This document summarizes business news from Mongolia reported in the Business Council of Mongolia NewsWire on January 27, 2012. Key highlights include Rio Tinto gaining majority control of Ivanhoe Mines and its Oyu Tolgoi project in Mongolia, the Mongolian government targeting a June 2012 IPO for Erdenes-Tavan Tolgoi, and several mining companies including Aspire Mining and Berkh Uul completing exploration and drilling programs at Mongolian mining projects.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 206 – January 27, 2012
NEWS HIGHLIGHTS:
Business:
 Rio stops at majority interest for OT in Ivanhoe grab;
 E-TT targets June 2012 IPO date;
 Rio may freeze out Friedland;
 Government should resist a rush to E-TT IPO, says investment banking head;
 Aspire confirms coking coal at new discovery;
 New data doubles Sharyn Gol's registered reserves;
 Berkh Uul completes registration data program;
 Draig completes survey of Uvurkhangai licensed sites;
 GMC submits Mogoin Gol report;
 President calls for more deals with national companies;
 Prophecy awaits proposals from companies for Chandgana project;
 Xanadu to acquire two explorations licenses;
 Worries over commodity prices drive Ivanhoe towards financing deal;
 MICC directs financing to new commercial building project;
 Newcom appoints new CEO;
 Mongolian Telecom lays off 200 workers;
 ERD stock prices jump following restructuring announcement;
 Boroo Union sues minerals and energy minister;
 Winsway denies accusations of false reports;
 Baotou Steel comes up short under reshuffle task.
Economics:
 Blame policy makers, not Mongol Bank, says IMF official;
 Central bank piles more gold into its reserves;
 Added pressures reveal cracks in the banking sector;
 EBRD weighs in on growth in Mongolia;
 EBRD forecasts dim for Europe, bright for Central Asia and Mongolia;
 Exports surge with imports close in tow;
 Buuz producers look to feed hungry Inner Mongolians;
 Icy winds may heat up homes with wind power;
 Mine, all mine;
 Resource nationalism risk provides greater risk for global miners;
 HKEx to shift focus to commodities.
Politics:
 Empty seats stay cold in government;
 Fuel price hikes erupt into protests;
 Mongol bank refutes explanations for fuel price by importers;
 DP wants to break up fuel monopolies;

2.  Power project bidders wait while pols scramble to fill ministerial positions;
 Mongolia's bridge to North America;
 Mongolia observes 20 years of diplomatic relations with Kazakhstan;
 China donates meteorological station;
 German tech center opens in UB.
*Click on titles above to link to articles.
SPONSORS
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BCM MEETING RECAP
The meeting on 23 January with Laurenz Melchers in the chair was attended by 95 members and invited
guests. Melchers announced four upcoming events: Coal Mongolia 2012 from 9 to 12 February in
Ulaanbaatar: the USETEC Fair from 5 to 7 March in Cologne, Germany; Mines & Money on 19 to 23 March
in Hong Kong; and Coal Trans Mongolia in June in Ulaanbaatar.
BCM Vice Director I. Ser-od announced that Arthur Cookson, the head of tax at Oyu Tolgoi LLC, as the
new co-chair of BCM's Tax Working Group. He also announced a BCM In The Classroom program to be
held at Mongolian National University throughout February. This program will bring esteemed speakers,
such as Cameron McRae, President & CEO of Oyu Tolgoi, who will open the joint project.
BCM membership now stands at 183 members. More than 90 percent of members from 2011 have

3. renewed their membership. The nine recently joined members are:
1. Citi Group - The leading global financial services company. It has approximately 200 million customer
accounts and does business in more than 160 countries and jurisdictions. Through Citicorp and Citi
Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of
financial products and services, including consumer banking and credit, corporate and investment
banking, securities brokerage, transaction services, and wealth management.
2. Turning Point Holdings LLC - This diversified company is a foreign investor company operating in the
areas of food and beverage, travel and property.
The recently opened Turning Point Café is a jazz-themed restaurant and bar located just half a block
from the State Department Store on Tserendorj Street (opposite the fountain). The Café offers a unique
selection of western-style menu items, sophisticated ambience, and smooth jazz music (recorded, with
occasional live performances).
Turning Point Travel organizes private and group tours in Mongolia. The company also organizes tours in
Bhutan, Nepal, Tibet and the Indian Himalayas.
3. Kincora Copper Limited – Focused on Mongolia, Kincora acts as a mining exploration and
development company. It is based in Vancouver, and listed on the TSX Venture Exchange. It says its
strength comes from a major asset in Mongolia and a management team supported by experienced
mining developers and years of background in Mongolia.
Its key asset, the Bronze Fox copper-gold deposit is located in southeast Mongolia, 200 kilometers from
the Chinese border, along the famed Oyu Tolgoi copper belt and approximately 140 kilometers
northeast of the world-class Oyu Tolgoi copper-gold project.
4. Europharma Co., Ltd - Founded in 1999, this company is one of the largest pharmaceutical
companies in Mongolia. The primary operation of the company covers on the import and trade of
medicines, medical devices, medical equipments, vaccines, bio preparations, diagnostic materials,
patient care products, and biologically active additional nutrition.
Since 2002, EuroPharma was designated as an organization to supply medicine and medical equipment
to State hospitals by the participating on the bids announced by the Ministry of Health Mongolia.
Nowadays the company distributes pharmaceuticals through its 11 wholesale centers and 23 drugstores
located in the capital city and 6 provinces of the country.
5. ARD Capital Group - Formerly known as Northern Securities, ARD Capital Group is a Mongolian
Financial Regulatory Commission (FRC) licensed broker, dealer and underwriting company and member
of the Mongolian Stock Exchange. Founded in 2007, it has the goal of offering a wide range of
investment banking services including brokerage, underwriting and investment consultancy.
Its operational team consists of market experts to young motivated entrepreneurs, in all which holds a
FRC license to work in Capital market.
6. United Securities LLC – United Securities was established in January 2011 in order to provide wide
range of financial services in Mongolian financial market with the international standards and
legislation from the perspectives of professional. At the end of 2011, the company had received its
broker-dealer special license, underwriting license from the FRC as well as became the member of
Mongolian Stock Exchange. United Securities LLC had signed strategic partnership agreement with
Ulaanbaatar Capital LLC. With this strategic partnership agreement, United Securities LLC can able to
offer full investment banking services to its clients.
7. Ulaanbaatar Capital LLC - An investment vehicle of the Ulaanbaatar City Bank, this financial group
has the purpose of providing non-banking financial services to its customers in a broad range of asset
classes across Mongolian and International money, commodity and securities markets. Also as an
investment vehicle we do look for opportunities to create joint ventures that will bring high yields in
the fastest growing economy.
8. BB Consulting - The founder of BB Consulting is the former managing partner of GTs Advocates. The
firm provides legal consulting services and advises Firebird funds in connection with their investments

4. into various mining and exploration projects in Mongolia.
9. Shunkhlai Group LLC - This investment company manages diverse business portfolios, with the largest
business lines in the portfolio are mining, consumer goods production and distribution, petroleum, oil
and gas, information and communication technology and international trading.
As one of the first private entities in Mongolia, it aims to further strengthen existing business lines as
well as to expand its portfolio, including property, commodity trading, infrastructure, and information
technology for purposes of enhancing our contribution to development of Mongolia.
BUSINESS
RIO STOPS AT MAJORITY INTEREST FOR OT IN IVANHOE GRAB
Rio Tinto PLC raised its stake in Canada's Ivanhoe Mines Ltd., the 66 percent interest holder in the Oyu
Tolgoi copper-gold project, to a majority stake but said it had not current plans to buy more shares.
The move came after Ivanhoe Mines scrapped the shareholder rights plan that prevented Rio Tinto from
gaining control of the company.
In December, an arbitrator invalidated the so-called ―poison pill,‖ which Ivanhoe could have used to
force the Anglo-Australian company to pay more for control. It was no secret that Rio Tinto covets the
Oyu Tolgoi asset and wanted to gain control of it. This was called an opportune for Rio Tinto to make
its move, as the risk for the deal dissipates as the mine nears production. Ivanhoe Mines' share prices
have also fallen, along with most other commodity stocks amidst European economic frets. The stock
stood at CAD 19.11 a piece last week—well below its CAD 28.92 a share 52-week high.
Rio Tinto, scarred by the costly takeover of aluminum giant Alcan at the height of the commodities
boom, is not expected to move aggressively on Ivanhoe Mines.
The mine is 70 percent complete, and Ivanhoe Mines plans for it to be in commercial production in the
first half of 2013. It is expected to produce more than 1.2 billion pounds of copper and 650,000 ounces
of gold a year, in the first ten years of operation, with the mine producing 1.7 billion pounds of copper
and one million ounces of gold at its peak, in year seven.
Source: Mining Weekly, Reuters
E-TT TARGETS JUNE 2012 IPO DATE
The Mongolian government hopes to launch a multi-billion dollar initial public offering for Erdenes-
Tavan Tolgoi Co. (E-TT) in London and Mongolia in June, ahead of parliamentary elections.
―We are trying to go for the IPO before the elections,‖ a senior Mongolian government official said,
adding a task force would be set up to look into the IPO process after new ministers have been selected
to replace the recently resigned ministers of the Democratic Party (DP).
Another person said that getting certain financial terms translated into Mongolian is taking a long time,
and the fact that every Mongolian born before March 2010 stands to get shares in the IPO is tough to
administer. The plan to list Tavan Tolgoi in Hong Kong at the same time as in London and Ulaanbaatar
was dropped because Mongolia is not among the overseas markets from which Hong Kong approves
listings, and it is not likely to give special dispensation to allow the Mongolian-incorporated company to
list ahead of the elections.
The company plans to list in London by issuing global depositary receipts, which are easier to get
approval for but tend to have lower liquidity than primary shares. A company is able to raise funds by
listing in the form of global depositary receipts, which would normally be issued by a depositary in a
single location such as London or Luxembourg. The government plans to sell as much as a 30 percent
stake in Tavan Tolgoi to international investors as well as another 10 percent to local companies. It also
plans to give 10 percent to Mongolian citizens. In that case the government would hold about 50
percent.
A USD 2 billion to USD 3 billion fund raising could value Tavan Tolgoi at around USD 10 billion and

5. double the market capitalization of Ulaanbaatar stock exchange.
Source: Wall Street Journal
RIO MAY FREEZE OUT FRIEDLAND
Rio Tinto PLC is expected to offload a number of Australian and Asian assets now under its control after
it clinched majority ownership of Canadian explorer Ivanhoe Mines Ltd. Rio's long held desire to own
the lucrative Oyu Tolgoi mine in Mongolia came to fruition when a private purchase of 15.1 million
Ivanhoe shares lifted Rio's stake in the Canadian company from 49 percent to 51 percent.
While not a surprise, Rio's CAD 302 million (USD 301.3 million) purchase has cast doubt on the future of
Ivanhoe's other assets, which include a controlling 59 percent in Ivanhoe Australia Ltd. Ivanhoe also has
a gold play in Kazakhstan, coal interests in Mongolia, and exploration tenements in south-east Asia. Rio
is believed to have recently told Ivanhoe Chief Robert Friedland that its long-term interests did not
extend beyond Oyu Tolgoi.
―I expect Rio only wants Oyu Tolgoi, so any deal they do would be for this asset, with the other assets
spun out to existing shareholders, excluding Rio Tinto,‖ said CLSA analyst Hayden Bairstow.
Given Friedland's frosty relationship with Rio Tinto, his future on the Ivanhoe Mines board now appears
clouded. Rio is entitled to nominate directors to the board in proportion to its shareholding, but it
pledged as recently as last July to maintain a majority of independent directors until January 2014. Rio
would not comment on speculation that a Canadian listing could accompany listings in Australia,
London, and New York.
Source: Sydney Morning Herald
GOVERNMENT SHOULD RESIST A RUSH TO E-TT IPO, SAYS INVESTMENT BANKING HEAD
The chief executive officer of investment bank Frontier Securities, Masa Igata, recently opined that a
rush to the Erdenes-Tavan Tolgoi Co. (E-TT) initial public offering (IPO) would result in the loss of up to
USD 5 billion.
―Rushing the IPO of the eastern tsankhi [block] due to political reasons will take its total value down to
USD 5-6 billion,‖ said Igata. ―On the other hand, if the IPO is postponed until next year, this value
could be USD 9 billion to USD 10 billion.‖
The investment banking head listed obstacles to the IPO, such as selecting a well educated,
experienced, and independent board for E-TT, and timely construction of the coal processing plant. He
said at E-TT's current value, profits would total between USD 1.5 billion to USD 1.8 billion if 30 percent
of the IPO is released now compared with USD 2.7 and USD 3 billion next year. Igata said the
government needs USD 12 billion of funding for the distribution of cash and stocks, and could do so
easily by releasing the IPO now but at the cost of additional profits.
Although E-TT originally intended a triple listing on markets on Mongolia, London, and Hong Kong,
recent reports have indicated that the Hong Kong IPO is no longer likely. Igata said the Hong Kong
Exchange (HKEx) better suits the project because geographically it makes sense to deal with the Asian
market. He said the euro zone debt crisis adds additional risks as well. Last week the head of the
company, B. Enebish, said that E-TT would eventually list on the HKEx for certain, without elaborating
on the IPO.
Igata seemed unconcerned by the possibility of political risks in Mongolia leading to less investment in
the country. He said the rapid economic growth forecasted for Mongolia over the next ten years has got
a hold on investors. Only an ―unexpected turns of events,‖ such as rash decisions by government a
nosedive in the economy could detract investors, he said. He pointed to the dwindling of influence
from Russia and China as evidence of a bright future for the country.
Source: Frontier Securities

6. ASPIRE CONFIRMS COKING COAL AT NEW DISCOVERY
Coal explorer Aspire Mining Ltd. has confirmed the existence of coking coal at a new coal discovery
area to the north east of its Ovoot coal project.
Initial raw coal analysis shows mid-volatile, low-moisture coal, similar in characteristic to that found at
Ovoot. The firm next plans to begin washing experimentation to test yields from processing and
potential product specifications.
Aspire Mining expects to complete 16,500 meters of exploration drilling through 2012. Exploration
targets include the new coal discovery area, and the Hurimt and Zuun Del prospects within the Ovoot
project. Geotechnical and water drilling will continue.
Source: Aspire Mining Ltd.
BERKH UUL COMPLETES REGISTRATION DATA PROGRAM
Berkh Uul JSC has completed its drilling program at the Delgerkhaan fluorspar deposit. The goal of the
program was to verify drilling data, enabling the registration of reserves with Mongolian authorities of
the Mineral Resource Authority of Mongolia (MRAM).
The minerals explorer drilled 1,700 meters at the site to confirm the mineral data for registration and
prepare a resource report. Drilling came into contact with previous mineral veins established by the
historic data based on drilling by Russians in the 1960s. A local consulting firm will prepare a resource
report for the MRAM, while Micromine, an Australia-based mining consultant, prepares the NI 43-101
report. The company's management expects the report to have similar data to that of the historical
document.
Berkh Uul JSC is a diversified Mongolian mining and exploration company. It is listed on the Mongolian
Stock Exchange (MSE) Top 20 index and is controlled by funds managed by Firebird Management LLC, a
New York-based private equity and hedge fund management company. Its primary asset is the
Delgerkhaan fluorspar deposit.
Source: Berkh Uul JSC
DRAIG COMPLETES SURVEY OF UVURKHANGAI LICENSED SITES
The coal explorer Draig Resources Ltd. announced the completion of its geophysical survey of its coal-
licensed areas in Uvurkhangai Aimag, Teeg and Nariin Teeg.
―The survey was carried out referencing existing drill holes completed during the due diligence process
prior to acquiring the licenses to allow for better correlation of the coal seems,‖ said Mark Earley,
Draig Resources' managing director. ―Preliminary review of the field data has identified a number of
highly potential drilling targets in both licenses.‖
The survey comprised 32 kilometers of geophysical survey work. The results from the survey are being
analyzed by Nordic Geological Solutions LLC. Draig is now in the process of planning its drill program
through the Mongolian winter over its eight coal licenses in Uvurhangai and Umnugobi Aimags.
Source: Draig Resources Ltd.
GMC SUBMITS MOGOIN GOL REPORT
Global Met Coal Corporation (GMC) has submitted technical data from its Mogoin Gol project to the
Toronto Stock Exchange (TSX) Venture Exchange for review.
The Mogoin Gol project comprises both current mining-and exploration-licensed areas. The project area
is underlain by a single coal seam that averages 7.8 meters in thickness. Coking coal currently being
mined on the property is sold to Russian steel mills. The mine has had continuous open-pit production
since 1971.
The report estimates 10.3 million tons of coal remaining within one of the licensed areas where
production is underway. At another licensed area is another seam that contains what analysts believe
to be 10.7 million tons of coal.

7. The report said there is still not enough data to undertake even a ―high level‖ mine design, and
recommended a modern mining fleet for production. It identified the highest cost and risk to be
transport of the coal. SRK Consulting Ltd., the company that prepared the report, gave a list of actions
that should be made and recommended additional assessments. It also recommended a two-phase
exploration program to cost up to 4.5 million.
Source: Global Metal Coal Corporation
PRESIDENT CALLS FOR MORE DEALS WITH NATIONAL COMPANIES
President Ts. Elbegdorj recently through his support behind Energy Resources LLC after news spread of
a possible sustainability agreement between that firm and the government.
The president visited Energy Resources during a tour through the countryside that took him to the Gobi
Desert and its provinces. He supported the idea of a sustainability agreement and said Mongolia must
do more to support its domestic investors. In the past the government has only committed to this kind
of agreement with foreign investors, said the president, and he welcomed the opportunity to strike
such a deal with a national firm.
A sustainability agreement would normally extend for 30 years, and if the investment exceeded USD
300 million, Mongolian law strongly encourages business with that investor. The company plans to build
and has already built infrastructure surrounding its Ukhaa Khudag coal mine, including a processing
factory, a thermal power station, a water supply system, roads, and housing blocks. Total investment
thus far comes to some USD 600 million and will reportedly reach USD 750 million by the end of 2012.
Investments funds have come from the stock market and long-term financing.
J. Odjargal, chairman of Energy Resources' board directors, said that the deal was not a scheme for tax
breaks and that his company would continue paying its taxes at the same rates. He added that mining
operations at Ukhaa Khudag will continue for 20 years and that his company would like to make a deal
for 15 years.
Source: Zuunii Medee
PROPHECY AWAITS PROPOSALS FROM COMPANIES FOR CHANDGANA PROJECT
Prophecy Coal Corp. has requested proposals from various companies for its Chandgana power plant.
Four Chinese engineering, procurement, and construction companies have reviewed the project data
and visited the site in the past 90 days, in addition to several other international companies that have
expressed written interest in bidding on the contract. The firm expects to have a final proposal by 31
March this year and conclude the selection process by the second quarter of 2012.
Since obtaining the power plant construction license in November last year, Prophecy Coal has been in
close dialog with the Ministry of Natural Resources and Energy regarding the drafting and signing of the
Chandgana project. Several meetings have taken place, including a meeting this month to establish a
working commission on the project.
The firm has also met in Beijing with Chinese government-sponsored policy banks currently involved in
Mongolian projects, as well as private equity firms engaged in international energy production projects.
Independent power plant project in Asia have a history of offering stable yields, and have garnered the
interests of institutional investors. Prophecy Coal hopes its Chandgana project will be viewed as a
similar investment.
Source: Prophecy Coal Corp.
XANADU TO ACQUIRE TWO EXPLORATIONS LICENSES
Xanadu Mines Ltd. has acquired the option to earn up to 80 percent of the Amgalant and Argalant Uul
exploration license. Xanadu will issue shares as consideration for the purchase of the licenses, the
equivalent of USD 500,000.
―At a time when prospective ground is increasingly difficult to acquire, both Amgalant and Argalant

8. promise a significant new metals opportunity for Xanadu's shareholders in the proven world-class South
Gobi porphyry copper belt,‖ said Brian Thorton, Xanadu's chairman. Our strategy is to focus on two key
minerals—copper-gold, and coking coal in 2012, next to the world's largest consumer of both, which is
China.‖
The two exploration licenses are located in the South Gobi region of southern Mongolia, approximately
460 kilometers southeast of the capital of Ulaanbaatar, in the central part of the South Gobi porphyry
belt. They are approximately 110 kilometers north east of Oyu Tolgoi.
The Mongolian government granted the exploration licenses in 2009 for nine years and cover 109 square
kilometers and 895 square kilometers for Amgalant and Argalant Uul respectively. Initial exploration
has identified reportedly numerous, large geophysical anomalies similar to the footprints recognized at
Oyu Tolgoi and could indicate the presence of porphyry mineralization.
Source: Xanadu Mines Ltd.
WORRIES OVER COMMODITY PRICES DRIVES IVANHOE TOWARDS FINANCING DEAL
Perceiving a cloudy future for world markets, Ivanhoe Mines Ltd. announced that it had negotiated an
additional USD 1.8 billion bridge financing for Oyu Tolgoi.
―The facility, a precautionary response to volatility in the project finance and corporate debt markets
stemming from recent events in Europe, could be used if there is a delay in completing and gaining
approvals for the long-term project-finance packages,‖ said the company in a statement last week.
―The proposed bridging facility approved by the Ivanhoe Mines board remains subject to approvals by
Rio Tinto and the bank credit committee, and completion of final documentation.‖
The company says financing will be provided by a major international bank. Ivanhoe's stock slipped two
percent on Wednesday by USD 18.60 a share, following the announcement. According to the firm,
construction is 70 percent complete, and it expects to begin initial production in mid-2012, with
commercial production to begin in the first half of 2013.
Source: Mining.com
MICC DIRECTS FINANCING TO NEW COMMERCIAL BUILDING PROJECT
Mongolian International Capital Corporation (MICC) has facilitated a EUR 10 million, seven-year loan
transaction the construction of a new commercial building for Tsast Properties LLC.
The loan will enable the firm to complete its construction of the International Commerce Center (ICC).
Current construction of the building is at 40 percent.
Tsast Properties is focused on real estate development in Ulaanbaatar, and is a subsidiary of Tsast
Impex, a holding group in the construction sector.
The ICC will be a 21-story commercial building located in Ulaanbaatar's central business district. It will
have two underground parking lots, a lobby with commercial area for coffee shops, restaurants up to
the fourth floor, office space and conference rooms up to the 16th floor, and an upscale lounge.
―We are excited to see the addition of ICC tower into Ulaanbaatar's city skyline, so we are delighted to
close Tsast's loan facility transaction,‖ said D. Achiterdene, president of MICC. ―Tsast transaction is the
latest entry in MICC's strong track record of arranging flexible, long-term and competitively priced
cross-border debt financing to Mongolia's top corporations.‖
Established in 2005, MICC provides investment banking, equity research, securities underwriting, and
brokerage services to Mongolian and international clients.
Source: Mongolian International Capital Corporation
NEWCOM APPOINTS NEW CEO
Newcom Group's board of directors has appointed B. Byambasaikhan as its new chief executive officer.
Byambasaikhan first joined Newcom in August 2010 as the managing director and was appointed as the
acting chief executive officer on 1 October 2011. Byambasaikhan is also the chief executive officer of

9. Clean Energy, a subsidiary company developing and constructing Mongolia's first 50 mega watt wind
farm.
The new executive holds a master of arts in international economic affairs and international law and
organizations from George Washington University. Byambasaikhan is a vice chairman of the Mongolia
Economic Forum 2012 and leads its clean technology and innovation group.
Source: Newcom Group
MONGOLIAN TELECOM LAYS OFF 200 WORKERS
Mongolian Telecom LLC laid off 200 workers due to declining sales.
Traditional landline telephone usage has fallen due to an increase in cell phone usage. That is why the
company has agreed to give each worker three to nine months salary.
A union official said most of the employees had worked for the company for a long time. Both the union
and Telecom have asked the Communications Regulatory Committee to grant the company mobile
rights, but the committee has not allowed those rights. If Telecom had cell phone rights, the union and
the company said, it sales would increase and it would not have to dismiss workers.
Source: News.mn
ERD STOCK PRICES JUMP FOLLOWING RESTRUCTURING ANNOUNCEMENT
Erdene Resource Development Corp. (ERD) reported stock gains after announcing that its board would
review the capital structure of the company to explore and evaluate potential alternatives to maximize
shareholder value.
The diversified resource company said its options include a spinoff of the Mongolian assets, sale of
subsidiaries, strategic investments, project financing, and other corporate and financial transactions.
The company's stock climbed 28 percent in morning trade after the announcement.
Source: NASDAQ
BOROO UNION SUES MINERALS AND ENERGY MINISTER
Boroo Gold LLC's trade union has sued the Minister Mineral Resources and Energy, D. Zorigt, on
corruption charges.
The trade union has appealed to the Ulaanbaatar administrative court to charge Zorigt with corruption
after refusing to sign a feasibility study by Boroo Gold regarding disposal methods. The company has
tried to garner approval for its methods of stacking and dissolving materials from the minister, but to
no avail.
Zorigt has given no explanations as to why he would not sign the report. Government agencies such as
the State Professional Inspection Committee and the Ministry of Nature, Environment and Tourism have
concluded that Boroo Gold's methods would not be harmful to the environment. Another company, Ikh
Mongol, is already using the same techniques for its mining operations.
Trade union members suspect the minister of corruption and have asked for a proper explanation for
his refusal to sign the documents. The company has already trained 64 people to work on the project,
but they face dismissal due to the delay.
Source: Udriin Sonin
WINSWAY DENIES ACCUSATIONS OF FALSE REPORTS
Winsway Coking Coal Holdings Ltd., which processes and transports coal to China from Mongolia, denied
allegations from a short seller than imports were less than the company reported and inventories were
overstated.
―This report is dead wrong,‖ Chief Financial Officer Jerry Xie said today on a call with investors.
―Winsway is absolutely not a fraud,‖ as was alleged in a report from Jonestown Research, an
anonymous group.

10. Scrutiny of accounting standards of Chinese companies intensified last June when short seller Carson
Block's Muddy Waters LLC alleged Sino-Forest Corp. overstated its assets and cash. Short sellers have
targeted other Chinese companies including vegetable producer Chaoda Modern Agriculture Holdings
Ltd. and software maker Longtop Financial Technologies Ltd.
Moody's investor Service said it was reviewing its rating for Winsway for a possible downgrade.
Jonestown doesn't publicly disclose its contact information, InvestDOOR, the website that published the
Jonestown Research report, said in an emailed response to Bloomberg, InvestDOOR doesn't research or
analyze companies, it said.
Winsway will proceed with its planned purchase of Canadian metallurgical-coal producer Grande Cache
Coal Corp. (GCE), Xie said. GCE said it did not believe the allegations in a statement and the deal will
continue as planned.
Moody's warned of ―red flags‖ at 61 companies in a July report, giving Winsway 11 out of a possible 20.
Jonestown said in its report it is betting that shares of both Winsway and Grande Cache will decline. In
short selling investors sell borrowed shares in anticipation that the securities will decline and they can
buy them back at a profit. Winsway uses so-called intermediaries to import coal and they may account
for differences in Winsway's own accounts and Chinese import data as alleged in the report, Xie said.
Xie said the company's audits statements are honest and that Jonestown's methodology to calculate its
inventory is based on wrong assumptions. Winsway has four suppliers in Mongolia, including Mongolian
Mining Corp. and SouthGobi Resources Ltd.
Source: Business Week
BAOTOU STEEL COMES UP SHORT UNDER RESHUFFLE TASK
Inner Mongolia Baotou Steel Rare-earth Hi-tech Co. Ltd., a leading Chinese rare-earth producer, has
failed to make a satisfactory performance in the shuffle of the rare earth industry. As China continues
to limit export sale of rare earth minerals, companies are looking to places such as Mongolia as a new
source of the product used in high-tech gadgets and green technologies.
About a year ago, 35 rare earth companies in the northern Chinese region were expected to be merged
or weeded out, but that task has not yet been completed. The reshuffle scheme has been revised but
the revised scheme has not been made public. An insider disclosed that some of the 35 companies
would not be weeded out as earlier expected, and instead, they would be merged by Baogang Group,
the parent company of Baotou Steel.
The merger would mean Baogang will pay more for the task because more rare earth smelting
companies are to be merged, pointed out experts. On 15 December 2011, China's Ministry of commerce
issued a list of 32 companies applying for 2012 quotas for rare earth and coke rare earth. Only 11
companies have gotten access to the first batch of the export quotas. The result was reported to be
influenced by the examination and supervision launched by the Ministry of Environment Protection.
In 2010 Baotou Steel completed the construction of six rare earth depots, designed for the storage of
rare earth raw material and rare earth products. The smallest of them can hold 5,000 to 6,000 tons.
Source: ChinaMining.org
PROPHECY AWAITS PROPOSALS FROM COMPANIES FOR CHANDGANA PROJECT
Prophecy Coal Corp. has requested proposals from various companies for its Chandgana power plant.
Four Chinese engineering, procurement, and construction companies have reviewed the project data
and visited the site in the past 90 days, in addition to several other international companies that have
expressed written interest in bidding on the contract. The firm expects to have a final proposal by 31
March this year and conclude the selection process by the second quarter of 2012.
Since obtaining the power plant construction license in November last year, Prophecy Coal has been in
close dialog with the Ministry of Natural Resources and Energy regarding the drafting and signing of the
Chandgana project. Several meetings have taken place, including a meeting this month to establish a

11. working commission on the project.
The firm has also met in Beijing with Chinese government-sponsored policy banks currently involved in
Mongolian projects, as well as private equity firms engaged in international energy production projects.
Independent power plant project in Asia have a history of offering stable yields, and have garnered the
interests of institutional investors. Prophecy Coal hopes its Chandgana project will be viewed as a
similar investment.
Source: Prophecy Coal Corp.
ECONOMICS
BLAME POLICY MAKERS, NOT MONGOL BANK, SAYS IMF OFFICIAL
An official from the IMF has said that blame towards the central bank for instituting a flexible currency
rate and the hike in gas prices are misplaced. Barnett argued that a flexible currency rate is a good
defense against economic crisis and not the source of the problem.
―I want to emphasize that the international market price of petroleum is driven by the U.S. Dollar, and
the domestic market price in each country depends on the international market price and currency
rates,‖ said Steve Barnett, the head of the Asia and Pacific Department of the International Monetary
Fund (IMF). ―There is a common principle that the domestic market price changes along with the world
market price and currency rate fluctuation, while the price of petroleum should be correlated to its
cost.‖
Barnett said that the IMF approved the Bank of Mongolia's implementation of a flexible rate structure,
and that inflexible rates are what led to the 2008 economic crisis in Mongolia. He pointed to an
overheating of the economy instigated by state spending as a reason for inflation, which effectively
raised the price of imported fuels. He also commented that the central bank had acted appropriately to
stabilize the tugrug's rate to better meet the external conditions.
Barrett had difficulty, however zeroing in on the source of the U.S. dollar's soaring appreciating.
―The tugrug's falling rate could be due to many factors,‖ he said. ―For instance, the tugrug's rate could
be due to foreign factors, such as the world market avoiding crisis. And the U.S. dollar rate was
strengthened while the euro's rate fell in 2010. A domestic factor could be economic stability
weakening due to the government's budget policy.‖
Barrett recommended that the central bank refrain from forcibly strengthening the currency rate. He
said the main factor in rising prices is the high budget expenditures in 2011 and 2012, and that although
complaints about prices are legitimate, they should be directed towards budget policy makers, not the
central bank.
Source: News.mn
CENTRAL BANK PILES MORE GOLD INTO ITS RESERVES
Both Mongolia and its neighbor Kazakhstan added to their gold reserves in December as the precious
metal advanced from an 11 consecutive year, according to the International Monetary Fund (IMF).
Mongolia added 1.2 tons to its reserves to take its assets to 3.5 tons. Kazakhstan's bullion holding rose
3.1 metric tons to 76.7 tons.
Central banks are expanding reserves for the first time in a generation as holdings in exchange-traded
products are within 1.9 percent of an all-time high set last month. The banks may buy 600 tons this
year, according to Goldman Sachs Group Inc. Global holdings of the metal advanced by 66.6 tons in
November from a month earlier to 30,877 tons. That's equal to almost 11 years of world mine
production.
―The trend of emerging countries' official sector gold buying will continue this year, which will be a
price-supportive factor going forward,‖ said Bayram Dincer, an analyst at LGT Managment. ―The desire
of central banks to diversify reserves with hard-currency gold is high and a long-term process.‖

12. Gold for immediate delivery gained 10 percent last year and reached a record USD 1,921.15 an ounce in
September. This month gold is up 6 percent. Gold accounts for 5.2 percent of Mongolia's total reserves.
Source: Bloomberg.com
ADDED PRESSURES REVEAL CRACKS IN THE BANKING SECTOR
Investors would be wise to pay special attention to banks' prudential ratio, said Frontier Securities
Chief Investment Strategist Dale Choi.
―At this stage in the business cycle, it is especially important to proactively manage risks and pay
attention to how strictly banks are adhering to prudential regulations in order to prevent the buildup of
future credit quality problems in the banking system (as it became painfully clear in 2009),‖ said Choi.
Interest income from Trade and Development bank is up 61 percent compared with the same period a
year ago, while other income is up 104; or increases of MNT 143 billion and MNT 33 billion respectively.
Assets increased 56 percent compared with the same period a year ago to MNT 2 trillion, in additions to
a 53 percent increase in liabilities to MNT 1.91 trillion, and a 102 percent increase in capital to MNT
178.34 billion. The World Bank reported in October 2011 that the banking sector remains under-
regulated, while expanding rapidly. Data from the International Monetary Fund (IMF) found that rapid
acceleration is making banks more vulnerable and adding more stress to banking systems. Total loans
have increased 73 percent compared with the same period a year ago to 5.64 trillion in December.
Choi said indicators for ―healthy pace of credit growth‖ include adequacy requirements, provisions on
new lending, reserve requirements and liquidity ratios. He added that non-performing loans and loans
in arrears were the most important indicators. Investors should also pay mind to how banks maintain
―buffer capital‖ that would be used to handle any losses.
Source: Frontier Securities
EBRD WEIGHS IN ON GROWTH IN MONGOLIA
Although Mongolia is entering a commodity boom, history teaches us that commodity revenues can
offer opportunities as well as long-term economic depressions. Increased macroeconomic volatility,
reduced incentives to invest in physical and human capital, and undermining economic political
institutions are all challenges faced by countries in the past, and Mongolia must fast in its immediate
future.
The European Bank of Reconstruction and Development surveyed what Mongolia can do to build on
reform steps it has already taken, to avoid a ―resource trap‖ in its report ―Managing Mongolia's
Resource Boom.‖ It argues that cash transfers to the general population should be linked directly to the
performance of mining assets that lead to good governance in the mining sector; social spending should
be kept separate from resource revenue, better targeted and fully incorporated into the budget; and
macroeconomic volatility could be reduced by financial reforms and fiscal stability.
Until recently Mongolia had remained a relatively small, landlocked, low-income economy, with a
population of 2.7 million, per capital gross domestic product (GDP) of around USD 1,500 in 2009 and
total GDP of USD 4.2 billion in that year. Its development potential, however, is enormous, linked
primarily with the enormous two Oyu Tolgoi copper-gold and Tavan Tolgoi coal projects.
In 2010 alone, net inward foreign direct investment (FDI) reached 25 percent of GDP. Although GDP
growth was moderate in real terms (around 6.5 percent), it reached 30 percent in per capita dollar
terms. At the same time the mining boom presents many challenges, some of which are common to
countries experiencing commodity booms. The key challenge is to sustain the growth momentum over
the long term. Studies indicate the resource-rich countries tend to under-perform compared with
resource-poor countries with similar initial income levels and other characteristics. This scenario is
called the ―resource curse.‖
Other challenges are more specific to Mongolia, as development of mining depends crucially on large-
scale investment in infrastructure, including transport, power supply and water supply. This is a

13. particular challenge in a landlocked country where distances are vast.
Source: European Bank of Reconstruction and Development
EBRD FORECASTS DIM FOR EUROPE, BRIGHT FOR CENTRAL ASIA AND MONGOLIA
While central and eastern Europe reel from the debt crisis, in Central Asia economies may have less to
worry about.
The European Bank for Reconstruction and Development on Tuesday cut its forecast for the central and
eastern Europe and rang alarm bells about the danger of an escalation of the euro-zone crisis. Figures
from the third quarter of last year showed the first net capital outflows from the region since the last
financial crisis in 2009, said the EBRD, which suggested there was every sign the exodus would
continue. West European banks under regulatory pressure at home to rebuild balance sheets ―appear to
be deleveraging since autumn,‖ it said.
Things look better further east, where exports of natural resources will boost economies for as long as
the prices of oil and other commodities remain strong. In Mongolia gold, coal, copper, iron ore, and
coal prices will be the deciding factors. The EBRD forecast for Russia is unchanged at 4.2 percent and
the outlook for central Asia and Mongolia goes up to 7 percent from 6.6 percent in October. The chart
below paints the region-wide picture (the last column CAM, refers to central Asia and Mongolia.
Source: Financial Times
EXPORTS SURGE WITH IMPORTS CLOSE IN TOW
While Mongolian exports grew in 2010, imports followed closely behind. The wealth obtained from the
sale of those exports has resulted in greater imports for mining, infrastructure, and construction.
Mongolia traded with 127 countries, bringing trade to USD 11.3 billion. Exports comprised USD 4.78
billion and imports 6.52 billion of that figure. Total external trade turnover increased by USD 5.19
billion, or 104 percent, and exports USD 1.87 billion, or 64 percent. Some of the imported materials
include diesel fuel, trucks, passenger cars, new tires, gasoline, and construction equipment.
Mongolia benefited from favorable commodity prices for nearly all of its export commodities, such as
coal, copper, iron ore, crude oil, greasy cashmere, zinc and gold in 2011. Coal exports this year
reached 21 million tons worth USD 2.25 billion, and copper exports valued up 25 percent with little
change in volume.
Meanwhile, imports have shot up alongside export growth. Mongolia spent USD 706 million on diesel.
The value of crude oil in Mongolia rose 75 percent compared with 27 percent growth in volume. This
indicative to the import of more expensive passenger cars.
Source: Frontier Securities

14. BUUZ PRODUCERS LOOK TO FEED HUNGRY INNER MONGOLIANS
Buuz, steamed mutton dumplings and a Mongolian national food, may be the next hot and steamy
commodity heading to China.
Mongolian food companies are searching for ways to market and sell buuz to a Chinese audience after
success at the recently held Food Exhibition at Erenhot, in the Chinese autonomous zone Inner
Mongolia.
A distributor of the buuz, Khaan Khuns Co. Ltd., sold 4.2 tons of buuz and the smaller yet similar
variety called bansh, said the company's general manager, Ts. Munkhsaikhan. He attributed one
advantage the Mongolian product has over China's to the fact that Mongolian mutton is twice as cheap
as in China. Chinese buuz are also made with 25 percent meet, while Khan Khun's products can boast
100 percent and better quality meat, said Munkhsaikhan.
Last November, the deputy minister of food and agriculture signed an agreement that would make it
possible to export finished and processed meat products to China. As buuz and bansh are classified as a
half-finished product, however, the agreement would have to change to allow their export to China,
said Munkhsaikhan. Buuz producers will meet with representatives of the Mongolian National Chamber
of Industry and Commerce (MNICC) to discuss an initiative to allow the sale of buuz to China.
Source: Udriin Sonin
ICY WINDS MAY HEAT UP HOMES WITH WIND POWER
Those harsh Siberian winds may actually do the people of Mongolia some good this year, once the new
wind farm at Salkhit goes into operation.
One of the main objectives of the Fresh Air program funded by the Millennium Challenge Corporation
(MCC) is to introduce wind energy technology. The program would make improvements to Nalaikh's sub-
station to allow it to receive wind energy. The energy would next be transferred to a plant at Sergelen
Soum in Tuv Aimag to produce electricity.
The project planners expect the wind power station and its 31 windmills to be finished by the end of
this year. The Salkhit wind farm is led by Mongolia's Newcom Group and U.S. General Electric Company
(GE). GE will supply the power station turbines, while Australia's Leighton Asia will assemble them. The
European Bank for Reconstruction and Development (EBRD) and the Netherlands FMO will handle the
financing of the project.
Source: Zuunii Medee
MINE, ALL MINE
Ulaanbaatar is a boom town on the frontier of global mining. Hotels are bursting; the Irish pubs are
heaving with foreign and national crowds. To pay for development, Mongolia is being dug up and sold to
China.
Already more than 80 percent of its exports are minerals, and some 3,000 mining licenses have been
issued. In addition to its treasure-chest of geological wealth, it is slap-bang next the world's fast-
growing market for most minerals. With just under three million people, Mongolia has a chance of
becoming a Qatar or a Brunei: a country that has only a small population but almost of it loaded.
The IMF expects growth to average 14 percent a year between 2012 and 2016. Notably, The Oyu Tolgoi
copper-gold project will from 2013 start adding about five percentage points a year on average to
growth up to 2020, when its impact peaks. All of the costs to bring in electricity, water, mining
infrastructure, and housing for its workers are justified by the 450,000 tons of copper it is expected to
produce each year. Oyu Tolgoi is a test of Mongolia's ability to work with foreign investors to pull off
such a mammoth undertaking. Next in line is Tavan Tolgoi, the world's biggest untapped coal deposit.
Notional shares in this project have already been distributed (electronically) to every Mongolian born
before 31 March 2011. Parliamentary elections in 2012 add political urgency to a scheme to raise
billions of dollars for the mine through an initial public offering (IPO) in Ulaanbaatar and London—which

15. would effectively double the capitalization of the Mongolian Stock Exchange's (MSE).
However, many worry about the economic, environmental, social and strategic costs of becoming
―Minegolia.‖ Economists fret about a ―resource curse,‖ or ―Dutch disease‖—whereby wealth floods in as
natural resources are exploited, pushing up the exchange rate, inflation, or both, and renders other
industries uncompetitive. Furthermore, Mongolia is prone to populist policymaking. After pledges made
at the previous election, every Mongolian, rich or poor, gets MNT 21,000 on the 15th of every month.
The big parties have declared a no-handout pact ahead of the next election, and the government has
set up a ―fiscal-stability fund‖ to smooth the commodity cycle. For economist, the resource curse is a
risk Mongolia has to take. Its comparative advantage is in commodities and mining services. There is no
point in trying to compete in manufacturing with China.
Mongolia is still a desperately poor country, having graduated to a ―lower-middle-income‖ status, with
a GDP of around USD 2,000 a head. Some believe the city is getting worse as more people come to town
and scramble to earn money. Mining refugees fleeing environmental devastation are also entering the
city. Beside the license-holders, Mongolia has tens of thousands of illegal gold prospectors, known as
―ninja‖ miners. A massive undertaking like Oyu Tolgoi is bound to distort the local economy and disrupt
the environment. Compared with the ninjas, the multinationals and development banks conduct impact
assessments and bio-diversity studies, in addition to job creation and employment to subcontractors. S.
Oyun Sanjasuuren, an independent MP, said mining is bound to be political because it is ―the main thing
in the country;‖ and the face of mining over the past 15 years has been ―mostly ugly.‖
Source: The Economist
RESOURCE NATIONALISM RISK PROVIDES GREATER RISK FOR GLOBAL MINERS
Last year, according to an Ernst & Young survey of the world's 30 largest miners, resource nationalism
jumped to the top of the risk list, after 25 countries announced their intentions to increase their take
of the mining industry's profits and other contemplate outright nationalization. As frontier nations such
as Mongolia become investment magnets, investors will have to decide which ones they can put their
faith in.
From 2001 to 2010, global mined gold production grew from 2,646 tons to just 2,696 tons. While this
meager pace partly reflects the side effects of underinvestment in exploration during the low gold
price cycle of the 1990s, it also reflects the longer lead time associated with the frontier market that
are now essential to growing global supply. In fact, three of the world's ten largest gold mines are
located in frontier markets: Uzbekistan, Papua New Guinea, and Mongolia. Research house Maplecroft
in its 2012 political risk atlas released yesterday identifies The Democratic Republic of Congo, South
Sudan, Myanmar, Turkmenistan, Iran, Guinea, Zimbabwe Venezuela, Iraq, Bolivia, Russia, Kazakhstan,
Angola, Nigeria, and Libya as resource nationalism hot spots.
In October Ivanhoe Mines Ltd. and Rio Tinto PLC dodged a bullet when the Mongolian government said
it was rethinking a 2009 deal that gave miners a 66 percent stake in Oyu Tolgoi and that it wanted half
of the USD 6 billion gold and copper project. Ivanhoe shares plunged on the news, but the firm took a
tough stance and after some desperate negotiations Mongolia backed off. Oyu Tolgoi is now 70 percent
built and Rio is poised to take full control of the project.
Eurasia Group says when mining projects such as Oyou Tolgoi, Conga in Peru, and Tasiast in Mauritania,
which have tremendous impact on economic activity in their host countries, gains ―VIP status‖ in the
eyes of the government it can also create additional risk as ―taxes, royalties, and local purchasing
becomes a driver for political conflict. Weak rule of law will exacerbate such risks, as will a propensity
on the part of host governments to partner with Chinese and other state capitalist partners under
opaque terms.
Source: Mining.com

16. HKEX TO SHIFT FOCUS TO COMMODITIES
Hong Kong's stock exchange will look to commodities markets for growth, marking a strategy shift for
the world leader in initial public offerings (IPOs). The Hong Kong Stock Exchange (HKEx) lists some
Mongolian mining companies, including Mongolian Mining Corp., and was recently called the more
advantageous partner when the head of the investment bank Frontier Securities compared the markets
in Hong Kong and London for Erdenes-Tavan Tolgoi LLC. A shift towards the commodities market would
most likely draw more attention to Mongolian companies to list in Hong Kong as well.
Hong Kong Exchanges & Clearing Ltd. Chief Executive Charles Li said the challenge would be great,
given that it is an area dominated by international players. The HKEx plans to tap into China's demand
for commodity products, ideally by launching products denominated in China's currency, the yuan,
rather than compete with those already dominating the market.
Mr. Li said the exchange would rule nothing out, even the possibility of buying a major exchange, and
that it will aggressively hire experts to bolster its limited knowledge in the complicated asset class. If
Hong Kong does not develop products, China could open up its domestic commodities exchanges to
international players or otherwise cut Hong Kong out of the market, said Li. China already has three
major commodities exchanges, the Shanghai Futures Exchange, the Dalian Commodity Exchange, and
the Zhengzhou Commodity Exchange. But they mainly provide services for domestic players. Hong Kong
hopes to step in when China wants to do business with the rest of the world, focusing on metals and
agriculture rather than soft commodities and oil.
The Hong Kong Mercantile Exchange, which began trading U.S. dollar-denominated gold futures on its
electronic platform last year, is also trying to capitalize on its proximity to China to attract
commodities business. In addition to commodities, Hong Kong Exchanges will pursue opportunities in
over-the-counter clearing and financial derivatives.
Source: Wall Street Journal
POLITICS
EMPTY SEATS STAY COLD IN GOVERNMENT
Despite Parliament's scramble to appoint new ministers after the disbandment of the coalition
government left many ministerial position vacant, it has still yet to fill those positions.
The MPP caucus criticized the Prime Minister, and the chairman of their own party, S. Batbold for his
nominations. Some members of the MPP said that Batbold is paying too much attention to the
vacancies, while neglecting other important duties. They pointed to draft laws and the appointment of
managing officials at the State Property Committee (SPC) and the Nuclear Energy Authority (NEA) as
more pressing matters. MPP caucus members also expressed their displeasure for nominating candidates
who had not been approved in last week's caucus. For example, Batbold had submitted candidate Ch.
Ulaan instead of D. Khayankhyarvaa as the selection for finance minister. Some members also said that
the prime minister's actions have tarnished the reputation of the MPP. A day later The DP caucus
rejected the MPP's nominees for the six ministerial positions.
President Ts. Elbegdorj would only approve of two of the prime minister's choices. Those were N.
Hurelbaatar for Health Care Minister and D. Tsogtbaatar for Minister of the Environment and tourism.
Last week Elbegdorj was vocal that the selections should be wise ones. He said the candidates must be
people with experience and should not include MPs. After receiving those comments from the
president, Batbold submitted his nominations to Speaker D. Demberel.
The full nominations for the ministerial offices are D. Khayankhyarvaa for finance minister, Ts.
Dashdorj for road, transportation and urban development minister, J. Enkhbayar for defense minister,
MPP Secretary General U. Khurelsukh for first deputy premier, former Secretary State of the Health
Ministry N. Khurelbaatar for Health Minister, and former Secretary State of Foreign Affairs and Trade
Ministry D. Tsogtbaatar for nature, environment and tourism minister.

17. Source: News.mn, Montsame.mn, Zuunii Medee
FUEL PRICE HIKES ERUPT INTO PROTESTS
An assembly of trade unions gathered together at Sukhbaatar square to protest the recent rise in fuel
and oil prices. Prices jumped as high as MNT 250 more per liter two weeks ago, causing widespread
price increases for commercial goods and anxiety among the populace.
Two weeks ago the Confederation of Trade Unions (CTU) announced that they would demonstrate
alongside other organizations such as the National Association for promised demands, and the Union of
Consumer Interests.
CTU President S. Ganbaatar said rising gas prices are ―really worsening people's living standards.‖ He
added that the trade unions of are fighting to protect citizens' interest, and, ―This is not a political
fight. It is an economic fight.‖
Speaker D. Demberel and head of the Standing Committee on Economics D. Zorigt met with
representatives of the CTU and commended them for their stance. They agreed that the price increases
were unjustified and that they understood their position. He said the Bank of Mongolia has organized a
national currency auction to cool down the currency rate and an investigation was already underway by
the committee led by Zorigt.
Following their meeting with officials, the demonstrators opted to suspend their protest.
Source: News.mn, Zuunii Medee
MONGOL BANK REFUTES EXPLANATIONS FOR FUEL PRICE BY IMPORTERS
The Bank of Mongolia has found that the claim by fuel and oil importer companies that the sharp price
increase was instigated by a surging the U.S. dollar to be untrue.
Following prices jumps over MNT 200 for gas in Mongolia, Parliament charged the central bank with
studying the cause for the price change. Fuel and oil importers explained the 16 percent price increase
for fuel to be an effect of the depreciation of the Mongolian tugrug, but government officials ordered
an investigation into the matter.
In its investigation, the central bank found that importers purchased USD 128.4 million at an average
rate of MNT 1,388.7 from commercial banks on December 2011 and January 2012 for their payment. In
December and January the central bank posted rates over MNT 1,400 for mainstream commercial
purchase. The bank found the claims by fuel importers ungrounded, and said they had broken
regulations set by the government. It added that the sharp price increased created anxiety among the
public, which resulted in overall price jumps for commercial goods and a MNT 60 price leap to MNT
1480.
Source: Udriin Sonin
DP WANTS TO BREAK UP FUEL MONOPOLIES
The Democratic Party (DP) has demanded the dismantling of the monopoly importers have over
petroleum and fuels.
―We will investigate the reasons that Mongolia only has a few wholesale gasoline companies,‖ said DP
party leader L. Gantumur. ―These companies hold monopoly rights over work with big mining project.‖
The Federation of Mongolian Trade Unions has sent the party two letters regarding the stabilization of
the tugrug rate and two more demands on reducing commodity prices, said Gantumur. On 9 January the
workers' organization met with the DP to discuss price hikes and submit a proposal demanding the
resignation of the president of the Bank of Mongolia, L. Purevdorj.
Source: Undesnii Shuudan
POWER PROJECT BIDDERS WAIT WHILE POLS SCRAMBLE TO FILL MINISTERIAL POSITIONS
A number of bids for projects will remain on hold following the sudden resignation of the head of the

18. State Property Committee, D. Sugar. Members of the Mongolian People's Party have criticized Prime
Minister S. Batbold for focusing on filling the six ministerial positions left vacant after the disposal of
the coalition government rather than tending to other duties such as filling this position.
Of the 11 companies that bid on the fifth power station, the government chose six for its short list.
However, a new chief has not yet been appointed to replace Sugar, delaying the process. It is rumored
that four of the six companies are foreign representatives, but the names of the short-listed companies
have not yet been released or submitted to Parliament.
There also seems to be confusion regarding the actual bid, as it is not clear whether the rights to the
Dornod power station are attached to this project as well.
Source: Unuudur
MONGOLIA'S BRIDGE TO NORTH AMERICA
Canadian Ambassador to Mongolia Greg Goldhawk reflected on the growth experienced in Mongolia and
how he has acted as a bridge between Mongolia and North America. However, the ambassador wonders
if Mongolia will follow the path of successful nations that benefited from their resource wealth such as
Canada, or fall victim to the ―resource curse‖ as so many nations in Africa did before it.
―It's about building networks of confidence and understanding between businesspeople and officials in
two different locations, be it Canada and the United States, or Canada and Mongolia,‖ said Goldhawk.
―And the process about how you do that is kind of the same everywhere you go.
As investment pours into Mongolia, and the capital is propagated with new gleaming buildings as seen
from Goldhawk's office, Mongolia's gross domestic product soared above 15 percent, Mongolia may do
well to follow in the footsteps of Canada, a resource-rich nation with a stable democracy. But
Goldhawk is not just an observer. Especially in a small country like Mongolia, diplomats can open
commercial and political doors, benefiting both their home and host countries, he said.
Goldhawk said he is flattered that Mongolia would like to mirror Canada, but added that he worries
over looming issues such as ―Dutch disease,‖ a scenario played out in many African countries in which
mineral wealth becomes a curse by broadening the gap between the rich and poor. Policy makers
understand this danger and are doing their best to address it, though governance remains one of the
top challenges to Mongolia's sustained growth.
―If they don't get that stuff right, all the money in the world isn't going to make this country a better
place, and they get that,‖ he said.
Source: Global Atlanta
MONGOLIA OBSERVES 20 YEARS OF DIPLOMATIC RELATIONS WITH KAZAKHSTAN
Ambassador of Mongolia to Kazakhstan H. Ayuurzan announced that this year marks the 20th
anniversary for Mongolian-Kazakh diplomatic relations at a press conference.
He said Mongolia was one of the first countries of the world to recognize Kazakhstan's independence
and sovereignty and to establish diplomatic relations back to 1992.
―A series of political and cultural events is being prepared to market this significant date,‖ said
Ayuurzan. ―First of all, Mongolian Minister of Foreign Affairs and Trade Gombojab Zandanshatar is
expected to visit Kazakhstan. Also the Ulaanbaatar mayor is expected in Astana in early February.‖
The ambassador also spoke about the planned ―Days of Astana City Culture‖ event to be held in
Mongolia in recognition of the anniversary. He said Mongolia will have concerts featuring Mongolian
artists in the cities Astana and Almaty, in addition to other exhibitions planned.
Source: Gazeta.kz
CHINA DONATES METEOROLOGICAL STATION
A handover ceremony for a meteorological observation station donated to Mongolia by China was held
last week.

19. The station built in Umnugobi Aimag is part of a meteorological cooperation program between the
China Meteorological Administration (CMA) and Mongolian National Authority of Meteorology and
Environmental Monitoring.
Tseesodroltsoo, a Mongolian environmental official, said that bilateral scientific cooperation has
yielded fruitful results in climate change, sand storm monitoring, and forecasting.
Source: People's Daily Online
GERMAN TECH CENTER OPENS IN UB
The German Society for International Cooperation opened a new Germany technology center in
Ulaanbaatar this week.
Ch. Kashchuluun, the head of the National Development and Renovation Committee, and representative
of companies from Germany and Mongolia took part in the center's opening ceremony. The German
organization aims to introduce Mongolians to German ―know how,‖ with its new technology center. It
will aim to connect Mongolian businesses with German clients, foster cooperation, and provide
informational materials, such as videos and sample goods.
The German ambassador to Mongolia, Peter Schaller, said during the opening ceremony that relations
and cooperation between Mongolian and Germany have great potential. He noted that about 10,000
Mongolian students have graduated from German institutes and universities. But he said that two
nations have weak economic ties. He said the center will make it possible to strengthen those ties.
Source: News.mn, Xinhua
ANNOUNCEMENTS
PMESSENTIALS AT ULAANBAATAR IN FEBRUARY
The American University of Mongolia's Center for Executive Education will hold three consecutive of its
two-day intensive Project Management Essentials (pmEssentials) program in February 2012 in
Ulaanbaatar.
This two-day intensive workshop is delivered by an experienced, practicing project manager and
academic to introduce project management concepts, principles, and procedures based on the Project
Management Body of Knowledge. Upon completion participants will learn practical and ready-to-use
tools and techniques of project management. Skill to learn include identifying project aims, objectives,
and outcomes; writing a project plan; ; monitoring progress and taking corrective actions; using project
management techniques.
Enrollment is based on a first-come-first-served basis, and is limited to only 15 participants per
workshop. For more information, visit aum.mn for a detailed program description and enrollment
forms; or contact Program Manager Muggie Davaa by email at munkhjargal@newcom.mn or by phone at
9911 7429.
___________________________________________
MICHAEL ALDRICH: OLD PEKING AS A MONGOLIAN CAPITAL; 26 JANUARY, 5:30 PM
Michael Aldrich will speak on the ongoing Mongolian contributions to China at the Mongolian University
of Science and Technology on Thursday 26 January at 5:30 PM. The lecture will be held in the central
library/E-School building, in conference room 405.
The Mongolian contributions to Chinese culture has often been presented as a brief chapter in text
books, while many Chinese have thought of the Yuan dynasty of the Mongols (1271-1368) was one of
uncultured barbarians. Aldrich will present a lecture on Old Peking as a Mongolian capital to China. He
will discuss how, and why Mongolian leaders transformed Peking into a city carefully modeled on
Chinese cosmological principles whose traces can still be seen today.
Aldrich is the managing partners of the Ulaanbaatar office of Hogan Lovells and frequently writes and

20. lectures on Asian history and culture. He has lived in Asia for nearly a quarter of a century, and in 2009
moved to Mongolia to develop his firm's Mongolia practice.
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COAL MONGOLIA, 9-10 FEBRUARY, ULAANBAATAR
The Coal Mongolia Conference will be held to attract technical and financial investments into the coal
sector of Mongolia in Ulaanbaatar at the SS Convention Center on 9-10 February.
The conference will cover topics for both extractive and mineral processing industries. Presenters will
introduce advanced environmental and technical practices they believe Mongolia should embrace. The
producers also hope the conference can be used to build corporate ties to ultimately strengthen
Mongolia's competitiveness in the region and develop personal networks.
The event is intended for Public sector representatives, coal prospecting and mining companies,
investment funds, banking and financial institutions, engineering and consulting firms, suppliers and
vendors, and professional associations. Attendees can expect seminars and workshops, exhibition
showcasing various projects and companies, a plenary session, an awards presentation dinner in honor
of best performers of the coal sector, and a site visit.
BCM is an Official Supporting Organization for this conference. BCM members will receive a 10%
discount when registering. They should contact Saruul at BCM, call at +976-11-317027 or email
saruul@bcmongolia.org.
___________________________________________
USETEC - COLOGNE, GERMANY MARCH 05-07.2012
The Business Council of Mongolia with support of the GIZ‘s Integrated Mineral Resources Initiative
project is now registering Mongolian business delegation to USETEC (One of the World‘s biggest
international mining and industrial used machinery trade fair) Cologne, Germany March 05-07. 2012.
The event will have used machinery dealers with a wide range of products on offer. A large number of
exhibitors and visitors will participate in this event from all over the world. The exhibitors will have
huge selection of machines and all these machines will be displayed in the fair.
The program includes also business & entertainment activities in Cologne.
Please contact 317027, 99066062 or serod@bcmongolia.org for registration and additional information
about the event.
Registration will close 6:00PM, Feb 10, 2012.
___________________________________________
“MM TODAY” ON MNB-TV, FRIDAYS AT 18:20
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 for
18:20 tonight. Tune in to watch this program that reports stories from today‘s BCM NewsWire.
___________________________________________
POSTINGS ON BCM‟S ENGLISH WEBSITE 'PRESENTATIONS' AND 'MONGOLIA REPORTS' SECTIONS AND
BCM‟S MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS
New for 2012 is a ‗Presentations‘ section on the BCM Mongolian website which can be reached via link
to bcm.mn/itgeluud. About 10 presentations already posted!
As a key component of BCM‘s Mongolian website, ‗News‘ section, articles from the Government‘s
―Open-Government.mn‖ site are regularly posted.
On BCM‘s English website, ‗Resource, Presentations‘ section, for your review are 7 speeches from the
Mongolian Investment Summit on December 8-9 in London, several speeches at the Risk Management
Forum on November 8 co-organized by BCM and Mandal Insurance, speeches at Discover Mongolia 2011,

21. speeches from BCM‘s 10 monthly meetings in 2011, and the address by Peter Nicholls, OT‘s VP-
Operations, at Global MInES in Sydney on July 4.
Also on BCM‘s English website, ‗Resource, Mongolia Reports‘ section, please note "Blitz and Lead" by
Sant Maral Foundation on August 2011, Z. Batbayar, Deputy Director of the Water Authority, at BCM‘s
Environmental Working Group‘s recent meeting and the Polit Barometer-May 2011 from Sant Maral
Foundation.
We are now posting some news stories and analyses relevant to Mongolia on the BCM website's
‗Mongolian Business News‘ as they come, instead of waiting until Friday to put them all together in the
weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will incorporate
items that are already on the home page, so that it presents a consolidated account of the week‘s
events.
___________________________________________
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 http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events with the
community. Hear breaking news and announcements as they happen when you follow BCM on Twitter
at http://twitter.com/#!/bcmongolia. Connect with BCM on Linked-in to join the diverse group of
professional contacts creating a better business environment in Mongolia today.
Of course for news information, interviews, and announcements regarding our organization, visit the
official BCM website at bcmongolia.org and bcm.mn.

22. ECONOMIC INDICATORS

23. 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-over-year (y-o-y)
CENTRAL BANK POLICY 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]
CURRENCY RATES – January 19, 2012
Currency Name Currency Rate
U.S. dollar USD 1,370.92
Euro EUR 1,796.73
Japanese yen JPY 17.62
British pound GBP 2,147.20
Hong Kong dollar HKD 176.93
Chinese yuan CNY 216.44
Russian ruble RUB 45.04
South Korean won KRW 1.22
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.