1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 123, June 18, 2010
SPECIAL ISSUE – MONGOLIA MINING INVESTMENT
SYDNEY, JUNE 21-22, 2010
NEWS HIGHLIGHTS:
Business:
State assets to raise capital through IPOs to be named in a month;
Two banks picked for Oyu Tolgoi loan structuring;
Mongolia receives proposals for international assistance for MSE;
Oyu Tolgoi Board holds first meeting;
Mongolian mining companies in talks with Hong Kong Exchange;
MEC appoints Dennis Carl Price as COO for Mongolia;
Petro Matad resumes operations;
TenGer Financial Group acquires 50% of Prime Insurance;
EBRD loan to help APU double beer production;
Origo Partners plans to invest USD20 million in Mongolian minerals;
Shandong Equipment launches operations in Mongolia;
Russia's ARMZ aims to be among top 3 uranium producers.
Economy:
Mongolia scales back bond sales target;
Social, economic data for May released;
Some Government services may be privatized;
MSE restructuring likely to begin in September;
MPs critical of Government‟s position on Chinese loan;
Mongolia seeks foreign investment to boost crude oil output;
Central Bank‟s failure to pay money to state budget criticized;
Remaining allowance from HDF only after updated registration;
MNMA chief critical of Government policy on Tavan Tolgoi;
Outstanding loans rise;
Cashmere sold for record price;
President‟s adviser emphasizes security concerns in mining;
Government wants ninjas to form small cooperatives;
No money for infrastructure in Altanbulag free trade zone;
New wave of gains seen for commodities;
Why China‟s pay unrest is healthy;
China CPI breaks 3%.
Politics:
New Prosecutor General reopens July 1 cases against police;
Russian official asks Mongolian ambassador to keep politics out of railway matters;
Both parties oppose cutting 7,000 state jobs this year;
Widespread support among MPs for resumption of child money payment;
2. Government rejects demand for child money;
No MP wants only narrow-gauge railway, says Deputy PM;
Minister admits to some shortcomings in State health care system;
Children‟s Park will be reopened before Naadam;
The “senseless majority” who rule Mongolia;
International body to assess needs of migrants;
U.S. senator accuses China of „honey laundering‟ through Mongolia;
Kazakhstan grabs uranium boom.
*Click on titles above to link to articles.
BUSINESS
STATE ASSETS TO RAISE CAPITAL THROUGH IPOs TO BE NAMED IN A MONTH
Mongolia‟s plan to privatize its state-owned assets will allow international investors access to some
of the world‟s largest untapped mineral resources through initial public share sales, most likely in
Hong Kong. Mr. D.Sugar, Chairman of the Government of Mongolia‟s State Property Committee, said
that even though the procedure of equity listings hasn‟t been confirmed, the Mongolian government
has decided to sell shares in both local and international stock markets.
Mr. Sugar named Erdenet Mining Corp., a Mongolian-Russian copper producer joint venture, the
Tavan Tolgoi coking coal deposit and the Oyu Tolgoi copper mine as the nation‟s biggest state-
owned assets to be privatized. Uranium companies may also be privatized.
“Mongolia doesn‟t have anybody who has offered shares in international markets yet, that‟s why we
are very cautious,” Mr. Sugar said in an interview. “We are asking international investors to invest
now, particularly those from Hong Kong.”
McKinsey & Co. is advising the Mongolian government in identifying state-owned enterprises to be
privatized. Final results are expected in one month. Mongolia is betting on overseas capital markets
as its primary source of fundraising over its less liquid domestic market.
Read more…
Erdenet, established by the governments of Mongolia and the former Soviet Union, started
operations in 1978, and produces more than 530,000 tons of copper concentrate and 3,000 tons of
molybdenum concentrate. It also processes 25 million tons of ore per year.
Tavan Tolgoi holds about 6 billion metric tons of coal in the deserts of southern Mongolia, making it
one of the world‟s largest unexploited reserves of the fuel. While it is 100 percent government-
owned, Mongolia plans to control part of the deposit by a state-run enterprise, with a second
tranche to be operated by a group of foreign and domestic companies, Mr. Sugar said.
Rio Tinto Group and Ivanhoe Mines Ltd. are developing Oyu Tolgoi, which may operate for as long as
30 years and generate between USD30 billion and USD50 billion in revenue.
Ivanhoe holds 66 percent of Oyu Tolgoi and Mongolia the rest. Rio owns 22.4 percent of Ivanhoe and
has an option to increase its stake to 44 percent. Production is scheduled to begin in 2013.
Selling part of its holdings in these assets will require the agreement of Mongolia‟s joint venture
partners, Mr. Sugar said.
The average daily turnover of the Mongolian Stock Exchange is about USD100,000 this year,
according to Mr. K.Altai, Chief Operating Officer of the Mongolian Stock Exchange. That compares
with HKD64 billion for the Hong Kong Stock Exchange.
Source: Bloomberg.com
TWO BANKS CHOSEN FOR OYU TOLGOI LOAN STRUCTURING
BNP Paribas and Standard Chartered Bank have won the mandate to work on the USD4.6 billion Oyu
Tolgoi copper and gold mine project. The two will work on structuring the proposed USD1.2 billion
B loan part of the debt financing backed by the EBRD and the IFC. The decision on the two will now
need to be approved by the project company's board.
The EBRD and the IFC are considering providing a two-part debt package in a limited-recourse
project financing consisting of up to USD300 million each as part of a group of primary lenders and
mobilizing of a further USD1.2 billion from commercial banks under a B loan structure.
Ivanhoe Mines has received expressions of interest from export credit agencies to provide up to a
further USD500 million in direct financing. Canada's EDC is likely to be involved. Other agencies
3. could be U.S. Ex-Im and KfW. In addition, it is believed the Oyu Tolgoi funding package could
include a Chinese bank tranche totaling USD1 billion. However, the eventual size of all the tranches
in the deal will depend on what can be raised in the market at the time of financing. It is not
expected that the deal will be in the market officially until at least early next year.
The financing options are complicated by the scheme being essentially two projects - a surface
operation and an underground mine. If both were financed together, the project would take seven
years to complete. It might be easier to finance the first phase and then to start producing cash
flows. The underground part would enable more export credit type financing to be procured, based
on heavy equipment orders. A total of 13 commercial banks submitted expressions of interest on
the deal. Other banks shortlisted for the structuring mandate are believed to have included Credit
Agricole, ING, HSBC, SG and Standard Bank. Hatch Corporate Finance is advising Ivanhoe.
Read more…
It is possible that the Chinese will become more involved in the project. Chinalco has a 9% stake in
Rio Tinto and Chinese co-operation and involvement would also be sensible, albeit politically
sensitive. The Mongolian government is aiming to list the Oyu Tolgoi mine on the local and
international stock markets.
The recently released 2010 Oyu Tolgoi Integrated Development Plan (IDP-10) estimated that the
initial capital cost required to achieve first production from the open-pit mine was USD4.6 billion.
This amount includes USD1.1 billion to be spent advancing underground development in preparation
for the start of block-cave mining following the start of production from the open pit.
Source: Reuters.com
MONGOLIA RECEIVES PROPOSALS FOR INTERNATIONAL ASSISTANCE FOR MSE
Mongolia plans to list its Oyu Tolgoi mine, one of the world's biggest untapped copper and gold
deposits, and is receiving proposals from global stock exchanges to assist with turning its state-run
stock market into a private enterprise, a government official said on Tuesday. Mongolia hoped to
list Oyu Tolgoi on the domestic exchange and an international one, Mr. D.Sugar, chairman of the
State Property Committee, said at the Mongolia Capital Raising Conference.
Mr. Sugar also said that Mongolia planned to list Tavan Tolgoi, one of the world's largest untapped
coal deposits. He added that the London Stock Exchange, the NASDAQ and the Hong Kong Stock
Exchange were among the groups that had submitted proposals to Mongolia to assist in privatizing
its exchange.
Source: Reuters.com
OYU TOLGOI BOARD HOLDS FIRST MEETING
The Oyu Tolgoi Representative Administrative Board held its first meeting last week, with Mr.
G.Batsukh in the chair. Over two days the board discussed and then approved working procedures
and also set the date of the next meeting. Mr. Keith Marshall, representing Ivanhoe Mines,
reported that with the hiring of 1,200 employees in the past two months, the number of Mongolians
working in the construction site has gone up to 1,800.
The board discussed how to increase the number of Mongolian companies supplying material and
providing services to the project. USD60 million worth of products must be bought by 2011. A
training program will soon be submitted to the Ministry of Education, Culture and Science, involving
3,000 Mongolian workers and five universities.
Source: Ardiin Erkh
MONGOLIAN MINING COMPANIES IN TALKS WITH HONG KONG EXCHANGE
Hong Kong Exchanges & Clearing Ltd. has met Mongolian mining companies seeking to list in the
city, said Chief Marketing Officer Lawrence Fok, who is in Ulaanbaatar for a forum on corporate
capital raising. Hong Kong Exchanges, which operates Asia‟s third-largest stock market, is
processing more than 70 initial public offering applications from both overseas and local companies,
Mr. Fok said, declining to name the Mongolian companies or give a time frame for possible listings.
“Hopefully there will be more companies using Hong Kong as a platform,” Mr. Fok said. “Mongolia
and other resource-rich countries share the same characteristics of having a small population and
massive resources, which would benefit from China‟s economic growth and its rising demand for
resources.”
Between six and eight companies that possess assets in Mongolia are listed in Hong Kong, Mr. Fok
said. The Hong Kong-traded stock of Vancouver-based SouthGobi Resources Ltd. has slumped 28
percent in the past three months. The company started production at its open-cast coal mine in
southern Mongolia last year to meet Chinese demand.
4. Mongolian companies “have the story about China‟s economic growth and its increasing demand for
resources,” Mr. Fok said.
Source: Bloomberg.com
MEC APPOINTS DENNIS CARL PRICE AS COO FOR MONGOLIA
Mongolia Energy Corporation (MEC) has announced the appointment of Mr. Dennis Carl Price as
Chief Operating Officer-Mongolia, effective May 14. Mr. Price will join hands with MEC's
management team to further develop the Group's mining operations in Mongolia.
Mr. Price has over 30 years of experience in the mining industry worldwide, including Mongolia,
Kazakhstan, Columbia, Georgia, Germany, Indonesia, Turkey and the United States. He has
extensive operating and engineering experience in exploration and mining of coal, gold and various
other minerals.
Source: Mongolia Energy Corporation
PETRO MATAD RESUMES OPERATIONS
Petro Matad has resumed operations at its Davsan Tolgoi prospect in Block XX in Dornod province,
after restrictions enforced following an outbreak of the foot-and-mouth disease were lifted. The
company had to suspend operation on June 1, as blanket restrictions were imposed on vehicle and
personnel movement in and out of the area. This prevented supply trucks from reaching the well,
and none of the onsite personnel was permitted to leave.
Movement of all personnel and vehicles is now unrestricted, and the company's remobilized
management team is now onsite.
Source: Petro Matad
TENGER FINANCIAL GROUP ACQUIRES 50% of PRIME INSURANCE
TenGer Financial Group has acquired 50% of Prime General Insurance LLC, a leading insurer of
Mongolia. The remaining half is owned by Petrovis LLC. The acquisition is expected to help Prime
Insurance strengthen its business position and become the leader in the field. Mr. U.Ganzorig, CEO
of Prime Insurance, has said the move will help the company provide “comprehensive financial
services to customers and to introduce a new standard in the financial sector of Mongolia”. Mrs.
J.Oyungerel, founder of Petrovis, has hailed the TenGer decision as a “clear example that well
known private enterprises of Mongolia can successfully cooperate”.
Prime Insurance Company, one of the top three insurers of Mongolia, provides service to 700
companies and 11,000 individuals. TenGer Financial Group is the lead investor in Xac Bank, Xac
Leasing, Xac Securities and Chorus Nomadic Solutions. Last year, it made its first international
investment, in a Kyrgyz financial company, and plans to expand in the Russian Federation, Central
Asian countries and China.
Among shareholders of the Group are EIT Capital Management, IFC, EBRD, Mercy Corps, Triodos
Bank Group of Holland, Blue Orchard Investment Fund of Luxemburg and some domestic NGOs.
Source: www.tengerfg.mn
EBRD LOAN TO HELP APU DOUBLE BEER PRODUCTION
The European Bank for Reconstruction & Development (EBRD) said last week that its USD25 million
loan to Mongolia‟s largest drinks company would help APU double its beer production capacity by
2014, buy a beer canning line and improve its energy efficiency and production costs.
Privately-owned APU has a 50% share of Mongolia's beer market, with brands including Fusion,
Altangovi, Kharkhorum and Borgio. It also makes vodka, juice, UHT milk, mineral water and soft
drinks.
APU chairman Purev Batsaikhan said the loan would “help us further in our quest to become a
world-standard manufacturer”.
Source: www.altassets.com
ORIGO PARTNERS PLANS TO INVEST USD20 MILLION IN MONGOLIAN MINERALS
Private equity investor Origo Partners plans to raise up to USD30 million via a placing through an
accelerated book-building process. It says it will use the net proceeds to fund a number of new,
well-advanced investment opportunities in the Chinese clean-tech and agriculture sectors and in
the Mongolian natural resources sector. Together with the company's existing cash resources, the
funds will be used for, among other things, Mongolian mineral resource investment opportunities
totaling USD20 million.
Source: Business Financial Newswire
5. SHANDONG EQUIPMENT LAUNCHES OPERATIONS IN MONGOLIA
Shandong Equipment LLC launched its operations in Mongolia at a ceremony on June 15. It is a
company wholly-owned by Wagner Asia Equipment LLC and will sell wheel loaders manufactured in
China by SEM Machinery Co. Ltd., which is 100% owned by Caterpillar. Wagner Asia is the Caterpillar
dealer in Mongolia and has so far sold 29 wheel loaders here.
Source: www.wagnerasia.com
RUSSIA‟S ARMZ AIMS TO BE AMONG TOP 3 URANIUM PRODUCERS
Russian state-controlled miner ARMZ is eyeing more acquisitions in a bid to become one of the
world's top three uranium producers after buying a controlling stake in Canada's Uranium One. ARMZ
director general Vadim Zhivov has said the deal will create an international heavyweight.
According to ARMZ's website, the company was the world's fifth largest uranium producer in 2009,
behind Rio Tinto, Cameco, Kazatomprom and Areva. Uranium One ranked eighth.
In order to increase its share of the global uranium market, ARMZ plans to continue to grow outside
Russia, which holds one-tenth of the world's reserves. When asked who ARMZ could acquire next,
Mr. Zhivov said, "It is not wise to predict what will happen next.”
Source: Reuters.com
ECONOMY
MONGOLIA SCALES BACK BOND SALES TARGET
Mr. B. Batbayar, director general of the financial and economic policy department of Mongolia, has
said the Government has scaled back its plans for global bond sales this year, after Europe‟s debt
crisis drove up borrowing costs. The Government still plans to raise USD500 million from bonds this
year and the remainder of its USD1.2 billion program according to market conditions.
“The Greek and European countries‟ sovereign debt crisis has some impact on us,” Mr. O.
Chuluunbat, MP, told the Frontier Securities Mongolia Capital Raising Conference. “We will have to
go for higher rates if we go global.”
Mongolia is rated B1 by Moody‟s Investors Service, four levels below investment grade and on par
with Fiji and Papua New Guinea. Standard & Poor‟s rates the nation BB-, the third-highest non-
investment ranking.
Source: Bloomberg.com
SOCIAL, ECONOMIC DATA FOR MAY RELEASED
All figures are for the period January-May 2010, unless otherwise mentioned. All comparisons are
with the period January-May, 2009, again unless otherwise mentioned.
Consumer price index
The national consumer price index in May rose 3.2 percent against April, 13.1 percent against the
end of last year, and 11.6 per cent against May 2009.
The rise was mainly because of a 6.4 percent increase in the price of food and non-alcoholic
beverages.
Unemployment
The number of unemployed people was 135,100 in the first quarter of 2010. This was 12.2 percent
of the working age population. There were 76,300 men in the total.
The number of registered unemployed was 38,701 at the end of May, showing a 0.2 percent drop.
Budget, tax collection
The general government budget (GGB) showed a deficit of MNT 169.8 billion, MNT 22.0 billion less
than in the same period last year. The current account presented a surplus of MNT 55.9 billion. Tax
revenue rose 71.0 percent. Income from the windfall profits tax rose 5.8 times, from corporate
income tax 2.1 percent, and from value added tax 67.7 percent.
Non-tax revenue decreased by 14.5 percent. Revenues from budget entities went up 65.0 percent.
Capital expenditure altogether rose 72.2 percent, but foreign-financed capital expenditure dropped
87.4 per cent.
Foreign trade
Total turnover of trade with 120 countries reached USD2,039.8 million, registering an increase of
58.5 percent. Exports rose 66.9 percent and imports 51.3 percent. The trade balance showed a
6. deficit of USD60.2 million, USD41.0 million or 40.6 per cent less than in the corresponding period in
2009.
Mineral products, natural or cultured stones, precious metals, jewelry and textiles and textile
articles accounted for 92.4 per cent of the total export value.
Industrial output
Total industrial output increased (at 2005 constant prices) 12.2 percent in the first five months of
2010.
Freight, passenger traffic
Export freight rose 27.6 percent, domestic freight 12.9 percent, and import freight 32.0 percent in
the first five months of this year. However, transit freight was 6.3 percent less. Passenger traffic
also rose, and the railway revenue was 26.8 percent more.
The number of people flying increased 32.6 percent and the volume of freight carried by air was up
29.2 percent. Total revenue from air transport increased 8.5 percent.
Construction
Domestic entities accounted for 71.3 percent of the construction and installation work in the first 5
months of 2010.
Stock trading
Altogether 6.4 million shares were traded for MNT 1.5 billion in 21 trading days in May. The number
of shares traded increased 10.0 percent against April, but was 6.4 percent less than in May, 2009.
Social insurance
Of the 440,300 people registered in social insurance schemes in the first five months of 2010, 40.2
per cent were from government institutions, while the rest were private sector employees. Of the
total amount allocated for pensions, retirement benefits accounted for 72.9 percent, allowances
for the disabled for 12.9 percent, payment to families without a breadwinner for 7.5 percent, and
military pensions for 6.7 percent of the total amount.
The number of people receiving social welfare pensions and benefits dropped by 86.7 percent and
the amount paid was 61.8 percent less.
Altogether MNT 162.3 billion were given to 2.3 million people from the Human Development Fund.
Household accounts
Average household income in the first quarter of 2010 stood at MNT393,000, rising by MNT48,300 or
14.0 percent over the previous year. Average household expenses were MNT378,000, an increase of
MNT 22,400 or 6.3 percent.
Source: The National Statistics Office
SOME GOVERNMENT SERVICES MAY BE PRIVATIZED
MPs have asked the government not to cut jobs this year. The Finance Ministry hopes to save
MNT138 billion from the state budget by abolishing 7,000 of the 154,000 state jobs at present.
Giving this information, MP Chuan (MPRP), head of the working group set up to review the proposed
budget revision, told media last week that the increasing number of government employees was an
obstacle to reducing budget expenses. In the past three years, Parliament has twice called for
improving the administrative structure and reducing expenses, but nothing significant came of
these. There is not enough money to pay for budgeted expenses, and the debt between government
organizations has been on the increase.
The working group is also exploring the possibilities of outsourcing some government services.
Private companies, both domestic and foreign, could be given a bigger role in sectors such as
energy and road transportation. Mr. Ulsan thinks the time has come to take “the bold step” to share
some services with non-government entities. Some privatization is likely to improve the quality of
work, under pressures of competition, he felt.
Source: News.mn
MSE RESTRUCTURING LIKELY TO BEGIN IN SEPTEMBER
Mr. Kh.Altai, First Deputy Director of the Mongolian Stock Exchange (MSE), has expressed his hope
and confidence that bids inviting companies to help privatize its management will attract response
from companies with international reputation. The selected company will be expected to begin
7. work in September. The proposed improvements cover areas like finance, audit, accounting,
preparation of statements, and risk evaluation. Domestic investors will also have to be trained to
become better-informed and wiser to the ways of international trading.
Mr. Altai has emphasized the need to raise facilities and performance to international standards if
the Government‟s goals for developing the domestic capital market are to be met. The Prime
Minister has already set up a working group for the purpose. It is headed by Minister
Ch.Khurelbaatar, with Mr. Altai as secretary. Its members come from related state organizations as
well as from the private sector. A document the group prepared, containing recommendations on
how to develop the capital markets, has now been approved by the Government.
These recommendations call for correlation of existing laws in several sectors, as also for new laws
on companies and investment funds. The stock exchange has got a new executive board comprising
skilled professionals from the State Property Committee, the private sector, international banks
and financial organizations. Mr. Altai thinks it is imperative to install a double registration system
whereby stocks for companies listed on foreign stock exchanges can also be traded on the
Mongolian Stock Exchange.
Source: Onoodor
MPs CRITICAL OF GOVERNMENT‟S POSITION ON CHINESE LOAN
There was criticism of both the Government and the Central Bank at a recent meeting of the
Standing Committee on the Budget when it discussed the status of foreign loans. When Finance
Minister S.Bayartsogt said serious talks on a USD30 billion from the Chinese Government would
begin only after Mongolia had set up a development bank, Mr. N.Batbayar wondered how a bank
that is yet to be established can hold up negotiations on an urgent loan. He cautioned the
Government against keeping Parliament in the dark, recalling that the decision to set up the State
Bank was taken administratively, and no permission from Parliament was sought on such an
important issue. Some MPs also wanted to know why the Central Bank places its foreign exchange
reserves overseas in accounts that pay 2% interest while it is saying it wants to borrow from abroad
and pay 4% interest.
Source: Onoodor
MONGOLIA SEEKS FOREIGN INVESTMENT TO BOOST CRUDE OIL OUTPUT
Mongolia is looking for foreign investors to help it boost domestic crude oil production tenfold in
the next three years, Mongolia's ambassador to Australia, Mr. J. Tserendorj, has said. The increase
in crude production to 10 million barrels a year from 1 million in 2009 would coincide with
construction of Mongolia's first oil refinery, enabling the country to reduce its dependence on Russia
for all petroleum products.
The move is the latest by Mongolia to exploit vast untapped natural resources with the help of
billions of dollars in foreign capital as it seeks more economic autonomy from its neighbors. "Right
now we export all our crude oil to China and are 100% dependent on Russia for oil products, except
for a little from Kazakhstan and China," Mr. Tserendorj said. "We have a plan to build a refinery in
Mongolia in order to not be dependent on imports."
Mongolia sits on vast quantities of untapped mineral wealth and analysts say it could be one of the
fastest growing economies of the next decade and a key investment target for global resources
companies. Foreign investors are watching to see if the country's fledgling democratic government
can build needed infrastructure, improve the rule of law and negotiate its way through the
geopolitical pressures exerted by Russia and China.
Source: Upstreamonline.com
CENTRAL BANK‟S FAILURE TO PAY MONEY TO STATE BUDGET CRITICIZED
The revelation that the Central Bank did not contribute anything to the state budget in 2009 has
caused consternation and dismay among observers. A noted economist, Mr. N. Dishevel, says the
failure shows that the Central Bank followed a wrong policy in relation to foreign currency reserves.
“That tax payers‟ money was wasted in loss-making currency deals shows that the bank‟s officials
are not qualified,” he said.
Other economists see little merit in the Central Bank‟s claim that the present foreign currency
reserves are at “a historic high” of USD1.3 billion. They say this should actually be much higher,
given the country„s natural resource and the high commodity prices in recent months. Gold
extraction was estimated to reach 15 tons but the Central Bank received less than 3 tons, indicating
failure of last year‟s measures to support gold extractors. Parliament cannot take Central Bank
officials to task because their appointment is decided by MPs.
8. Source: Zuunii Medee
REMAINING ALLOWANCE FROM HDF ONLY AFTER UPDATED REGISTRATION
The Department of Labor and Welfare Services has announced that the remaining MNT50,000 from
the Human Development Fund will be paid to every citizen only after work on updating the
population register, to start on July 1, is over.
Source: Onoodor
MNMA CHIEF CRITICAL OF GOVERNMENT POLICY ON TAVAN TOLGOI
Mr. D.Damba, President of the Mongolian National Mining Association (MNMA), does not think much
good will come out of the government‟s decision to extract the Tavan Tolgoi deposit through
operating contracts. Since the operating companies will be required to make sizable investments,
they will raise their costs at will, and once the work starts the government will have to go along.
He also thinks splitting the deposit among many operators makes less sense than allowing one big
company to run the show. The Mongolian Government does not have the resources to monitor the
work of so many companies operating in several areas in their different ways.
He regretted that the government had chosen to take decisions of such national importance
unilaterally, without seeking the views of professional organizations like the MNMA, or of any other
representative of the private sector. Only government representatives were included in the working
group. and its recommendations were published in newspapers as a fait accompli. It reinforces the
perception that the government thinks it has a monopoly of wisdom and sees no need to involve
specialized organizations, or scientific experts even in matters that go beyond politics.
Mr. Damba appreciated the Prime Minister‟s expressions of support to Mongolian companies getting
a role to play in the project, but was not very enthusiastic about the consortium of national
companies that has come up. There is a disturbing lack of clarity about how this is expected to
function, and, besides, its members include few companies with proven success in the mining
sector.
Source: Zuunii Medee
OUTSTANDING LOANS RISE
The Central Bank reports that money supply (broad money or M2) at the end of May recorded an
increase of 2.8 percent over the end of April, and of 35.3 percent over May, 2009. Currency issued
in circulation rose 4.0 percent over April, and 21.4 percent over May, 2009.
The volume of loans outstanding at the end of May increased 3.2 per cent over April, and 12.5
percent over May, 2009. The corresponding figures for principals in arrears were 8.3 percent and
22.6 percent respectively. The volume of non-performing loans stood 0.3 percent lower than in
April 2010, but 40.9 percent higher than in May, 2009.
Source: The Bank of Mongolia
CASHMERE SOLD FOR RECORD PRICE
The price of cashmere, known as Mongolia‟s “soft gold”, recently reached a record MNT50,000 per
kg, at Shinejinst in Bayankhongor province. This is twice last year‟s price and beats the earlier high
of MNT45,000 seen in 2001. The auction of the wool of white goats, endemic to the province, was
held on June 1, with nine national producers, including Gobi, Goyo Altai and Eermel, several
Chinese companies, and also local concerns who supply cashmere to China participating. The
district governor assured them that offers for the highest prices would be accepted, irrespective of
where the bidder was from.
Source: Undesnii Shuudan
PRESIDENT‟S ADVISER EMPHASIZES SECURITY CONCERNS IN MINING
Mr. M.Batchimeg, national security adviser to the President, feels the fast changing foreign and
domestic situation has emphasized Mongolia‟s security concerns. The President has decided to
restructure several specialized organizations, improve inter-agency relationship and cooperation,
and work for a better legal and management environment. This can be achieved only with
cooperation from Parliament and the government.
He defended the President‟s decision to temporarily discontinue issue of mining licenses even
though it had led to some disaffection among people whose interests were hurt. The President was
responsible for protecting the national interest, and not that of a certain group of people, National
security concerns were paramount in the face of the present intense competition for energy and
natural resources. The possible effect on the nation‟s economic security must be carefully
9. evaluated at a time when around 50% of the territory of Umnugovi and Dornogovi provinces is
covered by mining licenses. It is difficult to predict how exactly such large scale extraction will
impact the local communities‟ livelihood and the environment, so it has to be ensured that the
licenses go to responsible people.
Mr. Batchimeg referred to the international acclaim the Mongolian President had received when he
proposed at the World Economic Forum that there should be well defined norms to govern any
agreement in the minerals sector anywhere. This showed that a country‟s importance was not to be
“measured by whether it was small, like Mongolia”. This could very well turn out to be “our
significant contribution to international cooperation”, he said.
Source: Udriin Sonin
GOVERNMENT WANTS NINJAS TO FORM SMALL COOPERATIVES
During recent discussions in Parliament on amendments to the Mineral Resources Law and the Land
law, which are, among other things, aimed at adopting a comprehensive policy on artisanal mining,
the question repeatedly cropped up whether these miners, popularly called ninjas, really make
much money from the gold they find. A survey in August 2009 found over 35,000 artisanal miners
working in 100 areas of 57 districts of 18 provinces. They do not pay any royalty for what they
produce, but they did give to the Central Bank 564 kg of gold in 2008, and 400 kg more in 2009.
Such miners do not pay any tax or royalty.
The Government proposal is to allot 2,500 hectares of land to each cooperative group with five
members.
Source: Onoodor
NO MONEY FOR INFRASTRUCTURE IN ALTANBULAG FREE TRADE ZONE
In sharp contrast to the optimism of the director of the Zamiin Uud Free Economic Zone Reported in
the NewsWire last week), the head of the Altanbulag free trading zone, Mr. D.Erdenebat, has said
they have no money to start any work on infrastructure and have been able to build an earth road
to the border with Russia. Not a single company has begun building on land allotted to it.
Investment contracts were signed with 140 organizations. Of these, domestic companies were
allotted 288.6 acres of land and foreign companies 32.2 acres. The total investment is likely to be
USD 700 million. There are 25 domestic factories, 57 trading organizations, 41 service companies,
46 storage companies, 15 hotels and three banks. The foreign companies will mostly operate in
trading.
Source: Ardiin Erkh
NEW WAVE OF GAINS SEEN FOR COMMODITIES
Copper and oil prices could leap on strong industrial demand in coming months and gold may rise
further on inflation-linked buying, suggesting a new wave of gains for commodities. Market
strategists feel despite the slow jobs growth in the United States and the debt crisis in parts of
Europe, the world economy was recovering and that was good for commodity prices -- battered
lately by worries over global growth.
Ms. Abby Joseph Cohen, a veteran investment strategist at Goldman Sachs, Wall Street's leading
commodities trader, says, "We think the global recession is over. We see strong demand coming
particularly from the emerging economies who are building their infrastructure." She said U.S.
banks were no longer tightening lending conditions for small- and medium-sized businesses; federal
interest rates were likely to stay low for a long time and stockpiles of some materials were falling
faster than supply could come on board -- all good signs for basic resources like commodities.
Oil and copper prices have rebounded since last week. Goldman has a 12-month growth target of 23
percent for energy prices, 6 percent for base metals, 17 percent for precious metals and 4 percent
on livestock. It is only bearish on agriculture, which it expects to contract by 1 percent.
Source: www.miningweekly.com
WHY CHINA‟S PAY UNREST IS HEALTHY
There‟s trouble in the assembly plant of the world. Chinese workers in several plants are bypassing
state-controlled trade unions and confronting management. Consumers across the globe face a cost
hike at a key stage in the thousands of supply chains that bring them electronics, clothes and toys.
And about time too. Although the details of events in such a closed society are never clear, the
protests seem simply to be seeking out the path taken by every successful east Asian country. The
only real risk posed by labor unrest is if the Chinese authorities overreact, inflame a pay
negotiation into a political confrontation and so damage China‟s reputation as a reliable part of the
10. global production chain.
The rise in pay looks like a natural consequence of the country‟s development and of the operation
of labor markets, such as they are allowed to function. Productivity has risen over the decades,
partly because of more capital per employee but also as a result of higher skill among workers. It is
entirely natural for pay – whose share of gross domestic product has fallen steadily – to rise to
reflect those returns. Moreover, economic growth more oriented towards domestic consumption by
a growing middle class is precisely what China, and the unbalanced world economy, requires.
Wage rises on the scale being sought will have little effect on the world‟s consumers. Labor costs
are only about 5 per cent of the retail price of China‟s main exports – electronics and other
consumer goods. The Chinese pay claims are not going to price an iPad out of anyone‟s reach.
Pressure for higher pay in China, as long as it reflects higher productivity, is a feature, not a bug.
China was preceded down the development path by Japan, Singapore, South Korea, Indonesia,
Malaysia and Thailand. It will be followed by Vietnam, hopefully Laos, perhaps one day Burma, and,
who knows, eventually even North Korea. Chinese workers are not racing to the bottom. They are
beginning to rise towards the top.
Read more…
As for China‟s own competitive position, higher wage inflation may push some low-value business to
India or Vietnam – or poorer parts of China, which have plenty of room to develop basic industries –
but this is unlikely to cause too much disruption. The pay claims so far have in any case been
concentrated, as one would expect, in higher-value production.
A bigger risk to the Chinese economy would be an authoritarian overreaction by the state. Some
western companies have reportedly shortened their supply chains recently, European businesses
moving production from east Asia to eastern Europe or north Africa. But they seem mainly
concerned with reliability and speed, not pure cost. The worst thing China could do is to introduce
higher political risk into such a calculus. Indeed, it would help if workers could be represented
through genuinely free collective bargaining rather than a trade union movement controlled by the
state.
Source: The Financial Times
CHINA CPI BREAKS 3%
China's consumer price inflation in May breached the psychologically important 3% level, the
government's full-year target, for the first time this year, even as other indicators showed slowing
growth in economic activity. The country's consumer-price index rose 3.1% in May from a year
earlier, accelerating from April's 2.8% rise, government data showed.
Despite the CPI rise breaching the 3% level, analysts say an interest rate hike by the Central Bank is
not necessarily imminent. Inflationary pressures are expected to ease in the second half of the year
on falling raw material prices due to the European debt crisis and tightening measures already
taken in the domestic property market, economists say. The government's target is for an average
inflation rate of 3% over all of 2010.
The producer price index, a gauge of factory-gate prices, rose 7.1% in May from a year earlier,
higher than April's 6.8% rise and higher than economists' median forecast of a 6.9% rise. CPI in the
January-May period rose 2.5% from a year earlier, while PPI rose 5.9%.
Read more…
Other indicators showed that the pace of economic growth in China is moderating. Industrial
production expanded 16.5% in May, a tad slower than the 17.8% rise in April, and below economists'
expectations for a 17.0% rise. Fixed asset investment in urban areas rose 25.9% in the January-May
period, slower than 26.1% growth in the January-April period. Economists had expected a 25.8%
rise.
Retail sales rose 18.7%, picking up from April's 18.5% increase. Financial institutions in China
extended 639.4 billion yuan worth of new local-currency loans in May, down from 774.0 billion yuan
in April. Economists had expected 600 billion yuan in new yuan loans.
Source: The Wall Street Journal Asia
POLITICS
NEW PROSECUTOR GENERAL REOPENS JULY 1 CASES AGAINST POLICE
State Prosecutor General D.Dorligjav has ordered a fresh investigation into the police firing on July
1, 2008 which resulted in the death of five citizens. Initially, senior officials such as the head of the
General Police Authority, Maj.-Gen. Ch.Amarbold, the head of the Metropolitan Police Authority,
Mr. O.Zorigt, the head of the Public Discipline Department, Mr. G.Ganbaatar, and the head of the
11. Patrol Department, Mr. Sh.Batsukh, were investigated for abuse of power and causing massive
damage. Seven policemen were investigated for intended murder.
After 18 months of investigation, the cases against all of them were withdrawn on February 3, 2010
by the Metropolitan Prosecuting Authority. The senior officials were cleared under the Amnesty
Law, while the cases against the policemen were closed with the explanation that “even though
they had admitted to opening fire, it cannot be ascertained who fired the fatal shots.”
There was widespread popular discontent at the decision. Families of the victims kept on
complaining to the authorities and even went on a hunger strike, but the Government did not
budge. President Ts.Elbegdorj had always said he wished to see the case to an end and his
appointment of Mr.Dorligjav as the Prosecutor General was seen as a step in that direction.
Source: English.News.mn
RUSSIAN OFFICIAL ASKS MONGOLIAN AMBASSADOR TO KEEP POLITICS OUT OF RAILWAY MATTERS
Mongolian Ambassador to Russia D.Idevkhten met Mr. V.I.Yakunin, president of the state-owned
Russian Railways, which holds half the shares of Ulaanbaatar Railway, to impress upon him the
imperative need to extend the UB Railway network and to upgrade its technology so that the new
demands of an emerging Mongolian economy can be met. He asked Mr. Yakunin‟s what progress has
been made on the decision to raise the authorized capital of Ulaanbaatar Railway.
Mr. Yakunin said he agreed with the need to modernize the operations of Ulaanbaatar Railway so
that its capacity to carry transit cargo was raised. Reminding the Ambassador that it would be
better to keep politics out of matters relating to the railway, he said a decision has already been
taken in principle to augment the authorized capital of UR by both parties investing USD125 million
each. The Russian side has also agreed to give Mongolia a soft loan to be used as its contribution.
However, a final decision on how this will be done has not yet been made.
Source: Ardiin Erkh
BOTH PARTIES OPPOSE CUTTING 7,000 STATE JOBS THIS YEAR
Meeting separately, both the MPRP and the DP parliamentary groups this week decided that the
proposal to retrench 7,000 Government workers should not even be discussed this year. It could be
included in the 2011 budget and debated when the preliminary draft for that is submitted to
Parliament at its Autumn session.
A working group set up by Parliament to identify ways to bring down the budget deficit to levels
acceptable to the IMF had proposed the retrenchment in state organizations. The DP MPs felt the
question is not just one of dismissing 7,000 Government employees, who include teachers and
doctors. There is widespread concern and criticism that the quality of work in both education and
health sectors continues to be unsatisfactory. The DP feels proper management of the budget will
achieve better results than just ordering the Government to cut jobs. Individual sectors should
decide what salary is to be given to employees, and how to penalize incompetence as well as
reward efficiency. The DP MPs feel some private sector management practices should be followed
in government service also.
The MPRP group accepted that MNT8 billion must be cut from administrative expenses, but the lives
of many people depended on that money and no hasty decision should be taken, especially during a
period of economic recession. The popular perception that the government structure is too big
ignores the fact that it includes teachers and doctors. The MPRP group favored a complete overhaul
of the administrative structure under a plan to be debated in the Autumn session.
Source: Undesnii Shuudan, Ardiin Erkh
WIDESPREAD SUPPORT AMONG MPs FOR RESUMPTION OF CHILD MONEY PAYMENT
MPs from both parties this week renewed their demand for resumption of paying the child
allowance. The MPRP parliamentary group has said the amount to be paid will depend on how much
is in the Human Development Fund. This will be clear during the discussion of the budget, but the
party‟s MPs hoped it would be possible to pay the money every month.
The DP group feels that even under a revised budget, there would be enough money to pay
MNT20,000 a month to every child. The total cost would be MNT190 billion.
Source: Ardiin Erkh, Onoodor
GOVERNMENT REJECTS DEMAND FOR CHILD MONEY
Minister for Internal Affairs Ts.Nyamdorj has said there is no reason for the Government to revoke a
decision taken only last December and resume payment of child money at present. In any case the
amount formerly paid as child allowance was approximately the same as the MNT120,000 that the
12. Government has decided to pay from the Human Development Fund, and the Government is
considering paying the MNT50,000 still due to be paid on this account to be distributed in monthly
installments.
Asked if this did not mean that money that had gone to children was now being given to adults, Mr.
Nyamdorj said every household received the money, and could spend it on its children.
Source: News.mn
NO MP WANTS ONLY NARROW-GAUGE RAILWAY, SAYS DEPUTY PM
First Deputy Prime Minister N.Altankhuyag has justified the decision to have foreign companies
operating in Tavan Tolgoi on four grounds. First, “we need soft transportation conditions in order to
deliver the coal to Japan and Korea”; second, only foreign companies can make substantial advance
payments; third, the companies can be asked to invest in building a railway and developing
infrastructure; and fourth, “we can make beneficial negotiations with investing countries”, he said.
Mr. Altankhuyag has said the main importers of the coal are likely to be China, South Korea, Japan
and Germany, which means the coal will have to be transported through both China and Russia. This
calls for new railway routes. The Government wants all the new tracks to have a broad gauge. MPs
are still divided. Some of them favor building two separate railways, with gauges to facilitate entry
to both China and Russia, but, according to Mr. Altankhuyag, no MP has so far said that all of the
new railroad should have the narrow gauge.
Source: Ardiin Erkh
MINISTER ADMITS TO SOME SHORTCOMINGS IN STATE HEALTH CARE SYSTEM
Minister for Health S.Lambaa has told Parliament that the capacity of State-run maternity hospitals
in the country has not increased since the time Mongolia‟s population was 600,000. The country
now has 2.7 million people. There are, however, over 2,100 organizations offering health services in
the country. Mr. Lambaa thought mother and infant mortality rates were within acceptable limits,
but there was scope for improvement. According to him, the high poverty rate leading to under-
nourishment and less resistance to diseases contributed to the mortality figures. Interestingly,
women from herder households accounted for 30 percent of births but 40 percent of the maternal
mortality figures. Child mortality is decreasing, but infant mortality rate is still relatively high.
The Minister categorically denied that a single case of maternal mortality in Khongor could be
blamed on chemical pollution of the area following indiscriminate mining, and said such baseless
charges must stop.
Source: English.News.mn
CHILDREN‟S PARK WILL BE REOPENED BEFORE NAADAM
Ulaanbaatar Mayor G.Munkhbayar has announced that the partially renovated Children‟s Park will
be opened to the public, after being off limits for three years, before Naadam. It was expected to
be ready before Children‟s Day on June 1. MNT 18 billion has so far been spent on redesigning this
major attraction in Ulaanbaatar, formally known as The National Recreation and Amusement
Center, and another MNT12 million is likely to be needed before the work is over. No final date has
yet been set for this.
The redesigning has been the responsibility of a company specially formed for the purpose. Bodi
Properties owns 74 percent of its shares and the Government the rest. Apart from outdoor activities
and attractions, there will be many features to encourage visits during the winter months.
There is one snag. The Union of Democratic Forces, an NGO recently floated by some Democratic
Party leaders to “reform the country”, has written to the Mayor asking for a cancellation of several
deals that gave away parts of the park to private businesses. The park has been the largest
amusement center in Ulaanbaatar and once covered more than 30 percent of the city‟s green
space. After land parcels were sold to businesses, office premises, apartment buildings, and hotels
have begun being built there. The NGO charges most of the deals were illegal.
Source: The UB Post
THE “SENSELESS MAJORITY” WHO RULE MONGOLIA
If Parliament is Mongolian society in miniature, then our society has gone all crazy. It is said that a
society is to be considered sick, if two percent or more of its members are mentally ill. My
observation is that our Parliament shot above this number quite a while ago.
Everybody talks about the “resources curse” even as political leaders share the skin of the
proverbial bear that is yet to be killed. It is not the actual resources, but the huge amounts of
money that is suddenly generated from them through the mouths of decision makers that has
13. become a poison for the people and threatens to tear down the nation. One does not have to finish
school to know that a fool and his money are soon parted.
Mr. Z.Enkhbold is considered the pride of our Parliament because of his vast education and faultless
manners. He recently said all the coal should be transported by trucks to create jobs. His view is
that a railroad is not labor intensive. So he wants 20,000 Mongolians to become truck drivers. His
next proposal would certainly be to use shovels instead of excavators in mining. That would mean
another 20,000 jobs. No, wait, it would be even better if the coal is transported by hand in buckets.
Apparently, our “distinguished gentleman” has not thought of that.
Human rights are very much respected in our country, and anyone‟s right to be a fool is completely
protected. My point is that a stupid majority of fools are deciding the fate of us, having totally
sidelined MPs who are sensible. Who cares what the minority thinks?
Source: News.mn
The complete article called “Rusty mentality or differences in opinion?” by former Finance Minister,
noted historian and social commentator Baabar can be found at both BCM‟s websites (English and
Mongolian), Mongolian Business News.
INTERNATIONAL BODY TO ASSESS NEEDS OF MIGRANTS
The International Organization for Migration (IOM) is now in Ulaanbaatar making preparations to
conduct a wide ranging Emergency Displacement Assessment following the migration of thousands
of nomadic Mongolians to urban centers, mainly the capital, after they lost most of their animals
because of climatic inclemency. IOM has planned the assessment in partnership with UNICEF. Mr.
Bruce Reed, IOM‟s regional representative for East Asia, has said even before the dzud-induced
heavy increase, the migration has been steady for a decade or so, and the planned assessment will
give “a clearer picture of the strain this is putting on the urban centers‟ infrastructure and key
services, including shelter, health and education”.
Over years of working with people displaced by emergencies in various parts of the world, the IOM
has developed its own tools to collect targeted data, and to identify service delivery gaps in life-
saving areas like shelter, disease control, safe water supply, and sanitation. The assessment, to
begin after four weeks of preparatory work, will recommend mid- and long-term assistance
measures to address the needs of the most vulnerable section of the migrants – the elderly, women,
and children.
Source: www.iom.int
U.S. SENATOR ACCUSES CHINA OF „HONEY LAUNDERING‟ THROUGH MONGOLIA
U.S. Senator Charles Schumer (D-NY) has blasted China for alleged predatory trade practices,
including shipping its honey to the United States through India, Mongolia and Malaysia so that tariffs
would be cheaper. Mr. Schumer called the practice “honey laundering” and said he wants it
stopped. The senator said he will support a bill to authorize the U.S. Immigration and Customs
Enforcement agency to intercept such mislabeled honey, which may be sold as malt sweetener or
blended syrup, and ask the U.S. Food and Drug Administration to define honey, something it has
delayed doing.
Chinese honey gets slapped with a USD2.63 tariff on each kilogram. Mongolia and others are eligible
for a much lower tariff of only 1.9 cents per kg, according to Mr. Schumer‟s office. The reason for
the wide tariff disparity is China‟s record as a predatory trade partner, said a spokesman for the
senator.
Source: DemocratandChronicle.com
KAZAKHSTAN GRABS URANIUM BOOM
Kazakhstan surpassed Canada last year as the world's largest uranium miner. With more than 15
percent of global reserves, the Central Asian state is poised to become the primary supplier of the
metal to a new generation of nuclear reactors worldwide. Global uranium consumption is forecast
by the World Nuclear Association to reach 91,537 tons by 2020 and 106,128 tons by 2030, increases
of 33 percent and 55 percent respectively from the 68,646 tons forecast for this year.
The need for new mines will be exacerbated when Russia's 20-year 'Megatons to Megawatts' program
to export uranium from decommissioned nuclear weapons expires in 2013. This will remove 24
million pounds of reactor-quality uranium from the market, about 13 percent of world consumption,
which has helped restrain uranium prices by bridging the gap between supply and demand.
Kazakhstan has attracted foreign investors like Areva and Toshiba Corp. But it is not without risk:
investors were shocked when the man once hailed as the architect of such partnerships began a 14-
year jail term in March. Mr. Mukhtar Dzhakishev had led Kazatomprom since 1998 before his arrest
14. last year on charges of corruption, theft and the illegal sales of assets to foreign companies. He
denies the accusations.
The Kazakh uranium industry wasn't always so modern. The country inherited decaying Soviet
infrastructure and output fell by 75 percent in the years following independence. For many, this
legacy is hard to shake. And while opposition to nuclear power persists among some lobbies in
Australia, the only country with more uranium in the ground than Kazakhstan, the Central Asian
state is likely to advance its position as the world's largest uranium miner.
Read more…
The uranium boom is good news for the residents of Taikonur. Once populated only by Russian
geologists, the town was largely abandoned when the Soviet Union fell. It has been revived by an
influx of ethnic Kazakhs seeking well-paid work in the mines. The average monthly wage is around
USD1,200, more than double the national average. .
International miners vie for a share of the lucrative business. But Kazakhstan has made it clear it
will not let anyone invest in its uranium. "We don't need portfolio investors," said Mr. Nurlan
Ryspanov, vice-president for production at Kazatomprom, which owns a 10 percent stake in U.S.-
based reactor builder Westinghouse. "We need co-investors who, by entering the uranium business,
will bring with them new technologies and capabilities for us to enter new phases of the nuclear
fuel cycle."
Most Kazakh mines produce uranium via the in-situ recovery method. Drill rigs bore holes into the
steppe to recover uranium in an acid solution, which is concentrated in several stages before being
dried to produce yellowcake. The technique avoids the need to dig shafts or pits, cutting mining
and land reclamation costs and reducing the risk of injury to miners.
Source: Reuters.com
ANNOUNCEMENTS
MONGOLIA MINING INVESTMENT 2010 ON JUNE 21-22 IN SYDNEY
"Mongolia Mining Investment 2010", the first-ever Mongolian investment conference in Australia, will
be held on June 21-22 in Sydney. Organized by Informa, the conference is being supported by
Austrade, the Mongolian Embassy in Australia and BCM. The event will assist potential investors,
Mongolian mining companies and all other related parties in developing strategic plans for further
business openings in Mongolia.
Delegates will meet with influential government officials, mining and exploration companies,
investors, traders, analysts, equipment producers and suppliers. The registration fee for Mongolia-
based mining companies and Government officials is USD320. More information is available at
www.informa.com.au/mongolia-investment.
________________________________________
“BSPOT" on B-TV
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.
____________________________________
“MM TODAY” on MNB-TV
BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with
BCM on “MM Today”. This English news program is aired every Friday for 10 minutes and is
scheduled for 21:15 tonight. Tune in to watch this program that reports stories from today‟s BCM
NewsWire.
____________________________________
NEW POSTINGS ON BCM WEBSITE‟S „MONGOLIAN BUSINESS NEWS‟
The draft Tavan Tolgoi Investment Agreement which was submitted by the Government to
Parliament earlier this month is posted to BCM‟s Mongolian website (www.bcm.mn), „Mongolian
Business News‟ for your review.
As some of you might have noticed, 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.
16. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
May 31, 2010 *11.6% [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 – June 17, 2010
Currency name Currency Rate
US dollars USD 1,380.68
Euro EUR 1,696.30
Japanese yen JPY 15.06
British pound GBP 2,038.78
Hong Kong dollar HKD 177.20
Chinese yuan CNY 202.05
Russian ruble RUB 44.26
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.
