August 8 2014

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 337 – August 8, 2014
NEWS HIGHLIGHTS:
Business
 Khan Bank receives $8mn EBRD loan towards MSME business financing;
 Golomt signs cooperation agreements with Hungarian Ex-Im, Minsheng Bank;
 Golomt installs Finacle core banking system;
 Truck Retread launches heavy-duty tire repairs;
 MSE negotiates for use of Bloomberg's terminal for securities trades;
 Nomadic Fashion Show to be held in Tsonjin Boldog resort complex;
 MSE initiates legal actions against 196 delinquent companies;
 EBRD helps finance top-class cement plant in Mongolia;
 Major jurisdiction victory for Mongolian National Railway Company;
 HBOil posts H1 revenue 210% higher than full-year 2013;
 MSE launches custodian and securities services training;
 LSE, MSE will host Capital Market Day in London;
 Wolf Petroleum chairman sees new path with Petroleum Law;
 Sam Walsh steers Rio Tinto to recovery;
 Contenders for Rio Tinto’s chief executive role;
 Standard Chartered expects to pay penalty.
Economy
 Mongol Bank: FX auction, swap agreements, 1-and 4-week bills, treasury notes;
 Mongolia H1 foreign investment dips 70% on uncertainties;
 Mongolia raises rates amid debt pressure;
 Mongol Bank says it strengthens monetary policy with hike in interest rate;
 MNT 20.4 billion collected for Stabilization Fund;
 Mongol Bank to release monthly foreign currency reserve reports;
 Amgalan power station completion date pushed to October;
 Cabinet approves MNT 1.9bn for 10.6 km of road;
 Troubles for the Khatan Tuul River;
 Cabinet orders construction of grain silos nationwide;
 Ulaanbaatar transitions to digital TV;
 Inspectors fail UB roller coaster for faulty brakes;
 Dentists suggest Mongolians cut sugar intake;
 Scenes from Mongolia’s changing steppe;
 World's toughest horse race retraces Chinggis Khaan's postal route;
 Australian businesses are searching for Asian partners;
 China may invest more than CNY 250bn (USD 40 bn) in Inner Mongolia-China rail.
Politics
 Belarus Embassy opens in UB;
 SCO to admit Mongolia as a new member;
 Putin to arrive in Mongolia in September;
 Japanese delegation visits Mongolia’s Olympic headquarters;
 Premier meets Chinese children from flood-hit province;
 Premier's senior advisor arrested by anti-corruption agency;

2.  Threats to government stability on the rise—putting premier's job on the line;
 Police, nationalists squash Chinese protest;
 Tony Blair using his connections to change the world, profitably.
Others
 Announcements;
 BCM Updates - Working Groups; Websites; Social Networks; Photo Gallery.
ECONOMIC INDICATORS
 Weekly Market Indicators;
 Monthly Macroeconomic Overview – June 2014;
 Supermarket Price Comparison – August 2014;
 Inflation;
 Central bank Policy Rate;
 Currency Rates.
*Click on titles above to link to articles.
SPONSORS
Khan Bank International SOS
Wagner Asia Automotive Invest Mongolia Agency
BUSINESS
KHAN BANK RECEIVES $8MN EBRD LOAN TOWARDS MSME BUSINESS FINANCING
The European Bank for Reconstruction and Development (EBRD) announced on 31 July that it has
provided an USD 8 million loan to Khan Bank LLC to improve financing for micro, small and medium-
sized enterprises (MSME).
The loan is the third tranche under a USD 25 million framework created to allow the suppliers and
distributors of MSMEs with ties to big corporations to receive more competitive financing, according
to an EBRD press release. The new loan is being provided in the local Mongolian currency, the
tugrug, in an effort to develop the domestic capital markets.
―This is our first time borrowing in [the tugrik] from the EBRD,‖ Khan Bank Chief Executive Officer
Norihiko Kato said. ―Thanks to the EBRD‘s support of value chain finance, we will be able to better
meet the expectations of our current and potential customers.‖
The EBRD extended the first two tranches of the loan, totaling USD 17 million, to Khan Bank last
year.

3. Source: Cistran Finance
GOLOMT SIGNS COOPERATION AGREEMENTS WITH HUNGARIAN EX-IM, MINSHENG BANK
Golomt Bank LLC and Hungarian Export-Import Bank on 31 July signed a medium-term credit facility
to initiate investments and joint-venture projects using Hungarian services as well as medical
equipment, environmental protection and water treatment equipment, and agricultural machinery
to Mongolia.
―On the basis of this agreement, Golomt will show its best effort to support companies which will
import goods and services from Hungary. Golomt is pleased to take the opportunity to contribute to
further enhance current economic relationship between the two nations," said Bolormaa
Luvsandorj, chief investment officer of Golomt at the signing ceremony.
Golomt also signed a cooperation agreement with China's Minsheng Bank to allow business owners
from both countries to receive financial services such as letters of credit, collections, and
guarantees. The two banks signed a memorandum of understanding earlier this year for cooperation
in the delivery of banking and financial services amid increasing trade turn-over between the two
countries.
Source: Golomt Bank LLC
GOLOMT INSTALLS FINACLE CORE BANKING SYSTEM
Golomt Bank LLC has completed integration of the Finacle core banking system.
The Finacle system developed by Infosys Corp. will allow Golomt customers to receive the
―Premium – Smart‖ e-banking services anywhere in the world. In addition to core banking, the
system allows for customer relationship management, treasury, trade finance, wealth management,
and internet and mobile bank and credit-debit transactions.
Golomt installed Finacle version 10.2.14 over a period of 18 months for USD 10 million.
Source: Golomt Bank LLC
TRUCK RETREAD LAUNCHES HEAVY-DUTY TIRE REPAIRS
Truck Retread Mongolia on 1 August opened Mongolia's first large, heavy-duty tire repair facility.
Truck Retread is utilizing technology from Bridgestone Bandag to repair 30,000 heavy-duty tires a
year. The repairs extends tire usage by three times as many miles as Chinese competitors, said N.
Bavuu, director of this factory. He added that Australian professionals would train Mongolian
workers to operate the facility within six months of its opening.
Source: Udriin Sonin
MSE NEGOTIATES FOR USE OF BLOOMBERG'S TERMINAL FOR SECURITIES TRADES
The Mongolian Stock Exchange (MSE) is in talks to possibly adopt the Bloomberg Terminal electronic
trading system for bond trades.
The MSE's acting chief executive officer, D. Angar, met with representatives from Bloomberg who
specialize in the Asia-Pacific financial markets on 4 August to discuss the possibility of utilizing the
terminal system for the auction of government bonds. The Bloomberg terminal electronic trading
system is currently being utilized by stock exchanges in Great Britain, Sweden, Belgium, South
Africa, Finland and Georgia.
Source: Info Mongolia
NOMADIC FASHION SHOW TO BE HELD IN TSONJIN BOLDOG RESORT COMPLEX
Genco Tour Bureau on 20 August will host the "Nomadic Fashion Show" at the Tsonjin Boldog resort,
near the giant Chinggis Khaan statue.
The fashion show will be held outdoors and will feature some of Mongolia's top models wearing over
70 unique takes on traditional costumes. The show will also feature performances by the Mongolian
Morin Khuur Ensemble, Merit Artist D. Bold, singer S. Naran, the band Shanz 3, DJ Saran, Britain's DJ
MAC, and Mongolian contortionists.
Genco Tour Bureau has partnered for the event with the Ministry of Culture, Sport and Tourism of

4. Mongolia and Torgo Fashion Salon.
Source: InfoMongolia.com
MSE INITIATES LEGAL ACTIONS AGAINST 196 DELINQUENT COMPANIES
The Mongolian Stock Exchange (MSE) is preparing to take legal actions against 196 listed companies
that failed to file reports for the second quarter of this year. The MSE on 5 August sent an official
letter to the Financial Regulatory Committee ordering that appropriate legal action be taken
against the companies that failed to send in their reports.
Separately, the MSE has opened an investigation into the trade of shares of Khuvsgul Altan Duulga
following warning prompts from its Millennium IT surveillance system. Khuvsgal Altan Duulga's share
price fell 15 percent after the trade of 120 shares at a stock price of MNT 874.17 each.
Source: MSE
EBRD HELPS FINANCE TOP-CLASS CEMENT PLANT IN MONGOLIA
The European Bank for Reconstruction and Development (EBRD) has helped finance Mongolia‘s Senj
Sant for the construction of Mongolia's first dry process cement plant to help the company meet the
rising demand for cement in the country.
EBRD lent Senj Sant USD 65 million, following a USD 20 million equity investment in Senj Sant in May
2013. Senj Sant, which is owned by Mongolia‘s Monpolymet Group, is using EBRD financing for the
continued funding of the construction of the plant, as well as its commissioning and eventual
operation, which is expected in 2015. The plant is being built to process 3,000 tons of cement a day
and will be located about 450 kilometers south of Ulaanbaatar. Developers say the plant will deliver
a higher-quality product than what is currently imported from China and will help to diversify the
economy away from mining.
―The EBRD‘s long term financing, including equity, is not only helping us build the first greenfield
cement plant in Mongolia using environmentally friendly dry process, but also supporting the
company in raising business standards to international levels,‖ Monpolymet Group Chief Executive
Officer Munkhnasan Narmandakh told guests at the signing for the financing agreement.
Source: European Bank for Reconstruction and Development
MAJOR JURISDICTION VICTORY FOR MONGOLIAN NATIONAL RAILWAY COMPANY
A high court in London gave judgment in favor of Ulaanbaatar Railways (UBZ) JSC, the Mongolian
national railway company, in its USD 55 million jurisdiction battle against Standard Bank PLC.
UBZ, represented by Sidley Austin in London and MDS KhanLex in Ulaanbaatar, argued that the
English court had no jurisdiction over the company (one of the largest in Mongolia) and that London
was not the proper forum for the case. Giving judgment, Justice Walker found that Standard Bank
had failed to make good the necessary jurisdictional gateway under the applicable civil procedure
rules and that the courts of England and Wales were not the proper forum for the claim—with the
circumstances of the case pointing strongly to Mongolia.
In a key finding for practitioners dealing in the burgeoning Mongolian market, the judge also held
that it had not been established to the requisite standard that a foreign investor such as Standard
Bank would be treated unjustly if there were a trial in Ulaanbaatar.
Source: Sidley Austin LLP
HBOIL POSTS H1 REVENUE 210% HIGHER THAN FULL-YEAR 2013
HBOil JSC on 4 August posted earnings from first-half 2014 that were 210 percent greater than the
full-year 2013, or 410 percent higher on an annualized basis. HBO‘s first-half profits were MNT 221
million versus a loss of MNT 93 million for full-year 2013. First-half profits represented a 540
percent increase in profits from full-year 2012, or 1,080 percent increase on an annualized basis.
Bloomberg highlighted HBO as the best-performing A-Board stock, increasing 76 percent year-to-
date.
Source: BDSec JSC

5. MSE LAUNCHES CUSTODIAN AND SECURITIES SERVICES TRAINING
The Mongolian Stock Exchange (MSE) began its Custody & Securities Services Masterclass on 6 and 7
August to better prep market participants on custodian and securities trade.
The class will be presented by Bruce Lawrence, senior post-trade advisor at the London Stock
Exchange (LSE) Group. Lawrence, who has over 30 years of experience in finance, will introduce
organizations to the intricacies of the custody and security industry and at the same time assist
them in their on-going development as a Mongolian sub-custodian. This Masterclass will address the
important principles of the business and the produces and services required by the international
investor community.
Source: MSE
LSE, MSE WILL HOST CAPITAL MARKET DAY IN LONDON
The Mongolian Stock Exchange (MSE) and the London Stock Exchange (LSE) Group will co-organize
―Capital Market Day‖ in London on 9 September.
The event aims to attract more investment into Mongolian companies from LSE investors. The event
is also being used to encourage Mongolian companies to register with the MSE by 8 August and
introduce the idea of dual listing on the LSE.
LSE has partnered with the MSE to implement its Millennium IT system and improve its regulations.
Source: Mongolian Economy
WOLF PETROLEUM CHAIRMAN SEES NEW PATH WITH PETROLEUM LAW
Wolf Petroleum Ltd.'s chairman has expressed hope that the new Petroleum Law passed one day
before Parliament recessed will help stimulate investment interest in the Mongolia-focused
petroleum explorer.
Wolf Petroleum, which is currently looking for partners to begin up to USD 3 million in drilling at its
Sukhbaatar license, can benefit from the new regulation for a 180-day timeline for government
approval for product share agreements. ―The legal environment was slightly unclear before because
it took companies two to three years, or more, to establish a production sharing contract, which
lessens risks with the government. Any investor would be fed up negotiating contract conditions for
an uncertain period of time,‖ said Chairman T. Lkhagvadorj.
With FDI falling 70 percent for the first half of the year compared with the same period in 2013,
Mongolian companies are struggling to stay afloat. The plummeting FDI is largely due to the political
instability in the country, said Lkhagvadorj. ―The foremost important duty of the government is to
make business environment for private businesses stable and then receive taxes from them. If these
conditions are met, within the next two to three years, investments will revive.‖
Lkhagvadorj added that Wolf Petroleum shares on the Australian exchange had been suffering
because of political instability, with share price down 75 percent to USD 0.05 a share. ―But we will
not give up. We have deposits with abundant amount of oil resources and several investors that
want to invest.‖
Source: Unuudur
SAM WALSH STEERS RIO TINTO TO RECOVERY
The Oyu Tolgoi copper mine's lead investor Rio Tinto PLC approaches its interim results on Thursday
knowing they are likely to represent a watershed for the miner and Sam Walsh, its chief executive.
Behind Walsh is a year and a half of hard graft in trying to restore Rio‘s reputation, blemished by
the misguided acquisitions that cost predecessor Tom Albanese his job and catapulted the genial
64-year-old Australian into his seat. Now Walsh has entered the second half of the three-year term
he was initially granted. He has also come to the end of the period during which a relentless diet of
austerity—penance for Rio‘s mistakes—is almost all the company veteran has been expected to
deliver.
Rio‘s recovery, aided last year by better-than-expected prices for iron ore, its chief commodity,
and rising production, has come to the point where most observers expect significant cash to be
generated. Rio says its only use for that cash this year is to reduce its net debt—inflated by past

6. deals to USD 18 billion at the end of 2013—to a more comfortable ―mid-teens‖ level. Beyond,
decisions loom as to what to do with the money.
―We know that, certainly from next year, investors will want us to give them clarity on how we
intend to deploy the cash that this business is going to be generating,‖ said Chris Lynch, Rio‘s
finance director.
But there are also tentative signs that Rio will have more leeway over coming months to look at
other options. Decisions regarding strategic growth may not be wholly off the menu, with some
analysts and investors urging Rio to look to the future. Walsh himself said this month he detected
more investor appetite for growth. Rio has been talking about potential board approval for some of
its projects including South of Embley, a bauxite mine in Australia, and La Granja, a copper mine in
Peru. Rio has said capital spending in 2015 will be about USD 8 billion, half of the 2012 level.
Growth in such areas could balance any concerns that Rio, while still styled as a ―diversified‖
miner, has become highly dependent upon one commodity: iron ore.
Lynch said that, whatever options Rio takes, the company wants ―more stability over the cycle‖ and
that means it will run a more conservative balance sheet than in the past as a bulwark against
volatility. ―We have to be robust enough in any scenario. We have learnt that since the global
financial crisis and because more and more of our commodities are subject to near-term pricing,‖
he said. ―The mining business is about long-term assets and you don‘t want a knee-jerk, back and
forth, stop-start way of running the company, which would destroy value.‖
Source: Financial Times
CONTENDERS FOR RIO TINTO’S CHIEF EXECUTIVE ROLE
Sam Walsh has a contract as Rio Tinto PLC chief executive that is due to expire at the end of 2015.
The 64-year-old has said he would relish prolonging his leadership. But many observers think a
change will be made, regardless of Walsh‘s success in stabilizing the miner.
The question is how quickly one might come to the fore. ―Rio has a good slate of contenders to take
over as chief executive,‖ Andrew Keen at HSBC says, ―but they are not quite ready yet – a lot of
them are relatively new in the job.‖
Andrew Harding, head of iron ore, holds the job that was previously Walsh‘s, running Rio‘s most
important division, and for that reason is probably a frontrunner. Aged 47, he is a 21-year Rio
veteran and previously ran its copper business. Chris Lynch, finance director since 2013, is the only
executive on Rio‘s board other than Walsh and is another industry veteran, but at 60 is only a few
years younger than Walsh. Alan Davies, head of diamonds and minerals, and Harry Kenyon-Slaney,
head of energy, also have important operational experience across commodities and lengthy Rio
careers but like Harding are relatively new to their current roles.
The heads of the other mining businesses are also relatively new to Rio. Jean-Sébastien Jacques,
head of copper, joined Rio in 2011 from Tata Steel while Alfredo Barrios came to the group from BP
only in June and is running aluminum.
Source: Financial Times
STANDARD CHARTERED EXPECTS TO PAY PENALTY
Standard Chartered PLC said it expects to pay a financial penalty in connection with allegations of
failures in a system meant to prevent money laundering.
The British lender made the announcement as it reported an 8 percent rise in first-half profit that
was weighed down by a charge tied to suspected lending fraud at a Chinese port and a slowdown in
its financial-markets business. Net profit was USD 2.3 billion, up from USD 2.13 billion from the
same period last year, when the bank took a USD 1 billion charge to reflect a decline in the value of
its South Korean business. A slowing economy, heavy competition and a government program that
lets households write off a big chunk of bank debt have weighed on the lender.
"Our performance in the first half of 2014 is clearly disappointing," said Chief Executive Peter
Sands. "It is not what we strive for and not what our investors expect."
Standard Chartered said it is in talks with the New York banking regulator over new allegations that
it failed to flag suspicious transactions to regulators. The talks are expected to result in

7. enforcement action, including a monetary penalty, Standard Chartered said. The probe relates to a
computer system Standard Chartered put in place in 2007 to check payments for suspicious activity.
Once processed, payments are screened to find instances of unusual activity, and those cases are
then flagged to regulators.
In 2012, the bank paid USD 667 million to settle allegations by U.S. authorities over processing
transactions that may have violated U.S. sanctions. The bank, which focuses on emerging markets,
said adjusted profit, a measure watched by analysts, plunged 20 percent to USD 3.27 billion, from
the first half of 2013. The results were partially hit by continued difficulty at its South Korean
business. The bank said it put aside USD 174 million, in part to cover the fallout of suspected
lending fraud at Qingdao port on China's eastern seaboard.
Source: Wall Street Journal
SPONSORS
Oxford Business Group Mongolian Economy Magazine
ECONOMY
MONGOL BANK: FX AUCTION, SWAP AGREEMENTS, 1-AND 4-WEEK BILLS, TREASURY NOTES
The Bank of Mongolia on 7 August auctioned USD 18 million and CNY 128.5 million to commercial
banks for closing rates of MNT 1,880.00 and MNT 304.50, respectively. The central bank also
reported that it had received an equivalent of USD 2 million from swap agreements and accepted a
swap agreement ask offer of USD 18 million with commercial banks.
The central bank reported on 6 August the issue of one-week bills worth MNT 245.5 billion at a
weighted interest of 12 percent a year. The central bank on 4 August reported the issue of four-
week bills worth MNT 55 billion at a weighted interest of 12 percent a year.
The central bank reported on 6 August MNT 30 billion in bids for the auction for 12-week treasury
notes with a face value of MNT 30 billion. The bills were sold at a discounted price with an average
yield of 13.49 percent.
Source: Bank of Mongolia
MONGOLIA H1 FOREIGN INVESTMENT DIPS 70% ON UNCERTAINTIES
Foreign direct investment in Mongolia fell 70 percent in the first half of the year, central bank data
showed on Friday, with investors wary of the country's position on the foreign ownership of its
resources.
Mineral-rich Mongolia has made it easier for foreign companies to gain majority stakes in mining,
finance and other sectors, but protracted disputes with some multi-nationals are putting investors
off despite the government's efforts to resolve them, including changes to controversial legislation
aimed at limiting foreign ownership in "strategic sectors." The central bank said investment into
Mongolia fell a total of USD 873.2 million from January to June against a year earlier.
Mongolia has sought to attract billions of dollars of foreign capital to transform its remote pastoral
economy into a regional mining powerhouse, but giant projects such as the Oyu Tolgoi copper-gold
mine and the Tavan Tolgoi coal project have been subject to long delays. The central bank said that
Mongolia's earnings from coal exports dipped 17 percent in the first half of the year, with volumes
down 143 percent over the period. Over the same period, copper exports rose 144 percent to

8. become the country's biggest earning commodity over the period, driven by Oyu Tolgoi, a joint
venture between the Mongolian government and mining giant Rio Tinto.
Source: Reuters
MONGOLIA RAISES RATES AMID DEBT PRESSURE
Mongolia‘s central bank raised interest rates last week by 1.5 percentage points to 12 percent to
help stabilize an economy that‘s been buffeted by high inflation and falling foreign investment in its
mining sector.
Foreign investment in Mongolia‘s mines has fallen rapidly, in part due to frequent changes in local
regulations governing the sector. To compensate, the government has pushed expansionary fiscal
and monetary policies, funded by a rise in external debt to more than 150 percent of gross domestic
product. Exports, especially of coal, have slowed as China‘s economic growth has moderated. But
demand for imported consumer goods has remained strong because of the government‘s stimulus
policies and pushed inflation into double digits.
Moody‘s Investors Service last month warned the situation was untenable and downgraded
Mongolia‘s foreign currency government bond rating to B2 from B1. The agency warned that foreign
exchange reserves have fallen to USD 1.6 billion in May from USD 2.2 billion at the start of the year.
Mongolia‘s current-account deficit and its rising external debt burden have become harder to
finance as foreign investment has fallen. Instead, the government has run down foreign exchange
reserves, Moody‘s said. The nation‘s currency, the tugrik, has fallen over 10 percent against the
U.S. dollar this year.
Mongolia now needs to boost foreign investment, reduce government spending and rein in still-high
credit growth, Moody‘s said. The rate hike—which comes after a series of cuts last year—is a step in
this direction. Mongolia‘s parliament earlier this month also revoked a suspension on granting new
mineral exploration licenses, according to media reports.
Source: Wall Street Journal
MONGOL BANK SAYS IT STRENGTHENS MONETARY POLICY WITH HIKE IN INTEREST RATES
Mongolia has raised its policy interest rate by 1.5 percent to 12 percent to better bolster the
economy during a difficult financial period, said D. Boldbaatar, director of monetary policy and
research at the Bank of Mongolia.
―External economic environment has deteriorated for quite a long term,‖ said Boldbaatar. ―Because
the deficit from the balance of payments was so poor for the last year and a half, we had less
foreign exchange earnings than was paid on the international market. Due to the low resources for
the long term, it became impossible to support domestic demand.‖
The monetary policy head said foreign observers were watching for a sign that the central bank
would move to adjust its economic policy. Raising interest rates, he said, would encourage foreign
investment. Although there will be some pains from the added costs for borrowing, the expectation
that it would bring down inflation has taken precedent. The government will also cut programs by
MNT 766 billion, he added, but that does not include the 8 percent mortgage lending program.
Source: Undesnii Shuudan
MNT 20.4 BILLION COLLECTED FOR STABILIZATION FUND
The government has paid 39 percent more into the Stabilization Fund for the first half of the year
compared with the same period last year. The Stabilization Fund received MNT 20.4 billion in the
first half of year, according to the Ministry of Finance.
Source: Zuunii Medee
MONGOL BANK TO RELEASE MONTHLY FOREIGN CURRENCY RESERVE REPORTS
The Bank of Mongolia on 4 August announced a change in policy for the reporting of foreign
exchange reserves, effective July. Statistics will be published monthly rather than the current
practice of reporting every three months.
Source: Bank of Mongolia

9. AMGALAN POWER STATION COMPLETION DATE PUSHED TO OCTOBER
Work on the Amgalan power station is underway, after delays pushed back the completion date by
two months, said the chief engineer of the Amgalan power station.
―People have the understanding that the power plant will be finished in October 2014, and we need
to make a clarification that the plan has been postponed,‖ said Ch. Tsogtsaikhan, chief engineer of
pre-service administration for the Amgalan Thermal Power Plant. ―The whole construction has three
phases, and currently we are finishing construction of base objects and are shifting to the second
phase - assembly of steel construction parts. The third phase will be assembly of equipment and
technique.‖
Construction, which is being run by China's SMEK, was supposed to begin immediately after an
agreement signing in April 2013, but difficulty in procuring land after project developers received
protest from 45 households pushed back the completion date to October, said the engineer. Work is
about 40 percent complete, he said, with the construction of three coal burners to finish and pilot
runs of the first burner to begin by October this year.
The 300-megawatt power station will feed into a 770 meter transmission line running north and
another 771 meter line running south. The project has 428 workers on duty, 40 percent of whom are
Mongolian. Once complete, the power station will be manned by 100 workers.
Source: Undesnii Shuudan
CABINET APPROVES MNT 1.9BN FOR 10.6 KM OF ROAD
The Cabinet Secretariat on 28 July approved spending by the Development Bank of Mongolia of MNT
1.9 billion for the construction of 10.6 kilometers to complete the road between Undurkhaan Soum,
Khentii Aimag and Choibalsan Soum, Dornod Aimag as part of 95.4 kilometers of road under
construction between the two provinces.
Source: UB Post
TROUBLES FOR THE KHATAN TUUL RIVER
More than half of Mongolia‘s population resides near the Tuul River basin, which takes up three
percent of Mongolia‘s total landmass, and has provided clean, clear water since the time of
Mongolia's nomadic ancestors. Unfortunately, urbanization and industrialization now require
protection for this ancient life source.
More than two million people living nearby threaten the river, in addition to some 20,000 industrial
operations, 400 hectares of irrigated crop production, 330,000 livestock, and Mongolia‘s three
major thermal power stations. Ulaanbaatar residents consume 77 million cubic meters of water a
year from the Tuul River basin.
The facilities of the Ulaanbaatar Central Waste Water Treatment Plant are overstretched, making it
notoriously faulty. Looking at research from the past two years, the treatment plant falls far short
of what is needed. Although tests from water coming in and out of the plant showed that its
cleaning capacity had grown from 50.7 to 52.8 percent, it would fail to meet what is required even
if its facilities were boosted 90 percent because of the added environmental stress from
construction projects.
The government passed Resolution No. 203 in 2012, making polluters accountable for their
treatment of local water supply. However, the fines that should be assessed on companies are
never issued. Water from the Tuul River is highly dangerous for drinking, according to tests by the
Central Laboratory of Environmental Monitoring taken along the River; from Ulaanbaatar down to
Songino Soum, Zavkhan Aimag, and Khadan Khyasaa, Selenge Aimag. Processed water from the
waste treatment plant pollutes water from the Tuul River before traveling to Songino Soum, Shine
Tseg, and Khadan Khyasaa. Azotemia ammonia in the water surpassed acceptable levels between 36
and 94 times in tests, and phosphorus by five to 30 times. Permanganate oxide exceeded safe levels
by 1.5 to 5.7 times.
Source: Unuudur, UB Post

10. CABINET ORDERS CONSTRUCTION OF GRAIN SILOS NATIONWIDE
The Cabinet Secretariat on 1 August ordered the financing for the construction of grain silos after
hearing a summary on agriculture from Agriculture Minister Sh. Tuvdendorj. Tuvdendorj received
orders to initiate construction of grain silos in Khutag-Ondor Soum, Bulgan Aimag; Bayangol Soum,
Selenge Aimag; Baruun Turuun Soum, Uvs Aimag; Umnudelger Soum, Khentii Aimag; and in Dornod
Aimag.
Source: Montsame
ULAANBAATAR TRANSITIONS TO DIGITAL TV
Mongolian terrestrial television network operators officially switched to digital technology on 31
July.
Ten transmitters will be installed in Ulaanbaatar and 244 transmitters in counties. By the end of
August, digital transmitters will be installed in remaining counties and towns. Out of the four digital
technology standards implemented throughout the world, Mongolia chose to transfer to the
European DVB-T2 standard. Digital Terrestrial Television (DTTV) is designed to broadcast wide-
screen images with 16:9 aspect ratio through HDTV and SDTV, enabling viewers to directly receive
high-definition channels. Mongolia is expected to be equipped with full digital TV coverage across
the nation by 2016.
The old, analog signal will not be switched off as part of the digital TV transition, giving a year and
one-half's time before digital signals are used exclusively on 1 January 2016, said chairman of the
Information Technology, Post and Telecommunication Authority (ITPTA), Ts. Jadamba. Consumers
who do not wish to purchase a new television may purchase a box modem to receive the digital
signal.
Source: UB Post
INSPECTORS FAIL UB ROLLER COASTER FOR FAULTY BRAKES
The Ulaanbaatar Specialized Inspection Agency discovered several safety issues with the roller
coaster operating at the National Amusement Park this week during a routine inspection.
On-site inspection revealed that the front spring on the car‘s brake was missing, which is meant to
prevent the car from rolling backward on the tracks, while its rear spring was broken. Inspectors
also noted violations for staff failing to show up for work.
The roller coaster was installed at the park last year and received approval after testing by the
State Special Commission on 16 April. The operators of the roller coaster have been trained, but do
not hold any professional license to do so.
Source: UB Post
DENTISTS SUGGEST MONGOLIANS CUT SUGAR INTAKE
Visiting dentists have called on Mongolians to cut down on sweets after inspecting the pearly whites
of Mongolians in Bayankhongor Aimag.
Sugar intake was blamed as a major contributor to dental problems in the country. The German
Dental Association sent out 48 dentists to carry out free dental examinations for 8,000 patients in
the southwestern Aimag. Afterward, dental specialists said 60 to 70 percent of both children and
adults had dental problems. Dentists were concerned that only a few children had healthy teeth.
Source: News.mn
SCENES FROM MONGOLIA’S CHANGING STEPPE
Mongolia is the most sparsely populated nation in the world, and it is home to one of the last
surviving nomadic cultures. Their way of life has been largely unchanged for generations, with some
herding customs pre-dating the era of Chinggis Khaan. But the steppe‘s landscape is changing today.
A large part of the nomadic population is moving to urban areas to seek employment, education,
and modern conveniences. But the appeal of modernity draws not only those who have moved, but
also those who have chosen to stay in the steppe.
Today those Mongolians who remain on the steppe merge old traditions with new means. They

11. continue their lifestyle as pastoral herders, but many of them use motorbikes to herd cattle and
horses. Gas stations dot the vast landscape. Ox carts for moving their homes are beginning to be
substituted by trucks, as the availability of transportation and gas increases. A number of nomads
have been able to acquire solar panels, a useful way for them to gain access to electricity without
settling. They use solar energy to power television sets and to charge mobile phones. Their
television sets are their main source of information and entertainment, and their mobile phones a
way to contact their children attending boarding schools in the cities. Many Mongolians from
nomadic families now study in the cities, but, during the summer, they come back to help their
families maintain the herds, and a number go back to their nomadic lifestyle after having finished
their education.
In a rapidly changing country, a change in people‘s way of life is almost inevitable. But these
changes are also keeping old ways alive. Rather than leaving their life on the steppes, Mongolia‘s
nomads are beginning to adapt in their own manner, and are able to reap the conveniences of
modern society while still keeping an ancient and fascinating way of life alive.
Source: National Geographic
WORLD'S TOUGHEST HORSE RACE RETRACES CHINGIS KHAAN'S POSTAL ROUTE
Competitors gallop toward the finish of 2014's Mongol Derby. Fewer than half of the riders in this
year‘s race are expected to make it across the finish line. The goal—beyond not getting seriously
injured—is to ride a 621-mile circuit (1,000 kilometers) of Mongolian steppe in less than ten days.
Fewer than half of the riders are expected to make it across the finish line. The rest will either quit
or be carried off the course by the medical team. Broken bones and torn ligaments are common,
frustration and bruised egos the norm.
The race route is modeled on the horse relay postal system created under Chinggis Khaan in 1224,
which was instrumental in the expansion of the Mongolian Empire. According to the Adventurists,
the United Kingdom-based company that created the race in 2009, the course changes about 25
percent from year to year. Would-be competitors submit a written application and are interviewed
by phone. There is a USD 13,122 race fee, which covers the cost of the horses, medical and
veterinary support, GPS and tracking devices for each rider, interpreters, vehicles, and pre-race
training. Aside from selecting the riders, the Adventurists also take care in choosing each individual
horse for the race.
It is much more a mental challenge than it is a physical one, Willings says. "I think anyone can cope
with anything for a weekend," she says, "but over ten days, you get buffeted by good and bad
fortune a lot."
Despite the difficulty of the race, more riders are signing up every year. Last year, Prior Palmer, a
19-year-old British rider, won the race in seven days, making her the first female rider to win the
Mongol Derby. This year's field includes riders from 16 countries, including Germany, Switzerland,
Australia, the U.S., the U.K., Iceland, China, and Ireland.
Source: National Geographic
AUSTRALIAN BUSINESSES ARE SEARCHING FOR ASIAN PARTNERS
Australian businesses trying to break into Asian countries such as Mongolia say finding the right local
partner is the biggest challenge they face. But they also want government assistance to pave the
way to the region.
A groundbreaking market research study of large and small businesses with Asian interests has
identified China as by far the most popular offshore market, followed by Singapore, Hong Kong,
Indonesia and Malaysia. They are also penetrating fringe countries including Mongolia and Pakistan.
The study, to be released on Tuesday, says industry associations, followed by Austrade, professional
services firms and chambers of commerce are the most common sources of information for
businesses moving into the region. It has also identified the key areas where companies with
experience in Asia feel there are resource gaps which prevent them being more successful.
―The need for more assistance with developing cultural capacity is also clear,‖ the authors say.
The report reveals some striking differences between large and small companies over the

12. challenges of developing Asian platforms, although 17 percent of both groups nominate finding a
local partner as the main challenge. But small businesses are much more concerned about having
insufficient knowledge of the foreign regulatory environment, while bigger companies are more
concerned about hiring the right staff for the specific country.
Grant Dooley, who is seeking Asian capital for Australian projects as the head of the Asia business
group at Hastings, says smaller companies need assistance from agencies such as Austrade while big
companies can invest more in upfront development staff.
Source: Australian Financial Review
CHINA MAY INVEST MORE THAN CNY 250BN (USD 40BN) IN INNER MONGOLIA-CHINA RAIL
The National Development and Reform Commission (NDRC) has approved the feasibility study of the
nation's biggest investment in freight railways—stretching from Inner Mongolia to central China—
reports the Guangzhou-based 21st Century Business Herald, citing a source close to China Railway
Corp.
The railway won initial approval in early 2012, but only now has been able to earn its real birth
certificate, the source said. The railway should break ground in September, and the rail will start
going down in earnest by the end of this year, the source said. According to plan, the railway begins
from northern Inner Mongolia's Ordos and snakes through Shaanxi, Shanxi, Henan, Hubei, Hunan and
Jiangxi before ending at the Beijing-Kowloon Railway's Ji'an Station, a total of 1,806.5 kilometers
and 84 stations. The railway cost has been estimated at 193 billion yuan (USD 31.2 billion) and will
need five years to complete. It will be able to transport more than 200 million tons in commodities
a year.
Wang Mengshu, deputy chief engineer of the China Railway Tunnel Group and a member of the
Chinese Academy of Engineering, estimated the actual cost at upwards of CNY 250 billion (USD 40.5
billion). In his experience, the final cost for railway construction typically exceeds the mark
because of inflation and some changes in design proposals which add costs. The railway is one of
the demonstration state projects to attract social capital. While waiting for the final approval,
cities and provinces that will be welcoming the line have been actively preparing for the
construction of the railway.
The stake holding structure of the railway is diversified, mostly concentrating on domestic railway
investment firms and local energy giants. State-owned giant China Railway Investment Corp
accounts for 20 percent of the railway, while six others each own a 10 percent stake. The remaining
20 percent goes to domestic railway investment firms and energy companies.
Source: Want China Times
POLITICS
BELARUS EMBASSY OPENS IN UB
Belarus on 6 August opened its embassy for the first time in Ulaanbaatar.
After Ambassador Stanislav Chepurny handed over his credentials to President Taskhia Elbegdorj,
they discussed closening relations between their two nations. ―This noticeable event will surely
contribute to our further bilateral cooperation development, and I hope that Mongolia will be the
wide-open bridge to connect Belarus with the emerging Asian market; at the same time, the
Republic of Belarus will also become for us a trustworthy bridge to the European market in the
future,‖ said Chepurny.
Ulaanbaatar currently has 21 resident foreign ambassadors.
Source: InfoMongolia.com
SCO TO ADMIT MONGOLIA AS A NEW MEMBER
Mongolia and three other nations were admitted as new members of the Shanghai Cooperation
Organization (SCO) at a meeting of the foreign ministers of Russia, China, Tajikistan, Kazakhstan,
Uzbekistan and Kirgizstan held in Dushanbe last weekend.

13. SCO adopted new documents giving the green light for admitting the four observer-states, India,
Pakistan, Iran and Mongolia, to the six-member organization. A summit will be held again in
Dushanbe in September. At present, Tajikistan holds the SCO presidency.
―At present, the SCO has started to counterbalance NATO‘s role in Asia. Consequently, these
countries want to take part in the SCO in the capacity of safeguarding their interests,‖ said an
expert at the Higher School of Economics Alexei Maslov. ―At present, the SCO is strengthening
because the American policy towards Asia has been excessively tough and is aimed at suppressing
their interests. The American policy contradicts the interests of Asian countries. In this sense, it‘s
quite natural that India, Pakistan, Iran and Mongolia expressed desire to join the SCO.‖ Maslov
added that SCO provides geo-political security from China, providing a guarantee to nations that
China will ―honor the interests of these countries.‖
Russia has formally submitted a draft strategy adopted by foreign minister for the development of
the SCO up to 2025. The strategy has set the task of minimizing the negative influence of global and
regional processes on the SCO territory. It is also aimed at upgrading its role and significance in
solving global issues.
Source: Macedonia Online
PUTIN TO ARRIVE IN MONGOLIA IN SEPTEMBER
Russian President Vladmir Putin will pay an official visit to Mongolia on 3 September.
The visit comes five years after Putin received an official invitation from former Mongolian Prime
Minister Sukhbaatar Bayar in 2009. This visit was initiated by President Tsakhia Elbegdorj when
meeting with his Russian counterpart at the Fourth Summit of the Conference on Interaction and
Confidence-Building Measures in Asia (CICA), held in May in Shanghai, China. It was there that
Elbegdorj invited Putin to celebrate the 75th anniversary of the World War II Khalkh Gol battle
victory.
Mongolia wants to expand traditional bilateral economic relations with Russia and will likely
negotiate for expanded trade. According to Russian news publication TAR-TASS, a new visa-free
regime for travel may be signed.
Source: News.mn
JAPANESE DELEGATION VISITS MONGOLIA’S OLYMPIC HEADQUARTERS
A Japanese delegation on 4 August offered assistance in training Olympic athletes while visiting
Mongolia's Olympic headquarters in Ulaanbaatar.
K. Iwamoto, deputy head of the City Council of Fukuoka, Japan and leader of the delegation,
handed the Olympics committee an official request to cooperate in joint training at the Fukuoka
Prefecture prior to the 2020 Tokyo Summer Olympic Games. The Fukuoka Prefecture has offered
assistance in helping Mongolia allow two competitors to compete in badminton events at the
forthcoming Tokyo Olympics, under the leadership of Japanese coach N. Ishiguro.
Source: Montsame
PREMIER MEETS CHINESE CHILDREN FROM FLOOD-HIT PROVINCE
Prime Minister Norov Altankhuyag on 4 August met with a group of 100 children from northeast
China's Liaoning province, who visited the country at his invitation.
Altankhuyag invited the children from the flood-hit Liaoning province to visit Mongolia during his
tour of China in October 2013. During the meeting, the prime minister gave gifts to the Chinese
children.
"You all overcame a hard time. May you feel comfortable during your stay in Mongolia and make
friends with many Mongolian children," said Altankhuyag.
This year marks the 65th anniversary of the establishment of diplomatic relations between Mongolia
and China and also the year of the "Mongolia-China Cultural, Arts and Humanitarian Exchange," as
declared by the Mongolian government. In past years, children from China's disaster-hit areas of
Sichuan and Hulunbuir have also visited Mongolia for summer holidays at the invitation of Mongolian
premiers.

14. The Chinese children will stay at the children's summer camp "Nairamdal," about 30 kilometers from
Ulaanbaatar.
Source: Global Post
PREMIER'S SENIOR ADVISOR ARRESTED BY ANTI-CORRUPTION AGENCY
A senior advisor to Prime Minister Norov Altankhuyag and three other officials were arrested on
Wednesday night by the Independent Agency Against Corruption (IAAC), local media reported 31
July.
According to the report, Gansukh Luumed, the former minister of natural environment and tourism
and senior advisor to Altankhuyag, was arrested for embezzlement by IAAC. The prime minister
criticized the arrest as "sabotage of government actions." Gansukh is coordinator of the
government's subsidy program "Coal," which enables residents of ger districts in Ulaanbaatar to
purchase coal at a much lower price in winter.
"I will fight strongly with this kind of intentional action that violates law and breaches rights of
innocent people," Altankhuyag said in a statement issued Thursday. He added, "Arresting people
who were responsible for coordinating and implementing [the] 'coal' program, which benefited
thousands of low-and middle-income households, is a sabotage of government actions," he said.
Source: China Development Gate
THREATS TO GOVERNMENT STABILITY ON THE RISE—PUTTING PREMIER'S JOB ON THE LINE
The recent arrest of the senior advisor to the prime minister is making headlines during an already
difficult time for him. This is leading many to wonder how much longer he can hold his office.
Gansukh's arrest for the alleged embezzlement of funds from the state ―Coal‖ program meant to
bring higher-quality coal at a cheaper price is bringing lots of negative media attention on Prime
Minister Norov Altankhuyag. This week the Independent Agency Against Corruption (IAAC) criticized
Altankhuyag for visiting Gansukh, whom he has publicly defended, and hinted that the prime
minister himself could be interrogated. The Mongolian People‘s Party (MPP) claims that both the
prime minister and justice minister have broken Mongolian law. Making matters worse is a rumor
that Altankhuyag's daughter, who worked for Clean Air Foundation, could also be involved in
Gansukh's case.
The 100-day action plan approved on 9 May that Altankhuyag said would boost the nation‘s
weakening economy has fallen far short of its goals. The long-running dispute between the
Mongolian government and Rio Tinto over the underground expansion of the Oyu Tolgoi copper mine
continues to drag on, and Resolution No. 216, which was supposed to settle a dispute of ownership
for 106 licenses for many investors has not provided adequate measures to address the underlying
issues. Meanwhile, the tugrug continues its record-setting fall, flirting with an exchange rate of
MNT 1,880 per U.S. dollar. That is a 12 percent fall from the beginning of the year. Foreign direct
investment has also continued to fall—down 70 percent year-on-year for the first half of 2014.
It is not likely that any move will be made until after the visits of both Russia and China's heads of
state this month and next. However, Altankhuyag's days in office may be numbered.
Source: Mongolian Investment Banking Group
POLICE, NATIONALISTS SQUASH CHINESE PROTEST
Sukhbaatar District police on 1 August squashed a demonstration of more than 100 Chinese workers
at Chinggis Square demanding pay never received from the company Beren Group LLC.
The workers complained that the construction company has failed to provide them with any food
accommodations, in addition to the pay they never received. Protesters claimed that when they
brought their grievances to the company they received angry remarks that they would receive
nothing. At the scene were members of several nationalist movements, such as the Khas Union and
Bosoo Khoh Mongol.
Chinese workers arrived in Mongolia in June to work for Beren for housing construction.
Chinese workers were escorted away from Chinggis Square by the police and members of the
nationalist groups to the Chinese embassy. Embassy officials assured protesters that they would

15. send an official request to the company to resolve these issues. The workers were later brought to
the General Agency for Citizenships and Migration to check on the workers' documents and were
told they would discuss their grievances with Beren. The next day, authorities deported 42 of the
workers they found guilty of violating their visa.
About 72.58 percent of Mongolia's 24,800 foreign nationals are Chinese.
Source: Udriin Sonin
TONY BLAIR USING HIS CONNECTIONS TO CHANGE THE WORLD, PROFITABLY
In the years since stepping down as Britain's prime minister, Blair has tried to fashion a second act
as a globe-trotting do-gooder in Rwanda and a half-dozen other African nations—not to mention
Mongolia—focusing on poverty and infrastructure though his Africa Governance Initiative, one of the
four charities he or his wife, Cherie, have founded. But at home, enthusiasm for such endeavors has
been tempered by criticism of his equally ambitious business enterprises, through a private
consultancy called Tony Blair Associates, whose clients have included controversial monarchs and
autocrats like Kazakhstan‘s president, Nursultan Nazarbayev.
The British press, which still bristles over Blair‘s support of the United States in the Iraq war, is
taking aim at his newfound riches from consulting, raising questions over whether he is cashing in
on his connections. In many ways, Blair faces a perception problem. Years into his post-political
makeover, confusion lingers about what particular hat he wears at any given time.
Blair‘s work in Rwanda has suffered along with Rwandan President Paul Kagame‘s reputation, which
has been undercut by reports of ruthlessness and repression. David Himbara, an economist who was
a close aide to Kagame and was once the government‘s liaison with Blair, said the breaking point
that forced him to leave came after seeing Kagame order the beating of two aides over their choice
of office curtains. (Mr. Kagame offered a somewhat different account of what happened.) Himbara
said Blair‘s charity ―did good work, but good work when you realize you are working with a criminal
state, then good work becomes what?‖ Blair dismisses such criticism, pointing out how far Rwanda
has come under Kagame in the two decades since the Rwandan genocide.
Blair has received a warmer response from the American government, which has awarded one of his
charities grants of more than USD 7 million over several years. The relationship has been helped by
high-level friends, including Hillary Clinton, the former U.S. secretary of state.
Much of the discussion about Blair in Britain has focused on a simple question: How rich is he
getting? Blair brushed off suggestions in the media that he was worth 100 million pounds, roughly
USD 170 million, but he is not middle class, either. He is paid a total of USD 5 million to USD 7
million a year by three firms: JPMorgan, Khosla Ventures and the Zurich Insurance Group. He gives
about a dozen speeches a year; one 2009 speech in the Philippines earned him more than USD
300,000, but an aide said that was unusually high. His various enterprises employ more than 200
people. His companies reported roughly USD 12 million in net assets. Then there is the Blairs‘
growing collection of properties, but an aide said many of Blair‘s properties had mortgages or were
bought on behalf of his children. He also gave millions of dollars of the proceeds from his
autobiography to a charity for injured British troops.
―This notion that I‘m about to join the rich list or something is just ridiculous, and I‘ve got no
desire to do that,‖ Blair said. ―It‘s not why I‘m doing it.‖
Source: New York Times
ANNOUNCEMENTS
INVEST MONGOLIA, 2-3 SEPTEMBER, ULAANBAATAR
Frontier Securities' eighth annual Invest Mongolia conference is scheduled for 2 and 3 September in
Ulaanbaatar
This year, the conference will be held over two days for presentations and discussions on ―smart‖
governance, a roadmap for Mongolia to come out of its economic crisis, and industries such as
mining, infrastructure, tourism, real estate and oil.

16. BCM members will receive a 15 percent discount at registration. Register online at frontier-
conference.com. For more information call 976-7011-9999 or email: conference@frontier.mn
___________________________________________
2014 DISCOVER MONGOLIA, 4-5 SEPTEMBER, ULAANBAATAR
The 12th Discover Mongolia International Mining Investors Forum (IMIF) will be held in Ulaanbaatar,
Mongolia on 4 and 5 September at the Children's Palace of Mongolia— the location of the conference
for the past 11 years.
The forum will have two days of intensive minerals and mining discourse and exhibition for
companies. Although the Mongolian economy is undergoing serious challenges and difficulties, some
decisions and resolutions adopted at the law-making and executive branches of the government
makes us restore confidence and trust. Parliament‘s decisions to harness the country‘s economic
and business environment are long-term steps to nurture investor confidence and trust in Mongolia.
The 12th annual Discover Mongolia-2014 IMIF is pleased to announce its Platinum Sponsors are
Xanadu Mines and Mongol Metals and its Gold Sponsor is Anglo American.
Business Council of Mongolia is supporting Discover Mongolia 2014 International Mining. BCM
members will receive an early bird rate to attend the forum. For Exhibition, Sponsorship and
Delegates information visit discovermongolaiforum.com. For more information call 976-7014-9762,
fax 976-7014-9762, or email info@discovermongoliaforum.com.
___________________________________________
OIL & OIL SHALE MONGOLIA 2014 RESCHEDULED TO 10-11 SEPTEMBER IN UB
The international investment conference Oil & Oil Shale Mongolia 2014 has a new scheduled date of
10 and 11 September.
The Ministry of Mining and Petroleum Authority and Minex Mongolia LLC have decided to host the
event after the passage of the long-awaited new Petroleum Law. This will be the country's first
international investment conference on oil, gas, and oil shale. The event will be attended by
international investors, oil, gas, and oil shale companies, service providers, consultancies,
equipment suppliers, and traders. Delegates will have the opportunity to network with key industry
contacts and obtain vital information on legislation and policies on oil, gas, and oil shale
exploration and production regulations from government authorities.
BCM is supporting the conference. BCM members will receive a 15 percent discount to attend. For
more information or to register email Chimednyam at chimednyam@minex.mn or call +976 344488,
or +976 9910-5877.
BCM WORKING GROUP NEWS
The BCM Environmental Working Group met on 26 June with 15 members attending.
Bayarmaa A, Vice Director, BCM, moderated the session.
New members: Shinetsetseg-Breakthrough PR, Ariunaa Norovsambuu–The Asia Foundation.
New Participants: Tirza Theunissen-The Asia Foundation, Binderya Oyunbaatar, Dolzmaa
Davaasuren-The Nature Conservancy,
Guests: Batima Puntsagmaa-Mongolian Water Forum, Kevin Trzcinski-Mongolian National University,
Tsenguun Tumurkhuyag, Munkhjargal Bayarlkhagva-Sustainability East Asia, Altai Onkhor–Water
Resources Group.
Speakers and topics were:
Introduction of Urban Services Program by Tirza Theunissen, TAF Deputy Country Representative,
Asia Foundation;
Impact of Climate Change on Water Resources by P. Batima, Director, Mongolia Water Forum;
Application and Use of Solar Thermal and Energy Efficient Technologies in Mongolia by Kevin
Trzcinski, Vice President of International Relations, Mongolian National University.

17. If you have any questions, please contact Erdenetsetseg at erka@bcmongolia.org.
___________________________________________
The BCM Logistics Working Group met on 10 June with 7 members attending.
Mattias Ahlin-Scania, Chairman, moderated the session.
New members: D Enkhbat CEO-Mongolian Express; Rentsendorj Yondon, Mongolian Opportunities
Fund; Buyanderler Tsogt-Ochir, Logistics Supervisor, Cummins Mongolia; Nobuo Okada, General
Manager, Mitsui Co.
Tengis Garamgaibaatar, Chief Executive Officer, Monroad, was elected as WG chairman.
Congratulations to him for his new role as BCM`s Logistics Working Group Chairman! We thank
Mattias Ahlin for his groundbreaking efforts in launching the Working Group. Mattias is
returning to Scania‘s headquarters in Sweden.
Speakers and topics were:
1. Follow up from last meeting‘s discussion
a. Main challenges for the Mongolian Logistic sector
2. Discussion about BCM Logistics Working group role and focus areas
(Mission Statement)
a. Transport modes; road, rail, air
b. Customs efficiency
c. Legal framework; Loads and dimension, safety, standards
d. Stakeholders: Ministries, customs, transport organizations, vehicle manufacturer association
e. Transport efficiency
3. Discussion about meeting intensity and organization
4. Other business
Next meeting was scheduled on 7 August. If you have any interest joining the new and growing
Logistics Working Group, please contact Erdenetsetseg at erka@bcmongolia.org
___________________________________________
The BCM Capital Markets Working Group met on 29 May with 11 members attending.
Howard Lambert /ING Bank/ and Nick Cousyn /BDSec/, Co-chairmen, moderated the session.
Guest: Michael O`Malley-Executive Director at ISG MineElect.
Speakers and topics were:
Facilitating foreign direct investment (FDI) and Capital Markets update - by Byambaa Losolsuren,
Leader of FDI Capital Markets group of 100 Day Revitalization Council, and Partner of Mandal
Capital LLC.
If you have any recommendations on Capital Markets for the Revitalization Council, please contact:
erka@bcmongolia.org
___________________________________________
The BCM Tax Working Group met on 22 May, with 12 members attending.
Onch D. - Co-chair, BCM‘s Tax WG and Deloitte Onch a moderated the session.
Attending were representatives from the following BCM member entities - Deloitte Onch, PwC,
Ernst & Young, KPMG Tax, OT, Terra Energy, Petro Matad, MahoneyLiotta, TMZ and BCM.
New members: Amarbayasgalan and Tuvshinbayar from Terra Energy.
Meeting agenda:
• Overview - B. Byambasaikhan, Secretariat, 100 Day Revitalization Program; Chairman, BCM;
• Initial new tax policy thoughts from WG members.
On May 29 BCM‘s Tax Working Group sent a detailed study of the current value added tax (VAT)
deficiencies and recommendations for efficiencies to result in greater tax revenue to the 100
Days Revitalization Council.
Please contact T.Erdenetsetseg, BCM Working Group Coordinator, erka@bcmongolia.org .
___________________________________________

18. The BCM ‗expanded‘ Legislative Working Group (LWG) met on 20 May with 42 members attending at
Corporate Hotel meeting room.
This was the third expanded WG meeting on the draft Amendments to the Minerals Law. The 2 ½
hour session included BCM members from mining companies, embassies and the MNMA. Special
guests were 5 members of Parliament and others from the Mining Ministry, Geological Society
and Export Society.
LWG Co-chair, James Liotta, Mahoney Liotta, moderated the session.
The following 11 presentations were made:
- A healthy Private Sector Driven Industry (1997 and 2006 Minerals Law / Amendments / what to
look for. By Doug McGay – longtime resident in the Minerals and petroleum industry;
- Investor views and concerns about making investments in Mongolia and its mining sector. By
Randolph Koppa – Vice Chairman, BCM and President, TDB;
- A view from the Mining Majors by Sunjidmaa Jamba from Peabody Energy;
- A supply side view by Stephen Potter, Wagner Asia;
- Tax Issues impacting the Minerals Industry by D. Onchinsuren – Co-chair BCM Tax Working
Group and Deloitte Onch Audit;
- Use of MSE for State Privatizations by Nick Cousyn – Co-chair, BCM Capital Markets Working
Group and BDSec;
- Views from within the Industry by N. Algaa – Executive Director, MNMA;
- Transparency and Public Comment by David Wyche – Economic/Commercial Section Chief,
Embassy of the United States of America
- International Agreements that attract bi-lateral investment, and views on the State ownership
of assets by Maxim Berdichevsky – Counselor & Senior Trade Commissioner, Embassy of Canada
- Some specific thoughts on the Amendments by James Liotta – Co-chair, BCM LWG and
MahoneyLiotta Law Firm; Bayar Budragchaa - Co-chair, BCM LWG and ELC Law Firm.
As MP Garamgaibaatar, Chair of the Standing Committee on Economic Affairs and Head of the
Parliamentary Working Group on the Draft Amendments to the Minerals Law, commented at
the meeting's conclusion - "We should not really change general structure and core contents of
the draft Amendments."
Also MP Garamgaibaatar welcomed BCM sending any additional comments directly to his Working
Group which was accomplished by the BCM Legislative Working Group.
Note: Amendments to the Minerals Law were passed by Parliament on 1 July 2014.
BCM WEBSITES
MONGOLIAN WEBSITE: ‘PRESENTATIONS’
The following statistics and reports posted on Presentations section in Mongolian:
http://bcmongolia.org/mn/илтгэлүүд
• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 4 сарын байдлаар, Үндэсний
статистикийн хороо
• Мандал Женерал Даатгал тайлан, 2014 оны 5 сар
• Сант марал сангаас гаргасан УЛС ТӨРИЙН БАРОМЕТР №13(47), 2014 ОН 3 САР
• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 3 сарын байдлаар, Үндэсний
статистикийн хороо
•―Anti-Corruption legislation and State Policy‖ (Mongolian) by D. Munkhjargal, Prevention and
Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption
(IAAC) Mongolia at the ―ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE
ON TRANSPARENCY‖ Training seminar, Mar 06, 2014
___________________________________________

19. ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', ‘INTERVIEWS‘, MONGOLIAN
BUSINESS NEWS’, ‘PHOTO GALLERY’
2 presentations from BCM monthly meeting on June 23, 2014:
• T. Gansuld, Executive Director, Outotec Mongolia – ―Outotec Mineral Processing Solutions and
Experience in Mongolia‖
• Lisa Gardner, Journalist & Media Trainer – ―Mongolia‘s Media Laws: Defamation, Libel and
Threats to Press Freedom‖
3 presentations from BCM monthly meeting on May 26, 2014:
• B. Lakshmi, Director, Mongolia Economic Forum – ―Why Mongolia Business Summit?‖
• Nick Cousyn, Co-chair, BCM Capital Markets Working Group – ―Use of MSE for State Privatizations‖
• Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – ―Mongolia Roads –
Achievements and Challenges‖
• China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital
Securities Limited
Mongolia Reports: http://bcmongolia.org/en/mongolia-reports
• World Investment Report 2014 by United Nations Conference on Trade and Development ;
• Social and economic situation of Mongolia as of May 2014 by National Statistical Office of
Mongolia; (available in Mongolian language - Монгол улсын нийгэм эдийн засгийн байдал 2014
оны 3 сарын байдлаар, Үндэсний статистикийн хороо);
• Real Estate Report 2014 by Mongolia Properties;
• ASIA Reaching for the Top by International Monetary Fund, June 2014;
• ASIA Achieving Its Potential by International Monetary Fund, June 2014;
• Mongolia: Economy outlook 2014, by Asian Development Bank;
• Polit Barometer by Sant Maral Foundation, March 2014.
Interview Section: http://bcmongolia.org/en/interviews
• Talking to United World, the Executive Director of the Mongolian Drilling Association (MDA)
Professor J. Tseveenjav. Source: http://www.worldfolio.co.uk/;
• Jim Dwyer, Executive Director, BCM – ―Business need more business‖;
• Damshnamjil Tsogtbaatar, Chairman of the SPC: ―Privatizing Mongolia‖;
• Jan Hansen, Economist, ADB: ―The depreciation should help to increase the competitiveness and
to develop the non-mining industrial sector‖.
BCM's English website includes the ―Mongolia Business News‖ section. BCM continuously posts news
stories and analysis of relevance to Mongolia at ‗Mongolian Business News‖ before they are all put
together each week for Friday's weekly NewsWire.
The ―Photo Gallery‖ contains photos from the 6th Anniversary BCM Renewal dinner on November
11, 2013.
The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home
page for a consolidated account of the week‘s events.
SOCIAL NETWORK WITH BCM
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the

20. latest announcements and comment on events carried in the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
https://twitter.com/bcmongolia.
The bulk of the content on BCM‘s new LinkedIn page is Mongolian language to better cater to BCM's
Mongolian-speaking audience and members. Please click on the below link to follow us on our new
LinkedIn page.
http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo
Social stats: BCM now has 5,901 fans on our Facebook fans page, 642 connections on LinkedIn
network, and 1,136 followers on Twitter.
Of course for news information, interviews, event photos, VIDEOS and announcements regarding our
organization, visit the official BCM website at http://bcmongolia.org/en/

24. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
June 30, 2014 *14.6% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 15.1% y-o-y, Ulaanbaatar city, June 30, 2014
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
July 30, 2014 12.00% {source: Mongol Bank}

25. CURRENCY RATES – 14 AUGUST 2014
Currency Name Currency Rate
US Dollar USD 1,874.73
Euro EUR 2,507.26
Japanese yen JPY 18.29
British pound GBP 3,161.36
Hong Kong dollar HKD 241.89
Chinese Yuan CNY 304.17
Russian Ruble RUB 51.90
South Korean won KRW 1.81
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.