October 25 2013

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 297 – October 25, 2013
NEWS HIGHLIGHTS:
Business
 Customs dispute solved for Rio's Oyu Tolgoi shipments;
 HBOil tours Rason, North Korea;
 Company wins auction for N. Korean firm's Tokyo office;
 Famur may sell USD $100m in equipment to Mongolian firms;
 Golomt to issue Mongolia's first American Express-backed cards;
 Mobicom customers complain over excessive charges;
 Khukh Tsav cement plant to produce 2m tons a year;
 Mongolia and Lufthansa Consulting sign MoU;
 FMG Mongolia Fund lost 3.1% in September;
 Erdene raising capital for Altan Nar;
 Kincora completes IP survey;
 U.S. Embassy awards grant for government translator training;
 Canadian education fair in Mongolia;
 Private sector seeks active partnership with government;
 Oyu Tolgoi unveils renovated street;
 Miami Beach investor sets sights on Mongolia;
 Cost savings see Peabody Energy report adjusted profit.
Economy
 A tale of two mines;
 Where did all of the Mongolia bulls go?;
 Total commercial bank savings and capital grow;
 Reserves of USD reduced by 6.26 percent;
 Italian firms seek cashmere cooperation;
 Mongolia to increase petroleum reserves by 15 percent for 2014;
 Mongolia races to meet growing cement demand;
 Mongolia pushes exploration work toward extraction;
 Mongolia-made tram to be put into use in 2018;
 Incidences of human trafficking up 20 percent;
 Gobi desert project to save critically endangered camel;
 Winter stoves fuel smog responsible for 1 in 10 deaths;
 Copper prices: heading south;
 Climate change to cost East Asia 5.3% of GDP by 2100, ADB study says;
 Amid heavy pollution, Beijing issues emergency rules to protect citizens;
 Russia lets down guard on China;
 China's growth trajectory depends on political calibrations.
Politics
 Mongolian president to visit North Korea;
 Mongolian prime minister expects improvement in relations with China;
 China's vice foreign minister meets foreign affairs deputy minister;
 Elbegdorj meets Polish president;
 MPP demands end of Price Stabilization Program;

2.  Mongolia plants green wall in the Gobi desert;
 Women MPs donate salaries for hospital fund;
 D. Natsagdorj's statue takes the Lenin spot;
 Mongolian ethical hackers become Asia’s best;
 Investigation into land allocations put on ice;
 Narantuul fire caused by electrical fault.
ECONOMIC INDICATORS
 MSE Top 20 Index by market Capitalization;
 Foreign-listed Companies with Mongolian Assets;
 Monthly Macroeconomic Overview – September 2013;
 Inflation;
 Central bank policy rate;
 Currency rates.
*Click on titles above to link to articles.
SPONSORS
Khan Bank International SOS
Wagner Asia Automotive Oxford Business Group
Mongolian National Broadcasting Breakthrough PR
BUSINESS
CUSTOMS DISPUTE RESOLVED FOR RIO'S OYU TOLGOI SHIPMENTS
A customs dispute that had been holding up copper concentrate shipments from Rio Tin PLC's
massive Oyu Tolgoi mine has been resolved, Turquoise Hill Resources Ltd. said on Monday.
Oyu Tolgoi had been scheduled to start shipping to customers in China after opening in July, but
was forced to stockpile material while buyers negotiated import approvals. Turquoise Hill, 66
percent owner of the USD 6 billion mine run by Rio Tinto, said customers have received the needed

3. approvals, and a convoy carrying concentrate left its warehouse at the Chinese border on Saturday.
"The withdrawal of concentrate from the warehouse by customers is expected to ramp up quickly,"
said the Toronto-listed company in a statement. It said the mine will now start recording revenue.
Oyu Tolgoi's concentrator has been operating at full capacity, processing some 100,000 tons of ore
each day. Turquoise Hill reiterated that it expects shipments to be in line with its production by the
end of this year.
Source: Reuters
HBOIL TOURS RASON, NORTH KOREA
Representatives of HBOil JSC's management took a site tour of newly acquired oil assets at the
Special Economic Zone of Rason City, North Korea.
Following HBOil JCS's 20 percent shareholding in Korea Oil Exploration Corporation International
Inc., the managements of both HBOil and Ulaanbaatar-based brokerages BDSec JSC recently
conducted a site visit to the Seungri Oil Refinery in Rason. In addition to a detailed inspection of
the refinery complex, power station, pipelines, rail and the Songbong port, delegates formally met
with both the senior leadership of Rason and the state-owned (―KOEC‖), with whom HBO is a joint
venture partner.
―These meetings not only reconfirmed every critical detail laid out in HBO‘s JV with KOEC and the
shareholders‘ agreement that regulates the parties‘ relationship within the KOECII corporate
structure, but also proved to us that the leadership of Rason City and KOEC were unified in their
complete support to resume full operations at the SOR,‖ said the Source. It added, ―Without
exception, we found them to be highly intelligent and dynamic, as well as enthusiastic and
appreciative of the investment HBO has made and shall make into the country. These interactions
also reinforced our belief that the DPRK is indeed ‗opening up‘ and that Mongolia can and will play
a special role in this process.‖
Mongolia‘s minister of agriculture and industry departed Mongolia on 15 October for high-level
meetings in Pyongyang, which was preceded by a delegation of Mongolian businessmen who visited
on 1 October. A formal visit by President Tsakhia Elbegdorj is scheduled for 27 October.
Source: BDSec
COMPANY WINS AUCTION FOR N. KOREAN FIRM'S TOKYO OFFICE
A company rumored to be of a Mongolian origin has won an auction to acquire the Tokyo
headquarters site of the pro-Pyongyang General Association of Korean Residents in Japan, known as
Chongryon, for 5.01 billion yen, the Tokyo District Court said Thursday.
The successful bidder was named as "Avar Limited Liability Company," but detailed information such
as its location and the name of its representative remain unknown. The bid is due to receive the
court's final approval on Tuesday. Chongryon, which serves as North Korea's de facto diplomatic
mission in Japan in the absence of diplomatic ties, could be forced to move out of its head office if
asked to do so by the successful bidder. Only two parties submitted bids in the second round of the
auction held from 13 to 3 October, court officials said.
Japan has asked Mongolia to cooperate in resolving the issue of Japanese nationals abducted by
Pyongyang in the 1970s and 1980s. Mongolia hosted talks between senior diplomats of Japan and
North Korea in the capital Ulaanbaatar in November last year. In Ulan Bator on Thursday, a man
who claims to be the president of Avar Limited Liability Company effectively acknowledged that the
company had won the bidding.
"I don't think you have wrong information" about the deal, the unidentified man said over the
phone.
In the first round of the auction earlier this year, a Buddhist temple in Kagoshima Prefecture
offered the highest bid of 4.52 billion yen for the 10-story head office with two basement floors and
the 2,387-square-meter tract of land in Tokyo's Chiyoda Ward, but it failed to pay the bid price by
the deadline and was eliminated in the second round of the auction. The temple's chief priest is
known for maintaining close ties with senior officials of the North Korean government and
Chongryon.

4. The court decided in July 2012 to hold an auction for Chongryon's headquarters as demanded by the
Japanese government-backed Resolution and Collection Corp., which is owed about 62.7 billion yen
by Chongryon following the collapse of financial institutions in Japan for pro-North Korean
residents.
Source: Global Post
FAMUR MAY SELL USD 100M IN EQUIPMENT TO MONGOLIAN FIRMS
Polish mining machinery producer Famur may sign contracts worth USD 100 million with companies
in Mongolia, Polish Economy Minister Janusz Piechociński said. Famur was one of 40 businesses that
took part in a Polish-Mongolian economic forum on Monday.
The Polish firm signed letters of intent for the supply of machinery to three Mongolian mining
companies: Baganuur, Tsagaan Shonkhor Holding and Tsetsens Mining and Energy. Piechociński said
that apart from Famur, other Polish sector companies, including Damel, Kopex and Węglokoks, have
plans to do business in Mongolia. He expects Polish-Mongolian cooperation in the mining industry to
increase in the coming years. Minister Piechociński and Mongolian Minister of Mining Davaajav
Gankhuyag signed a declaration of cooperation in the mining sector.
―We will increase our involvement in the mining industry and we will share our experience in the
field,‖ said Piechociński. The declaration also covers an exchange of scientific knowledge and
education of the sector employees.
According to Ministry of Economy data, after seven months of 2013, Poland's exports to Mongolia
were worth EUR 23 million (33 million), 22 percent more than the same period of 2012. Imports
from Mongolia amounted to just EUR 36,000.
Source: Warsaw Business Journal
GOLOMT TO ISSUE MONGOLIA'S FIRST AMERICAN EXPRESS-BACKED CARDS
American Express and Golomt Bank LLC have signed a partnership agreement that will allow it to
issue bank cards backed by them.
―We are very pleased to expand our partnership with Golomt Bank, reflecting our strategy of
building relationships with the best partners around the world,‖ said Mike Trattles, vice president
for partner card services at American Express. ―We look forward to working with Golomt Bank to
bring new benefits and services to their customers which reflects our commitment to outstanding
value and first class service.‖
The agreement leaves Golomt responsible for creating the products, issuing the cards, overseeing
the credit management and managing customer accounts and billings.
Source: Golomt Bank LLC
MOBICOM CUSTOMERS COMPLAIN OVER EXCESSIVE CHARGES
Mobicom Corp. is under investigation by the Fair Competition and Consumer Protection Agency
(FCCPA) after it received complaints from contract subscribers over excessive charges. Inspection
results revealed that Mobicom charged excessively for its postpaid service. Although Mobicom
executive director David Holliday issued a statement admitting to excessive charges on 26 October,
the FCCPA is now investigating whether or not that was one of multiple incidents. In the event the
FCCPA finds the charges were intentional, it could fine Mobicom up to MNT 10 million.
Source: News.mn
KHUKH TSAV CEMENT PLANT TO PRODUCE 2M TONS A YEAR
The president of the Mongolian Alt Corporation (MAK) announced that the Khukh Tsav cement plant
would be able to produce two million tons a year of cement beginning from 2014.
At a state visit to the site by the minister and the state secretary of the Construction and Urban
Development Ministry, Ts. Bayarsaikhan and R. Erdeneburen, B. Nyamtaishir of MAK asked that a
quota of foreign workers be allowed to work at the plant. Engineering firm FLSmidth has been
contracted to provide machinery for the project. Once operational the PC42.5 PC52.5 and PC62.5
cement types will be produced at the cement plant located in Dalanjargalan Sum, Dornogobi Aimag.

5. Source: Global Cement
MONGOLIA AND LUFTHANSA CONSULTING SIGN MOU
The Ministry of Roads and Transportation signed a memorandum of understanding with Lufthansa
Consulting on 15 October 2013 in Frankfurt, Germany.
Mongolia has expressed its interest in Lufthansa Consulting‘s assistance in several fields. Aviation
experts will support the MRT in defining a suitable air transport policy that facilitates the growth of
the national aviation sector. Furthermore, the consultants will help to optimize the development
and management of existing and potential new aviation infrastructure. In addition, the consultants
will assist in enhancing the national and international market presence of the Mongolian national
carrier MIAT Mongolian Airlines.
―We are very pleased that the Mongolian government trusts in our know-how. We are confident in
our proficiency to help the country in creating a functioning aviation infrastructure to support the
growth and economic development of Mongolia,‖ said Andreas Jahnke, managing director of
Lufthansa Consulting.
Source: Aviation Tribune
FMG MONGOLIA FUND LOST 3.1% IN SEPTEMBER
Sentiment remained sour for Mongolian assets and the FMG Mongolia Fund was hit by further losses
in the off-shore listed Mongolian mining stocks as well as further depreciation of the currency, the
tugrug. The Fund‘s losses were mitigated by minor gains from a few core holdings listed on the MSE.
The passage of a new Investment Law has FMG expecting investor sentiment to turn more positive.
It noted it had observed rising stock prices and declining government bond yields.
―With many Mongolian asset prices at multi-year lows and a potential recovery and stabilization in
stock prices, we see a brighter future for Mongolian equities ahead,‖ said the Source.
Source: FMG
ERDENE RAISING CAPITAL FOR ALTAN NAR
Erdene Resource Development Corp. announced plans 18 October for capital raising to continue
exploration at the Altan Nar gold project.
Erdene intends to raise CAD 500,000 (USD 485,201) through a private placement of 7,140,000 units
at CAD 0.07 each. Each unit will consist of one common share and one-half 24 month warrant at
CAD 0.10. This is the latest in a series of fundraising activities that Erdene has undertaken in order
to develop its assets in southwestern Mongolia.
At the end of last year, Erdene completed a capital raise for CAD 1 million. The proceeds from this
fundraising were primarily directed to the Altan Nar gold-silver project. During the 2012 exploration
season the company drilled 2,465 meters across 17 holes, including 11 reconnaissance holes that
provided encouraging results over one kilometer away from the discovery zone. On October 7,
Erdene announced plans to continue exploration at the project to further define already identified
mineralization, focusing on near-surface anomalies that will help to prioritize the next phase of
drilling.
Source: Wall Street Journal
KINCORA COMPLETES IP SURVEY
Kincora Copper Ltd. announced the advancement of targets following the completion of an induced
polarization survey. The survey covered 48.96 kilometers at the Bronze Fox licensed area, where
independent consultants encountered hydrothermal copper activity and exploration targets.
―The aim of our field season was to responsibly add value at the asset level while remaining
comfortably funded into 2014 by both refining exploration data and specifying target generation of
large scale, potentially world-class size, porphyry copper-gold targets,‖ said Sam Spring, president
and chief executive officer of Kincora.
Source: Kincora Copper Ltd.

6. U.S. EMBASSY AWARDS GRANT FOR GOVERNMENT TRANSLATOR TRAINING
The U.S. Embassy awarded the American University of Mongolia's English Language Institute (ELI) a
grant to design and implement a training course in legal English skills for translators of Mongolian
trade and commercial laws and regulations.
Initiated as part of the new Transparency Agreement signed by the U.S. and Mongolian
governments, the ELI teachers will work closely with American law firms in Mongolia to design a
targeted and individualized intensive training plan. The program will both improve the learners'
skills in English for legal purposes and also provide them with support as they hone their skills in
legal document translation.
The award is for 15 months beginning 1 October.
Source: American University of Mongolia
CANADIAN EDUCATION FAIR IN MONGOLIA
The Canadian Embassy hosts Mongolia's first Canadian Education Fair at the Blue Sky Tower and
Hotel in Ulaanbaatar from 27 to 29 October.
Over 20 representatives from the Canadian education system attended the event where organizers
gave particular attention to French and English language trainings, university undergraduate
programs, and vocational trainings. Participant institutions from Canada were SAIT Polytechnic,
Alexander College, British Columbia Council for International Education, College of New Caledonia,
Columbia College, Coquitlam College, Royal Roads University, University of British Columbia, North
Island College International, Vancouver Island Schools, West Vancouver School District, Algonquin
College, Centennial College, Niagara College, Ryerson University, Seneca College, University of
Toronto, and University of Saskatchewan.
Source: Info Mongolia
PRIVATE SECTOR SEEKS ACTIVE PARTNERSHIP WITH GOVERNMENT
The National Council for Private Sector Support (NCPSS), the Business Council of Mongolia and The
CEO Club joined with business executives for the first roundtable discussion on bringing an equal
role for the private sector with the government in developing the Mongolian economy.
The event was organized in light of increased governmental regulatory pressures and was part of an
effort by those who support the private sector to propose an official and open partnership with the
government. Organizers put forward their underlining objective of developing the private sector,
which generates 77 per cent of the wealth in the country. In addition to this, representatives of the
private sector pledged to make their voices heard in their efforts to keep state involvements in
private business at bay and to develop an ongoing active partnership between the private sector
and the government.
―The private sector in Mongolia is acting in unison for the first time after a number of discussions
among the business councils and professional associations,‖ said Ganbold Davaadorj, chairman of
the NCPSS, during his opening remarks. ―All of these attempts are geared towards bolstering the
role of the private sector for economic development.‖
During the discussions speakers pinpointed the current policy gaps and strategic planning needed
for economic growth in sectors including infrastructure, energy, tourism and air transport. They
also highlighted the government‘s need to work with the private sector in tackling policy roadblocks
and proposed that the current government establish a partnership council that would allow the
private sector to share the government‘s growing burdens during this period of accelerated
economic growth.
Source: BCM
OYU TOLGOI UNVEILS RENOVATED STREET
Oyu Tolgoi LLC completed renovations of the Students` Street in Ulaanbaatar on 15 October.
Ulaanbaatar Mayor Erdene Bat-Uul and Oyu Tolgoi Chairman G. Batsukh attended the ribbon ribbon-
cutting ceremony that day. ―I would like to thank Oyu Tolgoi LLC for contributing to the
development of UB and its sponsorship,‖ said Bat-Uul.

7. Oyu Tolgoi spent USD 400,000 on 3,000 square meters of street renovation. Included in the work
was the installation of LED lights for the side walk, benches, garbage cans, and free high-speed
WiFi.
Source: Udriin Sonin
MIAMI BEACH INVESTOR SETS SIGHTS ON MONGOLIA
With the wind chill, temperatures in Ulaanbaatar, Mongolia, dipped below 10 degrees last week.
Still, Harris Kupperman showed up for his job in a short-sleeved polo and Ray-Bans, an iced coffee
in hand.
As chief executive of Mongolia Growth Group, Kupperman, 32, splits his time between Mongolia‘s
capital city and Miami Beach. When Kupperman co-founded Mongolia Growth in 2011, he took it
public with about USD 4 million in capital, mostly from himself, friends and family. The company
raised USD 51 million that year, and it has invested about USD 40 million in Mongolian real estate.
Those investments, Kupperman said, have "appreciated quite substantially." The company now has
more than 3,000 shareholders and more than 100 Mongolia-based employees.
Mongolia Growth is heavily invested in Ulaanbaatar real estate and, to a lesser extent, the
insurance business. Most of the 75 commercial, retail and residential properties it owns or manages
are on Peace Avenue, the main drag that runs through the crowded downtown. Kupperman, who
compared current-day Ulaanbaatar to ―Manhattan in the 1850s,‖ sees Peace Avenue as becoming
the next Fifth Avenue or Lincoln Road, and he envisions the capital city developing like wealthy
Doha, Qatar, or Abu Dhabi in the United Arab Emirates.
Kupperman‘s confidence has managed to persuade peers and potential investors who were reluctant
at first pitch. Mongolia was nowhere on Matthew Goodman‘s radar when he moved to South Florida
from New York in 2011 to work for Praetorian Capital. Before he could unpack his bags, Goodman
found himself on a flight with Kupperman, his new boss, headed to Ulaanbaatar. Goodman‘s first
impressions upon landing: It‘s freezing. No one speaks English. The food is lousy. There are no taxis.
What are we doing here?
―Some of the things [Kupperman] does, he thinks they are normal, but they‘re not,‖ Goodman said.
―But then you sort of realize the brilliance behind the madness: He‘s found this pot of gold in a
place where no one wants to go to get it.‖
Source: Miami Herald
COST SAVINGS SEE PEABODY ENERGY REPORT ADJUSTED PROFIT
The world‘s largest private-sector coal miner, Peabody Energy Corp., on Thursday reported an
adjusted third-quarter profit after aggressive cost-cutting measures had resulted in significant
savings in the face of weak commodity prices, boosted by improved shipments from its Australian
operations.
Successful cost containment has resulted in Peabody reporting its lowest U.S. unit costs in three
years and Australian unit costs improved 18 percent since early 2012. For the quarter ended 30
September, revenues fell about 13 percent to USD 1.8 billion, compared with the USD 2.06 billion in
the same period last year, as a result of lower realized pricing in the US and Australia. The company
had also cut its full-year capital spending target to USD 350 million from USD 400 million, mainly
owing to weak coal prices, and is focusing on sustaining existing operations. Peabody reported a net
loss attributable to common shareholders of USD 26.1 million, or USD 0.10 a share, compared with
net income of USD 42.9 million, or USD 0.16 a share, a year earlier.
"Metallurgical coal fundamentals are improving and continued build out of new generation is driving
record thermal coal demand. Supply rationalization is continuing as higher cost mines in the US and
China close, and other exporting nations face increased domestic demand and rising costs,‖ said
Peabody chairperson and Chief Executive Gregory Boyce, painting a potential optimistic picture for
the company‘s supplies of thermal and metallurgical coal.
Within the thermal coal market, Peabody expected about 75 gigawatts of new coal generation to
come on line in 2013, requiring about 50 million tons more global seaborne thermal coal. Longer
term, yearly world coal demand was estimated to rise to about 1.2 billion tons by 2017, driven by

8. an expected 400 gigawatts of new coal generation, along with rising global steel production. Steel
production was expected to grow 15 percent during this period, requiring an additional 150 million
tons a year of metallurgical coal.
Source: Mining Weekly
ECONOMY
A TALE OF TWO MINES
Expectations are high for the Oyu Tolgoi copper mine and Tavan Tolgoi coking coal mine; both
projects ride on their enormous reserves of 2.7 million tons of recoverable copper and 1.8 billion
tons of coal respectively, which are in big demand in next-door China. The problem for Mongolia is
that too much hope has been invested in these two mines.
For example, the Mongolian government has found itself continually at loggerheads with Rio Tinto
PLC, which is leading operations at Oyu Tolgoi with a 66 percent stake in the project through its 51
percent-owned Turquoise Hill Resources. The development of an underground mine there, where
the company says 80 percent of the mine's value lies, is on hold after a government official notified
Rio that parliamentary approval was necessary for a USD 4 billion project financing package.
Then there's the problem at the state-owned coal miner Erdenes Tavan Tolgoi, or Erdenes TT as
locals call it, since it signed an off-take agreement with Aluminum Corporation of China (Chalco)
that left it with USD 350 million in debt to be repaid in coal exports. Erdenes TT now regrets signing
the contract because it set below-market prices for coal in an already depressed market. The
Mongolian government has since attempted to cancel the contract by paying a cash penalty and
even suggested it would try to secure a better deal from another Chinese state-owned miner,
Shenhua. That didn't pan out, however, and Mongolia has since been stuck with the original deal.
―Despite the stumbling blocks,‖ said Howard Lambert at ING Bank, which was the first foreign bank
to open a representative office here in 2008 and has seen at first hand the ups and downs at both
projects, says the problems with the two mines need to be put into context. ―In terms of mineral
production, Mongolia has come a long way in a relatively short period of time," he argues. "OT [Oyu
Tolgoi] is producing from phase one, which is a milestone achievement. [Erdenes] TT is also
producing and has been for some time. The question now is in relation to the timing of the buildout
of the necessary infrastructure, power, wash plant and rail."
The two sides are back at the negotiating table. Government officials met with Rio management in
London in late September and another meeting is widely expected to be held in Ulaanbaatar soon.
Since then, Mongolian officials have spoken more amicably about Oyu Tolgoi and the need to find
consensus with the Anglo-Australian mining group. Prime Minister Norov Altankhuyag is also set to
visit China on October 22, where many expect him to discuss outstanding issues with China about
Erdenes TT‘s agreement with Chalco.
An end to the mines' problems, and a new beginning for Mongolian investment, could be in sight.
Source: BNE
WHERE DID ALL OF THE MONGOLIA BULLS GO?
Back in 2011, you couldn‘t open a financial publication without reading about the growth prospects
of Mongolia. It was the new frontier, the fastest growing economy in history—from nomad to space
age in a decade—an investment mecca for every hedge fund and macro tourist. A lot can change in
two short years. Today, Mongolia is nearly a pariah in the investment community.
It all started with Chalco‘s bid to acquire control of SouthGobi Resources Ltd.‘s coal assets.
Mongolia is terrified of attempts to exert control over it when China buys the vast majority of the
coal that Mongolia produces. Winsway Coking Coal, a Chinese company, is already a substantial
player in buying and transporting Mongolian coal. Mongolia was petrified that if the Chinese added
production capacity, they would control the entire supply chain in a very critical national industry.
In an instant Mongolia both confused and scared foreign investors with the Strategic Entities Foreign
Investment Law (SEFIL). While canceling any ability for Chalco to gain control over SouthGobi

9. Resources, the Mongolians closed the spigot on themselves!
Turquoise Hill Ltd. is the owner and operator of the Oyu Tolgoi copper mine. Turquoise Hill is 51
percent owned by Rio Tinto PLC. Nothing this large can happen in any country without constant
government involvement, especially when the government owns 34 percent of the mine. The latest
set of issues relates to cost overruns that exceed the original feasibility study. Like all mining
projects, Oyu Tolgoi is over budget. This means that it will take longer for Turquoise to recoup their
investment and for Mongolia to see dividends—possibly decades longer than expected. The fact that
the two sides cannot even agree on the size of the cost overrun shows the difficulty and confusion
that has marked the existing relationship between the two. In the end, both sides will reach a
compromise—they will each give something up—they have no choice. Despite a lot of heated
rhetoric in the foreign press, the mine has moved forward and started shipping copper this July—
production will ramp up rapidly from here.
The guys running Mongolia today aren‘t stupid. They understand the direction that they want the
country to go in. In late June, the presidential elections were held—the pro-business, incumbent
won. The Democratic Party now controls the presidency and parliament, which makes for efficient
government. The government is trying to repair its public image. According to the World Bank‘s
2013 ease of doing business survey, Mongolia now ranks 76th in the world, ahead of countries such
as Barbados (88), Uruguay (89) and China (91). It‘s getting better from here. Mongolia is now re-
opening the spigot and it‘s going to gush.
The author Harris Kupperman is chairman, chief and largest shareholder of Mongolia Growth
Group, a fully integrated and self-managed real estate investment company, focused on owning
high quality retail and office properties in downtown Ulaanbaatar.
Source: Marc Faber‘s Gloom Boom & Doom
TOTAL COMMERCIAL BANK SAVINGS AND CAPITAL GROW
Commercial banks' total capital increased 10.2 percent to MNT 1.2 trillion last month, year-on-year.
Total profits from banks was MNT 132.6 billion. Savings grew 20 percent to MNT 1.2 trillion.
Source: Zuunii Medee
RESERVES OF USD REDUCED BY 6.26 PERCENT
The Bank of Mongolia reported that U.S. dollar reserves had declined 6.26 percent year-on-year due
to spending for the stabilization of the economy.
Inflation stood at 9.9 percent nationwide with 8.4 percent inflation in the capital city. Money
supply grew 19.3 percent to MNT 8482 billion total.
Dollar reserves were down 1.68 percent month-on-month.
Source: Zuunii Medee
ITALIAN FIRMS SEEK CASHMERE COOPERATION
Italian companies have expressed an interest in cooperating with Mongolia in manufacturing wool
and cashmere products—including setting up a joint factory in Italy.
"Italians prefer the highest quality found in the Mongolian wool and cashmere products only,"
according to Armando Branchini, president of the European Cultural and Creative Industries Alliance
and head of the Italian-Mongolian business council. "However, a lack of good management to
manufacture and sell these kinds of products is taking down the industrial capacity of Mongolia."
During talks between the two countries in Mongolia last week, B. Jargalsaikhan, general director of
Buyan cashmere company, requested that any such project should receive state support.
Mongolia is the second biggest producer of cashmere after China.
Source: Just Style
MONGOLIA TO INCREASE PETROLEUM RESERVES BY 15 PERCENT FOR 2014
The Cabinet of Ministers has ordered a larger volume of petroleum reserves for next year.
At a Cabinet meeting, members have ordered a 15 percent increase in monthly reserve deliveries
from 13 companies, including NIK, Petrovis, Magnai Trade, Shunkhlai, Sod Mongol, Monpetiks, Just

10. Oil, and Oin Birj petroleum. Those companies will deliver at least 80,480 tons each month.
Source: Undesnii Shuudan
MONGOLIA RACES TO MEET GROWING CEMENT DEMAND
Currently, Mongolia's construction and construction materials sector is heavily dependent on China.
Cement and reinforcing steel bar are the most commonly used construction materials in Mongolia,
with unofficial numbers suggesting that some 80 percent of all cement is imported from China. The
trend towards importing is slowing down as efforts by the Mongolia government to enhance the
domestic production capacity are bearing fruit.
Despite the decrease of the world production of cement in the recession years of 2009 and 2010,
Mongolian cement production increased at 35 percent per annum. With the strong economic growth
of Mongolia driven by its abundant natural resources, the country has plans to develop its
infrastructure and construction under the umbrella program ―New Development‖. It would reinforce
both the cement demand and its supply by domestic producers.
In 2010 and 2012, Khutul Cement and Lime, the oldest and largest domestic cement factory
renovated its first line and a new cement plant was built in Darkhan. Although these measures were
meant to keep up with rising demand, the demand from construction and mining industries out-
stripped their best efforts so that up to 70 percent of the construction materials were still
imported.
Currently, there are 8 cement plants that can produce a total of 975,000 tons a year. However, due
to technical issues and outdated equipment issues none of the plants can produce at capacity, so
that the actual maximum production supply is somewhere just over 500,000 tons a year. In general,
the Mongolian construction sector has traditionally faced a lack of interest from investors which is
shown in a very low 2 percent share of total foreign investment. The trend is changing and large
domestic construction materials suppliers have recently received support from well-known
international institutions. Remicon JSC, a Ulaanbaatar-listed concrete material supplier, was
granted USD 5 million from the European Bank for Reconstruction and Development that will boost
their expansion. Mongolyn Alt Corp.'s (MAK's) cement project received a long-term loan from BNPP,
BHF-BANK and a Denmark‘s Export Credit Agency (EKF).
Source: National Securities
MONGOLIA PUSHES EXPLORATION WORK TOWARD EXTRACTION
Mongolia is seeing a growing number of mining licenses compared with exploration licenses, said a
government mining official.
Mongolia has 1,900 exploration licenses issued compared to 1,200 extraction licenses for companies
invested by countries such as the Czech Republic, Poland, Canada, and Australia. According to B.
Baatartsogt, head of the Geological Policy Coordination at the Mining Ministry, it is in Mongolia‘s
best interest to see some of these exploration projects transition into extraction.
―The number of exploration licenses in decreasing and, respectively, the number of extraction
licenses is increasing,‖ said Baatartsogt.
To help increase the number of extractive operations in Mongolia, Mongolia has increased the
budgeted allocation for exploration work to MNT 7.3 billion for 2014. The country is also changing
its policy of license issuances, instead targeting research work rather than commercial interests.
―New policy states that exploration work will be permitted only for specialists with research permit
licenses,‖ he said. ―There are also plans to establish geo-parks where there are rare geological
finds for scientific research and tourism.‖
Source: Undesnii Shuudan
MONGOLIA-MADE TRAM TO BE PUT INTO USE IN 2018
Electric Transport Co. is preparing to roll out new trams equipped with the latest technology for
2018.
Electric Transport plans to utilize a bus rapid transit (BRT) planned for Ulaanbaatar. The tram
system is similar to the electric trolleybus network already in use, but trams are faster and produce

11. less noise. The trams will be able to transport between 300 and 450 passengers at a time.
"The trolleybuses in UB operate through a couple of electric cables, whereas the tram works by one
cable, and the tram is faster," said an engineer.
Ulaanbaatar has plans to install 36 kilometers of tram track between Buudal Station No. 7 and the
new international airport. The Office of the Mayor of Ulaanbaatar has included the new system in
its action plan. The Asian Development Bank has loaned some USD 212 million for development in
Ulaanbaatar.
Source: Montsame
INCIDENCES OF HUMAN TRAFFICKING UP 20 PERCENT
The number of human trafficking cases has increased 20 percent while murder has fallen 19.3
percent, according to a monthly report from the Ulaanbaatar Metropolitan Police Department.
According to the September report, reported pick-pocketing crimes grew 76 percent from
September last year in addition to increases of 61.2 percent in livestock theft, 47.5 percent in
property fraud, 45.8 percent in general theft, 43.6 percent in robbery and 20 percent in human
trafficking. Areas where there were reductions in the number of crimes were forestry violations by
50 percent, tax avoidance by 33.3 percent, murder by 19.3 percent, and vehicle theft by 16.9
percent. Police officials followed up on 49,366 civil complaints and reports, of which 61.2 percent
were criminal cases with the remainder being administrative offenses. The report shows that 53.4
percent of those arrested were unemployed. For the first three quarters of 2013, crimes were
responsible for 331 death and 4,095 injuries.
Source: News.mn
GOBI DESERT PROJECT TO SAVE CRITICALLY ENDANGERED CAMEL
Efforts are underway in the Gobi desert to save a newly discovered species of camel from
extinction.
The critically endangered double-humped camel is restricted to parts of Mongolia and China and
was once thought to be the same species as the better known Bactrian camel. John Hare runs the
Wild Camel Protection Foundation (WPCF), which is behind the conservation program. Only around
1,400 of the camels survive in China and Mongolia.
"They are remarkable creatures," Hare said. "I mean, in China, for example, they withstood 43
atmospheric nuclear tests. They lived in the Lop Nur nuclear test area. And they‘re still breathing
naturally and they haven‘t got three humps."
The WCPF is working to save the camels through successful captive breeding and subsequent re-
introduction of the young animals into the wild. They are thought to be a very ancient species from
which the better known single-humped species may be descended. The wild double-humped camel
has to manage without fresh water for much of its life. With regard to the kind of challenges the
camels face just to survive, he explains: "People are going into the desert illegally. We found a case
of them setting landlines near a water point to blow the camel up so they can get food. There‘s a
lot of going against them. Wolves are another threat."
Source: Voice of Russia
WINTER STOVES FUEL SMOG RESPONSIBLE FOR 1 IN 10 DEATHS
In the coming weeks, as temperatures plummet, smog will spread across the streets of Ulaanbaatar
and into homes, shutting out the light. While Beijing's "airpocalypse" has made headlines worldwide,
it pales beside the haze of the Mongolian capital.
Ulaanbaatar is the world's second-most polluted city, superseded only by Ahvaz in Iran, according to
World Health Organization research. The biggest issue is not the smokestacks on the horizon—
Mongolia's manufacturing sector remains minute—nor the vehicles jamming the capital's streets.
Rather, it is the collision of urbanization and traditional culture: 60 to 70 percent of winter
pollution comes from the old-fashioned stoves heating gers.
Ulaanbaatar's pollutant levels of particulate matter, PM2.5, are 6 or 7 times higher than the World
Health Organization's most lenient air-quality guidelines for developing countries. The result, say

12. researchers, is that one in every 10 deaths is caused by air pollution—on their most conservative
estimate. Ryan Allen, of Simon Fraser University, in Canada, who led the study, said the true figure
could be as high as one in 5. Ulaanbaatar's public health institute has warned of a sharp increase in
birth defects in the capital as well as a 45 percent rise in the number of patients with respiratory
illnesses between 2004 and 2008. Joint research by the World Bank and National University of
Mongolia suggests that halving ger stove emissions could cut year-round levels of the larger PM10
particles by a third.
Foreign donors and Mongolian authorities have spent millions of dollars subsidizing the distribution
of 128,000 "clean" stoves in the last year and attempting to step up the production of clean fuels.
Khaltai Galimbyek, deputy head of the city's air pollution agency, says PM2.5 levels have already
fallen by around 25 percent since the program began.
But the ultimate problem, said Galimbyek, was that there were simply too many people in the
capital: its size has tripled since 1979 and it has over a third of the country's population. To make
Ulaanbaatar a healthier place, he believes, it has to stop mushrooming, which means that rural
areas have to be developed instead.
Source: The Guardian
COPPER PRICES: HEADING SOUTH
Production growth of the red metal buoyed (or stopped sharper falls in) shares of the big miners
last week. That is a bit odd, given that copper prices are down 30 percent since their 2011 highs.
Rising production is a limited comfort when demand remains slack.
Copper output jumped 23 percent from a year earlier at Rio Tinto PLC over the quarter as the Oyu
Tolgoi mine in Mongolia finally ramped up. At Anglo American output jumped by almost a third. Yet
excess supply could reach 800,000 tons by the end of next year, according to some estimates, as
bigger miners expand projects and China adds capacity. The country is now the world‘s second-
biggest producer, with annual output growing faster than in Chile. What is more, copper supply
disruptions are now at a decade low.
But demand looks to be worsening, too. While China‘s economic growth picked up slightly in the
third quarter, investment has been falling in the country‘s power sector. This drives most of China‘s
copper demand. Monthly spending growth on power infrastructure in the year to date is a quarter
the pace at the start of the year. That suggests that the copper price has not hit bottom yet.
Granted, depleting grades, or geographic scarcity, could support the copper price eventually, but
that is still a long way off. Goldman Sachs estimates that the copper price could reach USD 6,200 a
ton within 12 months from USD 7,200 today.
Investors in the likes of Rio need not worry too much—it still depends on iron ore for most of its pre-
tax earnings. But shares in purer-play copper miners such as Freeport-McMoRan and Antofagasta
have not fallen as sharply as falling earnings expectations. Both still benefit from the idea that a
global economic recovery will boost copper use. But that looks premature. Trading on 11 and 16
times expected earnings respectively, both miners trade at a big (50 and 33 percent) premium to
their three-year averages. This is at odds with reality.
Source: Financial Times
CLIMATE CHANGE TO COST EAST ASIA 5.3% OF GDP BY 2100, ADB STUDY SAYS
Climate change will lead to more flooding and drought in East Asia and could chop 5.3 percent off
annual gross domestic product by the year 2100 if measures aren‘t adopted to tackle it, according
to the Asian Development Bank.
Rising temperatures in China, Japan, Mongolia and South Korea will spur more flooding and tropical
storms in coastal areas and make northern agricultural regions more prone to drought, the ADB said
today in its ―Economics of Climate Change in East Asia‖ report. The study underscores the risks of
inaction on climate change faced by a region that was responsible for 30 percent of the world‘s
carbon emissions in 2010. China‘s model of economic growth at all costs has made it the world‘s
biggest carbon emitter and has blanketed cities in smog that can surpass World Health Organization
recommendations by almost 40 times.

13. ―East Asia needs to shift toward a model of economic growth focused on low carbon emissions and
more efficient use of resources,‖ the ADB said in the report.
Current projections suggest that regional mean temperatures in 2090 will be 3.8 to 5.2 degrees
Celsius higher than the 1961-1990 average, according to the report. The ADB said that under a mid-
range scenario, adapting infrastructure to climate change, would cost the region USD 22.9 billion a
year in 2005 dollars. Coastal protection would cost USD 4.2 billion a year and adapting agriculture
would require USD 9.5 billion a year. The costs of mitigating climate change are much lower than
the damage that would be caused by doing nothing, said Gordon Hughes, a professor at the
University of Edinburgh and one of the authors of the report. Roads are one of the most expensive
sectors for adaptation as they are particularly susceptible to higher temperatures, he said.
―The question is, do we spend money today to reduce the damage done by climate change in 40
years time, or do we wait a bit and adapt in a slightly different way but in 20 or 30 years,‖ Hughes
said. ―That‘s a very difficult trade off, but it‘s a very important trade off that needs to be made.‖
Source: Bloomberg
AMID HEAVY POLLUTION, BEIJING ISSUES EMERGENCY RULES TO PROTECT CITIZENS
Snappily titled the
―Six stops and one
wash,‖ the Beijing
city government
has announced a
new and complex
string of
regulations to
combat the effect
of persistent,
heavy air pollution
on the populace.
Ulaanbaatar, too,
is battling air
pollution and can
learn from any
successes
experienced in
China.
The plan seems to
rest on being able to predict pollution patterns with great accuracy. When one day of ―heavy‖
pollution, defined as an air quality index reading of 201 to 300, is predicted, a blue alert will be
called and extra street washing will be carried out. A yellow alert applies to one day of ―serious‖
pollution, defined as an AQI of over 300, and will also lead to extra street washing. Street washing
is intended to hold down the dust that accumulates from things like construction activity and sand
from the desert, though some here see it as a mostly cosmetic measure.
When three days of ―heavy‖ pollution are predicted, an orange alert will be called and more action
will be taken: factories will close, work on constructions sites will stop and there will be a ban on
barbecuing and setting off firecrackers. A red alert will be called when three days of ―serious‖
pollution are forecast, leading to the full ―Six stops and one wash‖ plan. As well as all the above
measures, kindergartens, elementary and high schools will shut, and cars can drive only on
alternate days; those with an odd number at the end of their license plate can drive on odd-
numbered days, and those with an even number on even-numbered days.
China has also announced a long-term, multi-billion-renminbi plan to clear the air, but the
government has warned it will not be easy or quick.
Source: New York Times

14. RUSSIA LETS DOWN GUARD ON CHINA
Russia and China's largest energy companies on Friday announced a "breakthrough" deal paving the
way for joint development of massive energy reserves in eastern Siberia, in a sign that Moscow is
overcoming its fear of Chinese encroachment on Russia's Far East.
Their preliminary agreement illustrates how Moscow is increasingly looking to Asia for customers for
its abundant energy reserves, and for funding to develop them. Russia's needs tie in with expected
long-term demand growth in oil and gas-deficient China and elsewhere in East and South Asia, and
slowing energy consumption in many industrialized nations. Russian state oil giant OAO Rosneft and
China National Petroleum Corp. said that under a memorandum of understanding signed during
Rosneft President Igor Sechin's trip to Beijing on Thursday they would explore for, and produce oil
and gas in eastern Siberia.
Rosneft and CNPC would form a joint venture, the companies said Friday in separate statements,
with Rosneft taking 51 percent and CNPC holding the rest. They plan to develop an oil field that
Rosneft gained full control of this week by consolidating 100 percent of the Taas-Yuryakh oil firm,
Rosneft said. CNPC said that the two would also collaborate closely to develop several large-scale
oil and gas fields.
"The oil produced will be used to meet the energy demand in eastern Russia and then exported to
China and other Asia-Pacific countries through the Russia-China crude pipeline," CNPC said. The
agreement "is a new breakthrough reached by the two sides in upstream cooperation, and will
surely promote future cooperation in the downstream businesses and other sectors," it added.
The energy trade between Russian and China could quadruple by 2025, consultancy Wood Mackenzie
said in a September study. It's not only oil and gas. Last month, state investment fund China
Investment Corp. took control of a 12.5 percent stake in Russian potash producer Uralkali JSC.
Source: Wall Street Journal
CHINA'S GROWTH TRAJECTORY DEPENDS ON POLITICAL CALIBRATIONS
Chinese President Xi Jinping's plans to shift the economy away from a growth-at-any-cost strategy
means that China's gross domestic product (GDP) rise over the coming year will depend as much on
political decisions as on economic conditions at home and abroad. Growth in China is directly
related to that in Mongolia, as China consumes nearly all of the mineral exports extracted from
Mongolian mines.
After China said Friday that its third quarter GDP growth accelerated to 7.8 percent, year-over-
year, from 7.5 percent in the prior quarter, Chinese officials said the country would have trouble
sustaining the faster pace. A lower target would give China room to revamp its economy even if the
changes. That is good news for companies, such as resources producers, that depend on Chinese
growth.
Political considerations will predominate, starting next month, when the Communist Party's senior
leaders meet in Beijing and release a reform plan aimed at setting the direction of the economy for
the coming decade. The sequencing of changes is crucial, economists say. Beijing could move ahead
with changes that increase costs for companies, such as wage increases, social-welfare taxes and
pollution controls.
Peking University economist Huang Yiping warns that "as the government moves more toward a
market economy, China should exhibit more typical emerging market cycles,"—meaning more booms
and busts. In June, he forecast that Chinese quarterly growth could decline to 3 percent or below
within the next three years, though he expected a fast pick-up in such an event.
One of the most difficult challenges facing the leaders after their November session is to decide
how to handle China's vast expansion of domestic credit. Interest payments for borrowers—often
developers and local governments—are rising, which makes it even tougher for them to make a
profit and repay their debt. In other countries, such a cycle has led eventually to economic crisis.
Over the past few months, the rate of credit growth has slowed as regulators have tried to reduce
the financial vulnerability. But such actions can slow economic output.
Source: Wall Street Journal

15. POLITICS
MONGOLIA PRESIDENT TO VISIT NORTH KOREA
North Korean dictator Kim Jong Un is set to meet his first head of state since coming to power
nearly two years ago when Mongolian president Tsakhiagiin Elbegdorj visits Pyongyang next week.
The Mongolian Embassy in Seoul confirmed the visit would take place but declined to comment
further. Mongolian media reported Elbegdorj would arrive in North Korea on Sunday. Ulaanbaatar
and Pyongyang are traditional allies. Mongolia was the second country to recognize North Korea as a
sovereign nation after the Soviet Union in 1948, when North Korea declared statehood. While the
agenda for the visit isn't clear, North Korea may follow up on a request for food aid made to
Elbegdorj by Pyongyang's ambassador to Ulaanbaatar in April. The official said North Korea may face
a "severe food shortage" this year, according to the president's official website. North Korea has
difficulty providing enough food to its people, especially in the regions farthest away from the
capital. The world food program said in a report this month that nearly a third of North Koreans
suffer from undernourishment. In a report from Ulaanbaatar, Japan's Kyodo News said Elbegdorj
may raise the issue of Japanese abductees believed to be in North Korea. Pyongyang has admitted
having abducted 13 Japanese and has returned 5, saying the others died. Tokyo believes the North
hasn't come clean on the scope of the abductions, and has been asking for more information.
Mongolia, which also has good relations with Japan, has sought to mediate in the dispute before.
Japanese Prime Minister Shinzo Abe discussed the issue with visiting Mongolian Prime Minister Norov
Altankhuyag last month in Tokyo. In July, Kim met Chinese vice president Li Yuanchao, believed to
be the most senior foreign official to speak with the North Korean leader since the death of
previous dictator Kim Jong Il in December 2011.
Source: Wall Street Journal
MONGOLIAN PRIME MINISTER EXPECTS IMPROVEMENT IN RELATIONS WITH CHINA
Mongolian Prime Minister Norov Altankhuyag, in a recent interview with Xinhua prior to a scheduled
visit to China, said he expects improvement of relations between his country and China in multiple
fields.
At the invitation of Chinese Premier Li Keqiang, Altankhuyag officially visited China from 22 to 26
October. Mongolia and China will strengthen cooperation in trade, political, security and other
areas while bilateral economic and trade cooperation are expected to reach a new level, said
Altankhuyag. On future cooperation between two countries, Altankhuyag said Mongolia and China
will formulate long-term strategic partnership development outlines, and strengthen cooperation in
the fields of trade, politics, defense, security, etc., especially economy and trade.
Mongolia supports China in strengthening economic and trade ties with Central Asian countries, and
will also actively participate in the construction of a "Silk Road Economic Belt," according to
Altankhuyag. Altankhuyag expects Chinese entrepreneurs to choose to invest in Mongolia. He said
that tax rates in Mongolia are lower, and the new investment law passed by Parliament this month
will help to stabilize the level of taxation and the investment environment, which will relieve
investors from worries about possible uncertainties arising from the investment environment in
Mongolia.
In June 2011, China and Mongolia set a strategic partnership. Statistics show that in 2012, bilateral
trade volume reached $6.6 billion. China has been Mongolia's largest trade partner and investor
country for many years.
Source: Global Times
CHINA'S VICE FOREIGN MINISTER MEETS FOREIGN AFFAIRS DEPUTY MINISTER
Vice Foreign Minister Liu Zhenmin co-chaired annual consultations between with Mongolia's deputy
minister of foreign affairs, D. Gankhuyag.
Liu said Mongolia was an important neighbor for China and it has always made relations with
Mongolia a high priority for its foreign policy. He suggested China work with Mongolia to push
forward their strategic partnership. He also noted the importance of Prime Minister Norov

16. Altankhuyag's visit this week.
Gankhuyag expressed satisfaction on behalf of Mongolia for the development of Mongolia-China
relations. He said Mongolia, too, makes its relations with China a high priority and that
Altankhuyag's visit was expected to yield fruitful outcomes for their partnership.
Source: Ministry of Foreign Affairs of the People's Republic of China
ELBEGDORJ MEETS POLISH PRESIDENT
President Tsakhia Elbegdorj Monday met with the visiting president of Poland, Bronislaw
Komorowski at the State House.
Elbegdorj thanked Komorowski for visiting Mongolia, and that Mongolia was always friendly with
Poland and its people. He also thanked Poland for its support during Mongolia's democratic
transition.
"I am very glad for our fruitful cooperation in fortifying the democracy," said Elbegdorj.
Komorowski said he was pleased by his visit to Mongolia and with the widening of cooperation
between their two countries. He said their two countries had developed on their own democratic
paths and that they both had worked to strengthen the democracy of not only their own countries,
but also of other nations.
Source: Montsame
MPP DEMANDS END OF PRICE STABILIZATION PROGRAM
The Mongolian People‘s Party voiced criticisms of the government Price Stabilization Program
during an address by Prime Minister Norov Altankhuyag where he presented results from the
initiative.
Altankhuyag reported that the Bank of Mongolia had provided MNT 192 billion to commercial banks
to provide low-interest loans to petroleum distributors to help mitigate swings in the foreign
exchange rate for the tugrug. The government allotted MNT 137 billion to maintain stability in food
prices and it loaned MNT 276 billion to construction companies to purchase materials and
equipment, with the aim for an end result of less costly housing.
MPP Deputy Heady S. Byambatsogt, however, said the price stability programs had proved
ineffective. He called for Parliament to organize a working group to evaluate spending on the
programs and that the government halt the practice of off-budget spending. MPP head N. Enkhbold
noted that consumer goods had doubled in price despite spending of MNT 129 billion for meat
production, MNT 143 billion for flour production, MNT 49 for construction, MNT 143 billion for low-
interest lending, and MTN 420 billion for 8 percent mortgages.
Source: Undesnii Shuudan
MONGOLIA PLANTS GREEN WALL IN THE GOBI DESERT
Sauxal trees have been planted across 350 hectares to alleviate desertification as part of the Green
Wall project in the Gobi Desert.
The project, which was launched in 2007 with the support of the South Korean government, aims to
plant trees throughout 3,000 hectares of land in a decade. Sauxal trees were planted in stages, first
in 50 hectares of land in 2011, then 100 hectares in 2012, and 200 hectares in Bayanzag this year,
100 kilometers away from Dalanzadgad Soum, Umnugobi Aimag.
―We planted sauxal trees from seeds in 2012. Millions of sauxal trees should have grown across 100
hectares, but the sauxal seeds have not grown well. Almost half of the seeds were destroyed,‖ said
a local manager of the Green Wall project, Ch. Odsuren. ―Now we use plantation. Watering the
saplings requires a lot of capital, so it seems that planting from seeds is not a suitable way in the
Gobi Desert.‖
Sauxal trees are small bushes only found in Central Asia. It has a thick trunk and many branches.
Dwellers of the Gobi Desert cherish this plant as they do coal because it can be used to build fires.
Source: News.mn
WOMEN MPs DONATE SALARIES FOR HOSPITAL FUND
Female parliamentarians are pooling their salaries to hasten the speed of construction of a hospital.

17. The Arjia Rinpoche hospital for children with blood disease and cancer is being constructed in
Ulaanbaatar at the initiative of the Tibetan Mongolian Buddhist Cultural Center in Bloomington,
United States. Although the hospital was due to begin operation at the end of this year, delays have
pushed that date back to next year, said officials.
The hospital is being financed through a fundraising campaign, and Mongolia's 11 women
parliamentarians have joined the effort. Each parliament member donated MNT 500,000 MNT for a
total MNT 5.5 million.
Source: Info Mongolia
D. NATSAGDORJ'S STATUE TAKES THE LENIN SPOT
The Ulaanbaatar Citizens Council has agreed that a statue of the renowned Mongolian writer and
poet Dashdorj Natsagdorj should be erected in front of the Ulaanbaatar hotel where Vladimir Lenin
once stood.
Natsagdorj (1906-1937), was a famous poet, writer and founder of modern Mongolian literature.
The Citizens' Khural this year removed the statue of Lenin earlier this year, along with the
Ulaanbaatar Gate that stood on the road from the Chinggis Khaan International Airport to
Ulaanbaatar. While the removal of the Lenin statue was meant to symbolize Mongolia putting its
socialist past behind it, the gate was removed to allow construction of a wider road.
Source: Info Mongolia
MONGOLIAN ETHICAL HACKERS BECOME ASIA‟S BEST
A Mongolian team of competitive computer hackers won a competition for the Asian region in a
tournament pitting some 170 countries against each other.
The team of six ―ethical‖ hackers representing Mongolia, calling themselves the Hawk team, on 16
September placed ninth in the Asia in the Global CyberLympics Hacking Championship in Atlanta,
United States. The team consisted of information assurance professionals from the Mongolian
National Data Center and placed ahead of some 650 teams. The Mongolian team beat out Asian
countries such as India, Indonesia, Sri Lanka and Malaysia in three rounds covering computer
forensics, computer network defenses, and penetration tests.
The Global CyberLympics event is part of a global search to identify experts who can help
strengthen the security systems of countries. It tests the skills of information assurance
professionals, in teams of four to six people. The event aspires to create an opportunity for ethical
hacking in the hopes of encouraging tech security. One key initiative for the CyberLympics is to
foster an environment that is safe for children using the Internet.
Source: Montsame
INVESTIGATION INTO LAND ALLOCATIONS PUT ON ICE
Authorities have suspended an investigation into former environment ministers for the illegal
allocation of protected land.
Law enforcement officers were investigating the illegal allocations of large areas of land along
Zaisan valley and the Tuul River in Ulaanbaatar by the former environment ministry heads. Those
involved in the investigation were public officials from the Mongolian People's Party, Democratic
Party, and Mongolian People's Revolutionary Party. Authorities were also looking into former
department heads at the Ministry of Environment and the directors of several companies.
One instance showed companies claiming to have plans to establish a travel complex center in their
applications for land, but instead those companies built high-cost residential apartment blocks. The
State General Prosecutor's Office has, for now, put the investigation on hold, calling for a review of
the case.
Source: News.mn
NARANTUUL FIRE CAUSED BY ELECTRICAL FAULT
Investigators have determined the reason for the large fire that consumed that grocery section of
Narantuul Market to be electrical.

18. The fire at Narantuul in August caused one death and damage to 441 rented spaces. The estimated
cost from damage is MNT 12.3 billion. Those who responded to the fire saved MNT 5.43 million in
goods.
It is still unclear whether the owner of Narantuul market, Sh. Saikhansambuu, is responsible for
repaying the costs for the damages. Over 400 renters at Narantuul market are still hoping for
compensation. The case has now been transferred to the prosecutor, which will make the final
decision pertaining to that question.
Source: News.mn
ANNOUNCEMENTS
TOKYO MOTOR SHOW & BUSINESS TRIP 2013, NOVEMBER 22-29, 2013
The Business Council of Mongolia with support of the Japan-Mongolia Business Council is now
registering Mongolian business delegation to participate in the 2013 Tokyo Motor Show & Business
Trip in Tokyo, Japan from 22 to 29 November.
At the 43rd Tokyo Motor Show 2013, automobile manufacturers from around the globe will gather
together and showcase their latest makes and models. The show continues its tradition of bringing
new and innovative ideas, latest technology in the automotive industry and brings to consumers the
unique opportunity to see everything the auto industry has to offer under one roof. The trip will
feature visits to Japanese companies and other interesting activities.
To register or for more information, call 70114442 or email tugi@bcmongolia.org. The registration
deadline is October 30, 2013.
___________________________________________
LESS THAN 1 WEEK LEFT UNTIL MONGOLIAN MINING SUMMIT 2013, 30-31 OCTOBER, PERTH
Secure your attendance at the most action-oriented program that will help you learn from Senior
Mining Executives involved in furthering Australia and Mongolia's business relationships in the
resource sector!
Already attending organizations include: AECOM Australia, Anglo American, Ernst & Young, Golomt
Bank, Macmahon Holdings, Oyu Tolgoi, Project Mining, Bechtel Australia, Austrade, Mongolian
Mining Corporation, Guildford Coal and more! Book your ticket here.
BCM is a supporting organization for this conference. Register online or email
registration@iqpc.com.au
___________________________________________
ONLY 3 WEEKS LEFT UNTIL MONGOLIA INVESTMENT SUMMIT, HONG KONG
Since opening up the registration for the fourth annual Mongolia Investment Summit 2013 in Hong
Kong from 19 to 20 November, organizers have received an overwhelming response from investors.
With the new Investment Law being passed by the Mongolian Parliament last week, we expect the
investor interest for the Summit to pick up even more.
Meet with up to 500 senior level delegates at the Summit and set up one-on-one meetings with
investors and potential business partners all in one place. Mongolia Investment Summit is the only
Mongolian investment event taking place in Hong Kong, the financial deal-making hub of Asia. All
registered delegates will have exclusive access to our advanced Mongolia Invest Online Meeting
Planner which will allow you to see who‘s coming and let you pre-arrange meetings with the other
attendees to make the best use of your time at the event.
BCM is again a supporting partner organization. BCM members will enjoy 15% discount; please quote
Priority Code 695BCM15D during registration. To speak, sponsor or exhibit: Please contact King Tai
at king.tai@beaconevents.com
___________________________________________

19. “MM TODAY” ON MNB-TV, FRIDAY, 19:00-19:15
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 from 19:00 to 19:15 tonight. Tune in to watch this program that reports stories from
today‘s BCM NewsWire.
BCM WEBSITES
MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS
The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.
As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the
government website Open-Government.mn are regularly updated.
S. Oyun, Minister of Environment and Green Development, presentation at BCM monthly meeting on
May 27 added to Mongolian website, bcmongolia.org/mn/илтгэлүүд.
- Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн
бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN
BUSINESS NEWS‟, „PHOTO GALLERY‟
On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available:
• Jim Dwyer, Executive Director of BCM – ―Mongolian Economy: Investment
Opportunity/Challenges‖ at the 16th Annual NAMBC Investors Conference, Sept 24, 2013
• Business-mongolia.com: ―Working group‘s conclusion on the economy‖
• Joshua Sunga, Internship Program Director, AIESEC- "Youth Leadership Development" at the BCM
Monthly Meeting Aug 26. 2013
• G. Zorig, Country Manager, Tree Global Mongolia – ―Tree Global Mongolia Overview Presentation‖
at the BCM Monthly meeting Aug 26, 2013
• G. Saruul, Deputy CEO, Mongolian Stock Exchange – ―Securities Law Overview‖ at the BCM Monthly
meeting Aug 26, 2013
• Bilguun Ankhbayar, Chief Executive Officer, Mongolian Investment Banking Group LLC,
―MIBG Review‖, at the MSE-BCM Securities Law Overview Session, July 4, 2013
• Robert Rooks, Director, PwC Hong Kong, ―A brief Overview of Custody Services‖, at the MSE-BCM
Securities Law Overview Session, July 4, 2013
• Anthony Woolley, Senior Associate, Hogan Lovells, ―The Revised Securities Market Law‖, at the
MSE-BCM Securities Law Overview Session, July 4, 2013
• B. Saruul, Director General, Securities Department, Financial Regulatory Commission of Mongolia,
―Securities Markets Law – Path to Market Reforms‖, at the MSE-BCM Securities Law Overview
Session, July 4, 2013
Please note the presentations from each of the BCM monthly meetings.
The ―Mongolia Reports‖ section includes the following:
- ―Selected Macroeconomic Indicators; data through October 16, 2013‖ by International Monetary
Fund;
- ―IMF Completes 2013 Article IV Mission to Mongolia‖ by International Monetary Fund;
- ―Mongolia Macro Flash‖, Adrienne Lui, Asia Pacific Economics Research, Citigroup Global Markets
Asia Ltd;
- ―Selected Macroeconomic Indicators for Mongolia, as of June 2013‖ by International Monetary
Fund;

20. - ―Polit Barometer April, 2013‖ by Sant Maral Foundation;
- ―Market Update‖ by Mandal General Insurance LLC;
- ―Annual Report 2012‖ by International Monetary Fund;
- ―Regional Economic Outlook: Asia and Pacific‖, April 2013 by International Monetary Fund;
- ―Highlights of 2012, Mongolia‖ by European Bank for Reconstruction and Development (EBRD);
- ―Official statement of Oyu Tolgoi LLC in relation to information, data and facts related to Oyu
Tolgoi‖ discussed during open session of the State Great Khural‖, dated 1 February, 2013‖;
- ―Mongolia Investment Climate Statement‖, by the Economic and Commercial Section of the U.S.
Embassy;
- ―Mongolia Foreign Labor Force Ratio for 2013‖ by Hogan Lovells International LLP;
- ―How Mongolia will perform in 2013?‖ by Mandal Asset Management;
- ―Mongolia Business Owner and CFO Survey result‖ by BDSec JSC;
- ―The fiscal regime for mining - a way forward‖ by IMF Fiscal Affairs Department;
- ―Taxes for Expatriates in Mongolia‖ by PricewaterhouseCoopers.
The following interviews are added to Interview Section from the Oxford Business Group, Mongolia
Reports 2013 book:
• B. Byambasaikhan, Chairman, Business Council of Mongolia: ―Talk is cheap‖;
• President Ts. Elbegdorj: ―Diversifying for growth‖
• Jim Dwyer, Executive Director, Business Council of Mongolia: ―Non-mining sectors budding‖;
• Peter Morrow, Chairman, American University of Mongolia: ―Filling in the blanks‖;
• N. Zoljargal, Governor, Bank of Mongolia: ―Sustainable vision‖;
• Gansukh, Minister of Roads and Transportation: ―Accessing new markets‖;
• J. Od, President, MCS Group: ―Building interest‖;
• B. Chuluunbaatar, President and CEO of Monnis Group: ―Climbing the ranks‖;
• Cameron McRae, President and CEO, Oyu Tolgoi: ―Sitting on a copper mine‖.
BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to
Parliament and Government is available for download.
BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business
News‖ before they are all put together each week for Friday's weekly NewsWire.
The ―Photo Gallery‖ contains photos from the 5th Anniversary BCM Gala dinner on November 5.
BCM Football Cup 2013 pictures are posted to the website - http://bcmongolia.org/en/photos/350-
en/album?albumid=200
The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home
page for a consolidated account of the week‘s events.
___________________________________________
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.
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.
Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better
business environment in Mongolia today.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
http://twitter.com/#!/bcMongolia.
We have now 1,705 fans on our Facebook fans page, 1,515 connections on LinkedIn network, and
785 followers on Twitter.
Of course for news information, interviews, event photos, and announcements regarding our

21. organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn
BCM WORKING GROUP NEWS
Business Council of Mongolia (BCM) has been moving forward with its ‗BCM in the University‘s
Classrooms‖ series since March 2012. Led by BCM‘s Education Working Group the program provides
lectures at universities to help inspire students and give them direction for their future careers.
Most recently B. Bayarmaa, a carbon finance specialist at Clean Energy LLC and chair of BCM`s
Environmental Working Group, gave a presentation titled ―Climate Change Mitigation and Green
Development‖ to an audience of more than 65 students and teachers and Sodnomdagva Ch,
Associate Professor at Geoecology and Environmental Science Department, National University of
Mongolia, at 23th of October 2013.
Next: ―BCM in the University Classroom‖ series will be held on 6th of November 2013 at Mongolian
National University. Nick Cousin–Chief Operating Officer of BDSec and Co-chair of BCM`s Capital
Markets WG has been invited to speak.
Presentation title: ―Capital Market update‖.
Please contact erka@bcmongolia.org
ECONOMIC INDICATORS

25. 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]
September 30, 2013 *9.9% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 8.4% y-o-y, Ulaanbaatar city, September 30, 2013
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]
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]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
CURRENCY RATES – OCTOBER 24, 2013
Currency Name Currency Rate
US dollar USD 1,701.37
Euro EUR 2,345.93
Japanese yen JPY 17.47
British pound GBP 2,753.50
Hong Kong dollar HKD 219.45
Chinese Yuan CNY 279.67
Russian Ruble RUB 53.68
South Korean won KRW 1.60
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.