The document is a newsletter from the Business Council of Mongolia covering business and economic news in Mongolia. Some of the key highlights include: - Prophecy Coal Corp acquiring additional coal exploration licenses adjacent to its Chandgana project to consolidate the coal basin. - SouthGobi Resources beginning construction of a new paved highway to transport coal from its Ovoot Tolgoi mine to the Chinese border. - Sojitz Corp. of Japan aiming to more than triple its sales of Mongolian coal to China within three years. - EzNis Airways receiving a new Boeing 737 aircraft, expanding its international flight routes from Mongolia. - Cockpit4u Aviation Service becoming the

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 227 – June 22, 2012
NEWS HIGHLIGHTS:
Business:
 Purchase of Erdenes-TT shares by companies ends 1 July;
 Tavan Tolgoi IPO likely in 2013 says Frontier Securities CEO;
 Prophecy consolidates Chandgana basin through acquisition;
 Nova looks to secure lithium reserve;
 Eumeralla hunts for tungsten at Chuluun Khoroot;
 SouthGobi begins constructing new road;
 Aspire and Russian Railways team up for railway development;
 Japan's Sojitz sets out to triple Mongolian coal sales to China;
 EzNis adds new Boeing 737 to fleet;
 Turkish Airlines to add UB flight to its schedule;
 Cockpit4u gets Mongolian training approval;
 KIT Digital selected to launch Bloomberg TV Mongolia;
 Voyager to raise USD 4.5 million in options offering;
 Wesfarmers exploring coal investment in Mongolia;
 Economic uncertainty sends KMEF portfolio down 10 percent;
 Prophecy drives Chandgana Power Project forward;
 XacBank nominated for “Sustainable Banking” award;
 Microloan finances shoemaker's operations expansion;
 Mongolian Resource Corp appoints new director;
 HKEx winning battle for LME.
Economy:
 Social economic data released;
 Mongol Bank to sell USD 32 million at FOREX auction;
 Full steam ahead on power plant development;
 Government looks to ease debt;
 State inspectors face hurdles to perform duties;
 Mining overshadows tourism;
 Candidates break the bank for elections;
 Mongolian scientist helps develop new influenza vaccine;
 Gold stretches gains to eighth day;
 Copper prices to continue climb, says German copper trader.
Politics:
 DP leads poll by 10 percent;
 DP leads overseas election exit polls;
 MPP accuses DP of violations of Election Law;
 Elections mark key step toward democratization;
 Enkhbayar's trial delayed again for change of legal defense;
 DP's proposed coal tax hikes a violation of WTO rules;
 Companies to submit new charters by 1 July;
 Mongolia falls on 2012 Failed State Index;
 Government scrambles to finance cash handouts before July;

2.  U.S. Attorney wants dinosaurs bones returned;
 Mongolian delegation attends partnership meeting in Brazil;
 DP looks to coal export taxes to finance city improvements;
 Mongolia looks to Korean enterprises as partners for development;
 Civil servants campaign for return of their jobs;
 Officials silently removed from Development Bank;
 CSM enters international accreditation body.
ECONOMIC INDICATORS:
 MSE Top 20 Index by Market Capitalization;
 Foreign-listed Companies with Mongolian Assets;
 Inflation;
 Central Bank policy rate;
 Currency rates.
*Click on titles above to link to articles.
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
Breakthrough PR Oxford Business Group
BCM MONTHLY MEETING NOTICE
BCM‘s next monthly meeting for members will be Monday, June 25, 2012 at 5PM at the KEMPINSKI
HOTEL KHAN PALACE, 2nd floor, Altai Ballroom.
The bilingual meeting will feature the following presentations:
- Call to Order/Business Council of Mongolia: Laurenz Melchers, Chairman, BCM
- BCM Report: Jim Dwyer, Executive Director, BCM
- G. Ariunkhishig, Managing Director, British School of Ulaanbaatar - "Introducing British School of
Ulaanbaatar"
- D. Bat-Ochir, CEO, XacBank - "Overview of XacBank"
- L. Byambaa, Partner, UMC Capital – ―Introducing Corporate Pension Plans in Mongolia‖

3. - L. Sumati, Director, Sant Maral Foundation – ―Latest Political Trends‖
A networking reception will be held for all attendees immediately following the business portion of
the meeting in ―Oasis‖ restaurant, 1st floor, Kempinski Hotel.
BUSINESS
PURCHASE OF ERDENES-TT SHARES BY COMPANIES ENDS 1 JULY
The deadline for companies to purchase shares of Erdenes-Tavan Tolgoi is just a week away.
The sale of Erdenes-TT shares began on June 1, allowing 41,390 companies established before 30
June 2010 to purchase a total of 32.9 million shares. Companies may purchase up to 36,240 shares
each at MNT 933 a share. The government has registered 921 companies for the purchase of shares.
Source: Zuunii Medee
TAVAN TOLGOI IPO LIKELY IN 2013 SAYS FRONTIER SECURITIES CEO
Mongolia's government is planning to launch an initial public offering (IPO) for the Tavan Tolgoi coal
mine and list it in the first quarter of next year, the chief executive of Frontier Securities, an
investment bank that advises the government on mining policies, said Wednesday.
The government plans to list shares of Tavan Tolgoi simultaneously in London, Hong Kong, and
Ulaanbaatar, but a listing in the second quarter might be ―more reasonable‖ given global
macroeconomic uncertainties and the deposit's valuation issues, Chief Executive Officer Masa Igata
said.
Igata said questions over the mine's as-yet-unbuilt railway infrastructure haven't been resolved.
However, B. Munkhdul, Chief Executive of CPS International, added that construction of the
adjacent Ukhaa Khudag railway began this month. The mine produced one million tons of coal last
year and is expected to produce up to three million to four million tons this year. Production will
likely rise to 7 million tons next year and 20 million tons by 2017, Igata said.
Source: MarketWatch, CPS International
PROPHECY CONSOLIDATES CHANDGANA BASIN THROUGH ACQUISITION
Prophecy Coal Corp has entered into a binding sale and purchase agreement to acquire assets
relating to certain Tugalgatai coal exploration licenses from Tethys Mining LLC, the Mongolian
subsidiary of Brazilian miner Vale SA.
The deal is subject to approval from the Mineral Resource Authority, to have such exploration
licenses transferred to it. The Tugalgatai licenses are contiguous to the company's Chandgana
license, which host a measured resource of 650 million tons and an indicated resource of 540
million tons of thermal coal.
According to records, Tethys applied to register a resource estimate of 2.33 billion tons of thermal
coal for the Tugalgatai license. Since 2006 Tethys Mining performed detailed exploration on the
Tugalgatai licenses, including drilling and geophysical methods. Exploration results indicate a large
and geologically simple coal occurrence within the licensed areas that is similar to Prophecy Coal's
Chandgana licenses.
The terms of the agreement include a USD 10 million upfront payment and an 8.5 percent royalty
on future coal sales from both the Chandgana and Tugalgatai licenses. The royalty can be
extinguished by paying Tethys USD 20 million before 2021 or USD 25 million from 2021 onwards.
―By consolidating the Chandgana coal basin of approximately 300 square kilometers, Prophecy is
looking for greater economies of scale to potentially produce low-cost electricity at the Chandgana
mine mouth power plant, and further develop coal to chemicals and coal gasification projects.,‖
said Chairman and Chief Executive Officer John Lee. ―It‘s also possible to further increase the
resource through exploration in this highly prospective basin.‖
With approval from the Minerals Resource Authority, the transaction is expected to close in the
third quarter.
Source: Prophecy Coal Corp.

4. NOVA LOOKS TO SECURE LITHIUM RESERVE
Nova Mining Corp. is in talks to secure a lithium supply from Mongolian National Mining Consultants
Ltd. at discount.
MNMC is a Hong Kong company, with its principal business operations in Ulaanbaatar, Mongolia.
MNMC is the registered owner of multiple mining properties that are located in Mongolia. Recent
surveys of MNMC's mining properties indicate significant quantities of commercially recoverable
lithium reserves.
Nova Mining Corp. is seeking lucrative mining projects for high-demand minerals, such as lithium, as
part of its newly instituted aggressive business model. Lithium is the main ingredient to long-life
batteries.
Source: Nova Mining Corp.
EUMERALLA HUNTS FOR TUNGSTEN AT CHULUUN KHOROOT
Newly minted Eumeralla Resources is nearing the start of exploration at its mineral exploration
license in northeast Mongolia. The site covers 12,657 hectares, including the historical Chuluun
Khoroot tungsten mine.
The company inked a contract for the provision of initial mapping, sampling, and surveying of the
license, which is set to begin in late June and complete in August. The mapping will pave the way
for the start of a drilling program.
The license is located about 20 kilometers north of Dashbalbar and 85 kilometers northwest of the
Solowevsk-Choibalsan railway. Previous exploration at the project has defined tungsten targets, but
follow up exploration has been limited.
Source: Proactive Investors
SOUTHGOBI BEGINS CONSTRUCTING NEW ROAD
SouthGobi Resources Ltd. has begun construction on a new paved coal highway to the Mongolia-
China border.
A ribbon-cutting ceremony was held on 16 June to commemorate the start of construction. The
paved highway will have an intended carrying capacity upon completion in excess of 20 million tons
of coal per year.
―The new paved coal highway will significantly increase the safety of coal transpiration to the
border, reduce dust, and improve efficiency and capacity of coal transportation,‖ SouthGobi
Resource's president and chief executive officer, Alexander Molyneux, said.
In August 2011, the State Property Committee awarded the tender to construct a paved highway
from the Ovoot Tolgoi complex to the Shivee Khuren border crossing to consortium partners NTB
LLC and SouthGobi Sands LLC, the subsidiary of SouthGobi Resources (together known as RDCC).
RDCC now has concluded a 15-year build, operate and transfer agreement under the Law on
Concessions.
Source: Proactive Investors
ASPIRE AND RUSSIAN RAILWAYS TEAM UP FOR RAILWAY DEVELOPMENT
Aspire Mining Ltd. has signed a memorandum of understanding (MOU) with Infrastructure
Development, the Mongolian subsidiary of Russian Railways, to collaborate on extending the trans-
Mongolian railway across northern Mongolia. The rail line would include a link to Aspire Mining's
Ovoot coking coal project.
―The securing of the MOU with Russian Railways represents a step forward in the development of
infrastructure to support the Ovoot coking coal project,‖ said Managing Director David Paull.
The MOU would allow the companies to explore the development of a strategic partnership for
infrastructure development. Aspire Mining's infrastructure arm, Northern Railways LLC, has plans to
build, own, and operate an extension of the existing trans-Mongolian railway at Erdenet through to
Ovoot via Moron Soum in Huvsgul Aimag.
The MOU provides a framework for both companies to discuss, amongst other things, the application
for a rail concession for the Erdenet-Moron-Ovoot rail line, investment, network rail capacity and

5. integration. Paull said the rail line would be in the interests of Mongolia, too, as it would establish a
new source of export revenues for the nation and routes to seaborne markets via the Russian rail
system.
Source: Aspire Mining Ltd.
JAPAN'S SOJITZ SETS OUT TO TRIPLE MONGOLIAN COAL SALES TO CHINA
Sojitz Corp., Japan's third-largest coal trader, aims to more than triple Mongolian coal sales to
China within three years as it seeks to handle 10 percent of the country's growing sales of the
mineral to the world's top consumer.
Sojitz expects its acquisition of a 10 percent stake in Mongolian resources and coal distributor—
Inner Mongolia's Zhongmeng Coal Co.—to help boost its China sales, Masaaki Bito, Sojitz's general
manager said.
Chinese firms are collectively the world's largest spot buyer of thermal coal, but their demand for
coal has flagged in recent months due to an oversupply of the fuel in Asia. While the bearish coal
market is a concern, demand from China for Mongolian coal is expected to pick up and may more
than double in three years, Bito said. Sojitz is aiming to boost its Mongolian coal sales to China to
three million to five million tons a year within three years. It now sells one million tons through
Zhongmeng, which has coal stockyards, trucks, washing plants at the border between China and
Mongolia, and a key cross-border export license.
Sojitz, which is seeking a stake in Mongolia's massive Tavan Tolgoi coal deposit as part of a
Japanese and South Korean consortium, expects China's demand for Mongolian coal to grow to 30
million to 50 million tons in three years, up from 20 million last year. Apart from Mongolia coal,
Sojitz also sells 8 million tons a year of Australian coal, 7 million tons of Indonesian coal, and three
million tons of Russia coal to Japan and other Asian countries, Bito said.
Source: Reuters
EZNIS ADDS NEW BOEING 737 TO FLEET
EzNis Airways received a new Boeing 737-700 from the International Lease Finance Corporation
(ILFC) on 19 June. The ILFC takes first place in the world with its price to purchase and second
place with its fleet.
The new plane has 12 seats for business class, and 112 for economic class. The additional plane will
allow the airline to expand its international air routes from Mongolia. As of the first quarter of
2012, Mongolia‘s international transportation flow has increased by 30 percent compared with a
year earlier.
The addition brings EzNis' fleet to 7 planes. Boeing 737 is a middle-distance jet that can make non-
stop flights from Ulaanbaatar to Beijing, Seoul, Tokyo, and Hong Kong.
The company also has plans to obtain a 74-seat Bombardier KYu400 by the third quarter of 2012 to
fly routes to Mongolia's western provinces.
Source: Montsame
TURKISH AIRLINES TO ADD UB FLIGHT TO ITS SCHEDULE
Turkish Airlines has announced plans to introduce an Istanbul-Bishkek-Ulaanbaatar route starting
from 2 July.
Flights to Istanbul, with a stopover in Bishkek, will be made to Ulaanbaatar three days a week on
Monday, Wednesday, and Friday. Earlier, on 27 April, the head of the Civil Aviation Authority of
Mongolia (CAA), S. Batmunkh, and the deputy director general of Turkey's Directorate General of
Civil Aviation, Bahri Kesici, signed a memorandum of cooperation regarding the flight path.
Source: Info Mongolia
COCKPIT4U GETS MONGOLIAN TRAINING APPROVAL
The first non-Mongolian type rating training organization Cockpit4u Aviation Service has been
approved by the Civil Aviation Authority (CAA).
With this new training authorization, Cockpit4u can now deliver approved Type Rating Training and

6. Train-the-Trainer program's leading to the issue of a CAA Type Rating and Type Rating Trainer
approval.
―We are very pleased to have worked closely with [CAA] and MIAT Mongolian Airlines to successfully
secure this TRTO approval in Mongolia, and we look forward to continue supporting the airline in
the provision of high-quality airline pilot training on Boeing 737 in the future,‖ said Dennis Pilz,
chief executive of the firm.
With this milestone, Cockpit41 continues its growth strategy in Asia.
Source: Cockpit4u
KIT DIGITAL SELECTED TO LAUNCH BLOOMBERG TV MONGOLIA
KIT Digital Inc. has been chosen to manage and launch the first broadcast channel of Bloomberg TV
in Mongolia.
Given the project's success, the company anticipates being given the opportunity to launch
Bloomberg channels in five additional APAC markets.
Source: KIT Digital Inc.
VOYAGER TO RAISE USD 4.5 MILLION IN OPTIONS OFFERING
Voyager Resources Ltd. will issue up to 446.4 million options at an issue price of USD 0.01 each to
raise USD 4.5 million before costs. The offer will be fully underwritten by CPS Securities, and will
be made pursuant to a prospectus to be lodged at ASX in the near future.
The offer to shareholders will be on the basis of one option for every three shares held in the
company at the record date and will have an exercise price of USD 0.03 expiring 31 December 2014.
Funds raised under the entitlement issue will be primary used to focus on additional drilling
programs and the application of a mining license at the company's KM Project in Mongolia.
Additional expenditures will also be allocated toward the company's Daitiin Ovor and Khongor
projects.
The company is now nearing completion of a study aimed at reviewing the extensive drilling,
geology, and geophysical database generated over the last 12 months. This includes over 50,000
meters of drilling which has highlighted some of the most promising drilling results in Mongolia since
the discovery of the Oyu Tolgoi copper deposit.
In line with the company's refocusing of its exploration efforts, it has appointed the current general
manager of marketing, Joe Burke, to the newly created position of chief executive officer. Burke
has over 22 years experience in business operations, management and project development in the
Asia-Pacific region.
Source: Voyager Resources Ltd.
WESFARMERS EXPLORING COAL INVESTMENT IN MONGOLIA
Wesfarmers Ltd. is contemplating taking steps to capitalize on Chinese consumption of raw
materials through investment into Mongolia.
Wesfarmers is confident China's demand for Australian resources will remain strong, predicting the
nation's economy will double in size in the next decade, underpinning the company's coal business.
The company has been exploring investment in Mongolia, but chief executive Richard Goyder said
while it was unlikely the group would make an investment there alone, it could be open to being
part of a consortium.
―We are a big exporter of coal, but while we export very little into China, it sets the market for
both thermal and metallurgical coal,‖ said Goyder.
Asked whether the company would invest in Mongolia, he said it was a possibility but it was unlikely
―we would be an on-the-ground investor.‖ He cited economic concerns with a higher cost of capital
for the companies preventing it from leading an exploration campaign alone.
The general view is that Chinese markets will soak up the supply from Mongolia for some time and
the landlocked country still faces major infrastructure and logistical challenges. The Mongolian
government has dithered on building railways into China, as a great deal of mistrust still exists in its
relationship with its southern neighbor.

7. Read more…
China had its lowest growth in almost three years, of 8.1 percent, in the first quarter, a figure
widely believed to be artificially inflated by the government.
"We would have a higher cost of capital than other people, so for no other reason than financially
others would get involved earlier than we would."
Goyder said even lower growth in China was coming off a high economic base.
―If you compound it for the next 10 years, you have an economy double the size compound for the
next 20 years and you have an economy four times the size,‖ he said. ―And if it's only 3 1/2 times,
it doesn't matter.‖
Goyder said even lower growth in China was coming off a high economic base.
Source: The Australian
ECONOMIC UNCERTAINTY SENDS KMEF PORTFOLIO SLIDING DOWN 10 PERCENT
The Khan Mongolian Equity Fund (KMEF) finished May down 10.4 percent due to investors' reluctance
to bet on risky assets with the greater economic downturn spurred by the European debt crisis.
May was one of the worst months for equity markets in recent years. As the debt crisis in Europe
intensified, few investors were in the mood to buy risk assets and instead rushed to treasury
securities—sending the 10-year U.S. Treasury yield to the lowest on record at 1.53 percent. The MSE
Top 20 Index was relatively unscathed, falling 3.9 percent.
Eight positions in the portfolio finished down double digit percentage points. Petro Matad Ltd. was
the worst performer, losing 58.3 percent, Draig Resources Ltd. lost 40 percent, Aspire Mining Ltd.
slid 38.6 percent, and Ivanhoe Mines Ltd. lost a further 22.6 percent. The best performer in the
portfolio was Gobi JSC, the Mongolian cashmere and garment group, which recovered 10.4 percent
from recent lows.
At the beginning of May, the KMEF portfolio consisted of 17 securities in total. The fund sold all of
its assets in SouthGobi Resources Ltd. on the back of news that their offices in Ulaanbaatar were
blocked by local authorities and raided by agents of the Independent Authority Against Corruption.
The company has since acquired a position in Mongolian Mining Corp. Ltd.
Source: Khan Mongolian Equity Fund
PROPHECY DRIVES CHANDGANA POWER PROJECT FORWARD
Prophecy Coal Corp. forecasts aggressive growth ahead as the company plans to bring its 600
megawatt Chandgana Power Project in central Mongolia on line by the first quarter of 2016, helping
to relieve a major ongoing and growing power deficit in the country.
―The power deficit is becoming much, much worse,‖ said Director Greg Hall, ―and the Chandgana
power plant will go a long way to addressing this.‖ He added, ―The plant will not only address the
power shortage, but also the terrible pollution problem.‖
The company said the plant will supply electricity to the central and eastern energy systems.
Prophecy Coal plans on increasing output from its Chandgana plant from 2017 to 2020 by adding
3,600 megawatts of capacity, selling excess power to Chinese markets and to industrial users. The
initial life of the plant is estimated to be around 30 years.
Recently, the company announced that it will sell 22,100 tons of thermal coal from its Ulaan Ovoo
mine to a local direct reduced iron (DRI), used for steel-making, manufacturing plant. The company
said the undisclosed buyer has indicated that it would eventually like to increase the supply from
Prophecy Coal to 300,000 tons on an annual basis. Hall said there is market demand to warrant
doubling current production at Ulaan Ovoo, which can be done without further capital investment.
Looking ahead, the company continues to make progress on opening the Zheitura border crossing to
facilitate coal export to Russia.
When asked about the new foreign investment act in Mongolia that recently passed, Hall said he is
not concerned and feels Prophecy Coal is in a position to benefit from the passage of the act.
―The act is similar to Canada's in that it gives the government the chance to review transactions
over a certain size and allows the process to be more transparent,‖ he said.
Source: Proactive Investors

8. XACBANK NOMINATED FOR “SUSTAINABLE BANKING” AWARD
XacBank has been nominated for an award at the Sustainable Finance Awards in London.
XacBank was been nominated for the Asia-Pacific region for the award in ―Sustainable Bank.‖ The
title was eventually awarded to Yes Bank of India, however.
The Financial Times and International Financial Corp. (IFC), a member of the World Bank, hosted
the Sustainable Finance awards for the seventh time this year on 14 June. The 2012 awards
attracted 161 entries from 145 financial institutions and 36 non-financial groups in 67 countries.
Source: Financial Times
MICROLOAN FINANCES SHOEMAKER'S OPERATIONS EXPANSION
The Prospero Foundation has made a micro-loan donation to a shoemaker in Kharhorin, Mongolia.
The 55-year-old Tsendjav lives with her husband and one daughter in a traditional ger. Her daughter
helps during the summer months, when she is not in university. The couple started the business in
2000, and has since built a stable operation. Over many years she has gained both experience and a
wide customer base.
The loan from the Prospero Foundation, delivered through XacBank, allowed Tsendjav to purchase
the leather, fabric, heels, and glue necessary for her to increase her production capacity, grow her
small business, and ultimately improve the living conditions of her family.
The Prospero Foundation is a private, international charitable foundation which was launched by
Mr. Ulrik Debo of Deondo Capital. The foundation is run by a global network of entrepreneurs.
Source: Prospero Foundation
MONGOLIAN RESOURCE CORP APPOINTS NEW DIRECTOR
The directors of Mongolian Resource Corp. (MRC) Ltd. have appointed Stephen Hamblyn as a non-
executive director.
Hamblyn, who has a Bachelor of Metallurgy and a Bachelor of Economics, has experience in mining
and a technical background in plant processing and metallurgical matters.
John Lee has resigned as a director of the company and remains as company secretary.
Source: Mongolian Resource Corp. Ltd.
HKEX WINNING BATTLE FOR LME
Hong Kong Exchanges & Clearing Ltd. said last week it had entered into a deal to buy the London
Metal Exchange (LME) for EUR 1.39 billion (USD 2.16 billion), giving the City's stock exchange instant
entry into commodities trading amid China's growing appetite for metals. The Hong Kong Exchange
is the bourse chosen by many Mongolian mining firms, including Mongolian Mining Corp.
―The deal could immediately prop up the Hong Kong Exchange [HKEx] to become one of the major
global metals and commodities exchanges,‖ Hong Kong Exchanges Chief Executive Charles Li said.
―It allows us to offer products beyond traditional equities derivatives trading, to currencies, fixed
income and commodities. It will bring all-round development for the exchange.‖
The LME accounts globally for 80 percent of trade in nonferrous metals such as copper and
aluminum, as well as other industrial metals. The acquisition is expected to be completed in the
fourth quarter and will be earnings-enhancing in the third year after the deal closes.
For Hong Kong Exchanges, the bet on commodities is a major reversal of strategy for the market
that had led the world in initial public offerings (IPOs) for the past three years but is lagging far
behind rivals this year. In early 2011 the exchange decided to cut its dependence on stocks and
consider expanding into commodities trading. Soon after the decision, the LME came on the market
and Hong Kong Exchanges quickly bid.
Read more…
Hong Kong Exchanges ranks seventh globally by the value of IPOs this year, behind NASDAQ, the
New York Stock Exchange (NYSE), Kuala Lumpur and even the Shanghai Stock Exchange. Hong Kong
made the case that it could boost the LME's business in China, which accounts for 40 percent of the
world's demand in metals, but just a fifth of LME's revenue.
China has three futures exchanges, but just one dealing in nonferrous metals. The retail-focused

9. Shanghai Futures Exchange is denominated in yuan, not the currency of global commodities trader,
the U.S. dollar.
Source: Wall Street Journal
ECONOMY
SOCIAL ECONOMIC DATA RELEASED
Consumer price index
The national consumer price index in May 2012 increased by 1 percent compared to the previous
month, 9.2 percent compared to the beginning of the year, and 15.4 percent compared to same
period of the previous year. The increase in the national index compared to the previous month was
mainly due to increases of 1.3 percent in food and non-alcoholic beverages and 2.4 percent in
housing, water, electricity and fuels.
Unemployment
The number of unemployed reached 58,200 at the end of May 2012, reflecting an increase of 15,400
persons, or 35.9 percent, compared to same period of the previous year.
External trade
Total external trade turnover increased by USD 660.5 million, or 17.9 percent, of which imports are
up by USD 530.4 million, or 25 percent. Exports are up by USD 130.1 million or 8.2 percent,
compared to same period of the previous year.
Industrial output
In the first five months of 2012, total industrial output increased by MNT 69.9 billion, or 9.1
percent, to MNT 834 billion (at 2005 constant prices) compared to same period of the previous year.
State budget
Current revenue of the General Government Budget amounted to MNT 1.8 trillion and current
expenditure reached MNT 1.782 billion. The budget equilibrated current balance was in surplus of
MNT 31.6 billion.
Social welfare
In the first five months of 2012, social welfare pensions and benefits were allocated to 53,900
persons, showing a decrease of 1,700 persons, or 3 percent. The total amount of the allocated
funds increased by MNT 5.6 million, or 41.6, percent compared to the same period of the previous
year.
In the first five months of 2012, the Human Development Fund (HDF) granted cash allowances
amounting to MNT 308.4 billion to 2.8 million people (with double counting) in payments of MNT
21,000, 132,000 people in payments of MNT 10,000, and 2,800 people in payments of 70,000.
Additionally, the HDF paid out a total of 63.7 billion to 193,000 people in MNT 1 million cash
payments for the elderly and disabled.
Freight and passenger
In the first five months of 2012, 8.3 million tons of freight and 1.6 million passengers (with double
counting) were carried by railway transport. Compared to same period of the previous year, the
number of carried freight rose by 1.3 million tons, or 18.9 percent, and the number of carried
passengers rose by 115,100 persons, or 7.8 percent.
In the first five months of 2012, 1.5 million tons of freight and 256,300 passengers (with double
counting) were carried by air transport. Compared to same period of the previous year, the number
of carried freight increased by 780.3 tons, or 2.1 times, and the number of carried passengers rose
by 76,800 persons, or 42.8 percent.

10. Source: National Statistical Office
MONGOL BANK TO SELL USD 32 MILLION AT FOREX AUCTION
The Bank of Mongolia has announced a foreign exchange (FOREX) auction to sell USD 30 million at a
closing rate of MNT 1,321.53 for U.S. Dollars.
The FOREX auction is one of the instruments used by the Central Bank to make the operations of
the domestic economy fair and transparent as well as ensure the stability of the national currency.
The Central Bank aims to prevent rapid fluctuations to the tugrug.
The Bank of Mongolia opted to close FOREX auctions on 27 December 2010 due to negative effects
on the economy.
Source: News.mn
FULL STEAM AHEAD ON POWER PLANT DEVELOPMENT
The long awaited Thermal Power Plant No. 5 is slated for construction to begin in 2013. The
government has decided the fifth power plant should be constructed next to the already-existing
Power Plant No. 3. The facility will have six furnaces, five turbines, and the capacity to produce
300 megawatts of combined heat and power. Plans are to finish the first phase of construction to
the fifth power plant by 2015 and begin the second round in 2020.
Power Plant No. 5 will have the capacity to produce 820 megawatts of electricity in total.
The foundation-laying ceremony for the construction of the new 2010-megawatt thermal substation
next to Thermal Power Plant No. 4 was held on 14 June. A team of scientists and researchers from
the Power Engineering School of the Mongolian University of Science and Technology (MUST)
conducted the feasibility study of the substation to be built with financing from the state budget.
Commissioning of the new substation to operate shoulder to shoulder with the central heating
network will enable the country to keep up with the increasing demand for heat. Planners also hope
to create comfortable conditions with improvements to turbine operations for heat transmission
through the central heating network.
The new substation will be a cornerstone to connecting residential districts to the site planned for
construction called Bayangolyn Am. The Ministry of Mineral Resources and Energy called for an open
bid earlier this year, where Alliance-Tech LLC has been selected for the substation's construction.
Source: Info Mongolia
GOVERNMENT LOOKS TO EASE DEBT
The government plans to reduce its external debt to 80 percent and the size of foreign loans to 50
percent with its 2012-2014 plans.
A report on Mongolia's economic, financial, and budgetary position by the Ministry of Finance
outlines the government's plans to reduce its debts by 50 percent by 2014. Additionally, the
government intends to develop the market of domestic debt in several phases to provide the
government's financial needs with the lowest size of expenditures. In its middle-term strategic
document on debt management is a plan to gather up to 50 percent of its financial resources from
the domestic debt market.
By the end of 2011, the government had debt of MNT 257.9 billion granted by donor countries and
international financial institutions. Foreign debt of MNT 76.9 billion has been repaid, bringing total
debt repayment by government to MNT 2.7 trillion.
Classifications outlined by the International Monetary Fund (IMF) and World Bank consider
Mongolia's external debt amounting to 28.3 percent of the country's gross domestic product (GDP) as
‗low risk to foreign debt‘.
Source: Montsame
STATE INSPECTORS FACE HURDLES TO PERFORM DUTIES
Officials are grappling with obstacles to the registration of vehicles used by mining companies.
D. Batbaatar, the head of the Transportation Regulation and Training Division of the Department of
Roads, said the abilities of inspectors to offer guidance has been seriously limited because the State

11. Special Inspection Agency has not yet issued official identification to them.
"We have 69 inspectors who are trying to do as much as they can in the registration of
transportation vehicles, but they cannot inspect and control this without proper, professional IDs,‖
Batbaatar said.
The mining industry has seen great demand for drivers, he said, but there is a gap in the workforce.
He pointed out that the company Ail Bayan has only 50 drivers to man its 100 vehicles. There is also
added pressure to pay higher salaries, as drivers are continuously moving to other companies in
search of better wages. Although Mongolia officially does not have foreign drivers, the workforce is
not large enough to meet demand, he said.
Batbaatar said, however, the inspection of three mining companies in Dorngobi Aimag produced
positive results.
Source: Undesnii Shuudan
MINING OVERSHADOWS TOURISM
Mining overshadows tourism while spurring the economic growth of Mongolian. I. Bold, Director of
the Mongolian National Tourism Organization (MNTO), said that mining has taken the place of
agriculture as Mongolia‘s competitor to tourism.
In 2004 tourism accounted for 13.4 percent of Mongolia's gross domestic product (GDP). Now that
number is falling, currently standing at 10 percent. Meanwhile, the mining sector is responsible for
30 percent of the country's GDP and is expected to rise more, according to Resource Investment
Capital, a consultancy in Ulaanbaatar.
Bold said that no matter what the tourism sector does, mining will be the main instigator of growth.
She also said that mining companies were able to acquire land-use rights in, unfortunately, places
of historic interest, including the Bichigt Khad and Darkhad Valleys and the sacred meditation sites
of Danzanraviaa.
Industry insiders say that human resources within tourism have been significantly impacted.
Enebish, owner of Tseren Tours, said that the unskilled workers hired are trained for language and
management skills and once they are competent, they leave to apply for higher paying mining jobs.
Most people that come to Mongolia are here for business purposes, skewing the data on tourism. In
2011, 43 percent of the 457,514 people who visited Mongolia were Chinese. Only 90,000 of those
visitors were tourists that were actually looking for leisure. Surprisingly, some tourism operators say
that mining has nothing to do with the problem. Mining projects are localized in areas that do not
have tourist attractions, they say. However, no direct conclusions on the matter have been made.
G. Damba of the Sustainable Tourism Development Centers suggests that government must make a
clear policy regarding land-use rights so that residents and the tourist industry can meet in the
middle. Hopefully, in the next few years, the mining industry will be able to continue and prosper
as well as maintain Mongolia's historic and amazing places that attract tourists.
Source: Tourism Review
CANDIDATES BREAK THE BANK FOR ELECTIONS
Almost overnight, the faces of candidates have appeared in posters on the streets Ulaanbaatar. This
month candidates have begun their campaigning for parliamentary elections on 28 June, but at no
small cost.
A survey organization has estimated that candidates are spending some MNT 1 billion on
advertisements for the election. The organization found that sum could have been used to construct
up to eight kindergartens.
Source: Udriin Sonin
MONGOLIAN SCIENTIST HELPS DEVELOP NEW INFLUENZA VACCINE
A Mongolian biologist has helped develop a new influenza vaccine together with German scholars.
D. Ankhlan, a PhD and scholar of the Institute of Molecular Virology, the Centre for Molecular
Biology of Inflammation, and the University of Muenster in Germany collaborated with a team of
German medical professionals to develop the vaccine. It is most effective to children and people

12. over the age of 65.
The team is now looking to make a deal with a manufacturing company for the vaccines production.
Source: Zuunii Medee
GOLD STRETCHES GAINS TO EIGHTH DAY
Gold rose for an eighth consecutive session on Tuesday, the longest winning streak since July last
year, after a weekend victory for pro-bailout parties in Greek elections failed to shave off worries
about a worsening debt crisis in Europe. Gold is a major commodity in Mongolia that Oyu Tolgoi LLC
plans to use to help pay for operation expenses.
Investors shifted their focus to a policy meeting by the U.S. Federal Reserve, which economists say
appears increasingly likely to offer more monetary stimulus despite political opposition, internal
reticence and concerns about whether it will be effective.
"Ahead of the FOMC meeting, gold bugs will watch for signs of more quantitative easing or an
extension of Operation Twist where it ends this month," said Lynette Tan, an analyst with Phillip
Futures in Singapore. She added, "A failure to confirm more asset purchases or the like could see
gold dropping again."
The United States' "Operation Twist" program, which involves buying long-term debt and funding the
purchase by selling short-term notes, is scheduled to expire at the end of June. Previous rounds of
asset purchases by the U.S. Federal Reserve to drive down interest rates and stimulate the economy
had weakened the U.S. dollar and boosted global stock markets, while burnishing gold's appeal as a
hedge against inflation.
Read more…
Gold jumped to its highest level in 2012 around USD 1,790 in February after the United States said it
would keep interest rates near zero until at least the end of 2014. But prices have shed about 9
percent since then on no signs of further easing.
The Group of 20 leading and emerging economies will "take the necessary actions" to strengthen the
global economy, and if growth weakens substantially, countries without heavy debt loads stand
ready to stimulate their economies.
Source: Reuters
COPPER PRICES TO CONTINUE CLIMB, SAYS GERMAN COPPER TRADER
Chinese copper demand is expected to continue to expand in the second half of 2012 as the
country's moves to stimulate its economy are likely to raise consumption of the metal, Germany's
Aurubis Group, Europe's biggest copper producer, said. Copper has historically been Mongolia's
biggest contributor to its economy, while China is the number one consumer of Mongolia's raw
materials.
"China's demand for copper is still projected to reach 8.4 million tons this year, i.e. 8 percent above
last year's volume," Aurubis said in a report. "Since many raw material investors are still currently
bracing themselves for a moderate weakening of economic growth, the biggest risk for copper apart
from the euro crisis arises from a modified view of China."
China's surprise cut in interest rates on 7 June could also help promote economic growth in the
country, Aurubis said. Meanwhile the spot market for copper concentrates is showing some signs of
recovery after recent stagnation, added the report. This is "primarily due to a clear reduction in the
demand by smelters because of significant maintenance downtimes," Aurubis said.
"As for long-term contracts, first agreements transpired during the semi-annual negotiations,
reaching USD 63.50/t and 6.35c/lb and above, attaining the level of the annual contracts for 2012,"
it said.
Source: Reuters
POLITICS
DP LEADS POLL BY 10 PERCENT

13. The Sant Maral Foundation has identified the Democratic Party (DP) as the favorite party for the 28
June election in its most recent national political opinion. Former President N. Enkhbayar, being
tried for charges of corruption, was chosen as the most popular individual politician.
The survey indicates an increase in support for former President Enkhbayar's Mongolian People's
Revolutionary Party-National-National Democratic Party coalition, now 15.9 percent, more than
double the level registered in Sant Maral's April survey. But the coalition still falls in third place
behind the DP and Mongolian People's Party (MPP). The DP is, according to the survey, 10
percentages points ahead of the now-ruling MPP in voter support for the election, and scored higher
than the MPP in voter approval of ―party activities in voter assessment of ability to solve the
nation's problems.‖
The pollster makes the caveat that the survey does not distinguish party preferences between voter
intentions in the 48 seats to be decided by direct election and the 28 seats to be filled by party list
voting. Voters are able to split their vote for one party in the direct elected seats and a different
party in the party list ballot. This is the first election in which Mongolian voters will use the 48-28
system. Commentators predict there will be voter confusion at polling places on 28 June because of
unfamiliarity with the new system.
According to the survey, Enkhbayar is regarded as the most important politician according to the
survey. Incumbent President Ts. Elbegdorj came in second.
Asked if they were satisfied with the government, 49.2 percent said they were satisfied. Voters
were similarly split on their view of the opposition parties: 44.7 percent approved of the conduct.
Economic issues, especially unemployment, were the main concern to voters. Additionally,
Mongolian voters said their best international partners are Russia (66.6 percent), the United States
(31.6 percent), Japan and China (tied at 21.4 percent), the European Union (13 percent), and South
Korea (10.2 percent).
Access the full survey in English at BCMongolia.org or in Mongolian at BCM.mn.
Source: NAMBC
DP LEADS OVERSEAS ELECTION EXIT POLLS
Some Mongolians living abroad have organized an exit poll as they cast their votes at their
respective embassies and consulates. The results of this exit poll are reported on D. Sainbayar's
blog, SainBayar.com, in Mongolian language.
Voters were asked whether they were willing to participate in an exit poll in front of Mongolian
embassies in London, Seoul, Tokyo, and Washington D.C., as well as the San Francisco consulate.
Those surveyed were asked to divulge the party they voted four.
Voters overwhelming preferred the Democratic Party (DP), which received 44 percent of the 249
voters questioned, followed by the Mongolian People's Party (MPP) with 25 percent. The Civil Will
Green Party (CWGP) came in third with 13 percent, just one point above the Mongolian People's
Revolutionary Party (MPRP).
The results are similar to that of different locations, in that there is no difference in the ranking of
the parties except for the CWGP and MPRP. Voters in Seoul gave the DP the fewest votes (38
percent) and Washington the most (54 percent), representing notable variations. The MPP finished
strongest among voters in London (35 percent) and weakest in Washington (16 percent).
While the methodology doesn't allow for much inference to the larger population of Mongolians
living abroad, nor the Mongolian electorate, it does show a stronger preference for the DP than one
might expect in the general election. The number of those in favor of the CWGP, given its focus on
urban professional and its anti-corruption stance, might be lower than expected, but the problem
may be due to the party's inability to differentiate itself from the others.
Source: Mongolia Today
MPP ACCUSES DP OF VIOLATIONS OF ELECTION LAW
The Mongolian People's Party has made complaints to the General Election Committee, accusing the
Democratic Party of violating the Election Law.
N. Enkhbold, Vice Speaker of Parliament, and other high level officials within the party said the DP

14. has broken the Law on Election by making changes to the names on the party's list of candidates.
"Eighty percent of Mongolians abroad voted for the Democratic Party," said MP Z. Enkhbold in a
televised appeal to the General Election Committee.
The party also complained that the committee preemptively disclosed the results of votes living
abroad. It is suspicious of reports made by the Election Committee, saying that certain candidates
of changed position on the party list, such as R. Gonchigdorj, who was moved from 12th on the list
to ninth. According to article 26.10 in the Law on Elections, changes to party lists cannot be made,
said MPP Secretary Ya. Sodbaatar.
Party Officials also reported confusion regarding voter registration. Enkhbold reported registration
fraud in the third unit of Khan-Uul District. He also said citizens have made complaints regarding
the State Registration Office as well as the office for registration to the capital.
Source: Undesnii Shuudan
ELECTIONS MARK KEY STEP TOWARD DEMOCRATIZATION
Depending on whom one believes, Mongolia's former president N. Enkhbayar is either a champion of
democracy targeted for judicial persecution by an increasingly authoritarian regime or he is a
corrupt charlatan whose finely crafted portrayal of martyrdom hoodwinked Washington, the United
Nations and the European Union.
The evidence suggests the second view is nearer the truth and Mongolia's Constitutional Court has
upheld a General Election Commission ruling that because Enkhbayar, president from 2005 to 2009,
is facing five corruption charges, he is not eligible to run in parliamentary election on 28 June. The
ruling has stalled and perhaps ended Enkhbayar's attempts at a political comeback after his defeat
in the 2009 presidential election.
Parliamentary elections next week and presidential elections next year give every indication of
being key stepping stones along Mongolia's tumultuous transition which began when it emerged as
an independent state from the collapsed Soviet Union in 1990. Next week's election will carry
forward two significant developments on the transition road.
The contest for seats in the 76-member Parliament will be fought under new rules mixing seats
allocated by proportional representation and other directly elected. Major contestants for
government are the current ruling party, the Mongolian People's Party (MPP) of Prime Minister S.
Batbold, and the Democratic Party (DP) of President Ts. Elbegdorj. The new dispensation will give
smaller parties the chance to win seats in Parliament and thus influence what continues to be the
major unresolved issues of Mongolian politics.
That is what kind of laws the country wants to regulate and produce the most sensible benefits
from the country's vast mineral reserves. The philosophical argument has swung dramatically and
sometimes violently on the streets between the totally laissez-faire approach advocated by the men
from the World Bank and the International Monetary Fund (IMF) who tendered advice to post-Soviet
Ulaanbaatar 20 years ago, and the economic nationalists who want foreign investors thoroughly
trussed and bound.
Source: Vancouver Sun
ENKHBAYAR'S TRIAL DELAYED AGAIN FOR CHANGE OF LEGAL DEFENSE
Former President N. Enkhbayar has requested to the Sukhbaatar District Court to hire a new lawyer,
which has caused further delay before he stands trial. Enkhbayar will be tried for corruption
allegations from his time as prime minister and president.
Mongolia's third president wants to hire N. Sarangerel as his new lawyer while refusing B.
Oyungbileg.
―We give time to the new lawyer to study N. Enkhbayar's dossier. Therefore, the court hearing
scheduled on 21 June will have to be postponed again,‖ said E. Batmunkh, head of the Sukhbaatar
District Court Office. ―I guess the court hearing might be held in early July.
Source: News.mn

15. DP'S PROPOSED COAL TAX HIKES A VIOLATION OF WTO RULES
The new taxes proposed by the Democratic Party (DP) on coal exports to support infrastructure for
the capital would reportedly violate World Trade Organization (WTO) rules on export taxes. The
proposal comes a week before elections, on 28 June, with a group of senior DP seat holders running
for reelection.
The sponsors were apparently not asked and made no comment as to how their proposal squares
with the general WTO prohibition of export taxes on tariffs. Mongolia joined the WTO in 1997 and
the radius of Mongolian discretion in export taxes was limited by several of Mongolia's bilateral
accession agreements.
The group to introduce the draft included MP Z. Enkhbold, former head of the State Property
Committee and a resource activist; Lu. Bold, former defense minister, R. Amarjargal, former prime
minister, and G. Bayarsaikhan, one of the 20 MPs who demanded changes to the Oyu Tolgoi
investment agreement last fall.
The special coal export tax would be about 2 percent to 3 percent per ton with the proceeds
earmarked to finance various infrastructure projects for Ulaanbaatar, especially those with the aim
to reduce pollution. The bill's sponsors told reporters that within three to four years, the tax could
collect MNT 1.8 billion (USD 1.3 million) to help build apartments as well as provide water and
electricity lines for residents of Ulaanbaatar's ger districts.
Source: NAMBC
COMPANIES TO SUBMIT NEW CHARTERS BY 1 JULY
Companies operating within Mongolia will have until 1 July to amend their charters to comply with
the 2011 revised Company Law.
The law, passed in 2011, requires that all companies amend their charters to incorporate new
requirements it outlines and submit them to the State Registry by the deadline. Although all non-
conforming provisions of existing companies' charters automatically became null and void as of 21
November, 2011, when the law took effect, it nevertheless requires companies to submit their
amended charters.
Key features of the law are the broadening of personal liability of governing persons, administrative
sanctions for non-compliance, stricter corporate governance rules, changes to transactions where
conflicts of interests are present, the abolition of minimal capital requirements, and the
introduction of closed joint venture companies. The passage of this new Company Law was a major
step toward bringing Mongolian corporate governance closer to international standards. However, a
recent analysis by Hogan Lovells suggests that it ―remains under-developed by comparison‖ to
western jurisdictions.
―The lack of precision in the drafting will cause some uncertainty until market norms emerge, and
[the Company Law] introduces some unexpected pitfalls that have the potential to deter rather
than encourage trade and investment,‖ said the law firm.
Source: Hogan Lovells
MONGOLIA FALLS ON 2012 FAILED STATE INDEX
Mongolia fell two places to 129th on the Failed State Index by Fund For Peace (FFP). The index
awarded Mongolia a score of 58.7 from 12 social, economic and political indicators of pressure on
the state, along with over 100 sub-indicators.
The Index ranks 178 countries on indicators, including "Uneven Development," "State Legitimacy,"
"Group Grievance," and "Human Rights." Each indicator is rated on a scale of one to 10, based on the
analysis of millions of publicly available documents, other quantitative data, and assessments by
analysts. A high score indicates high pressure on the state, and therefore a higher risk of instability.
The 2012 index ranks Somalia the worst for the fifth consecutive year. Meanwhile, Finland remains
at the best position, with its Scandinavian neighbors Sweden and Denmark rounding out the best
three rankings. All three nations benefit from strong social and economic indicators, paired with
excellent provision of public services and respect for human rights and the rule of law.
Kyrgyzstan is the most improved nation, rebounding from a marked fall the previous year that was

16. predicated by the mid-2010 revolution that led to significant political reforms and ultimately a
stable transition of power.
Source: Foreign Policy, Fund For Peace
GOVERNMENT SCRAMBLES TO FINANCE CASH HANDOUTS BEFORE JULY
The government is banking on tax contributions from private business as well as their purchase of
Erdenes-Tavan Tolgoi JSC stock to make up for the gap in the Human Development Fund to fulfill its
monetary promises to citizens.
Although government promised to distribute the remaining MNT 1 million payments promised to
670,000 senior citizens and disabled peopled before the end of June, recent remarks made by the
finance minister indicate that the government has not yet gathered enough money to make those
payments. Funds have been consolidated from Erdenet Mining Corp., with 70 percent of dividends
from value-added tax (VAT).
Erdenes-TT is another large contributor, but because it has already taken an advanced payment of
USD 250 million from Aluminum Corp. of China Ltd. (Chalco), it cannot ask for additional funds.
Government's decision to sell its shares of Erdenes-TT to citizens and national businesses at a set
price of MNT 933 a share has allowed it to gather some funds to contribute, however.
A sum total of 41,390 national businesses that have undergone inspection from the Central Tax
Office are now eligible for the purchase of 23,360 shares each. Also, the government announced the
deadline for businesses to register for purchases has been extended until 1 July.
Source: Udriin Sonin
U.S. ATTORNEY WANTS DINOSAURS BONES RETURNED
The United States is seeking to return the Tyrannosaurus baatar to Mongolia after officials there
said the dinosaur bones were smuggled into the country.
The skeleton, which spans 24 feet in length and is eight feet tall, had been shipped to the United
States from the United Kingdom via Florida and then to Texas before arriving in New York in 2010. It
was auctioned by Texas-based Heritage Auctions Inc. in New York in May for more than USD 1
million. The auction proceeded despite a restraining order obtained by President Ts. Elbegdorj in a
Texas court before it took place.
―The skeletal remains of this dinosaur are of tremendous cultural and historic significance to the
people of Mongolia,‖ U.S. Attorney Preet Bharara said in a statement. ―When the skeleton was
allegedly looted, a piece of the country's natural history was stolen with it, and we look forward to
returning it to its rightful place.‖
Bharara alleges the customs documents for the dinosaur misstated the bones' country of origin as
Great Britain instead of Mongolia. The government's paleontologists concluded the skeleton must
have come from Mongolia because the dinosaur was native to that region and its bones have only
been discovered there. Mongolia has laws making dinosaurs discovered there to be government
property.
The complaint also alleges the bones were priced too low in the customs documents, with the value
listed at USD 15,000 instead of USD 950,000 to USD 1.5 million listed in the Natural History Auction
catalog. The description in the auction catalog and the customs documents also differed.
Source: Bloomberg
MONGOLIAN DELEGATION ATTENDS PARTNERSHIP MEETING IN BRAZIL
A delegation from Mongolia attended the third consultative meeting between the foreign affairs
ministries of Mongolia and Brazil in Brasilia, Brazil on 15 June.
B. Odonjil, the head of the Americas, Middle East and Africa at the Ministry of Foreign Affairs and
Trade, led a delegation at a meeting to report on the partnership between Mongolia and Brazil
regarding politics, economics, and society. Representatives from both countries discussed
possibilities for multilateral cooperation, in particular to U.N. reconstruction issues.
The meeting is the only official gathering of the two countries and is held once every two years.
Brazil and Mongolia established diplomatic relations on 19 June 1987.

17. Source: Info Mongolia
DP LOOKS TO COAL EXPORT TAXES TO FINANCE CITY IMPROVEMENTS
Members of the Democratic Party announced their intention to draft a special tax law for coal
exports.
The draft law aimed to set a special tax on coal exports to finance Ulaanbaatar's city infrastructure
and reduce air pollution. MPs told local press a set tax on coal exports could generate additional
revenues of MNT 1.8 billion within the next three to four years. The DP member promised taxes
would create a ―comfortable environment‖ for 733 residents of ger districts.
MPS plan to build apartments in land within the city's ger districts and also build new lines for water
and electricity delivery. A survey shows that 70 percent of air pollution is caused by smoke from the
ger districts due to the burning of coal.
Source: News.mn
MONGOLIA LOOKS TO KOREAN ENTERPRISES AS PARTNERS FOR DEVELOPMENT
The National Development and Innovation Committee (NDIC) and the Embassy of the Republic of
Korea in Ulaanbaatar jointly organized a business meeting for the economy on 15 June.
The meeting was an opportunity to discuss the economic conditions of Mongolia as well as future
trends and investment conditions. Delegations from South Korean companies, such as KEPCO, KAL
Group, Samsung Group, and Halla Engineering & Construction Corp. participated in the meeting,
where they were familiarized with the necessary sectors for investment in Mongolia as well as
projects and programs.
―Mongolia was previously a country that had an agriculture-based economy, now it has become a
mining-based economy country,‖ said the head of the NDIC, Ch. Khashchuluun. ―The feature of a
mining based economy is that it guides a large amount of money. However, we need to allot this
monetary capital in the development of other sectors.‖
The NDIC head went on to say that Mongolia would have to rely on foreign investment and
experience of foreign partners, with South Korea targeted as a chief candidate. He also mentioned
that during the competition, in order to attract investors of larger South Korean companies, it was
important for Mongolia to provide detailed information on the possible opportunities. He was also
concerned about the weak development of roads, transportation, and infrastructure, and the low
levels of competency indicators.
Source: Info Mongolia
CIVIL SERVANTS CAMPAIGN FOR RETURN OF THEIR JOBS
Officials of the State Registration Office have spoken out to the press to contend with reforms that
have forced them to leave their positions.
The reforms came down from a decision made by the Ministry of Justice and Home Affairs. Recently
removed officials from offices such as D. Enkhtsetseg and Ch. Chanlulodoi, the former heads of the
Citizen's Registration and Legislation and Property Registration and Legislation Departments
respectively, told local press they are hoping to return to their positions.
As a result of appeals made to their respective legislative offices, officials returned to their posts
on 7 June. Shortly after, however, the courts overruled the decision, citing Resolution 109.
Source: Undesnii Shuudan
OFFICIALS SILENTLY REMOVED FROM DEVELOPMENT BANK
An announcement from the Ministry of Finance of a vacancy for the position director of budget
policy at the Development Bank of Mongolia has alerted the press to the fact that B. Batjargal has
been removed from this position.
While no announcement as to why Batjargal is being replaced, the official has been known for his
strong criticism of politicians pushing to release cash allowances, which he says have added to
inflationary pressures. Many feel Batjargal made enemies in government by voicing his opinions.

18. The Development Bank made headlines this year for its successful sale of a USD 580 million bond
offering within hours of its release. Batjargal has been credited as a strong leader behind this
project, the funds of which will be used to fund various infrastructure projects.
Additionally, a vacancy in the position of chairman of the board of the Development Bank has been
announced.
Source: Zuunii Medee
CSM ENTERS INTERNATIONAL ACCREDITATION BODY
The Center for Standardization and Measurement (CSM) has entered a multilateral mutual
recognition arrangement with the Asia Pacific Laboratory Accreditation Cooperation (APLAC),
becoming the 34th member organization.
The agreement was signed during the 29th meeting of the MRA's council, held from 7 to 8 June in
Bangkok, Thailand. Mongolia was represented at the meeting by G. Gantumur, head of the CSM, and
S. Gantsetseg, an expert official from the center.
The CSM became a member of the APLAC in 2004, in accordance with the 253rd resolution, which
aims to improve Mongolia's competitiveness in national production and support free trade. The CSM
also joined the International Laboratory Accreditation Cooperation (ILAC) in 2007 and the Pacific
Accreditation Cooperation (PAC) in 2009. The APLAC is a cooperation of accreditation bodies in the
Asia Pacific region that accredit laboratories, inspection bodies and reference material producers.
Source: Montsame
NEW MONGOLIAN LAWS
The following law and amendments, addenda and annulments of/to laws were published in the
latest weekly Government bulletin. Unless otherwise decided by Parliament, they will take effect
ten (10) days after publication.
Date Laws
19.06.2012 Law on Regulation of Foreign Investment in Economic Entities Operating in Sectors of
Strategic Importance (Foreign Investment Law)
Addendum to Law on Special Permit for Business Activity
Addendum to Law on Nuclear Energy
Addendum to Law on Mineral Resources
Addendum to Law on State Registration of Legal Body
Addendum to Law on Foreign Investment
Amendments to Law on Regulation of Public, Private Interest, Prevention from
Interest Conflict in Public Service
Amendments to Law Against Corruption
Addendum to Law on Criminal Execution
Amendments to Law on Exemption from State Sign Fee
Recent postings to the Laws of Mongolia section of BCM websites:
- English website: Company Law (revised)
- Mongolian website: Company Law (revised); Foreign Investment Law
Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish to access complete versions of the laws and regulations in Mongolian language
are welcome to email the BCM office: info@bcmongolia.org.

19. ANNOUNCEMENTS
DISCOVER MONGOLIA-2012 MOVES TO 30-31 AUGUST
The organizing committee of the Discover Mongolian International Forum has announced that the
conference date has changed to 30 to 31 August in Ulaanbaatar. The conference venue will again be
the Children's Palace. BCM is a Supporting Organization of Discover Mongolia 2012, and its members
will have the opportunity for an early-bird rate for attendance.
Oyu Tolgoi LLC, Mongolia's largest copper and gold mining firm, will be the event's premier sponsor,
in addition to the Forum's ―gold sponsors‖: Monnis International Inc., Xanadu Mines Ltd., Aspire
Mining Ltd., Micromine Mongolia LLC, and Mongolian Mining Corp. The conference agenda will
concentrate on recent developments that have taken place in Mongolia's mining and foreign
investment landscape.
For more information, call +976 7014 9762 or email info@discovermongoliaforum.com
___________________________________________
MINExpo INTERNATIONAL 2012, LAS VEGAS, 24-26 SEPTEMBER
The Business Council of Mongolia (BCM) with the support of the U.S. Embassy‘s Commercial Section
in Ulaanbaatar is now registering a Mongolian business delegation to participate in ―MinExpo
International 2012‖ which will be organized at the Las Vegas Convention Center on September 24-
26, 2012.
MinExpo International 2012 is the world's largest and most comprehensive exposition dedicated to
mining equipment, products and services. More than 1,400 exhibitors in eleven exhibit halls will
display the latest technology, equipment, components, parts and services for exploration,
extraction, safety, environmental remediation and preparation and processing of metallic ores,
coal, industrial minerals and more!
Registration deadline is 5 pm, 15 July. Please contact BCM at 70114442, tugi@bcmongolia.org for
registration and additional information about the event.
___________________________________________
REGISTER NOW FOR MONGOLIAN MINING DIRECTORY-2013
Mongolian Mining Directory-2013 (MMD) which provides information database for Mining companies,
investors, suppliers, service companies, government and non government organizations will be
published for the fourth year to commemorate the 90th anniversary of the Mongolian mining
industry. The MMD is distributed free of charge to international and domestic mining companies,
international conferences and exhibition, embassy offices in Mongolia and foreign countries to
investors.
BCM is a Supporting Organization of the MMD and welcomes Mongolian mining industry participants
who are interested in advertising their products and services in Mongolian Mining Directory-2013.
For more information please visit: www.mining.mn, www.mongolianminingdirectory.mn or call
+976-7011 5590.
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REGISTER FOR BCM‟S MINING SUPPLY CHAIN DATABASE AT NO COST
The new version of BCM‘s Mining Supply Chain Database is ready for use. Following the initiative of
Oyu Tolgoi LLC, the BCM has maintained the Mining supply chain database since March 2009. It is
honor to introduce you to the new version of the database which is totally upgraded as to its
content and use of information technology opportunities.
We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain
Database. Please visit here for registration.
If you have any questions regarding the database, please contact Undral at undral@bcmongolia.org
or 317027.
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20. POSTINGS ON MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS
The new ‗Presentations‘ section on BCM‘s Mongolian website can be reached via link to
bcm.mn/itgeluud. Several presentations already posted include 11 from the 2nd Coaltrans on May
23-24 in UB.
As a key component of BCM‘s Mongolian website ‗News‘ section, articles from the Government‘s
―Open-Government.mn‖ site are regularly posted.
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POSTINGS ON ENGLISH WEBSITE 'PRESENTATIONS', 'MONGOLIA REPORTS' AND „MONGOLIAN
BUSINESS NEWS‟
On BCM‘s English website, ‗Resource, Presentations‘ section, for your review are 12 presentations
from the 2nd Coaltrans on May 23-24 in UB; 5 presentations from BCM‘s May 28 monthly meeting; 3
speeches from ―Corporate Governance Training for Directors‖ on April 27-28; 12 presentations on
Mongolian entities at Mines and Money Hong Kong 2012 on March 21-23; 11 presentations from Coal
Mongolia 2012 on February 9-10; and speeches from all BCM‘s monthly meetings in 2011-12.
Also on BCM‘s English website, ‗Resource, Mongolia Reports‘ section, please note the Polit
Barometer, June 2012, and the Polit Barometer, April 2012 by Sant Maral Foundation (Mongolian
and English versions); Risk Report for Mongolia 2012 by Mongolia Economic Forum; ―Preliminary
estimates of staggering costs of inefficient trade regulation in Mongolia‖ by Olin McGill, consultant
to USAID BPI; ADB‘s Asian Development Outlook, April 2012; detailed results of BCM‘s NewsWire
survey of March 2012; World Bank‘s Mongolia Quarterly Economic Update, February 2012; Executive
Summary of the Mongolian Real Estate Report 2012 by M.A.D. Investment Solutions; 2011 Mongolia
Investment Climate Statement by Economic and Commercial Section of U.S. Embassy, Ulaanbaatar,
Mongolia; and Transition Report 2011 (Mongolia data) by EBRD and the Economic Research Institute.
We are now posting some news stories and analyses relevant to Mongolia to BCM website's
‗Mongolian Business News‘ as they come, instead of waiting until each Friday to put them all
together in the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday,
and will incorporate items that are already on the home page, so that it presents a consolidated
account of the week‘s events.
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SOCIAL NETWORK WITH BCM
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better
business environment in Mongolia today.
Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-
MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in
the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
http://twitter.com/#!/bcMongolia.
Of course for news information, interviews, and announcements regarding our organization, visit
the official BCM website at www.bcmongolia.org and www.bcm.mn.

21. ECONOMIC INDICATORS

22. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
May 31, 2012 *15.4% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 16.6% y-o-y, Ulaanbaatar city, May 31, 2012
CENTRAL BANK POLICY RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
CURRENCY RATES – June 21, 2012
Currency Name Currency Rate
U.S. dollar USD 1,333.98
Euro EUR 1,687.42
Japanese yen JPY 16.91
British pound GBP 2,090.55
Hong Kong dollar HKD 171.90
Chinese yuan CNY 209.58
South Korean won KRW ` 1.16
Russian ruble RUB 40.49
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.