07.10.2011, NEWSWIRE, Issue 188

BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 188, October 7 2011
NEWS HIGHLIGHTS:
Business:
 Gov’t of Mongolia, Ivanhoe Mines and Rio Tinto announce joint statement;
 Mongolia reaffirms OT investment agreement;
 Energy Resources completes road for coal transport;
 Students protest for Khushuut to be strategic deposit;
 Petro Matad to continue drilling at DT-11;
 Petro Matad takes time to study Davsan Tolgoi geology;
 Centerra supports better governance in resource sector;
 Lucky Strike to acquire CN Coal project;
 Leadership transition at Newcom;
 Xanadu Mines selects new non-executive director;
 MGG issues stock options to include lower ranking employees;
 Unitel to offer cloud services;
 Molycorp to breathe new life into rare earths market;
 Ivanhoe settles affairs abroad.
Economy:
 Investors question political stability in Mongolia;
 Russia worries for its investors;
 Building for the Boom;
 Strengthening the regulatory regime;
 South Gobi predicts continued growth in coal market;
 Real estate in UB experiences 55 percent growth;
 Analysts predict a reinvigoration of M&A activity in Asia;
 World economy can weather weak copper prices a bit longer;
 Copper crumbles under the pressure of economic crisis;
 No relief in precious metals market.
Politics:
 MPs move to dissolve government;
 Pols must toe the line to win votes and investment;
 Mongolia sore about Khurts arrest;
 Parliament opens autumn session;
 MPP prepares for 2012 election;
 Government dismisses Development Bank head over bond dispute;
 Putin to create Eurasian Union;
 Philippine representatives promote peace in Ulaanbaatar;
 Government to expand its social welfare;
 Elbegdorj calls for end to citizen allowances;
 Standing Committee protests taxes on HDF allowances;
 MPP caucus calls for budget revisions;

 Japan to aid in development of education in Mongolia;
 New campaign promotes women's role in politics;
 Mongolians remember Zorig;
 Snowstorm effects power outage in Darkhan and Selenge;
 Quakes shake up the Gobi;
 Mongolia falls short on pristine nature list.
*Click on titles above to link to articles.
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
Mongolian Star Melchers Breakthrough PR
MCS Property Oxford Business Group
OPEN LETTER TO MEMBERS OF THE MONGOLIAN PARLIAMENT AND THE GOVERNMENT
Since the signing of the landmark Oyu Tolgoi investment agreement with the Government of Mongolia,
domestic and foreign partners have rallied to develop Mongolia‟s vast mineral resources. On the basis
of contracts that were negotiated in “good-faith,” significant capital is being raised in global capital
markets that will propel jobs and prosperity for all Mongolians. This growth in addition to promising
dramatic expansion of infrastructure, health, education and other services will provide job
opportunities for generations of Mongolians.
We welcome the government‟s clear statement of support for the stability of the multi-billion dollar
Oyu Tolgoi investment agreement. Capital abhors insecurity and unpredictability, and the recent

initiatives to renegotiate contracts and amend current law fails to recognize the damage that will be
done to the reputation of Mongolia as an emerging market where a relatively progressive development
and growth agenda have attracted wide-spread interest and investment.
When the OT agreement was signed in 2010, it was hailed by the investment community, both domestic
and foreign, for the powerful signal that it communicated. It affirmed the Government‟s “open for
business” policy and it demonstrated Government and Parliament‟s willingness to amend laws ensure
the commercial viability of mining projects.
Efforts to renegotiate Oyu Tolgoi, or any other project would undermine the country‟s efforts to build a
reputation as a legitimate partner to business, both domestic and foreign. Mongolia has begun
cultivating a reputation as a sound and predictable place to do business, where risks and rewards are
fairly allocated. It is in the interests of the Mongolian people to carefully protect our reputation for
trustworthiness.
The Business Council of Mongolia, on behalf of its 200 members employing tens of thousands of
Mongolians, applauds the Government for reaffirming the stability of agreements into which it enters.
The BCM will mobilize all resources at its disposal to support the government to strengthen the rule of
law and contribute to Mongolia‟s growing prosperity.
BCM Board of Directors:
Boroo Gold Monnis International
Breakthrough PR Newcom Group
Erdene Resources Development Oyu Tolgoi
Just Group Peabody Energy
Khan Bank Petro Matad
Leighton Asia PricewaterhouseCoopers
Lynch & Mahoney QGX Mongol
Mandal General Insurance Rio Tinto
MCS Group Sant Maral Foundation
MICC South Gobi Sands
Mongolian Star Melchers Tavan Bogd
Mongolyn Alt Corporation Trade & Development Bank
BUSINESS
GOV'T OF MONGOLIA, IVANHOE MINES AND RIO TINTO ANNOUNCE JOINT STATEMENT
On Thursday, the Government of Mongolia, Ivanhoe Mines and Rio Tinto released a joint statement. The
joint statement says Ivanhoe Mines, Rio Tinto and the Government of Mongolia have concluded
discussions on the two aspects of the Investment Agreement that were raised by the Government of
Mongolia, and are pleased to confirm that all parties have reaffirmed their continued support for the
Investment Agreement.
The Government of Mongolia has once again confirmed that the Investment Agreement was signed in
full compliance with all laws and regulations of Mongolia.
Since the signing of the Investment Agreement, Mongolia has achieved international stature as one of
the countries most attractive to foreign investment. Mongolia's economy has become one of the fastest
growing economies in the world. The people of Mongolia are reaping great benefit from the
construction of Oyu Tolgoi project and stand to benefit even more when project becomes operational.
The Investment Agreement has also formed the basis for the construction of Oyu Tolgoi, which recently
passed the 50 per cent completion mark and is expected to begin initial production during the third
quarter of next year.
Ivanhoe Mines and Rio Tinto respect the position of the Government of Mongolia and appreciate their
continued support for the Investment Agreement.
The shareholders are united in their commitment to secure the necessary project finance and bring the

Oyu Tolgoi Project to completion and full production for the benefit of the nation of Mongolia. All
stakeholders: investors, lenders, employees, contractors, civil society and local communities can have
full confidence in the future of Oyu Tolgoi.
Read more…
To reach this point, USD 2.6 billion have been invested by Ivanhoe Mines and Rio Tinto and significant
amount have been committed to bring Oyu Tolgoi into production.
Section 15.30 of the Investment Agreement provides that "Upon mutual consent recorded in writing,
the Parties may amend or modify this Agreement". Ivanhoe Mines and Rio Tinto acknowledge that the
Government of Mongolia acted in accordance with this provision of the Investment Agreement in
seeking to discuss these changes.
Source: Montsame
MONGOLIA REAFFIRMS OT INVESTMENT AGREEMENT
The investment agreement for the giant Oyu Tolgoi copper-gold project in Mongolia stands, the
government announced on Thursday, after its requests to renegotiate it with Rio Tinto and Ivanhoe
mines were declined. In a joint statement, the three owners of the mine, set to start producing late
next year, said they had all “reaffirmed their continued support” for the agreement struck in 2009.
The government last month requested Anglo-Australian Rio Tinto and Vancouver-based Ivanhoe to
renegotiate Mongolia‟s 34% ownership of Oyu Tolgoi, after 22 members of parliament petitioned the
president to increase the country‟s stake and lift royalties. The two companies refused to do so,
releasing a statement on October 3 saying that the investment agreement, which took six years to
negotiate, was constitutionally binding, and seeking to change it would threaten investment in the
country. They also wrote to Mongolia‟s National Security Council (NSR), made up of President
Tsakhiagiin Elbegdorj, speaker of Parliament Demberel Damdin and Prime Minister Sukhbaatar Batbold,
asking it to ensure the government sticks with the investment agreement. Rio Tinto and Ivanhoe also
said they had invested $2.6-billion in the project, now 50% complete, which they might not have done
without the investment agreement.
“The government of Mongolia has once again confirmed that the investment agreement was signed in
full compliance with all laws and regulations of Mongolia,” Thursday‟s joint statement read.
Ivanhoe owns 66% of Oyu Tolgoi, and Rio Tinto, the project‟s operator, last month increased its
ownership of the company to 49%. Under the 2009 accord, Mongolia has the right to lift its ownership of
the mine to 50% after 2039, if all parties agree to this.
“Ivanhoe Mines and Rio Tinto acknowledge that the government of Mongolia acted in accordance with
this provision of the investment agreement in seeking to discuss these changes,” the companies said.
Read more…
Shares in Ivanhoe ratcheted up 14% on the news to trade at C$17.74 as at 11:09 Friday in Toronto.
Rio Tinto and Ivanhoe also said they warned the government that it‟s actions “could seriously
undermine the confidence that international investors have in Mongolia‟s future as a safe and stable
country in which to invest”.
Oyu Tolgoi is expected to produce more than 1.2-billion pounds of copper and 650 000 oz of gold a year
in the first ten years of operation, and the mine would produce around 1.7-billion pounds of copper and
one-million ounces of gold at its peak, in year seven. The first openpit phase is set to start commercial
production in 2013, with underground production set to arrive two years later.
Source: Mining Weekly
ENERGY RESOURCES COMPLETES ROAD FOR COAL TRANSPORT
Mongolia Mining Corporation‟s Energy Resources subsidiary completed the construction of 245
kilometers of new road between its Ukhaa-Khudag coal mine site and Gashuun Sukhait at the Chinese
border.
Officials said the new road will reduce dust, accidents, and breakdowns. The road has the capacity for
the transport of 15 million tons of coal. Although the state commission approved the opening of the
road, it did make recommendations for its repair. Dale Choi, chief market strategist of Frontier
Securities called the state commission's acceptance “imminent.”
Source: Business Mongolia, Frontier Securities

STUDENTS PROTEST FOR KHUSHUUT TO BE STRATEGIC DEPOSIT
The Student Union of Hovd Aimag's and D. Battstogt, a political leader of the group the People's Union
to Demand its Promises leader, gave notice to Parliament to their demand that Khushuut Coal Deposit
be placed on the list of strategic deposits.
When the government adopted its strategic deposit list in 2007, Khushuut was not registered, although
BayanTeeg and Nuurst Hotkhon coal deposit, which hold coal of a lesser grade, were. The group claims
that someone had an interest in keeping Khushuut off the list.
“The Hong Kong-listed MoEnCo owns the Khushuut Coal Mine 100 percent,” said the notice to
Parliament. “Its coal quality is better than the coal found at Tavan Tolgoi.”
The deposit contains 60 million tons of coal, said MoEnCo on its website. However the company only
reported 85.8 million tons to the Mongolian government. The group says it is in the interest of the
nation to add Khushuut to the list. The group doesn't protest the right to mine there, but contends that
a portion should be reserved for the Mongolian government and its people.
Source: Undesnii Shuudan
PETRO MATAD TAKES TIME TO STUDY DAVSAN TOLGOI GEOLOGY
Petro Matad reported its interim results for the first six months of 2012. The six months period ended
30 June 2011.
Petro Matad drilled 8 wells in 2011 at its Davsan Tolgoi Prospect in Block XX in the east of Mongolia.
The firm decided to suspend drilling operations for the winter so as to collate all the 2011 data and re-
assess the geology of the Prospect. All but one well showed the presence of hydrocarbons and early
results indicate multiple areas of great interest to the Company. Petro Matad was able to gather up
enough data through drilling and seismic surveys for a better understanding of the Davsan Tolgoi
geology.
Results from the exploration efforts at Block V indicate the presence of a productive hydrocarbon
system. A 1600m core hole that was drilled for scientific purposes revealed oil staining and indicated
the presence of gas. At Block IV as well as Block V, the Company identified oil shale occurrences that
may have commercial potential.
On its corporate side, the firm has established and in-house legal and compliance department. It has
continued its ongoing liaison with the Mongolian government in the event of a possible amendment to
its Petroleum Law. The firm has a current cash balance of about USD 25 million.
Source: Petro Matad
PETRO MATAD TO CONTINUE DRILLING DT-11
Petro Matad will halt its drilling activities through winter with exception to its Davsan Tolgoi well 11
(DT-11). The well has reached a total depth of 1,220 meters. DT-11 was drilled in response to
complications and the abandonment of well DT-1.
DT-11 has encountered fair to good oil shows. The company described its findings as characteristic of a
strong hydrocarbon odor, dark brown oil staining, dull golden to bright yellow fluorescence, and yellow
to white streaming cut.
“We are pleased that the efficient drilling and sound mechanical condition of the DT-11 replacement
well will permit us to fully test the same uppermost Tsagaantsav Reservoir encountered in DT-1,” said
Chief Executive Officer Douglas McGay.” We expect testing to commence in the near future.”
Petro Matad Limited is the parent company of a group focused on oil exploration as well as future
development and production in Mongolia.
Source: Petro Matad
CENTERRA SUPPORTS BETTER GOVERNANCE IN RESOURCE SECTOR
Centerra Gold will partner with Extractive Industries Transparency Initiative (EITI) in its mission to

improve governance in resource-rich countries. EITI is an international non-profit organization joining
governments, companies, civil society, investors, and international organizations together for its
mission.
EITI works to verify company publications concerning payments to governments and government
reported revenues from oil, gas, and mining. Sixty oil, gas, and mining companies have come to support
the group. The group uses signatory governments with an international multi-stakeholder structure t
band together for good governance so that the extracting and processing of resources can generate
revenues that foster growth and reduce poverty.
Centerra is a gold mining company focused on operating, development, exploring, and acquiring gold
properties in emerging markets worldwide. The firm's main asset in Mongolia is its Boroo gold mine.
Source: Centerra Gold Inc.
LUCKY STRIKE TO ACQUIRE CN COAL PROJECT
The initial estimates of Lucky Strike indicate 272 million tons of measured coal at the CN Coal project
in Tuv Aimag. Estimates were prepared by the U.S. firm Norwest.
Lucky strike has an option to acquire an 80 percent interest in the project from five private local
companies. In addition to the 272 million tons is 232 million tons of inferred resources. Shares jumped
up almost 3 percent to US 0.70.
Lucky Strike completed the legal documents needed for the six mineral exploration licenses covering an
area of 13,093 hectares, located approximately 175 kilometers southwest of Ulaanbaatar.
Norwest recommended a two-phase exploration program. For the first, the firm will perform a geologic
mapping and drill approximately 8,000 meters. The second would consist of an additional 5,000 meters
of drilling on the remaining area covered by the licenses for a potential expansion of operations.
Lucky Strike is a mining and exploration firm aiming to become a cash-flowing company through the
transportation of coal from Mongolia into China.
Source: Proactive Investors
LEADERSHIP TRANSITION AT NEWCOM
Newcom Group‟s Board of Director‟s today announced that its co-founder and chairman Mr.
Tserenpuntsag Boldbaatar is temporarily stepping in as an Executive Chairman, including the
chairmanships of Mobicom Corporation and Eznis Airways. The board also appointed Mr. Bayanjargal
Byambasaikhan as an acting Chief Executive. Mr. Byambasaikhan was Newcom‟s Managing Director for
Energy and Infrastructure, and Chief Executive of Clean Energy, a Newcom subsidiary.
Mr. Baatar Bold who served as Newcom‟s Chief Executive for two years is leaving to pursue other
opportunities. Newcom thanks Mr. Bold for his contribution to Newcom Group during his two year
tenure.
Newcom Group, founded in 1993, is a long term investor committed to bringing global expertise and
innovation to Mongolia. Newcom Group (www.newcom.mn) employs about 2000 people and has a
successful track record and portfolio of investments across telecommunications, information
technology, airline, energy, financial services, and real estate. The company‟s headquarters are in
Ulaanbaatar, Mongolia.
Source: Newcom Group
XANADU MINES SELECTS NEW NON-EXECUTIVE DIRECTOR
Xanadu Mines' board decision to select Hannah Badenach as a non-executive director of the firm
became effective this week.
Badenach is Vice President of Asset Development and Operations at Noble Resources and a lawyer. She
has practiced law for several years in Asia, including two years in Mongolia, starting in 2004 with Lynch
& Mahoney. Badenach was also managing director of QGX Mongol from 2006 until 2008 when the

company was sold.
“Ms. Badenach has extensive experience in management and development in Mongolia and the board
believes she brings diversity and skills which will add significant value to the company,” said the
source.
Xanadu Mines Ltd. is a Mongolian exploration company with two thermal coal assets, Galshar and Khar
Tarvaga. It is currently exploring at its Nuurstei and Javkhalant sites for coking coal, copper, and gold.
The firm also recently acquired the Sharchuluut Uul cooper project 40 kilometers from Erdenet copper
mine.
Source: Xanadu Mines
MGG ISSUES STOCK OPTIONS TO INCLUDE LOWER RANKING EMPLOYEES
Mongolian Growth Group (MGG) issued 175,000 stock options to its employees. The firm has broadened
its distribution of options to include lower ranking employees. Mongolians own about four percent of
the company through its stock options.
“We think that all employees should have a stake in the future of our business,” said Chief Executive
Officer and Chairman Harris Kupperman. “We intend to issue options to new employees and then be
sparse on option grants going forward. The exception is to reward truly impressive performance as
someone's responsibility grows.”
Although MGG has issued grants recently, it said it will focus on options as a reward to its employees in
the future.
Mongolia Growth Group is a real estate, financial services, and insurance conglomerate at an early
stage and focusing its operations in the emerging economy of Mongolia.
Source: Mongolian Growth Group
UNITEL TO OFFER CLOUD SERVICES
Unitel Group signed a cooperative agreement with the U.S. firm Seven Networks to introduce cloud
technology to its services. This is the first time a company will use this technology in Mongolia.
Unitel's Green Berry service will first be implemented in its mobile phone service. The service will allow
cell phone users to send and receive messages that can also be accessed on a computer.
Cloud technology is a storage method that allows information to be stored on the web rather than on a
hard drive or other hardware. Seven Networks is based in San Francisco and is working to provide the
world with complex services to 115 companies and in 65 countries.
Source: Udriin Sonin
MOLYCORP TO BREATH NEW LIFE INTO RARE EARTHS MARKET
A new source for heavy rare earths may salvage the rare earths market as companies search for ways to
produce goods without them. Molycorp announced it has rediscovered a deposit at Mountain Pass in
California, U.S.A. of have rare earths. Some companies are beginning to consider Mongolia as a possible
source of rare earths, but a drop in demand could put an end to that endeavor.
Molycorp has already begun building an enormous new rare earth refinery for light and heavy rare
earths at Mountain Pass to replace the old one. The new plant will open in stages between late next
year and the end of 2014. The company may be able to begin producing heavy rare earths after 12
months said Mark Smith, Molycorp chief executive.
Geologists first noted an outcropping of heavy rare earths in 1950 while mapping out Mountain Pass, but
Unical (the company then operating at the site) was more interested in light earths and consequently
the deposit was lost in the firm's archives. A team tasked with searching those archives after Chevron
bought up Uncoal and recast it as Molycorp rediscovered the deposit. Extensive test drilling is needed
to determine the quality and quantity of rare earth ore there, but announced the deposit to inform the
market an adequate supply of rare earths is on its way.

Rare earth materials are needed for a variety of green-energy technology and high-tech gadgets. China
has dominated the market, producing over 90 percent of the world's light rare earth and close to 100
percent of the heavy type. However, last year it decided to scale back its production and exports. Light
rare earths are far more common than the heavy variety, now selling for up to USD 2,600 a pound.
Scarcity of the minerals has forced companies to find ways to produce goods without them.
Molycorp's rare earths will add to that of Australia's Lynas Corp., set for production next year. Both
companies focused on light rare earths. However projections of a surplus for next year have caused
Molycorp's stocks to take a nose-dive. This new deposit may change its performance on the market,
however.
Source: New York Times, Mining Weekly
IVANHOE SETTLES AFFAIRS ABROAD
Ivanhoe Mines received approval for its acquisition of AUD 92.6 million worth of shares in its subsidiary
Ivanhoe Australia. Ivanhoe Mines is the 66 percent stakeholder in the Oyu Tolgoi copper and gold
project.
Ivanhoe Australia announced its intention to raise up to AUD 180 million in part to repay debt to its
parent company, Ivanhoe Mines. The firm agreed to acquire more shares to resolve some of that debt.
Ivanhoe Mines agreed to acquire AUD 92 million worth of shares, which would result in a net AUD 62
million funding contribution after extinguishing the intercompany debts. Its stake in Ivanhoe would fall
to 59 percent from 62 percent. This week the company received permission from the Australian Foreign
Investment Review Board to do so.
Ivanhoe Mines said that it remained strongly committed to its investment in Ivanhoe Australia, and
considered the funding to be an important step in the continued growth in the Australian subsidiary.
Source: Mining Weekly
ECONOMY
INVESTORS QUESTION POLITICAL STABILITY IN MONGOLIA
Rio Tinto and Ivanhoe Mines have had to suffer increasing political pressure regarding their Oyu Tolgoi
project. A controversy seems to be an effect of the turbulence within Mongolia‟s mining sector as the
2012 elections approach.
The government announced its interest in raising its stake in Oyu Tolgoi to 50 percent ahead of
schedule. The news brought discontent to Mongolia's mining sector just when the global economic crisis
was beginning to affect mining firms. Rio has warned that the demand for commodities may fall and a
drop in production in its biggest copper mine in Chile.
Although Mongolia has managed to come out unscathed by economic perils thus far, investors are
fearful about how a change in the political environment may impact resource projects.
“An unstable environment, where changes to agreements are forced, leads to investors being very
apprehensive and uncertain,” said Cameron McRae, Rio's country director and the head of operations at
Oyu Tolgoi. “Therefore the stability of this investment agreement sends a very important signal from
Mongolia to the world.”
Discussions over the Oyu Tolgoi copper and gold project only touched on the stake, said D. Zorigt,
mining minister.
A change in politics could mostly seriously impact the Tavan Tolgoi coal project as well. The
government is selling the rights to half of the deposit to foreign investors, while the other half will be
under the control of the state-owned firm Erdenes Tavan Tolgoi. It is possible that firm will list on
markets in London, Hong Kong, and Ulaanbaatar by March next year.
Both Oyu Tolgoi and Tavan Tolgoi are enormous deposits of copper and coal respectively. The
development of these mines has already brought enormous economic growth to Mongolia.

Source: Financial Times
RUSSIA WORRIES FOR ITS INVESTORS
Mongolia's politicians have signaled that they would like to revise some of the agreements it made
regarding its biggest projects. Russian investors in particular may be affected by this trend.
The attack on foreign investors may be related to a struggle for power within Parliament before the
upcoming 2012 election. The shake up to investor agreements is causing discontent among investors,
fearing instability in Mongolia's government sector.
Most controversial was the government's decision to reevaluate its Oyu Tolgoi investment agreement
with Ivanhoe Mines and Rio Tinto who owns a stake in the project by proxy through its 49 percent stake
in Ivanhoe. It has also hinted it may alter the distribution of stakes on its Tavan Tolgoi Western Tsankhi
project to allow participation from Japan and Korea. Russia was displeased by the results of Mongolia's
decision to grant Russian Railway an 18 percent stake in the project compared with the 40 percent
given to the Chinese firm Shenhua and 24 percent given to the U.S. firm Peabody Energy.
“Mongolia is hinting that it will soon announce the new results for its Tavan Tolgoi bidders and it will be
beneficial to the Russian side,” said a Russian official. “They aim to cheat all.”
Politics seems to be at the center of the controversy. MPs want to position themselves as strong
arbiters in the face of foreign business to Mongolians. President Ts. Elbegdorj was elected in the 2008
election representing the Democratic Party, but PM S. Batbold from the Mongolian People‟s Party took
the prime minister position.
Source: Zuunii Medee
BUILDING FOR THE BOOM
Economic growth from Mongolia's mining sector has attracted funding for the construction of
infrastructure projects for power, transport and other municipal sectors.
The Tavan Tolgoi coal project promises to be a huge generator of profits for Mongolia, but will need
extensive development before construction begins on the Western Tsankhi. As Chinese, Korea, U.S.
and Russian firms compete for the rights to develop the site with an estimated 6.4 billion tons of coal,
Parliament promises a final decision to be made this month. U.S. firm Peabody Energy and Russian
state-owned firm Russian Railways are supposedly on the short list, in addition to the high likelihood of
participation from South Korea and Japan. The projected cost is about USD 645 million for
development. A sum of USD 6 billion will be needed for the Oyu Tolgoi copper and gold mine.
Production is expected for fall 2012.
Power plants are a main point on the agenda for Mongolia's infrastructure projects. Ivanhoe Mines
awarded Mongolian companies contracts to build the mine's power transmission line. There is also the
possibility that Mongolia may export energy to China. The money earned from this endeavor could be
used to build railway lines and roads to both China and Russia, in addition to route between power
plants.
“We have a demand for power and electricity, and we have a plan to build a major power generation
system in the mineral development areas,” said Prime Minister S. Batbold. “There is growing demand
inside Mongolia and also huge demand inside China, so we could export energy to China.”
Read more…
A plethora of infrastructure projects in Mongolia are underway with the aid of foreign governments.
South Korean President Lee Myung-bak agreed to a plan for the construction of 100,000 apartment units
in Ulaanbaatar. A senior official from the Chinese Communist Party (CPC) spoke with President Ts.
Elbegdorj about the possibility for expanding infrastructure development. China is Mongolia's biggest
trading partner, accounting for about 90 percent of the country's total exports. U.S. Vice President Joe
Biden recognized the United State's commitment to USD 286 million from the Millennium Challenge
Corporation. Mongolian and U.S. officials are also discussing the possibility of a gas-to-liquids project

sponsored by the U.S. firm Envidity; however a legal dispute has caused delays.
Source: Oxford Business Group
STRENGTHENING THE REGULATORY REGIME
In an effort to attract more investment and compete with markets world-wide, Mongolia intends to
bolster its regulation policies and practices. The government will direct reforms to improve supervision
of the banking sector and has enlisted help from the London Stock Exchange (LSE) to improve its own
capital market.
Issues concerning the development of the Mongolian Stock Exchange (MSE) were discussed by a panel
discussion hosted by Frontier Securities in August at the conference “Mongolia: Capital Raising &
Investment.” Prime Minister S. Batbold directed reforms of the MSE in the hopes of developing it into a
properly functioning platform with multiple foreign companies listed by 2016. The MSE signed a
strategic partnership contract with the LSE to introduce electronic trading, develop rules and
regulations, and privatize the Ulaanbaatar market. Although the MSE has experienced growth, legal and
regulatory barriers prevent foreign companies from listing, including the need to be Mongolian and
subject to Mongolian law and “ambiguity” on certain legislation and regulation.
“If the problematic areas are fixed such that South Gobi Resources can co-list on the MSE, other foreign
companies will follow,” said Sarah Armstrong, South Gobi Resources' chief legal counsel for Asia.”
For banking, the IMF found that Mongolia is making progress in its effort to improve its banking sector.
It praised the government for a revised banking law to improve regulation. The Bank of Mongolia's
partnership with The Bank of Korea to share fiscal policy also shows promise.
Read more…
Eight banks and the Mongolian Bankers Association joined together to become shareholders of a newly
established Banking and Finance Academy. The group aims to make the organization an independent
institution for the support to the banking sector to train loan officers, tellers, executives, and directors
to improve and standardize services. Services such as micro finance have been a major challenge to
banks because of Mongolia's small and diffuse population.
There are currently 14 commercial banks, 188 non-bank financial institutions, and about 207 savings
and credit cooperatives.
Source: Oxford Business Group
SOUTH GOBI PREDICTS CONTINUED MARKET GROWTH
South Gobi Resources expects demand to continue from China despite fears of weakness in the market.
The firm reports a total sale up to 1.6 million tons of coal selling between USD 50 and USD 55 per ton.
The company does not expect a drastic change in the fourth quarter from the third.
“With respect to the coking coal market, SouthGobi reiterates it is not currently observing weakness
among its customers and the regions of China in which its coal is generally consumed.
South Gobi is a mining firm focused on metallurgical and thermal coal deposits in Mongolia's South Gobi
region. The company‟s main asset is its Ovoot Tolgoi mine.
Source: South Gobi Resources
REAL ESTATE IN UB EXPERIENCES 55 PERCENT GROWTH
High capital growth in Ulaanbaatar has demonstrated trend towards urban living over the suburbs.
Indications of this growth initially appeared last winter when the normally stagnant market continued
at above average levels.
The most growth witnessed is at the 40K State Department Store area with nearly 55 percent capital
growth on average in the last six months. Rentals have remained consistent at an average between 8
percent and 12 percent.
The prices of these apartment shot up to an average 68 percent from last year and 50 percent for

monthly rent.
Growth in the financial sector has been a major driving factor to the increase in property value in
addition to “natural growth” stemming from both the emerging Mongolian middle-class and those
seeking to relocate to the city from the suburbs. Increased traffic conditions and the convenience of
living within walking distance to the city center also draw people to the city center.
Read more…
The 40k apartments are some of the best constructed building found in Ulaanbaatar featuring thick
walls, high ceilings, and large windows. Expats also enjoy the close proximity to restaurants, bars, and
shops while Mongolians prefer the comfort, convenience and safety there. However poor maintenance
and plumbing issues raise their own challenges. They also lack heated garages, fire exits, and lifts.
Rumors have persisted that the 40k apartments may be demolished for better housing, but laws and
current market prices make that that has become nearly impossible. Landlords have opted to renovate
their areas to add value to their properties.
The increase in value has been spreading to the rest of the city center. The high cost for homes at
these older buildings has resulted in a greater expense in newer ones and it is likely the 50K apartments
near the Ulaanbaatar Department Store and behind the Bayangol Hotel will see a similar growth in
value.
Source: MAD Mongolia
ANALYSTS PREDICT A REINVIGORATION OF M&A ACTIVITY IN ASIA
Although mergers and acquisitions (M&A) has seen a slowdown this quarter, activity is expected to
regain traction for the rest of 2011. M&A will largely be fueled by China and India in there perpetual
quest to subside there energy needs.
This quarter consisted of about USD 22.7 billion worth of resource deals in Asia, falling a bit short of
last year's quarterly total of USD 23.1 billion. The total volume of M&A activity reached USD 88.5 billion
in the third quarter, down from USD 113.98 billion last year. However, strong demand for resources in
Asia will likely drive M&A activity for the remainder of the year.
“While global capital markets remain cautious, M&A activity in natural resources continues,” said Roger
Kennedy, head of natural resources at J.P. Morgan Asia-Pacific. “Much of the investment continues to
be driven out of Asia as both national and private companies look to acquire long-term resources and
reserves.”
Although it is unlikely resource deal will slow down, Chinese firms are behaving with more discipline.
China's Yanzhou Coal Mining Co. in May abandoned its deal to buy Australia's Whitehaven. State-owned
China Guangdon Nuclear Power may offer a new bid for Great Britain's Kalahari Minerals. For India, GVK
Power & Infrastructure signed a USD 1.26 billion deal to buy a majority stake in three Australian coal
mines and a port project owned by Hancock Group.
China ranked third world-wide for its deals, largely in the resource sector, thus far this year.
Source: Mine Web
WORLD ECONOMY CAN WEATHER WEAK COPPER PRICES A BIT LONGER
Bear markets in copper and silver has some fearing global recession, but those worries may be
unfounded. Both copper and silver are top imports from Mongolia and has had a significant impact on
current economic conditions.
Projections indicate that a massive selloff in copper would not have a huge effect on returns for the
S&P 500. Data from the market indicates that both copper and silver are oversold, but future prices will
likely follow the movement of the U.S. dollar. The rally in the dollar is putting pressure on risk assets
such as equities, precious metals and oil.
Clearly the price action in silver and copper in late August and throughout September has been ugly.
Both metals are oversold in nearly every time frame, however if the Dollar continues to strengthen we

could see deeper declines in both silver and copper prices as illustrated in the charts above.
Market data suggests that equity returns following a drop in copper prices does not mean lower
domestic equity prices in the United States are certain. However, a slowdown in activity in China has
had a direct impact on copper prices. If the U.S. dollar continues to strengthen, copper and silver will
likely trade lower.
Source: International Business Times
COPPER CRUMBLES UNDER THE PRESSURE OF ECONOMIC CRISIS
Investor worries and a reduction in construction projects planned for the year are hitting copper prices
hard. Copper futures fell three days in a row last week, resulting in the largest quarterly decline since
the 2008 financial crisis. Copper is a major export from Mongolia to China.
Copper peaked at record highs in July, but has taken a slow 25 percent plunge since then. Some
investors feared that the debt crisis in Europe would curb demand in base metals because they are so
closely tied to growth. The most actively traded copper contract for December fell 2.9 percent to USD
3.152 a pound on the Comex division of the New York Mercantile Exchange.
Last week HSBC released a new estimate of China's manufacturing activity for September with slightly
higher figures that its preliminary estimate. However, it still showed negative growth for a third
consecutive month. A slowdown in China's industrial sector has put the squeeze on the copper market.
China accounted for 40 percent of the world' copper consumption last year. In the United States, a
small drop in personal income does not bode well construction projects.
Barclays Capital reduced its copper price projects in light of the unexpected weakness in economic
activity for this second of this year and 2012. Barclays Analysts predicted copper prices on the London
Metal Exchange (LME) to average at about USD 3.62 a pound from USD 5.44 a pound for the fourth
quarter of this year.
Source: Wall Street Journal
NO RELIEF IN PRECIOUS METALS MARKET
A recent climb in the prices of precious metals is not offering relief to investors. Gold climbed back
from a 1 percent loss in the price of gold. Gold has been a mineral that firms such as Ivanhoe Mines
have put more focus into for production.
“No one seems to know where the market is headed,” a Singapore-based trader said. He added that he
wasn't very confident in gold after its recent jump in price.”
Another analyst said the benefit to gold's comeback is the potential benefit it could have to the
European market. Other analysts said they expected Gold to experience another shakeup this week.
Barclays Capital said it targeted gold for USD 1,523 per ounce from USD 1,616.
Silver fell more than 2 percent, but then climbed back up past 2 percent to settle at USD 30.76 an
ounce. Barclays said a price below USD 30 per ounce for silver would be a good thing and could help
retail get back on track.
Source: Wall Street Journal
POLITICS
MPS MOVE TO DISSOLVE GOVERNMENT
A faction within Parliament has banded together for a motion to dissolve the government. The decision
is a reaction to the 20 MPs who sent a letter to both Ivanhoe Mines and Rio Tinto demanding a change
to the Oyu Tolgoi agreement.
Although Prime Minister S. Batbold agreed to meet the group to hear their grievances, he did not come
because of a scheduling conflict. He was unable to meet because of another meeting with the
Mongolian People's Party held at the same time. This has driven the group to initiate a dismissal of

government.
“Members who previously protected the OT agreement may support us,” said the group.
The MPs are currently collecting signatures to pass the motion. Mongolia law stipulates a minimum of
19 signatures from lawmakers of a total 76 to bring a motion to the floor to dissolve the government. If
the group manages to do so, the request for a dismissal will be delivered to Parliament Speaker D.
Demberel.
Source: Zuunii Medee
POLS MUST TOE THE LINE TO WIN VOTES AND INVESTMENT
Next year's June election in Mongolia will determine the leaders that oversee two world class copper
and coal mines begin production. Tavan Tolgoi coal project and Oyu Tolgoi copper and gold project will
generate billions of dollars of cash flow to Mongolia.
Mongolia's politicians are leveraging themselves in the face of Ivanhoe Mines and Rio Tinto for a larger
stake in Oyu Tolgoi, likely in an attempt to win votes for the upcoming election. The Tavan Tolgoi
Western Tsankhi deal will likely see some revision in the near future as well.
“Populist rhetoric is the way not to get left behind,” said David Hanbury, ResCap analyst. Mongolia will
increase its interest to 50 percent in Oyu Tolgoi for the benefit of its citizens and protection of its
national interests over the long term. But it can and only should do this according to the terms of the
investment and shareholder agreements signed in 2009.
Further, although populist rhetoric can win votes with Mongolian voters, government officials should be
wary not to go too far out of line to alienate investors.
Source: ResCap Mongol Minute
MONGOLIA SORE ABOUT KHURTS ARREST
The release of a Mongolian official extradited to Germany on kidnapping charges has created tensions
between Mongolia and the Britain. B. Khurts was reportedly on official business to discuss bilateral
cooperation with British officials when British authorities sent him to Germany for his arrest in August.
Germany last week withdrew charges against B. Khurts who had been imprisoned at Wandsworth prison.
The release came two weeks before German Chancellor Angela Merkel's official visit to Mongolia, but
Germany insists her visit had no influence on its decision. German diplomats in Ulaanbaatar insist his
release was based on decision by German courts.
Khurts' trial was planned for 24 October. Khurts was charged with the kidnapping of D. Enkhbat, who
was under suspicion for the assassination of S. Zorig. Enkhbat's children, who are German citizens,
blamed Khurts for the death of their father. They claim their father's death was a result of the harsh
treatment he received in Mongolian prison and the violence against him from special agents led by
Khurts.
The visit of Khurts was arranged by former Ambassador to Ulaanbaatar William Dickson and Mongolian
officials. However, the Foreign Office later insisted that it offered no formal invitation and Khurts had
traveled without any diplomatic status. The Mongolian government fought against the extradition in
London's High Court and accused British officials of entrapment.
The controversy has created a rift between Mongolia and Britain. The government described Khurts'
arrest as a “grave discourtesy” and officials warned that British business would be frozen out of
lucrative contracts.
Source: The Independent
PARLIAMENT OPENS AUTUMN SESSION
Parliament began its autumn sessions this week.
The session was attended by 89 percent of Parliament, in addition to President Ts. Elbegdorj and Prime
Minister S. Batbold. The session began with opening remarks from Speaker D. Demberel outlining the

agenda for the session.
MPP PREPARES FOR 2012 ELECTION
The Mongolian People's Party plans to appoint one of its members in the Finance Ministry to further its
agenda. The party and its managing council met behind closed door to discuss issues for the Finance
Ministry this week. The party is preparing for the upcoming 2012 election in June.
Feeling under-represented in the Finance Ministry, the party has decided to concentrate on having one
of its members appointed to the Finance Ministry. The current minister is a member of its rival
Democratic Party.
Party officials also discussed how it could allocate the MNT 1 million promised to citizens without
raising inflation. It also wishes to address to keep government worker salaries comparable to those in
the private sector. State workers are set to receive a 53 percent raise in 2012.
The party went on further to discuss the implementation of various programs and a resolution to the
Oyu Tolgoi dispute. The government wishes to raise its stake from 34 percent to 50 percent in the
project ahead of the timetable laid out in the 2009 investment agreement to the project.
GOVERNMENT DISMISSES DEVELOPMENT BANK HEAD OVER BOND DISPUTE
The government appointed B. Batjargal to replace Ch. Khashchuluun as the head of Development Bank's
representative managing council.
Khashchuluun left partially because of disputes with the government over the issuance of Development
Bank bonds. Khashchuluun said it was not possible for domestic investors to purchase Development
Bank bonds. However officials from the bank met with 11 banks and three law firms to prepare for a
bond issuance anyway. Four banks and one law firms agreed to issue the bonds on the Asian market.
Critics have pointed out that although the government has guaranteed financing, the Development Bank
has not even begun its USD 5 billion railway project. For this reason, Minister for Road, Transportation,
and Urban Development Kh. Battulga spoke out against the bank at a recent government meeting.
MP R. Amarjargal sent questions about the bond issue to Prime Minister S. Batbold last Thursday. Some
believe the bank has not been able to work without political interference.
Source: News.mn
PUTIN TO CREATE EURASIAN UNION
Russian Prime Minister Vladmir Putin called for the creation of a Eurasian economic union in a recently
published article. The announcement is a part of the nation's efforts to rebuild economic ties with
former Soviet republics. Mongolia is a former Soviet satellite nation that still retains close ties with
Russia.
Putin hopes the Eurasian Union will become a “powerful supranational body” to bridge relations
between Europe and the Asia Pacific region. However, he defended the plan against assumptions that it
might be a recreation of the Soviet Union.
“It's naive to try to restore or copy what has already been left in the past, but tight integration on a
new political, economic, and value basis is the requirement of the time,” he said.
Russia aims to build the Eurasian Union on the foundation of the already existing Customs Union, a
trade groups that includes Kazakhstan and Belarus. The first step towards the group‟s creation will be
made on 1 January, when the Customs Union members plan to create the “Common Economic Space”
to coordinate issues such as macroeconomic policies and competition rules.
Putin promised freedom, democracy, and market laws as a part of the scheme to faster integration into
Europe for its members. He also suggested the union could be crucial to restoring the world economy.
Putin's statements suggest that Russia will focus its foreign policy to strengthen ties with its former

Soviet countries after the election of Russia's next president. Putin has already announced he would
like to reenter the office of the president. This issue would signal a change in foreign policy as
President Dmitry Medvedev has spent his time in office focusing on normalizing relations with the
United States.
Source: Wall Street Journal, Moscow Times
PHILIPPINE REPRESENTATIVES PROMOTE PEACE IN ULAANBAATAR
Legislators from the Philippines recently visited Ulaanbaatar to participate in the Global Peace
Leadership Conference sponsored by the Mongolian government. The delegations included
Representatives Josie Joson, Gina de Venecia, Aliah Dimaporo, and Bernadette Herrera-Dy.
“The Philippines and Mongolia are two countries in stark contrast with each other in terms of language,
culture, population, demography and others,” said Joson. However, despite our countries‟ differences,
we are both burdened by damages caused to our environment by rapid industrialization.
The representatives shared the common experiences as large exporters of natural resources. Both are
struggling to balance their need for development and economic growth with preserving the
environment and their homelands. The delegation recommended a “Green Wall” of trees in southern
Mongolian to combat desertification. Massive reforestation was the only practical solution to defend
against climate change, said de Venecia.
Herrera-Dy spoke on behalf of international dispute resolution, and shared her experiences managing
mining activities in her district. She addressed the issue of peace directly to the Association of
Southeast Asian Nations (ASEAN).
Read more…
“I refer in particular to contested portions of the Spratlys, an island group believed to hold rich oil and
natural gas reserves,” said Herrera-Dy. By engaging ASEAN directly, there will be mutual benefits from
Northeast Asia and Southeast Asia.
Jonson said that her and her colleagues were in a uniform stance to promote peace and gender
equality, in addition to the fight against corruption, poverty, and the destruction of Asia's natural
environment.
Source: Manila Bulletin
GOVERNMENT TO EXPAND ITS SOCIAL WELFARE
The Mongolian government plans to implement a variety of programs and benefits for Mongolian
citizens. In 2008 the government promised to raise gross domestic product (GDP) per capital to USD
5,000 and now projects GDP per capita will read USD 5,362 next year.
The government identified four priorities for dealing with the economic boom in the mining industry:
maintaining steady revenues; ensuring equal benefits to all citizens; supporting economic development
programs; and increasing investment in the health care and education sectors.
The government will raise the salaries and pensions of state workers by 53 percent next year. If passed,
state workers' salaries will have doubled since 2008. The proposed budget maintains the monthly
allowance of MNT 21,000 to every citizen through the first half of this year. Women 55 and older, men
60 and older, and disabled citizens will receive payments of MNT 1 million, and the government will
pay students MNT 500,000 each towards tuition fees. The government has also proposed implementing
a “100,000 Homes” program to provide MNT 100 billion as down payments for 100,000 citizens who
want to purchase a home.
Source: MAD Mongolia
ELBEGDORJ CALLS FOR END TO CITIZEN ALLOWANCES
President Ts. Elbegdorj has called for an end to the cash handouts provided by the Human Development
Fund.

The president made the announcement during his tour through Darkhan-Uul and Selenge Aimag, where
he won the vote by a wide margin in the 2008 election. The president met with local residents and
listened as they voiced their opinions at a hall in Selenge.
"That we allowed such a great amount of money to be issued to citizens was a mistake," he said. "It was
bad for the economy and encouraged people to be lazy," said Elbegdorj.
The president added that he still supports tuition allowances for students as well as programs for
children because they are the most "fragile" group in society.
The distribution of money to citizens has been cited by analysts as source for rising inflation in
Mongolia.
Source: News.mn
STANDING COMMITTEE PROTESTS TAXES ON HDF ALLOWANCES
Members of the Standing Committee on Social Policy, Education, Culture and Science objected to taxes
on the Human Development fund allowances to citizens.
Countryside residents have complained that Saving Bank has been deducting MNT 350 in taxes from
their monthly allowance of MNT 21,000. Committee members said they have asked that the tax be
lifted. The MNT 350 tax amounts to MNT 945 million a month and MNT 11 billion a year.
Some citizens in the countryside have also complained that it is difficult for them to receive their
allowance because it can only be taken from Saving Bank.
The committee members said they will establish a working group to investigate the matter.
Source: News.mn
MPP CAUCUS CALLS FOR BUDGET REVISIONS
The Mongolian budget needs urgent revision said deputy leader of the MPP caucus in Parliament, Su.
Batbold.
MPs said increasing investment was a priority and the issue must be submitted to Parliament. Some
companies have apparently halted operations because they lack financing and some organizations are in
debt.
Batbold added that some schools and hospitals are in urgent need of repair.
Source: News.mn
JAPAN TO AID IN DEVELOPMENT OF EDUCATION IN MONGOLIA
Japan will fund a project to improve lessons on the natural sciences in secondary schools in Mongolia.
The Ambassador to Extraordinary and Plenipotentiary of Japan to Mongolia Kidokoru Takuo signed a
contract for the project last week. The project will be a cooperative effort between Mongolia and
Japan with aid from Japanese non-government organizations and the Mongolian State University of
Education.
“I hope this project will contribute to improving education for Mongolian pupils and it may also
contribute towards the development of bilateral friendly relations,” said Takuo at the signature
ceremony.
The project aims to develop the skills of pupils for critical thinking. Japan will donate MNT 160 million
to Mongolia for the project.
During his reception, Parliament Speaker D. Demberel stressed his appreciation for Takuo's efforts to
widen Mongolian-Japanese relations. He added that the 40th anniversary of diplomatic relations
between Japan and Mongolia will take place this year. Takuo worked as the Ambassador to Mongolia for
over two years.
Source: Montsame

NEW CAMPAIGN PROMOTES WOMEN'S ROLE IN POLITICS
Political activists have launched a new campaign to increase women's participation in politics in
Mongolia. Sponsored by the Standing Committee on State Structure, the National Committee for Gender
Equality, and Mongolian National Public Radio and Television, the “Women Can” campaign seeks to
empower Mongolian women with a 45-day campaign.
Organizers hope the campaign will help change the traditional perception of women in politics,
increase the number of women who vote, and increase the number of women running for elective
office and seeking positions of authority.
Organizers say Mongolian politics improved if more women participated and would like to see between
10 and 15 women elected to Parliament. Currently three women hold seats in Parliament. The group
also supports a quota for women in Parliament to encourage the election of females in office.
Source: News.mn
MONGOLIANS REMEMBER ZORIG
Mongolians remembered the late Infrastructure Minister S. Zorig on the thirteenth anniversary of his
assassination on Sunday. Zorig is remembered for his stance against corruption and a political leader of
the 1990 democratic revolution.
President T. Elbegdorj and MP S. Oyun, Zorig's sister, laid flowers at the monument built in his memory.
The leader, who was called the “Golden Swallow of Democracy” by supporters, was stabbed to death in
his apartment on 2 October 1998. Many believe his murder was optically motivated as it occurred just
before he was believed to be named Prime Minister. His sister Oyun has said that she believes her
brother was murdered to prevent him from launching an anti-corruption campaign. The case remains
unsolved.
Source: News.mn
QUAKES SHAKE UP THE GOBI
Earthquakes occurred 18 kilometers south of Khankhongor Sum in Umnugobi Aimag on 27 September
and again 29 September.
The first earthquake reach a 5.86 magnitude on the Richter scale followed by a 5 magnitude quake 25
kilometers south of the town. Four smaller 5 magnitude tremors occurred in between the two more
strongly felt quakes.
It is estimated that 1,000 earthquakes have gone unrecorded in Umnugobi. According to information
recorded at the provincial capital, Dalanzadgad Soum, and nearby communities between 6 and 7 events
were felt. Some buildings at Dalanzadgad suffered from cracks in the walls as a result of the quakes.
Buildings constructed before 1970 were most vulnerable to the earthquakes. This includes a museum,
drug store, theater, and library.
Source: Undesnii Shuudan
SNOWSTORM EFFECTS POWER OUTAGE IN DARKHAN AND SELENGE
Heavy snowfall and rain last week created extensive damage in areas of Darkhan-Uul and Selenge
Aimag. The storms lasted from 27 to 28 September.
The government will discuss the measures it will take in response to the disaster in an irregular cabinet
meeting. According to the report, electric lines and posts were destroyed due to sleet and a strong
storm. The disaster cut off electricity in some factories in Khutul Soum and some districts.
Source: Business Mongolia
MONGOLIA FALLS SHORT ON PRISTINE NATURE LIST
Although Mongolians may believe their nature to be pristine, a recent poll of the most countries for
nature disagreed.

The degradation to Mongolia's environment put Mongolia on the bottom of a list the world's top
countries with pristine nature. The list is based on a 25-point index of various categories. If the top
country has 100 percent pristine nature, then Mongolia has 42.8 percent.
Mongolia ranked among China, Laos, and Indonesia.
Source: Unuudur
ANNOUNCEMENTS
NETWORK WITH BCM
The Business Council of Mongolia (BCM) is expanding 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.
___________________________________________
MONGOLIA TRADE & COMMODITY FINANCE CONFERENCE, ULAANBAATAR, OCTOBER 13
This landmark conference at the Chinggis Khaan Hotel will only welcome leading experts within the
trade and commodity finance sector, utilizing a format that includes detailed case studies, informed
debate and invaluable networking opportunities.
Among topics to be discussed:
• Considering the threat posed by volatile commodity prices
• Utilizing Mongolia‟s competitive advantage to improve product diversification
• Improving underdeveloped promotion services to demonstrate the unique appeal of Mongolia
• Raising capital from foreign investors to develop projects and infrastructure
• Developing an export financing structure
• Expanding trading relations beyond traditional allies to become a truly global trade partner
• Reducing dependence on foreign imports
• Forging relationships between local and international banks to provide vital liquidity.
BCM is an Institutional Partner for this event and special offers are available for BCM members. The
conference brochures with agenda have been available in BCM office and were distributed at BCM‟s
September 26 monthly meeting.
Please contact Ms. Monika Kuzniewska, Marketing Executive, at monika@exportagroup.com or by
phone at +44 (0) 20 8772 3013 for further information.
___________________________________________
MONGOLIA INVESTMENT SUMMIT 2011, HONG KONG, OCTOBER 26-27
Join 300+ delegates and 45+ expert speakers from Mongolia and around the world, who have already
registered to attend the Mongolia Investment Summit 2011 at the Conrad Hong Kong on 25-27 October.
With just three weeks to go until this year‟s summit and the event expected to sell-out soon, visit our
online registration site today to secure your place. Register now and find answers to your key
questions on Mongolian investment:
- What are the top investment opportunities in Mongolia?
- Which industry sectors show the greatest growth potential in 2012?
- How can I minimize risk and maximize reward in Asia‟s hottest frontier market?
- How will government policy impact foreign investment over the next twelve months?
- What progress is Mongolia making in upgrading its infrastructure to support rapid growth?
To download your copy of the event brochure, click on Mongolia Investment Summit 2011 Brochure and
take a look at the full range of topics to be covered.
Due to popular demand we are adding some additional exhibitor spaces, as the current floorplan has

now sold-out. However, due to the size of the venue, we are only able to squeeze in a couple more
spots. So, if you would like to exhibit at this year‟s Summit, please contact Toby Duckworth on
toby.duckworth@aspermontuk.com immediately to secure your space.
Visit Mongolia Investment Summit 2011 Registration to reserve your place today or call us on +852 2219
0111 or Email at info@beaconevents.com. We look forward to welcoming you to the Conrad Hong Kong
at the end of this month.
___________________________________________
METALS MONGOLIA, ULAANBAATAR, NOVEMBER 3-4, 2011
The main objective of the international investment conference, to be held in Government House, is to
provide a discussion platform and assist in medium- and long-term planning and implementation
associated with the government‟s intentions to achieve value-added production at industrial parks
through downstream processing of ferrous and non-ferrous metal products. It is aimed to provide
potential investors with an insight into the government‟s policies pertaining to the metallurgical
industry, related exploration, extraction, processing, and infrastructure projects; to facilitate such
investments; provide opportunity for open discussion and possible solutions through involvement of
representatives of both public and private sector and professional organizations on the opportunities
and challenges in project financing, tax and legal environment.
The conference will have main and branch sessions involving over 800 representatives of parties
engaged in ferrous and non-ferrous metal projects, manufacturers, suppliers, foreign and domestic
investors, academics, professional associations, state administrative bodies, embassies. The main
conference will cover the present situation and future trends in Mongolia‟s metallurgical industry. A
special feature will be the “Government Hour,” which will feature an open discussion on strengthening
PPP in the metal-based industrialization process.
The branch conferences will be on:
- Opportunity to develop rare-earth based industries
- Developing base metal industries
- Developing iron and steel industries
- Issues facing provision of required infrastructure to ferrous and non-ferrous metals based on
industries-experiment and opportunity.
Each branch conference will include thorough discussions of resources and reserves of the type of metal
discussed, applicable market conditions, investment projects, technology and equipment.
BCM is a Supporter of the event.
For more information, Visit: http://www.metalsmongolia.mn/, or call +976-70115590, Fax:+ +976-
70125590, or email: info@metalsmongolia.mn.
___________________________________________
M&A PRIVATE EQUITY PANEL, UB, NOVEMBER 8
Mergermarket, a part of Financial Times Group, will host the Mongolia 2011 Mergers and Acquisitions
(M&A) Private Equity Panel Discussion on 8 November. The event will be presented in association with
David Polk & Wardwell and the Business Council of Mongolia. The conference intends to initiate an in-
depth discussion about M&A and private equity investment opportunities and deal execution in
Mongolia. The event will bring together leading professionals in Mongolia and across the Asia-Pacific,
setting the stage for an international networking opportunity around Mongolian M&A activity. Panelists
will include Bold Baatar of the Mongolian Stock Exchange (MSE), Mandar Jayawant of Mongolian
Opportunities Partners, George Lkhagvadorj Tumur of Hunnu Coal, Mark Lehmkuhler and Bonnie Chan
of Davis Polk, and Jim Dwyer of the Business Council of Mongolia acting as moderator. Areas for
discussion will include the development of the investment climate for M&A and private equity in
Mongolia over 2012; the countries to act as primary bidders for inbound opportunities; the key
differences between listed and unlisted companies with regard to M&A; the role private equity will play
in the development of Mongolia's investment market; the IPO prospects for Mongolia; the difficulties in
sourcing and completing transactions in Mongolia; and the key risks facing bidders interested in
Mongolia.
For more information or to register, email eventsapac@mergermarket.com or call Amy Chau at

852 3158 9782.
___________________________________________
MM TODAY” ON MNB-TV, FRIDAYS AT 21:15
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.
___________________________________________
“BSPOT” ON B-TV, MONDAY TO FRIDAY AT 21:30
B-TV (Business TV) now 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.
___________________________________________
POSTINGS ON BCM‟S ENGLISH WEBSITE 'PRESENTATIONS' AND 'MONGOLIA REPORTS' AND BCM‟S
MONGOLIAN WEBSITE „NEWS‟ SECTIONS
As a key component of BCM‟s Mongolian website, „News‟ section, articles from the Government‟s
“Open-Government.mn” site will be regularly posted. Also several draft laws, still to be discussed in
Parliament, are posted on BCM‟s English website in the Legislative Working Group section.
On BCM‟s English website - „Resource, Presentations‟ section for your review are several speeches at
Discover Mongolia 2011, speeches from BCM‟s 8 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, August 2011, Z. Batbayar, Deputy Director of the Water Authority, at BCM‟s
Environmental Working Group‟s recent meeting, the Polit Barometer-May 2011 from Sant Maral
Foundation and the U.S. Embassy Mongolia‟s Commercial Section‟s “2011 Mongolia Investment Climate
Statement” - www.bcmongolia.org.
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.

INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
August 31, 2011 *9.0% [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]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
CURRENCY RATES – October 6, 2011
Currency Name Currency Rate
U.S. dollar USD 1,293.66
Euro EUR 1,720.37
Japanese yen JPY 16.87
British pound GBP 1,995.02
Hong Kong dollar HKD 166.21
Chinese Yuan CNY 202.93
Russian Ruble RUB 39.54
South Korean won KRW 1.08
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.

07.10.2011, NEWSWIRE, Issue 188

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07.10.2011, NEWSWIRE, Issue 188