August 24 2012

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 236 – August 24, 2012
NEWS HIGHLIGHTS:
Business
 MSCHCD warns politicization and media rumors hurt TT’s stock price;
 Haranga Resources positive on viability of Selenge project;
 Erdene expands size of Altan Nar target;
 Winsway enters alliance for marketing of Mongolian iron-ore in China;
 Aspire opens new chapter in Mongolia story;
 UK firm pierces horse-supplement market;
 Gobi Energy selects drill targets for 2012;
 Draig introduces changes to management;
 Energy Resources to provide employee apartments;
 Mongolia Legal Forum in UB;
 Mongolia, Malaysia to promote ties with September expo;
 Caterpillar CEO warns of economic uncertainty.
Economics
 Development Bank to invest MNT 100 billion in Mongolia's rails;
 UB mayor leads action plan to reduce UB traffic;
 Inner Mongolians petition for citizenship;
 Savings on the rise;
 Universities request 25-50 percent hike in tuition;
 Mineral wealth yet to be realized on MSE;
 Risking life in the gold rush;
 President promises lifetime payments to Olympic winners;
 Ulaanbaatar signs up nature's engineers to restore Tuul River;
 Vitamin D supplements reduce colds among Mongolia's children, says study;
 The “comfort curse”;
 Mongolia mining report – Q3;
 Coal comprises nearly half of all Mongolia's exports;
 The road ahead for coal trade with China;
 Coal miners make cuts as market dims;
 Vale expects recovery in iron ore prices;
 China’s copper demand grows to 43 percent of globe;
 China slightly eases rare-earths quotas.
Politics
 New government lineup formed;
 Gankhuyag confirmed as mining minister;
 MP Oyun nominated for minister of environment and green development;
 Altankhuyag to keep Cabinet on tight leash;
 Loose ends to June election;
 Sacked Mongolian Railway head receives re-appointment;
 Enkhbayar transferred to hospital after losing consciousness;
 China pushes Chalco purchase of South Gobi stake;
 Ulaanbaatar makes way for city planning;
 Minister of Justice submits legislation for Umnugobi court;

2.  Kuwaiti amir arrives in Mongolia for private visit;
 Multinational partners train at Khaan Quest 2012;
 Regional powers reluctant to form anti-China pact;
 Fossil dealer submits court papers for return of dinosaur skeleton.
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.
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BCM MONTHLY MEETING ANNOUNCEMENT
BCM‘s next monthly meeting for members will be Monday, August 27, 2012 at 5 pm at the Kempinski
Hotel Chinggis 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
- Welcome and Greeting: Piper Campbell, U.S. Ambassador to Mongolia
- Dr. Nigel Finch, Director of Admissions and Associate Professor, University of Sydney Business
School, ―Enhancing Sustainable Economic Growth in Mongolia by Improving Transparency and
Accountability in the Mongolian Public Sector‖
- Peter Benson, ADB Team Leader, MonRoad Sector Capacity Development Project, ―Repairing

3. Mongolian Roads"
- Caroline Clarke, Managing Partner, PricewaterhouseCoopers Audit LLC, ―International Women‘s
Forum and the Business Sector in Mongolia‖
- John Bachrach, Director, IEEC, member of IMC Montan, ―Mining Consulting – Adding Value in the
Sector‖
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
MSCHCD WARNS POLITICIZATION AND MEDIA RUMORS HURT TT‟S STOCK PRICE
The head of the Mongolian Securities Clearing House and Central Depository (MSCHCD) warned that
efforts to politicize Tavan Tolgoi and the spread of rumors are inflicting harm on the valuation of
the company's stock.
Now that many of Mongolia's citizens have become shareholders of Erdenes Tavan Tolgoi (E-TT) JSC,
thanks to the distribution of shares by government, Mongolians have a direct interest in the
performance of the company's eventual initial public offering. However, decisions by government to
allow citizens to trade in their shares for cash handouts has done harm to the company.
―...[I]t is better to invest in developing infrastructure, new technology and innovation, and expand
the operations of the company,‖ than handing out in cash payments said T. Gandulam, executive
director of MSCHCD. ―The Mongolian people should focus not on how much money they are going to
receive, but supporting this company that has so much potential so as to help it become a global
level competitor.―
Gandulam applauded the decision by government to stop trading for the moment, as trading could
affect the company's valuation. He said spreading unsubstantiated rumors in the media about
declines in the company's valuations would only do harm and that all Mongolians should keep this in
mind.
He added that N. Enebish, director of E-TT, had indicated to him that the IPO on the Mongolian
Stock Exchange (MSE), London Stock Exchange (LSE), and possibly the Hong Kong Exchange (HKEx)
would occur at the end of the first quarter of next year or during the beginning of the second.
Source: UB Post
HARANGA RESOURCES POSITIVE ON VIABILITY OF SELENGE PROJECT
Haranga Resources Ltd. reported viable possibilities for operations at its Selenge Iron-Ore project
for a mine life of up to 16 years and total value up to USD 1 billion.
An independent techno-economic assessment by ProMet Engineers completed on the Selenge
project confirms that even a resource at Haranga Resources' lower end of its exploration target
range justifies the exploration program underway there. However, admittedly a number of
potential external factors, such as the price of iron-ore, could change the valuations.
The assessment functions as a preliminary scoping study to attempt to ascertain likely project
economics and viability. The primary outcome for Haranga Resources is a confirmation that the
Selenge projects have considerable potential value if exploration targets are met and therefore will
continue its 9-rig drilling campaign. The company is currently preparing its mining license for the
project.
Source: Haranga Resources Ltd.
ERDENE EXPANDS SIZE OF ALTAN NAR TARGET
Erdene Resource Development Corp. defined a greater strike length of surface quartz at its main
target at Altan Nar as well as identified new exploration targets in its update on 2012 exploration.
The gold-bearing surface quartz target at the Discovery Zone at Altan Nar, a prospect for gold and
silver mineralization, now stands at 7.5 square kilometers. While detailed work has thus far been

4. restricted to the Discovery Zone at Altan Nar, recent exploration activity has resulted in several
new targets for testing. On average, the Discovery Zone has returned more than 30 meters of more
than 1 gram per ton of gold.
Results from the northwest extension at Altan Nar include an area where 10 of 15 samples returned
an average of 5.95 grams per ton of gold and 23.1 grams per ton of silver. Multiple other areas
returned rock samples with assays greater than 1 gram per ton of gold and up to 11.9 grams per
ton. Studies are now underway to define the character of the ore by ALS Ammtec in Australia.
Erdene Resources also receive approval for an environmental impact study for its Zuun Mod
molybdenum-copper project, located approximately 40 kilometers east of Altan Nar. Also, the
company has finalized the pit optimization study by Minarco-MineConsultant, part of the Runge LLC
group, which will provide data for its future pre-feasibility study.
Read more…
Erdene Resources received a 30-year mining license for 6,041 hectares that covers most of the Zuun
Mod project from the Mongolian government. A second license covering 358 hectares was received
in July, an area reportedly hosting 17.8 percent of the 168 million tons of inferred resource there.
Finally, early-stage surface exploration on the new Altan Arrow project, located 15 kilometers
south-southeast of Altan Nar, has uncovered an average of 3.5 grams per tons of gold and 60 grams
per ton of silver over a one-kilometer strike length. Samples include 57 grams per ton of gold and
416 grams per ton of silver. Erdene Resources has planned for addition exploration at Altan Nar in
the third quarter.
Source: Erdene Resource Development Corp.
WINSWAY ENTERS ALLIANCE FOR MARKETING OF MONGOLIAN IRON-ORE IN CHINA
Winsway Coking Coal Holdings Ltd. has entered into a long-term Strategic Alliance Agreement with
the Lung Mining Group for the marketing of Mongolian iron-ore products in China.
The agreement makes Lung Mining responsible for the production and supply of Mongolian iron-ore
products and delivery of such products to the Erlian China-Mongolia port. Winsway has exclusive
rights to purchase those products for the logistics and sale of these products in China.
The agreement allows for the purchase price to be set monthly and will span 25 years, beginning
this year.
Source: Winsway Coking Coal Holdings Ltd.
ASPIRE OPENS NEW CHAPTER IN MONGOLIA STORY
Aspire Mining Ltd. has already defined the second largest coking coal reserve in Mongolia, but
additional coal intersected during drilling outside the existing resource at its Ovoot coking coal
project could increase the size.
There is still plenty of room for Ovoot to grow into a Tier 1 resource, with only around 20 percent
of the Ovoot Basin explored by Aspire Mining. The coal miner has identified an extension of coal 800
meters to the northeast that could potentially add to existing open-cut coal reserves. The further
exploration success now potentially brings the Ovoot project open-pit coal resource and reserves
within around 1 kilometer of the underground resource to the northeast.
The best results so far have been in a hole that intersected 12.5 meters of coal from 195 meters.
Aspire Mining is also currently drilling 300-meter holes to test for rock strengths that would allow
for wall designs for below 300 meters and could expand reserves further.
―The existing 178 million-ton coking coal reserve base is significant and already the second largest
coking coal reserve in Mongolia,‖ said David Paull, managing director. ―There is the potential with
these resources extensions and geotechnical studies to see a further increase of our coal reserves.‖
Read more…
Ovoot's coal reserve is the fourth largest among the source's ASX-listed coal explorers and
developers, and the second largest in Mongolia, after Tavan Tolgoi. With only 20 percent of drilling
and evaluation complete, Aspire Mining is in the early stages of developing one of the world's
largest undeveloped coal resources. The miner also receives support from Noble Group Ltd., one of
the world's largest commodity trading and logistics companies to move coal worldwide.

5. Aspire Mining is now moving exploration to the Hurmit prospect, located in the Central Ovoot Basin
around 20 kilometers east of the Ovoot project. The company has received final approval for
accessing drill sites for an initial exploration program of 2,000 meters there. It is targeting near
surface coking coal for open-pit mining and is expected to complete this year's exploration program
by the end of October.
Source: Proactive Investors
UK FIRM PIERCES HORSE-SUPPLEMENT MARKET
Equine Products UK Ltd. has branched into the Mongolian market, with a EUR 10,000 (USD) order.
Four pallets of supplements from Equine Products will be delivered to Ulaanbaatar. Pharmaceutical
importer EuroPharma will supply the country's horse racing herdsmen, as equine tourism is said to
be thriving. Equine Products' supplements will predominantly be used by herdsman taking part in
the Naadam festival, which features wrestling, archery, and, of course, horse racing.
―This is an exciting new market for us to be exporting to, and Mongolia has a very different way of
doing business than the Middle East, for example.‖ He later added, ―Horses are sacred in Mongolia
and there is new wealth in the country, which is being invested in the equine industry.‖
Equine Products' product range includes nutritional support products for joints, hooves, skin,
respiratory, health, digestion, and behavior.
Source: Bdaily
GOBI ENERGY SELECTS DRILL TARGETS FOR 2012
Gobi Energy Partners LLC reported that it was able to select potential drilling locations for its 2012
campaign in its press release highlighting the second quarter of 2012.
Gobi Energy, a subsidiary of Manas Petroleum Corp., picked its targets based on its interpretation of
2D seismic data acquired from 2011 along with the result of passive seismic tests. Three prospects
were selected as potential drilling locations with plans to drill two in 2012.
The company planned to spud its first well, Ger Chuluu A1, this week after completing its 2D
seismic campaign. It has planned for a well 1,200 meters deep.
Source: Manas Petroleum Corp.
DRAIG INTRODUCES CHANGES TO MANAGEMENT
Draig Resources Ltd. has made a series of changes to its board and management structure that
includes the appointment of an executive director and a non-executive director.
Andrew Harrison, who served as a non-executive director, was appointed as executive director to
lead the business development and commercial efforts of the company. Harrison has significant
experience in senior management and board positions in publicly listed companies. He has held
senior positions in a number of major organizations, including Brambles Industries Ltd.; and has
playing leading roles in strategy, management, and business development across a number of
sectors.
Draig Resources also appointed Colwin Lloyd as non-executive director. Lloyd is a geologist with
more than 22 years' experience in mining and exploration across a broad range of commodities and
geological regions. Jade Styants has resigned as a non-executive director, citing increased executive
work commitments.
Source: Draig Resources Ltd.
ENERGY RESOURCES TO PROVIDE EMPLOYEE APARTMENTS
Energy Resources, a subsidiary of Mongolia Mining Corp., will purchase an apartment complex from
MCS Property in a bid to attract more talent for its operations.
MCS Property has agreed to sell the apartments, effective 31 March 2013. The apartments are
designed to be self-contained, fully furnished residential units, in addition to a guesthouse with a
restaurant at the ground floor. The residential units will house modern computer equipment, a
gym, lobby, and laundry facilities. Both MCS Property and Energy Resources fall under the umbrella
of the MCS Ltd. umbrella.

6. Energy Resources has opted to purchase the apartments for employee use. The company believes
that providing homes would help attract and relocate employees to Tsogttsetsii Soum as well as
attract people with families.
Source: Mongolia Mining Corp.
MONGOLIA LEGAL FORUM IN UB
Hogan Lovells is partnering with Hong Kong International Arbitration Center to host the Mongolia
Legal Forum: Investment Opportunities and Mitigating Risks in Ulaanbaatar on 20 September.
Dedicated to both foreign investors and Mongolian companies, the forum will explore ways in which
companies can exploit commercial opportunities while also mitigating their risks, including by
structuring for threat protection and providing international arbitration of commercial disputes.
Source: Hong Kong International Arbitration Center
MONGOLIA, MALAYSIA TO PROMOTE TIES WITH SEPTEMBER EXPO
A mini-exposition highlighting Malaysian education, trading and tourism will be held in Ulaanbaatar,
Mongolia from 17 to 18 September.
The expo is part of a promotion to promote bilateral relations between Malaysia and Mongolia, said
Malaysian ambassador to China, Datuk Iskandar Sarudin.
―Some of the participants plan to explore business opportunities in Mongolia, especially mining,
hotels, construction, consumer products and the power sector,‖ he said. He said several Beijing-
based companies had agreed to participate in the promotion of Malaysian products.
He added there was interest in the education sector to attract Mongolian students to Malaysian
education and technology. Among the institutions taking part are Limkokwing University of Creative
Technology (LUCT) and the University of Management and Technology. Noting that LUCT and the
Albukhary Foundation offered scholarships to Mongolian students, the envoy was optimistic that this
would contribute in increasing the number of Mongolian students in Malaysia
Source: Borneo Post
CATERPILLAR CEO WARNS OF ECONOMIC UNCERTAINTY
The global economic outlook is more uncertain now than at the start of the financial crisis in late
2008, the chief executive of Caterpillar, Doug Oberhelman said. Global outlook is important
because it has a direct effect on the commodity prices Mongolia depends on to fuel its growth.
The chief executive officer of the world‘s largest maker of construction equipment, which is
supplied in Mongolia by official distributor Wagner Asia, also predicted that it could take another
five years before Europe‘s economy begins to see growth again.
―There‘s never been a more unpredictable set of tea leaves than right now. Even in 2008 and 2009,
US housing was already dying and had been for two years. We saw that,‖ Oberhelman is quoted as
saying in the Financial Times.
―I don‘t think the situation is as grave as it was in 2008, but the uncertainty, the storm clouds are
around things that none of us know about—like what will happen with the political situation in
Europe,‖ he said.
Oberhelman is cited as saying that barring Europe, most big economies looked unlikely to contract,
although he said it was not clear whether they would grow significantly.
Source: Mining Weekly
ECONOMY
DEVELOPMENT BANK TO INVEST MNT 100 BILLION IN MONGOLIA'S RAILS
The Development Bank of Mongolia has decided how it would provide financing for the Tavan Tolgoi
coal mine and Mongolia's railways.
The governing board of the bank held two meetings to discuss how to invest the USD 600 million it
raised from debt offerings where it decided on these two large projects that are integral to the

7. country's development. The Development Bank will provide USD 100 million for the development of
technical economic evaluation for E-TT. The delay to financing may have been due to caution that
the government may have opted to spend that money through handouts from the Human
Development Fund (HDF).
State-owned miner Erdenes Tavan Tolgoi (E-TT) JSC will receive its funding through several
installments. The bank‘s governing board has developed a scheme to invest its USD 600 million by
February next year through a series of short-medium-and long-term investments via government
bonds. This will help mitigate the losses experienced by the Development Bank on interest paid on
the USD 580 million debt offering it released earlier this year, as ordered by Prime Minister N.
Altankhuyag last week.
Still to be decided on are the 100,000 Homes project and the MNT 110 billion worth of road and
bridge construction projects being planned. The Development Bank is also considering the prospect
of partnering with commercial banks on especially large projects.
Source: Undesnii Shuudan
UB MAYOR LEADS ACTION PLAN TO REDUCE UB TRAFFIC
Ulaanbaatar Mayor E. Bat-Uul received approval for his action plan to reduce traffic jams from the
Ulaanbaatar City Assembly.
The action plan includes several measures, including the compulsion for state workers to use public
transport instead of private cars. In January 2012, Ulaanbaatar housed 77,000 of the 155,000 state
workers in Mongolia. Beginning next Monday, they will have to leave their cars at home, instead
having to take public transport to get to work. In light of this, the City Administration has advised
public transport companies to improve their services.
Related to this initiative, the city assembly has also made a change to the timetable of some
universities and private secondary schools and supermarkets. The assembly has also decided to
restrict private cars from the central areas of Ulaanbaatar between 8 a.m. and 10 p.m. according to
the digits on their license plates. One directive is cars with license plates ending with digits one and
six may not enter the small ring and Peace Square on Monday. The same applies for those ending
with two and seven on Tuesday, three and eight on Wednesday, four and nine on Thursday, and
zero and five on Friday.
The assembly also discussed a proposal to introduce school buses to Ulaanbaatar. General Manager
of the City of Ulaanbaatar Ch. Bat said the city administration has begun negotiations with some
schools for the introduction of school buses.
Source: News.mn
INNER MONGOLIANS PETITION FOR CITIZENSHIP
Members of a citizen organization for Mongolia's Inner Mongolian residents are requesting full
citizenship to Mongolia.
The members of Oluulaa are guest workers from China's Inner Mongolia autonomous region. The
group plans to deliver to President Ts. Elbegdorj a list of signatures it collected from Inner
Mongolian residents who would like to be citizens.
Source: Unuudur
SAVINGS ON THE RISE
Savings in commercial banks grew by 26 percent in the first six months of 2012 compared with a
year ago reported the Bank of Mongolia.
In an official report by the Central Bank it says commercial bank savings grew by MNT 900 billion to
MNT 4.3 trillion. The savings may be due to the distribution of government handouts this year as
evidenced by the 25 percent growth in individual savings to MNT 2.8 trillion.
The growth of savings is a strong sign for the economy, but may result in greater competition
between commercial banks. In the past high interest rates only seemed to make loans more difficult
to attain while individuals failed to take on the opportunity in collecting interest from savings. The
average annual interest rate for savings is between 6 and 7.2 percent for USD and 13.4 to 15.5

8. percent for tugrugs for term deposits.
Source: Zuunii Medee
UNIVERSITIES REQUEST 25-50 PERCENT HIKE IN TUITION
Representatives from a number of Mongolia's universities have requested a 25 to 50 percent hike in
tuitions as well as a delay to the start of the new school year.
With the coming of the start of the 2012-2013 academic year, recently appointed Minister of
Education and Science L. Gantumur met with the directors of some Mongolia's higher education
institutions to discuss the state of education. The directors and representatives of institutions such
as the National University of Mongolia, Mongolian State University of Education, and Mongolian
University of Science and Technology gathered to propose the tuition hike, citing the need to
protect Mongolian education from being taken over by Korean and Japanese higher education.
Those in attendance requested that the start of the academic year be postponed by one month due
to construction under way on roads in the city and instead begin 1 October.
The minister said he would take the request under serious consideration. He added that the
financial difficulties of Mongolian institutes were of great importance, despite their rankings and
public reputations.
Source: Info Mongolia
MINERAL WEALTH YET TO BE REALIZED ON MSE
The discovery of vast mineral deposits in the hinterlands is driving progress at the Mongolian Stock
Exchange (MSE), but society is struggling to keep up with the furious growth of the nation‘s
economy.
Located in a former children's cinema on Sukhbaatar Square, the MSE was opened in 1993 as a way
to privatize government-owned assets after almost 70 years of Soviet rule. It originally had 30
brokers and was open for two hours a week.
Times have changed, however. The MSE is one-half way through a three-year, USD 14 million
partnership with the London Stock Exchange (LSE), and installed a top-of-the-line brokering
software system called Millennium Exchange, considered the best in the world. The MSE was the
world's top performing exchange in 2010; last year it was number two, after Venezuela.
Foreign involvement to develop the mines and a growing relationship with China is not without its
problems. Nor is the domestic political situation entirely stable, with the former prime minister
having been jailed for four years last month for corruption and a new leader, N. Altankhuyag, from
the Democratic Party (DP), confirmed in office only nine days ago.
The current government is opposing a near USD 1 billion bid from Aluminum Corp. of China Ltd.
(Chalco) for SouthGobi Resources Ltd. An expected stock market floatation by Tavan Tolgoi JSC,
expected for both the Mongolian and London Stock exchanges (and Hong Kong too if all goes
according to plan), was pushed back from this year to early 2013 for reasons many attribute to
political interference.
For now, only 40 of the 350 companies listed on the exchange are actively trading; daily trading
volume rarely exceeds USD 150,000. The exchange has delivered 17 IPOs in its history. But The MSE
has drafted a new Securities Law which will make it easier for Mongolian companies to list on the
exchange—and for foreigners to invest in them.
Source: The Guardian
RISKING LIFE IN THE GOLD RUSH
Mongolia is experiencing a gold rush. But with 40 percent of the population living in poverty, around
100,000 people work in deadly unregulated mines in order to survive.
"When I look at families with horses, I feel so sad tears well up in my eyes." Sukhbaatar used to be a
nomadic herder. "That was when I was a real man with horses," he said. Now he is a miner.
Two years ago, all of Sukhbaatar's livestock were killed in a long harsh winter know as a zud. Severe
droughts and zuds in recent years have killed an estimated 8 million animals.
Sukhbaatar's destination was Uyanga, a mining town on the steppe. The mining boom has created a

9. new class of super-rich, but more than a million people live in acute poverty, risking their lives for
a few pounds a day working in these unregulated mines.
People work at holes in the ground, that look a little like craters on a moon. Smoke from dung fire
lit to melt layers of permafrost rises out of some of them. One person can fit into each hole,
lowered down by rope, but there is nothing in the hole to support the walls.
"The ground collapses. Some people are saved and some have died buried in the ground,"
Sukhbaatar admits.
While modern mining is done by big machines, with stringent health and safety rules, Sukhbaatar,
Gansuvd, their daughter and son-in-law use pick axes and shovels, which is grueling work. Digging
down to the gold seam on the ancient river bed can take days. They are lucky to make USD 6 a day.
The government in this part of Mongolia refuses to issue licenses for people like Sukhbaatar because
they claim that they damage the environment. But further up the valley, big companies have been
given licenses to mine gold on an industrial scale. They have pledged to make good the
environmental damage when they have finished mining in the area. But Sukhbaatar believes they
will take what they want and move on.
Source: BBC
PRESIDENT PROMISES LIFETIME PAYMENTS TO OLYMPIC WINNERS
President Ts. Elbegdorj has promised to support the athletes who won medals in the past and future
Olympics financially for the remainder of their lives.
The president made the announcement at an official ceremony held for the athletes that was
attended by Prime Minister N. Altankhuyag and Deputy Minister and head of Mongolia‘s London 2012
team M. Enkhbold as well as the victorious athletes and coaches of every generation who earned
medals for the Olympics. Elbegdorj decreed to grant monthly cash payments to Mongolian citizens
for the lifetime of anyone has earned a medal. The initiative was approved on 16 August by
Parliament.
To any athlete who earned an Olympic gold medal will be MNT 4 million a month, while silver
medalists would receive MNT 3 million, and bronze medalists MNT 2 million. Furthermore, any
athlete who earned a gold medal at the World Championships, another sporting event that features
similar events to the Olympics, would receive MNT 2 million a month, while silver and bronze
medalists would receive MNT 1 million a month.
Source: UB Post
ULAANBAATAR SIGNS UP NATURE'S ENGINEERS TO RESTORE TUUL RIVER
Ulaanbaatar is importing foreign experts to combat falling water levels in Mongolia's third longest
river. Qualifications include sharp incisors, flat tails and webbed toes.
If all goes according to plan, the task of restoring the headwaters of the Tuul River will be left to
the Eurasian beaver. At home, due to poaching, their numbers have declined sharply in the past 20
years. But in May, Germany gifted 14, and Russia another 30—just for this special task.
―Beavers are diplomats of the environment,‖ said Yu. Delgermaa, directors of the Nature Protection
Agency's office at Ulaanbaatar's City Hall. The agency is in charge of the beaver introduction
program.
Many scientists believe beavers can contribute to river ecosystem regeneration and restoration
because their natural dams help maintain river levels during dry spells, while the flooded areas help
nourish the soil and promote plant growth.
Water levels in the Tuul have been declining since the late 1990s, Delgermaa said. A 2003 survey
conducted by the City Council revealed 22 of 72 tributaries of the Tuul had dried up. Sections of the
riverbed often dry out each spring.
―Fifty to 60 percent of Mongolia's population lives along the Tuul. It's a very important river and we
have to do what we can to make sure we protect it for the future. The beavers will be the cheapest
and most effective natural method,‖ said Delgermaa.
Samjaa Ravchig, the head of the scientific team overseeing the program, warned that this is a long-
term project. He explained that in Bavara, after the last beaver had been killed there in the 1960s,

10. it took nearly 10 years for beavers to successfully adapt and build their dams.
Following the Communist collapse in 1991, the Bulgan River sub-species were poached until
numbers plummeted to about 1,000, said Ravchig. Although the population is making a comeback, it
is still listed as critically endangered in the Mongolian Red Book—a reason why these indigenous
beavers were not deployed for this experiment.
Source: Pearly Jacobs
VITAMIN D SUPPLEMENTS REDUCE COLDS AMONG MONGOLIA'S CHILDREN, SAYS STUDY
A study of Mongolian third and fourth graders in Ulaanbaatar has suggested that low vitamin D
levels are associated with an increased risk of colds.
The Blue Sky Study, conducted by Carlos Camargo of Massachusetts General Hospital in Boston and
his colleagues, included the observation of 247 third and fourth graders and is apparently the first
to show that supplementing children's intake of the vitamin can reduce their risk of colds.
Ulaanbaatar was chosen because of the combination of it extremely cold climate and high latitude,
which restricts the amount of time children play outside in the sun. Sun shining on the skin is a
major source of vitamin D. Moreover, foods and milk in Mongolia are not routinely supplemented
with vitamin D.
At the beginning of the study, the children had an average vitamin D level in their blood of about 7
nanograms per milliliter. Any level below 20 monograms is considered a deficiency. About half of
the children (104) received normal milk with no vitamin D and the rest received daily milk fortified
with 300 international units of vitamin D. After three months, blood levels of the vitamin in the
control group were unchanged, while the level in the group who received supplements rose to an
average of 19 nanograms per millimeter. At the end of the three months, the children's parents
were interviewed about the incidence of colds. The children who received vitamin D supplements
had 50 percent fewer colds.
Source: LA Times
THE “COMFORT CURSE”
Mongolia has a real chance to be a wealthy country, with good health and happiness. But the
fortune comes with great challenges.
One of the curses of quick and massive wealth for some countries is the increased obesity of its
people. People grow lazy, have others work for them, and eat "modern" foods. This country, and
others like it, can now sees the health problems that spoiling a population have wrought in many
countries. Those countries are now investing in cures, medicines, and more, but are they investing
in incentives to get their people out exercising and to be active?
For the health of a population, wealth can be both a curse and a gift. It would be easy for yet
another country that has a chance at great wealth to spoil its children of the future. However,
Mongolia has a chance to turn that curse around by giving the right incentives for healthier lives and
by building healthier cities, towns and villages.
Business and government could spearhead this aim by giving cash incentives for losing weight,
getting blood sugar down, and having better health reports for their employees and their families.
Fatty and sugary foods could be taxed. Alcohol and cigarettes could be taxed more heavily. But it
will be up to Mongolia, not an outsider, to decided, based on its culture, people-to-people
relations, and traditions. However, it would help if those in leadership looked at the rest of the
world and saw how quick and gigantic wealth has affected the health of people of many countries.
Author Paul Sullivan has been a professor of economics at the National Defense University since July
1999. He is an adjunct professor of security studies and science, technology and international
Affairs at Georgetown University.
Source: UB Post
MONGOLIA MINING REPORT - Q3
Growth in Mongolia's mining industry will be led by a rampant increase in coal copper and gold
production.

11. The downward trend in Mongolia's mining sector is expected to come to an abrupt halt as the sector
undergoes phenomenal growth. The impressive growth rates in copper and gold production will be
driven by the Oyu Tolgoi mine. Copper production levels are expected to reach 559,000 tons by
2016, with an average growth rate of 27.9 percent from 2010 levels. Decreasing ore grades at the
country's largest mines have led to a slow decline in Mongolia‘s copper production. As for gold,
production is expected to reach 892,000 ounces.
Coal production is expected to more than quadruple to 107 million tons by 2016. Growth will be
driven by SouthGobi Resources Ltd., a subsidiary of Turquoise Hill Resources Ltd., as the company
continues to invest in the Ovoot Tolgoi mine, currently the country's largest coal mine.
Mongolia has made significant progress over the last decade to improve its business environment.
Most importantly, the government rescinded the 68 percent windfall tax in early 2011, which had
been a significant impediment to foreign investment into the country. The repeal of that tax led to
a wave of investment including the completion of the Oyu Tolgoi investment agreement, which
brings billions of dollars of investment into the country.
Mongolia's mining sector is dominated by Turquoise Hill and state-owned players such as Erdenes
MGL and Erdenet. Small companies such as Centerra Gold and Erdene Resource Development also
have a stake in the country and have substantial exploration projects. The mining sector is
expected to grow more fragmented.
Source: Business Wire
COAL COMPRISES NEARLY HALF OF ALL MONGOLIA'S EXPORTS
Coal accounted for 44.6 percent of all exports in the first eight months of 2012, reported the
National Statistical Office.
With total external trade at about USD 7 million, exports comprised USD 7.71 million with imports
at USD 4.3 million. External trade showed a 9.4 increase of USD 604 million compared to the same
period of the previous years, of which exports comprised USD 116.1 million and imports 12.8
percent. The foreign trade balance showed a deficit of USD 1.6 billion, a 30.3 percent increase
compared to the same period last year.
Total exports were comprised of coal of 44.6 percent, copper concentrate of 19.2 percent, iron ore
of 12.1 percent, crude oil of 7 percent, zinc ore with concentrate of 2.4 percent, and fluoride ore
with concentrate of 2.2 percent. Semi-manufactured forms of gold and molybdenum comprised 1.9
percent and 0.9 percent, respectively
Source: Info Mongolia
THE ROAD AHEAD FOR COAL TRADE WITH CHINA
Mongolian Mining Corp. (MMC) broke ground on a rail line that will link its Ukhaa Khudag coking coal
mine to the Chinese border, crossing Gashuun Sukhait, helping to move coal far more cheaply than
the 400 trucks currently doing the job.
MMC sees China, which took 99 percent of Mongolia's coal exports in 2011, as Mongolia's best option
for thermal and coking coal exports. Low coal production costs can make Mongolian coal highly
competitive in seven nearby provinces that consumed more than a billion tons of coal in 2010. The
per capita steel demand levels in the populous and fast-growing provinces of Central and Western
China are still only 40 percent of the levels seen on China's East Coast. As the Chinese economy
recovers, these regions will provide growth markets able to absorb rising Mongolian coal exports.
Mongolian coal projects should expect to operate on Chinese regional coal prices, which will likely
rise closer to global seaborne princes as the Chinese government consolidates the mining sector and
caps domestic coal production by 2015 and China's proportion of seaborne thermal coal supply rises.
Using mine-mouth power plants to sell energy across Mongolia's border to Russia and China would
also serve as an alternate method of monetizing coal reserves.
Exporting coal through Russia is cost prohibitive and rising Russian exports to Asia already strain
Russia's rails and Pacific ports. A 90 million-ton-per-year decline in European and Russian coal
demand since 2000 has re-oriented coal producers toward the Asian market. With European coal
demand in a death spiral, politically savvy Russian coal exporters like SUEK and Mechel will fight

12. hard (and probably win) to keep Mongolian coal off Russian rail lines and out of their Pacific Coast
terminals.
Mongolia could accept Chinese regional prices to become a low-cost supplier to North-Central China
and go for volume. Mongolian mines will, however, face competition from new low-cost thermal
coal supplies from Xinjiang, but the two sources have similar mining costs and Mongolian miners will
have shorter shipping distances to the North Central Chinese market.
Source: China Sign Post
COAL MINERS MAKE CUTS AS MARKET DIMS
BHP Billiton said on Thursday that worsening market conditions could lead to job cuts at its coal
mines in Australia, a country that competes with Mongolia for coal export sales to China, as slowing
industrial activity in China forces global miners to scale back operations.
Global coal output is set to shrink over the next year or two as miners grapple with a combination
of low prices, weak demand and currency headwinds, and high-cost Australian operations are under
particular pressure. Australia's mining boom has hinged on China importing hundreds of millions of
tons of iron ore, coal, copper, and other minerals for most of the past decade, but China's economy
is now growing at its slowest pace in more than three years. BHP earlier this year closed one of the
mines outright, citing poor profit margins, while closest rival Rio Tinto PLC, also said in July it was
cutting jobs in Australia.
Softening demand growth in China has hammered prices of coal, iron ore, and other commodities to
their lowest levels in years, bruising the profits of miners such as BHP Billiton, Brazil's Vale SA,
Xstrata Ltd., and Anglo American PLC. BHP Billiton abandoned an USD 80 billion five-year spending
plan announced in 2011 when commodities markets were still firing, and has since signaled it would
review its project pipeline.
Thermal coal producer Xstrata said this week it had cut some of its contractors at its Australian coal
operations ―given current market conditions‖. Spot metallurgical coal prices have dropped to just
over USD 170 a ton, down over 20 percent from the beginning of July. China, too, which in addition
to being the world's top consumer of coal is also the top producer, said on Wednesday it would cut
its coal output targets in three top-producing regions by up to 7 percent due to a supply glut.
Source: Reuters
VALE EXPECTS RECOVERY IN IRON ORE PRICES
Brazil's Vale SA, the world's number two mining company, expects the prices of iron ore, a
commodity of growing importance in Mongolia, to start recovering in September, Chief Executive
Murilo Ferreira said. Vale operates in Mongolia through its subsidiary Tethys Mining.
The company considers iron ore stocks in China to be low and expects annual growth in the world's
second largest economy to between 7 percent and 7.5 percent. The low price of iron ore, however,
may cause Vale to reevaluate investments in its potash project in Canada, Ferreira said.
Source: Reuters
CHINA‟S COPPER DEMAND GROWS TO 43 PERCENT OF GLOBE
China's apparent copper consumption advanced by 905 kilotons to 4,414 kilotons in the first six
months of this year, which represented just over 43 percent of global demand, as per latest data
released by World Bureau of Metal Statistics (WBMS). Mongolia will rely on China for to buy up the
copper from Oyu Tolgoi once initial and commercial production begins.
According to WBMS data, apparent copper demand dropped 8.4 percent year-on-year to 1,595.2
kilotons in the same period. The copper market recorded a deficit of 129 kilotons in January to
June 2012, which follows a surplus of 433 kilotons in the whole of 2011.
Reported stocks rose by 3.4 kilotons during June and ended the month 163 kilo tons lower than at
the end of 2011. No allowance is made in the consumption calculation for unreported stock
changes, particularly in the Chinese government stockpile.
Global copper mine production in January to June was 8.23 million tons, which was 3.2 percent
higher than in the same period in 2011. Global refined production rose to 10.1 million tons up 3.1

13. percent with significant increases recorded for Spain (56.8 kilotons), Iran (11.8 kilotons), and India
(20.7 kilotons). Chilean output fell by 70 kilotons. Global consumption for January to June 2012 was
1,201 kilotons, the figure for the 2011 calendar year was 19,465 kilotons.
Source: Scrap Monster
CHINA SLIGHTLY EASES RARE-EARTHS QUOTAS
China's government erased its restrictions on rare-earth exports for the first time since 2005 in an
apparent nod to a trade fight over Beijing's tight global grip on production of the strategically
important minerals. China's tight grip over the industry led to demand to exceed supply in some
areas and made Mongolia a possible target as a new source for the key ingredients of many high-
tech gadgetry.
Industry executives, however, said the move will do little to shake China's dominance over a market
crucial to industries as diverse as oil refining, electric vehicles and ballistic missiles. China's Ministry
of Commerce said Wednesday that it will permit 2.7 percent more volume of rare earth—30,996
metric tons—to leave the country this year than it did in 2011. The increase follows a number of
tighter limits imposed since 2005 that led to major price surges beginning about two years ago,
making some of the elements more valuable than gold.
The restrictions raised cries from industries dependent on the minerals. In July, the World Trade
Organization (WTO) accepted a complaint from the United States, the European Union, and Japan,
putting pressure on China at a time when it is contending with other trade disputes with the United
States, ranging from cars to solar panels. China contends its export limits are one of a number of
efforts spurred by environmental concerns.
―Pressure on China [to loosen export controls] has been quite high,‖ said Frank Tang, an analyst at
investment bank North Square Blue Oak. He said China is ―now signaling to the wider world not to
worry.‖
But industry observers say the move comes as China's rare-earth export limits become less
important. Chinese miners have not come close to exporting as much as permitted during the past
two years as manufacturers look to reduce their use of Chinese-produced minerals, leading the
sharp drop in prices.
Companies in the United States, Australia and elsewhere are also ramping up production.
Meanwhile, China is moving up the rare-earth value chain, increasingly processing the minerals into
high-end products like magnets, adding to its sway in the market even if limits are eased.
Source: ABC News
POLITICS
NEW GOVERNMENT LINEUP FORMED
The new Democratic Party (DP)-led coalition government lineup has been officially completed, with
Parliament approving the last five cabinet members Monday.
The five newest members included D. Terbishdagva, who will serve as deputy prime minister; and
four ministers nominated by the Justice Coalition and the Civil Will-Green Party (CWGP). The
Justice Coalition‘s Ch. Ulaan, M. Sonompil and N. Udval were appointed finance minister, energy
minister and health minister, respectively. CWGP leader S. Oyun is the minister for environment
and green development. Last Friday, Parliament approved 13 ministers nominated by the DP,
including Minister for Foreign Affairs and Trade L. Bold, Defense Minister D. Bat-Erdene, Justice
Minister Kh. Temuujin, Minister for Economic Development N. Batbayar, and Minister for Mining D.
Gankhuyag.
The new coalition government has 16 ministries and 19 cabinet members, including prime minister,
deputy prime minister and head of Cabinet Secretariat. Mongolia‘s last government had 11
ministries and 15 cabinet members.
Source: CRI English

14. GANKHUYAG CONFIRMED AS MINING MINISTER
Parliament has confirmed D. Gankhuyag as the minister of mining, a move that has sparked
speculation over whether the new government intends to review existing mining investments deals
for its massive mineral resources.
Gankhuyag, 49-year old chemical engineer and ruling Democratic Party member, previously
demanded that some contracts with foreign mining companies in Mongolia be renegotiated to give
the state a larger stake in the biggest mines. He was confirmed by Parliament in a late session last
Friday.
In 2011, Gankhuyag was one of several lawmakers to sign a letter urging Rio Tinto PLC and
Turquoise Hill Resources Ltd. to renegotiate a 2009 agreement for the USD 13 billion Oyu Tolgoi
copper and gold mine and increase the government stake to 50 percent from 34 percent.
At the time Turquoise Hill Resources was known as Ivanhoe Mines. Under the original 2009
agreement, Mongolia can only increase its share to 50 percent after 30 years.
"Ganhuyag is known to investors for having been tough on the Oyu Tolgoi investment agreement.
However, we view that his position was motivated by a political battle against the government of
the time," Origo Partners analyst Dale Choi, told Reuters.
"Now he is part of the new government himself and does not have to continue with this hardline
position. Possibly now he will be bound only by the election platform of the Democratic Party."
Source: Michael Kohn
MP OYUN NOMINATED FOR MINISTER OF ENVIRONMENT AND GREEN DEVELOPMENT
The Civil Will-Green Party (CW-GP) announced in a press release today that it has nominated MP S.
Oyun for the cabinet seat slotted for them in return for joining the grand coalition. Previously it
was announced that MP B. Demberel, chairman of the Mongolian National Chamber of Commerce
and Industry (MNCCI) would be nominated but he publicly announced his decline.
Source: CPS International
ALTANKHUYAG TO KEEP CABINET ON TIGHT LEASH
The Premier of Mongolia, N. Altankhuyag, has introduced new rules to the Cabinet of Ministers with
the submission of names for the nominees of the members of the Cabinet.
The new rules include the revocation of weekend holidays, 12 hour workdays, and the prohibition of
visiting bars. The complete rules are as follows: no weekend holidays; daily working hours for the
government and Cabinet Ministers will span until 21:00; no receptions other than diplomatic ones;
no visits to pubs and bars during office terms; implement orders and directions given by the
Premier without delay; and no fights or disorderly, immoral conduct.
Source: Info Mongolia
LOOSE ENDS TO JUNE ELECTION
Two candidates from the Mongolian People's Party (MPP) who won in the June 2012 parliamentary
election in Uvurkhangai Aimag have been stripped of their offices after a ruling by the Khan-Uul
District Court of Ulaanbaatar that they are guilty of violating the Law on Elections.
The oath swearing ceremony for Mongolia's recently chosen MPs will be delayed due to the 20
August conviction of S. Chinzorig and N. Tumurkhuu. It will next be up to the Electoral Committee
and General Election Commission to decide whether the ceremony will be held.
Currently 71 of the 76 seats available for MPs have confirmed winners. The final candidate waiting
for confirmation is Justice Coalition member Ts. Oyunbaatar.
September will see the conclusion to June's election with runoff elections to settle instances where
none of the candidates received the 28 percent vote required to declare victory. Democratic Party
(DP) member L. Erkhembayar and MPP member D. Sumiyabazar will participate in a runoff vote for
Songinokhairkhan District as well as MPP candidates B. Batzorig and D. Arvin for the Bayan Zurkh-
Nalaikh electoral district.
Source: Info Mongolia

15. SACKED MONGOLIAN RAILWAY HEAD RECEIVES RE-APPOINTMENT
B. Batzaya, former head of the Mongolian Railway, was re-appointed by the State Property
Committee.
Batzaya was previously sacked by Zayabai, charge d‘affaires of the State Property Committee.
Batzaya sued against this decision, to which the court has now resolved the decision in favor of
Batzaya.
Source: Business Mongolia
ENKHBAYAR TRANSFERRED TO HOSPITAL AFTER LOSING CONSCIOUSNESS
N. Enkhbayar, Mongolia's third president who was recently sentenced to four years of prison on
charges of graft, has been transferred into the hospital.
The health condition of the Mongolian People's Revolutionary Party leader (MPRP) has deteriorated
during his time in the 461st prison in Tuv Aimag. Enkhbayar fell unconscious on 15 August, 2012,
reported the MPRP's media department, which attributed the cause to extreme exhaustion following
his last bout in prison when Enkhbayar went on a hunger strike.
Doctors and physicians appointed by the Ministry of Health were reportedly denied entrance into
the prison to examine Enkhbayar. The following morning about 100 of Enkhbayar's supporters
gathered outside the prison to demand his transfer to a hospital, to which he was transferred at
around 3 p.m. on 20 August.
Source: Info Mongolia
CHINA PUSHES CHALCO PURCHASE OF SOUTH GOBI STAKE
Dai Bingguo, Chinese state councilor and top national security advisor to President Hu Jintao, will
visit Ulaanbaatar officially to meet Mongolia's newly installed government, but Dai's timing is likely
governed by a growing crisis in Sino-Mongolian mineral trade and investment.
It is certain that Dai will make a last-ditch effort to influence Mongolian authorities to approve the
USD 926 million bid of China's state-controlled Aluminum Corp. of China Ltd. (Chalco), which is
investing increasingly in coal and iron projects worldwide, to take a 58 percent controlling stake of
SouthGobi Resources Ltd.
SouthGobi Resources' majority stakeholder is Turquoise Hills Resources Ltd., formerly Ivanhoe Mines
Ltd. Turquoise Hills needs the money from the stock sale to fulfill the contractual terms of its
partnership with multinational mining giant Rio Tinto PLC to develop Mongolia's large copper-gold
deposit known as Oyu Tolgoi, located 80 kilometers north of the Sino-Mongolian border.
Chalco originally had given itself until 4 July to complete the Ovoot Tolgoi stock purchase, but has
been forced to extend the finalization period twice for negotiations with Mongolian authorities. It is
expected that Dai will offer incentives to Mongolia to permit the deal to go forward, but SouthGobi
Resources chief executive Alex Molyneux was quoted as believing that the government had made
any Chalco acquisition impossible.
However, a further card that Dai will carry into his discussion is that Turquoise Hills and Rio Tinto
must conclude a deal to import power from China at least for a few years in order for the big Oyu
Tolgoi copper-gold project to begin operations. Although talks have been ongoing for a year, there
has been no agreement.
Author Alicia Camp has a PhD in Mongolian Studies, was involved in the preliminary negotiations to
establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a
Mongolian consultancy company (US Mongolia Advisory Group), and writes and speaks extensively
on Mongolian issues.
Source: Asia Times
ULAANBAATAR MAKES WAY FOR CITY PLANNING
Ulaanbaatar is cracking down activities impeding the proper development of the capital city.
At a citizen cabinet meeting was discussion regarding the 0.07 hectares of land promised to more
than 1 million of the inhabitants of Ulaanbaatar. There the cabinet discussed with citizens three
proclamations: Beginning 1 August, all construction projects, with the exception of any public work,

16. would be suspended and any projects that violates zoning laws would be either punished or have
the permits canceled. The city will prohibit distributions—and in some cases revoke—the
distribution of 1,300 hectares of land in the city center. Finally, no land in the city center will be
distributed from now until 2030.
Mayor E. Bat-Uul promised that city development plans would be rectified and the practice of
illegally privatizing lands by politicians would be brought to an end. He said future land distribution
would have to depend on the decisions of city planners.
Source: Unuudur
MINISTER OF JUSTICE SUBMITS LEGISLATION FOR UMNUGOBI COURT
Minister of Justice Kh. Temuujin has submitted a bill to establish a judge for the council of the
speaker of Parliament at Khanbogd Soum, Umnugobi Aimag.
Mining activity in Umnugobi has ramped up in recent years, but the province is too far from
Ulaanbaatar for proper monitoring and correspondence. With 3,900 resident and 11,000 guest
workers living at the Gashuun Sukhait border point, compounded by the mining activity there, this
area is particularly sensitive with crime. Administrative conflict, law suits, and policy debate are all
on the rise.
"Bayan-Ovoo, Manlai, Khanbogd, and Tsogtsetsii Soums and the governors of Umnugobi Aimag have
sent request for a medium court for those towns to the General Court Council," said Temuujin.
The legislation names Khanbogd, the community closest to the Oyu Tolgoi copper and gold project,
as the chosen destination to house a court, said Temuujin. He added that his ministry is currently
planning for court appointment there.
Source: Zuunii Medee
KUWAITI AMIR ARRIVES IN MONGOLIA FOR PRIVATE VISIT
Amir Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah arrived on Sunday in Mongolia on a private visit.
The amir was accompanied by Deputy Chief of the National Guards Sheikh Mshaal Al-Ahmad Al-Jaber
Al-Sabah. He was greeted upon arrival at Chinggis Khaan International Airport by Office Manager of
the Mongolian President Tsagaan Bontsk, Kuwaiti Ambassador to Mongolia Mubarak Mohammed Al-
Suhaijan and embassy staff.
Source: Kuwait News Agency
MULTINATIONAL PARTNERS TRAIN AT KHAAN QUEST 2012
A conglomerate of U.S., Mongolian and various international forces took part in a staff exercise
during Khan Quest 2012, to enhance their ability to operation in a multinational environment.
Khaan Quest is a regularly scheduled, multinational exercise sponsored by U.S. Army Pacific
(USARPAC) and hosted annually by the Mongolian Armed Forces. Khaan Quest 2012 is the latest in a
continuing series of exercises designed to promote regional peace and security. This exercise marks
the tenth iteration of this regionally significant training event.
"This exercise gives us an opportunity to train in an environment that exposes us to different ways
of conducting peacekeeping operations," said Major Mark Binggeli of the Alaska Army National
Guard. "It benefits us in getting a whole new perspective."
In the staff exercise, the various participants are tested and trained by putting them in a fictional
scenario where they have to plan missions, react to situations that arise, and interact with external
entities like the media and the Red Cross. Elements of the exercise are tasked with role-playing as
these external people and organizations. As the situations unfold in the fictional nation created for
the exercise, the staff must navigate through various problems to meet the needs of the nation's
population, explained Binggeli.
Another benefit to multinational training is that it helps build stronger relationships between
nations. In this year's exercise, more than 10 nations have come to train together in the vast
countryside of Mongolia, strengthening the bonds between one another.
"It brings our soldiers together with soldiers of other nations," said McHugh. "This is how you make
friends."

17. Source: Defense Video & Imagery Distribution System
REGIONAL POWERS RELUCTANT TO FORM ANTI-CHINA PACT
The Asia-Pacific region is witnessing some 70 joint military exercises this year, half of which are led
by the United States, including the month-long Khaan Quest military exercise in Mongolia.
Zhan Junshe, vice director of the Military Academic Research Institute of the PLA Navy, says
although the United States denies it, many of those military drills are targeting China.
"The increase of both scale and frequency of the joint military drills the United States has conduct
in the region so far this year is related to its strategy in Asia. They are aimed at increasing the U.S.
military presence in the region and boosting traditional alliances."
The ongoing drills between Japan and the United States may demonstrate the Japanese military's
capability of remote delivery. Some analysts argue the recent military exercises could signal that
Japan is gradually shifting the defensive nature of its military strategy.
However, some experts like Yin Zhuo, director of the Expert Consultation Committee of the PLA
Navy, said there is no reason for major regional players to be too worried, as Northeast Asia is
seeking west-led military exercises one after another.
"China should take it easy, as the country is used to be a bilateral relationship in which Mongolia
always respects its border with China, but again always wants to find a balance among major
powers.
While being closer with the United States and NATO is one choice, it is also a fundamental strategy
for Mongolia to keep its good relationship with its neighbor to the north, Russia, and to the south,
China, said Yin. Analysts say some other Northeast Asian countries have the same concern, which
makes them very unlikely to form a political or military alliance against China.
"For those countries, a NATO-like alliance in Asia targeting China will destroy the peace and
development in the region. Besides, economically speaking, they will lose heavily without a doubt."
Source: CRI English
FOSSIL DEALER SUBMITS COURT PAPERS FOR RETURN OF DINOSAUR SKELETON
Eric Prokopi, the U.S. fossils dealer whose dinosaur was seized by the U.S. government to return it
to Mongolia, filed court papers on Monday that he was a victim of a media campaign stirred up by
academic paleontologists. The U.S. government seized the Tyrannosaurus baatar skeleton in June.
It had sued to obtain the bones, which had been sold at an auction for USD 1.05 million.
According to the court papers, Prokopi and Dallas-based auction house Heritage Auctions were in
negotiations with Mongolia's president to settle the dispute when the U.S. filed a seizure lawsuit to
obtain the dinosaur. A judge has ordered the U.S. government to seize the dinosaur from a storage
facility in New York after the U.S. claimed it had been brought into the country with bogus
documents. The U.S. said the documents disguised the dinosaur skeleton, which originated in
Mongolia, as reptile bones from Great Britain.
Prokopi has said that he brought the bones into the country in March 2010 when they were just
chunks of rocks and broken bones. He said he turned them into ―an impressive skeleton.‖ According
to the court papers, about 25 percent of the dinosaur is made of inorganic, plastic material molded
from other fossils specimens while 50 percent is from one bataar specimen and the rest is from
other specimens.
The court papers called the effort to return the 70 million-year old skeleton to Mongolia
unprecedented, saying fossils from China, Kazakhstan, Mongolia, and Russia have been openly sold
on the international market and collected in the United States by people and museums for
generations.
Source: Associated Press

18. ANNOUNCEMENTS
DISCOVER MONGOLIA-2012, AUGUST 30-31
The Discover Mongolia conference will be held on August 30-31 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.
___________________________________________
MINING MONGOLIA 2012/BUILDING & CONSTRUCTION MONGOLIA 2012, SPORTS PALACE, 5-7
SEPTEMBER
190 companies from 22 countries including pavilions from Australia, Canada and Germany will
display a wide range of technology, supplies and services for the mining and the construction
sector, on a scale never seen before in Mongolia. Inside and outside displays, providing a first
opportunity for buyers to see technology and learn about new mining & construction service from
industry experts at the Buyant Ukhaa Sports Palace from 5-7 September 2012. For more show
information and online visitor pre-registration which will be closed on 24 August (Friday), please
visit http://www.miningandconstructionmongolia.com and make your registration immediately.
As a supporting organization to this even, BCM members will receive a 5 percent discount when
booking an exhibition space.
___________________________________________
MONGOLIA INVESTMENT SUMMIT 2012, HONG KONG, OCTOBER 30-31
The Mongolia Investment Summit 2012 will be held from 29 to 30 October at the Four Seasons Hotel
in Hong Kong to once again bring the best of Mongolia's investment opportunities to Asia's leading
investment hub.
Now in its third year, the summit has strongly cemented its position as the largest Mongolian
investment event outside of Ulaanbaatar, providing foreign investors with the most comprehensive
overview of Mongolia's key economic growth sectors all under one roof.
Speakers to the event include Altai Khangai, Chief Executive Officer of the Mongolian Stock
Exchange (MSE), Cameron McRae, President and Chief Executive Officer of Oyu Tolgoi LLC, and
James Passin, Co-founder and Manager of Firebird Mongolia Fund.
BCM is again a Supporting Organization for the event. Jim Dwyer, Executive Director of BCM, will
chair both morning sessions. For more information, find a brochure to the event by logging on to
the website: mongoliainvestmentsummit.com.
___________________________________________
REGISTER NOW FOR MONGOLIAN MINING DIRECTORY-2013
Mongolian Mining Directory-2013 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.

19. ___________________________________________
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.
BCM WEBSITES
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 World Bank‘s Mongolia Quarterly
Economic Update–June 2012; 11 speeches 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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ENGLISH WEBSITE 'PRESENTATIONS', 'MONGOLIA REPORTS' AND „MONGOLIAN BUSINESS NEWS‟
On BCM‘s English website, ‗Resource, Presentations‘ section, for your review are the following
recent postings:
- Lowering the High Cost of Paying Taxes by Olin McGill, Business Environment Reform Advisor, BPI-
"Quantifying the Costs of Regulatory Inefficiency" workshop, July 23, 2012
- Quantifying the Costs of Regulatory Inefficiency by Olin McGill, Business Environment Reform
Advisor, BPI-"Quantifying the Costs of Regulatory Inefficiency" workshop, July 23, 2012
- Why Businesses Cheat: Mongolia Reforms Confiscatory Costs of Paying Taxes by Olin McGill
Business Environment Reform Advisor, BPI-"Quantifying the Costs of Regulatory Inefficiency"
workshop, July 23, 2012
- 4 presentations from BCM‘s June 25 monthly meeting;
- 12 presentations from the 2nd Coaltrans on May 23-24 in UB;
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Also on BCM‘s English website, ‗Resource, Mongolia Reports‘ section, please note the following
recent postings:
- Taxes of expatriates in Mongolia from PricewaterhouseCoopers on August 18, 2012
- 2012 Mongolia Investment Climate Statement by Economic and Commercial Section of the US
Embassy, Ulaanbaatar, Mongolia
- World Bank: Mongolia Quarterly Economic Update- June, 2012
- Risk report for Mongolia 2012 by Mongolia Economic Forum
- Polit Barometer, June 2012, and the Polit Barometer, April 2012 by Sant Maral Foundation
(Mongolian and English versions);
- ADB‘s Asian Development Outlook, April 2012;
- Detailed results of BCM‘s NewsWire survey of March 2012;
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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

20. 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.
ECONOMIC INDICATORS

24. 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]
July 31, 2012 *14.5% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 14.9% y-o-y, Ulaanbaatar city, July 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 – August 23, 2012
Currency Name Currency Rate
U.S. dollar USD 1,365.80
Euro EUR 1,701.51
Japanese yen JPY 17.22
British pound GBP 2,156.94
Hong Kong dollar HKD 176.08
Chinese yuan CNY 215.01
South Korean won KRW 1.20
Russian ruble RUB 42.90
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.