The document summarizes business and economic news from Mongolia reported in Issue 266 of the Business Council of Mongolia NewsWire dated March 22, 2013. Key highlights include: - Mongolian officials tried to calm fears that disagreements between the government and Rio Tinto over the Oyu Tolgoi mine would delay its planned June start of commercial production. - Rio Tinto paid nearly $12 billion in taxes globally in 2012, including $280 million in Mongolia. - Rio Tinto attracted nearly double the $2 billion sought from commercial banks for project financing of Oyu Tolgoi, securing around $3.65 billion committed so far. - Several mining companies including Newera Resources

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 266 – March 22, 2013
NEWS HIGHLIGHTS:
Business
 Mongolia tries to calm fears Rio wrangle will delay giant mine;
 Rio pays nearly USD 12bn in taxes;
 OT said to get USD 3.7bn from banks;
 Newera announces up to 111m tons at Shanagan coal project target;
 Voyager raises USD 2.56 million;
 Areva blamed for animal deaths;
 Khan Bank announces e-banking outreach campaign;
 Benoy to make Olympic Residence its Mongolian flagship development;
 AUM appoints board member;
 FMG fund sees 5.4 percent decline in Feb.;
 Aspire releases H2 2012 report;
 Xanadu releases 2012 H2 report;
 Power and infrastructure summit to be held in UB;
 GE expects tough year for wind power business.
Economy
 The state of the mining sector;
 Rising bond yields;
 Lowest Monthly FDI Since 2010;
 Inflation falls, but not likely because of Price Stabilization Program;
 Sheep cashmere plant opens;
 Mongolia gets mixed ratings by Fraser survey;
 Spending Money to Make Money in the Gobi;
 UB expects 16.5bn in auto taxes for 2013;
 Mongolia to reduce hunting licenses for 2013;
 Mongolia to receive 10,000 tons of gasoline monthly;
 Can “Brand Mongolia” be a reality?
 Finance minister announces sovereign wealth fund plans;
 Mongolia marks improvement on Human Development Index;
 Iron ore production and refinement lags behind growing demand;
 BRICs in the global driving seat;
 Digitizing the mining industry;
 Capitalism makes you happy.
Politics
 Premier announces plans for SEFIL amendments;
 Government to ramp up production at strategically important mines;
 Mining minister says OT shareholders meeting yet to be set;
 Parliament receives amendment to VAT law;
 Authorities attempt to strip court official of immunities for investigation;
 UB Mayor orders land confiscations;
 Coal mines closed in Nalaikh;
 Cabinet chooses head to lead TT power plant project;

2.  Mongolia highlights role of peacekeepers in U.N. Missions;
 East Asia’s New Peacemaker: Mongolia?;
 MPRP launches Justice Campaign;
 Researchers finds Mongolia using surveillance software;
 Freedom in the World 2013;
 Giving power to the people of Mongolia.
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.
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BCM MONTHLY MEETING NOTICE
BCM‘s monthly meeting for members will be on Monday, March 25, 2013 at 5PM at the KEMPINSKI
HOTEL KHAN PALACE, 2nd floor, Altai Ballroom.
The bilingual meeting will feature the following presentations:

3. - Call to Order/Business Council of Mongolia: B. Byambasaikhan, Chairman, BCM
- BCM Report: Jim Dwyer, Executive Director, BCM
- Ruth Pulaski, Director Marketing & Development, American University of Mongolia – ―American
University of Mongolia: Integrating a Liberal Education Approach to Learning‖
- B. Bayar, Managing Director, ELC LLC – ―Update on Legal Developments Regarding Foreign
Investment‖
- Tony Burchill, Australian Consul-General & Trade Commissioner, Austrade – ―The Business of Being
a Third Neighbour‖
- B. Batzaya, State Secretary, Ministry of Road, Transportation, Construction and Urban
Development – ―Update on Current & Future Projects‖
A networking reception will be held for all attendees immediately following the business portion of
the meeting in the ―Tenger‖ restaurant, 1st floor, Kempinski Hotel Khan Palace.
BUSINESS
MONGOLIA TRIES TO CALM FEARS RIO WRANGLE WILL DELAY GIANT MINE
Mongolian officials tried on Thursday to calm fears that disagreements between the government and
miner Rio Tinto PLC would delay a planned June start of commercial production at the giant Oyu
Tolgoi copper and gold mine.
Rio Tinto and Mongolia are at loggerheads over the future of one of the world's largest untapped
copper deposits just as the mine ramps up output and the Rio Tinto subsidiary that owns it tries to
line up USD 4 billion for the next stage of development. The mine is operating under a temporary
budget after the two sides failed to agree on a deal last month, having disagreed over taxes and
rising costs that Mongolia fears will erode prospective earnings.
―The Mongolian government and the investor both highlight the importance that the production
should start on time,‖ Dorjsuren Javkhlanbold, a senior official at Mongolia's mines ministry, said.
―We have a joint understanding of what we are going to do. We need to make several clarifications
[to] our investment agreement and we are confident the revision will soon be successful.‖
The government has raised concerns about rising costs that will delay the state receiving its share
of profits from the mine and is looking for ways to increase the benefits for the country's
impoverished population. Javkhlanbold said the amount of initial investment—which he said had
risen from USD 4.7 billion to USD 7.1 billion was key to the discussion. Oyu Tolgoi puts total capital
required for the project's first phase at USD 6.6 billion.
―It is important to make the rules of the game clear,‖ he said in Singapore. ―If we don't have clear
rules, we will misunderstand each other and after a long time this misunderstanding will become
conflicts between the investor and the government.‖
Source: Reuters
RIO PAYS NEARLY USD 12BN IN TAXES
Mining giant Rio Tinto PLC on Friday reported that it had paid some USD 11.6 billion in global taxes
during 2012.
In its voluntary tax report, the miner noted most of the taxes were paid in Australia, with more
than USD 8.9 billion outlaid to all levels of Australian government last year. Rio Tinto's Mongolian
operation added USD 280 million in taxes, with Canada accounting for USD 1 billion, the United
States for USD 376 million, Chile for USD 331 million, and the United Kingdom for USD 150 million. A
further USD 140 million was paid in France and South Africa accounted for USD 130 million in taxes.
Corporate income tax was the largest component of Rio Tinto's tax payments around the world,
followed by government royalties and payroll tax.
―Rio Tinto makes significant contributions to public finances in all the countries where we are doing
business,‖ said chief financial officer Guy Elliott. ―We believe it is important to disclose this tax
information because this level of transparency helps us to retain our license to operate, promotes

4. government accountability and plays a key role in combating corruption.‖
Source: Mining Weekly
OT SAID TO GET USD 3.7BN FROM BANKS
Rio Tinto PLC attracted nearly double the USD 2 billion sought from commercial banks for the Oyu
Tolgoi project finance deal, according to three people familiar with the matter.
The Mongolian mine has attracted about 3.65 billion from banks, including 11 lenders committing
USD 300 million each, said the people, who asked not to be identified because the transaction isn't
public. Further banks may participate in the loan before it closes next month, they said.
Rio Tinto is seeking about USD 2 billion of 12-year loans from banks and a further USD 2 billion from
export credit agencies and international development lenders. The boards of International Finance
Corp. (IFC) and the European Bank for Reconstruction and Development (EBRD) granted approval to
join the USD 4 billion project finance deal last month.
HSBC Holdings PLC, Intesa Sanpaolo SpA and Natixis have committed USD 300 million to the deal,
said the people. They join Australia & New Zealand Banking Group Ltd., BNP Paribas SA,
Commonwealth Bank of Australia, Credit Agricole SA, ING Groep NV, Sumitomo Mitsui Banking
Corp., Societe Generale SA and Standard Chartered PLC in providing the biggest amount, people
familiar with the matter said last week.
Bank of Tokyo-Mitsubishi UFJ Ltd. and National Australia Bank Ltd. have committed USD 150 million
each, and Nederlandse FMO NV has pledged USD 50 million, they said.
David Outhwaite, a London-based spokesman for Rio Tinto, declined to comment on the financing.
The bank commitments come amid a tussle for control of the USD 6.6 billion copper and gold
project, Mongolia's single biggest investment. At full capacity the mine, which is suffering from cost
overruns, will account for almost a third of the economy.
Source: Bloomberg
NEWERA ANNOUNCES UP TO 111M TONS AT SHANAGAN COAL PROJECT TARGET
Newera Resources Ltd. announced a coal target of 64 million to 111 million tons of coal at its
Shanagan coal project.
The estimate follows two phases of drilling at Shanagan. The company said it has significant
potential to increase the exploration target and complete a maiden JORC resource by completing a
third drilling program at Shanagan.
Source: Newera Resources Ltd.
VOYAGER RAISES USD 2.56 MILLION
Voyager Resources Ltd. raised USD 2.56 million in a share placement.
The proceeds from the placement will be used for its flagship Khul Morit copper project in
Mongolia. The placement was for the sale 160 million shares at USD 0.016. The next phase of
drilling at Khul Morit is likely to start in April.
Source: Business Mongolia
AREVA BLAMED FOR ANIMAL DEATHS
The Central Geological Laboratory has held Areva SA responsible for the death of dozens of calves in
Dornogobi Aimag.
The lab found that samples showed contamination from heavy metals following local reports that 19
calves had died in Zuunbayan Soum alone in addition to other deaths throughout the area. The
grazing land had reportedly been turned into a uranium dumping ground by Cogegobi Mongolia, a
subsidiary of Areva. Areva began exploring for mineral deposits at Dulaan Uul and the Umnud
Uranium project in Dornogobi in 1997.
Source: News.mn
KHAN BANK ANNOUNCES E-BANKING OUTREACH CAMPAIGN
Mongolian micro-finance provider Khan Bank LLC recently launched its ―Welcome to the E-Banking

5. World‖ campaign to provide information about e-banking services such as payment services
available via the Internet and mobile phones. The campaign is scheduled for three months ending in
May 2012 and will be held in Khan Bank branches in Ulaanbaatar and elsewhere.
Source: Microcapital.org
BENOY TO MAKE OLYMPIC RESIDENCE ITS MONGOLIAN FLAGSHIP DEVELOPMENT
Benoy Architecture has announced it will build Asia Pacific Investment Partners' Olympic Residence
luxury high-rise apartments.
The development, which is located near Ulaanbaatar's embassy district, will combine office, retail
and residential space under the one roof, says the company on its website. Benoy has promised the
development would provide Mongolia's most luxurious apartments.
―The Olympic Residence is yet another milestone for Benoy is Asia, marking our first project in
Mongolia,‖ said Simon Blore, Benoy‘s managing director. The creation of this stunning mixed-use
development further demonstrates the innovative force behind Benoy's successful expansion across
Central Asia.‖
Source: News.mn
AUM APPOINTS BOARD MEMBER
International Development group DAI's vice president of solutions Jim Winkler on 14 March was
elected to the board of directors of the newly established American University of Mongolia.
An economist who specializes in private sector development, economic growth, competitiveness,
and governance, Jim has supervised more than 50 long-term DAI projects funded by USAID,
personally managing projects in Vietnam, Croatia, Cambodia, and the Palestinian territories. He
holds a Ph. D in international relations from the Fletcher School, Tufts University.
As head of DAI's Solutions group, Jim leads a team of 50 core technical staff and global practices in
economic growth, economic and social stability, agriculture and agribusiness. Health, governance,
and environment and climate change.
―I have known Jim Winkler for many years as a colleague at DAI,‖ said AUM Chairman J. Peter
Morrow, the former chief executive of Khan Bank LLC. ―With his academic background and
development experience, we welcome him and his contribution to the building of the university.‖
AUM was established in September by a group of Mongolian and American business, educational, and
community leaders to bring the best tradition of American higher education to serve the unique
needs of students in Mongolia. This fall, the first students will be accepted into the university's
four-year undergraduate program. Degree programs in engineering, business administration, and
natural sciences will be the first priorities, followed by additional programs developed at the
master and doctoral levels. The school's developers intend to make it a full-fledged research
university.
Source: DAI
FMG FUND SEES 5.4 PERCENT DECLINE IN FEB.
The FMG Mongolian Fund saw a 5.4 percent in February due to controversies it says were chiefly due
to quarrels between the government and the private investors of the Oyu Tolgoi copper and gold
project.
The Mongolian government voiced criticism of Rio Tinto's management of the USD 6 billion project
and argued for a bigger share of profits and more control over management. Production at the mine
began in February and is expected to produce commercially on schedule by June 2013.
During February, one of the fund's holdings Sharyn Gol JSC reported stronger-than-expected results
with revenue up 31 percents and earnings per share 344 percent higher than the previous year.
Source: FMG Mongolia Fund
ASPIRE RELEASES H2 2012 REPORT
Aspire Mining Ltd. released its half-year financial report for the period ended 31 December 2012.
Aspire experienced USD 4.85 million in losses after write-off of exploration expenditure of USD 1.62

6. million incurred on projects other than the Ovoot Coking Coal project and share-based payments of
USD 208,370. Aspire is investigating a small pre-rail road based operation which could see up to one
million tons a year of coking coal from Ovoot.
The Ovoot project is capable of delivering up to 14 million tons a year of coal from the open bit and
750,000 tons a year from the small underground operation over a 20-year life of mine. Under the
revised study, total marketable coal produced over the mine lifetime is 184 million tons of quality
coking coal, which includes five million tons of inferred coal resources to be mined from the open
pit.
Aspire's Mongolian rail infrastructure subsidiary, Northern Railways LLC, is progressing the
completion of a revised rail pre-feasibility study over an alternative southern alignment identified
by Calibre Rail as a superior alignment to that in the original rail pre-feasibility study completed in
February 2012. The rail study revision is expected to be completed this month.
The company also concluded several agreements in January 2013 with Noble Group, covering a
comprehensive package of initiatives to progress the development of the Ovoot project by assisting
to attain access to rail and port capacity, initial mine and rail pre-development funding and coal
marketing. Noble has agreed to offer support for Northern Railways to assist with pre-development
expenditures associated with completing the necessary assessment required by the government.
Source: Aspire Mining Ltd.
XANADU RELEASES 2012 H2 REPORT
During the period the company focused on exploration on its existing licenses, the acquisition of
additional license areas, and a review of existing exploration data. Total expenditure during the
period for existing licenses was USD 3.1 million, substantially in respect of Elgen Zost. Further, the
company expended USD 5.6 million to obtain its interest in Oyu Ulaan. The primary focus was on
the company's metal projects and also working closely with Noble Group in advancing the coking
coal investments.
The Strategic Entities Foreign Investment Law (SEFIL) has caused a delay in the completion of the
transaction for Oyu Ulaan. However, Xanadu's geologists have continued to advance their
understanding of the gold porphyry opportunity ahead of final approval being received under SEFIL.
At the Sharchuluut Uul copper project, initial drilling began that has provided proof of concept and
allowed explorers to identify targets for stage-two drilling in 2013. Elgen-Zost project activities
included a reverse-circulation and diamond drill program completed for 28 drill holes for a total of
6,996.6 meters. At Argalant Uul copper-gold porphyry explorers conducted 507-line kilometers of
ground magnetics.
Xanadu's joint venture project with Noble Group, Ekhgoviin Chuulu LLC, saw a focus on green field
exploration opportunities via information synthesis and geological mapping. The company collected
channel samples from coal seams at Nuurstei, including a 30 kilogram bulk sample sent to the SGS
lab in Mongolia. Analysis confirmed a premium hard coking coal project. The Khus project saw a 17-
hole-drilling and sampling program indicating potential for bituminous coal with up to nine-meter
apparent seam thickness. At Javkhlant, explorers created a detailed 1:5000 scale mapping program
of four coal outcrop target areas.
Source: Xanadu Mines Ltd.
POWER AND INFRASTRUCTURE SUMMIT TO BE HELD IN UB
An energy and Infrastructure summit will be held at the Kempinski Hotel Khan Palace in
Ulaanbaatar from 15 to 16 May. Mongolia, Power, Energy and Infrastructure Summit will bring
together independent power producers, asset manager, local banks and insurance firms, and
government officials, all dedicated to resolving the country's energy issues.
2013 will be a critical year for Mongolia, given expected production output from the mining
industry. The operations are expected to bring added strain on the existing power structure of
Mongolia while Mongolia takes its first steps toward its ambitious renewable energy goals. With the
establishment of a private-public partnerships unit and the entrance of a new ruling party in
government, the outlook for infrastructure is taking on a new form.

7. Source: Euro Money Seminars
GE EXPECTS TOUGH YEAR FOR WIND POWER BUSINESS
General Electric Co., the turbine supplier to Newcom LLC's Salkhit wind farm, expects sales in its
wind energy business to remain flat this year, the company said in its 2012 financial report.
Although earnings from General Electric's power and water business grew by 8 percent in 2012, the
wind energy sector remains "volatile," the company said. While the production tax credit's eleventh-
hour extension improved the forecast for 2014, it came a little too late to help the company this
year.
"We had a very strong year in 2012, but due to U.S. regulatory uncertainty, this year will be
difficult," the report said. "Based on strong global demand with expanding service, we expect power
and water growth to resume in 2014."
Source: NA Wind Power
ECONOMY
THE STATE OF THE MINING SECTOR
On 18 March the Business Council of Mongolia hosted a forum for two presentations on the
Mongolian mining sector to discuss the path it is taking in its development and its role in the
economy. The presentations were directly prompted by the draft Minerals Law presented by the
Office of the President that many in the private sector say would make it impossible for companies
to run profitable operations in the company.
Ch. Khaschuluun, a researcher and analyst currently leading UBRM Consulting, began the event
introducing Mongolia's economic data from a decade ago, today and in the coming decade. Gross
domestic product (GDP) has grown by USD 9.1 billion to USD 10 billion from a decade ago, while
annual GDP growth is projected to grow by 12.5 percentage points to 18 percent compared to a
decade ago. He described that in another decade's time Mongolia could enjoy USD 37 billion GDP
and USD 12,600 GDP per capital in addition to adequate infrastructure and a diverse economy.
However, getting to that point will not come without effort. It will taking effective measures in
reducing poverty and the investment of time, resources, and the Mongolian people to develop
sectors other than mining. Also needed will be the proper management of boom-bust cycles and
savings from the wealth earned today for future generations. Khaschuluun advised investors to be
aware that certain changes were likely to take place. Those included more local involvement, the
fewer issuances of licenses and new legislation such as the foreign investment law. But with that in
mind, the country and private investors have the opportunity to cooperate to maintain a fair
business climate that is open to foreign investment while implementing these changes.
Brian Fisher, managing director of BAEconomics, spoke next on his projections for the Mongolian
economy if the draft Minerals Law was passed in its current form. Most startling was his projection
that the law would effect 4 percentage points lower average annual GDP growth and GDP per capita
over the next two decades than with the current law.
―The attractiveness of a country to foreign direct investors is dependent on the domestic
investment environment, the stability of the policy regimes in place and the effective tax rates
imposed compared with alternative investment destinations,‖ reads a slide from the presentation.
―.An uncertain environment where tax rates and other policies are unpredictable and where there
is pressure to re-negotiate established investment agreements will be less attractive to investors
than locations where policies are stable and predictable and where investment agreements, once
established, are honored in full.‖
Fisher explained how vital the mining sector is to the Mongolian economy, representing on average
about a quarter of GDP over the last four years. The government has grown increasingly more
reliant on mining revenue, which would mean devastating effects if that revenue were to dissipate.
Source: BCM

8. RISING BOND YIELDS
Mongolia is seeing higher yields to its sovereign debt offering following the political uncertainty
experienced in the country and perceived hostility toward foreign investment.
Mongolia's five-year bond yields grew by 8 percentage points to 4.8 percent from January. These
five-year bills have experienced growth of 45 basis points in the year since they were first released
on the international market. This may signal that Mongolia's slightly shorter-term four-year risk has
caught up with its medium-term five-year risk.
These risks include the uncertainty in the future of Oyu Tolgoi as well as the Strategic Entities
Foreign Investment Law (SEFIL) and draft Minerals Law. Mongolia's risks may have exceeded the
expectations of investors when they first purchased the bonds.
―While the implications are probably not as severe as that of, say, Spain's ten-year yields increasing
by almost a hundred basis points during a two-and-a-half-month period (Mongolia isn't as dependent
on international debt markets as Spain), they are nevertheless significant...‖ said the source.
The effects mentioned include the more difficult task it will be for government to collect funds on
international debt markets. Last fall the government announced plans to sell a total of USD 5 billion
in bonds, with USD 1.5 billion sold last December. The added costs for debt will probably have
government reassess plan to raise a further USD 3.5 billion this year. Moreover, the greater risks
will mean fewer investments in the short-term while Mongolia has already seen a sharp decline in
foreign direct investment.
Source: Mongolia International Capital Corp.
LOWEST MONTHLY FDI SINCE 2010
According to preliminary numbers released by the Bank of Mongolia, net direct investment was USD
165 billion in January, the lowest on record since 2010.
It is also clear that FDI was at relatively low levels since October 2012, if we judge it by 2011 to
2012 standards.
Source: Mongolian International Capital Corp.
INFLATION FALLS, BUT NOT LIKELY BECAUSE OF PRICE STABILIZATION PROGRAM
According to data from the Bank of Mongolia, the consumer price index in February was up by 11.3
percent from a year earlier by 1 percent from a month earlier.
The growth compares favorably with January's 13 percent and 14 percent growth year-on-year. The
source said the growth was likely due to slowed growth despite record-breaking spending by
government that could be lifting some inflationary pressures from the economy. Also, last year
import prices for petroleum increased sharply, adding to inflationary effects.
The Bank of Mongolia has claimed credit for the reduction with its Price Stabilization Program,
which provides loans to companies that supply petroleum, ―commonly-used‖ imported goods, food
products and housing to provide goods below market rates. Unfortunately, however, the program
could easily turn into a rewards program for special interests and encourage rent seeking, while
doing very little to actually combat inflation.
―We also believe that the program raises serious questions on the issue of central bank
independence,‖ said the source. ―Last year, we have seen the Parliament and the Cabinet pressure
the Bank of Mongolia to defend the value of the tugrug against the dollar, as the currency's
depreciation was partly blamed for higher petroleum prices.‖
It added that the Price Stabilization Program was also likely the brainchild of the Cabinet of
Ministries rather than the central bank.
Source: Mongolian International Capital Corp.
SHEEP CASHMERE PLANT OPENS
A new cashmere plant that uses sheep fibers for production has been commissioned by the Ministry
of Agriculture and Light Industry.
The factory has the capacity to produce eight tons of cashmere from sheep by separating the thick
fur for fine-thread production. Unused fibers will be used to make insulation for building

9. construction.
The company said the cashmere separated from sheep's wools is cheaper, warmer and of better
quality than goat's cashmere. Over 50 percent of the hairs from sheep can be used for cashmere,
with Mongolian production techniques able to produce 10 kilograms of washed wool from four
kilograms of cashmere.
Source: Unuudur
MONGOLIA GETS MIXED RATINGS BY FRASER SURVEY
Mongolia moved up in the composite investment attractiveness index in the 2012-2013 Fraser
Institute Annual Survey of Mining Companies, released 28 February.
This composite index considers both policy and mineral potential and is weighted to emphasize
mineral potential. Mongolia ranked 36 out of 96 jurisdictions in the composite index. However,
continued uncertainty driven by changes to policy by the government brought Mongolia to 84th out
of 96 in the latest survey. Mongolia ranked 78 out of 93 last year and 54 out of 79 in the 2010-2011
period.
In a separate index measuring uncertainty about mining policy and implementation Mongolia ranked
85th out of 96, with almost two-thirds of respondents saying that current policy vectors represented
either a strong investment deterrent or that they would not pursue investment at all under current
conditions. Only about a third of respondents called the Mongolia uncertainty factor merely a mild
deterrent.
The survey represents responses from 742 exploration, development, and other mining-related
companies worldwide. Finland had the highest policy potential index score; others in the top 10
most attractive jurisdictions were Sweden, Alberta, New Brunswick, Wyoming, Ireland, Nevada,
Yukon, Utah, and Norway. The five least attractive jurisdictions for investment based on the PPI
rankings are (starting from the worst: Indonesia, Vietnam, Venezuela, Congo, Kyrgyzstan. In
Eurasia, China had the most significant drop in score and rank in this year's survey.
Source: NAMBC
SPENDING MONEY TO MAKE MONEY IN THE GOBI
The World Bank recently published a report analyzing public infrastructure investment in Mongolia
that argued that as the economy grows the challenge of scaling up the country's infrastructure in
cost-effective and targeted ways will be significant determinant in whether Mongolia avoids the
―resource curse.‖
The authors describe public financing in infrastructure as suffering from a ―build-neglect-rebuild‖
syndrome in which maintenance of current systems is ignored in favor of comparatively more
expensive and sometimes unnecessary new construction. Budgeting for construction is not well
managed, as seen in the fact that 50 to 60 percent capital expenditures occurred in the last quarter
and 30 percent in the last month of each fiscal year, as government agencies try to expend funds on
hastily started or incomplete projects to ensure unused funds are not returned to the central
budget.
The World Bank has no lack of critiques as the report delves into the details of the project. For
example, according to the provincial government, approximately MNT 96.6 billion was allocated
from 2008 to 2012 into infrastructure and equipment projects, or MNT 1.7 million per head.
However, that's also just 15 days worth of expenditure for the Oyu Tolgoi mine. Although this may
sound like relatively small investment, in 2012 investment was seven times greater than in 2008,
with MNT 34.5 billion spent on projects last year.
Much of the benefit of the mines in the region still comes at an individual level from relatively
good-paying mining jobs and government salaries paid for by increased tax revenue rather than
indirectly from investments in public infrastructure. This is something that needs to change to avoid
the resource course, said the World Bank report.
Source: The Mongolist

10. UB EXPECTS 16.5BN IN AUTO TAXES FOR 2013
The City of Ulaanbaatar expects to collect MNT 16.5 billion in taxes for vehicle ownership and
pollution this year.
Ulaanbaatar began collecting a tax on vehicles on 1 March. The government established a one-stop
tax collection office at nine of Ulaanbaatar's districts and three diagnostic centers for emissions
control at Songinokhairkhan, Bayangol and Bayanzurkh Districts.
Tax owed for auto emissions depends on engine size and manufacturing year. Cars produced within
the last four years are exempt from the auto pollution tax.
Source: Unuudur
MONGOLIA TO REDUCE HUNTING LICENSES FOR 2013
Mongolia has renewed its hunting regulations with a focus on protecting rare species in the country.
Mongolia has permitting special hunting permissions to foreign visitors as a means of adding to
government revenue since 1962. In 2012 the country collected MNT 3.5 billion from the hunting of
50 wild sheep, 102 mountain goats, three red deer, 13 roe deer, 44 antelopes, seven gray wolves,
and 150 predatory birds. Also last year, the government gave permission to 260 individuals to fish in
the country.
The government plans to drastically reduce its permissions for 2013, allowing just 15 wild sheep, 32
mountain goats, 10 red deer, 40 antelope and 10 wild boar. However, it will allow for the hunting
of 50 gray wolves, up from last year. For fisheries, the government will allow foreign fisherman to
catch and release 200 taimen.
Source: Zuunii Medee
MONGOLIA TO RECEIVE 10,000 TONS OF GASOLINE MONTHLY
Mongolia will begin receiving gasoline refined using Mongolia-extracted petroleum from China,
announced the Petroleum Authority.
China will send a total of 10,000 tons of gasoline a month, with the first imports to arrive in April.
The plan will help Mongolia ween off its dependence from Russia imports, which has in the past
made it vulnerable to its neighbor to the north.
Last year Mongolia imported 1,200 tons of petroleum products, of which 1,100 was gasoline. The
Russian oil exporter Rosneft provided 60 percent of all imports received by Mongolia with the rest
coming from TNKBP, Gasprom, Gunvor, Korean SK-Energy, and Hyundai Oilbank. Rosneft prices are
reportedly higher than that of the market. However, negotiations with Russian officials has opened
the possibility to align the prices of petroleum products with market prices.
Source: Unuudur
CAN “BRAND MONGOLIA” BE A REALITY?
Recently the Mongolian prime minister started a conversation about the opportunity to create a
new global brand. Let's call it ―Brand Mongolia.‖
Mongolia's tourism is seen by some economists as the logical inflection point to diversify the heavy
reliance on mining exports in the Mongolian economy and there are many interesting plans to
increase international tourist arrivals to the country. If you were looking to build a new and
sustainable brand you might be persuaded by the argument that some economic sectors, such as
agriculture or mining, only generate short and medium-term gains in an economy, but tourism is the
―oil that never runs out.‖ Mongolia attracts around 450,000 international inbound tourists each year
to enjoy its numerous tourist attractions. Tourism currently accounts for 3 percent of total
employment and contributes 9 percent to GDP. So perhaps it makes sense to use tourism as the
anchor to build a national brand?
With Mongolia myopically focused on internal issues such as its political instability, crumbling
infrastructure and a failing education system, it is easy to understand why the outward focused
tourism sector has received so little state support to date. A recent publication by the World
Economic Forum may provide some insights for the Mongolian policymakers to consider when
contemplating how they might deliver to this challenge.

11. The report entitled ―The Travel & Tourism Competitive Report 2013‖ ranked Mongolia 99 overall
out of 140 economies in a benchmarking study but received some of the lowest global rankings for
its service and attitude toward tourists, specifically the degree of customer orientation. The report
also pointed out that the attitude of the Mongolian population toward foreign visitors was among
the worst in the world. Clearly there is much to do to bring about a vision of international tourism
being the globally recognized brand for Mongolia, but like all leading brands, the quality of service
is a major intangible driver of brand value and one which ―Brand Mongolia‖ can't afford to ignore.
Source: Nigel Finch
FINANCE MINISTER ANNOUNCES SOVEREIGN WEALTH FUND PLANS
Finance Minister Ch. Ulaan announced plans to establish a sovereign wealth fund to help the
country avoid the perils of ―Dutch disease.‖
Ulaan said that establishing a wealth fund was a common practice among nations to establish long-
term stability of the economy and efficiently make use of revenue earned from natural resources.
Governments may establish their own state-owned funds to invest internationally to benefit society
and the country.
Mongolia's Ministry of Finance is now researching the wealth funds of various nations hoping to learn
what structure would work best for the country, said Ulaan. He said wealth funds often fall into the
category of a stability fund, savings fund, or risks fund. While the already-present Stability Fund
and Human Development Fund share some characteristics with a wealth fund, he noted that the
government lacks the mechanisms to manage and bring continuous capital to these funds.
Source: Zuunii Medee
MONGOLIA MARKS IMPROVEMENT ON HUMAN DEVELOPMENT INDEX
Mongolia moved up two spots on UNDP's Human Development Index to the 108th position.
―The Rise of the South: Human Progress in a Diverse World‖ examines the profound shift in global
dynamics driven by the fast-rising new powers of the developing world and its long-term
implications for human development.
The report identifies more than 40 countries in the developing world that have done better than
had been expected in human development terms in recent decades, with their progress
accelerating markedly over the past then years, The report analyzes the consequences of these
countries' achievements and the challenges that they face today in the coming decades.
Source: UNDP
IRON ORE PRODUCTION AND REFINEMENT LAGS BEHIND GROWING DEMAND
Although Mongolia both mines and consumes its domestic iron ore it has yet to open any plant
producing finished metals using those raw materials. This has left finished iron metals expensive in
the country, well above market prices, with prices expected to grow alongside demand up to 2050.
―If the capacity is calculated to account for two MTPA [million tons per annum], it would need 1.2
million tons of coking coal which will be supplied from Tavan Tolgoi,‖ said L. Bayarkhuu, chief
executive of the Mongolian Association of Metal Producers.
He added that domestic production would result in 20 percent lower costs for the construction of
apartment buildings in Mongolia. A steel mill would also create 1,200 new jobs, he said.
The Mongol Steel Corporation has established some 10 iron-ore mining operations with the intention
of eventually building a steel mill. Meanwhile iron ore still receives zero tax for export, unlike
major producing nations such as Brazil and India.
―At present, Mongolia sells its raw iron ore at the price of USD 65 per ton. If it starts processing and
exporting its iron ore, the price would probably go up to USD 100,‖ said Bayarkhuu.
Iron ore is currently Mongolia's third largest export commodity, comprising 12.1 percent of exports.
A 2012 study estimated Mongolia had 726.5 million tons of available iron ore resources, of which
288.3 million is indicated. Customs data shows that 400,000 tons of iron products are imported each
year, with some 60 percent of steel reinforcement imported from China.
According to M. Battugs, deputy director of the Darkhan metallurgical plant, Mongolian steel

12. production is set to grow by 350,000 to 500,000 a year. Meanwhile steel demand is expected to
grow throughout the Southeast Asian region, with big buyers identified as Japan, South Korea, and
China. However, Mongolia has still yet to even meet domestic demand, though it exported 6.3
million tons or iron ore in 2012. Mongolia's largest trade partner, China, has a particularly large
appetite and is expected to consume 68 percent of the world's iron ore production.
Source: Mongolian Economy
BRICS IN THE GLOBAL DRIVING SEAT
Jim O'Neil, the man that coined the term BRIC, quit as the head of Goldman Sachs Asset
management last month, a decade after he coined the term, How have the four giants that make up
this group—including Mongolia's main trading partner, China, and northern neighbor Russia—done in
that time?
Russia has put in the greatest growth, with the economy expanding 537 percent. That just trumps
China's 523 percent, while its far above Brazil's 337 percent and India's 299 percent. The result is
clearly out of whack with current sentiment, with Russia's relations with the rest of the world at
their lowest level. Portfolio investors have been returning to emerging markets, but Russia is being
ignored. The discount on Russian stocks compared to BRIC peers is at an all-time high, despite the
fact that the country has the strongest growing economy in Europe.
O'Neil is upbeat on the BRIC's next decade, but admits Russia may lag.
―Controversially, I think world gross-domestic product between 2011 and 2020 will be stronger than
each of the past three decades because of the BRICs,‖ O'Neill told the Wall Street Journal.
China creates another Spain every year. In 2011, just one year, the increase of dollar GDP in the
four BRIC countries was equivalent to the size of Italy's entire economy.
―By 2015, the aggregate GDP for the four BRIC countries will probably be bigger than the US,‖ he
added.
Russia in particular suffers from its dependency on oil and is likely to put in the slowest growth
amongst the four, with an average of 4 percent a year, as it is also the most developed, the analyst
notes, but claims that on its own, such forecasts miss the point.
―Russia, the most supposed 'weakest,' is probably going to add more to global GDP this decade than
the entire euro zone,‖ he claimed.
Source: BNE
DIGITIZING THE MINING INDUSTRY
Digitization and change go hand-in-hand. Take mining. Traditionally characterized by physical
labor, it is now and industry that focuses relentlessly on the pursuit of knowledge and new
technology.
Codelco is the largest copper producer in the world--soon to be rivaled by Oyu Tolgoi in Mongolia.
Owned by the Chilean state and employing 18,000 people, Codelco faced a number of
transformation challenges at the turn of the century, from driving new productivity in an intensely
competitive market to meeting tough sustainability targets. An important goal of this new future
was automation, moving from a physical-intensive model to a knowledge-and technology-intensive
one.
The new business unit had both operational and strategic objectives: to drive initiatives in mining
automation and also to support the company in developing, evolving and communicating a digital

13. vision. Today, four mines in Chile are operated automatically: trucks drive themselves, operations
are controlled remotely and information is shared in real-time. And the vision for the future is
equally transformative: an intelligent mining model relying on integrated information networks and
fully automated processes.
The MIT Center for Digital Business and Capgemini Consulting reported that on average companies
who are using technology to deliver a fundamental transformation of these so-called "Digerati"
businesses are in the minority but outperform their peers by 26 percent. Digirati deliver a
measurably better financial performance than their peers. Not only are the Digirati more profitable,
but they also achieve higher market valuations, outperforming their peers by an average of 12
percent.
While there is no "one-size-fits-all" in digital transformation, there are steps all business leaders can
take to build their digital advantage. First, leaders need to frame the digital challenge and focus
investment. This means making choices about which digital practices they will excel in, based on an
understanding of the pace of transition between the old and the new in their industry, as well as
competitive dynamics. Second leaders need to engage the organization at scale, meaning
developing a shared understanding of the digital vision and implementing proper governance
structures.
Source: Financial Times
CAPITALISM MAKES YOU HAPPY
The World Health Organization has produced some fresh data on the health, or otherwise of former
Soviet satellites. The source picked out suicide rates on the Commonwealth of Independent States
(CIS). Those who disapprove of the way that market economies force people to compete with each
other might point to the spike in suicide rates in the CIS after 1989 (something which may be down
to different methods of data collection. Those who take the opposite view will point to the marked
decline in suicide as the CIS countries sloughed off on system and embraced another.
Source: The Economist
POLITICS
PREMIER ANNOUNCES PLANS FOR SEFIL AMENDMENTS
Prime Minister of Mongolia Norov Altankhuyag announced that the Strategic Entities Foreign

14. Investment Law (SEFIL) would be amended to only apply to state-owned entities.
The prime minister said private entities would be excluded from the law. Foreign state-owned
entities, however, will still be subject to parliamentary approval for any purchase more than 49
percent of any company operating in the mining, banking and finance, or information technologies
and communication sectors. The Bank of Mongolia recently said that the year-on-year foreign direct
investment had fallen 41 percent. This decline has largely been blamed on the knee-jerk
introduction of the law following Aluminum Corp. of China's bid to buy up to 60 percent of
SouthGobi Resources Ltd.
―The pending changes will be welcomed news for investors and should reinvigorate foreign capital
into the market,‖ said the source.
The source noted that the draft minerals law is still a matter that investors will look into but this
news should be a strong message to investors that Mongolia has not given up on foreign investment
yet.
Source: Mongolian Investment Banking Group
GOVERNMENT TO RAMP UP PRODUCTION AT STRATEGICALLY IMPORTANT MINES
The Cabinet of Ministers approved a government resolution to transfer its shares of Erdenet Mining
Co. as well as the Baganuur and Shivee-Ovoo mines to Erdenes MGL LLC in a bid to streamline
activity aimed at ramping up mining activities at deposits with government ownership.
Erdenes MGL is responsible for carrying out the extraction of minerals of projects listed as
strategically important deposits. Currently it has ownership of Erdenes Tavan Tolgoi LLC and
Erdenes Oyu Tolgoi LLC and holds mining licenses for the 4,293 Shivee-Ovoo coal project.
Ministers were also ordered to analyze feasibility studies of several projects, including the Tsagaan
Suvarga copper-molybdenum project and Boroo gold mine to make assessments of the resources
there and ensure that the companies operating there are complying with environmental and
rehabilitation regulations. They were also asked to open negotiations concerning government-held
shares.
Source: Montsame
MINING MINISTER SAYS OT SHAREHOLDERS MEETING YET TO BE SET
A shareholders' meeting to resolve disputes that are holding up construction and funding of
Mongolia's USD 6.6 billion copper and gold mine is yet to be set, Mining Minister Davaajav
Gankhuyag said.
Mongolia's state-owned news agency Montsame reported on 14 March that a meeting would take
place on 20 March, citing Economic Development Minister Nyamjav Batbayar. Taxes due and cost
overruns are among issues that remain in dispute, Gankhuyag said at a press conference in
Ulaanbaatar. The government alleges that the project has gone 40 percent over budget while Rio
Tinto says the figure is closer to 18 percent. Mongolia says it will only approve the 2013 budget
when it sees a complete feasibility study for phase two of the project.
Source: Bloomberg
PARLIAMENT RECEIVES AMENDMENT TO VAT LAW
Parliament received proposed amendments to the Law on Value Added Tax (VAT) that establishes a
threshold of MNT 200 million in revenue for companies to pay VAT.
The bill, which was submitted by MPs S. Byambatsogt, L. Enkhamgalan, and B. Garamgaibaatar,
raises the threshold from the original value of MNT 100 million. The 2007 law has put enormous
pressure on small companies because of rises in inflation and commodity prices, the bill's authors
argued. According to statistics, they said, 36.1 percent of all taxpaying companies earn less than
MNT 200 million while only representing 2.4 percent of all sales revenue.
Source: Udriin Sonin
AUTHORITIES ATTEMPT TO STRIP COURT OFFICIAL OF IMMUNITIES FOR INVESTIGATION
The Mongolian State Procurator's office requested that the Constitutional Court suspend court
official D. Sugar's powers due to an investigation into his participation in the MIAT money-

15. laundering scandal.
Constitutional Court members, like MPs, are given special immunities from legal actions intended to
insulate them from politically motivated accusations. However, it was never public knowledge that
Constitutional Court members held this privileged before Sugar's case. Mongolian law allows only
Parliament to lift his immunities.
Source: Udriin Sonin
UB MAYOR ORDERS LAND CONFISCATIONS
The Mayor of Ulaanbaatar order that 104 illegal land licenses be revoked on 15 March.
Land licenses of 90 hectares in the possession of 30 citizens and entities were revoked after they
were determined not to comply with Mongolian law. Furthermore, 2.3 hectares of land held by 25
citizens and entities that was once public land was confiscated as well as 60.8 hectares of land held
by 12 citizens and entities that were once government property.
Source: Zuunii Medee
COAL MINES CLOSED IN NALAIKH
The State Specialized Inspection Agency and the Nalaikh District Inspection Office suspended mining
operations of 185 mines in Nalaikh district following a joint inspection of the underground coal
mines.
The agency suspended operations to provide the mine operators time to improve working
conditions. Only 28 out of over 200 underground coal mines that run mining operations in Nalaikh
district licenses. Almost 1,500 miners work Nalaikh, where accidents are frequent due to poor labor
security and working conditions. Over the past decade an estimated 200 miners have died and
numerous injuries have been caused in mining activities.
Source: News.mn
CABINET CHOOSES HEAD TO LEAD TT POWER PLANT PROJECT
Former Mongolian Railway Director M. Enkhsaikhan received appointment to head the project on
constructing a thermal coal-fired power station to be constructed near the Tavan Tolgoi coal
project.
The project is one of the four chosen by the Cabinet of Ministers to receiving funding using
proceeds from the USD 1.5 billion Chinggis bonds sold last year. The plant would supply the Oyu
Tolgoi copper project with energy. The USD 50 million to be directed to finance the project would
fulfill a third of costs while the remainder will come from private investment.
Source: News.mn
MONGOLIA HIGHLIGHTS ROLE OF PEACEKEEPERS IN UN MISSIONS
Mongolia held a series of activities on Monday to mark Soldiers' Day and highlight the role of
Mongolian peacekeepers in U.N. peacekeeping operations.
At a welcome ceremony, President Tsakhia Elbegdorj praised the contributions made by the
Mongolian military to U.N. peacekeeping missions over the past 10 years. Elbegdorj said he visited
Mongolian peacekeepers in South Sudan in February together with Defense Minister Dashdemberel
Bat-Erdene and Chief of General Staff Biamguu-Jav.
Mongolia has 850 peacekeepers stationed in South Sudan. During the past 10 years, more than 5,000
Mongolian servicemen have participated in 14 international peacekeeping operations.
Source: NZweek
EAST ASIA‟S NEW PEACEMAKER: MONGOLIA?
The past year has heightened some important security landmines in East Asia, including the usual
cycle of ―provocation followed by negotiation‖ from North Korea and a diplomatic tussle between
Tokyo and Beijing over islands in the East China Sea. Add to this the fractured bilateral relationship
between the United States' two most important allies in the region—Japan and South Korea—and
there appears to be too many problems to be solved by a ―re-balance‖

16. To help mediate the quarrels is Mongolia, who could take on an enhanced role in the region. The
most obvious situation mentioned is the stalemate between the United States, Japan, and South
Korea on one side and North Korea on the other. Indeed, Mongolia attaches importance to its
relationship with Pyongyang and has gone out of its way to point this out to outside observers. For
example, in a 2011 speech at the Brookings Institution, Mongolian President Tsakhia Elbegdorj noted
the importance of Mongolia's bond with the North:
―Mongolia has a unique relation with North Korea. We have our embassy there, we have
governmental line to connect, and every year meetings, and now we are developing an exchange
program. And when the (North Koreans) come to Mongolia, they see that there is a different way of
governance.‖
Critics may argue that Mongolia's window into North Korea may be merely cosmetic and incapable
of producing tangible results, but Ulaanbaatar is interested in playing this intermediary role. This is
further buoyed by the pride Mongolia has taken as it sits in the presidency of the Community of
Democracies.
Last year Japan accepted Mongolia's offer to serve as an intermediary in the long-stalled talks
between Tokyo and North Korea on resolving Pyongyang's past abduction of Japanese nationals.
Though much has occurred since then to scuttle the chance for a meaningful thaw—including a new
premier for Japan and the rocket launch and nuclear tests by North Korea—there are other
opportunities for dialogue. While regional democracy promotion in Central Asia and its relationship
with North Korea are noteworthy, Mongolian diplomacy—while limited in capacity—needs to go the
extra steps. There are other disputes in the region where Mongolian involvement could yield
tangible benefits, such as a third party to the dispute over territorial disputes between Russia and
Japan. Mongolia will need to pick its battles and should distance itself from intractable and
sensitive disputes such as the Diaoyu/Senkaku Islands.
Nonetheless, there is room—and the need—for Mongolia to initiate a strong diplomatic offensive in
East Asia. It is clear Mongolia covets this role but it will need the requisite support of Washington,
Seoul and Tokyo.
Source: The Diplomat
MPRP LAUNCHES JUSTICE CAMPAIGN
The Mongolian People's Revolutionary Party (MPRP) has announced the launch of a nationwide
Justice Campaign.
The announcement followed a party assembly where a request was received that proposed such a
campaign. The campaign will be organized in cooperation with non-government organizations.
Leading the organization of activities will be Deputy Minister D. Terbishdagva, Finance Minister Ch.
Ulaan, Deputy Head of Parliament L. Tsog, and Minister of Health N. Udval.
Source: Undesnii Shuudan
RESEARCHERS FINDS MONGOLIA USING SURVEILLANCE SOFTWARE
Last May, two security researchers volunteered to look at a few suspicious e-mails sent to some
Bahraini activists. Almost one year later, the two have uncovered evidence that some 25
governments, including Mongolia, may be using off-the-shelf surveillance software to spy on their
own citizens.
Morgan Marquis-Boire, a security researcher at Citizen Lab at the University of Toronto's Munk
School of Global Affairs and Bill Marczak, a computer science doctoral student at the University of
California, Berkeley, found that the emails contained surveillance software that could grab images
off computer screens, record Skype chats, turn on cameras and microphones and log keystrokes.
The world ―FinSpy" appeared in the spyware code. FinSpy is spyware sold by Gamma Group, a
British company that says it sells monitoring software to governments solely for criminal
investigations.
But evidence suggests the software is being sold to governments where the potential for abuse is
high. ―If you look at the list of countries that Gamma is selling to, many do not have a robust rule
of law,‖ Marquis-Boire said. ―Rather than catching kidnappers and drug dealers, it looks more likely

17. that it is being used for politically motivated surveillance.‖
The list of countries with servers running FinSpy is now Australia, Bahrain, Bangladesh, Britain,
Brunei, Canada, the Czech Republic, Estonia, Ethiopia, Germany, India, Indonesia, Japan, Latvia,
Malaysia, Mexico, Mongolia, Netherlands, Qatar, Serbia, Singapore, Turkmenistan, the United Arab
Emirates, the United States, and Vietnam.
The sale of surveillance technology is still largely unregulated, but Marquis-Boire and Marczak's
findings have promoted greater scrutiny. Responding to their findings last fall, Germany's foreign
minister Guido Westerwelle called for a Europe-wide ban on the export of surveillance technology
to repressive regimes. And last month Privacy International and other groups filed complaints with
the Organization for Economic Cooperation and Development against Gamma Group and others like
it.
―I don't think you can put technology back in the bottle,‖ said Marquis-Boire. ―I understand why
police would want to use this type of technology, but I'm just not for commercial companies selling
them to nondemocratic regimes with questionable human rights records.‖
Source: New York Times
FREEDOM IN THE WORLD 2013
Mongolia's political rights rating improved from two to one due to significant progress in the
conduct of parliamentary elections, which were regarded as free and fair.
Parliamentary elections held in June 2012 were deemed free and fair, further confirming Mongolia's
status as Asia's only post-socialist democracy. The election was won by a coalition of the
Democratic Party, Justice Coalition, and Civil Will-Green Party, led by Prime Minister Norov
Altankhuyag.
Corruption remains a serious problem in Mongolia and is viewed as pervasive. The Independent
Authority Against Corruption (IAAC) has been actively investigating corruption allegations since
2007. In April 2012, the IAAC arrest former president and Mongolian People's Revolutionary Party
(MPRP) leader Nambar Enkhbayar on corruption charges, banning him from taking part in the June
election. Although Enkhbayar claimed the arrest was politically motivated, the ban on his
participating in the elections was upheld by Mongolian courts, and many observers accepted the
arrest as a consequence of the pervasive corruption that took place during his presidency.
While the government generally respects press freedom, many journalists and independent
publications practice a degree of self-censorship to avoid legal action under the State Secretes Law
or libel laws that place the burden of proof on the defendant. Freedom of religion is guaranteed by
the constitution. Buddhism and shamanism experienced revivals after the fall of communism, while
Christianity has made some penetration and Islam is practiced widely by the Kazakh Muslim
minority. Freedoms of assembly and association are observed in law and practice.
The judiciary is independent, but corruption among judges persists. The police force has been
accused of making arbitrary arrests and traffic stops, holding detainees for long periods, and
beating prisoners.
While women comprise 60 percent of all university students and 60 percent of all judges, they hold
only nine parliamentary seats. Spousal abuse is prohibited by law, but social and cultural norms
continue to discourage victims from reporting such crimes. Mongolia is a transit and destination
country for men, women, and children who are subjected to sex trafficking and forced labor. The
government has continued to eliminate trafficking though funding for such efforts has been
inadequate.
Source: UNHRC
GIVING POWER TO THE PEOPLE OF MONGOLIA
Rio Tinto PLC and the government of Mongolia are committed to ramping up production at the Oyu
Tolgoi and copper mine, one of the world's largest. The recent turmoil between these two partners
should push them to clarify their roles and help create more solid support for the project from the
Mongolian public.
Rio Tinto has recently faced some corporate difficulties, including write-offs, which make success

18. with Oyu Tolgoi imperative for the new management team under Sam Walsh. For the Mongolian
government the project is so big that it comes close to dominating the economy. Despite these
shared long-term interests, the two sides have been quarreling over the past six weeks, in the latest
in a string of disputes over the financing and implementation of the scheme.
The government must decide what role its representatives at Oyu Tolgoi are to play. Do they
represent an arms-length financial interest. If yes, will they resist regulation by ministries and other
agencies that might reduce profits in the short term. And if no, is their position inherently
antagonistic to Oyu Tolgoi and its other owners? And what lessons for Rio Tinto are there?
Rio Tinto may also have to embrace democracy more fully. Clearly, Oyu Tolgoi's long-term viability
depends on securing a social compact for the project with Mongolians.
Mongolia is home to 700,000 households and literacy is high. This offers Oyu Tolgoi and its owners a
rare opportunity to address the population directly. An information campaign to explain (not
advertise) the revenue stream arrangements for a large project like Oyu Tolgoi would go a long way
to giving citizens the information they need to hold their representatives accountable. There is
room for a country-wide citizens' council to oversee the government directors on the Oyu Tolgoi LLC
board. Such a council could even help guide a future sovereign wealth fund that might be used to
smooth out the impact of commodity price fluctuations on export revenues.
The author Julian Dierkes is associate professor at the Institute of Asian Research, University of
British Colombia.
Source: Financial Times
ANNOUNCEMENTS
CORPORATE PRACTICAL MANAGEMENT FOR PRODUCTIVITY IMPROVEMENT TRAINING BY
PRODUCTIVITY TREND INSTITUTE, 27-29 MARCH, BLUE SKY TOWER, ULAANBAATAR, MONGOLIA
Productivity Trend Institute is organizing the practical training supported by the Business Council of
Mongolia on the topic of ―Corporate Practical Management for Productivity Improvement‖ to be
held in Blue Sky Tower, Ulaanbaatar, 27-29 March, 2013.
This training will give a basic understanding on PRODUCTIVITY as well as the theoretical knowledge
on its creation, measurement, and ways of IMPROVEMENT. Besides, the training covers the methods
of increasing the PRODUCTIVITY and gives the ability and ideas to popularize and put into practice
the PRODUCTIVITY MANAGEMENT. The training also gives knowledge and information on business
and production activities and management, as well as other related basic concepts combining them
with the productivity management, human resource policy and others. The Program includes
lecture, seminar, discussion, practical work and simulation game.
Tuition fee: 400 000 tugriks including lunch, coffee break and other related materials.
BCM members are kindly invited to involve in the training course and will receive a 10 percent
discount for registration.
Please contact at 99862552 or at zoobookr@yahoo.com for registration and for additional
information.
___________________________________________
FOREIGN INVESTMENT IN MONGOLIA CONFERENCE, APRIL 19, UB
BCM and UB Risk Management Consulting (Dr. Khashchuluun, former Chair of NDIC) are organizing a
"Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at
the Kempinski Hotel.
As we know, Mongolian economy has been rapidly growing with 17.5% in 2012 and 12.3% growth in
2013. During 2010-¬‐2012, foreign investment in Mongolia increased at a rapid speed,contributing
significantly to economic growth, creating more jobs and financing various projects in the country.
However, the OT copper gold project, long a cornerstone of Mongolia‘s increased FDI, is almost
completed. The timing of other potentially large FDI projects such as PPP power stations and the TT

19. project are not clear. The result could be that inflows into Mongolia may not grow as much as in
previous years.
Speakers include:
- S. Bold, Chief Economist, Central Bank
- S. Javkhlanbaatar, Foreign Investment Regulations and Registration Department Head, Ministry of
Economic Development of Mongolia
- B. Amarsanaa, Academic Secretary of National Legal Institute
- D. Gan-Ochir, Head of Financila Stability Council, Advisor to President of Central Bank
- D. Achit-Erdene, CEO, MICC
Attached is the Agenda of the event. For registration, please contact tugi@bcmongolia.org, 317027.
___________________________________________
INTERNATIONAL TRADE FAIRS BAUMA AND USETEC, APRIL 18-25, MUNICH & COLOGNE, GERMANY
The Business Council of Mongolia is registering Mongolian business delegates to participate in a
business tour in Germany between 18 and 25 April, 2013. The business tour program will include:
• Attending the 30th international trade fair for Construction Machinery, Building Material
Machines, Mining Machines, Construction Vehicles and Construction Equipment in Munich
(http://www.bauma.de/en/)
• Attending the 20th World Trade fair for Used Technology, Used Machinery and Equipment from
over 20 sectors in Cologne (http://www.usetec.com/)
Please contact Undral at 317027 or at undral@bcmongolia.org for registration and for additional
information about the business tour.
___________________________________________
MONGOLIA INVESTMENT SUMMIT 2013, APRIL 16-18, LONDON
Business Council of Mongolia members are invited to attend the Mongolia Investment Summit
London 2013 and receive a 15 percent discount on their registration fee.
Mongolia Investment Summit London has over 200 delegates registered to attend in April. With
significant amounts of investment in Mongolia traditionally coming from Asia there are new
opportunities to be explored in the Western Hemisphere. Investor interest is high from the west and
fund managers, private investors and financiers want to gain exposure to Mongolian growth.
Mongolia Investment Summit London in April will provide an important opportunity to meet these
investors, raise the profile of Mongolia and promote your business.
The event provides an excellent opportunity to meet with major investors, mining groups,
government officials and real estate specialists to identify new business partners. At the event, the
views on the country will be discussed by investors from companies such as Barclays Natural
Resource Investments, HSBC Global Asset Management, Collabrium Capital and more. The event
provides an opportunity not to be missed.
Enter the discount code ―Business-Council-Mongolia-Special‖ when you register to receive the early
bird discount plus an additional 15percent off.
___________________________________________
3RD RISK MANAGEMENT FORUM, 1 MAY, ULAANBAATAR
The 3rd Risk Management Forum of Mongolia will be held on 1 May 2013 in Ulaanbaatar at the Blue
Sky Tower.
This is the largest risk event in Mongolia, co-organized by the Business Council of Mongolia and
Mandal General Insurance. The Risk Forum will provide the most comprehensive overview of risks
that Mongolia faces today and the status of risk management all under one roof. Risk management
techniques and tools will be shared and best practices promoted across industries.
Last year, the event had attracted over 250 representatives of Mongolia's top corporations and

20. government agencies and resulted in the formation of Risk Institute of Mongolia. This year, the
expert speakers will be address topics concerning Macro Risks, Business Risks, and Community Risks.
For more information, visit RiskForum.mn.
___________________________________________
MONGOLIA ENERGY AND INFRASTRUCTURE SUMMIT, 15-16 MAY, ULAANBAATAR
Business Council of Mongolia members are invited to attend the Mongolia Energy and Infrastructure
Summit and receive a 15 percent discount on registration fees.
On the 15th and 16th May 2013, the Mongolia Energy and Infrastructure Summit will bring together
independent power providers, asset management firms, local and international banks, law firms,
and government officials to discuss the business opportunities and challenges facing the Mongolian
energy and infrastructure sector.
Key coverage includes:
- Renewable energy and the future of clean energy in Mongolia
- Infrastructure needs for the mining industry
- Insurance and political risk considerations for investors and developers
- Power and infrastructure projects for Ulaanbaatar‘s urbanization
- Financing challenges and the role of ECAs and multilaterals
For more information, please visit the event website: www.euromoneyseminars.com/MEI13
Enter the discount code ―MEI_BCM‖ when you register online to receive 15 percent off.
___________________________________________
COAL PROCESSING & MINING TECHNOLOGY EXPO, 4-5 JUNE, 2013
The Coal Processing & Mining Technology Expo will be held in Ulaanbaatar from 4 to 5 June 2013.
The expo is co-located with the Transportation & Logistics Expo, and because of this co-location you
will be able to meet with a more diverse and broader group of attendees. With many international
as well as local Mongolian companies already signed up to exhibit, you will be a part of what is
becoming the premier event for the mining and transportation industries serving Mongolia.
BCM members will receive a special 10 percent discount. To register and receive your discount
email Saruul at saruul@bcmongolia.org. For more information about the exhibition contact Glenn
Scott atgscott@uexpos.com or visit the website coalexpomongolia.com.
___________________________________________
“MM TODAY” on MNB-TV, Friday‟s at 18:50
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 15 minutes and is
scheduled from 18:00 to 19:00 tonight. Tune in to watch this program that reports stories from
today‘s BCM NewsWire.
___________________________________________
BCM‟S MINING SUPPLY CHAIN DATABASE
The new version of BCM‘s Mining Supply Chain Database is in use. Following the initiative of Oyu
Tolgoi LLC, the BCM has maintained the Mining Supply Chain Database since March 2009. It is an
honor to introduce you to the new version of the database which is totally upgraded as to its
content and use of information technology opportunities.
As of December 31, suppliers registered on the database totaled 1,405. During 2012, 251 new
supplier entities joined the Database and 236 prior supplier registrants updated their company
profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted.
We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain
Database. Please visit here for registration—FREE!
If you have any questions regarding the database, please contact Undral at undral@bcmongolia.org
or 317027.

21. 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.
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟,
„PHOTO GALLERY‟
On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available.
The following 3 presentations were added from Coal Mongolia, 21-22 February:
―Current state of coal sector of Mongolia and future trends‖ by Minister of Mining D. Gankhuyag at
the Coal Mongolia 2013, Feb 21, SS Convention Center, Ulaanbaatar;
―Economic Reform Objectives‖ by Vice Minister, Economic Development, H.E. Mr. O. Chuluunbat at
the Coal Mongolia 2013, Feb 21, SS Convention center, Ulaanbaatar;
―Presentation for Coal Mongolia 2013‖, Norihiko Kato, CEO of Khan Bank, Feb 21 at the SS
Convention Center, Ulaanbaatar, Mongolia.
Presentation by Bold Baatar, CEO of Altan Dornod Mongol, ―Mongolian Mining Investment
Environment‖ at the Mining Industry Open Discussion on February 1, 2013, at Kempinski Khan Palace
Hotel.
Please note the presentations from each of the BCM monthly meetings. Please also note 25
presentations from the Mongolian Investment Summit 2012 on 30-31 October in Hong Kong; and 9
presentations from Discover Mongolia 2012.
The ―Mongolia Reports‖ section includes ―Highlights of 2012, Mongolia‖ by European Bank for
Reconstruction and Development (EBRD); the ―Official statement of Oyu Tolgoi LLC in relation to
information, data and facts related to Oyu Tolgoi discussed during open session of the State Great
Khural, dated 1 February, 2013‖; ―2013 Mongolia Investment Climate Statement‖ by the Economic
and Commercial Section of the U.S. Embassy; ―Mongolia Foreign Labor Force Ratio for 2013‖ by
Hogan Lovells International LLP; ―How Mongolia will perform in 2013?‖ by Mandal Asset
Management; ―Mongolia Business Owner and CFO Survey result‖ by BDSec JSC; ―The fiscal regime
for mining - a way forward‖ by IMF Fiscal Affairs Department; ―Mongolia-a supplement to Mining
Journal‖ from Mining Journal October, 2012; ―Macro Overview‖ September, 2012 by EPCRC; ―Taxes
for Expatriates in Mongolia‖ by PricewaterhouseCoopers.
BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to
Parliament and Government is available for download.
BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business
News‖ before they are all put together each week for Friday's weekly NewsWire.
The ―Photo Gallery‖ contains photos from the 5th Anniversary BCM Gala dinner on November 5.
The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home
page for a consolidated account of the week‘s events.
___________________________________________
SOCIAL NETWORK WITH BCM
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is

22. improving each day with BCM.
Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better
business environment in Mongolia today.
Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in
the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
http://twitter.com/#!/bcMongolia.
We have now 1,009 fans on our Facebook fans page, 1,160 connections on LinkedIn network, and
635 followers on Twitter.
Of course for news information, interviews, event photos, and announcements regarding our
organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.
BCM WORKING GROUP MEETING
The BCM Education Working Group met on Wednesday, 20 March, with 13 members attending.
Saha Meyanathan/DAS/, Robin Charpentier /AUM/ moderated the session.
New Member: Andrew Orgill /Santis Education Center /was welcomed.
Speakers and topics were:
- IU-EMBA program - Ms.Robin Charpentier /Director, Academic programs, American University of
Mongolia/
- English Language Education in the Workplace Symposium (TOEIC) and Jobs Fair April, 2013 -
Andrew Orgill /President of Santis Education Center/
- TVET NGO Update - Saha Meyanathan/Adviser/
- Update on the MCC TVET project - Anthony Tyrrel /International Education Consultant/
Please contact:erka@bcmongolia.org

23. ECONOMIC INDICATORS

24. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
February 28, 2013 *11.3% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 11.1% y-o-y, Ulaanbaatar city, February 28, 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]
CURRENCY RATES – March 21, 2013
Currency Name Currency Rate
US dollar USD 1,408.22
Euro EUR 1,820.97
Japanese yen JPY 14.74
British pound GBP 2,130.14
Hong Kong dollar HKD 180.89
Chinese Yuan CNY 226.66
Russian Ruble RUB 45.50
South Korean won KRW 1.26
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.