October 10 2014

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 346 – October 10, 2014
NEWS HIGHLIGHTS:
Business
 Rio $5.4 billion copper project mired as deadline missed;
 Darkhan metallurgical facility to expand into wet concentrate;
 Sinopec submits pre-feasibility for coal gasification;
 Erdene Resource selling shares for Altan Nar project to resource drilling;
 Mongolia’s MIAT expands routes;
 Kazakh Airlines opens regular flight to Mongolia;
 Aero Mongolia launches public flights to OT airport;
 Hera receives first delivery of Mogilev Carriage Works cement trucks;
 Clean Energy wins 50-MW wind farm permit for Tsogttsetsii;
 KHOT announces road repair contract for Darkhan;
 Kincora Copper waits for cost assessment in '106 license' dispute;
 J & U Gold employees detained by extremist groups;
 Mongolian mission for Gradon Architecture's Tanja Smith;
 USAID steps away from donor activities, looks towards advisor role;
 Chinese new equipment and technology will be introduced in UB;
 Rio turned down Glencore merger idea.
Economy
 Mongol Bank: FX auctions, swap agreements, 1-week bills, treasury bills;
 World Bank lowers Mongolia 2014 GDP forecast to 6.3%;
 Mongolia to begin to budget in 2015 for Chinggis bond repayment;
 PM reports on results of 100-Day Economic Action Plan to parliament;
 Premier urges rail construction from TT to border to finish by October 2015;
 Government reshuffle good news for investors—but political instability, says MIBG;
 Mongolia to introduce new traffic regulations for friendlier roads in UB;
 Fire at Shangri-La raises questions about emergency services in UB;
 Mongolia-China border closes for four days;
 Mongolia holds promise for Vietnam labor, tourism;
 Mongolian farmers herd together in face of adversity;
 Doctors see improvement in children's skin ailments with Vitamin D supplements;
 Price of steelmaking ingredient, iron ore, falls to a five-year low;
 Indian coal import growth could overtake China;
 The premier’s plan to ‘pull the wool over our eyes’ - EDITORIAL.
Politics
 Mongolia's parliament endorses government restructuring bill;
 L. Khangai appointed as president's agent;
 ADB offers financing for employment, waste management initiatives;
 Mongolia approves partnerships with international nuclear energy groups;
 Mongolia participates in OSCE parliamentary assembly autumn session;
 Mongolia, DPRK MPs discuss access to ports in Rason Special Economic Zone;
 Korea denies report that ex-Mongolian president seeking asylum;
 Mongolia considers additions to World Heritage List;
 Mongolia to further contest Asian Games boxing decision;
 Former Khutul Cement chair sentenced to four years for graft;
 UB Mayor opposes proposed 2015 budget;
 UB leads charge to fight corruption alongside Asia Foundation;
 UB bans pigeon feeding.

2. Others
 Announcements;
 BCM Updates - Working Groups; Websites; Social Networks; Photo Gallery.
ECONOMIC INDICATORS
 Weekly Market Indicators from MIBG;
 Inflation;
 Central bank Policy Rate;
 Currency Rates.
*Click on titles above to link to articles.
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BUSINESS
RIO $5.4 BILLION COPPER PROJECT MIRED AS DEADLINE MISSED
Rio Tinto Group and the Mongolian government broke another deadline set by lenders for the USD
5.4 billion expansion of their Oyu Tolgoi project, raising concerns over the earnings outlook for
Rio’s copper business and the strength of the Mongolian economy.
Commitments from project finance lenders expired 30 September, Rio’s unit in Canada, Turquoise
Hill Resources Ltd. (TRQ), said in a statement yesterday. Oyu Tolgoi’s shareholders have not asked
for those commitments to be extended, although “engagement” with lenders continues, it said.
“With iron ore in decline, the market is looking for Rio’s other businesses to fill the gap,” said
David Radclyffe, a Sydney-based analyst at CLSA Asia-Pacific Markets. “The market is concerned
from the point of view that Rio needs to do the expansion to give its copper business relevance.”
Underground development at Oyu Tolgoi, the largest foreign investment in Mongolia, has been held
up for more than 18 months on disputes between London-based Rio and the government over taxes
due and cost overruns, among other issues. Copper accounted for 11 percent of Rio’s revenue in the
2013 fiscal year, behind iron ore and aluminum. An Oyu Tolgoi board meeting was scheduled
yesterday, according to Mongolia’s mining ministry. Three Mongolian members of the board didn’t
respond to phone calls after the meeting. A call and e-mail to the government’s cabinet secretary
Saikhanbileg Chimed went unanswered.

3. “The delay was going to happen,” said Narantuguldur Saijrakh, director of Khan Investment
Management, a Singapore-based investment company with a focus on Mongolia. “There will be no
immediate impact on the economy, but if delays continue for another six months that could be a
difficult situation.”
Without expansion, Rio would need to consider a writedown of the mine, Radclyffe said. The
project had a book value of USD 4.96 billion at the end of June, according to an August filing. “Rio
doesn’t want to do that, as they’ve just had to make some pretty embarrassing writedowns as it
is,” Radclyffe said. Rio in July sold Mozambique coal assets for USD 50 million, after writing down
the mines acquired in an AUD 3.9 billion (USD 3.4 billion) deal in 2011.
Source: Bloomberg
DARKHAN METALLURGICAL FACILITY TO EXPAND INTO WET CONCENTRATE
Mongolia plans to expand the state-owned Darkhan metallurgical plant into a wider metallurgy and
mining complex with the opening of an iron ore wet-concentrate plant by the end of the year.
Construction by Canada's Hatch Ltd. is already complete, while the installation of electric power
lines and waste disposal are underway. Meanwhile, Finland's Outotec and Japan's Kobe Steel are
currently preparing feasibility study for a four-year plan to upgrade the facility.
Source: Montsame
SINOPEC SUBMITS PRE-FEASIBILITY FOR COAL GASIFICATION
China’s largest petroleum firm Sinopec Ltd. on 2 October submitted to the Mining Ministry a pre-
feasibility study for the construction of a brown-coal gasification plant to produce 15 billion cubic
meters of synthetic gas a year.
The project, which is estimated at USD 30 billion, is set to launch an extraction process up to 60
million tons of brown coal from several coal beds in Dundgobi and Dornogobi Aimags. Coal
gasification operations would launch 2018, according to the plan. The Mongolian market is
estimated to consume five percent of annual production, he said.
"This project is to be much greater than Oyu Tolgoi in terms of investments and production
capacity," said Vice-minister of Mining O. Erdenebulgan, who added that all of the gasification work
would take place within the country.
Source: Montsame
ERDENE RESOURCE SELLING SHARES FOR ALTAN NAR PROJECT RESOURCE DRILLING
Erdene Resource Development Corp. of Halifax plans to issue a non-brokered private placement of
up to 11.5 million company units at a price of 14 cents a unit for gross proceeds of up to USD 1.61
million.
Net proceeds will be used for exploration, including a resource drilling program on the company’s
Altan Nar gold-polymetallic project in Mongolia, according to a news release. Each unit will consist
of one common company share and half of one common share purchase warrant. Each whole
common share purchase warrant will entitle the holder to purchase one common company share at
a price of 21 cents for a 24-month period from the anticipated 31 October closing date.
Source: Chronicle Herald
MONGOLIA’S MIAT EXPANDS ROUTES
With the official launch of its first scheduled flight to Singapore, Mongolia’s MIAT Mongolian Airlines
LLC flag carrier has signaled its intention to significantly extend its east-west route network—
potentially to the United States and Australia.
Its current mainly single-destination network serves Japan, China, and Korea in the east, and Berlin
and Moscow to the west from its central Asian base at Ulaanbaatar, Mongolia. However, the
addition of a new twice-weekly service between its home hub and Singapore via Beijing using the
carrier’s Boeing 737-800 aircraft opens up Southeast Asia to the carrier. MIAT has already
committed to expanding its long-haul routes with the addition last year of a new 767-300 to service
more distant destinations. The company did not say if the expansion would be in the form of direct

4. flights, but given its newly introduced policy of running multi-stop schedules such as Moscow-
Frankfurt-Berlin and now Beijing-Singapore, it seems likely it will do the same for its stated
Australian and North American target destinations.
“Singapore is the first extension [in this plan],” a company spokesperson said. “Our company policy
is to open destinations to Australia and America,” he said. He added that the “fifth freedom”
landing and reprovisioning agreements at both Beijing and Singapore made it likely they would be
used for these route expansions.
Although at the time of delivery MIAT Chief Executive Officer Jargalsaikhan Gungaa said the
carrier’s new 767-300 aircraft would principally be used on the Berlin, Frankfurt and Moscow
schedules, the company could use them to extend its reach even further with destinations beyond
the Asian continent. A Changi Airport spokesperson noted the new Singapore schedule would “open
up [Mongolia’s] economy and resource sectors… not only with Singapore but the Asia-Pacific.”
Source: Air Transport Worldwide
KAZAKH AIRLINES OPENS REGULAR FLIGHT TO MONGOLIA
Kazakhstan's Bek Air airlines on 4 October launched its first flight for a new flight path reaching
Mongolia. The route covers Astana, Ust, and Kamenogorsk in Kazakhstan and Bayan Ulgii in
Mongolia, according to a 3 October press release from Kazakhstan's Ministry of Innovation
Development (MID).
"At the initial stage the flight will be performed once a week. With increasing flow of passenger and
cargo the flight frequency will be increased," said the ministry.
The flight was prompted with a memorandum of understanding between Mongolia and Kazakhstan's
air space authorities signed last May. "We have been negotiating over the past two years so that
Kazakhstan and Mongolia, where a large Kazakh diaspora lives, would be bound by direct air
communication," the deputy chairman of the MID Civil Aviation Talgat Lastaev said.
Source: Trend.az
AERO MONGOLIA LAUNCHES PUBLIC FLIGHTS TO OT AIRPORT
Aero Mongolia touched down at its first plane at Oyu Tolgoi LLC’s Khanbumbat Airport on 1 October
for its new twice weekly service to the airport at Khanbogd Soum, Umnugobi Aimag.
The first flight carried senior Government officials and businesspeople in Fokker-50 aircrafts to the
Gobi Desert's first international-standard runway for an opening ceremony. The ceremony observes
the opening of the airport to the greater community to travel between Khanbogd and Ulaanbaatar.
In the past the air travel was provided exclusively to Oyu Tolgoi employees.
“Local people have often asked us to open new flights so we are delighted that, because of the
construction of Khanbumbat, we have been able to do this,” said Aero Mongolia Chief Executive
Officer U. Sagamdoldoi.
Flights between Khanbumbat and Ulaanbaatar will take place on Wednesdays and Saturdays. Aero
Mongolia has opened a representative ticket office in Khanbogd.
Source: Oyu Tolgoi LLC
HERA RECEIVES FIRST DELIVERY OF MOGILEV CARRIAGE WORKS CEMENT TRUCKS
Hera Equipment LLC last month received 30 cement trucks from Belarus' Promagroleasing,
according to a 3 October statement from Promagroleasing.
Hera received 30 Mogilev Carriage Works hoppers for the transport of cement. Hera, which
specializes in the sales of construction, road construction and agricultural equipment, became an
official dealer for Mogilev Carriage Works in 2014.
Source: Belarusian Telegraph Agency
CLEAN ENERGY WINS 50-MW WIND FARM PERMIT FOR TSOGTTSETSII
The Energy Regulatory Commission has signed a contract with Newcom Group's Clean Energy unit
for the construction of a 50-megawatt wind farm in Tsogttsetsii Soum, Umnugobi Aimag.

5. Clean Energy LLC has received a five year-permit to build the wind farm as Mongolia seeks
alternatives to fossil fuels such as coal burning for energy production. The government is targeting
20 to 25 percent of its energy to be from renewable sources by 2020, up from the less than 2
percent that it is today. Coal currently supplies about 80 percent of Mongolia's energy.
Wind speeds at Salkhit, where Clean Energy already has a wind farm, average 8.2 meters per
second. That compares with speeds exceeding 9 meters per second in the Gobi Desert, where there
is the potential for 11 gigawatts per year of solar energy and 300,000 megawatts of wind power,
according to Clean Energy. The new wind farm could bring up to 160 million kilowatt-hours per
year.
Another wind farm could reduce carbon emissions by 230 tons a year by replacing energy generated
from coal-fired plants burning 180,000 tons of coal and consuming 1.2 million tons of water.
Source: Mongolian Economy
KHOT ANNOUNCES ROAD REPAIR CONTRACT FOR DARKHAN
KHOT Infrastructure Holdings Ltd. on 7 October announced that its indirectly controlled subsidiary,
Ashid Munkhiin Zam LLC (AMZ), has been awarded a contract to repair 6 kilometers of a 12
kilometer road repair contract awarded to four companies, including AMZ.
The project is located in Khongor Soum, Darkhan, which is situated on the north-south road that
connects Russia, China, and all the major cities in Mongolia, including Ulaanbaatar, Sukhbaatar,
Darkhan and Sainshand. The total cost of the project has been budgeted and approved by the
Mongolia Ministry of Road and Transportation. KHOT anticipates completion of the project in early
quarter-four 2014.
"We are very pleased KHOT has won its initial road construction contract in Mongolia,” said KHOT
Chairman James Passin. “The relatively modest size and scope of this first contract is a valuable
first step as it allows the Company to gear up for the much larger opportunities in this burgeoning
sector."
Source: KHOT Infrastructure Holdings Ltd.
KINCORA COPPER WAITS FOR COST ASSESSMENT IN '106 LICENSE' DISPUTE
Kincora Copper Ltd. is still waiting for confirmation of incurred costs in its dispute with the
Mongolian government over two licenses revoked last year. The copper explorer wants to retender
for the licenses and is seeking to have a “threshold price” of around USD 6.95 million confirmed. It
wrote down their value down by that amount in 2013. Called the Golden Grouse licenses, the
exploration permits were rescinded last year along with 104 others following an investigation into
government officials who were said to have issued them illegally. The government now says that
former license holders must corroborate any expenses incurred, “a threshold price,” and that these
will form the starting point of the tender for their re-issue.
Companies that previously held licenses, such as Kincora, do not have to pay the threshold price
when participating in a new competitive auction. If successful, they will get full tenure rights again
and, if not, past expenses will reimbursed by the successful bidder. A threshold price for Golden
Grouse has not been set yet, though, and Kincora said it has also not received an indicative
timeline for the retendering process, though it is pursuing this proactively with government
officials.
Source: Proactive Investors
J & U GOLD EMPLOYEES DETAINED BY EXTREMIST GROUPS
Members of the extremist Green Union of World Mongolians and Bosoo Khukh Mongol banned
together with local citizens of Gurbanbulag Soum on 4 October to detain workers at a mine owned
by J&U Gold LLC.
The group demanded to see the papers of workers before confiscating them and forcibly escorting
them to the Gurvanbulag town center to witness a town meeting, according to J & U General
Director G. Chinmurun, where they accused them of operating without official contracts with the
local community. According to a statement from the Green Union of World Mongolians, the

6. company excavates gold without official permission, without paying taxes, and in breach of the
2009 law that banned mining and exploration at certain areas near forests and bodies of water.
“This is a misunderstanding,” said Gurbanbulag Soum Governor D. Banzragch. “Our citizens called
people from civil movements and requested land permissions contracts, which is not legal.”
A similar incident occurred last year, but was never followed up on by police, said Chinmurun. He
said their company has met great resistance from local authorities, too.
“We couldn’t get a land contract from a local tax officer, who is also harassing us,” he said.
Source: Udriin Sonin
MONGOLIAN MISSION FOR GRADON ARCHITECTURE'S TANJA SMITH
Architect Tanja Smith is taking the expertise of a North East agency to Mongolia to strengthen the
firm’s links with the nation.
Gateshead-based Gradon Architecture has been working with the nation for some time, joining
forces with architects from the country to design a new ministerial building, destined for a prime
site near the Parliament in Ulaanbaatar. And the firm has also submitted its design proposals for 50
energy-efficient homes, work which could become the blueprint for the overhaul of Soviet-era
homes across the city, helping to protect residents against temperatures which often dip to minus
30C. Now Smith, who is a chartered architectural technologist and associate at Gradon
Architecture, is to make Ulaanbaatar her temporary home to further cement the firm’s work in the
capital, while also successfully challenging that stereotype that she works in a man’s profession, in
which only one in seven architects are women.
“We want to show the Mongolian people how serious we are about improving people’s quality of life
and believe that having a permanent base in Ulaanbaatar is a powerful way to demonstrate this
commitment,” said Smith. She added, “We want to fully integrate and entrench ourselves in the
country’s culture and values - after all, you can’t develop meaningful architecture without first
understanding what is truly important to the local community.”
Over the past year, Smith has been at the forefront of developing the practice’s unique relationship
with Mongolia—clocking-up more than 24,000 air miles traveling back and forth to the country in
2014 alone. As a regional advocate for supporting women in construction through her work with the
National Association of Women in Construction (NAWIC), Smith is a vocal supporter of readdressing
the gender imbalance in the industry and is ready for the challenge that her new role brings.
Source: The Journal
USAID STEPS AWAY FROM DONOR ACTIVITIES, LOOKS TOWARDS ADVISOR ROLE
USAID will move towards a development adviser role to Mongolia rather than aid donor in
recognition of the changing dynamics within Mongolia.
U.S. government resources, including USAID resources, will be focused on facilitating private-sector
business incubation, public-private partnerships, and rule-of-law capacity building and institution
strengthening. As Mongolia matures, U.S. assistance and partnership will also continue to transition
to support our maturing relationship and to promote continued economic engagement.
U.S. Ambassador Piper Campbell and USAID staff on 30 September reflected on two decades of U.S.
assistance and partnership with the Mongolian people. USAID has provided over USD 230 million to
Mongolia since 1991, helping Mongolia through the initial years of its economic independence.
USAID launched its first program in Mongolia with a grant to provide emergency assistance to the
country's power plants, with other early activities focusing on emergency food supply, economic
reform, and advancing civil society. Over time USAID provided further support for infrastructure,
economic and judicial reform, public financial management, and development of a market
economy. In recent years, USAID assistance has focused on supporting Mongolia's long-term,
sustainable development by strengthening governance and building an enabling environment for
business and economic growth.
Ambassador Campbell remarked, "We are very proud of what the Government of Mongolia has
accomplished in partnership with USAID."

7. While the USAID role in Mongolia is transitioning to a smaller presence, other U.S. government
programs are not just remaining, but also growing. As just one example, the U.S. Peace Corps
program that provides volunteers in rural areas and in Ulaanbaatar has nearly doubled the number
of volunteers in the last two years.
Source: U.S. Embassy
CHINESE NEW EQUIPMENT AND TECHNOLOGY WILL BE INTRODUCED IN UB
"The China New Equipment, Technology and Products 2014" exhibition will be held at Misheel Expo
Center in Ulaanbaatar from 10 to 12 October, introducing products from across China.
Beijing Zhongqi Expo International Co., Ltd. is hosting the event, along with Mongolian partners and
the Inner Mongolia Business and Investors Association, to bring over 100 Chinese companies in
mining, agriculture, farming, construction, road maintenance, energy products, cosmetics and
pharmaceutical to Mongolia.
Source: InfoMongolia.com
RIO TURNED DOWN GLENCORE MERGER IDEA
Rio Tinto PLC said Glencore put forward the idea of a potential merger of the two companies to
create the world’s largest miner and commodities trader, before Rio’s board rejected the idea.
Glencore approached Rio in July regarding a potential tie-up, but Rio’s board concluded
unanimously that a “combination was not in the best interests of Rio Tinto’s shareholders.”
Bloomberg on Monday said Glencore had talked to Chinalco, the Chinese aluminum company that is
Rio’s largest investor, about its views of a possible tie-up.
A “GlenTinto” combination would follow Glencore’s takeover of Xstrata in 2012, a deal that
catapulted it into the ranks of the world’s largest miners. A deal with Rio—the world's second
largest iron ore miner—would fill Glencore in the iron-making commodity. A share-based merger
could get easier if the gap in market capitalization between Rio and the smaller Glencore continues
to close.
Rio shares have fallen 12 percent so far this year because of the weakness in the iron ore market,
giving it a market capitalization of GBP 57 billion, while Glencore has performed better, with its
shares up 10 percent, giving it a market value of GBP 45 billion. Chinalco has owned its Rio stake
since 2008, when its GBP 7 billion purchase of shares thwarted an attempted takeover of Rio by
BHP Billiton Ltd. Chinalco’s shares in Rio are now worth about half of their value at the time of the
deal, but it is not known what Chinalco’s view of a Rio-Glencore tie-up would be.
Glyn Lawcock, analyst at UBS, said there was logic in Glencore trying to pick up Rio cheaply in
current market conditions with a weak iron ore price. He said a “merger of equals” was unlikely to
take place as Rio’s board feel the company is currently undervalued by equity markets. Citi said a
deal would provide Glencore with a global platform to compete with BHP Billiton; create
immediate scale in iron ore that would bring marketing opportunities; provide access to Rio’s
strong balance sheet; and operational synergies.
Any proposed merger would face regulatory hurdles in Australia and China.
Source: Financial Times
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Oxford Business Group Mongolian Economy Magazine

8. ECONOMY
MONGOL BANK: FX AUCTIONS, SWAP AGREEMENTS, 1-WEEK BILLS, TREASURY BILLS
The Bank of Mongolia on 9 October reported the sale of USD 32.8 million and CNY 99.3 million in
currency auctions for closing rates of MNT 1,844 and between CNY 300.20 and CNY 301.11,
respectively. Also on 9 October, the central bank accepted bid offers for an equivalent of USD 6
million from swap agreements with commercial banks and ask offers for an equivalent of USD 25
million.
The central bank reported on 8 October the issue of one-week bills worth MNT 164.1 billion at a
weighted interest of 12 percent a year.
The central bank reported on 8 October MNT 159.45 billion in bids for the issue of 52-week treasury
bills with a face value of MNT 159.14 billion. Each unit was sold at a discounted price with a
weighted average yield of 16.0737 percent.
Source: Bank of Mongolia
WORLD BANK LOWERS MONGOLIA 2014 GDP FORECAST TO 6.3%
The current economic slowdown in Mongolia reflects an adjustment of the economy in response to
high inflation and strong balance-of-payments pressure that has the World Bank readjusting its 2014
economic growth forecast down 3.2 points to 6.3 percent.
The current account deficit has narrowed significantly in 2014, but a large drop in FDI keeps the
balance-of-payments deficit large, putting heavy pressure on international reserves and currency
value. Continued currency depreciation and expansionary economic policies pushed inflation into
double-digit territory. These economic imbalances have been fed by a dampening global minerals
market and aggressive expansionary economic policies that kept economic growth at double-digit
levels over the last three years. The primary objective of economic policies needs to be restoring
internal and external economic stability and avoiding a more vulnerable situation. Monetary and
fiscal policy needs to be tightened in order to tackle the immediate economic challenges and
preserve financial and fiscal soundness.
The current account deficit narrowed significantly in the first half of 2014, largely due to a
narrowing trade deficit. The current account balance recorded a deficit of USD 603 million in the
first six months of the year, a significant drop from USD 1.607 million during the same period last
year. The trade account recorded a slight surplus of USD 35 million between January and June, a
turnaround from a deficit of USD 756 million during the same period a year ago. Despite the
narrowing current deficit, balance-of-payments pressure still remains high due to declining foreign
capital inflow. The capital and financial account registered a surplus of USD 30 million in the first
half of 2014, a sharp drop from a surplus of USD 914 million during the same period in 2013. Net
foreign investment inflow fell to USD 370 million over that period, down 70 percent from a year
ago.
The large financing gap in the balance of payments has led to a continuous decline in the
international reserve level and a sliding currency value throughout the year. The gross international
reserve of the central bank fell to USD 1.2 billion in July 2014, down 58 percent from USD 3.1
billion a year ago and 70 percent from its peak of USD 4.1 billion in December 2012.
Read the full report here.
Source: World Bank
MONGOLIA TO BEGIN TO BUDGET IN 2015 FOR CHINGGIS BOND REPAYMENT
Parliament will have to include funds to set aside for repayment of borrowed funds in its 2015
budget as repayment dates march closer.
Parliament Speaker Zandakhuu Enkhbold has implored Parliament to pass the Debt Management
Law as soon as possible. The 2015 budget will have to include money set aside for the repayment of
the Chinggis and Samurai bonds as well as the 2012 Development Bank bond, he said. Revenue to
Mongolia in the year to September fell 13.6 percent short by MNT 605.8 billion of earnings this

9. year. Mongolia received MNT 3.798 billion this year compared with MNT 3.951 billion in loans
repayments due, according to data from the National Statistical Office, showing a deficit of MNT
153 billion.
Source: Mongolian Economy
PM REPORTS ON RESULTS OF 100-DAY ECONOMIC ACTION PLAN
Prime Minister Norov Altankhuyag in a 5 October speech to Parliament highlighted the
achievements of his so-called “EZEN” 100-day economic stimulus initiative where he argued that
although the legislative exercise could not solve all of Mongolia's problems the country is now
better positioned to repair the economy.
The Altankhuyag government submitted 28 bills to Parliament for the economic stimulus initiative.
Parliament has approved 12 bills while 16 more still need to be voted on. The new legislation
provided value-added tax (VAT) exemptions to small business to import new equipment, while the
number of inspections in customs was cut to an eighth and time spent on inspections was reduced
to a third. The border capacity at Gashuun Sukhait has tripled while truck drivers are now able to
pass 24 hours a day. Altankhuyag also established the Economic Council to advise him on the
interests of the private sector during this time.
Mongolia's negotiations with China and Russia will have a substantial impact on trade, he said.
Mongolia now has access to eight different sea ports in China, in addition to the Tianjin port it
previously used, and will expand its railway capacity.
Source: UB Post
PREMIER URGES RAIL CONSTRUCTION FROM TT TO BORDER TO FINISH BY OCTOBER 2015
Prime Minister Norov Altankhuyag has urged construction to begin again and hasten for the 267-
kilometer railway being built between Tavan Tolgoi and Gashuun Sukhait so that coal deliveries by
rail can launch by the scheduled date for next year.
Altankhuyag made an official visit to the construction site to see that commissioning of the railway
is made in October 2015. But prepwork has stood at only 76 percent complete since last summer. A
bridge for the rail to travel over is 50 percent complete. No work has taken place on the rail this
year due to difficulties in attaining investment, according to past reports in BCM's NewsWire.
Mongolia has provided funding of USD 193.9 million out of a total USD 200 million from the Chinggis
Bond for the rail's construction. Mongolian Railways LLC (MTZ) has contracted Samsung C&T Corp.
to lead construction of the project, which in turn has hired 12 domestic contractors employing over
1,700 for construction.
Once operational, the railway would transport up to 30 million tons of coal a year, cutting costs by
at least 50 percent.
Source: UB Post
GOVERNMENT RESHUFFLE GOOD NEWS FOR INVESTORS—BUT POLITICAL INSTABILITY, SAYS MIBG
Prime Minister Norov Altankhuyag's plan to restructure the government of Mongolia by consolidating
the number of ministries from 16 ministries to 13 is a positive for investors looking for more
cooperation from the Altankhuyag government, according to Mongolian Investment Banking Group
(MIBG).
“This maneuvering by the Prime Minister is largely seen as another attempt to bolster foreign
investors’ sentiment, a much-needed step in reviving the domestic economy,” reads the Source.
“That said, we cannot overlook the fact that political and Government instability is a real
possibility after certain factions of the Democratic Party have been forced to resign from the
Government.
Altankhuyag's plan is to merge the Ministry of Transportation with the Ministry of Construction and
Urban Development into the Ministry of Infrastructure Development; the Ministry of Energy will
merge with the Ministry of Mines to become the Ministry of Geology, Mining, and Energy; and the
Ministry of Finance will absorb the Ministry of Economic Development. The Invest Mongolia Agency
that operates from within the Ministry of Economic Development will be transferred to the Ministry

10. of Foreign Relations and a National Economic Committee will be established within the Prime
Minister’s office.
It is likely that the restructuring will see the resignation of Minister of Road and Transportation A.
Gansukh for his close affiliation with former Agriculture Minister WHO Battulga, who is seen by the
Source as challenger to Altankhuyag's government leadership role. Minister of Economic
Development Nyamjav “Fortuna” Batbayar and Minister of Energy Mishig Sonompil are also
expected to resign.
“We believe the above changes will increase public support for the Altankhuyag Government. To
date, they have been viewed favorably due to cost savings, increased transparency, decreased
bureaucracy, and contradicts the view that the Prime Minister is creating Ministries to facilitate
political alliances,” reads the source.
Source: Mongolian Investment Banking Group
MONGOLIA TO INTRODUCE NEW TRAFFIC REGULATIONS FOR FRIENDLIER ROADS IN UB
Government authorities plan to a launch a new strategy to manage traffic in Ulaanbaatar in an
effort to reduce the number of traffic accidents in the city. Ulaanbaatar plans to enforce a 2012-20
national strategy for traffic safety and security that includes regulations such as a setting the city-
wide speed limit at 30 kilometers an hour by 2015. The plan will also see merging lanes put in place
on roads.
Source: News.mn
FIRE AT SHANGRI-LA RAISES QUESTIONS ABOUT EMERGENCY SERVICES IN UB
The fire that broke out on 30 September at the 24-story Shangri-La Hotel has demonstrated the
urgent need to improve the emergency response capacities of Ulaanbaatar's fire department.
Nearly 40 firefighters battled the blaze for two hours before the fire was extinguished, with six
firefighter engines arriving late due to traffic and lacking equipment to reach the higher floors of
the building. Firefighters managed to save 23 people who were stuck on the roof, helping them exit
the building safely. No injuries were reported.
“Firefighters couldn’t reach the top floors, as our fire truck tower ladders are only 35 meters tall
and could only reach the 12th floor with high-pressure water hoses,” said T. Dulamdorj, chief of
the National Emergency Management Agency (NEMA), told reporters at the scene. “The city
administration should definitely take this issue into consideration and secure helicopters for fires
occurring in tall buildings similar to this, as this case clearly proved a shortage of required facilities
and equipment for a city with a growing number of tall buildings,” he added.
Authorities said they believed that the fire started on the seventh floor and quickly spread to other
floors, leaving most of the building’s facade scarred. Authorities attributed the cause of the fire to
electrical problems. Dulamdorj said the fire spread so quickly because the material used for the
facade was very flammable. The building was at 80 percent completion and scheduled to open in
December before the fire broke out.
A final report on the fire will be provided within five business days, he said.
Source: UB Post
MONGOLIA-CHINA BORDER BRIEFLY CLOSED FOR FOUR DAYS
China briefly closed parts of its border with Mongolia from 1 to 4 October in observation of the 65th
anniversary of the founding of the Peoples Republic of China. Both sides may close their borders
during national celebrations and holidays according to the Mongolia-China border treaty.
Source: News.mn
MONGOLIA HOLDS PROMISE FOR VIETNAM LABOR, TOURISM
Six decades after the establishment of diplomatic ties, the traditional friendship and partnership
between Vietnam and Mongolia continues to thrive as a result of the relentless pursuit of
opportunities for advancement by its leaders and citizens.

11. “Recently, despite great effort, economic and trade ties have remained relatively modest and not
matched with their fullest potential,” Ambassador to Mongolia Phan Dang Duong said during an
interview recently. “Annual average two-way trade turnover only hit around USD 16 to 18 million.
Mongolia and Vietnam will need to sign agreements on food safety and other areas before trade can
grow, he said but market study, experience sharing, and trade fairs could foster relationships to
prompt such agreements. Mongolia and Vietnam are cooperating in rail and air travel, with a direct
flight between Ulaanbaatar to Vietnam in the works—either Hanoi or Ho Chi Minh is eligible. He said
new visa agreements should be made to stimulate travel between their countries.
“With 90 million people, Vietnam is a potential tourism market of Mongolia as many Vietnamese
people want to explore the country. Vice versa, due to cold winter and no sea, Mongolian people
want to visit Vietnam to enjoy warm weather.”
Source: Voice of Vietnam
MONGOLIAN FARMERS HERD TOGETHER IN FACE OF ADVERSITY
Summer was bountiful for the herders of Darkhid, a small farming community about 40 kilometers
from Ulaanbaatar. Yaks and cows roam across the grassy steppe. A youth on horseback corrals a
flock of sheep. The air is thick with the sweet smell of sea buckthorn.
“Three years ago it was not like this, it was a rocky and sandy place where very little grew,” says
herder Jadamaa Davaa. “Now we have vegetables, fruit trees, and bushes.” Davaa, a broad-
shouldered man in middle age with a thick mustache, points approvingly at a squat greenhouse
perched on a gently sloping hillside: “Now it has changed completely.”
The catalyst for change was the creation of a community co-operative in Darkhid seven years ago.
Before 2007, these nomadic families farmed the same way they had for centuries: working in
isolation, moving four or five times a season, living in the circular ger tents that are common across
Central Asia. Cutting down on costs is not the only advantage of working together. Up to 90 percent
of Mongolia is vulnerable to land degradation, according to the United Nations. Darkhid—despite
the clear spring that runs through the valley—was under threat from desertification when the co-
operative began.
“Before we established the community group we just herded [animals on] the land everywhere,”
says the cooperative’s de facto leader Davaasuren Terbish. “The livestock were eating all the
grasses, so the land turned into a kind of desert. So now we manage the land together. We have
seen an improvement in the soil.”
Not everywhere in Mongolia has been so lucky. Desertification, accelerated by climate change and
the effects of the country’s massive mining industry, has forced many herders off the land. For
Nomadic Nature Conservation’s Tungalagtuya Khuukhenduu, Mongolia has one big advantage as it
wrestles with seismic economic, social and environmental challenges—its people: “Mongolians are
really able to accept new things and adapt quickly.”
Source: Irish Times
DOCTORS SEE IMPROVEMENT IN CHILDREN'S SKIN AILMENTS WITH VITAMIN D SUPPLEMENTS
A study conducted by Massachusetts General Hospital physicians of more than 100 Mongolian school
children found that daily treatment with a vitamin D supplement significantly reduced the
symptoms of winter-related atopic dermatitis, a type of eczema.
“While we don’t know the exact proportion of patients with atopic dermatitis whose symptoms
worsen in the winter, the problem is common,” said Carlos Camargo, a doctor at the hospital's
department of emergency medicine. “In this large group of patients, who probably had low levels
of Vitamin D, taking daily Vitamin D supplements—which are inexpensive, safe and widely
available—proved to be quite helpful.”
Camargo led both an earlier Boston pilot study and the current investigation, which was performed
in collaboration with investigators from the Health Sciences University of Mongolia. That
investigation involved only 11 children but provided preliminary support for the hypothesis that
ultraviolet light can be an effective treatment for a chronic inflammatory disorder called atopic

12. dermatitis. Symptoms of the skin disorder are most commonly seen in children and often worsen
during wintertime.
The current study, conducted in collaboration with the National Dermatology Center in Mongolia,
enrolled 107 children, ages 2 to 17, from nine outpatient clinics in the capital city of Ulaanbaatar.
The participants—all of whom had a history of atopic dermatitis symptoms worsening either during
cold weather or around the transition from autumn to winter—were randomly divided into two
groups. One group received a daily vitamin D dose of 1000 IU while the other received a placebo—
both delivered in odorless, colorless and tasteless drops. At the end of the month, children
receiving the Vitamin D supplement had an average 29 percent improvement on the primary
assessment tool used, compared with 16 percent improvement in the placebo group.
Source: Massachusetts General Hospital
PRICE OF STEELMAKING INGREDIENT, IRON ORE, FALLS TO A FIVE-YEAR LOW
For more than half a decade the mining industry has ploughed billions of dollars into new iron ore
projects. Now, the impact is starting to be felt for Mongolia's fourth most-exported mining
commodity.
The price of benchmark iron ore for delivery into China has fallen by more than 40 percent this year
as a wave of new supply, mainly from mines in Australia, has hit the market. BHP Billiton Ltd.
estimates an extra 400 million tons will hit the market in the next three years, against an expected
increase in demand of just under 200 million tons. However, the supply tsunami is not the only
factor weighing on iron ore, which recently hit a five-year low and is now trading at USD 80 a ton.
Concerns about a slowdown in demand from China, the world’s biggest steelmaker and consumer of
seaborne iron ore, have also taken hold.
Goldman Sachs analysts say the iron ore industry’s long period of above-trend profitability has come
to an end, destroyed by the billions of dollars that large producers have ploughed into new, low-
cost capacity. In spite of the price slump, the big three iron ore producers—BHP, Rio and Vale SA—
have no plans to change their strategies to increase production, even though some leading
shareholders are questioning whether they should be adding more tonnes to an oversupplied
market.
Source: Financial Times
INDIAN COAL IMPORT GROWTH COULD OVERTAKE CHINA
Could India soon overtake China as the world’s biggest consumer of seaborne thermal coal? For
many miners and traders, the answer to that question, posed at the Financial Times’ inaugural
Commodities Retreat in Singapore last week, is yes.
Coal is India’s most important energy source--supplying more than half of all power stations--and
the country, alongside Korea, is emerging as one of the few bright spots in the one billion ton a
year seaborne thermal coal industry. In the wake of adverse legal rulings—the Supreme Court
recently canceled more than 200 coal licenses held by dozens of private sector groups—miners and
traders are tipping strong import growth from India. They say domestic supply growth is weak and
unlikely to improve in the foreseeable future because of bureaucratic and infrastructure
challenges.
Glencore, the world’s largest producer of high quality thermal coal, told analysts on a recent site
visit that it expects Indian annual imports to rise from 150 million tons to 180 million tons in 2015
and 300 million tons by 2020. While that forecast is at the bullish end of market forecasts, few
believe India’s heavily regulated mining sector will be able to dig up enough coal to satisfy local
demand.
India’s rising demand is in sharp contrast to that of China, where the authorities in Beijing are
attempting to reduce imports of thermal coal. However, the National Development and Reform
Commission has reportedly told domestic power plants to reduce monthly coal imports for the rest
of the year to half of the monthly average recorded between January and August. According to
Ljubisavljevic,that could affect 35 million tons of imports.

13. India could overtake China next year if only standard grades of thermal coal—bituminous and sub
bituminous types—are counted. China buys so many different types of seaborne thermal coal—from
high quality Vietnamese anthracite to lower grade Indonesian lignite—that if they are included,
China is still a substantially larger importer than India. If the full spectrum of coal grades is
included, then China will import about 220 million tons whereas India trails at around 135 million,
says Macquarie.
Source: Financial Times
THE PREMIER’S PLAN TO ‘PULL THE WOOL OVER OUR EYES’ - EDITORIAL
The reappointment of one or two ministers is within the authority of Prime Minister Norov
Altankhuyag, and does not require approval from Parliament. There is no need to restructure the
entire Cabinet. Why try to pull the wool over our eyes?
Prime Minister Norov Altankhuyag's proposal to restructure the Cabinet Secretariat to promote
“work that is faster, more dynamic, more accurate, and has a higher level of responsibility” will be
brought up for discussion during the fall session of Parliament. It is not too difficult to infer the real
reason behind the plan: Altankhuyag needs to replace Economic Development Minister Nyamjav
“Fortuna” Batbayar because Batbayar's influence in government rivals his own. It's a mediocre play
employed by a poor manager.
The two previous Cabinets for “Alliance” and “Reform” relied on a delicate balance between the
political interests of the political parties. Attempting to balance political interests with government
appointments from different parties has created factions within government. The current economic
situation will only worsen during restructuring.
A few conditions must be met for a well-functioning and stable government. First of all,
parliamentarians should not receive any ministerial appointments. Mongolia has seen plainly that
having 20 percent of its members with ministerial positions creates conflicts of interests. The next
condition is the need to see the agendas of political parties. Finally, the roles of ministries need to
be clearly established. Until these conditions are met, there is little chance for the Mongolian
government to function effectively with stability.
Dambadarjaa “Jargal DeFacto” Jargalsaikhan is the host of the DeFacto television show on NTV
Mongolia and a host of the radio program Defacto. He writes weekly columns on current economic,
political and social issues.
Source: UB Post
POLITICS
MONGOLIA'S PARLIAMENT ENDORSES GOVERNMENT RESTRUCTURING BILL
Mongolia's lawmakers on Tuesday approved changes in government structure in a bid to clear up
overlapping functions and cut off excess staff.
The parliament passed by 73.9 percent of votes a bill diminishing government ministries from the
current 16 to 13, with 11 regulatory agencies and 19 implementing agencies. According to the bill
submitted by Prime Minister Norov Altankhuyag, Ministries of Finance and Economic Development
will be merged into the Finance Ministry; Ministries of Mining and Energy into the Geology, Mining
and Energy Ministry; Ministries of Construction and Urban Development and Road and Transport into
the Ministry of Infrastructure Development. Furthermore, the government will appoint a first
deputy prime minister and deputy prime minister.
The bill suggests that the foreign minister be a deputy prime minister and that the foreign minister
widen foreign cooperation, strengthen economic relations with its neighbors and other foreign
countries, and regulate and coordinate foreign relations and collaboration of all ministries. In
connection with it, the first deputy prime minister will be in charge of current deputy prime
minister's duties and responsibilities, according to the bill.
Source: Xinhua
L. KHANGAI APPOINTED AS PRESIDENT'S AGENT

14. The Office of the President has appointed L. Khangai as the president's acting agent in charge of
affairs concerning cooperation with Russia, as well as infrastructure and corruption.
Source: Montsame
ADB OFFERS FINANCING FOR EMPLOYMENT, WASTE MANAGEMENT INITIATIVES
Social Policy Standing Committee head D. Battsogt has agreed to back Asian Development Bank
(ADB) project proposals that target employment and waste management.
ADB Country Director Robert Schoellhammer proposed that Mongolia this year budget for its "Skills
for Employment" and "Darkhan Waste Water Management” projects. ADB could provide USD 25
million in financing for the employment initiative, he said, which would focus on the three targeted
spheres of agriculture, construction and road-transportation. The second project aims to make the
living conditions of Darkhan more convenient by upgrading the waste water management.
Source: Montsame
MONGOLIA APPROVES PARTNERSHIPS WITH INTERNATIONAL NUCLEAR ENERGY GROUPS
The Cabinet Secretariat on 4 October approved partnership agreements with two international
groups to help direct its operations in nuclear energy research and business.
Mongolia approved a mid-term technical cooperation program with the International Atomic Energy
Agency (IAEA) to collaborate on its nuclear energy strategy. The Cabinet authorized the head of the
Nuclear Energy Agency, N. Tegshbayar, to sign the 2015-2019 program, which would receive some
financing from the IAEA. The nuclear energy group will help train Mongolian engineers to upgrade
its facilities. Mongolia and the IAEA have cooperated on 63 projects worth a total USD 13.2 million
since 1973.
Education Minister L. Gantumur that same day received the go ahead to sign an agreement with the
European Organization for Nuclear Research (CERN) to facilitate Mongolia's research in the area.
The European group is a leading global high-energy research engine that was established in 1954.
Source: Montsame 1, 2
MONGOLIA PARTICIPATES IN OSCE PARLIAMENTARY ASSEMBLY AUTUMN SESSION
Mongolia has confirmed its intention to host a 2015 meeting for the Organization for Security and
Co-operation in Europe (OSCE) during a meeting last held last week.
MP N. Enkhbold led a Mongolian delegation in Geneva, Switzerland from 3 to 5 October for the
autumn meeting of OSCE where they listened in on reports coverings topics such as elections held in
member states. Enkhbold in a speech at a standing committee’s meeting said Mongolia would host
the autumn meeting next year.
Source: Montsame
MONGOLIA, DPRK MPS DISCUSS ACCESS TO PORTS IN RASON SPECIAL ECONOMIC ZONE
A Mongolian delegation in North Korea from 27 to 30 September negotiated for Mongolian access to
ports in the Rason Special Economic Zone.
Deputy Parliament Speaker R. Gonchigdorj led the delegation to meet with Chairman of the
Presidium of the Supreme People's Assembly Kim Yong-nam and Deputy Chairman of the Supreme
People’s Assembly Ahn Dong-chun, who was invited to visit Mongolia. The Mongolian delegation
visited a popular tourist destination in the city Wonsan, the Songdowon International Children's
Camp in there, the National Academy and Institute of Koryo Medicine, and the Pyongyang Maternity
Hospital and Okryu Children's Hospital in Pyongyang.
Source: InfoMongolia.com
KOREA DENIES REPORT THAT EX-MONGOLIAN PRESIDENT SEEKING ASYLUM
The South Korean government has denied a local news report that former Mongolian President
Nambar Enkhbayar was seeking political refugee status in Korea.
"We have not received any requests from Nambaryn Enkhbayar seeking asylum here," a Korea
Immigration Service (KIS) official said on condition of anonymity.

15. Enkhbayar, 56, was convicted of corruption by Ulaanbaatar's highest court in 2012 after serving his
four-year presidential term from June 2005 to June 2009. Seoul's immigration office added that
Enkhbayar has been living in Korea since August of last year after the Mongolian government
granted him a pardon, citing his "health."
The former Mongolian president and prime minister was sentenced to two-and-half years in jail in
2012 for illegally acquiring government-owned properties, including the Urgoo hotel, before
receiving a presidential pardon in 2013. Citing Ulaanbaatar media reports in September, Korean
newspaper JoongAng Ilbo reported that Enkhbayar's move is seen as a bid to dodge possible re-
investigation over past corruption charges.
Enkhbayar had close ties with former Korean presidents―the late Roh Moo-hyun and Lee Myung-
bak―during his presidential years. As a Buddhist, Enkhbayar also won prizes awarded by Korean
Buddhist organizations in both 2006 and 2007 for his piety.
Source: Korea Times
MONGOLIA CONSIDERS ADDITIONS TO WORLD HERITAGE LIST
Mongolia will debate nominations for UNESCO's World Heritage List at a seminar to be held at the
Mongolian University of Science and Technology.
Mongolia is considering adding 16 additional natural and cultural sites to the list. The operational
guidelines of the World Heritage Committee recommend countries update their tentative lists
approximately once every 10 years. Mongolia’s Orkhon Valley Cultural Landscape, Petroglyphic
Complexes of the Mongolian Altai (World Cultural Heritage) and Uvs Nuur Basin (World Natural
Heritage) are already registered to the UNESCO World Heritage.
A seminar will be held separately for World Natural Heritage and World Cultural Heritage where
experts from World Natural and Cultural Heritage organizations will assist the National Committee
of Mongolia for World Heritage.
Source: News.mn
MONGOLIA TO FURTHER CONTEST ASIAN GAMES BOXING DECISION
Mongolia will escalate its complaints about a referee ruling in a boxing match at the 2014 Asian
Games in Seoul, Korea, its chief of mission said on Saturday.
"Our national Olympic body has decided to write a protest letter to the International Boxing
Association (AIBA) explaining the details of the contentious bout," MP B. Bat-Erdene told reporters.
"We will also take up the matter at future meetings of the world body and tell them that something
is wrong with the rules".
Bat-Erdene said the Mongolian team felt cheated in the men’s 55-kilogram category when Tugstsogt
Nyambayar lost his semifinal match with South Korean contender Ham Sang-Myeong, which was
determined on a point basis. Mongolia made a brief sit-in protest and also complained officially.
India, too, made an official protest for the results of a match that ruled in favor of South Korea,
between L. Sarita Devi and South Korea's Park Ji-na in the women 60-kilogram semifinal. Both
Mongolia and India's protests were rejected by the AIBA's technical committee because the game's
regulations do not allow teams to challenge referee rulings.
“I am happy that India protested and hope that countries who felt the jury was biased during the
Asian Games should also approach the AIBA for this," Bat-Erdene said.
Mongolia sent 66 athletes to Korea, finishing at 16th place and bringing home 21 medals—5 gold, 4
silver and 12 bronze. International Master of Sport D. Otgondalai was the only Mongolian to vie for a
gold medal in the boxing tournament of the 2014 Incheon Asian Games.
Source: Montsame
FORMER KHUTUL CEMENT CHAIR SENTENCED TO FOUR YEARS FOR GRAFT
A former director of Khutul Cement and Lime Plant LLC received a sentence of four years and six
months on counts of graft.
Also convicted of crimes was accountant D. Naranchimeg, who sentenced to three years and six
months. Other employees received sentences of six months. The Independent Authority Against

16. Corruption (IAAC) opened an investigation into total more than 20 officers at the Khutul Cement &
Lime Plant since 2013. [Source does not indicate whether all 20 individuals who were under
investigation received sentences -ed]
Source: Udriin Sonin
UB MAYOR OPPOSES PROPOSED 2015 BUDGET
Ulaanbaatar Mayor Erdene Bat-Uul publically aired his opposition to the proposed 2015 budget
submitted to him at an 8 October press conference, saying that he would not push the budget
forward to the Ulaanbaatar Citizens' Khural.
"If this draft is adopted, the city's construction will stagnate," Bat-Uul said, adding that he was
"shocked with this unprecedented version of a draft budget."
The proposed budget would see between MNT 450 billion and MNT 500 billion in spending on the
salaries of teachers, healthcare providers, and maintenance workers. "It is impossible, because
Ulaanbaatar cannot provide some 330 billion for the above costs, it will make the city go
bankrupt,” he said.
Source: Montsame
UB LEADS CHARGE TO FIGHT CORRUPTION ALONGSIDE ASIA FOUNDATION
Ulaanbaatar Mayor Erdene Bat-Uul signed the “Ulaanbaatar Declaration Against Corruption” during
a forum focusing held on 6 and 7 October in Ulaanbaatar on how the capital can lead the offense
against graft.
The “Transparent Ulaanbaatar 2014: Anti-Corruption Forum” brought together more than 200
guests from 16 countries including keynote speaker Larry Diamond, a senior fellow at Stanford
University’s Hoover Institute and the Freeman Spogli Institute for International Studies. Mayor Bat-
Uul hosted this dedicated forum to demonstrate his commitment to ensuring these efforts succeed.
“In Mongolia, corruption is so common that it has become a kind of social norm. In the end, it
makes the state turn against the interests of the public. The state becomes the enemy of its own
people. It ruins the main principles of democracy,” said Bat-Uul in a speech that set the tone for
the day's discussions.
Despite a strong commitment to combating corruption including national legislative and
institutional reforms over the last few years, Mongolia continues to rank among the most corrupt
countries in the world, according to international indices. The Asia Foundation, through its
Strengthening Governance and Transparency Program funded by USAID, has been working together
with the Ulaanbaatar City Municipality since 2013 to improve good governance and increase
transparency in the capital.
The Asia Foundation formally partnered with Bat-Uul and Navaansuren Ganbold, commissioner
general of the Independent Authority Against Corruption (IAAC), on 9 December 2013 with the
signing of a joint action plan for 2013 and 2014 to improve good governance within the city
municipality. That partnership has seen a resolution to land permission issues with the digitization
of over 150 land demarcations maps that have been made publically available on a website for the
city's land and property office. The initiative has also seen the public dissemination of up-to-date
information on the city's human resources and budget and a collaboration with the city’s legal
department to develop an integrated database containing key decisions and city legislation made
by the Ulaanbaatar's Citizens' Council, the governor’s office, and the city’s nine districts and
agencies.
Source: Asia Foundation
UB BANS PIGEON FEEDING
Ulaanbaatar city officials have introduced a new ban on feeding pigeons, citing health concerns.
The Specialized Inspection Agency has banned the sale of pigeon feed and feeding pigeons by hand
at the Gandantegchinlen Monastery in an aims to slow down the growth of pigeon populations in
such areas where pigeon feeding has become customary. The ban is due to concerns from health
experts that the birds bring a high risk of the spread of disease and infection, said officials.

17. Source: News.mn
___________________________________________________________
ANNOUNCEMENTS
RISK MANAGEMENT AND INSURANCE SOLUTIONS CONFERENCE, 16 OCTOBER, CORPORATE HOTEL
Session 1: Risk Management and Insurance Solutions Conference for Mongolian Industries. Mining
Sector
Morning session (08:00 – 14:00)
Type of event: conference
Description:
The first session of the Risk Management and Insurance Solutions Conference for Mongolian
Industries, arranged by Aon in cooperation with BCM.
Organizers will bring together professionals from the leading Reinsurance and Insurance markets of
Europe, as well as other risks specialists in order to present a full-cycle overview for the mining
industry with a major focus on real cases and applicable specifics. Companies operating in this field
and the ones investing into such business are invited as well as local insurance companies and
financial institutions.
_________________________________________________________
Session 2: Risk Management and Insurance Solutions Conference for Mongolian Industries: Trade
Credit and Political Risks Workshop
Afternoon session (14:00 – 21:00)
Type of event: workshop
Description:
The second session of the Risk Management and Insurance Solutions Conference for Mongolian
Industries, arranged by Aon in cooperation with BCM.
Political Risks and Trade Credit Risks will be in focus for this workshop. In its course participants
will be provided with a comprehensive overview on the competitive and effective solutions to
protect interest of investors into Mongolian business (Political Risks), as well as Mongolian
companies that have trading operations (Trade Credit). Both groups of risks are quite universal and
will be of interest for wider audience of BCM members.
Participation in both sessions is free of charge and is subject to preliminary reservation. A special
reception at Monet restaurant in Central Tower will be held for all participants of both sessions on
the evening of 16 October. Email saruul@bcmongolia.org by 10 October for registration or call 11
317027.
____________________________________________________________________
MONGOLIA PROJECTS & INVESTMENT SUMMIT, 17-19 NOVEMBER, HONG KONG
The Mongolia Projects & Investment Summit will be held in Hong Kong from 17 to 19 November,
where Prime Minister Norovyn Altankhuyag will present his vision to sustain Mongolia’s growth.
The context of the Summit will be a constructive, productive and sincere appraisal of Mongolia as a
place for FDI, given the current circumstances, and what is being done to strengthen its
attractiveness to the international investment community. The Mongolia Projects & Investment
Summit Hong Kong will bring together leading business, investment and governmental figureheads
in an environment of progressive discussion and action.
The implementation of the new Investment Law, amendments made to the Mining Law, a realized
dedication to PPP and more do show that the government is moving in the right direction. The
question on investors’ minds is what tangible progress has been made since last November which
would warrant a return of FDI?
BCM members are eligible for a 15 percent early bird special. Download the brochure for the
conference agenda here. For registration logon here, or for more information email
info@beaconevents.com or call: +852 2219 0111.

18. _____________________________________________________________________
‘BCM IN THE UNIVERSITY CLASSROOM’ NEWS
Business Council of Mongolia (BCM) has been pushing forward with its ‘BCM in the University
Classroom’ series since March 2012. Led by BCM’s Education Working Group, the program provides
lectures at universities to help inspire students and give them direction for their future careers.
The series has grown to include an average of 10 lectures per academic year. Now 1,856 students
and teachers have participated with BCM in the University Classroom Project.
Most recently Bilguun A, CEO at MIBG gave a presentation entitled “Review and Outlook of
Mongolian Investment Environment” to an audience of 87 teachers and students at the University of
the Humanities, on 9 October.
The next BCM in the University`s Classroom series lecture will be held on 22 October at Mongolian
National University. GDM Company will be invited to speak. Presentation title: “Green solutions for
Building Industry”. For further details, please contact Erdenetsetseg T, BCM Working Group
Coordinator at erka@bcmongolia.org.
_____________________________________________________________________________________
BCM WORKING GROUP MEETINGS
Legislative Working Group
BCM’s Legislative Working Group has gathered more than 40 expert lawyers from all sectors and
member organizations of BCM.
They represent law firms and lawyers from national, international organizations, embassies and
private sector to advocate for certain legal and business practice matters.
Recently, the BCM’s Legislative Working Group gave recommendations on the Minerals Policy which
was submitted to the Parliament for consideration. They also presented recommendations on the
amendments to the Minerals Law to a group of influential MPs.
The Legislative Working welcomes suggestions from BCM members to discuss particular laws for
amendment or further action.
For further details, please contact Erdenetsetseg T, BCM Working Group Coordinator at
erka@bcmongolia.org.
Tax Working Group
BCM`s Tax Working Group met on 1 October with 14 people attending.
Co-chair Tsendmaa Ch, Tax Executive Director of PwC, moderated the meeting.
New members: Rentsenkhand D - BDO, Nyamdulam N and Zoljargal Ch - PATC.
New Participants: Enkhmaa D, Munkhtsetseg S from MSM.

19. Speakers and topics were:
1."The changes to tax regulations" in 2014 by Azzaya L, Senior Tax Consultant of PwC, and
Tsendaa Ch, Tax Executive Director of PwC
2. Open discussion
Members discussed various tax law applications in Mongolia and asked any agenda topics for next
WG meeting.
If you have any suggestions for the next Tax WG meeting agenda, please send it to
erka@bcmongolia.org.
Logistics Working Group
BCM`s Logistics Working Group met on 30 September with 9 people attending.
Chairman Tengis G, Chief Executive Officer of Monroad, moderated the meeting.
New Participant: Inca Bataa from Santa Fe Relocation Services
Speakers and topics were:
1. "Mongolian Customs"- Amgalan N, Regulatory Reform Manager at Business Plus Initiative (USAID).
2. Defining the mission in a position paper of the Working Group.
Members discussed the Logistics WG mission and suggested it include the following key areas:
1. Logistics policies-influence
2. Transparent customs-inspection agency
3. Logistics routes
4. Logistics centers
5. Transport insurance
6. Transportation cost (import, export, nationwide)
If you have any comments or suggestions on the Logistics WG mission, please send them to
erka@bcmongolia.org.
The next working group meeting is scheduled on 25 November with the following agenda:
1. Discussion of Logistics WG Mission statement
2. Guest: Federation of Freight Forwarder of Mongolia.
We still welcome those who have interest to join our BCM`s Logistics Working Group.
______________________________________________________________________________________
BCM WEBSITES
MONGOLIAN WEBSITE: ‘PRESENTATIONS’
The following statistics and reports posted on Presentations section in Mongolian:
http://bcmongolia.org/mn/илтгэлүүд
6 Presentations at Discover Mongolia, Children’s Palace, UB, 4-5 September, 2014 (MNG)
• Б.Оюунгэрэл - "Монголын Геологи, Уул уурхайн Мэргэжлийн Институт" Дисковер
Монголиа 2014
• Б.БААТАРЦОГТ ГЕОЛОГИЙН БОДЛОГЫН ХЭЛТСИЙН ДАРГА - "ГЕОЛОГИ ХАЙГУУЛЫН
ТАЛААР ТӨРӨӨС АВЧ ХЭРЭГЖҮҮЛЭХ АРГА ХЭМЖЭЭ" Дисковер Монголиа
• Монголын алт үйлдвэрлэгчдийн холбооны Удирдах зөвлөлийн дарга Т.Ганболд - "АЛТНЫ
САЛБАРЫН ӨНӨӨГИЙН БАЙДАЛ, ЦААШДЫН ЗОРИЛТ" Дисковер Монголиа 2014
• Лхамаасүрэнгийн Раднаасүрэн УУЯ-ны СБТГ-ын ТБХ-ийн дарга "МОНГОЛ УЛСЫН
НҮҮРСНИЙ ЭКСПОРТЫН ӨНӨӨГИЙН БАЙДАЛ" Дисковер Монголиа 2014
• Г. Эрдэнэбилгүүн "Ашигт малтмалын нөөц ашигласны төлбөр, холбогдох асуудлууд,
боломжит шийдлүүд" Дисковер Монголиа 2014
• УИХ, ЗАСГИЙН ГАЗРЫН ГИШҮҮН Д.ГАНХУЯГ "ЭРДЭС БАЯЛГИЙН САЛБАРЫН ЭРХ З ҮЙН
ОРЧНЫ ШИНЭЧЛЭЛ" 2014 ОНЫ 09 ДҮГЭЭР САРЫН 04 ДИСКОВЕР МОНГОЛИА

20. • U.S. Ambassador Piper Campbell's speech at Invest Mongolia
• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 4 сарын байдлаар, Үндэсний
статистикийн хороо
• Мандал Женерал Даатгал тайлан, 2014 оны 5 сар
• Сант марал сангаас гаргасан УЛС ТӨРИЙН БАРОМЕТР №13(47), 2014 ОН 3 САР
• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 3 сарын байдлаар, Үндэсний
статистикийн хороо
• “Anti-Corruption legislation and State Policy” (Mongolian) by D. Munkhjargal, Prevention
and Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption
(IAAC) Mongolia at the “ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE
ON TRANSPARENCY” Training seminar, Mar 06, 2014
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', ‘INTERVIEWS‘, MONGOLIAN
BUSINESS NEWS’, ‘PHOTO GALLERY’
2 Presentations at BCM Monthly Meeting on September 22, 2014:
• Peter A. Markey, Managing Partner, Ernst & Young Mongolia – "Business Risks in the Mining
and Metal sector"
• Kh. Dorjpalam, Officer Treasury, Oyu Tolgoi - "Overview of the Risk Management and
Insurance Conference in October in UB"
9 Presentations at Discover Mongolia, Children’s Palace, 4-5 September, 2014 (ENG)
• Cameron McRae, Executive Chairman, SkyPath Partners LLC, Mr. Geoff McNamara, Pacific
Road Capital, Financial Regulation Committee, Ministry of Economic Development, Moderator: Jim
Dwyer, Executive Director, Business Council of Mongolia - "Panel Discussion"
• Amarbayasgalan.E, Director, Investment Banking Division, Golomt Bank - "Banking and
Mining" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014
• Neil Ashdown, Deputy Head of Asia, IHS - "Mongolian Competitiveness among Asian
Emerging Market" Discover Mongolia 2014 International Mining Investors Forum, September 4-5,
2014
• Paul Cromie, Chief Geoscientist for Asia Pacific, Anglo American - "Anglo American Global
Exploration" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014
• Peter Akerley, President & CEO, Erdene Resource Development - "Mining Exploration
Project" Discover Mongolia 2014 International Mining Investors Forum ,September 4-5, 2014
• George Lloyd, CEO, Xanadu Mines - "Mining Exploration Project" Discover Mongolia 2014
International Mining Investors Forum, September 4-5, 2014
• Adrian Buck, Geo Consultant - "TSIM Geophysics: Mongolian Case Studies" Discover Mongolia
2014
• Sebastian Rosholt, Senior Associate, Minter Ellison LLP - "Amendments to the 2006 Mineral
Law of Mongolia: Private sector overview" Discover Mongolia 2014 International Mining Investors,
September 4-5, 2014
• Bilguun Ankhbayar, CEO, MIBG LLC - "Review and Outlook of Mongolian Investment
Environment" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014
12 Presentations at Invest Mongolia, Blue Sky Hotel, 2-3 September, 2014 (ENG)
• APIP - "Trends and Dynamics of the Real Estate Market in UB" Invest Mongolia 2014
• "Mongolian Cashmere Industry Overview" Invest Mongolia 2014
• B.Tsogtgerel, Vice Minister - "MINISTRY OF INDUSTRY AND AGRICULTURE" Invest Mongolia
2014

21. • Toshinobu KATO, JICA Mongolia - "Perspective on Long-term Development Strategy in
Mongolia～Japanese experience and cooperation" Invest Mongolia 2014
• Tokyo Stock Exchange - "Opportunities for Mongolian Companies to Raise Capital in Japan"
Invest Mongolia 2014
• Matthew Pottle, Country Managing Partner, PwC - "Mongolia: capitalising on the
megatrends" Invest Mongolia 2014
• Graeme Hancock, President, Anglo American Mongolia - "ANGLO AMERICAN AN
INTRODUCTION" Invest Mongolia 2014
• John Johnson, CEO, CRU China-"China's top commodity trends and what this means for
Mongolia" Invest Mongolia 2014
• Batsukh Galsan, Chairman, "OYU TOLGOI" PROJECT" Invest Mongolia 2014
• Ya. Batsuuri, CEO, Erdenes Tavan Tolgoi JSC - "Largest developing coking coal deposit in the
world" Invest Mongolia 2014
• Graeme Knowd, Associate Managing Director - "Mongolia Banking System Outlook Mongolian
Banks Face Cyclical and Structural Challenges " Invest Mongolia 2014
• Erdenedalai Odkhuu, Associate; Bolormaa Gulguu, Associate, Hogan Lovells (Mongolia) LLP -
"Legal Developments in 2014 :Changes and Future Developments" Invest Mongolia 2014
2 presentations from BCM monthly meeting on June 23, 2014:
• T. Gansuld, Executive Director, Outotec Mongolia – “Outotec Mineral Processing Solutions
and Experience in Mongolia”
• Lisa Gardner, Journalist & Media Trainer – “Mongolia’s Media Laws: Defamation, Libel and
Threats to Press Freedom”
3 presentations from BCM monthly meeting on May 26, 2014:
• B. Lakshmi, Director, Mongolia Economic Forum – “Why Mongolia Business Summit?”
• Nick Cousyn, Co-chair, BCM Capital Markets Working Group – “Use of MSE for State
Privatizations”
• Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – “Mongolia Roads –
Achievements and Challenges”
• China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital
Securities Limited
Mongolia Reports: http://bcmongolia.org/en/mongolia-reports
• Mongolia Economic Report – August 2014 by BCM;
• World Investment Report 2014 by United Nations Conference on Trade and Development ;
• Social and economic situation of Mongolia as of May 2014 by National Statistical Office of
Mongolia; (available in Mongolian language - Монгол улсын нийгэм эдийн засгийн байдал 2014
оны 3 сарын байдлаар, Үндэсний статистикийн хороо);
• Real Estate Report 2014 by Mongolia Properties;
• ASIA Reaching for the Top by International Monetary Fund, June 2014;
• ASIA Achieving Its Potential by International Monetary Fund, June 2014;
• Mongolia: Economy outlook 2014, by Asian Development Bank;
• Polit Barometer by Sant Maral Foundation, March 2014.
Interview Section: http://bcmongolia.org/en/interviews
• Peabody Energy's Greg Boyce Says Don't Write Off Coal
• Talking to United World, the Executive Director of the Mongolian Drilling Association (MDA)
Professor J. Tseveenjav. Source: http://www.worldfolio.co.uk/;
• Jim Dwyer, Executive Director, BCM – “Business need more business”;

22. • Damshnamjil Tsogtbaatar, Chairman of the SPC: “Privatizing Mongolia”;
• Jan Hansen, Economist, ADB: “The depreciation should help to increase the
competitiveness and to develop the non-mining industrial sector”.
BCM's English website includes the “Mongolia Business News” section. 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 6th Anniversary BCM Renewal dinner on November
11, 2013.
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 https://www.facebook.com/TheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
https://twitter.com/bcmongolia.
The bulk of the content on BCM’s new LinkedIn page is Mongolian language to better cater to BCM's
Mongolian-speaking audience and members. Please click on the below link to follow us on our new
LinkedIn page.
http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo
Social stats: BCM now has 6,130 fans on our Facebook fans page, 1,737 connections on LinkedIn
network, and 1,250 followers on Twitter.
Of course for news information, interviews, event photos, videos and announcements regarding our
organization, visit the official BCM website at http://bcmongolia.org/en/
________________________________________________

24. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
August 31, 2014 *13.7% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 13.6% y-o-y, Ulaanbaatar city, August 31, 2014
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]
July 30, 2014 12.00% {source: Mongol Bank}
CURRENCY RATES – 9 OCTOBER 2014
Currency Name Currency Rate
US Dollar USD 1,846.28
Euro EUR 2,360.47
Japanese yen JPY 17.15
British pound GBP 2,992.45
Hong Kong dollar HKD 238.05
Chinese Yuan CNY 301.10
Russian Ruble RUB 46.29
South Korean won KRW 1.72
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.
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