August 26 2011

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 182, August 26 2011
NEWS HIGHLIGHTS:
Business:
 Selection for Tavan Tolgoi investors is not final, says SPC;
 Thermal plant to power Tavan Tolgoi and Oyu Tolgoi;
 Macmahon Holdings and BBM Operta Group win Tavan Tolgoi contract;
 For Ivanhoe, copper out-shined by gold's lustrous prices;
 Petro Matad reports success at DT-9;
 Xanadu begins advanced gold exploration in Dornogobi;
 Guildford may list Terra Energy subsidiary on ASX;
 Terra Energy acquires exploration license;
 Just Agro LLC to issue MNT30 billion of corporate bonds;
 Garrison International acquires coal prospect in Dundgobi;
 Blina explores Bayankhongor for copper;
 Could Mongolia be a leader in alternative fuels?
 Lucky Strike recruits its dream team;
 Leighton chairman steps down;
 AIDD sends executive to earn his MBA;
 Allens joins membership of the Business Council of Mongolia.
Economy:
 2011 Mongolian budget surplus MNT 1 trillion;
 MSE proves its competency in bond sales;
 Coal exports reach USD 1 billion in Mongolia;
 Tavan Tolgoi deal reduces Mongolian shares' value to pennies, says NGO;
 Discover Mongolia conference to discuss investment opportunities in Mongolia;
 Wool market gets hairy;
 Government invests in cashmere industry;
 Rock beats paper: precious metals appreciate against the U.S. dollar;
 Mongolian and Korea's banks work together for development;
 Housing prices on the rise in Ulaanbaatar;
 Mongolia may borrow from China for “100,000 Homes” project;
 Border towns reap the rewards of Mongolian-Chinese trade;
 NGO grants financial aid to students;
 China's stock exchanges discuss cooperative agreements;
 Kazakhstan must kick its oil dependence, says IMF.
Politics:
 Mongolia may be a candidate for U.S. uranium lease program;
 Mr. Biden comes to UB;
 No nuclear waste talks took place, says U.S. ambassador;
 Bilateral Transparency Agreement key to Mongolia-U.S. FTA, says Biden;
 China chimes in on Biden's attempt to ease financial fears;
 Presidential visit deepens relations between S. Korea and Mongolia;
 South Korea fumes about Tavan Tolgoi outcome;
 Experts denounce Tavan Tolgoi deal;

2.  Foreign investors expected to benefit Mongolia for rights to Tavan Tolgoi;
 Government to warm 70,000 Mongolian homes;
 Falcon sales take off;
 Chinggis Khan inspires a nation for democracy and a free economy;
 Central Asian region uses education as greatest hope for peace;
 Russia looks back on 20 years of “supposed” democracy;
 Selbee to receive extreme river makeover.
*Click on titles above to link to articles.
BCM MONTHLY MEETING RECAP
The meeting on August 22 with Laurenz Melchers in the chair, was attended by 65 members and
invited guests who overcame severe traffic caused by visits of U.S. VP Biden and S. Korean
President Lee. Executive Director Jim Dwyer introduced the BCM NewsWire's new editor-in-chief,
Terrence Edwards. Membership now stands at 188 members, up from 160 last August. Those
recently joined are:
1. CGBEM is jointly-owned by Mongolia Minerals Corp., a Canadian company based out of Calgary
and its Mongolian partner. The company is focused exclusively on the exploration and development
of coal and other mineral resources in Mongolia.
2. Mongolia's Opportunities Fund provides growth capital to companies that exhibit established
profitable business models, have strong management teams and demonstrate potential to become
market leaders. It invests in businesses for agribusiness, infrastructure, and mining services and
supply chains.
3. Allworld Exhibitions is an exhibition organizer currently organizing 150 international exhibitions
in 11 countries. It was called one of the top organizers by revenue in the Asian Exhibition Market.
The company assists in global exporters to penetrate emerging markets, especially in Asia and the
Middle East. Allworld Exhibitions delivers industry specialized exhibitors.
4. Allens Arthur Robinson is a leading international law firm in 12 offices across Asia. The firm works
with 55 of the world's top 100 companies, eight of Australia's top 10 public companies, and 77 of
Australia's top 100 public companies.
5. Oxford Business Group is a global publishing and consultancy company which produces original
economic and business intelligence on markets in the Middle East, Africa, Asia, and Latin America.
Through its print and online publications, OBG offers comprehensive analysis of macroeconomic and
sector developments. It publishes annual reports on more than 30 countries and territories, as well
as monthly sector updates. Each Report is the product of many months of on-the-ground research.
The evening‟s first speaker was Sarah Kamowski, Vice President of AIESEC-Mongolia, a group
initially sponsored by Yale University engaging 60,000 students in 120 countries. It is the world's
largest run student organization and has been in Mongolia since 2008. At least 20 young volunteers
will come to Mongolia as part of AIESEC's program to bring interns from abroad to businesses in
Mongolia and to send Mongolian students abroad to gain international work experience. The
organization also sends students to conferences abroad and connects them to a global network. In
addition to its intern program it provides a local business program for leadership development,
youth-to-business events, and a global exchange program.
Ts. Tumentsogt, Chief Representative of General Electric International in Mongolia, discussed GE‟s
solutions for Mongolia. These include work in the mining sector, infrastructural development,
helping to diversify Mongolia's economy, creating renewable energy opportunities, and exploiting
synergies between Mongolia and China. Other market opportunities include power generation,
railway locomotive sales, and health care services.
Anne Delarue, a representative of Oxford Business Group, announced her company will publish a
2012 report about Mongolia. Oxford Business Group is a consultancy research, subscription-based
publication with 15 years of experience. Representative Anne Delarue said the company decided to
report on Mongolia because of its impressive GDP growth (over 14 percent in 2011 to June 30),
opportunities posed by Oyu Tolgoi, untapped potential in sectors such as energy and communication
in addition to mining, and favorable commodity prices.
Finally, John Karlsen, CEO of Newcom Mining Services, announced plans to launch the Gobi Rentals
mining services company. It will open two facility locations at Tsogttsetsii and Khanbogd. It will

3. target mining operations, construction projects, and residential and commercial construction in the
Gobi Desert.
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
Mongolian Star Melchers Breakthrough PR
MCS Property Oxford Business Group
BUSINESS
SELECTION FOR TAVAN TOLGOI INVESTORS IS NOT FINAL, SAYS SPC
Japanese and Korean companies may still compete for the right to develop the Western Tsankhi
mining site at Tavan Tolgoi. This news comes a month after the Mongolian government's decision to
grant 40 percent to China, 24 percent to the USA, and 36 percent to a Mongolian-Russian
consortium. The decision was heavily protested by experts and citizens; and called for review by
President Ts. Elbegdorj.
“Japanese and Korean operating companies have not been eliminated,” said State Property
Committee Chairman D. Sugar. “When we started negotiations, China and Russia expressed strong
interest to us. But the Japanese and Korean operating companies did not offer high technology.
They only wanted to buy coal.”
According to the company official, operations for the site are on schedule and the IPO for the site
will take place by January 1 2012. He said the government will receive more returns the sooner the
Tavan Tolgoi site sells. In addition, claims that the site cannot be divided are unwarranted and only
Parliament can address such issues.
According to reports, the government's selection of investors is currently being reviewed by
Parliament. The official said he hoped the issue to be resolved this year. Exploration and extraction
has already begun at Zuun Tsankhi. He also hinted at the possibility of bids from an Australian-
German consortium. Sugar refused to comment on any claims regarding corruption.
Source: MAD-Mongolia, News.mn
THERMAL PLANT TO POWER TAVAN TOLGOI AND OYU TOLGOI
A power network will be built for the Gobi region with the thermal power plant currently planned

4. for construction at the center of it. Preliminary plans for the network have already commenced.
The power plant will connect various mining sites and communities in the Gobi Desert. Currently a
220-kilowatt line from Ulaanbaatar to Mandalgobi soum's Tavan Tolgoi operations to supply
Tsagaansuvarga is under construction. Another 100-kilowat line to operations at Dalanzadgad began
this summer in addition to the beginning of construction for a 110-kilowatt line to Chinhua Mak.
Frontier Securities Chief Investment Strategist Dale Choi called the plant a nucleus, feeding energy
to the surrounding area.
However, it is unclear how Oyu Tolgoi will fit into the network. Project planners are considering
building a portion of the plant at OT to save time while infrastructural problems remain unresolved.
Its seems as though at 220-kilowatt power line from China will feed the Oyu Tolgoi project with
energy for at least a short time. However, three plans for energy supply are available to the site
and one of those methods will be supplying energy there by the time full production begins.
Somehow a 220-kilowatt power line will be feeding the Oyu Tolgoi site with energy.
By the time Oyu Tolgoi is connected to the power grid, the plant will have been completed long ago
and an energy policy will have been implemented. What exactly that policy will look like is
currently unknown.
Source: Frontier Securities
MACMAHON HOLDINGS AND BBM OPERTA GROUP WIN TAVAN TOLGOI CONTRAC
Australian project house Macmahon and its German joint venture (JV) partner BBM Operata Group
have been awarded the preferred contractor status at the Tavan Tolgoi coal operation, in Mongolia.
The contract will involve large-scale opencut mining operations in the Eastern Tsankhi area of the
Tavan Tolgoi project, worth an estimated $7.3-billion, being developed by State-owned Erdenes
Tavan Tolgoi JCS.
Macmahon said that subject to the finalisation of the negotiations, the JV anticipated that it will
start mining operations in the first quarter of 2012. The current mine plan indicates that production
will ramp up to 15-million tons of coal a year, once all infrastructure is in place.
Confusion arose last week in regard to a deal that was either agreed or not agreed upon between
Macmahon Holdings and the Mongolian government about operations at East Tsankhi at Tavan
Tolgoi. However, the company has made an official statement declaring a deal has been
contracted. The JV partners will now work to finalise the contract details with Erdenes Tavan
Tolgoi JSC over the coming months.
Source: Mining Weekly, Udriin Sonin
FOR IVANHOE, COPPER OUT-SHINED BY GOLD'S LUSTROUS PRICES
The value of precious metals is beginning to overshadow copper's. Ivanhoe Mines estimates its Oyu
Tolgoi mine will result in negative cash costs at current gold and silver prices. Precious metals will
contribute and average 44 percent of the mine's revenue for the first five years if current prices
continue as they are, said the company.
Gold is currently proving to be a more lucrative prospect than copper. Gold hit record highs this
week approaching USD 1,900 per ounce this week, while silver climbed to USD 43.58 per oz.
According to company estimates, producing a pound of payable copper produces a results in a
negative cash cost of USD 0.07 in the company's first five years of production.
“Revenues from gold and silver will have a significant positive effect on lowering the average cash
cost to produce a pound of copper during the first five years of mining at Oyu Tolgoi,” Ivanhoe CEO
Robert Friedland said in a press release.
Oyu Tolgoi mine is expected to produce 650 000 ounces of gold, three-million ounces of silver and
1.2 billion pounds of copper annually in its first 10 years of commercial operation.
Source: Mining Weekly
PETRO MATAD REPORTS SUCCESS AT DT-9
Exploration of the Davasan Togloi-9 (DT-9) oil well owned by Petro Matad is producing positive
results, reported the company. The company is employing 3D mapping software in coordination
with drilling techniques.
"DT-9 is the latest successful well in the Company's Davsan Tolgoi exploration program and we are
pleased to note such a good, solid interval of hydrocarbons,” said Petro Matad CEO Doug McGay.
The Davsan Tolgoi Shoroo Prospect is now starting to develop very satisfactorily, considering the
success of DT-9 and the previously drilled DT-4, together with the recently completed re-mapping
of the reprocessed 3D seismic data in this area.
The CEO went on further to say that using computer software the company is compiling a great deal

5. of datum on the site.
Future drilling locations are being prepared in another part of Shoroo Prospect, where the Lower
Tsagaantsav Reservoir sits 100 meters above DT-9.
Source: Petro Matad
XANADU BEGINS ADVANCED GOLD EXPLORATION IN DORNOGOBI
Exploration for gold and silver began at Elgen-Zost-Suug. Xanadu Mines Ltd. employed exploration
drilling for its Solenker Epithermal Gold Project using a multi-purpose drill.
The site is located in Dornogobi Aimag, approximately 750 kilometers southeast of Ulaanbaatar and
less than 50 kilometers from the Chinese border. The company currently holds five exploration
licenses covering more than 400-square kilometers of that region. The company has mapped the
distribution of significant mineral veins for test drilling and developed a geophysics program for
relevant geological activity.
“It represents one of the standout advanced gold exploration opportunities in southern Mongolia
where previous explorers had encountered extensive anomalism in shallow drilling, but had been
discouraged by the windfall profits tax on gold at the time,” said Chairman Brian Thornton.
Xanadu Mines is an exploration company, operating six years in Mongolia. It owns two thermal coal
assets, Galshar and Khar Tarvaga. It is utilizing its exploration licenses for coking coal at Nuurstei
and Javkhalant, and copper and gold in the south east Gobi Desert. Most recently, it acquired the
Sharchuluut Uul porphyry copper project.
Source: Xanadu Mines
GUILDFORD MAY LIST TERRA ENERGY SUBSIDIARY ON ASX
Guildford Coal Ltd. may list its coal assets in Mongolia separately on the Australian Securities
Exchange (ASX). It is possible it will list Terra Energy (of which it controls 70 percent).
Terra Energy is expected to export coal from its South Gobi project in the first half of next year.
The company believes it can build a mine with an annual production capacity between two and
three million metric tons of coal at its site. The site is located near SouthGobi Resources Ltd.,
which produces 5 million tons of coal annually.
"The Guildford board believes that the potential for a Terra Energy IPO on the ASX will provide
investors with an excellent opportunity to invest in a portfolio of quality Mongolian projects with
near-term production potential," Craig Ransley, Guildford's chairman said.
The South Gobi project contains both high-quality coking coal for steel production and thermal coal
for power generation, said Guildford.
Source: Fox Business
TERRA ENERGY ACQUIRES EXPLORATION LICENSE
Due to recent acquisitions Terra Energy LLC may become a new coal producer in Mongolia. The
Guildford Coal Ltd. subsidiary assumed 100 percent of Alag Tevsh for USD 3.5 million which holds a
coal exploration license for the South Gobi region.
An overview of the company's acquisitions is encouraging. The company's newly acquired license
permits it to explore near existing coking and thermal coal projects that are looking to expand their
own operations. Geologists who independently developed the site provide encouragement as well.
Guildford Coal Managing Company director Mick Avery stated, “The highly prospective Terra Energy
LLC projects have the potential to host large scale thermal and coking coal mineral resources and
represent an opportunity for Guildford to become a coal producer within 12 months as the South
Gobi Project is well located close to the Chinese border station of Ceke where coal from Mongolia is
already trucked into China.”
Reports say the price of coal is rising. Currently the coal sells at an average of USD 54 per ton.
Source: Guildford Coal
JUST AGRO LLC TO ISSUE MNT 30 BILION OF CORPORATE BONDS
In order to finance purchase of raw material (livestock purchase) as well as to expand the business,
Just Agro LLC, a wholly owned subsidiary of Just Group LLC, is issuing MNT30 billion of secured
corporate bonds that will be listed on Mongolia Stock Exchange (MSE). The issue, which was
approved by Financial Regulatory Commission of Mongolia (FRC) last month, will be the first
corporate bond listed on the MSE since 2008. BDSec JSC is working as an underwriter of this bond
issue.
The total amount is divided into 3 tranches depending on the timing of issuance with the first
tranche or MNT10 billion of bonds expected to be issued by the end of this month. The bond,

6. secured by real estate put as collateral in the event of bond default, pays interest rate of 16.2% on
an annual base and the coupon payment will occur every quarter.
Just Agro LLC, which currently controls 30% of the domestic meat processing market and supplies
20% of the meat export, is planning to increase its use of capacity from 30% to 80% by purchasing
more raw material or livestock using the bond proceeds. The company has 11 slaughtering and meat
processing factories throughout Mongolia.
Source: BDSec
GARRISON INTERNATIONAL ACQUIRES COAL PROSPECT IN DUNDGOBI
The Canadian firm Garrison International recently acquired the Nalaa coal and uranium prospect,
reported the Winnipeg Free Press.
The 73-square kilometer site is located in Dundgobi Aimag and is known chiefly as a coal basin.
However, there is reason to believe there is uranium present, Winnipeg Free Press reported.
The Nalaa prospect sits within the thermal coal basin of the Dundgobi region, which hosts several
major coal deposits. The license covers a large area of prospective coal and the company will
conduct further tests for analysis.
“Previous Russian explorers had developed several small mining pits in this area and bulk samples
were sent to Russia for analysis,” said Blair Krueger, president of Garrison, a company listed on the
TSX Venture Exchange.
The property was acquired through the USD 22,000 purchase of Dehroy Financial Advisory LLC, a
Mongolian company that holds the exploration license for the prospect. Garrison is a Canadian-
based junior mineral exploration company focused on acquiring and developing advanced stage gold
properties in Mongolia.
Source: ResourceInvestingNews.com, Winnipeg Free Press, Garrison International
BLINA EXPLORES BAYANKHONGOR FOR COPPER
Drilling in Bayankhongor Aimag will begin for copper exploration. Blina LLC, the Mongolian
subsidiary company of Blina Minerals NL, will operate on its Bayanburd Copper Gold license and
utilize two drill rigs.
The central portion of the licensed area received geological inspection in 2008, noting the existence
of copper and gold. To the east and west are two other areas for potential exploration, but both
need more study. With the proper research done, drilling will begin operations. The results
gathered from these drill sites will lead to further refinement. Drilling results will ultimately lead
to decisions about purchasing 51 percent of the property and further exploration in 2012.
The site is 500 kilometers south east of Ulaanbaatar and 39 kilometers south of the provincial
capital, Bayankhongor soum. The company reported good access and infrastructure.
Source: 4-traders
COULD MONGOLIA BE A LEADER IN ALTERNATIVE FUELS?
Mongolia will transition from a fuel importer to exporter within the next two years, said Envidity
Inc. chairman Wesley Clark. With support for the Mongolian government, the company is planning to
extract coal for fuel conversion.
In cooperation with Liver Energy Group and Shine Shivee LLC, Envidity plans to extract
“economically stranded” coal, 150 meters deep underground. The coal extracted in this project will
be turned into synthetic diesel using new technology, said Clark. Project operations started in July
and USD 1 billion has been dedicated to the project.
The Mongolian government supports this project, believing it can help reduce Mongolia's
dependence on foreign imports. The project has the potential to produce 1,000 barrels of synthetic
diesel each day before two years are over. This would satisfy 10 percent of local demand.
Furthermore, project planners believe they will be able to produce 14,000 barrels each day within
60 months.
“Prime Minister Batbold asked me in March 2010 during a meeting in Ulaanbaatar to help bring this
kind of project to Mongolia,” said Clark. “With the Envidity Project now ready for launch, I have
kept my promise to the Prime Minister in bringing this patented UCG-GTL technology to Mongolia to
allow domestic production of transport fuels. This is a key strategic project for Mongolia.”
This project aims to grants Mongolia the world's largest clean-energy technology transfer in history.
Read more…
The synthetic fuel is a clean and reasonably priced fuel alternative for the future, said the
company. The project will create 3,000 construction and 150 high salary positions for Mongolians,
reported MAD-Mongolia. Project planners are considering 7 different commercial plants within the

7. next 15 years and estimates project USD 7 billion from investors.
Source: MAD-Mongolia
LUCKY STRIKE RECRUITS ITS DREAM TEAM
Lucky Strike is recruiting a team of advisors from various backgrounds and professions to capitalize
on the opportunities in Mongolia. The Canadian mining firm Lucky Strike Resources recently hired
10 professionals to strengthen its technical and management team, said the company.
The new recruits hold expertise in areas such as geological study, engineering, and corporate
relations. Senior Geologist and Project Geology Overseer Ed Ullmer has 40 years of experiencing in
geological exploration and development in the United States. He also holds 15 years experience
consulting on mining projects. With over 35 years of experience in operations management, Don
Arsenault will serve as the company's senior mining engineer and Mongolia mining advisor. The
company has also recruited a series of engineering experts in different areas of study for technical
advisement.
B. Bat-Amgalan will serve as its Mongolia advisor. He has experience developing business in
Mongolia and received the Order of the Polar Star from President Ts. Elbegdorj in 2010 for his
contributions to the development of history and cultural heritage in Mongolia. The company
depends on him for his experience in mining operations, relations within the mining community,
and understanding of Mongolian culture for success.
The company is confident 2011 will be an important year to build a foundation for Lucky Strike's
success in the Mongolian market.
Source: Market Watch
LEIGHTON CHAIRMAN STEPS DOWN
David Mortimer, the Chairman of Leighton Holdings resigned from the company board, resulting in a
3 percent drop in shares. Leighton Holdings is the parent company of Leighton Asia, which has
operations in Mongolia. Reports said the chairman resigned for personal reasons.
"Whilst the last 12 months have been very demanding, I am pleased to be leaving after the board
has addressed legacy issues and has been able to announce a positive forward outlook for the
company," Mortimer said in a statement.
The company says it will appoint a successor “in the near future.”
This is the second time Leighton's chief executive has resigned this year. Former Chief Executive
Wal King left after 23 years of working in that position. Under his leadership, the company grew
quickly to compete with some of the world's biggest construction companies. It is also the world's
largest outsourced mining operator. However, Leighton has reported significant legacy problems
since Mr. King's departure.
Source: Wall Street Journal
AIDD SENDS EXECUTIVE TO EARN HIS MBA
A Mongolian mining services company will send seven students to the Hong Kong campus of the
Richard Ivey School of Business. AIDD will send its Mongolian executive Munkhbaatar Munguntsetseg
in addition to six additional students.
Munguntsetseg will attend the university for its Executive MBA program. Ivey‟s EMBA in Hong Kong is
an 18-month, weekend-based program designed for executives in Asia. The school‟s Consortium
Programs are 12-day, modular leadership programs for groups of companies. The Richard Ivey
School of Business established a campus in Hong Kong in 1998. Ivey offers an Executive MBA and
non-degree Executive Development programs to executives from across Asia.
“The economic trajectory of Mongolia is positive and evolving rapidly,” said Greg Goldhawk,
Canada's ambassador to Mongolia and former Richard Ivey School of Business graduate. “Education
is widely recognized in Mongolia as one of the essential foundation stones to achieving sustainable
and diversified growth. AIDD Group has shown front-rank leadership in recognizing these facts and
partnering with the Ivey School to develop its internal management capacity.”
AIDD LLC was founded as a Mongolian company in 2004 and over the past 7 years AIDD has
completed extensive drilling projects across Mongolia, China, and Kazakhstan.
Source: AIDD
ALLENS JOINS MEMBERSHIP OF THE BUSINESS COUNCIL OF MONGOLIA
The Business Council of Mongolia (BCM) recently inducted the law firm Allens Arthur Robinson
(Allens) as a member of its organization. The organization is a NGO promoting business and
investment in Mongolia. It brings together Mongolian and foreign-based businesses to act as an

8. independent business advocacy group for Mongolia.
Partners Erin Feros and David Wenger, Senior Associate John Koshy, and Lawyer Emma Wanchap
attended the meeting to witness their induction.
“We see the firm's membership in the BCM as an essential component of our Mongolia group's
activities,” said Feros. “We welcome this opportunity to meet with colleagues and build
relationships here on the ground in Ulaanbaatar.”
Wenger, who is based in Hong Kong, said he has seen more investment into Mongolia from Hong
Kong and described Mongolia as an exciting new frontier. The firm is already involved in work such
as the Oyu Tolgoi copper and gold project.
Source: Allens Arthur Robinson
ECONOMY
2011 MONGOLIAN BUDGET SURPLUS MNT 1 TRILLION
The Mongolian budget turned out a MNT 1 trillion surplus during the first six months of this year.
Mongolia's GDP grew by 14.3 percent. The government's next aim is to spread this wealth to the
people, reported Zuunii Medee.
The government issued bonds at the Mongolian Stock Exchange (MSE) recently for investments, such
as agricultural development. After negotiations with the Financial Regulatory Commission, MSE,
commercial banks, the Mongol Bank, and brokers, over MNT 25 billion worth of bonds were sold.
The Ministry of Food, Agriculture and Light Industry Development drafted the procedures to
distribute funds through small and medium sized loans for entrepreneurs in an effort to combat
“Dutch disease.” This describes the threat of inflation when reliance is too heavy on one single
sector; one Mongolia has been warned against.
In past years, Mongolia has suffered losses as high as MNT 900 billion.
Source: Zuunii Medee
MSE PROVES ITS COMPETENCY IN BOND SALES
Recent activities at the Mongolian Stock Exchange (MSE) can inspire confidence from investors,
reported Frontier Securities. The MSE last week sold MNT 26.7 billion worth of government bonds.
Auctions for government bonds began early this month and will extend through the end of October.
Weekly auctions will fund MNT 300 billion of loans via commercial banks to the cashmere and wool
industry in addition to various small and medium-sized enterprises.
“Although it appears that the government bonds have to be a very attractive investment (locking in
at between 8 and 10 percent is a very impressive yield), there is a definite need for professional
quality research and ratings on the bonds,” said Frontier Securities Chief Investment Strategist Dale
Choi.
Source: Frontier Securities
COAL EXPORTS REACH USD 1 BILLION IN MONGOLIA
Mongolian coal exports recently reached a record USD 1 billion this year. This is over a 120 percent
increase from last year, reported Frontier Securities.
Coal exports are currently earning USD 120 million a month and USD 4.5 million each day. Frontier
Securities said these prices fall within its predictions for 2011 and predicts an additional 20 percent
increase in following years.
Southgobi Resources Ltd. produced 1.97 million tons of raw coal. Its increased production is a direct
result of its mining infrastructure. At 1.5 million tons, the company sold its coal at approximately
USD 53 per ton. This price is a 36 percent increase from 2010.
While profits are rising, companies are battling the rising costs of fuel and screening. However,
most gains are from favorable price growth, said Frontier Securities.
Source: Frontier Securities
TAVAN TOLGOI DEAL REDUCES MONGOLIAN SHARES' VALUE TO PENNIES, SAYS NGO
China acquired its stake at the Tavan Tolgoi coal mining site at a price severely under market
value, said experts. Others claimed the Mongolian government violated its own laws by going ahead
with the deal.
The NGO Fair Judgment of Citizens criticized Minister D. Zorigt for making a deal that undercuts the
value of the shares issued to all Mongolian citizens born before March 2011. According to the NGO,
if an average 15 million tons of coal is extracted from the site each year, it will total 450 million
tons after 30 years of operation, resulting in a net profit of USD 5,492,000,000. Divide that figure by

9. 14 billion shares and Mongolian can only expect to receive USD 0.32 for each. Since each citizen
was granted 536 shares, the result is USD 126 after 30 years of coal extraction from Tavan Tolgoi
per citizen, or USD 1.09 each month since mining operations began.
Claims that the Mongolian government violated its own laws are also piling up. According to
Resolution No.39 passed by Parliament, dividing the Tavan Tolgoi deposit into a west and east site
is a clear violation. The resolution also instructs government to establish an Erdenes Tavantolgoi
subsidiary for transferring the special licenses for the deposit itself. Furthermore, others complain
Mongolia should be heading operations itself without foreign mining operations at all.
The decision to grant the Chinese mining company Shenhua Energy 40 percent of the western
Tsankhi mining site located at Tavan Tolgoi and the rights to transport and sell all coal extracted
from it has been under heated debate since its announcement.
Source: Zuunii Medee
DISCOVER MONGOLIA CONFERENCE TO DISCUSS INVESTMENT OPPORTUNITIES IN MONGOLIA
Investment and development opportunities will be promoted in Mongolia this fall. Industry leaders
from around the world will attend a conference for Mongolia's development in September. Discover
Mongolia will focus on issues regarding Oyu Tolgoi and Tavan Tolgoi mines.
As mineral and resource revenues reach MNT 1 trillion, investors are beginning to see Mongolia as a
new investment opportunity for global energy, reported MAD-Mongolia. Profits from mining are
already contributing to one-third of the national budget reported the Mineral Resources Authority.
Currently, investors are weighing the risks and potential for investments in Mongolia's resources. In
2009, gold revenues added to MNT 60.5 billion in addition to MNT 75.8 billion from coal. However,
some investors worry about legal issues, taxes, and a lack of infrastructure.
Source: News.mn
WOOL MARKET GETS HAIRY
As the price for wool rises internationally, Mongolia's prices are taking a dive. To keep up with the
high costs for their children's education, Mongolian herders are selling their animal products
cheaply. Some complain the government's focus is misplaced, concentrating on livestock instead of
the herders who tend to them.
University tuition fees rose once again this year to 9.1 percent, making it more difficult for parents
to pay. As a result, herders are selling their wool at prices far below market value. Although the
price for wool reached record highs this year, some herders are selling wool at prices as low as MNT
1,500 per kilogram. Yet, the global market price begins at MNT 15,312 per kilogram.
Herders are feeling neglected as the government focuses its energy on livestock numbers. The
government's MNT 50 billion loan to wool processing plants does nothing to ease the burden on
herders either.
In China, wool has reached its highest prices in 25 years. Wool is peaking in South Africa and
Australia as well. Australia, one of the world's chief suppliers of wool, raised its prices over 50
percent between the months of March and July.
Source: Zuunii Medee
GOVERNMENT INVESTS IN CASHMERE INDUSTRY
The Mongolian Stock Exchange (MSE) cashed government bonds worth MNT 26.7 billion last week to
invest into Mongolia's cashmere industry, and small and medium-size enterprises (SME).
Source: Eurasia Capital
ROCK BEATS PAPER: PRECIOUS METALS APPRECIATE AGAINST THE U.S. DOLLAR
As investors lose confidence in the U.S. dollar and Euro, precious metals continue to rise in value.
Gold reached a record high of $1,888.90 an ounce after staging its biggest weekly gain in two and
one-half years.
Forebodings regarding the economy in addition to weak macro data from the United States and the
loss in faith in the European economy have boosted gold's value by over a quarter since July.
Investors will not likely turn their attentions back to the U.S. dollar until they receive
encouragement from the U.S. Federal Reserve. However, some fear that additional bond purchases
from the Federal Reserve could spark inflation and bolster gold even further. While some theorize
how high gold prices can reach, some speculators scaled back their bullish bets in U.S. gold futures
and options for a second week last week, as bullion's rapid rally prompted some investors to
liquidate positions, data showed.
"Key resistance in gold will be found at $1,946. However, the market may need an extraordinary

10. event to take it above that level," said MF Global in a research note.
Other precious metals tracked gold's strength. Silver rose 2.5 percent to a three month high of USD
43.93 and platinum it hits three-year high at USD 1,890.25.
Source: Mining Weekly
MONGOLIAN AND KOREA‟S BANK‟S WORK TOGETHER FOR DEVELOPMENT
A recent meeting between the Bank of Mongolia and Korea resulted in the signing of a Memorandum
of Understanding (MOU). The agreement focuses on technical assistance cooperation.
Bank of Mongolia Governor L. Purevdorj met with his Korean counterpart Kim Choong-soo to discuss
financial matters and cooperation between the two nations. In attendance were foreign policy
officials from Korea.
Agreements included USD 2 million for road repairs. In addition the board of directors of the Asian
Development Bank granted another USD 2 million worth of aid.
Source: Eurasia Capital
HOUSING PRICES ON THE RISE IN ULAANBAATAR
Apartment prices are still rising in Ulaanbaatar. At an apartment sales exhibition held 19 August,
the price for apartments had risen between 15 and 30 percent from this year's first quarter.
However, the prices may drop due to construction projects for news residential buildings.
The rise in apartment prices may have resulted from a number of logistical reasons. Material
reasons such as the increased cost for construction and supplier costs contribute to the hike in
prices. Also the better quality of construction was another contributing factor.
“The trade fair held this month tested the current demand for housing today,” said housing analyst
Yo. Badraa. “It is possible after the implementation of the „100,000 homes‟ project funded by the
State the price may drop a bit.”
Officials have finished project planning and are now moving on to engineering and construction.
Three years ago, the city experienced a drop in the construction sector. This year may be a period
for growth.
Source: Udriin Sonin
MONGOLIA MAY BORROW FROM CHINA FOR “100,000 HOMES” PROJECT
The Mongolian government is considering a MNT 300 billion loan from China to help finance its Shine
Yarmag apartments “100,000 Homes” program.
A credit guarantee for a 12-year loan was recently released for the project by Ch. Khashchuluun,
the Chairman of the Development Bank of Mongolia. This loan places full control of the project in
the hands of Cabinet Secretariat, Ch. Khurelbaatar.
Construction is being planned in two phases; each divided into three parts.
Source: News.mn
BORDER TOWNS REAP THE REWARDS OF MONGOLIAN-CHINESE TRADE
The status of Erenhot, a town located in the Gobi Desert at the Mongolian-Chinese border, is
gaining recognition as it is at the center of trade between the nations. Currently, trade is
specifically benefiting from a China-Mongolia-Russia Economic and Trade Cooperation Fair to be
held at the end of August hosted by Erenhot.
The event will run from 26 August until 30 August and has received registrations from over 200 firms
from the three nations. It will feature exhibits ranging from home appliances, construction, and
decoration materials to heavy machinery.
The city is an unlikely winner. Located in the remote Gobi Desert and with a population of 100,000,
its success is due in large part to the China-Mongolia-Russia railway, serving as China's largest land
customs station with Mongolia.
"Three years ago, I was driving my jeep to Ulaanbaatar to trade small, China-made commodities,”
said a business man in the area, “but eventually I shifted the business focus to construction
materials, thanks to the regional development of the railway infrastructure." He said as economic
growth gathers speed, Mongolia's demand for China's construction materials increases.
Read more…
Since 1998, China has been Ulaanbaatar's top trade partner and its largest source of foreign
investment. Bilateral trade between the two countries jumped 64 percent to 3.9 billion U.S. dollars
last year.
A dozen other land ports on China's border with Mongolia, such as Ganqimaodu in Bayan Nur City,
have experienced growth due to trade. Ganqimaodu witnessed fast urbanization as it shifted from a

11. small town to a bustling logistics distribution center in the past four years, mainly thanks to coal
imports from Mongolia. Trade via Ganqimaodu soared 85.6 percent year-on-year in the first half
year to 600 million U.S. dollars.
Source: Xinhua
NGO GRANTS FINANCIAL AID TO STUDENTS
Mongolian students will receive financial aid to help pay tuition fees in Mongolia. The Human
Development Fund will grant MNT 491,960 to students for their education. This comes while tuition
fees are on the rise in Mongolia.
The grants will provide for the academic year 2011-2012 and be dispersed from January 2012. The
Cabinet requested that relevant ministries begin planning tuition fee expenses in its 2012 budget.
Estimates report about 170,000 students will receive a tuition fee allowance for Mongolian
universities. Estimates report a sum total of MNT 8 billion to cover the costs.
Source: MAD-Mongolia
CHINA'S STOCK EXCHANGES DISCUSS COOPERATIVE AGREEMENTS
The Hong Kong Exchange (HKE) is discussing opportunities to cooperate with mainland stock
exchanges. The HKE is in talks with both the Shanghai and Shenzhen stock exchanges, which could
result in the development of index and other equity derivative products, reported the Wall Street
Journal. The greatest challenge here is China's restrictions on trade. The HKE is currently bidding to
list Mongolian companies in its markets.
The news quickly followed Chinese Vice Premier Li Keqiang's announcement for several initiatives to
strengthen Hong Kong's role as a financial center in Asia. This included the allowance for exchange-
traded funds (EFTs) holding stocks listed under the HKE to be sold in mainland China. Although it is
unclear when these long-awaited EFTs will be launched, officials suggest it will be soon.
This step comes after petitions from Hong Kong's exchange operator for closer ties between Chinese
markets. The HKE believes cooperation is crucial because more than 70 percent of its trading
volume is in China-related securities. These plans come at a time when the HKE is trying to better
sync itself with the markets of mainland China. It is considering extending its trade hours to better
suit Chinese markets and began listing local shares denominated in the yuan.
Source: Wall Street Journal
KAZAKHSTAN MUST KICK ITS OIL DEPENDENCE, SAYS IMF
The IMF warned that Kazakhstan, Central Asia's largest oil producing country, needs to steer away
from its dependence on oil exports in a recent study, reported Kazakhstan Newswire. This news
comes at a time when Mongolia is thinking to embrace its own oil reserves and has begun
construction on the first of three oil refinement plants.
Kazakhstan holds over 40 billion gallons of proven reserves of oil and nearly 50 percent of
government revenues are from the extraction and export of oil.
The study warns that oil is not necessarily the guarantee of wealth and prosperity many believe it
to be. The volatile nature of oil prices will be a constant problem that may result in fiscal disaster.
Distributing the wealth fairly seems to be the biggest challenger and is not a great source for
employment. Oil exports do not directly benefit other domestic growth industries such as
manufacturing, construction, or real estate.
As an alternative, the report points to the chemicals sector for its greater advantages. Kazakhstan
is generally thought to have a positive business environment and was successful in rising 15 places
higher in the World Bank's 2011 “Doing Business” list than last year. Better still, the country has a
reserve of USD3.7 billion in finance reserves saved from a portion of its oil revenues.
Source: Gazeta
POLITICS
MONGOLIA MAY BE A CANDIDATE FOR U.S. URANIUM LEASE PROGRAM
Mongolia was included on a list of countries the U.S. Department of Energy (DOE) hopes to “lease”
uranium from. Although the United States has nuclear cooperation agreements in the U.S. Atomic
Energy Act, Mongolia was not one of them.
The United States described how such a trade might work. A country, such as Mongolia, would mine
the uranium reserves, then enrich and fabricate the material, at which point it could be leased to a
reactor company abroad. Finally, the spent nuclear fuel would be sent back to country of origin.
However, there was not an explanation what a country should do with that spent uranium.

12. Meanwhile, other countries and international entities have been planning for “fuel banks” to create
nuclear fuel reserves for countries threatened by fuel shortages. Mongolia's neighbors Russia and
Kazakhstan are two nations who have volunteered to host such an institution. However, there is a
difference in opinion how this sort of institution would be run compared to the plan the United
States is suggesting.
"Some of the differences have to do with how the U.S. would implement the conditions for the
supply of sensitive nuclear technology to new nuclear countries," said Mark Hibbs, a nuclear energy
analyst at the Carnegie Endowment for International Peace.
These plans may have affected the rumors that the United States was considering to dispose its
nuclear waste in Mongolia. Director of the State Department's Nuclear Energy, Safety and Security
Office Richard Stratford spoke about building an “international storage depot” for spent nuclear
fuel in Mongolia with the Carnegie International Nuclear Policy. However, U.S. Ambassador to
Mongolia Jonathan Addleton denied this statement and the DOE said the United States in unable to
broker such a deal.
Read more…
Although Mongolia lacks a nuclear cooperation agreement, last year the two nations signed a
memorandum of understanding to cooperate on civil nuclear technology. During his visit this week,
U.S. Vice President Joseph Biden talked about strengthening economic ties with a Transparency
Agreement. The possibility of a United States-Mongolia Free Trade Agreement, although never
committed to, is not out of the question either.
Hibbs said involving Mongolia in a program might be a good idea, but worries about the lack of
“nuclear expertise.” The United States also recently agreed with nuclear supply countries to
“discourage the transfer of enrichment technology or reprocessing technology to Mongolia, he
added.
"It's not clear how transparent its corporate and political governance structure is; all these
questions would have to be resolved before any project like that could go forward," Hibbs said.
Reports from the New York Times suggest that a long time will go by before such a program can
pass through U.S. Congress.
Source: New York Times
MR. BIDEN COMES TO UB
Vice President Joseph Biden continued his tour of Asia in Mongolia on Monday to discuss its vast coal
reserves and using them to end poverty. Biden's visit comes a month after the now pending
decision to grant the U.S. mining firm Peabody Energy 24 percent of the Western Tsankhi mining
site at Tavan Tolgoi.
Biden talked with President Ts. Elbegdorj and Prime Minister S. Batbold about using foreign
investment as a means of reducing poverty in Mongolia. Previously in June, Elbegdorj promised to
give U.S. companies a role in its booming energy sector during talks in Washington, DC with U.S.
President Barack Obama. Biden is the most senior U.S. figure to visit Mongolia since 2005, when
former president George W. Bush made a brief stopover in Ulaanbaatar.
The United States sees Mongolia as a huge potential gain for investment and a strong ally. It is
strongly interested in Tavan Tolgoi, one of the world's largest coal fields with 6.4 billion tons of
reserves. Mongolia has been an ally of the United States in Iraq and Afghanistan, sending troops to
support the U.S. military. Mongolia is also recognized for its cautious foreign policy, seeking to
retain friendly terms with its neighbors to the north and south: Russia and China.
During his visit, the U.S. vice president attended a demonstration of traditional Mongolian sports,
including archery, wrestling and horse racing, before flying on to long-standing U.S. ally Japan.
Source: AFP
NO NUCLEAR WASTE TALKS TOOK PLACE, SAYS U.S. AMBASSADOR
The U.S. Ambassador denied all rumors regarding plans about waste disposal in Mongolia. Concern
has spread in Mongolia that the U.S. and Japan are planning to use Mongolia as a waste burial site
and many believed negotiations were a part of Vice President Joseph Biden's agenda during his visit
to Mongolia.
“We never talked about nuclear waste burial,” said U.S. Ambassador Jonathan Addleton. “This
official visit has nothing to do with nuclear burial. In talks and discussions, this topic will not be
covered or mentioned, because the U.S. Government has no idea, or proposal or objectives to bury
nuclear waste in Mongolia.”
Reports that the U.S. and Japan plan to use Mongolia as a nuclear waste disposal site have
circulated in Mongolian newspapers.

13. Source: Udriin Sonin
BILATERAL TRANSPARENCY AGREEMENT KEY TO MONGOLIA-U.S. FTA, SAYS BIDEN
Vice President Joseph Biden's brief visit to Mongolia strengthened U.S.-Mongolia economic ties,
reported NAMBC. During his visit he congratulated Mongolia on its success as a democracy,
discussed ways the two nations can improve relations, and thanked Mongolia for its contributions in
Iraq and Afghanistan.
Biden stressed that the United States is watching Mongolia closely in its progress towards full
transparency. He stressed that a bilateral Transparency Agreement was crucial to this aim.
Although no commitment was made towards a Mongolia-United States Free Trade Agreement (FTA),
the Transparency Agreement (TA) has implications towards that possibility. One unofficial
translation from the website open-government.mn provides statements that lead to the same
conclusion.
Source: NAMBC
CHINA CHIMES IN ON BIDEN‟S ATTEMPT TO EASE FINANCIAL FEARS
Chinese and U.S. leaders spoke together to ease fears regarding the weakness of the U.S. economy.
U.S. Vice President Joseph Biden used his trip to China and cooperation with its leaders as an
opportunity to ease global fears of another recession. The U.S. vice president is currently on a tour
through Asia that recently took him through Mongolia.
“In spite of the difficulties facing the United States economy at present, I have full confidence that
the United States will overcome these difficulties and get its economy back on the track of healthy
growth,” said Biden. “The prosperity and stability of the United States is in the interest of the
whole world.”
China has great interest in the state of the U.S. economy and its debt because it owns a great deal
of U.S. bonds; possibly exceeding USD 1.1 trillion.
However, China did make some demands from the U.S. representative. Vice President Xi Jinping,
the presumed successor to President Hu Jintao, demanded new measures to restore confidence in
global financial markets. Both agreed business relations between the two nations were strong and
strengthen diplomatic ties. However, Xi requested that the United States lift restrictions on high
tech exports. On his part, Biden promised to help ease the difficulty Chinese citizens face when
trying to obtain American visas while urging the Chinese to ease difficulties for American operations
in the Chinese market.
Source: Associated Press
PRESIDENTIAL VISIT DEEPENS RELATIONS BETWEEN S. KOREA AND MONGOLIA
The South Korean President Lee Myung-bak met with both Prime Minister S. Batbold and Parliament
Speaker D. Demberel during his visit to Mongolia. Lee was on a tour through Central Asia that took
him through Mongolia, Uzbekistan and Kazakhstan. Discussions focused on deepening relations
between the two nations.
The Prime Minister said the two nations are elevating their relationship from bilateral cooperation
to a comprehensive partnership. Both agreed to cooperate on the construction of processing plants,
including a coal processing factory at Baganuur mine that would reduce air pollution in
Ulaanbaatar. A construction project to build an industrial complex in Dornogobi is also on the table.
There was also talk about enrolling local governors in training programs at a South Korean
institution for local government.
“Our country really appreciates the development and progress of Mongolia. I hope the cabinet
chaired by S. Batbold will exploit a great chance to intensively develop Mongolia in a short time,”
said Lee.”
In his meeting with the parliament speaker, the two discussed the importance of cooperation of
relations between each nation's parliaments to expand relations. This would include mutual visits
and regular meets between members of Mongolia's Great Khural and South Korea's National
Assembly.
Finally, the Prime Minister ended with the announcement that the South Korean government agreed
to grant Mongolia a soft-loan of USD 300 million to support economic growth and human
development.
Source: Montsame
SOUTH KOREA FUMES ABOUT TAVAN TOLGOI OUTCOME
The results of Tavan Tolgoi brings Mongolia's commitment to partnership with South Korea into

14. question said Korean Ambassador John IL. The comment comes as a result of Mongolia's choice of
investors for the Western Tsankhi site at Tavan Tolgoi.
The Korean ambassador recalled 10 years of participation in the Tavan Tolgoi project, organizing a
domestic consortium and three years of bidding. The Korean consortium included top minerals
companies from Korea and was lead by the state run Korea Resources Corporation. He further
commented that Korea wants to continue in Mongolia's development by taking part in
infrastructural works and it should not be looked at as steel makers and coking coal consumers.
The ambassador still has hope for a reevaluation of the choices made about the investors for Tavan
Tolgoi. Korea said it is interested in participating in the final stages of the site's development. He
cited Korea's experience as a Japanese colony and the loss of its minerals under its tyranny as
evidence of its understanding to Mongolia's position.
Source: Udriin Sonin
EXPERTS DENOUNCE TAVAN TOLGOI DEAL
Mineral and economic experts complained that Mongolia is selling its coal resources to China too
cheaply at a recent forum on the Tavan Tolgoi deposit open to the community.
In the discussion, experts posited that at USD 70 per ton, Mongolians are only receiving a USD 10
profit. Another official said not enough attention was being paid to water and energy, issues that
threaten domestic security.
The forum comes after the decision to sell 40 percent of the rights to Tavan Tolgoi's Western
Tsankhi for USD 250 billion worth of coal. China has the right to transport and sell that coal as it
sees fit during this time. Mongolia has been shipping coal from Tavantolgoi to China for three
weeks.
According to a draft resolution in Parliament, each Mongolian will receive 536 shares of
Tavantolgoi. The value of these stocks is expected in 2012.
Source: News.mn
FOREIGN INVESTORS EXPECTED TO BENEFIT MONGOLIA FOR RIGHTS TO TAVAN TOLGOI
Mongolia desires more than money in return for the prestigious Tavan Tolgoi Western Tsankhi coal
mining project. The bidders who won the rights to the Tavan Tolgoi mining project must give
certain returns to the Mongolian state. The Mongolian government expects foreign investors to
benefit Mongolia in other ways in addition to developing the site into a leading mining facility of
the world.
The Mongolian government still holds power over the special licenses contract bidders earned for
the Tavan Tolgoi project. In return, the foreign companies shall pay a sum to the Erdenes
Tavantolgoi company, build infrastructure to attract further investment and add value to the area,
and instruct vocational training for the community and its Mongolian employees. Furthermore, the
government requested that the foreign companies develop a network for the trade of resources.
The Mongolian government sold 40 percent of the rights for coal extraction to the Chinese firm
Shenhua Energy, 24 percent to the United States firm Peabody Energy, 18 percent to Mongolian
Railway, and 18 percent to a consortium of Russian companies.
Source: Olloo
GOVERNMENT TO WARM 70,000 MONGOLIAN HOMES
Parliament members announced that it will distribute 70,000 “Eco-friendly” ger heaters for the
upcoming winter season. The program is part of an initiative announced by President Ts. Elbegdorj
last winter.
Mineral Resources and Energy Minister D. Zorigt and Nature, Environment and Tourism Minister L.
Gansukh announced their plans as part of a “fresh air” initiative aiming to reduce air pollution in
Ulaanbaatar. Homes will receive heaters fueled by coking oil to help reduce air pollution.
It is hoped that this program will reduce air pollution in the city. The Government will also offer
assistance to low-income citizens who would like to purchase one of their own heaters.
Source: News.mn
FALCON SALES TAKE OFF
A total 260 falcons will be exported this year to foreign markets, said Mongolia's Environment and
Tourism Ministry, but not without protest in Mongolia. Mongolian falcons are a prize to wealthy
individuals, specifically in the Middle East.
Each falcon will be sold at an estimated value of USD 12,000 to wealthy parties in the Persian Gulf.
Last year, Mongolia exported 240 falcons to the United Arab Emirates, Qatar, and Kuwait. These

15. nations send their own falconers, but are by law expected to do so under the supervision of the
local government. Conservation groups interested in the preservation of this species object to the
practice.
Source: News.mn
CHINGGIS KHAN INSPIRES A NATION FOR DEMOCRACY AND A FREE ECONOMY
In Mongolia, the memory of Chinggis Khan is one of pride and to some even worship. During periods
of foreign rule in Mongolia from Russia and China, it was forbidden to speak about Chinggis or pay
respects to the leader. However, since the introduction of democracy, a revival has followed,
stretching into the economic boom initiated by mining. Just as Chinggis is once said to be
descended from a wolf, his spirit may live on in the so-called “wolf economy.”
Some try to reach the Khan through mystical religious experiences (Chinggis is believed to have
been a great shaman by some), while other take pride in claiming lineage from him. One in ten
Asians can trace their family lineage back to Chinggis Khan.
However, pride in a great empire past does not lift spirits for some living under present hardship.
"It is so difficult to be optimistic," says Baigalmaa, a poor Mongolian woman who raises a grandson
with a heart condition. "It's already over for me. I am thinking about my children and grandchildren.
It is difficult and I think it will get worse in the future."
Read more…
There are 12 people total living in a small, two-room shack. They survive on Baigalmaa's husband's
pension of about $80 a month and a small government handout of less than $20. Baigalmaa is
skeptical about all the promises she has heard about mining.
"Mostly foreigners take away all the benefits," she said. "I don't know if people like us will get
anything or not... I won't know if I'll get it or not until I am actually holding it in my hands."
Source: CNN
CENTRAL ASIAN REGION USES EDUCATION AS GREATEST HOPE FOR PEACE
It has been 20 years since the collapse of the Soviet Union, but Central Asian nations such as
Mongolia are still trying to realize a common regional identity. The Central Asian region as well as
each of the nations within it are trying to cope with ethnic clashes and move on from stagnating
soviet mechanisms. Education is the greatest hope for the next generation and peace in the region.
The “Friendship of Nations” movement sponsored by the Soviet Union has long since passed and
ethnic groups in Central Asia are becoming more nationalistic and intolerant towards ethnic
minorities and foreign influences. Border disputes propagated and nations started resenting their
neighbors. The bubbling pot boiled over last year when conflicts manifested in the violence against
minorities in Southern Kyrgyzstan. Ironically, Kyrgyzstan was thought to be the best example of a
nation pointed towards success as a democratic and developing nation. Last year's violence resulted
in the death of over 400 people, instilling fear in the region.
"It's a very turbulent neighborhood," said Anna Matveeva, a fellow of the Crisis States Research
Center at the London School of Economics. "Afghanistan, Iran on the southern borders of the region,
of course, causes a lot of apprehension among the Central Asian states.”
Matveeva said historical claims to territory and identity are today being exacerbating by the
conflict over resources. These conditions make it difficult for nations to work cooperatively with
one another.
Educating the post-soviet generation was a top priority for nations such as Kazakhstan and
Mongolia. They hope scholarship programs sending students to western universities will give them
competitive international skill sets. It‟s creating a modern “leadership class,” that may create
reforms in nations who clutch to old soviet ways.
Yet, any sort of pan-Eurasian unity is trumped by an opportunity to put individual concerns before
regional or global ones, as was the way during 70 years in the USSR.
Source: Radio Free Europe Radio Liberty
RUSSIA LOOKS BACK ON 20 YEARS OF “SUPPOSED” DEMOCRACY
Former USSR Statesman Mikhail Gorbachev called the current Russian government a poor imitation
of its communist predecessor and said the nation is “going backwards.” This statement comes 20
years after the collapse of the USSR. Unfortunately, this anniversary does not afford many
achievements as a nation or a democracy.
Many Russians are unhappy about the course Russia has taken and regret supporting former
president Boris Yeltsin, reported the Wall Street Journal. They believe Yeltsin's administration
invited corruption and dishonesty into government, which has further down-spiraled since Yeltsin's

16. predecessor Vladimir Putin took office in 2000.
The former KGB Colonel, who commented that the fall of the USSR was a colossal geopolitical
disaster, introduced many familiar policies harking back to the Soviet error. Complaints against
human rights violations and of a stifled press filled Putin's term in office and have lingered within
his predecessor Dmitry Petrov's era. Currently, Putin serves as Prime Minister to Russia, and many
believe his is the true force guiding the nation still.
Source: Wall Street Journal
SELBEE TO RECEIVE EXTREME RIVER MAKEOVER
The Mongolian government is planning a two-year project for the restoration of the Selbee River. It
said MNT 2 billion will be spent this year on the initial stage of this work.
The plan for restoration is to change the stream's direction using machines to dig river tracks
between 20 and 80 meters deep. Next, a plastic material will be laid on the river's bottom to
separate the stream from the soil. The first year of work will be committed to digging, while the
second shall focus on the construction of greenery and parks.
The government is dedicating MNT 8 billion for construction costs. However, funds budgeted for the
first year will likely be insufficient, reported Udriin Sonin. The costs for the transportation and
disposal of earth will likely costs 1,000 times more than what is currently planned for.
Source Udriin Sonin
ANNOUNCEMENTS
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Suitable for business extension and business entry venture.
Contact by cell at 9915-1124 or by email: churchills@magicnet.mn.
___________________________________________
COMPETITIVENESS AND CORPORATE SOCIAL RESPONSIBILITY CONFERENCE, ULAANBAATAR, SEPT
6-7
This conference, organized by GIZ Integrated Mineral Resource Initiative, will be focused on
debating whether corporate social responsibility increases the competitiveness of an economy and
its players in the long run or whether it is rather a disadvantage that, particularly in structurally
weak economies such as Mongolia, prevents the establishment of globally competitive value chains.
The main areas for discussion will be:
• CSR and Sustainable Economic Development
• Economic Globalization and CSR
• CSR and Enterprises.
BCM is a Supporting Organization for this event. For any questions please contact imri@giz.de.
___________________________________________
DISCOVER MONGOLIA 2011, ULAANBAATAR, SEPTEMBER 8-9
Discover Mongolia is partnering with Behre Dolbear Mongolia to hold a pre-conference workshop,
"ABC's of Mining”, on September 5 and 6." The workshop is designed for non-mining professionals.
This year‟s international mining investors' forum is the 9th edition of the annual hallmark event in
the mining sector in Mongolia. It will see domestic as well as multinational mining companies and
global resource financiers gather in Mongolia. The conference provides the opportunity for these
companies to introduce their projects and share views on Mongolia's emergence as a major resource
exploration frontier in the world.
"We have tried to create a balanced and highly informative agenda so that existing and new
investors and investment professionals can get the maximum understanding on Mongolia's
investment environment around its mining and resource sector" said Mr. P. Ochirbat, chairman of
the organizing committee.
This year's forum is being sponsored by SouthGobi Resources, Erdene Resource Development, Hunnu
Resources, PwC, Oyu Tolgoi LLC, Rio Tinto, Monnis LLC, Micro Mine, Prophecy Coal, Runge, Aspire
Mining, Transwest, Voyager Resources, Haranga Resources, and Golomt Bank.
BCM is the official supporting organization and its members will get a special discount. Online

17. registration has started at www.discovermongoliaforum.com.
___________________________________________
RETAIL LOGISTICS AND SUPPLY CHAIN MANAGEMENT, ULAANBAATAR, SEPTEMBER 27-28
The goal of this international conference, organized by the GIZ Integrated Mineral Resource
Initiative,
is to familiarize Mongolian businesses with a more expansive terminology of logistics and the
functions of modern supply chain management. Certain prospects for services shall be highlighted in
the context of Mongolia, with particular focus on trade-logistics.
The main areas for discussion will be:
- Transport and Infrastructure
- Logistics and Supply Chain Management for Retail and Wholesale Businesses.
In addition, Mongolian and German firms will have the opportunity to solicit and discuss business
opportunities together.
BCM is a Supporting Organization of this event. For any questions please contact imri@giz.de.
________________________________________________
MONGOLIA TRADE & COMMODITY FINANCE CONFERENCE, ULAANBAATAR, OCTOBER 13
This landmark conference at the Chinggis Khaan Hotel will only welcome leading experts within the
trade and commodity finance sector, utilizing a format that includes detailed case studies,
informed debate and invaluable networking opportunities.
Among topics to be discussed:
- Considering the threat posed by volatile commodity prices
- Utilizing Mongolia‟s competitive advantage to improve product diversification
- Improving underdeveloped promotion services to demonstrate the unique appeal of Mongolia
- Raising capital from foreign investors to develop projects and infrastructure
- Developing an export financing structure
- Expanding trading relations beyond traditional allies to become a truly global trade partner
- Reducing dependence on foreign imports
- Forging relationships between local and international banks to provide vital liquidity.
Speakers include:
- Ganhuyag Chuluun Hutagt, Vice Minister, Ministry of Finance of Mongolia
- Alisher Ali, Chief Executive Officer, Eurasia Capital
- Bat-Ochir Dugersuren, Chief Executive Officer, XacBank
- Randolph Koppa, President, Trade & Development Bank of Mongolia
- Jim Dwyer, Executive Director, Business Council of Mongolia
- Laurenz Melchers, Director, Mongolian Star Melchers
- Marat Utegenov, Executive Director, Mongolia Development Resources
- James Polson, Executive Director, AIDD
- B. Byambasaikhan, Managing Director, Newcom Group
- B. Enkhbat, Vice-President, Operations, Just Group
- Vincent O'Brien, Chair, Market Intelligence Group, ICC Banking Commission
BCM is a Supporting Organization for this event and special offers are available for BCM members.
The conference brochures with agenda will be available in BCM office and will also be distributed at
BCM‟s September 26.
Please contact Ms. Monika Kuzniewska, Marketing Executive, at monika@exportagroup.com or by
phone at +44 (0) 20 8772 3013 for further information.
BCM MEMBERS WILL RECEIVE DISCOUNT AT MONGOLIA INVESTMENT SUMMIT 2011-HONG KONG
The second annual Mongolia Investment Summit 2011 will be held at Conrad Hong Kong, on 25-27
October. This year, the event planners are doubling the program in size and scope. The program
will feature updates on Mongolia‟s growing array of investment opportunities.
At the conference will be news on high-profile mining projects, such as Tavan Tolgoi and Oyu
Tolgoi, as well as juniors and explorers. Additionally will be information on opportunities in other
non-mining sectors that are benefiting from the natural resources windfall, such as energy, power
generation, infrastructure, mining services, financial services, property and more.
A wide array of companies will attend in addition to insights from seasoned investors and analysts,
such as Chief Executive Officer of Newcom Group and Chairman of the Mongolian Stock Exchange
Bold Baatar. Guests will also hear from Zandanshatar Gomboav, the Minister of Foreign Affairs and

18. Trade, in his opening address.
For its support for the event, members of the Business Council of Mongolia will receive a 15 percent
discount. For the discount, members should quote their mail code BH605OLD when registering. For
registration or more information, call +852 2219 0111, email info@beaconevents.com. Visit the
website to download a full brochure and registration at beaconevents.com.
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MM TODAY” on MNB-TV, Fridays at 21:15
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 for 21:15 tonight. Tune in to watch this program that reports stories from today‟s BCM
NewsWire.
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“BSPOT” on B-TV, Monday to Friday at 21:30
B-TV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every
evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.
___________________________________________
POSTINGS ON BCM ENGLISH WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIA REPORTS' and BCM
MONGOLIAN WEBSITE‟S „NEWS‟ SECTIONS
As a key component of BCM‟s Mongolian website, “News” section, articles from the Government‟s
“Open-Government.mn” site will be regularly posted. Also several draft laws, still to be discussed
in Parliament, are posted on BCM‟s English website in the Legislative Working Group section.
BCM Vice Director I. Ser-Od‟s interview at “Ulaanbaatar” magazine.
„Presentations‟ from BCM‟s 7 monthly meetings in 2011, Peter Nicholls, OT‟s new VP-Operations, at
Global MInES in Sydney on July 4, summaries of the key addresses at Eurasia Capital‟s Mongolian
Investment Conference on May 25, Jim Dwyer of BCM‟s interview on Mongolia National
Broadcasting‟s “Face to Face” on May 16, and the very successful Mines and Money Hong Kong‟s
„Mongolia Investment Summit‟ morning on March 25 are posted in BCM website‟s "Resource,
Presentations" for your review.
„Mongolia Reports‟ including Z. Batbayar, Deputy Director of the Water Authority, at BCM‟s
Environmental Working Group‟s recent meeting, the Polit Barometer-May 2011 from Sant Maral
Foundation and the U.S. Embassy Mongolia‟s Commercial Section‟s “2011 Mongolia Investment
Climate Statement” are among the reports posted on BCM's website (www.bcmongolia.org) in the
“Resource, Mongolia Reports” section.
We are now posting some news stories and analyses relevant to Mongolia on the BCM website's
„Mongolian Business News‟ as they come, instead of waiting until Friday to put them all together in
the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will
incorporate items that are already on the home page, so that it presents a consolidated account of
the week‟s events.

19. ECONOMIC INDICATORS

20. 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]
July 31, 2011 *10.1% [source: NSOM]
*Year-over-year (y-o-y)
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
CURRENCY RATES – August 25, 2011
Currency Name Currency Rate
U.S. dollar USD 1,239.66
Euro EUR 1,785.67
Japanese yen JPY 16.14
British pound GBP 2,044.07
Hong Kong dollar HKD 158.60
Chinese Yuan CNY 193.96
Russian Ruble RUB 42.80
South Korean won KRW 1.15
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.