This newsletter from the Business Council of Mongolia provides an overview of recent Mongolian business and economic news. It discusses developments at the Oyu Tolgoi mine, including its 2014 budget approval and a power deal. It also reports on mining, exploration and financing deals involving Tavan Tolgoi, Shenhua, Erdenet, and several junior miners. On the economic front, it mentions inflation, currency rates and plans to allocate part of the budget to construction. For politics, it notes progress on a minerals policy and cooperation between ministries. The newsletter recaps the previous month's BCM meeting and welcomes seven new member companies to the Business Council of Mongolia.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 304-305 – December 20, 2013
HAPPY HOLIDAYS TO ALL OUR BCM MEMBERS!
WATCH FOR SPECIAL „2013 YEARENDER‟ NEWSWIRE ISSUE NEXT FRIDAY,
DECEMBER 27
NEWS HIGHLIGHTS:
Business
 Oyu Tolgoi approves 2014 budget;
 OT mine‟s „Phase Two‟ bank financing pledges extended;
 Trafigura agrees to off-take deal for Oyu Tolgoi mine;
 OT to cooperate in Tavan Tolgoi power plant project;
 Erdenes TT unlikely to pay $160m debt to Chalco in 2013, says CEO;
 Reserves of the Tavan Tolgoi JSC coal deposit increased twofold;
 Shenhua to import 30-50m tons of coke per year from Mongolia;
 Erdenet Mining brings MNT 370 billion to state budget;
 Asgat silver deposit to undergo development;
 MIAT to hire foreign-skilled management;
 Standard Bank consultant detained amid debt dispute;
 Khan Bank opens express banking center;
 Erdene announces new gold discovery at Altan Nar;
 Xanadu Mines forms JV for copper exploration in Mongolia;
 Jatenergy tests prove conversion of Mongolian brown coal to semi-coking coal;
 SouthGobi Resources announces restated financial and operating results;
 MSE cancels Khansh Invest‟s brokerage licenses;
 MNU partners with University of California for renewable energy;
 McDonald's International calls for franchisee to possibly open in Mongolia;
 Japanese “Sun Rice” plant opens in Mongolia;
 MNBC migrates to DVB-T2 with Thomson Video Networks;
 Chinese firm negotiating to acquire Just Agro;
 Mongol TV exposes media corruption with fake McDonalds‟ story;
 EBRD adopts new strategy for energy and natural resources sector;
 Sustainability hosts SESA workshop;
 UB registers Maternity Hospital No. 1;
 Rio Tinto‟s Sam Walsh digs in for the long haul;
 Kyrgyzstan files ecology damage lawsuit against Centerra.
Economy
 Fitch affirms two Mongolian banks at 'B'; revises outlooks to „Negative‟;
 Mongolia score falls on political risks index for mining investment;
 Mongolia looks for second chance with foreign investors;
 CPI increases to 12 percent, year-over-year, in November;

2.  Growth seen in export of precious metals;
 MNT 78.8 billion will be entered into the Stabilization Fund;
 Economic Development Ministry plans to put 81% of budget into construction;
 TT power plant may need conclusion to OT dispute, says director;
 Cabinet to conclude concession on Altanbulag-Zamyn Uud highway;
 MNT 11.6 billion will be spent for building emergency alarms in UB;
 EIU clarifies extent of official estimates of oil shale reserves;
 Mongolia and the threat of the resource curse;
 Mongolia's nomads warm to solar power;
 Iron-ore and coal prices go separate ways;
 Are commodities traders „too big to fail‟?
 Smog darkens Shanghai's prospects for becoming a global financial center.
Politics
 Minerals Policy enters final discussions;
 Parliament unanimously backs “Smart Government” initiative;
 Government calls to end practice of appointing MPs as ministers;
 Committee leaders to be elected this month;
 Foreign currency banned for mining/exploration licensing fees;
 Mining Ministry to cooperate with Association of Fluorspar Explorers;
 DP rejects Amarjargal‟s resignation;
 MPP head to step down;
 Fifth round of negotiations for the Japan-Mongolia Economic Partnership Agreement;
 First Mongolia-China joint border commission meeting in Beijing;
 Belarus to open embassy in Mongolia in 2014;
 Howell, New Jersey, USA becomes 'sister city' of Sukhbaatar district;
 Mongolian calligraphy added to UNESCO Cultural Heritage List;
 Though Improving, Mongolia still reeling under corruption;
 MPP demands dismissal of ministers;
 Former Tavan Tolgoi JSC director arrested;
 Mongolia, Turkmenistan join international racing federation;
 Mongol TV head: media can help fix the big problems.
ECONOMIC INDICATORS
 MSE Top 20 Index by market Capitalization;
 Foreign-listed Companies with Mongolian Assets;
 Inflation;
 Central bank policy rate;
 Currency rates.
*Click on titles above to link to articles.

3. SPONSORS
Khan Bank International SOS
Wagner Asia Automotive Oxford Business Group
Mongolian National Broadcasting Breakthrough PR
BCM MONTHLY MEETING RECAP
The BCM meeting on 9 December with Bayanjargal Byambasaikhan in the chair was attended by 80
members and invited guests. Byambasaikhan made reference to the changes made to the legal
environment for investors and how the president is putting his efforts into creating a ―smart‖
government to improve things even further.
―I think this message is of a change for the economic life of Mongolia,‖ said Byambasaikhan.
―Everyone is saying government is an obstacle and it needs to be changed. That's what's being
discussed now.‖
BCM membership now stands at an all-time high. The seven most recently joined members are:
1. Amar Power LLC operates in the fields of construction of power plant and facilities, relevant
configuration services, consulting service, sales and supply of electrical equipments. Its skillful
engineering team cooperates with several organizations, companies and research institutes of
Russia, China, the United States, Canada, Australia, Turkey and Poland that perform similar
operations and activities.
2. AREC Mortgage Corporation is a non-banking financial institution that specializes in real estate
finance in Ulaanbaatar. AMC provides finance on mortgaged property and provides project finance
to real estate developers for their development projects.
The banking system in Mongolia is still relatively underdeveloped. AMC provides loans to SMEs at
lower rates than would otherwise be available to them. All loans are well secured by property
mortgage. AREC has a team in Ulaanbaatar that performs property management and asset
management for the assets AREC manages.
3. Fiscal Audit provides audit consulting, financial statement analyzing, tax consulting and financial

4. statement assurance services from independent position to legal entities and business owners in line
with the Law of Mongolian Auditing, Law of Mongolian Accounting and other International Auditing
and Financial statement preparation standards using with professional ethics of auditors.
4. Fluor is one of the world‘s leading publicly-traded engineering, procurement, construction,
maintenance, and project management companies. It was ranked No. 1 on Fortune magazine‘s
―Engineering, Construction‖ industry list of America‘s largest corporations and #1 in the same
category on Fortune‘s annual survey of ―World‘s Most Admired Companies.‖
It operates over 1,000 projects annually, serving more than 600 clients in 79 different countries
with 41,000 employees executing projects globally. It has offices in 29 countries on six continents
and in 2012 celebrated 100 years of exceeding client expectations.
5. Khaan Insurance LLC is a national investor-owned insurance company in Mongolia.
Khaan Insurance was formed in 2012 to write insurance throughout the Mongolia. It has 18 active
branches and was listed in the top 10 entities in terms of equity—all in just a year since its
establishment. Khaan Insurance's reinsurance partners are globally accredited companies.
Its core businesses are property, casualty and liability insurance.
6. NovaTerra advises entrepreneurs, large corporations, governments, financial institutions and
private equity firms. Its approach is to be deeply involved with clients in long-term relationships.
NovaTerra can invest alongside its clients and further invest part of its success fees into deals or
companies. NovaTerra has a proven record in negotiating and closing projects and agreements with
the Mongolian Government
7. Outotec Oyj provides customers with technology solutions and services that support the entire
life cycle of operations. Outotec tailors solutions to customers‘ needs to ensure that they receive
the smartest value from virtually all types of ore while making the least impact on the
environment. In addition, its global sales and service network guarantees that there is always an
experienced Outotec professional on hand for support.
Outotec Mongolia LLC was officially formed in Mongolia from January 2013. It now cooperates with
Erdenet Mining Co., Oyu Tolgoi LLC, Energy Resources LLC and Boroo Gold.
J. Bayarmagnai, executive director of the Quality Supplier Development Center (a USAID grantee)
spoke first on his organization and its missions to increase the productivity and competitiveness of
small- and medium-size enterprises. He said the center acts by intervening to facilitate in
relationships between buyers and suppliers, and that its impact can be determined by looking at
added sales as indicators. They also look to remove bottle necks that producers face in meeting the
needs of buyers.
―This is very exciting because I believe it can bring real quality and value to business,‖ said
Bayarmagnai.
One example offered was the center's experience with Wagner Asia Equipment LLC, which required
a local company able to repair or salvage parts back to specifications. The center sought out a
company and found Geomach which assisted in removing bottlenecks, such as attaining financing
for a welding machine.
―Basically, we have no limit,‖ he said. ―We can help SMEs deliver quality products and services to
buyers.‖
L. Sumati, director of the Sant Maral Foundation, spoke next to discuss progress made in Mongolia's
battle against corruption. He said it was impossible to deny all the progress made given all the
positive responses in his latest poll, which surveyed 1,200 people in the business community about
corruption.
Sant Maral found that land access to be a leading challenge for businesses in Mongolia, leading the
list of grievances since 2006. Other issues included mining licensing, customs, and regulations.

5. Respondents said the most difficult agencies to work with were the Tax Office, Special Inspection
Agency, Customs, and local authorities. ―There may be some optimal time for development for the
future, but for today it remains difficult,‖ he said.
Meanwhile, at the household level, people reported dramatically less experiences with corruption,
with the number of responders who said they had paid bribes falling from a high of 28 percent in
2007 to 8 percent this year. He said there were generally positive feelings about the Independent
Agency Against Corruption and the arrests they had made, too.
D. Jigjidmaa, investment promotion program manager at the World Bank's International Finance
Corp. in Mongolia gave the final presentation on investment protections.
―Mongolia is not so different from other developing countries, especially regarding the political risks
of the last four to five years,‖ said Jigjidmaa.
She said IFC had been engaged with the Mongolian government since March 2013 to collaborate on
the Investment Law that took effect in November. It has also signed a cooperative agreement with
the Ministry of Economic Development to help improve the investment environment. This includes
the establishment of a reference guide for complaints made by investors and how government
responded. They hope to work closely with the government to improve grievance management and
dispute resolution.
―Now we're fine-tuning how the mechanism will work. Every minister wants control over
investments in the sectors they oversee.‖
The plan, she said, is to work from January 2014 to the following July to build awareness and a
stakeholder network. Afterward, they will then benchmark international experiences, such as the
improvements made to South Korea's investment environment since 2009, to help direct the
evolution of Mongolia's dispute resolution mechanism.
BUSINESS
OYU TOLGOI APPROVES 2014 BUDGET
The Oyu Tolgoi LLC board of directors unanimously approved the company program, plan and
budget for 2014. The decision was taken at the quarterly board meeting held in Ulaanbaatar from
11 to 12 December.
―It‘s great to have unanimous board support for the project‘s coming year,‖ said Craig Kinnell,
president and chief executive officer of Oyu Tolgoi. ―This is a sign of confidence in the entire
8,000-strong Oyu Tolgoi team. After safely ramping up production this year, we‘re now looking
forward to our first full year of exporting business.‖
Source: Turquoise Hill Resources Ltd.
OT MINE‟S „PHASE TWO‟ BANK FINANCING PLEDGES EXTENDED
Turquoise Hill Resources Ltd. said on Monday that parent Rio Tinto PLC had secured extended
commitments from the banks that have agreed to finance the underground expansion of the Oyu
Tolgoi copper and gold mine. The extension, to March 31, gives Rio Tinto more time to resolve a
dispute over costs with the government of Mongolia. Rio, which owns 50.8 percent of Turquoise Hill
and operates Oyu Tolgoi, put the mine's more than USD 5 billion expansion on hold in July, saying
the Mongolian government wanted parliament to approve the project's financing. Mongolia, which
will not see its share of Oyu Tolgoi's profit until Turquoise Hill recovers its costs, has complained
that total costs on the first phase were USD 2 billion higher than planned. It wants assurances such
overruns will not happen again, and hopes to resolve the dispute by early 2014, a government
source told Reuters last month. Turquoise Hill, which owns 66 percent of Oyu Tolgoi, had said in
June that financing commitments would expire Dec. 12. The Vancouver-based company announced
a rights offering to raise up to USD 2.4 billion in November, citing the delays at Oyu Tolgoi. A
feasibility study for the underground expansion is still on track for the first half of 2014, the
company said on Monday. It also confirmed that it expects Oyu Tolgoi to produce 150,000 to

6. 175,000 tons of copper in concentrates, and 700,000 to 750,000 ounces of gold in concentrates in
2014.
Source: Reuters
TRAFIGURA AGREES TO OFF-TAKE DEAL FOR OYU TOLGOI MINE
Commodity trader Trafigura has agreed to provide financing for the massive Oyu Tolgoi mine in
exchange for a long-term deal to buy an undisclosed portion of the output, it said on Monday.
Trafigura, which markets a wide range of metals including copper concentrate, referred to the off-
take deal in its first fully public annual report since being set up 20 years ago. "We also provide
finance in exchange for long-term supplies. For instance, we recently signed an off-take agreement
with Oyu Tolgoi in Mongolia," it said, giving no further details.
Rio Tinto put the mine's USD 5 billion expansion on hold in July, saying the Mongolian government
wanted Parliament to approve the project's financing. Mongolia hoped to resolve the dispute by
early 2014, a government source told Reuters last month. Fifteen banks that have agreed to finance
the expansion have told Rio they will extend their commitments, which were due to expire at the
end of the year, until next March, a statement said on Monday. Trafigura also said the global copper
market is expected to be broadly in balance next year as low inventories and a recovery in global
growth offset stronger mine output.
"We don't expect prices to rise markedly, but on the other hand, with concentrates trading at close
to cost levels for some producing areas, a collapse in prices is also unlikely," the Trafigura report
said.
The benchmark copper price on the London Metal Exchange has shed 8.3 percent this year, weighed
down by more output from new mines such as Oyu Tolgoi and improved operations at many existing
mines. The global copper market is expected to widen its surplus next year to 328,000 tons from
182,000 tons this year, analysts polled by Reuters said in October.
Source: Reuters
OYU TOLGOI TO COOPERATE IN TAVAN TOLGOI POWER PLANT PROJECT
Oyu Tolgoi LLC's board of directors agreed to participate in the Tavan Tolgoi power plant project
following a series of meeting held from 11 to 13 December.
The board discussed issues that remain under dispute at the meeting, before giving approval of the
2014 budget. After the meeting, board members announced their plan to cooperate in the Tavan
Tolgoi power plant project. Issues regarding involvement and the volume of investment are
expected to be discussed early next year. Also discussed was the issue of the underground mine of
Oyu Tolgoi, but the board did not come to any conclusion on the matter. Both Mongolian and
foreign board members agreed to grant a loan to resolve the funding issue, but did not set on a date
of when the loan could be received.
Source: Montsame
ERDENES TT UNLIKELY TO PAY $160M DEBT TO CHALCO IN 2013, SAYS CEO
Erdenes Tavan Tolgoi LLC will not likely meet its target for paying off debt owed to Aluminum Corp.
of China Ltd. (Chalco) by the end of this year, its chief executive told newspaper Uls Turiin Toim.
―To date, we have paid off about 60 percent of total debt and the remaining amount is about USD
160 million out of USD 350 million,‖ said Erdenes Tavan Tolgoi Chief Executive Officer Yachil
Batsuuri.
The state owned coal miner will sell 600,000 tons of coal on top of the one million tons of coal
already sold for a net profit of USD 70 million to USD 80 million, Batsuuri said. A six-month halt in
shipments was the primary factor for delayed payment of total debt owed, he said. Although
production at Tavan Tolgoi was on target, he said, the transportation issues prevent it from making
the sales required to fully pay of its debt.
―The coal being extracted from the East Tsankhi of the Tavan Tolgoi site is fully devoted to paying
off the Chalco debt of USD 350 million and therefore, in order to work benefaction, we have been
developing the West Block since July and started to export coal from September this year, said

7. Batsuuri.
He said Mongolia had successfully negotiated new terms for coal sales after months of selling its
coal reserves at a below-market rate. The current deal is due to expire at the end of 2013, he said.
He added that Erdenes Tavan Tolgoi plans to issue shares on international markets in 2015.
Source: Info Mongolia
RESERVES OF THE TAVAN TOLGOI JSC COAL DEPOSIT INCREASED TWOFOLD
A court ruling has allowed Tavan Tolgoi JSC to expand the size of its operating territory for an
added 70 million tons of reserves.
Tavan Tolgoi JSC, which operates upon the same coal deposit as Mongolian Mining Corp (MMC). and
Erdenes Tavan Tolgoi (Erdenes TT), saw its total reserves double with the expanded licensed area.
Tavan Tolgoi has signed a memorandum of understanding with China's Shenhua Group to supply
coking coal for 20 years, and will work in cooperation with Erdenes TT, MMC, and Shenhua for the
construction of a rail line to China.
The rail line will connect the Mongolia's Gashuun Sukhait port and the Gantsmod port of China.
Source: Unuudur
SHENHUA TO IMPORT 30-50M TONS OF COKE PER YEAR FROM MONGOLIA
Chinese coal producer Shenhua Group Corp. Ltd. will import 30 million to 50 million tons of coke
from Mongolia per year in the future.
Zhang Guangjun, deputy general manager with the Shenhua Science and Technology Research
Institute, disclosed at a forum on 4 December that it would import 30 million to 50 million tons of
coke from Mongolia per year in the future. Available data shows that the nation imported a total of
about 30 million tons of coke in the first half of this year and in line with industry observers, the
import of Shenhua will deliver a strong impact on the domestic coke market.
It has taken the group about a decade to gain the exploitation right of a Mongolia-based Tavan
Tolgoi coal mine. Policy factors have been the strongest barrier from reaching that goal.
Information from the China National Coal Association (CNCA) released on its website at the start of
November shows that it had signed a memorandum of understanding with three Mongolian firms,
namely Erdenes Tavan Tolgoi LLC, Energy Resources LLC and Tavan Tolgoi JSC, on railway
construction cooperation and boosting coal trade. And in line with some industry observers, this is a
prelude to its success in gaining the exploitation right.
Zhang reiterated that its failure to gain the exploitation right had a close tie with foreign
investment policies of Mongolian and so far, the government had not even reached a conclusion
internally. People in the circle said at the start of October that Mongolia released new policies for
foreign investments recently and according to the policies, provided that a state-owned foreign
firm wanted to invest in industries including mining, banking, communications and news and media
in Mongolia. Purchasing a stake exceeding 33 percent in any of these economic sectors by a foreign
state-owned entity requires a nod from concerned Mongolian authorities only at the ministerial
level. And this might mean that the threshold for Chinese firms to invest in the Mongolian mining
industry would be lower.
Source: MENAFN
ERDENET MINING BRINGS MNT 370 BILLION TO STATE BUDGET
Erdenet Mining Co. represents 30 percent of government revenues for industry, contributing MNT
370 billion to the state budget in the year to December.
According to the Erdenet Mining's chief executive, the amount of MNT 66 billion will go toward the
state by the year's end. Last year company represented 13 percent of income from taxes, 10
percent of gross domestic product (GDP) and 20 percent of total export.
Source: Zuunii Medee
ASGAT SILVER DEPOSIT TO UNDERGO DEVELOPMENT
The board of Mongolia‘s 51 percent-owned joint venture with Russia Mongolrostsvetmet LLC decided

8. to begin development of the Asgat silver deposit.
Asgat, located in northwest Mongolia, 1,800 kilometers from Ulaanbaatar, has a total average ore
reserve of 23.1 million tons and estimated 246 million ounces of silver. The board agreed that the
project is economically viable now that a paved road leading to the development has been
complete. The project is owned 51 percent by Erdenes MGL LLC and 49 percent by Russia‘s Rostec.
The board agreed to the establishment of a working group to proceed with the next steps for
development.
Source: Business-Mongolia.com
MIAT TO HIRE FOREIGN-SKILLED MANAGEMENT
The Cabinet of Ministers decided on 14 December to hire a foreign-skilled executive management
team to operate state-owned MIAT Mongolian Airlines.
The Cabinet hopes in hiring a foreign management it may produce greater profits, increase its
competitiveness, ensure greater flight safety, and better prepare national staff. The Cabinet
relayed orders to the State Property Committee and MIAT's representative Council.
Source: Montsame
STANDARD BANK CONSULTANT DETAINED AMID DEBT DISPUTE
Mongolia has issued a travel ban on a New Zealand national consulting for Standard Bank Group Ltd.
amid an escalation in a dispute with a local company over a debt repayment.
Chris Bradley was part of a five-person team from Africa‘s biggest lender that visited Ulaanbaatar
last month to seek talks with the government over its USD 131 million in loans to Just Group LLC, a
holding company, said two people familiar with the matter. The people asked not to be named
because they aren‘t authorized to speak publicly. Standard Bank alleges the loans are in default and
filed a lawsuit in July in a London court seeking repayment.
Standard‘s loans were made between 2007 and 2010 to Just Group to fund raw materials supplies
and debt repayments at state-controlled Erdenet Mining Corp. and Ulaanbaatar Railways. Bradley
said by phone on 2 December that he had been due to depart Mongolia on 29 November, but ―is
restricted by the authorities from leaving.‖ Bradley said he was advised of his situation by local
police and that he is a suspect in an investigation.
―I went in gladly to assist the police and compare notes,‖ said Bradley. ―We are focusing on the
commercial aspects of this transaction and they are focusing on the criminal aspects. The two,
although linked, are also running in parallel.‖
Mongolia has barred foreign executives from leaving the country during investigations into
companies before. Justin Kapla, a U.S. citizen and then-president of coal miner SouthGobi Sands
LLC, was banned from departing at the end of last year and is still in the country, after the nation‘s
Independent Authority Against Corruption launched a probe into the company‘s mining licenses.
Sharavlamdan Batkhuu, Just Group‘s controlling shareholder, and other companies in the group
have defaulted on loans since 2011, Danjilaa Ganbat, director of the banking supervision
department at Mongol Bank, the nation‘s central bank, said in July. Ganbat made his comments
after Just Group‘s Savings Bank, Mongolia‘s fifth-largest lender, was declared insolvent due to
affiliated companies defaulting on loans. Batkhuu and Just Group are among the defendants in the
Standard Bank lawsuit.
Standard Bank wasn‘t able to arrange any meetings with Mongolia‘s government to resolve the debt
dispute, the people familiar with the matter said. Bradley was the Mongolia specialist on the team
and the only member not directly employed by the bank, said one. Bradley said he worked as an
employee of Standard Bank from 1999 to 2001, and has consulted on a contract basis for the bank
over the last nine years, including five visits to Mongolia since May ―to engage with the government
on our issues, the debt recovery.‖
Cabinet Secretary Saikhanbileg Chimed said by e-mail on 3 December that he thinks it‘s better to
solve the debt dispute out of court and planned to ―push appropriate people to respond.‖
Bradley, 50, is a native of Hokitika, New Zealand. ―In the absence of a New Zealand consulate, the
British Embassy is working on behalf of Bradley‘s consular welfare,‖ said Julian Pearson, Deputy

9. Head of Mission at the British Embassy in Ulaanbaatar, on 2 December.
Source: Bloomberg
KHAN BANK OPENS EXPRESS BANKING CENTER
Khan Bank LLC opened an express banking center on 10 December.
The Express Banking Center services include a new ATM to deposit cash, an E-Corner which allows
customers to make transfers between Khan Bank accounts, review accounts through Internet
banking and receive account slips. They can also be used to obtain foreign remittances.
The Banking Centers are located at the State and Ulaanbaatar department stores on Peace Avenue
and will be open 24 hours every day.
Source: Khan Bank LLC
ERDENE ANNOUNCES NEW GOLD DISCOVERY AT ALTAN NAR
Erdene Resource Development Corp. reported significant gold and silver results from the second
phase of trenching completed during the fourth quarter at its Altan Nar gold-polymetallic project.
Results have been received for an additional 11 of the 28 trenches completed. The trenching
program was designed to test 10 distinct mineralized zones across the 5.5-kilometer-long Altan Nar
target area. Samples from the final thirteen trenches over the central Altan Nar prospect area have
been submitted to SGS laboratories with results anticipated during first quarter 2014.
Highlights include the discovery of a new high-grade gold mineralized zone one kilometer north of
Discovery Zone (Maggie prospect); Significant gold mineralization (Northbow prospect) identified in
the northern portion of a previously untested, 700-meter-long, anomaly, that widens and intensifies
to the south; and gold and base metal mineralized zones confirmed at northwestern and
southeastern extent of the 5.5-kilometer-long Altan Nar target area (Northwest and Far South
prospects). All 11 trenches, testing 6 distinct targets, returned highly anomalous precious and base
metal mineralization.
Source: Erdene Resource Development Corp.
XANADU MINES FORMS JV FOR COPPER EXPLORATION IN MONGOLIA
Xanadu Mines Ltd. has established a joint venture company, Mongol Metals, with Ganbayar
Lkhagvasuren, director and substantial shareholder of Xanadu, to execute Xanadu‘s business and
copper exploration strategies.
Xanadu recently returned broad copper and gold values from a 780-meter trenching program to test
coincident geophysical and geochemical anomalies at its Oyut Ulaan copper-gold porphyry project
in Mongolia. The program has defined three near-surface mineralized porphyry centers with results
up to 85 meters at 0.75 percent copper with 0.54 grams per ton gold, including 36 meters at 1.49
percent copper and 1.02 grams per ton gold. The trenching was performed concurrently with the
recent drilling at the Diorite Hill prospect, and drill testing of the new targets is scheduled within
the next phase of drilling.
Source: Proactive Investors
JATENERGY TESTS PROVE CONVERSION OF MONGOLIAN BROWN COAL TO SEMI-COKING COAL
Jatenergy Ltd. is on track to pursue its Mongolian coal upgrading plans after testing proved that
coal from the country were highly suitable for conversion using Coal Plus technology.
This sets the stage for the immediate start of its investment strategy with Monrospromugoli LLC,
which could result in a USD 2 million upfront technology payment and ongoing annual royalties of
USD 1.76 million. The test results had demonstrated that the high moisture, high volatile, low
calorific Mongolian brown coal can be easily converted into semi-coking coal using Coal Plus.
―This report independently verifies that Coal Plus has potential in Mongolia,‖ executive chairman
Tony Crimmins said. He added, ―As the technology is already commercialized and in use in 5
locations in China for over 4 years, we see high probability of financing this project in Mongolia‖.
The confirmation that Mongolian brown coal is suited for conversion using Coal Plus into higher
value products paves the way for Jatenergy‘s agreement with Monrospromugoli to go ahead.

10. Source: Proactive Investors
SOUTHGOBI RESOURCES ANNOUNCES RESTATED FINANCIAL AND OPERATING RESULTS
SouthGobi Resources Ltd. released its regular update on restated financial statements and
management discussion and analysis presentation In the consolidated financial statements for the
year ended 31 December 2012; the restated financial position at 31 December 2012, 31 December
2011 and 1 January 2011; the results of operations for the years ended 31 December 2012 and 31
December 2011; and the statement of changes in equity and statement of cash flows for the years
ended 31 December 2012 and 31 December 2011.
Following the correction in SouthGobi‘s point of revenue recognition, revenues from affected coal
sales contracts are recognized in later periods than previously reported and some revenue has been
reported after 31 December 2012 as not all contracted coal has been collected by customers.
During the periods from 2010 to 31 December 2012, trade and other receivables have been adjusted
lower and deferred revenue recognized to reflect revenue being recorded in later periods than
previously reported. The inventory balance increased over the same period to reflect higher coal
inventory stockpile balances. Prepaid expenses also increased, with a corresponding decrease in
trade and other payables, as coal sales royalty expenses were recognized in late r periods than
previously reported.
The consolidated financial statements, auditors‘ reports and related financial information for the
affected periods contained in SouthGobi‘s filings filed prior to 14 November 2013 should no longer
be relied upon. The restatements do not result in a change in cash at the end of any period. The
statement of cash flows as reported does not change except for the reclassification of various items
within operating activities.
Separately, on 19 November 2013 SouthGobi paid USD 8.1 million in cash to the China Investment
Corporation, in accordance with the convertible debenture agreement. The amount related to the
6.4 percent per year cash interest payment and is payable semi-annually. Further, on 21 November
2013, SouthGobi issued 3.5 million common shares to China Investment.
Source: SouthGobi Resources Ltd.
MSE CANCELS KHANSH INVEST‟S BROKERAGE LICENSES
The Mongolian Stock Exchange has invalidated the brokerage and securities dealing licenses of
Khansh Invest LLC on 4 December.
―The company‘s clients will be transferred to other brokerage firms that conduct professional
services in the market with licenses for broker-dealer related issues and it shall be governed
according to the concerning jurisdiction and regulations,‖ said the Source.
Source: Mongolian Stock Exchange
MNU PARTNERS WITH UNIVERSITY OF CALIFORNIA FOR RENEWABLE ENERGY
Mongolian National University (MNU) and the University of California announced 13 December the
signing of a memorandum of understanding to conduct high temperature, solar thermal technology
research in Mongolia in 2014.
Under the terms of the agreement, the Mongolian Innovation and Technology Centre at MNU will
have a 100-kilowatt high-temperature, non-tracking solar array on their campus that is not only the
first and the largest solar array of its kind in Mongolia, but anywhere in the world.
―We are delighted to be working with the University of California on this great project and we
particularly excited to make this announcement on the 15th Anniversary of MNU,‖ said MNU
Founder and Chairman Munkhbat Lkhagvasuren ―The thermal solar array will be installed,
monitored and evaluated by our MNU Engineering Department under the advice and instruction of
the faculty of the University of California,‖ Munkhbat said.
The technology was developed by University of California‘s solar director and professor, Roland
Winston, who is also a world-renowned scientist in the solar research field. Winston‘s technology is
already operational at the University of California, Purdue University and the Gas Institute of
Chicago, although it has not yet been released for commercial deployment anywhere in the world.

11. ―My goal in working with MNU is to provide the technology and the staff,‖ he said. ―Ultimately, it
is the Mongolian engineering students that will be required to install and operate these systems, as
well as determine the scope of the application beyond simply providing a high temperature heat
source.‖
Source: Mongolian National University
MCDONALD'S INTERNATIONAL CALLS FOR FRANCHISEE TO POSSIBLY OPEN IN MONGOLIA
McDonald's International sent out a press release on December 10 calling for partners to approach
the company to open its first burger outlets in Mongolia.
―We have not set a firm date for the development of McDonald's restaurants in Mongolia. In the
future we may take steps to open McDonald's restaurants in Mongolia and if we seek a franchisee to
represent us the person will have the following characteristics.
―High integrity, business experience in the market, history of success, ability to work well with a
franchisor, ability to complete a training program that can take about nine months, willingness to
devote full time to the McDonald's restaurant business, retail experience, knowledge of real estate
market, significant capital.‖
The press release ends by inviting candidates to apply for a franchise.
Source: BNE
JAPANESE “SUN RICE: PLANT OPENS IN MONGOLIA
An opening ceremony for Mongolia‘s Technik Import LLC and Japan‘s Niigata Kubota ―Sun Rice‖
factory in Ulaanbaatar on December 10.
Niigata brown rice will be imported, sorted, and packed at the Ulaanbaatar factory, which has a
daily capacity for the production of two to three tons of packaged rice. The plant is equipped with
fully automated machines from Kubota. The rice will begin sale in the domestic markets at MNT
5,000 to MNT 7,000 per kilogram.
―Mongolia has been receiving rice from the people of Japan under aid program for many years,‖
said Deputy Minister B. Tsogtgerel. ―During the latter event, I and Ambassador Takenori Shimizu
were discussing that the period of receiving rice as aid is over and now the time of reciprocal
assistance has come, and the ―Sun Rice‖ factory is a sample of joint cooperation to produce the
world known quality in Mongolia‖.
Niigata Prefecture is the second largest producer of rice in Japan, after Hokkaido.
Source: Info Mongolia
MNBC MIGRATES TO DVB-T2 WITH THOMSON VIDEO NETWORKS
Video Mongolia Digital Broadcasting (MNBC) has launched Mongolia's first ever DVB-T2 service, using
head-end systems from Thomson Video Networks.
Launched in 2007, MNBC was Mongolia's first digital terrestrial TV network operator and will now be
able to broadcast up to 120 digital TV channels over five UHF transponders to maintain its position
and compete with Mongolia's national satellite operator. Working with systems integrator Digital
Horizon, MNBC has deployed TVN's Vibe EM1000 multi-channel SD encoders and NetProcessor 9030
multiplexer and video processor with an embedded DVB-T2 gateway.
Source: Rapid TV News
CHINESE FIRM NEGOTIATING TO ACQUIRE JUST AGRO
A Chinese company is in negotiations to purchase Mongolia's only meat exporter, said a company
source.
Just Agro LLC, which owns 11 meat companies with the Makh Market brand is reportedly the subject
of negotiations for sale to a Chinese entity, said the source who asked not to be named. The Just
Agro company provides 40 percent of meat processing and 30 percent of storage in Mongolia and is
the only meat exporter in Mongolia.
Last July authorities revealed that Just Group‘s Sh. Batkhuu falsified signatures of the State
Property Committee and Erdenet Mining Co.'s director to receive USD 131 million in loans from

12. South Africa's Standard Bank, putting up the Erdenet Mine as collateral for the credit. After Just
Group was dissolved the central bank took over all its assets, including Just Agro.
Source: Unuudur
MONGOL TV EXPOSES MEDIA CORRUPTION WITH FAKE MCDONALD'S STORY
An investigative news show on Mongol TV planted a false news story last week with all 9 of
Mongolia's major local media outlets about McDonald's opening a branch in the country. The
exercise was undertaken to expose corruption and the rampant practice of paid-for journalism in
Mongolia, Mongol TV said.
The appearance of a "Mr. P. Rank," promising McMutton burgers and goat milk-shakes, in the
"official" press release set off no alarms at the media networks, which took between USD 150 and
USD 700 from an undercover journalist to run the story on their websites, on the front page of three
newspapers, and on TV news on three networks, including the local public broadcaster.
―Soon the first letter our children learn will be ‗M‘, Mr. P. Rank says with a golden, shining smile,"
according to the fake release, which also claimed McDonald's was to be sponsored by Mongolia‘s
Health Ministry and sold in schools all over the country.
After Mongol TV unveiled the sting, it invited representatives of the 9 duped media organizations to
explain their actions, though all reportedly declined.
Source: Hollywood Reporter
EBRD ADOPTS NEW STRATEGY FOR ENERGY AND NATURAL RESOURCES SECTOR
The European Bank for Reconstruction and Development (EBRD) has adopted a new strategy that
will guide its investments in the energy and natural resources sector for the next five years, EBRD
press release reported Tuesday.
The bank sets out a commitment to helping its countries of operations move toward a sustainable
energy future. The EBRD region, which stretches from Morocco to Mongolia, is faced with a
challenge of providing sustainable, secure and affordable energy. The energy strategy identifies
energy efficiency as the first and best response to this challenge.
―What the EBRD brings to this challenge is our focus on structural reform,‖ said EBRD Managing
Director for Energy and Natural Resources, Riccardo Puliti. ―We have learnt from our work that,
when properly channeled, market forces can be harnessed to make energy sectors more sustainable
- environmentally, economically and politically."
The bank intends building on its well-established support for the Extractive Industries Transparency
Initiative by requiring clients operating in the extractive industries sector to disclose subsoil
contracts and licenses as well as all payments they make to local and national authorities.
In the case of coal-fired generation the strategy supports the move to lower-carbon fuel sources in
response to the challenge of climate change. In alignment with other international financial
institutions, the EBRD will not finance any coal-fired power generation projects except in rare and
exceptional circumstances in which there is no feasible alternative energy source.
The strategy also reinforces the EBRD's growing support for renewable energy, which will include
financing both energy-generating capacity and key infrastructure such as transmission lines and
backup generation.
―We have also developed and invested in the first wind farm in Mongolia - where it was also the
first new energy generator in 30 years," said Puliti.
Source: Trend News Agency
SUSTAINABILITY HOSTS SESA WORKSHOP
Sustainability East Asia LLC organized a National Validation Workshop on 10 December as part of its
responsibilities for establishing a strategic environment and social assessment (SESA).
Participants from across the country arrived to represent government, the private sector, and non-
government organizations to discuss the proposed SESA. The next step will be to assess mining
growth options and identify at least three likely growth scenarios which mining could bring to
Mongolia. Afterward, the SESA team will evaluate the environmental and social issues that are likely

13. to arise as a consequence of each scenario.
The Mining Sector Institutional Strengthening Technical Assistance Project commissioned
Sustainability to conduct a strategic environmental and social assessment for Mongolia's mining
sector.
Sustainability will also perform a gap analysis of the legal, regulatory, and institutional capacity to
deal with each possible scenario. An action plan is expected for SESA by summer 2014.
Source: Sustainability East Asia LLC
UB REGISTERS MATERNITY HOSPITAL NO. 1
The new building annex for Maternity Hospital No. 1 was registered as capital city property
13 December at a regular session of the Ulaanbaatar Citizens' Council, This maternity hospital
building was built with financing from Boroo Gold and was presented as a gift to the people of
Mongolia. With a capacity to receive 150 mothers and children, its total cost was MNT 9.2 billion. It
includes the hospital building of 1,169 square meters, external heating, clean water and sewer
water pipelines, a diesel station, an asphalt road, a pedestrian walkway, outdoor vegetation and an
external LED sign.
This new building was commissioned 15 June. The new annex has one vacuum operation room and
two standard operating rooms on the fifth floor, 100 beds for women and 50 beds for infants on the
third and fourth floors, paraclinical and sanitation units, a pharmacy, a conference room and
training rooms on the second floor, an ambulatory section and reception on the first floor, and staff
cafeteria, closets, washrooms and a disinfection chamber in the basement.
Source: Centerra Gold Inc.; News.mn
RIO TINTO‟S SAM WALSH DIGS IN FOR THE LONG HAUL
Sam Walsh wants to remain as Rio Tinto PLC‘s chief executive beyond the end of his contract and
has told the miner‘s board he will not be ready to retire in 2015.
―I am there if they want me,‖ said Walsh. ―Likewise if there‘s someone else who can come in and
take what I‘ve done to the next level, that‘s fine too.‖
The Australian, 63 later this month, replaced Tom Albanese 11 months ago, after Rio decried
―unacceptable‖ writedowns on its coal business in Mozambique. Walsh says investors support his
strategy to cut costs and sell non-core assets.
Walsh said he has explored selling all of Rio‘s aluminum business this year, in what would be a
signature reversal of Albanese‘s costly purchase of Alcan in 2007. But he says no offers have been
good enough while the business is not generating enough cash for an initial public share offering or
spin-off to Rio‘s shareholders. Walsh has also been frustrated in attempts to sell Rio‘s diamonds
business.
―Who would thank me if I sold something under value just to get a tick? At the end of the day you
have to be pragmatic about things,‖ he said. Offers ―weren‘t in the bailiwick of where we thought
they should be.‖
The Alcan deal epitomized Rio‘s poor recent dealmaking and Walsh admits the company had
―relaxed some of the controls‖ it should have had. Rio staff has now ―refound their mojo‖, he said.
On operating costs, which Rio has said it will cut USD 3 billion next year, he said: ―There is rolling
momentum and that‘s important.‖
Source: Financial Times
KYRGYZSTAN FILES ECOLOGY DAMAGE LAWSUIT AGAINST CENTERRA
Kyrgyzstan is suing Canada's Centerra Gold Inc. for 15 billion soms (USD 304 million) over what the
government says is ecological damage, marking a new twist in a bitter row with the investor running
the largest Kyrgyz gold mine.
The state environmental protection and forestry agency said in a statement that it had filed the
lawsuit at an economic court in the Kyrgyz capital Bishkek, saying Centerra Gold had ignored its
earlier request for voluntary compensation. It said the alleged ecological damage included
"emissions of pollutants and waste dumps." It said its claim referred to the company's operations

14. between 1996 and 2011.
Centerra had said earlier that it viewed the government's claim as exaggerated and unfounded.
"The company disagrees with these charges and plans to give explanations on this matter in the
nearest time," said a spokesman for the Kumtor Operating Company (KOC), the Centerra subsidiary
that runs the Kumtor mine in the Tien Shan mountains.
The Toronto-listed miner, which also owns the Boroo gold mine in Mongolia, is already under
pressure from the Kyrgyz parliament, which demands the state hold 67 percent in a proposed joint
venture to run the mine. In September, the government and Centerra Gold signed a memorandum
of understanding, paving the way for Kyrgyzstan to swap its 32.7 percent stake in the Canadian firm
for 50 percent in a venture that would own Kumtor. But in October the legislature voted to tear up
the document and seek control over the planned venture. It gave the cabinet until 23 December to
report on its talks with Centerra Gold on setting up the venture. Pearson said Centerra is having
"constructive dialogue" with the Kyrgyz government.
Source: Reuters
ECONOMY
FITCH AFFIRMS TWO MONGOLIAN BANKS AT 'B'; REVISES OUTLOOKS TO „NEGATIVE‟
Fitch Ratings on 16 December revised the outlook on the Long-Term Issuer Default Ratings (IDRs) of
Khan Bank LLC and XacBank LLC to ―Negative‖ from ―Stable‖. At the same time, the agency
affirmed the two Mongolian banks' IDRs and viability ratings at 'B' and 'b'.
The revision of the outlooks on both banks' IDRs reflects weakening operating conditions, as
indicated by the change in the Outlook for the Mongolian sovereign (B+) to Negative from Stable on
13 December. The sovereign's outlook was revised due to mounting risks to the country's economic
and financial stability. Ratings on the two banks could be downgraded if pressures on asset quality
and liquidity intensify. Persistent local-currency depreciation would reduce borrowers' repayment
capacity and could lead to accelerated deposit withdrawals given the country's high level of
dollarization.
The banks' ratings also remain sensitive to the withdrawal of credit stimulus, as this could result in
asset deterioration on slowing economic growth or higher inflation. Further decline in the
government's international reserves could also trigger a negative rating action, as the banks'
currency-related risk is counterbalanced by the authorities' swap facility and unlimited foreign-
currency conversion. Both banks' ratings are also sensitive to any changes in their steady access to
capital from private-sector owners.
Khan Bank's Support Rating and Support Rating Floor (SRF) reflect Fitch's view that, as the largest
bank in Mongolia, it would be likely to receive state support in case of need. However, the
Mongolian sovereign's ability to provide timely support to the banking system remains limited as
underlined by its IDR of 'B+'. A downgrade of the sovereign ratings would point to weakening in the
Mongolian government's ability to provide timely support to the banking system, which put negative
rating pressure on Khan Bank's SR and SRF. In contrast, Fitch expects XacBank's SR and SRF of '5'/'B-'
to be maintained, even if the sovereign's rating is downgraded to 'B'. This is because the current SR
and SRF already reflect the agency's view that support from the sovereign, in case of need, cannot
be relied upon.
The rating actions are as follows: Khan Bank Long-Term Foreign-Currency IDR affirmed at 'B';
Outlook revised to Negative from Stable Short-Term Foreign-Currency IDR affirmed at 'B' Long-
Term Local-Currency IDR affirmed at 'B'; Outlook revised to Negative from Stable Viability Rating
affirmed at 'b' Support Rating affirmed at '4' Support Rating Floor affirmed at 'B' XacBank Long-
Term Foreign-Currency IDR affirmed at 'B'; Outlook revised to Negative from Stable Short-Term
Foreign-Currency IDR affirmed at 'B' Long-Term Local-Currency IDR affirmed at 'B'; Outlook revised
to Negative from Stable Viability Rating affirmed at 'b' Support Rating affirmed at '5' Support
Rating Floor affirmed at 'B-'.
Source: Fitch Ratings

15. MONGOLIA SCORE FALLS ON POLITICAL RISKS INDEX FOR MINING INVESTMENT
An annual survey by Behre Dolbear of political risks saw Mongolia decline 5 points in an index
ranking Mongolia 19th out of 25 countries.
Mongolia this year received a score of 26.9 compared with 32 last year. Leading the countries
surveyed was Australia, down 0.7 points from last year. Russia, with a total score of 17.1 compared
with 16 last year, was the lowest ranking.
The 25 countries considered in this year‘s survey are ranked based on seven criteria:
-the country‘s economic system,
-the country‘s political system,
-the degree of social issues affecting mining in the country,
-delays in receiving permits due to bureaucratic and other issues,
-the degree of corruption prevalent in the country,
-the stability of the country‘s currency, and
-the competitiveness of the country‘s tax policy
Each criterion is rated on a qualitative scale from one (worst) to 10 (best) that reflects conditions
that promote investment growth in the mining sector. The maximum score attainable for a country
is 70 points.
Source: Behre Dolbear Group
MONGOLIA LOOKS FOR SECOND CHANCE WITH FOREIGN INVESTORS
Saruul Ganbaatar, the deputy head of Mongolia's stock exchange, hopes the country's days of
interventionist economic policies are over and new laws ensuring foreign investors' access to the
frontier market's industries will bring back sorely needed cash.
Ganbaatar, 32, who cut his investment teeth in Chicago's financial houses after graduating from
Loyola University, is careful not to over-promise on what the stock market can deliver in 2014 and
beyond, in terms of new listings or overall growth. In October a law was passed easing ownership
restrictions for private companies to invest in the strategic industries. A Securities Markets Law
coming into effect 1 January 2014 is expected to provide the key ingredient to attract deep
pocketed institutional investors such as mutual funds to invest.
"This really is the missing ingredient," said Ganbaatar, who has been traveling the globe, promoting
the changes in the laws to global investors for the past two weeks.
The stock index fell 19 percent in 2012 and year-to-date is down 11.5 percent, although it did start
to climb with the newly passed laws. On 1 January, the new Securities Markets Law will allow
Mongolia's commercial banks to offer custodial banking services. Custodial banks serve as safeguards
for a firm or individual's financial assets, playing a critical role in the final settlement of market
transactions. Total market capitalization now is between USD 900 million and USD 1 billion. Don't
expect the number of new listings to mushroom. There may instead be a cull of companies. Fifty-
five to 60 of them, many of which have not traded in years, are being reviewed for potential
delisting.
The Mongolian Stock Exchange, 100 percent state-owned, is perhaps itself a candidate for
privatization. It has been in a strategic partnership with the London Stock Exchange for two and a
half years.
"They have the right of first refusal," he said.
Source: Reuters
CPI INCREASES TO 12 PERCENT, YEAR-OVER-YEAR, IN NOVEMBER
The National Statistical Office reported a 12 percent increase in the national consumer price index
(CPI) in November, year-over-year.
The CPI growth, which also in November grew 1.3 percent from the previous month, was explained
by a 1.4 percent increase in food prices and non-alcoholic beverages, 2.3 percent for clothing,
footwear and fabrics, and 0.7 percent for housing, water, electricity, and fuels.
Source: Info Mongolia

16. GROWTH SEEN IN EXPORT OF PRECIOUS METALS
The export value of precious metals grew 11.4 percent in November from the month before and 6.3
percent from the same period in 2012, according to the National Statistical Office.
Exports totaled USD 3.8 billion in the year to December while imports grew to USD 5.8 billion. The
foreign trade balance saw a deficit of USD 2 billion. November saw exports of USD 381 million and
imports of USD 514 million, with exports and imports in decline between July and November. The
value of export products for the first 11 months was USD 1.1 billion. Despite the gain in precious
metal exports, exported minerals which represented 81 percent of all exports in the year to
November fell 12.9 percent from the year before.
Source: Zuunii Medee
MNT 78.8 BILLION WILL BE ENTERED INTO THE STABILIZATION FUND
The Stabilization Fund is set to collect MNT 49 billion this year and MNT 29.8 billion next.
The Stabilization Fund was established to collect surplus revenue in years of economic gains from
the mining sector to cushion possible annual losses during economic downturns and weak
commodity demand. Any gain in the price for gold and coal next year will also be reflected in
allotments to the fund.
Source: Zuunii Medee
ECONOMIC DEVELOPMENT MINISTRY PLANS TO PUT 81% OF BUDGET INTO CONSTRUCTION
The Economic Development Ministry plans to invest MNT 81.4 percent of its total investment budget
into construction.
Beginning 1 January 2014, the ministry will provide MNT 930.3 in loans toward the construction
sector. The ministry will spend 3.9 percent of its budget for reconstruction and repair, 10 percent
for the purchase of new techniques and technical equipment, 39.96 percent for infrastructure,
27.43 percent for education and health, 6.36 percent for employment and agriculture, and 29.26
percent for other sectors of the economy.
Projects include the construction of 30 clinics, 27 cultural centers, 683.1 km of paved roads and
1,032 m length of bridges. Mongolia has received USD 5.5 billion in aid in the last two decades, of
which 55 percent was in the form of low rate loans and 45 percent as non-repayable grants, for
investments into agriculture, infrastructure, power, and health sectors.
Economic growth since 2011 has allowed Mongolia less aid than in the past. The government has
now turned its focus on providing funding with concession agreements to large scale projects such
as the Nariin Sukhait-Shivee paved road and the power station at Mogoin gol. Other projects include
Power Plant No. 5, the Altanbulag-Ulaanbaatar-Zamyn Uud highway, the Tavan Tolgoi- Khanbogd-
Khangi road, and the Tuul Songino water reservoir complex.
Source: Zuunii Medee
TT POWER PLANT MAY NEED CONCLUSION TO OT DISPUTE, SAYS DIRECTOR
Uninterrupted development of the Tavan Tolgoi power plant will ride on the outcome of disputes
concerning Oyu Tolgoi's underground mine, said the director of the plant
―One of the main risks is the issue of a main user,‖ Enkhsaikhan said. ―The key buyer of the power
from the TT Power Plant is OT. Due to the uncertainty over ‗phase two‘ and unresolved matters
with the government of Mongolia, OT is not regarded as a reliable buyer, on a stand-alone basis.‖
He added that the power company may request a guarantee from Oyu Tolgoi.
A consortium that includes Korea's Posco Energy and Daewoo Engineering and Construction, GDF
Suez Energy Asia, Japan's Marubeni Corp. and Kansai Electric Power in March was selected for
development of the plant, which has a preliminary estimate cost of USD 1 billion. Those expenses
include installation of 150 kilometers of electric lines between Tavan Tolgoi and Oyu Tolgoi. The
consortium will be expected to raise 30 percent of the cost itself, while the remaining 70 percent
will come from bank loans. However, the uncertainty surrounding the Oyu Tolgoi copper mine could
create more hold ups.
Source: Zuunii Medee

17. CABINET TO CONCLUDE CONCESSION ON ALTANBULAG-ZAMYN UUD HIGHWAY
The Cabinet of Ministers ordered ministers to conclude a concession agreement for the Altanbulag-
Ulaanbaatar-Zamyn-Uud highway.
The government is planning to establish the concession contract with the Chinggis Land
Development Group, which, according to the agreement, shall have exclusive rights to construction,
ownership and transfer of property using its own financing. The concessionaire shall complete the
construction within three years, after that shall operate the facility for another 30 years before
transferring the ownership to the Government.
If Chinggis Land accepts these terms, it would be responsible for developing a feasibility study and
blueprint of the project to be approved by the relevant ministries before concluding a financing
agreement. The concession agreement will come into effect after the Chinggis Land Development
Group obtains a financing agreement for USD 1 billion from a commercial bank of Mongolia.
The government will be responsible for freeing up the land where the highway is planned, while the
Chinggis Land would cover the costs for doing so.
Source: Montsame
MNT 11.6 BILLION WILL BE SPENT FOR BUILDING EMERGENCY ALARMS IN UB
The National Emergency Management Agency has installed an emergency alarm system in 60
locations of Ulaanbaatar. The alarm will alert citizens to natural disasters, such as earthquakes.
The alarms will be controlled from a center by microwave radios and satellite communication
devices.
Source: Udriin Sonin
EIU CLARIFIES EXTENT OF OFFICIAL ESTIMATES OF OIL SHALE RESERVES
The latest research from Mongolia's mining ministry gives a clearer picture of oil shale's
development potential in the coming years. Although Mongolia has long been known to have
substantial oil shale deposits, previous estimates were extrapolated from rudimentary surveys
conducted in the 1990s and thus left the actual reserves open to speculation.
Plans to develop the industry took shape only in April 2013, when an American company, Genie
Energy, signed a five-year deal with the Petroleum Authority of Mongolia to explore oil shale
reserves in central Mongolia. Genie also plans to build a USD 4 billion processing factory in Tuv
Aimag. According to government projections, the processing plant will generate USD 850 million of
tax revenue annually. Aside from the economic benefits of the project, domestic fuel sources could
help Mongolia to improve its energy security by loosening the country's dependence on its powerful
neighbors. At present 90 percent of Mongolia's oil and related products come from Russia, with most
of the remaining amount being imported from China.
Yet the benefits of large-scale oil shale extraction are not as clear as they might seem at first
glance. Most importantly, Mongolia's oil shale resources should not be confused with the shale oil
phenomenon that is currently sweeping the United States. Oil shale (also called kerogen) is more
expensive to extract than shale oil and carries greater environmental costs. In particular, oil shale
requires a large amount of water to process, which could be a risky proposition in Mongolia, where
hydrological resources are already under strain. Although other countries—Estonia in particular—use
oil shale as a substitute for coal, extracting liquid fuel from the shale is a complex and relatively
untested process.
Genie Energy's progress on the project seems more substantial than that of comparable coal
liquefaction projects that have faltered in the region. However, environmental, technical and
political limitations suggest that Mongolia's overall dependence on foreign fuel will not change
significantly in the foreseeable future.
―We remain doubtful that oil shale will play a significant role in Mongolia in the next two years, so
our economic growth and trade forecasts will remain unchanged,‖ said the Source.
Source: Economist Intelligence Unit

18. MONGOLIA AND THE THREAT OF THE RESOURCE CURSE
Mongolia is at a crossroads; while investors complain the government is dragging its feet on allowing
miners to start digging, it is crucial that it get things right at the early stages of the resources
boom.
Mongolia's challenge will soon be the world's, says Richard Dobbs and his team at McKinsey in a
report predicting a USD 17 trillion investment bonanza by 2030 to keep up with demand for oil, gas
and other materials. In 1995, about 58 countries depended on resources for the bulk of their output
and wealth. In 2011, that number had risen to 81. By 2030, roughly half of the world's economies
will essentially become giant filling stations for developing superpowers from China to South Africa.
That means that instead of the world moving toward greater transparency, democracy and freer
markets, we could see rising corruption levels and even greater income inequality.
"Economies with natural-resource endowments have a huge opportunity to transform their
prospects, but history suggests that they could all too easily squander the windfall," says Dobbs,
director of the McKinsey Global Institute in London.
The world would be wise to take steps today to break this cycle. McKinsey recommends several.
While not terribly original, they include strengthening public institutions and good governance;
building decent infrastructure; boosting national competitiveness; promoting sound fiscal policy
making; and spending the windfall wisely, while engaging in forward-looking economic and social
planning. The trouble is that political will and integrity is often the first casualty once the minerals
start flowing out and the spoils come pouring in.
Mongolia is at that very crossroads today. Investors complain the government is dragging its feet on
allowing miners to start digging. But it's more important to get things right at the early stages of
the resources boom. That means acting now to create the institutions and regulatory frameworks
needed to ensure revenue transparency—knowing exactly how much money is being dug out the
ground and where it's going. Why not set up a sovereign-wealth fund to save for Mongolia's future?
When the stakes are that high, a little patience can go a long way.
Source: Bloomberg
MONGOLIA'S NOMADS WARM TO SOLAR POWER
In Mongolia, often known as the land of the blue skies, the sun shines for 250 days on average each
year. It beats down on the sparse plains and on the Gobi desert that spans the country's southern
border with China.
It shines, even during the frigid winter days, on the hundreds of thousands of nomads who still roam
the steppes, herding animals and living in dome-like tents calling gers. About 800,000 of Mongolia's
2.8 million inhabitants still live the traditional nomadic lifestyle that has remained largely
unchanged for generations. Apart from the addition of motorbikes, the occasional petrol generator,
and a passing trade from intrepid tourists wanting to stay in a ger for the night, life is almost the
same as that of many nomads' grandparents and great-grandparents. Almost, but not exactly.
Dotted across the steppes, glints of light can be seen as the sun bounces off the solar panels that
have been installed on the sides of gers made of felt and yak's wool. At the start of this millennium,
Mongolia's herders and nomads had little or no access to modern electric power and its potential
benefits. But as of 2013, thanks to a concerted push by the Mongolian government, almost 70
percent of nomadic people have access to electricity. Bor, a herder who mainly travels around
western Mongolia's Arkhangai province, is one of the people whose family benefits from portable
solar home systems (SHS).
"We use it for generating the power for lighting in the ger, charging phones, we can also generate a
fridge to keep food longer and we can run a television. That is very useful for us because we can
get the most recent weather forecast, which is important for our work and keeping our animals
safe. Before we had power it was very difficult. Now it is almost like living in the city."
The ability to charge mobile phones is also important for the herders, who often have children
staying at boarding schools. Access to electricity also allows families to contact emergency health-
care and doctors for advice without having to make the often arduous journey to the nearest village
or town.

19. The solar systems were distributed and installed with the help of the World Bank, after the
Mongolian government's National 100,000 Solar Ger Electrification Program ran into difficulties. A
World Bank report, Capturing the Sun in the Land of the Blue Sky, describes the difficulties faced by
the Mongolian government on its ambitious project.
By 2005, five years into the plan, 30,000 families had been kitted out with an SHS, but then the
program began to stagnate."The government of Mongolia recognized that considerably more effort
was necessary not only to keep the program on track, but to scale-up implementation in order to
achieve the National 100,000 Solar Ger Electrification Program target," the report said. In 2006, the
World Bank agreed to cover half of the initial outlay costs for each family as well as after-sales
maintenance, with 50 centers set up across the country, including at least one in each of its 21
provinces, so that the herders would not have to travel to Ulaanbaatar every time the solar panels
needed maintenance.
The SHS project also offers environmental benefits to a country where the ratio of carbon dioxide
emissions to economic output is ten times higher than the world average, because of the increase in
mining over the past decade as the true extent of Mongolia's mineral wealth became apparent. The
solar systems are slowly replacing the diesel generators used by some nomads as a means of
generating power, although they are still using stoves for heating, burning wood, coal and dung
throughout the year.
Source: Al Jazeera
IRON-ORE AND COAL PRICES GO SEPARATE WAYS
Prices of the key ingredients in steel production—iron ore and coking coal—are moving along sharply
different paths, as mining companies resist cutting coal output despite the market being awash with
the raw material.
While iron-ore prices have risen 22 percent since May, coking coal is still searching for a rebound.
Coking-coal prices are off more than 4 percent over the same period. China is on course for another
year of record steel production, with supply directed to the construction of high-rise apartment
buildings, the manufacture of luxury cars and other uses.
"There is simply too much coal on the market," the International Energy Agency said in a report this
week.
Shipments of steelmaking coal from Australia—the world's biggest exporter of the commodity—are
forecast by the government to rise to 178 million tons in 2015 from 145 million tons last year. Most
goes to China, which accounts for 60 percent of global demand. In contrast, global iron-ore
exporters are struggling to increase output in areas other than Australia's remote Pilbara region,
supporting prices of that commodity. The spot price of iron ore climbed to nearly USD 140 a ton
earlier this month, a four-month high. Prices have since eased a bit, to USD 134.30 a ton, but
remain well above the consensus forecasts of analysts at the start of this year.
Coal miners could scale back production, but that isn't always easy to do. In Australia, many miners
are locked into so-called take or pay contracts with rail and port operators. Many analysts don't
expect coking-coal prices to rebound for at least another 12 months. RBC Capital Markets expects
coking-coal prices to average USD 154 a ton in 2014, down from USD 159 a ton forecast for this
year. Instead, they see more chance that iron-ore prices will come down more sharply. RBC predicts
an 11 percent fall in iron-ore prices next year, as new supply from Anglo American's Minas Rio
project and mines owned by Fortescue Metals Group Ltd. is added to the market. UBS is even more
bearish, predicting iron ore will fall below USD100 in the second half of 2014.
Source: Wall Street Journal
ARE COMMODITIES TRADERS „TOO BIG TO FAIL‟?
When the banking industry‘s top lobby group commissioned a report by on commodity trading
houses, the idea was to show trading houses like Glencore Xstrata, Vitol or Cargill were ―too big to
fail‖ and therefore needed to be regulated in a similar manner to the banks.
But instead of highlighting the inherent issues surrounding the industry, the report found trading
companies posed less systemic risk than the big banks. As a result, the Global Financial Markets

20. Association which commissioned the report, decided not to finalize or publish it. (The GFMA claims
that it often commissions reports which are shared with regulators and other interested parties but
never published). But the debate hasn‘t ended.
A separate report published in July by the Centre for European Policy Studies, a think-tank, argued
the growth of commodity trading houses, which underpin the global trade in raw materials could
―have systemic‖ implications. Commodities trader Trafigura has become the latest to wade into the
debate. In its recent prospectus for a EUR 500 million bond issue, the world‘s second largest metals
trader and third biggest oil trader, addresses the GFMA report as well as the issue of systemic risk.
Making some tart observations, the trading house says the GFMA paper was aimed squarely at the
Financial Stability Board, a group of global regulators.
―[The report] was widely seen as a tactic by some banks active in the commodity trading space as a
way of creating more equality between market participants by seeking to usher in further
restrictions on pure commodity trading companies,‖ the prospectus says.
Commodity traders are facing the need to be more open about their operations and lift the veil of
secrecy. Indeed, the author of the GFMA report—Craig Pirrong, a widely respected academic—is
working on a white paper on commodities traders. Commissioned by Trafigura, it will look at what
commodities trading houses activities and the recent trend to accumulate more assets, risk
management as well as looking at different types of commodity companies.
Source: Financial Times
SMOG DARKENS SHANGHAI'S PROSPECTS FOR BECOMING A GLOBAL FINANCIAL CENTER
In the debate over which matters more in China, money or quality of life, the quality-of-life side
may have found the ultimate argument: If you can't breathe, nothing else really matters. And it‘s a
debate Mongolia has to have as it makes its own steps towards industrial and economic growth.
China's pollution problem is spreading and growing worse, a fact on stark display last week in
Shanghai, the country's financial center. A stretch of filthy-air days in that coastal city so
thoroughly shocked residents—who had largely escaped the smog that has long plagued the likes of
Beijing and Harbin—that it inspired fresh talk about getting away from China. Lawrence Shu, a
Shanghai-based partner at Hylands Law Firm, said he and his friends are thinking more seriously
about moving abroad.
"The smog had a big impact, because it feels really bad if you can't breathe freely," he said.
The environment used to take a back seat among the Chinese. But as they get richer, they are
traveling abroad more, making the pollution back home more obvious. The Internet also
contributes: Blue-sky pictures posted on social networks by Chinese travelers abroad constantly
remind folks of what is lacking at home, and Chinese now use various apps to track air-quality data.
If Shanghai's smog discourages smart financial professionals from wanting to live there, that will
hinder China's effort to create a global financial center. If businesses such as financial companies
and luxury-goods makers perceive that China's elites are spending more time outside their home
country, they will be less willing to invest in China.
Most rich Chinese haven't packed their bags and left yet, but they are keeping their options open.
"Relocation is a big decision," said Anne Wang, who works in the financial industry in Shanghai. But
just in case, she recently received a U.S. visa that would allow her to live there.
Source: Wall Street Journal
POLITICS
MINERALS POLICY ENTERS FINAL DISCUSSIONS
The government published a final draft of Mongolia‘s State Policy on the Minerals Sector for 2013
through 2025.
The document was first presented to Parliament in July and is now entering final discussions during
the autumn plenary session of Parliament following a 42 percent drop of foreign investment and 23
percent fall in the currency, year-on-year.

21. ―We have reviewed the proposed State Policy on the Mineral Sector, which we feel will be a
positive step forward if passed,‖ said the Source. ―The passing of this policy will result in more
transparency and an increasing participation from foreign investors. That said, it will take time for
these feats to be accomplished. Investors will be weary of Government promises as they seek
longevity to prove Government intentions.‖
The proposed policy is divided into four main sections: rationale, principles, main policy and
implementation-results. The major points stressed in the policy include transparency and
responsible mining. The law sends the message that growth is going to be driven by private sector
participation and the intent to provide a stable investment environment, technological innovation
and value-added activities.
Key priorities of the law since it was first unveiled include stability of taxation and the legal
environment, an end to any discrimination between foreign and national investors, and the
preservation of strategic resources and deposits.
This most recent version saw the inclusion of a new section supporting development of local areas
and the interests of local citizens. Other key elements include exploration—which would see
greater government regulation for strategic mineral deposits while cutting down bureaucracy and
conducting scientific research—production support, and local support. The new document also
highlights greater support for non-governmental organizations for the environment, allowing them
to claim damages from mining operations, the establishment of funds to support economic
diversification, environmental protections and land rehabilitation.
The new draft has removed the risk assessment section and replaced it with a section on
implementation. This includes the improvement of the legal environment and producing of relevant
regulations, programs and projects for 2013 to 2015, followed by the implementation of programs
and projects from 2014 to 2025, and finally the provision of conclusions on midterm policy
implementation and further planning for up to 2020 and 2025.
―We believe that this policy will take us one step closer to attracting investors and supporting
private sector development in Mongolia,‖ said the Source. ―Despite current investor hesitation this
state policy, in addition to the new amended Minerals Law set to pass next year, will further
encourage investors to enter the market and will build support for the junior mining community.‖
Source: Mongolian Investment Banking Group
PARLIAMENT UNANIMOUSLY BACKS “SMART GOVERNMENT” INITIATIVE
Parliament has unanimously backed President Tsakhia Elbegdorj's ―From Big Government to Smart
Government‖ initiative for government reform concepts, having signed a joint statement of support
on 13 December.
The joint statement gives full support to the president's initiative, and commits to cooperation for
its undertaking. This includes support for enhancing government systems and policies in line with
democracy and a market economy, improving the capacities of public services, and curtailing
government intervention into private business affairs. Also included are protections to private
business, including establishing government structures for rule of law, support to domestic
industries, and honoring contracts. The fight against corruption is another main perogative.
On 16 November 16 the Office of the President of Mongolia organized a national consultative
meeting on this topic at the Government Palace. Elbegdorj next met with members of the
Parliament on 9 December to organize an open dialogue with representatives of Parliament for an
appeal for them to sign the joint statement. Reaffirming the commitment of the Mongolian
lawmakers to a breakthrough reform of the Government, the leaders of party floors and factions in
the Parliament and independent members of the Parliament signed the document for the reform on
December 13, 2013.
Source: Montsame
GOVERNMENT CALLS TO END PRACTICE OF APPOINTING MPS AS MINISTERS
The coalition government has thrown their support behind President Tsakhia Elbegdorj's proposal to
prohibit Parliament members from serving as cabinet ministers.

22. Democratic Party members discussed a draft resolution and proposed amendments submitted by the
president for the new restriction at a party meeting on Monday. The draft amendments were
unanimously backed by the faction. The Justice Coalition, which includes the Monglian People's
Revolutionary Party and Mongolian Democratic Party came to the same conclusion following its own
meeting, said coalition head N. Battsereg on Monday.
Source: Montsame
COMMITTEE LEADERS TO BE ELECTED THIS MONTH
The coalition government will soon be electing officials to lead the various committees in
government.
Parliament has 8 standing committees to elect leaders to this month, with each committee to be
led by a representative of the coalition government. Current committee heads are Ts. Tsolmon at
the Security and Foreign Policy Committee, G. Bayarsaikhan at the Environment, Food and
Agriculture Committee, Z. Bayanselenge at the Social Policy, Education, Culture and Science
Committee, R. Burmaa at the Petition and Requests Committee, A. Bakei at the State Structural
Committee, Ts. Davaasuren at the Budget Committee, Sh. Tuvdendorj at the Legislation
Committee, and B. Garamgaibaatar at the Economic Committee.
Source: Zuunii Medee
FOREIGN CURRENCY PAYMENTS BANNED FOR MINING/EXPLORATION LICENSING FEES
The Ministry of Finance has banned the use of foreign currencies to pay for mining and exploration
licensing fees to the Mineral Resources Authority, beginning 1 January 2014.
The Ministry of Finance has prompted these entities and companies holding licenses to comply with
Mongolian currency law that states that all businesses and agencies must do business in Mongolian
tugrug. According to the 2009 law, transactions must not be carried out in foreign denominated or
foreign currency based rates.
Source: News.mn
MINING MINISTRY TO COOPERATE WITH ASSOCIATION OF FLUORSPAR EXPLORERS
The Ministry of Mining Wednesday established a memorandum of mutual understanding with the
Association of Fluorspar Explorers (AFE) to cooperate in augmenting the country‘s export.
In addition to expanding export, goals include developing transparent and responsible mining,
improving qualities and standards of fluorspar metallurgy and flotation concentrate, and in
increasing the production output of the mineral‘s ore enrichment. The hope is the memorandum
will create a launching point for a national program for fluorspar, its exploitation, increase the
volume of production by intensifying research, and increase competitiveness in international
markets. It will also be necessary to introduce the latest technology to the country along with
running joint trainings with foreign NGOs, the Ministry said.
Source: Montsame
DP REJECTS AMARJARGAL‟S RESIGNATION
Parliament voted against MP R. Amarjargal‘s resignation request on 12 December.
During Tuesday‘s meeting, the majority of the Standing Committee on State Structure voted against
Amarjargal`s resignation. The head of the Democratic Party (DP) caucus, D. Erdenebat, took a
strong stance against letting Amarjargal leave.
Amarjargal said he wanted to resign to take responsibility on behalf of his party members for the
current political situation and economic restraints in Mongolia. DP members agree with his
conclusion but encourage him to make the effort and participate for social change and
development. Members of the opposition Mongolian People‘s Party members said that Amarjargal
could see the problems and nature of the majority of Parliament and praised his plan to resign.
Source: News.mn

23. MPP HEAD TO STEP DOWN
Mongolian People Party (MPP) Head N. Enkhbold has requested his resignation as party leader.
MPP Deputy Head D. Oyunkhorol said 9 December that Enkhbold submitted his request to step down
during a party meeting. Oyunkhorol said Enkhbold‘s resignation was due to personal reasons. The
new party head will be appointed by the MPP's governing board.
Source: Udriin Sonin
FIFTH ROUND OF NEGOTIATIONS FOR THE JAPAN-MONGOLIA ECONOMIC PARTNERSHIP
AGREEMENT
The fifth round of the negotiations for the Japan-Mongolia Economic Partnership Agreement (EPA)
will be held from 16 to 19 December in Ulaanbaatar.
The Japanese delegation will be led by Jun Yokota, ambassador in charge of economic diplomacy,
and the Mongolian delegation will be led by Ochirbat Chuluunbat, vice minister for economic
development. Experts from relevant ministries and agencies of both sides will participate in the
meetings.
In this round, negotiations are in areas including trade in goods and investment.
Source: 4-Traders.com
FIRST MONGOLIA-CHINA JOINT BORDER COMMISSION MEETING IN BEIJING
The very first meeting of Mongolia-China joint commission of borders took place 11 and 12
December in Beijing, China.
This meeting was co-chaired by T. Togsbilguun, a director of the Department of Neighbour
Countries of Mongolia‘s Ministry of Foreign Affairs, and by Xiao Jiangguo, a representative of border
checkpoint and seaport affairs. Both sides shared on ideas for implementation of the
intergovernmental contract on the border regime, and reached some agreements on conducting a
joint examination in the border signs and on activating the collaboration in law enforcement around
frontier areas. After this they discussed issues of developing border checkpoints at a same level,
putting some border checkpoints into a permanent regime, giving an international status to four
checkpoints.
The gathered also made a protocol on their meeting and inked its results. The next meeting will run
in 2014 in Ulaanbaatar.
Source: Montsame
BELARUS TO OPEN EMBASSY IN MONGOLIA IN 2014
Belarus will open its embassy in Mongolia in 2014, reads a resolution from the Belarus Council of
Ministers of the Republic of Belarus from 12 December 2013. Belarus‘ Finance Ministry will finance
the costs of opening and maintaining Belarusian Embassy in Mongolia from the funds set aside in its
national budget for the opening and maintenance of diplomatic missions and consular missions of
the Republic of Belarus abroad.
Source: Belarusian Telegraph Agency
HOWELL, NEW JERSEY, USA BECOMES 'SISTER CITY' OF SUKHBAATAR DISTRICT
The Howell Township and the Sukhbaatar district in Mongolia signed a memorandum of
understanding to create ‗sister cities‘ between Howell, New Jersey, USA and the Sukhbaatar District
on Tuesday.
The program was aimed at opening up talks on how each can benefit from one another, Mayor
William Gatto said. "Howell Township is a very diverse city and they've taken the relationship with
the Kalmyk community here in Howell and expanded it to a country where they have had no
relationship in the past," he said.
The ‗sister cities‘ program will allow both Mongolia and Howell to "exchange ideas and come up
with new and better ways to do things that benefits both cultures." Outside of Mongolia, Howell has
the largest population of Kalmyks in the world, with many living in the Freewood Acres section of
the township, Gatto said.

24. Some of the goals of the agreement include promoting a common prosperity and development for
both parties, an electronic pen-pal program and education opportunities for exchange students.
Through a translator, Baljinnyam Gan-erdene, of the Citizens Representatives Council of Sukhbaatar
District, said he came to Howell to see how democracy works in the United States.
"I'm really glad and hope that this unforgettable and successful visit opens the door to our
friendship and prosperity between our residents," Gan-erdene said.
Gatto gave Gan-erdene a Howell flag and a throw blanket created by the Historical Society
depicting the history of the township. Gan-erdene also gave Gatto several items, including a bronze
piece of art.
Source: NJ.com
MONGOLIAN CALLIGRAPHY ADDED TO UNESCO CULTURAL HERITAGE LIST
State Parties at the 8th Session of the Intergovernmental Committee for the Safeguarding of the
Intangible Cultural Heritage in Azerbaijan unanimously agreed to register Mongolian calligraphy as
an intangible cultural heritage in need of urgent safeguarding on 2 December.
―Mongolian heritage, calligraphy, is now being recognized by the world and I am grateful on behalf
of my country for decision makers,‖ said Secretary-General of Mongolian National Commission for
UNESCO Gundegmaa Jargalsaikhan. He noted that Mongolian calligraphy was the fifth cultural
heritage item of Mongolia to be listed, and now stands among the Mongolian epic, traditional folk
dance, the traditional music Tsuur, and a circular breathing technique.
Mongolian calligraphy is a 1,000-year-old writing system that vertically connects continuous strokes
together to create a word. Letters of Mongolian script have been created and taught by nomads
from generation to generation. During the 1937-1940 purges of the Soviet era, thousands of tutors
and traditional scholars of the script were killed. Those who remained alive were banned from
mentoring the younger generation. Soon after that, or around 1946, a new, Cyrillic script was
adopted as the only eligible script therefore banning all the teachings of old Mongolian script and
Latin lettering. Only in the 1970s, was the old Mongolian script re-introduced to scholars, allowing a
limited number of classes in universities.
After the 1990 democratic changes, along with the revival of Mongolian identity, interest in
traditional calligraphy reawakened. As a sign of such revival, the very first non-communist political
organization, the Democratic Union of Mongolia, used folded calligraphy as its main logo.
Source: Info Mongolia
THOUGH IMPROVING, MONGOLIA STILL REELING UNDER CORRUPTION
The third joint survey by the Asia Foundation and Sant Maral Foundation to gather data on the
perception of corruption in Mongolia revealed that efforts to curb corruption in what is considered
as one of the world‘s most corrupt countries could be having impact.
The survey shows a significant drop in the percentage of respondents who believe corruption has
increased in the last three years, from 38.9 percent in November 2012, to 18.3 percent currently. In
contrast, in 2006, a majority of respondents (63%) indicated that corruption has increased ―a lot‖ in
the last three years. The survey also shows that corruption has declined in importance as a critical
social problem since 2006. Despite these positive signs overall, respondents indicated that
corruption remains a serious issue in some specific key areas.
Conducted in September of this year, the survey featured face-to-face interviews in 1,360
households across Mongolia, including seven districts in Ulaanbaatar and 21 counties in six
provinces. A majority (76.6%) cited that widespread corruption in the law enforcement agencies is
one of the main reasons the government has been unable to tackle corruption effectively. When
corruption is perceived to be this widespread, the attention will obviously turn to the performance
of the apex anti-corruption body, the Independent Authority Against Corruption (IAAC). The survey
shows that the IAAC is slowly but surely beginning to gain confidence among citizens. The
percentage of those surveyed who think that its performance is ―good‖ or ―very good‖ increased
from 7.8 percent in March 2010 to 20.3 percent in March 2013. In September 2013, the result shows
a new high of 29.4 percent.

25. People‘s perceptions on corruption are often shaped by personal experiences. Although very few
respondents in the survey said that they had actually paid a bribe themselves (8 percent, about a 3
percent drop from 2012, and an 18 percent drop since 2006), as noted before, many are not willing
to report instances where they are asked for one. Similarly, 36 percent of respondents said they
would not pay a bribe, but 26 percent indicated that they would pay if they had the financial
capability.
Basanta Pokharel is The Asia Foundation‟s chief of party for the STAGE program in Mongolia. He
can be reached at basanta.pokharel@asiafoundation.org. The views and opinions expressed here
are those of the individual author and not those of The Asia Foundation.
Source: Asia Foundation
MPP DEMANDS DISMISSAL OF MINISTERS
Mongolian People‘s Party Chairman N. Enkhbold and party head S. Byambatsogt submitted to the
Speaker a request for the dismissal Minister of Finance Chultem Ulaan and of Economic
Development Minister Nyamjav ―Fortuna‖ Batbayar.
"Our faction believes that these ministers must be held responsible for the worsening of the
national economic situation. We also intend to do the same with other ministers after hearing
opinions of people," said Byambatsogt.
Source: Montsame
FORMER TAVAN TOLGOI JSC DIRECTOR ARRESTED
The Independent Agency Against Corruption arrested former Tavan Tolgoi JSC director Kh.
Tumenbayar for undisclosed reasons.
An unnamed official source suggested that the arrest may be related to abuses of power and
payments to political parties as well as the construction of a high-class hotel in Dalanzadgad Soum,
Umnugobi Aimag. Kh. Tumenbayar is a member of the Democratic Party, a member of Parliament,
and is an associate of ―Ajnai‖ Bat-Erdene, the Minister of Defense who helped Tumenbayar attain
position as the director of Tavan Tolgoi for 6 years and rise to head of the Umnugobi Aimag Citizens'
Council.
Tumenbayar voluntarily resigned from his position at Tavan Tolgoi last month. The IAAC has
reportedly not given details to the reasons for the investigation opened on Tumenbayar because of
possible connections to high-ranking officials.
Source: Unuudur
MONGOLIA, TURKMENISTAN JOIN INTERNATIONAL RACING FEDERATION
The International Federation of Horseracing Authorities (IFHA) has welcomed racing organizations
from Mongolia and Turkmenistan as affiliate members.
Recent ratification to IFHA statutes at its annual General Assembly in October created a new
affiliate membership category within the Federation. Thus, the Federation of Mongolia Horse Racing
Sport and Trainers and the Turkmen Atlary State Association, by unanimous vote of the IFHA
Executive Council in Paris in October, have become the IFHA‘s first two affiliate members.
The Federation of Mongolian Horse Racing Sport and Trainers (FMHRST) is a non-governmental
organization (NGO) which serves to the development of equestrian sport in Mongolia and works to
protect the rights of horsemen who specialize in this national sport. The new affiliates were
announced by IFHA Chairman Louis Romanet this week, and several key appointments to IFHA
executive office positions and committees have also been made.
Source: Horse Talk
MONGOL TV HEAD: MEDIA CAN HELP FIX THE BIG PROBLEMS
Nomin Chinbat, head of Mongol TV, has grander intentions than just ridding the country's television
business of rampant pirated content and unlicensed formats. The young executive wants to help
clean up Mongolian politics and the nation by creating a free and open media.
―The networks are used as propaganda channels for politicians. They are used very effectively every

26. four years at election time,‖ says Chinbat, whom the Source named one of the 25 Most Powerful
Women in Global TV at MIPCOM 2013.
―There are laws against piracy, but they aren‘t implemented,‖ explains Chinbat, who says that
politicians in the country of roughly three million won‘t challenge journalists because their
relationships with them are too cozy.‖
Mongol TV has invested in original programming, licenses all of its imported content, and runs
investigative journalism features highlighting social problems such as alcoholism and corruption.
The company is organizing a Mongol TV Day for February 2014, to which it has invited major
international studios, to raise awareness of the issues, and introduce the global industry to
Mongolia. Britain‘s ITV and America‘s CBS are already confirmed, and negotiations are ongoing with
other attendees. The situation has improved in recent years, with some channels having become
what Chinbat calls ―hybrids, which license some sports rights, but then steal others and copy
formats.‖
―These days some of these channels might license 25 episodes of a format, and make 50. But this is
actually progress,‖ says Chinbat.
Chinbat and her team were at the Asian Television Forum (ATF) in Singapore looking for new
formats that can be produced within the constraints of Mongolian television budgets. However, with
Mongolia's young population—65 percent of the country is under 35 years old—mobile viewing is on
the rise, and the network is already working second-screen utilization and new media applications.
This demographic sweet spot should guarantee strong growth in the population, economy and
nascent entertainment sector in Mongolia in the coming decades.
Source: Hollywood Reporter
ANNOUNCEMENTS
“MM TODAY” ON MNB-TV, FRIDAY, 19:00 TO 19:10
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 from 19:00 to 19:10 tonight. Tune in to watch this program that reports stories from
today‘s BCM NewsWire.
BCM WEBSITES
MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS
The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.
As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the
government website Open-Government.mn are regularly updated.
S. Oyun, Minister of Environment and Green Development, presentation at BCM monthly meeting on
May 27 added to Mongolian website, bcmongolia.org/mn/илтгэлүүд.
- Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн
бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN
BUSINESS NEWS‟, „PHOTO GALLERY‟
The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong,
November 18-20:
- Regulatory Update: Navigating Mongolia‘s legal framework for foreign direct investment,
Javkhlanbaatar Sereeter, Director General, Foreign Investment Regulations and Registration
Department, MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA;

27. - Investment keynote: Investing into Mongolia in 2013 – Where do the opportunities lie?, James
Passin, Co-Founder and Manager, FIREBIRD MONGOLIA FUND;
- Development keynote: Key challenges and opportunities for continued growth in Mongolia,
Randolph Koppa, President, TRADE AND DEVELOPMENT BANK OF MONGOLIA;
- Outlining government policies and long-term plans for Mongolia‘s mining sector, Amarjargal
Khurelbat, Head of International Cooperation Division, MINISTRY OF MINING OF MONGOLIA;
- From copper to met coal: Demand and price outlook and expected impact on Mongolia‘s economy,
Ghee Peh, Managing Director, Metals and Mining Research, UBS SECURITIES ASIA;
- How Mongolian banks and financial institutions are dealing with the challenges and opportunities
of a fast growing economy, Norihiko Kato, Chief Executive Officer, KHAN BANK;
- Update on the Mongolian stock market – Impact of the new Securities Law, Altai Khangai, Chief
Executive Officer, MONGOLIAN STOCK EXCHANGE;
- From investment banking to trade finance to micro credits to insurance, Amartuvshin Hanibal,
Managing Director, TENGER FINANCIAL GROUP LLC
- Spotlight presentations: Showcasing Mongolian investment opportunities, Peter Morrow, Board
Director, ASIA PACIFIC INVESTMENT PARTNERS;
- Spotlight presentation: Showcasing Mongolian investment opportunities, Munkhbat Davaatseren,
CEO of Golomt Securities, GOLOMT BANK;
- Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources,
Batmunkh Batkhuu, Chairman, SHARYN GOL JSC;
- Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources,
Jimmie Wilde, Chief Operating Officer, BERKH UUL JSC;
- Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources, Mona
Forster, Executive VP, ENTRÉE GOLD INC;
The following two presentations are from the ―ANTI-CORRUPTION LEGISLATION/POLICY,
INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ training seminar for businesses, in
Ulaanbaatar, November 18, 2013:
-―International business standard on transparency‖ by Jelena Pesic, Director, PwC;
-―Finland‘s best practice on transparency and anti corruption‖ by Dr. Pekka Hallberg (as it is
world‘s number one), Emeritus President of the Supreme Administrative Court of Finland;
The following 15 presentations are from the Mongolia Mining Summit, Perth, Australia, October 29-
31, 2013:
• Mongolia‘s Minerals Future and Development by Otgochuluu Ch, Director General, Department of
strategic policy and planning at Ministry of Mining, Mongolia at the Mongolian Mining Summit 2013,
Perth, Australia, Oct 29-31, 2013
• Mongolian Economy: Investment Opportunities/Challenges, Jim Dwyer, Executive Director,
Business Council of Mongolia at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31,
2013
• Oyu Tolgoi: Lessons from the Gobi, Houston Spencer Vice President, Communications and Media
Relations, Oyu Tolgoi at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013
• Market dynamics for Mongolian coking coal in the Chinese market, Graeme Hancock, President
and Chief Representative at Anglo American, Mongolia at the Mongolian Mining Summit 2013, Perth,
Australia, Oct 29-31, 2013
• Speech by Mr. Ariunbold Byamba, Deputy Director, Erdenes MGL LLC at the Mongolian Mining
Summit 2013, Perth, Australia, Oct 29-31, 2013
• Launching Mining Projects in Mongolia–A Major Contractor‘s Perspective, Eric Erdenebat
Tseveendorj, Country Manager, Orica Limited at the Mongolian Mining Summit 2013, Perth,
Australia, Oct 29-31, 2013
• Investing in a dynamic legislative environment, Elisabeth Ellis, Managing Partner Ulaanbaatar,
Minter Ellison at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

28. • Sandvik In Pit Crushing & Conveying (IPCC), Doug Turnbull, Principal Mining Engineer, Sandvik
Mining Systems, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013
• Ovoot Coking Coal Project, David Paull, Managing Director Aspire Mining, at the Mongolian Mining
Summit 2013, Perth, Australia, Oct 29-31, 2013
• The business of being a third neighbor, David Landers, General Manager, East Asian Growth
Markets at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013
• Nuurst Thermal Coal Project, Daniel Rohr, Chief Financial Officer, Modun Resources Ltd, at the
Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013
• Culture matters in building sustainable long-term business relationships, Hana Tserenkhand
Byambadash Business Development Consultant. AusMon Consulting and Dr Christine Hogan Adjunct
Professor, Curtin University. Consultant & Author at the Mongolian Mining Summit 2013, Perth,
Australia, Oct 29-31, 2013
• Maximizing Business Benefits from Your IT Investment, Brad Skeggs, Executive Director, COSOL, at
the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013
• Presentation by Battsengel Gotov, CEO, Mongolian Mining Corporation, at the Mongolian Mining
Summit 2013, Perth, Australia, Oct 29-31, 2013
• Mongolian Mining Sector "Present and Future Developments", N.Algaa, Executive Director,
Mongolian National Mining Association, at the Mongolian Mining Summit 2013, Perth, Australia, Oct
29-31, 2013
The ―Mongolia Reports‖ section includes the following:
- ―Ministry of Finance of Mongolia, 2013 Government Debt Auctions‖ by Bank of Mongolia;
- ―Doing Business in Mongolia: 2013 Country Commercial Guide for U.S. Companies‖ by U.S.
Embassy;
- ―Real Estate Report 2013‖ by Mongolian Properties;
- ―Selected Macroeconomic Indicators, November 20, 2013‖ by International Monetary Fund‖
- ―2013 Second Annual Mongolian CEO Survey‖ from PricewaterhouseCoopers Audit LLC;
- ―Selected Macroeconomic Indicators; data through October 16, 2013‖ by International Monetary
Fund;
- ―IMF Completes 2013 Article IV Mission to Mongolia‖ by International Monetary Fund;
The following are added to Interview Section from the Oxford Business Group, Mongolia Reports
2013 book:
• B. Byambasaikhan, Chairman, Business Council of Mongolia: ―Talk is cheap‖;
• President Ts. Elbegdorj: ―Diversifying for growth‖
• Jim Dwyer, Executive Director, Business Council of Mongolia: ―Non-mining sectors budding‖;
• Peter Morrow, Chairman, American University of Mongolia: ―Filling in the blanks‖;
• N. Zoljargal, Governor, Bank of Mongolia: ―Sustainable vision‖;
• Gansukh, Minister of Roads and Transportation: ―Accessing new markets‖;
• J. Od, President, MCS Group: ―Building interest‖;
• B. Chuluunbaatar, President and CEO of Monnis Group: ―Climbing the ranks‖;
• Cameron McRae, President and CEO, Oyu Tolgoi: ―Sitting on a copper mine‖.
BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to
Parliament and Government is available for download.
BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business
News‖ before they are all put together each week for Friday's weekly NewsWire.
The ―Photo Gallery‖ contains photos from the 6th Anniversary BCM Renewal dinner on November
11, 2013.
BCM Football Cup 2013 pictures are posted to the website - http://bcmongolia.org/en/photos/350-
en/album?albumid=200

29. 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
BCM LAUNCHES NEW LINKED-IN COMPANY PAGE
The Business Council of Mongolia has launched a new company page on the social networking
website LinkedIn to network its members and followers including small-medium enterprises (SMEs).
The new page will allow BCM to alert followers to the latest news and information critical to their
businesses. Members‘ businesses will be promoted. Additionally, BCM plans to deliver monthly
infographics on the latest data as well as videos and other media content as they come. The bulk of
the content on the new page will be in Mongolian language to better cater to BCM's Mongolian-
speaking audience and members. The following link can direct you to the New BCM's Linked-in page.
http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo
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
We have now 2,482 fans on our Facebook fans page, 1,527 connections on LinkedIn network, and
835 followers on Twitter.
Of course for news information, interviews, event photos, and announcements regarding our
organization, visit the official BCM website at http://bcmongolia.org/en/

30. ECONOMIC INDICATORS

31. 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]
November 30, 2013 *12.0% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 11.1% y-o-y, Ulaanbaatar city, November 30, 2013
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
CURRENCY RATES – DECEMBER 19, 2013
Currency Name Currency Rate
US dollar USD 1,641.38
Euro EUR 2,246.80
Japanese yen JPY 15.79
British pound GBP 2,688.74
Hong Kong dollar HKD 211.70
Chinese Yuan CNY 270.31
Russian Ruble RUB 49.81
South Korean won KRW 1.55
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.