May 15 2009

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
info@bcmmongolia.org
Issue 69, May 15, 2009
NEWS HIGHLIGHTS:
Business: Standing Committee forwards to Government proposals on draft OT agreement; MPs
say OT advance payment is actually a “high-interest loan”; Tiny percentage of licenses
actually used in mining; Mining Association wants bigger role for private sector;
Mining firms should work for community development, says risk consultant; D.Enkhtur
of Anod Bank on hunger strike in jail; Khan Bank introduces internet banking for cell
phone users; Peabody completes acquisition of interest in joint venture with Polo in
Mongolia; Rio Tinto head to gauge shareholders’ mood; Rio shares drop as talk of a
rights issue grows; 21 currency exchange centers given new license.
Economy: USA noncommittal about diverting MCC grant to new projects; Government wants
better terms from Russian bank; Joint railway venture with Russia will need USD2
billion; Central Bank cuts interest rate to stimulate growth; Money supply marginally
less than in March; SMEs to get low-interest loans; Consumer sentiment down, survey
finds; Consumer prices rise 2.2 percent in a month, annual inflation rate drops to
12.5%; Government approves action program to balance budget; MPs mull banning
mining near rivers to save water sources; 26,000 companies come clean under tax
amnesty law; Energy prices will increase step by step; Ministry wants to fix minimum
wages; First phase of work on “Moscow” micro-district completed; Agricultural
equipment from Russia arrives; Savings-and-credit workers receive training; MNCCI
receives offer from Irkutsk; Crisis gives new lease of life to EBRD; Sheraton opens in
June 2011; China outpaces USA in cleaner coal-fired plants.
Politics: Friendly talks and signing of agreements mark Putin’s six-hour visit; Ministry wants
fewer students at universities; Members of band return from Moscow with no swine
flu; 121 children living in streets; More babies born, and more die, too; Mongolia ranks
29th
in childcare among developing nations; 850th
birthday of Chinggis Khaan next
year; Mongolian diplomats in Europe meet; No cars on May 31; Newspaper sales fall 3
million copies in a year.
BUSINESS
STANDING COMMITTEE FORWARDS TO GOVERNMENT PROPOSALS ON DRAFT OT AGREEMENT
The Standing Committee on the Economy last week discussed the 11 recommendations submitted by
two working groups set up to review proposals and suggestions on the draft Oyu Tolgoi investment
agreement. These were received from party groups in Parliament, individual MPs, the media, and
NGOs as well as concerned citizens. The committee decided to forward these recommendations to
the Government for consideration to be incorporated in the draft before it is submitted to
Parliament for approval. They include the following.
The draft includes references to some taxes that are new and also to some at variance with present
tax regulations, but does not explain how these would be enforced.
Both party groups in Parliament have proposed to cut the initial agreement period from 30 years to
15 years, but this can be done only after amending the current minerals law. Also, according to the
draft the initial 30-year period could be extended for two 20-year periods, thus making it possible
that the agreement will be valid for 70 years. This should be clarified.
The draft is also not clear about just when Mongolia can demand raising its 34% stake to 50%. At one
point it says this can be done after Mongolia has repaid the amount invested on its behalf, but
elsewhere it says this can be done a year after extending the initial agreement.
Read more…

2. The arrangement of the quantum of money that is to be spent by the investors as Mongolia’s 34%
share of ownership and that will be adjusted against future dividends was not of benefit for the
country. It was also not clear how the figure of USD5 billion had been arrived at as the investment
share equivalent to 34% ownership. The USD125 million advance payment to Mongolia carries too
high an interest rate considering the amount is not very big.
The area where the agreement will apply must clearly be limited to the Oyu Tolgoi copper and gold
deposit as registered in State documents and should not extend to any other area of the investor’s
exploration and extraction work, nor should the various tax waivers offered in the agreement be
allowed to be claimed for any work anywhere outside the specific deposits covered by the
agreement.
The details of the work schedule on the proposed copper smelter to be set up, its capacity, and
sources of its funding should be included in the agreement.
Since the draft says that in case any conflict arises between the English and Mongolian versions of
the agreement the former will prevail, utmost care should be taken to see that both versions are
identical in language and content and both sides must consent to regard both versions as binding.
The investor will provide regular and adequate information about the project’s negative impact on
the environment to the local people. The environmental restoration program must be transparent.
Members were critical of the poor quality of the feasibility study. The Minister of Natural Resources
and Energy, Mr. D.Zorigt, said an updated and upgraded version of the study has now been
submitted to Speaker D.Demberel.
Source: Zuunii Medee, www.news.mn, business-Mongolia.com
MPs SAY OT ADVANCE PAYMENT IS ACTUALLY A “HIGH-INTEREST LOAN”
A group of MPs told a Press conference on Tuesday that according to the draft Oyu Tolgoi
investment agreement as it stands now Mongolia will be lent USD1.7 billion to acquire 34 percent
ownership of the project and pay USD4.2 billion by 2023 to settle the debt. It will enjoy dividends
only after that. Among those who spoke to the media were the Head of the Standing Committee on
the Economy, Mr. Ts.Bayarsaikhan, the leader of a working group set up to study suggestions and
proposals about the agreement, Mr. G.Zandanshatar, and two of its members, Mr. D.Damba-Ochir
and Mr. D.Baldan-Ochir.
They refuted the popular perception that Mongolia is currently losing USD1 million a day as there is
no work on the project, saying all income would go towards repayment of loans. In this connection
they said the USD125 million which Mongolia will receive is “not so much an advance payment as a
high interest loan.”
Mr.Zandanshatar mentioned that the start of the project would have some immediate benefits.
Some 3,500 new jobs will be created and the USD125 million advance payment would help pay for
the distribution of the Motherland Treasure to elder citizens.
Read more…
Admitting that the eyes of international investors were on what form the agreement takes, the MPs
asked everybody to understand that the issue is too complex and important to be decided in any
hurry. Oyu Tolgoi has 32 million tons of copper and 1,200 tons of gold, making it three times bigger
than Erdenet. They feel it would be right to require the company to start operations in 2011 and
work with full capacity by 2014. If the company cannot do this, the contract will be void.
Source: Ardiin Erkh
TINY PERCENTAGE OF LICENSES ACTUALLY USED IN MINING
Around 5,200 exploration and mining licenses owned by 1,928 entities cover 30.2% of Mongolia’s
territory. However, the area actually under mining at the moment makes for only 0.3% of this.
Some entities hold more than 60 licenses. Around 77% of the license holders are domestic.
Asked what happens if license holders do not start work, Minister of Minerals and Energy D.Zorigt
told MPs at a recent meeting that around 10% of the licenses might be canceled in the near future.
MP D.Gankhuyag objected to the practice of raising funds in international capital markets by
pledging exploration licenses in areas where no money has been invested, but the Minister said this

3. does not contravene any law.
Source: Undesnii shuudan
MINING ASSOCIATION WANTS BIGGER ROLE FOR PRIVATE SECTOR
The Mongolian National Mining Association (MNMA) marked its 15th
anniversary last week by holding
a conference on "Investments in Mining Industry of Mongolia: Opportunities and Challenges".
According to Mr. N.Algaa, Deputy Director of the Association, in recent years the mining sector has
faced “countless problems because of frequent changes in the law”. Also neither the tax nor the
general mining policy has been consistent. The State has increased its presence in an industry
where development can come only through the activities of a strong, vibrant, and unfettered
private sector. He urged the Government to ensure stability in the mining industry by putting in
place a fair tax regime for both foreign and domestic investors. Since the “good and liberal” 1997
mining law was amended in 2006, “we in the mining sector have not been moving forward, but
actually constantly moving backward”, he said.
Source: Onoodor, Montsame
MINING FIRMS SHOULD WORK FOR COMMUNITY DEVELOPMENT, SAYS RISK CONSULTANT
Mr. Robert Johnson, director of global energy and natural resources at Eurasia Group, a leading risk
consultancy, feels mining is among the industries most vulnerable to political risk, and the global
financial crisis has added another dimension to the risk profile. However, he also sees the risks of
expropriation of mining assets and other forms of resource nationalism declining in most cases,
particularly with respect to base metals projects in frontier markets such as Mongolia. Governments
in these countries have had to soften resource nationalistic policies around forced equity transfer
and higher taxes in order to sustain investments that are at risk during the current downcycle. Gold
could be an exception given the continued high global prices.
Asked what kind of social or infrastructure projects mining firms should be pursuing, and also if
they offer any degree of protection particularly in an economic downturn, Mr. Johnson said the
single most effective political risk management tool is unquestionably community development,
both in terms of local job/revenue creation and in terms of investments in local social, educational,
and public health infrastructure. This must be complemented by a public affairs strategy that
ensures these efforts are communicated to the public as a whole. While not a guarantee, these
efforts often mitigate potential political risks.
Source: Reuters.com, www.guardian.co.uk
D.ENKHTUR OF ANOD BANK ON HUNGER STRIKE IN JAIL
Mr. D.Enkhtur, one of the founders and a former Executive Director of Anod Bank who is now in
prison, has been on hunger strike since May 5. Another senior official of the bank also in jail, Mr.
N.Davaa, is likely to join him soon. In an email sent by his brother to Web news sites under his
name Mr. Enkhtur says the bank supported 200,000 people by giving them loans, 20,000 people by
giving them employment, and contributed hundreds of billions of MNT to the state budget. “I’m
proud of my work that was recognized by awards such as Best Financier, Best Tax Payer and Best
Businessman,” Mr. Enkhtur writes. He says Anod Bank faced problems stemming from external
factors over which it had no control and also from honest mistakes by its management.
“Unfortunately, the Central Bank is treating the bank, after 17 years of close monitoring, as if we
have taken tens of billions of MNT for private use, and has put us in jail. The action against us
reminds one of the political repression of the 1930s, 1960s and 1980s.”
Ms. B.Oyunbileg, lawyer for both persons, has told media that her clients have been charged with
“causing large amounts of loss on personal considerations” and with “defrauding others and
spending their assets without authorization”, even though their responsibilities did not cover these
areas of banking work. “In other words, they did not have the authority or opportunity to commit
the crimes they are accused of,” she said. Since 1999 both held positions where they did not have
the right to buy or sell shares for the bank. They might have given an opinion but the final decision
could never be theirs.
Read more…

4. According to her, Anod Bank lent road companies MNT40 billion to be returned when the
Government paid them their dues. The Government did not do this but if it had, the bank would
not have faced such severe problems. “My clients were imprisoned because they put pressure on
the Government,” she said.
About the imprisonment itself, she said according to the law, “A person charged with a serious
crime may be imprisoned.” He may be but he does not have to be, she said, as investigation can
proceed even if the accused is not in jail. There are many considerations like the nature of the
charge, the social standing of the accused, or his health. “They are acting as if keeping a man in
jail is the only option,” she regretted.
She also charged the prison authorities with not taking good care of her clients’ health and with
hiding the fact of Mr. Enkhtur’s hunger strike for three days.
Source: www.news.mn
KHAN BANK INTRODUCES INTERNET BANKING FOR CELL PHONE USERS
Khan Bank and Skytel have jointly introduced internet banking using a cell phone. For the first time
in Mongolia any customer of the bank who is a Skytel subscriber can access the service in areas
covered by Skytel to conduct transactions any time without a computer and without having to visit
the bank. Existing internet users of the bank do not have to pay extra for this service. It features a
variety of functions including information on account balance and transaction details, and intra-
bank account transfers.
Source: www.khanbank.com
PEABODY COMPLETES ACQUISITION OF INTEREST IN JOINT VENTURE WITH POLO IN MONGOLIA
Peabody Energy has announced that it has completed the acquisition of a 50% interest in Peabody &
Polo Resources BV, a joint venture that holds Polo Resources Limited's Mongolian coal interests.
Peabody has said it will invest USD23 million in the venture that holds coal licenses throughout
Mongolia, with a significant number of licenses in the South Gobi region. Mongolia has substantial
metallurgical and thermal coal resources that are strategically located to serve the high demand in
China and other Asian markets.
Peabody, the world's largest private-sector coal company, will continue to pursue multiple business
development opportunities in Mongolia. It also maintains warrants to acquire an approximate 15%
equity interest in Polo Resources Limited. Polo is an emerging energy company focused on acquiring
and developing advanced stage coal and uranium properties in Asia and Australia.
Source: www.peabodyenergy.com
RIO TINTO HEAD TO GAUGE SHAREHOLDERS’ MOOD
The chairman of Rio Tinto Ltd will meet shareholders in the UK and Australia over the next three
weeks to test their appetite for the company's planned USD19.5 billion tie-up with China's Chinalco,
the Australia Financial Review said on Monday. Citing a "well-placed" source, the business daily said
the newly appointed Jan Du Plessis will use the trip to gauge how shareholders may vote on the
deal, before reporting back to the board by the end of May. Several major Rio investors have
complained that the Chinalco deal favors one shareholder over others. Under the plan, the Chinese
group would buy stakes in Rio's iron ore, copper and aluminum assets and spend USD7.2 billion on
convertible debt that could double its Rio stake to 18 percent. Some investors have also speculated
Rio might have to amend the deal after its shares climbed above the USD45 conversion price on the
first of two tranches of the convertible notes.
The paper said Mr. Du Plessis, who has said he would not put the planned deal to a vote unless
support was certain, would not base a decision on whether to hold a vote solely on the discussions,
but there was a chance investors will tell him that the company should opt for a rights issue instead
of the Chinalco deal.
Source: Reuters.com
RIO SHARES DROP AS TALK OF A RIGHTS ISSUE GROWS
Rio Tinto dropped as much as 5 percent on growing speculation the global miner is set to launch a
rights issue instead of selling USD9.5 billion in stock and assets to China's Chinalco aluminum group.

5. The Telegraph of Britain's, citing a recent Citigroup report, said on its Web site that "given the
avalanche of rights issues in recent weeks...the market's appetite for them and the fact that Rio's
price is over the convertible strike price, calls for a rights issue for Rio should gain momentum."
Rio Tinto has drawn up a “plan B” if the Chinalco deal, aimed at helping it pay off billions of dollars
in debts and ride out the commodities down cycle, is blocked by regulators or shareholders.
Investors have been speculating Rio might have to revise the deal since its shares in April climbed
above the USD45 conversion price on the first of two tranches of convertible notes that would be
issued to Chinalco under the deal. Australian politicians have also voiced concern about selling part
of the company to a Chinese state-owned entity, with some even running television advertisements
against the idea.
Source: Reuters.com
21 CURRENCY EXCHANGE CENTERS GIVEN NEW LICENSE
The Financial Regulation Bureau has issued licenses to 21 former exchange centers to work as non-
banking financial organizations. This follows an earlier decision to shut down all existing currency
exchange centers and give this new license to those with a minimum corpus of MNT50 million and
meeting certain other criteria. The 21 were chosen from 47 applicants and all showed reserve funds
of MNT 50-200 million.
Source: Zuunii medee
ECONOMY
USA NONCOMMITTAL ABOUT DIVERTING MCC GRANT TO NEW PROECTS
The US has given a noncommittal reply to a recent enquiry from Mongolia if the MCC grant refused
by Ulaanbaatar Railway can be diverted to new development projects. Secretary of State Hillary
Clinton’s acknowledgment of a letter from Foreign Affairs and Trade Minister S.Batbold does not say
anything about the request. She merely says Mongolia remains among the countries chosen by the
USA to receive assistance from the Millennium Challenge Account, and reiterates continued US
support to the Mongolian people in strengthening democratic institutions and in aiming for
prosperity.
Meanwhile, the Government met last week for another discussion on identifying projects for which
it hopes to get MCC funds. Five such projects are likely to be forwarded. The first is on
traumatology and prevention and control of common non-infectious diseases like blood pressure,
diabetes, throat, intestinal, breast and cervical cancer, and heart attacks and apoplexy; the second
on short- and long-term vocational training, including establishing colleges based on US community
college models; the third on developing an intensive farm program near urban centers; the fourth is
on air pollution control and production of clean energy; and the last to widen a road between
Ulaanbaatar and Darkhan in 2010-12.
The Foreign Affairs and Trade Ministry has denied “rumors that Mongolians have refused US aid” and
has asserted that three of the four MCC-funded projects are on track. These relate to property
rights, vocational training and healthcare and education. The Minister has written to the MCC Board
of Directors explaining the background to the case of the railway project and the Ministry says the
US Government “fully understands the Mongolian side’s intention to look for alternatives”. The MCC
Board will meet on June 17.
Source: www.gogo.mn, en.News.mn, The Ministry of Foreign Affairs and Trade
GOVERNMENT WANTS BETTER TERMS FROM RUSSIAN BANK
Asked before Russian Prime Minister Vladimir Putin’s visit what Mongolia needed most of its
northern neighbor, Finance Minister S.Bayartsogt said the USD300 million credit from Russia has got
stuck because the Agricultural Bank of Russia wanted the Mongolian Government to stand guarantee
for the money it would give to Mongolian commercial banks, but the Government would not do so
unless the Russian bank offered better terms.
Minister of Road, Transport, Construction and Urban Development Kh.Battulga expressed the hope

6. that Russia would confirm its proposed investment of USD1.5 billion in the railway. Since 1990, only
the Mongolian side has been spending money and its investments to date add up to USD130 million
in rail road. Some third party could also be involved in railroad construction projects in the Gobi
region.
Source: Undesnii shuudan, Zuunii Medee
JOINT RAILWAY VENTURE WITH RUSSIA WILL NEED USD2 BILLION
Mr. L.Purevbaatar, Deputy Chief of the Railway Authority, a Government implementing agency, has
told media that the Government is currently negotiating with the Russian Railway Co. on
establishing a joint venture that will have two specific goals. The first is to build a 920-km new
railway between Tavan Tolgoi and Zuunbayan, and the other is to modernize Ulaanbaatar Railway.
According to preliminary estimates USD2 billion will be needed for the two projects.
Mr. Purevbaatar said once the funds were found for the joint venture, work on setting up the
infrastructure will begin.
Source: Ardiin Erkh
CENTRAL BANK CUTS INTEREST RATE TO STIMULATE GROWTH
The Central Bank reduced on Tuesday its interest rate from 14 to 12.75 percent. Its President, Mr.
L.Purevdorj, told journalists that with the rate of inflation coming down to 12.5 percent in April
from 20.7 percent in January (year-over-year), and with exchange rates expected to stabilize, it is
now time to stimulate economic activity and put more money in the market. He hoped commercial
banks would begin lending at lower rates, but knew this would not happen immediately “as banks
have to meet their own compulsions”.
Mr.Purevdorj said there would be no change in the quantum of reserve funds commercial banks are
required to have. “Our policy is to help commercial banks expand and reduce the number of small
banks,” he said.
Source: en.News.mn
MONEY SUPPLY MARGINALLY LESS THAN IN MARCH
The Central Bank reports that money supply (broad money or M2) in April totaled MNT 2,400.6
billion, MNT12.7 billion or 0.5 percent less than in March, and MNT66.1 billion or 2.7 percent less
than in April 2008. A growth in quasi-money was the main reason of an increase in money supply by
MNT81.7 billion or by 3.5 percent over the figures in the beginning of 2009.
At the end of April, currency issued in circulation reached MNT355.6 billion, up by MNT17.3 billion
or 5.1 percent over March 2009, and by MNT11.5 billion or 3.3 percent over April 2008. Outstanding
loans amounted to MNT2,580.2 billion, less by MNT91.5 billion or 3.4 percent than in March, and
more by MNT143.7 billion or 5.9 percent over April 2008.
Source: www.mongolbank.mn
SMEs TO GET LOW-INTEREST LOANS
MNT3.8 billion will be given as loans to small and medium enterprises under an agreement signed
between the Ministry of Food, Agriculture and Light Industry and Mongol Post, Xac, Zoos, and
Capitron banks. MNT4.6 billion has been lent to 570 individuals and companies under this program
since 2006. Local authorities, implementing banks, and small and medium entrepreneurs all asked
for more. MNT2.7 billion or 78% of the total loan volume this time will be used in the provinces,
while the rest will be disbursed to companies and individuals in Ulaanbaatar. The interest rate will
be 1% per month and repayment time is up to 2 years.
Source: www.gogo.mn, Niigmiin toli
CONSUMER SENTIMENT DOWN, SURVEY FINDS
A survey of 500 consumers representing different sectors conducted by ACI Mongolia has found that
the consumer sentiment indicator stands at 43.8 which is negative territory. The indicator has a

7. scale of 0-100 and only a reading above 50 implies positive sentiment. As many as 83.3% of the
respondents said the increase in consumer goods prices has hit them hard and considered the weak
MNT to be the main cause. About 1/3 thought the economic situation would keep deteriorating
throughout 2009.
The overall employment situation in the past few months was stable, apart from seasonal jobs,
including in construction and mining, and consumers expected it to remain so. Their faith in the
banking sector is not too strong, with 37.9% of the respondents saying saving money with banks was
no longer safe. Amidst general pessimism about the general economy 32.5% anticipated positive
developments in the mining and related industries in 2009. Buying plans were mostly on hold, with
52.4% of all respondents without any decided spending plans in the coming months. The number of
people planning to buy a home or a car has come down significantly in the past 3 months. The ACI
Consumer Sentiment Index is published once each quarter.
Source: www.fma.mn
CONSUMER PRICES RISE 2.2 PERCENT IN A MONTH, ANNUAL INFLATION RATE DROPS TO 12.5%
The national consumer price index rose 2.2 percent in April 2009 over the March figures. The
biggest monthly price increase, of 4.4 percent, was in the food and beverage group. But the annual
inflation rate dropped to 12.5 percent from 16.3 percent in March (year-over-year), a dramatic
improvement from its peak rate of 34 percent in August 2008.
Source: Montsame
GOVERNMENT APPROVES ACTION PLAN TO BALANCE BUDGET
A special meeting of the Government on Tuesday approved the draft action program to balance the
budget and reduce deficits that will be presented to the World Bank, the Asian Development Bank
and the Government of Japan before they agree to give credit to Mongolia. The draft will now be
discussed at the related standing committees before negotiations begin.
The program details the various measures to be followed to ensure proper expenditure planning,
implementation management, enhance people's trust in the financial sector, determine the most
effective mining policy, protect the poor, and to execute a master plan for the improvement of ger
areas.
Source: Ardiin Erkh, Montsame
MPs MULL BANNING MINING NEAR RIVERS TO SAVE WATER SOURCES
Various views were offered when Parliament last week discussed the draft law seeking to annul all
licenses given to mining and exploring operations near rivers and forest areas. According to Mr.
B.Bat-Erdene, one of the nine initiators of the draft, it will not affect strategic deposits but is
aimed at other mines at such locations that threaten the ecological balance. He suggested some
compensation to companies that have taken care of the environment when their licenses are
withdrawn. At the same time he proposed penalties for those who have not.
MPs were worried about how many licenses would have to be rescinded and how much
compensation would have to be paid. No definite information on either was available but some
feared as much as 70 percent of mining and 30 percent of exploration licenses would be cancelled
if the draft becomes law. Of the 46 members present, 35 favored further discussion of the draft in
view of the fact that 850 streams, 1,181 of 3,347 recorded lakes, 2,277 of the 9,306 recorded
wells, and 14 percent of the 429 medicinal water sources have dried up.
Source: Udriin Sonin
26,000 COMPANIES COME CLEAN UNDER TAX AMNESTY LAW
According to the National Tax Authority approximately 26,000 companies have taken advantage of
the tax amnesty law that came into force on May 1 last year. A substantial amount of money in
owed taxes has been collected even after claims of MNT 7 billion against 360 companies were
waived as part of the amnesty.
Source: www.news.mn

8. ENERGY PRICES WILL INCREASE STEP BY STEP
A senior official of the Energy Regulation Office has said electricity prices are planned to be
increased step by step from the present MNT66-68/kw. They will cost MNT 90/kw from July 15 and
by 2012 it could be MNT100 or more. Heating prices will also rise by 40% in the next two years.
Talking to journalists attending a recent workshop on energy sector finances, he said Mongolia has
enough coal to produce electricity, but everything else to do with power generation has to be
imported. As the MNT gets weaker, the price of everything goes up. Power companies are facing
severe problems, losing MNT3.89 billion in 2007, MNT24.41 billion in 2008, and MNT 20.5 billion in
the first quarter of this year.
Source: Odriin sonin
MINISTRY WANTS TO FIX MINIMUM WAGES
The Ministry of Social Welfare and Labor has sat with employers to discuss its plans to fix minimum
wages at MNT650 per hour or MNT108,000 per month. This could vary from trade to trade. The goal
of the exercise is to encourage employers to use local labor and also to help domestic labor to earn
more. The number of foreign workers in Mongolia has risen from 5,000 in 2002 to 37,000 today, with
China providing 87% of them, Russia 3% and South Korea 2%. Most of them are in the construction
and mining sectors.
Source: Montsame, Business-Mongolia.com
FIRST PHASE OF WORK ON “MOSCOW” MICRO-DISTRICT COMPLETED
With six apartment buildings coming up, the first phase of work on the "Moscow" residential micro-
district in Ulaanbaatar has been completed. The second phase will also have six such buildings and
three of them are already under construction. The project is a joint undertaking between the cities
of Ulaanbaatar and Moscow and is governed by an agreement updated by the two Mayors last
March. A high-level team from the Russian company responsible for the construction was in
Ulaanbaatar recently to discuss future financing and specific sites for the next buildings to be
erected.
Source: Montsame
CRISIS GIVES NEW LEASE OF LIFE TO EBRD
Eastern Europe's financial firestorm has swept away questions about the future of the European
Bank for Reconstruction and Development (EBRD) and replaced them with worries about whether it
has enough funds. The global financial and economic crisis that has engulfed the countries within
the EBRD's region, expanded in recent years to include Turkey and Mongolia, has reinvigorated the
London-based development bank set up at the end of the Cold War to help former communist
economies adjust to free markets.
With newfound purpose, the EBRD is stepping up investment to unprecedented levels, aiming to
spend up to 7 billion euros to help these countries face their biggest economic challenge since the
fall of the Berlin Wall 20 years ago. It is also contributing 6 billion euros to a 24.5 billion euro two-
year package led by the World Bank and the European Investment Bank for the region. The
adequacy of its response and whether the EBRD has sufficient resources will be the likely topics of
discussion when its 60-odd shareholders meet in London on May 15-16.
Source: Reuters.com
SHERATON OPENS IN JUNE 2011
The Sheraton Ulaanbaatar is planned to open on June 1, 2011. Individual reservations are not being
accepted now, but group inquiries can be made at the pre-opening office in Shanghai. The hotel,
coming up on Chinggis Avenue, will have 300 guest rooms and suites, 10 meetings rooms and two
restaurants. It will be part of a 35-hectare redevelopment area housing a luxury retail mall,
cinemas and restaurants.
Source: www.sheraton.com

9. AGRICULTURAL EQUIPMENT FROM RUSSIA ARRIVES
The first installment of agricultural equipment from Russia has arrived. They will be used
immediately to help in the spring sowing. The Russian Ministry of Agriculture hopes to deliver the
next batch of machinery and equipment before the end of May. Prime Ministers S.Bayar and V.Putin
signed an agreement in March under which the Rosagroleasing company will send to Mongolia 295
tractors, 170 pieces of plowing equipment, 300 winnowers, 8,000 tons of seeds, and 5,000 tons of
diesel fuel. Payment will be made with a Russian loan for UD300 million.
Source: Montsame
SAVINGS-AND-CREDIT WORKERS RECEIVE TRAINING
A five-day training for employees at saving-and-credit cooperatives (SCC) was organized recently by
the Association of Asian Confederation of Credit Unions (ACCU) with help from Mongolia's Saving-
and-Credit Cooperatives Union. The 210 SCCs active in Mongolia have a capital turnover of over
MNT40 billion and a growing need was being felt to bring their activities to the international level.
The participants were trained mainly in capacity building and auditing procedures. SCCs that meet
established criteria will receive certificates to that effect soon.
Source: Montsame
MNCCI RECEIVES OFFER FROM IRKUTSK
The Sibexpo center of Russia's Irkutsk province has offered a proposal of cooperation to the
Mongolian National Chamber of Commerce and Industry (MNCCI). The center organizes about 40
exhibitions, fairs, and conferences every year in which firms from South Korea, China, the Czech
Republic and Ukraine regularly participate. Mongolian enterprises and entities taking part in them
will have the opportunity to establish ties with foreign counterparts. The center expects Mongolian
participation in an agricultural fair scheduled for October.
Source: www.gogo.mn
CHINA OUTPACES USA IN CLEANER COAL-FIRED PLANTS
China’s frenetic construction of coal-fired power plants has raised worries around the world about
the effect on climate change. China now uses more coal than the USA, Europe and Japan combined,
making it the world’s largest emitter of gases that are warming the planet. But largely missing in
the hand-wringing is this: China has emerged in the past two years as the world’s leading builder of
more efficient, less polluting coal power plants, mastering the technology and driving down the
cost.
While the USA is still debating whether to build a more efficient kind of coal-fired power plant that
uses extremely hot steam, China has begun building such plants at a rate of one a month. “The
steps they’ve taken are probably as fast and as serious as anywhere in power-generation history,”
said Mr. Hal Harvey, president of ClimateWorks, a group in San Francisco that helps finance
projects to limit global warming.
Western countries continue to rely heavily on coal-fired power plants built decades ago with
outdated, inefficient technology that burn a lot of coal and emit considerable amounts of carbon
dioxide. China has begun requiring power companies to retire an older, more polluting power plant
for each new one they build. Mr. Cao Peixi, the president of the China Huaneng Group, the
country’s biggest state-owned electric utility, said his company was committed to the changeover
even though it would cost more. “We shouldn’t look at this project from a purely financial
perspective,” he said. “It represents the future.”
Source: www.nytimes.com
For the full story as published in the New York Times, please visit BCM website, BCM News & Press.
POLITICS
FRIENDLY TALKS AND SIGNING OF AGREEMENTS MARK PUTIN’S SIX-HOUR VISIT

10. Prime Minister Vladimir Putin’s six-hour visit to Mongolia on Wednesday was marked by cordial
talks, and the signing of several agreements to underscore Prime Minister S.Bayar’s description of
the visit as “significant in boosting bilateral relations in economic, education and cultural spheres”.
After a meeting with Mr. Putin that took twice the scheduled 30 minute, Mr. Bayar said, "We agreed
to pay more attention to promoting Mongolia's mineral resources sector and its infrastructure and
Mongolia intends to speed up cooperation with Russia in exploitation of nuclear energy for peaceful
purposes." Responding, Mr. Putin said Russia also attaches much importance to strengthening
bilateral economic cooperation and to increasing investments in Mongolia. "I am full of confidence
that the two countries will closely cooperate in the mining sector, particularly in the exploitation of
uranium deposits," he said.
Foreign Minister S.Batbold welcomed Mr. Putin when he arrived in Ulaanbaatar from Tokyo at 3
p.m. on Wednesday, two hours behind schedule. He came straight to the State Palace and held the
meeting with Bayar. Official talks began after this. Interpreters were disposed of and all
conversation was in Russian to save time. Then came the formal ceremony where several
agreements were signed. These included one to set up a joint venture between state-owned
Erdenes MGL of Mongolia and the also state-owned Russian Railways Company.
Read more…
Another agreement between Rosatom and Atomon, both state-owned, will allow 10 Mongolian
students and 5 workers in the nuclear energy sector to study and train in Russia during 2009-2010.
The two Transport Ministers signed a memorandum of understanding to further cooperation in
increasing the freight transportation volume of Ulaanbaatar Railway and to open in Ulaanbaatar an
affiliate unit of the Railway University in Irkutsk, Russia. MIAT and Aeroflot signed a code sharing
agreement.
Since time was limited only one question was allowed from each side at a 30-minute press
conference and the Foreign Ministry had selected the questions beforehand. The Itar Tass
correspondent asked both Prime Ministers if joint ventures established in the socialist period
continued to be efficient now and the role new joint ventures will have in trade and investment
relations.
Mr. Bayar felt such joint companies “still have a key role to play in the Mongolian economy”, and
talks were on to improve their efficiency with help from other Russian companies. He also saw an
important position for joint ventures in new sectors such as mining. Mr. Putin referred to Mongolia’s
huge mineral resources and how a friendly Russia could help use them to their full capacity. He
emphasized the need to be competitive and said the two countries had decided to improve
management systems and update technology in both old and new joint ventures.
After this Putin paid a courtesy call on President N.Enkhbayar and also met with Mr. D. Demberel,
Speaker of Parliament.
Source: Montsame, Xinhua, en.News.mn
MINISTRY WANTS FEWER STUDENTS AT UNIVERSITIES
The Ministry for Education, Culture and Science has decided to enroll fewer students at universities
and institutes in 2009-2010. However, it will try to have more students at technology schools.
Source: Zuunii Medee
MEMBERS OF BAND RETURN FROM MOSCOW WITH NO SWINE FLU
The two members of the folk rock band Altan Urag who were taken to hospital in Moscow Monday
last week when they were returning from Mexico, were back home on Saturday. Russian health
authorities have certified that they did not have swine flu. They were met at Chinggis Khaan Airport
by doctors of the Infectious Disease Research Center and taken to the hospital where the rest of the
band has been held in quarantine since Wednesday. According to the director of the hospital, none
of them has symptoms of swine flu, but they are kept under observation as they were in Mexico

11. which had many cases of the flu.
Source: Ardin Erkh
121 CHILDREN LIVING IN STREETS
A survey by the National Commission of Human Rights has identified 121 children between 9 and 17
who have no home and live in the streets of Ulaanbaatar. Of them, 46 have lived like this for
between a year and three, and 53 for between three and nine years. The Commission has
demanded registration and protection for them so that they are not used for human trafficking,
sexual abuse or organ donation.
Source: Zuunii Medee
MORE BABIES BORN, AND MORE DIE, TOO
Altogether 22,070 live births were registered in the first four months of 2009, 1,886 more than in
the same period last year. The number of women who gave birth increased by 9.3 percent to reach
21,990. But the child and maternal mortality also went up, with 480 infants and 17 women dying, or
40 and 17 more than last year respectively.
Source: Odriin sonin
MONGOLIA RANKS 29th
IN CHILDCARE AMONG DEVELOPING NATIONS
Mongolia has been ranked 29th
among 100 developing countries in preparing young children to
succeed in school, according to the 10th annual State of the World’s Mothers report issued recently
by Save the Children, a global independent humanitarian organization. Sweden tops the wealthiest
countries in its commitment to early childhood development while Cuba and Armenia lead the
developing countries. Following them are Cyprus, Chile and Azerbaijan. Children face the greatest
obstacles to thrive at school in Chad, followed by Afghanistan, Burundi, Guinea-Bissau, and Mali.
“Comprehensive early childhood development programs, starting in infancy, can put millions of
children worldwide on the path to school success,” said Mr. Charles MacCormack, president and
CEO of Save the Children. “There are simple steps that parents and caregivers, even the poorest,
can do to help babies and toddlers grow up healthier, do well in school, and reach their full
potential.” The report’s School Success Index for Developing Countries is based on an analysis of
key indicators of early childhood growth and development that together are highly predictive of
completion of primary school. World Bank economists estimate that each additional year of primary
education increases a person’s future productivity by 10 to 30 percent, depending on the country.
Source: www.savethechildren.org
850TH
BIRTHDAY OF CHINGGIS KHAAN NEXT YEAR
The 850th
birthday of Chinggis Khaan will be observed in 2009. This follows the celebration in 2006
of the 800th
anniversary of the establishment of the Great Mongol State. Official plans for the
celebration will include scholarly assessments of the role and achievements of Chinggis Khaan and
renewed efforts to locate his burial site.
Source: Onoodor
MONGOLIAN DIPLOMATS IN EUROPE MEET
Officials in Mongolian diplomatic missions in European countries held a meeting on May 1 and 2 in
Brussels to exchange information on the immigration policies of EU counties and to discuss how the
rights of Mongolians living and working in these countries could be better protected. The EU is
working on adopting a common policy on immigration, but as of now all its member countries follow
their own rules. A suggestion was made that the Web site of the Foreign Ministry should contain
detailed information about the laws and procedures of the different countries relating to foreign
immigrants.
The meeting also heard about the Blue Card that is to be introduced in EU countries in 2011. This
will be something similar to the Green Card in the USA.
Source: en.News.mn

12. NO CARS ON MAY 31
Idle strolling and children playing will be the scene in downtown Ulaanbaatar on May 31. Cars will
be banned for the streets that Sunday, an experiment that was a great success last year. At least
for one day there will be considerably less carbon in the air that people breathe.
Source: Onoodor
NEWSPAPER SALES FALL 3 MILLION COPIES IN A YEAR
The Press Institute reveals that the number of daily newspapers has reached 16, but their total
sales have fallen by about three million copies since last year. The number of weekly newspapers
has also gone up.
The fall in circulation is explained by an increase in the number of Web news sites and internet use.
About 80 percent of the print media sales are claimed by dailies. Half the metropolitan residents
read newspapers at least once a week and 29 percent of them read magazines daily. The number of
newspaper readers has fallen by 1.3 percent and that of magazine readers is up by 3.5 percent.
Source: Zuunii shuudan
NEW MONGOLIAN LAWS
The following amendments to a current Mongolian law were published in the recent weekly
Government Bulletin. Unless decided otherwise by Parliament, the amended law takes effect ten
(10) days after publication.
Bulletin Date Law
05.04.2009 Abrogation of some provisions of “Law on Administrative and territorial units
of Mongolia and their administration”
Please visit BCM’s website, Legislative Committee, for a summary of new Mongolian laws.
BCM members who wish complete versions of the laws in Mongolian language are welcome to call or
email the BCM office (11-332-345; info@bcmmongolia.org) to arrange for a convenient pickup.
ANNOUNCEMENT
TREE PLANTING AT GACHUURT
The Mongolian Children's Aid Foundation is asking for volunteers to help in the planting of
approximately 3,000 trees this Saturday at the site of the new Lotus Children's Center it is building
in Gachuurt. The planting begins around 10:00 A.M. and those needing transportation can take vans
provided by Wagner Asia that will leave from the large parking area between the Grand Khan Irish
Pub and the Drama Theater at 9:30 A.M. Lunch will be provided and the vans will leave Gachuurt
at 4:00 P.M. to return to the city.
Basically, people will be putting the trees, which are really only small sticks now, in holes already
prepared and watered, and then fill them with soil. Disposable gloves will be provided to all
volunteers. They should bring warm outer wear, hats and sunscreen. Those intending to help are
requested to call Mrs. Ruth Pulaski at 9909-8221 or send an email to ruth@mcaf.mn.

13. SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended May 8, 2009, trading activity on the Mongolian Stock Exchange (MSE) totaled
1,485,300 shares with 32 companies traded. Total market value of transactions was MNT 750.1
million. Total market capitalization of the 358 stock companies listed on the MSE was MNT 442.9
billion, and decreased by MNT 8.0 billion or 1.77% from the previous week.
The Top-20 Index decreased by 102.60 points or 2.1% compared to the previous week, closing at
4,862.87 points. The MSE Composite Index decreased by 74.14 points or 3.0% compared to the
previous week, closing at 2,411.46 points.
Most active stocks traded were: Tuul Songino Usnii Nuuts (725,000 shares), Remicon (599,400
shares), Naco Tulsh (45,000 shares), Genco Tur Buro (37,000 shares), and Khuh Gan (34,500 shares).
Major share price percentage gainers were: Buligaar (14.8%), Jinst Uvs (12.5%), Naco Tulsh (7.3%),
Zoos Goyol (4.5%), and Khuh Gan (3.5%). Major share price percentage losers were: Mongol Savkhi
(15.0%), Shariin Gol (15.0%), UB Hotel (13.9%), APU (11.1%), and Makhimpex (11.1%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
April 30, 2009 *12.5% [source: NSOM]
* year over year (yoy)

14. CURRENCY RATES – May 14, 2009
Currency name Currency Rate
US dollars USD 1422.19
Euro EUR 1947.48
Japanese yen JPY 14.75
British pound GBP 2170.33
Hong Kong dollar HKD 183.50
Chinese yuan CNY 208.48
Russian ruble RUB 44.52
South Korean won KRW 1.14
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.