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![ECONOMY
MONGOL BANK FOREX AUCTION
The Bank of Mongolia refused bid offers for U.S. dollars and Chinese yuan from local commercial
banks, but did engage in swap agreements.
The Central Bank received offers for an equivalent of USD 92 million for tugrugs and USD 4 million
for U.S. dollars, from local commercial banks. The Bank of Mongolia accepted the swap agreement
offer for an equivalent of USD 32 million for tugrugs.
Source: Montsame
MONGOLIA PAYS $60 MILLION FOR JBIC GUARANTEE ON SAMURAI BOND
Mongolia paid USD 60 million to the Japanese Bank for International Cooperation (JBIC) for the 90
percent guarantee on its yen-denominated bond offering in 2014, said a member of the prime
minister's staff. ―Annual interest of the Samurai bond is 1.5 percent and we have to pay annual
guarantee fee of 1.9 percent, which means we have to pay 3.4 percent in total, annually‖, said D.
Batmunkh, the economic policy advisor.
Source: Undesnii Shuudan
POWER PLANT TO BE BUILT IN GOBI REGION
A 600-megawatt coal-fired power plant is planned for construction next to the Tevsh coal mine in
Dundgobi Aimag.
The mine mouth plant in Saintsagaan Soum, Dundgobi is expected to be the biggest energy producer
in the country. Funding of USD 35 million is planned for development and construction. Contractor
Mogul Power, a subsidiary of a US-based Mogul Energy International, warned that costs could exceed
that estimate, however.
The plant is expected to recover construction costs in 15 years after commissioning. Construction is
expected to launch this year, as soon as financing agreements are in place.
Source: Montsame
MONGOLIA SEES DOWNSTREAM COAL, VALUE-ADDED GOODS AT SAINSHAND COMPLEX
The Industry and Agriculture Ministry reported its findings from the feasibility for the Sainshand
Industrial Complex.
The industrial park will include a coal chemicals plant as well as a steel and metallurgical factory
for the production of value-added goods. The eventual hope is the park will help create more
diversity in the economy.
Growth of the global population is expected to contribute to global steel consumption for a
projected increase of between 0.5 and 2 times from present levels by 2050. By 2030, global
consumption is predicted to grow by one billion tons, with demand from China expected to increase
250 million tons within that same timeframe.
National production of iron ore is also predicted to grow in upcoming years, according to a study
[Source provides no citation of study -ed]. The Tomortein deposit has a proven reserve of 230
million tons, compared with 180 million tons at the Bayangol deposit and 229 million tons at
Kharanga.
Source: Montsame
MONGOLIA EXPLORES OIL SHALE FOR ENERGY SECURITY
Extensive oil shale reserves could reduce Mongolia‘s dependence on imported energy, but there is
some uncertainty over whether its deposits are commercially viable.
To reduce these costs and dependency on foreign sources of oil, Mongolia has been looking to
bridge its energy deficit with non-conventional means. One of the options is oil shale, a
sedimentary rock from which oil can be extracted. In early December, the Mining Ministry issued a
statement announcing initial surveys had identified oil shale reserves of more than 700 billion tons.
The total of reserves given by the ministry is somewhat less than the 800 billion tons that had been](https://image.slidesharecdn.com/bcmnewswireissue309-160215032227/85/24-01-2014-NEWSWIRE-Issue-309-8-320.jpg)
![unchanged from the November forecast, and after expansion of 2 percent in 2013. The EBRD‘s
latest Regional Economic Prospects report said emerging economies were still suffering from capital
outflows that were likely to persist in light of the expected gradual tightening of U.S. monetary
policy. For the first time since 2011 net private capital flows turned negative for the EBRD region as
a whole in the third quarter.
―For sustained recovery to take hold, countries in the region need to resume structural reforms and
tackle the persistent legacies of the crisis, including high rates of non-performing loans and long-
term unemployment,‖ the report said.
Looking ahead, the report expected only a gradual improvement in external factors affecting the
transition region, with a slow and uneven recovery in the euro zone and a general deceleration in
larger emerging markets partly offset by the stronger outlook in the United States and Japan. It
said growth in countries most closely integrated with the Euro area would remain modest even as
the negative impact of the euro zone crisis diminished. In addition to uncertainties linked to the
euro zone, other risks to the outlook include the possibility of a faster deceleration in large
emerging markets, especially China.
Growth in Central and Northeast Asia will remain relatively strong owing to a number of large
natural resource projects in Kazakhstan, Mongolia and Turkmenistan. Growth is expected to
decelerate somewhat in the Kyrgyz Republic and Tajikistan on account of weaker demand and lower
expected growth of remittances from Russia.
Source: European Bank for Reconstruction and Development
CHINA'S ECONOMIC GROWTH SLOWS TO 7.7%
China's economic growth slowed slightly in the fourth quarter, complicating the challenge for the
country's leaders as they seek to reshape the world's second-largest economy.
Many economists expect the Chinese economy to slow further in the coming year as China's leaders
prepare to start introducing reform measures meant to remake the Chinese economy so it depends
less on investment and trade and more on domestic spending and the expansion in the service
industries. The nation's economy grew 7.7 percent in the fourth quarter from a year ago, slower
than the 7.8 percent it posted in the third quarter, according to data released Monday by China's
National Bureau of Statistics. For the year it also posted 7.7 percent growth, matching the pace of
2012.
"There was steady economic progress [last year] and this was no small achievement," the bureau
said in a statement. But it added that the Chinese economy still faces imbalances, while
"fundamentals of the economic recovery are still not stable."
The results come after Chinese leaders unveiled a raft of reform goals in November intended to
steer the economy away from its traditional reliance on exports and big government-funded
infrastructure projects. While economists say such rebalancing could strengthen the Chinese
economy over the longer term, it could subtract from growth over the short term. Closing aging
industrial plants, for instance, quickly subtracts from growth, while building new service firms will
only slowly add to economic output.
In the coming year, China should be able to count on improved exports if the U.S. and European
economies improve. That said, the country has a number of vulnerabilities, including property
markets that some economists describe as bubbles and credit growth over the past five years that
matches rates in the United States, Europe, South Korea and Japan that ended in deep recession in
those countries. Few mainstream economists predict a crisis in the coming year. But any
government effort to slow the increase in credit or property prices is bound to be a drag on growth.
That's because such measures usually involve either higher taxes or interest rates, both of which
inhibit investment and consumption.
Source: Wall Street Journal
NEW FLIGHTS, NEW BUSINESS
Air transport could have an important role in providing a direct connection between landlocked
Mongolia and the rest of the world, expanding foreign trade and developing Mongolia‘s economy.](https://image.slidesharecdn.com/bcmnewswireissue309-160215032227/85/24-01-2014-NEWSWIRE-Issue-309-14-320.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]
December 31, 2013 *12.5% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 12.3% y-o-y, Ulaanbaatar city, December 31, 2013
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]](https://image.slidesharecdn.com/bcmnewswireissue309-160215032227/85/24-01-2014-NEWSWIRE-Issue-309-24-320.jpg)
Uploaded byThe Business Council of Mongolia
24.01.2014, NEWSWIRE, Issue 309
The document summarizes news from the Business Council of Mongolia newsletter. It highlights several business and economic stories including Turquoise Hill posting 2013 production numbers and guidance for 2014, FeOre selling its iron ore stake for $56.7 million, Merex planning an IPO of 40% of its shares on the Mongolian stock exchange, Xanadu Mines completing the acquisition of the Oyut Ulaan project, and MIAT planning an IPO with assistance from an international investment firm. It also previews the agenda for the upcoming BCM monthly meeting.
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24.01.2014, NEWSWIRE, Issue 309
- 1. BUSINESS COUNCIL ofMONGOLIA NewsWire www.bcmongolia.org info@bcmongolia.org Issue 309 – January 24, 2014 NEWS HIGHLIGHTS: Business Turquoise Hill posts 2013 production numbers and 2014 guidance; FeOre sells iron ore stake for USD 56.7 million; Merex to IPO 40% of shares on MSE; Xanadu Mines completes Oyut Ulaan acquisition; MIAT plans IPO; Mayer Brown advises ING on $20m private placement for MIAT; Erdene intersects high-grade gold, base metals zones at Altan Nar; Khan Bank opens first mobile branch equipped with tellers in Mongolia; Mongolian first vehicle manufacturer opens; MSE appoints acting CEO; Residents select construction companies for UB City project; British firm gets involved in Mongolia's 'cold war'; The power of Facebook campaigns: the Mongolia test; Mongolia's Katya Zol to present at NY Fashion Week; UB to host Asian Fashion Week 2014 in August; Undur Tolgoi announces name change; Rio Tinto signals start of turnaround. Economy Mongol Bank forex auction; Mongolia pays $60 million for JBIC guarantee on Samurai bond; Power plant to be built in Gobi region; Mongolia sees downstream coal, value-added goods at Sainshand complex; Mongolia explores oil shale for energy security; Mongolia seeks foreign investment for fluorspar; State-owned assets planned for privatization; Ministry of Roads and Transportation reveals plans for 2014; Youth Labor Center opened a website; Bus union to raise ticket price MNT 100; UB apartment prices average MNT 2.2m per square meter in December; Accidental deaths at construction sites cut in half in 2013; Lottery system to allot free land to Mongolian citizens; Mongolian exports fall 2.6% in 2013 as coal shipments decline; Ger districts have the right stoves, but the wrong coal; Maternal nurses say congenital defects on the rise due to air pollution; Mongolian Institute of CPAs begins ACCA training; Medical doctors and obstetricians to be trained in Japan; Embassy in London explains closure of HSBC account; Iron ore tumbles as China port stocks jump; Recovery remains slow in EBRD regions; China's economic growth slows to 7.7%; New flights, new business.
- 2. Politics Mongolian presidentsets new reform goals; Minerals Law amendments may lead to lifting of license ban; Bill to increase VAT threshold to MNT 50 million will be submitted; Japan, Mongolia eye security cooperation to promote peace in Asia; Chinese leaders meet Mongolian foreign minister; Foreign minister visits Uyghur Autonomous Region; Environmental activist Munkhbayar receives 21-year sentence; Mongolia's "godfather of corruption" plots return; The clown isn't Ronald in Mongolian story on McDonald's. 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 Mongolian National Broadcasting Oxford Business Group BCM MONTHLY MEETING ANNOUNCEMENT BCM‘s monthly meeting for members will be on Monday, January 27, 2014 at 5PM at the KEMPINSKI HOTEL KHAN PALACE, 2nd floor, Altai Ballroom. 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 - Richard Kobayashi, CEO, Standard Investment LLC - "The year 2014 starts with new IPO on the Mongolian Stock Exchange"
- 3. - Ts. Amraa,Deputy Director, Petroleum Authority of Mongolia – ―Oil & Oil Shale Mongolia 2014‖ Conference - Ts. Banzragch, Head of Forest Protection and Forestry Management Division, Ministry of Environment and Green Development - "Forest protection and business opportunities" - D. Irmuun, Director of Division for Promotion and Consultancy Services, Invest Mongolia Agency - "IMA Consultancy Services for Investors and Account Manager's role" New Members: 1. ABB (Mongolia) Representative Office - global leader in power and automation technologies. 2. AUM Alt - owns the license for extracting gold for 829 hectare field in Ult in the territory of Uyanga soum of Uvurhangai province. 3. IUE Group - implement number of projects such as Morin Khuur Tower soon to be the tallest skyscraper in Mongolia, as well as a master plan for the Yarmag Township Project, the largest residential project in Ulaanbaatar city. A networking reception will be held for all attendees immediately following the business portion of the meeting in "Tenger" Restaurant, 1st floor of Kempinski Hotel. BUSINESS TURQUOISE HILL POSTS 2013 PRODUCTION NUMBERS AND 2014 GUIDANCE Turquoise Hill Resources Ltd. on 16 January announced fourth quarter results for 2013 and full year operational results for the same year. Turquoise Hill produced 77 kilotons of copper in concentrates, 157 kilo-ounces of gold in concentrate and 489 kilo-ounces of silver in concentrate. Daily rates for shipments of concentrate are not yet aligned with production rates as two of Oyu Tolgoi's receiving smelters have experienced technical difficulties and consistent customer delivery schedules have not yet been embedded. As such some sales volumes have been deferred into the second and third quarters of 2014 and inventories are expected to build during the first. The Oyu Tolgoi LLC, 66 percent stake holder, also guided that in 2014 the copper and mine would produce 150 to 175 kilotons of copper in concentrates, and 700 to 750 kilo-ounces of gold in concentrates. Oyu Tolgoi is expected to return to more normal inventory levels by year's end 2014. ―As a result of 2013 production being sold in 2014 and of the bullish guidance on gold, our sales volumes forecast for 2014 now appear to be pessimistic and need to be revised up,‖ said the Source. ―We believe that this is a reflection of the fact that Oyu Tolgoi only started operations back in 2013 and goes through a normal ramping up process and are therefore not really alarmed by 2013 sales miss. Also, the fact that sales slipped from 2013 to 2014 but that production forecast for this year are solid lead us to believe that, all in all, there will be no significant impact on our valuation.‖ Source: Visor Capital FEORE SELLS IRON ORE STAKE FOR USD 56.7 MILLION FeOre Ltd. has ended a trading halt with the announcement of a deal with China Energy (Cayman) Limited, an ―independent private‖ company, for the sale of its interest in Topone Star Investments Ltd., which indirectly holds 80 percent interest in its Ereeny and Dartsagt iron ore projects located in Mongolia. The deal includes USD 51.03 million cash consideration and an additional deferred payment of USD 5.67 million upon when the buyer successfully lists the asset on the Hong Kong Stock Exchange. FeOre intends to use the proceeds and cash balances (approximately USD 20.1 million) to redeem its convertible bonds and undertake a share buy-back program. FeOre shares jumped as much as 41percent to 5.8 cents in early morning trade. Source: Cover Mongolia
- 4. MEREX TO IPO40% OF SHARES ON MSE Merex JSC on 18 December registered 65,005,000 shares, with face value of MNT 100 on the Mongolian Stock Exchange. Merex plans to raise MNT 2.6 billion from the initial public offering (IPO) of 26,000,000 common shares, or 40 percent of total equity. Proceeds from the sale will be used to smooth production and fully implement its business plan. Standard Investment LLC is the underwriter for the offering Established in 2012 for the foreign trade of construction materials, Merex is building a concrete mix using South Korean equipment with a capacity of producing 150 cubic meters of concrete per hour, in the Songinokhairkhan district. Source: Mongolian Stock Exchange XANADU MINES COMPLETES OYUT ULAAN ACQUISITION Xanadu Mines Ltd. has completed the acquisition of 90 percent interest in Vantage, which holds the Oyut Ulaan porphyry copper-gold project in Mongolia, following shareholder approval. Xanadu has paid cash consideration of USD 600,000 and will issue five million Xanadu shares, and performance share options contingent on the recognition of a JORC resource of up to 900,000 tons contained copper equivalent. Xanadu maintained a 25 percent interest and operatorship of the project throughout 2013, and will continue systematic exploration at Oyut Ulaan over 2014. The next phase of exploration will focus on delineating potential shallow high-grade mineralization by exploring along strike from existing intersections, and testing geophysical and geochemical anomalies which remain within the Oyut Ulaan area district. Source: Proactive Investors MIAT PLANS IPO MIAT Mongolian Airlines has hired a multinational investment firm to assist in its initial public offering (IPO) on the Hong Kong Exchange. The MIAT board will decide whether to list 49 percent equity on the stock market after an evaluation has completed. The announcement follows Mongolia's state policy agenda for air transport, which outlines plans to partially privatize the airline. Source: News.mn MAYER BROWN ADVISES ING ON $20M PRIVATE PLACEMENT FOR MIAT Mayer Brown JSM on 21 January said it has advised ING Bank N.V., Singapore Branch as arranger and book runner on the issuance by MIAT Mongolian Airlines of USD 20 million floating rate guaranteed notes due in December 2018. The notes are guaranteed by the Ministry of Finance of the Government of Mongolia, and form an important part of MIAT‘s acquisition financing of a Boeing 767-300ER aircraft. ―This important transaction for MIAT represents a substantial expansion for its fleet, and enhances its position as the national flag carrier of Mongolia,‖ said corporate and securities partner Jason T. Elder, who led the transaction. In addition to Jason T. Elder in Hong Kong, the Mayer Brown JSM team included partners Stephen Walsh, Robert Flanigan and James Taylor in London, who were assisted by associate Nishrin Hussain, legal assistants Stephanie Hurst and Karen Chong in Hong Kong as well as associate Trasa Duffy in London. Source: Mayer Brown JSM ERDENE INTERSECTS HIGH-GRADE GOLD, BASE METALS ZONES AT ALTAN NAR Erdene Resource Development Corp. reported it had received final assay results for its fourth quarter 2013 trenching program at its Altan Nar gold-polymetallic project in southwest Mongolia. "There is little question that Altan Nar not only has the potential for multiple, bulk mineable open pits with high grade shoots, but now represents one of the most significant metal discoveries in Mongolia since Oyu Tolgoi in the mid-1990's,‖ said Peter Akerley, president and chief executive officer of Erdene. ―We will now accelerate our efforts for the 2014 exploration season and move
- 5. this very excitingproject toward early development." Union North results confirmed a minimum 150 meter strike, open in both directions and centered on high grade mineralized shoots with up to 19 meters of 8.9 grams per ton gold, 66 grams per ton silver, 7.7 percent lead and 2.5 percent zinc, including seven meters of 20.2 grams per ton gold, 138 grams per ton silver, 17 percent lead and 5 percent zinc. ANT-24 (Union South) work returned 10 meters of 4.5 grams per ton gold, 9 grams per ton silver, and 2.2 percent lead opening up more than 500 meters of strike length between the Union North and South Zones. Riverside results indicate intensifying mineralization in the north with 14 meters of 1.4 grams per ton gold and potentially forming a structural intersection with Union North. Altan Nar now hosts five large, distinct, well-mineralized structures in Union North and South -- Discovery Zone, Riverside, Maggie, Northbow and Southbow, with multiple areas requiring additional exploration. Source: Erdene Resource Development Corp. KHAN BANK OPENS FIRST “MOBILE BRANCH” EQUIPPED WITH TELLERS IN MONGOLIA Khan Bank LLC on 16 January announced the commissioning of its ―Mobile Branch,‖ a vehicle tasked with delivering banking and loan services to customers on the road. The Mobile branch is equipped to serve all of the tasks offered by any other Khan Bank branch and will have two tellers on board. Khan aims to utilize the mobile branch to deliver its banking service to densely populated areas, open markets, public events and organizations. An opening ceremony for the Mobile Branch was held at Khakhorin market in Songinokhairkhan district and was attended by Norihiko Kato, chief executive officer of Khan Bank, and T. Javkhlan, director of Khan Bank‘s Retail Bank for Ulaanbaatar. Source: Khan Bank LLC MONGOLIAN FIRST VEHICLE MANUFACTURER OPENS Ecobus LLC opened Mongolia‘s first vehicle manufacturing factory for the production of large buses billed as eco friendly buses meeting Euro 4 standards. ―I haven't cut a red ribbon in recent years, pretending that I had done something huge, but I‘ve decided to visit the opening ceremony of the factory because the bottom truth is that Mongolia will train manufacturing staff in our country and support the people who are initiating and creating the new buses,‖ said President Tsakhia Elbegdorj during the opening ceremony. Ecobus had produced ten buses by the time of this report. The vehicles run on the J-800 series eco- diesel engine. The new buses will allow passengers to pay for their tickets via credit card. The Ecobus factory has the capacity to produce 120 buses per year. Source: UB Post MSE APPOINTS ACTING CEO The board of directors of the Mongolian Stock Exchange (MSE) JSC has appointed D. Bolormaa as acting chief executive officer. The State Property Committee accepted the resignation of the former chief executive, Altai Khangai, on 15 January. Bolormaa will retain her role until a permanent replacement is selected. Source: News.mn RESIDENTS SELECT CONSTRUCTION COMPANIES FOR UB CITY PROJECT Ulaanbaatar residents last Saturday selected four companies for the city replanning project. Zag LLC and Asar Orgoo LLC will lead the construction efforts in Sukhbaatar, while Burd Construction and Hera Properties won the vote for construction in Bayanzurkh and Songinokhairkhan. The selection process was outlined in the Ulaanbaatar City development plan that runs until 2020 as well as the Mayor's action plan for 2013-2016. For this second stage selection, ger district residents cast their votes for any of the 12 companies admitted by the government. Source: Montsame
- 6. BRITISH FIRM GETSINVOLVED IN MONGOLIA'S 'COLD WAR' A British architecture firm is helping to tackle Mongolia's ―cold war‖ after completing designs for a major housing development in the country‘s capital. Gateshead‘s Gradon Architecture has submitted design proposals for 50 energy-efficient homes in Ulaanbaatar—a city regarded as the second most polluted on the planet, according to the World Health Organisation. Working with a local developer, the designs could form a blueprint for replacing Soviet-era homes across the city and will help to protect residents against deadly minus 30 temperatures. The three and four-story townhouses, located in the Nuht Valley district of the city, will incorporate a number of sustainable features to reduce heat loss and keep families warm. Due for approval from the country's Department of Construction and Planning, the development will include photovoltaic panels, solar hot water heating, together with insulation that exceeds British building regulation standards. ―Many buildings in Ulaanbaatar date back to the Soviet era,‖ said Chris Allan, associate architect at Gradon Architecture. ―This means that many people are living in poor-quality accommodations, which lack even basic polystyrene insulation as well as double glazing. In one of the coldest and heavily polluted cities in the world, this is having a real impact— especially on public health. Once plans have been approved, construction work will begin onsite in summer 2014. Source: 24dash.com THE POWER OF FACEBOOK CAMPAIGNS: THE MONGOLIA TEST Mongolia is home to close to 2.8 million people, out of which a third are nomadic. Apart from being the homeland of the notorious Genghis Khan and a common place to find dinosaur remains, the most popular Facebook page in Mongolia has a little over 200,000 fans. That strange sound you hear is the social media strategists of the world snorting. 200,000 fans? That‘s it? Yes guys, that‘s it! Yet, when KFC launched a Facebook campaign in Mongolia with Circus Social, it worked magically well and reaped amazing rewards. KFC Mongolia was looking to drive awareness around the launch of the Hot and Spicy Cob and Strips. The idea was to generate some buzz around a new product that was soon to be launched in ―What keeps you warm in the middle of Mongolia‘s winter?‖—the idea was to create a fun campaign around the Mongolian winter and how fans keep themselves warm. KFC decided to go with a photo contest that would ask for submissions around fans demonstrating the fun ways in which they keep themselves warm. KFC offered close to USD 350 worth of prizes to be given out for participation in the contest. Participants submitted a photograph of themselves (humorous, preferably)— showing the way they beat the frigid Mongolian cold. Their photograph would then be uploaded into the app and displayed inside the fiery KFC flames border our amazing designer created. The app saw over 300 plus entrants take part in the contest—some people submitting more than just one submission. KFC Mongolia‘s Facebook page grew by 20,000 fans. The Facebook campaign was covered in a popular Mongolian magazine as well. With 52,000 fans—KFC Mongolia is in the Top 20 Facebook pages by size in Mongolia. Source: Business2Community MONGOLIA'S KATYA ZOL TO PRESENT AT NY FASHION WEEK Mongolian Fashion designer G. Zoltstetseg, also known as Katya Zol, will participate in Mercedes- Benz Fashion Week New York from 6 to 13 February. A Mongolian delegation of over 20 personnel will attend, including face painter E. Erdenesuvd, model G. Oyungerel, the Matrix salon, and UBS television. Katya Zol will present a collection that reflects Mongolian traditional costumes as well as excitement and a modern aesthetic to the global scene, featuring Mongolian styles for wool, cashmere, leather and felt. Zol was born in Mongolia and began to sew from a very young age. Her original designs immediately caught the attention of family, locals and other seasoned Mongolian designers. In early 2012, Katya was invited by the Mongolian Arts and Culture Council to be the first Mongolian fashion designer to present her collection in Kuala Lumpur, Malaysia. Then, in October 2012, Katya received a
- 7. requested to presenther collection at the launch of Fashion One Television. Two months later Cosmopolitan Magazine contained a feature with evening dresses from Zol‘s collections. "Through my fashion collections, which come from my heart and soul, I hope to bring joy to people. I love to expose and share with the rest of the world my imagination, passion for my culture and its artistry, perseverance, determination and aspiration for quality and refinement," said Katya. Source: Info Mongolia UB TO HOST ASIAN FASHION WEEK 2014 IN AUGUST 2014 Asian Fashion Week will be held in Ulaanbaatar from 28 to 31 August, said Group Fashion Week‘s President Arwin Shama and Imex Corp. LLC Director of Foreign Relations G. Shur-Erdene at a press conference in Blue Sky Tower on 17 January Designers from over 50 countries are expected to attend. From Mongolia will be 50 models, 5 designers and 5 hairdressers from the nation's leading beauty salons. Last year's event was held in Japan, where designers and models from over 40 countries participated. Source: Info Mongolia UNDUR TOLGOI ANNOUNCES NAME CHANGE Undur Tolgoi Minerals Inc. has changed its name to Khot Infrastructure Holdings, Ltd. to have its name better reflect the company's new focus on cash generating, non-resource infrastructure projects within Mongolia. "Our corporate name change and new trading symbol are further steps in the Company's rapid transition and total commitment to the Mongolian infrastructure sector," said Don Padgett, president and chief executive officer Trading under the new name commenced on the Canadian Securities Exchange at the opening of trading on 15 January under the new trading symbol "KOT". Khot was required to obtain a new CUSIP number for its common shares in conjunction with the name change, which is G52720 102. Source: Khot Infrastructure Holdings Ltd. RIO TINTO SIGNALS START OF TURNAROUND Rio Tinto Group is starting to dig itself out of its debt-saddled hole, producing record levels of iron ore in the fourth quarter and slashing an annual USD 3 billion of costs. The Anglo-Australian miner‘s debts soared after misguided acquisitions and heavy investment under former chief executive Tom Albanese and it has pledged to tackle this under Sam Walsh, who took over the reins a year ago. The company said on Thursday it produced 70.4 million tons of iron ore in the fourth quarter, a 6 percent increase on the same period of 2012. Rio said it implemented USD 2 billion operating cost cuts in 2013 and slashed exploration costs by USD 1 billion, exceeding a USD 750 million target set for the year. ―We have exceeded our cost cutting targets for the year and announced or completed $3.5bn of non-core asset sales,‖ said Mr. Walsh. ―These actions, together with lower capital expenditure in 2013 and beyond, will ensure that Rio Tinto is well positioned to deliver greater value to shareholders,‖ he added. However, Rio Tinto and its peers—many of whose balance sheets also bear the scars of big spending—still face challenges. Chinese demand for commodities is weakening as the economy decelerates. The price of iron ore, a key ingredient in steelmaking, fell earlier this week as weaker steel prices in China and anti-pollution regulations curb demand. Steel production dipped below two million tons a day at the end of last month for the first time since last February, while iron ore stocks at large Chinese mills have risen to 21.5 days of consumption, the highest level in two years. Rio also reported a big recovery in copper volumes and record annual production for bauxite and thermal coal. Mined copper volumes increased by 5 percent in the fourth quarter to 172,800 tons, when compared to the same quarter a year ago. Rio said it benefited from recovery of pit operations at its Kennecott mine in Utah, which had suffered a landslide, and the ramp up of production at the Oyu Tolgoi mine in Mongolia to full capacity. Source: Financial Times
- 8. ECONOMY MONGOL BANK FOREXAUCTION The Bank of Mongolia refused bid offers for U.S. dollars and Chinese yuan from local commercial banks, but did engage in swap agreements. The Central Bank received offers for an equivalent of USD 92 million for tugrugs and USD 4 million for U.S. dollars, from local commercial banks. The Bank of Mongolia accepted the swap agreement offer for an equivalent of USD 32 million for tugrugs. Source: Montsame MONGOLIA PAYS $60 MILLION FOR JBIC GUARANTEE ON SAMURAI BOND Mongolia paid USD 60 million to the Japanese Bank for International Cooperation (JBIC) for the 90 percent guarantee on its yen-denominated bond offering in 2014, said a member of the prime minister's staff. ―Annual interest of the Samurai bond is 1.5 percent and we have to pay annual guarantee fee of 1.9 percent, which means we have to pay 3.4 percent in total, annually‖, said D. Batmunkh, the economic policy advisor. Source: Undesnii Shuudan POWER PLANT TO BE BUILT IN GOBI REGION A 600-megawatt coal-fired power plant is planned for construction next to the Tevsh coal mine in Dundgobi Aimag. The mine mouth plant in Saintsagaan Soum, Dundgobi is expected to be the biggest energy producer in the country. Funding of USD 35 million is planned for development and construction. Contractor Mogul Power, a subsidiary of a US-based Mogul Energy International, warned that costs could exceed that estimate, however. The plant is expected to recover construction costs in 15 years after commissioning. Construction is expected to launch this year, as soon as financing agreements are in place. Source: Montsame MONGOLIA SEES DOWNSTREAM COAL, VALUE-ADDED GOODS AT SAINSHAND COMPLEX The Industry and Agriculture Ministry reported its findings from the feasibility for the Sainshand Industrial Complex. The industrial park will include a coal chemicals plant as well as a steel and metallurgical factory for the production of value-added goods. The eventual hope is the park will help create more diversity in the economy. Growth of the global population is expected to contribute to global steel consumption for a projected increase of between 0.5 and 2 times from present levels by 2050. By 2030, global consumption is predicted to grow by one billion tons, with demand from China expected to increase 250 million tons within that same timeframe. National production of iron ore is also predicted to grow in upcoming years, according to a study [Source provides no citation of study -ed]. The Tomortein deposit has a proven reserve of 230 million tons, compared with 180 million tons at the Bayangol deposit and 229 million tons at Kharanga. Source: Montsame MONGOLIA EXPLORES OIL SHALE FOR ENERGY SECURITY Extensive oil shale reserves could reduce Mongolia‘s dependence on imported energy, but there is some uncertainty over whether its deposits are commercially viable. To reduce these costs and dependency on foreign sources of oil, Mongolia has been looking to bridge its energy deficit with non-conventional means. One of the options is oil shale, a sedimentary rock from which oil can be extracted. In early December, the Mining Ministry issued a statement announcing initial surveys had identified oil shale reserves of more than 700 billion tons. The total of reserves given by the ministry is somewhat less than the 800 billion tons that had been
- 9. estimated previously, thoughthe latest figure is preliminary and will likely be subject to revision. If there is an upward adjustment, it could come as the result of work being conducted by U.S.- based firm Genie Energy, which in late April signed an agreement with the Petroleum Authority of Mongolia to explore and assess the commercial potential of oil shale resources in a nearly 35,000 square kilometers area in central Mongolia. The deals allows local subsidiary Genie Oil Shale Mongolia to determine over a five-year period the commercial viability of the country‘s oil shale deposits to move towards developing the resources for production. The drawbacks are shale oil is more costly to extract and process than conventional oil, and does not generate the same energy levels when burned. Critics of the oil shale industry add that the extraction process can cause environmental damage and uses large amounts of water. However, the government has said any extraction and processing activity would be conducted in an environmentally sensitive manner. If proved viable, production of fuel and other oil-based products from oil shale could begin as early as 2018. Other unconventional options are also available. In August, plans were announced for a South Korean-Mongolian joint venture to invest USD 2 billion in a coal-to-liquids plant in the Baganuur district of the Ulaanbaatar region. Though oil shale or coal-to-liquids may not prove as cost effective as conventional oil, it may provide a degree of energy security. Source: Oxford Business Group MONGOLIA SEEKS FOREIGN INVESTMENT FOR FLUORSPAR Mongolia's potential for fluorspar is great, but it will have to resolve a series of challenges to establish any kind of industry. Mongolia contains vast fluorspar deposits, as well as graphite and rare earths, producing 430,000 tons of all grades of fluorspar in 2013 with 70 exporters responsible for selling the material to a global market. Accounting for over 30 percent of total annual sales of fluorspar in Mongolia is Mongolrostsvetmet LLC, the Russian-Mongolian joint venture. The country‘s other major suppliers are: MonCzechMetal (11 percent), Kevin Invest (8 percent), Bayalag Jonsh (4 percent), and Naimgan Ord (4 percent). Just under 50 percent of products come from small-scale suppliers. There still remains over 140 known deposits of fluorspar with ore grading between 30 and 35 percent calcium fluoride, which are yet to have an owner. Despite the minerals extractions possibilities available in the country, foreign investment has fallen year-on-year in the country because of regulatory volatility. Foreign direct investment in the country dropped by 47 percent during 2013. James Rodríguez de Castro, managing director of Mongolian Minerals, said the government has not yet realized that foreign investment can be won by regulatory stability. De Castro said Russian influence on Mongolia‘s rail system is holding back logistical development. Mongolia adopted the Russian rail standard, but Chinese trains in contrast run on so-called standard gauge tracks used throughout most of the rest of the world. This means exporting to China is more expensive than to Russia. Another challenge for fluorspar extraction in Mongolia is that its deposits are distributed all over the country in small pockets instead of being concentrated in a few places, which makes it difficult to commercially mine, particularly with limited rail-road access. Owners of small deposits of minerals also face problems from illegal miners. Source: Industrial Minerals STATE-OWNED ASSETS PLANNED FOR PRIVATIZATION Mongolia's attempts to transition from a big government to a ―smart‖ one includes the privatization of Mongolia‘s state owned companies. Doing so will lift a heavy burden from the shoulders of government Erdenes MGL, the parent company of Erdenes Tavan Tolgoi and Erdenes Oyu Tolgoi, is Mongolia‘s largest state-owned asset. By incorporating other state owned companies, Erdenes MGL aims to become a nationwide government-owned operation to rival companies on the global market. In 2013, state-owned Baganuur and Shivee Ovoo were incorporated in Erdenes MGL. Other companies to be incorporate in Erdenes MGL are the Asgatyn Mungunii Ord silver deposit, Tsagaan Suvargyn Zes
- 10. copper and molybdenumdeposit, Nariin Sukhaityn coal deposit, and Bargilt, Tumurtei and Tumulug Tolgoi iron ore deposits. But there is evidence piling up which suggests that the government runs its businesses poorly. For example, 34 out of the 101 state-owned companies operate at tremendous losses, according to D. Tsogtbaatar, chairman at the State Property Committee. Thirteen of those 34 companies see losses exceeding MNT 1 billion a year, while 11 lose anywhere between MNT 100 million to MNT 1 billion annually, and another 10 state-owned companies see losses of between MNT 5 million to 100 million each year. Tsogtbaatar said poor management was at the heart of the issue. Despite the losses seen each year, there is no loud outcry for change. The lack of interest may make the president‘s initiative to privatize state-owned companies a heavy challenge. Source: Mongolian Economy MINISTRY OF ROADS AND TRANSPORTATION REVEALS PLANS FOR 2014 Minister of Roads and Transportation A. Gansukh reported plans to construct over 2,000 kilometers of paved roads this year and the commissioning of up to four airline routes in a summary of objectives for the ministry in 2014. An additional 2,200 kilometers of paved roads will be built this year, said Gansukh. That follows the construction of 1,560 kilometers of paved roads for total costs of MNT 974 billion in 2013. The ministry goal is to have roads connecting Khuvsgul, Dornod, Umnugobi, Sukhbaatar, Govi-Altai and Zavkhan Aimags to Ulaanbaatar. G. Jargalsaikhan, state-owned MIAT Mongolian Airlines' executive director, said the company plans to buy two more Boeing planes by 2016, after recently acquiring its first this month. MIAT has opened airline routes to Erlian, Shanghai and Taipei and plans to open three or four more new routes this year. Ulaanbaatar Railway saw a record 21 million tons of cargo transported in 2013. The New Railway project for the construction of rail from Ukhaa Khudag to Gashuun Suhait is underway. Korea's Samsung C&T Corp. is the general contractor for the project, hiring 13 Mongolian companies and 1,300 workers for the project's completion. Ground work for the railway is expected to finish by June, with railway assembly and a communications network building to begin afterward. Source: Udriin Sonin YOUTH LABOR CENTER OPENED A WEBSITE The Mongolian Youth Labor Center launched a new website on 21 January to help young people find employment. Myjob.mn has registered 5,700 job seekers and 350 companies. A. Munkhbat, head of the Mongolian Youth Federation, said he expected between 100,000 and 150,000 new jobs in construction and mining this year. Source: Udriin Sonin BUS UNION TO RAISE TICKET PRICE MNT 100 Bus tickets are expected to rise to MNT 500 this year due to hikes in gas prices, said a union head for the bus companies. The rise in gas prices from MNT 1,300 to 1,750 has forced the bus companies to raise bus ticket prices by MNT 100, said Ts. Purevsambuu, head of the Big Bus Union. He said the Ulaanbaatar government would not be able to supplement the extra costs for gas. The union contract with Ulaanbaatar's Public Transportation Department expired on 23 December, which the union says gives it the right to raise the ticket price. In response to a letter from Purevsambuu's union, Ulaanbaatar City asked that it delay the price increase by a month so it could study the problem further. Source: Zuunii Medee
- 11. UB APARTMENT PRICESAVERAGE MNT 2.2M PER SQUARE METER IN DECEMBER The average price for the purchase of apartments was MNT 2.2 million per square meter in December, reported real estate firm Master Properties. Some 37,000 units constructed from some 211 projects are ready for sale in Ulaanbaatar, including 32 projects for the construction of 1,500 houses, reported the company. Price per meter varies, but more than 10 percent of all projects are under MNT 1.5 million, 60 percent are between MNT 1.5 million to 2.5 million. By location, apartments sell per square meter at MNT 2.6 million at Khanuul, MNT 2.4 million at Chingeltei, MNT 2.5 million at Sukhbaatar, MNT 2.2 million at Bayanzurkh, MNT 2.1 million at Bayangol, MNT 1.5 million at Songinokhairkhan, and MNT 1.1 million at Nalaikh. In terms of location, construction companies employed 64 projects in Bayanzurkh, 31 in Songinokhairhan, 16 in Bayangol and Sukhbaatar. Less than 10 projects were done in the Chingeltei and Nalaikh Districts. Source: Undesnii Shuudan ACCIDENTAL DEATHS AT CONSTRUCTION SITES CUT IN HALF IN 2013 The number of deaths from construction accidents in Ulaanbaatar were cut in half in 2013, reported the city. Ulaanbaatar reported 29 accidents and 14 deaths in 2013 compared with 56 accidents and 29 deaths the year before in the construction sector. In 2013 the Department for Specialized Inspection of Ulaanbaatar submitted a letter to the Ministry of Construction and Urban Development that requested the suspension of construction companies' activities involved in deadly accidents, but no reply was ever given. Source: Zuunii Medee LOTTERY SYSTEM TO ALLOT FREE LAND TO MONGOLIAN CITIZENS Ulaanbaatar households will have the option to received land at no cost from 52 designated places. According to the Property Relations Department of Ulaanbaatar, applications for land will be received beginning 1 April. As there will not be enough land to allot to every household that applies, a lottery system will be used to determine the recipients. A map of the allocations is complete and the process of allocating that land is underway. Mongolian citizens living abroad will also have the opportunity to receive land. Source: Undesnii Shuudan MONGOLIAN EXPORTS FALL 2.6% IN 2013 AS COAL SHIPMENTS DECLINE Mongolia's export trade in 2013 fell 2.6 percent compared to the previous year as a result of a decrease in coal shipments to China over the period, the country's Central Bank said. The total value of Mongolian exports reached USD 4.27 billion in 2013, down from USD 4.38 billion in the previous year, the bank said in its foreign trade review for December. Deliveries of coal to southern neighbor China were affected by disputes over prices as well as falling demand during the year. According to official Chinese data, coal imports from Mongolia fell 20 percent over the year to 17.3 million tons. The Mongolian Central Bank said an increase in copper concentrate exports, driven by the launch of the first phase of Rio Tinto Group's massive Oyu Tolgoi project, was offset by an 11.5 percent drop in coal shipments. Landlocked Mongolia is heavily dependent on its export of mining resources, mostly to China. The bank said 88 percent of its total export trade consisted of minerals in 2013, down 2.4 percentage points compared to the previous year. More than 90 percent of Mongolia's exports typically go to China, but the bank has yet to publish detailed figures for 2013. Source: Reuters GER DISTRICTS HAVE THE RIGHT STOVES, BUT THE WRONG COAL Efforts by the government to curb air pollution via the use of ―clean stoves‖ may be hampered by an inadequate consideration of available coal. Almost 80 percent of households burn coal from the Nalaikh mine, in addition to coal from
- 12. Baganuur. The Baganuurvariety is less popular in ger districts, as it cannot maintain adequate levels of warmth without high levels of consumption. The stoves said to burn coal more cleanly were intended for use with the Nalaikh coal. Munkhuu, a salesman for coal from Nalaikh, explained that the higher cost of Nalaikh coal plays a key part in coal selection for those in the ger districts. ―People who have a middle-range income are able to buy Nalaikh coal,‖ he explained. ―Two buckets of Baganuur coal heat are equal to one bucket of Nalaikh, and then you need additional buckets of Baganuur coal to stay warm,‖ Munkhuu says. When Baganuur coal is used instead, he said the effectiveness of the stove in curbing pollution decreases by up to half, effectively canceling out the advantages of such stoves in the first place. The city‘s power plants consume enormous amounts of coal each year, with three to four million tons of raw coal required to keep the plants functioning each year. Domestic consumption of coal regularly tops some one million tons. Coal burning makes up 80 or 90 percent of pollution in Ulaanbaatar. Two years since smoke-free stoves first appeared on the Mongolian market, over 120,000 households have purchased the stoves. The smoke-free stove project that helps distribute the stoves now offers four types of stoves to six central districts of Ulaanbaatar. Stoves can be bought from between MNT 29,000 and MNT 36,000, which is 93 percent cheaper than their original price. Yet, if ger district residents continue to use these stoves with Baganuur coal rather than Nalaikh, the government will need to reconsider its plans. Source: UB Post MATERNAL NURSES SAY CONGENITAL DEFECTS ON THE RISE DUE TO AIR POLLUTION Nurses at Ulaanbaatar‘s leading maternity hospital hold air pollution responsible for a dramatic rise in the number of pregnant women giving birth to babies with brain damage and significant birth defects. A senior neonatal nurse with over thirty years experience at Ulaanbaatar‘s First Maternity Hospital, who asked not to be named, explained that since 2000, she and her colleagues have seen a notable rise in congenital and birth defects as air pollution has worsened. Babies born with intracranial pressure, cleft palates, cleft lips and other birth defects were rare in the post-Soviet period, while birth defects—especially preterm births—have become increasingly common. Research suggests that a leading factor in the growing number of preterm births could be related to high levels of exposure to carbon monoxide produced by coal burning. ―Today almost all newborn infants are being born with brain damage due to oxygen deficiency to the brain and heart problems to a certain extent,‖ the nurse explained. She warned that pregnant woman exposed to the air pollution were at a high risk of birth defects for their babies, and even miscarriage. Health Minister Natsag Udval cited a ministry and World Health Organization study in an interview with Eagle TV that showed a rise in the number of birth defects developing in newborns in recent years. ―It is not only cleft lip and palates or defective organ development, the development of defects covers many organ systems, leading to an increase of defective embryos, which are not viable,‖ she said. According to the nurse at the First Maternity Hospital, expected mothers who cannot afford air purifiers should leave the city for a community with fresher air, one that is ―as far from Ulaanbaatar as possible.‖ Source: UB Post MONGOLIAN INSTITUTE OF CPAs BEGINS ACCA TRAINING The Mongolian Institute of Certified Public Accountants (MONICPA) on 16 January launched a training course for the Association of Chartered Certified Accountants (ACCA) for paper F7 Financial Reporting for accountants. In attendance were the ACCA operation team, certified public accountant (CPA) and trainer from the Philippines Ramon Martinez, and students. The ACCA is the global body for professional accountants with 162,000 members and 428,000 students in 173 countries.
- 13. Source: Montsame MEDICAL DOCTORSAND OBSTETRICIANS TO BE TRAINED IN JAPAN Mongolian doctors will participate in medical training in Japan from 22 January to 1 March. The Ministry of Health, the Japanese government, and the Japan International Cooperation Agency (JICA) have partnered to hold medical trainings every year until 2016. A total of 10 doctors and obstetricians have been selected from the National Center for Mothers and Infants, the 1st Maternal House of Ulaanbaatar, and regional diagnostic and treatment centers in Uvurkhangai, Orkhon and Khuvd Aimags. Source: Montsame EMBASSY IN LONDON EXPLAINS CLOSURE OF HSBC ACCOUNT The Mongolian Embassy to Britain in London on 16 January released a statement in response to local reports from the day before that the Mongolian Embassy‘s bank account in London had been closed, saying the decision was a wide-reaching one. The Mongolian Embassy saw its HSBC account closed after the bank decided last June to close down all bank accounts associated with diplomatic representative offices all over the world. HSBC‘s decision was not an action specifically directed at Mongolia alone, said the statement, but rather involved the closure of over 40 diplomatic representative offices‘ bank accounts in London. The Mongolian Embassy opened a bank account in another bank in September 2013, which is now in effect. Source: News.mn IRON ORE TUMBLES AS CHINA PORT STOCKS JUMP The calm before the storm? Last week iron ore, one of the best-performing commodities of last year, broke out of the narrow USD 10 trading range it had occupied for 148 days since the middle of August. The price of the steel making ingredient that represents a large slice of Mongolia‘s mining exports fell to a six-month low. The weakening in prices came as port stocks in China, which buys two-thirds of the world‘s seaborne supply, hit a 12-month high and data showed domestic steel production had dipped below two million tons a day in December—its lowest level for the year. ―After years of tightness, we believe supply growth will exceed demand growth in 2014,‖ Goldman Sachs said in a report published on Tuesday, forecasting prices of USD 108 a ton this year and USD 80 in 2015. The benchmark price for seaborne iron ore delivered to China—with 62 percent iron content—was trading at USD 123.20 a ton on Tuesday, down 8 percent since the start of the year. But others are less sure, arguing the market remains relatively tight and that seaborne iron ore will continue to gain market share, especially in China. Last year was a good year for iron ore, which is critical to the profitability of miners such as Rio Tinto PLC. Benchmark prices averaged USD 135 a ton, a 4 percent increase on 2012. An unexpected surge in Chinese crude steel production and restocking by steel mills helped buoy prices last year, but replenished inventories make restocking no longer providing a prop for iron ore prices. But the key reason for the drop in price is a credit squeeze preventing traders from buying steel in anticipation of a pick-up in construction activity after the lunar new year holidays. Domestic grade declines and the implementation of more stringent environmental controls will mean steel mills favoring higher grade, less polluting seaborne iron ore supply produced by companies such as Rio, he says. ―This means that seaborne iron ore demand should continue to grow faster than global steel production.‖ Source: Financial Times RECOVERY REMAINS SLOW IN EBRD REGIONS Mongolia is expected to counter a trend of a slow recovery this year in the regions where the European Bank for Reconstruction and Development (EBRD) invests. The EBRD‘s economists see growth in the transition region of a modest 2.7 percent in 2014, virtually
- 14. unchanged from theNovember forecast, and after expansion of 2 percent in 2013. The EBRD‘s latest Regional Economic Prospects report said emerging economies were still suffering from capital outflows that were likely to persist in light of the expected gradual tightening of U.S. monetary policy. For the first time since 2011 net private capital flows turned negative for the EBRD region as a whole in the third quarter. ―For sustained recovery to take hold, countries in the region need to resume structural reforms and tackle the persistent legacies of the crisis, including high rates of non-performing loans and long- term unemployment,‖ the report said. Looking ahead, the report expected only a gradual improvement in external factors affecting the transition region, with a slow and uneven recovery in the euro zone and a general deceleration in larger emerging markets partly offset by the stronger outlook in the United States and Japan. It said growth in countries most closely integrated with the Euro area would remain modest even as the negative impact of the euro zone crisis diminished. In addition to uncertainties linked to the euro zone, other risks to the outlook include the possibility of a faster deceleration in large emerging markets, especially China. Growth in Central and Northeast Asia will remain relatively strong owing to a number of large natural resource projects in Kazakhstan, Mongolia and Turkmenistan. Growth is expected to decelerate somewhat in the Kyrgyz Republic and Tajikistan on account of weaker demand and lower expected growth of remittances from Russia. Source: European Bank for Reconstruction and Development CHINA'S ECONOMIC GROWTH SLOWS TO 7.7% China's economic growth slowed slightly in the fourth quarter, complicating the challenge for the country's leaders as they seek to reshape the world's second-largest economy. Many economists expect the Chinese economy to slow further in the coming year as China's leaders prepare to start introducing reform measures meant to remake the Chinese economy so it depends less on investment and trade and more on domestic spending and the expansion in the service industries. The nation's economy grew 7.7 percent in the fourth quarter from a year ago, slower than the 7.8 percent it posted in the third quarter, according to data released Monday by China's National Bureau of Statistics. For the year it also posted 7.7 percent growth, matching the pace of 2012. "There was steady economic progress [last year] and this was no small achievement," the bureau said in a statement. But it added that the Chinese economy still faces imbalances, while "fundamentals of the economic recovery are still not stable." The results come after Chinese leaders unveiled a raft of reform goals in November intended to steer the economy away from its traditional reliance on exports and big government-funded infrastructure projects. While economists say such rebalancing could strengthen the Chinese economy over the longer term, it could subtract from growth over the short term. Closing aging industrial plants, for instance, quickly subtracts from growth, while building new service firms will only slowly add to economic output. In the coming year, China should be able to count on improved exports if the U.S. and European economies improve. That said, the country has a number of vulnerabilities, including property markets that some economists describe as bubbles and credit growth over the past five years that matches rates in the United States, Europe, South Korea and Japan that ended in deep recession in those countries. Few mainstream economists predict a crisis in the coming year. But any government effort to slow the increase in credit or property prices is bound to be a drag on growth. That's because such measures usually involve either higher taxes or interest rates, both of which inhibit investment and consumption. Source: Wall Street Journal NEW FLIGHTS, NEW BUSINESS Air transport could have an important role in providing a direct connection between landlocked Mongolia and the rest of the world, expanding foreign trade and developing Mongolia‘s economy.
- 15. Mongolia has severalprivate airlines, in addition to state-owned MIAT Mongolian Airlines. State controls—the state determines their tariffs, sets air routes, limits the number of flights and grants advantages to state-owned—however, prevent free competition by not allowing new players into the market. A year ago, the parliament announced the adoption of the State Policy on Civil Aviation through 2020, which aims to create free competition in Mongolia‘s air transport industry. However, on the very same day, they gave the status of ―national airline‖ to MIAT and promised to provide ―policy support‖ to its operations. But more competition is better for consumers. Eznis Airways and Aero Mongolia have been competing with each other in the domestic flight routes, while MIAT‘s domestic flights were canceled as it resulted of deficits. When Hunnu Air entered the industry, ticket prices dropped significantly and the number customers increased considerably. In 2013, there was no price difference between airline tickets bought by foreigners and Mongolians. The price of a round trip ticket from Ulaanbaatar to Khovd was reduced from MNT 650,000 to MNT 400,000 that year, while a two-way ticket from Ulaanbaatar to Murun dropped to USD 200 from 450 USD from the year before. The number of airline customers increased 30 percent in 2013. Although MIAT is currently the only airline that conducts international flights to China, Russia and South Korea it runs deficits every year. Half of the total passengers who travel from Ulaanbaatar to Seoul are in-transit. Free competition would cut the price of air travel to Seoul by 30 percent, and Ulaanbaatar-Beijing tickets would be twice as less. MIAT has recently announced that it will replace its flights to Berlin with ones to Frankfurt. It is not clear at the moment the kind of changes or advantages it will bring. This airline industry needs to be developed with a vision to create every opportunity and condition that will help world-class passenger airlines and cargo carriers emerging from Mongolia. MIAT‘s monopoly prohibits innovation. Source: UB Post POLITICS MONGOLIAN PRESIDENT SETS NEW REFORM GOALS President Tsakhia Elbegdorj can rightfully boast that he has persuaded parliament to take a more welcoming stance toward foreign investment, but he is aiming for even more. Elbegdorj, who was re-elected last June to a second four-year term, addressed businesspeople in Ulaanbaatar last month and sketched out plans for 13 new bills. He used the slogan, "From big government to ‗smart‘ government." "After three years when I leave, they will talk about my legacy," Elbegdorj said. "Investors want direct answers to how safe, how secure their investments are." The proposed laws would impose greater fiscal discipline on government borrowing, enhance transparency at "all levels of government," limit the kinds of investments the government can make, and reform property and contract rights. Bayanjargal Byambasaikhan, chairman of the Business Council of Mongolia and managing partner of the financial advisory company NovaTerra, sees the reform of land ownership rules as most critical. "What we have is a law written 10 to 15 years ago when the economy and businesses were small and people didn't know much about international standards," said Byambasaikhan, who was at the president's address. "Now we need rules in line with international project finance standards." Elbegdorj's plans may be too ambitious given the country's political structure, a hybrid of presidential and prime ministerial systems, even though both are led by the Democratic Party. "Thirteen (bills) is too many, I think," said Luvsandendev Sumati, head of the Sant Maral Foundation, a non-profit polling agency, pointing to discord both within the ruling party and with its coalition partners, especially the Mongolian People's Revolutionary Party, and the tendency of lawmakers to stake out populist positions. Analysts differ on whether economic growth is slowing or accelerating. The Economist Intelligence Unit has projected that Mongolia will be the second-fastest growing economy in the world this year,
- 16. behind South Sudan,with gross domestic product rising 15.3 percent thanks to the first full year of operations of Oyu Tolgoi. However, Ulaanbaatar-based Mandal Asset Management believes growth will slow to 10 percent from an estimated 12 percent last year. Elbegdorj and officials from the Mongolian Stock Exchange have been touring foreign financial centers to promote investment. They hope the recent reforms can help drive a rebound in foreign inflows. Source: Nikkei Asian Review MINERALS LAW AMENDMENTS MAY LEAD TO LIFTING OF LICENSE BAN Changes being considered to Mongolia‘s minerals law are expected to pave the way to the end of a three and a half year moratorium on new exploration licenses, according to an official from the Ministry of Mining. Amendments to the 2006 law under review include creating a National Geological Survey and forming a Policy Council to oversee legal changes in the mining sector, said Chuluuntseren Otgochuluu, director general of the department of strategic policy and planning at the ministry and part of the group framing the changes. The amended law would build on a minerals policy adopted by Mongolia‘s parliament on 16 January that seeks to limit the state‘s role in mining and create stability in the industry, Otgochuluu said. ―The main message is that we are giving more advantages to the private sector,‖ he said in a January 20 interview in Ulaanbaatar. ―If there is too much state involvement, it‘s not good. Last year was the best lesson.‖ In addition to the Policy Council, which would include domestic and foreign investors, the proposed amendments also include clarifying defined geological exploration boundaries and so-called ―strategic deposits,‖ he said. ―We will increase the level of the economic impact to be recognized as a strategic deposit,‖ Otgochuluu said. ―It is not our objective to increase the number of strategic deposits.‖ The government is planning to rescind a ban on the sale of exploration licenses that began in June 2010 once the amendments are in place, said Otgochuluu. That may stoke new investment as exploration companies seek to stake claims, he said. Passage of the amendments may also trigger a resolution to last year‘s cancellation of 106 mining licenses, Otgochuluu said. Should the changes be approved, the former license holders will be able to apply to regain their permits and each will be considered on a case-by-case basis, he said. ―The minerals sector is the main engine to reach prosperity, but we have some disadvantages, such as extreme weather conditions,‖ he said. ―So our laws should be more liberal to stay competitive. Amendments will improve the investment climate.‖ Source: Bloomberg BILL TO INCREASE VAT THRESHOLD TO MNT 50 MILLION WILL BE SUBMITTED Parliament will receive a bill that stands to decrease the tax burden on small business. According to the bill, the threshold on value-added tax (VAT) will be increased from MNT 10 million to MNT 50 million. Companies can pay VAT voluntarily starting from MNT 10 million. If approved, 50 percent of taxpaying SME‘s would be exempt from VAT. According to the bill for Corporate Taxes, for companies that have less than MNT 1.5 billion of annual sales, 90 percent of the corporate tax paid will be returned. Companies operating in mining, the import and export of oil products, mobile phone services, alcohol, spirits and tobacco businesses will not be able to receive the return of taxes. Source: Udriin Sonin JAPAN, MONGOLIA EYE SECURITY COOPERATION TO PROMOTE PEACE IN ASIA Japanese Prime Minister Shinzo Abe and Mongolian President Tsakhia Elbegdorj agreed 17 January to boost cooperation in promoting peace and stability in East Asia, amid threats from an assertive China and North Korea"s nuclear and missile development. During a 20-minute telephone talk, Abe also called for a "multilayered and strategic" dialogue to
- 17. enhance bilateral tieswith Mongolia, the Japanese government said. On the economic front, Elbegdorj praised Abe's economic policies, saying they have had "good effects" on the global economy, according to the government. The "Abenomics" policy mix consists of bold monetary easing by the Bank of Japan, massive fiscal stimulus and a growth strategy. Source: Kyodo CHINESE LEADERS MEET MONGOLIAN FOREIGN MINISTER Chinese Vice President Li Yuanchao and State Councilor Yang Jiechi on Friday met with visiting Mongolian Foreign Minister Luvsanvandan Bold, reaffirming China's commitment to stronger ties with Mongolia. Bold is the first foreign minister to visit Beijing this year, which will witness a trio of celebrations in China-Mongolia relations. This year marks the 65th anniversary of the establishment of the China- Mongolia relationship, the 20th anniversary of the Treaty on Friendly Relations and Cooperation between Mongolia and China and the China-Mongolia Friendship and Exchange Year, Li said. Both Li and Yang called on both sides to seize opportunities, implement important consensus reached by the two leaders, build strategic trust, enhance mutually-beneficial cooperation, deepen the bilateral strategic partnership, seek common prosperity and benefit the two peoples. Bold said Mongolia gives top priority to developing friendly ties with China and sees the China's development as an important opportunity, pledging to deepen bilateral pragmatic cooperation in all fields. In his meeting with Bold, Yang hoped the two countries would facilitate trade cooperation, and make arrangements for activities of the China-Mongolia Friendship and Exchange Year, to promote greater progress of bilateral ties. Bold reiterated the importance his country attached to developing relations with China, vowing to cement substantial cooperation in various areas and promote common development. Bold began his visit to China on Thursday. In the meeting between Chinese Foreign Minister Wang Yi and Bold on Thursday, they agreed to increase annual two-way trade volume to USD 10 billion, and explore the feasibility of building a free-trade zone. Source: Ecns.cn FOREIGN MINISTER VISITS UYGHUR AUTONOMOUS REGION Minister of Foreign Affairs of Mongolia Luvsanvandan Bold visited Urumqi city of the Xinjiang Uyghur Autonomous Region during his visit to China. Bold met Shi Dagang, a deputy governor of the region, to discuss issues concerning the collaboration between Mongolia and this Chinese region in augmenting economic and commercial turnover and in making the inter-citizen ties closer. Bold also visited Tian Run, a company that Mongolia‘s XacBank has invested in. Source: Montsame ENVIRONMENTAL ACTIVIST MUNKHBAYAR RECEIVES 21-YEAR SENTENCE Environmental activist and the head of the Gal Undesten movement, Ts. Munkhbayar, has been sentenced to 21 years, six months on Tuesday for criminal charges related to shooting a live round during a protest, carrying a grenade, and planting bomds near Sukhbaatar Square. The primary criminal court at Detention Center 461A heard the two-day trial finally for Munkhbayar, G. Boldbaatar, D. Tumurbaatar, and J. Ganbold, while M. Munkhbold received a two- year sentence. Two other suspects, O. Sambuuyondon and B. Gantulga were acquitted. They were charged with crimes related to an incident in September where environmental activists and Munkhbayar protested outside the Government Palace while Parliament discussed an amendment to a law that bans the exploration and exploitation of minerals near certain forests and rivers. During the protest a shot was fired and a bomb scare was later initiated. Bombs were reportedly found in locations near the square. ―We don‘t agree with the court‘s decision. So we will approach the court of appeals,‖ said the coordinator of the United Movement of Mongolian Rivers and Lakes (UMMRL), Tserenkhand. Source: News.mn
- 18. MONGOLIA'S "GODFATHER OFCORRUPTION" PLOTS RETURN The reappearance on the scene of the jailed former President and Prime Minister Nambar Enkhbayar after a presidential pardon cut short his two-and-a-half-year prison sentence for corruption is certain to have a dramatic effect on Mongolian politics and the delicate relationships that exist within the coalition government. Enkhbayar‘s accomplishments include the repayment of debt to Russia that Mongolia had racked up as a Soviet satellite state, as well as serving as president during nearly all of the negotiations for the Oyu Tolgoi investment agreement with Ivanhoe Mines, now called Turquoise Hill Resources and majority owned by Rio Tinto. Many believe that the two are not unrelated. "It's common understanding that the money he used to pay off old Soviet debt was with Ivanhoe money," says Badral Munkhdul, head of the market intelligence firm Cover Mongolia. It is his alleged involvement in these kinds of deals that earned him the nickname "the godfather of corruption". That reputation finally caught up with Enkhbayar when he was arrested and stood trial in the summer of 2012 on four counts of corruption, including the illegal privatization of a newspaper and the prime-located Urgoo hotel. Even if his conviction bars him from holding office again, Enkhbayar could still exert significant influence behind the scenes. How Enkhbayar might choose to influence progress in talks over the Oyu Tolgoi project as well as the litany of other smaller projects under development is not clear, says Cover Mongolia's Munkhdul. "At this moment in time I think he would be described as a populist politician, but... I would describe it as his current political strategy more than his own political views," says Munkhdul. For many, Enkhbayar's return, as well as the reduced sentences for many other public officials arrested for corruption, demonstrates a lack of conviction in Mongolia's battle against corruption. What happens next could determine whether the message sent to investors is that Mongolia is open for business or is once again for sale. Source: BNE THE CLOWN ISN'T RONALD IN MONGOLIAN STORY ON MCDONALD'S When reports emerged on 10 December that McDonald's would open its first branch in Mongolia, the media and the Internet were abuzz with speculation the U.S. fast food franchise would be serving "McMutton burgers" and "goat milkshakes". The only problem: Ronald McDonald wasn't actually coming and neither were his burgers. In fact, the "news" about McDonald's was a publicity stunt by one of Mongolia's newest TV news broadcasters, Mongol TV, to highlight how easily corporations and politicians can pay to have stories published that, among other things, are used to cast aspersions on controversial mining projects such as Rio Tinto Group's Oyu Tolgoi or Centerra Gold's Boroo. Erdene Lkhavga, an executive producer at Mongol TV who took part in the ruse, phoned nine of Mongolia's major news outlets in television broadcasting and print to push the story before Mongol TV on 11 December confessed live on its 9 o'clock news program that the story was a prank and named every print newspaper and broadcaster that had run the story. Oyu Tolgoi came under fire after announcing innocently that some of the gold in the 2012 Olympic medals was sourced from Oyu Tolgoi. However, an evening news report by local television network TV9 falsely claimed around the time of the start of the Olympics that the gold samples used for the medals were in actuality eight tons of gold smuggled out of the country, without any royalties or tax paid to the country. On Oyu Tolgoi's website that claim is refuted, saying most of the metal used came from Rio's Kennecott Utah Copper mine. The entrance of U.S. media groups into the market could be a positive influence. Sponsored by the locally owned Trade and Development Bank of Mongolia LLC, Bloomberg opened an affiliated television network in Ulaanbaatar in 2012. More recently, CNN entered into a partnership agreement with Eagle TV that includes training for the Mongolian staff. "Having that kind of competition is great for a media market. Raising the bar means everyone's going up," said Betina Infante, managing director of Breakthrough PR. Source: BNE
- 19. ANNOUNCEMENTS “COAL MONGOLIA 2014”REGISTRATION HAS OFFICIALLY BEGUN "Coal Mongolia- 2014" the annual coal sector investor 4th International Conference shall be organized from 20th to 21st of February 2014. The scope of this forum has been expanding every year also has earned a reputation as one of the global leading and ingenuity forum in the coal sector and became the largest international Coal Investors Conference and Exhibition. The objective of this forum is to discussing key topics such as attracting foreign investment for coal exploration, mining and processing projects in Mongolia. The current development trends in the coal sector, future perspectives, investment, legal environment, infrastructure and latest technologies also it is designed to increasing the competitiveness of Mongolian coal in the Asian market. As of 2013, it was a challenging and difficult year for the Mongolian sector despite the fact that the mining companies made a historical record exploring 28.6 million tons of coal by November last year and exported 16 million tons of coal. For more information, call 70115590 or www.coalmongolia.mn www.mining.mn ___________________________________________ “MINER AND SUPPLIER-2014” TO BE HELD FOR 4TH YEAR, 13-14 MARCH 2014. CHINGGIS KHAAN HOTEL BCM members will have 10% discount to register for the event. To get the discount code, please contact saruul@bcmongolia.org. It is single and larger event which is going to be held in the sector of Mongolian mining supply and executive officers, supply managers, financial directors and engineers have great expectations for this event which influences goods and service research that is broadly familiar within the sector. It will be organized under the slogan ―LET‘S MOVE TO THE DEVELOPMENT NEW STAGE!‖ where mining companies will share their experiences, introduce with advanced technique, technology and management. Upon your participation at our meeting and exhibitions, you will be provided with the chance to share your experiences, conclude your achievement and successes, introduce with advanced techniqus, technology and management, determine your resources and chances, properly adjust your supply and establish relationships with new customers. For more information please contact naranbat@infomine.mn or 70116009. ___________________________________________ “MM TODAY” ON MNB-TV, FRIDAY, 19:00 TO 19:10 BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is scheduled from 19:00 to 19:10 tonight. Tune in to watch this program that reports stories from today‘s BCM NewsWire. BCM WEBSITES MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „BUSINESS NEWS‟ SECTIONS The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud. As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the government website Open-Government.mn are regularly updated. S. Oyun, Minister of Environment and Green Development, presentation at BCM monthly meeting on May 27 added to Mongolian website, bcmongolia.org/mn/илтгэлүүд. - Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013
- 20. ‗Business News‘: 1. Б.Бямбасайхан:Дэлхийн эдийн засгийн чуулга уулзалтаар Монголын талаар ярилцах нь маш чухал үйл явдал 2. MICC Тэмдэглэл № 4 ___________________________________________ ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN BUSINESS NEWS‟, „PHOTO GALLERY‟ The following presentations were made at the BCM monthly meeting on Dec 9, 2013: - ―Quality Supplier Development Center: Your partner for doing business in Mongolia‖, J. Bayarmagnai, Executive Director, Quality Supplier Development Center /USAID Grantee; - ―Impact of Corruption in Mongolia‖, L. Sumati, Director, Sant Maral Foundation; - ―Investment Protection Issues in Mongolia‖, D. Jigjidmaa, Investment Promotion Program Manager, IFC Mongolia; - Presentation of ―Win Win with Mongolia‖. The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong, Nov 18-20: - Regulatory Update: Navigating Mongolia‘s legal framework for foreign direct investment, Javkhlanbaatar Sereeter, Director General, Foreign Investment Regulations and Registration Department, Ministry of Economic Development; - Investment keynote: Investing into Mongolia in 2013 – Where do the opportunities lie?, James Passin, Co-Founder and Manager, FIREBIRD MONGOLIA FUND; - Development keynote: Key challenges and opportunities for continued growth in Mongolia, Randolph Koppa, President, TRADE AND DEVELOPMENT BANK OF MONGOLIA; - Outlining government policies and long-term plans for Mongolia‘s mining sector, Amarjargal Khurelbat, Head of International Cooperation Division, MINISTRY OF MINING OF MONGOLIA; - From copper to met coal: Demand and price outlook and expected impact on Mongolia‘s economy, Ghee Peh, Managing Director, Metals and Mining Research, UBS SECURITIES ASIA; - How Mongolian banks and financial institutions are dealing with the challenges and opportunities of a fast growing economy, Norihiko Kato, Chief Executive Officer, KHAN BANK; - Update on the Mongolian stock market – Impact of the new Securities Law, Altai Khangai, Chief Executive Officer, MONGOLIAN STOCK EXCHANGE; - From investment banking to trade finance to micro credits to insurance, Amartuvshin Hanibal, Managing Director, TENGER FINANCIAL GROUP LLC - Spotlight presentations: Showcasing Mongolian investment opportunities, Peter Morrow, Board Director, Asia Pacific Investment Partners; - Spotlight presentation: Showcasing Mongolian investment opportunities, Munkhbat Davaatseren, CEO of Golomt Securities, GOLOMT BANK; - Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources, Batmunkh Batkhuu, Chairman, SHARYN GOL JSC; - Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources, Jimmie Wilde, Chief Operating Officer, BERKH UUL JSC; - Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources, Mona Forster, Executive VP, ENTRÉE GOLD INC; The following two presentations are from the ―ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ training seminar for businesses, in Ulaanbaatar, November 18, 2013: - ―International business standard on transparency‖ by Jelena Pesic, Director, PwC; - ―Finland‘s best practice on transparency and anti corruption‖ by Dr. Pekka Hallberg (as it is world‘s number one), Emeritus President of the Supreme Administrative Court of Finland;
- 21. The following 15presentations are from the Mongolia Mining Summit, Perth, Australia, October 29- 31, 2013: • Mongolia‘s Minerals Future and Development by Otgochuluu Ch, Director General, Department of strategic policy and planning at Ministry of Mining, Mongolia at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Mongolian Economy: Investment Opportunities/Challenges, Jim Dwyer, Executive Director, Business Council of Mongolia at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Oyu Tolgoi: Lessons from the Gobi, Houston Spencer Vice President, Communications and Media Relations, Oyu Tolgoi at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Market dynamics for Mongolian coking coal in the Chinese market, Graeme Hancock, President and Chief Representative at Anglo American, Mongolia at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Speech by Mr. Ariunbold Byamba, Deputy Director, Erdenes MGL LLC at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Launching Mining Projects in Mongolia–A Major Contractor‘s Perspective, Eric Erdenebat Tseveendorj, Country Manager, Orica Limited at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Investing in a dynamic legislative environment, Elisabeth Ellis, Managing Partner Ulaanbaatar, Minter Ellison at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Sandvik In Pit Crushing & Conveying (IPCC), Doug Turnbull, Principal Mining Engineer, Sandvik Mining Systems, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Ovoot Coking Coal Project, David Paull, Managing Director Aspire Mining, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • The business of being a third neighbor, David Landers, General Manager, East Asian Growth Markets at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Nuurst Thermal Coal Project, Daniel Rohr, Chief Financial Officer, Modun Resources Ltd, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Culture matters in building sustainable long-term business relationships, Hana Tserenkhand Byambadash Business Development Consultant. AusMon Consulting and Dr Christine Hogan Adjunct Professor, Curtin University. Consultant & Author at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Maximizing Business Benefits from Your IT Investment, Brad Skeggs, Executive Director, COSOL, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Presentation by Battsengel Gotov, CEO, Mongolian Mining Corporation, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 • Mongolian Mining Sector "Present and Future Developments", N.Algaa, Executive Director, Mongolian National Mining Association, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013 The ―Mongolia Reports‖ section includes the following: - ―Selected Macroeconomic Indicators, December 18, 2013‖ by International Monetary Fund; - ―Ministry of Finance of Mongolia, 2013 Government Debt Auctions‖ by Bank of Mongolia; - ―Doing Business in Mongolia: 2013 Country Commercial Guide for U.S. Companies‖ by U.S. Embassy; - ―Real Estate Report 2013‖ by Mongolian Properties; - ―Selected Macroeconomic Indicators, November 20, 2013‖ by International Monetary Fund‖ - ―2013 Second Annual Mongolian CEO Survey‖ from PricewaterhouseCoopers Audit LLC; - ―Selected Macroeconomic Indicators; data through October 16, 2013‖ by International Monetary Fund; - ―IMF Completes 2013 Article IV Mission to Mongolia‖ by International Monetary Fund;
- 22. The following areadded to Interview Section from the Oxford Business Group, Mongolia Reports 2013 book: • B. Byambasaikhan, Chairman, Business Council of Mongolia: ―Talk is cheap‖; • President Ts. Elbegdorj: ―Diversifying for growth‖ • Jim Dwyer, Executive Director, Business Council of Mongolia: ―Non-mining sectors budding‖; • Peter Morrow, Chairman, American University of Mongolia: ―Filling in the blanks‖; • N. Zoljargal, Governor, Bank of Mongolia: ―Sustainable vision‖; • Gansukh, Minister of Roads and Transportation: ―Accessing new markets‖; • J. Od, President, MCS Group: ―Building interest‖; • B. Chuluunbaatar, President and CEO of Monnis Group: ―Climbing the ranks‖; • Cameron McRae, President and CEO, Oyu Tolgoi: ―Sitting on a copper mine‖. BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to Parliament and Government is available for download. BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business News‖ before they are all put together each week for Friday's weekly NewsWire. The ―Photo Gallery‖ contains photos from the 6th Anniversary BCM Renewal dinner on November 11, 2013. BCM Football Cup 2013 pictures are posted to the website - http://bcmongolia.org/en/photos/350- en/album?albumid=200 The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home page for a consolidated account of the week‘s events. ___________________________________________ SOCIAL NETWORK WITH BCM BCM LAUNCHES NEW LINKED-IN COMPANY PAGE The Business Council of Mongolia has launched a new company page on the social networking website LinkedIn to network its members and followers including small-medium enterprises (SMEs). The new page will allow BCM to alert followers to the latest news and information critical to their businesses. Members‘ businesses will be promoted. Additionally, BCM plans to deliver monthly infographics on the latest data as well as videos and other media content as they come. The bulk of the content on the new page will be in Mongolian language to better cater to BCM's Mongolian- speaking audience and members. The following link can direct you to the New BCM's Linked-in page. http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks. Keep up to date on the latest business deals in Mongolia and how the climate for investment is improving each day with BCM. Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the latest announcements and comment on events carried in the NewsWire with the community. Hear breaking news and announcements as they happen when you follow BCM on Twitter at https://twitter.com/bcmongolia. Social Stats as of today: BCM now has 3,037 fans on our Facebook fans page, 1,566 connections on LinkedIn network, and 890 followers on Twitter. Of course for news information, interviews, event photos, and announcements regarding our organization, visit the official BCM website at http://bcmongolia.org/en/
- 23. BCM WORKING GROUPNEWS The BCM Environmental Working Group met on Wednesday, 22 Jan 2014 with 16 members attending. Bayarmaa A, of Clean Energy, Newcom Group moderated the session. New members: Olga Khardaeva - PwC Advisory Manager; Bolormaa Purevjav - Director Environmental Programs; Jonathan Stacey - Environmental Project manager. Participants: Munkh-Amgalan Tserendorj - Eurofeu Asia: Jennifer Butz, Mongolia Country Manager, GGGI; Seung-yeon Stella Lee, GGGI; Dr. James Seong-Cheol Kang, GGGI; Bonjun Koo - GGGI; Bulganmurun Tsevegjav-GGGI. Speakers and topics were: -Global Green Growth Institute (GGGI) and Mongolia Country Program by Dr. James Seong-Cheol Kang, Country Manager/Principal Transport Specialist - NZNI ―Water for Life‖ Project by Keith Swenson, New Zealand Nature Institute‘s Specialist - Protected Area and Sustainable Landscape Management - JICA Two-Step-Loan project by Bayarlkham Byambaa, Environmental Finance Specialist Please contact: erka@bcmongolia.org ECONOMIC INDICATORS
- 24. INFLATION Year 2006 6.0%[source: National Statistical Office of Mongolia (NSOM)] Year 2007 *15.1% [source: NSOM] Year 2008 *22.1% [source: NSOM] Year 2009 *4.2% [source: NSOM] Year 2010 *13.0% [source: NSOM] Year 2011 *10.2% [source: NSOM] December 31, 2013 *12.5% [source: NSOM] *Year-over-year (y-o-y), nationwide Note: 12.3% y-o-y, Ulaanbaatar city, December 31, 2013 CENTRAL BANK POLICY LOAN RATE December 31, 2008 9.75% [source: IMF] March 11, 2009 14.00% [source: IMF] May 12, 2009 12.75% [source: IMF] June 12, 2009 11.50% [source: IMF] September 30, 2009 10.00% [source: IMF] May 12, 2010 11.00% [source: IMF] April 28, 2011 11.50% [source: IMF] August 25, 2011 11.75% [source: IMF] October 25, 2011 12.25% [source: IMF] March 19, 2012 12.75% [source: Mongol Bank] April 18, 2012 13.25% [source: Mongol Bank] January 25, 2013 12.50% [source: Mongol Bank] April 8, 2013 11.50% [source: Mongol Bank] June 25, 2013 10.50% [source: Mongol Bank]
- 25. CURRENCY RATES –JANUARY 23, 2014 Currency Name Currency Rate US dollar USD 1,723.47 Euro EUR 2,341.94 Japanese yen JPY 16.52 British pound GBP 2,857.94 Hong Kong dollar HKD 222.14 Chinese Yuan CNY 284.75 Russian Ruble RUB 50.51 South Korean won KRW 1.60 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.