNIT
Rio Tinto further improved its cash position on Monday by selling a part of its food packaging
business to Bemis Co for USD1.2 billion. Rio, which has just raised USD15.2 billion in one of the
world's biggest rights issues, will receive from Bemis USD1 billion in cash, with the rest in equity.
The deal takes Rio's expected proceeds from asset sales this year to USD3.7 billion, and analysts say
Rio would be encouraged to sell other noncore assets in the coming days.
The deal moves Rio Tinto closer to extricating itself from near-disastrous consequences of its 2007
acquisition of Canadian aluminum and packaging company Alcan. Bought near the height of the
commodities boom, Alcan left Rio Tinto with USD38 billion in debt. Rio Tinto had hoped to repay
some of the debt by quickly selling the packaging assets, but the global financial crisis delayed that
plan as asset prices tumbled. "The sale is the first significant step in reducing the asset portfolio
acquired with Alcan," Rio Tinto Chief Financial Officer Guy Elliott said in a statement. "The
transaction represents solid value given the challenging financial environment."
Source: Reuters.com
IVANHOE HIRES FORMER CANADIAN PM CHRETIEN AS INTERNATIONAL ADVISOR
Former Canadian Prime Minister Jean Chretien has been appointed senior international adviser by
Ivanhoe Mines. “We believe that Mr. Chretien's experience and knowledge will be a prime asset in
assisting the Ivanhoe companies to continue to build their businesses through opportunities that will
be encountered in the energy and mineral resource sectors around the world during what is
becoming the Asian Century," Mr. Robert Friedland said in a statement.
“Mr. Chretien was instrumental in advancing relationships between many Canadian businesses and
rapidly industrializing China and its neighbor nations,” Mr. Friedland added. Ivanhoe's most high-

7. profile asset is the giant Oyu Tolgoi copper/gold project, in Mongolia. Ivanhoe also controls
Mongolian coal miner SouthGobi Energy Resources.
Source: www.miningweekly.com
THE SLOWING OF THE JUNIOR BOOM
After five years of rapid growth in junior company exploration budgets with annual increases
averaging about 55%, calculations by the Metals Economic Group (MEG) show that in 2008 the
group‟s total increased by only 16% year-on-year to a little more than USD6.1 billion. MEG‟s 19th
annual edition of the Corporate Exploration Series (CES) says slower growth in junior budgets,
combined with increased allocations by major companies, decreased the juniors‟ share of the
worldwide exploration total to less than 50% in 2008, from more than half of the worldwide total in
each of the previous two years.
Juniors have led the exploration charge over the past five years. Planned junior exploration
spending increased by a remarkable 1072% since the bottom of the cycle in 2002, accounting for
more than half of the overall USD10.9 billion increase in exploration allocations by all companies
from 2002 to 2008. Demonstrating the impact of the market crisis on the juniors, there was a sharp
decline in exploration-related equity financing for gold and base metals by the junior companies
included in the CES compared with the amounts raised in 2006 and 2007. This dependence on equity
financing to fund exploration makes them the most vulnerable sector of the industry and with the
evaporation of easy access to capital now affecting many junior explorers, 2009 will not be an
exception.
Source: www.asiaminer.com
CHINA DEFENDS M&A POLICY
China has said its policy toward foreign acquisitions of domestic firms is fair, explaining that
broader national concerns take precedence over the potential benefits to any single company. The
comments come as protectionist tendencies around the world are rising with Beijing at the center
of anti-dumping accusations from firms in the West that view Chinese competition as unfair. "We
want to actively encourage mergers and acquisitions," Mr. Jiang Yaoping, a deputy economic
minister, told a conference last week, "but not to maximize the benefits of one particular company.
The concerns of the wider public and the country are more important."
Regulators rejected in March a USD2.4-billion bid by Coca-Cola for China's top juice maker, Huiyuan
Juice, blocking what would have been the largest-ever takeover of a Chinese company by a foreign
rival. The ruling by Mr. Jiang's ministry that the merger would have been bad for competition
fanned fears that Beijing would not focus on narrow market-concentration grounds but rather on
the basis of China's national economic development.
Executives at the conference said mainland firms would meet obstacles when investing overseas if
China did not open its economy wider to foreign investment. It is not reasonable to expect overseas
markets to allow your investments if you don't open your market to them, they said. China's huge
state-owned firms have also found themselves at the wrong end of political tug of wars. Fears of
Chinese Government ties threatened the planned USD19.5 billion tie-up between Australian miner
Rio Tinto Ltd. and state-owned aluminum firm Chinalco.
Source: Reuters.com
WORLD BANK PRESSES FOR NEW MINING LAWS IN ZIMBABWE
Zimbabwe will re-evaluate all mining contracts and introduce a "use it or lose it" policy for its
mining industry under a proposed law. News of the vetting of mining contracts is likely to surprise
investors at a time the country is wooing them to help repair a battered economy. Mining in the
southern African country has become the leading source of foreign exchange, with gold accounting
for a third of exports, but political turmoil, lack of energy and unfavorable regulatory rules has led
to several mines closing.
"The government... is working on amendments to the mining laws, so that we comply with new
standards for the extractive industries, which the World Bank is insisting on," the Finance Minister
has said. "That law will introduce the concept of 'use it or lose it' with respect to... mining claims.
It will also introduce the re-evaluation of every mining contract that has been signed in Zimbabwe."
Source: Reuters.com

8. ECONOMY
MONGOLIA RAISES USD75 MILLION FROM RARE DEBT PLACEMENT
Mongolia raised USD75m in a private placement in the last week of June. It was a rare commercial
debt sale from a country rescued by the International Monetary Fund only months ago. Standard
Bank was the sole arranger of the one year zero coupon note, the first dollar bond issue from a
Mongolian borrower for more than two years. It was sold at an issue price of 89.686% and redeems
at par.
It was not clear whether the deal had been fully marketed, and bankers who were not involved said
there had been no noise around the transaction. But according to Dealogic it marks the first dollar
debt sale by the emerging market sovereign, which is rated B1 by Moody's Investors Service.
Mongolia has long been a potential candidate for an international dollar bond, with a variety of
banks linked with the job of finding investors for a deal, but the terms of Mongolia's loan from the
IMF made it difficult for the sovereign to sell a deal in the global dollar market. Mr. Takatoshi Kato,
deputy managing director of the IMF, said as much in a statement last month, when the IMF
approved a USD39.4m draw-down by Mongolia. "The authorities should be prudent in undertaking
any new non-concessional external borrowing, and carefully consider the costs, risks, and broader
debt sustainability implications of such loans," Mr. Kato said on June 24. "This is especially true
given that the prospects for donor support are good and should provide sufficient fiscal financing
during the course of this year."
Some bankers speculated that the deal was backed by gold receivables, but it is documented as a
plain vanilla transaction. "It's a straight bond, no asset-backed nature," said a banker with
knowledge of the issue. "But the proceeds are being used for lending to gold companies, which is
why it falls under the IMF exemption from the blocking of external borrowing."
Read more…
Mongolia has long had an on-off relationship with the global dollar bond market, and had considered
coming to the market as recently as January, when it shortlisted five banks as potential lead
managers. Deutsche Bank, HSBC, Goldman Sachs, ING and Morgan Stanley were shortlisted but the
deal was put on hold.
It had considered selling a deal in 2006, going as far as mandating Citigroup and ING to manage the
issue. But the deal was scrapped after the Governor of the Central Bank was replaced later that
year and the Finance Ministry given the role of debt issuer over the Central Bank.
The last dollar bond sold by a Mongolian issuer was a USD75m three year deal sold by the Trade &
Development Bank of Mongolia in January 2007, according to Dealogic. ING was sole bookrunner on
that deal, which paid a spread of 394 basis points over US Treasuries.
Source: www.euroweek.com
MONGOLIA’S OWN INTERESTS MUST COME FIRST
A Russian-Mongolian joint company called Infrastructure Development has been established and the
blueprint for a new railway line from Tavan Tolgoi to Zuunbayan in the east is ready. It will be 920
km long, and after it joins Choibalsan station on the existing track and thence continues along the
old railway until the border point of Ereentsav, its total length will be 1,160 km. Laying a railway is
expensive business, particularly in our terrain, so this enormous length has a direct bearing on the
final costs of mining in Tavan Tolgoi.
Things are not much better on the Chinese side. Minister of Road, Transport and Urban
Development Kh.Battulga discussed this matter extensively with railway officials during his visit to
China at the end of May, but the talks were not too fruitful, judging by media reports. It is not so
much a problem with arrangements at Erlian as the larger one of China having already exhausted its
capacity for freight forwarding. The Chinese railway system is severely overstretched and cannot
take any extra stress without extensive reorganization. Coal alone accounts for some 40% of the
total railway cargo in China, and the scope to increase this, especially in the highly industrialized
and densely populated western and southern regions, is quite restricted. Indeed, freight forwarding
schedules are now prepared a year in advance. Demands from local companies get priority, and
other and outside requests are met only if and when something extra can be inserted in the
schedule.
Mongolia must realize it cannot convert the coal at Tavan Tolgoi into a real resource just by
announcing a bid and selecting an investor. The long transportation of the output from the mines

9. has to be efficient, quick, and regular. The competitiveness of our export is not a worry for either
Russia or China; they are challenges and hurdles that Mongolians themselves have to anticipate and
tackle beforehand. Our decision on Tavan Tolgoi, whatever it turns out to be, should not be taken
to serve the interests of any country or any group. The right choice can be made only when
Mongolia issues the license to mine deposits of strategic importance solely on the basis of sound
economic projections backed by careful and unbiased study.
Source: www.mongolianminingjournal.com
NAMBC CHIEF CALLS ON ELBEGDORJ, URGES QUICK OT AGREEMENT
Calling on President Ts.Elbegdorj on Wednesday, the visiting president of the North America-
Mongolia Business Council (NAMBC), Mr. Steve Saunders, said investors in North America and Canada
were eagerly watching the fate of the Oyu Tolgoi Investment Agreement. “Once a mutually
acceptable agreement is reached, other large international investments will follow,” he said.
President Elbegdorj agreed and thanked NAMBC for its “considerable contribution to boosting co-
operation between Mongolia and North America in mineral resources and mining spheres”.
In a newspaper interview Mr. Saunders called Mongolia “the only country in the world that can get
out of the economic recession without spending even one MNT”. All it needed to do, he said, was to
get its mines working. Stressing the need to act without further delay, Mr. Saunders said, “There is
a saying „Measure seven times and cut once.‟ The Parliament of Mongolia has measured the OT
agreement seven times already, now is the time to cut.”
Source: Onoodor, Montsame
ACCOUNTABILITY NEW WATCHWORD AT MINERALS AUTHORITY
Mr. B.Tuvshinjargal, director of the administration department of the Minerals Authority, claims
that following implementation of new policies and some internal restructuring, it now provides
transparent, efficient and quick services to applicants for new licenses. The whole process has been
overhauled to ensure that a decision either way is taken on an application within 20 days of its
submission. The Minerals Authority has adopted an internal ethics code governing all its work, and
has also put in place an operations manual, new labor regulations, and social security and training
programs.
Some departments have been disbanded or merged with others and some positions abolished. All
queries, complaints, and suggestions are attended to without delay. Accountability is being strictly
enforced at all levels. The World Bank is offering assistance to introduce a system of receiving
applications online. A decision will soon be taken on the around 1,000 holders of special licenses,
who have not yet submitted their reports for 2008, and on the around 1,500 pending applications
for licenses.
Source: Undesnii Shuudan
REFORM COMMITTEE CHIEF STRESSES INSTITUTIONAL DEVELOPMENT
The Chairman of the National Development and Innovation Committee (NDIC) set up in March to
recommend guidelines for long-term economic policies, Mr. Ch.Khashchuluun, thinks income from
natural resources will at some point begin to taper off and then be exhausted. Before that happens,
new products have to be identified and the appropriate technology to produce them with the
maximum efficiency installed. “All this will not happen overnight, but with foresight and proper
planning our economy should be supported by them after 30-40 years from now,” he says,
explaining how the Mongolian economy has to gradually veer away from being minerals-dominated
to one that uses advanced technology to deploy its natural resources in diverse ways and efficiently
to produce ecologically sustainable and highly intellectual products.
Calling institutional development the most important component in this economic progress, he
explains that this „institution‟ is not a physical or tangible unit. It has rather to do with laws and
regulations and stands for the entire business environment. The more unequivocal and stable these
are, the less money will be needed to operate productively. This is mostly evaluated in terms of
costs of transaction, referring to expenses of running a business apart from operational costs. “The
lack of well established and transparently enforceable regulations makes for the waste of a lot of
time and money here at present,” he says, adding that it is a priority for Mongolia to install a stable
legal and operational framework.
Read more…

10. The committee has made an on-the-spot study of the technological and transportation problems in
the Southern Gobi, especially Tavan Tolgoi, and has submitted a comprehensive plan to the
Cabinet. The Government may not be an investor itself, but it can act as a coordinating force
among the 20-30 companies investing there, consolidating all the infrastructure projects of all the
investors, and help prepare comprehensive plans that serve everybody‟s interests.
Mr. Khaschuluun said Mongolia‟s two neighbors were facts of life and so was cooperation with them.
However, given the difficult financial situation in which the Russian Government finds itself at
present, “before we agree on a joint venture, especially on any major project, careful assessment
of the true financial position of the Russian party has to be made, or we shall be stuck with an
agreement without capital, leading to long delay, and maybe, even worse, no project at all”.
Source: www.mongolianminingjournal.com
MPs WANT TAX RELIEF FOR SMEs IMPORTING MACHINERY
More than half of the “year of industrialization”, as the Government dubbed 2009, has passed with
very little to show for it. Six MPs cited a survey to tell newsmen that small and medium businesses
have waited all this while for some form of assistance, and are losing hope. Most of them
desperately need more modern machinery and equipment. These MPs want the Government at least
to waive VAT and customs duties on import of machinery to help such units become more
competitive. The Democratic Party caucus in Parliament has pledged support to any such move.
Source: Zuunii Medee, Ardiin Erkh
EXCISE DUTY ON PETROLEUM ANNULED
Importers will not any longer have to pay any excise duty on petroleum and diesel fuel. The
Government decided on July 8 to annul the levies, accepting importers‟ argument that with prices
rising by 11-33 per cent in a month, continuation of excise duties will lead to fuel costing MNT 360-
470 per liter.
Prices were raised last week to make petrol per liter dearer by MNT 130 in two stages in just a few
weeks. The Oil Authority had earlier rejected importers‟ request to raise the price by MNT250-300,
on the ground that too much pressure could not be put on people.
Source: Montsame, www.news.mn
BAYAR REVIEWS AGRICULTURE PROGRAM, TOLD HARVEST WILL BE GOOD
Prime Minister S.Bayar, initiator of the Atar-3 program for increased agricultural production,
reviewed its progress on Tuesday and was told that despite some problems caused by heavy rain
and cold weather, the autumn harvest was expected to be good. The Ministry for Food, Agriculture
and Light Industry has promised to meet the entire domestic demand for potatoes and some
vegetables. Wheat seeds worth USD10 million were brought from Russia. The State also paid MNT30
billion for 193 tractors and 30 mechanized plows from there. Rain clouds were sown in certain
regions and irrigation systems were installed to serve 29,000 hectares.
Source: Udriin Soniin
GROUP FORMED TO WORK ON SETTING UP A DEVELOPMENT BANK
The Government has proposed the establishment of a Development Bank to fulfill the aims
indicated in Mongolia‟s action plan for 2008-2012. A working group headed by Mr. Ch.Khashchuluun,
Director of the National Development and Innovations Committee (NDIC), will work on the proposal.
Only 145 of the 345,000 people who had taken a loan from banks and other financial institutions
until the end of the third quarter of 2008 could borrow an amount over MNT500 million. The
Development Bank will provide mid- and long-term capital to be invested in the Mongolian
economy. Commercial banks work for profits, but the Development Bank will give long-term loans
at low interest.
Mr. Khaschuluun has said the Development Bank will not be just another state-owned entity, but
will be similar to an international financial institution. It will fund major infrastructure projects of
Mongolia in cooperation with other commercial banks. His group has begun holding talks on the
matter with the Central Bank and the Ministry of Finance.
Source: en.News.mn, www.mongolianminingjournal.com

11. WATER ACTIVISTS ON HUNGER STRIKE, DEMANDING DISCUSSION OF BILL
Activists of the Mongolian Rivers and Lakes Movement are on hunger strike to protest against
Parliament‟s failure so far to discuss the draft law to ban mining in areas near water basins and
forests. The MPs who initiated the draft have expressed their support, but have also explained to
the protesters that it would be difficult for Parliament to discuss it in this session.
The activists feel the Government and Parliament have failed to realize the gravity of the situation.
It was not a case of a group of people fighting for water. “The issue is one of national security.
What will happen if Mongolia‟s water sources were to dry up?” they asked. Speaker Demberel has
not acknowledged any of their letters and if he does not arrange for Parliament to discuss the draft
before the spring session ends, they will continue their protest in some other form. The draft was
submitted in March, a working group was formed to study its contents, and a standing committee
has also discussed it, but it has not reached Parliament. A total of 276 special licenses will have to
be withdrawn if the measure is approved.
Source: Udriin Sonin
FEWER TOURISTS FOR NAADAM
The Ministry for Nature, Environment and Tourism has estimated that about 2,000 tourists will be
coming to see Naadam this year, a sharp fall from last year‟s figure of 3,000. A drop was expected
in view of the global financial crisis, but the Ministry Is hopeful that the total number of tourists
will be the same as in 2008.
Source: Onoodor
WHY CANNOT MONGOLIA GIVE TOURISTS A BETTER DEAL?
The Ministry of Environment and Tourism regularly announces that it is working on measures that
would attract more tourists to Mongolia, but just what these measures are never clear to us.
Indeed, what have we developed in the past several years, besides our traditional nomadic
lifestyle, to bring in tourists? There are still not too many places to see in the country, and those
which do receive tourists could do with better traveling and living conditions. The Ministry thinks
big, but our opinion is that smaller places with basic comfort are more useful than large complexes.
And yes, tourists do come to see how we celebrate Naadam. But have we been able to make any
real improvement in terms of tourists‟ convenience over the days of the festival? At the Central
Stadium, there are no proper rest rooms, the seats might tear your clothes, the wrestlers will be
too far away with no big screen to show what is happening. Inconvenience overtakes enthusiasm.
Our pious ideas of improving conditions are usually as short-lived as the tourist season.
Source: Zuunii Medee
BANK ANALYSTS SEE USD RISING FOR SOME MONTHS MORE
A monthly survey from ACI Mongolia among analysts at banks has found that they expect the USD to
keep growing stronger for some six months and then reach a plateau, with likelihood of the MNT
regaining some strength in the months after that. After reaching a high of MNT 1700-1800 for a USD,
the exchange rate has been stable at between MNT 1420-1440 for the past few months.
Source: www.fma.mn
CHECKS REVEAL DEFECTS IN WINDOWS IN BUILDINGS UNDER CONSTRUCTION
Inspection of the windows and doors in 120 buildings under construction in six districts of
Ulaanbaatar has revealed several defects and violations of standards. The inspection was carried
out by a joint team of experts from the National Center for Construction, the City Development and
Construction Authority, the Architecture Corporation, the Association for Protection of Consumer
Rights, and the Union of Window and Door Manufacturers of Mongolia. At some places the window
and door models had not been shown in the general plan, at some others the quality was poor, and
at others the installation was flawed.
About 40 percent of the windows were imported from China, while 55 percent were made by the
companies themselves. The inspection also revealed that the windows of buildings built with
government money were the cheapest and of the lowest quality. Interestingly, work on 35 of the
selected buildings has stopped because the builders have no money.
Source: en.News.mn

12. POLITICS
PARLIAMENT HAS TOO MUCH AUTHORITY, BAYAR FEELS
Prime Minister S.Bayar thinks the Mongolian Parliament is saddled with more authority and
responsibilities than it can handle, leading to avoidable delays, as in the case of the Oyu Tolgoi
investment agreement. Such things should be left to the Government, as an institution of 75
members will always be too unwieldy to agree on all individual details of a comprehensive
document, he told journalists in the course of an informal conversation on Saturday. His
Government‟s goal was to increase the per capita annual income in Mongolia to USD5,000 from the
present USD2,000. Exploring the country‟s mining deposits would certainly help achieve this, he
said, adding that while “mining resources were important, they are not enough, as no country in
the world can progress without developing its human resources”.
Asked about rumors that the joint government might resign, Mr. Bayar answered, “Overcoming the
economic crisis will be very difficult if we do not take united action. The coalition was established
on that understanding and it has served the country well. I do not wish the experiment to end.” He
said numerous regulations have been quashed to streamline bureaucratic procedures and now the
number of civil servants also needs to brought down from the present 150,000 to 100,000. Eligibility
criteria have to be made more stringent so that only competent people get in.
Source: Zuunii medee, Ardiin Erkh
PARLIAMENT TO SIT NEXT WEEK, TOO
Deputy Speaker N.Enkhbold confirmed on Wednesday that Parliament will continue its spring
session after Naadam, instead of going into recess on July 10. It will not be possible to finish all the
pending work this week, and so Parliament will sit until Thursday or Friday next week.
Among the draft laws still to be discussed were those on budget revision, the Oyu Tolgoi investment
agreement, amnesty, compensation for July 1 sufferers, the by-election, and appointing new
ambassadors. If they are not approved in this session, the Government will face procedural
problems.
Source: Undeshnii Shuudan
PEOPLE’S TRUST WILL GIVE MPRP A RESOUNDING VICTORY IN 2012, SAYS PARTY LEADER
Talking at a gathering of trainee journalists on Tuesday, the Secretary of the MPRP, Mr. U.Barsbold,
said the Democratic Party “does not have a reasonable policy” and “promises anything and
everything just to win an election”. The DP support base, according to the third most important
official in the MPRP, is formed by “young citizens who are now the majority of Mongolian voters and
who have little knowledge of political matters”. Calling the DP, a partner in the country‟s coalition
government, “the opposing party”, Mr. Barsbold said as a socialist party “with 90 years of political
experience”, the MPRP is against making indiscriminate promises to people, a trait shared by
parties all over the world which were under “Western influence”.
Denying that any MPRP leader showed similar “political irresponsibility” during the presidential
election, Mr. Barsbold claimed the Mongolian people know well that the MPRP was not given to
making promises it cannot fulfill. That is why “they trust our leaders”, he said. Referring to
demands in the MPRP that party leaders accept responsibility for the defeat in the presidential
election, its first since 1996, Mr. Barsbold said a political party is a living organism and needs
constant reinvigoration. Recalling that 70 percent of the 400 people who approved the democratic
Constitution of Mongolia were MPRP members, he said that the MPRP‟s faith in democracy was
proved by the fact that one can talk about dismissing the head of the party openly.
Expressing confidence that the MPRP will win a resounding victory in 2012, Mr. Barsbold said there
is always one good child in a family who leads the others, some of whom may be irresponsible.
Parents do not demand anything serious from them, but depend upon the good kid to take
responsibility. “The MPRP‟s position in Mongolian politics is the same. People trust us only because
they know we are worthy of that trust. We have to make sure others less responsible do not manage
to cause too much damage,” he said.
Source: en.News.mn
MORE SOLDIERS FOR UN PEACE KEEPING DUTIES
Mongolian soldiers will leave for Afghanistan in September to join UN peace keeping duties. The

13. country has been contributing small units to such missions since 2002, but from now on contingents
of 800 men will participate in such work. The head of the troop enrollment department of the UN
visited Mongolia some time ago to see the state of military training here and agreed to the larger
number.
Source: Ardiin Erkh
S.KOREAN DEFENSE MINISTER TO DISCUSS N.KOREA WITH MONGOLIA
North Korea will be high on the agenda when South Korea's Defense Minister visits Russia and
Mongolia later this month to meet his counterparts there. Defense Minister Lee Sang-hee is set to
visit Russia from July 19-21 and Mongolia from July 22-24 to seek cooperation in dealing with North
Korea and discuss bilateral issues, Defense Ministry spokesman Won Tae-jae said in Seoul.
"Mr. Lee will present his country's stance on North Korea's behavior and seek cooperation from
Russia and Mongolia," Mr. Won said, declining to elaborate as the agenda needs to be further
refined. "We're hoping Russia and Mongolia can serve as bridges between South and North Korea,
and pressure Pyongyang to stop its provocations," a South Korean official said.
Mongolia has over the years increased economic cooperation with North Korea, importing workers
from the reclusive country to support its understaffed economy.
Source: english.yonhapnews.co.kr
STATE TO BUILD HOUSE FOR EX-PRESIDENT ENKHBAYAR
The Government plans to provide accommodation and other facilities to former president
N.Enkhbayar, in keeping with practice. Still, Parliament has to approve the proposal. A 100 sq.m
house with heating facilities will be built for him at State expense. The State will also provide him
with security, office assistants, household staff, and drivers for four years. Until the house is built,
he will be given an apartment with the same floor space and the State will pay for heating,
electricity and water.
Former presidents were given a 50 sq. m house until 2005 when the floor space was increased to
100 sq. m.
Source: Undesnii Shuudan
AMNESTY WILL COVER BRIBERY CONVICTIONS, TOO
Statistics would lead one to believe that amnesty leads to an increase in crime. Released offenders,
many claim, take this opportunity to go back to their errant ways. The number of criminal
incidents had shown a steady decrease until the amnesty declared on June 23, 2006, when 1,590
inmates, or nearly 30% of the criminal population, were freed. After that the number of serious
criminal cases rose to 18,000 in 2007 and 21,000 in the following year, an annual increase of some
30%.
So what will be the result of the new president‟s amnesty proposal? Just how far he has gone
beyond those jailed in connection with the July 1 violence is not clear, but this time 3,500
prisoners, or almost half of those currently serving sentence, will be back under the sun, as the
Mongolian saying goes. An interesting segment of those thus prematurely returned their freedom
would consist of people either convicted in bribery cases, or being investigated by the Anti-
Corruption Authority. One can only wonder what the effect of this would be on society.
Source: Zuunii Medee
PARLIAMENT DISCUSSES COMPENSATION FOR JULY 1 LOSSES
The Government‟s initial estimate that altogether MNT12 billion will be needed to pay citizens, as
well as police and military personnel, who died or suffered physical injury or some other loss in last
year‟s July 1 violence may have to be revised with MPs demanding more as the amount of
compensation. Former Minister L.Gundalai said during a discussion in Parliament that the family of
each of the five people who lost their life should receive no less than MNT400 million. “The
Government must also apologize to the people,” said the DP MP. Mr. D.Zagdjav (MPRP) went further
and thought they should receive MNT500 million each. Mr. Gundalai applauded and commented,
“I‟m glad there is at least one person in the MPRP who thinks for himself.”
Source: Udriin Shuudan

14. MPs’ GROUP ASKS PEOPLE TO SPEAK OUT ON RIGHTS ABUSES AFTER JULY 1
The working group established by Parliament‟s Human Rights Sub-commission to prepare a
comprehensive report on the abuse of human rights after arrests and during interrogations following
the July events last year plans to collect the statements of all who were arrested and all among
them who are serving jail terms about how they were treated. The four-member working group is
led by Mr. Kh.Temuujin who told a press conference that the statements submitted would be
reviewed from August 1 to 14 and then the final report would be prepared. Mr. Temuujin said their
work would help people “draw aside the curtain of fear that hides the truth”. Most citizens still do
not “trust the judicial organizations, but they are afraid to express their fears”, he said.
Source: Ardiin Erkh
FORMER USAID MISSION DIRECTOR NAMED NEW U.S. AMBASSADOR
President Barack Obama has announced his intent to nominate Mr. Jonathan S. Addleton as
Ambassador to Mongolia. Mr. Addleton, a career member of the US Senior Foreign Service since
1984, is Counselor for International Development at the US Mission to the European Union in
Brussels, Belgium. Previously, he served as USAID Mission Director in Pakistan (2006-2007),
Cambodia (2004-2006) and Mongolia (2001-2004). He also worked briefly at the World Bank, Macon
Telegraph and Carnegie Endowment for International Peace. He has a PhD and MA from the Fletcher
School of Law and Diplomacy at Tufts University.
In announcing this nomination, President Obama said, "I am confident that this fine individual will
represent our nation with distinction and strengthen our diplomatic efforts to meet 21st century
challenges. I look forward to working with him in the months and years ahead."
Mr. Addleton was born and raised in Pakistan where his parents served as missionaries. His memoir
on his childhood in Pakistan was published by University of Georgia Press under the title „Some Far
and Distant Place‟. He has also published articles in a variety of publications, including Asian
Survey, Asian Affairs, Muslim World, Foreign Service Journal and the Washington Post. He will be
joined in Ulaanbaatar by his wife and daughter.
Source: mongolia.usembassy.gov
NO UB RAILWAY TRAIN TO BEIJING AND ERLIAN ON JULY 11, 12
Ulaanbaatar Railway will run no train to Beijing and Erlian on July 11 and 12 because of Naadam.
Traffic on all other routes will continue on schedule. Train No. 304 will go to Davaanii Ar.
Source: www.news.mn
ULAANBAATAR HAS 140,000 MOTOR VEHICLES
An enumeration exercise carried out in two stages over three months has determined that
Ulaanbaatar has 140,000 motor vehicles, a rise of 30,000 over last year‟s figures. These include
100,143 cars, 19,856 trucks, 8,084 buses, 3,364 special purpose vehicles, 616 motorcycles, 1,194
trailers and 1,886 equipment vehicles.
Source: Montsame
MONGOLIA MAY LOSE STEPPES, DEMAND FOR CASHMERE PARTLY BLAMED
Mongolia is facing rapid desertification, due partly to the unchecked growth of animal herding for
prized cashmere wool from Chinese buyers and partly to global warming. The rapid disappearance
of pasture fields has alarmed the Mongolian government. According to the Ministry of Nature and
the Environment the grassland is thinning out in 75 per cent of the nation's land area, while 7 per
cent has completely turned into deserts. The Ministry has urged the National Security Council to
persuade the Government to take remedial action.
The head of the Ministry's Sustainable Development and Strategic Planning Department has said that
family livestock in Mongolia traditionally consisted of 30 per cent goats and 70 per cent sheep. This
balance has collapsed as buyers from China have bid up the price of cashmere, resulting in the
growth of cashmere goat herding in Mongolia. Unlike sheep, goats kick up the roots of grass and
uncontrolled herding devastates pasture lands.
As global demand for cashmere shoots up, the population of livestock in Mongolia, a major producer
of prized cashmere wool, has swollen, growing from 25.1 million heads in 1993 to 40 million in
2007, the report said.
The development of mining in Mongolia, which contributed 29.2 per cent of the gross domestic

15. product in 2006, is believed to have added to the woes of desertification along with global
warming. Since 2005, the Government has stepped up efforts to keep the land from going barren,
but the pace of desertification has shown little sign of waning. Ministry officials say privately that
96 per cent of the country could one day become desert if nothing is done to halt the process.
Source: The Kyodo news agency(home.kyodo.co.jp)
UNIVERSITY OF PITTSBURGH STUDENTS IN MONGOLIA FIELD STUDIES PROGRAM
A group of eight undergraduate students from the University of Pittsburgh in the USA have been in
Mongolia since June 1 as participants in the Mongolia Field Studies program, sponsored by the
University Honors College in conjunction with the National University of Mongolia. The three-month-
long program allowed them to travel to China and Russia before arriving in Mongolia, where they
have enrolled in intensive Mongolian language courses. Since 1997, the program has given students
the opportunity to either conduct independent research or intern for a Mongolian agency while in
the country.
The following students are part of the program this year, with Ms. Allison Hahn as program director:
- Ms. Kristen Alexovich, senior, interning for the Business Council of Mongolia;
- Ms. Kate Lasky, junior, researching the presentation of democracy in Mongolian schools;
- Mr. John Lasky, senior, studying the psychology of ger district residents;
- Mr. Brendan Morrell and Mr. Cory Rodgers, juniors, researching Mongolian traditional medicine;
- Mr. Eric Neimeyer, junior, interning for World Vision International;
- Ms. Julie Percha, junior, studying freedom of the press; and
- Mr. Hendrik Van Hemmen, senior, researching water quality in the Gobi Desert.
The students return to the USA at the end of July.
Source: BCM Newswire
NEW MONGOLIAN LAWS
The following amendments to current Mongolian laws were published in a recent weekly
Government Bulletin. Unless decided otherwise by Parliament, the amended laws take effect ten
(10) days after publication.
Date Law
07.06.2009 Amendments to "Law on Insurance"
Addendum to "Law on legal status of Financial Regulatory Commission"
Addendum to "Law on National holidays and Celebration days"
Please visit BCM‟s website, Legislative Committee, for a summary of new Mongolian laws.
BCM members who wish complete versions of the laws in Mongolian language are welcome to call or
email the BCM office (11-332-345; info@bcmmongolia.org) to arrange for a convenient pickup.
ANNOUNCEMENTS
“MM TODAY” ON MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on “MM Today”. This English news program is aired every Friday for 10 minutes and is
scheduled for 9:50 PM tonight. Tune in to watch this program that reports stories from today‟s BCM
NewsWire.
________________________________
“COMMERCIAL NEWS USA” MAGAZINE
BCM regularly receives the bi-monthly “Commercial News USA” from the U.S. Embassy‟s UB
Commercial Section. This magazine contains trade shows, product showcases, and profiles of best
U.S. exporters. We would be pleased to share this information with BCM members. Also, we would

16. urge other BCM diplomatic mission members to submit trade information to the BCM.
SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended July 3, 2009, trading activity on the Mongolian Stock Exchange (MSE) totaled
664.000 shares with 34 companies traded. Total market value of transactions was MNT 470.3
million. Total market capitalization of the 358 stock companies listed on the MSE was MNT 463.3
billion, and decreased by MNT 4.8 billion or 1.0% from the previous week.
The Top-20 Index increased by 0.36 points or 0.01% compared to the previous week, closing at
4,848.36 points. The MSE Composite Index decreased by 56.75 points or 2.3% compared to the
previous week, closing at 2, 438.03 points.
Most active stocks traded were: Tuul Songino usnii nuuts (563,000 shares), Khuh gan (54,000
shares), Mogoin gol (13,600 shares), Genco tur buro (12,900 shares), and APU (5,500 shares).
Major share price percentage gainers were: Spirt Bal Buram (15.5%), HB Oil (13.6%), Talkh chicker
(12.4%), Zoos goyol (10%), and Mon.Tsakh Kholboo (6.6%). Major share price percentage losers

17. were: Takhi Co. (15%), Shariin Gol (13.9%), APU (13.8%), Darkhan nekhii (11.8%), and UB Hotel
(11.1%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
June 30, 2009 *6.3% [source: NSOM]
* year over year (yoy)
CURRENCY RATES – July 9, 2009
Currency name Currency Rate
US dollars USD 1442.46
Euro EUR 2003.36
Japanese yen JPY 15.30
British pound GBP 2320.20
Hong Kong dollar HKD 186.11
Chinese yuan CNY 211.06
Russian ruble RUB 45.39
South Korean won KRW 1.13
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.