June 19 2009

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 74, June 19, 2009
NEWS HIGHLIGHTS:
Business: Elbegdorj prefers 50% profit sharing to part ownership in OT; Moody's downgrades
ratings of Khan, TDB, and Xac banks; Centerra settles Boroo dispute, to pay more
redundancy benefits; Boroo mine operating license suspended for up to 3 months;
Progress on several issues at talks with Ivanhoe, says Zorigt; “Two neighbors” blamed
for delaying Tolgoi agreements; Robert Shapiro back in Mongolia to help with OT
agreement; Government wants to suspend all uranium licenses; Rabobank leads
Erdenet copper pre-financing; Red Hill Energy agrees to sell Ulaan Ovoo mines to
Falcon Mining; ZTE clicks deal with Skytel; Chinese firm to extend oil drilling work
after initial success; 5,177 mining licenses granted this year; Unpaid dues from power
plants may force coal mines to close down; Petroleum prices up, but less than
importers wanted; Staff complain about way Anod Bank is being run; 7 banks tie up
with MoneyGram to make Euro transactions easier; Khan Bank team visits herders to
provide relief; Copper slides on weak US data, stronger dollar; Goldman sees 2010
copper price at USD5,800 a ton; Chinalco praises Australia, hints Rio is to blame;
Australia sees good in BHP-Rio tie, China sees red; Rio Tinto launches rights issue,
warns outlook 'uncertain'; Shenhua retains focus on Mongolian coal mines; Chinese
company wants to buy 20% shares of Denison Mines; U.S.-Mongolia Business Forum
focuses on energy; Depleting water resources discussed at conference.
Economy: World Bank boss urges transparency to attract private investment; Central Bank again
reduces interest rate; Industrial output falls 7.2% yoy; Money supply rises, but still
lower than a year ago; Steep rise in unemployment; Trade turnover less, so is deficit;
Sharp fall in freight and passenger traffic; Tax revenue falls 29.8%, pushing up budget
deficit; Consumer prices rise 8% yoy, 0.1% mom; Average household spends more than
it earns, survey finds; All tax refunds to be paid by June; Business wants MPs to hear
what it needs; Loans to SMEs will raise GDP in Ulaanbaatar to MNT7 million per head;
World Bank to help „professional inspection‟ turn more professional; New market
access for Canadian livestock in Mongolia; Crisis rumbles along the Mongolian steppe;
MPs discuss competition law amendments with MNCC.
Politics: Elbegdorj sworn in, says he will fulfill people‟s demand for reform and change; Ex-
President does not have a bank account, PM does not have a car; Enkhbayar hosts
farewell dinner for MPs; MPRP members call for changes in party; Medical graduates
no longer need two years‟ training; Crimes rise; NGO faults TV channels on coverage
of presidential election; World Bank leads support to Mongolia‟s statistical system;
Three held for Mongolia‟s first credit card fraud.
MEETING NOTICE TO BCM MEMBERS
The next BCM monthly meeting for Members will be Monday, June 22 at 5 PM at the Open Society
Forum.
Our meeting will feature a presentation by Mr. Do.Ganbold, President, Mongolian National Mining
Association (MNMA), on key developments in the mining sector. The Ambassador of the U.S. to
Mongolia, Mr. Mark Minton, will provide an update on Mongolian-U.S. bilateral relations.
Teleconferencing will again be available for Members not able to attend in person. Call number is

2. (1-218) 936-7979, access code 771358 to be connected. Cost will be solely that of the long distance
call to the above US number.
BUSINESS
ELBEGDORJ PREFERS 50% PROFIT SHARING TO PART OWNERSHIP IN OT
In an interview on the eve of assuming office as Mongolian President, Mr. Tsakhiagiin Elbegdorj said
he wanted to change a proposed gold and copper mining deal with Rio Tinto Group and Ivanhoe
Mines Ltd. that would allow the government to buy an equity stake in the project. “I think an
equity share is not a good proposal,” Mr. Elbegdorj said, suggesting instead that the government
take 50 percent of the profit.
Mongolia has struggled to create a framework for foreign investment in its gold, copper and coal
deposits, leaving projects in limbo. Copper‟s 39 percent slump in the past year has hurt state
finances, increasing the urgency of opening more mines as economic growth slows.
“I think now we are approaching the final moments to get a good agreement,” Mr. Elbegdorj said.
“I would like to say to the foreign investors, do not close the door, there are still opportunities.”
Mr. Elbegdorj called reaching an agreement his “first priority” on the economic front, though he
gave no more specific time frame for a deal than the next three years. This agreement is the first
agreement,” he said. “If we make a good agreement, this will be an example for exploiting other
big deposits and there is no space to make mistakes.”
Mr. Elbegdorj also proposed that the government consider changing a 2006 windfall profit tax that
imposes a rate of 68 percent on revenue when copper prices exceed a certain amount per ton.
Instead, he suggested a graduated system, for example a rate of 40 percent when copper prices
reach USD8,000 per ton and 60 percent when they reach USD10,000 per ton. “I think one big high
rate is not very wise,” he said.
Source: Bloomberg.com
MOODY‟S DOWNGRADES RATINGS OF KHAN, TDB, and XAC BANKS
Moody's Investors Service has downgraded its rating of three Mongolian banks to reflect stresses
arising from the current crisis and the increasing convergence between the government's ability to
support them and its own debt capacity. The banks are: Khan Bank, Trade and Development Bank of
Mongolia (TDB) and XacBank.
Explaining the rating actions, Moody's has said it is concerned that the core capital level of the
banks could be further weakened by the expected deterioration in asset quality. An estimate of
credit losses shows that the rated banks' earning power and capital adequacy would deteriorate to a
level under which their current BFSRs and outlooks would not be justified.
The rating actions follow a comprehensive review of all rated banks in Mongolia after (i) conducting
scenario analysis that tested the banks' sensitivity to various credit loss assumptions; (ii) concluding
Moody's review on Mongolia's sovereign ratings; and (iii) better aligning the banks' credit ratings and
the Mongolian government bond ratings as a result of the global financial crisis.
Read more…
Among the rating actions taken are:
[1] The Bank Financial Strength Rating (BFSR) of Khan Bank and XacBank were lowered to D- from D,
and map to a baseline credit assessment (BCA) of Ba3 from Ba2. The revised ratings carry stable
outlooks. The BFSR of TDB was placed on review for possible downgrade.
[2] All three banks' foreign currency long term deposit rating was confirmed, but assigned at the
same time a negative outlook.
[3] Khan Bank's foreign currency long term issuer rating and senior unsecured MTN rating were
lowered to Ba3 from Ba2. Its local currency long term bank deposit rating, issuer rating, and senior
unsecured MTN were lowered to Ba3 from Baa3. Its foreign currency subordinate MTN was lowered
to B1 from Ba2. Its local currency subordinate MTN was lowered to B1 from Ba1. Its local currency
short term bank deposit rating was lowered to NP from P-3. The revised ratings carry a stable
outlook.
[4] TDB's foreign currency long term issuer rating and senior unsecured rating were lowered to Ba3

3. from Ba2. Its foreign currency subordinate MTN rating was lowered to B1 from Ba2. Its local
currency long term bank deposit and issuer ratings were lowered to Ba3 from Ba1. The revised
ratings are placed on review for possible downgrade.
[5] XacBank's foreign currency long term issuer rating was lowered to Ba3 from Ba2. Its local
currency long term bank deposit and issuer ratings were lowered to Ba3 from Ba1. The revised
ratings carry a stable outlook.
Source: www.moodys.com
CENTERRA SETTLES BOROO DISPUTE, TO PAY MORE REDUNDANCY BENEFITS
Centerra Gold Inc has announced that the labor dispute with the Boroo trade union was settled on
June 16 with the parties officially signing a Settlement Agreement as well as amendments to the
Collective Agreement. The key terms of the settlement provide enhanced future redundancy
benefits to permanent employees. The company believes the settlement will not have a material
impact on future cash costs.
All site-based employees will return to work when the current suspension of operations at the mine
site has been lifted. Boroo Gold is working with the relevant government agencies to remove the
suspension as soon as possible in order to resume normal operations.
Boroo Gold Co. Ltd. values its employees and looks forward to a long and cooperative relationship
with the Boroo Trade Union and BGC employees. Boroo Gold and Centerra Gold desire their
presence in Mongolia will grow through additional investments that create employment
opportunities as well as other economic and social benefits for the people of Mongolia.
Source: www.mining-journal.com/breaking-news, www.centerragold.com
BOROO MINE OPERATING LICENSE SUSPENDED FOR UP TO 3 MONTHS
Centerra Gold said on June 12 authorities in Mongolia have suspended the operating license at its
Boroo mine, knocking the company's shares down 9 percent. The news had no immediate impact on
Boroo's production as it came when the mine was already shut down due to a labor dispute, since
resolved. Centerra said Mongolia cited issues related to record-keeping, incorrect land use, and
improper operating procedures in its suspension, which is set to last for up to three months. If the
issues are not resolved within the three-month period, the licenses could be revoked.
Centerra spokesman John Pearson said the suspension was handed down following a visit from
Mongolia's State Specialized Inspection Agency. "We're working with the authorities to understand
what these issues really are and to resolve them in a timely manner," he said. Mr. Pearson said he
did not know whether the inspection agency's visit was related to conditions of the work stoppage.
Some striking workers had gone on a hunger strike.
"I don't know whether that was directly related to the strike or not. Certainly there was a working
group formed to inspect the Boroo mine site. So they came and visited and the report came out of
that visit," he said. Mongolian media have reported the Government formed the working group to
investigate the company after workers accused it of misdeeds.
Read more…
The mine had been expected to produce between 160,000 and 170,000 ounces this year, but
Centerra will revisit its projections when the issues are resolved, Mr. Pearson said.
Analysts said it is unlikely the shutdown will extend past three months. "I think the issues are fairly
succinct and look like they can be remedied quickly with proper co-operation by both parties. I
don't even think it'll last three months," said one, adding, "My understanding is senior management
is on the way down there in the next day or two to try and resolve this."
Another said the Mongolian government likely wants to establish itself as a presence at the mine,
but he agreed that the shutdown probably will not last very long. "Who knows when you're dealing
with governments, but Centerra are well used to dealing with them and if they say three months,
then it'll probably be three months," he said.
Source: Reuters.com, The Canadian Press

4. PROGRESS ON SEVERAL ISSUES AT TALKS WITH IVANHOE, SAYS ZORIGT
Minerals and Energy Minister D.Zorigt has said renewed negotiations with Ivanhoe Mines on the Oyu
Tolgoi investing agreement have led to progress on several issues raised by MPs, but those related
to finance are eluding a consensus. These mainly center on how Mongolia will provide its 34
percent share of the investment expenses. Another contentious issue is that of the period of the
initial agreement.
The regular Government meeting last week discussed a letter from Ivanhoe Mines which sought to
dispel the doubts raised by MPs that the draft investment agreement did not adequately protect
Mongolian interests and could even damage national security. Mr. Zorigt said his Ministry is
preparing a reply to this and when it is ready it will be sent to the mining company as well as to the
Government and Parliament.
Source: Ardiin Erkh
“TWO NEIGHBORS” BLAMED FOR DELAYING TOLGOI AGREEMENTS
Senior Democratic Party MP, Mr. E.Bat-Uul has blamed Mongolia‟s “two neighbors” for the delay in
reaching an agreement on investments on the two Tolgoi deposits. “We wouldn‟t be begging
everybody for money if mining there had begun,” he said, adding, “We got to tell the truth to the
people. The neighbors do not want to let us out of their control and do not wish western mining
giants to work here, as they think that may then allow the governments of the USA, Japan,
Australia and such countries to have more influence in Mongolia.”
Source: The Mineral News, MNMA
ROBERT SHAPIRO BACK IN MONGOLIA TO HELP WITH OT AGREEMENT
Mr. Robert Shapiro, co-founder and chairman of Sonecon, a U.S. private finance consultancy, is in
Mongolia again to help in reaching an agreement on investing in the Oyu Tolgoi project. He earlier
provided the Government and Parliament with information and analysis on various aspects of the
proposed agreement. Mr. Shapiro feels the best course for the Government would be to impose
taxes on the investor for the entire life of the project, rather than own equity in it, but accepts
that a national government will have its own compulsions.
Source: Zuunii medee
GOVERNMENT WANTS TO SUSPEND ALL URANIUM LICENSES
The first discussion of the national policy on radioactive minerals by the Standing Committee on
Security and Foreign Policy heard two conflicting views, both forceful, on what the national policy
on uranium should be. Mr. Ch.Khurelbaatar opposed the Government proposal to impose total state
ownership, especially when it has been seen that Mongolia “cannot mange state concerns
responsibly”. Both democracy and the economy “flourish only when private entrepreneurship is
allowed to thrive and Mongolia should not follow Hugo Chavez‟s way,” he said, expressing concern
that if the state decides to own all the uranium in the country, it will mean all existing licenses will
be canceled.
The Head of the committee, Mr. Z.Enkhbold, said uranium is not like copper or coal but “is a
mineral under international control, and special conditions are placed on its use”. That makes
“total Government control of the sector essential”, more since Mongolia has “enough uranium to
meet one full year‟s global demand”, he said.
Minister for Minerals and Energy D.Zorigt agreed that uranium has a special status in international
affairs, but assured that “licenses of reliable companies will not be taken back”. Mr. N. Enkhbold
wanted uranium to continue being treated as a strategic mineral, but was against canceling or
suspending licenses, as “we cannot be seen as changing the rules suddenly in the middle of the
game”.
Read more...
Mrs. B. Dolgor, Head of the Cabinet at the State Secretariat, has said that work on improving the
legal environment can begin only when all current licenses are suspended. The logic is difficult to
follow. The present license holders have not broken any rules, nor have any charges been leveled
against them. Most of them have invested considerable time and money on efforts to determine the

5. deposit size. Now their activities have been frozen and the Government wants to take the licenses
back.
Mr. B. Erdenebileg of the Central Asian Uranium Co. calls the move “ridiculous” and wonders how
the companies are expected to recoup their invested amounts. A Western Prospector official, who
declined to be named, has said the Government should seek other solutions, and negotiate terms
with companies that would transfer their licenses.
All data relating to uranium deposits in Mongolia were concealed until 2002 by Russia which had
mined and taken away over 550 tons of the metal during 1988-1995. Mongolia became aware of its
wealth in the form of uranium resources only when its U-308 deposit found a place in international
mining maps. The country now realizes that the uranium it has can prove as important as either of
the two Tolgois. And bigger powers are actively seeking to place their hands on it.
Source: Zuunii Medee
RABOBANK LEADS ERDENET COPPER PRE-FINANCING
Ocean Partners, Rabobank and Banco Espirito Santo have signed a USD55 million trader-led pre-
payment financing for the Erdenet Mining Corporation, better known as just Erdenet. This is the
first new metals structured commodity finance transaction in the region since late 2008.
The one-year deal is a club arrangement, with Rabobank acting as coordinating arranger and
providing USD42 million of the funding. Banco Espirito Santo (BES) is providing the remaining USD13
million. Ocean Partners is the borrower of record, which on-lends to Erdenet. As such, there is a
pass-through risk, with performance risk being taken on Erdenet to produce and deliver copper
concentrate to OP at the Chinese border. Pricing on the deal is not being disclosed. Denton Wilde
Sapte (DWS) acted as legal counsel for the lenders.
Source: www.tradefinancemagazine.com
RED HILL ENERGY AGREES TO SELL ULAAN OVOO MINES TO FALCON MINING
Red Hill Energy has signed an agreement with Falcon Mining AG of Zug, Switzerland whereby the
latter will acquire a 100% interest in Red Hill Mongolia LLC, a wholly owned subsidiary of Red Hill
Energy, which owns a 100% interest in Red Hill's Ulaan Ovoo coal project in northern Mongolia.
Falcon Mining will assume operational activities and incur 100% of all costs pertaining to pre-
production, coal mine development and managing all coal production activities at Ulaan Ovoo. The
project is located within 120 km of Mongolia's central railroad.
Falcon Mining has agreed to pay Red Hill Energy USD30 million with the first USD3 million due within
14 days of Red Hill Energy receiving both shareholder and TSX-V regulatory approval. The present
transaction represents less than 20% of Red Hill Energy's combined measured and indicated tons of
thermal coal, with the company retaining its 100% ownership of both the Chandgana Tal and
Chandgana Khavtgai coal projects in central Mongolia.
Read more…
The Mongolian Government has granted the Ulaan Ovoo coal project all major pre-requisite
approvals required prior to commencing with coal mining operations, including approval of the
Detailed Environmental Impact Assessment (DEIA) as well as the issuance of a long term, fully
transferable mining license.
Falcon Mining has indicated that it intends to continue supporting initiatives of Mongolian
communities and projects sponsored and assisted by Red Hill Energy including the Dolma Ling
Community Center which provides medical services, meals, education and other vital services to an
impoverished neighborhood of Ulaanbaatar.
Source: www.redhillenergy.com
ZTE CLICKS DEAL WITH SKYTEL
The Chinese company ZTE Corp has bagged a UMTS contract with Skytel of Mongolia. The deal will
require ZTE to set up a nationwide commercial UMTS network thereby marking convergence of
Skytel‟s UMTS and CDMA networks. “We are honored to partner with Skytel to assist them in
maintaining their leadership position in Mongolia,” said Mr. Zhang Jianguo, General Manager of

6. ZTE‟s UMTS products. “Our SDR technology will help Skytel meet their growing market needs while
maximizing the ROI to attain the best business results.”
Source: www.Telecomtiger.com
CHINESE FIRM TO EXTEND OIL DRILLING WORK AFTER INITIAL SUCCESS
PetroChina, the largest oil/gas producer and distributor in China, is also the leading Chinese
company operating in Mongolia in terms of the amount invested. China National Petroleum
Corporation (CNPC) is the sole shareholder of PetroChina which, in turn, set up PetroChina Daqing
Tamsag LLC in Mongolia in 2005. Its president, Mr. Fang Baocai, says the company has made about
300 drillings in Tamsagbulag basin, Dornod province, since 2005 and has found oil in 70 of them.
Since 20% success is considered adequate, “we are extending our operation," Mr. Fang added.
PetroChina Daqing Tamsag holds exploration rights in Contract Blocks XIX, XXI & XXII in
Tamsagbulag basin. In 2005, it paid USD940,962 into Mongolia's state budget, and after a drop
(USD301,0951) in 2006, this amount rose to USD6,563,282 in 2007, and then to USD17,897,246 in
2008. Last year it employed 3,972 employees and the number is expected to reach 5,064 in 2009.
Source: Montsame
5,177 MINING LICENSES GRANTED THIS YEAR
The Mineral Resource and Petroleum Authority reports that so far this year 5,177 mineral licenses
have been granted to 1,993 companies. Of these 42 percent are for gold, 15 percent for coal, 13
percent for fluorspar, 19 percent for construction material, and 11 percent for other common
minerals. While 281 of the license holders are 100-percent foreign invested, 1,488 are local, and
154 are joint enterprises.
Source: Montsame
UNPAID DUES FROM POWER PLANTS MAY FORCE COAL MINES TO CLOSE DOWN
Some coal mines are about to close down because the power stations have not paid for their coal.
According to Mr. T.Naran of the Coal Association, some MNT30 billion is outstanding on this
account, despite promises by the Government that all dues will be cleared. “Coal mines don‟t get
paid while the Government plans to build a new power station. It would be wiser to take care of
the coal mines which feed the four power stations now, as Mongolia may crash if the mines
collapse,” says Mr. Naran.
Source: www.news.mn
PETROLEUM PRICES UP, BUT LESS THAN IMPORTERS WANTED
Petroleum importing companies raised prices by a flat MNT50 per liter on Monday afternoon, after
the Government had rejected their plea for a higher increase. The Ministry told the producers to
consider the interests of the consumer.
Source: Zuunii Medee
STAFF COMPLAIN ABOUT WAY ANOD BANK IS BEING RUN
A committee of Anod Bank employees has written to Mr. L.Purevdorj, the Central Bank President,
charging Mr. B.Nasanjargal, sent 6 months ago by the Central Bank to rescue Anod from an
emergency, with doing nothing much so far, “except dismissing 60% of the staff, and closing all
previously profitable activities”. The committee has demanded an account of his achievements up
to now and has also asked that the report of the foreign auditors be published.
The letter regrets that no dismissed worker has been taken back even after a court found the
firings illegal. No other bank is also willing to employ them. It resents that in these difficult days
for the bank Mr. Nasanjargal is paid MNT5 million a month which equals 20 dealers‟ salary. It claims
that Anod Bank, the only national bank established without foreign investment, has been
“deliberately dragged towards bankruptcy”, with its legitimate executives kept in jail. Demanding
their release, if necessary with conditions, the letter says they “will be able to revive the bank‟s
fortunes”.
Source: Udriin Soniin

7. 7 BANKS TIE UP WITH MONEYGRAM TO MAKE EURO TRANSACTIONS EASIER
Seven banks - Trade and Development, Mongol Post, Savings, Ulaanbaatar City, Erel, Anod and
Capitron – are now working as accredited representative of MoneyGram, which has 162,000 service
outlets in over 180 countries. According to B. Bayarmaa, a senior TDB official, this has made it more
convenient to operate transactions in Euro as the amount sent or received in Euro no longer has to
be changed into USD first. The difference in exchange rates usually meant some money was always
lost in the process. Now, any Euro transaction will be only in that currency.
Source: Udriin sonin
KHAN BANK TEAM VISITS HERDERS TO PROVIDE RELIEF
A team led by Mr. D. Batsaikhan, Deputy CEO of Khan Bank, visited Bayankhongor and Uvurkhangai
provinces recently to arrange for Khan Bank Foundation relief to herders who suffered loss of life,
livestock and property in a strong blizzard and sand storm last April. The group also discussed a
livestock re-stocking program with herders. The Bank has provided assistance to 40 herder families
in 4 provinces so far and the Foundation has already spent MNT13 million on the livestock re-
stocking program.
Source: www.khanbank.com, Montsame
COPPER SLIDES ON WEAK U.S. DATA, STRONGER DOLLAR
Copper prices slid on Monday, retreating from last week's rally, after weak US Manufacturing data
strengthened the dollar and signaled to traders that demand remains weak. Copper for three-
month delivery on the London Metal Exchange closed at USD5,006 a ton, down from USD5,230 on
June 12.
"Prices were looking over-extended and we were looking for a pullback over the summer," said an
analyst at Barclays Capital. "Probably what we are seeing today is a bit of a correction from those
extremely big gains, sparked by the data." A stronger dollar makes metals priced in the US currency
more expensive for holders of other currencies.
Copper, used in power and construction, hit an eight-month high of USD5,388 a ton last week on
Thursday on a slew of improved economic data, but analysts say fundamentals remain weak. It has
risen more than 60 percent this year in a rally sparked by increased demand from China. But this
demand, which appears to have been based largely on stockpiling by the world's top copper
consumer, seems to be tailing off.
Source: www.miningweekly.com
GOLDMAN SEES 2010 COPPER PRICE AT USD5,800 A TON
Goldman Sachs expects the current downward movement in the price of copper to be short-lived
amid growing expectations of a recovery in global economic growth, and it sees copper selling at
USD5,800 per ton by the end of 2010. The investment bank kept its 12-month copper price target at
USD4,800 per ton, unchanged from its May forecast.
"We are moving to a much less cautious stance on metal markets, and now view the current
correction as likely to be shallower and shorter in duration," Goldman said in a research note
released on Tuesday. Goldman pointed to stronger activity on the long end of the forward price
curve, which reflected an improvement in the global growth outlook, particularly in emerging
markets. "While we still expect weaker current fundamentals to create some weakness in time
spreads this summer, such a pullback would likely be very small in the context of the upward
pressure on long-dated prices."
Source: www.miningweekly.com, Reuters.com
CHINALCO PRAISES AUSTRALIA, HINTS RIO IS TO BLAME
Chinese metals conglomerate Chinalco feels Australia had an "open and welcoming" attitude to its
failed USD19.5-billion bid to invest in Rio Tinto. Chinalco President Xiong Weiping has said the deal
collapsed because of factors beyond Chinalco's control, with disagreements on board seats and a
convertible bond issue, and despite its offer of several amendments after the terms were thrashed
out in February.

8. Among the concessions, Chinalco agreed to accept a lower stake in Rio than the original 18 percent,
gave ground on the convertible bond, and simplified the agreed marketing structure for iron ore.
"We believe these were very significant concessions and amendments to the original transactions
and were sufficient to meet the requirements of both the shareholders and the Australian
regulators," Mr. Xiong said.
Read more…
Chinalco failed to resolve the question of representation on Rio's board. But it did not blame
Australia's government, which has been under the investment spotlight because of its stringent
process for accepting foreign investment. "In the process of this transaction, Chinalco has also felt
the open and welcoming attitude from the Australian government towards foreign investment,
including from China," Xiong said.
Xiong cited several factors that were beyond Chinalco's control and contributed to the break-up of
the Rio deal: metals market changes, Rio's share price rise, the requirements of Rio's shareholders,
Rio's planned share placement and the BHP joint venture. Chinalco, which is Rio's largest
shareholder with a 9 percent stake, has not yet decided whether to subscribe to Rio's planned rights
issue, but was studying all the possibilities, Xiong said.
He reiterated that Chinalco was "very disappointed" and said the deal had represented a good
value-creating opportunity for Rio, improving its market image and boosting its shares. Chinalco will
stick to its strategic goal of becoming a global diversified mining company, he said.
Source: www.miningweekly.com
AUSTRALIA SEES GOOD IN BHP-RIO TIE, CHINA SEES RED
Australia's government gave cautious support last week to BHP Billiton's and Rio Tinto's planned iron
ore joint venture, as a newspaper reported that China had threatened sanctions against the two if
the deal went ahead. As angry press commentaries in China voiced suspicions that Canberra quietly
encouraged the deal as a way of sinking an alternative Chinese investment in Australia's biggest iron
ore province, Australian Resources Minister Martin Ferguson said he saw benefits in the deal,
assuming it would receive all the required regulatory approvals.
"I actually think the joint venture has synergies of benefit to Australia, in terms of improving
productivity, which represents a better return on our natural resources to the Australian
community," he told Australian radio. The proposed venture could be a threat to China, the world's
biggest steel making country, as the combination of the world's second and third largest iron ore
producers would leave only two main suppliers alongside Brazil's Vale. In the face of this, China may
impose trade sanctions against BHP and Rio if they carry out the merger without the approval of
Chinese competition agencies, the Sydney Morning Herald has said.
Read more…
"According to China's anti-trust law, we can veto such a merger agreement if the concentration of
overseas business operations stands to affect domestic market competition," Mr. Ma Yu, the
director of the foreign investment department at the Ministry of Commerce, was quoted as saying
in the report from Beijing. The paper said China's new anti-trust law empowers it to block offshore
deals, but enforcement mechanisms remain unclear. BHP declined to comment on the report.
Resources minister Ferguson also played down the threat of any sharp reaction from China. "We will
get through it. In the end, China needs our resources and Australia needs China. As we return to
global growth, we are key to actually fuelling China's growth opportunities, and China is also key to
our recovery," he said.
Source: www.miningweekly.com
RIO TINTO LAUNCHES RIGHTS ISSUE, WARNS OUTLOOK „UNCERTAIN‟
Diversified mining giant Rio Tinto has released a prospectus for its USD15.2-billion rights issue,
announced earlier this month after the company terminated a USD19.5-billion investment
agreement with Aluminum Corporation of China (Chinalco). The rights issue will enable the group to
reduce debt, strengthen its financial position and “take advantage of future potential value-
creating opportunities”, Chairman Jan du Plessis said in a letter to shareholders on Tuesday.
However, the group cautioned that the outlook for the balance of this year remained “uncertain”.

9. “The key driver of earnings in the second half of the year is expected to remain the pricing of the
group‟s key commodities, particularly iron ore, aluminum and copper. Chile iron ore prices for the
2009/10 contract year have been settled with some important Asian customers (other than Chinese
customers), there remains uncertainty in the pricing of spot iron ore, copper and aluminum,” Rio
Tinto said.
In light of the “uncertainties” over the macroeconomic outlook, the group has decided it will not
pay an interim dividend for the current financial year, although it does plan to pay a final dividend,
“subject to satisfactory trading results”. The group expects that the total cash dividend payment
for the 2010 financial year will be at least equal to the USD1.75 billion paid for 2008, albeit over an
increased number of shares.
Source: www.miningweekly.com
SHENHUA RETAINS FOCUS ON MONGOLIAN COAL MINES
China Shenhua Energy Co Ltd, the top Chinese coal miner, will not consider buying any major
overseas mines before it starts operating the Watermark coal project in Australia. "We will not go
for other projects if we have not succeeded in this one, the first step of our overseas efforts,"
Shenhua board secretary Huang Qing was quoted as saying by the Shanghai Securities News.
"Shenhua will take an active and cautious approach (toward overseas buying)."
Mr. Huang said Shenhua would focus on opportunities in Australia, Indonesia and Mongolia that
could be potential suppliers to coal users on China's southeast coast. He added that the company
was also interested in coking coal resources in Mongolia. He downplayed concerns over the impact
of rising coal imports on the domestic market, saying most of the coal was still supplied by
domestic producers. China's major power companies stepped up coal imports this year as they
failed to reach price agreements with domestic coal miners for annual supply contracts.
Coal imports in April soared to a record high of 9.16 million tons, up 3.4 million tons from a month
earlier and far above market expectations. Imports in the first four months surged 56 percent to
22.77 million tons.
Source: Reuters.com
CHINESE COMPANY WANTS TO BUY 20% SHARES OF DENISON MINES
Sinostil, China‟s second biggest metal ore company, is considering buying 20% of the shares of
Denison Mines, which conducts uranium exploration in Mongolia. This expression of interest comes
after the Canadian company announced on Monday the signing of definitive agreements on equity
financing and uranium off-take with the Korea Electric Power Corporation.
Source: Zuunii medee
U.S.-MONGOLIA BUSINESS FORUM FOCUSES ON ENERGY
The Fourth U.S.-Mongolia Business Forum on June 9 in Washington DC provided valuable information
about commercial opportunities in Mongolia, and gave companies a chance to meet potential
business partners. The focus of the Forum was on the energy sector, especially coal mining, coal
and methane power production, oil extraction and processing, renewable energy, and nuclear
energy.
Among the speakers were Mr. Rick Wade, Senior Advisor to U.S. Secretary of Commerce Gary Locke,
Mongolian Minister of Foreign Relations and Trade S.Batbold, Ms. Michelle O‟Neill, Acting Under
Secretary for International Trade at the U.S. Department of Commerce, Mr. B. Ariunsan, Deputy
Minister of Mineral Resources and Energy of Mongolia, senior U.S. and Mongolian Government
officials, and representatives of the business communities in the two countries.
Source: Mr. Michael D. Richmond, Senior Commercial Specialist, U.S. Embassy in Ulaanbaatar
DEPLETING WATER RESOURCES DISCUSSED AT CONFERENCE
A recent conference on mining and the environment, jointly organized by the Ministry of
Environment and Tourism, the Ministry of Finance, and the Germany-based Friedrich Ebert
Foundation, was mainly devoted to issues related to mining in the Gobi regions. As mining work
expands there, availability of water is becoming a major challenge. Delegates from Ivanhoe Mines

10. noted that when the Oyu Tolgoi project works to full capacity, it will use up to 785 liters of water
per second. The participants called upon Mongolian authorities to introduce thorough and regular
environmental inspection arrangements at the mining sites and on the soil and water in their
regions, build paved roads to reduce dust and dryness, an to plant more perennial trees.
Source: Zuunii shuudan
ECONOMY
WORLD BANK BOSS URGES TRANSPARENCY TO ATTRACT PRIVATE INVESTMENT
In a public address in Ulaanbaatar last week, Dr. Juan Jose Daboub, the World Bank‟s managing
director for operations in 74 countries, said, “Mongolia has managed the transition of its economy
and politics since 1991 very well, but the impact on the country of the present global economic
crisis has revealed the need for continued reforms.” During a three-day visit to Mongolia Mr.
Daboub met Government officials, parliamentarians, members of the business community, civil
society, and other development partners, in addition to seeing first-hand how the crisis has hit the
most vulnerable in Ulaanbaatar as well as in Mongolia‟s outlying rural communities.
Referring to the possible contribution of the mining sector to the economy, Mr. Daboub said, “From
my conversations, it is clear to me that there is a common vision and a strong desire to develop the
mining sector in a sustainable and transparent way in order to benefit present and future
generations of Mongolians. We stand ready to continue to support the authorities in this endeavor.”
In his meetings with representatives from the civil society and the private sector, Mr. Daboub
highlighted the important role of the private sector as creator of sustainable jobs, growth and
development.
Read more…
“With the global economy in recession and credit flows still tight, small countries like Mongolia
more than ever need to ensure that they maintain transparent, efficient and competitive business
environments to attract private investment. Our private sector arm IFC is present in Mongolia and
actively pursuing investment opportunities,” he said. Underlying the importance of good
governance, he commented that stronger institutions and transparent mechanisms that enhance
public awareness and oversight are the best allies in the fight against corruption.
“I have seen in the eyes and smiles of Mongolian children optimism and determination to take
destiny into their own hands for a better future. We will support the government and work with it
to create the opportunities they need and deserve.” he said. “There is potential in this great nation
and I believe that once the dust settles from this economic storm Mongolia‟s march will continue.
The World Bank stands ready to accompany Mongolians in their path to prosperity,” he said as a
final word.
Source: www.worldbank.org.mn
CENTRAL BANK AGAIN REDUCES INTEREST RATE
The Central Bank has reduced the interest rate by 1.25 percentage points to 11.5 percent. The
measure is expected to lower the inflation rate, stabilize the currency, and arrest the economic
downturn. If all goes well, the rate will be brought down to 10 percent by late 2009. The interest
rate was 14 percent before it was reduced by 1.25 percent in March.
Source: Zuunii medee
INDUSTRIAL OUTPUT FALLS 7.2% YOY
Industrial output at the end of May was 7.2 percent less than in the same period in 2008. The fall
was 1.5 percent in the mining and quarrying sector and 21.8 percent in the manufacturing sector.
The former resulted primarily from the 1.6-42.8 percent drop in production of minerals such as
copper, gold, fluorspar, tungsten and zinc, while in the latter there was a drop of 11.1-83.6
percent in the production of items like spirits and beer, lime, wheat flour, carpets, and
molybdenum concentrate.
Of the MNT35.9 billion worth of construction and installation work in the period, 92.7 percent was
done by domestic entities.
Source: Montsame

11. MONEY SUPPLY RISES, BUT STILL LOWER THAN A YEAR AGO
The Central Bank reports that money supply (broad money or M2) at the end of May amounted to
MNT2,461.4 billion, a 2.5 per cent increase in a month, but 2.2 per cent less than in May 2008.
Growth of quasi money is the main reason why money supply has risen 6.1 per cent since the
beginning of 2009.
Currency issued increased 8.1 per cent over April, and 2.9 per cent over May 2008.
Outstanding loans at the end of May dropped 1.2 per cent from April 2009, but were 2.4 per cent
more than in May last year.
Source: Montsame
STEEP RISE IN UNEMPLOYMENT
Registered unemployment at the end of May was 20.4 percent higher than in the same period of
2008. Numerically, there were 38,500 people looking for a job, 6,571 more than in the
corresponding period last year. Some provinces have shown a decrease but most not, including
Ulaanbaatar city, and there has been a 200% increase in Umnugovi, according to the National
Statistics Office.
Source: National Statistical Office
TRADE TURNOVER LESS, SO IS DEFICIT
Mongolia carries out trade with 90 countries, with the total turnover reaching MNT1,287 million in
the first five months of the year, or 40 percent less than the corresponding figure for 2008. At
USD592.9 million, exports fell 40.5 percent, and imports worth USD 694.1 million showed a drop of
39.6 percent. The deficit this year is, however, USD 52.2 million less than in January-May 2008.
Source: Montsame
SHARP FALL IN FREIGHT AND PASSENGER TRAFFIC
The railway carried 10.7 percent less freight and 28.9 percent fewer passengers between January
and May than in the corresponding months last year. The drop was sharper in both sectors in air
transport. There the freight volume fell as much as 47.8 percent and the number of passengers by
32.0 percent.
Source: www.nso.mn
TAX REVENUE FALLS 29.8%, PUSHING UP BUDGET DEFICIT
The general Government budget showed a deficit of MNT199.4 billion at the end of May. The
current account deficit was MNT70.2 billion. Tax revenue fell MNT212.4 billion or 29.8 per cent
from the corresponding period last year. Collection from the windfall profits tax was 86.9 per cent
lower, and 45.5 per cent less from corporate income tax, and 7.4 per cent less from value added
tax.
Non-tax revenue up to May rose MNT27.8 billion from the same period in 2008, mainly because
dividends went up by MNT41.4 billion, and despite income from crude oil falling MNT11.2 billion,
and despite state-owned organizations earning MNT7.9 billion less.
Expenditure and net lending increased 1.5 per cent in one year, mainly because of an 8.2 per cent
rise in wages and salaries. Capital expenditure in the first five months was 5.7 per cent lower than
in the same period last year.
Source: Montsame
CONSUMER PRICES RISE 8% YOY, 0.1% MOM
The national consumer price index in May was up by 0.1 per cent over April, 5.7 percent over the
end of 2008, and 8.0 per cent more than in May last year.
Source: National Statistical Office
AVERAGE HOUSEHOLD SPENDS MORE THAN IT EARNS, SURVEY FINDS
The National Statistics Office reports that according to a survey of socio-economic conditions in the
1st quarter of 2009, the average monthly household income now stood at MNT344,700, an increase

12. of 21.4 percent over the figure 12 months ago. The average monthly household expenses stood at
MNT355,700, rising 9.5 percent in a year.
Source: www.nso.mn
ALL TAX REFUNDS TO BE PAID BY JUNE
The National Tax Office has compiled a list of businesses that paid more tax than was due from
them and has started refunding the excess paid. Of the MNT3.9 billion to be refunded to 20,738
entities, MNT2.6 billion has already been received by 12,765. The rest will be paid by the end of
June.
Source: Udriin sonin
BUSINESS WANTS MPs TO HEAR WHAT IT NEEDS
Several speakers at a recent meeting jointly organized by the Mongolian National Chamber of
Commerce and Industry (MNCCI) and the Parliamentary Standing Committee on the Economy
emphasized the need to consider the legitimate interests of business when formulating monetary
and credit policies. MNCCI head S.Demberel said stronger measures were required to control
inflation and hoped Parliament would seek the views of business people when preparing the
monetary policy for 2010.
The Director of the Monos Group, Mr. L.Khurelbaatar, criticized the Unfair Competition Monitoring
Agency for using dated methods and following a rigid mindset. Several entrepreneurs wanted
similar formal discussions to be held before Parliament debates any measure related to the
economy and business.
Source: Montsame
LOANS TO SMEs WILL RAISE GDP IN ULAANBAATAR TO MNT7 MILLION PER HEAD
An entrepreneurs‟ forum was held last week as part of the Mayor‟s program to celebrate the 370th
anniversary of Ulaanbaatar. An industrialization plan for the city was presented to the attending
Government officials and representatives of the MNCCI and other organizations. The plan will
disburse among small and medium sized entrepreneurs low-interest loans from a fund with a USD10
million corpus. The authorities are confident that successful implementation of the plan will raise
the average GDP of every citizen of Ulaanbaatar to MNT7 million.
Source: Udriin sonin
WORLD BANK TO HELP „PROFESSIONAL INSPECTION‟ TURN MORE PROFESSIONAL
A meeting of the Consultative Council for Investment Climate and Private Sector Development
(CCICPSD) was held last week, co-chaired by First Deputy Prime Minister N.Altankhuyag and World
Bank Managing Director Juan Jose Daboub. Among those present were representatives of the private
sector, and international and domestic banking and financial organizations. The meeting discussed
ways to improve professional inspection, to get out of the crisis in the construction sector, and to
simplify license-related procedures in this sector.
Ms. Josephine Bassinette, Program Manager, Business Enabling Environment, at the IFC –- a member
of the World Bank group with special responsibility for providing investments and advisory services
to build the private sector in developing countries -- said professional inspections certainly played
an important role in ensuring public security, but their inefficient implementation puts various
burdens on the private sector. She felt such inspection is not transparent enough in Mongolia at the
moment, and allows corruption and bribery to flourish. The IFC has prepared a project to change
the ways of work in the area which will fulfill all requirements of the State, while making things
easier for business. The project will introduce the best international practices, enhancing
inspectors' competence and thus getting more out of their work. Emphasis will be placed on raising
the level of public awareness of such inspection activities and their goals.
Source: Montsame
NEW MARKET ACCESS FOR CANADIAN LIVESTOCK IN MONGOLIA
An agreement was reached in talks early this week between Canada‟s Agriculture Minister Gerry
Ritz and visiting Mongolian Minister for Food, Agriculture and Light Industry, Mr. Tunjin

13. Badamjunai, that gives Canadian farmers and exporters new market opportunities in Mongolia for
beef, cattle and swine and their products. Mr. Ritz called this “an important development in
relations between our two countries”, opening “doors to many new exports and opportunities in
agricultural cooperation". Canadian agriculture and food products that can be exported to Mongolia
are: live cattle, live swine, ovine/caprine genetics (sheep/goats), bovine genetics, porcine semen,
day-old chicks and hatching eggs, and meat products, including all beef and beef products.
"The Government's decision to open a new Embassy in Ulaanbataar last year is already paying
dividends," said International Trade Minister Stockwell Day, who met with Minister Badamjunai on
Monday to discuss further trade cooperation. "We are the second largest foreign investor in
Mongolia and our existing strong commercial relationship in the mining sector is broadening into
real opportunities for Canada's agricultural producers."
Source: Marketwire, www.internationaltrade.gc.ca
CRISIS RUMBLES ALONG THE MONGOLIAN STEPPE
A drop in demand for cashmere clothing as investment bankers, lawyers and other high-flyers have
either lost their jobs or faced salary cuts has led to a 50 percent fall in cashmere prices, sapping
the income of goat herders on the Mongolian steppes. That is just the tip of the iceberg of the
impact the global financial crisis is having on the people of this vast, landlocked country, wedged
between Russia and China.
Aside from plunging wool prices, the economic slowdown in countries such as South Korea means
that the tens of thousands of Mongolians working there are sending less money back home to their
families, or even returning home after losing jobs. And with prices for the country's main export,
copper, and other metals down relative to last year, construction and other spending have slowed,
taking a toll on the government's coffers and its ability to help the poor.
Read more…
Mr. Sereeter Damba, who like much of the population is a nomadic herder, is looking for new ways
to support his wife and 11 children now that his 200 sheep and goats are no longer worth what they
used to be. "I'm trying to find a way to plant crops, some vegetables, because I'm not making
enough from my herd. But it's hard to get land to do so," Mr. Damba, 52, said at a settlement at
Bayanchandman, 70 km northwest of Ulaanbaatar.
In the meantime, a loan of MNT500,000 (USD355) is helping his family to get by at a time when
inflation in Mongolia is still over 12 percent after peaking at 34 percent last summer. He is
determined to hold onto his herd, which serves as collateral on the loan.
"Of course I'll pay it back," he said. Many others have not been so lucky. Pinched between double-
digit interest rates and low meat and cashmere prices, more and more herders have been driven
into default on their loans, forcing them to give up some or all of their flocks.
With jobs scarce and inflation high, the real effective wages of day laborers fell by about 60
percent between April 2008 and April this year, the World Bank said in a recent report. Once
protected by a socialist safety net, the poor are increasingly unable to rely on state handouts as
the government's revenues have dropped by more than 30 percent over the past year in the wake of
tumbling metals prices relative to the historic highs reached last year.
Source: Reuters.com
MPs DISCUSS COMPETITION LAW AMENDMENTS WITH MNCCI
Some MPs recently met with officials at the Mongolian National Chamber of Commerce and Industry
(MNCCI) to discuss the amendments they propose to make to the current Competition Law. Several
companies and businesses have already sent to the MNCCI their opinions on the proposed changes.
Some feel these should be more specific, while others have found some articles lack basis in reality.
Some have commented that most of the suggested amendments appear to follow provisions in the
competition laws of Russia and Kazakhstan and, if approved, will increase government control of
business, allowing government agencies to get involved in the day to day running of companies. The
MNCCI told the MPs the private sector must be kept free of bureaucratic interference, and
identified a number of articles that should be more clearly reformulated, and also called for the
total withdrawal of certain articles.
Source: Udriin sonin

14. POLITICS
ELBEGDORJ SWORN IN, SAYS HE WILL FULFILL PEOPLE‟S DEMAND FOR REFORM AND CHANGE
Soon after taking the oath of office on June 18, the newly elected President of Mongolia, Mr.
Ts.Elbegdorj, gave a call for national unity, asserting that he would “work to fulfill the trust of
those who supported me, and also work to gain the trust of those who did not”. Addressing
dignitaries, both Mongolian and foreign, assembled at the Great Hall of Government House, he
thanked people for electing him, saying democratic responsibility assumes more importance in
times of crisis. The historic choice of May 24 showed people wanted reform and change. Above all,
they wanted fairness, as much as they wanted clean water and fresh air. A corrupt state system
corrodes the nation and renders it powerless. “I want to tell everybody, „Stop corruption in state
work right from this moment‟,‟ he said.
His priority would be reforming the judicial system, as the fundamental basis of a truly fair society
was that everybody was equal before the law. Mongolia did not need foreign advice or help to
achieve this. What it did need was, he said, unity among the people to work for a common purpose.
Turning to guests from abroad, Mr. Elbegdorj said Mongolia‟s traditional foreign policy to have
friendship with all nations would be pursued with a new vigor and thrust. Mongolia will continue to
have special ties with its two neighbors, but will also seek to be an active member of the world
community.
Read more…
The ceremony went with clockwork precision. Mr. Elbegdorj took the oath at 12.06 p.m., knelt
before the national flag, and then received the seal of office from his predecessor. He had been
persuaded not to wear a business suit as he had wanted, but to stick to convention. He, however,
shunned ostentation and while Mr. Enkhbayar wore the same deel of handmade silk from 1940 and
a handmade hat with 32 cross stitches that he had done when he took office four years ago, the
new President was in things more ordinary.
He however changed into a suit when he came out to Sukhbaatar Square where people had
gathered since late morning to have a glimpse of the new president and watch the military parade.
The list of foreign guests did not feature any heavyweight, disappointing many. However, observers
refuse to see any diplomatic significance in this. It is being said that the explanation is more
mundane. Both Prime Minister S.Bayar and a member of the National Security Council were on
vacation, and by the time they came back to decide on the invitation list and sent letters to foreign
leaders, it was too late for them to take time off from their busy schedule to be able to attend the
ceremony.
The President will move his office from the third floor in the left wing of Government House to the
fifth floor of the Chinggis Khaan Complex. All his staff will also be located there.
Source: en.News.mn, Udriin sonin
EX-PRESIDENT DOES NOT HAVE A BANK ACCOUNT, PM DOES NOT HAVE A CAR
According to their declaration of assets and income to the Anti-Corruption Authority, a legal
requirement since 2006, some of the 100 high officials earn less than a director of a small company.
Many report that they do not even have a car or the piece of land allotted free to each citizen of
Mongolia.
President Elbegdorj has a yearly income of MNT5.582 million. The total income of his family is
MNT39.8 million. He has a Mercedes Benz and a Lexus and also owns a house valued at over MNT253
million, 80 horses, 60 sheep, and 25 cows.
Former President N.Enkhbayar earns MNT90 million a year and has one apartment worth MNT67
million. He has 48 horses worth MNT13.5 million and does not have any money in the bank or any
land. His wife does not work and has no separate income.
Speaker of Parliament D.Demberel earns MNT5.319 million a year and has bank deposits of MNT8.6
million. Members of his family earn a total of MNT4.59 million. He has an apartment valued at
MNT60 million and a car worth MNT6 million. He has 59 heads of livestock worth MNT7.1 million,
shares in Gobi Company worth MNT21 million. He also does not own any land.
Prime Minister S.Bayar does not have a car, but his apartment is worth MNT195 million. His annual
income is MNT147 million and he owns 10 percent of Sansar CATV and Palace LLC as well as 0.07

15. acre of land received free from the state.
Source: www.news.mn
ENKHBAYAR HOSTS FAREWELL DINNER FOR MPs
One of the last official acts of former President N.Enkhbayar was to host a dinner for MPs and
Cabinet members. Taking leave of them, he said that since his election in 2005 he had done his best
to fulfill his program. “With the cooperation of Parliament, government and the civil society, we
adopted a long-term National Development Policy. The program on regional development will also
change the face of rural areas and the capital city,” he said. He reminded his guests that the first
duty of anybody holding a public office was to be free of corruption and to work free of any
pressure. He also emphasized the need to have a competent bureaucratic structure.
Source: Ardiin Erkh
MPRP MEMBERS CALL FOR CHANGES IN THE PARTY
Mr. S. Byambatsogt, a young MPRP member of Parliament, has welcomed the efforts by some of his
party colleagues to form a group to press for changes in the party. “It is unfortunate that there are
many politicians who prefer to be surrounded by puppets or yes-men who believe flattery will make
their fortune or that politics is merely a means to make money,” he said. Asserting that the country
can move forward only if politics is cleansed of such self-seekers, the MP praised the party
members who told a recent press conference that the results of the presidential election have
made it clear that people do not approve of the way the party works.
They have already sent suggestions to the leadership on how the party can be made more
acceptable. More care should be taken to ensure that policies and programs are actually
implemented. There should also be new and broad-based ways to discuss and adopt policies.
“Everything in the party now revolves around only a few people, and this must change,” they felt.
Source: Zuunii medee, Ardiin Erkh
MEDICAL GRADUATES NO LONGER NEED TWO YEARS‟ TRAINING
In a bid to fill medical posts in the provinces, Parliament last week decided that fresh Health
Science University graduates would now be allowed to practice medicine without having to go
through two years of attachment to a hospital. The changes take effect immediately and are
expected to use the 480 students graduating this year to serve in rural areas that need 360 doctors,
with 28 districts having no doctor at all.
Not all MPs were happy about the change. One said inexperienced new graduates cannot be
dependable doctors and warned, “We are putting the lives of people at stake.” Another, however,
said in any case most fresh graduates get their training in the provinces and experienced doctors
are concentrated in Ulaanbaatar. A former Health Minister and a medical doctor himself,
L.Gundalai said the logic behind asking a medical graduate to work for two years as a trainee
before they can call themselves a doctor should be extended to MPs also, asking them to work in
the Civil Representatives‟ Assembly in a soum for a year and then in a province for another year
before they can qualify to become an MP.
Source: en.News.mn
CRIMES RISE
The total number of crimes committed nationwide in the first five months of 2009 increased by 4.8
percent over the same period last year, according to the National Statistics Office.
Source: Montsame
NGO FAULTS TV CHANNELS ON COVERAGE OF PRESIDENTIAL ELECTION
Globe International has released the final results of its systematic monitoring of the TV coverage
between May 8 and 22 of the May 24 presidential election. The NGO was supported by the Open
Society Forum in the work that covered all election-related programs on the National Public

16. Broadcasting Television, UBS, TV-5, TV-9 and TV Channel 25. The goal of the project was to
evaluate mass media performance in providing objective and balanced coverage of candidates in
their news and current affairs programs.
Altogether the five channels devoted 1,324 hours to the election in these 15 days, excluding news
programs. Positive information about the two candidates accounted for 64 percent (83 hours) of
this, neutral information for 13 percent (17 hours) and negative information for 23 percent (30
hours). Positive coverage of Mr. Enkhbayar was 1.9 times more than that of his challenger, while
negative coverage of Mr. Elbegdorj was 4.3 times more than that of the incumbent president. News
programs devoted 51 hours to the candidates, of which 61 percent went to Mr. Enkhbayar, and 39
percent to Mr. Elebgdorj. There was 6 times more negative information about Mr. Elbegdorj than
about his opponent.
Read more…
The NGO concluded that:
 TV channels did not provide equal opportunity to the two candidates.
 People did not receive accurate information about the candidates, as the channels were
mostly one-sided, polarized and biased.
 The news programs failed to meet professional standards. They were more like election
advertisements, and actually, almost half of the news coverage had been paid for. This
kept on increasing as Election Day drew closer.
 The Mongolian National Public Broadcasting Television performed better than the
commercial channels.
Source: www.globeinter.org.mn
WORLD BANK LEADS SUPPORT TO MONGOLIA‟S STATISTICAL SYSTEM
The World Bank has approved an investment credit of USD2 million for a multilateral 5-year project
to strengthen the national statistical system of Mongolia. The project aims to improve the
efficiency and effectiveness of the system so that it can provide relevant, timely and reliable data
for evidence-based policy making in support of the Government of Mongolia‟s MDG-based National
Development Strategy (NDS).
The other donors are South Korea with USD0.7 million and the Trust Fund for Statistical Capacity
Building, with USD0.4 million. The Turkish International Cooperation Agency will support the
project through in-kind contributions. The Mongolian National Statistics Office will be the main
executing agency of the project and will be responsible for its overall management and
implementation.
”This project is part of the Bank‟s ongoing efforts to support the government in implementing
„second generation‟ reforms in terms of strengthening the national statistical system to produce
reliable, timely and quality data for monitoring of key poverty and development indicators,” said
Mr. Arshad Sayed, Country Manager and Resident Representative for the World Bank in Mongolia.
The project will reduce the cost of information supply, increase demand, and make coordination of
statistical activities, financing, and execution more effective. It will also help statistical agencies in
line ministries through improved institutional interaction.
Source: www.worldbank.org
THREE HELD FOR MONGOLIA‟S FIRST CREDIT CARD FRAUD
The Economic Crimes Department of the police is working on the country‟s first case of credit card
fraud. Three men who had studied in Britain and Germany have been arrested and are being
interrogated.
Police found the machine which was used to make the fake cards and chips at their residence. The
three, who withdrew more than MNT12 million from banks with their cards, are believed to have
accomplices in Ukraine and England.
Source: Undeshnii shuudan

17. NEW MONGOLIAN LAWS
The following new law and an amendment to a current Mongolian law were published in a recent
weekly Government Bulletin. Unless decided otherwise by Parliament, the amended law takes
effect ten (10) days after publication.
Date Laws
06.17.2009 Addendum to "Law on Crops"
"Law on Accepting plenipotentiary rights of the President of Mongolia"
Please visit BCM‟s website, Legislative Committee, for a summary of new Mongolian laws.
BCM members who wish complete versions of the laws in Mongolian language are welcome to call or
email the BCM office (11-332-345; info@bcmmongolia.org) to arrange for a convenient pickup.
ANNOUNCEMENTS
FRONTIER SECURITIES CONFERENCE, “RECOVERING MONGOLIA”
Frontier Securities with the collaboration of FIFTA and Mongolian University of Science and
Technology is pleased to announce its June Conference “Recovering Mongolia” to take place at The
Corporate Hotel, Ulaanbaatar, on June 29-30, 2009. The Conference focuses on investment
opportunities in Mongolia which is slowly but surely recovering from the financial crisis.
For registration please contact staff@frontier.mn or call 70119999 or fax 70111991.
“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 9:30 PM tonight. Tune in to watch this program that reports stories from today‟s BCM
NewsWire.

18. SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended June 12, 2009, trading activity on the Mongolian Stock Exchange (MSE) totaled
10,668,000 shares with 26 companies traded. Total market value of transactions was MNT 1.3
billion. Total market capitalization of the 358 stock companies listed on the MSE was MNT 465.9
billion, and increased by MNT 12.5 billion or 2.75% from the previous week.
The Top-20 Index increased by 100.62 points or 2.2% compared to the previous week, closing at
4,787.47 points. The MSE Composite Index increased by 49.20 points or 2.0% compared to the
previous week, closing at 2,483.33 points.
Most active stocks traded were: Genco tur buro (10,025,500 shares), Tuul songino usnii nuuts
(278,500 shares), Khuh gan (255,100 shares), APU (50,400 shares), and Naco tulsh (30,000 shares).
Major share price percentage gainers were: Mon Tsakh Kholboo (15.4%), Noyot khairkhan (15.0%),
Undurkhaan (14.6%), Khuh gan (11.8%), and Tavan tolgoi (11.7%). Major share price percentage
losers were: Bishrelt Industrial (15.0%), Buligaar (14.0%), and Naco tulsh (9.3%).

19. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
May 31, 2009 *8.0% [source: NSOM]
* year over year (yoy)
CURRENCY RATES – June 18, 2009
Currency name Currency Rate
US dollars USD 1427.54
Euro EUR 1982.50
Japanese yen JPY 14.83
British pound GBP 2335.53
Hong Kong dollar HKD 184.19
Chinese yuan CNY 208.78
Russian ruble RUB 45.81
South Korean won KRW 1.13
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.