March 18 2011

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 159, March 18 2011
SPECIAL ISSUE – MINES and MONEY Hong Kong 2011
NEWS HIGHLIGHTS:
Business:
 Investors agree to amend Oyu Tolgoi agreement, Minister Zorigt reports;
 Ivanhoe-BHP discover new copper-molybdenum-gold zone close to Oyu Tolgoi;
 Petro Matad set to resume drilling;
 Speaker says sliding royalty rate should apply to Oyu Tolgoi, too;
 Denison Mines to spend CAD7.4 million in Mongolia;
 GTSO plans first shipment of Mongolian rare earth ore in April, or sooner;
 MICC appoints Managing Director;
 Mongolia Growth enters property insurance market in partnership with UMC;
 Trendfield Holdings upbeat about potential of Mongolian license.
Economy:
 Government to issue 3 bonds to raise MNT800 billion;
 EU seeks information on areas of state control over economy;
 Social, economic data released;
 Outstanding loans rise m-o-m, y-o-y;
 Money from bonds not for apartment buildings, says Central Bank chief;
 Detailed survey of agriculture sector planned;
 Deputy PM sees Erdenes TT shares priced at minimum USD1;
 Court rejects NGOs’ case against Government;
 Speaker hears of Umnugobi herders’ resentment at way mining develops;
 MP asks Prime Minister 4 questions on status of New Creation program;
 Devolution of financial powers only in stages, local officials told;
 Erdenes TT group holds “secret” meeting with Government;
 Shiveekhuren port to increase capacity;
 Korean consortium optimistic about getting Mongolian railway contract;
 Deputy Minister hopes more exports will follow improved livestock health;
 Launching a “global-local” anti-corruption network in Mongolia;
 Economic reforms start showing results in Mongolia;
 BP blocks partners from joining deal with Rosneft;
 Australia launches training program, critical skills fund;
 Finnish Parliament updates 1960s mining law;
 Chinese Premier rejects faster currency rise;
 China noses out USA as top goods producer;
 China's good news, bad news story.
Politics:
 MPP MP wants Batbold to refute charges and to be more open;
 Trade Union leader wants Government to be more transparent;
 Enkhbayar “ready to talk” on July 1 sequence of events;

2.  Iranian inroads in Mongolia;
 No punishment possible for some not submitting assets declaration;
 Relating education to jobs needs planning;
 Fewer import points for medical supplies;
 Green Party officials sue their leader for libel;
 Deputy Speaker defends Parliament decision to have its own TV channel;
 Mongolia hires advocacy representation firm in Washington, DC;
 Mongolian and U.S. universities to jointly train mining students;
 New electronic ID cards in October;
 U.S. team to join Mongolia Charity Rally this year.
*Click on titles above to link to articles.
BUSINESS
INVESTORS AGREE TO AMEND OYU TOLGOI AGREEMENT, MINISTER ZORIGT REPORTS
Minister of Mineral Resources and Energy D.Zorigt reported at the Government meeting on
Wednesday that an agreement has been reached with the foreign investors in the Oyu Tolgoi
project on amending some provisions in the investment agreement regarding financing so that
conditions are made easier for the Mongolian side. He said the agreement follows protracted talks.
Source: Montsame
IVANHOE-BHP DISCOVER NEW COPPER-MOLYBDENUM-GOLD ZONE CLOSE TO OYU TOLGOI
Ivanhoe Mines and BHP Billiton Ltd. have discovered a new zone of shallow copper-molybdenum-
gold mineralization approximately 10 km north of the Oyu Tolgoi copper-gold mining complex
currently under construction in southern Mongolia. The discovery, known as Ulaan Khud North,
extends the known strike length of the Oyu Tolgoi mineralized system by an additional three km to
the north, to more than 23 km. Less than half of the 23-km-long mineralized trend at Oyu Tolgoi
has been extensively drill-tested to date.
"The Ulaan Khud North discovery reinforces our longstanding belief that with continued exploration
there is excellent potential to discover new porphyry deposits, rich in copper and gold, which are
associated with the world-class Oyu Tolgoi mineralized trend," said Mr. Robert Friedland, Executive
Chairman and Chief Executive Officer of Ivanhoe Mines.
Ulaan Khud North is located on a 19,625-hectare exploration license that is part of Ivanhoe's joint-
venture partnership with BHP Billiton, which was formed in 2005. BHP has earned a 50% interest in
the joint venture by spending USD8 million in exploration costs and conducting an airborne survey
over the Oyu Tolgoi area.
The Pre-Mining Agreement for the property specifies that Ivanhoe and BHP Billiton have three years
to conduct additional exploration, complete an environmental impact study, prepare a final
feasibility study and gain approval for the design for the project.
Source: Ivanhoe Mines
PETRO MATAD SET TO RESUME DRILLING
Petro Matad, which last year drilled three consecutive oil strikes on Block XX in eastern Mongolia,
plans to return to the frontier acreage next month to take up where it left off in December when
severe weather conditions forced a retreat. This winter suspension is commonplace in Mongolia,
where winter temperatures average -20C but can sink as low as -40. Yet, amazingly, AIM-quoted
Petro Matad is hoping to become the first company to work year-round in the country.
Last year it spudded the DT-4 well in November using a partially winterized rig, extending its
drilling operational window by well over one month. It suspended the well at 1,271 meters to
hibernate operations during the worst of the winter months and hopes to resume work next month
to reach TD of 2,020 meters, again buying another month of drilling time. CEO Douglas McGay said
the company was “advancing field exploration activities into both ends of the harsh Mongolian
winter” as it worked towards “all-year round operation for the first time in Mongolian oil
exploration history”.
For the company, the potential prize is certainly worth the winterization effort, with the prospects
and leads so far identified on Block XX reckoned to hold, before last year‟s drilling campaign, mean

3. recoverable resources of 882 million barrels of oil. The other big player here is PetroChina
subsidiary Daqing Oilfield, which runs an aggressive drilling program on its acreage immediately to
the north of Block XX to deliver Mongolian barrels to energy-hungry markets to the east.
And Petro Matad‟s initial efforts have certainly provided encouragement as to the potential of its
lands. Last year it focused on the giant Davsan Tolgoi prospect on the 10,340 sq km Block XX,
where three successful wells were drilled. Testing of these wells should get under way in May using
a workover rig, once both day and night time temperatures are above freezing.
Read more…
The first well, DT-1, was drilled to 1,220 meters, encountering oil shows and elevated mud gas
throughout the primary objective Tsagaantsav formation. The DT-2 well, on the flank of the crest
of the Davsan Tolgoi anticline, found hydrocarbons in the primary objective Tsagaantsav formation,
the overlying Upper Zuunbayan formation and the underlying Sharilyn formation.
The third well, DT-3, was drilled on the apex of the crest and completed in late October at a depth
of 1,266 meters in basement rocks. The well encountered “significant hydrocarbon shows” in the
primary objective Lower Tsagaantsav formation, with average porosities above 20 per cent but low
hydrocarbon saturations, making this formation unsuitable for testing. It would appear that DT-3
lies in a separate compartment from the DT-1 and DT-2 wells and the 3D data will be remapped in
light of the drilling results.
Now the company is getting to grips with the implications of last year‟s three-well program, which
extended the known hydrocarbon play a significant distance southward. A 1,000-km 2D seismic
survey is planned to provide in-fill coverage over existing leads and prospects in the northern
portion of the block and coverage of six grabens in the central and southern parts.
Investors will also be keen for results of the DT-4 well, 3.4 km west of DT-1, which is testing a four-
way fold closure that is part of a fault block prospect named Davsan Tolgoi West with a pre-drill
potential mean un-risked resource of 21 million barrels. It carries a pre-drill chance of success of 38
per cent.
Petro Matad is also turning its attention to Blocks IV and V in Central Mongolia, which is true
frontier territory. It has hired Major Drilling Group International to undertake stratigraphic drilling
to provide further data on the subsurface rocks in these previously undrilled blocks, which together
cover 71,000 sq km. This will help calibrate the first ever seismic acquired in Central Mongolia,
which was acquired by the AIM company last year. Early results are said to show “suitably thick
sequences of source, reservoir, and seal rocks to have generated and trapped significant
hydrocarbons”.
Source: Oilbarrel.com
SPEAKER SAYS SLIDING ROYALTY RATE SHOULD APPLY TO OYU TOLGOI, TOO
During a recent visit to the Oyu Tolgoi project coming up fast in Umnugobi province, Parliament
Speaker D.Demberel said the Government would like to introduce a new provision to the agreement
on the mining project. The sliding rate of royalty, now in force at all extractive work, should apply
to Oyu Tolgoi also and the agreement might have to be revised to allow this. Mr. Demberel
expressed satisfaction with the pace of the development and hoped similar care will be taken of
environmental concerns when mining work began. He was also happy with how the company was
following the terms of the agreement and hoped the number of Mongolian workers would keep
growing, and be more than what was mandatory.
Source: Zuunii Medee
DENISON MINES TO SPEND CAD7.4 MILLION IN MONGOLIA
Denison Mines plans to spend CAD7.4 million for exploration and development in Mongolia this year.
The company has reported a net loss of CAD14.2 million for 2010, compared to a net loss of CAD147
million for 2009. It hopes to produce 10 million pounds of uranium annually by 2020 through
production at its currently operating mines, as well as exploration and development of existing
projects.
Source: Denison Mines
GTSO PLANS FIRST SHIPMENT OF MONGOLIAN RARE EARTH ORE IN APRIL, OR SOONER
Green Technology Solutions, Inc. has said it is targeting April for the initial shipment of its first
batch of rare earth ore from Mongolia “but the final shipping date may well come sooner”. GTSO
President and CEO John Shearer said, “We‟ve already been contacted by interested parties hoping
to purchase Mongolian rare earths from us, and we plan to begin fulfilling demand as soon as we
possibly can.” GTSO and Rare Earth Exporters of Mongolia (REE) formed a joint venture last month

4. to obtain rare earth mining claims and operations in Mongolia.
Mr. Shearer said the ore will be sent by truck from the mines to Ulaanbaatar, where it will be
shipped by rail to the international seaport of Vladivostok, Russia. While in port, the ore will be
sold to the government or corporation that places the highest bid.
Mr. Shearer sent a letter last Wednesday to the Embassy of Mongolia in the USA seeking assistance
in guiding the joint venture through the proper channels and authorities in transporting mining ore
within the country. GTSO is in communication with Russian Railways for the purpose of coordinating
rail transport of its mining ore from Ulaanbaatar to Vladivostok. The company‟s strategic exporting
plan purposefully avoids moving any mining ore through China.
The JV has executed a new land lease agreement in the mineral-rich province of Tuv. Negotiations
for additional mining properties are ongoing.
Read more…
“We‟ve been told by Mongolian embassy officials that Mongolia is over-reliant on trade with China
and that the government seeks to encourage trade with other nations, such as the U.S.,” Mr.
Shearer said. “We are taking pains to follow the letter of the law in Mongolia in order to ensure
that our dealings there are mutually beneficial.”
Source: Green Technology Solutions
MICC APPOINTS MANAGING DIRECTOR
MICC, Mongolia‟s leading investment bank, has appointed Mr. Ean Alexander, Managing Director. His
primary focus will be on establishing and managing MICC‟s fund management business, while his
other activities will include developing MICC‟s metals and mining investment banking business with
Mongolian and foreign clients. Based in Ulaanbaatar, Mr. Alexander will report to Mr. Achit-Erdene
Darambazar, President of MICC.
"Ean brings to MICC a breadth of experience in mergers and acquisitions, corporate finance, asset
management, capital markets and deep understanding of the metals and mining, and oil and gas
sectors," said Mr. Darambazar, commenting on the appointment. "He has an outstanding track
record in these endeavors and I expect our clients to benefit greatly from his expertise. We look
forward to his contributions."
Mr. Alexander joins MICC from Macquarie Capital where he was most recently in Natural Resources,
Mergers and Acquisitions group. Prior to that Mr. Alexander worked at both Rio Tinto, and
InterContinental Hotel Group.
Source: MICC
MONGOLIA GROWTH ENTERS PROPERTY INSURANCE MARKET IN PARTNERSHIP WITH UMC
After extensive research, Mongolia Growth Group Ltd. has decided to enter the Mongolian property
and casualty insurance market. A partnership has been struck with various members of UMC Group
to provide consulting services during the business formation process with the intention that certain
individuals will stay on as senior management of the future insurance company. In keeping with the
principles of MGG, the future insurance management team has agreed to receive below market
salaries with most of the compensation being based on profitability measures.
"We believe that insurance is a growth market in Mongolia where many consumers are not
adequately covered," said Mr. Harris Kupperman, CEO of MGG. "We have found a management team
that shares our culture of integrity and entrepreneurship. Their past success demonstrates their
ability and we are thankful that they have chosen us as their partner to build this company."
"UMC is delighted to work with MGG in the Mongolian insurance markets," said Mr. G. Otgonjargal,
UMC Group partner. "We are looking forward to a long term successful cooperation in serving our
valuable customers in Mongolia. UMC is committed to shaping competitive business models,
delivering strong results in performance and building a company that will withstand the test of
time."
Source: Mongolia Growth Group
TRENDFIELD HOLDINGS UPBEAT ABOUT POTENTIAL OF MONGOLIAN LICENSE
THL Mongolia Ltd. purchased 70% of KMNG LLC holdings in March 2010. KMNG is based in
Ulaanbaatar and owns 3 exploration licenses -- 13602X, 13603X and 13408X -- in the South Gobi
Province at the southern border of Mongolia, in the territories of Khanboulag, Khanbogd, Sayshand
and Dalanazadgad. The cumulative area of the licenses is 1935.5 sq. km.
Based on geological, structural, and alteration mapping combined with assay results of grab samples
THL believes License 13602X has the potential to be a world-class epithermal polymetallic deposit.
A 3.5-km long and 700-m wide zone has been clearly defined to contain high grade silver-lead,

5. arsenic, stibnite and moderate grade gold, copper and zinc in grab samples. THL Mongolia is a fully
owned subsidiary of Trendfield Holdings, a private mining exploration company with offices in
Beijing, Hong Kong, Niamey and Ulaanbaatar.
Source: Trendfield Holdings Ltd.
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
ECONOMY
GOVERNMENT TO ISSUE 3 BONDS TO RAISE MNT800 BILLION
The Government has agreed to issue three bonds, together worth MNT 800 billion, to raise capital in
the domestic market. The first one, for MNT250 billion, will have a 5-year term and would be
issued by the Development Bank. The second one will also be for MNT250 billion but for a 10-year
term, and the last one, for MNT300 billion, will be redeemable in 15 years.
Source: Montsame
EU SEEKS INFORMATION ON AREAS OF STATE CONTROL OVER ECONOMY
The European Union has asked the Government for information on 40 issues before it can consider
scrapping Mongolia‟s name from its list of non-market economies. Giving this information to media,
Mr. S.Demberel, Chairman of the Mongolian National Chamber of Commerce and Industry, says the
EU reluctance to accept the Government‟s claim that the country is a free and open economy shows
how much basic reform was still needed in this area.
The Director of the Finance and Economic Institute, Mr. D.Batjargal, agrees that several major
restructuring steps have to be taken before the Prime Minister‟s wish to have Mongolia treated as a
country that has come out of the circle of controlled economies can be fulfilled. It is true that
Mongolia is ready for rapid development, but this does not mean that the private sector is free of
unreasonable controls. The restrictions on it are mainly a residue of the old mindset and the refusal
by a section in power to accept that times have changed and arbitrary authority merely delays
progress.
Source: Zuunii Medee
SOCIAL, ECONOMIC DATA RELEASED
The National Statistics Office has released social and economic indices. The figures relate to
February alone or for the first two months of the year together, and the comparison is also with the
corresponding period in 2010, unless otherwise noted.
Consumer price index
The national consumer price index in February rose by 0.5 percent over January, 3.5 percent over
the end of December, and 11.0 percent over February, 2010.
Unemployment
The number of economically active people, that is those fit and above 15 years old, was 1,129,800

6. in the 4th quarter of 2010. Of them, 53.1 per cent were men. The number of those unemployed was
106,100, of whom 59,200 were male. The rate of unemployment was 9.4 percent nationally. The
number of registered unemployed was 7.1 percent more than in 2010.
Household income, expenses
The average monthly monetary income of a household in the 4th quarter of 2010 was MNT71, 500 or
20.5 percent more than in the corresponding period last year. Expenses were MNT76, 300 or 20.7
percent more.
Budget, tax receipts
The General Government Budget balance showed an overall surplus of MNT18.5 billion in the first 2
months of 2011. The surplus in the current account was MNT31.9 billion. Tax revenue rose by 54.2
percent over the same period last year, with income tax receipts rising 22.8 times, social security
contribution 39.4 percent, excise duties collection 39.8 percent, VAT receipts 2.2 times, and
revenue from other taxes 81.4 percent. Non-tax revenue increased by 10.2 percent.
Social insurance
Of the total 329,300 people registered under Social Insurance, 61.6 percent were from Government
organizations, with the other 38.4 percent belonging to the private sector. Of the total pension
paid, 73.5 percent went to retired people, 12.6 percent to the disabled, 7.1 percent to families
without a breadwinner, and 6.8 percent to former military personnel. Social welfare pensions and
benefits were paid to 51,300 people, 7.9 percent fewer than in 2010, and the total amount paid
rose 21.1 percent.
Foreign trade
Total turnover of trade with 96 countries in the first two months of 2011 reached USD1031.5
million, a rise of 69.8 percent over the corresponding period last year. This year‟s trade deficit of
USD199.8 million is in contrast to the USD15.9 million surplus in 2010. Imports were up 2.1 times,
while exports rose 33.4 percent.
Industrial output
Industrial output in the first two months rose 0.3 percent over the same period in 2010.
Freight, passengers
The volume of freight carried by the railway in the first two months rose 4.4 percent over the same
period in 2010 and the number of passengers rose 2.3 percent. The corresponding increases in air
transport were 4.5 percent and 51.9 percent respectively.
Source: Montsame
OUTSTANDING LOANS RISE M-O-M, Y-O-Y
The Central Bank reports that money supply (broad money or M2) at the end of February was 1.3
percent more than in January and 63.3 percent more than a year ago. Loans outstanding at the end
of February were 2.6 percent more than in January and 29.9 percent more than at the end of
February, 2010. Principals in arrears rose 9.3 percent over January, but were 23.6 percent less than
in February, 2010. Non-performing loans were up 0.4 percent against the figure for January, 18.4
percent less than in February, 2010.
Source: The Central Bank
MONEY FROM BONDS NOT FOR APARTMENT BUILDINGS, SAYS CENTRAL BANK CHIEF
Central Bank President L.Purevdorj has termed the Government decision on Wednesday to sell
bonds worth MNT800 billion in the domestic market “significant” for two reasons. First, this is the
first time the Government will raise so much money in the capital market, and, second, this will
allow money that sits idle in banks to be used to create wealth.
Mr. Purevdorj, however, dampened popular enthusiasm by making it clear that the money would be
used exclusively to finance large programs and projects through the Development Bank. No part of
it will be used for apartment financing. Nor is there any plan to use it to reduce interest on
apartment loans to 6%. The latter will lead to various problems, he said. It would take a large
amount of money and would also damage the market structure. “It will be more a social welfare
program than an economic one, and so will have to be discussed from various perspectives,” he
said.

7. Source: Onoodor
DETAILED SURVEY OF AGRICULTURE SECTOR PLANNED
Agriculture accounts for 16% of the country‟s GDP, employs 33.5% of its working force and earns
12.5% of its export revenue. Now, for the first time ever, a detailed study will be made of the
sector. The National Statistics Office (NSO) annually organizes a livestock census and regularly
publishes basic data relating to agriculture and farming but the present effort will be more
detailed, and is aimed at providing adequate information on rural development, state of the
environment, water and land utilization, post-mining recovery of nature, desertification, fishing,
forestry, the economics of production, food security and related data.
Collection and computation of such data requires special skills and the NSO and the Ministry of
Food, Agriculture and Light Industry have asked foreign partners for help on this.
Source: Ardiin Erkh
DEPUTY PM SEES ERDENES TT SHARES PRICED AT MINIMUM USD1
The Government working group, The State Property Committee and Erdenes Tavan Tolgoi have
begun talks with the shortlisted companies on the transport route they favor to export the coal, on
their terms to be responsible for the trade, how much of the extracted coal they want to sell for
their own, how much advance payment they are ready to pay and on what terms, etc.
Another set of negotiations will involve the investment banks already selected for the Erdenes
Tavan Tolgoi IPO. The first thing to be decided is the price to be asked for a share in the company.
This is a complex process and much of the success of the IPO will depend on proper pricing.
Investors have to be convinced of our political stability, of the potential for profits in the extractive
industry in an international perspective. Even with so many imponderables, First Deputy Prime
Minister N.Altankhuyag is confident an Erdenet Tavan Tolgoi share at the IPO will not be worth less
than USD1. The company will most likely have 15 billion shares, of which 30% will be on offer at the
IPO.
Source: Undesnii Shuudan
COURT REJECTS NGOS’ CASE AGAINST GOVERNMENT
The Sukhbaatar District Court on Tuesday threw away the charges brought by the United Movements
of Rivers and Lakes of Mongolia against the Government. After eight hours of hearing arguments,
the judges ruled that there is no law that the Government should assess the damage to nature and
the environment caused by mining companies and to compensate local communities for such
damage. “We are not satisfied at the court‟s decision and shall consider an appeal to a higher
court,” a representative of the NGOs‟ umbrella organization said.
Deputy Minister for Mineral Resources and Energy B.Ariunsan told journalists after the trial that the
case against the Government was that it has failed to protect the ecology and the environment in
Mongolia from being damaged by indiscriminate and unmonitored mining. “They named many rivers
as having been affected, but did not present any evidence of any damage done by mining activity.
Their charges were not backed by any research or definite and concrete facts, though they said
they had used 18 indicators to justify their claim,” he said.
He admitted that the 2-year-old law prohibiting mineral resources exploration and exploitation in
river and forest basins is still to be implemented and added, “It will take time to assess the damage
such activity has caused. We are of course working on it.” He said many aspects to the case, such
as taxes paid, property pledges, apartment loans issued to workers, etc., have to be cleared
“before we can issue a clear notice on mining companies fixing responsibility for not rehabilitating
the environment and computing their financial liabilities and also claims for compensation,” he
said.
Source: News.mn
SPEAKER HEARS OF UMNUGOBI HERDERS’ RESENTMENT AT WAY MINING DEVELOPS
The vast desert in the south of Mongolia is locally known as the Galb Gobi, famous for its red
camels. These animals are not the only elements of the beauty of the Gobi to disappear as mining
operations take off to extract about 25.4 million tons of copper and 1,028 tons of gold from the
area‟s underground reserves. Local residents told Parliament Speaker D.Demberel everywhere he
stopped during his recent visit to Khanbogd, Tsogttsetsii, Khurmen and Dalanzadgad that they had
mixed feelings about the rapid expansion of mining and what it meant for the future.
Some referred to the roads used to transport the mines output and also material for new roads
being, and to be, built as highways to disaster. They raise a massive cloud of dust under the weight
of heavily laden trucks, and as the unpaved roads stretch sideways more and more pasture land

8. deteriorates into grassless tracts. People also feel the local authorities do not speak for their rights,
as they do not wish to antagonize the miners or hinder development of mines. However, not all who
get a job in these building programs receive fair wages or work under good conditions. Resentment
among local herders is building up, and the Speaker was told time and again to seek balance
between diverse interests, if calm and peace were to be guaranteed.
Source: Undesnii Shuudan
MP ASKS PRIME MINISTER 4 QUESTIONS ON STATUS OF NEW CREATION PROGRAM
MP S.Byambatsogt of the MPP has asked Prime Minister S.Batbold four specific questions about the
status of the New Creation program, passed nine months ago. He wants to know how much money
has so far been found and from which sources for the MNT18.2 trillion program, of which MNT1.3
trillion is expected be from the state and local budgets, MNT0.09 trillion from loans and aid, and
MNT16.8 trillion from other sources left unspecified.
The MP also asks if a time plan for the program‟s implementation is ready; if there has been any
work on the apartments scheduled to be built this year; and what data have been collected on land
planning, land owning, and required amendments to existing laws.
Source: Undesnii Shuudan
DEVOLUTION OF FINANCIAL POWERS ONLY IN STAGES, LOCAL OFFICIALS TOLD
The Standing Committee on the Budget has planned to hold a series of meetings in various
provinces to explain to local officials the proposed changes in laws that are aimed at granting more
financial power, especially in spending, to provincial and district representatives‟ assemblies and
Governors. The first of these took place in Darkhan on March 14 and was attended by a large
number of officials of Darkhan-Uul, Selenge, Orkhon, Bulgan and Tuv provinces.
MP Ch.Ulaan, head of the working group on draft law processing, assured the participants that their
views on the drafts would be considered when they are discussed further. Devolution of budget
spending rights to local areas should be done in stages, he said, and should follow an improvement
in the standard and capacity of the local areas‟ performance.
Source: Ardiin Erkh
ERDENES TT GROUP HOLDS “SECRET” MEETING WITH GOVERNMENT
The Government meets every Wednesday, but there are non-regular meetings also to discuss issues
without the media being present. One such meeting is believed to have been held last week with
the Erdenes Tavan Tolgoi working group at its urgent request. There are no details of what was
discussed or what the nature of the urgency was.
Source: News.mn
SHIVEEKHUREN PORT TO INCREASE CAPACITY
Representatives of Mongolia and Chinese Inner Mongolia have decided after a meeting last week
that the capacity at Shiveekhuren port to handle larger volumes of coal export will be increased,
along with an expansion and reorganization of its coal transport area. A new customs checkpoint
will also be set up. Representatives of several companies such as MAK, SGS, and Chinhua-MAK Nariin
Sukhait, attended the meeting to press their case for quicker and easier coal movement through
that border post.
Source: Montsame
KOREAN CONSORTIUM OPTIMISTIC ABOUT GETTING MONGOLIAN RAILWAY CONTRACT
A consortium of 19 Korean construction companies is likely to win a 1,000-km railroad construction
project in Mongolia worth USD3 billion. According to Lotte Engineering & Construction, the
consortium, along with Korea Rail Network Authority, recently submitted its preliminary business
plan as part of its bid to Mongolian authorities. This followed an agreement by the Korean
government to cooperate on the railroad project at the request of the Mongolian government in
2009.
“The Korean consortium has received a positive response from the Mongolian side on our business
plans to connect the Tavan Tolgoi mine with the railroad,” said Mr. Do Eun-dae, vice president of
Lotte E&C. “Countries such as China and Russia have shown interest in the Mongolian railroad
project, but as a result of long cooperation, Mongolia has expectations of our technology and
governmental support,” said Mr. Lim Young-sik, team leader at Korea Rail Network Authority. “The
Mongolian government wishes to start the project as soon as possible.”
Construction of the railroad will take place between Tavan Tolgoi and Zuunbayan, and Sainshand

9. and Choibalsan, which stretches over 1,040 km. Building is expected to last five years as the Korean
consortium will be responsible for the first stage of the planned 5,500 kilometer railway.
Mongolian government officials are expected to visit Korea to sign a memorandum of understanding
with the consortium this month.
Source: JoongAng Daily
DEPUTY MINISTER HOPES MORE EXPORTS WILL FOLLOW IMPROVED LIVESTOCK HEALTH
The Deputy Minister for Food, Agriculture and Light Industry, Ms. J.Saule, has said herders all over
the nation expect 11.3 million new births this year. They are all hoping the Mongol Livestock
program will be a success in meeting its priority target of improving the quality of the animals and
their health, so that a herder can do with fewer. Too many animals have badly damaged the
pasture land. Also, animal quality is of more economic profit than just numbers. The program is
aimed at exporting substantially more farm products. “If we could eliminate foot and mouth
disease in the five western provinces, the world will buy our processed meat and also raw livestock
products,” she said.
She said flour prices have remained stable in Mongolia because there has been no need to import
wheat and 5.7 times more meat was stocked in 2010 than in 2009. She actually expected the meat
price to come down. Asked if she as a woman had trouble working in such a difficult Ministry, she
firmly said, “No. I have an experienced staff to help me, and the Minister, the State Secretary and I
have perfect understanding. It is true that our Ministry is busy in all four seasons, but hard work
cannot be a cause for complaint in public life.”
Source: Ardiin Erkh
LAUNCHING A “GLOBAL-LOCAL” ANTI-CORRUPTION NETWORK IN MONGOLIA
I recently had the opportunity to co-facilitate and present at an anti-corruption meeting in
Mongolia that brought together leading players from business, civil society and government
agencies. The initial idea to have the meeting came from the Office of the President of Mongolia,
which is keen to improve Mongolia‟s image from a governance standpoint and make the country an
attractive investment destination.
According to the latest Corruption Perception Index released by Transparency International,
Mongolia ranks 116th out of 178 countries in terms of level and impact of corruption.
At the meeting, the aim was to explore ways in which the World Economic Forum‟s Partnering
Against Corruption Initiative (PACI) could support the private sector in Mongolia in a process backed
by the Mongolian Government and local non-governmental organizations to improve local corporate
governance standards across sectors.
This meeting was part of a larger PACI plan to create replicable and scalable models for harnessing
the collective power of the private sector to fight corruption at the country level, working within
the context of a public-private partnership. After the three-day meeting, we came away with a
clear commitment to initiate a local anti-corruption network in Mongolia, driven by the private
sector with strong multi-stakeholder support, as a pilot project.
Read more…
The idea is to have a strong nucleus of leading companies in Mongolia commit to adopting a zero-
tolerance policy towards bribery and corruption and to implement a world-class corporate anti-
corruption program modeled on a framework developed by PACI. The network will be self-policing,
and participation in the network will be taken into account by governmental agencies in the award
of tenders for public contracts. Civil society will ideally play an oversight role to ensure the
credibility of the network.
Corruption is all over the news all the time, and most businesses are acutely aware of the impact of
corruption on the cost of doing business globally, which is currently estimated at up to 10%. These
statistics represent a formidable obstacle to the socio-economic development of many countries,
with total bribes paid in 2003 estimated at least USD1 trillion.
Until now, most anti-corruption initiatives have been global in nature. A worldwide effort across
countries and industries coordinated through global anti-corruption initiatives such as the United
Nations Convention against Corruption for the public sector and PACI for the private sector are
clearly necessary.
That said, with the emergence of strong national chambers of commerce in many countries as well
as substantial resource flows within countries with the potential to support high levels of in-country
corruption, more needs to be done to support the development of country-based, private sector
driven anti-corruption networks. Furthermore, these networks need to be closely linked with the
global anti-corruption initiatives.

10. I am very excited about the initiation of this project because I only see great things to come. First,
joining local and national anti-corruption networks with global initiatives will offer smaller
organizations the credibility they need to attract a critical mass of leading local companies, while
at the same time retaining local ownership of the corporate anti-corruption fight to ensure a high
level of local engagement.
Second, the approach provides local companies with the tools they need to upgrade their own
corporate anti-corruption programs and further enables them to take advantage of world-class anti-
corruption expertise by joining a global corporate network.
Finally, the integrated approach enables local companies to effectively and collectively engage
with other key stakeholders, for example governmental agencies, to develop solutions to
corruption.
We have high hopes for this project and are confident that key lessons and valuable models for
other countries and global anti-corruption initiatives will soon follow. Ending corruption will not
happen if only one company, one industry or one country takes the initiative. The fight against
corruption requires the collective action and partnership of every player, at every level. What we
have recently accomplished in Mongolia is just one more step in the long march towards a
corruption-free world.
(The writer of this blog, Mr. Arthur Wasunna, is the Partnering Against Corruption Initiative project
manager and a Global Leadership Fellow at the World Economic Forum. PACI is a global multi-
sector, anti-corruption initiative established by CEOs to level the playing field among industries and
help consolidate anti-corruption efforts. PACI brings together more than 160 companies to fight
bribery and corruption.)
Source: TrustLaw
ECONOMIC REFORMS START SHOWING RESULTS IN MONGOLIA
The Mongolian economy is about to take off in a very big way. Massive mineral reserves are about to
transform the wealth of this landlocked country and the implications both for the Mongolians and
for foreign investors are huge. Such new found massive wealth is not without its drawbacks, and the
potential pitfalls in Mongolia are also very real.
However, reform is happening at a frantic pace, and this is already having a major impact on the
wealth of the Mongolians and the opportunities now presenting themselves in terms of selling to
this market. Getting the wealth from the nation‟s mineral reserves is not going to be an easy task.
At least 50 percent of Mongolians are nomads, essentially involved in agriculture through the raising
of herds of goats, sheep and other animals. Byproducts such as cashmere and other meat and dairy
produce are still a major industry in Mongolia, albeit one that is largely fragmented. Within a
territory the size of Western Europe, some 1.3 million Mongolians retain their nomadic culture and
use the land to raise livestock. Uniting them is no easy task.
The other 50 percent live in Ulaanbaatar, the capital city, and are slowly adapting to the
developing service economy the city provides. Yet making sure all share in the national wealth is
not going to be easy. As was pointed out by the head of Barclays Capital at the recent Mongolian
Economic Forum: “Mongolia‟s wealth belongs to all of the Mongolian people, and it is important
that this is used for the benefit of future generations.”
This then requires an enormous restructuring of the national finance system. Mongolia‟s Stock
Exchange is being restructured with the assistance of the London Stock Exchange, and new
dynamics are coming into play. A Mongolian investment bank and a sovereign wealth fund are also
on the way. The government also wants to radically restructure many of its state-owned
enterprises, and especially those in its energy sector. Many of these are ineffectively run, and
getting private enterprise into them is paramount.
Read more…
The government has indicated that it intends, once the Mongolian Stock Exchange is reformed and
the investment bank readied, to sell off over 100 SOEs, mainly through IPOs. The link with the
London Stock Exchange provides access to finance both from Europe and North America, and some
operations may also be listed not just in Mongolia, but also in Hong Kong, London and on New York‟s
Nasdaq. A timeline of three years was given for this sell-off to commence.
Putting that money to good use, though, will be a multi-tiered approach. While most of the
businesses to be listed will remain at least partly government owned, the proceeds from the sale
will be divided. About 50 percent is earmarked directly to the government coffers, and a further 30
percent to be divided between the Mongolian investment bank and the sovereign wealth fund. Of
the remaining 20 percent, it is mooted that half will be given gratis to Mongolian nationals, with
the remainder to be sold at preferential rates. Quite how this is to be accomplished has still to be

11. worked out, however it will have an immediate impact. Assuming the stocks sold raise the expected
amount of value, Mongolia will suddenly become a country where every citizen is a U.S. dollar
millionaire.
In this regard, the country is already studying the models of nations such as Qatar and the UAE, and
some 16 global banks are now advising the government on this repositioning of national wealth.
Concerning the regulatory aspects of mining, much of the nation‟s reserves will be operational for
between 50 to 100 years, meaning that getting political and economic stability into managing the
nation is key. However, the government also wishes to develop industries away from the core
mining sector. To this end, at present most foreign direct investment incentives are targeted at the
mining sector. The government then needs to address the discriminatory aspects of investment
incentives in other industries and encourage secondary markets to flourish.
I have stressed to the government the importance of getting added value into Mongolia‟s natural
resources and not to rely purely on the sale of raw materials. The development of secondary
industries is the key in Mongolia. Not only to add value to their own raw materials, but also to do
the same to those from Russia. While Russia‟s policy focus remains on exporting raw materials,
Mongolia can position itself to be a major regional hub for minerals and related processing.
This is also likely to impact upon the development of new and high-tech industries in Mongolia. For
example, a concrete enterprise has been developed in the country in conjunction between a
Mongolian SOE and BASF that permits the concrete to be delivered, fast, several kilometers
underground. It is then able to set quickly and with great strength at certain temperatures only,
meaning it can be efficiently managed and placed into position under extreme conditions. The
development of such high-tech products and new industries is not new. When Chile‟s mining
industry began, the country had very little technical expertise. Now the country exports
technologies to Australia – a fact that would have been unheard of 20 years ago. Mongolia‟s vast
array of minerals and the sometimes difficult conditions under which they have to be extracted will
also spur-on new innovations.
In short, Mongolia is about to become very wealthy, very fast. With its capital city just a one hour
and thirty minute flight north from Beijing, the opportunities for foreign investors as concerns the
creation of this new wealth are well worth exploring.
(The writer, Mr. Chris Devonshire-Ellis, is the principal of Dezan Shira & Associates.)
Source: 2point6billion.com
BP BLOCKS PARTNERS FROM JOINING DEAL WITH ROSNEFT
BP PLC, in a vote last week, blocked an attempt by its billionaire Russian partners to join its
planned USD16-billion alliance with Russian state oil giant OAO Rosneft, deepening a conflict that
could turn into a major setback for BP. The BP-Rosneft accord, signed in January, envisioned a
share swap that would give Rosneft a 5% stake in BP and allow the British oil giant to jointly explore
and develop parts of the Russian Arctic. BP would get 9.5% of Rosneft's shares in the transaction.
In February, however, another group of BP's partners in Russia won a British court order temporarily
blocking the Rosneft deal. The partners, a group of Soviet-born billionaires, contend that the deal
violates exclusivity provisions in their shareholder agreement with BP for the Russian joint venture
TNK-BP Ltd. The group has sought to have TNK-BP replace BP in the Rosneft deal.
TNK-BP's management, led by Chief Executive Mikhail Fridman, who also leads the group of Russian
shareholders, had proposed to the venture's board that TNK-BP buy BP shares from the company to
swap them for the Rosneft stake.
But BP said it wouldn't let TNK-BP buy the BP shares and its representatives on the TNK-BP board
voted against the plan at a meeting in Paris Saturday, effectively scuttling it.
Read more…
In a setback for BP, the board's three independent directors voted along with the four
representatives of the Russian shareholders in favor of the proposal, which needed a unanimous
result to pass.
The Russian partners, meanwhile, rejected a BP proposal to allow BP and Rosneft to go ahead with
the share swap with Rosneft as planned while opening talks on letting TNK-BP into the Arctic deal.
AAR, as the Russian shareholder group is known, argued that would amount to BP entering an
alliance with one of TNK-BP's main competitors.
In a statement, BP said that AAR "through their actions, have risked progress to the detriment of
Rosneft, TNK-BP and BP." Mongolia buys almost all its petroleum products from Rosneft
Source: The Wall Street Journal
AUSTRALIA LAUNCHES TRAINING PROGRAM, CRITICAL SKILLS FUND

12. Australia has launched an 18-month apprenticeship training program for 1,000 workers and AUD200-
million fund for critical skills training to address skills shortages in the country‟s resources sector.
Skills and Jobs Minister Chris Evans said the program was targeted at practical, industry-based
solutions designed to deliver skilled workers.
Releasing the government‟s response to the National Resources Sector Employment Taskforce
report, he said the government was accepting all its 31 recommendations. “Implementing these will
immediately assist the resources sector meet its increasing demand for skilled labor while
maintaining the national momentum on addressing skills shortages,” Mr. Evans said.
Industry and government will each provide AUD2 million to the scheme. The government has also
opened the AUD200-million Critical Skills Investment Fund to partner with industry to provide
training and employment opportunities. The fund would help train 39.000 skilled workers over four
years and target areas of critical need for the resources, construction, infrastructure and renewable
energy sectors.
Source: The Mining Weekly
FINNISH PARLIAMENT UPDATES 1960S MINING LAW
Finland's Parliament on Tuesday passed a new mining law that miners fear will increase bureaucracy
and compensation to landowners, making future operations more difficult.
Parliamentarians voted 147 in support and 13 against on updating a law from the 1960s. It is
expected to come into force on July 1.
The government says the new law promotes mining but also takes into account environmental
issues, citizens' and landowners' rights and gives municipalities more potential to influence
decision-making on mining projects.
Source: Reuters
CHINESE PREMIER REJECTS FASTER CURRENCY RISE
China's premier on Monday ruled out allowing a faster rise in the value of its tightly controlled
currency to fight surging inflation, citing the danger of possible job losses and the impact on
Chinese businesses. At a news conference, Premier Wen Jiabao repeated Chinese complaints that
the U.S. Federal Reserve's efforts to spur American growth are partly to blame for global inflation,
though he avoided mentioning the Fed by name.
Mr. Wen said Beijing is taking steps to rein in surging inflation that pushed up consumer prices by
4.9 percent in February. But he said the yuan's rise against the U.S. dollar would be kept gradual.
Analysts say a stronger yuan would cool Chinese inflation by making imported oil and other goods
cheaper in Chinese currency terms. Beijing has restrained the yuan's rise since the 2008 global crisis
to help Chinese exporters that employ millions of workers compete abroad.
"The appreciation of the Chinese currency should be a gradual process, because we must bear in
mind its impact on Chinese businesses and our employment situation," Mr. Wen said at the news
conference, held following the closing of the annual session of China's legislature.
Beijing faces pressure from Washington and other trading partners to ease currency controls that
they say keeps the yuan undervalued, giving China's exporters an unfair price advantage and
swelling its multibillion-dollar trade surplus.
Source: The New York Times
CHINA NOSES OUT USA AS TOP GOODS PRODUCER
China has become the world‟s top manufacturing country by output, returning the country to the
position it occupied in the early 19th century and ending the US‟s 110-year run as the largest goods
producer. The change is revealed in a study released on Monday by IHS Global Insight, a US-based
economics consultancy, which estimates that China last year accounted for 19.8 per cent of world
manufacturing output, fractionally ahead of the US with 19.4 per cent.
China‟s reversion to the top position marked the “closing of a 500-year cycle in economic history”,
said Mr. Robert Allen of Nuffield College, Oxford, a leading economic historian. Ms. Deborah Wince-
Smith, chief executive of the Council on Competitiveness, a Washington-based business group, said
the US “should be worried” by China taking over a position that the country had occupied since
about 1895.
“This shows the need for the US to compete in the future not on the basis of commodity
manufacturing but on innovation and new kinds of services that are driven by production
industries,” she said.
The last time China was the world‟s biggest goods producer was in about 1850 when the country
was close to the end of a long period of population growth and technological ascendancy. Buoyed

13. by the industrial revolution, the UK then became the top maker of factory goods and held this
position for almost 50 years, following which the US began a long run as the world‟s premier
manufacturing nation.
Economic historians believe China‟s share of world manufacturing output in 1830 was nearly 30 per
cent, after which it fell to about 6 per cent in 1900 and half this figure in 1990.
Read more…
Since then, China has been rapidly catching up on the US, helped by low labor costs that have
caused a massive shift of manufacturing to China, strong inward investment by foreign companies
and a fast-expanding economy.
The IHS data – worked out on the basis of current-year dollars – show that world manufacturing
output in 2010 was USD10,078 billion, which represents “real”, inflation-adjusted growth of 9.7 per
cent on the equivalent number in 2009, indicating a strong recovery from the recession.
Source: The Financial Times
CHINA’S GOOD NEWS, BAD NEWS STORY
Oil prices won't affect China's growth, but China's growth will affect oil prices. At first sight, a
surprise trade deficit in February appears to confirm the worst fears about the impact of the oil-
price increase on China. A deficit of USD7.34 billion, the largest since 2004, reflects weak external
demand and higher costs for oil, the most important item on China's import shopping list. The
markets were unimpressed, with the Shanghai Composite index closing down 1.5% on Thursday last
week.
In fact, February's trade data need to be treated with caution. A sustained increase in the price of
oil certainly could dent demand from major trade partners. But a five-day holiday at the beginning
of the month is the more obvious explanation for lackluster exports. It isn't only through damping
exports that runaway oil prices could affect China's growth. China imports more than half its oil,
and with no domestic substitutes it is relatively insensitive to changes in price; import volumes held
steady even during the oil-price peak in the summer of 2008.
Higher costs for imported oil might pass through into higher inflation, forcing the government to
take further steps to tighten policy. But with domestic prices for gasoline and diesel set by the
National Development and Reform Commission, and managed at an artificially low level, the pass-
through is limited. The price of light, sweet crude on the New York Mercantile Exchange is up 12%
this year, but after a single price increase at end of February, China's gasoline and diesel prices are
up just 4.1% and 4.5%, respectively.
For the international economy, the good news is that higher oil prices will not hammer the China
growth story. The bad news is that the China growth story, and its resulting demand for oil, will
continue to support high crude prices.
Read more…
Even that increase won't have a large direct impact on Chinese consumers. With just over 10% of
urban households owning a car, increases in the price of gas have little direct impact on outgoings.
Taxi drivers might grumble. But fuel-price increases don't hit the family pocketbook in the same
way they do in the U.S.
That doesn't mean there will be no impact on prices at all. China's agricultural sector is powered by
diesel. If increases in international oil prices are sustained, the National Development and Reform
Commission might be forced to pass the cost along to farmers, resulting in higher food prices.
But with fighting food-price inflation still near the top of the government's agenda, the most likely
outcome is that the regulated price of diesel will increase only slowly, if at all. The higher cost of
oil will be more evident in lower refining margins for China's oil companies than in higher inflation
in the mainland economy.
Source: The Wall Street Journal
POLITICS
MPP MP WANTS BATBOLD TO REFUTE CHARGES AND TO BE MORE OPEN
Former Central Bank Governor and now an MPP MP, Mr. O.Chuluunbat, has expressed his
disappointment that The Mongolia Economic Forum did not devote any time to an exchange of views
on what the best and most transparent ways to utilize the revenues from Tavan Tolgoi, Oyu Tolgoi
and all such mineral deposits should be. He has demanded a radical reform in the way the budget is
prepared, as the present priorities do not favor equitable distribution, preferring instead
concentration of wealth in a few hands.
He has also called for wider participation in framing policies and taking decisions that relate to the

14. nation‟s welfare and future. “The Government is doing everything by itself, behind closed doors,”
when a better and more transparent way would have been to form a nationally representative
committee where independent experts and those from the civil society could offer non-partisan
opinion. Matters of such seminal importance should be run on a national consensus, he said.
Mr. Chuluunbat said his own party also had people critical of the Government‟s way of working.
“With the election coming up, any division in the party is not good,” he said, and added that there
were specific questions the Prime Minister should answer. For example, a former head of the
party‟s media section, Mr. Myagmar, had alleged that Mr. S.Batbold had not “paid a penny to
purchase Chinggis Khan Hotel and, soon afterwards, Mr. Avirmed said Mr. Batbold did not pay
anything when obtaining the licenses of the Tavan Tolgoi coal and the Boroo gold deposits, though
exploration of both had been conducted with State money”. Mr. Chuluunbat urged the Prime
Minister to refute the charges without delay, as “by keeping quiet, he is only fanning discontent
and suspicion”.
Source: Undesnii Shuudan
TRADE UNION LEADER WANTS GOVERNMENT TO BE MORE TRANSPARENT
Mr. S.Ganbaatar, Head of the Confederation of Trade Unions, has expressed fears that the
Government is leaving it to “foreigners to make decisions in the mining sector that will define the
future of our country”. He wonders why the Government acts in a hush-hush manner and does not
ask independent national experts or a Mongolian organization to make estimates of deposit reserves
and prepare feasibility studies. The USD150 million from the Oyu Tolgoi agreement could have been
used to build the 540-km road from Tavan Tolgoi to the border, but the Government wants foreign
investors to do this.
Mr. Ganbaatar said as Tavan Tolgoi goes into operation, about 12,000 Mongolians will work as
drivers, each earning MNT2 million or so. Proper vocational training can prepare over 20,000 people
for jobs in the mines. A coal washing plant could come up after two years and a coking coal plant
after four. The minimum monthly salary in the country should then be at least MNT220,000, he
said.
He regretted that the Government shows little interest in discussing the issue of raising minimum
wages even as its revenues keep rising. It promises to hold meetings but then does not, “in gross
violation of the terms of the tripartite agreement”. The suspicion is rising, he said, that the
Government wants “revenues from the mining sector to go to the pockets of only a part of society”,
as it does not hold any public debate or discussion on how they can be spent for collective welfare.
Source: Undesnii Shuudan, Zuunii Medee
ENKHBAYAR “READY TO TALK” ON JULY 1 SEQUENCE OF EVENTS
Former President N.Enkhbayar has said in a TV interview that the then Prime Minister, Mr. S.Bayar,
pressured him into declaring a state of emergency during the disturbances of July 1, 2008, a move
that made the situation even worse, ultimately leading to loss of 5 lives in police firing. This was
the first time that Mr. Enkhbayar, who later lost his bid to be re-elected President, has spoken in
public on Mongolia‟s worst incident of public violence. He has also offered to testify about that
day‟s events and the role of others, including Mr. Bayar and the then Interior Minister, Mr.
Ts.Munkh-Orgil. The Prosecutor General, who has reopened the investigation into the case against
three senior police officers to ascertain how the orders to open fire were issued to the police, is
expected to ask Mr. Enkhbayar for his version of the evening‟s incidents.
Source: Undesnii Shuudan
IRANIAN INROADS IN MONGOLIA
Iran has been steadily increasing its ties with Mongolia and 2010 was a year of increased Iranian
overtures toward Ulaanbaatar. In another manifestation of how democratic Mongolia and Iran are
looking towards substantially developing their economic ties, it was announced in early December
2010 that a new Mongolian-Iranian joint venture entitled Bayan Meat, Ltd, had signed a sheep meat
export contract with Mongolia's largest meat slaughterhouse, Mahimpex of Ulaanbaatar. Mahimpex
is owned by Jenco, whose wealthy president, Mr. Kh. Battulga, has been the Mongolian Minister for
Road, Transport, Construction and Urban Development since 2008.
In January 2010, an Iranian direct charter plane flew out 75 tons of Halal-slaughtered lamb from the
western Mongolian city of Khovd per agreement with Baruun Mongol International in the country's
west, which has been exporting fresh lamb and mutton carcasses to Iran since 2007. The president
of Mongolia's Meat Association, Mr. M. Lhachinbaltai, revealed that Mongolia's target 2010 volume to
Iran from the two slaughterhouses was 2,000 tons. The bulk of Mongolia‟s livestock, including 15.8

15. million sheep, is not exported.
During 2010, Iran had been exploring its options for Mongolian raw uranium. On October 19,
Mongolian President Ts. Elbegdorj received the newly accredited Iranian ambassador to China, Mr.
Mehdi Safari, a former deputy foreign minister, who took up his strategic post in Beijing in the
summer of 2010 as part of Iran's plan to shore up Chinese support for its controversial nuclear
program.
It may not have been a coincidence that Mr. Safari made his first appearance in Ulaanbaatar less
than one week after France and Mongolia signed a cooperation agreement in the nuclear energy
field, covering uranium exploration and exploitation by Areva, the French nuclear power company.
Areva, which has been expanding its presence from Kazakhstan into Asia, has been cooperating with
Japan's Mitsubishi Corporation since December 2009 on uranium exploration licenses on more than
14,000 sq. km in Mongolia's Dornogobi and Sukhbaatar provinces.
Read more…
Strong interest by foreign investors in Mongolia's uranium deposits has been a feature of the past
year. In June 2010, during Chinese Premier Wen Jiabao's visit to Mongolia, the director-general of
the Mongolian Nuclear Energy Agency signed an MoU on Radioactive Minerals and Nuclear Power
Cooperation with the General Manager of China's leading uranium development and nuclear fuel
company, China National Nuclear Corporation (CNNC).
In January 2010, India and Mongolia renewed their agreement on civil nuclear cooperation and
began considering how India would start uranium mining in Mongolia. Other recent market entries
were the US company Mongolia Forward and the Canadian company Uranium One Inc. This interest
has come on the heels of 2007-2008 Russian protocols with Mongolia on cooperation in the
production of Mongolian uranium.
Iran and Mongolia trace their modern political relationship to 1971 when diplomatic relations were
first established between the Shah's Government and then communist Mongolia. Two years later,
Mongolian leader Yu Tsedenbal paid a state visit to Tehran, which was followed in 1976 by an
Iranian prime ministerial visit to Ulaanbaatar to sign economic, trade and science agreements. In
the Islamic Republic era, Iranian contact was maintained via its embassy in Beijing and since 1997
from Moscow. Mongolian ambassadors in Prague beginning in 1973 were accredited to Tehran, but
after Mongolia's democratic revolution, accreditation moved to Belgrade in 1991, Beijing in 1995,
and finally to Moscow in 1997.
Since 1990, the economic relationship has been relatively minor for both countries. In that year,
Iran hosted a Mongolian delegation of experts from Mongol Gazriin Tos (Mongolian Oil Ltd) and later
the Iranians helped draft the first Mongolian law on petroleum. Additional ambassadorial level
discussions on petroleum took place in 2002 in Ulaanbaatar. The Shanghai Cooperation Organization
(SCO) has facilitated meetings among defense and security experts of these two permanent
observer nations, but Mongolia's reluctance to join the SCO as a full member has been utilized as a
rationale for Russia and China to prevent Iran from entering.
Some level of personal rapport has been established between Mongolian and Iranian leaders at
international forums. In 2003, the two presidents met in a Malaysian conference, and that same
year Mongolia contributed 1,000 woolen blankets after the Iranian earthquake. At the 2009 Non-
Aligned Summit in Havana then Mongolian president N. Enkhbayar met with Iranian President
Mahmoud Ahmadinejad to reportedly discuss their nations' historical ties and the Hazara minority
people. Hazara are Shiite Turko-Mongols in Afghanistan who have been repressed by the Taliban and
the Afghan majority Sunni population. Continuous war and brutalities resulted in Hazara migration
to Iran as well as to Pakistan; however, Hazaras in Iran accuse the Iranians of maltreatment.
For the last 20 years, Hazara elements have appealed for Mongolian sanctuary and support to
prevent Iranian forced repatriation to Afghanistan. Mongolia responds cautiously on this issue,
because its balance of power strategy in Eurasia, based on its "Third Neighbor" concept, sees
expanding ties to Iran as one partial counterweight to China's economic monopolization.
Mongolian Defense Minister L. Bold will make an important visit to Washington this month to meet
with Pentagon officials including US Secretary of Defense Robert Gates. Although it is unclear if
Iranian-Mongolian relations will be on the agenda, it may come up in bilateral discussions on how to
deepen cooperation on the terrorism issue.
It would be in US interests, as well as Mongolian, to find other ways to utilize Mongolian meat
products to counter growing Iranian penetration of this key sector. Around five years ago, there was
some discussion by an USAID agricultural expert of encouraging Mongolian meat sales into
Afghanistan, which often suffers from meat-shortages, but this concept still has not been realized.
Whether it is meat or uranium, the US policymakers should do more than passively monitor Iranian
courting of Mongolian resources and instead try to facilitate its economic ties with other states to

16. offset Iranian inroads into this strategically important country.
Source: China Business
(This article first appeared in The Jamestown Foundation. Dr. Alicia Campi has a PhD in Mongolian
Studies, was involved in the preliminary negotiations to establish bilateral relations in the 1980s,
and served as a diplomat in Ulaanbaatar. She has a Mongolian consultancy company, US-Mongolia
Advisory Group, and writes and speaks extensively on Mongolian issues.)
NO PUNISHMENT POSSIBLE FOR SOME NOT SUBMITTING ASSETS DECLARATION
The anti-corruption law calls for civil servants to report their income and assets by February 15
each year and an overwhelming number of them did so this year. Of the 69 officials who refused to
submit such “private information”, 61 were members of citizens‟ representative assemblies in
provinces, mainly Bulgan, Bayan-Ulgii and Uvurkhangai, and the other 8 are from special and
administrative law organizations. According to Mr. M.Enkh-Amar of The Anti-Corruption Authority,
the law says public servants who fail to make the declaration were to be dismissed from service,
but no action can be taken against the present defaulters as they are elected administrators and
cannot be dismissed.
Source: Zuunii Medee
RELATING EDUCATION TO JOBS NEEDS PLANNING
More than 60% of Mongolians continue with studies after leaving secondary school, with about 40%
of them choosing some form of vocational training. The result is that every year the country churns
out a great number of qualified people who fail to land a job, because they chose courses that were
on offer and that mostly have no relation to the actual demands of the labor market. Those with
the highest scores make a beeline for law, economics and international relations schools, which is
unfortunate as we certainly need good people in the natural science, linguistics and mining.
The Ministry of Science, Culture and Education says it plans to prepare a database to help match
students with jobs likely to be on offer. This should go some way towards more meaningful and
relevant education, but some educationists, including the Director of the National University of
Mongolia, Mr.Tumur-Ochir, warn that the more immediate need is for schools to decide on areas
where they can offer the best tuition/training and then develop courses and faculties with the help
of the Academy of Science. Numbers should give way to quality if we want Mongolians to get most
of the jobs at Oyu Tolgoi and Tavan Tolgoi.
Source: Zuunii Medee
FEWER IMPORT POINTS FOR MEDICAL SUPPLIES
The Government has ordered that medicines, medical supplies, and medical equipment can
henceforth be legally imported only through the Chinggis Khaan airport, Sukhbaatar and Altanbulag
border posts of Selenge province, and Zamiin Uud border post of Dornogobi. This is believed to be a
move to clamp down on rampant import of substandard drugs and equipment, by centralizing
control and monitoring at a few selected places with better facilities.
Source: Udriin Sonin
GREEN PARTY OFFICIALS SUE THEIR LEADER FOR LIBEL
Green Party leader D.Enkhbat, MP, who took his party to an alliance with the Civil Will Party, a
move that was promptly rebutted by the party, has now been sued by the party Secretary, Ms.
N.Narantsetseg, and the chief of its Ulaanbaatar Council, Ms. Kh.Altantsatsral, for libel. The charge
before the Sukhbaatar district court is that Mr. Enkhbat called members of the party “dead souls”,
after the title of a novel by Nikolai Gogol about serfs in Czarist Russia. The two women have
claimed MNT75 million in damages and have said they would donate the money to environment
protection.
Source: English.News.mn
DEPUTY SPEAKER DEFENDS PARLIAMENT DECISION TO HAVE ITS OWN TV CHANNEL
Deputy Speaker of Parliament G.Batkhuu has defended the decision to have an exclusive TV channel
and studio to be run by Parliament, even though proceedings in Parliament are extensively covered
by a number of TV channels. He says the plan is to have a channel of record which would preserve
entire speeches, and which could provide other channels with any information on what an MP said
when. “Our channel will also record meetings MPs attend, with local and foreign visitors and
organizations,” he told media.
A cyber archive was set up last year with USD200 million in grant from the Government of South

17. Korea, and all videos of Parliament and protocols are kept there. All events to do with Parliament,
including MPs‟ foreign and domestic visits, meetings and work in local areas would be kept in this
cyber archive because “what Parliament does is part of history”, he said. Files in MPs names would
be opened and would contain their speeches and interviews.
The channel, expected to begin broadcasting some time during the Spring session, is being set up
with most MPs contributing the MNT10 million allocated to them from the general budget to
advertise legislation. They feel the channel will serve the same purpose.
Source: News.mn
MONGOLIA HIRES ADVOCACY REPRESENTATION FIRM IN WASHINGTON, DC
Effective January 1, 2011, the Embassy of Mongolia has hired Gage International (www.Gage.com),
a business consulting and government relations firm, as their lobbyist in Washington, DC. This is the
first time the Government has adopted this common practice among many foreign embassies to hire
outside advisors to assist them. Gage has been engaged to help the embassy elevate the profile of
Mongolia in Washington, DC.
Gage recently joined the North America-Mongolia Business Council (NAMBC) and is eager to make
contact with U.S. companies and organizations active or invested in Mongolia to assist in developing
broader Congressional support for bilateral relations. Gage CEO Leo A. Giacometti previously served
in various positions in the U.S. Government. Mr. AJ Rehberg, Vice President, will be the primary
point of contact for the firm‟s work with the embassy. He also serves as Vice President of Public
and Government Affairs for Mongolia Forward, a uranium mining venture in Mongolia.
Source: The North America-Mongolia Business Council
MONGOLIAN AND U.S. UNIVERSITIES TO JOINTLY TRAIN MINING STUDENTS
The University of Arizona in the USA and Mongolia's University of Science and Technology have
signed an agreement to train mining professionals. The course program at the Mongolian university
will be adapted to that in the U.S one. This will allow successful Mongolian students to receive a
degree from both universities.
Source: Montsame
NEW ELECTRONIC ID CARDS IN OCTOBER
First Deputy Prime Minister N.Altankhuyag has said that all citizens covered in the new registration
system will be issued fresh ID cards before October. MNT10 billion will be spent on preparing these
electronic cards that will give information on the holder‟s education, tax status and such personal
details. A tender will soon be announced to choose the company to devise and produce these cards.
Source: Zuunii Medee
U.S. TEAM TO JOIN MONGOLIA CHARITY RALLY THIS YEAR
For the first time, a U.S. team, Silk Road Warriors, will take part in this summer‟s annual Mongolia
Charity Rally. Commonly called the Mongol Rally, the event is organized by the UK-based NGO, Go
Help, for the specific purpose of donating and delivering much-need ambulances to Mongolia.
Participating teams raise money to purchase ambulances and other utility vehicles to be donated to
Mongolian public health agencies and charities. Teams drive the ambulances from London to
Mongolia as part of a road rally. Upon arrival, the vehicles are delivered to vetted public health
charities or the Mongolia public health service.
In 2008 and 2009, over 60 utility vehicles and ambulances were delivered. During the 2010 rally,
over USD400,000 was raised and almost 20 vehicles were delivered. As a result of this success,
ambulances to be donated this year will be used to create a new centralized Emergency Medical
Service in Mongolia to be managed by Go Help. This 2011 initiative is sponsored by Vodaphone and
Save the Children Foundation, among others.
Source: The North America-Mongolia Business Council
ANNOUNCEMENTS
MINES and MONEY Hong Kong 2011, MARCH 22-25
Asia‟s premier and largest mining investment event already has 600 people confirmed to attend and
looks set to attract well over 1,500 attendees making it THE event where miners and investors
come together to do business. Over 150 mining companies are exhibiting. The Business Council of
Mongolia is a supporting association of this event and as such this entitles all its members to a 15%

18. discount on the conference price.
The event has a strong focus on Mongolia again this year with Robert Friedland, Executive Chairman
of Ivanhoe Mines, giving a keynote address and both South Gobi Resources and Hunnu Coal are Gold
Sponsors. On top of this there is a morning on 25 March dedicated to Mongolian Mining Investment.
This special session highlights key developments in Mongolia‟s mining industry and the investment
opportunities that reside there.
This event promises to deliver a large number of investors all looking for their next big opportunity.
For registration, simply visit the website www.minesandmoney.com/hongkong and click on the
registration button. If you are interested in sponsorship opportunities then please contact Toby
Duckworth on +44 20 7216 6074 or toby.duckworth@aspermontuk.com.
Among the speakers are:
- Robert Friedland, Chairman, Ivanhoe Mines
- Andrew Forrest, CEO, Fortescue Metals Group
- Zheng Zhi, Chairman , China Mining United Fund
- Jing Ulrich, MD & Chairman , China Equities & Commodities, J.P. Morgan
- Bernard J. Guarnera, President & CEO, Behre Dolbear & Company
- B. Enebish, Executive Director, Erdenes MGL
- Peter C. Akerley, CEO, Erdene Resource Development.
___________________________________________
2012-2013 FULBRIGHT STUDENT FELLOWSHIP
The Public Affairs Section of the U.S. Embassy to Mongolia is now accepting applications for the
2012 -2013 Fulbright Student Fellowship Program. Fulbright Student Fellowships are part of a U.S.
Government-funded academic exchange program, and fund graduate-level (M.A., M.S) studies at
U.S. universities. Fulbright Student Fellows are selected by the Public Affairs Section of the U.S.
Embassy. Deadline: April 11, 2011. Visit: http://mongolia.usembassy.gov/fulbright_2012-2013.html
___________________________________________
2012-2013 HUBERT HUMPHREY FELLOWSHIP
This is a one-year, non-degree professional exchange program. It provides approximately a year of
study and related professional experience in the U.S. to mid-career professionals working in the
following public service fields, in either the public or private sector: agricultural
Development/Agricultural Economics, communications/Journalism, Substance Abuse Education,
Treatment and Prevention, Economic Development, Finance and Banking, Educational
Administration, Planning and Policy, Higher Education Administration, HIV/AIDS Policy and
Prevention, Natural Resource and Environmental Policy and Climate Change, Human Resources
Management, Public Health Policy and Management, Public Policy Analysis and Public
Administration, Teaching of English as a Foreign Language, Technology Policy and Management,
Trafficking of Persons, Policy and Prevention, Urban and Regional Planning, Law and Human Rights.
Application deadline: April 15, 2011.
Visit: http://mongolia.usembassy.gov/sholarship_announcements/humphrey2012.html
___________________________________________
“MM TODAY” on MNB-TV, Fridays at 21:15
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on “MM Today”. This English news program is aired every Friday for 10 minutes and is
scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‟s BCM
NewsWire.
___________________________________________
“BSPOT” on B-TV, Monday to Friday at 21:30
BTV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every
evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
___________________________________________
NEW POSTINGS ON BCM WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIA REPORTS'
Presentations from BCM‟s monthly meetings on February 28 and January 24, the BCM Environmental
Working Group meeting on February 2 and the Haranga Resources investor‟s meeting sponsored by
MICC on February 23 as well as Mongolia Reports including the U.S. Embassy to Mongolia‟s
Commercial Section‟s “2011 Mongolia Investment Climate Statement” are posted on BCM's website

19. (www.bcmongolia.org) in the "Resource, Presentations" and “Resource, Mongolia Reports” sections
for your review.
We are now posting some news stories and analyses relevant to Mongolia on the BCM website's
„Mongolian Business News‟ as they come, instead of waiting until Friday to put them all together in
the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will
incorporate items that are already on the home page, so that it presents a consolidated account of
the week‟s events.
ECONOMIC INDICATORS

20. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
February 28, 2011 *11.0% [source: NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
CURRENCY RATES – March 17, 2011
Currency Name Currency Rate
US dollar USD 1,225.98
Euro EUR 1,711.16
Japanese yen JPY 15.47
British pound GBP 1,968.80
Hong Kong dollar HKD 157.14
Chinese Yuan CNY 186.51
Russian Ruble RUB 42.63
South Korean won KRW 1.08
Disclaimer: Except for reporting on BCM‟s activities, all information in the BCM NewsWire is
selected from various news sources. Opinions are those of the respective news sources.