June 14 2013

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 278 – June 14, 2013
NEWS HIGHLIGHTS:
Business
 Mongolian miners' operation at Tavan Tolgoi may foil int'l bidding;
 Launch of Mongolian copper mine on hold pending authorization;
 USD 122 million Salkhit wind farm to open in June;
 Khushuut not a strategic deposit, says MEC;
 Modun Resources wins preferred coal briquettes supplier to government;
 Xanadu revises terms of Oyut Ulaan acquisition;
 India firm completes test delivery of Mongolian iron ore;
 CPS Securities and Indian Ocean Capital merge;
 Petro Matad raises USD 5 million through share issue to Petrovis;
 Golomt Bank named “Employer of the Year 2012”;
 Good news from Mongolia’s equity market;
 Major Drilling cuts staff by 38% as weak market hurts earnings;
 Rio Tinto coal assets garner interest from Indian, Chinese firms.
Economy
 USD 31 million paid for first Chinggis bond interest payment;
 New mortgage plan to encourage homeownership in UB;
 Tugrik strengthens;
 Fuel prices fall by MNT 50;
 MNT 40 million in mortgages offered to civil servants;
 Putting global food on the map;
 Mongolia protects the Snow leopard;
 Dutch DTAs lead to huge revenue losses in developing countries;
 Cash woes top “business risk” list for minerals companies;
 New mining companies to launch in Kazakhstan;
 Copper falls to 1-month low on China, Central Bank fears;
 China’s economic shift not bad news for all commodities, bank argues;
 China’s tough policy choices.
Politics
 Tony Blair strikes gold in Mongolia;
 Presidential candidates speak on OT;
 Mongolia enlists 300 observers for June election;
 “Warriors Tyrannosaurus” debuts in UB;
 China grants CNY 30 million in aid;
 Canada provides Mongolians with new visa options;
 Finland’s speaker visits Mongolia;
 India, Mongolia engage in joint military exercises;
 Japan, Mongolia agree to cooperate over N. Korea's abductions;
 Mongolia joins international environment group;
 Former education minister accused of corruption;
 MP’s wife under investigation;
 Former health minister arrested for corruption;

2.  Former Petroleum Authority chairman suspected of bribery and extortion;
 Court rules against MPP claim for Lenin Museum;
 AFCCP prohibits the use of foreign currencies;
 MIAT scandal suspects convicted and sentenced;
 Farmers protest excessive use of imported powdered milk.
ECONOMIC INDICATORS
 MSE Top 20 Index by market Capitalization;
 Foreign-listed Companies with Mongolian Assets;
 Inflation;
 Central bank policy rate;
 Currency rates.
*Click on titles above to link to articles.
SPONSORS
Khan Bank Major Drilling
International SOS
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Wagner Asia Equipment Oxford Business Group
Mongolian National Broadcasting Breakthrough PR
BUSINESS
MONGOLIAN MINERS' OPERATION AT TAVAN TOLGOI MAY FOIL INT'L BIDDING
State-owned Erdenes Tavan Tolgoi LLC plans to start mining operations at the country‘s Tavan
Tolgoi coal mine, a move that would raise uncertainty over the international bidding for rights to
developing one of the world‘s largest coal deposits.
Yaichil Batsuuri, Chief Executive Officer of Erdenes TT, told Kyodo News on Saturday that the miner

3. plans to start and continue operations at the mine with other Mongolian companies until the
selection of a successful bidder. Batsuuri said the Mongolian government has approved the tentative
operation by the Mongolian companies and that they plan to produce 2.6 million tons of coal by the
end of this year. The operation could start as early as this month, and the coal produced is
expected to be exported to China.
The Mongolian side has apparently chosen to prioritize early development of the mine instead of
waiting for the completion of the international bidding. But concerns are spreading over how the
operation by the Mongolian side on its own would affect the bidding procedure.
An official at a Japanese company said the move may lead to cancellation of the international
bidding. The bidding procedure for the Tavan Tolgoi mine began in December 2010, and the major
Japanese trading houses Itochu Corp. and Marubeni Corp. are among the bidders.
Source: Global Post
LAUNCH OF MONGOLIAN COPPER MINE ON HOLD PENDING AUTHORIZATION
The first export from Mongolia‘s $6.2 billion Oyu Tolgoi copper and gold mine is being held at a
later date than expected as project developers await final authorization from the government for
the launch of export.
A number of journalists were contacted to express their interest in a ceremony mooted for 14 June.
That event appears not to be taking place. Oyu Tolgoi LLC said nothing had changed from previous
statement that it was expecting first exports before the end of June. The opening of Oyu Tolgoi is
vital for Mongolia as it is expected to make up a third of the country‘s economy by 2020. The mine
is also a crucial source for growth for operator Rio Tinto as it aims to ease its dependence on iron
ore and cast off small unprofitable assets.
Mongolia‘s Prime Minister Norov Altankhuyag had planned to attend the event at the mine, a
government spokesperson said. A spokesperson for President Tsakhia Elbegdorj had said it was
unlikely he could attend because of activities related to his re-election campaign. Elbegdorj, who is
seen as more supportive of foreign investment than opposition candidates, is expected to win the
poll, scheduled for 26 June.
―We‘re hopeful come the second half of the year people will become a bit more positive on
Mongolia,‖ said Sam Spring, chief executive of Kincora Copper Ltd., a copper explorer with a
project near Oyu Tolgoi. ―Hopefully, Oyu Tolgoi ramping up and the completion of the project
financing helps, as does the presidential election.‖
Source: Reuters
USD 122 MILLION SALKHIT WIND FARM TO OPEN IN JUNE
Mongolia is scheduled to start operations at its first wind farm this month, a USD 122 million project
that is the biggest power plant in 30 years.
The 50-megawatt facility developed by Clean Energy LLC, a subsidiary of Newcom Group, using 31
turbines from General Electric Co. is located on a wind-raked ridge about 45 miles southwest of
Ulaanbaatar. Sengee Enkh-Amgalan, the company‘s Chief Executive Officer, plans to officially start
the plant on 20 June. The government has set a target to get 20 percent to 25 percent of its energy
from renewable by 2020, up from less than 2 percent currently. Coal supplies about 80 percent of
the nation‘s energy.
―In order to meet the 20 percent goal, the government really has to support these kinds of
enterprises,‖ said Enkh-Amgalan, adding that he expects the government will subsidize the costs of
wind power in order to make it affordable.
Clean Energy says the wind park will save 122,000 tons of coal, 1.6 million tons of water, and will
eliminate 180,000 tons of carbon dioxide emissions each year. The government agreed to a power
purchase agreement with Clean Energy, which will receive 9.5 cents a kilowatt-hour for power from
the wind for the lifetime of the project. Enkh-Amgalan said the power station can produce 140
million to 160 million kilowatt-hours per year, which gives the plant revenue of USD 15 million a
year. Turbines at the plant will last about 20 years, he said.
A similar project in China would cost 30 percent less said Enkh-Amgalan, due to the vast distances

4. and lack of roads in Mongolia, where most highways are little more than vague jeep tracks across
the desert. Clean Energy Asia and Tokyo-based SoftBank Corp. have 200,000 hectares of land in the
Gobi Desert and plan to construct a wind park with a capacity of 200-megawatts to 300-megawatts,
said Enkh-Amgalan. Wind speeds in Salkhit average 8.2 meters per second, while Gobi Desert speeds
exceed nine meters per second. The Gobi has the potential to yield 11 gigawatts per year of solar
energy and 300,000 megawatts of wind power, Enkh-Amgalan said.
Source: Bloomberg
KHUSHUUT NOT A STRATEGIC DEPOSIT, SAYS MEC
Mongolia Energy Corp. (MEC) has responded to news reports that the Khushuut mine has been
declared a strategic deposit, saying the matter is still under debate by Parliament.
It came to the Source‘s knowledge on 3 June that there were Mongolian news articles reporting the
proposal regarding strategic deposits had been made by the Mongolian government. Upon inquiries
made with a Mongolian legal advisor, the Source learned that the government had made the
following progress recently:
―The government of Mongolia has decided to submit to Parliament a draft resolution which will
amend the attachments of Resolution No. 27 dated 6 February 2010 regarding ‗Declaration of
Certainty Deposits as being Strategically Important.‘ The resolution draft states that the deposits
pertaining to the coal of Khushuut and Tsadamnuur, gold of Gatsuurt, and rare elements of
Khalzanburgedei, Lugiin Gol, Mushgia Khudag and Khotgor are classified as mineral deposits of
strategic importance.‖
The Minerals Law states that a mineral deposit is of strategic importance if it has a potential impact
on national security, economic and-or social development of the country at regional and/or national
levels, or that it is capable of producing greater than 5 percent of the gross domestic product (GDP)
of any given year. Under the said Minerals Law, the size of the government participation is
determined largely by the level of state funding which had been provided for the exploration and
development of any deposit, with the government of Mongolia entitled to participate up to 50
percent in the event that there has been state funding of such deposit and up to 34 percent if such
deposit was discovered with private funds.
If a strategic deposit is ruled, Mongolia may negotiate for up to 50 percent of its interest. Even if
the Khushuut coal mine is designated as a strategic deposit by Parliament, such designation would
not automatically grant the government to participate into the mine or allot any shares of MoEnCo,
the MEC subsidiary holding the license, to the government. The government would also need to
discuss with MoEnCo for the terms of the arrangement.
Source: Mongolia Energy Corp.
MODUN RESOURCES WINS PREFERRED COAL BRIQUETTES SUPPLIER TO GOVERNMENT
Modun Resources Ltd. is on the road to commercializing the wholly-owned Nuurst coal project in
central Mongolia, with the company‘s subsidiary (Modun Resources LLC) being selected as a
preferred supplier of coal briquettes to the Mongolian government.
Modun was one of four tenderers through the Mongolian National Committee for Air Pollution
Reduction that sought domestic and international expressions of interest to establish a new cleaner
fuel production facility. The next step for Modun is that the key terms and conditions of the product
sale and purchase agreement will be negotiated directly with the Mongolian government, with the
briquette plant to have an initial name plate capacity of 200,000 to 250,000 tons per year.
―Discussions with the Mongolian government about formalizing this arrangement into an off-take
agreement for the supply of Nuurst coal briquettes will commence immediately,‖ said Rick Dalton,
Managing Director of Modun.
Mongolia hopes to be using the cleaner coal by November 2014 for its commitment to reducing
pollution, which has come to the center of President Elbegdorj‘s re-election campaign. Modun was
selected as one of four preferred suppliers as part of the government‘s Clean Air Initiative to
reduce air pollution in Ulaanbaatar. The company‘s successful proposal was based on using thermal
coal from its Nuurst project and creating briquettes using a binderless coal briquetting process,

5. which after being independently tested in Australia and Mongolia, has resulted in a substantial
increase in energy end decrease in emissions.
Source: Proactive Investors
XANADU REVISES TERMS OF OYUT ULAAN ACQUISITION
Xanadu Mines Ltd. will pay less upfront for the acquisition of the Oyut Ulaan copper and gold
porphyry project in Mongolia in return for a modest cash payment, some shares, and issuance of
performance share options.
Drilling by Xanadu has also intersected thick zones of gold rich porphyry copper mineralization from
released results. The porphyry copper project covers a large district of around 40 square kilometers
comprising numerous mineralized porphyry centers. The agreement struck with Temujin Mining
Corp. replaces an earlier agreement in May 2012 and its initial implementation which was delayed
by changes in Mongolia‘s foreign investment law.
Parliament recently approved amendments to the law allowing the acquisition to proceed. The
consideration for a 90 percent interest in the project located in the South Gobi region is now a
payment of USD 600,000, the issue of 5 million Xanadu shares and the issue of performance share
options once a JORC resource of 900,000 tons of contained copper equivalent is achieved at the
project. The Oyut Ulaan mining license has been granted and Xanadu has earned a 25 percent
interest. The completion of the transaction is conditional upon approval by Xanadu‘s shareholders
and the government.
Source: Proactive Investors
INDIA FIRM COMPLETES TEST DELIVERY OF MONGOLIAN IRON ORE
India Globalization Capital (IGC) Inc. announced the achievement of a milestone in the execution of
its strategic plan of establishing a shipping hub at the border of Mongolia and China to provide iron
ore to its customers in China and source raw materials.
―Importing from Mongolia has important strategic value,‖ said Ram Mukunda, chief executive of
IGC. ―Our beneficiation plants process low-grade ore into high-grade ore. It has been our plan to
diversify the source of raw materials, from India, and Mongolia, to include grades of ore that are of
substantially better quality than our reserves. This test delivery has been a big step for IGC in
delivering on the opportunities before us.‖
Mukunda said process would help produce higher-grade ore that would deliver higher levels of iron
ore processing. Processing of ore brought base level iron content from 2 to 3 percent to 66 percent.
Comparatively Mongolian and Indian ore having a base level of between 40 and 50 percent.
Source: India Globalization Capital
CPS SECURITIES AND INDIAN OCEAN CAPITAL MERGE
Australian-based stockbroking firm CPS Securities and Indian Ocean Capital have executed a merger
agreement to create arguably Perth‘s leading boutique stockbroking securities and investment firm.
The merged entity will be rebranded CPS Capital Group.
The merger is effective immediately, with the merged entity to offer full stockbroking and
corporate advisory services to clients domestically and internationally, as well as focusing on its
investment banking strategy. CPS Capital Group will have an advisory and marketing team of 29 in
Australia and overseas, together with an additional 13 administrative and compliance team
members. It is expected to significantly grow its advisor team, both locally and nationally, in the
coming months and also add a dedicated research offering. It will also build on the already strong
affiliations the two firms have individually established in Mongolia, Singapore, Hong Kong, United
Kingdom, South America, Toronto, and the United States.
―It‘s a very exciting time for our clients and staff, as both companies bring a wealth of experience
and expertise to the table, which when combined cement our position as a significant stockbroking
and corporate advisory business in [Western Australia],‖ said Tony Cunningham, managing director
of CPS Capital Group. He added ―CPS Capital Group will be focused primarily on clients interested
in and companies operating in the resources sector or in the junior to mid-cap space, a part of the

6. market that in our view will see significant value creation in the future.‖
Source: CPS Capital Group
PETRO MATAD RAISES USD 5 MILLION THROUGH SHARE ISSUE TO PETROVIS
Petro Matad Ltd., the parent company of a group concentrating on oil exploration, as well as future
development and production, in Mongolia, has raised USD 5 million before expenses.
This has been done through the issue of some 90.6 million ordinary shares of USD 0.091 each to its
largest shareholder, Petrovis. The new shares have been issued to Petrovis at an issue price of 3.56
pence per ordinary share. The net proceeds of the funding, along with the company‘s existing cash
reserves of approximately USD 2.1 million, will enable Petro Matad to undertake field operations
during the current 2013 field season.
As previously notified to the market, the company is in the process of conducting a farm out. The
company has had a number of international companies visit the farm-out data room. It is now
closed and Petro Matad is continuing discussions with interested parties. It is anticipated that the
company will be in a position to make a further statement on the progress of this transaction during
the third quarter.
Source: Stock Market Wire
GOLOMT BANK NAMED “EMPLOYER OF THE YEAR 2012”
Golomt Bank LLC was ranked first in Mongolia Talent Network‘s ―Employer of the Year 2012‖ report,
which ranked the most preferred companies by employees.
Employees throughout Mongolia voted for the poll, with nearly 1,500 from 272 companies sharing
their views. The top employers were determined using a combination of the number of votes and
strength of the agreement with the following statements, ―My Employer Deserves to be Employer of
the Year.‖ Points were allocated per respondent based on their individual responses, with two
points added for the response ―Strongly Agree,‖ one point added for ―Agree,‖ no points added for
―Neither Agree nor Disagree,‖ onepoint subtracted for ―Disagree,‖ and two points subtracted for
―Strongly Disagree.‖
Golomt was voted as ―Top Employer 2012,‖ driven by positivity of response, but also an
overwhelming level of participation from Golomt employees. Employees were particiuarly positive
about the company‘s people management, in addition to team and company atmosphere and
promotion and advancement.
―I think our employees are so motivated because working in this company allows them to develop in
their professional fields, in a good work environment, with long-term stability, and a fair chance of
promotion and advancement, earning fair salaries and bonuses, and with good community
strategy,‖ said Golomt Bank‘s human resources director.
Wagner Asia Equipment LLC and XacBank LLC also performed extremely well, earning them the
second and third places, respectively.
Source: Mongolia Talent Network
GOOD NEWS FROM MONGOLIA‟S EQUITY MARKET
Several Mongolian focused equities stepped out of the shadows last week with a range of
announcements setting the stage for increased activities in the second half of 2013. Prophecy Coal
Corp., Xanadu Mines Ltd., and Undur Tolgoi Ltd. all released positive information regarding their
activities in country. This included signals of impending investment and acquisition in prospective
projects.
Prophecy reported that its Chandgana coal project in northern Mongolia signed a 25-year coal-
offtake agreement with Prophecy Power Generation LLC. It followed up the announcement with
more positive new on Friday stating that they had closed a final tranche of financing through
private placement for a total contribution of USD 1.14 million.
Xanadu also brought good news to the market with an update on work at the Oyut Ulaan copper-
gold project. With legislative changes allowing the transaction to be processed, Xanadu has gained
a consideration for 90 percent interest in the project. The consideration is subject to a cash

7. payment of USD 600,000, plus 5 million Xanadu shares, and milestone payments upon the
completion of a 900,000-ton JORC resource. This follows a May announcement when Xanadu
announced its pursuit of terms with Temujin Mining Corp. to acquire the project through the
purchase of Temujin‘s wholly owned subsidiary Vantage LLC.
Lastly, Undur Tolgoi announced the acquisition of interest in the Ochiriin Bulag gold prospect.
Through an initial investment of USD 125,000, Undur Tolgoi acquired 5.05 percent of Anya-2 Sarl, a
private Luxembourg company. Anya holds 66 percent of Western Minex LLC, a private Mongolian
company that owns the Ochiriin Bulag project. Two additional tranches of USD 300,000 will follow
60 days and 120 days after both companies have received approval from their boards of directors
and respective regulatory bodies.
Source: Mongolian Investment Banking Group
MAJOR DRILLING CUTS STAFF BY 38% AS WEAK MARKET HURTS EARNINGS
Canadian mine drilling equipment and services provider to Mongolian mining and exploration
operations Major Drilling Group International Inc. on Thursday said it had cut its weekly payroll staff
by 38 percent to conserve funds, as mining companies slash exploration budgets.
―In February, due to the uncertainty around economic matters impacting the mining market, some
customers delayed or cancelled their exploration drilling plans. In a number of jurisdictions,
uncertainty as to the policies of host governments or issues of land tenure also had a compounding
impact on this quarter‘s results. These factors, combined with the fact that sources of funding for
junior mining companies remain limited, have led to significantly decreased activity in certain
regions,‖ Chief Executive Officer Francis McGuire said during an analyst conference call on
Thursday morning.
He added that, in light of the slowdown in activity, the company had undertaken a review and
restructuring of certain operations and had implemented reductions of salaried employees. The
market was expected to remain depressed during the rest of the financial year, especially in the
gold sector.
Major Drilling also said it would cut senior executives‘ salaries and directors‘ fees, as it aimed to
reduce general and administrative costs by 20 percent from their peak in the first quarter.
Source: Mining Weekly
RIO TINTO COAL ASSETS GARNER INTEREST FROM INDIAN, CHINESE FIRMS
Rio Tinto PLC moved closer to selling about USD 3 billion in coal assets, receiving expressions of
interest from three potential bidders, a person familiar with the matter said.
Coal India Ltd., China‘s Shenhua Group Corp. and India‘s Aditya Birla Group have indicated that
they would bid for the Australian properties, the person said. First-round bids are due this week.
Rio Tinto in April hired Deutsche Bank AG to sell stakes in several mines that produce thermal coal,
which is used for producing energy. The stakes include up to 29 percent in the New South Wales
Coal & Allied unit, which Rio owns with Japan‘s Mitsubishi Corp. The Anglo-Australian company also
is selling interest in tint Clermont and Blair Athol thermal-coal mines in neighboring Queensland.
Global mining companies are responding to weak demand for commodities such as coal by selling
smaller or less-profitable assets. BHP Billiton and Mitsubishi are trying to sell the Gregory Crinum
metallurgical-coal complex in Queensland. And Brazil‘s Vale SA is seeking to sell minority stakes in
two undeveloped coal deposits in Queensland. Coal India, the world‘s biggest coal company by
output, has said it wanted to secure offshore coal supplies to satisfy increasing demand from
consumers such as Indian power producers. Coal India has set aside about USD 1 billion for foreign
acquisitions for the fiscal year through next March. Currently, its only assets outside India are two
coal blocks in Mozambique.
Source: Wall Street Journal

8. ECONOMY
USD 31 MILLION PAID FOR FIRST CHINGGIS BOND INTEREST PAYMENT
Economic Development Minister Nyamjav Batbayar reported that Mongolia had paid USD 31 million
for its first interest payment on last year‘s USD 1.5 billion Chinggis bond.
According to the agreement made between the Bank of Mongolia and the government, the Central
Bank is responsible for paying interest payments before funds generated from the bond sale are
allocated. Interest is due every six months following the bond‘s sale. Batbayar did not comment on
where the Central Bank would take funds for this first payment.
The government invested its money in securities with average interest of some 4.624 percent, with
MNT 900 billion given to commercial banks to hold for 12 months for 7 percent interest. The Central
Bank was thus responsible for making up the difference between interest owed for this payment and
interest generated from the government‘s investments.
The government looks to have transferred funds of USD 450 million for the power plant, railroad
and road infrastructure. The government has made plans to for spending of all but USD 347 million.
USD 50 million has been allocated to the Tavan Tolgoi power plant project, MNT 200 million for a
road network connecting Ulaanbaatar with six additional provincial capital as well as roads in the
capital. Funds not yet paid include USD 68.8 million for development of Mongolia‘s ger districts,
USD 27.7 million for green house complexes at Mongolia‘s 21 provincial capitals, USD 16.7 million
for investment into the textile industry, USD 45 million for a factory to produce construction
materials, and USD 14 billion for housing projects. Other planned funding includes MNT 570 billion
for investment into the wool and cashmere industry and MNT 200 billion for a dairy plant to be
located near Ulaanbaatar.
Source: Undesnii Shuudan
NEW MORTGAGE PLAN TO ENCOURAGE HOMEOWNERSHIP IN UB
The government approved a long-awaited mortgage plan.
The scheme offers 20-year mortgages for 80 square meter apartments that have been commissioned
as well as previously built apartments. The government has promised that the mortgages would be
available to everyone who held a permanent job and could be paid off in 20 years.
The mortgages will be offered through every commercial bank in Mongolia through agreements
made by the Bank of Mongolia. Monthly payments will not exceed a household‘s income by 45
percent. Homeowners already holding mortgages will have the opportunity to convert to this new
type of mortgage after seven months.
The government said MTN 360 billion would be loaned to construction companies before the
issuance of mortgages. Central Bank President Naidansuren Zoljargal said the mortgage plan would
increase monetary circulation by 30 to 40 percent in Mongolia. In an effort to prevent inflation, the
main concentration of funds will be directed into the Social Insurance Fund.
Source: Eurasia Capital
TUGRIK STRENGTHENS
The Mongolian tugrik appreciated by 0.61 percent in a week‘s time, reported the Bank of Mongolia
last week on Thursday.
The tugrik sold U.S. dollars to commercial banks at a rate of MNT 1,433.84 per dollar. The tugrik
appreciated by 0.61 percent from a week before after long-term depreciation against the dollar.
The Central Bank posted an official currency rate of MNT 1,433.43 at the auction‘s close.
Source: Eurasia Capital
FUEL PRICES FALL BY MNT 50
Prime Minister Norov Altankhuyag and Mining Minister Davaajav Gankhuyag announced on Friday
that fuel prices had fallen by MNT 50 per liter.
The officials made their announcements during a meeting at a Magnai Trade fuel station.
Altankhuyag credited the Mining Ministry and Petroleum Authority for the price reduction, saying,

9. ―This will also make it possible for the start of other beneficial projects.‖
Petroleum Authority Director G. Olziiburen said the price reduction would save people some MNT 4
billion a month. Currently Mongolia consumes some 80 million liters of fuel a month.
Source: Montsame
MNT 40 MILLION IN MORTGAGES OFFERED TO CIVIL SERVANTS
The Housing Mortgage Corporation will provide up to MNT 40 million in mortgages to government
workers for the government‘s 4,000 Homes program.
Currently 1,251 state workers have submitted applications for the loans, with 404 requesting a total
of MNT 12 billion for apartments. The remaining MNT 33.8 billion for the 847 others is soon to be
decided upon.
The Ministry of Finance plans to release a MNT 6 billion bond for a second round of financing for the
program. A third round of financing is also planned.
Source: Business-Mongolia.com
PUTTING GLOBAL FOOD ON THE MAP
Researchers hailing from Mongolia, India, Turkey, western Europe, New Hampshire, Maryland and
Northern Arizona University have just started mapping the world‘s crops in the finest detail ever.
Ultimately, about 20 people will spend the next five years using satellite data to piece together
what grows where around the globe, and whether it is irrigated or rain-fed. A handful of the
primary researchers met at the U.S. Geological Survey this week to plot how they will proceed with
a USD 3.5 million NASA grant.
The general idea is to look at where the Earth grows food now, and where it might come from in
the future, when water supplies are more heavily demanded. Worldwide population could grow by
about two billion from now to 2050, the United Nations projects. One worry: Where will food
originate for all these people, particularly a growing global middle class with a taste for diverse and
meaty foods?
―Everybody‘s concerned about food security going forward because of population growth,‖ said
Prasad Thenkabail, a research geographer with the U.S. Geological Survey in Flagstaff and a lead
investigator.
So researchers are going to take sophisticated software (software that can match areas of corn, for
example, and realize it‘s seeing a crop), and land-based surveys, and make maps of what the world
looked like in 2010. This would allow governments and industries to see what is growing where,
what crops have multiplied or shrunk over time in a region, and to plan where best to invest limited
aid money for crops in Africa, for example. The data will also feed into bigger forecasts about what
could happen amid climate change, with agriculture serving as both a major producer and victim of
the gases driving climate change.
Source: Arizona Daily Sun
MONGOLIA PROTECTS THE SNOW LEOPARD
The Ministry of Environment and Green Development hosted a seminar last week on Thursday to
discuss ways to further strengthen snow leopard conservation.
More than 30 experts, scholars and officials from Mongolia‘s environmental protection departments,
the World Environment Foundation, the Snow Leopard Conservation Foundation and other institutes
discussed conservation measures and shared experience from other countries. Experts said that,
due to habitat loss, poaching conflicts with humans and other reasons in recent years, the snow
leopard had been listed as endangered.
Snow leopards are targeted by hunters for their beautiful fur. Mongolia‘s southern Gobi region is
implementing a project to protect the species. The Snow leopard is mainly distributed in China‘s
Xinjiang region, Mongolia, and other countries in the Central Asia plateau.
Source: Xinhua

10. DUTCH DTAS LEAD TO HUGE REVENUE LOSSES IN DEVELOPING COUNTRIES
The Netherlands serves as a conduit country for international tax dodging, leading to huge revenue
losses in developing countries, a Dutch research agency stated in a report published Tuesday. Last
year, Mongolia annulled its tax agreement with The Netherlands following claims that the deal
allows multinationals to avoid paying tax.
According to the report, published by SOMO under the name ―Should Netherlands sign tax treaties
with developing countries?‖ Dutch double taxation treaties (DTAs) lead to huge revenue losses in
developing countries because they reduce taxation on passive income.
―This is in contradiction to the Dutch government‘s policy coherence for development,‖ SOMO said
in a statement.
Research showed that out of the 36 researched countries, 28 countries together lose 771 million
euros (USD 1.023 billion) on dividend and interest tax income alone every year. But SOMO thinks
that the total revenue loss resulting from Dutch DTAs will be much higher. ―This is because tax
avoidance through profit sharing with the use of royalties and capital gains are not included in the
same calculations,‖ the statement said.
―The Dutch governments‘ claim that treaties are beneficial for developing countries is simply not
true. This report shows that Dutch tax treaties have a seriously negative impact on poor countries‘
revenue and that there is no evidence that these tax losses are compensated with an increase in
investment as a result of having DTAs,‖ said SOMO researcher Katrin McGauran.
State Secretary of Finance Frans Weekers and a majority of the House recently denied that the
Netherlands is a tax haven. According to Weekers, Dutch tax treaties with developing countries
have a beneficial effect because they provide more investment.
Source: Xinhua
CASH WOES TOP “BUSINESS RISK” LIST FOR MINERALS COMPANIES
Capital liquidity has surpassed resource nationalism and skills shortages to be the biggest risk for
mining and metals companies according to a report by Ernst & Young. Mining is Mongolia‘s biggest
industry, with the Oyu Tolgoi copper-gold mine alone expected to represent a third of its gross
domestic product.
Capital allocation and access to capital topped the business risk list, up from eighth position last
year. The findings were contained in an Ernst & Young report entitles, ―Business Risks Facing Mining
and Metals 2013-2014. Ernst & Young global mining and metals leaders Mike Elliott said capital
dilemmas threatened the long-term growth prospects of larger miners, and the short-term survival
of cash-strapped juniors.
―The rising business risks that are top of mind with mining and metals CEOs and boards today are
being driven by the need to protect returns and manage the interests of varied and often competing
stakeholders,‖ Elliot said. He added, ―This is in stark contrast to just 12 [to] 18 months ago when
fast-tracking production was still top of the agenda and capacity constraints defined the key
business risks.‖
Margin protection and productivity improvement was placed second in the report, up from fourth
position last year, and resource nationalism was considered the third biggest risk after topping the
list in 2012. Skill shortage was placed fifth, down from second position. The report said a decline in
commodity prices in 2012 cost inflation and falling returns had created a mismatch between larger
companies‘ long-term investment plans and the short-term expectations of shareholders, who are
increasingly demanding higher dividends.
Source: Mining Journal
NEW MINING COMPANIES TO LAUNCH IN KAZAKHSTAN
Mongolia‘s neighbor to the west, Kazakhstan, plans to launch around 20 new companies in the
mining sector, despite a global slowdown that is affecting the industry. Minister for Industry and
New Technologies Asset Issekeshev announced 12 June.
Speaking at the IV Astana Mining & Metallurgy International Congress, Issekeshev said the new
enterprises would be launched as part of the ongoing state industrialization program.

11. ―In Kazakhstan, mining and metals sector is one of the key sectors of the economy, accounting for
about 9 percent of GDP, about 18 percent of the total industrial production and almost a quarter of
exports,‖ Issekeshev told delegates.
Source: BNE
COPPER FALLS TO 1-MONTH LOW ON CHINA, CENTRAL BANK FEARS
Copper hit its lowest in more than a month on Tuesday, pressured by worries that central banks
could soon start scaling back on stimulus measures and concerns about the outlook for demand from
top consumer China.
Three-month copper on the London Metals Exchange ended at USD 7,065, down from a close of USD
7,230 on Monday. It earlier touched its lowest since early May at USD 7,032 a ton intraday trade.
Copper‘s fall echoed other markets, as concerns over China added to worries that central banks
could soon start tightening the ultra-loose monetary policies that have fuelled rapid gains in asset
prices this year. World shares fell and yields on riskier European debt rose on Tuesday after the
Bank of Japan‘s decision not to follow up its USD 1.4 trillion stimulus program announced in April.
Also adding pressure to prices was data at the weekend from China, the world‘s biggest consumer
of copper, showed unexpected weakness in May trade and domestic activity struggling to pick up.
―There‘s really no incentive for anybody to look to the buy side at the moment. In the short term,
the weak Chinese data was clearly a negative,‖ said Wiktor Bielski, an analyst at VTB Capital.
Keeping prices in check were concerns about the outlook for supply of the metal used in power and
construction.
―A lot of the big production increases over the next few years are now in jeopardy because of
financial pressure on miners, or environmental problems for example,‖ said Matt Fusarelli of
Sydney-based consultancy AME Group.
More supply is expected to hit the market, however. Global miner Rio Tinto PLC plans to start
exporting copper from the USD 6.2 billion Oyu Tolgoi mine in Mongolia on Friday, marking the
opening of a mine that will eventually make up one-third of the country‘s economy.
Source: Reuters
CHINA‟S ECONOMIC SHIFT NOT BAD NEWS FOR ALL COMMODITIES, BANK ARGUES
Not all commodities will lose out should China succeed in changing its growth model from one based
on resources-intensive infrastructure investment towards one supported by higher levels of
domestic consumption, new research by Barclays indicates. China gobble up more than 90 percent
of the mineral resources extracted from Mongolia.
China‘s twelfth five-year plan, endorsed in March, prioritizes economic rebalancing and the current
poor commodity market sentiment is often attributed to this transition, owing to the fact that the
giant Asian economy is the biggest consumer of many of the world‘s commodities. However,
Barclays commodities research Managing Director Kevin Norrish says usage intensity of several
commodities, including gasoline, nickel and aluminum, could grow robustly as a result of China‘s
proposed transition. By contrast, silver, platinum and several agricultural commodities are
vulnerable, while the usage-intensity downside for commodities such as coal, steel, copper and zinc
is expected to be relatively modest.
Norrish believes that the prevailing weak sentiment is probably driven more by cyclical factors than
the structural issues being cited, including China‘s economic shift and perceptions that the supply-
side risks have dissipated.
―In my opinion, many in the commodities business are confusing the cyclical and the structural,‖ he
said, noting that commodities have performed poorly historically when growth and interest rates
are low.
A new commodities outlook statement by the bank argues that it is seeing signs of a ―return of
fundamentals‖ and a breaking free from established ties with other asset classes. A modest
differentiated recovery is being forecast for 2013, while Norrish and his team believe commodities
are on the ―brink of a great rotation in price performance.‖
Source: Mining Weekly

12. CHINA‟S TOUGH POLICY CHOICES
China‘s monthly data releases continue to show a trend of slowing growth and economic activity.
Given that we are now in the last month of the second quarter, it is likely that the second quarter
GDP growth figure is going to continue the disappointment.
Already expectations are building for the government to ride to the rescue once again, but a
slowdown in headline growth and especially investment is almost certainly necessary if economic
rebalancing is to get seriously underway. As China moves into its famous Dragon Boat Festival
holiday, a slew of data has already been released covering the month of May. The picture being
painted is not particularly encouraging for those expecting an imminent recovery in China‘s
headline GDP rates. Most disturbing of all perhaps was China‘s trade data for May. Year-on-year
growth in exports fell well short of expectations at only 1 percent whilst imports (which would
theoretically rise faster as China rebuilds towards its much heralded consumption-driven economic
model) actually fell by 0.3 percent.
The trade slowdown is not as bad as it seems though, or to put it more accurately, the previous
months‘ strong performance was not as strong as it seemed. A crackdown on the recent anomalies
in Chinese trade data, now believed to have included large amounts of false invoices due to the
misuse of ―bonded areas‖ and special trade finance channels by entrepreneurs engaging in hidden
capital movements and ―carry trade,‖ has probably returned the data to a much more reliable
picture.
Despite having made statements stressing that the government is willing to endure lower growth
rates, there is building expectations (read: ―hope‖) after this latest batch of data that Li Keqiang
and his administration are planning to provide some sort of stimulus again. Since the government
has proven much more effective in the past at stimulating investment-driven growth than
consumption, there are some hard choices to be made.
Source: The Diplomat
POLITICS
TONY BLAIR STRIKES GOLD IN MONGOLIA
Former Prime Minister Tony Blair has negotiated a contract to advise the Mongolian government just
as the country strikes it rich from a vast copper and gold mine in the Gobi desert.
Blair‘s diplomatic skills will be needed in a country undergoing rapid economic transformation. The
Mongolian government has been in dispute with Rio Tinto PLC over the operation of the country‘s
biggest mine. Sources have suggested Blair was called in to mediate between the two although Blair
and Rio Tinto both denied that was true. The addition of Mongolia to Blair‘s portfolio will bolster
the income of Blair‘s Government Advisory Practice, which operates as part of Tony Blair
Associates, ―the umbrella organization‖ for Blair‘s ―commercial operations.‖ The Source‘s
investigations have shown Blair and a team of consultants are now paid millions of pounds to advise
governments in Kazakhstan, Kuwait, Colombia, Brazil and has a deal to work in Albania as well.
It is estimated that Blair, who owns eight homes in the United Kingdom, has earned in the region of
GBP 50 million (USD 78.5 million) since leaving Downing Street in 2007. He makes his money through
his consultancy work, speeches and paid posts with JP Morgan, the investment bank, among others.
Blair points out a large amount of his money is ploughed back into philanthropic work including two
international charities he set up after leaving office. Blair refuses to reveal the full extent of his
government consultancy empire, but the deal in oil and gas-rich Kazakhstan alone is said to be
worth as much as GBP 13 million (USD 20.4 million). No figure has ever been confirmed.
Blair travelled with his entourage to Ulaanbaatar on 22 March for a two-day visit. He was
accompanied on the trip by John Grogan, a former Labour MP from Selby and who is now chairman
of the Mongolian-British Chamber of Commerce. During the trip, Blair met with President Tsakhia
Elbegdorj and Prime Minister Norov Altankhuyag. A senior Mongolian official confirmed that Blair
had pitched his firm‘s services to the government during the visit in March. The official said: ―He
offered technical assistance to the Cabinet Secretary for his delivery unit concept. That‘s from his

13. years as prime minister, a structure to implement policy reforms.‖ The official said the matter
would be discussed again after the 26 June presidential election.
Last night a spokesman for Blair said, ―We will be working with the Mongolian government, helping
them deliver their reform program.‖ But the spokesman insisted Blair‘s company would not make
millions of pounds of profit, saying ―The cost of the program is to cover a full-time, highly qualified
team living and working in the country. It is done on the same basis as the many other consultants
that work there.‖
Source: The Telegraph
PRESIDENTIAL CANDIDATES SPEAK ON OT
The candidates for Mongolia‘s June 26 presidential election have made their statements to how
they would approach the Oyu Tolgoi investment agreement as president.
Incumbent President Taskhia Elbegdorj said he could not state any conclusions on the investment
agreement or make any promises. Mongolian People‘s Party presidential candidate has promised to
improve the Oyu Tolgoi Investment Agreement with an option [not further explained by the source]
that is mutually beneficial and balanced. Mongolian People‘s Revolutionary Party Naatsag Udval has
stated that the investment agreement was passed under corrupt intentions for election purposes.
She said as president she would resolve issues concerning the Oyu Tolgoi mine and other strategic
deposits with the best possible outcomes for the people of Mongolia.
Source: Zuunii Medee
MONGOLIA ENLISTS 300 OBSERVERS FOR JUNE ELECTION
Over 300 observers from 32 countries have been granted certificates for short-term observation
during the election of the president.
According a report by the General Election Committee, foreign observers will visit electoral districts
in the cities and provinces and observe the printing process of ballot papers and programming of
the voting machines. Observers are expected to take note of advertising practices, voter
participating as well as the preparations made in the lead up to the election.
Source: News.mn
“WARRIORS TYRANNOSAURUS” DEBUTS IN UB
Hundreds of spectators and reporters gathered at Sukhbaatar Square Saturday to have their first
look at an exhibition of ―Warriors Tyrannosaurus‖ fossils returned from the United States.
The Mongolian fossils had been smuggled into the United States, but they would soon become a
valuable heritage of Mongolia, Tsedevdamba Oyungerel, minister of culture, sport and tourism, said
at an opening ceremony. In order to effectively protect the country‘s abundant dinosaur fossils
resources, the government has decided to build a Mongolian dinosaur museum, with the temporary
exhibition open until September, said the minister.
A large number of Mongolia‘s dinosaur fossils have been smuggled into Europe, North America and
Asia. More than 120 pieces of them are expected be returned to their homeland in the near future.
Source: Xinhua
CHINA GRANTS CNY 30 MILLION IN AID
China has agreed to a grant of CNY 30 million (USD 4.9 million) to Mongolia.
The agreement for the aid was signed by Economic Development Minister Nyamjav Batbayar and
Chinese Ambassador Wang Xiaolong. The aid was promised during last month‘s visit by Chinese State
Councilor Yang Jiechi [Yang was visiting to discuss development strategies for Mongolia‘s rails –ed].
―China has been helping Mongolia and the aid would be useful for the improvement of the lives of
Mongolian people,‖ said Wang.
Source: Unuudur
CANADA PROVIDES MONGOLIANS WITH NEW VISA OPTIONS
The Canadian embassy announced plans to provide Mongolians with long-term multiple-entry visas.

14. Canadian Ambassador Gregory Goldhawk announced the visa during a meeting with Foreign Minister
L. Bold. Goldhawk said Canada would provide 10-year visas to Mongolian civilians with normal
passports and four-year multiple-entry visas to diplomats. Goldhawk said it was a joy to see the
number of Mongolians heading to Canada grow each year and that the introduction of the new long-
term visas was an important step to encouraging travel.
The two officials also discussed measures to increase bilateral relations and cooperation between
their countries. This year Canada and Mongolia celebrate 40 years of diplomatic relations and the
fifth year anniversary of the establishment of the resident Canadian Embassy in Ulaanbaatar.
Source: News.mn
FINLAND‟S SPEAKER VISITS MONGOLIA
Parliament Speaker Zandakhuu Enkhbold met Monday with his counterpart from Finland Eero
Heineluoma during an official visit to Mongolia.
The Mongolia-Finland inter-parliamentary group, set up in 2012 with 11 members and led by MP N.
Battsereg, plays a big role in activating of the collaboration between the parliaments, he said, and
added that Mongolia‘s Parliament desired widened political and economic ties. Battsereg also noted
that Finland had sent its representatives, headed by the justice minister, to the seventh ministerial
conference of the Community of Democracies, lauding Finland as a leading country of education and
science.
―Mongolia is willing to study Finland‘s experience in the education and on innovation
development,‖ said Battsereg.
Heineluoma said Finland would like to collaborate with Mongolia in mining and agriculture. He also
inquired about the structure of Mongolia‘s court system as well as the state of agriculture.
Source: Montsame
INDIA, MONGOLIA ENGAGE IN JOINT MILITARY EXERCISES
In an effort to develop international cooperation and joint training for U.N. peacekeeping missions,
the Indian Army is participating in a joint exercise with its Mongolian counterpart from 10 to 24
June.
The Indian Army is represented by 28 personnel, who are participating in several joint counter-
insurgency and counter-terrorism operations, in Mongolia. Codenamed ―Nomadic Elephant – 2013,‖
the exercise will focus especially on the needs of the peacekeeping missions under the U.N. flag
and will help in increasing the coordination and understanding between troops of the two nations.
Defense cooperation and relations between India and Mongolia have seen a steady growth over the
last decade with the first joint exercise in 2004. For the last few years, the joint drills are being
held every year. In 2012, the joint training was held at Belgium, in Karnataka.
Source: Business Standard
JAPAN, MONGOLIA AGREE TO COOPERATE OVER N. KOREA'S ABDUCTIONS
Foreign Minister Luvsanvandan Bold and his Japanese counterpart Fumio Kishida agreed on Tuesday
to cooperate in dealing with North Korea, including its abductions of Japanese nationals decades
ago, the Japanese Foreign Ministry said.
Mongolia hosted talks between senior diplomats of Japan and North Korea on the thorny bilateral
issue in Ulaanbaatar last November. In a separate meeting in Tokyo, Japanese Prime Minister Shizo
Abe and Bold confirmed plans to deepen economic cooperation between the two countries, with
Abe saying he hopes Mongolian Prime Minister Norov Altankhuyag will visit Japan soon, possibly in
fall, to advance economic exchanges, according to a participant.
The two sides also agreed to work together to build a ―strategic partnership,‖ following Abe‘s trip
to Mongolia in March, during which he agreed with Mongolian leaders to advance cooperation on
mineral resource development and the environment. Mongolia borders China and maintains
diplomatic relations with North Korea, with which Japan does not have diplomatic ties, due partly
to the abduction issue. With the whereabouts of Japanese nationals abducted by North Korea in the
1970s and 1980s still unclear, Abe has vowed to resolve the long-standing issue while he is prime

15. minister, and bring back all abductees.
Source: Kyodo News International
MONGOLIA JOINS INTERNATIONAL ENVIRONMENT GROUP
Environment and Green Development Minister Sanjaasuren Oyun signed an agreement for Mongolia
to join the Global Green Growth Institute during the 2013 Global Green Growth Summit in South
Korea.
Over 500 representatives of governments, non-government organizations and private entities
attended the summit where she signed the agreement. The institute is a new international
organization driven by needs of emerging and developing countries. It is designed as an open global
platform to support experimentation and collective learning by developing countries seeking to
leapfrog the resource-intensive and environmentally unsustainable model of industrial development
pioneered by advanced economies in an earlier era.
Source: Info Mongolia
FORMER EDUCATION MINISTER ACCUSED OF CORRUPTION
MP Yo. Otgonbayar has been accused of extortion by an anonymous source from an investigation.
Otgonbayar stands accused of demanding a MNT 230 million bribe in order for a Nalaikh school to
pass state inspection during his tenure as education minister. The source said that after he refused
to pay the bribe he was beaten by a gang of individuals on Peace Bridge and had his car taken.
Source: Udriin Sonin
MP‟S WIFE UNDER INVESTIGATION
The wife of MP and former Education Minister Yo. Otgonbayar is being investigated as an accessory
of white-collar crime.
At a press conference last Friday, City Deputy Prosecutor Ts. Batbold announced O. Erdensolongo
was under investigation by the Anti-economic Crime Division of Police and is under the authority of
the Attorney‘s Office. Investigators are looking at transactions made by Erdenesolongo in her 21
bank accounts at Golomt, Zoos, Toriin Bank, and Ulaanbaatar Bank.
Batbold also corrected erroneous news reports, saying the Bank of Mongolia checks all information
coming from commercial banks and inspections were being made to determine the source of
payments, their legitimacy, and if taxes were paid for the transactions and funds in question.
Otgonbayar has not yet made a request for visitation with his wife.
Source: Undesnii Shuudan
FORMER HEALTH MINISTER ARRESTED FOR CORRUPTION
Police arrested former Health Minister N. Khurelbaatar upon his arrival at the Chinggis Khaan
International Airport from abroad on 7 June.
Khurelbaatar is under investigation by the Special Investigation Unit of the Prosecutor General and
Interpol for accepting bribes and embezzlement.
―I hope that the legal and inspection organizations find me not guilty,‖ said Khurelbaatar during his
arrest. ―The truth will overcome all. Maybe there are political motivations.‖
A safe containing MNT 600 million in bills denominated in Chinese yuan was stolen from the home of
Khurelbaatar‘s son. Investigators believe that money may have been attained through illegal means.
Source: Unuudur
FORMER PETROLEUM AUTHORITY CHAIRMAN SUSPECTED OF BRIBERY AND EXTORTION
A former Petroleum Authority Chairman has been accused of accepting bribes from PetroChina
Daqing Tamsag and extortion.
Former Chairman D. Amarsaikhan has been accused of receiving bribes to ensure that a production
sharing agreement was permitted for the extraction of petroleum on the Menengiin steppe of
Dornod Aimag. The agreement provides the Chinese investors 76 percent of profits and the
Mongolian government 24 percent. A recent audit shows, however, that between 2005 and 2012 the

16. former chairman allegedly received 1 percent of Mongolia‘s 24 percent.
The unaccounted for 1 percent was automatically transferred to a bank account in Hong Kong,
where no taxes would be due, for money laundering. Further investigation found allegations that
Amarsaikhan demanded funds from a Korean firm in return for the delivery of cheap fuel supplies to
Mongolia.
Source: Udriin Sonin
COURT RULES AGAINST MPP CLAIM FOR LENIN MUSEUM
The Chingeltei District Court on Wednesday ruled against the Mongolian People‘s Party‘s (MPP‘s)
claim of ownership over the Lenin museum.
The judge panel delivered its decision pointing out that the museum building must be used in
accordance with its museum specifications, not as a commercial building. The panel removed any
claim of ownership by the Mongolian People‘s Party, which has used the building for its own
commercial use for years.
The hearing for the property was postponed several times because the defense representing the
MPP failed to arrive at court. However, the judge decided it would not delay the matter any further
and held the hearing anyway. The government has selected the Lenin Museum for the site of a now-
planned dinosaur museum, which would house the recently repatriated Tyrannosaurus baatar from
the United States.
The Lenin museum was built using government funds under the authority of the Ministry of Culture
in 1974. Since the abolishment of the Historical Institute of the Mongolian People‘s Revolutionary
Party, the now renamed MPP has used the building for private rental [-The current MPRP was a
break off sect from the MPP formed in 2010 and has no claim over the property –ed].
Currently, 200 exhibits are found in the Paleontological Center of the Science and Technology
Academy in addition to 90 exhibited fossils in Europe, 25 in Asia, and 150 at the Natural History
Museum.
Source: News.mn
AFCCP PROHIBITS THE USE OF FOREIGN CURRENCIES
The Authority for Fair Competition and Consumer Protection (AFCCP) has introduced a new rule that
all domestic currency may be used for transactions.
AFCCP delivered a notice to companies last month that foreign currencies could not be used for
transactions. The new regulation addresses complaints received by AFFCP that paying fees in a
foreign currency was in violation of Mongolian law. The law will restrict people from paying for
services such as public transportation and school tuition in foreign currencies.
O. Magnai, chief of the authority, said inspections had been made to ensure that the law was being
followed and that punitive measures would be taken against any person or entity found in violation
of the new regulation.
―If there are any violations regarding the rule, a civilian can complain about it to the Authority for
Fair Competition and Consumer Protection,‖ he said. We will take direct measures.‖
Source: News.mn
MIAT SCANDAL SUSPECTS CONVICTED AND SENTENCED
A judges‘ panel sentenced the former directors of MIAT Mongolian Airlines accused of embezzling
funds from a War Risk Insurance account to between 10 and 14 years.
Former Director B. Erdenbileg received a sentence of 14 years and one month, B. Bat-Erdene got 12
years and two months, Ts. Orkhon got 11 years, former Vice Director Ch. Khorolsuren got 13 years
and one month, Ch. Khorolsuren‘s brother and former director of Mongolian Airlines Group Ch.
Suuritogtok got 10 years and one month, and former branch director of Branch No. 6 of Golomt
Bank G. Saranchimeg got 11 years and one month. The judges‘ panel sentenced six out of seven
suspects believed to be involved with the embezzlement. The company‘s former accountant, N.
Gantumur, will receive a separate hearing because his attorney failed to appear at trial.
The court ordered the seizure of assets of those convicted. It also ordered that charges against all

17. other suspects related to this hearing be dropped. That included charges against Orkhon‘s wife
Tsetsegmaa and Erdenebileg‘s brother Mandakhbayar because no evidence was provided by the
prosecutor on behalf of his allegations of guilt.
Additional investigations are still pending, however, for D. Sugar, former chairman of the State
Property Committee, S. Batkhishig, a former member of the Constitutional Court, and civil servant
N. Galt, who allegedly established a false insurance company in Japan.
Source: News.mn
FARMERS PROTEST EXCESSIVE USE OF IMPORTED POWDERED MILK
The Mongolian Milk Farmers Union held a peaceful demonstration at Sukhbaatar square at 10 a.m.
on 10 June.
Over 500 demonstrators representing 5,000 farmers were expected to attend the demonstration.
The Mongolian Milk Farmers Union claims that milk producers give them less than market price for
the milk they provide. They demanded that the government support milk farmers to increase
domestic dairy production and halt the import of powdered milk.
Estimates shows that almost 80 percent of dairy products sold in Ulaanbaatar are made from
imported powdered milk, while only 20 percent comes from local sources. The Ministry of Health
recommends 430 grams of milk per capita in Mongolia compared with the current volume of 100
grams per capita in Ulaanbaatar.
Source: News.mn
NEW MONGOLIAN LAWS
The following laws, amendments were published in the latest weekly Government bulletin. Unless
otherwise decided by Parliament, they will take effect ten (10) days after publication.
Date Laws
10.06.2013 Law on Budget - 2014 Mongolia consolidated budget, 2015-2016 budget conception
Amendments to Law on Government's Special Fund
Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish to access complete versions of the laws and regulations in Mongolian language
are welcome to email the BCM office: info@bcmongolia.org.
ANNOUNCEMENTS
COALTRANS MONGOLIA, 19-20 JUNE, ULAANBAATAR
The Coaltrans Mongolia conference will be held at the Blue Sky Tower from 19 to 20 June. BCM
members will receive a 15% discount to attend the event, please use the discount code BCM.
Coaltrans Mongolia will explore the development of coal projects in the country and offer an insight
into what level of influence Mongolia will have over future international coal prices. Join us as we
return to this exciting market for the third year, to have an impact on how this new coal frontier
evolves and cement your position as a leading player in the market.
Speakers will include Batsuuri Yaichil, chief executive officer of Erdenes Tavan Tolgoi LLC, Graeme
Hancock, president and chief representative of Anglo American Development, and Bayanjargal
Byambasaikhan, chairman of the Business Council of Mongolia.
For more information, email coaltrans@euromoneyplc.com.
___________________________________________
FUTURE MONGOLIA, 19-22 JUNE, ULAANBAATAR
The Future Mongolia international trade fair will be held at the Buyant Ukhaa Sport Palace in
Ulaanbaatar, near the Chinggis Khaan International Airport, from 19 to 22 June, 2013.
After the successful premier with nearly 100 exhibitors from 14 nations and some 4,200 visitors, we

18. cordially invite you to the second Future Mongolia. This international trade fair offers the
opportunity on an enlarged exhibition space to present modern and sustainable solutions and
responses to the present needs of Mongolia and its population.
BCM members will get 5% discount on raw space. Please contact Saruul at saruul@bcmongolia.org to
get a special discount code. For more information, visit Future-Mongolia.com.
___________________________________________
"MSE-BCM SECURITIES LAW OVERVIEW SESSION", 4 JULY, KEMPINSKI HOTEL
BCM and Mongolian Stock Exchange are organizing a "MSE-BCM Securities Law overview session"
on July 4 from 9:30 am – 12:30 pm in the "Altai" conference room at the Kempinski Hotel.
Speakers will elaborate on key items in this new Securities Law. MSE speakers will also detail the
planning to be undertaken by January 1, 2014 when the law becomes effective.
Speakers include:
- Altai.Kh, Mongolian Stock Exchange (confirmed)
- Saruul.G, Mongolian Stock Exchange (confirmed)
- Randolph Koppa, Trade and Development Bank (invited)
- Michael Aldrich, Hogan Lovells (invited)
Registration is FREE. For registration, please contact Tugi at tugi@bcmongolia.org. The first 125
members registered will be admitted. The deadline for registration is Friday, June 28.
___________________________________________
BCM FOOTBALL CUP 2013, 6 JULY - Sponsorship Package is available
BCM successfully organized the first ―BCM Football Cup 2012‖ as part of BCM‘s 5th year anniversary
on July 7, 2012. BCM would like to invite you to participate in the "BCM Football Cup 2013"
tournament which will be held on High School # 5's football field on Saturday July 6, 2013 as a team
or as a spectator.
BCM Football Cup 2013 Registration procedures:
- Will register 10 teams from BCM members by June 28 (application fee is 250,000 MNT) on a first
come, first registered basis.
- Please list each player‘s name and position at your company. Each team can have 11 or more
players named, but just 9 players including the goalkeeper on the field due to size of the field.
Note: Professional players will not be accepted.
- The competition will be among 12 teams in two Groups.
- Will announce the teams for the competition on Monday, July 1, 2013. We will have a lottery for
the groups and technical session on Thursday, July 4 with the captains of the teams.
Awards will be given to the top 3 teams, the "Most Valuable Player" and ―Most Valuable
Goalkeeper‖.
We are seeking one main sponsor/partner for this event which will have a specific sponsorship
package.
Please contact Otgoo at otgoo@bcmongolia.org and 99197985, 317027 for registration and
additional information.
___________________________________________
“MM TODAY” on MNB-TV, Friday, 19:00-19:10
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 from 19:00 to 19:10 tonight. Tune in to watch this program that reports stories from

19. today‘s BCM NewsWire.
___________________________________________
BCM‟S MINING SUPPLY CHAIN DATABASE
The new version of BCM‘s Mining Supply Chain Database is in use. Following the initiative of Oyu
Tolgoi LLC, the BCM has maintained the Mining Supply Chain Database since March 2009. It is an
honor to introduce you to the new version of the database which is totally upgraded as to its
content and use of information technology opportunities.
As of December 31, 2012 suppliers registered on the database totaled 1,405. During 2012, 251 new
supplier entities joined the Database and 236 prior supplier registrants updated their company
profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted.
We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain
Database. Please visit here for registration—FREE!
If you have any questions regarding the database, please contact 317027.
BCM WEBSITES
MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS
The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.
As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the
government website Open-Government.mn are regularly updated.
S. Oyun‘s, Minister of Environment and Green Development, presentation at the BCM monthly
meeting on May 27 has been added to BCM‘s Mongolian website, bcmongolia.org/mn/илтгэлүүд.
- Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн
бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013
The following presentations were added from "Foreign Investment in Mongolia: Challenges, Risks
and Solutions" conference (in Mongolian) on April 19 at the Kempinski Hotel organized by the
Business Council of Mongolia (BCM) and UB Risk Management Consulting:
• Гадаадын хөрөнгө оруулалтын өнөөгийн байдал, хэтийн төлөв, Төв банкны ерөнхий эдийн
засагч С.Болд, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ,
ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4 дүгээр сарын
19
• Шууд хөрөнгө оруулалтын өнөөгийн байдал, тулгамдсан асуудал, шийдвэрлэх арга зам,
Монголын Бизнесийн зөвлөлийн дэд дарга И.Сэр-Од, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ
ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага
хурал, 2013 оны 4 дүгээр сарын 19
• Үнэт цаас, хувьцааны зах зээлийн хөрөнгө оруулалт: эрсдэл, сорилт, цаашдын хандлага,
Монгол банкны Ерөнхийлөгчийн зөвлөх, санхүүгийн тогтвортой байдлын зөвлөлийн ажлын
албаны дарга Д. Ган-Очир, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ,
СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4
дүгээр сарын 19
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟,
„PHOTO GALLERY‟
On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available.
• ―Update on the issue of strategic deposits‖ by Mongolia Energy Corporation Limited
• Nick Cousyn, Chief Operating Officer, BDSec JSC, ―Gobi‘s Resort‖ at the BCM Monthly meeting

20. April 22, 2013
• Brian White, Editor, The Mongolist – ―Analyzing Mongolian Politics from the "Middle Layer", at the
BCM Monthly meeting Apr 22, 2013
• Ch. Otgochuluu, Head of Strategic Policy and Planning Department, Ministry of Mining, ―Brief
introduction on mining policy‖ at the BCM monthly meeting Apr 22, 2013
• ―The current flow of investment into Mongolia‖, S. Bold, Chief Economist, Central Bank, at the
"Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at
the Kempinski Hotel.
• ―About regulation on FDI‖, S. Javkhlanbaatar, Foreign Investment Regulations and Registration
Department Head, Ministry of Economic Development of Mongolia, at the "Foreign Investment in
Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.
• ―Legal issues of regulation of foreign investment‖, B. Amarsanaa, Academic Secretary of National
Legal Institute, at the "Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference
on April 19, 2013 at the Kempinski Hotel.
• ―Investment in stocks and equities in Mongolia: risks, challenges and trends‖, D. Gan-Ochir, Head
of Financial Stability Council, Advisor to President of Central Bank, at the "Foreign Investment in
Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.
• ―On current state of equities foreign investment‖, D. Achit-Erdene, CEO, MICC, at the "Foreign
Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the
Kempinski Hotel.
• ―Market Update‖ by Mandal General Insurance LLC
• ―Annual Report 2012‖ by International Monetary Fund
• Ruth Pulaski, Director Marketing & Development, American University of Mongolia – ―American
University of Mongolia: Integrating a Liberal Education Approach to Learning‖ at the BCM monthly
meeting, March 25, 2013
• B. Bayar, Managing Director, ELC LLC – ―Update on Legal Developments Regarding Foreign
Investment‖ at the BCM monthly meeting, March 25, 2013
• Tony Burchill, Australian Consul-General & Trade Commissioner, Austrade – ―The Business of Being
a Third Neighbor‖ at the BCM monthly meeting, March 25, 2013
Other recently added presentations:
• Dr. Brian Fisher, Managing Director, BAEconomics, "Economic Impact of draft Minerals Law" at the
Kempinski Hotel, March 18, 2013, Ulaanbaatar
• Dr. Ch. Khashchuluun, CEO of UBRM Consulting, ―Mongolia and Mining, The policy evolution:
What's the next?‖ at the Kempinski Hotel, March 18, 2013, Ulaanbaatar
• Martin Pow, Partner, Enterprise Risk Services and Learning Leader, Deloitte Onch LLC, ―Black
Swans: Fact or Fiction,‖ A different risk management philosophy at the BCM Risk Management
Working Group meeting, March 14, 2013
The following 3 presentations were added from Coal Mongolia, 21-22 February:
• ―Current state of coal sector of Mongolia and future trends‖ by Minister of Mining D. Gankhuyag at
the Coal Mongolia 2013, Feb 21, SS Convention Center, Ulaanbaatar;
• ―Economic Reform Objectives‖ by Vice Minister, Economic Development, H.E. Mr. O. Chuluunbat
at the Coal Mongolia 2013, Feb 21, SS Convention center, Ulaanbaatar;
• ―Presentation for Coal Mongolia 2013‖, Norihiko Kato, CEO of Khan Bank, Feb 21 at the SS
Convention Center, Ulaanbaatar, Mongolia.
• Presentation by Bold Baatar, CEO of Altan Dornod Mongol, ―Mongolian Mining Investment
Environment‖ at the Mining Industry Open Discussion, February 1, 2013, at Kempinski Khan Palace
Hotel.
Please note the presentations from each of the BCM monthly meetings.
The ―Mongolia Reports‖ section includes the following: - ―Selected Macroeconomic Indicators for
Mongolia, as of June 2013‖ by International Monetary Fund; ―Polit Barometer April, 2013‖ by Sant

21. Maral Foundation; ―Regional Economic Outlook: Asia and Pacific‖, April 2013 by International
Monetary Fund; ―Highlights of 2012, Mongolia‖ by European Bank for Reconstruction and
Development (EBRD); the ―Official statement of Oyu Tolgoi LLC in relation to information, data and
facts related to Oyu Tolgoi discussed during open session of the State Great Khural‖, dated 1
February, 2013‖; ―2013 Mongolia Investment Climate Statement‖, by the Economic and
Commercial Section of the U.S. Embassy; ―Mongolia Foreign Labor Force Ratio for 2013‖ by Hogan
Lovells International LLP; ―How Mongolia will perform in 2013?‖ by Mandal Asset Management;
―Mongolia Business Owner and CFO Survey result‖ by BDSec JSC; ―The fiscal regime for mining-a
way forward‖ by IMF Fiscal Affairs Department; ―Taxes for Expatriates in Mongolia‖ by
PricewaterhouseCoopers.
BCM's English website includes the ―Mongolia Business News‖ section where Mongolia Stock
Exchange: New Securities Law explained is posted and the Open Letter to Parliament and
Government is available for download.
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 5th Anniversary BCM Gala dinner on November 5.
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.
Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better
business environment in Mongolia today.
Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in
the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
http://twitter.com/#!/bcMongolia.
We have now 1,182 fans on our Facebook fans page, 1,245 connections on LinkedIn network, and
692 followers on Twitter.
Of course for news information, interviews, event photos, and announcements regarding our
organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.
BCM WORKING GROUP MEETING
The BCM Capital Markets Working Group met on Wednesday, June 12, with 18 members attending.
Howard Lambert /ING Bank/ and Nick Cousin /BDSec/ moderated the session.
New Member: Zulbayar Badral /Lehman Bush/
Participants: Anastasia Zherbakhanova/Anderson Anderson/ Erdenedelger/Khan Bank/ Anar-Erdene
J/ING/ Oyundari G/Embassy of Canada/, Shaukat Tapia/PWC/ Enerelt E /ADB/.
Speakers and topics were:
- Update on the US road show for MGG.- Nick Cousin/BCSec Chief Operating Officer/
- Securities Law highlights and overview MSE planning to Jan 1, 2014.- Saruul.G /CRO,
Mongolian Stock Exchange/
- Coking coal market for Mongolia – Dr. Graeme Hancock /President and Chief Representative,

22. Mongolia Anglo American Development LLC/
Note: Mr. Saruul`s presentation is available on BCM‘s Capital Markets Working Group web page.
Please contact: erka@bcmongolia.org
ECONOMIC INDICATORS

23. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
May 31, 2013 *9.7% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 8.4% y-o-y, Ulaanbaatar city, May 31, 2013
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]

24. CURRENCY RATES – JUNE 13, 2013
Currency Name Currency Rate
US dollar USD 1,433.73
Euro EUR 1,913.31
Japanese yen JPY 14.80
British pound GBP 2,245.58
Hong Kong dollar HKD 184.57
Chinese Yuan CNY 233.51
Russian Ruble RUB 44.29
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.