1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 134, September 3 2010
SPECIAL ISSUE: DISCOVER MONGOLIA 2010
NEWS HIGHLIGHTS:
Business:
Mongolian Mining plans USD700 million IPO in Hong Kong;
Erdenes Tavan Tolgoi begins removing soil;
Border port to work 24 hours a day by year-end;
Korean experts commend Boroo Gold’s reclamation work;
Rio Tinto's “first priority” Is expansion, not acquisitions, says CEO Albanese;
Shenhua warns of slowdown;
Second Petro Matad exploration well spudded;
Khan Bank CEO calls on First Deputy Prime Minister;
Business mission has a busy time at Melbourne trade fair;
Stewart Group expands assay laboratory in Ulaanbaatar;
Khan Bank sponsors Young Leader Program;
New mining opens up vast earning opportunities;
Khan Bank offers financial leasing services in agriculture.
Economy:
PM promises first oil refinery by 2014;
Capital markets the catalyst if PM’s plans are fulfilled, says MSE advisor;
Choice of company to restructure MSE on September 15;
World Bank worries about inflation, macroeconomic vulnerability;
MNT gains 9.9% over USD since beginning of 2010;
Mongolia weighs wind for China;
Road builders say low-cost work means poor quality;
Central Region tries to lure foreign investment;
ADB, GTZ co-finance big grant for microinsurance in Mongolia, China;
Apartments priced beyond the reach of ordinary people;
Global future awaits yak wool;
New York Society of Security Analysts to hold Mongolia Investment Conference;
China, U.S. data propels copper to 4-month high;
Russia opens China pipeline for Siberian oil;
Chile reworks bill raising mine royalty from 2018;
China can weather sharp slowdown: Standard & Poor's sovereign-ratings head;
Chinese manufacturers report growth;
China flies Red Flag of high-end nostalgia;
The renminbi’s way to go global has pitfalls;
China fortifies State businesses to fuel growth.
Politics:
Government makes a point in scorching Gobi heat;
2. Time for a change in climate research;
Sub-Committee head says they are not bound by any time limit to answer letters;
Citizen’s Chamber nominated for German Prize;
President teaches a class as new school year begins;
New bird disease identified in Ulaanbaatar poultry farm;
Foreigners can now enter China at checkpoint in Khovd;
Pedestrian obstacles to go.
*Click on titles above to link to articles.
BUSINESS
MONGOLIAN MINING PLANS USD700 MILLION IPO IN HONG KONG
Mongolian Mining Corp. is selling about USD700 million of stock in an initial public offering, the first
by a Mongolian company in Hong Kong, according to a term sheet sent to investors by the sale‘s
arrangers. The company, formerly known as Energy Resources, plans to price its shares on
September 24 and start trading on October 5, the term sheet said. Citigroup Inc. and JPMorgan
Chase & Co. are managing the IPO.
New shares account for 75 percent of the initial sale, which represents 20 percent of the company‘s
enlarged share capital. After the listing, the company may exercise an option to sell additional
shares equal to 15 percent of the offering. Proceeds of the sale will be used to develop mines, fund
transport infrastructure projects and acquire companies with mining rights, according to the term
sheet. The underwriters will receive investors‘ orders from September 20 to September 24.
Controlling shareholders will be prohibited from selling stock in the 12 months following the IPO,
while other major shareholders are subject to a lockup period of 6 months.
No company based in Mongolia is currently listed in Hong Kong. The IPO would come after Moscow-
based United Co. Rusal in January became the first Russian company to go public in the territory.
Source: Bloomberg.com
ERDENES TAVAN TOLGOI BEGINS REMOVING SOIL
The draft text of the Open International Tender to select the Tavan Tolgoi mine operator is almost
final and the advertisement will be published soon. According to the Government‘s Press Office,
Erdenes Tavan Tolgoi, formed as a subsidiary of the State-owned Erdenes MGL to be responsible for
all work related to the coal deposit, has assembled a field team and hopes to remove soil 12-16
meters deep before November, according to Mr. B.Enebish, its General Director.
The Government and the State Property Committee are working on the tender notice inviting bids
to operate the deposit under contract with Erdenes Tavan Tolgoi. Among the requirements listed in
the tender are:
Ability to annually mine 15 million tons of coal;
Financial capacity, and/or capacity to access funds from reliable financial organizations;
Experience in managing and operating coal mines;
Capacity to use modern and progressive technology and techniques; and
Application of international standards to protect the environment and to post-mining
reclamation.
Source: MongolianPortfolio.com, News.mn
BORDER PORT TO WORK 24 HOURS A DAY BY YEAR-END
Oyu Tolgoi LLC will build 180 new apartments, and enlarge and improve the energy, heating,
sewage and drinking water supply system at Gashuun Sukhait in Umnugobi aimag before the end of
the year as part of the planned expansion and extension of services at the border point. Once these
are in place, the port will start working for 24 hours a day. Announcing this to media, the Chief of
the Government Office, Mr. Ch.Khurelbaatar, said the workload at the port has increased
dramatically in recent weeks. Apart from the rise in coal export, every day some 50 trucks are
bringing mining and construction equipment for the Oyu Tolgoi project from China.
Source: Ardiin Erkh
3. KOREAN EXPERTS COMMEND BOROO GOLD‟S RECLAMATION WORK
At the request of the Government of Mongolia, the South Korean Government has sent an expert
team here to assess the damage to the environment from mining and to establish an information
database. The team has been very impressed by its visit to the reclamation program of Boroo Gold
LLC in Selenge province and has indicated this could well be a model for such work elsewhere in the
country.
Source: Undesnii Shuudan
RIO TINTO‟S “FIRST PRIORITY” IS EXPANSION, NOT ACQUISITIONS, SAYS CEO ALBANESE
Rio Tinto Group, the world‘s third-largest mining company, will give priority to boosting output by
expanding its own operations rather than through acquisitions, Chief Executive Officer Tom
Albanese has said. ―I‘d like to see higher copper production, that‘s why we are investing with‖
Ivanhoe Mines Ltd. in the Oyu Tolgoi project, Mr. Albanese said in an interview in Brisbane. ―We
have other projects around the world. If managers can develop an attractive investment proposition
to expand in this market, we‘ll certainly look at it. Our first priority is organic growth.‖
Growth plans at Rio, BHP Billiton Ltd. and rivals may help to boost industry spending worldwide
next year to a record USD113 billion, Sanford C. Bernstein & Co. said last month. Mr. Albanese has
pledged to increase spending by 50 percent next year to USD13 billion as he expands coal, copper
and iron ore output to meet rebounding global growth.
―I‘ve just been through post-earnings meetings with a range of shareholders around the world and I
think they recognize the strength of those organic growth opportunities,‖ he said. ―They want to
know details of what those are, but there is certainly recognition of the importance of focusing on
organic growth.‖
Source: Bloomberg.com
SHENHUA WARNS OF SLOWDOWN
China Shenhua Energy Co., the country's largest listed coal producer by output, has said it faces
uncertainties during the second half of this year, as China's economic growth is likely to decelerate.
"It is expected that major coal-consuming industries will still post growth in the second half of the
year," the company said in a prepared statement. "However, given the impact of factors such as
China's macro adjustment and control, energy-saving and emission reduction policies, as well as the
relatively higher base in the second half of last year, there will be a slowdown in the growth rate as
compared with that in the first half of the year."
Shenhua also said growth in coal demand is expected to decline compared with the year's first half.
The Beijing-based company, which also operates railways, ports and power plants, said coal output
rose 3.2% to 109.2 million metric tons, accounting for 48% of the company's full-year production
target of 229 million tons. Coal sales rose 12% to 137.4 million tons, and the average selling price of
the company's coal increased 8.4%.
Source: The Wall Street Journal Asia
SECOND PETRO MATAD EXPLORATION WELL SPUDDED
Petro Matad has announced that the Davsan Tolgoi-2 exploration well was spudded on August 28.
The well is being drilled vertically to an estimated target depth of approximately 1,300 meters and
operations are expected to take approximately 25 days. DT-2 is the second exploration well to be
spudded as part of Petro Matad's program to drill three wells in 2010 on its Production Sharing
Contract on Block XX in Eastern Mongolia.
Source: Petro Matad Limited
KHAN BANK CEO CALLS ON FIRST DEPUTY PRIME MINISTER
Mr. Simon Morris, who joined Khan Bank as Chief Executive Officer about a month ago, called on
First Deputy Prime Minister N.Altankhuyag earlier this week to discuss topical issues. Mr.
Altankhuyag said the banking sector has to be restructured in anticipation of the promised mining
boom and this requires united action and a sense of responsibility. Mr. Morris said even in the short
time he has been here, he has been struck by the Government‘s, as also the people‘s,
determination to develop the economy with help from the abundant natural resources, and
promised his bank will fulfill all expectations.
Source: Montsame
BUSINESS MISSION HAS A BUSY TIME AT MELBOURNE TRADE FAIR
A 14-member Mongolian Business Mission is back home after attending the Franchising & Business
4. Opportunities trade fair and a special workshop in Melbourne on August 19-24. The event was co-
hosted by the Business Council of Mongolia and Saki Partners, a BCM member in Australia. Among
those the mission met outside the fair were Mrs. Green Yang, Senior Export Advisor of Austrade,
and Mr. John Downes, Director of Business Development Center.
The high point of the visit was the full-day workshop on franchising. After welcome addresses from
Mr. Nigel Finch of Sydney University and Mr. Rod Young of DC Strategy, the participants
heard two lectures, ―Introduction to Franchising‖ and ―International and Master Franchising‖. This
was followed by five franchiser presentations, before and after lunch. A walking tour of local retail
franchises brought the event to an end, with some final concluding words at DC Strategy.
The visitors were quite active making business contacts and some of them, such as Khurai, Xacbank
and Europharma, have reported they held encouraging initial talks with Australian Hooblestone, the
National Australian Bank, and The Natural Source respectively.
BCM is working on arranging a follow-up event in Ulaanbaatar in mid-2011.
Source: BCM Newswire
STEWART GROUP EXPANDS ASSAY LABORATORY IN ULAANBAATAR
Stewart Group, the international inspection, analysis and assay group has expanded its operations in
Mongolia. A new fire assay laboratory, with state-of-the-art equipment, has been added to the
Stewart Mongolia LLC facility in Ulaanbaatar, which can now provide a significantly broader range
of services to the key mining regions in the country. The expansion is the second major
development at the Mongolia facility in 12 months, after it became the first internationally owned
laboratory in the country to achieve ISO/IEC 17025:2009 accreditation.
In addition to analysis of gold, silver and platinum group metals, the Mongolian site can conduct
multi-elemental analysis, coal and solid fuel analysis, trace element analysis by ICPAES, and sample
preparation of solid fuel and geochemical materials.
Source: Commodities Now
KHAN BANK SPONSORS YOUNG LEADER PROGRAM
Khan Bank Foundation is sponsoring, for the fourth consecutive year, the Young Leader Program of
Zorig Foundation, aimed at developing future leaders of Mongolia. Applications are now being
received from young people for enrolment and 20 persons between 22 and 25 will be selected to
participate in an 8-month program designed to improve skills in communication, analysis, project
development and implementation, as also to nurture critical thinking and foster team spirit. Some
140 alumni of the program are employed in various social and economic sectors in managerial
positions.
Source: Khan Bank, Zorig Foundation
NEW MINING OPENS UP VAST EARNING OPPORTUNITIES
Most people seem unaware of the comparatively high salary that Mongolians working in Oyu Tolgoi
and Ukhaa Khudag earn. An employee of Oyu Tolgoi said their average monthly salary is MNT1
million, while Mr. S.Odjargal, President of MCS Group which operates in Ukhaa Khudag, has said,
―Our workers normally get around MNT 890,000 per month, apart from free accommodation and
meals.‖ Workers at Koje Govi LLC, owned by the French Areva Group, also make similar amounts.
The claim of MP Ya. Batsuuri that once mining takes off and the Sainshand industrial complex is in
place, many Mongolians will get a salary of USD 3,000 thus seems very realistic.
This is in sharp contrast to the situation only a few months ago when 15,000 young Mongolians were
fighting to be chosen for 3,000 employment positions in South Korea, where they can earn much
more than what is possible here. But all that is now set to change, it appears. Prime Minister
S.Batbold has rightly said that Mongolians will soon find that they can earn as much in the Gobi as
abroad.
Some 40,000 jobs will be created in the coming five years, to be filled by the 45,000 young people
now enrolled in vocational training centers. In addition, Oyu Tolgoi LLC has agreed to train 3,300
people as part of the project development. There can be no let-up in reforming and updating our
old and mostly irrelevant vocational training programs, in building the sort of capacity that is likely
to be in demand, and in using training techniques and equipment that comply with international
standards. The present young generation will find that they can get rich by staying home.
Source: Onoodor
KHAN BANK OFFERS FINANCIAL LEASING SERVICES IN AGRICULTURE
Khan Bank and Agromashtech LLC have signed a financial leasing services agreement that will allow
5. individuals and companies working in agriculture, especially in agronomy, to access Agromashtech
services, and training on use of equipment such as harvester combines, tractors, agricultural
trailers, swing machines, and irrigation and loading equipment.
Agromashtech is the official dealer in Mongolia for two large Russian agricultural equipment
manufacturing companies and its operations here have made a significant contribution to the
successful spread of the Government‘s ambitious agriculture program called Atar-3. Under the
agreement, people will be able to lease new technology through the Bank, and also to choose from
the products of the vendor company contracted with the bank.
Source: Khan Bank
ECONOMY
PM PROMISES FIRST OIL REFINERY BY 2014
Prime Minister S.Batbold announced after watching the exploration work of the 100% Chinese
company Donshen in the Gobi that Mongolia‘s first oil refinery will be ready by 2014. Donshen has a
product sharing agreement with the Government and hopes to begin oil extraction before the end
of this year. Exploration results so far indicate there is enough oil for the fields to be operated for
30 years.
The oil refinery is planned to be built in the Sainshand industrial complex and 10 companies have
already expressed their interest in taking up the work. The Prime Minister said Mongolia has enough
oil reserves to be self-sufficient and once refineries start processing the crude for domestic use, the
country will leave behind its traditional 100% dependence on import.
Source: Undesnii Shuudan
CAPITAL MARKETS THE CATALYST IF PM‟s PLANS ARE FULFILLED, SAYS MSE ADVISOR
The Mongolian Stock Exchange (MSE) celebrated on August 27 the 15th anniversary of the country‘s
first bond sales. Executive Director R.Sodkhuu congratulated all individuals and institutions that
have participated in and contributed to the growth of the capital market and recalled the early
days of the transition from a planned to a market economy. There were only two brokers in the
stock exchange then, while today Mongolia has busy and thriving primary and secondary markets.
Things are moving fast, he said, as shown by the fact that the capital market, valued at MNT88
billions in 2008, is now worth MNT944 billion.
Speaking at the same ceremony, Mr. S.Davaasambuu, an advisor at MSE, said 15 years ago most
Mongolians considered a share certificate as just a piece of paper not worth a second look. Things
have certainly changed since then, but many more public companies, with shares held by the
people, have to come up to provide the platform for the country‘s economic diversity. The capital
markets will be the catalyst in this, Mr. Davaasambuu said, if the Prime Minister‘s plans are to be
fulfilled.
Source: Zuunii Medee, Ardiin Erkh
CHOICE OF COMPANY TO RESTRUCTURE MSE ON SEPTEMBER 15
KOSPI from South Korea and the NASDAQ (USA)-Mosdaq consortium are believed to be the front
runners for the State Property Committee‘s choice to restructure and privatize the Mongolian Stock
Exchange (MSE). The tender announcement two weeks ago was met with bids from 10 international
companies. Two other favorites in the running for the selection are the London Stock Exchange and
the Deutsche Bourse Group from Germany. The final announcement is expected to be made on
September 15.
Whoever is chosen will have its plate full to develop the capacity of the small Mongolian capital
market to make it ready to meet demands on its resources as mining takes off. At present, share
transaction accounts for 2-3% of the GDP and 4-5% of total investment. The international norm for
both is 50%. Handing over the job of developing a country‘s stock market to foreign institutions has
not always been successful. Mongolia has the added problem that its laws and regulations are often
outdated and out of sync with present-day practices. The Ministries of Finance, Justice and Internal
Affairs and the Financial Regulatory Authority will have to work harder on this aspect so that the
country‘s choice can work without hindrance.
Source: Ardiin Erkh
WORLD BANK WORRIES ABOUT INFLATION, MACROECONOMIC VULNERABILITY
In its Mongolia Quarterly Economic Update, which covers development up to the end of June, the
World Bank says the improvement in public finances, coupled with buoyant revenue due to the
6. commodity price recovery, has led to growing pressures for increased government spending.
Recently approved budget amendments envisage a 4.5 percent of GDP increase in spending on the
originally approved 2010 budget, while the Mid-Term Budget Framework (MTBF) for 2011-2013
projects another 12.1 percent of GDP increase in spending in 2011. If these public spending plans
materialize, they will set the stage for a renewed bout of high inflation and a possible return to the
macroeconomic vulnerability characteristic of the boom-and-bust cycle of the recent past.
According to the government‘s own estimates, inflation is likely to reach over 20 percent by the
end of the year.
With uncertain domestic and foreign financing conditions, continued fiscal consolidation remains
crucial for Mongolia. The adoption of, and adherence to, the Fiscal Stability Law—which was
recently passed by Parliament—will be key in Mongolia‘s efforts to constrain fiscal spending to
prudent and sustainable levels. The new law will also manage the huge revenue inflows expected
from the Oyu Tolgoi mine from 2016 onward.
Source: The World Bank
MNT GAINS 9.9% OVER USD SINCE BEGINNING OF 2010
Mr. S.Bold, a senior official at the Central Bank, has said the MNT has risen 9.9% against the USD
and 9.7% against the CNY between January 1 and August 31. Export earning has risen, and so have
foreign direct investment and inward remittances, while foreign debts and outflow of foreign
currency have been halted. In other words, macro economic trends are good for the MNT. Foreign
currency reserves are also high and increasing every month.
He has discounted suggestions that this stability has been supported by official intervention,
stressing that Mongolia does not believe in maintaining artificial exchange rates. At a certain time
of extreme fluctuation, the Central Bank did intervene to avert any risk to the national economy
but this is not the Bank‘s policy.
Source: Zuunii Medee
MONGOLIA WEIGHS WIND FOR CHINA
Mongolia, one day, hopes to export more than just coal to neighboring China. At a recent cabinet
meeting, Prime Minister S.Batbold outlined plans to ramp up the country‘s investments in
alternative energy and to export wind power to China — enough to equal 40 million tons of coal.
Landlocked Mongolia‘s largely untapped mineral and energy resources have been generating a lot of
interest. But mining, and the burning of coal, exacts an environmental toll that could lead to
financial hassles. ―While Mongolia has a lot of coal, it is a matter of time before coal-based power
plants will become subject to carbon penalties,‖ said Mr. B.Bold, chief executive of Newcom Group,
an investment group in the process of building a wind-power-generation plant in Mongolia.
The Mongolian government would like to use proceeds from the country‘s large mining projects to
subsidize solar, wind and other renewable energy projects. It would also show preference to mining
projects that demonstrate efficient water use, government officials say.
Source: Dow Jones Reprints
ROAD BUILDERS SAY LOW-COST WORK MEANS POOR QUALITY
Representatives of road and bridge construction companies last week told a press conference that
with prices of raw materials rising, it now takes MNT475 million to construct 1 km of a 3-level
paved road, using asphalt and concrete. Builders can now hope to keep a profit varying between
0.84% and 1.3% per km of road and between 4.3% and 4.4% on the case of a long bridge. They
deplored the usual official preference for the lowest bidder, disregarding considerations of quality.
Companies that persist in using better material even if prices have risen since they got the contract
are in an unenviable situation, with no redress from the Government.
A representative of the company now building a 16-km paved road with asphalt and concrete from
Mandalgovi toward Undur-dov said they are operating at an 18.3% loss. His claim was immediately
supported by another man who said his company was building 27 km of a similar road from Undur-
khaan toward Sumber and its loss now stood at 54.8%.
Source: Udriin Sonin
CENTRAL REGION TRIES TO LURE FOREIGN INVESTMENT
Prospective investors, most of them non-Mongolian, in the Central Region – comprising Darkhan-
Uul, Selenge, Tov and Gobisumber provinces – spent two days last week attending a forum at
Darkhan and listening to the potential of the region‘s mining, infrastructure, agriculture and
manufacturing sectors.
7. Deputy Premier M.Enkhbold inaugurated the forum which was addressed by representatives of the
joint organizers – the Ministry of Foreign Affairs and Trade, FIFTA, The National Committee on
Regional Development, and the administrations of the four provinces.
Their presentations stressed the promise the region held out to investors and listed a number of
large projects seeking investment.
Source: Montsame
ADB, GTZ CO-FINANCE BIG GRANT FOR MICROINSURANCE IN MONGOLIA, CHINA
The Asian Development Bank (ADB) is providing a two-year USD750,000 grant from the ADB-
administered Regional Cooperation and Integration Fund to examine market supply and demand for
microinsurance in China and Mongolia. The grant will address policy, regulatory and institutional
barriers in the region‘s microinsurance sector.
ADB will work with the Access to Insurance Initiative (A2II), a global program launched in 2009 with
the International Association of Insurance Supervisors (IAIS) – the international standard setting
body for insurance regulation and supervision. The Initiative seeks to link development agencies and
industry supervisors to promote expanded insurance services to the poor worldwide.
A Memorandum of Agreement has been signed under which the German development agency and
secretariat of the initiative, GTZ, will provide co-financing of about USD178,000 and will engage in
and support work agreed with ADB and A2II. The ADB, A2II, and GTZ teams will work with the
Chinese Insurance Regulatory Commission and Mongolia Financial Regulatory Commission.
Source: www.microfinancefocus.com
APARTMENTS PRICED BEYOND THE REACH OF ORDINARY PEOPLE
The construction sector has been limping back to normalcy, with work on 52 buildings completed
this year, allowing 3,658 families to move into new apartments. However, 1,080 of them are war
veterans who were allotted free accommodation and more than 2,000 Government employees who
could take special loans on easy terms. Less than one-sixth of the new owners thus bought
apartments with their own money. Many received money from relatives working abroad. When will
Mongolians really earn enough to buy apartments for themselves from their own salary?
A recent survey shows that 41.79 percent of ger district residents aim to buy apartments within 10
years. Of them, 83.3 percent hope to live with their family, 9.3 percent are newly wed, 2.3 percent
want to live alone, and 4.2 percent want to rent out the apartment. Half of those surveyed want
two-room apartments, while 34.4 percent want three-room ones. However, most of the apartments
actually sold are one-room, which means people end up buying what they can afford, not what they
want.
Why are apartment prices so much beyond the reach of the average salaried class? An overwhelming
majority of the survey respondents said they would find it impossible to pay more than USD700 per
sq.m. Five percent, however, were willing to go up to USD1,000 per sq.m. or more. Construction
companies usually charge MNT1 million per sq.m. but it is believed they would make 10-15 percent
profit even at MNT650,000-MNT750,000. Even at this high price the workmanship and quality of
construction in the apartments of Ulaanbaatar are suspect.
Source: English.News.mn
GLOBAL FUTURE AWAITS YAK WOOL
Processed yak wool could be the next big Mongolian fiber export item after cashmere, if a planned
pilot project to export some to France this year yields encouraging results. Combed from the shaggy
beasts that dot the remote ranges of the Khangai mountains in Arkhangai province, 190 kilograms of
washed and de-haired wool await the final freight clearance to Europe. Each processed kilo will
fetch 38 Euro, and the entire money will go directly back to the cooperative of herders that
collected the wool.
Development organizations including Swiss Development Cooperation and Mercy Corps, and NGOs
like AVSF have been working over the years to develop new marketing chains for different products
from herders and to address the environmental aspects of overgrazing. In 2008 Mercy Corps carried
out the first value chain assessment for yak wool where it identified lack of a potential market as
the biggest obstacle to its large-scale commercial use. Since then, the organization has been
assisting rural producers to gain skills and capacities to win new and diversified markets.
Yak wool itself has been recognized as the next best alternative to cashmere. Combed yak wool has
properties very similar to those of cashmere. Each fiber has an average diameter of 18 mm and a
length of 35 mm compared to cashmere‘s 15 mm diameter and 38 mm length. However, the market
demand still remains a niche segment and promoters of yak wool are realistic enough to accept that
8. it can never replace cashmere.
The complete report by Pearly Jacob can be read at BCM website - News, Mongolia Business News.
NEW YORK SOCIETY OF SECURITY ANALYSTS TO HOLD MONGOLIA INVESTMENT CONFERENCE
The New York Society of Security Analysts (NYSSA) will hold its first conference on investing in
Mongolia on September 23. Regional experts will discuss the country‘s economic outlook and
investment potential, and executives from Mongolian public companies will discuss their businesses.
They include speakers from:
* Khan Bank
* SouthGobi Resources
* Petro Matad
* Erdenes MGL
* Prophecy Resource Corp.
* Hunnu Coal
* Newcom Group
* Mongolia Development Resources
The conference is sponsored in part by Khan Bank and Bodi Financial Advisory Services. Additional
sponsors are Mine Info, Prophecy Resource Corp, SouthGobi Resources Ltd, and Tanan Impex LLC.
With over 10,000 members, NYSSA is the largest of the 135 societies worldwide that make up
Chartered Financial Analysts (CFA) Institute, which has nearly 100,000 members.
Source: NYSSA
CHINA, U.S. DATA PROPEL COPPER TO 4-MONTH HIGH
Copper hit a four-month high on Wednesday, as firmer manufacturing data in both China, the
world's biggest copper consumer, and the United States, the world's largest economy, boosted the
demand outlook. Analysts and traders also pointed to a continuous drop in copper inventories and
estimates of a small deficit in the copper market by the end of the year, which they believe will
keep supporting prices.
Copper for three-months delivery on the London Metal Exchange at one time rose to USD7,647 a
ton, its highest since April 27, from a close of USD7,440 a ton on Tuesday.
Source: The Mining Weekly
RUSSIA OPENS CHINA PIPELINE FOR SIBERIAN OIL
Prime Minister Vladimir Putin on Sunday opened a new pipeline to export east Siberian oil to China
that will help Russia reorientate its oil trade towards the east. The pipeline, running 67 km from
Skovorodino in east Siberia to China‘s north-eastern frontier, is an offshoot of a new oil export
route Russia is building to the Pacific Ocean, providing a strategic window on the fast-growing
energy markets of Asia.
―This is a vital project for us as we begin to diversify our sales of strategic raw materials,‖ Mr.
Putin said. ―So far we have delivered most oil to Europe ... The Asia-Pacific region has received
insubstantial volumes.‖ Russia began exporting oil this year from a new export terminal on the
Pacific Ocean built to serve fields in east Siberia, one of the world‘s last untapped oil provinces.
Some Kremlin-friendly oil companies have been granted tax breaks to speed development of east
Siberian reserves and offset a decline in production in other regions.
Transneft, the Russian oil pipeline monopoly, completed the construction of a pipeline from Taishet
in the Irkutsk region to Skovorodino last year, the first stretch of a planned 2,757-km pipeline to
the Pacific. On completion in 2012, the pipeline will be capable of carrying up to 1.6 million barrels
of oil a day, about one-third of Russia‘s current exports.
Russia last year took a USD25-billion loan from China in exchange for future oil deliveries,
cementing its energy-trading relations with the world‘s fastest growing oil consumer. The deal
entitles China to import 300,000 barrels a day of Russian oil for 20 years starting in 2011.
Source: The Financial Times
CHILE REWORKS BILL RAISING MINE ROYALTY FROM 2018
Chile's government has said it will soon be sending a revamped bill to Congress aimed at raising
royalties paid by mining companies that would be used to pay for reconstruction from February's
massive earthquake. President Sebastian Pinera's government reworked the bill after its center-left
opponents shot it down in July, in a major challenge to his legislative agenda. Mr. Pinera hopes to
raise around USD1 billion over three years from the royalty in the world's No.1 copper producer, and
said he would give around USD300 million of that to Chile's regions.
9. The royalty revamp is part of a wider plan to finance the state's USD8.4 billion share of
reconstruction after the earthquake. The government has also issued USD1.5 billion in international
debt, raised taxes on some goods and tapped copper boom savings.
Mining companies currently pay a royalty of between 4 and 5 percent. The bill that was rejected
called for a sliding scale starting at 4 percent. The new bill initially sets the royalty at 4 percent to
9 percent on mining sales and raises it to 5 percent to 9 percent starting in 2018.
"The royalty establishes a minimum rate of 4 percent, which we have today, and so ensures a floor,"
Mr. Pinera said. "But it allows that when the price of copper is at high levels, the state and all
Chileans will in a way be partners of the mining industry and we can share these benefits."
However, the royalty would have to be voluntary because the country already has contracts with
foreign miners that expire around 2017. Mr. Pinera hopes miners will agree to pay higher royalties
amid growing expectations for foreign companies to contribute more to the post-quake rebuilding.
Public pressure has been building in Chile to make foreign miners who profit from the country's
resources contribute more to rebuilding damage from the earthquake.
Source: www.miningweekly.com
CHINA CAN WEATHER SHARP SLOWDOWN: STANDARD & POOR‟S SOVEREIGN-RATINGS HEAD
China's fiscal position is strong enough to withstand any sharp slowdown in economic growth, in
contrast to Japan's weak outlook, the chairman of Standard & Poor's sovereign-ratings committee,
Mr. John Chambers, has said. Analysts have warned that China's growth is vulnerable to a collapse
in real estate values or a deluge of bad debt after the Government supported the economy during
the global financial crisis by increasing bank lending.
Mr. Chambers, who heads the committee that sets and changes S&P's ratings for 118 central
governments, says such concerns are overdone. "They have plenty of dry powder and the eventual
losses that will be borne by the banking system will be manageable," Mr. Chambers said. He added
he is not too concerned about a potential real estate bubble in China.
China's ability to withstand an economic downturn is crucial for the rest of Asia, because it has
been driving growth in the region. Mr. Chambers said China's economy will likely continue to grow
in the high single-digit range, but the outlook for Japan is less clear. The ratings company warned
in January that Japan's growth outlook remains tepid, and its leaders need to show political will to
tackle the fiscal deficit. "The concerns we identified in January still remain," Mr. Chambers said.
"The fiscal position and the growth prospects are pretty weak."
S&P rates Japan AA, with a negative outlook. China is rated A+, with a stable outlook. South Korea's
biggest worry is the stability of North Korea. A collapse of the communist dictatorship could mean
huge reunification costs for the south, "which even the government is now recognizing," Mr.
Chambers said.
Source: The Wall Street Journal Asia
CHINESE MANUFACTURERS REPORT GROWTH
Fears that the Chinese economy is running out of steam eased after a survey showed that factory
activity accelerated in August, but results from other Asian economies were gloomier due to
slackening demand from beyond the region. Chinese purchasing managers‘ surveys published on
Wednesday registered improvements from July, with the official PMI index published by the
Federation of Logistics and Purchasing rising half a point to 51.7 and a HSBC-sponsored poll rising
2.5 points to 51.9. The 50-point mark separates contraction from expansion. The HSBC had hit a 16-
month low in July while the official index declined over the previous three months.
Most Chinese economists think the country will continue to grow strongly for the rest of the year
but that some slowdown is needed after the economy grew at a breakneck rate of 11.9 per cent in
the first quarter. However, international investors have been reacting nervously to reports of
slowing growth.
Elsewhere in the region, PMI survey results fell close to their lowest points in a year and a half. The
HSBC PMI index for Taiwan fell below 50 for the first time in 18 months, Japan‘s Nomura/JMMA PMI
2.7 points to 50.1, and South Korea‘s PMI 2.3 points to 50.9 despite data released on Wednesday
showing exports rose 29.6 per cent in August from a year before with help from a weakened won.
Source: The Financial Times
CHINA FLIES RED FLAG OF HIGH-END NOSTALGIA
In an effort to exploit nostalgia for China‘s communist and colonialist past, two Chinese State
companies have relaunched old brands – including Chairman Mao‘s famous Red Flag limousine – to
challenge foreign dominance of the country‘s luxury markets. China‘s evocatively named First Auto
10. Works (FAW) has announced it will spend USD263.3 million to re-raise the Red Flag brand, which has
largely fallen into disuse along with the ideology that spawned it. The money would fund a
production facility with an annual capacity 30,000 units, to give FAW the ultra-luxury model it
needs to boost profits and prestige.
Shanghai Jahwa, China‘s largest cosmetics brand, has also revived one of its famous nostalgia
brands, Shuang Mei, or two sisters. With a logo redolent of 1930s Shanghai, when the city was
labeled as the Paris of the Orient, the brand has been renamed Shanghai VIVE, and is sold at the
recently reopened Art Deco Peace Hotel on the Shanghai Bund. Its packaging and advertising
conjures visions of old Shanghai, in all its decadence. The brand ranges from Pride of Shanghai soap
to skin creams – at prices same or above those for foreign luxury cosmetics.
The relaunch of the two brands heralds China‘s coming of age as a retail culture, with Chinese
brands increasingly eager to compete head to head with foreign brands. Localizing luxury is part of
Beijing‘s plan to rebrand China as more than just a cheap goods factory. But retail analysts are
uncertain about the value of nostalgia appeal in the country: Shanghai VIVE ―might create a sense
of excitement for westerners, but not for most Chinese women‖, says a market research analyst in
Shanghai. ―Those were not glamorous time for most Chinese so they don‘t look at it with the same
longing and nostalgia as westerners.‖ He also felt ―consumers just don‘t buy into the idea that a
Chinese car is as good as a European high-end one‖.
Chairman Mao launched the Red Flag in 1958 because he thought China needed its own luxury car.
Now, after 52 years, FAW will try again to make that a reality.
Source: The Financial Times
THE RENMINBI‟S WAY TO GO GLOBAL HAS PITFALLS
Great power shifts are usually accompanied by changes in the international reserve currency. So it
is telling that China is taking steps to broaden the use of the renminbi among international
investors. Dominance of the global economy, Beijing believes, goes hand-in-and with dominance of
the global monetary system.
Whether China will be able to stomach the rest of the renminbi‘s journey to reserve currency status
is far from clear. A reserve renminbi would have to be fully convertible, on the capital account as
well as the current account. But this would imply opening up China to the whims of global capital –
precisely what it has been protecting itself against (as its huge foreign exchange reserves attest).
Freer capital flows may also prove destabilizing for domestic banks, creating liquidity bubbles in
good times and choking off the credit supply as conditions deteriorate. No longer would the banking
sector be an effective instrument of macroeconomic policy, as it has been during the crisis with its
government-induced lending sprees. It would be a source of, and not a remedy to, increasing
economic volatility.
Even less palatable for the Government is the prospect of losing control over the renminbi.
Maintaining a currency peg in the face of massive capital inflows is extremely difficult. And if
increasing foreign demand for the renminbi pushes up its value, China‘s export-led growth model –
which relies on an undervalued currency – may become unsustainable.
China will become the world‘s largest economy in the next few decades. It is natural that the
renminbi eventually attains reserve currency status. China should not push this process forward
prematurely, lest it destabilizes its economy. But the sooner it starts the domestic reforms that will
prepare it for such a shift, the easier it will find its new international role.
Read more…
Measures to internationalize the renminbi are nothing new. Hong Kong banks have offered offshore
renminbi accounts for more than six years, and currency swap agreements with foreign central
banks have been in place since 2000. But they have accelerated in recent months. Restrictions on
offshore transfers have been eased and a program allowing companies to settle cross-border trades
in renminbi expanded. The latest decision to open up domestic bond markets was particularly
significant. Until then there were few investment opportunities for international holders of
renminbi. These are, however, only small steps.
Source: The Financial Times
CHINA FORTIFIES STATE BUSINESSES TO FUEL GROWTH
During its decades of rapid growth, China thrived by allowing once-suppressed private
entrepreneurs to prosper, often at the expense of the old, inefficient State sector of the economy.
Now, whether in the coal-rich regions of Shanxi Province, the steel mills of the northern industrial
heartland, or the airlines flying overhead, it is often China‘s State-run companies that are on the
march.
11. As the Chinese government has grown richer — and more worried about sustaining its high-octane
growth — it has pumped public money into companies that it expects to upgrade the industrial base
and employ more people. The beneficiaries are State-owned interests that many analysts had
assumed would gradually wither away in the face of private-sector competition.
New data from the World Bank show that the proportion of industrial production by companies
controlled by the Chinese state edged up last year, checking a slow but seemingly inevitable
eclipse. Moreover, investment by State-controlled companies skyrocketed, driven by hundreds of
billions of dollars of government spending and state bank lending to combat the global financial
crisis.
They join a string of other signals that are fueling discussion among analysts about whether China,
which calls itself socialist but is often thought of in the West as brutally capitalist, is in fact seeking
to enhance government control over some parts of the economy. The distinction may matter more
today than it once did. China surpassed Japan to become the world‘s second-largest economy this
year, and its State-directed development model is enormously appealing to poor countries. Even in
the West, many admire China‘s ability to build a first-world infrastructure and transform its cities
into showpieces.
Read more…
Once eager to learn from the United States, China‘s leaders during the financial crisis have
reaffirmed their faith in their own more statist approach to economic management, in which
private capitalism plays only a supporting role. ―The socialist system‘s advantages,‖ Prime Minister
Wen Jiabao said in a March address, ―enable us to make decisions efficiently, organize effectively
and concentrate resources to accomplish large undertakings.‖
The issue of state versus private control is a slippery one in China. After decades of economic
reform, many big State-owned companies face real competition and are expected to operate
profitably. The biggest private companies often get their financing from state banks, coordinate
their investments with the government and seat their chief executives on government advisory
panels.
Chinese leaders also no longer publicly emphasize sharp ideological distinctions about ownership.
But they never relaxed state control over some sectors considered strategically vital, including
finance, defense, energy, telecommunications, railways and ports.
Mr. Wen and President Hu Jintao are also seen as less attuned to the interests of foreign investors
and China‘s own private sector than the earlier generation of leaders who pioneered economic
reforms. They prefer to enhance the clout and economic reach of state-backed companies at the
top of the pecking order. Many now believe that the 1980s reforms that unleashed China‘s private
sector and the 1990s reforms that dismantled great sections of the state-run sector are being partly
undone.
There are no comprehensive statistics to catalog the government‘s influence over the economy. So
the shift is partly inferred from coarse measures like the share of financing in the economy
provided by state banks, which rose sharply during the financial crisis, or the list of the 100 largest
publicly listed Chinese companies, all but one of which are majority state owned.
The statistic showing an uptick in the share of industrial production attributable to the state sector
is regarded by some analysts as a blip rather than the start of a trend. The World Bank‘s senior
economist in Beijing, Mr. Louis Kuijs, said the state sector‘s unusually rapid growth will most likely
moderate with the ending of the government‘s stimulus spending.
In some ways, the differences in this debate are small. Everyone agrees that China runs a
bifurcated economy: at one level, a robust and competitive private sector dominates industries like
factory-assembled exports, clothing and food. And at higher levels like finance, communications,
transportation, mining and metals — the so-called commanding heights — the central government
claims majority ownership and a measure of management control.
Yet the two camps‘ view of China‘s future are markedly different. Those who see little evidence of
an expanding state sector generally believe that China has a decade or more of robust growth
awaiting it before its economy matures. Theirs is a Goldilocks view of state intervention — not too
much or too little, but just enough to push a developing economy toward prosperity.
The skeptics have a darker view: they believe distortions and waste, in no small part due to
government meddling, have resulted in gross misallocation of capital and will end up pushing
growth rates down well before 2020. What drives their pessimism, the skeptics say, is that China,
like Japan a generation ago, has too much confidence in a top-down economic strategy that defies
conventional Western theory.
The skeptics also point to what they say is the growing political and financial influence of China‘s
State-owned giants — 129 huge conglomerates that answer directly to the central government, and
12. thousands of smaller ones run by the provinces and cities. In the last year or so, many of these 129
companies have moved forcefully into China‘s real-estate industry, with hundreds of billions of
dollars in construction projects and land deals. State-owned steel giants have cut deals to buy out
more profitable and often more efficient private competitors. A host of government conglomerates
have snapped up coal mining companies in Shanxi Province.
The reasons for the state‘s push for greater involvement in business vary. State control of energy
supplies is crucial to China‘s growth, and the Shanxi coal takeovers will increase production,
guarantee fuel to some state-owned utilities and give Beijing new power to control coal prices.
State mining companies also argue that they have a superior safety record to their accident-prone
private competitors.
But in other areas the state looks more mercenary. Take telecommunications. Upon joining the
World Trade Organization, China committed itself to opening its communications market to foreign
joint ventures for local and international phone service, e-mail, paging and other businesses. But
after eight years, no licenses have been granted — largely, the United States says, because capital
requirements, regulatory hurdles and other barriers have made such ventures impractical. Today,
basic telecommunications in China are booming, and are virtually 100 percent State-controlled.
Take the passenger airline industry. Six years ago, the central government invited private investors
to enter the business. By 2006, eight private carriers had sprung up to challenge the three state-
controlled majors, Air China, China Southern and China Eastern. The state airlines immediately
began a price war. The state-owned monopoly that provided jet fuel refused to service private
carriers on the same generous terms given the big three. China‘s only computerized reservation
system — currently one-third owned by the three state airlines — refused to book flights for private
competitors. And when mismanagement and the 2008 economic crisis drove the three majors into
financial straits, the central government bought stock to bail them out: about USD1 billion for China
Eastern; USD430 million for China Southern; USD220 million for Air China.
Some analysts argue that the state-owned conglomerates, built with state money and favors into
global competitors, have now become political power centers in their own right, able to fend off
even Beijing‘s efforts to rein them in. Of the 129 major state enterprises, more than half the
chairmen and chairwomen and more than one-third of the chief executive officers were appointed
by the central organization department of the Communist Party. A score or more serve on the
party‘s Central Committee, which elects the ruling Politburo. They control not just the lifeblood of
China‘s economy, but a corporate patronage system that dispenses top-paying executive jobs to
relatives of the party‘s leading lights.
China‘s leaders have sought occasionally in the past year to curb speculative excesses by state-
controlled businesses in real estate, lending and other areas. In May the State Council, a top-level
policy body sometimes likened to the cabinet in the United States, issued orders to give private
companies a better shot at government contracts — for roads and bridges, finance and even military
work — that now go almost exclusively to state-owned companies. Virtually the same rules were
issued five years ago, to little effect.
Yet it is hard to argue with success, other economists say, and China‘s success speaks well of its
top-down strategy. Asian powerhouses like South Korea and Japan built their modern economies
with strong state help. Many economists agree that shrewd state management can be better than
market forces in getting a developing nation on its feet.
Experts on both sides of the debate have but two questions. One is how much longer state control
of vast areas of the economy will generate that growth. The other is whether, should that strategy
stop working, China will be able to change.
Source; The New York Times
POLITICS
GOVERNMENT MAKES A POINT IN SCORCHING GOBI HEAT
Chairs and tables had been set up in the sands of the Gobi desert for a Cabinet meeting last Friday
aimed at drawing attention to climate change. The Prime Minister sported a blue tie while he and
all his 12 ministerial colleagues donned dark green baseball caps reading "Save our planet". The
meeting was held in scorching heat in Gashuunii Khooloi, a sandy valley in South Gobi province,
about 670 km south of Ulaanbaatar.
The ministers, dressed in suits and ties, arrived in the desert in jeeps after a 15-hour journey.
Officials planted a Mongolian flag in the ground, set up long tables and chairs in the fine, golden
sand and discussed climate change against the backdrop of a vast expanse of desert and a bright
blue sky.
13. "Mongolia is feeling the impact of global climate change," Prime Minister S.Batbold said at the one-
hour meeting. He pointed to the recent winter as an example of problems Mongolia faces. The
winter was the harshest in decades and a fifth of the country's livestock died. The Government
blames global warming for a decrease in rainfall and says that rising average temperatures have
caused many rivers and springs to dry up and snow cover to melt. It also says the frequency of
natural disasters and drought has jumped.
The site for the meeting was chosen because parts of it used to be arable land, said Badarch, head
of social policy for South Gobi province. "Five years ago, many edible plants used to grow in this
valley and there were fewer sand dunes. Now the valley is completely covered with sand. The sand
dunes are moving and taking up more space each year."
Minister of Natural Environment and Tourism L.Gansukh said Mongolian herders' traditional way of
life is under threat. "Global climate change accelerates the desertification process in Mongolia.
Currently, 70 percent of Mongolian land is affected by desertification."
The Government has said it hopes delegates at the global climate talks in Cancun, Mexico, in
November would reach a decision that is "favorable for landlocked, developing countries ... very
much affected by climate change and desertification".
Source: AP
TIME FOR A CHANGE IN CLIMATE RESEARCH
Over the course of this year, six reviews have examined various aspects of climate research – most
recently Monday‘s report on the Intergovernmental Panel on Climate Change by the world‘s
scientific academies. While none has challenged the fundamental view that man-made global
warming must be tackled by cutting emissions of carbon dioxide and other greenhouse gases, there
has been harsh – and often deserved – criticism of the IPCC and the climate research centers that
contribute to its assessments.
Now it is time to implement fundamental reforms that would reduce the risk of bias and errors
appearing in future IPCC assessments, increase transparency and open up the whole field of climate
research to the widest possible range of scientific views. Restoring public confidence in the IPCC is
essential, because it is the main intermediary between scientists and politicians who have to decide
on climate policies that could cost the global economy hundreds of billions of dollars. Given that
most scientists believe in the need to tackle global warming, the IPCC cannot hope to satisfy the
most extreme ―climate skeptics‖. But it must never again undermine its own credibility by sloppily
repeating unsubstantiated statements that exaggerate the risk of climate change, such as the
notorious claim that Himalayan glaciers could disappear by 2035.
Read more…
At its plenary meeting in South Korea next month, the 194 national governments that control the
IPCC must push through a thorough overhaul of management and procedures. The IPCC needs
stronger leadership to maintain credibility, including a new executive committee (with at least one
member who is not a climate scientist) and a chief executive rather than a relatively powerless
secretary. Although Rajendra Pachauri, IPCC chairman since 2002, has been unfairly vilified in some
quarters, his recent performance under pressure has not helped the cause of climate science; the
time has come for him to move on.
A rejuvenated IPCC leadership could tackle the deficiencies in its review process. This should
become more inclusive, welcoming alternative views where these are scientifically valid, and at the
same time more exclusive, rejecting unsubstantiated claims of dramatic change. The many
uncertainties need recognition, with IPCC assessments talking more about risks and probabilities
than they have in the past. Then the debate can get back to the real issues posed by climate
change.
Source: The Financial Times
SUB-COMMITTEE HEAD SAYS THEY ARE NOT BOUND BY ANY TIME LIMIT TO ANSWER LETTERS
Mr. E.Munkh-Ochir, MPRP MP and head of Parliament‘s Sub-Committee on Special Monitoring, told
media that its meeting on Monday had not taken up the case of the Anti-Corruption Authority (ACA)
officials. This, he said, might have been contrary to people‘s expectation, but did not contravene
any legal provision. The sub-committee had indeed received a letter from Parliament‘s Standing
Committee on Legislation saying the case is very important and action by the sub-committee was an
urgent necessity, but, he said, ―We receive many letters from citizens and standing committees.
We shall read them in good time and decide what action needs to be taken on which. ―He rejected
the view that the sub-committee was deliberately delaying progress in the case, reiterating his
stand that ―there is no legal compulsion for us to reply to any letter within a fixed period‖. He also
14. denied that Parliament had failed to act within the stipulated time on the State Prosecutor
General‘s request for the dismissal of the ACA director, Mr. Ch.Sangaragchaa, and Vice-Director
D.Sunduisuren. According to him, the law did call for discussion on any such request to begin within
14 days but there was no compulsion to reach a decision within a given time. Mr. Munkh-Ochir said
he personally felt the Prosecutor General‘s request does not have much support. ―He is not clear on
why he is accusing the two ACA officials of abusing power, or of unauthorized spending of budget
money, or of spying on employees illegally,‖ he said.
Source: Ardiin Erkh
CITIZEN‟S CHAMBER NOMINATED FOR GERMAN PRIZE
The Citizen‘s Chamber set up at the initiative of President Ts.Elbegdorj has been nominated for the
2011 Reinhard Mohn Prize(formerly known as Carl Bertelsmann Prize), awarded by the Bertelsmann
Foundation of Germany. The Prize, instituted in 1988, is awarded annually and is worth €150,000.
The 2011 award will go to a governmental institution - possibly in cooperation with a non-
governmental actor - which has initiated successful projects (or programs) to vitalize democracy, to
integrate underrepresented citizens and to establish new forms of democratic problem-solving
capacities through participation.
The Citizen‘s Chamber has organized 32 public discussions on national issues, with a total
participation of some 2,000 people. It has also 367 opinions through E-mail, letters, phone and fax.
Source: Montsame
PRESIDENT TEACHES A CLASS AS NEW SCHOOL YEAR BEGINS
The most important event of the start of the new academic year on September 1 was President
Ts.Elbegdorj teaching a class on Mongolian history in a secondary school in Ulaanbaatar. The lesson
termed "Mongolia‘s pride" was broadcast nationwide through the State television channel.
The President said every citizen should be proud of being a Mongolian and must learn to value the
nation‘s history and heritage. The young generation should also vow to protect the Earth --our
home – from environmental degradation.
Among others who attended the opening ceremony at various places were Parliament Speaker D.
Demberel, Prime Minister S.Batbold and several Ministers. Some 142,000 children will be in
kindergarten this year, and 522,000 in secondary school, while professional schools will have 44,000
students and higher educational institutions 164,000.
Source: English.News.mn, Montsame
NEW BIRD DISEASE IDENTIFIED IN ULAANBAATAR POULTRY FARM
Deputy Prime Minister M.Enkhbold, who is also Chief of the National Emergency Commission, will
supervise the work of disinfecting areas in a district of Ulaanbaatar where a poultry farm has been
identified as the source of a contagious bird disease, "Newcastle," the first time in the country's
history. The Government has earmarked MNT125 million for the work and the Mayor has been asked
to take all necessary measures without delay. Apart from leading to inflammation of the eyes,
Newcastle poses no threat to humans.
Chicken death was reported at the farm some days ago and experts confirmed the outbreak,
tentatively concluding the disease was transmitted from chicken feed. A total of 1,600 eggs will be
destroyed, and 4,847 chickens slaughtered. There are a total of about 270,000 chickens in
commercial farms in the Ulaanbatar region. Currently, quarantine has been imposed in all chicken
farms and mobile patrols have been set up around the area.
Source: Ardiin Erkh
FOREIGNERS CAN NOW ENTER CHINA AT CHECKPOINT IN KHOVD
Mongolia has begun allowing foreign tourists cross its border to get to China at a checkpoint in
Khovd province. Mongolia took the decision after receiving a request from the administration of the
Altay region in Siberia to make a popular ―Altay-golden mountains‖ route passing through Russia,
Mongolia, China and Kazakhstan more accessible.
Source: Voice of Russia
PEDESTRIAN OBSTACLES TO GO
MNT150 million is planned to be spent under the Mayor‘s orders to make life for pedestrians in
Ulaanbaatar easier. Inspection of squares and pavements has identified 77 structures that will be
relocated and 215 more that will be demolished. The official notice for this has begun to be served
on individuals, businesses, and organizations now benefiting from these.
15. Source: News.mn
ANNOUNCEMENTS
“DISCOVER MONGOLIA” (SEPTEMBER 8-10) ADDS NEW SESSION, PARLIAMENT HOUR
This year‘s Discover Mongolia Investors‘ Forum will take place on September 8-10 in Ulaanbaatar.
The Organizing Committee plans to have, in addition to the usual Government Hour, a new session,
Parliament Hour, where current and prospective investors will be able to interact with the
country‘s lawmakers, and to know about the legal framework that Mongolia wants to set up in the
mining and exploration sector.
Mr. Bernard J. Guarnera, President of Behre Dolbear Group Inc., will be the Keynote Speaker and
will talk on a study conducted by the Group on ―Where not to invest‖. Among the other speakers is
a Mongolian MP, Mr. D. Odkhuu, whose topic is ―Mongolia‘s Regional Development Concepts‖.
The Premier Sponsor for this year‘s event is SouthGobi Resources, and the Gold Sponsors are Erdene
Resource Development, Micromine Mongolia, Hunnu Coal, Geosan, and Prophecy Resources. The
Regular Sponsors are: Aspire Mining, MoEnCo, Monnis, PricewaterhouseCoopers, Runge Group, Trade
and Development Bank of Mongolia, and Energy Resources.
__________________________________________
1ST
ANNUAL MONGOLIA INVESTMENT CONFERENCE
The 1st Annual Mongolia Investment Conference on September 7 in Ulaanbaatar, co-organized by
Eurasia Capital, will provide insight into the most promising sectors of the Mongolian economy
through in-depth discussion of the market and the products. It will showcase a range of Mongolia-
based opportunities in the natural resource and financial sectors and beyond. The conference also
offers investors the chance to meet key decision-makers in Mongolia and to learn of the key market
drivers, risks and influences in the frontier market.
The session will be preceded by a trip to Oyu Tolgoi and Ovoot Tolgoi in the South Gobi on
September 6. All efforts will be made to arrange any one-on-one meeting requested in advance by
participants. Seats are limited and access is guaranteed only to those registered. For more
information and applications, please contact Ms. Zhyldyz Sadyralieva at
zhyldyz.sadyralieva@eurasiac.com or at 976 99061673.
__________________________________________
GIANT STEPPES OF JAZZ INTERNATIONAL FESTIVAL (SEPT 28 - OCT 2)
Jazz is coming to town again. The 4th Giant Steppes of Jazz International Festival will bring
together international and local jazz artists to add more charm to Ulaanbaatar sunny autumn. This
year‘s festival line-up includes performers of a variety of jazz styles from Germany, Norway,
Switzerland and the U.S. alongside the best of Mongolian jazz. A Gala concert will be held at the
Khan Bank Theater on October 1, with nightly performances at River Sounds on September 28, 29,
30 and October 2. There will also be free evening Jam Sessions at The Square in Central Tower.
For more information, please call 9911-1061 (Eng/Mgl), 8803-3300 (Mgl). Tickets will be on sale at
The Square Restaurant (Central Tower, 3rd
fl) and Hi-Fi Video Megastore (Seoul Street).
__________________________________________
“BSPOT" on B-TV
BTV (Business TV) will be broadcasting a 20-minute Mongolian-language news program on two
evenings every week, based mostly on items in the BCM NewsWire that were published outside
Mongolia. The program is called ―Through the eyes of others‖ and the first broadcast will be on
Saturday, August 28, at 19.30.
BTV (Business TV) already telecasts a 10-minute English-language news program called BSPOT every
evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
_____________________________________
“MM TODAY” on MNB-TV
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 21:15 tonight. Tune in to watch this program that reports stories from today‘s BCM
NewsWire.
______________________________________
NEW POSTINGS ON BCM WEBSITE‟S „MONGOLIAN BUSINESS NEWS‟
The draft Tavan Tolgoi Investment Agreement which was submitted by the Government to
16. Parliament is posted in both languages to BCM‘s websites, (www.bcmongolia.org) and
(www.bcm.mn), ‗Mongolian Business News‘ for your review.
As some of you might have noticed, 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.
SPONSORS
ECONOMIC INDICATORS
17. 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]
July 31, 2010 *9.8% [source:NSOM]
*Year-over-year (y-o-y)
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]
18. CURRENCY RATES – September 2, 2010
Currency name Currency Rate
US dollars US 1,308.98
Euro EUR 1,665.02
Japanese yen JPY 15.55
British pound GBP 2,015.37
Hong Kong dollar HKD 168.30
Chinese yuan CNY 192.18
Russian ruble RUB 42.49
South Korean won KRW 1.10
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selected from various news sources. Opinions are those of the respective news sources.