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![provide additional environmental benefits through the expansion of smokeless fuel production
capacity.
―We are honored to work with the EBRD to improve Sharyn Gol‘s ability to generate cash in order to
create additional returns for stakeholders, while making a positive impact on air quality in
Ulaanbaatar through the reduction in air pollution resulting from the substitution of raw coal with
Naco Fuel‘s environmentally friendly smokeless fuel,‖ said Graham Chapman, Sharyn Gol‘s chief
executive.
Sharyn Gol also announced that it has executed a USD 5 million convertible loan agreement with
SHG Investments Pte. Ltd., an entity controlled by an affiliate of Firebird Management LLC, Sharyn
Gol‘s controlling shareholder. Sharyn Gol will use the proceeds of the convertible loan facility for
general working capital purposes and for the continued upgrading of mining equipment in order to
execute its objective to grow annualized production to 2.5 million tons per year.
Source: BDSec JSC
ALTAN RIO CLOSES PRIVATE PLACEMENT WITH EBRD
Altan Rio Minerals Ltd. announced on 20 May the closure of its private placement worth nearly USD
1 million with European Bank for Reconstruction and Development (EBRD).
Altan Rio issued to EBRD 16,666,000 common shares at USD 0.06 per share, for gross proceeds of
USD 999,960, granting it approximately 18.7 percent of outstanding shares.
"We are delighted to have attracted a partner of the caliber of EBRD," said Evan Jones, president
and chief executive officer of Altan Rio. "As shareholders will be aware, the ability for junior
explorers such as Altan Rio to raise capital to fund ongoing activities is somewhat limited in the
current market environment. As such, by entering into this agreement, Altan Rio has substantially
reduced financing uncertainty."
The private placement is the first tranche of a potential investment in the company by EBRD of a
minimum of USD 5 million and a maximum of USD 10 million under a subscription agreement and
framework agreement between the parties. The common shares issued under the private placement
are subject to a four month-hold period.
Source: Altan Rio Minerals Ltd.
KHAN BANK REGISTERS FOR U.S. TAX COMPLIANCE
Khan Bank LLC has registered with the U.S. Internal Revenue Service (IRS) for tax compliance for its
U.S. citizen account holders.
―By complying with FATCA, Foreign Financial Institutions have following benefits such as sound
reputation in the global arena, unhindered foreign settlement, strengthened cooperation with
correspondent banks and more opportunity to provide a variety of financial services to their
customers,‖ reads the Source.
In 2010, the United States approved the Foreign Asset Tax Compliance Act (FATCA), which requires
U.S. citizens living outside the United States who meet a certain income bracket to pay tax.
Compliance insures that Khan Bank will cooperate with the IRS for these conditions.
Source: Khan Bank LLC
LIBERTY DENIES MEDIA ALLEGATIONS OF MISCONDUCT
Liberty‘s Partners has responded to a 15 May ―Morning News‖ article alleging of misconduct and
―further attempts to cast doubt on Liberty‘s integrity‖ for its advisory services delivered for a 2011
contract with Mongolian Railway (MTZ).
―Liberty absolutely rejects these accusations contained in the ―Article‖ and views these baseless
accusations as a clumsy attempt to undermine Liberty‘s credentials, obscure the true facts,
attempt to demean and bring into question the accomplishments of Liberty in the minds and face of
public and Liberty‘s partner organizations,‖ reads the Source. [Original article unavailable -ed]
MTZ executed the Agreement for Advisory Services on 7 April 2011 that permitted McKinsey &
Consulting Company Inc. to lead an advisory team with BNP Paribas, Pillsbury Winthrop Shaw
Pittman LLP and Liberty. Liberty's role on the team was to perform local advisory services, such as](https://image.slidesharecdn.com/bcmnewswireissue326-160215024344/85/23-05-2014-NEWSWIRE-Issue326-6-320.jpg)
![However, Mongolia‘s water challenge is not limited to Ulaanbaatar and is posing a great challenge
to the development of Mongolia‘s agriculture and mining sectors. A number of water transfer
projects aiming to transfer part of the waters of northern Orkhon and Selenge rivers to cater to the
needs of the growing mining industry in the south are currently under assessment. They entail
water pipelines stretching for hundreds of kilometers through the steppe, a plan that would involve
huge financial and physical capital.
―With an adequate pipeline in place, half of the water flow of one of the many mid-sized rivers in
northern Aimags [provinces] would be enough to cater to the needs of the mining industry in the
south, but first we need to define environmental flow constraints,‖ IMH‘s Davaa said.
The Brisbane Declaration defines environmental river flow as follows: ―Environmental flow
management provides the water flows needed to sustain freshwater and estuarine ecosystems in
coexistence with agriculture, industry, and cities.‖ A number of countries have adopted this as a
reference to the sustainability of water use in certain basins. Mongolia has not yet followed suit,
but the sooner it draws a line to define sustainable use thresholds for its river waters, the quicker
authorities, citizens and private businesses will find the best way to address the country‘s water
challenges in Ulaanbaatar, Oyu Tolgoi and elsewhere.
Source: The Diplomat
CHINA'S MASSIVE COAL INDUSTRY DEVOURING WATER RESOURCES
Chinese coal mines have spurred industrial development outside the city of Chifeng in eastern Inner
Mongolia, but the industry is taking a toll on the nation‘s water resources. Not far from there, here
in Mongolia, coal mines are also taking an enormous toll on the environment.
Some 15 percent of the nation's annual water withdrawals are claimed by the coal industry, with
many mines and plants located in arid areas where rivers are under stress, underground aquifers are
in decline and pollution is rampant. In the decades ahead, climate change will aggravate China's
water problems by melting glaciers that help sustain the summer flows of some major rivers. By
2030, the basin of the Yellow River, China's second-longest river, is forecast to be 18 percent short
of the water needed to meet demand, according to a study from China's Institute of Water
Resources and Hydropower Research.
In Inner Mongolia, water shortages have been a problem for decades. Overgrazing and farming have
turned some once-productive lands into dust bowls, forcing the relocation of thousands of people,
and stirring up huge sand storms that have swept across Asia. Coal development in recent years
added to the region's stresses, accelerating desertification as open-pit mines reroute water flows
and coal plants draw from water reserves.
Despite the water shortages in northern and western China, the government has continued to
approve construction of a new generation of water-guzzling plants that turn coal into methane gas.
These plants, which use water not only for cooling but also for the conversion process, far surpass
the water demands of traditional coal-fired electricity plants. The 18 coal-to-gas plants that have
so far received preliminary approval for construction would collectively use more than 120 billion
gallons of water annually. That's more than twice the amount of water used in Seattle in 2013. The
World Resources Institute found that 11 of those proposed plants are in areas of such severe water
stress that they likely would have to reduce production or shut down during some dry seasons.
Source: Journal Sentinel
CHINA AND RUSSIA REACH 30-YEAR GAS DEAL
China and Russia signed a USD 400 billion gas deal on Wednesday, giving Moscow a megamarket for
its leading export and linking two major powers that despite a rocky history of alliances and
rivalries have drawn closer to counter the clout of the United States and Europe.
Putin, on a two-day visit to Shanghai, and the Chinese leader, Xi Jinping, oversaw the signing of the
contract between Gazprom and the China National Petroleum Corporation, the biggest natural gas
deal Russia has sealed since the collapse of the Soviet Union. The contract runs 30 years and
requires the construction of pipelines and other infrastructure that will require tens of billions of
dollars in investment. The pact bolsters President Vladimir Putin‘s ―Eurasian Economic Union‖ by](https://image.slidesharecdn.com/bcmnewswireissue326-160215024344/85/23-05-2014-NEWSWIRE-Issue326-12-320.jpg)
![helping to draw Russia and China closer, forming a more powerful economic counterweight to the
United States and Europe. This comes at a time when the Obama administration is trying to isolate
Russia economically over the crisis in Ukraine and as American tensions with China are rising over
cyberspying and China‘s territorial disputes with its neighbors.
―The Sino-Soviet rift that brought the two countries to the brink of nuclear war in the ‘60s has been
healed rather dramatically,‖ said Strobe Talbott, president of the Brookings Institution and the
chairman of Secretary of State John Kerry‘s Foreign Policy Advisory Board.
The final price of the Russian gas was not disclosed, and energy markets were trying to parse who
gained the bigger advantage. Russia had been holding out for a price close to what European
countries pay, and China for a price akin to the cheaper gas it buys from Central Asia, according to
expert observers. With Russia‘s economy near recession, and the International Monetary Fund
projecting 0.2 percent growth this year, Putin was desperate to get the deal done, energy experts
said. The chief executive of Gazprom, Alexey Miller, said the contract had Russia supplying 38
billion cubic meters of gas annually over 30 years, making the price about USD 350 per thousand
cubic meters. In 2013, the average price of Gazprom‘s gas in Europe was about USD 380 per
thousand cubic meters.
Source: New York Times
KYRGYZSTAN-CHINA GAS PIPELINE TRANSIT TO START IN 2016
Transit of natural gas through a Kyrgyzstan-China gas pipeline will start in 2016, said the Kyrgyz
Minister of Energy and Industry Osmonbek Artykbayev. The announcement came just as China and
Russia announced a landmark deal for USD 400 billion gas deal.
Artybayev said the total cost of the project to deliver 30 billion cubic meters of gas was about USD
1.5 billion [Source does not specify over what time period –ed]. He said Kyrgyzstan would receive
about USD 2.5 billion for the transit of the gas. Kyrgyzstan will not take credit, but instead will rent
land use rights for the pipeline, which will run through Turkmenistan, Uzbekistan, Tajikistan, and
Kyrgyzstan to China.
Representatives of Kyrgyzstan's Ministry of Energy and Industry and Chinese National Petroleum
Corp. on 11 September 2013 signed a memorandum for the establishment of a coordination
committee to implement a cooperation agreement between Kyrgyzstan and China for the
construction of the gas pipeline.
Source: 24.kg
POLITICS
PETROLEUM BILL FAILS TO PASS IN PARLIAMENT
Parliament on 15 May voted against the proposed Petroleum Law, which set out to update the
current law.
Fifty percent of MPs voted against the law, claiming that the revision was not necessary. The bill
also suffered from poor attendance by MPs. Most members from the Justice Coalition, which is
comprised of the Mongolian People's Revolutionary Party and Mongolian People's Democratic Party,
were absent. Also absent were members of the Cabinet Secretariat.
The new bill would have allowed companies to make stability agreements after production-sharing
agreements were signed, where the government would have been entitled to 50 percent of profits.
The agreement would also grant the government 60 percent ownership of the oil project after
initial investments had been recuperated.
Source: News.mn
PREMIER ESTABLISHES POLICY COUNCIL FOR 100-DAY ECONOMIC TRANSFORMATION PLAN
Prime Minister Norov Altankhuyag is leading a new council to represent the private sector for his
100-day economic stimulus plan.
Altankhuyag announced the formation of the working group on 19 May to employ the legislative](https://image.slidesharecdn.com/bcmnewswireissue326-160215024344/85/23-05-2014-NEWSWIRE-Issue326-13-320.jpg)
![INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
April 30, 2014 *12.3% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 12.0% y-o-y, Ulaanbaatar city, April 30, 2014
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
CURRENCY RATES – 23 MAY 2014
Currency Name Currency Rate
US Dollar USD 1,824.55
Euro EUR 2,502.55
Japanese yen JPY 18.07
British pound GBP 3,075.37
Hong Kong dollar HKD 235.34
Chinese Yuan CNY 292.63
Russian Ruble RUB 53.22
South Korean won KRW 1.78
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.](https://image.slidesharecdn.com/bcmnewswireissue326-160215024344/85/23-05-2014-NEWSWIRE-Issue326-28-320.jpg)
Uploaded byThe Business Council of Mongolia
23.05.2014, NEWSWIRE, Issue326
The document summarizes news from the Business Council of Mongolia newsletter. Key points include: - Eznis Airways suspended operations due to financial losses. - Centerra Gold's Boroo mine began repairs to its ball mill which will reduce processing capacity by 50% for two weeks. - Xanadu Mines will acquire a 90% stake in the Kharmagtai copper-gold project for $14 million. - A new cement plant utilizing dry processing opened in Selenge aimag with the capacity to produce 1 million tons annually. - Khan Bank registered with the US IRS for tax compliance on accounts of US citizen account holders.
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Similar to 23.05.2014, NEWSWIRE, Issue326
23.05.2014, NEWSWIRE, Issue326
- 1. BUSINESS COUNCIL ofMONGOLIA NewsWire www.bcmongolia.org info@bcmongolia.org Issue 326 – May 23, 2014 NEWS HIGHLIGHTS: Business Eznis suspends operations; Centerra Gold’s Boroo begins ball mill repairs; Prima Fluorspar ends negotiations for Delgerkhaan fluorspar project; Xanadu Mines to acquire Mongolia porphyry copper-gold project; Greenfield cement plant opens in Selenge; Russia to advance Yak-130 aircraft to Mongolia; Nomadic Expeditions launches new Trans-Siberian railway trips; MGG lays groundwork for strengthened cash flow; Sharyn Gol announces drawdown of $5mn from EBRD loan facility; Altan Rio closes private placement with EBRD; Khan Bank registers for U.S. tax compliance; Liberty denies media allegations of misconduct; Erdenes MGL changes name to Erdenes Mongol; CEO Club appoints GE's Tumentsogt as president; Consolidation Services recruits emerging markets specialist to advisory board; Trade Mission Network to bring U.S. business mission in September; Mongolian hard rockers Hanggai are riffing on their traditions. Economy Mongol Bank: FX auctions, swap agreements, treasury bills; ADB, Japan prepare project to address UB's power shortcomings; Mongolia eyes tourism boost with new paved roads; GPRS systems installed in inter-city buses; UB to introduce new public transport lanes; New rail buses to make cross-UB travel a 20-minute journey; Road work underway in UB for 2014 at 17 locations; MUST opens research center for GMOs; Iron ore hits 20-month low on China concerns; Is UB running out of water?; China's massive coal industry devouring water resources; China and Russia reach 30-year gas deal; Kyrgyzstan-China gas pipeline transit to start in 2016. Politics Petroleum bill fails to pass in Parliament; Premier establishes policy council for 100-day economic transformation plan; Arrested developments in Mongolia; Premier appoints mining minister as acting agriculture minister; China's Xi meets Mongolian president in Shanghai; President invites Russia’s Putin to Mongolia and proposes to abolish visas; N. Korean envoy, U.S. experts to hold informal meeting in Mongolia; Mongolia and Israel to cooperate in disaster protection, health care;
- 2. Belarus ratifiescooperation agreement for education; Mongolia and South Korea sign MOU on workplace health and safety; Law Enforcement University boosts ties with Chinese institution; Russian servicemen to take part in international military drills in Mongolia; Mongolian kids in Korea get their own place to learn; Two Inner Mongolian exiles deported to China; Mongolian companies lose thousands from internet scammers; Seven priceless heritage statues were stolen from Erdene Zuu monastery; Show me the money! Strengthening EITI implementation in Mongolia; Researcher seeks answers on ancient Mongolian horse rituals; Why ASEAN Is Mongolia’s best chance for a prosperous future. Others New Mongolian Laws; Announcements; BCM Updates - Working Groups; Websites; Social Networks; Photo Gallery. ECONOMIC INDICATORS MSE Top 20 Index by Market Capitalization; Foreign-listed Companies with Mongolian Assets; Inflation; Central bank Policy Rate; Currency Rates. *Click on titles above to link to articles. SPONSORS Khan Bank International SOS Invest Mongolia Agency Mongolian Economy Magazine Oxford Business Group Milestone GRP
- 3. MONTHLY MEETING NOTICE BCM‘smonthly meeting for members will be on Monday, May 26 at 5PM at the BEST WESTERN PREMIER TUUSHIN HOTEL, 4th floor, ―Suld‖ conference room. The bilingual meeting will feature the following presentations: - Call to Order/Business Council of Mongolia: B. Byambasaikhan, Chairman, BCM - BCM Report: Jim Dwyer, Executive Director, BCM - H.E. N. Altankhuyag, Prime Minister of Mongolia – ―100-Day Economic Transformation Plan‖ - B. Lakshmi, Director, Mongolia Economic Forum – ―Why Mongolia Business Summit?‖ - Nick Cousyn, Co-chair, BCM Capital Markets Working Group – ―Use of MSE for State Privatizations‖ - Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – ―Mongolia Roads – Achievements and Challenges‖ New Members: 1. SUMITOMO MITSUI BANKING CORPORATION - Representative Office of Sumitomo Mitsui Banking Corporation, one of the top Asian financial institutions, opened in October 2013 to run market research and support the Tokyo headquarters and other branches around the world. 2. IARUDI CONSULTING - provides professional accounting and compliance services to overseas clients looking to operate in the local marketplace and to Mongolian companies looking to expand or otherwise strengthen their finance function. 3. TRAFIGURA MONGOLIA - Geological assistance for Mongolian mining companies. 4. UNIVERSITY OF THE HUMANITIES - offers undergraduate and graduate courses, and conducts research projects on different areas of social sciences, humanities, ecological & management sciences, computing & information technology. 5. LIBERTY PARTNERS - specializes in middle-market private equity investments in manufacturing, business services, healthcare, and education-related companies. A networking reception will be held for all attendees immediately following the business portion of the meeting in the ―Prime Grille Restaurant‖ on the 3rd floor, Best Western Premier Tuushin Hotel. ________________________________________________________________________________ BUSINESS EZNIS SUSPENDS OPERATIONS Eznis Airways LLC will suspend its operations, effective immediately, said the chief executive of its parent company, Newcom Group, on 22 May. The company could no longer sustain financial losses after doing everything in its power over the past two years to remain afloat and to retain its employees, said Baatar Unebat at the company‘s headquarters. Source: Info Mongolia CENTERRA GOLD‟S BOROO BEGINS BALL MILL REPAIRS Centerra Gold Inc. said that the Boroo gold mine's ball mill was taken out of service following the failure of the mill's vacuum contactors. A work-around has been developed and is being implemented. The Boroo mill is expected to process stockpiled ore at approximately 50 percent of its throughput capacity during this time. Centerra has located the necessary parts and the mill is expected to return to full capacity in two weeks. ―No material impact is expected on Boroo's gold production guidance for the year,‖ reads the Source. Source: Centerra Gold Inc.
- 4. PRIMA FLUORSPAR ENDSNEGOTIATIONS FOR DELGERKHAAN FLUORSPAR PROJECT Canadian junior company Prima Fluorspar Ltd. on 19 May announced it had terminated further negotiations to acquire a 99.8 percent ownership stake in Mongolia-based Berkh Uul‘s Delgerkhaan fluorspar project. Prima entered into a non-binding letter of intent with an affiliate of New York-based investment company Firebird Management on 31 August 2013. Prima‘s stock halted from trading on the TSX- Venture exchange following the announcement of the letter in early September 2013. Conditions for the transaction were indicative evaluations of Berkh Uul‘s and Prima‘s fluorspar project and Prima‘s placement of shares for the Mongolian fluorspar assets. Additionally, Prima was required to raise a minimum of USD 6 million to fund the Berkh Uul project. The transaction would have allowed Prima to reinforce its position as future global fluorspar producer, especially in the Asian market. Source: Cover Mongolia, Industrial Minerals XANADU MINES TO ACQUIRE MONGOLIA PORPHYRY COPPER-GOLD PROJECT Xanadu Mines Ltd. is proceeding with the acquisition of a 90 percent interest in the Kharmagtai advanced porphyry copper-gold exploration project in Mongolia for USD 14 million from Turquoise Hill Resources Ltd. The first phase of diamond drilling is scheduled to begin in early June. This follows the company‘s shareholders approving the transaction at the Extraordinary General Meeting held today. Previous exploration at Kharmagtai had identified significant shallow high-grade porphyry copper-gold mineralization, including 245 meters at 0.75 percent copper and 2.48 grams per ton of gold from three meters. Xanadu has estimated an exploration target of 200 million to 450 million tons at 0.25 to 0.3 percent copper and 0.25 0.3 grams per ton of gold. Source: Proactive Investors GREENFIELD CEMENT PLANT OPENS IN SELENGE Mongolia's largest cement factory reopened with new environmentally friendly technology on 14 May. The cement plant, which is located at Khutul Soum, Selenge Aimag, utilizes newly installed dry- method greenfield processing which is easier on power consumption and the environment. With the dry-method, water usage and toxic gas emissions are reduced and power consumption is 45 percent less than the alternative wet-method of production. The dry-processed cement‘s quality is also reportedly much higher than wet-processed cement. The plant is expected to manufacture 3,000 tons of cement a day and one million tons of cement a year, which makes up 50 percent of the total demand for cement in the domestic market. Mongolia currently manufactures 240,000 tons of cement per year. The plant sources materials from two limestone mines. The Khutul cement Lime Plant was a wet-method cement manufacturer built in the Soviet era, but fell into disuse after 26 years of continuous operation. Parliament ordered that government attract national investment for the plant to transition it to a dry-processing operation able to produce one million tons of cement per year. Basement LLC received the contract to begin construction in January 2011, before finishing in October 2013. Experts from the School of Geology and Mining at Mongolia‘s University of Science and Technology developed the pre-feasibility studies for the plant. Source: UB Post RUSSIA TO ADVANCE YAK-130 AIRCRAFT TO MONGOLIA Russia is seeking to advance its Yak-130 aircraft to Mongolia, Vietnam, and Latin America, Federal Service for Military-Technical Cooperation (FSMTC) Director Alexander Fomin said on 15 May. ―We are working to advance these aircraft to Mongolia, Vietnam and other countries,‖ he said. Source: Itar-Tass News Agency
- 5. NOMADIC EXPEDITIONS LAUNCHESNEW TRANS-SIBERIAN RAILWAY TRIPS Travelers yearning to cross two bucket-list adventures off their lists-crossing the Trans-Siberian Railway and traveling to Mongolia-can now do so with Nomadic Expeditions Mongolia LLC's new collection of Trans-Siberian Railway trips. The award-winning outfitter has rolled out nine new exclusive train trips on two different train lines, spanning Russia, Mongolia and China, with select routes concluding with a Gobi Desert extension where travelers stay in Nomadic Expeditions' luxury ger camp, the Three Camel Lodge. Three Camel Lodge, the award-winning lodge located in the heart of the Gobi desert, provides a once-in-a-lifetime experience of staying in handmade felt gers. The Trans-Siberian Railway is the longest train travel experience in the world, computing up to nearly 6,600 miles and spanning seven time zones. The two train lines featured in Nomadic Expeditions' Rail Journeys collection offer travelers the chance to choose between the classic Trans- Siberian railway experience, which travels between Moscow and Ulaanbaatar or Beijing (or vice versa), and the luxury, over-the-top Trans-Siberian experience, which travels between Moscow and Ulaanbaatar or Vladivostok, off the Sea of Japan (or vice versa). Source: Nomadic Expeditions Mongolia LLC MGG LAYS GROUNDWORK FOR STRENGTHENED CASH FLOW Real-estate firm Mongolia Growth Group Ltd. (MGG) on 20 May announced a re-alignment of its operating cost structure in North America and Mongolia with the goal of further improving cash flow. Over the past two months, newly appointed Chief Executive Officer Paul Byrne has undertaken a review of both recurring and forecasted costs with a goal of better matching those expenses with current revenue run-rates. Based on first quarter 2014 levels of both recurring and forecasted costs, the company has identified annual expenses of approximately CAD 500,000 (USD 458,757) that will be reduced or deferred until the company shows positive cash flow. "The Company has the right business model and operating platform and it is now time that we focus on strengthening cash flow from our high quality asset base," said Paul Byrne, chief executive officer of MGG. "To achieve this, we need to be more effective with aligning our operating expenditures with our revenues, while still focusing on growth initiatives like our transformation into an asset management, real estate development and funds management business. Going forward, we will be increasing spending on revenue producing initiatives, while re-evaluating all non-revenue producing expenditures. Ultimately, as a business, we need to show stronger cash flow and reward shareholders with a dividend." The majority of these savings are related to expenditures at the company's corporate operations, whereby now the emphasis is on building much more capability in Mongolia, where there are greater operating synergies and resulting cost efficiencies. It is anticipated that the cost-saving initiatives announced today will be undertaken over the second half of this year, with savings becoming visible early in 2015. These savings are in addition to the substantial savings that have been gained through the disposal of Mandal Daatgal, MGG's former insurance subsidiary. Source: Mongolia Growth Group Ltd. SHARYN GOL ANNOUNCES DRAWDOWN OF $5MN FROM EBRD LOAN FACILITY Sharyn Gol JSC on 19 May announced that it had drawn down USD 5 million under the terms of its USD 10 million debt financing package with the European Bank for Reconstruction & Development (EBRD). The proceeds of the drawdown will be used to finance expenses related to the acquisition and installation of a coal washing plant and improvements to a smokeless fuel processing facility. The coal washing plant, which will be operational by September, will supply washed coal to Sharyn Gol‘s subsidiary Naco Fuels JSC, which produces smokeless fuel for the domestic market; the washing plant will also allow Sharyn Gol to produce export quality coal for trial shipments through the Russian rail system, as well as premium coal for a range of domestic customers in Mongolia. The investment will reduce emissions by allowing the production of higher-quality coal, as well as to
- 6. provide additional environmentalbenefits through the expansion of smokeless fuel production capacity. ―We are honored to work with the EBRD to improve Sharyn Gol‘s ability to generate cash in order to create additional returns for stakeholders, while making a positive impact on air quality in Ulaanbaatar through the reduction in air pollution resulting from the substitution of raw coal with Naco Fuel‘s environmentally friendly smokeless fuel,‖ said Graham Chapman, Sharyn Gol‘s chief executive. Sharyn Gol also announced that it has executed a USD 5 million convertible loan agreement with SHG Investments Pte. Ltd., an entity controlled by an affiliate of Firebird Management LLC, Sharyn Gol‘s controlling shareholder. Sharyn Gol will use the proceeds of the convertible loan facility for general working capital purposes and for the continued upgrading of mining equipment in order to execute its objective to grow annualized production to 2.5 million tons per year. Source: BDSec JSC ALTAN RIO CLOSES PRIVATE PLACEMENT WITH EBRD Altan Rio Minerals Ltd. announced on 20 May the closure of its private placement worth nearly USD 1 million with European Bank for Reconstruction and Development (EBRD). Altan Rio issued to EBRD 16,666,000 common shares at USD 0.06 per share, for gross proceeds of USD 999,960, granting it approximately 18.7 percent of outstanding shares. "We are delighted to have attracted a partner of the caliber of EBRD," said Evan Jones, president and chief executive officer of Altan Rio. "As shareholders will be aware, the ability for junior explorers such as Altan Rio to raise capital to fund ongoing activities is somewhat limited in the current market environment. As such, by entering into this agreement, Altan Rio has substantially reduced financing uncertainty." The private placement is the first tranche of a potential investment in the company by EBRD of a minimum of USD 5 million and a maximum of USD 10 million under a subscription agreement and framework agreement between the parties. The common shares issued under the private placement are subject to a four month-hold period. Source: Altan Rio Minerals Ltd. KHAN BANK REGISTERS FOR U.S. TAX COMPLIANCE Khan Bank LLC has registered with the U.S. Internal Revenue Service (IRS) for tax compliance for its U.S. citizen account holders. ―By complying with FATCA, Foreign Financial Institutions have following benefits such as sound reputation in the global arena, unhindered foreign settlement, strengthened cooperation with correspondent banks and more opportunity to provide a variety of financial services to their customers,‖ reads the Source. In 2010, the United States approved the Foreign Asset Tax Compliance Act (FATCA), which requires U.S. citizens living outside the United States who meet a certain income bracket to pay tax. Compliance insures that Khan Bank will cooperate with the IRS for these conditions. Source: Khan Bank LLC LIBERTY DENIES MEDIA ALLEGATIONS OF MISCONDUCT Liberty‘s Partners has responded to a 15 May ―Morning News‖ article alleging of misconduct and ―further attempts to cast doubt on Liberty‘s integrity‖ for its advisory services delivered for a 2011 contract with Mongolian Railway (MTZ). ―Liberty absolutely rejects these accusations contained in the ―Article‖ and views these baseless accusations as a clumsy attempt to undermine Liberty‘s credentials, obscure the true facts, attempt to demean and bring into question the accomplishments of Liberty in the minds and face of public and Liberty‘s partner organizations,‖ reads the Source. [Original article unavailable -ed] MTZ executed the Agreement for Advisory Services on 7 April 2011 that permitted McKinsey & Consulting Company Inc. to lead an advisory team with BNP Paribas, Pillsbury Winthrop Shaw Pittman LLP and Liberty. Liberty's role on the team was to perform local advisory services, such as
- 7. acting as anintermediary between project developers and the Mongolian government. Liberty said it provided financial advisory services to the Ministry of Roads, Transportation, Construction and Urban Development such as assistance in the development of railway infrastructure. Although Liberty advised the ministry on a pro bono basis, the company was permitted compensation through financing on specified projects. ―Liberty has at all times complied and continues to comply fully with the laws and regulations of Mongolia and Foreign Corrupt Practices Act of the United States, as well as adhered to The Chartered Financial Analyst® (CFA) Institute Code of Ethics and Standards of Professional Conduct. We stress that it is such adherence to necessary compliance that allows Liberty to partner with the best breed of global business elite.‖ Read the full release here. Source: Liberty Partners ERDENES MGL CHANGES NAME TO ERDENES MONGOL Erdenes MGL LLC on 20 May announced that it had changed its name to Erdenes Mongol LLC, effective that day. The name change reflects the new object to operate as a national corporation. Erdenes Mongol owns the entirety of Erdenes Tavan Tolgoi LLC, and Erdenes Oyu Tolgoi LLC—which holds the 34 percent equity in the Oyu Tolgoi copper mine. The state-owned holding company also holds stakes in other mines: 75 percent of Baganuur JSC, 90 percent of Shivee Ovoo JSC, 51 percent of Erdenet Factory LLC‘s. It also owns the entirety of the road between Tavan Tolgoi and Gashuun Sukhait as well as Gashuun Sukhait border port. Source: Info Mongolia CEO CLUB APPOINTS GE'S TUMENTSOGT AS PRESIDENT Mongolia's CEO Club on 21 May announced the appointment of Tsevegmid Tumentsogt as the club‘s fifth President. Tumentsogt, who has served as General Electric (GE) Co.'s chief representative to Mongolia since 2011, has a background in developing strategies and shaping the regulatory environment for Mongolia's infrastructure and energy. He succeeds Amarsaikhan Sainbuyan, chairman and chief executive officer of Oyuny Undra Group, upon the end of his two-year term. ―I am honored to take over the role of president of the CEO Club of Mongolia, which already has a strong reputation of being a leading voice of the business community in Mongolia‖ said Tumentsogt. ―I believe the club can continue to make a difference in improving business environment in Mongolia by working together with business advocacy groups, professional associations, government and the international community.‖ Source: CEO Club of Mongolia CONSOLIDATION SERVICES RECRUITS EMERGING MARKETS SPECIALIST TO ADVISORY BOARD Consolidation Services Inc. and its wholly owned subsidiary, Mongolia Equipment Rental Corporation, announced the appointment of Jorge Ramiro to its advisory board. Ramiro is also an advisor to and a shareholder of the Mongolian investment firm Standard Capital, which has twelve subsidiaries, five joint venture companies and is a shareholder in 60 companies in a variety of sectors. Ramiro previously worked for Ulaanbaatar-based Frontier Securities, where he was part of the special investments team in the natural resources division. In this capacity, he participated in the funding of Mongolian companies by Hong Kong investors. "Considering his emerging market finance experience and deep relationships in the Mongolian market, Jorge Ramiro will make a tremendous addition to the team during this exciting period of our Company's expansion into one of the fastest growing economies in the world, Mongolia," said board member Roy Tashi. Source: Consolidation Services Inc.
- 8. TRADE MISSION NETWORKTO BRING U.S. BUSINESS MISSION IN SEPTEMBER Trade Mission Network (TMN) has announced its first U.S. business mission to Mongolia for 2 to 7 September 2014 which is centered on the country‘s annual Discover Mongolia Forum held this year in Ulaanbaatar on 4 and 5 September. TMN builds on the experiences of founders Steve Powell and Al Hamman, who have worked on business transactions and trade missions in South America, Africa, the Middle East and Asia over the last two decades. Business leaders participating in the TMN mission will pursue specific, pre-defined opportunities with decision makers at local and international companies in Mongolia and with relevant government officials. TMN has an exclusive partnership with the Business Council of Mongolia (BCM) and its over 240 members in various sectors that will enable this synergy. ―The Business Council of Mongolia is pleased to be working with TMN and we all expect great results between their businessmen guests, our members and the Mongolian government,‖ said BCM Executive Director Jim Dwyer. Beyond personalized meetings between TMN conference attendees, BCM members and relevant government officials and related seminars, TMN guests will have full access to the Discover Mongolia Forum and its sponsors, participants and guests. City and countryside tours, social events, trips to the Gobi Desert and visits to businesses, logistics and infrastructure systems, mining sites (such as Oyu Tolgoi) outside of Ulaanbaatar are also planned by TMN. Source: Trade Mission Network MONGOLIAN HARD ROCKERS HANGGAI ARE RIFFING ON THEIR TRADITIONS Think Mongolian rock and you might picture the freezing, windswept crags overlooking the vast grasslands that mark this small, sparsely populated country sat between two giants, China and Russia. What you probably don‘t think of is a six-piece band led by a former punk called Ilchi and influenced by Led Zeppelin. Hanggai, who release their third album this week, are the tip of a metal-infused iceberg in Mongolia, the best of a strong local tradition of rock and a breakout act who have toured the world, from London to Adelaide to Womad, Abu Dhabi. Since they formed in 2004, there have been many personnel changes, but always at the core is Ilchi, who led his fellows in extending the repertoire from punk and metal to incorporate traditional Mongolian music. In fact, many of Hanggai‘s personnel hail originally from Inner Mongolia, a province of China separate from Mongolia, and those band members who are ethnic Han nevertheless specialize in playing Mongolian instruments. They found one another on the music scene in Beijing. ―In Inner Mongolia, lots of young people listen to bands from Mongolia, from Ulaanbaatar, and most bands from Mongolia are metal bands,‖ says Ilchi, on the phone from Beijing. But for all that, Beijing is full of censored CDs and bland pop, he says, it is possible to find international rock music there too. Source: The National ECONOMY MONGOL BANK: FX AUCTIONS, SWAP AGREEMENTS, TREASURY BILLS The Bank of Mongolia on 22 May reported the currency auction of USD 20 million for a closing rate of MNT 1820.15 and CNY 46.5 million for a closing rate of MNT 292. Also on 6 May, the Bank of Mongolia received an equivalent of USD 63 million from swap agreements with commercial banks. The central bank reported on 22 May the issue of one-week bills worth MNT 172.1 billion at a weighted interest of 10.5 percent a year. The central bank reported on 21 May MNT 23 billion in bids for the issue of three-week treasury bills with a face value of MNT 10 billion. Each unit was sold at a premium price with a weighted average yield of 11.64 percent. Also on 21 May, the central bank reported MNT 33 billion in bids for 52-week treasury bills with a face value of MNT 20 billion. Bills were sold at a discounted price with a weighted average yield of 9.45 percent.
- 9. Source: Bank ofMongolia ADB, JAPAN PREPARE PROJECT TO ADDRESS UB'S POWER SHORTCOMINGS Under a USD 2 million technical assistance grant project, the Asian Development Bank (ADB) and Japan will study the electricity transmission and distribution constraints faced by Ulaanbaatar in preparation for a major power project that would help 1.2 million people. The grant comes from the Japan Fund for Poverty Reduction, provided by the Government of Japan and administered by ADB. The technical assistance project will look into the technological, economic, financial, social, institutional, and environmental challenges facing the Mongolian capital‘s power delivery. ―Mongolia has seen a surge in growth in recent years, accompanied by growing demands for electricity,‖ said Teruhisa Oi, Senior Energy Specialist. ―Much of this demand is not being met due to the unavailability of new power plants. The capital needs not only new plants to supply power, but also to strengthen existing networks to bring to the population a reliable, affordable, and a cleaner source of energy.‖ The capital‘s existing power network is old and outdated—its inefficiency and unreliability causing electricity distribution losses totaling 19.6 percent in 2012, almost four times higher than international best practice of 5 percent. Meanwhile, customers faced an average of 13 power interruptions during 2012 totaling 2,084.5 minutes. The planned electricity and transmission project would improve the reliability and quality of electricity services for 1.2 million people, or about 40 percent of Mongolia‘s population. It would upgrade the electricity transmission and distribution networks in and around Ulaanbaatar to boost energy efficiency, reduce transmission and distribution losses, and cut back on greenhouse gas and air pollutants from existing power plants. It would also develop a new heat and power plant through a public-private partnership supported by ADB. In addition to investments, the project would strengthen the capacity of the Energy Regulatory Commission, which issues licenses to power plants and proposes customer tariffs. The total cost of the technical assistance, which will be carried out over two years, is about USD 2.2 million, of which USD 200,000 will be met by the Mongolian government in the form of logistical and staff help. Source: Asian Development Bank MONGOLIA EYES TOURISM BOOST WITH NEW PAVED ROADS Expanding tourism business in Mongolia has become a major goal for the country's road construction projects, said N. Batsuuri of the Ministry of Road and Transportation. Building up the nation's road network would help boost the country's tourism capacity, said N. Batsuuri, a department head of the Ministry of Road and Transportation. This year will see the commissioning of a paved road between Khatgal and Khankh Soums in Khuvsgul Aimag to Khuvsgul Lake. Another road planned would run from Khankh to the Russia-Mongolia border. Roads planned for Uvurkhangai Aimag would stretch between Khujirt Soum through to the Ulaan Tsutgalan waterfall and the Tovkhon Monastery, as well as other natural beauty tourist destinations. Building a comprehensive road network nationwide is a major priority for the government, which has set the goal to construct 5,572 kilometers of roads for the mid-term. Mongolia's road network currently spans 49,350 kilometers, including 4,690 kilometers of paved roads. The Cabinet Secretariat has thus far ordered the construction of 3,700 kilometers of roads, of which over 1,800 kilometers will be built this year. Another 2,970 kilometers off roads will be built via concession agreements with private firms. Mongolia will participate in the ITB Berlin international exhibition in 2015 as an official partner. Mongolia plans to use the exhibition for the opportunity to forward its tourism agenda. Source: Montsame GPRS SYSTEMS INSTALLED IN INTER-CITY BUSES Buses traveling between cities have been equipped with general packet radio systems (GPRS) to keep open communication with a control center.
- 10. The National Centerof Auto Transportation unveiled the new systems at Chinggis Square on 18 May. The control center will track the location of buses as well as follow up on drivers' statuses and travel conditions using an Inmarsat satellite connection. The system provides information on vehicle locations, the distance from destinations, and the speed being traveled, as well as signal for accidents. Surveillance cameras and a text messaging system will monitor the number of passengers on board, as well as fuel consumption, load weights, temperatures, the status of buses' motors, and tire pressure. Monitoring drivers' driving speeds is a priority for the new system because most accidents occur while drivers are speeding. The system will connect the control center with 306 large passenger buses, 194 medium-sized buses, and 260 small buses at a cost of MNT 3 million for the purchase of equipment on each bus. Installation of this equipment is free. The monthly operating cost for the GPRS system will be some MNT 50,000 per bus. Source: Udriin Sonin UB TO INTRODUCE NEW PUBLIC TRANSPORT LANES A city decree will create more lanes reserved only for the use of public transportation this year throughout the central regions of the city. Only buses, trolley buses, standardized taxis, school buses and employee buses will be permitted to travel the restricted lanes. New public transportation lanes will be established on Chinggis Avenue, from the 120 Myangat intersection with the Erel Factor to Enebish Avenue, and from the intersection with Mother and Child Hospital to the Tsaiz Market, beginning 23 May. Another public- transport only lane will be established on Sambuu Street, from 1st Grocery Store to Geser Monastery. Street lanes dedicated to public transportation were first introduced in August 2012 on Peace Avenue, from Tavan Shar to the Officers Palace. City authorities introduced the lanes to free up the roads from traffic jams by creating more efficient public transportation services. Source: Zuunii Medee NEW RAIL BUSES TO MAKE CROSS-UB TRAVEL A 20-MINUTE JOURNEY City transit authorities unveiled the first two RA Railbus series of high-speed trains to join Ulaanbaatar's public transportation services at a 16 May ceremony at the Ulaanbaatar Central Railway Station. Authorities are employing the trains to improve public transportation to help alleviate high-volume traffic in the city. The rail buses, made by Russia's Metrovagonmash factory, will be commissioned on 6 June. Cars will have 136 seats, with the capacity to hold between 350 and 400 passengers at a time while traveling at speeds up to 100 kilometers an hour. Travel time from the Tolgoit to the Amgalan railway stations will take just over 20 minutes. "Having high-speed trains is an important step for the public transport service of our city,‖ said Mayor Erdene Bat-Uul at the unveiling. ―It definitely will enhance the public transport services and will give us possibilities to prepare new urban planning.‖ This year rail buses will run three times a day on rails used by Mongolia's locomotive trains. Travel frequency will be bumped up to six times a day once construction on 3.7 kilometers of railway for the rail bus is finished for commissioning sometime next year. Source: Montsame ROAD WORK UNDERWAY IN UB FOR 2014 AT 17 LOCATIONS Ulaanbaatar will see 17 road construction projects underway this year for the Streets Program to renovate and construct roads in the city. The Ministry of Economic Development has approved the expansion and renovation of 21.09 kilometers of roads in 17 locations, as well as 478 meters of bridge construction. Also to take place this year is work for the re-planning of the road network at Ulaanbaatar's ger districts and 59 kilometers of highway road. USD 190 million for work this year has been budgeted, said project leader B. Batbold. Project
- 11. leaders had receivedMNT 50.6 billion in funds from the Development Bank of Mongolia as of March, with some MNT 43.6 billion already spent, he said. Source: Montsame MUST OPENS RESEARCH CENTER FOR GMOS Mongolian University of Science and Technology's (MUST‘s) School of Food Engineering and Biotechnology has opened the Food Research Institute. The institute, which was financed with MNT 4.3 billion, will study and research genetically modified organisms (GMOs), food safety, diet and health. Source: News.mn IRON ORE HITS 20-MONTH LOW ON CHINA CONCERNS Iron ore, Mongolia's fourth-largest exported by volume commodity in March, fell to its lowest level in 20 months on Friday after bearish signs from the Chinese steel industry and persistent concerns about rising supplies. Benchmark 62 percent iron ore, according to The Steel Index, fell 2 percent to USD 100.7 a ton—the lowest level since September 2012—while iron ore futures also sank. The June contract for 62 percent ore on the Singapore Exchange fell 1.6 percent to USD 100.65—the lowest price for a front month contract since April 2013. The main ingredient in steelmaking, iron ore is crucial to the profits of major mining companies such as Rio Tinto PLC. Fears of a mismatch between supply and demand and slowing industrial growth in China have had a significant impact on the value of iron ore. The price has fallen 17.7 percent over the past year. China consumes about two-thirds of the world‘s iron ore. Chinese steel prices also dropped. ―If Chinese steel production hadn‘t been this high, the price would have fallen even more than it has,‖ said Colin Hamilton, head of commodities research at Macquarie. ―At the moment people are holding enough iron ore for current production and future growth, but if expectations come down they‘ll hold less iron ore and take less from the market.‖ Last night Macquarie, one of the most accurate predictors of iron ore‘s price over the past year, dramatically cut its estimate for the average price of the raw material for the third quarter to USD 100 a ton, down from previous forecasts of about USD 115. Falling steel prices are also putting pressure on Chinese steel mills. ―The steel sector is in a financial mess, with both private mills and state-owned enterprises struggling to generate positive cash flow. Credit is extremely tight,‖ wrote analysts from Credit Suisse in a report published this week. ―Meanwhile, China‘s domestic iron ore sector is now being savaged by lower-cost, abundant imports.‖ Source: Financial Times IS UB RUNNING OUT OF WATER? Once known for its abundant and immaculate waters, the Tuul River flowing through Mongolia‘s capital Ulaanbaatar is rapidly shrinking. ―The city is indeed going to face water shortages in the near future,‖ Batsukh Baljinnyam, head of the technical and policy department of state water utility Usug, which is in charge of water and sewage services in Ulaanbataar, said. ―Scarcity problems will emerge in 2015, and intensify from 2020 onwards,‖ he added. ―We need to find new water sources.‖ Decreasing recharge levels due to the Tuul River‘s shrinking water flow, which researchers largely trace back to climate change phenomena, as noted by Davaa Gombo, head of the hydrology unit at Mongolia‘s Institute for Meteorology and Environment monitoring (IMH), and increasing withdrawals pose a serious threat to the equilibrium of Ulaanbaatar‘s aquifer. The search for new water resources has already begun and water reuse technologies to ease the pressure on Ulaanbaatar‘s aquifer are being explored. Local private concessionaire Morit Impex is trying to develop a USD 200 million wastewater treatment plant project able to treat 200,000 cubic meters per day of sewage coming from the city. There is also large room to make water distribution and usage more efficient. The city‘s decade-old water network leaks up to 30 percent of the water it distributes.
- 12. However, Mongolia‘s waterchallenge is not limited to Ulaanbaatar and is posing a great challenge to the development of Mongolia‘s agriculture and mining sectors. A number of water transfer projects aiming to transfer part of the waters of northern Orkhon and Selenge rivers to cater to the needs of the growing mining industry in the south are currently under assessment. They entail water pipelines stretching for hundreds of kilometers through the steppe, a plan that would involve huge financial and physical capital. ―With an adequate pipeline in place, half of the water flow of one of the many mid-sized rivers in northern Aimags [provinces] would be enough to cater to the needs of the mining industry in the south, but first we need to define environmental flow constraints,‖ IMH‘s Davaa said. The Brisbane Declaration defines environmental river flow as follows: ―Environmental flow management provides the water flows needed to sustain freshwater and estuarine ecosystems in coexistence with agriculture, industry, and cities.‖ A number of countries have adopted this as a reference to the sustainability of water use in certain basins. Mongolia has not yet followed suit, but the sooner it draws a line to define sustainable use thresholds for its river waters, the quicker authorities, citizens and private businesses will find the best way to address the country‘s water challenges in Ulaanbaatar, Oyu Tolgoi and elsewhere. Source: The Diplomat CHINA'S MASSIVE COAL INDUSTRY DEVOURING WATER RESOURCES Chinese coal mines have spurred industrial development outside the city of Chifeng in eastern Inner Mongolia, but the industry is taking a toll on the nation‘s water resources. Not far from there, here in Mongolia, coal mines are also taking an enormous toll on the environment. Some 15 percent of the nation's annual water withdrawals are claimed by the coal industry, with many mines and plants located in arid areas where rivers are under stress, underground aquifers are in decline and pollution is rampant. In the decades ahead, climate change will aggravate China's water problems by melting glaciers that help sustain the summer flows of some major rivers. By 2030, the basin of the Yellow River, China's second-longest river, is forecast to be 18 percent short of the water needed to meet demand, according to a study from China's Institute of Water Resources and Hydropower Research. In Inner Mongolia, water shortages have been a problem for decades. Overgrazing and farming have turned some once-productive lands into dust bowls, forcing the relocation of thousands of people, and stirring up huge sand storms that have swept across Asia. Coal development in recent years added to the region's stresses, accelerating desertification as open-pit mines reroute water flows and coal plants draw from water reserves. Despite the water shortages in northern and western China, the government has continued to approve construction of a new generation of water-guzzling plants that turn coal into methane gas. These plants, which use water not only for cooling but also for the conversion process, far surpass the water demands of traditional coal-fired electricity plants. The 18 coal-to-gas plants that have so far received preliminary approval for construction would collectively use more than 120 billion gallons of water annually. That's more than twice the amount of water used in Seattle in 2013. The World Resources Institute found that 11 of those proposed plants are in areas of such severe water stress that they likely would have to reduce production or shut down during some dry seasons. Source: Journal Sentinel CHINA AND RUSSIA REACH 30-YEAR GAS DEAL China and Russia signed a USD 400 billion gas deal on Wednesday, giving Moscow a megamarket for its leading export and linking two major powers that despite a rocky history of alliances and rivalries have drawn closer to counter the clout of the United States and Europe. Putin, on a two-day visit to Shanghai, and the Chinese leader, Xi Jinping, oversaw the signing of the contract between Gazprom and the China National Petroleum Corporation, the biggest natural gas deal Russia has sealed since the collapse of the Soviet Union. The contract runs 30 years and requires the construction of pipelines and other infrastructure that will require tens of billions of dollars in investment. The pact bolsters President Vladimir Putin‘s ―Eurasian Economic Union‖ by
- 13. helping to drawRussia and China closer, forming a more powerful economic counterweight to the United States and Europe. This comes at a time when the Obama administration is trying to isolate Russia economically over the crisis in Ukraine and as American tensions with China are rising over cyberspying and China‘s territorial disputes with its neighbors. ―The Sino-Soviet rift that brought the two countries to the brink of nuclear war in the ‘60s has been healed rather dramatically,‖ said Strobe Talbott, president of the Brookings Institution and the chairman of Secretary of State John Kerry‘s Foreign Policy Advisory Board. The final price of the Russian gas was not disclosed, and energy markets were trying to parse who gained the bigger advantage. Russia had been holding out for a price close to what European countries pay, and China for a price akin to the cheaper gas it buys from Central Asia, according to expert observers. With Russia‘s economy near recession, and the International Monetary Fund projecting 0.2 percent growth this year, Putin was desperate to get the deal done, energy experts said. The chief executive of Gazprom, Alexey Miller, said the contract had Russia supplying 38 billion cubic meters of gas annually over 30 years, making the price about USD 350 per thousand cubic meters. In 2013, the average price of Gazprom‘s gas in Europe was about USD 380 per thousand cubic meters. Source: New York Times KYRGYZSTAN-CHINA GAS PIPELINE TRANSIT TO START IN 2016 Transit of natural gas through a Kyrgyzstan-China gas pipeline will start in 2016, said the Kyrgyz Minister of Energy and Industry Osmonbek Artykbayev. The announcement came just as China and Russia announced a landmark deal for USD 400 billion gas deal. Artybayev said the total cost of the project to deliver 30 billion cubic meters of gas was about USD 1.5 billion [Source does not specify over what time period –ed]. He said Kyrgyzstan would receive about USD 2.5 billion for the transit of the gas. Kyrgyzstan will not take credit, but instead will rent land use rights for the pipeline, which will run through Turkmenistan, Uzbekistan, Tajikistan, and Kyrgyzstan to China. Representatives of Kyrgyzstan's Ministry of Energy and Industry and Chinese National Petroleum Corp. on 11 September 2013 signed a memorandum for the establishment of a coordination committee to implement a cooperation agreement between Kyrgyzstan and China for the construction of the gas pipeline. Source: 24.kg POLITICS PETROLEUM BILL FAILS TO PASS IN PARLIAMENT Parliament on 15 May voted against the proposed Petroleum Law, which set out to update the current law. Fifty percent of MPs voted against the law, claiming that the revision was not necessary. The bill also suffered from poor attendance by MPs. Most members from the Justice Coalition, which is comprised of the Mongolian People's Revolutionary Party and Mongolian People's Democratic Party, were absent. Also absent were members of the Cabinet Secretariat. The new bill would have allowed companies to make stability agreements after production-sharing agreements were signed, where the government would have been entitled to 50 percent of profits. The agreement would also grant the government 60 percent ownership of the oil project after initial investments had been recuperated. Source: News.mn PREMIER ESTABLISHES POLICY COUNCIL FOR 100-DAY ECONOMIC TRANSFORMATION PLAN Prime Minister Norov Altankhuyag is leading a new council to represent the private sector for his 100-day economic stimulus plan. Altankhuyag announced the formation of the working group on 19 May to employ the legislative
- 14. effort Parliament passedearlier this month. The council consists of 30 members, 18 of whom are businessmen and academics. Bayanjargal Byambasaikhan, chair of the Business Council of Mongolia, will serve as council secretary. Other members include L. Byambaa, deputy president of the Mongolian Financial Market Association; Kh. Gantsogt, state secretary of the Finance Ministry; N. Munkhbat, executive director of the Development Bank of Mongolia; and B. Lakshmi, a financial market researcher. The council will not have the power to directly affect policy, but instead will be responsible for acting as a medium for the private sector to reach the government directly. The council will have joint meetings with the working group responsible for directing the 100-day economic stimulus program twice a week, with public reports to be made each Monday. The first objectives for the council will be to assist in the revision of the Mongolian tax system and to reduce state interference in private business affairs. Source: Undesnii Shuudan ARRESTED DEVELOPMENTS IN MONGOLIA Mongolia's vast natural resources have enticed foreign investors to what is still very much a frontier market. Politicians' re-writing of investment rules has been one major risk for intrepid investors, but another more worrying hazard is emerging: arrest and travel bans. Justin Kapla, a veteran in Mongolia's mining industry with a Mongolian family, held the post of president at SouthGobi Sands, the license holder for the Ovoot Tolgoi coal mine in the Gobi desert, for just six months when prosecutors raided his offices on 8 May 2012, investigating illegal dealings with a former head bureaucrat at the Mineral Resources Authority, who was charged and later convicted of corruption. Kapla was banned from leaving the country, though this ban was lifted about a month later, on June 20 and again after the company was suspected of evading taxes and laundering billions of dollars. Kapla denies the accusations, citing as proof internal audits as well as external audits from the "Big Four" accountants PricewaterhouseCoopers and Deloitte. He also questions the methodology of the investigators. "All they've done is shown sums of findings in reports," he said. "They've never presented us with materials that show how they've come up with those numbers." The reason for this worrying trend is manifold, say observers. Mongolia's police are gung-ho about rooting out graft due to the strong anti-corruption stance taken by Mongolian President Tsakhia Elbegdorj since he was elected in 2009. Then there are suspicions that the travel bans are being used as leverage in contract disputes. "We are concerned by reports that the Mongolian exit visa system is being misused to pressure foreign investors to settle civil and investment disputes,‖ says Algeoa of the US embassy. ―Such concerns could have a chilling effect on international investors considering whether Mongolia is a viable destination for foreign direct investment.‖ Authorities are being given a second chance with SouthGobi to show it is open to foreign investment two years after Mongolia first put up walls against foreign investment with the Strategic Entities Foreign Investment Law. Turquoise Hill Resources Ltd. has confirmed it is considering bids for its 56 percent share in the miner. One person familiar with the company suggests the starting price will value the whole company at around USD 235 million, which would make it the largest deal in the last two years. But while the government's moves to repeal unfriendly laws and create an environment more conducive to foreign investment are welcome steps, none of it will do much good if investors are too afraid to visit their investments. Source: BNE PREMIER APPOINTS MINING MINISTER AS ACTING AGRICULTURE MINISTER Mining Minister Davaajav Gankhuyag has taken on the role as acting minister at the Ministry of Industry and Agriculture of Mongolia following the resignation of former Minister Khaltmaa Battulga. Prime Minister Norov Altankhuyag appointed Gankhuyag as acting minister on 16 May, the day after Parliament approved Battulga‘s resignation request. Battulga wrote in his resignation that his decision was because of his support of the so-called
- 15. ―Double Deel‖ lawand his belief that seat holders in Parliament should not have the double responsibility as a member of the Cabinet Secretariat. Source: Info Mongolia CHINA'S XI MEETS MONGOLIAN PRESIDENT IN SHANGHAI Chinese President Xi Jinping 19 May met with his Mongolian counterpart Tsakhia Elbegdorj in Shanghai. Elbegdorj was there to attend the Fourth Summit of the Conference on Interaction and Confidence Building Measures in Asia scheduled for Tuesday and Wednesday in Shanghai. Xi called on both countries to be good neighbors, good friends and good partners, and support each other on issues of core interest and major concern. This year marks the 65th anniversary of China-Mongolia diplomatic ties as well as the Year of China- Mongolia Friendly Exchanges. Both sides held celebrations that received warm responses from the two peoples, Xi said, hailing the sound momentum of bilateral ties. "I care very much about China-Mongolia ties and assign great importance to them," Xi said. He proposed both sides keep close contacts and strategic communication between top leaders and step up exchanges among legislatures, parties and armed forces. Noting the two economies are highly complementary, Xi said China sticks to the principles of win-win cooperation and mutual benefits in developing economic ties with Mongolia. China will consider mining, infrastructure construction and finance cooperation with Mongolia as one issue of three aspects and plan their advancement accordingly, Xi said. He called on both sides to take the construction of a Silk Road economic belt as an opportunity to expand cooperation. China will encourage companies to invest in Mongolia, Xi said, vowing support for Mongolia in global and regional affairs. "We are willing to enhance cooperation with Mongolia in multilateral organizations such as the United Nations and the Shanghai Cooperation Organization," Xi added. The Mongolian side is committed to working with China to make Mongolia-China ties an example for country-to-country relations in the region, said Elbegdorj. Elbegdorj invited Xi to pay a state visit to Mongolia and praised China's support for Mongolia, vowing to firmly back China on issues regarding Taiwan and Tibet. Mongolia will implement bilateral agreements in good faith and beef up cooperation with China in such areas as minerals, power and infrastructure building, he said. Elbegdorj also vowed closer coordination with China in global and regional affairs. Source: Xinhua PRESIDENT INVITES RUSSIA‟S PUTIN TO MONGOLIA AND PROPOSES TO ABOLISH VISAS Russian President Vladimir Putin on Tuesday met with his Mongolian counterpart Tsakhia Elbegdorj to discuss issues of cooperation between the two countries, including in the area of transport. ―We have good large-scale joint ventures we have inherited from the past, moreover, we have good prospects for the future,‖ Putin said, opening the meeting, adding that Russia ranked second among Mongolia‘s trade partners. The Mongolian president, who spoke with Putin in Russian, agreed that the two countries had potential for further cooperation, including in the area of railway transport. ―Mongolia is located between China and Russia and is the shortest way for transit by rail and other transport means,‖ he said. ―We should look at how to use these possibilities.‖ Elbegdorj said that a three-party agreement on cooperation in the area of transportation was being prepared, as was a similar bilateral agreement. Apart from that, Mongolia, he noted, was working on amendments to the 1949 agreement on the establishment of Ulaanbaatar Railways JSC. The Mongolian leader also proposed to abolish visa formalities between the two countries. ―It‘s high time to look at easy-term or visa-free trips for Mongolian citizens to neighboring countries,‖ he said. ―Let me invite you to Ulaanbaatar in August, maybe, in its second half,‖ he said at a meeting with the Russian leader. Source: Itar-Tass News
- 16. N. KOREAN ENVOY,U.S. EXPERTS TO HOLD INFORMAL MEETING IN MONGOLIA North Korea's chief nuclear envoy is scheduled to hold an informal meeting with former U.S. government officials on the sidelines of an academic conference in Mongolia this week, a diplomatic source with knowledge of the matter said Wednesday. The planned meeting between Ri Yong-ho, Pyongyang's chief negotiator to the stalled six-party talks, and former U.S. officials, including Joel Wit, a former U.S. State Department official specializing in North Korean issues, comes as Pyongyang has threatened to conduct its fourth nuclear test. Ri arrived in Beijing on Tuesday on his way to Mongolia. Source: Yonhap News MONGOLIA AND ISRAEL TO COOPERATE IN DISASTER PROTECTION, HEALTH CARE Israel and Mongolia made a bilateral cooperation agreement for disaster prevention and a partnership proposal for eye surgery during an Israeli delegation visit last week. Israeli Colonel Amir Eshil led a delegation paying a working visit to Mongolia from 11 to 14 May to initiate an exhibition for Israel's defense industry. The Israeli delegation held a meeting with officials from the National Emergency Management Agency (NEMA), where representatives of Israeli defense companies presented their defense product lines, the Israeli army, and disaster reduction strategies. Representatives also shared experience in counteracting bio-chemical threats and firefighting on the steppe and in forests. Minister of Health Natsag Udval also received an Israeli delegation, on 13 May, led by non-resident Israeli Ambassador Matan Vilnai. Vilnai proposed that Israel and Mongolia cooperate on health care. He told the health minister about Israeli technology to treat diabetes and offered to send a team of optical surgeons to Mongolia. Udval directed the ambassador to the National Trauma and Orthopedic Research Center of Mongolia for such partnerships. Source: Montsame, Info Mongolia BELARUS RATIFIES COOPERATION AGREEMENT FOR EDUCATION The House of Representatives of the National Assembly of Belarus ratified the agreement on cooperation in the education sector between the governments of Belarus and Mongolia on 14 May. The agreement was signed in Ulaanbaatar in 2013. The document spells out the main cooperation areas in education. It first of all pertains to the exchange of working experience on the pivotal areas of development, planning and organization for their national education systems. It also establishes direct contacts between educational establishments, initiates student and researcher exchanges; and prompts the organization of joint conferences for education and science research. Source: Belarus Telegraph Agency MONGOLIA AND SOUTH KOREA SIGN MOU ON WORKPLACE HEALTH AND SAFETY The Ministry of Labor and the Korea Occupational Safety and Health Agency (KOSHA) on 15 May signed a memorandum of understanding on occupational safety and health cooperation. The memorandum was signed by the deputy labor minister and the chairman of the National Committee of Labor Safety and Hygiene, J. Batkhuyag, and South Korea`s vice minister of employment and labor, Jung Hyun-ok, among others. Over a decade has passed since Mongolia and Korea's labor ministries signed a cooperation agreement, and more than 110 Mongolian staff have participated in KOSHA-led occupational safety and hygiene training courses. Source: News.mn LAW ENFORCEMENT UNIVERSITY BOOSTS TIES WITH CHINESE INSTITUTION The Law Enforcement University of Mongolia and the People`s Public Security University of China signed a cooperation agreement that includes an initiative for a student exchange program during a visit this week. A delegation led by the vice president of the People's Public Security University of China, Jang Pei Wen, visited the University from 19 to 21 May. ―Signing a cooperation agreement is significant for the exchange of teachers of both universities for
- 17. experience sharing, theexchange of research, and for student exchanges,‖ said Law Enforcement University President R. Chingis, who is also a professor at the university as well as a police chief. ―I hope the joint program will be efficient in raising the level in organizing field exercises, combating transnational crimes and human trafficking,‖ he added. Source: News.mn RUSSIAN SERVICEMEN TO TAKE PART IN INTERNATIONAL MILITARY DRILLS IN MONGOLIA More than 65 units of military hardware belonging to troops of the Russian Eastern military district will take part in a active stage of a drill for liquidation of assumed "illegal armed formations" for the Selenga-2014 military exercise, the press service of the Eastern Military District said on 20 May Russia is planning to deliver to Mongolia 152-millimeter self-propelled artillery installations Akatsiya, multiple-rocket launch systems Grad, air defense self-propelled installations Shilka, and helicopters Mi-24 belonging to an Air Force base of the Eastern military district stationed in the Baikal region, the press service said. The Russian commanders are planning to reinforce a ground force component of the Russian troops sent to the exercises, employing more than 20 personnel armored carriers, seven T-72 tanks and several 120 millimeter mortar launchers Vasilyok. The deal comes from an agreement reached by Russia and Mongolia in the second round of consultations on the Selenga-2014 joint maneuvers. All the hardware will be delivered from Russia to Mongolia by a military train. The hardware will be unloaded at Bayan-Tumen railway station in Mongolia from where it will move to the area where a field camp of the joint group of troops will be stationed. The Russo-Mongolian exercises Selenga-2014 will be held on a test range in Choibalsan, Mongolia, in the third month of August. Around 500 Russian servicemen of a motor-rifle regiment, permanently stationed in Buryatia, will take part in the joint maneuvers with an overall number of around 1,000 participants. Source: Itar-Tass News MONGOLIAN KIDS IN KOREA GET THEIR OWN PLACE TO LEARN Located in Gwangjin District, eastern Seoul, the International Mongolia School is the first and only Mongolian school accredited by both the Korean and Mongolian governments. It offers primary and secondary education in grades one through nine for 85 Mongolian kids. Its curriculum is the same as for a school in Mongolia, and classes are taught in Mongolian, although students also take Korean- language classes seven times a week. A steady stream of migrants have left harsh conditions or limited opportunities in Mongolia to seek better jobs in Korea. The number of Mongolians living in Korea stood at 24,175 last year, a significant number considering that Mongolia‘s entire population is 2.9 million, according to the Ministry of Foreign Affairs. In 2006, the number of Mongolians living in Korea was 15,237, according to Statistics Korea. Korea is one of the biggest destinations for Mongolian migrant workers in the world. With the constant influx, Mongolians have created a so-called Mongol Town in Dongdaemun where they run restaurants and grocery stores along with other businesses for their compatriots. But for Lee and Yoo, the increasing number of Mongolian migrant workers meant there were more children without access to education or other public services, and that prompted the couple to start the charity to educate young Mongolians. But the couple still faces various challenges—in particular, a lack of funding. The school charges KRW 1 million (USD 975) a year for tuition, but the fees are far from sufficient. Because of its limited space, the principal has had to turn away Mongolian children and teenagers wishing to study. However, a glimmer of hope found its way to the couple when the Seoul city government decided to offer a new, bigger site for the school. The new building is scheduled to be completed by July, but the school is struggling to pay construction fees each month. ―We are relying on charity,‖ Lee said. ―For this month, I‘m not sure whether donations are enough to keep construction going. But I believe that we can manage to get through the financial troubles because we‘ve come far from small study sessions with eight students.‖
- 18. Source: Korea JoongangDaily TWO INNER MONGOLIAN EXILES DEPORTED TO CHINA Mongolia has repatriated two exiles from neighboring China‘s restive Inner Mongolia region after they planned to join public calls against the deportation of a fellow exile who is a prominent anti- China dissident, a U.S.-based rights group said Friday. Dalaibaatar Dovchin and Tulguur Norovrinchen, both of whom studied music in Mongolia, were sent across the border by train on Tuesday and have not been heard from since Wednesday, the New York-based Southern Mongolia Human Rights Information Center (SMHRIC) said. Dalaibaatar had a valid student visa and Tulguur had an asylum-seeker certificate from the U.N. refugee agency, but authorities gave no explanation for their deportation, the group said. The two were detained by police in Ulaanbaatar for two hours on 9 May while planning to attend a press conference calling on authorities not to repatriate anti-China activist Alhaa Norovtseren, who is also from Inner Mongolia, according to SMHRIC. Alhaa, an outspoken critic of Chinese policies in Inner Mongolia, has made public appeals to be allowed to stay in Mongolia after being notified last month that he must leave, threatening to self- immolate in protest if he is deported. The deportation underscores concerns among Inner Mongolians over Mongolia‘s ties with Beijing, which has been accused of blatant human rights abuses, activists say. Tulguur‘s wife Batzayaa Doshdondog told SMHRIC Wednesday she was going to China in search of her husband because she had no information about his or Dalaibaatar‘s status other than that they had been sent to the Chinese border city of Erenhot (in Chinese, Erlian). Ethnic Mongolians in Inner Mongolia have long complained that mining and desertification are destroying their traditional grazing lands, and that the government has forced them to settle in permanent dwellings in defiance of their herding traditions. Inner Mongolian communities around the globe are ―deeply troubled‖ by Mongolia‘s ―unusually close‖ relationship with China and violation of the rights of Inner Mongolian exiles, SMHRIC said. Source: Radio Free Asia MONGOLIAN COMPANIES LOSE THOUSANDS FROM INTERNET SCAMMERS Ten companies have fallen prey to scammers employing phishing schemes on unsuspecting personnel in May. Edmon Printing, Khurd, and BSB, among others, transferred large volumes of foreign currencies to fake accounts. Some of the transactions made amounted to EUR 84,000, USD 49,000, USD 12,000, USD 30,000, Yuan 113,000, and MNT 17 million. Scammers attained transfer account numbers and inter-banking accounts with emails posing as foreign partners with similar email addresses that Mongolian personnel would be familiar. Emails sent typically might request urgent funds for wire transfer or payment for services. Police have advised that Mongolian companies always call and verify with foreign partners for any such requests. Source: Undesnii Shuudan SEVEN PRICELESS HERITAGE STATUES WERE STOLEN FROM ERDENE ZUU MONASTERY Uvurkhangai Aimag police reported a robbery of priceless artifacts during the late evening of 19 May. Seven priceless statues of gods were stolen from the Erdene Zuu monastery in Kharkhorum Soum, one of Mongolia‘s oldest Buddhists monasteries. Among the stolen items were a golden statue of the Duynkhor god weighing in above 22 kilograms and a copper and golden statue of the Jugdernamjil god. Police announced a nationwide search for the burglars and warned against the purchase of the stolen artifacts. According to police spokesperson Major B. Battarkhuu, there is no estimated value for the items stolen. Authorities announced an award to anyone who could provide information connected with the crime.
- 19. Source: Udriin Sonin SHOWME THE MONEY! STRENGTHENING EITI IMPLEMENTATION IN MONGOLIA Mongolia is a leading Extractive Industry Transparency Initiative (EITI) implementer, but its full potential as a supplier of relevant and usable extractive information is yet to be realized. The number of companies participating in EITI—a global coalition of governments, companies and civil society working together to improve openness and accountable management of revenues from extractives—in Mongolia grew to 1,531 last year, more than any other country in the world. EITI Mongolia is transforming the EITI reporting process by creating an efficient, electronic system— "eReporting"—that will feed into a publicly accessible database. The new system being developed will integrate with software tools for visual presentation of data, free-to-use tools that are in the public domain and cadastral maps. Users of the information will be able to produce "mashups," overlaying extractives data with other datasets such as unemployment and water resources. A weakness of EITI in Mongolia (and in many implementing countries) is its sustainability—it is dependent on a World Bank grant, typically given for two years at a time. Adam Smith International has worked with the Mongolian Ministry of Mining and EITI Mongolia to develop a new sustainable institutional model and legal framework for EITI implementation that will see the creation of a Mongolian-led and Mongolian financed initiative. Additionally the EITI Mongolia Law, soon to be submitted to Parliament, specifies the roles and responsibilities of the many stakeholders involved. A third and currently missing ingredient that needs adding is benefits for companies. All companies need to recognize the utility of EITI in forming their social license to operate. For this to happen, EITI needs to play a role in informing dialogue between companies, mine-affected communities and local governments. Source: Adam Smith International RESEARCHER SEEKS ANSWERS ON ANCIENT MONGOLIAN HORSE RITUALS An American researcher will spend this summer in Mongolia studying how those who inhabited the region 3,000 years ago interacted with horses. University of New Mexico undergraduate William Taylor is interested in people from the region‘s ancient Deer Stone-Khirigsuur culture, who lived on the Mongolian steppes. Little is known about these ancient people, named after the elaborate stone obelisks carved with images of flying deer they left behind. It is not clear why, but people of this culture also ritually buried the heads of horses in groups around their stone monuments. With so few clues to the culture, anthropologists have to use every means they can imagine to try to learn more. Taylor hopes to learn if these horses were ridden, or used to pull chariots, and is seeking clues from the skulls of horses found in ritual burials. ―For the last year or so, I‘ve been doing a comparative project where I examine North American feral horses on the Navajo reservation, and on the east coast, where they have a famous population called the Chincoteague ponies,‖ he said. ―These are horses that we know have never been ridden or subjected to the stresses of human use.‖ Taylor has compared those horses with those he knows have been put to particular use, such as farm horses, or military horses. Using a three-dimensional scanner, Taylor has sought a quantitative signal he could use to distinguish between wild horses and ridden horses. Now, he has packed his portable 3D scanner and is traveling to Mongolia to examine horse skulls. He hopes comparing the scans he already has of horse skulls with those in Mongolian museums will yield some answers. Source: Horse Talk WHY ASEAN IS MONGOLIA‟S BEST CHANCE FOR A PROSPEROUS FUTURE Despite its great potential, the Mongolian economy has not developed as well as expected—a trend that can be reversed with sound regional integration. But finding the right economic partners is difficult; and the nation runs the risk of falling behind as an underdeveloped and isolated ―white spot‖ on East Asia‘s dynamically advancing economic integration map. Regional integration offers Mongolia the opportunity for a more prosperous future. But the country
- 20. has lagged inthis effort, which is surprising given its geographical location where bold integration initiatives have been launched, such as China‘s ―Silk Road Initiative,‖ and where economic alliances have been strengthened under Central Asia Regional Economic Cooperation (CAREC) and Shanghai Organization for Cooperation (SCO). ASEAN is the most successful regional integration effort in Asia and among developing countries and is planning to install a common market with the ASEAN Economic Community by 2015 for the free exchange of goods, services, investments, capital, and to a certain extent, labor. ASEAN has created an advanced financial integration scheme in form of a common surveillance mechanism and a comprehensive currency swap arrangement including a capacious reserves pool, the Chiang Mai Initiative Multilateralization, to function as a shield against liquidity shortage risks. All this has happened with the close participation of the PRC, Japan, and Korea under the ASEAN+3 scheme connecting the 10 ASEAN members in different economic, financial, and infrastructure dimensions to Asia‘s ―big three.‖ ASEAN+3 is on the way to building the biggest free trade area in the world. This powerful trade association could become the regional key organization for economic integration in East Asia and beyond. Despite many development obstacles, Mongolia has a chance for economic success. Apart from working on its domestic development deficits, Mongolia will only be able to realize this opportunity via a goal-oriented, regional economic integration with East Asia where the ASEAN+4 model is the only promising option. Sebastian Paust is a senior adviser to the managing board of Deutsche Gessellschaft fur International Zusammenarbeit (GIZ). He is a member of the ADBI advisory council. He has also served as a member of the GIZ managing board, and as a member of the Asian Development Bank executive board. Source: Economy Watch NEW MONGOLIAN LAWS The following amendments and addendum to laws were published in the latest weekly Government bulletin. Unless otherwise decided by Parliament, they will take effect ten (10) days after publication. Date Laws 16.05.2014 Amendments to Law on Criminal Procedure; Amendments to Law on Settlement of Civil Case at Court; Amendments to Law on Settlement of Administrative Case; Addendum to Law on Court of Mongolia. Please visit BCM's website, Legislative Working Group, for a summary of Mongolian laws. BCM members who wish to access complete versions of the laws and regulations in Mongolian language are welcome to email the BCM office: info@bcmongolia.org. ANNOUNCEMENTS MONGOLIA BUSINESS SUMMIT 2014, JUNE 19-21, ULAANBAATAR The non-government organization Mongolia Economic Forum will organize the Mongolia Business Summit to be held from 19 to 21 June in Ulaanbaatar. The event is receiving support from the Office of the President to provide information on the foreign investment environment for various economic sectors in Mongolia. Also to be discussed will be private-sector projects and Public-Private-Partnership projects in mining, infrastructure, processing, agriculture, wool and cashmere, food and the production of building materials. The three-day deal-driven event will serve as an excellent platform for participants to interact
- 21. directly with governmentofficials, international investors, Mongolia's leading domestic companies, as well as deliver promising business opportunities. During the Summit, optional tours including visits to mine sites, cashmere factory, agricultural, food and processing facilities and cultural destinations, will be offered. Register at http://meforum.mn/mongolia-business-summit-2014. ___________________________________________ “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 WORKING GROUP NEWS The BCM expanded Legislative Working Group (LWG) met on Tuesday May 20, with 42 members attending at Corporate Hotel meeting room. This was the third expanded WG meeting on the draft Amendments to the Minerals Law. The 2 ½ hour session included BCM members from mining companies, embassies and the MNMA. Special guests were 5 members of Parliament and others from the Mining Ministry, Geological Society and Export Society. LWG Co-chair, James Liotta, Mahoney Liotta, moderated the session. The following 11 presentations were made: - A healthy Private Sector Driven Industry (1997 and 2006 Minerals Law / Amendments / what to look for. By Doug McGay – longtime resident in the Minerals and Petroleum industry; - Investor views and concerns about making investments in Mongolia and its mining sector. By Randolph Koppa – Vice Chairman, BCM and President, TDB; - A view from the Mining Majors by Sunjidmaa Jamba from Peabody Energy; - A supply side view by Stephen Potter, Wagner Asia; - Tax Issues impacting the Minerals Industry by D. Onchinsuren – Co-chair BCM Tax Working Group and Deloitte Onch Audit; - Use of MSE for State Privatizations by Nick Cousyn – Co-chair, BCM Capital Markets Working Group and BDSec; - Views from within the Industry by N. Algaa – Executive Director, MNMA; - Transparency and Public Comment by David Wyche – Economic/Commercial Section Chief, Embassy of the United States of America - International Agreements that attract bi-lateral investment, and views on the State ownership of assets by Maxim Berdichevsky – Counselor & Senior Trade Commissioner, Embassy of Canada - Some specific thoughts on the Amendments by James Liotta – Co-chair, BCM LWG and MahoneyLiotta Law Firm; Bayar Budragchaa - Co-chair, BCM LWG and ELC Law Firm. As MP Garamgaibaatar (Chair of the Standing Committee on Economic Affairs and Head of the Parliamentary Working Group on the Draft Amendments to the Minerals Law) commented at the meeting's conclusion - "We should not really change general structure and core contents of the draft Amendments." Also MP Garamgaibaatar welcomed BCM sending any additional comments directly to his Working Group. ___________________________________________ The BCM Tax Working Group met Tuesday, May 20, with 12 members attending. Onch D. - Co-chair, BCM‘s Tax WG and Deloitte Onch a moderated the session. Attending were representatives from the following BCM member entities - Deloite Onch, PwC,
- 22. Ernst&Young, KPMG Tax,OT, Terra Energy, Petro Matad, Mahoney Liotta, TMZ and BCM. New members: Amarbayasgalan and Tuvshinbayar from Terra Energy. Meeting agenda: 1. Overview - B. Byambasaikhan, Secretariat, 100 Day Revitalization Program; Chairman, BCM 2. Initial new tax policy thoughts from WG members. BCM Tax Working Group will make some recommendation on Mongolian Tax Policy to the government. If you have any comments on Tax Policy, please send us your recommendations with real fact and Tax impact on the commercial bill before 26th of May. Please contact T.Erdenetsetseg (Working Group Coordinator) at: E-mail:erka@bcmongolia.org. „BCM IN THE UNIVERSITY CLASSROOM‟ NEWS Business Council of Mongolia (BCM) has been progressing with its ‗BCM in the University Classroom‘ series since March 2012. Led by BCM‘s Education Working Group, the program provides lectures at universities to help inspire students and give them direction for their future careers. The series has grown to include an average of 10 lectures per academic year. Now 1,544 students and teachers have participated to BCM in the University Classroom Project. Thank you to all who participated in BCM in the University classroom project. We are now collecting specific lecture topics for the next year academic year until 1 of June 2015. University of the Humanities joined our BCM in the University Classroom project in May. So BCM‘s project has expanded to 4 of Mongolia‘s biggest Universities -- National University of Mongolia, Institute of Finance and Economics, Mongolian National University and University of the Humanities -- with over 40.000 students collectively. If you like to share your experience on some specific topic, you can discuss with us for the next school term. Please contact: erka@bcmongolia.org BCM WEBSITES PRESENTATIONS (in Mongolian): The following statistics and reports posted on Presentations section in Mongolian: http://bcmongolia.org/mn/илтгэлүүд • Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 4 сарын байдлаар, Үндэсний статистикийн хороо • Мандал Женерал Даатгал тайлан, 2014 оны 5 сар • Сант марал сангаас гаргасан УЛС ТӨРИЙН БАРОМЕТР №13(47), 2014 ОН 3 САР • Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 3 сарын байдлаар, Үндэсний статистикийн хороо • ―Anti-Corruption legislation and State Policy‖ (Mongolian) by D. Munkhjargal, Prevention and Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption (IAAC) Mongolia at the ―ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training seminar, Mar 06, 2014 The presentation below was made at Mongolian National University as part of the ―BCM in the University Classroom series‖ on February 27, 2014: • Ser-Od Inchinkhorloo, Vice Director, BCM, ―Investment environment: Past, Present, Future‖ (Mongolian)
- 23. The presentation belowis from the February 24 BCM monthly meeting: • О. Зоригт, Гүйцэтгэх захирал, Майн Инфо "Майн Инфо ХХК-ний товч танилцуулга", МБЗ-ийн 2 сарын 24-ний сарын хурал Dr. Khashchuluun, Executive Director, National Council of Private Sector Support, ―Taxation Impact Research‖ to BCM Tax Working Group, February 19, 2014 • ТАТВАРЫН БАГЦ ХУУЛИЙН ӨӨРЧЛӨЛТ: ХУВИЙН ХЭВШИЛД, Ч. Хашчулуун, Хувийн хэвшлийг дэмжих үндэсний зөвлөлийн гүйцэтгэх захирал 2014.02.19 20 Presentations from Coal Mongolia, 20-21 February, 2014: • Уул уурхайн сайд Д. Ганхуяг, Төрөөс Эрдэс Баялгийн Салбарт Баримтлах Бодлого, Нүүрсний Салбарыг Хөгжүүлэх Стратегийн Чиг Хандлага, Коал Монголиа 2014, 2 сарын 20-21. • Сангийн сайд Ч.Улаан, МОНГОЛ УЛСЫН САНГИЙН ЯАМ, Улсын төсөвт нүүрсний салбарын үзүүлэх нөлөө, татварын орчин шинэчлэл, Коал Монголиа 2014, 2 сарын 20-21. • Монгол орны нүүрсний салбар дахь байгаль орчны асуудал, Байгаль орчин, ногоон хөгжлийн яам, ХБОБНГ-ын дарга Д.Энхбат Коал Монголиа 2014, 2 сарын 20-21. • НҮҮРСНИЙ АЖ ҮЙЛДВЭРЛЭЛИЙГ ХӨГЖҮҮЛЭХ ТЭЭВЭР ЛОЖИСТИКИЙН АСУУДЛУУД: Л.ПҮРЭВБААТАР ТӨМӨР ЗАМЫН ИНЖЕНЕРҮҮДИЙН ХОЛБООНЫ ЕРӨНХИЙЛӨГЧ, ―УУЛ УУРХАЙН БҮТЭЭГДЭХҮҮНИЙ ТЭЭВЭРЛЭЛТ‖ Коал Монголиа 2014, 2 сарын 20-21. • МОНГОЛ УЛСЫН НҮҮРСНИЙ САЛБАР ДАХЬ ХӨРӨНГӨ ОРУУЛАЛТ, ХУДАЛДААНЫ ТААТАЙ ОРЧИН БҮРДҮҮЛЭХ НЬ,ЭДИЙН ЗАСГИЙН ХӨГЖЛИЙН ДЭД САЙД О.ЧУЛУУНБАТ Коал Монголиа 2014, 2 сарын 20-21. • Уул уурхайн дэд сайд О. Эрдэнэбулган, Олон улсын нүүрсний зах зээл дэх Монгол улсын өрсөлдөх чадварыг нэмэгдүүлэхэд төрийн оролцоо Коал Монголиа 2014, 2 сарын 20-21. • Ж. Батцэнгэл, Монголын Уул Уурхайн Корпорацийн дарга, МОНГОЛЫН НҮҮРСНИЙ САЛБАРЫН ӨНӨӨГИЙН НӨХЦӨЛ БАЙДАЛ, Тулгарч буй бэрхшээл ба шийдэх боломж Коал Монголиа 2014, 2 сарын 20-21. • Аршад Саеид, Пийбоди Энержи компанийн Монгол ба Энэтхэг улсыг хариуцсан Ерөнхийлөгч, Дэлхийн нүүрсний зах зээл, Монгол улсад үзүүлэх нөлөөлөл, Коал Монголиа 2014, 2 сарын 20- 21. • МОЗА гүйцэтгэх захирал Ч. Хашчулуун, Занарын дэлхийн хувьсгал ба Монголын эдийн засагт үр нөлөө, Коал Монголиа 2014, 2 сарын 20-21. • Багануур Энержи Корпорэйшн ХХК, Нүүрс хийжүүлэх, шингэрүүлэх цогцолбор парк төслийн товч танилцуулга, Коал Монголиа 2014, 2 сарын 20-21. • АДУУНЧУЛУУНЫ ЦАХИЛГААН СТАНЦ, БЕНЗИНИЙ ҮЙЛДВЭРИЙН ТӨСӨЛ, Ж.Золжаргал – Төслийн удирдагч, Коал Монголиа 2014, 2 сарын 20-21. • Ц.Ганцог, Жени Ойл Шэйл Монголиа ХХК Гүйцэтгэх захирал, ШАТДАГ ЗАНАРЫГ АШИГЛАХ БОЛОМЖ, Коал Монголиа 2014, 2 сарын 20-21. • Фэн Вэй эрчим хүчний зөвлөгөө өгөх компани, 2014 оны хятадын нүүрсний зах зээлийн шинжилгээ болон үнийн таамаглал, Коал Монголиа 2014, 2 сарын 20-21. • Я. Батсуурь, Эрдэнэс Таван Толгой ХК, Танилцуулга, Коал Монголиа 2014, 2 сарын 20-21. • Хишиг Арвин Индустриал ХХК, ҮНДЭСНИЙ КОМПАНИУДЫН ТӨЛӨВШИЛ, ӨРСӨЛДӨХ ЧАДВАР, Коал Монголиа 2014, 2 сарын 20-21. • Виртген Групп, МОНГОЛЫН НҮҮРСНИЙ ЗАХ ЗЭЭЛ ДЭХ WIRTGEN БРЭНДИЙН SURFACE MINER БУЮУ АНГИЛАН ОЛБОРЛОГЧИЙН ТЕХНОЛОГИ БОЛОН АШИГЛАХ БОЛОМЖУУД, Коал Монголиа 2014, 2 сарын 20-21. • ―Тавантолгой‖ ХК-ийн Гүйцэтгэх захирал Р.Сэддорж, Дэвшилтэт технологи ба инновацийг нутагшуулах нь, Коал Монголиа 2014, 2 сарын 20-21. • ―УУЛ УУРХАЙН ДЭД БҮТЦИЙН ХӨРӨНГӨ ОРУУЛАЛТЫГ ДЭМЖИХ ТӨСӨЛ‖ Төслийн Зохицуулагч Б.Энхбаатар,Коал Монголиа 2014, 2 сарын 20-21. • ДЭД САЙД Д.ДОРЖПҮРЭВ, Эрчим Хүчний Яам, 2014 ОНД ЭРЧИМ ХҮЧНИЙ САЛБАРЫН ХИЙГДЭХЭЭР ТӨЛӨВЛӨСӨН АЖЛУУД БОЛОН ТӨРӨӨС БАРИМТАЛЖ БУЙ БОДЛОГО, Коал Монголиа 2014, 2 сарын 20-21.
- 24. • Ай ЭмСи Монтан Компани, Нүүрс баяжуулах талаар, Коал Монголиа 2014, 2 сарын 20-21. The below presentation is from the January 27 BCM monthly meeting: • ОЙ ХАМГААЛАЛД СУУРИЛСАН БИЗНЕС, Цэсэдийн БАНЗРАГЧ /Ph.D/, БОНЯ- ны ОЙ ХАМГААЛАЛ, ОЙЖУУЛАЛТЫГ ЗОХИЦУУЛАХ ХЭЛТЭСИЙН ДАРГА, МБЗ-ийн 1 сарын 27-ны гишүүдийн сарын хурал дээр ___________________________________________ ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN BUSINESS NEWS‟, „PHOTO GALLERY‟ • China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital Securities Limited 4 presentations from 3rd Mongolia Trade and Commodity Finance Conference, May 13, Blue Sky-UB: • Mongolia – New Investment Laws, Stephen Tricks, Consultant, Clyde & Co; • Mongolia Investment Law: select issues, B. Enkhbat, Partner, MDS & KhanLex Law Firm; • Mongolia‘s promise of mineral wealth, Arnout van Heukelem, Head of Metals & Mining Asia ING; • Utilising international partnerships to extend access to trade finance, Marco Nindl, Trade Finance Banker, EBRD. 16 Presentations at 2014 Mongolia Investment Summit London, April 30-May 1: • Assessing developments in current economic policy and how the government will manage and improve existing regulations, Ochirbat Chuluunbat, Vice Minister for Economic Development, Ministry of Economic Development, Mongolia • How should investors interpret the shift in government policy and the introduction of the new investment law?, Andrew Danenza, Founder and Managing Partner, Melbury Capital, UK • Examining legal developments and what this means for the stimulation of FDI, Chris Melville, Partner, Hogan Lovells, Mongolia • Examining Mongolian mining policy and how it could benefit the production and export of mineral resources, Rentsendoo Jigjid, State Secretary, Ministry of Mining, Mongolia • Analyzing the Mongolian coal market: how could mining companies best respond to the operating environment and fluctuations in demand?, Battsengel Gotov, Executive Director and CEO, Mongolian Mining Corporation, Mongolia • Examining how Mongolian banks and financial institutions are dealing with the challenges and opportunities of a fast growing economy, Norihiko Kato, CEO, Khan Bank, Mongolia • Spotlight presentations: a chance to showcase your services and projects to a wide investor audience, Leading bank of Mongolia: Golomt Bank - Munkhbat Davaatseren CEO, Golomt Securities LLC, Mongolia • To what extent has Mongolia retained its previously high levels of investment appeal? Alisher Ali Chairman, Eurasia Capital, Mongolia • How can Mongolia attract private investment in power development? Philip Lam, Senior Banker, Power and Energy Utilities, EBRD, UK • Examining the potential for successful renewable energy projects in Mongolia and the benefits cleaner energy will bring for foreign investors, Bolor J. Artan, Deputy CEO, Newcom Group, Mongolia • Spotlight presentations: a chance to showcase your services and projects to a wide investor audience, Michael Jonas Director, Genie Mongolia and Executive Vice President, Genie Oil and Gas, Mongolia • Assessing the Mongolian Stocks Exchange‘s cooperation with the London Stock Exchange and how this can benefit investors, Jon Edwards Deputy Head of Primary Markets- Emerging Markets, London Stock Exchange, UK • Spotlight presentations: a chance to showcase your services and projects to a wide investor audience, Boldbaatar Lamjav, Board Member, Nuudelchin, Mongolia
- 25. • Mining infrastructurecase study: examining the development of infrastructure to support Erdenes Tavan Tolgoi and how a continuation will bring, Badarch Enkhbat, CFO, Erdenes Tavan Tolgoi, Mongolia • Developing strategic mineral assets and infrastructure in Mongolia: Examining the timescales and how obstacles can be overcome, Sainbuyan Odon CEO, Erdenes MGL LLC, Mongolia • How could you ensure an effective IPO and the raising of the necessary capital for your business?, Ayuna Nechaeva, Business Development Manager – Russia, CIS and Mongolia, London Stock Exchange, UK. ___________________________________________ •―BCM‘s Green Office Initiative: Starting from waste management and recycling‖, A. Bayarmaa, Head of BCM Environmental Working Group/Senior Carbon Finance Specialist, Clean Energy LLC, at the BCM monthly meeting April 28, 2014 •―Socio-Political Situation in Spring 2014‖, L. Sumati, Director, Sant Maral Foundation, at the BCM monthly meeting April 28, 2014 • ―Public-Private Partnership in Mongolia: Now and Future Prospects‖, E. Enerelt, Investment Officer, ADB and Ts. Batbayar, Director of Concession Division, Ministry of Economic Development at BCM monthly meeting, March 24, 2014; • ―Areva in Mongolia: 15 years of presence – New perspectives in uranium mining‖, Thierry Plaisant, General Director, Areva Mongol at BCM monthly meeting, March 24, 2014; • ―Impact of Corruption in Mongolia‖ by L. Sumati, Director of Sant Maral Foundation at the ―ANTI- CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training seminar, Mar 06, 2014; • ―Anglo American Business Integrity policy and its application within the Business Globally‖ , Dr. Graeme Hancock, President and Chief Representative Mongolia of Anglo American at the ―ANTI- CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training seminar, Mar 06, 2014; • Change of the package of taxation laws: private sector, Dr. Ch. Khashchuluun, Executive Director, National Council for Private Sector Support, at the BCM`s Tax working group's meeting Feb 19, 2014; • Economic and Capital Markets Update, Nick Cousyn, Chief Operating Officer, BDSec at the BCM Monthly Meeting, Feb 24, 2014 Mongolia reports: http://bcmongolia.org/en/mongolia-reports • Social and economic situation of Mongolia, as of April 2014, by National Statistical Office • Mongolia: Economy outlook 2014, by Asian Development Bank; • Selected Macroeconomic Indicators as of Jan 2014, by International Monetary Fund; • Monthly statistical bulletin, March, 2014 , by Mongol Bank; • Social and economic situation of Mongolia as of March 2014 by National Statistical Office of Mongolia (available in Mongolian language - Монгол улсын нийгэм эдийн засгийн байдал 2014 оны 3 сарын байдлаар, Үндэсний статистикийн хороо) • Polit Barometer, March 2014, by Sant Maral Foundation. Interview Section: http://bcmongolia.org/en/interviews • Talking to United World, the Executive Director of the Mongolian Drilling Association (MDA) Professor J. Tseveenjav. Source: http://www.worldfolio.co.uk/ • Jim Dwyer, Executive Director, BCM – ―Business need more business‖; • Damshnamjil Tsogtbaatar, Chairman of the SPC: ―Privatizing Mongolia‖; • Jan Hansen, Economist, ADB: ―The depreciation should help to increase the competitiveness and to develop the non-mining industrial sector‖; • Jim Dwyer, Executive Director, BCM: ―Minerals Policy‖; • D. Bayasgalan, Director of Golomt Bank: ―Golomt has no problem‖; • From the Oxford Business Group, Mongolia Reports 2013 book;
- 26. • B. Byambasaikhan,Chairman, BCM: ―Talk is cheap‖; • President Ts. Elbegdorj: ―Diversifying for growth‖; • Jim Dwyer, Executive Director, BCM: ―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‖. BCM's English website includes the ―Mongolia Business News‖ section. • 2014 Article IV staff report for Mongolia by International Monetary Fund; • BCM comments on draft Amendments to the Minerals Law made to Mr. D.Gankhuyag, the Minister of Mining, February, 2014; • BCM 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 The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home page for a consolidated account of the week‘s events. SOCIAL NETWORK WITH BCM The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks. Keep up to date on the latest business deals in Mongolia and how the climate for investment is improving each day with BCM. Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the latest announcements and comment on events carried in the NewsWire with the community. Hear breaking news and announcements as they happen when you follow BCM on Twitter at https://twitter.com/bcmongolia. The bulk of the content on BCM‘s new LinkedIn page is Mongolian language to better cater to BCM's Mongolian-speaking audience and members. Please click on the below link to follow us on our new LinkedIn page. http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo Social stats: BCM now has 5,527 fans on our Facebook fans page, 585 connections on LinkedIn network, and 1,067 followers on Twitter. Of course for news information, interviews, event photos, VIDEOS and announcements regarding our organization, visit the official BCM website at http://bcmongolia.org/en/
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- 28. INFLATION Year 2006 6.0%[source: National Statistical Office of Mongolia (NSOM)] Year 2007 *15.1% [source: NSOM] Year 2008 *22.1% [source: NSOM] Year 2009 *4.2% [source: NSOM] Year 2010 *13.0% [source: NSOM] Year 2011 *10.2% [source: NSOM] Year 2012 *14.0% [source: NSOM] Year 2013 *12.5% [source: NSOM] April 30, 2014 *12.3% [source: NSOM] *Year-over-year (y-o-y), nationwide Note: 12.0% y-o-y, Ulaanbaatar city, April 30, 2014 CENTRAL BANK POLICY LOAN RATE December 31, 2008 9.75% [source: IMF] March 11, 2009 14.00% [source: IMF] May 12, 2009 12.75% [source: IMF] June 12, 2009 11.50% [source: IMF] September 30, 2009 10.00% [source: IMF] May 12, 2010 11.00% [source: IMF] April 28, 2011 11.50% [source: IMF] August 25, 2011 11.75% [source: IMF] October 25, 2011 12.25% [source: IMF] March 19, 2012 12.75% [source: Mongol Bank] April 18, 2012 13.25% [source: Mongol Bank] January 25, 2013 12.50% [source: Mongol Bank] April 8, 2013 11.50% [source: Mongol Bank] June 25, 2013 10.50% [source: Mongol Bank] CURRENCY RATES – 23 MAY 2014 Currency Name Currency Rate US Dollar USD 1,824.55 Euro EUR 2,502.55 Japanese yen JPY 18.07 British pound GBP 3,075.37 Hong Kong dollar HKD 235.34 Chinese Yuan CNY 292.63 Russian Ruble RUB 53.22 South Korean won KRW 1.78 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.