BCM Mongolia Business NewsWire Issue 110 Highlights Investment, Mining Deals

BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 110, March 19 2010
SPECIAL ISSUE: 2nd
ANNUAL MONGOLIA-ASIA INVESTMENT FORUM 2010
Euromoney Conference – 25 March, 2010 – The Westin Beijing
NEWS HIGHLIGHTS:
Business:
 Khan rebuts all charges based on “inaccurate information”;
 “Our participation would give impetus to Oyu Tolgoi,” says Chinalco chief;
 Ivanhoe sends reply;
 Shenhua still bidding for Tavan Tolgoi;
 Rio not at fault for Chinalco deal failure, says China report;
 Chinalco to team up with Rio in Guinea;
 Rio chief’s nine-million-dollar pay;
 Central Bank confirms TDB in good shape, after rumors cause concern;
 Xac Bank issuing Kiva loans to address poverty, pollution;
 Final report on Anod Bank this month;
 Booklet published on laws in mineral sector;
 Erdenet output of copper shows little change;
 Rio Tinto trial set to begin Monday;
 20-member business team to attend franchising expo in USA;
 Working group holds meetings with all Tavan Tolgoi hopefuls;
 Suppliers to Oyu Tolgoi exhibit products;
 MNMA, BCM to continue working together;
 Shangri-La net profits rise.
Economy:
 Social and economic indices;
 Loss from dzud has crossed USD60 million;
 Second phase of distribution of MNT70,000 begins on April 1;
 MNT8 billion spent on pension and social welfare;
 No increase in bank loans, “non-performing” decrease somewhat;
 Finance Minister asked for details of bonds sold in 2002-2009;
 FIFTA to hold session in Hong Kong on listing there;
 Kuwait lends USD20.5 million to build road;
 17 TVET projects chosen for MCA-M grants;
 Over 182,000 Mongolians employed abroad;
 Meeting discusses how number of foreign workers can be reduced;
 Environmental Impact Assessment database launched;
 Monetary grants to work against deforestation;
 Multi-purpose sea-buckthorn program approved;
 Stimulus slowdown impacting real economy in China;
 How China manipulates global trade rules to its advantage;
 China keen to invest in “almost every commodity”, says South African Minister;

 China keeps its spot as top holder of U.S. debt;
 China talks tough to USA;
 World Bank urges China to cool its economy, head off inflation;
 Record number of Chinese unhappy over inflation.
Politics:
 Enkhbayar launches broadside on Bayar before MPRP conference;
 First protest on main square since July 1, 2008 passes off peacefully;
 Former official extradited from Austria, now in Mongolian prison;
 President seeks stricter punishment for corruption;
 Leader of new forum denies President is behind them;
 S.Oyun blames “wealthy minority” for social injustice;
 Hazardous chemicals in soil removed in 10 provinces;
 Mongolia performed generally well, says U.S. report on human rights;
 Bid to amend 1993 law on police and intelligence services;
 Another open hearing about July 1 on April 14;
 MP owning Narantuul to forgo MNT70,000 allowance;
 Multi-purpose sea-buckthorn program approved;
 Only Mongolians and Chinese can fly to Hailar from Choibalsan for now;
 MUST arranges online training course in mining;
 City official charged with taking bribe from Chinese firm;
 Mongolia to use Indonesia’s success in community empowerment;
 Bansh and khuushuur in Ottawa food fair;
 China plans high-speed rail connection to Europe.
*Click on titles above to link to articles.
MEETING NOTICE TO BCM MEMBERS
The next BCM monthly meeting for Members will be Monday, March 22, 2010 at 5 PM at the Open
Society Forum. The bilingual meeting will feature the following:
 Mr. D. Damba, the newly elected President of the Mongolian National Mining Association
(MNMA), will introduce himself and outline plans for the MNMA in 2010.
 Mr. George Tumur, Managing Director, Hunnu Coal, will provide a ―Brief overview of
Hunnu Coal‘s IPO on the Australian Stock Exchange (ASX).‖
 Mr. B. Enebish, Executive Director, Erdenes MGL LLC., will review ―Plans of Erdenes
MGL‖.
We will again conclude the business part of the meeting by asking BCM members in the audience to
briefly comment on specific problems, solutions, risks, opportunities and/or strategies affecting
their businesses. BCM members can learn from one another by sharing good news and bad.
Teleconferencing will be available for Members not able to attend. The call number is (1-218) 936-
7979, access code 771358 to be connected. The cost will be only that of the long distance call to
the above U.S. number.

BUSINESS
KHAN REBUTS ALL CHARGES BASED ON “INACCURATE INFORMATION”
In an open letter to MP Z. Enkhbold, Khan Resources has clarified its point of view about certain
conclusions and recommendations recently made by the working group led by him after its visit to
Dornod uranium district last summer. The company notes that the license it holds was not included
in the list of licenses whose legality was sought to be investigated. Reiterating that the company
has been fully cooperating with Government officials, Khan says it would be pleased to provide all
relevant documents to the working group if asked to do so. Expressing confidence that Khan has
fulfilled all its obligations towards CAUC, the company says it is difficult to understand why only it
should be investigated when there are two other partners in the joint venture. ―It is most
unfortunate that inaccurate information has been delivered…through recent official and unofficial
sources that suggests that only Khan may have been in breach of the law,‖ the letter says.
It traces the full history of the operations of Khan Resources in Mongolia ―in compliance with all
laws and regulations‖, and asserts that the company intends to work ―according to international
standards‖, even though some of the measures ―will be more costly‖, in keeping with Khan‘s strong
belief ―in putting health, safety, and environment protection as a number one priority, and well
ahead of profits‖.
The letter details the course of events that led to the conclusion of a Memorandum of
Understanding on January 22 between MonAtom LLC, the representative of the Mongolian
Government, and Khan, ―whereby Khan agreed to transfer 51% of the shares of Khan Resources Co.,
Ltd to MonAtom free of charge‖, in ―clear acknowledgment by Khan of the Mongolian right to own a
majority of the Dornod uranium deposit and thereby comply with the Nuclear Energy law‖. The
Russian partner (ARMZ) in CAUC ―did not respond to this request and abstained from voting‖.
Khan says ―ARMZ did not obtain any approval from the NEA‖ when it made a hostile take-over bid to
purchase all of the common outstanding shares of Khan Resources. The NEA broke its silence only
when it issued a statement ―a day before the expiration of the ARMZ take-over bid‖ saying that the
MoU had ―violated Mongolian laws and should not be implemented‖. Khan says ―this would have led
to a drop of the share price of KRI, and would have allowed‖ ARMZ to purchase them for low value.
It was at this time that CNNC of China made an offer to acquire all shares of KRI, and ―KRI had no
other option than to accept the CNNC offer under such circumstances‖.
Read more…
The letter expresses surprise and disappointment that the ARMZ has made ―speculative and
unsubstantiated comments‖ and has been ―releasing information about actions that have not taken
place and appears to be telling the Government of Mongolia what to do and what not to do‖. Then
it explains how in a market economy a publicly traded company cannot dictate who buys its shares,
and in this regard the Khan management ―has no power to prevent investors purchasing its shares,
whether they be Russian, Chinese or any other third party… (as) only shareholders make the final
decision‖. That final decision on the CNNC offer is yet to be made ―and it is too early to predict‖
what it will be. Thus, ―obtaining prior approval from the NEA of a deal which is not yet complete
and one in which we cannot predict, does not make any sense to us. More importantly we cannot
find any regulations demanding such approval before the deal is completed.‖ Besides, the
Mongolian law stipulates that ―the license holder must obtain approval if it intends to sell, pledge
or transfer its shares to others‖. In this case, ―a third party has made an offer to purchase all
outstanding common shares of the Canadian parent company‖ and this ―potential sale will not
change the ownership of shares of the company holding licenses in Mongolia‖. Khan clarifies ―that
no amendments were made into the ownership of Khan Resources Co., Ltd and CAUC holding
licenses in Mongolia and, if there were indeed any changes to the ownership of these two
companies, we would have obtained approval in accordance with the law‖.
The letter says ―the claim by certain NEA officials that Khan ‗violated‘ the law, and did not get the
Dornod uranium deposit reserve approved, is simply not true and is completely misleading‖. It
details how time and again Khan ―has been asking to conclude the Dornod deposit pre-mining
agreement since 2007 in accordance with the new Mineral Law requirements, but Government
agencies would simply ask it to wait‖.
The letter concludes by appealing ―to all parties to study the facts, and to present to the public
accurate and objective information, and then to make decisions in conformity with the laws and
regulations‖.
Source: Khan Resources Inc.
The full text of the letter is available at BCM Website – Mongolia Business News.

“OUR PARTICIPATION WOULD GIVE IMPETUS TO OYU TOLGOI,” SAYS CHINALCO CHIEF
Aluminum Corp of China (Chinalco) is building a coal business and a wholesale business to add to its
existing seven business divisions, says its President, Mr. Xiong Weiping, without elaborating on the
plan. The company is in talks with many potential partners, including Rio, and hoped to participate
in Oyu Tolgoi, the Mongolian copper-gold project being developed by Rio's partner Ivanhoe Mines,
he said.
―Since Chinalco is the largest non-ferrous metal company in China, and China has a geographic
advantage with Mongolia, we believe that having a big company like Chinalco involved would give
some helpful impetus to the project,‖ he said. The company will further expand into overseas
resources, and its confidence remains undimmed by the failure to raise its stake in Rio Tinto. ―We
will make some breakthroughs in overseas development this year,‖ Mr. Xiong said in an interview in
Beijing.
Chinalco, which plans to focus increasingly on copper, rare metals and coal, burst onto global
investors' radars by investing in Rio Tinto in February 2008, a deal that helped to derail a merger
plan between Rio and its rival BHP Billiton and made Chinalco the global mining dealmaker to
watch. But a later bid to double its stake in Rio Tinto last year came unstuck when the Anglo-
Australian company spurned its advances in favor of a tie-up with BHP.
Read more…
―This will not affect Chinalco's development and confidence in resolutely implementing its strategy
of becoming an international mining company,‖ Mr. Xiong said. Chinalco, the top shareholder in Rio
with a 9.3 percent stake in the mining group, has no plans to sell its shares, he said. ―Our
investment in Rio was because we are optimistic about the global mining industry and the potential
value of Rio. Currently there are lots of rumors about this. But I can tell you, being the responsible
person, that we do not have any plans or discussions about selling nor any plans or discussions about
disposing of the stake in Rio Tinto.‖
Source: Reuters.com
IVANHOE SENDS REPLY
Ivanhoe Mines Mongolia Inc. has submitted its reply to the four main points raised by the
Professional Council of Minerals when it sent back the technical and economic feasibility study of
the Oyu Tolgoi project. The reply was sent on March 12, within the stipulated time given for it.
Source: Udriin Sonin
SHENHUA STILL BIDDING FOR TAVAN TOLGOI
China Shenhua Energy, the world's most valuable coal producer, said it is still bidding for the Tavan
Tolgoi project. Mr. Ling Wen, Shenhua's president, said in Hong Kong on Tuesday that the company
retained its interest despite the Mongolian Government deciding to keep 100 percent of the huge
coal deposit. Referring to reports in the Mongolian media earlier this month, citing unnamed
officials, that the company has withdrawn from bids to develop the deposit, Mr. Ling said, ―We
have followed the Tavan Tolgoi project for seven years. We have the edge and we are actively
bidding for it.‖
Source: Reuters.com, Bloomberg.com
RIO NOT AT FAULT FOR CHINALCO DEAL FAILURE, SAYS CHINA REPORT
A detailed report to the State Council, or China's cabinet, did not blame Rio Tinto or the Australian
Government for the collapse last year of a USD19.5-billion tie-up between Chinalco and the Anglo-
Australian mining giant. Instead, according to The Australian Age, the report blamed economic
forces and a powerful public relations campaign by BHP Billiton for the failure of what would have
been China's biggest offshore investment.
Chinalco had agreed to a USD19.5 billion equity and asset tie-up to help rescue Rio Tinto from its
debt woes in February 2009, which Rio abruptly called off in June, opting instead to raise money
through a rights offer and by forming an iron ore joint venture with BHP. The collapse of the deal
damaged relations between Australia and China. A month later, at the height of fraught iron ore
negotiations, China arrested four Shanghai-based Rio Tinto staff, including Australian citizen Stern
Hu, on allegations of spying and bribery, deepening the rift.
―Objectively speaking, the failure of the merger between Chinalco and Rio Tinto lies in the rapid
recovery of the world resources market, including the related stock market, which was beyond
everyone's expectations,‖ the Chinese report said, according to the newspaper. Chinalco Vice
President Lu Youqing said he had not read the report, but added, ―The case is over. We have
analyzed it already. It is a normal business activity and not every activity has to be a successful

one. Also, an unsuccessful one is not necessarily a bad thing. What we are thinking now is what to
do next to develop the company, not struggle with the past.‖
Read more…
The Chinese Government's report said the deal failed because Chinalco did not do enough to engage
other Rio shareholders or to fight the public relations war in Australia. Rio kept Chinalco informed
about its talks with BHP, and the State Council accepted that as global conditions improved it made
more sense for Rio to link up with BHP in an iron ore joint venture than to tie up with Chinalco, a
customer, according to the report the Age cited.
The report concluded that China underestimated the backlash to the deal and the effectiveness of a
campaign led by Rio's rival BHP against the Chinese state-owned company owning key resources in
Australia. It also outlined several other mistakes China made, including trying to grab too much in
the one deal, seeking a bigger equity stake and joint ventures in assets.
Source: Reuters.com
CHINALCO TO TEAM UP WITH RIO IN GUINEA
Chinese industrial giant Chinalco and Rio Tinto are close to agreeing on a deal which would see the
Chinese finance the pre-development of Rio's Simandou iron ore field in Guinea, Africa. The deal
would lead to Chinalco receiving a stake in the venture with Rio being the senior partner. Simandou
has the potential to become one of the world's great mining provinces.
Source: Reuters.com
RIO CHIEF’S NINE-MILLION-DOLLAR PAY
Mr. Tom Albanese, the chief executive of miner Rio Tinto, received remuneration of USD9 million in
2009, four times the amount he received in 2008. Most of the increase came from a recalculation of
his share options. While Mr. Albanese saw his base salary fall by USD250,000 to USD1.4 million, his
short-term pay rose 35 per cent to 2.7 million dollars.
Source: Reuters.com
CENTRAL BANK CONFIRMS TDB IN GOOD SHAPE, AFTER RUMORS CAUSE CONCERN
The Central Bank has said it sees no reason to worry about the health of Trade and Development
Bank (TDB). The bank administration has also strongly denied there is any problem whatsoever. The
reassurances were found necessary after the city had been abuzz with rumors about the bank, with
customer confidence continuing to be low following what happened at Zoos and Anod banks.
The bank‘s Executive Director, Mr. B.Medree, told media that one account holder who had
extended his account by six months later complained that he had meant it to be extended for a
year and demanded interest for a year. The bank refused this, explaining that it had his signature
for a 6-month extension but he refused to listen to reason and threatened to write to the Prime
Minister and the media. He then had articles published in newspapers that TDB had secretly met
the Ministry for Finance and was about to go bankrupt. This is totally untrue. ―In any case, the
Ministry for Finance does not control the banking sector. The Central Bank does this and the Central
Bank has no problems with us,‖ Mr. Medree said.
The Director of the Inspection Department at the Central Bank, Mr. B.Lhagvasuren, said they are
―satisfied that TDB is doing well and there is nothing to worry‖.
Source: en.News.mn
XAC BANK ISSUING KIVA LOANS TO ADDRESS POVERTY, POLLUTION
The Eco Products Team at XacBank, a Kiva lending affiliate, is offering personal consumption "green
loans" to help people buy energy efficient stoves, Ger covers, and energy efficient fuel. GTZ, a
German government-run sustainable development organization, developed and tested the energy
efficient stoves, which are lined with kiln-type bricks that circulate and retain heat more
efficiently. That reduces fuel consumption by more than 60%,and fuel costs and air pollution are
also reduced.
The Ger covers, designed by the UNDP and produced locally, are insulating blankets that cover the
entire ger. Specialized insulation retains heat within the ger, reducing fuel use by 50%. The energy
efficient fuel is produced from compacted sawdust and gasified coal. It is more expensive, but the
price difference is offset by the need to burn less fuel. The impact on the environment is striking.
XacBank has so far posted 22 green loans on Kiva and plans to do more. A Kiva loan can be given as
a gift, allowing the recipient to submit a loan request somewhere in the world.
Source: www.elegantroots.com

FINAL REPORT ON ANOD BANK THIS MONTH
A senior Central Bank official has revealed that a team from there has been working at Anod Bank
since November 30. It will recommend by the end of this month whether the bank will be allowed
to go into liquidation or whether it can be revived with structural changes. The final decision will
be taken soon after.
Source: Ardiin Erkh
BOOKLET PUBLISHED ON LAWS IN MINERAL SECTOR
Laws in the Mineral Sector of Mongolia, recently published by the Mineral Resources Authority, is a
compilation of laws, Parliamentary resolutions, Government decisions, legal documents and
statements from Ministers and senior officials in the minerals sector. According to Mr. D.Batkhuyag,
Chairman of the MRAM, the booklet will ―help, on the one hand, state organizations implement the
law and, on the other, help companies observe it‖.
Source: www.miningmongolia.mn
ERDENET OUTPUT OF COPPER SHOWS LITTLE CHANGE
Erdenet Mining Corporation produced 126,485 tons of copper concentrate last year, practically
unchanged from the 126,796 tons produced in 2008. The company has said in a statement that it
processed 25.9 million tons of ore in 2009, up slightly from 25.6 million tons in 2008. Erdenet is a
51:49 JV between the Mongolian Government and Russian state conglomerate Russian Technologies.
The company said it produces 7% of the world's copper concentrate and 5% of its molybdenum
concentrate.
Erdenet produced 533,083 tons of concentrate in 2009, slightly more than in 2008 but a reduced
copper content in the ore led to the decline noted above. The output of molybdenum concentrate
rose to 2,409 tons in 2009 from 1,900 tons in 2008.
Source: Steelguru
RIO TINTO TRIAL SET TO BEGIN MONDAY
China has scheduled the trial of four Rio Tinto PLC executives accused of commercial crimes,
marking the final stages of a case that has roiled Beijing's relations with Australia and fueled
concerns about its treatment of foreign businesses. The four executives -- Australian national Stern
Hu and three Chinese nationals -- will be tried starting Monday in the Shanghai No. 1 Intermediate
People's Court. The news comes more than eight months after the men were detained on murky
allegations of stealing state secrets in the midst of tensions between global miners and China's steel
industry over the price of iron ore. The accusations were later downgraded to stealing commercial
secrets and taking bribes.
The trial's opening date sets up a potentially awkward situation for Rio Tinto. The Anglo-Australian
mining giant's chief executive, Tom Albanese, is scheduled on the same day to participate in a
development conference in Beijing attended by senior Chinese officials, meaning that the CEO's
most visible effort to reaffirm strong relations with China's Government since his executives were
detained will take place at the same time they are being tried. Rio Tinto has denied that it or its
employees did anything wrong. In a statement, it "reiterate[d] its hope for a transparent and
expeditious process for its employees".
The trial is scheduled to last no more than three days; even complex cases in China often conclude
in a single day. In China's politicized, opaque legal system, verdicts aren't necessarily considered
merely on the merits of a case, lawyers say.
Source: The Wall Street Journal Asia
20-MEMBER BUSINESS TEAM TO ATTEND FRANCHISING EXPO IN USA
BCM and the Commercial Section of the U.S. Embassy are jointly hosting a Mongolian business
mission to the International Franchising Exhibition in Washington DC from 9-11 April. The mission
comprises 20 people from 17 companies including mining, heavy machinery, freight forwarding,
geodesy, pharmacy, sanatorium, and restaurants. They will meet with NAMBC officials and
members, and also visit the U.S. Department of Commerce, apart from attending the franchising
event. BCM plans to host the next mission for organizations in the food packaging and processing
sector in November 2010.
Source: BCM Newswire
WORKING GROUP HOLDS MEETINGS WITH ALL TAVAN TOLGOI HOPEFULS
The working group on Tavan Tolgoi has now finished its series of meetings with all the 11 bidders

selected after the first tender for the coal deposit. They have been explained Mongolia‘s terms,
and will now submit their reply. The Prime Minister wants Mongolia to keep 100% ownership of the
deposit and investors to work as contracted operators. He has also ordered that substantial progress
must be made before the end of the Spring session of Parliament.
Source: Zuunii Medee
SUPPLIERS TO OYU TOLGOI EXHIBIT PRODUCTS
Around 80 of the 1,500 companies that supply goods and services to the Oyu Tolgoi project
organized an open day in Misheel Expo on March 14 to advertise their products. The companies
included suppliers of heavy mining equipment and clothes, as well as banking and insurance
companies. Fuel importing companies and domestic airlines were also present.
Source: Onoodor
MNMA, BCM TO CONTINUE WORKING TOGETHER
BCM Executive Director Jim Dwyer and Vice Director I. Ser-Od called on the new MNMA President
D.Damba last week to greet him on his assumption of office. Their talks focused on the two
organizations continuing with their collaboration and on complementing each other‘s work. It was
decided to prepare a Memorandum of Understanding on working together in 2010.
Source: BCM NewsWire
SHANGRI-LA NET PROFITS RISE
Luxury-hotel operator Shangri-La Asia Ltd. has said its 2009 net profit rose 54%, lifted by higher
property prices, though its core hotels business suffered from weaker demand amid the global
financial crisis. The Shangri-La hotel under construction in Ulaanbaatar is set to open in 2012.
The Hong Kong-listed company is controlled by Malaysian businessman Robert Kuok Hock-nien, who
also holds majority ownership in Ulaanbaatar‘s Central Tower with MCS as local partner.
ECONOMY
SOCIAL AND ECONOMIC INDICES
The National Statistics Office has published social and economic data. All figures are for February
alone or for the first two months in 2010 and, unless otherwise mentioned, all comparisons are with
the corresponding period in 2009.
CPI
The consumer price index rose 3.0 percent over January, 5.4 percent over the end of 2009, and 8.3
percent over February 2009.
State budget
The overall balance in the General Government budget in the first two months of 2010 showed a
deficit of MNT51.4 billion, MNT 0.8 billion less than in the same period of the previous year, mainly
because revenue increased 53.8 percent more than did expenditure.
The current account deficit was MNT36.6 billion. Tax revenue was 74.8 percent more than in 2009.
Windfall profits tax yielded 227.4 times more, corporate income tax 2.2 times more, and value
added tax 34.6 percent more. Non-tax revenue was up by 91.3 percent.
FDI
Foreign direct investment in the fourth quarter of 2009 was USD284.1 million, 2.2 times more than
in the same period in the previous year.
Trade balance
Total turnover in trade with 86 countries in the first two months of 2010 was USD607.6 million, of
which exports were USD311.7 million and imports USD295.8 million. The total turnover increased
38.7 percent, exports 34.1 percent, and imports 43.7 percent.
The trade balance surplus was USD15.9 million, 40.0 per cent less than in the same period of 2009.
Industrial output
Total industrial output in the first two months of 2010 was MNT266.2 billion, an increase of 17.0 per
cent at 2005 constant prices. Industrial products worth MNT507.3 billion at current prices were sold
at domestic and foreign markets.
Domestic companies executed 66.3 percent of the total construction and installation work worth
MNT3.9 billion.
Passengers, freight
The number of railway passengers in the first two months of 2010 rose 7.1 percent, and the volume

of freight 21.2 per cent. The corresponding rise in airlines passengers and freight was 29.0 percent
and 29.4 percent respectively. The combined revenue of railway and air transportation increased
22.2 percent.
Unemployment
The number of registered unemployed people at the end of February 2010 rose 11.6 percent over
January. Women were 54.3 percent of the total. Of the 3,000 registered unemployed persons who
got a job in the first 2 months of 2010, 18.1 percent were employed by government or state-owned
enterprises and the rest by companies, cooperatives or small-scale private businesses.
Labor Force Survey
The latest Labor Force Survey (LFS), conducted in the fourth quarter of 2009, puts the number of
economically active Mongolians aged 15 and above at 1,120,300, with men accounting for 53.2 per
cent of them. People holding jobs numbered 977,400 and 142,900 were unemployed. The rate of
unemployment in the quarter was 12.8 per cent nationwide, 16.5 per cent in urban areas and 7.9
percent in the provinces.
Household economics
A nationwide sample survey of 2,802 households in the last quarter of 2009 found average monthly
monetary income was MNT349,100, an increase of 1.6 percent, while the average monthly
monetary expenditure was MNT368,300, rising by 0.9 percent.
Source: Montsame
LOSS FROM DZUD HAS CROSSED USD60 MILLION
Hundreds of thousands of Mongolians who lead nomadic lives and depend entirely on livestock for a
living, are grappling with the country's second straight dzud -- a severe winter after a dry summer.
The rare double-barreled weather phenomenon -- one of the worst on record in Mongolia -- often
leads to food shortages for the livestock that generations in the landlocked, impoverished Asian
nation have depended upon for survival.
More than 3.5 million animals -- cows, sheep, goats, yaks, horses and camels -- have died so far,
with 60 percent of the country still buried under deep snow. The last major dzud occurred over
three straight winters from 2000 to 2002, with about 2.5 million animals dying each year. This year's
dzud has been even more deadly, and officials predict that some five million animals could die
before summer.
Herders with 200 animals or less have been hardest hit. Inexperienced and ill-prepared for the
harsh winter conditions, many have lost 50 to 60 percent of their livestock. ―The big herders have
managed, but small-scale herders are not equipped to deal with a dzud as powerful as this one,‖
said Mr. Akbar Usmani, the UNDP country representative. ―They need to be weaned away from
herding into some other line of business.‖
Total economic losses stemming from the dzud have already exceeded USD60 million. Nine human
deaths have so far been reported -- mainly herders who got lost in whiteouts while searching for
wayward animals. UN field workers report many cases of psychological trauma as herders try to
cope with the loss of their livelihoods and the sight of dead animals piling up near their homes.
Source: AFP
SECOND PHASE OF DISTRIBUTION OF MNT70,000 BEGINS ON APRIL 1
Around 1.3 million children, elders and disabled citizens have so far received MNT70,000 each from
the Human Development Fund, distribution of which began before Tsagaan Sar. The second phase of
distribution, to cover the rest of the population, will begin on April 1. Account books and
registration forms should reach all provinces by March 20. Since there is no national database on
working adults, the database with the Civil Registration Authority will be used to prepare the full
list of recipients.
Anybody now living away from his registered place of residence will have to get a certificate to that
effect, with proper authentication. Mongolians abroad will get the certificates from the embassy
and can claim the money on return home. Prisoners and those in care houses will receive the money
where they are. Around 1,100 people living in the streets will have to get their registration verified
and ID cards will be issued to them before the money is paid. Nobody can claim the money without
showing valid and proper registration papers.
Source: Undesnii Shuudan
MNT8 BILLION SPENT ON PENSION AND SOCIAL WELFARE
Altogether 172,700 people received social welfare pensions and other benefits totaling MNT7.9
billion in the first 2 months of 2010, while the number of those contributing to social insurance

stood at 353,300. Of them, 59.0 per cent worked for privately run establishments and enterprises,
while the rest had jobs in organizations receiving money from the Government budget. Of the
amount distributed, MNT5.4 billion went towards pension, 73.0 percent of which was claimed by
the elderly, 12.8 percent by the disabled, 7.6 percent by families who had lost their breadwinner,
and 6.6 percent by ex-servicemen.
Source: Montsame
NO INCREASE IN BANK LOANS, “NON-PERFORMING” DECLINE SOMEWHAT
The Central Bank reports that money supply (broad money or M2) at the end of February 2010 rose
3.1 percent over the previous month, and 27.9 percent over the same period in 2009. Currency
issued in circulation was 0.4 percent more than in the previous month, but 11.3 percent less than in
the same period last year.
Loans outstanding at the end of February 2010 were 0.3 percent more than in the previous month,
but 0.1 percent less than in the same period of 2009. Principals in arrears at the end of February
2010 were 16.6 percent over January 2010, 0.1 percent over the same period in 2009, and were 5.3
percent of the total loans outstanding. ―Non-performing‖ loans at the end of February 2010
were16.5 percent of the total loans outstanding, and fell 3.4 percent from the previous month, but
rising 2.2 times over the same period of the previous year.
Source: www.mongolbank.mn
FINANCE MINISTER ASKED FOR DETAILS OF BONDS SOLD IN 2002-2009
MP S. Byambatsogt has asked Minister of Finance S. Bayartsogt for information on Government
bonds worth approximately MNT1 trillion traded in 2002-2009. He wants to know the repayment
terms, details of buyers and what discounts they were offered, and also how the sales proceeds
have been spent. Among the Government‘s stated purposes in selling the bonds at different times
were to stabilize the fiscal budget, put more money into circulation, and protect savings account
holders‘ deposits in banks. The Government was allowed to trade MNT650 billion, or 55.1% of the
total since sales began, in 2009 alone.
Mr. Bayambatsogt wants to know why the bonds were sold mostly to the Central Bank and
commercial banks and why private individuals, enterprises, and organizations were not targeted. He
has asked for details of the studies, if any, that were made on the possible outcome of the sales
and if any effort was made to attract foreign buyers.
The MP has also asked the Minister to report on the USD66.2 million loan the Government took to
provide capital to gold mining companies.
FIFTA TO HOLD SESSION IN HONG KONG ON LISTING THERE
The Foreign Investment and Foreign Trade Agency (FIFTA) will be organizing a discussion on the
prospects and modalities of Mongolian enterprises being listed on the Hong Kong Stock Exchange in
Hong Kong on April 12, jointly with Hong Kong Exchanges and Clearing, the Mongolian State
Property Committee, and the Mongolian Stock Exchange.
Mongolian officials will detail investment opportunities in the country and explain Government
policies to facilitate large investments. There will be several roundtable discussions, where
delegates can raise questions.
Source: Montsame
KUWAIT LENDS USD20.5 MILLION TO BUILD ROAD
A Kuwait Fund for Arab Economic Development (KFAED) soft loan of USD20.5 million will be used to
build the Unt-Tarialan Road, part of the Unt-Moron Corridor Project. The project will help link
Khuvsgul province with Ulaanbaatar and will thus expedite the economic and social development of
Bulgan and Khuvsgul provinces, by promoting tourism, facilitating movement of passengers and
goods, and reducing travel time and cost.
An 88-km stretch on the Unt-Moron corridor, between Unt and Tarialan, will be built with the loan.
It will be of asphalt, 7 meters wide and will 1.5m-wide shoulders on each side. The project will
take about 3 years. The loan, to cover about 87% of the total cost, is repayable in 22 years and
carries 2% annual interest.
With this present agreement, the Kuwaiti Fund has provided Mongolia with about USD 83 million in
four loans.

17 TVET PROJECTS CHOSEN FOR MCA-M GRANTS
Altogether 17 projects - nine in the field of Employers and Training Institutions Cooperation and
eight in Incubation and Dissemination of Best Practices – received total investment grants of more
than USD1,200,000 at a recent ceremony organized by the Millennium Challenge Account-Mongolia
(MCA-M) Technical and Vocational Education and Training (TVET) Project. This was the final step of
a Competitive Grants Program aimed at improving the quality and relevance of TVET services to
meet labor market needs. Initially, 66 proposals were received from over 30 TVET institutions, and
38 of them were evaluated by an independent panel which chose the final 17 on the basis of pre-set
criteria.
The grant certificates were distributed by Mr. Yo.Otgonbayar, Minister for Education, Culture and
Science, Mr. Robert Reid, MCC Resident Country Director, and Mr. Bayarbaatar, MCA-M Chief
Executive Officer.
Source: www.mca.mn
OVER 182,000 MONGOLIANS EMPLOYED ABROAD
Recently released official figures reveal 182,506 Mongolians are employed in foreign countries,
whilst 9,550 are there as students. An overwhelming majority of 90,000 of them are in Kazakhstan,
with 46,000 holding dual citizenship. The second most popular destination for immigrant workers
from here is South Korea, which now has 46,000 Mongolians.
Beijing has the most number of Mongolian students, with 2,344 of them, followed by 807 in Russia's
Irkutsk.
Source: Montsame
MEETING DISCUSSES HOW NUMBER OF FOREIGN WORKERS CAN BE REDUCED
Representatives of some 30 entities and companies attended a meeting called last week by Minister
of Social Welfare and Labor T.Gandhi in association with employers of foreign workers to discuss
the current situation in matters of importing manpower from abroad. Participants exchanged views
on why it was often imperative to bring in workers from outside the country, and also on how their
number could be brought down. The need to find jobs for Mongolians in foreign-invested companies
operating in Mongolia was stressed.
The total number of permissions granted to foreigners to work in Mongolia was 31,041 in 2009. Of
them, 84.8 percent were Chinese, 4.1 percent Russian, 1.8 percent South Korean, 1.1 percent
American, another 1.1 percent North Korean, 0.5 percent Ukrainian, and 0.4 percent Kazakhstani.
Most of the workers are employed in the mining and construction sectors.
Source: Ardiin Erkh
ENVIRONMENTAL IMPACT ASSESSMENT DATABASE LAUNCHED
With funds from the World Bank, the Mongolian Government has launched an Environmental Impact
Assessment (EIA) database project, where more than 3,000 ‗detailed‘ EIAs have already been
scanned and digitized. While only the Ministry of Nature, Environment and Tourism (MNET) and the
State Specialized Inspection Agency have access to the full EIA, anybody can now click
http://geodata.mne-ngic.mn/eiareport and find out about the company that conducted the EIA,
the comments of the MNET and the Agency, the summary of the impact, anticipated or
experienced, and the proposed environmental management plan.
To ensure the sustainability of this database, the Ministry has asked all companies moving from the
'General' to the 'Detailed' EIA stage to fill out the fields and upload the files. No EIA will be
approved unless the database requirements have been met. The next step is to have the General
EIAs posted while the Detailed EIAs are in progress so that the public can see what is being planned
and where.
Nearly 100 people were employed on this project, most tasked with scanning in every page of all
Detailed EIAs so far approved. The project sites are divided into gross categories such as mining
concessions, forest cover, protected areas, etc.
Work has also begun on drafting amendments to the EIA Law to allow for much greater public
participation. The Governance Partnership Facility will be assisting civil society's outreach to MPs to
help give the amended Law an easy ride when it finally gets to Parliament.
Source: go.worldbank.org
MONETARY GRANTS TO WORK AGAINST DEFORESTATION
The government has instituted monetary grants for those proposing to use innovative methods and
technology to reduce deforestation and its harmful effects on the environment. Up to 20

individuals, 5 cooperatives and 3 enterprises and public organizations will be chosen every year to
receive grants of MNT500,000, MNT2 million and MNT3 million respectively.
Source: Montsame
MULTI-PURPOSE SEA-BUCKTHORN PROGRAM APPROVED
An ambitious program approved last week plans to plant the sea-buckthorn in 20,000 hectares of
land in the next six years to prevent desertification, protect the soil and the environment, provide
people with nutrition, earn revenue from export, and create jobs. The Government will help in the
harvesting, processing and marketing of the crop in the first stage to be over in 2012.
The second stage will cover the next four years, when processing units will come up in regions, and
farmers will be encouraged to be independent. One hectare can have 1,200-1,600 bushes and one
bush will produce 7-10 kg of fruits. One ton of fruits will make 20-50 kg of oil, 600 liters of juice
and other products.
Mongolia grew fruits in 1,200 hectares in 2009. Some 80 per cent of them were sea-buckthorns. Its
berries are multi-purposed, edible and nutritious, though very acidic and astringent, unpleasant to
eat raw, unless the astringency is reduced. Its fat is used in cosmetic purposes. Constituents of sea-
buckthorn berries have potential value as antioxidants that may affect inflammatory disorders,
cancer, and other diseases. The fruits also have a high Vitamin C content. Folk medicine uses sea-
buckthorn as a herbal remedy to relieve cough, aid digestion, invigorate blood circulation and
alleviate pain.
Source: en.News.mn
STIMULUS SLOWDOWN IMPACTING REAL ECONOMY IN CHINA
The rapid growth in China's bank lending and investment spending slowed in February, a sign that
the Government's gradual withdrawal of stimulus policies in recent months is starting to have an
effect on the real economy. Still, economists continued to sound warnings about inflation pressures
and urged Beijing to unwind its stimulus measures further.
Fixed-asset investment in urban areas, China's main barometer of capital spending, rose 26.6% in
the January-February period from a year earlier, according to data from the National Bureau of
Statistics. That is the slowest growth rate in a year, and down from the 30.5% expansion for all of
2009, reflecting the shift in priorities for this year. Premier Wen Jiabao has said ―the launching of
new projects must be strictly controlled‖ this year.
Meanwhile, the consumer-price index, the nation's key inflation gauge, in February rose 2.7% from a
year earlier, the fastest rise in more than a year and quickening from January's 1.5% rise. The Lunar
New Year holidays, which fell in February this year and January last year, lifted the latest CPI
number as people spent more on food and travel during the holidays, which tends to drive up
prices.
Read more…
The People's Bank of China, which has said it will work to gradually normalize monetary conditions
this year, reported that banks extended USD102.6 billion in new local-currency loans in February,
around half the amount lent in January and well below the figure for February 2009. Growth in
outstanding loans eased to 27.2% at the end of February, from 29.3% in January, also the slowest
growth rate in a year.
China was the first major economy to recover from the global financial crisis, thanks to the
government's successful drive to boost the economy. Although China's top leaders have repeatedly
said they are committed to supporting growth amid uncertain prospects for the global economy, the
concern about a buildup of inflation and possible asset bubbles have led them to dial back the
intensity of the stimulus since late 2009. Officials have restricted the funds available to banks for
lending and have slowed government spending on public-works projects.
HOW CHINA MANIPULATES GLOBAL TRADE RULES TO ITS ADVANTAGE
With China‘s exports soaring, even as other major economies struggle to recover from the
recession, evidence is mounting that Beijing is skillfully using inconsistencies in international trade
rules to spur its own economy at the expense of others, including the USA. Seeking to maintain its
export dominance, China is engaged in a two-pronged effort: fighting protectionism among its trade
partners and holding down the value of its currency.
To maximize its advantage, Beijing is exploiting a fundamental difference between two major
international bodies: the World Trade Organization, which wields strict, enforceable penalties for
countries that impede trade, and the International Monetary Fund, which acts as a kind of

watchdog for global economic policy but has no power over countries like China that do not borrow
money from it.
China had a USD198 billion trade surplus with the rest of the world last year, with its exports to the
USA outpacing imports by more than four to one. Despite that, in the last 12 months, Beijing has
filed more cases with the WTO‘s powerful trade tribunals in Geneva than any other country
complaining about another‘s trade practices. In addition, Beijing has worked to suppress a series of
IMF reports since 2007 documenting how the country has substantially undervalued its currency.
China buys dollars and other foreign currencies — worth several hundred billion dollars a year — by
selling more of its own currency, which then depresses its value. That intervention helped Chinese
exports to surge 46 percent in February compared with a year earlier.
Read more…
Many prominent academic economists see a basic contradiction in the global system of oversight on
trade and currency. ―Many of us would like to see the WTO-style commitments — with people‘s feet
being held to the fire — at other international agencies, like the IMF,‖ said Mr. Jagdish Bhagwati of
Columbia University.
Filing a case at the WTO against another country is the heaviest artillery available to countries in
trade disputes. But it also is expensive. Preparing a case and pushing it through a tribunal can easily
require millions of dollars in legal expenses, and low-income countries seldom file them.
China joined the WTO in 2001 and in its first seven years filed only three cases. But it has stepped
up its pace recently, and has filed four of the 15 cases in the last years: two against the USA, on
poultry and tires, and two against the European Union, on steel fasteners and poultry.
The IMF does not have powers similar to the trade organizations. The fund‘s policies call for it to
disclose documents and information on a timely basis, with the deletion only of market-moving
information. But under the rules a member country may decide to withhold a report, an
organization official said.
China allowed the release of its reports until the IMF decided in June 2007 that reports should pay
more attention to currency policies. China has quietly blocked release of reports on its policies ever
since, without providing specific reasons.
A person who has seen copies of the most recent report last summer said that the monetary fund
staff concluded the renminbi was ―substantially undervalued‖. The IMF regards a currency as
substantially undervalued if it is more than 20 percent below its fair market value.
More than four-fifths of the IMF‘s members allow publication of the agency‘s annual staff reports on
their economies. Countries blocking release are mostly tightly controlled places like Myanmar,
Sudan, Turkmenistan and Saudi Arabia, although Brazil has also not released its reports.
Source: The New York Times
CHINA KEEN TO INVEST IN “ALMOST EVERY COMMODITY”, SAYS SOUTH AFRICAN MINISTER
Mineral Resources Minister Susan Shabangu has said China has shown strong interest in investing in
her country‘s mining sector, and South Africa was a willing but cautious partner. ―There is a lot of
interest from China. They are interested in manganese, platinum, uranium and I would say almost
every commodity. But we are also cautious to see if their investment is going to benefit South
Africa. It is critical for us to ensure our own interest is catered for.‖
Ms. Shabangu said that the Chinese were keen to invest in processing of minerals in the country - a
key priority of South Africa's government, which hopes to extract as much value from its mines as
possible and boost job creation. Rather than grabbing mines, the country would run a State-owned
firm focused on strategic minerals such as coal and uranium, which were required for power
generation.
Source: Reuters.com
CHINA KEEPS ITS SPOT AS TOP HOLDER OF U.S.DEBT
China continued selling U.S. Treasury securities in January, although it remained the largest foreign
holder following revisions that showed it had never actually lost the top spot to Japan. Overall,
foreigners were modest net buyers of long-term U.S. financial assets in January, according to the
Treasury Department's monthly Treasury International Capital report, known as TIC.
China remained a net seller, with its holdings falling USD5.8 billion to USD889.0 billion in January,
following net sales of more than USD34 billion in December. The heavy selling by China in December
initially raised fears that the largest creditor nation to the U.S. might be starting to unload its U.S.
assets. But major upward revisions to China's holdings in late February showed that China hadn't
ceded its position as top Treasury holder to Japan, as initially thought.

CHINA TALKS TOUGH TO USA
Premier Wen Jiabao aimed sharp words at Washington in his once-yearly news conference on
Sunday, ceding little ground on China's currency policy and suggesting that U.S. efforts to boost its
exports by weakening the dollar amounted to ―a kind of trade protectionism‖.
Mr. Wen's forthright comments reflect a new dynamic in what is arguably the most important
bilateral relationship in the world. As the only major economy still growing strongly, and the U.S.'s
largest creditor, China is behaving with new assertiveness. Beijing has emerged from the global
recession with a fresh confidence about its state-led economy, which has delivered stimulus
projects from high-speed railways to highways and bridges with remarkable efficiency. At the same
time, it makes no secret of its disdain for U.S. economic management, and is in no mood to be
lectured by Washington about how to support the world economy.
China is taking measures to promote imports and reduce its sizable trade surplus, Mr. Wen said. He
played down China's new status as the world's largest merchandise exporter—it overtook Germany in
2009—noting that 60% of its exports are produced by foreign companies that have invested in China.
Limiting China's trade would hurt these foreign companies, he said.
Read more…
Mr. Wen went into detail about his role at the Copenhagen climate talks late last year, showing
flashes of emotion as he sought to correct a widespread belief that he snubbed Mr. Obama by
sending a lower-ranking official to a meeting. ―My conscience is clear despite the slander of
others,‖ he said, quoting an ancient Chinese proverb. Instead, he argued, it was China that felt
insulted. He said that at a banquet hosted by the Danish queen on December 17, he learned from
an unnamed European leader of a meeting among a small group of countries later that night. ―Why
was China not notified of this meeting? So far no one has given us any explanation of this, and it is
still a mystery to me,‖ he said. His comments didn't directly address his own absence at a meeting
next morning, which included Mr. Obama as well as U.K. Prime Minister Gordon Brown. Deputy
Foreign Minister He Yafei took part as China's representative in that meeting, according to
participants.
WORLD BANK URGES CHINA TO COOL ITS ECONOMY, HEAD OFF INFLATION
The World Bank has urged China's Government to take more measures to cool its economy and head
off inflation, as the bank expects the country's economic growth to accelerate to 9.5% this year. In
its latest China Quarterly Update, the World Bank raised its forecast for China's economic growth
this year from the 8.7% increase the bank projected in November and suggested Beijing use rate
hikes and a stronger yuan to avoid inflation and the formation of asset bubbles in the domestic
property market.
The suggestions come as Beijing has been gradually exiting from the stimulus measures put in place
during the financial crisis. The central bank has twice ordered banks to keep a bigger portion of
deposits on reserve this year to curb loan growth after a massive increase in lending last year, and
Premier Wen Jiabao stressed the importance of price stability in his annual work report to the
nation's legislature.
The bank recommended that China's macroeconomic policy stance this year needs to be tighter
than in 2009 and that China must adopt different policy measures than most other major economies
because it is growing so much faster. It said the case for using interest rates to tighten policy and
allowing a more flexible exchange rate is growing. ―Inflation expectations can be contained by a
tighter monetary policy stance and a stronger exchange rate,‖ the bank said. ―Relatively low
interest rates contribute to the overinvestment and speculation that the Government is trying to
limit.‖
Read more…
The World Bank said inflation rate in China is unlikely to rise too high this year, but it expects the
consumer price index to rise 3.7% in 2010 before moderating to 2.8% in 2011. China's Government
has estimated CPI will rise around 3% this year after falling 0.7% last year.
The World Bank's recommendation that China use the exchange rate to help rebalance the economy
is not new, but it follows repeated calls from other countries for Beijing to let the yuan appreciate.
The update says China's export prospects appear good in the short term, but the situation is not so
clear for later in the year.
Another risk for China this year, the bank said, are the strained finances of local governments, but
it suggested the problem could be controlled.

RECORD NUMBER OF CHINESE UNHAPPY OVER INFLATION
More than one in two Chinese savers regard the current inflation rate as unacceptable, according to
a central bank survey that is likely to fan official concern about deteriorating inflation
expectations. Consumer prices rose 2.7 percent in the year to February, up from 1.5 percent in
January and flirting with the Government‘s 3 percent target for 2010. Although still modest,
inflation now exceeds the 2.25 percent rate on one-year bank deposits -- strengthening the case for
the People's Bank of China (PBOC) to raise interest rates, some economists say.
Fifty-one percent of depositors questioned -- a record high since the start of the poll in 1999 -- said
they were dissatisfied with the current rate of inflation, compared with 46.8 percent in the
previous quarterly poll. The survey's index of future price expectations fell to 65.6 from 73.4, but
after accounting for seasonal fluctuations, the PBOC said people expected inflation to keep rising
next quarter.
Premier Wen Jiabao has said that inflation, along with income inequality and corruption, could
upset social stability and even undermine the power of the state if it got out of hand.
Real monetary tightening would come in the form of strict controls on bank lending, but in a
separate survey 51.7 percent of bankers said they expected no change in monetary policy next
quarter.
Read more…
Despite the negative real deposit rate, the proportion of families who said they intended to save
money rose to 43.6 percent from 42.0 percent last quarter, while a slightly smaller share said they
would spend more, according to the central bank.
The index measuring demand for loans rose to 69.1 from 67 in the previous survey, largely due to
the manufacturing sector. But the appetite for mortgages eased -- a possible sign that government
steps to cool the property sector are working.
The central bank's survey of executives showed improvements in domestic and export orders,
profits, capacity utilization, sales and raw material supplies this quarter; only investment in
equipment fell compared with the previous survey.
Source: Reuters.com
POLITICS
ENKHBAYAR LAUNCHES BROADSIDE ON BAYAR BEFORE MPRP CONFERENCE
The ensuing MPRP general conference promises to be a lively affair with former President
N.Enkhbayar bluntly accusing party chairman and former Prime Minister S.Bayar of being ―the
mastermind behind the well-orchestrated sabotage‖ of his re-election bid last year. Mr. Enkhbayar
prefaced his salvo, in a long and wide-ranging interview published in the newspaper Zuunii Medee,
by saying, ―It does not help if the finger of blame is forever kept sheathed,‖ and added he was
coming out with ―the truth now as several events can now be seen in proper perspective‖ and also
because ―the party has to be stopped from committing suicide by allowing its leaders to
deliberately betray its interests‖.
Mr. Enkhbayar was certain he had polled more votes in the nationwide election ―but fraud in six
districts changed the outcome‖. He charged that ―a handful of MPRP leaders‖ under Mr. Bayar had
originally ―rehearsed in some constituencies in the 2008 parliament election the rigging they would
later practice in the presidential election to defeat me‖.
Recalling his brief speech conceding victory to Mr. Elbegdorj on the morning after the election, Mr.
Enkhbayar asserted he had not said he accepted the people‘s verdict but, instead, had said, ―I
honor the results announced by the General Election Committee.‖ His explanation was, ―They are
different. We all know how the GEC works and how its declarations do not always reflect the real
results of the voting.‖ Another consideration that had weighed with him was maintaining public
peace. Discontent with results as they had been declared had led to the July I protests and ―we
could not risk triggering another disorder that could endanger people‘s lives‖.
Mr. Enkhbayar traced events from time considerably before the presidential election to show how
he thought Mr. Bayar was ―planning his conspiracy‖, and claimed the MPRP under Mr. Bayar and the
DP had struck a deal that extended to the DP forfeiting the Chingeltei by-election. ―They lost an MP
but gained a President,‖ he said. It was significant, he said, ―that the result of the presidential
election has never been discussed in any party forum‖, and regretted that Mr. Bayar‘s actions ―have
―caused more harm to the party than to me‖.
Read more…
Referring to the ―many failures‖ of the present government, Mr. Enkhbayar said there was no
compulsion for Mongolia to admit that it still owed Russia USD180 million. ―Mongolia acknowledged

the debt solely in order to make someone a scapegoat, to blame N.Enkhbayar after all I had done to
settle the ‗great debt‘ to Russia,‖ charged the former President.
He foresaw ―the death of our young democracy if elections are not made honest‖, saying, ―We
cannot afford to have a system where liars win.‖
Mr. Bayar, who resigned as Prime Minister but retained his party chairmanship in a departure from
the MPRP tradition, is now in the USA for medical treatment and is expected to return home this
week to start preparing for the party conference next month.
Source: en.News.mn
FIRST PROTEST ON MAIN SQUARE SINCE JULY 1, 2008 PASSES OFF PEACEFULLY
Sukhbaatar Square last week saw the first organized mass protest movement since the infamous
incidents of July 1, 2008. After attending a meeting jointly called by an alliance of several civil
movements, more than 1,000 people went there to formally submit two letters, one to Prime
Minister S.Batbold and the other to Parliament Speaker D.Demberel. The first demanded the
resignation of Minister for Justice and Internal Affairs Ts.Nyamdorj because of repeated crimes in
the border areas and of Minister for Health S.Lambaa because of the loss of 30 lives from the H1N1
virus. It also demanded that Minister for Social Security and Labor T.Gandhi should re-institute the
Child Money. The letter to the Speaker demanded the dismissal of the State General Prosecutor
who closed the case against shooting of citizens on July 1, and contained several other demands.
The Deputy Chief of the Government Cabinet Secretariat formally received the petitions, and the
organizers told him they would wait until April 19 for a response, and, if there was none, would
plan their next course of action.
The meeting drew people from several provinces, many of them coming uninvited. One of them, a
herder from Khuvsgul province, said, ―Not all high officials are bad, but those who are eating
people‘s money should apologize and resign. If they confess and go, the people will forgive them.‖
Many of the speakers referred to the July 1 incidents. One of them likened the Government to ―a
barely breathing patient in the intensive care unit‖ and wanted the people to help it recover.
The Head of the National Soyombo Movement, Mr. B.Lhagvajav, called for non-party members in
the civil representatives‘ assemblies and urged immediate changes in the judicial system, ―run by
friends and siblings‖. One organizer said so many ordinary people had come ―because their heart
beats for the country and they will do what they can to prevent Mongolia being taken over by
China‖.
Source: www.News.mn
FORMER OFFICIAL EXTRADITED FROM AUSTRIA, NOW IN MONGOLIAN PRISON
Former State Secretary of the Ministry for Industry and Trade, as it was earlier called, D.Surenkhor,
was taken into Mongolian custody at Chinggis Khaan Airport on March 13 after being extradited by
the Austrian Government who had arrested him on a request from Interpol. According to the Police
Department of the Civil Aviation Authority, they had no role in the matter because of its special
circumstances.
Intelligence officers took charge of Mr. Surenkhor and took him to Gantskhudag prison. He is
accused of embezzling MNT100 million from the state budget. Many had expected him to benefit
from President Elbegdorj‘s amnesty law.
A letter purported to be from Mr. Surenkhor and published in a newspaper before the presidential
election gave details of a Swiss bank account where Mr. N.Enkhbayar was alleged to have USD1.3
billion. The letter also said Mr. Surenkhor would come to Mongolia to confess to his crime if Mr.
Elbegdorj won. It will now be investigated if he had really written the letter.
Source: Ardiin Erkh
PRESIDENT SEEKS STRICTER PUNISHMENT FOR CORRUPTION
Draft amendments to the Criminal Law prepared by President Ts. Elebgdorj propose stricter
punishments for those convicted of corruption and also to make them ineligible to receive amnesty.
At present, corruption does not fall in the category of serious crimes and is thus covered by
amnesty laws. Persons convicted of robbery or theft are sentenced to 15 years, while those guilty of
embezzlement of large amounts of Government money get only 5-year terms. The President thinks
this is contrary to the basic principle of equality of all before the law. The draft also seeks to
extend from the present 2 years to 10 the period for which a person convicted of corruption cannot
work in a high position.

LEADER OF NEW FORUM DENIES PRESIDENT IS BEHIND THEM
Answering media questions after the first general meeting of the Union of Democratic Forces, its
Head, Mr. Z.Enkhbold, last week denied that they were aiming to bring the Government down.
Instead, he said, participants had talked about how social barriers could be removed and how
institutions of a true democratic society could be nurtured to change the present situation when
―neither Parliament nor the Government is seen as representing the people‖.
Asked why a new forum was needed to say these things and ―why the MPs who are among its
leaders did not raise their voice in Parliament or in Government meetings‖, Mr. Enkhbold said,
―Because the system of operating is all wrong. Decisions reached through the same old pre-90s
system are bound to be irrelevant and useless. We no longer want diktats from the top.‖
Being an MP did offer him much scope for work, ―but there is little freedom to consult the people
before a debate. That mechanism is essential if decisions are to be taken together with those for
whom they are taken.‖ They hoped to have online discussions every day where 40,000 to 50,000
people will participate. ―What they favor will be the Government‘s decision,‖ he said.
When a journalist talked about ―rumors getting stronger‖ that the President is behind the UDF ―as
he has not so far made a single comment in public‖ about it, the Democratic Party MP said, with a
laugh, ―Doesn‘t that show that he is not behind us?‖
Source: Ardiin Erkh
S.OYUN BLAMES “WEALTHY MINORITY” FOR SOCIAL INJUSTICE
The ideals of the Mongolian democratic revolution have been betrayed but can be reinvigorated
with active people‘s participation, said former Foreign Minister S. Oyun at a celebration to mark
the 10th
anniversary of the establishment of her Civil Will Party. She asked members to be vigilant
about a ―wealthy minority‖ in the country which was following ―repressive measures‖ to tighten its
hold over the government and ordinary people.
She said this ―decade of our fight to assert the people‘s rights‖ has been marked by erosion of
people‘s power before those who ―buy votes by disbursing and promising cash‖. Persons of
―integrity and intelligence‖ must come forward to ―grab the reins of governance from this
minority‖, so that social justice might prevail. Any society will have different economic strata, but
there should be ―nobody so poor as not being able to support his/her family and no son so made so
unfortunate that he cannot help his old mother‖.
She felt a drastic change in the current norms and structure of social governance can be brought
about by adhering to the Constitution, and by adopting and implementing proper development
goals. Parliament has to be kept true to its avowed goal of representing the people. The Civil Will
Party is ready to cooperate with other political parties, civil movements, and NGOs in this task.
HAZARDOUS CHEMICALS IN SOIL REMOVED IN 10 PROVINCES
The Government program to cleanse 36 districts of ten provinces of hazardous chemicals in the soil
has ended successfully. The Emergency Authority, the Ministry of Environment and Tourism, and the
State Specialized Inspection Agency jointly began the work in April 2008 after ascertaining that
mercury and cyanide left behind mostly by gold miners were posing dangers to the life of humans
and animals in many places. Some 91 kg of mercury residue has been removed. The whole program
cost the State MNT3 billion.
Source: www.miningmongolia.mn
MONGOLIA PERFORMED GENERALLY WELL, SAYS U.S. REPORT ON HUMAN RIGHTS
The U.S. Bureau of Democracy, Human Rights, and Labor has, in its just released 2009 report on
Mongolia, noted that the Government generally respected the human rights of its citizens.
However, the report noted the following human rights problems: police abuse of prisoners and
detainees; impunity; poor conditions in detention centers; arbitrary arrest, lengthy detention, and
corruption within the judicial system; continued refusal by some provincial governments to register
Christian churches; secrecy laws and a lack of transparency in government affairs; domestic
violence against women; and trafficking in persons.
In contrast with 2008, there were no reports that the Government or its agents committed arbitrary
or unlawful killings, nor was there any report of politically motivated disappearance. Despite a
legal prohibition, the use of unnecessary force--particularly to obtain confessions--in the arrest
process was common. Of the 30 complaints of torture received during the year from citizens against
police officers, 27 were dismissed and three led to convictions. Mechanisms to investigate police
abuses remained inadequate.

Conditions in prisons were poor but improved significantly during the year. There were 5,200
prisoners, of whom 315 were women and 10 were juveniles. Arbitrary arrest and detention occurred
but was less common than in previous years. General public awareness of basic rights and judicial
procedures was limited, especially in rural areas. Corruption in law enforcement agencies was
endemic. Bribery could contribute to the dismissal of a case or reduction of a recommended
sentence. Trial procedures are often plagued by legal inconsistencies.
Government interference with licensing and indirect intimidation of the press, particularly
broadcast media, was evident. Perceived self-censorship continued to be a problem. Both libel and
"insult" were criminal charges. Many newspapers were affiliated with political parties, or owned
(fully or partly) by individuals affiliated with political parties, and this affiliation strongly
influenced the published reports. Underpaid reporters frequently demanded payment to cover or
fabricate a story.
The potential for bias within the General Election Commission was a concern, particularly for
smaller political parties.
Read more…
The law provides criminal penalties for official corruption; however, the Government did not always
implement the law effectively, and officials sometimes engaged in corrupt practices with impunity.
Varying degrees of corruption at most levels of government resulted in a blurring of the lines
between the public and private sectors. Conflicts of interest were frequent. The problem was
compounded by ineffective governmental oversight bodies and media that frequently failed to
expose corruption. The sentences of a number of officials convicted of accepting bribes were
commuted under a blanket amnesty law passed in July.
Government and parliamentary decision making was not transparent, and public legislative hearings
were rare. Meetings of the standing committees of Parliament were not open to the press or the
public. The far-reaching State Secrets Law inhibited freedom of information and government
transparency while also undermining accountability. The law also hindered citizen participation in
policy discussions and government oversight.
During the year 223 persons were convicted of rape, but NGOs alleged that many cases were not
reported and claimed that police and judicial procedures were stressful to victims and tended to
discourage reporting of the crime. Social stigma also lowered the number of cases reported.
Domestic violence remained a serious problem, particularly against women of low-income rural
families.
Prostitution is illegal, as is public solicitation for prostitution and organizing prostitution. Women's
activists claimed that in Ulaanbaatar there were hundreds of brothels posing as saunas, massage
parlors, and hotels, and sex tourism from South Korea and Japan remained a problem.
Child abuse was a significant problem, principally in the forms of violence and sexual abuse. Both
problems were most likely to occur within families. Although against the law, the commercial
sexual exploitation of children--involving those under 18 years of age--was a problem. There were
instances of teenage girls kidnapped, coerced, and deceived across the country and forced to work
as prostitutes.
The country remained a source of internal and transnational trafficking of men, women, and
children for forced labor and sexual exploitation. Most trafficking victims were taken to China, but
destinations such as Kazakhstan, South Korea, Japan, Macau, Hong Kong, Malaysia, Turkey, and
Switzerland were alleged or confirmed.
Of the country's 97,000 persons with disabilities, approximately 42,000 received an allowance from
the government's Social Welfare Fund, and 46,000 persons received allowances from the Social
Insurance Fund.
Some foreign businesspersons resident in the country complained that Government tax and licensing
authorities subjected them to much greater scrutiny than domestic competitors. Other foreign
entrepreneurs complained privately that they were disproportionately targeted for shakedowns by
corrupt Government officials, including police. Furthermore, they were targeted with frivolous
criminal law suits in the event of business disputes, forcing them to leave the country or undergo an
onerous process of clearing their names.
Laws protect collective bargaining, and these were effectively enforced. The law regulates
relations among employers, employees, trade unions, and the Government. The Government's role
is limited to ensuring that contracts meet legal requirements concerning hours and conditions of
work. Wages and other conditions of employment are set between employers, whether state or
private, and employees, with trade union input in some cases. Approximately 52 percent of workers
were covered by collective agreements. The Labor Dispute Settlement Commission resolves disputes
involving an individual; disputes involving groups are referred to intermediaries and arbitrators for

reconciliation.
The law protects the right of workers to participate in trade union activities without discrimination,
and the Government protected this right in general. Nevertheless, in the strike against Aero
Mongolia, the administration and courts did not recognize the rights of mechanics to establish a
company-level trade union, allowing the company to fire those workers seeking to unionize. The
case remained in appeal at year's end. The Government does not allow intervention in collective
bargaining by third parties.
Source: mongolia.usembassy.gov
The full report can be seen at the web page of the U.S. Embassy in Mongolia.
BID TO AMEND 1993 LAW ON POLICE AND INTELLIGENCE SERVICES
Minister of Justice and Internal Affairs Ts.Nyamdorj has presented a draft law on police and
intelligence services to Speaker D.Demberel for discussion in Parliament. These are the first
amendments sought in the present law on the police organization, adopted in 1993. The draft seeks
to incorporate international experience to improve the structure, management and operation of the
police in keeping with the changes in Mongolian society since 1993.
A draft law on casinos has also been presented to the Speaker. Its initiators see casinos as earning
substantial revenue, as in many other countries, and propose that one percent of this should be put
in a national fund to finance social welfare activity projects.
Source: Montsame
ANOTHER OPEN HEARING ABOUT JULY 1 ON APRIL 14
Parliament‘s Sub-Committee on Human Rights will hold a second public hearing on April 14 on the
July 1 incidents of 2008. This follows the earlier open hearing on December 3, the first in modern
Mongolian history. That event was marked by open talk about how human rights were violated
during the public protest on that day.
Source: en.News.mn
MP OWNING NARANTUUL TO FORGO MNT70,000 ALLOWANCE
MP Sh.Saikhansambuu who, among other things, owns the Narantuul Market, has said he will not
claim the MNT70,000 from the Human Development Fund. He has clarified that he took the decision
not because he is rich and does not need it, but because he does not wish to burden the people
with debt.
According to him, the advance money received by the Mongolian Government from the Oyu Tolgoi
investors is being distributed this way, so it is actually a debt that must be paid back.
MULTI-PURPOSE SEA-BUCKTHORN PROGRAM APPROVED
An ambitious program approved last week plans to plant the sea-buckthorn in 20,000 hectares of
land in the next six years to prevent desertification, protect the soil and the environment, provide
people with nutrition, earn revenue from export, and create jobs. The Government will help in the
harvesting, processing and marketing of the crop in the first stage to be over in 2012.
The second stage will cover the next four years, when processing units will come up in regions, and
farmers will be encouraged to be independent. One hectare can have 1,200-1,600 bushes and one
bush will produce 7-10 kg of fruits. One ton of fruits will make 20-50 kg of oil, 600 liters of juice
and other products.
Mongolia grew fruits in 1,200 hectares in 2009. Some 80 per cent of them were sea-buckthorns. Its
berries are multi-purposed, edible and nutritious, though very acidic and unpleasant to eat raw
unless the astringency is reduced. Its fat is used in cosmetic purposes. Constituents of sea-
buckthorn berries have potential value as antioxidants that may affect inflammatory disorders,
cancer, and other diseases. The fruits also have a high Vitamin C content. Folk medicine uses sea-
buckthorn as a herbal remedy to relieve cough, aid digestion, invigorate blood circulation and
alleviate pain.
ONLY MONGOLIANS AND CHINESE CAN FLY TO HAILAR FROM CHOIBALSAN FOR NOW
Apropos of the information carried in the last issue of this newswire that the Choibalsan airport in
Dornod province has become international from March 10, Eznis Airways has clarified that as the
new international checkpoint there is not yet linked to the real-time online network of the
immigration agency, the manual processing service now covers only passengers holding Mongolian or

Chinese passports. Eznis, whose flights to Hailar in Inner Mongolia now stop at Choibalsan, believes
the facility will be extended to third-country nationals some time in April.
Source: Eznis Airways
MUST ARRANGES ONLINE TRAINING COURSE IN MINING
The Mining and Engineering School of the Mongolian University of Science and Technology (MUST)
will conduct short-term training courses on mining following an agreement with the Mining School
of the University of British Columbia and the Infomine Inc. Graduates of the course will be awarded
a Certificate in Mining Studies.
This online professional training in mining is part of a continuing education initiative developed
jointly by the Canadian university and the company‘s EduMine website.
CITY OFFICIAL CHARGED WITH TAKING BROBE FROM CHINESE FIRM
A former official at the City Construction and Planning department will be tried at the Bayangol
district court for granting undue favors to a Chinese-invested company and for accepting a three-
bedroom apartment from it as a bribe.
Source: Onoodor
MONGOLIA TO USE INDONESIA’S SUCCESS IN COMMUNITY EMPOWERMENT
Mongolia is seeking to learn from Indonesia about the success of its national program for
independent community empowerment before it embarks on the second stage of its own similar
project. A Mongolian delegation recently held talks with officials of the Welfare Coordinating
Ministry in Jakarta on the matter. Mongolia has a Sustainable Livelihood Program in all its 21
provinces, focused on improving the economy of poor families.
SLP covers four activities, namely improving management of livestock, encouraging the community
in planning and implementing its own development activities, increasing access of rural
communities to funding resources, and capacity building to help the community in proper and
efficient program implementation.
Source: Montsame
BANSH AND KHUUSHUUR IN OTTAWA FOOD FAIR
The diplomatic missions of 19 Asia-Pacific countries last week organized a food fair in Ottawa,
offering some 30 types of food to visitors. This was the first time the Embassy of Mongolia
participated in the annual event, preparing bansh and khuushuur with vegetables. All income from
the event will be donated to earthquake-hit Haiti.
Source: Montsame
CHINA PLANS HIGH-SPEED RAIL CONNECTION TO EUROPE
China‘s plans for a straight connection to Europe on high-speed rail might seem like a pipe dream if
it weren‘t for the fact that it is already about halfway through the construction of the largest high-
speed rail (HSR) network in the world with also the fastest trains in it. With its internal projects
getting closer to completion, China‘s goal is to continue on with an HSR revolution internationally in
order to create two-day HSR trip times between Beijing and London.
But it is about much more than a rail connection or two to Europe. The South China Morning Post
has reported that the international network is supposed to include a total of 17 countries. As
mapped, this is likely to be the largest infrastructure project in history. It would also extend south
to Singapore and northeast into Mongolia and Russia. Another connection to Europe would likely go
through India, Pakistan and West Asia, although exact routes are not yet determined.
Negotiations with the relevant 17 countries are reported to be already under way. China would like
to fund the whole project itself in exchange for natural resources it lacks. One of the senior
consultants working on the project has said, ―We would actually prefer the other countries to pay
in natural resources rather than make their own capital investment.‖ The central and eastern
European portions of the network are moving forward as well, he said. China wants to complete this
network in 10 years.
Read more…
Clearly, China is intent on this for its own benefit. In exchange for developing the system, it could
acquire tons of much needed natural resources from other countries. However, perhaps more
importantly, creating such a network would probably solidify China‘s central role in the Asian
economy and perhaps even the world economy. Nonetheless, China says that other countries

approached it for help and that is how the idea got started.
The countries likely to lose out due to the system‘s development and investment would be those
across the ocean who are more reliant on international air travel.
Source: CleanTechnica.com
NEW MONGOLIAN LAWS
The following amendments to a Law were published in a recent weekly Government bulletin.
Unless otherwise decided by Parliament, they take effect (10) days after publication.
Date Amendments
12.03.2010 Amendments to Law on Parliamentary Elections of Mongolia
Please visit BCM‘s website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish complete versions of the laws and regulations in Mongolian language are
welcome to call or email the BCM office: 332345 or info@bcmongolia.org.
ANNOUNCEMENTS
2nd
ANNUAL MONGOLIA-ASIA INVESTMENT FORUM, MARCH 25, THE WESTIN BEIJING
Euromoney Conferences invites you to apply for your free place at the 2nd
Annual Mongolia-Asia
Investment Forum at the Westin Beijing on March 25.
The Panels: Investing in Mongolia‘s Mining Assets; Investing in Infrastructure to support the mining
industry; Developing Mongolia‘s capital markets; Mining Supply Chain Management; Investing in
Mongolia‘s property market. Click here for a copy of the latest agenda.
BCM will again partner with Euromoney on organizing this Forum, to be held in Beijing for the first
time, to strengthen cooperation and trade relationships between Mongolia and the rest of Asia.
For further information please contact: Nick Wakefield on +852 2842 6939 or
nick.wakefield@euromoneyasia.com.
____________________________________
“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.

SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the 4 trading days ended March 12, 2010, trading activity on the Mongolian Stock Exchange
(MSE) totaled 763,200 shares with 35 companies traded. Total market value of transactions was
MNT 706.5 million. Total market capitalization of the 347 stock companies listed on the MSE was
MNT 820.3 billion, and increased by MNT 41.7 billion or 5.4% from March 5, 2010.
The Top-20 Index increased by 825.92 points or 9.7% compared to the previous week, closing at
9,333.81 points. MSE Composite Index increased by 377.28 points or 9.3% compared to the previous
week, closing at 4,453.43 points.
Most active stocks traded were: Khukh gan (489,800 shares), Gobi (42,700 shares), APU (37,600
shares), Naco tulsh (37,400 shares), and Shivee ovoo (32,800 shares).
Major share price percentage gainers were: Sor (31.7%), Ulaanbaatar ZB (30.7%), Makh impex
(29.6%), APU (29.6%), and Erdenet khivs (27.2%).
Major share price percentage losers were: Mongolian telecommunication (9.1%) and Moninjbar
(4.0%).

INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
February 28, 2010 *8.3% [source:NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
CURRENCY RATES – March 18, 2010
Currency name Currency Rate
US dollars USD 1,416.92
Euro EUR 1,954.64
Japanese yen JPY 15.66
British pound GBP 2,160.17
Hong Kong dollar HKD 182.56
Chinese yuan CNY 207.58
Russian ruble RUB 48.55
South Korean won KRW 1.26
Disclaimer: Except for reporting on BCM‘s activities, all information in the BCM NewsWire is
selected from various news sources. Opinions are those of the respective news sources.

BCM Mongolia Business NewsWire Issue 110 Highlights Investment, Mining Deals

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BCM Mongolia Business NewsWire Issue 110 Highlights Investment, Mining Deals