The document provides a summary of business, economic, and political news from Mongolia based on a newsletter from the Business Council of Mongolia dated October 23, 2009. Some of the key highlights include Entrée Gold supporting the Oyu Tolgoi investment agreement, Mongolia Energy announcing coal resources at its Khushuut mine, and Rio Tinto posting a record 12% increase in iron ore output for the third quarter. The document also announces an upcoming meeting for BCM members to discuss topics such as the mining and healthcare sectors in Mongolia.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 91, October 23 2009
NEWS HIGHLIGHTS:
Business:
 Entree Gold sees its interests served by OT agreement;
 Mongolia Energy's Khushuut mine has 135 million tons of coal;
 Hong Kong listed company acquires mine in Dundgovi;
 Ivanhoe pays first installment of advance payment;
 Ivanhoe to stay the full course in Oyu Tolgoi, Friedland says;
 RZD signs memorandum on Zuunbayan-Dalanzadgad rail line;
 Tavan Tolgoi decision by year-end, says Deputy Minister;
 China gold firm claims “breakthrough” in Mongolia;
 Peabody plans to develop coal venture in Mongolia;
 Nomin opens first business center in Dornod province;
 BHP posts record iron ore output;
 Rio Tinto's iron ore output surges 12 percent;
 Norilsk, BHP plan to mine Russian coal from 2015;
 Australian minister urges China to speed up Rio case.
Economy:
 “Exponential economic growth” forecast;
 “Very rapid growth” needs prudent management, cautions ING analyst;
 Mining deal signals Mongolia’s transformation;
 Central Bank chief warns inflation could return;
 Large increase in non-performing and loans with principal in arrears;
 Copper hits 13-month peak as dollar weakens;
 GDP drops 2.2 percent year-on-year
 Industrial output falls 10.5 percent;
 Trade turnover falls, so does deficit;
 Drop in freight and passenger traffic;
 Unemployment rises 27.1 percent year-on-year;
 Tax revenue falls 24.3 percent;
 Railway workers’ salary cut restored;
 Apartment prices will not exceed MNT650,000/sq.m;
 Report on mining ban near forests next month;
 Commercial banks get gold, not the Central Bank;
 China biggest investor for 11 years in a row;
 World Bank organizes conference on Mongolia’s finances;
 China’s September iron ore imports hit all-time high;
 Global steel consumption expected to rebound;
 China’s recovery seen as broad and sustainable.
Politics:
 Zorigt wins by-election, filling the last seat in Parliament;
 Bayar asserts his strength in party;
 DP against Government control of Treasure Fund;
 Sant Maral survey sees individual optimism amidst economic stagnation;
 OT agreement part of national security policy;
 Citizens write more letters to Government;

2.  Working group on July 1 events wants to present report in public;
 MP says Government employees are a pampered lot;
 More under-1 and maternal deaths this year;
 Priority guidelines formulated;
 Number of working children up by 20 percent;
 Direct flights between Ulaanbaatar and Ulan-Ude in April;
 Monastery gets UNESCO conservation award.
MEETING NOTICE TO BCM MEMBERS
The next BCM monthly meeting for Members will be Monday, October 26, at 5 PM at the Open
Society Forum.
Our bilingual meeting will feature two presentations: the first by Mr. B.Batbayar, CEO, National
Life on “High-end Health Care Products and Services”, and the second by Mr. Sergey Gromov, CEO,
Chinggis Khaan Bank on “Investment Opportunities with Chinggis Khaan Bank.”
An update on the work of BCM’s TVET Working Group will be provided by its Chairman, Mr. Randy
Myer, Product Support Operations Director, Wagner Asia. Mr. D.Ganbold, President, Mongolian
National Mining Association (MNMA), will update on the latest from the mining sector.
We will conclude the business portion of the meeting by asking BCM members in the audience to
briefly comment on specific problems, solutions, risks, opportunities and/or strategies affecting
their businesses. We believe that BCM members may learn from one another from sharing good
news and bad.
Teleconferencing will again be available for Members not able to attend. The call number is (1-
218) 936-7979, access code 771358 to be connected. The cost will be solely that of the long
distance call to the above U.S. number.
BUSINESS
ENTRÉE GOLD SEES ITS INTERESTS SERVED BY OT AGREEMENT
Entree Gold Inc. feels that the recently signed Investment Agreement on Oyu Tolgoi contains
several key issues that will have a specific beneficial impact on Entrée. The agreement paves the
way for finalizing feasibility, development and mining studies of the many Oyu Tolgoi deposits,
including Entree's Hugo North Extension and Heruga deposits. Also, greater certainty is afforded to
all stakeholders, with the agreement providing fiscal stability and reliable access to water, power,
transportation and labor.
The Entree-Ivanhoe Mines exploration licenses (Shivee Tolgoi and Javhlant) which are subject to the
joint venture are contained within the Contract Area covered by the agreement. The conversion of
the joint venture licenses from mineral exploration licenses to mining ones is a condition precedent
to the agreement. The conversion removes the risk of license forfeiture on grounds of expiry of the
date of the exploration license. Mining licenses have a 30-year term with two possible renewals of
20 years each. This allows the diligent and systematic exploration on these licenses for new
deposits to continue. Under the Entree-Ivanhoe Mines joint venture, Entree retains either a 20% or
30% carried interest, dependent on the depth of mineralization.
Entree’s flagship property is in Mongolia, where it holds three exploration licenses comprising the
179,590-hectare Lookout Hill property. Lookout Hill completely surrounds the 8,500-hectare Oyu
Tolgoi project of Ivanhoe Mines, and hosts the Hugo North Extension of the Hugo Dummett copper-
gold deposit and the Heruga copper-gold-molybdenum deposit. Ivanhoe Mines and Rio Tinto are the
major shareholders of Entree, holding approximately 15% and 16% of issued and outstanding shares
respectively.
Source: Entrée Gold Inc.
MONGOLIA ENERGY‟S KHUSHUUT MINE HAS 135 MILLION TONS OF COAL
Mongolia Energy Corporation (MEC) has announced that an independent technical review of the
proposed Khushuut open pit coal mine in Khovd Province, Mongolia, has estimated the life

3. expectancy of the Khushuut Mine at 19 years and that the 600 hectares contain some 156.2 hectares
of coal bearing strata. The total run-of-mine coal resources ranges between 134.7 million to 140.9
million tons at the assumed price of between USD60 to USD135 at the mine.
The total capital expenditure for developing the mine, excluding the construction of the Khushuut
Road, was estimated to be HKD1,582.9 million (USD204 million) over two years. The total capital
expenditure to be incurred on equipment, including both initial and replacement expenditure, over
the projected 19 years of operation is estimated to be HKD3.5 billion (USD452 million).
MEC intends to engage an experienced international mining contractor to manage and conduct the
mining operations, who will be responsible for the majority of the above equipment capital
expenditure. MEC is currently building a road to link the mine to the Yarant Border Station at the
Chinese border, a distance of approximately 310 km.
MEC is an energy and resources developer and has approximately 330,000 hectares of concession
areas in western Mongolia for coal, ferrous and non-ferrous metal resources, aside from other
projects in Mongolia and China.
Source: Proactive Investors China
HONG KONG LISTED COMPANY ACQUIRES MINE IN DUNDGOVI
Hong Kong Stock Exchange-listed Solartech International Holdings Ltd. has signed a memorandum of
understanding with British Virgin Islands incorporated Winner Progress Ltd. to acquire Nergui Mine,
a gold and copper mine located in Dundgovi Province, Mongolia.
According to the MoU, Solartech International will take over Sun Progress Ltd., a wholly owned
subsidiary of Winner Progress which owns the exploration and mining licenses to the Nergui Mine.
The mine is estimated to contain gold and copper resources.
Source: Steelguru
IVANHOE PAYS FIRST INSTALLMENT OF ADVANCE PAYMENT
A check for USD100 million, as first installment of the total advance payment of USD250 million
stipulated in the Oyu Tolgoi investment agreement, was paid by Mr. Peter Meredith, Deputy
Chairman of Ivanhoe Mines, on Tuesday. Speaking on the occasion Mr. Meredith said the company
will similarly stick to all other parts of the agreement. The third and last installment of the
advance payment will come by June, 2010.
Later, Finance Minister S.Bayartsogt told media that Oyu Tolgoi was just one of 15 strategic mines
in the country, including Tavan Tolgoi. With foreign investors keen on doing business here,
Mongolia will have to be “wise in taking decisions and spending its revenue”, he said. There was
always some risk in huge investments and the Government was aware that as the MNT grows
stronger export prices would rise and sectors other than mining might find it difficult to compete
globally.
He said Ministers and others who worked so hard on the investment agreement would not get any
extra monetary rewards and recalled that during negotiations, the investors’ side had expressed
their surprise that while they had hired very expensive economists and lawyers, the Mongolian side
consisted only of politicians.
Mr. Bayartsogt also said he will give the physical check for the USD100 million to a museum in 2011
which would mark the 100th
anniversary of the Mongolian Finance Department.
Source: Onoodor
IVANHOE TO STAY THE FULL COURSE IN OYU TOLGOI, FRIEDLAND SAYS
“We want to be the builder, not the auctioneer, and intend to be around for the long term to fulfill
our responsibilities,” Ivanhoe Mines Chairman Robert Friedland has said, in a pledge to keep a
controlling stake in the Oyu Tolgoi copper and gold deposit, to be developed with Rio Tinto. The
entire project, including an open pit and an underground mine, may require about USD9 billion in
capital spending over three decades.
The site may produce more than 1 billion pounds of copper and 500,000 ounces of gold annually in
the first decade of production, which is estimated to start in 2013, Ivanhoe Chief Executive Officer
John Macken said after Mr. Friedland had spoken.
Ivanhoe spent USD156 million on exploration and development at Oyu Tolgoi last year and USD245.5
million in 2007, the company said in an April statement. Rio Tinto has said it will pay USD388
million to double its stake in Ivanhoe to about 20 percent as part of a 2006 agreement to give Rio a

4. share of Oyu Tolgoi.
Source: Bloomberg.com
RZD SIGNS MEMORANDUM ON ZUUNBAYAN-DALANZADGAD RAIL LINE
RZD President Vladimir Yakunin and Minister of Roads, Transportation, Construction and Urban
Development Kh. Battulga have signed a memorandum on building the Zuunbayan-Dalanzadgad rail
line to serve mining operations in the South Gobi Region. The sides also agreed to support the
strategy drawn up by the recently set up joint venture Infrastructure Development to develop the
Ulaanbaatar Railway and build new railway infrastructure in the country. RZD is Russian Railways, a
State-owned mega-company.
RZD has expressed its readiness to start in November the stage-by-stage financing of design and
survey work for the construction of the Zuunbayan-Dalanzadgad rail line, to cost USD250 million.
All this came about during last week’s conference in Ulaanbaatar on the strategic development of
Mongolia’s railway infrastructure, attended by Mr. Yakunin, Mr. Battulga, Infrastructure
Development General Director Vitaly Morozov, Korea Rail Network Authority President Cho Hyun-
yong, Mr. Wang Linshu, senior advisor to the Chinese Minister of Railways, and representatives of
Ivanhoe Mines and Boston Consulting Group.
Talking about the transit potential of Mongolia and its integration into the international transport
network, Mr. Yakunin noted that the geopolitical position of Russia and Mongolia, as well as the
shared technical base of their railways, enables them to seek an important role in the global
economic system as a transport bridge between two major macroeconomic regions – the European
Union and the Pacific Rim. “In addition to the possible transport route for the export of Mongolian
raw material to China, the use of the Trans-Siberian route will enable their export to Japan, South
Korea, and other countries via Russia’s Far East ports, and also in the future via the developing
North Korean port of Rason. In this way, Mongolian freight will have a reliable outlet to sea ports,”
Mr. Yakunin said.
Source: RAIL-NEWS.com
TAVAN TOLGOI DECISION BY YEAR-END, SAYS DEPUTY MINISTER
Mongolia will select the winners of the highly contested Tavan Tolgoi coal mine stake sale by the
end of this year, Mongolia's Deputy Minister of Mineral Resources and Energy, Dr. A. Baldanjav, told
reporters on the sidelines of the China Mining Conference in Tianjin on Wednesday.
Tavan Tolgoi, which holds estimated reserves of 6.5 billion tons of coking coal, may be split among
bidders from China, Russia, and a leading international miner such as BHP Billiton, earlier reports
have said.
Source: Reuters.com
CHINA GOLD FIRM CLAIMS “BREAKTHROUGH” IN MONGOLIA
State-owned China National Gold Group Corp. is planning to step up its presence in central Asia,
Russia and Africa to scout for new investment destinations, the China Daily reported on Wednesday.
The company was considering two new precious metals projects in these regions and expected to
finalize the deals early next year, the newspaper said, citing the overseas business manager of the
company.
The official also said that the nation's largest gold producer had achieved breakthroughs in Russia
and Mongolia, but declined to give details.
Source: Reuters.com
PEABODY PLANS TO DEVELOP COAL VENTURE IN MONGOLIA
Demand for coal to generate electricity and make steel in China and India is expected to grow by 7
percent to 8 percent annually in the next five years, leaving the world "chronically" short of the
fuel, Chief Executive Greg Boyce of U.S. coal miner Peabody Energy Inc. said on Tuesday. He also
outlined his company's plans to double exports from Australia to handle Asian demand and to
develop its joint venture in Mongolia to produce coal for the Chinese.
The coal shortage, as industrial activity rebounds from last year's economic downturn, is driving up
prices and Peabody forecast steam, or thermal, coal selling for USD100 per ton by 2012, up from
around USD70 today. It also said metallurgical, or coking, coal is already selling for USD160 per ton
-- way above this year's benchmark of USD129.

5. Asked about plans for Mongolia, where Peabody has a 50 percent interest in a joint venture for Polo
Resources' coal interests, Mr. Boyce said, “We believe Mongolia will play a role in supplying the
largest coal market in the world, which is China.”
Source: Reuters.com
NOMIN OPENS FIRST BUSINESS CENTER IN DORNOD PROVINCE
The recently opened Nomin Herlen in Dornod province, a subsidiary of Nomin Holding Company, is
the first international business center in the region. A long disused carpet factory has been
renovated to provide facilities for 560 stalls for clothes and other goods and 260 grocery stalls.
Around 1,000 local people are expected to find employment in them.
It also has a restaurant, a fitness club, beauticians, dry cleaning and auto repair shops, auto
washing service, and space for various other small and medium enterprises.
Source: Zuunii Medee
BHP POSTS RECORD IRON ORE OUTPUT
BHP Billiton Ltd. posted solid third-quarter production figures featuring record iron ore and
petroleum output, and said it was seeing improvements in demand for steel-making materials.
Increasing shipments of Australian iron ore and coking coal to Asian steelmakers has been a feature
of this quarterly reporting season and analysts said the BHP numbers should dispel any lingering
fears that tensions between Australian miners and China are affecting sales.
The global miner said it was seeing improving demand for commodities used by a recovering steel
sector, but retained its cautious tone on future outlook. It said restocking of commodities in China
is now complete, with a better picture of real Chinese demand to emerge over the remainder of
calendar 2009. But it added that there is little evidence yet of sustainable demand from developed
economies, despite some positive early signs.
Source: The Wall Street Journal
RIO TINTO‟S IRON ORE OUTPUT SURGES 12 PERCENT
Rio Tinto's iron ore production surged to a new record in the third quarter, as shipments to China
remained at a “high level”, CEO Tom Albanese said last week. The company also raised its 2009 iron
ore production forecast by as much as 7.5% after it climbed 12% to 47.5 million tons in the
September quarter, from 42.4 million tons in the third quarter of 2008. “We are seeing early signs
of a recovery in some of our key markets, although we remain cautious about the near-term
outlook,” Mr. Albanese said in a statement.
Rio Tinto's mined copper production increased by 24% in the third quarter. The company expects its
share of mined copper production to be 780,000 tons in 2009, in line with a previous forecast, and
its share of full-year refined copper output to be 420,000 tons, slightly below the previously
forecast 425,000 tons. The Oyu Tolgoi mine, which Rio Tinto is developing with Ivanhoe Mines, will
produce about 450,000 t/y of copper and 330,000 oz/y of gold over its life-of-mine. Production will
start in 2013.
Meanwhile, Mr. Albanese reported that Rio Tinto had made “considerable progress” on divestments
in the quarter, enabling the company to reduce net debt. The group had announced assets sales
totaling USD4.1 billion in 2009 and had received a binding offer of USD2.025 billion for its Alcan
Packaging global pharmaceuticals, global tobacco, food Europe and food Asia divisions.
Source: www.miningweekly.com
NORILSK, BHP PLAN TO MINE RUSSIAN COAL FROM 2015
Norilsk Nickel plans to start mining coal with BHP Billiton in the Russian Arctic from 2015, the first
production to result from a three-year-old alliance between the mining giants. They will develop
the Syradasai deposit in a project that could eventually produce as much coking coal for the steel
industry as Russian market leader Mechel produced last year.
The project envisages construction of a processing plant and power station at the deposit.
Source: Reuters.com
AUSTRALIAN MINISTER URGES CHINA TO SPEED UP RIO CASE
Australia's climate change minister Penny Wong has said she urged China's Vice Premier Li Keqiang
to expedite the case of four employees of mining giant Rio Tinto, currently held on suspicion of

6. corporate espionage. She raised the issue with Mr. Li, who is widely tipped as China's next Premier,
during a meeting that primarily focused on tackling global warming.
The detainees include Australian citizen Stern Hu in a case has strained ties between Australia and
its second-largest trade partner. “I did raise with the Vice Premier the issue of Australian citizens
who are currently in the situation in question, and I did urge the Chinese to treat the case
expeditiously in accordance with Chinese law, and we think that will be in the interests of both
countries.”
Source: www.miningweekly.com
ECONOMY
“EXPONENTIAL ECONOMIC GROWTH” FORECAST
Mr. John Finigan, CEO of Golomt Bank, told the “Raising Capital – New Opportunities for Mongolian
Companies” conference last week that the monetary worth of ten strategic deposits in Mongolia,
including Tavan Tolgoi and Oyu Tolgoi, is estimated at USD1.3 trillion. Apart from this, the country
has USD10 billion worth of rare earth elements and USD117 billion worth of uranium. The
conference was organized by Bank of New York Mellon and the London Stock Exchange.
Mr. Finigan forecast “exponential economic growth” in the coming years, with nominal GDP crossing
USD25 billion and per capita GDP reaching above USD8,000 by 2015. The country’s GDP last year
was USD4.8 billion and this would be somewhere around USD67 billion by 2020. This compounded
annual growth rate of 25% would put Mongolia on par with Qatar.
The CEO of Petro Matad, Mr. Douglas McGay, said the hard work, time, money and expertise needed
to access international financial markets “should not be underestimated, but it is well worth it”.
Source: www.frontier.mn
“VERY RAPID GROWTH” NEEDS PRUDENT MANAGEMENT, CAUTIONS ING ANALYST
Mongolia’s economy is poised for a return to “very rapid growth” after the signing of the Oyu Tolgoi
agreement, ING Groep NV has said. “Oyu Tolgoi is like the 2003-2008 commodity price boom, only
bigger,” Mr. Tim Condon, chief Asian economist for ING, has said in a report yesterday. “It is a
huge, positive demand shock” for Mongolia’s USD5.3 billion economy, he added.
Mongolia’s currency should be allowed to strengthen to keep inflation from accelerating as the
thousands of jobs created by the project increase demand for goods and services, Mr. Condon said.
“Even if most of the initial project cost spending for Oyu Tolgoi is on imported equipment and has
no impact on the local economy, mine construction will require workers. Thousands of ancillary
support jobs also will be created.”
The project, including an open pit and an underground mine, may require about USD9 billion in
capital spending over three decades. A rules-based policy regime and a stable exchange rate stance
will help the economy avoid boom-bust cycles associated with commodity price fluctuations, Mr.
Condon said.
“As occurred during the commodity price boom, some of the increased spending from new Oyu
Tolgoi jobs will leak abroad through increased imports,” Mr. Condon said. “But not everything
people consume is imported. Services, especially housing, are harder to import. Unless there is a
powerful supply response, the increased demand will boost their prices and Mongolia will
experience a repeat of high and volatile inflation.”
Read more…
The MNT weakened more than 45 percent against the USD between November and the middle of
March, and has since gained about 14 percent. “An appreciating MNT will attract labor and capital
from export-oriented activities and encourage the substitution of imports for locally-produced
services where this can be done,” Mr. Condon said.
A rules-based policy regime, and a free-floating or pegged currency, will help the country “on a
path to sustained, rapid growth that avoided boom-bust,” Mr. Condon said. “Oyu Tolgoi with the
existing high-discretion regime, in which populist pressure determines the allocation of resources,
and exchange rate policy juggles protecting traditional exporters and curbing inflation pressure”
would put Mongolia on a path to “boom-bust”, he said.
Source: Bloomberg.com

7. MINING DEAL SIGNALS MONGOLIA‟S TRANSFORMATION
Nine years after it first began exploring the Oyu Tolgoi gold and copper deposits in Mongolia,
Canadian firm Ivanhoe and its larger partner Rio Tinto have secured the mining rights deal that
could transform the country’s economic prospects. News of the deal will come as a relief to almost
everyone with a stake in Mongolia’s future: from the foreign mining companies and investors who
had begun to despair of realizing the potential of the country to the Mongolian people who faced
declining employment prospects.
“The impact of this deal will be huge,” says Mr. Chad Blewitt, CFO of Ivanhoe. “The project by
itself could cause a rise in GDP of around 30%, and then there’s the multiplier effect on the
economy as supporting services and infrastructure build up. As well as increasing the number of our
personnel we’ll obviously be bringing in a lot of construction material, maybe 80 truckloads a day at
times, and at the moment the physical infrastructure isn’t there for that.”
Ivanhoe shouldn’t find it too difficult to secure funding for the project once 10 final preconditions
are met, with sources close to the deal saying that the involvement of Rio Tinto and its staff has
been instrumental in preventing the whole project from turning sour. There was much debate over
the form that an upfront payment from Ivanhoe should take, and on the Government’s part some
degree of agonizing over how to ensure that Mongolia and its people benefit from the extraction of
the country’s resources as much as foreign companies do. Funding for the development of the
project comes largely from Rio Tinto, which has increased its stake in Ivanhoe mines from 9.9% to
19.7%. Rio is allowed to increase its stake to 46.6% over the next two years.
Read more…
“The hope for securing enough capital investment [in Oyu Tolgoi] is Rio Tinto,” says Mr. D.Ganbold,
president of the Mongolian National Mining Association. “The more Rio Tinto has participation in the
project, the fewer financial difficulties will be encountered. Of course, it doesn’t mean that there
will not be any financial problems.”
Building up the required infrastructure and services industry to support Oyu Tolgoi and subsequent
projects will require a level of investment that, according to the World Bank, cannot be met by
domestic supply. While much of the necessary capital can be raised by foreign firms internationally,
the race is on for Mongolia to improve its barely functioning capital markets so local firms can join
in.
“It’s tough at the moment for portfolio investors looking to get exposure to the Mongolia story,”
says Mr. Mandar Jayawant, founder of the Frontier Investment & Development Partners, one of a
handful of private equity funds looking to raise capital in the country, “because the exchange here
is virtually dead, with daily volumes of maybe USD200,000 on a good day. That might pick up over
time as more companies look to list but for now there’s little activity.” His fund is near to a first
close with some USD15 million raised, mostly from developmental financial institutions and a few
strategic investors. He hopes it will eventually reach USD100 million.
Mr. Blewitt says that his firm is working closely with the Government in developing infrastructure.
The country’s rulers clearly have an important role to play in boosting domestic growth – the
problem is finding the money to do it. In changing the outlook on Mongolia’s sovereign rating of B
negative to B stable after the signing of the Oyu Tolgoi deal, Fitch Ratings noted that the
agreement was positive for the country but that concerns remain about its vulnerability to external
shocks. It’s not clear, says Mr. Peter Morrow, CEO of Khan Bank, if Mongolia would now be able to
borrow from the international capital markets at a reasonable rate.
“Who knows when there’ll be a sovereign?” he says. “They’ve been talking about it for years, but
when they could have done it they decided they didn’t need the money, and then when they
needed the money they couldn’t get it. At Khan Bank we’re awash in liquidity because there’s not
been much loan demand, but longer term Mongolia’s got to get access to the capital markets and a
benchmark sovereign issue would really help.”
Mr. Morrow says that other sources of capital are available to the country’s top banks – Khan Bank
has a medium-term note program listed in Singapore and USD75 million in commitments from
multinational development agencies. Smaller banks in Mongolia do not necessarily have those
options; when Savings Bank of Mongolia and Mongol Post Bank announced a merger on October 12,
the news came as little surprise to local observers who have been predicting industry consolidation
for some time.
Source: The Euromoney Magazine

8. CENTRAL BANK CHIEF WARNS INFLATION COULD RETURN
Deposing before Parliament’s Standing Committee on the Economy, Central Bank President
L.Purevdorj last week cautioned that without proper coordination between the monetary policy and
budget priorities, development of the mining sector could lead to some inflation and rise in food
prices in 2010. As the world economy revives, Mongolia’s imports such as fuel and food are likely to
be more expensive.
Mr. Purevdorj said that the bigger banks have begun emerging from the crisis, but medium and
small banks would have to wait for some time longer. Admitting that the Central Bank had failed to
effectively monitor the situation in Anod Bank, he said the overall responsibility had to be shared
by the Finance Ministry and the Financial Regulatory Agency. The Central Bank did not have access
to accounts in foreign deposits and so had to accept what Anod reported. He hoped Parliament
would approve a law in this session allowing the Central Bank to improve its personnel and
technological resources.
He told MPs who wanted to know what the monetary policy would do for the economy next year
that the basic goal was to maintain stability. The economy will not grow very much and the budget
deficit would not exceed 5 percent of GDP. He urged more freedom for the Central Bank to act.
Source: Udriin Sonin
LARGE INCREASE IN NON-PERFORMING AND LOANS WITH PRINCIPAL IN ARREARS
The Bank of Mongolia reports that money supply (broad money or M2) at the end of September
reached MNT2,653.4 billion, showing a 3.5 percent rise over August 2009 and a 5.1 percent rise over
September 2008. A 25.1 percent growth of quasi-money was the main factor behind the 16.9 per
cent rise in money supply since January 2009. Currency issued in circulation reached MNT363.5
billion at the end of September, 5.4 per cent less than in August 2009, but 0.7 percent more than in
September 2008.
Outstanding loans increased by 1.6 per cent over August, but were 3.2 per cent less than in
September 2008. Principal in arrears amounted to 7.5 per cent of total outstanding loans. Their
total increased 14.3 per cent over August and was 3.6 times more than in September last year.
Non-performing loans were 15.1 per cent of the total outstanding loans and rose 12.0 percent over
August, and was 5.3 times more than in September, 2008.
Source: www.mongolbank.mn
COPPER HITS 13-MONTH PEAK AS DOLLAR WEAKENS
Boosted by a weak US dollar, bargain hunting by investors and upbeat prospects for economic
recovery, copper rallied to its highest level in more than a year on Tuesday, when the metal used in
power and construction touched USD6,570/t on the London Metal Exchange, its highest level since
September last year. “There's no evidence of a pickup in demand outside China, but expectations
are there'll be an improvement next year from very low levels,” said a senior commodity strategist.
The dollar hit a 14-month low against a basket of currencies on Tuesday, making dollar-priced
metals cheaper for non-US investors and boosting interest in hard assets over cash. Copper prices
have more than doubled this year due to improved economic data signaling recovery, record
imports from China and increased investor interest in hard assets. More recently, however, worries
over the outlook for demand outside China have limited gains, with analysts citing gains in LME
inventories as evidence demand remains weak.
Source: www.miningweekly.com
GDP DROPS 2.2 PERCENT YEAR-ON-YEAR
Mongolia's Gross Domestic Product in the first three quarters reached about USD1.76 billion, down
2.2 percent compared with the same period last year.
Source: Xinhua
INDUSTRIAL OUTPUT FALLS 10.5 PERCENT
Total industrial output reached MNT1,138.1 billion in the first nine months of 2009, registering a
10.5 percent decrease (at 2005 constant prices) against the previous year’s figure. Output of main
mining products such as copper, zinc, tungsten, gold and fluorspar fell 35 per cent.
Construction and installation work worth MNT145.4 billion was carried out in this period, with
domestic entities responsible for 85.9 percent of this and foreign entities for 14.1 percent.

9. Source: The National Statistics Office
TRADE TURNOVER FALLS, SO DOES DEFICIT
Mongolia trades with 111 countries, and its total external trade turnover in the first nine months of
2009 reached USD2,778.1 million, USD1,605.9 million or 36.6 percent less than in the corresponding
period last year. The deficit of USD190.5 million was 2.4 times less than in the same period in 2008.
Exports accounted for USD1,293.8 million and imports for USD1,484.3 million in this turnover, less
by 33.9 percent and 38.8 percent respectively than last year’s. The drop in exports was because of
a decline of 52.7 percent in the value and 12.4 percent in the volume of copper, and of 40.8
percent in the value and 41.9 percent in the volume of gold.
Source: Montsame
DROP IN FREIGHT AND PASSENGER TRAFFIC
Altogether 17.4 million tons of freight and 162.7 million passengers were carried by all types of
transport in the first nine months of 2009. Comparison with the corresponding period last year
shows the volume of freight fell by 2.8 percent, while the number of passengers rose by 3.9
percent. The airlines carried 59,600 fewer people while the number of people travelling by road
showed a large increase.
Source: Montsame
UNEMPLOYMENT RISES 27.1 PERCENT YEAR-ON-YEAR
The number of people actively seeking a job and registered as unemployed all over the country was
40,400 at the end of September, an increase of 8,611 or by 27.1 percent over the figure a year ago.
Source: Montsame
TAX REVENUE FALLS 24.3 PERCENT
The General Government Budget has shown a deficit of MNT332.5 billion at the end of September.
The current balance, however, shows a surplus of MNT56.1 billion. Compared with the same period
in 2008, tax revenue declined by 24.3 percent, with windfall profits tax 73.5 percent less,
corporate income tax 35.4 per cent less, and VAT 3.0 percent less. Non-tax revenue rose 27.1
percent against last year’s figures.
Capital expenditure in the first nine months was 6.1 percent less than in 2008, mainly because of a
6.6 percent decline in domestic investment.
Source: National Statistics Office
RAILWAY WORKERS‟ SALARY CUT RESTORED
The salary of railway workers was raised by 10 percent on October 1. Domestic and export
transportation has increased considerably since last year, when salaries had to be cut because of
falling revenues.
Source: Zuunii Medee
APARTMENT PRICES WILL NOT EXCEED MNT650,000/SQ.M
The Government has now finalized the modalities of buying apartments for Government employees
and citizens under long-term loan agreements. The program is aimed at meeting the widespread
demand for modern living space, assisting construction companies to overcome financial
difficulties, and also at raising the liquidity ratio of commercial banks.
Not more than MNT650,000 per sq.m will be paid for the apartments, said Finance Minister
S.Bayartsogt. Construction companies had quoted higher prices but now have to be content with
this. Bonds worth MN180 billion will be sold to collect the funds. The Apartment Financing
Corporation will then make arrangements for Government employees to take long-term loans from
banks with the apartment as collateral. Ordinary citizens will have to apply for these loans and
fulfill certain predetermined criteria.
The loans will have to be repaid over 15 years or more. The interest will depend on the lending
banks’ policy and will be jointly determined by the bank, the Central Bank and the Finance
Ministry.
Source: en.News.mn

10. REPORT ON MINING BAN NEAR FORESTS NEXT MONTH
MP B.Bat-Erdene has said the working group established to facilitate implementation of the law to
prohibit mining operations in river and forest areas would submit its report in November. Defining
the forest boundaries was not proving to be easy.
The MP also complained that a Chinese company has started work on diverting the Kherlen River to
Shivee-Ovoo. This comes after public protest a few years ago led to abandonment of a move to
change the course of the river to the Gobi regions.
Source: Ardiin Erkh
COMMERCIAL BANKS GET GOLD, NOT THE CENTRAL BANK
As gold prices rise at the world market, less gold is being deposited at the Central Bank. Only 2.2
tons of the anticipated 4.9 tons of gold has been offered so far and only USD7.6 million of the
USD44.5 million lent by the Central Bank to 20 gold mining companies has been repaid back. Most
companies, especially the foreign-invested ones, are keeping the gold with commercial banks.
Source: Udriin Sonin
CHINA BIGGEST INVESTOR FOR 11 YEARS IN A ROW
Speaking at a ceremony to celebrate the 60th
anniversary of Mongolia-China diplomatic relations
Chinese Ambassador Yui Hun Yao revealed that China has been the biggest investor in Mongolia for
eleven consecutive years. Trade between the two countries has reached USD2.5 billion, 10 times
more than in 1990.
Total Chinese investment since 1990 has been USD1.734 billion and the number of Chinese
companies registered in Mongolia stands at 4,835. Nearly 1 million Chinese citizens came to
Mongolia last year.
Source: Onoodor
WORLD BANK ORGANIZES CONFERENCE ON MONGOLIA‟S FINANCES
The second Mongolia Economic Policy Conference, organized by the World Bank on October 29, will
engage well known policy makers both from within and outside Mongolia in finding ways to address
the country's development challenges. It will focus on the vulnerability in the banking system and
public finances, exposed as a result of the ongoing economic crisis. The presenters and panelists
include the Regional Chief Economist and Director of the World Bank, the Governor of the Bank of
Mongolia, the Coordinator of International Finance at the Chilean Ministry of Finance, senior
experts from the IMF and the Netherlands Ministry of Finance, Members of Parliament,
representatives from external partners, the private sector, the civil society and academia.
Source: The World Bank
CHINA‟S SEPTEMBER IRON ORE IMPORTS HIT ALL-TIME HIGH
China's iron ore imports hit an all-time high in September, a surprising jump suggesting that China's
steel mills cranked up output to record levels as exports rose, and amid signs they are overshooting
the needs of the recovering economy. The 64.55 million ton inflow of ore was booked mostly in July
and August, traders said, when domestic iron ore prices reached a nearly one-year peak as China
remained locked in annual term price negotiations with major global miners including Rio Tinto.
Imports are expected to fall for the remainder of the year, as sliding Chinese steel prices have
pushed ore prices lower and dampened trade. But falling prices could also discourage domestic ore
production and boost imports. China's daily crude steel output in early and mid-September was
more than 1.65 million tons, possibly boosting monthly output at the world's biggest steel-making
nation to a new high, partly due to recovering exports.
“The September iron ore import figure looks a bit unusual as domestic iron ore prices fell in the
month, but we also saw steel production was high with the recovering export market, while port
inventories declined a lot,” said a Shanghai-based analyst. A senior official with the China Iron and
Steel Association, the country's industry group, said on Monday that iron ore imports had exceeded
actual demand by about 50 million tons so far this year.
Source: Reuters.com
GLOBAL STEEL CONSUMPTION EXPECTED TO REBOUND
Global steel consumption is forecast to rebound by more than 9% next year, recovering after this

11. year's 8.6% decline, which was less severe than earlier expected, the World Steel Association said
last week. In recent months, however, China's output has far exceeded demand, forcing major steel
mills to cut prices since August. Its steel product exports in September increased 19% from August,
but total exports were still down 68% in the year to date.
“Exports rose since May ... indicating a slow but steady demand recovery for Chinese steel products
in the rest of the world. Exports may continue to rise for the rest of the year and through into
2010,” said a Hong Kong-based analyst.
Source: www.miningweekly.com
CHINA‟S RECOVERY SEEN AS BROADER AND SUSTAINABLE
China's recovery is becoming broader and potentially more sustainable, a shift that could provide
better support for a still-fragile global economy. Reinforcing those signs is a change of tone from
China's cautious government, which is now becoming more confident in a solid rebound. Economic
data released Thursday showed China's gross domestic product growing by 8.9% from a year earlier
in the third quarter, following the 7.9% gain in the second quarter. The expansion in industrial
output, the backbone of the manufacturing-heavy economy, accelerated further to 13.9% in
September from 12.3% in August.
Just as important is evidence that improvements in the economy are achieving a momentum that's
no longer totally dependent on the Government's massive stimulus program. The key shift in the
latest quarter: a turnaround in the financial health of Chinese companies. The present plans of
corporate spending on new hires and equipment, if sustained, could help wean China's growth off
its reliance on easy bank lending and government stimulus projects.
As the fastest-growing major economy, China has a key role to play in pulling the world out of the
deep slump it fell into last year. But its rebound this year has been so quick, and driven by such a
huge flood of money from the state-controlled banking system, that many investors have
questioned whether the expansion can continue for much longer.
Read more…
The government surveys of companies show revenues rising by just over 5% in the past few months,
reversing steady declines since the end of 2008. The improvement has come even as the Chinese
Government has quietly dialed back the boost it is delivering to the economy. New bank lending in
the third quarter was less than half the second-quarter total, and growth in Government spending
has also slowed.
World trade has also started growing again in the last few months, helping solidify China's recovery.
The nation's exports were up to USD325.07 billion in the third quarter from USD276.10 billion in the
second quarter. While still down by 20% or so from their levels last year, the flow of export orders
helps keep factories running and workers employed in the nation's massive manufacturing sector.
There's much debate over how quickly trade can recover from here, given the weakened state of
Western economies. But many analysts are saying the U.S. recession has likely already ended. With
China now on track to easily surpass its target of 8% growth this year, the government's stimulus
plan looks to have achieved its goal of carrying the country through the worst of the global
downturn.
Source: The Wall Street Journal
POLITICS
ZORIGT WINS BY-ELECTION, FILLING THE LAST SEAT IN PARLIAMENT
As widely anticipated, MPRP candidate and Minister for Minerals and Energy D.Zorigt has won
Sunday’s by-election to Parliament, winning 60.37 percent of the valid votes cast. His nearest rival,
Mrs. R.Burmaa of the DP, claimed 29.57 percent. The seat had been won by Mr. Ts. Elbegdorj last
year and fell vacant when he later assumed the Presidency.
Mr. Zorigt does not have to be a Member of Parliament to remain a Minister, so there was no
imperative for him to become one. Why his party chose him will be clear in the coming weeks. With
the by-election over, following Mr. S.Erdene taking his seat from Bayangol district after a long
dispute, Parliament will now be working at full strength almost 16 months after nationwide
elections. The relief is tempered by the popular perception that both recent events were part of a
deal between the DP and the MPRP.

12. The suspicion arises because Mr. Erdene of the DP took his seat in Parliament without any official
statement on the results of the several probes that marked his election. There is not even any clear
statement that he got more votes than his challengers. Similarly the Chingeltei by-election victory
came because, many feel, the DP deliberately chose a weak candidate.
Source: en.News.mn
BAYAR ASSERTS HIS STRENGTH IN PARTY
The by-election has proved that the MPRP never had an enemy called the DP. Its enemies are within
the party itself. The by-election did not show the MPRP was stronger than the DP. Its main purpose
was to assert the dominance of Mr. S.Bayar’s group in the MPRP and to show that by cleverly joining
forces with others it could marginalize the powerful group led by Mr. N.Enkhbayar.
The way the Prime Minister’s group used the DP to establish its own position in the MPRP shows that
it will manage to dominate Mongolian politics for several more years. Will this rid the party of
corrupt elements? Probably not. It is just a matter of holding power, and equations could change.
Mr. Bayar did not want a coalition with the DP because he liked them or wanted cooperation, not
constant confrontation. He wanted more support behind him against groups in his party and knew
he would be well able to manipulate his partners in government to serve his interests.
Letting Mr. S.Erdene take his seat in Parliament does not add to the DP’s strength, so the MPRP
does not have anything to fear. The MPRP under Mr. Bayar has the strength to take any decisions,
with help from some in the DP who will agree to do anything for him. The DP was once the voice of
principled opposition, but that yesterday now seems far away.
Source: Ardiin Erkh
DP AGAINST GOVERNMENT CONTROL OF TREASURE FUND
The leader of the DP group in Parliament has said they do not want members of the Government to
administer the proposed Treasure Fund. The MPRP group of MPs has been reported as favoring the
Prime Minister to head the administration of the fund to be made up with mining revenues.
The DP wants politics to be kept out of this planned national institution and would demand popular
election of members of the council.
Source: www.news.mn
SANT MARAL SURVEY SEES INDIVIDUAL OPTIMISM AMIDST ECONOMIC STAGNATION
The results of the latest Politbarometer survey by Sant Maral Foundation of 1,200 respondents in
Ulaaanbaatar and Uvs, Tuv, Hentii, Huvsgul provinces reveal that 0 .3 percent people nationwide
perceive the present economic situation in Mongolia to be “very good”, while 7.3 percent think it is
“good”, 6.1 percent see it as “very bad” and 38.4 percent as “bad”. 20.8 percent feel it is
improving, while 45.5 percent think it is in stagnation, and 24.7 percent feel it is in decline.
Asked how the money from the mining sector should be used, 30 percent wanted it “to be invested
by the state to improve economic development”, 25.3 percent favored “long-term social programs
through more investment in education, health, etc.”, and 16.6 percent wanted “increased social
programs to give immediate relief to the poor”. While the nationwide percentage of those who felt
“all citizens should equally benefit through direct disbursement” was 23.3 percent, this was 27.6 in
the countryside and 16.9 in Ulaanbaatar.
President Ts. Elbegdorj was the first choice of 38.5 percent of the respondents as “the person who
should play an important role in politics”, with Prime Minister S.Bayar a close second with 37.2
percent support, followed by former President N. Enkhbayar with 18.2 percent. The DP was the
choice of 29.1 percent of the people “if elections were held tomorrow”, while 26.8 percent said
they favored MPRP. Support for DP was higher in both Ulaanbaatar and in the provinces.
Read more...
A whopping 51.1 percent felt “Government policies always fail to solve the most important
problems”, while 57.6 percent said political parties do not represent public opinion and 30.6
percent felt voters' influence on political decision making was “rather little”, 12.8 percent felt it
was “none”, and 33.1 percent saw it as “rather strong” and 12.2 percent as “very strong”.
Even as 72.2 percent respondents nationwide felt there was more injustice in the country and only
2.8 percent said there was more justice, 85.2 percent asserted they were very proud to be
Mongolian and 84.2 percent were optimistic about their immediate future.
The data were collected between October 1 and 11, and the whole exercise is sponsored by the

13. Konrad Adenauer Foundation of Germany.
Source: Sant Maral Foundation
OT AGREEMENT PART OF NATIONAL SECURITY POLICY
Following the agreement on Oyu Tolgoi, hopes are high that this site, in the hitherto
underdeveloped heart of the Gobi Desert, will bring forth unprecedented prosperity to a nation of
fewer than three million people. This project will also launch a series of other possible contracts
involving other partners worldwide – Russia and China to begin with, as well as India and Japan,
among others. By enlisting fiscal and technological investment from these and other countries,
Mongolia aims to utilize its vast yet untapped deposits of gold, silver, iron ore, coal, and uranium.
But there are also political and security motivations behind this agreement, in addition to the
hoped-for economic benefits. Beginning here and now, Mongolia’s national security – both in theory
and in practice – will be defined in terms of perceived success in multi-dimensional geo-economic
balancing rather than the relatively simple geo-political and/or geo-strategic balancing that has
dominated both scholarly thought and practical action since Mongolia’s Democratic Revolution in
1990.
Throughout Mongolia’s two-decade period of democratic experience and real independence –
following almost 70 years of membership in the Soviet bloc which restrained freedom of action in
the international arena – its perception of and strategy for national security has undergone three
distinct episodes, one gradually evolving into the next. Now, Mongolia’s national security strategy is
progressing into a fourth and more complicated stage. Despite the shift in substance from politics
to economy, the core concern remains the same. Mongolia will continue to pursue a strategy of
diversifying its partners – more partners result in greater balancing opportunities and hence, a more
guaranteed external security environment.
Source: The Brookings Institution
For the full article by Mr. Munkh-Ochir Dorjjugder, Associate Senior Analyst, Institute for Strategic
Studies, National Security Council of Mongolia, please visit BCM website, Articles/Reports on
Mongolia.
CITIZENS WRITE MORE LETTERS TO GOVERNMENT
Ordinary citizens sent 423 letters, mostly containing complaints, to the Government in the third
quarter of 2009. Some 78 per cent of the problems raised were redressed. The issues included
appointment of state workers and their activities; quality and content of laws and resolutions; the
working of state institutions such as courts and prosecuting organizations; implementation of court
decisions; specific actions of the police and other investigating institutions; decisions in the geology
and mining sector; disbursal of loans and spending of state funds; and grievances on wages,
allowances and pensions.
The number of such letters has increased 3.8 times against the previous year, and observers feel
this has to do with the assumption of the presidency by Mr. Ts. Elbegdorj.
Source: Onoodor
WORKING GROUP ON JULY 1 EVENTS WANTS TO PRESENT REPORT IN PUBLIC
The report of the working group established to probe the human rights aspects of the July 1
incidents could be presented at a public ceremony if standing committees agree to such a “first” in
Mongolia’s parliamentary history. After the public presentation, if it does take place, the report
will be discussed by the sub-committee before being presented to Parliament.
There is no information on the work so far done by another working group established quite some
time ago by Parliament Speaker D.Demberel. This group was asked to study whether the declaration
of the state of emergency on July 1, 2008 had followed all legal requirements and also to assess the
performance of the President, the Prime Minister, the Minister for Internal Affairs, and the
Parliament Speaker at the time. The group was permitted full access to all confidential state
documents and a great deal of public interest was generated when it was set up, but since then
there has been no news of any work it might have done.
Source: Ardiin Erkh
MP SAYS GOVERNMENT EMPLOYEES ARE A PAMPERED LOT
MPs last week decided by a thin majority to discuss amendments in the Government Service law

14. that was approved in May, but could not be implemented as certain clauses in it were found to
contradict one another. About 2,300 people, including school and kindergarten principals, face a
loss in salary because it is not clear which category they should fall under. About 100 such
principals cannot claim their pension. It is also not clear how new principals are to be selected.
There are similar uncertainties in the health sector.
Referring to the proposal to give six months’ salary as an incentive to school officials every five
years, Mr. Z.Enkhbold said Government employees were being pampered. “Their children study in
universities for free. They are given an amount equal to 36 months’ salary when they retire. They
can claim incentives each month. No matter how poor their performance, they get their full salary.
They also have various legal protections against charges of underperforming. There is no reason to
raise their allowances further,” he said.
Source: en.News.mn
MORE UNDER-1 AND MATERNAL DEATHS THIS YEAR
Mongolia had 10.7 percent more live births in the first nine months of 2009 than in the
corresponding period last year. The number of infants dying before reaching one year rose by 87
and that of maternal deaths by 11, whereas mortality figures for children between 1 and 5 years
fell by 22.
Source: Zuunii Medee
PRIORITY GUIDELINES FORMULATED
The Government has finalized a policy “to develop a multi-pillar economy, install structural
reforms, and to attract domestic and foreign investors”. The main features of the policy will now
be publicized.
The priorities are to optimally exploit mineral deposits, establish a heavy industries base, develop
intensive agriculture, and generally encourage industrialization. These can be achieved only by
developing infrastructure and, similarly, sustainable development will be possible only with
improved human resources, environmental protection, better governance, and promotion of the
private sector.
Source: Undesnii Shuudan
NUMBER OF WORKING CHILDREN UP BY 20 PERCENT
A joint survey by the International Labor Organization, UNICEF and the World Bank has revealed
that the number of underage workers in Mongolia has risen 20 percent from the 36,000 recorded in
2006. Poverty following from the economic crisis is believed to be the main cause behind the
increase. Many children were employed in mines and other forms of hard labor.
Source: Udriin Sonin
DIRECT FLIGHTS BETWEEN ULAANBAATAR AND ULAN-UDE IN APRIL
Direct flights between Ulaanbaatar and Ulan-Ude, capital of the Buryatia Republic in the Russian
Federation are expected to begin in April, 2010, following an agreement recently reached between
the Russian and Mongolian sides. Carriers from both countries will operate the flights.
Mongolia is a popular destination for people in Buryatia and the flights are likely to stimulate
tourism in the region.
Source: www.interfax.ru
MONASTERY GETS UNESCO CONSERVATION AWARD
The Sangiin Dalai monastery in Nomgon soum of Umnogovi province has been chosen for the Award
of Excellence in the 2009 UNESCO Asia-Pacific Awards for Culture Heritage Conservation. A total of
48 entries from 14 countries in the region vied for the honor. The work on the 18th
-century
monastery was carried out by two NGOs, Development of Gobi and Consensus Center, and was
funded by Misereor, the overseas development agency of the Catholic Church in Germany.
In another development, the ancient Mongolian musical instrument Tsuurt and the traditional dance
form Biyelgee were included in UNESCO’s list of the world’s cultural heritage on October 1.
Source: Montsame, en.News.mn

15. ANNOUNCEMENTS
BCM MINING SUPPLY CHAIN „SUPPLIER EXHIBITION‟ – Oct. 28, 10 AM-2PM, Khan Bank Theater
The Business Council of Mongolia (BCM) is arranging a Mining Supply Chain SUPPLIER EXHIBITION on
Wednesday, October 28, from 10 AM to 2 PM, at the Khan Bank Theater. Suppliers who are
registered in the BCM MSC Database are welcome to exhibit their products or services at no charge.
Exhibit space is quite limited, so please contact the BCM office at 332-345 immediately to make
arrangements. Mining company buyers and other visitors will have free admission as well.
BCM has developed and completed a database consisting of national companies, manufacturers and
service providers to the mining sector. The Council has announced 1,153 companies are registered
in the Mining Supply Chain database. The database allows these 1,153 companies to expand their
businesses, attract investment from international and domestic sources, and promote themselves.
Check out the database at www.bcmongolia.org/mining supply.
_______________________________________
“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 9:15 PM tonight. Tune in to watch this program that reports stories from today’s BCM
NewsWire.
SPONSORS

16. ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended October 16, 2009, trading activity on the Mongolian Stock Exchange (MSE)
totaled 881.7 shares with 47 companies traded. Total market value of transactions was MNT 426.8
million. Total market capitalization of the 358 stock companies listed on the MSE was MNT 711.8
billion, and decreased by MNT 22.1 billion or 3.0% from the previous week.
The Top-20 Index decreased by 353.21 points or 4.5% compared to the previous week, closing at
7,480.48 points. The MSE Composite Index decreased by 133.43 points or 3.6% compared to the
previous week, closing at 3,555.60 points.
Most active stocks traded were: Naco tulsh (237,600 shares), Khuh gan (139,400 shares), Moningbar
(107,300 shares), Mongol securities (100,000 shares), and BDSec (73,400 shares).
Major share price percentage gainers were: Suu (72.5 %), Aduunchuluun (50.2%), HB oil (32.1%), UB
buk (15%), and Sor (14.8%). Major share price percentage losers were: Spirt bal buram (36.4%),
Guril tejeel Bulgan (23.4%), Talkh chicker (15.4%), Mongolian gegee (10%), and NIC (10%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Sept. 30, 2009 *-2.9% [source: NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
CURRENCY RATES – October 22, 2009
Currency name Currency Rate
US dollars USD 1440.47
Euro EUR 2154.51
Japanese yen JPY 15.88
British pound GBP 2375.05
Hong Kong dollar HKD 185.87
Chinese yuan CNY 210.98
Russian ruble RUB 49.44
South Korean won KRW 1.22
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.