1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 109, March 12 2010
NEWS HIGHLIGHTS:
Business:
Goldman Sachs may file case on Olon Ovoot;
MNMA elects new President;
Mongolia Energy to start coal delivery to China in August;
Hunnu Coal granted option to acquire project in Dornogobi;
Garrison resumes construction at Tovshiir;
Rio reported to be in talks with Chinalco;
Mongolian firms seeking overseas investors, says securities analyst;
State authorities urged to probe “illegal” activities of Petro-China;
Eznis flights to Hailar now stop at Choibalsan;
APU declares dividends worth MNT1.4 billion;
Gobi goes to Japan;
USAID to help improve efficiency and transparency of inspections;
Rio CEO invited to China conference.
Economy:
Crucial to continue with policy reforms, says World Bank;
Economist sees great hope for rapid development;
Mongolia’s debt reaches USD2.8 billion;
MNT 775 million discrepancy in mining report to be probed;
Big rise in both coal extraction and export;
Overlaps cause delay at Zamiin Uud;
Russia offers new power supply contracts;
Only economic diversification can assure survival, says former PM;
Livestock commodity exchange planned;
World Bank cautions against herders being forced into distress sale;
China’s appetite for gold seems sated;
Chile quake not to affect global output, but may mean smaller surplus;
China, wary over economy, to steer steady course;
China eyes 11 percent industrial output growth this year;
Wen Jiabao's 8% catchphrase;
Is economic roar from China too loud?
Even a slowing China will attract resource investors, feels analyst;
China's exports rise for third month;
China’s central bank needs time to decide policy tweaks;
Moving while staying still on yuan;
CIC says investment decisions will be trickier this year;
Inward mobility: Beijing's latest policy challenge.
Politics:
Elbegdorj likely to defer Russia visit, as issues defy solution;
Erdenet citizens urge President to go ahead with judicial reforms;
Civil society ready to launch movement;
Lack of consensus stalling decisions, regrets MP;
Good things happen when Americans, Mongolians meet, says Ambassador;
Pilot project planned on allowance distribution;
2. Geologists’ meeting to focus on Mongolia’s potential;
Advance deposits for environmental restoration;
Fee parking from May;
Ulaanbaatar to have its Independence Square;
Mongolian cranes seen in south India after six years.
*Click on titles above to link to articles.
BUSINESS
GOLDMAN SACHS MAY FILE CASE ON OLON OVOOT
Goldman Sachs is believed to have filed a case against Mongolia in an international arbitration court
in matters relating to Mongol Gazar and the Olon Ovoot mines. This news comes in the wake of
unconfirmed but strong reports that the Mongolian Government has lost the case against the
Russian-owned Altan Dornod. Mr. B.Lhagvasuren, director of the Inspection Department at the
Central Bank, has denied any information about Goldman Sachs filing any case.
Mr. Ts. Myanganbayar, a business magnate, mortgaged the Olon Ovoot gold mine license to several
banks and to Goldman Sachs to borrow a total of MNT 210 billion. Of this, Zoos Bank, now known as
State Bank, gave him MNT 60 billion, Anod MNT 30 billion, and Goldman Sachs MNT 15 billion.
Goldman Sachs is a global investment banking and securities firm but is not registered in Mongolia,
nor does it have any accredited representative here. Accordingly it may not have the legal right to
enter into any commercial transaction in the country. A man with only a visiting card is said to have
been representing the company to meet Mongolian officials. Nobody knows anything more about
him, or what position, if any, he holds at the company. It is believed that the Olon-Ovoot license
was mortgaged to a company calling itself Goldman Sachs International. The Mineral Department
agreed to the mortgage but this is now being contested as mining licenses can be mortgaged only to
banks or non-banking financial organizations and they have to be legal entities in Mongolia.
Source: Ardiin Erkh
MNMA ELECTS NEW PRESIDENT
The General Assembly last week of the Mongolian National Mining Association unanimously elected
Mr.D.Damba President in succession to Mr. D.Ganbold whose four-year term expires soon. Mr.
Ganbold had earlier announced that he was not seeking another term.
Mr. D.Jargalsaikhan, a former President of the MNMA, expressed the gratitude of all members to
the outgoing President for his ―skillful stewardship in difficult times‖. Mr. P.Ochirbat, former
President of Mongolia and Honorary President of MNMA, was in the chair. He recalled how Mr.
Ganbold‘s ―total commitment to the mining sector and political savvy‖ had helped him ―act as a
bridge between the state and business‖.
Mr. Ganbold urged his successor to strive to build up the MNMA, which has the status of an NGO, so
that it is seen as equal to a state organization.
Several members who spoke at the annual meeting wanted the MNMA to develop closer ties with
other mining-related associations and NGOs, so that they could work together as a team to
persuade the Ministry and Parliament to offer more support to the mining sector.
Source: The Mongolian National Mining Association
MONGOLIA ENERGY TO START COAL DELIVERY TO CHINA IN AUGUST
Mongolia Energy Corp., a former technology company which remade itself into a natural resources
developer in 2007, will deliver its first coking coal cargo this August and is also looking at projects
beyond Mongolia, a senior executive has said. MEC, which is still in the money-losing, ramp-up
phase of developing its Khushuut site in western Mongolia, aims to supply quality coal to China's
steel industry, like Hong Kong-listed peer SouthGobi Energy.
Because of Khushuut's location, MEC plans to serve the steel industry in China's Xinjiang Province
with Bayi Steel, a unit of China's largest steelmaker Baosteel Group, as its first designated
customer. MEC would see cash flow kick in after it started delivery of coking coal to Bayi, Chief
Executive James Schaeffer has said.
―To get this mine online in a three-year period, in a remote location, especially with the adverse
weather we've had -- it's a significant achievement,‖ Mr. Schaeffer said. ―We can get the first coal
moving out of the mine in August.‖ Khushuut is an open-pit mine in Khovd province. MEC has
3. appointed Leighton Holdings, the world's biggest contract miner, as its mining contractor for the
development.
Source: www.reuters.com
HUNNU COAL GRANTED OPTION TO ACQUIRE PROJECT IN DORNOGOBI
Australian Hunnu Coal has been granted an option to acquire an 80% interest in the Erdenes
Thermal Coal Project in Dornogobi province of south eastern Mongolia, 380 km from Ulaanbaatar
and 56 km from a bulk commodity loading rail facility at Bor Undur, which is connected to the
Mongolian railway grid.
Exploration work carried out in 1978 discovered coal bearing Lower Cretaceous Khukhteeg
Formation distributed throughout the property. Mr. George Tumor, Managing Director, said, ―The
Erdenes Coal Project is strategically located in a high quality thermal coal basin, where mines can
be quickly brought into production to deliver thermal coal to both domestic and Chinese export
markets.‖ The company has an exploration target of 40Mt to 60Mt based on existing exploration
work.
Source: baabar.mn
GARRISON RESUMES CONSTRUCTION AT TOVSHIIR
Garrison International has resumed construction of a processing facility in its Tovshiir gold project
in south-eastern Mongolia. Mr. Blair Krueger, President of Garrison, has said that ―the financial
crisis that significantly delayed‖ the work ―is now behind the company‖. Once the processing
facility has been completed and it becomes operational, Garrison will have achieved its goal of
producing gold from its primary asset in Mongolia.
Tovshiir is an open cut gold mining project and would be capable of producing 500 tons per day of
gold ore using feedstock grading 4.7 g/t Au. JPCM Ltd., an Australian quarry group, has been
engaged to undertake the mining and site ore crushing and to deliver fine material to Garrison's
grinding circuit.
The construction of the plant is estimated to cost USD1,650,000. It is likely to be commissioned in
late 2010 and full production should be reached by March 31, 2011.
Source: www.garrison-intl.com
RIO REPORTED TO BE IN TALKS WITH CHINALCO
Rio Tinto Group is in talks with Aluminum Corp. of China about potential joint ventures, the
Australian Financial Review has reported. Rio Chief Executive Officer Tom Albanese will probably
visit Chinalco, as Rio‘s largest shareholder is known, in Beijing this month as his board seeks to
pursue projects with the miner, the newspaper said, citing unidentified people familiar with the
plans. Any agreement is likely to include overseas assets, possibly in Mongolia or West Africa, the
Review reported.
Source: Bloomberg.com
MONGOLIAN FIRMS SEEKING OVERSEAS INVESTORS, SAYS SECURITIES ANALYST
Mongolian owned and operated resources firms -- from coal to copper to iron ore companies -- are
actively searching for foreign investors and hope to list in markets such as Hong Kong this year, the
top executive of an Ulaanbaatar-based financial services firm told the Reuters Global Mining and
Steel Summit in Hong Kong last week. Mr. Masa Igata, Founder and CEO of Frontier Securities, said,
―Mongolian miners are interested in listing in Hong Kong and London toward the second part of the
year.‖
In January, Mongolia-focused coal miner SouthGobi Energy Resources Ltd raised USD439 million in
its Hong Kong IPO. Mongolian coal firm Energy Resources is also eyeing a Hong Kong or London IPO,
although no bankers have been hired. As more Mongolian companies -- both foreign and domestic
owned -- seek listings abroad, major investment banks will become more involved in the sector.
Frontier Securities aims to piggyback on those deals to build a name for itself.
Most of the firm's business is still concentrated on working with domestic companies in the country.
Frontier's position as a foreign-owned financial services firm distinguishes it from domestic
competitors who may not be exposed to international accounting and transparency standards.
Source: Reuters.com
STATE AUTHORITIES URGED TO PROBE “ILLEGAL” ACTIVITIES OF PETRO-CHINA
A coalition of environmental protection movements in the country has sent a report to the
President, the Parliament Speaker, the Prime Minister, and the Ministers of Minerals and Energy,
4. Finance, and Labor and Social Welfare detailing ―illegal activities‖ by Petro-China Dachin Tamsag
and demanded an enquiry into how the company has been allowed to violate Mongolian laws,
pollute the environment, and harm local communities in several ways. Petro-China has been
working in three oil fields in Dornod aimag since 2005 on the basis of a product sharing agreement
with the Government. Petro-China has refused to make available to the coalition a copy of the
agreement, as also of its performance and monitoring reports, even though the NGOs have a
constitutional right to the information. Petro-China says these are ―company secrets that cannot be
disclosed to a third party‖.
The coalition has referred in its report to the numerous cases of violations and improprieties in the
company‘s working revealed during inspections by the National Audit Office and the Specialized
General Inspection Agency. Petro-China has consistently refused to take corrective measures. The
coalition now wants a detailed enquiry into specific terms of the agreement which, it says, violate
several Mongolian laws. It also wants to know why the contents of the agreement are not made
public.
The coalition also seeks a clarification from the Mongolian state authorities on if it is tenable for
the Petroleum Authority to defend and justify Petro-China‘s actions by saying, as it has done, that
―Chinese rules, procedures, and standards are being observed as the Chinese workforce follows
Chinese technique and technology‖. The Authority has also accepted the Petro-China argument that
an ―evaluation of its work and future plans was made in China‖ and that this should be sufficient.
Petro-China employs 3,620 Chinese nationals, all of whom are exempted from paying the required
fees to the Mongolian Government.
Source: Udriin Sonin
EZNIS FLIGHTS TO HAILAR NOW STOP AT CHOIBALSAN
Choibalsan in Dornod province became on March 10 the third Mongolian city to boast an
international airport, after Ulaanbaatar and Ulgii in Bayan-Ulgii province, when the Ulaanbaatar–
Hailar (in Inner Mongolia) flight introduced by Eznis Airways last year made its first stop there on
Wednesday. Following months of coordinated preparatory work by relevant agencies the Customs
and passport control personnel have been trained, the airport terminal given a new look, and
facilities such as real-time online network have been installed.
The people in the three eastern provinces of Dornod, Hentii and Sukhbaatar will now be able to fly
to the Hailar area with which they have substatntial trade and cultural relations. Eznis has
announced special OW promo fares of MNT49,999 between Choibalsan and Hailar for the first two
months.
Source: www.eznisairways.com
APU DECLARES DIVIDENDS WORTH MNT1.4 BILLION
APU has been a leading company in Mongolian ever since it was established 86 years ago. Last year
its food and beverage products numbered 60 and it paid MNT44 billion in tax. Upgraded technology
helped increase production, and also improved the product quality.
The annual general meeting of its 3,500 shareholders was held last week where the company
announced it would distribute MNT1.4 billion as dividends. This is the sixth straight year that the
company has declared a dividend. The management also announced plans to spend USD35 million
for further upgrading of equipment and technology.
Source: Zuunii Medee
GOBI GOES TO JAPAN
It has taken Gobi, established in 1981 with Japanese help in locally processing Mongolian cashmere
and camel wool and also in producing consumer end products, almost three decades to make a
splash in Japan. But, given the response, the wait was worth it. A trade meeting in Tokyo on March
2-4, held in cooperation with the Mongolian Embassy, attracted businessmen from Japan and also
South Korea and several promising trade deals have been set rolling.
An accompanying exhibition showing the full range of Gobi‘s autumn and winter collection in
combed and spun cashmere, pashmina and other material saw enthusiastic footfalls every day.
Source: Udriin Sonin
USAID TO HELP IMPROVE EFFICIENCY AND TRANSPARENCY OF INSPECTIONS
A Memorandum of Understanding was recently signed between the General Agency for Specialized
Inspection and USAID's Economic Policy Reform and Competitiveness Project (EPRC) to help improve
the efficiency of specialized inspections, ensure transparency, and promote services directed at
5. customers and clients. Chairman Ya.Sodbaatar signed for the Agency and Director Fernando Bertoli
for EPRC.
According to the MoU, EPRC will provide assistance in preparing and improving detailed procedures
of specialized inspection, and also in setting in place a monitoring system based on risk
management.
Source: Montsame
RIO CEO INVITED TO CHINA CONFERENCE
The chief executive of Rio Tinto, the Anglo-Australian miner whose employees are awaiting trial on
commercial spying charges in China, is scheduled to visit Beijing this month to attend the China
Development Forum that usually attracts top Chinese officials. The event could mark an
opportunity for Mr. Tom Albanese to engage with senior Chinese officials in a semipublic forum,
coming about eight months after Chinese authorities surprised the company by detaining four of its
employees amid widespread criticism of the company's activity in its largest single market. It could
also provide a gauge of how Rio Tinto is regarded by its Chinese hosts.
Rio Tinto is among the most profitable foreign companies operating in China, where it booked
USD10.69 billion in revenue in the country last year, or 24% of its global total, driven by the steel
industry's demand for its iron ore. Yet it has also faced steep challenges in the country, including
intense criticism in recent years from the government and steelmakers of its iron ore pricing policy.
Mr. Albanese has said a top priority is rebuilding the relationship in China. The invitation-only
Forum provides an opportunity for personal diplomacy. It brings together titans of global business—
around 37 multinational company chiefs are on the organizer's confirmed list this year—as well as
leading Chinese officials, regulators, business people and academics.
Read more…
Unlike in past years, Rio Tinto executives aren't among those due to appear on stage, according to
the draft agenda. Rio Tinto has taken a number of steps in recent months that appear aimed at
improving relations in China. This year it formed a new executive position, namely managing
director for China based in Shanghai, and installed the Mandarin speaking executive who opened
the company's first China office 25 years ago, Mr. Ian Bauert.
In December, Rio Tinto was one of about 20 multinational companies that sponsored a table at a
Shanghai American Chamber of Commerce ―Government Appreciation Dinner‖, which an Amcham
flier describes as an opportunity ―to express thanks to our host government for the previous year's
successes and to look ahead to another year of cooperation‖. The cost is around USD2,950,
according to Amcham. Rio Tinto wasn't listed among the sponsors by Amcham in 2008.
Source: The Wall Street Journal Asia
ECONOMY
CRUCIAL TO CONTINUE WITH POLICY REFORMS, SAYS WORLD BANK
The World Bank‘s Economic Update for January says Mongolia‘s medium-term growth outlook is
favorable. However, the upcoming mining boom does carry with it the attendant ―Dutch disease‖
risks and a return to the profligate populism of the past. Other risks relate to resolving the ongoing
solvency problems in the banking sector and to near-term fiscal pressures before the sharp
increases in mineral revenues associated with the OT project in later years. Accordingly, it remains
crucial to continue the policy reforms started in 2009.
These include the adoption of the planned fiscal stability law to move away from the boom and
bust cycle of mineral prices; improvements to the budget process and to the proper planning and
management of public investment; and putting in place a framework to support future
infrastructure investment. Implementation of a targeted poverty benefit should ensure that in the
future the poor are protected from mining boom-and-busts in a fiscally sustainable manner.
Similarly, addressing the banking sector problems in a decisive and transparent manner is urgently
needed to prepare the sector for the upturn in economic activity, and investment and capital
inflows in the years ahead. Finally, continued reforms in the mining sector will enhance incentives
for new exploration and environmentally and socially sustainable development in a sector that is a
key driver of medium to long term growth.
Source: www.worldbank.org/mn
For complete World Bank Monthly Economic Update for January, see BCM website, Resources –
Mongolia Reports.
6. ECONOMIST SEES GREAT HOPE FOR RAPID DEVELOPMENT
Dr. Robert J. Shapiro, chairman of Sonecon, a private economic policy consulting firm, and also of
NDN's Globalization Initiative, sees great hope for Mongolia‘s rapid development now that large
mining projects are ready to take off. The Oyu Tolgoi Investment Agreement has put the country on
the world mining map, and has sent a message to investors abroad that the Mongolian Government
now means business. The national economy will benefit in many ways. Long-term employment
opportunities will be created, larger export earnings will fill the foreign exchange coffers, tax
revenues will increase, releasing money for development, and a trickle-down effect of the mining
projects will see other sectors of society and the economy get stronger. Mongolians will also be
exposed to modern operational methods and new technologies.
Dr. Shapiro feels that the project must be allowed to begin as planned, instead of wasting time on
minor issues and in nitpicking. Delays can put off prospective sources of finance. He urged
Mongolians opposed to paying the 2% royalty to the original license holder in Oyu Tolgoi to
understand that this is standard international practice. Such minor hiccups aside, ―I am very
positive about the future of the Mongolian economy,‖ said Dr. Shapiro.
Source: Udriin Sonin
MONGOLIA’S DEBT REACHES USD2.8 BILLION
Mongolia's accumulated debt since 1991 has reached USD2.8 billion, Finance Ministry officials told a
working group set up by the Standing Committee on Security and Foreign Policy last week. At
present more than MNT100 billion is needed to repay the annual interest and the Ministry estimates
this will increase 200% in ten years. Apart from loans, Mongolia has received USD1.8 billion in aid
from donor countries and institutions in this period.
Source: Montsame
MNT 775 MILLION DISCREPANCY IN MINING REPORT TO BE PROBED
Among those who attended the meeting of the National Council of the Extractive Industries
Transparency Initiative (EITI) on March 5 were the Deputy Chairman of the Council, Minister of
Minerals and Energy D. Zorigt, Minister of Finance S. Bayartsogt, Head of the National Statistics
Office S. Mendsaikhan, Head of the Anti-Corruption Authority Ch. Sangaragchaa, Executive Director
of the Open Society Forum P. Erdenejargal, Member of EITI International Board N. Dorjdari, Head
of the Mongolian Employers‘ Federation L. Naymsambuu, representatives of several NGOs, and
officials of mining companies like Erdenet, Ivanhoe Mines, and Areva Mongol.
The meeting discussed and approved the latest EITI Validation Report and decided to seek the help
of the Press Office of the Government in publicizing the report and the recommendations it
contains. The National Audit Office and the Specialized General inspection Agency were asked to
jointly investigate the discrepancy amounting to MNT 775 million noted in the Mongolia 2007 EITI
Reconciliation Report and to submit a report by May 2010.
Source: Udriin Sonin
BIG RISE IN BOTH COAL EXTRACTION AND EXPORT
Mongolia ranks among the top ten countries of the world in terms of its coal resources. Of the 13.2
million tons of coal extracted in 2009, 7.5 million tons were exported. Total extraction rose 40%
over the previous year and exports 80%. Both figures will keep going and up and up as so far only 80
of the over 300 deposits and occurrences in 12 basins and three territories have been explored.
Present estimates put the country‘s coal resources at 162.3 billion tons and improved exploration
technology may very well find new deposits.
Coal processing is planned to start in the near future with a targeted output of 10.2 million tons of
high quality coking coal in 2011 which should go up to 20 million tons by 2015. Coking will begin at
Ukhaa Khudag and Khushuut.
Source: Undesnii Shuudan
OVERLAPS CAUSE DELAY AT ZAMIIN UUD
A team from the Mongolian Press Institute and media organizations recently visited Zamiin Uud and
also Ereen in China to see how things worked in goods transportation across the border. Business
owners complain that in the absence of clear demarcation of their respective responsibilities, there
is often overlapping of work between the State Specialized Inspection Agency and the General
Authority of Customs. This causes delay and other avoidable difficulties.
Last year, Zamiin Uud Customs earned MNT3.8 billion in revenue and fees. It also detected 829
cases of attempted violation of rules. The average such detection for each Customs official was 5.5,
7. twice as high as at any other border port.
Ereen warehouses for perishable commodities like fruits and vegetables are spread over some
50,000 sq. meters. Men from the Specialized Inspection Agency take samples for sanitary tests while
Customs authorities check weight and numbers. With the wider use of X-ray facilities, physical
examination by the Customs has decreased by 6.8%. The technology is most effective in checking
loaded automobiles and trucks.
Source: Onoodor
RUSSIA OFFERS NEW POWER SUPPLY CONTRACTS
Last week, during talks in Moscow between representatives of Russia's energy export and import
monopoly Inter RAO UES, and Mongolia's state-run power companies and Ministry of Mineral
Resource and Energy, the Russian company said it is ready to switch to long-term and mutually
advantageous contracts on power supplies to Mongolia. The present contracts that run until 2012
call for annual adjustment of price parameters and supply terms. Now Inter RAO has offered to
switch to 15-year contracts.
The Mongolian side plans to study these proposals and respond by the middle of March. If a positive
decision is taken, the parties will also hold consultations engaging responsible ministries and
infrastructure companies. The new proposal envisions revision of the price formula once in three
years, allowing Mongolia the opportunity to plan its budget and draft a long-term strategy for social
and economic development. It will also be able to pledge these long-term contracts to raise funds
for projects, including those on the construction of power generating facilities.
Inter RAO will get a similar opportunity for long-term planning of the revenue side of its budget on
one of its major export activities.
Source: ITAR-TASS
ONLY ECONOMIC DIVERSIFICATION CAN ASSURE SURVIVAL, SAYS FORMER PM
Former Prime Minister D. Byambasuren does not see any ―quick exit from the present economic
crisis, even if some superficial indications may look promising‖. The distribution of cash has led to
an overall increase in prices of items in daily use. Banks are still troubled with outstanding loans
and the long-term impact of the dzud will be clear only with time. Livestock is the economy‘s key
sector and difficulties there will be felt in many areas of life: herders‘ livelihood, the consumer
market, and health of the banking system. Herders, he felt, are not receiving adequate support,
but abandoning them will have disastrous consequences.
Canceling the export tax on raw cashmere or providing compensation based on the number of goats
does not have any sustainable effect. Instead, Mr. Byambasuren urged easier credit facilities and
fairer marketing opportunities for herders. He regretted that there is no progress in setting up a
copper processing industry, even 40 years after production began in Erdenet, and the landmark Oyu
Tolgoi investment agreement was signed. Profligacy in public expenditure has led to a severe
imbalance in foreign trade figures. ―On top of this domestically driven crisis came the global
downturn and the Government had no clue to how to get out of the mess,‖ he said.
Raw commodity prices will always move in cycles and ―Mongolia‘s survival in a tough world‖ can be
ensured ―only by a diversification of the economy and strengthening the economic structure‖, he
said.
Source: Onoodor
LIVESTOCK COMMODITY EXCHANGE PLANNED
The Ministry for Food, Agriculture and Light Industry and the Mongolian Stock Exchange have signed
a cooperation agreement as the first step to establishing a livestock commodity exchange. A draft
law on this has to be approved by Parliament before work can begin in right earnest. The Ministry
will be responsible for preparing the rules and methods of offering farm products on sale and the
Stock Exchange will develop an electronic trading system with links to the provinces. It is hoped
this will free herders from the clutches of traders and thus guarantee a fair price for livestock
products.
Source: Onoodor
WORLD BANK CAUTIONS AGAINST HERDERS BEING FORCED INTO DISTRESS SALE
The World Bank has warned that various pressures on herder households have already resulted in
their migration to soum and aimag centers, and finally to cities. This will raise the unemployment
and poverty indices of urban areas. The Bank sees further difficulties for herders as they are forced
to slaughter herds before the animals die of the cold and then to sell the meat at a low price
8. because of lack of access to the market. Middlemen and traders will offer only distress sale prices.
Source: Zuunii Medee
CHINA’S APPETITE FOR GOLD SEEMS SATED
China's chief foreign-exchange regulator has suggested the country's appetite for further gold
purchases may be limited and offered soothing words about China's role as an investor in U.S.
Treasurys. ―Gold is not a bad asset, but currently a few factors limit our ability to increase foreign-
exchange investment in gold,‖ said Mr. Yi Gang, director of China's State Administration of Foreign
Exchange (SAFE). He said gold doesn't offer good long-term returns because of price swings.
China rarely reveals its thinking on its investment of its foreign-exchange reserves, which at USD2.4
trillion is the world's largest. The issue of China's gold holdings has been highlighted since the global
financial crisis, as the dollar's movements have prompted academics and officials outside SAFE to
recommend more diversification of China's reserves.
Mr. Yi revealed that while China's gold reserves, at 1,054 metric tons, are the fifth largest in the
world, the holdings, at current prices, are only a small part of its foreign-exchange reserves. Based
on data on holdings at the end of last year, gold represented about 1.5% of China's foreign-exchange
reserves at current market prices.
Amid continuing jitters about Beijing's appetite for U.S. debt, Mr. Yi also said China holding
Treasurys can be mutually beneficial for China and the U.S. China buys and sells U.S. Treasurys on a
daily basis and Beijing doesn't want such trading to be politicized, Mr. Yi said. He reiterated that
China will be a ―responsible investor‖ in Treasurys.
Source: The Wall Street Journal Asia
CHILE QUAKE NOT TO AFFECT GLOBAL OUTPUT, BUT MAY MEAN SMALLER SURPLUS
While the earthquake that hit Chile will not significantly affect annual global copper production,
even a small disruption will help edge the already-tight copper market closer to a supply-demand
balance. The net production decline for 2010 will likely be less than 50,000 tons, which is not very
much compared with the 15.7 million tons mined globally each year, but considering that the
surplus is only about 110,000 tons, the projected fall in production makes markets quite tight. After
a small surplus this year, BMO Capital Markets expects a copper deficit in 2011 of more than
200,000 tons.
BMO has picked copper as its number-one commodity this year, followed in order by iron-ore,
platinum, silver, metallurgical coal and gold. The commodities share the characteristics of strong
demand expectations, coupled with supply constraints. Markets continue to favor commodities,
mainly because of double-digit economic growth expectations in China, but also because of
synchronized growth, albeit at a slower pace, elsewhere in the world.
There was no damage to most copper operations in the world's biggest producing nation and work in
several mines was resumed within days of the quake.
Source: www.miningweekly.com
CHINA, WARY OVER ECONOMY, TO STEER STEADY COURSE
China will seek to heal social rifts and spur home-driven growth with more public welfare and rural
spending even as the Government tightens its belt after a burst of feverish spending, Premier Wen
Jiabao told the country's parliament last week. China's economy faced a clouded international
outlook in 2010 and would stick to a steady policy course this year, shifting tack if needed to
counter the lingering impact of the global credit crunch, he said. China would maintain an
appropriately easy monetary stance and an active fiscal policy, he added, showing no sign of a
break from current settings.
In his annual ―State of the Union‖-style report to the National People's Congress, Mr. Wen unveiled
increases in spending for China's poorer citizens and 700-million strong farming population that
outstripped the planned rise in military outlays. China wants to slow spending and bank lending
after pumping out cash to counter the global downturn, but Mr. Wen said improvements in social
welfare, healthcare and rural services were needed to secure the nation‘s economic health and the
ruling Communist Party‘s hold over an increasingly fractured society.
China escaped the worst of the global slump by ramping up credit, slashing interest rates and
launching a USD585-billion infrastructure program in late 2008. The economy grew 8.7 percent last
year as a result, by far the fastest pace of any major country, but Mr. Wen played down the
achievement. More domestically-driven growth, fueled by consumers more confident about their
health, incomes and welfare protection, was needed to keep the world's third-biggest economy
growing at a solid pace, he said, adding, ―We must not interpret the economic turnaround as a
9. fundamental improvement in the economic situation. There are insufficient internal drivers of
economic growth.‖
Reflecting the conservatism of China's financial planners, the budget deficit will again be kept
below 3 percent of national income, Mr. Wen said. Last year the deficit was just 2.2 percent of GDP
despite massive government spending on infrastructure and job creation.
Source: Reuters.com
CHINA EYES 11 PERCENT INDUSTRIAL OUTPUT GROWTH THIS YEAR
China must have 11 percent industrial output growth this year to achieve its GDP target of 8
percent, Minister of Industry and Information Technology Li Yizhong has said. He was speaking on
the sidelines of the annual session of parliament.
Source: Reuters.com
WEN JIABAO’S 8% CATCHPHRASE
There are differing opinions about Mr. Wen Jiabao's abilities and accomplishments as premier of
China. But one thing can be said unequivocally: He's a lousy prognosticator of economic growth
rates. Last week, as he has done every year since 2005, the premier listed a target for gross
domestic product growth of ―about 8%‖ at the opening of the annual session of the National
People's Congress. (In 2003 and 2004, the target was about 7 %.)
Every year this figure is dutifully reported as an actual target or forecast. In fact, the number is
useless as either. In the past five years, real annual economic growth has fluctuated from 10.4% up
to 13% and down to 8.7%, and the Government has gone through at least two cycles of tightening.
The ―target‖ hasn't budged.
Eight is a lucky number in China, which might have something to do with it. The more common
explanation is that the 8% figure is, roughly, the minimum pace at which the Government thinks the
economy needs to grow in order to produce sufficient employment growth and maintain ―social
stability‖.
Read more…
To be fair, the premier has acknowledged that it's not a precise number. But the government also
dresses the figure up in language that makes it sound more carefully considered than it evidently is:
The 2007 report said the target was determined after taking ―into account a number of factors,
such as what is needed and what is feasible‖.
Economists have long heaped scorn on the 8% figure. ―It is time to lower the GDP growth target, or
eliminate it altogether,‖ wrote Royal Bank of Scotland economist Ben Simpfendorfer in a June
report. He argued that ―policy must instead focus on the quality of growth, as opposed to the pace
of growth.‖
We wouldn't be surprised if, in fact, some in the leadership also wish they could abandon 8%. But
having repeated it for so long, the Government is sort of stuck with the 8% mantra. If it were to
drop the target, particularly at a moment of uncertainty like the current one, the effects would be
unpredictable. And if there's one thing the Chinese Government hates, it's unpredictability.
Source: blogs.wsj.com/chinarealtime
IS ECONOMIC ROAR FROM CHINA TOO LOUD?
The Year of the Tiger is off to a roaring economic start. Now economists are gauging whether
China's momentum may be too strong for the global good. One of the most closely watched
economic figures to be released will be the consumer-price index. An investment analyst estimates
consumer prices rose 2.7% in February from a year earlier, faster than January's 1.5% rise. ―Overall,
you will be looking at a picture of strong retail sales, strong industrial production and strong
investment figures,‖ he says. But with that will come ―some acceleration in CPI‖.
Inflation could raise the prospect of an interest-rate increase in China, which could raise borrowing
costs as well as export prices for foreign consumers. Still, the impact might be subdued because of
still-tepid demand in the West. Fast-rising debt levels could be more worrisome. In light of the
sovereign-debt crisis in Europe and the U.S. Government's huge debt, investors want assurance that
Asia's debt—public and private—remains under control.
―The extent to which growth has been financed with debt gives you an idea of how sustainable it
is,‖ says another analyst. Accelerated lending in China would be seen as a sign of overheating, he
says. Also, China's central bank, the People's Bank of China, is expected to report new loans
extended by banks. Lending by the country's four largest state-owned banks, which account for
nearly half of all loans, contracted 39% in February from the previous month, according to local
media reports. That is largely because of orders from the Government to the banks to scale back
10. loans. Still, economists doubt Beijing is willing to put on brakes that could cost jobs. And that is
what concerns investors.
Source: The Wall Street Journal Asia
EVEN A SLOWING CHINA WILL ATTRACT INVESTORS, FEELS ANALYST
An investment analyst has said commodity-related investments will remain a crucial avenue to gain
exposure to the China story even if growth slows to single digits in the coming years. Mr. Mark
Mobius, president of Templeton Emerging Markets, feels risks from derivative contracts, capital
flight that drains liquidity or changes of sentiment by leveraged investors like hedge funds do not
outweigh a positive long-term picture for China and other emerging markets.
―There will always be traps out there,‖ he said, but added, highlighting China's likely growth
trajectory and industrialization in other emerging nations, including India, that ―high levels of
growth in China are sustainable‖. It will, however, get harder and harder as the economy grows.
―You cannot expect double-digit growth rates over the longer term but you can achieve high single
digit growth,‖ he said.
Mr. Mobius said China's extensive experience in developing its own infrastructure meant the country
had a huge advantage when doing business in other developing nations. They are used to massive
projects - doing very big civil works projects quickly by importing their own labor, their own
engineers. China, like other nations, faces all sorts of social and political barriers to working in
resource-rich but sometimes chaotic countries, ―but they are probably better suited to handle
those. And China will go into places where other people fear to tread.‖
He said China's key areas of interest were oil, coal, iron ore and copper and noted that part of
China's focus on overseas resources was to secure supply but there are other reasons.
Source: www.miningweekly.com
CHINA’S EXPORTS RISE FOR THIRD MONTH
China's exports expanded strongly for the third straight month in February from depressed year-
earlier levels, though they slipped slightly from January, showing the recovery remains tentative.
The choppiness of the export rebound could bolster the case for Beijing to stick with its currency
policy, which has helped exporters.
China's exports in February rose 45.7% from a year earlier, a pickup from January's 21% increase,
though the jump was mainly due to a low comparison base, as exports in February 2009 fell at their
fastest rate during the international financial crisis. Seasonally adjusted exports last month fell
2.2% from January, suggesting lingering weakness in external demand—a recurring theme in recent
remarks by officials.
Imports grew 44.7% in February from a year earlier, slowing from January's 85.5% pace, which in
turn was partially due to the steep import drop in January 2009. Seasonally adjusted imports in
February rose 6.3% from the previous month, reversing January's 0.9% drop, indicating domestic
demand remains strong despite government efforts to slow lending. The trade surplus narrowed to
USD7.61 billion in February from USD14.17 billion in January.
Economists say the February data are difficult to interpret because the weeklong Lunar New Year
holiday, when factories close, was in February this year, but in January last year, creating
distortions in year-earlier comparisons. They generally predict exports will continue to pick up this
year because the global economy is recovering.
Source: The Wall Street Journal Asia
CHINA’S CENTRAL BANK NEEDS TIME TO DECIDE POLICY TWEAKS
The People's Bank of China will adjust policy to meet the Government's 3 percent inflation target
for 2010 but needs more time to decide whether to raise interest rates, senior central bank officials
have said. ―We have many ways to control prices, including liquidity controls,‖ one of them said.
Another thought distortions caused by the long Lunar New Year holiday last month made it tough to
get a clear reading of the economy and March data would provide more clarity. ―We need more
time to observe,‖ he said.
They brushed aside international demands that the yuan's exchange rate be allowed to resume its
climb. ―We are facing some external pressure, as everybody can see,‖ one said. ―China can handle
all its own affairs very well.‖ Beijing has frozen the currency against the dollar since mid-2008 to
help its exporters, provoking complaints from abroad that China is reaping an unfair competitive
advantage.
Source: Reuters.com
11. MOVING WHILE STAYING STILL ON YUAN
If People's Bank of China Governor Zhou Xiaochuan is ever looking for a new career, he might find
steady work as a diplomat. His words on China's exchange-rate policy over the weekend achieved a
tricky dual goal. Admitting that the exchange-rate policy was part of China's response to the global
economic crisis, Mr. Zhou raised the hopes of those looking for an end to the yuan's de-facto peg
against the dollar. But he gave no indication on how or when China might start to raise the yuan's
value.
Mr. Zhou's words aren't entirely novel. In October, the central bank chief said keeping the yuan
pegged to the dollar was ―an unusual method adopted during an unusual time‖. Still, coming during
the weekend's annual meeting of China's National People's Congress, they did make a splash. By
Monday, currency-derivative traders were betting the yuan will be 3% stronger against the dollar in
a year's time.
Such predictions remain for the brave. Even a close parsing of Mr. Zhou's words offers little definite
about when a yuan movement might come. Just as unclear is how China will move off the dollar peg
that has been in place since July 2008. A one-off, large revaluation may please economic purists,
but would be a bold move out of character for China's leaders.
Resumption of the yuan's steady appreciation against the dollar, the trend in place from 2005 to
2008 also would be problematic. It would spur heavy inflows to China chasing a one-way bet,
complicating Beijing's efforts to control both asset- and consumer-price inflation.
Read more…
An economist with a bank reckons China's best bet is to genuinely benchmark the yuan against a
secret basket of currencies, similar to the system Singapore operates. That, he says, could keep the
yuan from always moving the same way against the dollar. That China's policy makers might be
considering such a change isn't out of the question. As Mr. Zhou said, ―the exchange-rate
mechanism and the price of the renminbi are in a dynamic process of continuous change‖, again
leaving much room for interpretation.
Having thought it over, traders pared their early expectations of yuan appreciation by Monday
afternoon. They will have to continue to live in hope.
Source: The Wall Street Journal Asia
CIC SAYS INVESTMENT DECISIONS WILL BE TRICKIER THIS YEAR
China's USD300 billion sovereign-wealth fund anticipates this year will be a more difficult one for it
to make investments because the global economic trend lacks clarity.
China Investment Corp. Executive Vice President Jesse Wang has identified factors such as swings in
foreign-exchange movements and the unclear direction of resource prices as the main challenges.
Unlike in the past years, he said, it has become harder to predict where global energy and
resources prices may head this year. For example, last year recovery from the financial crisis drove
asset prices up.
Mr. Wang also made CIC's first official comment on speculation that China would help bail out
Greece, noting that the responsibility for such bailouts should fall primarily on the European Union.
CIC's main mission is to have sound financial returns. ―If the EU is unwilling to help, how can you
expect others to act as a white knight and save Greece?‖
As a passive financial investor that doesn‘t seek management control in any entities it invests in,
CIC recorded ―relatively good‖ investment returns last year, Mr. Wang said. He said an annual
report to be released later would have more details but did not say when this will be published. CIC
announced more than USD8.15 billion worth of acquisitions last year.
CIC, a sovereign fund that manages a portion of China's foreign-exchange reserve, is not allowed to
make direct domestic investments, although Mr. Wang said the fund has taken account of ―China
factors‖ while making investments. For example, CIC has invested a lot in Australia, whose
economy is closely linked to the Chinese demand for its rich resources.
Source: The Wall Street Journal Asia
INWARD MOBILITY: BEIJING’S LATEST POLICY CHALLENGE
The hukou, or registration, system, which divides Chinese citizens into rural and urban dwellers, is
a festering anomaly amid China's rapid economic reform in recent decades. A remnant of the 1950s
planned economy, the system restricts labor mobility within China. Besides the resentment it
causes, it is helping prolong imbalances in China's economy that policy makers would like to rectify.
For sure, there is labor mobility within China: The urban population has grown by about 1% per year
on average over the last decade. But China's urbanization rate remains below other countries at a
similar stage of development. Morgan Stanley, citing academic research, says 56% to 58% of China's
12. population should be urban-based given its per-capita gross domestic product. By the end of 2009,
China was only 46% urbanized.
Rural residents who move to cities find themselves denied subsidies for health care, education and
housing. That, in turn, limits consumption by the new city dwellers, given their need to pay for
those basic services. China, as a result, isn't getting as much economic bang out of urbanization as
it could.
As ever in China, talk of reform now may take some time to translate into action.
Read more…
The system also discourages the work force from moving to where it might be employed most
productively. In addition, making urbanization easier will help avoid wasteful public and private
investment. Less of the spending on infrastructure and housing in cities will be wasted, in other
words, if more people can make use of it all.
Reform of the system is being more urgently discussed by China's party leaders, but there is a limit
to the conversation. Thirteen Chinese newspapers published a joint editorial calling for an end to
the hukou system. One of the authors has since been removed from his position as a senior editor.
Such a cooling of expectations isn't without logic. The Chinese authorities worry an influx of rural
migrants to the cities will overwhelm existing social services. Local governments are worried about
the cost of accommodating ever more newcomers.
Source: The Wall Street Journal Asia
POLITICS
ELBEGDORJ LIKELY TO DEFER RUSSIA VISIT, AS ISSUES DEFY SOLUTION
President Ts.Elbegdorj‘s planned visit to Russia at the end of March is likely to be put off. It was
widely anticipated that the visit would see agreements signed on the future of the Ulaanbaatar
Railway, the settlement of the debt to Russia, and cooperation in the uranium sector. Sources
declining to be identified say that talks so far have not resolved any of the issues and so the visit
will have to be deferred.
Source: Undesnii Shuudan
ERDENET CITIZENS URGE PRESIDENT TO GO AHEAD WITH JUDICIAL REFORMS
President Ts.Elbegdorj‘s meeting last week with the citizens of Erdenet turned into an indictment
of the way legal and judicial organizations worked in the province of Orkhon. A woman said she had
been practically living in courts trying to get the truth established after the court ordered her son
to 8 years‘ imprisonment for theft of two mobile phones. Many at the meeting sympathized with
her, saying they, too, ―knew how judges treat poor people and how they please those with money
and power‖. The audience urged the President to boldly carry on with his plans to reform the
judiciary so that reliable justice was available to all.
After listening to numerous cases of abuse of law and power in the judiciary, the President
explained the core tenets of his judicial reforms agenda and assured citizens that ―I do have the
strong will and I am committed to fulfilling my pledge‖. However, he cautioned of problems on the
way. ―Frankly speaking, I am not fully convinced that authorities of some organizations share the
same belief and conviction. Those who acted irresponsibly are protected by legal provisions, and
their wrong actions are concealed from scrutiny. A thorough overhaul is needed, not patchwork
corrections and we are working on our draft law,‖ he said, urging legal and judicial officers to
respect human rights in the discharge of their duties.
Source: Montsame
CIVIL SOCIETY READY TO LAUNCH MOVEMENT
Mr. J. Batzandan and Mr. O. Magnai have said that after a relatively long period of enforced quiet
following the July 1 incidents, the more than 100 civil society movements have begun coordinating
their programs. They think the time has come for civil society to press for substantial changes in
the body politic.
The Government ―has no firm direction or control‖, even though the country is poised for a
breakthrough with the anticipated expansion of the mineral sector, after years of talk. Civil society
monitoring is crucial as the coalition government is stuck in its own contradictions. ―Oligarchs
flourish as 80% of population have to do with less than 10% of the GDP,‖ the two said, and added,
―There is no other way but to launch a struggle for the people‘s rights.‖
Source: Onoodor
13. LACK OF CONSENSUS STALLING DECISIONS, REGRETS MP
MP Kh.Badamsuren has revealed that as part of its determination to develop a transparent and
responsible mining sector, essential for Mongolian prosperity, the Government has set up several
working groups to prepare comprehensive and stable legal frameworks, policy documents, and draft
investment agreements. There are also smaller groups, consisting of MPS, Ministry officials,
academics and specialists in the related field, focusing on individual items like copper, precious
metals, coal and iron. Another group has the task of coordinating mining production with railway
transportation, energy and city planning policies.
Mr. Badamsuren said the groups have to contend with paucity of reliable data, lack of model
concepts and absence of a national consensus. Most decisions are favored or opposed on political
grounds and disputes are thus made to linger. Citing the railway issue as an example, the MP said
no progress can be made on the decision the Government has already taken, nor is anybody willing
to suggest a fresh debate. The political parties reached an agreement but ―now the situation is like
a battle between the private sector and the state‖. He favored a Parliamentary discussion early in
the Spring session so that construction on the railway can begin without further delay.
Source: Undesnii Shuudan
GOOD THINGS HAPPEN WHEN AMERICANS, MONGOLIANS MEET, SAYS AMBASSADOR
U.S. Ambassador to Mongolia Jonathan Addleton told a reception attended by people representing a
variety of businesses and non-profits in Atlanta, ―When Mongolians and Americans meet, good
things often happen.‖ He emphasized the importance of business relationships between the U.S.
and Mongolia. ―If you go back to the early 1900s, it's quite fascinating that there were American
businessmen in Ulaanbaatar basically dealing in furs and the tea trade,‖ he said, adding, ―It's really
amazing what's happened in the last 25 years.‖
He cited one company, Wagner Asia Equipment LLP, Mongolian agent for several U.S. companies
including Caterpillar Inc. ―Wagner started off 10 years ago with USD10 million in business. They
expect to do about USD100 million this year.‖
With large deposits of coal, copper and gold, Mongolia represents a promising growth market, and
―some people say that over the next five or 10 years, Mongolia could rank among the fastest
growing economies in the world‖, Dr. Addleton said. Business links help ensure that the U.S.-
Mongolian relationship remains strong, he added. ―In my view, long-term relationships do depend
on the depth of the commercial relationships,‖ he said.
Source: globalatlanta.com
PILOT PROJECT PLANNED ON ALLOWANCE DISTRIBUTION
Minister of Labor and Social Welfare T. Gandhi has reported that around 91% of the 1.3 million
citizens identified to receive MNT 70,000 each from the Human Development Fund has claimed the
money. They were mostly children, the elderly, and people with disabilities. Prime Minister S.
Batbold wants the distribution of the allowance to the rest of the population to begin as soon as
proper arrangements can be made. Accordingly, it has been decided to start payment in one sub-
district in Ulaanbaatar and one ‗bag‘ in every province on an experimental basis. Reports from
there on irregularities and duplication of citizens‘ ID cards will be considered before the
distribution program is extended.
Source: Zuunii Medee
GEOLOGISTS’ MEETING TO FOCUS ON MONGOLIA’S POTENTIAL
The Mineral Exploration Roundup - 2010 conference comes at an important time for Mongolia with
the country‘s mining industry set to take off. The three-day conference begins on March 12 and will
examine the geology and exploration of ore deposits in Mongolia and their genesis, geotectonics and
metallogeny. It will also focus on the energy mineral resources of Mongolia, including uranium and
coal.
There will be plenty of opportunity for discussion about the changing nature of the country‘s
exploration and mining potential. The event is organized by the Ministry of Mineral Resources and
Energy, Mineral Resources Authority of Mongolia, Mongolian Society of Economic Geologists, The
Geological Society of Mongolia, Mongolian University of Science and Technology, and the National
University of Mongolia.
Last year‘s Roundup was attended by more than 700 national and foreign geologists working
throughout Mongolia.
Source: www.monseg.mn, www.geos.mn
14. ADVANCE DEPOSITS FOR ENVIRONMENTAL RESTORATION
Perturbed by frequent cases where mining companies are not doing enough environmental
restoration work, the Ministry for Nature, Environment and Tourism has decided to ask miners to
deposit 50 percent of the amount earmarked for such restoration in advance every year. The money
will be kept in a special account.
Source: en.News.mn
FEE PARKING FROM MAY
Ulaanbaatar will have fee parking lots in 11 downtown regions from May. The proposed rate is MNT
200 per hour. The lots will be in areas which draw the most traffic such as Sukhbaatar Square and
major trading centers.
Source: en.News.mn
ULAANBAATAR TO HAVE ITS INDEPENDENCE SQUARE
The Metropolitan Governors‘ Council has approved the suggestion of Mayor G.Munkhbayar that
Yalalt Square in front Chandmani center of Chingeltei district will be spruced up and renamed
Independence Square. According to the mayor, there is an Independence Square in every country‘s
capital city and he wanted Ulaanbaatar to have one in the 100th
anniversary year of the National
Independence Revolution and the 90th
anniversary year of the People‘s Revolution.
The area that is currently Chandmani center was where Ulaanbaatar was established in 1778. It was
also a major spot where people fighting for freedom and independence gathered together. The
square is considered a symbol of freedom and democracy. MNT 500 million will be spent on
decorating the Square in the coming weeks.
Source: en.News.mn
MONGOLIAN CRANES SEEN IN SOUTH INDIA AFTER SIX YEARS
Migratory Demoiselle cranes from Russia and Mongolia have arrived in large numbers in the southern
Indian state of Karnataka for the first time since 2003. They measure between 85–100 cm in length
and have a 155–180 cm wingspan. Mr. Gopi Sunder, a Research Associate with the International
Crane Foundation who has studied the birds, says they fly right above the Himalayas to an altitude
of 4,875-7,925 meters. ―Many predators like Golden Eagles on mountain cliffs wait to feed on these
birds, thus it is ecologically significant that so many of them should reach south India this year,‖ he
said.
In another Mongolian connection, two bar-headed geese tagged by well- known wildlife veterinarian
Martin Gilbert have also made it to Karnataka. They were tagged in Mongolia to study how avian
influenza spreads.
Source: The Deccan Herald
ANNOUNCEMENTS
2nd
ANNUAL MONGOLIA-ASIA INVESTMENT FORUM, MARCH 25, THE WESTIN BEIJING
Euromoney Conferences invites you to apply for your free place at the 2nd
Annual Mongolia-Asia
Investment Forum at the Westin Beijing on March 25.
The Panels: Investing in Mongolia‘s Mining Assets; Investing in Infrastructure to support the mining
industry; Developing Mongolia‘s capital markets; Mining Supply Chain Management; Investing in
Mongolia‘s property market. Click here for a copy of the latest agenda.
BCM will again partner with Euromoney on organizing this Forum, to be held in Beijing for the first
time, to strengthen cooperation and trade relationships between Mongolia and the rest of Asia.
There are still a few opportunities left for exhibiting at the conference. Euromoney Conferences
welcomes any organizations who wish to take advantage of this opportunity to showcase their
company to this high profile audience. For further information please contact: Nick Wakefield on
+852 2842 6939 or nick.wakefield@euromoneyasia.com
___________________________________
CHANGE IN MINETECH DATES
The Mongolian National Mining Association has announced that the dates of the Minetech Expo have
been changed from April 2-3 to April 9-10. The venue, Misheel Expo, remains the same.
15. ___________________________________
“MM TODAY” ON MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is
scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‘s BCM
NewsWire.
SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended March 5, 2010, trading activity on the Mongolian Stock Exchange (MSE) totaled
1.3 million shares with 31 companies traded. Total market value of transactions was MNT 620.9
million. Total market capitalization of the 347 stock companies listed on the MSE was MNT 778.6
billion, and increased by MNT 65.2 billion or 9.1% from Feb 26, 2010.
The Top-20 Index increased by 972.37 points or 12.9% compared to the previous week, closing at
8,507.89 points. MSE Composite Index increased by 436.75 points or 12.0% compared to the
previous week, closing at 4,076.15 points.
Most active stocks traded were: Khukh gan (605,000 shares), Hai Bi Oil (260,000 shares), Genco tour
bureau (121,300 shares), Naco tulsh (97,800 shares), and Moningbar (61,700 shares).
Major share price percentage gainers were: APU (43.9%), Shivee ovoo (31.2%), Gobi (20.8%), UID
18.6%, and Genco tur buro 15.4%.
Major share price percentage losers were: Mongol savkhi (15.0%), Sor (11.0%), Zoos goyol (6.3%), HB
oil 5.6%, and Mongol shevro 4.4%.
16. 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]
February 28, 2010 *8.3% [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]
CURRENCY RATES – March 11, 2010
Currency name Currency Rate
US dollars USD 1,423.91
Euro EUR 1,929.75
Japanese yen JPY 15.82
British pound GBP 2,122.05
Hong Kong dollar HKD 183.51
Chinese yuan CNY 208.60
Russian ruble RUB 47.87
South Korean won KRW 1.26
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.
