May 27 2011

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 169, May 27 2011
NEWS HIGHLIGHTS:
Business:
 Hunnu buys controlling stake in Mongolia coal JV from Rio Tinto;
 MMC coal washing plant starts trial run;
 Shares of Garrison subsidiary transferred on strength of stolen company stamp;
 Petro Matad spuds new well;
 Voyager Resources doubles target size in Khongor;
 Meritus obtains “very good intersection” in final hole;
 MMC signs two further connected transactions;
 Standard Chartered Bank appointed financial adviser for Tavan Tolgoi;
 Van Eck plans Mongolia equities ETF;
 Mongolia Equity Opportunities Fund aims high;
 DHL launches door-to-door service linking Ulaanbaatar to Tianjin and beyond;
 Mongolian Star Melchers sells Mitsubishi Fuso trucks in Mongolia;
 B-TV program adjudged best;
 C @ Limited kicks off exploration on coal licenses;
 Petro Matad names investment banker as non-executive director;
 Guildford Coal appoints Non-Executive Chairman;
 Anod Bank matter transferred to prosecutors;
 Hopu sells half of Winsway Coking stake for USD82 million;
 Australian engineers enable lights on at Energy Resources’ coal wash plant.
Economy:
 Unprecedented rise in GDP in Q1;
 Rents, home sales rebounding in Ulaanbaatar;
 Shortage leads to diesel use curbs on mining companies;
 Mongolia looks to be in no rush to begin exporting commodities;
 Mongolia needs a long-term vision;
 Several sources of financing railway construction under consideration;
 Government to consider raising salary and pension rates;
 Apartment prices will fall, says head of Construction Association;
 Economists warn about MNT rising against USD;
 Mongolia’s pragmatic approach: Use it, and don’t abuse it, or lose it;
 Germany wants part in mining sector, Mongolia technology;
 Austrade chief explains shift in focus to emerging markets;
 Agreement with CW-GP Party gives MNCCI chance to lobby for business;
 Committee wants wool sector and SME loans to carry 7% interest;
 Plan being readied to train workers on the job;
 Happy to be serving the country, says Development Bank Deputy Director;
 Zinc mine agrees to recycle water it uses as citizens complain;
 Planned new international airport will reduce flight cancellations and delays;
 Freight train from Antwerp to Chinese heartland passes through Mongolia;
 Queensland makes grants available for skills development;
 Chinese data add to fears of slowdown.

2. Politics:
 ACA officials lose appeal against jail terms;
 Judge-General appeals to all court officials to be independent;
 Demands unacceptable, President tells civil movements;
 Two die in accident soon after coal road reopens;
 Ex-President defends “Gold” program;
 Mayor’s Office suggests new site for Parliament complex;
 Electronic voting system has to be adapted to the election system, MPs told;
 Russia presses for mining to start in Asgat;
 Mongolia balances public opinion with nuclear ambitions;
 Foreign Minister to submit draft law banning import of spent nuclear fuel;
 OSCE-Mongolia Conference stresses co-operation with Asian Partners;
 China struts larger on world stage.
*Click on titles above to link to articles.
BCM MONTHLY MEETING RECAP
The meeting on May 23, with Mr. Laurenz Melchers in the chair, was attended by 90 members and
invited guests. Executive Director Jim Dwyer reported on the expanding work of the Working
Groups. Membership now stands at 179 and those to join since the last meeting are:
1. KANU, recently established to provide contract mining, infrastructure and earthworks
construction services, site services and equipment training. It is an alliance of Khishig Arvin
Contract Mining Services and Nuna Logistics Limited, and between them these two have over 37
years of proven construction experience in Mongolia and Canada.
2. The Australian Trade Commission -- the Australian Government‘s trade and investment
development agency. Better known as Austrade, it assists international buyers in locating and
identifying the right Australian suppliers; provides international investors with key industry and
government contacts; and helps Australian exporters with a comprehensive range of exporter
services. It has now opened an office in Ulaanbaatar.
3. General Electric, an advanced technology, services and finance company that operates in more
than 100 countries. Besides innovative, efficient and advanced technological solutions, the GE can
offer vast experience in providing capital to meet financing needs, establishing partnerships with
the Government, local businesses, partners, and foreign investors. It opened an official
Representative Office in Ulaanbaatar on May 2.
The first speaker of the evening was Mr. N.Algaa, Executive Director, Mongolian National Mining
Association, who provided an update on the mining sector. The recent tripartite agreement on basic
minimum wages is likely to be revised to make it mandatory for certain sectors, like mining, to pay
its workers more. Fees for use of water in mining are also likely to be raised. The association will
continue to protest against such discriminatory moves and to press for more equitable provisions in
the draft Minerals Law.
Mr. G.Badruun and Ms. B.Onon, both project officers at the Zorig Foundation, gave a brief
introduction to the activities of the Foundation. Among its principal goals are the spread of
democratic values and acceptance of transparency and accountability in all walks of public service.
This it hopes to achieve through programs in three priority areas: Good governance, Community
Development, and Youth and Education. This last has been receiving more and more attention at
present through grant of scholarships mostly to acquire skills that meet the donor‘s specific needs,
pairing with schools abroad, and developing leadership qualities among the young, especially by
providing environmental fellowships.
Mr. D.Bat-oktyabri, Founder, Startup Weekend Mongolia/Nu-idee LLC, explained the concept, a
novel means to encourage entrepreneurship in Mongolia. Their first session will be from May 27 to
May 29, when, in a span of 54 hours, some 60 young people will learn the basics of preparing to do
business. The participants will write project proposals and BCM will give a prize to the two best
submissions.

3. Mr. Stephen Ujvarosy, President, Telchar Systems, presented a case study in legislative efficiency in
which he detailed work Legistar had done with the Iraqi parliament. There was no overt or specific
reference to Mongolia, but beneath the apparent dissimilarities, there are many areas of
convergence in how legislatures work in different countries, and how this can be streamlined.
BUSINESS
HUNNU BUYS CONTROLLING STAKE IN MONGOLIA COAL JV FROM RIO TINTO
Mongolian coal developer Hunnu Coal has paid AUD40 million for Rio Tinto‘s 70% stake in the Altai
Nuurs coal joint-venture project in the Gobi Altai province in Mongolia. The project has an
exploration target of between 250 million tons and 500 million tons and comprises six exploration
licenses over 46, 212 ha, as well as four mining licenses totaling 202 ha. ―This is a major acquisition
for Hunnu Coal and represents a clear future growth path for the company,‖ the company said in a
statement.
The explorer has over 413 million tons of Joint Ore Reserves Committee- (JORC) compliant coal
resource across its project areas, and has become one of the major coking coal and thermal coal
explorers in Mongolia. Hunnu said in a statement that it would now start JORC modeling at the Altai
Nuurs project, with a major drilling program planned for the remainder of 2011. Around 19,437
meters of drilling has already been completed, with some 107 reverse circulation and core drill
holes.
Hunnu‘s acquisition of the Altai Nuurs project was part of its acquisition drive to become the major
coal developer in Mongolia, along with its strategic investment partner Banpu PCL. The developer
was planning to move into production during this year.
Source: Mining Weekly
MMC COAL WASHING PLANT STARTS TRIAL RUN
Mongolian Mining has started the trial run of its first washing plant near its UHG mine site, largely in
line with the company's original plan, showing strong execution capability. The development would
enable the company to produce and sell washed coal, reducing logistic costs. With washed coal
products, the company will also be able to gradually expand its customer base, including end-users.
Source: ETNet
SHARES OF GARRISON SUBSIDIARY TRANSFERRED ON STRENGTH OF STOLEN COMPANY STAMP
Garrison International has announced that on January 21, the company stamp for Garrison Asia LLC,
its wholly owned subsidiary, was taken without authorization from the Ulaanbaatar office of
Garrison Asia and on March 31, it came to the knowledge of senior officers of the company that on
February 6, this stamp had been used to transfer the ownership of the shares of Garrison Asia LLC
away from the company. In Mongolia as well as in some other parts of Asia, the company stamp is
equivalent to a signature. The stamp was therefore was used to improperly confirm that the
company had approved the transfer of the shares. Notwithstanding the use of the stamp, in order to
change the ownership of Garrison Asia LLC, a notarized signature from the signing authorities of this
company would have been required. It is not clear at this time how the notarized signatures were
obtained by the two men who took the stamp from Garrison's office. As the company's entire
operations take place under the subsidiary Garrison Asia LLC, until this matter is resolved the
company has no active operations.
The matter was immediately reported to the Mongolian Police who conducted an investigation and
have recommended judicial action against certain people they have identified for the crime.
Discussions are now under way between the accused and the company to reach an agreement to
transfer the shares back to it. Although this is a very serious situation, Garrison hopes to resolve the
matter as quickly as possible. The company's Board of Directors remains unchanged and the
company's transfer agent remains in place. As a result of the unauthorized transfer of the shares,
Garrison Asia LLC no longer has assets sufficient to satisfy the Continued Listing Requirements of
the TSX Venture Exchange and has been placed on 90 days‘ notice to evidence its ability to satisfy
requirements.
Garrison is a junior mineral exploration company focused on acquiring and developing advanced
stage gold properties in Mongolia.
Source: Garrison International Ltd.

4. PETRO MATAD SPUDS NEW WELL
Oil explorer Petro Matad has commenced drilling operations at the Davsan Tolgoi-5 (DT-5)
exploration well in Block XX. The well is planned to be dug vertically to an estimated target depth
of 2,020 meters and will test a portion of the recently identified Uvgan Gal paleovalley as well as
part of the Lower Tsagaansav Formation.
According to the company, the DT-5 well is 3.1 kms north-northeast of the DT-1 well and 2.5 kms
south of the 19-62 well on the adjacent Block XIX, operated by Daqing Oilfields. Earlier last week,
Petro Matad reported its discovery of significant hydrocarbons in the DT-4 well.
Source: EBR
VOYAGER RESOURCES DOUBLES TARGET SIZE IN KHONGOR
Voyager Resources has now received all assay results from all the 24 diamond core drill holes
completed at its Khongor Copper Gold Porphyry Project and says these have expanded the porphyry
copper mineralized zone to an area measuring some 400 meters by 150 meters, doubling the size of
the target previously reported. The project is in the South Gobi Arc Terrain that hosts the Oyu
Tolgoi Copper Gold Deposit.
Geophysical and geochemical surveys have commenced at Khongor, with induced polarization
geophysical surveys identifying additional and deeper targets for drill testing.
Source: Voyager Resources
MERITUS OBTAINS “VERY GOOD INTERSECTION” IN FINAL HOLE
Meritus Minerals Ltd. has now received all remaining assay results from its winter drilling program
at the Toordogiin Shil Prospect Gutain Davaa. They now show, besides what had been known, that a
strongly mineralized zone of 7.00m of 16.44g Au/ton was intersected. A very good intersection was
also obtained in the final hole which intersected 31.00 m of 3.70g Au/ton including 7.00 m of 6.06g
Au/ton and 3.00 m of 15.67g Au/ton.
Source: Meritus Minerals
MMC SIGNS TWO FURTHER CONNECTED TRANSACTIONS
Energy Resources, an indirect wholly-owned subsidiary of Mongolian Mining Corporation, entered
into the following agreements on May 23.
(i) An office and camp supporting service agreement whereby Uniservices Solution will provide
services for a period of 4 months for a total consideration of approximately USD4,905,256; and
(ii) a purchase of fuel agreement whereby Gobi Oil will supply fuel products to the Group from May
23 to July 15 for a total consideration of USD9,500,000.
Uniservices Solution is a wholly-owned subsidiary of MCS Holding LLC, and Gobi Oil is an associate of
each of Petrovis Resources Inc., a substantial shareholder of the company, Mr. P. Batsaikhan and
Dr. J. Oyungerel, both a non-executive Director.
Source: Mongolian Mining Corporation
STANDARD CHARTERED BANK APPOINTED FINANCIAL ADVISER FOR TAVAN TOLGOI
The State-owned Erdenes MGL LLC has chosen Standard Chartered Bank (StanChart) as financial
adviser for its roughly USD15-billion Tavan Tolgoi project, a source familiar with the matter has
said.
Source: IFRASIA
VAN ECK PLANS MONGOLIA EQUITIES ETF
Van Eck Global, the New York-based fund sponsor known for its natural resources investments, has
filed paperwork with the Securities and Exchange Commission to market an equities fund of
companies in Mongolia. The Market Vectors Mongolia ETF will hold at least 80 percent of its assets
in companies either based in or listed in Mongolia, or based elsewhere but derive at least half their
revenues from business activities in Mongolia, according to the filing. Van Eck said that as of the
filing, the basic materials, energy and industrials represent a significant portion of the index, which
it did not name.
Van Eck, which warned of risks of investing in a country that does not have a long history of capital
markets as they exist in the developed world, said in the filing the fund will be able to use
derivative instruments such as swaps to carry out its investment strategy. The fund company did
not name the fund‘s ticker or say what the ETF‘s annual expense ratio might be.
Source: IndexUniverse

5. MONGOLIA EQUITY OPPORTUNITIES FUND AIMS HIGH
The investment objective of The Mongolia Equity Opportunities Fund, set up by Khan Investment
Management Limited, is to capture the opportunities for growth offered by the expanding
Mongolian economy by investing in local and international listed companies, or companies soon to
be listed, with assets and operations in Mongolia. Khan Investment is a specialist Cayman Island
Investment Management Group, specifically created to structure and promote the Mongolia Equity
Opportunities Fund.
Khan has created and structured the Fund in accordance with what it believes are the most
important attributes for potential investors, including fund domicile, liquidity terms, portfolio
diversification and importantly, to provide access to the local Mongolian Stock Exchange and
participate in the many local Initial Public Offerings of private and state owned enterprises slated
over the coming years. Khan has also selected all third party services providers of the Fund,
including importantly the Investment Manager, Gordian Capital Singapore Private Limited, and the
chief Investment Adviser, Monet LLC.
Source: Monet Capital
DHL LAUNCHES DOOR-TO-DOOR SERVICE LINKING ULAANBAATAR TO TIANJIN AND BEYOND
DHL, the world‘s leading logistics company, celebrates five years of operations in Mongolia with the
launch of a new rail service — the Genghis Khan Connection, a scheduled tri-weekly cross border
rail solution available during the high season from April to October linking Ulaanbaatar to Tianjin,
China and out to the rest of the world. DHL Global Forwarding is the only global logistics provider in
Mongolia to offer scheduled services and reliable solutions to congested routes and complex
customs processes.
The 30-day Genghis Khan Connection leverages Mongolia‘s improving infrastructure to help
customers avoid peak season congestion at regional border towns, seaports and airports which can
sometimes substantially delay shipments. The service dovetails DHL Global Forwarding‘s existing
global network of connections to provide a new viable transport option for businesses particularly in
consumer goods, fashion and accessories and equipment, machines and spare parts. Rail being a
greener alternative to air and road options, the Genghis Khan Connection also helps reduce
customers‘ CO2 footprint.
Mr. Kelvin Leung, CEO, North Asia Pacific, DHL Global Forwarding, said, ―Mongolia has hitherto
suffered from limited routing options that include Russia and China for cargo from Europe, America
and Asia. This has led to unreliable delivery, seasonal congestion that can delay shipments by up to
21 days as well as result in higher costs.‖ Mr. Ambrose Linn, of DHL Global Forwarding, said his
company ―will continue to enhance connections between Mongolia and China, Japan and Korea to
offer our customers first-mover advantage in this fast-developing country‖.
Source: DHL
MONGOLIAN STAR MELCHERS SELLS MITSUBISHI FUSO TRUCKS IN MONGOLIA
Mongolian Star Melchers (MSM) will sell FE Canter light-duty trucks (GVW 4.7-7.2 tons) and FK
Fighter medium-duty trucks (GVW 11.0 tons) made by Mitsubishi Truck and Bus Corporation (MFTBC)
in Japan. The commercial vehicle manufacturer has said its entry into the Mongolia market
complements its international expansion in key markets with growth potential, especially in the
Asia region.
The company has already delivered its first 10 Canter light-duty trucks to MCS Coca-Cola LLC at a
customer delivery ceremony in Ulaanbaatar where the MFTBC VP of Sales and Service International,
Mr. Kai-Uwe Seidenfuss, said the company is ―excited to bring its trucks to Mongolia and sees solid
economic growth potential‖ in the region. "Furthermore, we believe our efficient, high quality
products and comprehensive service offerings together with our local partner MSM will strongly
support the industrial sector in the market," Mr. Seidenfuss said.
Source: ABR
B-TV PROGRAM ADJUDGED BEST
―We are by Their View‖, a program produced by B-TV (Business TV) which used many items
published in the BCM NewsWire, has been adjudged the best program in the Business and Economy
category in the 73rd
and latest edition of the survey of media users, published recently. The survey
assessed and graded in several categories 3,143 programs broadcast by 15 public television
channels.
Source: Institute of Media and Publication, Department of News and Research

6. C @ LIMITED KICKS OFF EXPLORATION ON COAL LICENSES
Perth-based C @ Limited has commenced an exploration program on the Mongolian coal licenses it
currently has under an option agreement, and has mobilized a rig to commence drilling in South
Gobi province. The option agreement, announced 20 April, has a 10-week due diligence period that
started on May 6.
The company says it has made significant progress on its due diligence, which has been extended to
include the exploration program which is expected to gain a greater level of understanding of the
prospectivity of the licenses, along with validating due diligence material provided by the license
holder.
C @ Limited and its local partner Trinity Mongolia Pty Ltd have reviewed the data on the eight
licenses since signing the agreement providing confidence to move ahead. The exploration program
will include up to 5,900 meters of diamond core drilling and up to 1,200 meters of trenching on
both the South Gobi and Uvurkhangay province licenses. A reputable drilling contractor has been
appointed.
The company will undertake geophysical logging on all drill holes and coal sampling from the
exploration program will be transported to the SGS laboratory in Ulaanbaatar for quality testing. C
@ Limited expects the drilling program to be complete within five weeks with an additional two
weeks for completion of any remaining coal samples for quality testing. Due diligence work also
includes a legal review of the licenses which is expected to be completed shortly.
Source: C @ Limited
PETRO MATAD NAMES INVESTMENT BANKER AS NON-EXECUTIVE DIRECTOR
Petro Matad has appointed Ms. D. Enkhmaa as a non-executive director of the company with
immediate effect. Ms. Enkhmaa has also been appointed to the Board's Corporate Governance,
Social Action and Environment Committee. The appointment is on the nomination of Petrovis LLC,
Petro Matad's largest shareholder, with Ms. Enkhmaa replacing Ms. D. Enkhchimeg who has resigned
as a director of Petro Matad.
Ms. Enkhmaa, 32, is a Mongolian and Australian national who is based in Mongolia. She is an
investment banker and currently Head of Country Coverage for Mongolia for Macquarie Capital
Advisers. Commenting on the decision, Mr. Doug McGay, CEO of Petro Matad, has said, "Ms.
Enkhmaa‘s experience in energy and specifically the oil & gas sector, along with her banking
experience and qualifications, combine to make her a valuable addition to the company and we
look forward to drawing upon her skills."
Source: Petro Matad
GUILDFORD COAL APPOINTS NON-EXECUTIVE CHAIRMAN
Guildford Coal Limited has appointed Mr. Craig Ransley to the position of Non-Executive Chairman.
Mr. Ransley previously held the position of Non-Executive Deputy Chairman and his change of role
reflects recent rapid progress in advancing the company‘s strategy of fast tracking potential project
developments from its expansive coal portfolio. Guildford is currently conducting coal mineral
resource drill-outs on the Hughenden Project in Queensland and the South Gobi Project in Mongolia.
Mr. Ransley was the founder of the company and instrumental in its subsequent ASX listing.
Source: Guildford Coal Limited
ANOD BANK MATTER TRANSFERRED TO PROSECUTORS
All investigation into charges against Anod Bank directors causing financial loss to 1,200 persons by
selling them counterfeit shares has been concluded and the matter was transferred to Ulaanbaatar
Prosecutors Office on May 24 for further action.
Source: Udriin Sonin
HOPU SELLS HALF OF WINSWAY COKING STAKE FOR USD82 MILLION
China-focused private equity fund Hopu Investment Management Co sold nearly half its stake in
Winsway Coking Coal Holdings for around USD82 million on May 20, Winsway has said. Hopu
subsidiary Winstar Capital Group sold 163 million shares at HKD3.92 at the end of a six-month lock-
up period.
Winsway raised USD473 million in a Hong Kong IPO last year. The company is one of China's major
integrated importers and distributors of coking coal, accounting for around 65 percent of total
Mongolian coal imported into China in 2009, based on SXcoal's import data. Hopu owns almost 5
percent of the company after the sale.
Source: Reuters

7. AUSTRALIAN ENGINEERS ENABLE LIGHTS ON AT ENERGY RESOURCES COAL WASH PLANT
A benchmark coal wash plant in the new mining hotspot of Mongolia has hit its critical ‗lights on‘
date
with the help of nine Australian electrical engineers. Located in the South Gobi region near the
Mongolian/Chinese border, the Uhkaa Khudag mine is the first large-scale coal mine in Mongolia to
be developed and operated to international mining standards and practices. Owned by an
international consortium called Energy Resources, the mine‘s output of 800 tons of coal per hour is
destined for the Chinese market.
Project supervisors from Australian electrical installation solutions provider, O‘Donnell Griffin, gave
up their Christmas and New Year holidays to travel to Mongolia to help supervise the electrical
installation at the brand new facility. They ensured quality and safety standards were upheld and
trained the local workers on the job. The O‘Donnell Griffin team, headed by project manager,
Stephen Jago, was subcontracted to Sedgman Limited, the plant‘s Australian designer and builder.
―We‘ve done many coal wash plant installations with Sedgman in the past and we have a very
strong working relationship,‖ said Mr. Jago. ―They knew the quality of our work was high and they
knew we could immediately provide the level of human resources required, so they came straight
to us to run this project. Reaching the ‗lights on‘ stage is significant because it means the high
voltage reticulation is complete, the structure is in place, and power has been introduced into the
main switchboard.‖
O‘Donnell Griffin‘s role was to supervise and train the local tradesmen, ensuring the design
specifications and quality standards were adhered to strictly. ―Mongolia is a new mining hotspot
and the local tradesmen don‘t quite have the necessary specialized skills yet,‖ explained Mr. Jago.
―Our engineers helped guide the local workers in their day-to-day tasks, giving them the skills and
advice they needed to keep the project running smoothly. The plant is Australian-designed and
needed to be built according to stringent specifications, so we needed to show the locals how to rig
and wire the installation correctly.‖
While O‘Donnell Griffin has managed many remote and overseas projects, this one presented
particular challenges because of unpredictable and extreme weather conditions as well as language
and cultural barriers. ―The first two staff members to go to Mongolia were Mark Withers and Jacob
O‘Brien. They both gave up their Christmas and New Year holidays with their families to go from a
sweltering Queensland summer to a freezing Mongolian winter,‖ said Mr. Jago.
―Temperatures fell to around minus 27 degrees C. Meanwhile, the guys were living in tiny huts
heated by pot belly stoves. The food was unfamiliar and there were only a few English-speaking
locals. There were days the guys couldn‘t work at all because of blizzards or sandstorms.
―Maintaining morale was a definite concern, so we tried to make their working conditions as
flexible as possible. They worked 28-day shifts followed by a 10-day holiday back home in Australia.
It was a challenge, but all nine guys maintained a positive attitude – they were there to get the job
done and they did that job safely and effectively. There were no injuries or other problems on site
even though the weather conditions were so treacherous.‖
Read more…
Mr. Mark Withers and Mr. Jacob O‘Brien were chosen to be the first to travel to Mongolia because of
their highly specialized skills as engineers and supervisors. They were followed by an additional
seven engineers. All nine workers have now returned to Australia. ―This was an AUD10-million
installation. Each of our engineers supervised between 30 and 40 local trades people. It was an
Australian design being installed to Australian specifications with Australian quality standards.
Those standards were very different to what the local workers were used to. For example, while
the Australians are used to bringing lots of heavy equipment like cranes and winches to get the job
done, the Mongolians are more used to relying on pure manpower,‖ said Mr. Jago.
O‘Donnell Griffin would normally use its own trades people on a job like this, but part of the
project involved training the locals. ―There are a few key concepts that are second nature to
O‘Donnell Griffin employees but were less familiar to the local trades people,‖ said Mr. Jago.
―Safety was the first one. Our guys are used to examining situations, then quickly and effectively
determining the safest way to proceed. They don‘t take risks and they don‘t get hurt. The second
concept was quality. Doing it properly and getting it right, even if it takes a few seconds longer.
Rigorously testing the system and maintaining quality assurance.‖
Mr. Jago said it was ―a challenge to communicate those concepts through the language barrier
because the vast majority of the local tradies didn‘t speak English. We used interpreters and
English-speaking supervisors where possible. It was a big challenge but our guys really pulled it off
and the local workers proved they were more than up to the job. We recruited the team both
internally and externally to make sure we got the right mix of skills, experience and attitude. We

8. have a large pool of talent that we can call on to ramp up for jobs when we need them.‖
Since the fall of communism in 1991, Mongolia has seen the beginnings of a potentially huge mining
boom. Australian companies are getting in on the ground floor and the geographical and population
similarities between the two countries have seen natural synergies develop to the benefit of both
nations.
Source: PACE
SPONSORS
Khan Bank Eznis Airways
Kempinski Hotel Khan Palace Mongolian National Broadcasting
Mongolian Star Melchers
ECONOMY
UNPRECEDENTED RISE IN GDP IN Q1
Mr. Ch.Khashchuluun, Chairman of the National Development and Innovation Committee, has said
GDP in the first quarter of this year grew by an unprecedented 9.7 percent, as against 6 percent in
2010, and the rate is still increasing. Per capita GDP was USD2,200 last year, or about USD500 more
than in 2009. Contrary to what many had feared, the present rate of 5.5 percent inflation is ―very
much a manageable figure‖. This can be attributed to the adequate meat and vegetable stocks in
winter that have kept prices stable in spring. The appreciation in the value of the MNT has also
helped keep inflation in leash.
Source: business-mongolia.com
RENTS, HOME SALES REBOUNDING IN ULAANBAATAR
In the first quarter of 2011 the ―average band‖ of Ulaanbaatar house prices ranged from USD702 to
USD1,223 per sq. m. However, luxury apartment prices range from USD1,653 to USD8,264 per sq. m.
As the economy returns to double-digit growth, the property market is expected to continue
recovering in 2011 and 2012.
In the 105-meter Blue Sky Tower, currently the tallest building in Mongolia, located in the heart of
Ulaanbaatar, apartments are offered at over USD8,016 per sq. m. These are some of the most
expensive apartments in the country. More typical is the Temple View Residence near the Choijin
Lama Temple, developed by Mongolian Properties, where condominium units are priced at about
USD2,400 per sq.m. Prices range from USD188,000 for two-bedroom units to USD259,322 for three-
bedroom units. At the Royal Green Villa, in the Zaisan neighborhood, premium apartments sell for
not more than USD400,000. Prices of luxury apartments at the Olympic Residence, an 18-storey
mixed-use development, start at USD2,300 per sq. m. That is around USD200,000 per apartment.
Ulaanbaatar‘s most desirable residential buildings/compounds include The Brauhaus, the Temple
Residence, The Jiguur Grand Office Building, The Star Apartments, The Royal County, The Sarnaikh

9. Building, Lux House, The Erel Building, The Russian Embassy Building, Regency Residence, and the
Blue Sky Tower. The ―Embassy District‖ and the area around the State Department Store, also
known as the 7 Courtyards, are two of the most popular residential areas for foreign homebuyers
and tenants, as well as wealthy Mongolians.
Net rental yields are high in Ulaanbaatar, at around 9% to 18%, according to local real estate
experts. ―Mongolia is a good investment, with rental yields of up to 18%,‖ says Mr. Jess Lampe of
Olympic Residence. ―The reason for the high returns is a basic supply and demand imbalance.‖ In
the first quarter of 2011, three-bedroom apartments at the Royal Green Villa rented for USD3,471
per month. At the Temple View Residence, apartment rents start at USD2,066 per month.
Read more…
Residential property prices soared in Mongolia over the last decade, boosted by strong economic
growth, high copper prices, and large increases in gold production. There was an influx of mining
organizations, and expatriates, foreign diplomats, and executives moved into the city en masse.
However, Mongolia‘s heavy reliance on commodity prices as a catalyst for economic growth meant
that the global crisis hit hard. In 2009 the economy contracted by 1.6%, after experiencing an
average annual GDP growth rate of 8.8% from 2003 to 2008. Foreign investment dried up. Banks
stopped lending. Construction projects screeched to a halt. Housing demand, especially from
foreign expatriates, vanished, causing the residential property market to stagnate from H2 2008 to
H1 2010.
In late-2009, the economy started to recover. In the second half of 2010, the property market
started to regain its momentum. Confidence from real estate developers and homebuyers is now
slowly returning to the market, though real estate prices are still below pre-crisis levels.
Mongolia‘s mortgage market is still underdeveloped and very small. Housing finance was introduced
only in early 2000s. Yet the pace is astonishing. In 2010, the size of the mortgage market was about
4% of GDP, up from just 1% of GDP in 2005. Outstanding mortgage loans rose in 2010 no less than
47.7% from the previous year to USD275.87 million. Mortgage interest rates are very high, at 15% to
20% per year. The loan-to-value (LTV) ratio is 70% of the appraised value of the property. The term
period is usually over 20 years. However, for local housing projects the government is proposing a
mortgage interest rate of 6%, and to increase the LTV ratio to 90% of the property value.
Source: Global Property Guide
SHORTAGE LEADS TO DIESEL USE CURBS ON MINING COMPANIES
The Government has decided to limit the amount of diesel mining companies, including Energy
Resource LLC and Erdenes Tavantolgoi LLC, can use, as the country faces a shortage of diesel
following Russia‘s failure to supply the agreed amount of fuel and depletion of the national reserve.
Public transportation services will also be restricted. Coal mines that do not supply thermal power
stations will receive no diesel for 10 days.
The Government has also abolished all diesel import duty, to counter the likely price increase
because of the shortage. Teams are being sent to Russia and China to seek fresh sources of diesel.
The state budget will allocate more funds to increase petroleum storage capacity in the remaining
months of the year and in 2012. The Ministry will submit a report on setting up a petroleum refinery
to the Government meeting next week.
Source: English.News.mn, open-government.mn
MONGOLIA LOOKS TO BE IN NO RUSH TO BEGIN EXPORTING COMMODITIES
Mongolia is going to be a major future supplier of commodities from coal through gold to copper –
and maybe even crude oil. But how soon will this landlocked country with a population of 3 million
really begin delivering these resources to the world in a significant, market-moving way? After
spending a week in the Mongolian capital and speaking with everyone from the prime minister to
coal miners, my sense is that no one is in any rush to boost exports of natural resources.
Although Mongolia is located right next to its biggest customer, China, their history of rivalry makes
Mongolia suspicious of its southern neighbor. And capricious politics – Parliament has tried to oust
Mr. D. Zorigt, Minister for Mineral Resources and Energy, twice this year – mean that economic
logic is sometimes subordinate to politics or nationalism.
Take the development of Tavan Tolgoi, by some calculations the world‘s second-largest coal
deposit. The government recently scrapped plans to build a railway directly to the border, less than
300 km away, even after feasibility studies and initial permits for the line had been granted.
Instead, a new line will go east, connecting the mines to the Trans Mongolian Railway that leads to
both Russia and China, albeit by a longer route.
Politicians from both sides support the decision. It will help develop Mongolia‘s domestic processing

10. industry, they say, pointing to plans for an industrial park in Sainshand, where the railroad from
Tavan Tolgoi will connect to the trans-Mongolian line. And with coal-washing plants in place,
Mongolia‘s minerals can fetch a higher price. (Word on the street in Ulaanbaatar has it that Chinese
traders are offering as little as USD150 per ton for unwashed coking coal – yes, coking coal – at the
border town of Gashuun Sukhait, where coal from South Gobi province is trucked out along a dirt
track.)
Read more…
The new rail line will also allow Mongolia to play China and Russia off each other to see who can
offer the better price, and it is understood that Mongolia is negotiating for port access via the
Chinese rail system, ideally allowing exports of coking coal to anywhere in the world. And if the
politicians are right, companies will be lining up to get a piece of the action in Sainshand. According
to one banker, engineering group Bechtel is bidding for a role in the planning and development of
the industrial zone. This approach is part of a broader strategy: politicians seem focused on
developing the resources sector in a way that gives Mongolia the best deal.
There will be a general election in about 12 months and everyone wants to be able to tell their
constituents that they are defending Mongolia‘s national interest, particularly in terms of China.
There‘s something of a rush for the government to complete the planned IPO of part of the Tavan
Tolgoi deposit before the elections take place, a process that would give 10 per cent of the shares
to every man, woman and child in Mongolia. But there is much less urgency on developing the
infrastructure to get the coal to market.
There are some exceptions to this pattern: the Oyu Tolgoi mine, which is co-owned by Rio Tinto,
Ivanhoe and the Mongolian Government, is ahead of schedule and will come online next year. The
copper and gold produced there will be shipped out by truck, posing fewer logistical difficulties
than the bulky coal. But still, the investment agreement governing the mine took more than five
years to negotiate and remains a source of intense political debate.
This caution may not be a bad thing for Mongolia: already the currency is straining under the influx
of foreign investment. But it is certainly a frustration in Beijing, where state-owned mining
companies can be heard waxing eloquent about their northern neighbor. Not to mention the fact
record prices for thermal coal have caused power outages in some Chinese provinces. China may
have to wait a little longer though, before Mongolia really comes online.
Source: The Financial Times
MONGOLIA NEEDS A LONG-TERM VISION
Mongolia has always conjured a mix of exotic appeal and isolation. The remote nation has for
decades endured severe economic stagnation and political repression. That seems to be changing.
Some 20 years after dismantling the country's Stalinist system and bringing about greater political
freedom, Mongolia is now ―the wolf on the move‖, as they say in the capital city of Ulaanbaatar.
Like the much-vaunted Asian Tigers of the 1980s -- Singapore, Taiwan and South Korea -- the
Republic of Mongolia is now branding itself as the ―wolf economy‖. Its strategy: leverage Mongolia's
vast natural resources to boost socioeconomic growth.
With only 2.5 million people, Mongolia sits in an area three times the size of France. Its sprawling,
mostly desolate territory boasts of massive deposits of copper, coal, iron, gold, uranium, zinc and
other natural resources. Experts say it probably has oil and rare earth elements, too. ―Under any
scenario, even if and when commodity prices fall substantially from their current levels, Mongolia's
per capita GDP is heading for advance economy levels in the coming 20 years,‖ says a Western
economist who has lived and worked in Mongolia for two decades. He has asked not to be named
because of concerns it could jeopardize his work relationships in China and Mongolia.
Mining mania is sweeping the country. Mining companies from various countries are lining up to do
business and sign lucrative deals. Mongolia hopes to raise USD25 billion in investments over the next
five years, government officials say. GDP last year rose more than seven percent, buoyed largely by
the mining boom. Government officials forecast sustained faster growth over the next five years --
unless the "the wolf on the move" falters and trips.
Economists warn of what some call "resource curse". As a young democracy, observers say, Mongolia
remains susceptible to corruption, mismanagement and myopic policies. "There's a sort of mining
mania but also a mining phobia, even hatred," President Ts. Elbegdorj has said. The government
now needs to ensure that the mining wealth trickles down to the needy. "Investment in education,
health care, infrastructure and other long-term determinants of productivity have not been
adequate," the Western economist said. "All those sectors are difficult for Mongolia, with its large
land mass, sparse population, nomadic traditions and harsh climate."
Read more…

11. Daily life remains harsh for the poor who live outside the capital. Most live off government
handouts of less than USD20 a month. "Life is very difficult. We can't do anything," said animal
herder Chaoga, who lives with her husband and three children in a ger. "If we go to the city, we
can't afford to buy anything."
What the country needs, Mongolia-watchers say, is a long-term vision. "To date there has been
more of a tendency to squabble over division of today's revenues than to focus on medium- and
long-term goals," the Western economist said. "One example which is critically important is the
national crisis with alcoholism. Simply transferring more money to people without ridding the
society of the scourge of alcoholism will have horrific results."
Challenges also loom outside Mongolia's borders. "I usually describe my country as a little pony
between two big elephants," said Mr. Elbegdorj, referring to Russia and China. As a landlocked
nation bordering China, Mongolia grapples with its larger neighbor's growing influence in the region.
It has deftly fended off Beijing's political pressure on sensitive issues. For example, it has
periodically invited the Dalai Lama to visit -- Tibetan Buddhism is a traditional religion there -- at
the risk of provoking the ire of Beijing.
Still, Mongolia remains hard-pressed to avoid over-dependence on China, its major trade partner
and main market of its mineral resources. "Maintaining good relations with China will always be
important," says the Western economist. "But there are many counterweights available, and the
Mongolians are skilled at utilizing them." Mongolia is actively building its economic ties with Russia,
Japan, the US, Canada, Turkey and other countries.
Mongolia's top leaders say they are determined to learn from the failings of other resource-rich
countries and make their resources a blessing, not a curse. The government is working on laws to
tighten mining regulations, avert over-exploitation and plug corruption. Leaders say they are aware
the stakes are high -- and that corrupt tyrants do not last in power. "If we put the money in our own
pockets, we will end up badly," Mr. Elbegdorj said. "We know that."
Source: edition.cnn.com
SEVERAL SOURCES OF FINANCING RAILWAY CONSTRUCTION UNDER CONSIDERATION
The three companies so far contracted to build the new railway -- Dorniin Railway, the Russian-
Mongolian JV Ulaanbaatar Railway, and Trans Con – are at present working with their own funds,
but this will change soon, according to the Minister of Road, Transport, Construction and Urban
Development, Mr. Kh.Battulga, who has said the average construction cost of 1 km of the 1,100-km
railway has been estimated to be roughly USD 2-2.5 million. A fourth company is likely to be
selected soon to take up the work on another 100-km stretch. The Government is considering
several ways of financing the entire project. It expects much of the capital to come from the
Development Bank, and 49% of the Mongolian Railway Company could also be privatized. There is
also the likelihood that companies selected for mining at Tavan Tolgoi will develop infrastructure
themselves.
Source: Unuudur
GOVERNMENT TO CONSIDER RAISING SALARY AND PENSION RATES
Prime Minister S.Batbold told Parliament last week that following the 30% raise in minimum wages,
the Government would consider paying salary and pension at increased rates, but only after making
a careful study of the whole issue. He was taking part in a debate on the state policy on
employment. Earlier, he reported the country‘s population has reached 2.8 million, 63.3% of whom
live in Ulaanbaatar. A major part of the population will be in the working age group until 2025,
making it imperative for the Government to generate jobs. To this end, in the last two years the
Government has given out loans worth MNT60 billion to SME enterprises.
Most of the questions asked by MPs after the Prime Minister‘s statement were about increasing
salary and pension, and about specifics of the use to which the mineral resources income will be
put. Many wondered if the Government can do much if it continues to spend a substantial share of
its income on paying individual cash allowances. Mr. Batbold reminded them that all political
parties have agreed not to promise any further cash allowance.
Source: Undesnii Shuudan
APARTMENT PRICES WILL FALL, SAYS HEAD OF CONSTRUCTION ASSOCIATION
The President of the Mongolian Construction Association, Mr. M. Batbaatar, is confident that
apartment prices will fall substantially towards the end of this year, or early in 2012 at the latest.
The rise in prices has been because demand overran supply, with little construction in recent times.
However, this will change as the Government‘s 100,000 Apartments program takes off. Construction

12. companies know this and have been trying to sell off their highly priced apartments before the fall
begins. Mr. Batbaatar did not agree with builders who blame the price rise on increasing cost of
building material. ―Prices of material have gone up, but not enough to have an impact on the final
price of an apartment,‖ he felt. The main expenses for construction companies are on land and on
installation of power and sewerage lines. The 100,000 Apartments program will be different as the
Government will provide free land and will also bear the costs of power and sewerage connection.
Both will mean considerable savings for the buyer. ―Besides, the program is targeted at low- and
middle-income groups, so the end cost has to be what they can afford,‖ Mr. Batbaatar said.
Source: Unuduur
ECONOMISTS WARN ABOUT MNT RISING AGAINST USD
The MNT and the AUD have been the two national currencies to appreciate most against the USD,
but what does this actually mean for Mongolia‘s economy? Economists like D.Batjargal, Director of
the Finance and Economics Institute, and Ts.Dolgorsuren, an expert on international economics and
business administration, say the inflow of investment from outside will keep the dollar inexpensive,
which makes importers and domestic consumers happy, as the price of imported goods, including
food items, and services will stay stable. The compulsion to be competitive will also stop domestic
producers from raising their prices. However, this may act as a disincentive and easy affordability
may encourage higher imports. Exports, on the other hand, get more expensive and thus will face
challenges. They have warned that the "hot money" now coming in could very well go out as quietly
but perhaps more quickly, leaving the country‘s resources depleted.
Source: Zuunii Medee
MONGOLIA’S PRAGMATIC APPROACH: USE IT, AND DON’T ABUSE IT, OR LOSE IT
In Mongolia, as in many western countries, mineral resources are the State‘s property. Only legal
entities registered in Mongolia, both domestic and international, can hold exploration and mining
licenses. Exploration licenses are initially granted for 3 years, and can be extended twice, each
time for a period of 3 years, with minimum amounts spent on exploration work from the second
year onwards. This is a typical framework in the mining world to promote exploration, transfer into
long life mining licenses and ultimate development into economically producing mines. This is
known as ―Use it or lose it‖ in the resources world.
But mining activity is not the only requirement to fulfill in playing by the rules. Recently, following
scrutinizing site visits from very senior Mongolian officials, Petro China was faulted for not fulfilling
contractual obligations in development of one of its oil blocks. These included roads badly
damaged by oil transportation traffic, no reclamation work completed, and industrial waste buried
underground, against all environmental guidelines. Enquiry following complaints from local citizens
revealed that the company did not have an environmental reclamation fund. Surprising to some,
Mongolia is already a crude oil exporting country, earning USD155 million in 2010 and the amount is
increasing rapidly. Petro China, the USD300 billion market cap NYSE listed company, and China Inc.
as the obvious long term consumer, are important partners for Mongolia, albeit within the bounds
of existing rules and subject to potential suspension (as in this case) without compliance.
Mongolia has taken a very pragmatic approach of supporting resources development in country. And
with an increasingly keen eye from locals, ―Use it, and don‘t abuse it, or lose it‖ may be the new
unofficial slogan for the frontier mining country going forward.
Source: www.resource-cap.com
GERMANY WANTS PART IN MINING SECTOR, MONGOLIA TECHNOLOGY
Mineral Resources and Energy Minister D. Zorigt says that Germany is receptive to a Mongolian
proposal for a bilateral strategic partnership and wants a bigger role in developing the country's
mining sector. He was answering media questions after a meeting last week with a German
delegation headed by Mr. B. Pfaffenbach, State Secretary of Ministry for Economics and Technology.
Mr. Zorigt told reporters they had talked about entering into a strategic partnership that will help
Mongolia acquire Germany's technology and Germany get into the mining sector. Deutsche Bank,
one of the four investment banks chosen to manage the IPO of the Tavan Tolgoi coking coal deposit,
wants to participate in the construction of a new railway, and some companies are interested in
factories to wash or coke coal. They are studying how much finance will be needed, and what sort
of export insurance is available.
Source: Xinhua, Ardiin Erkh

13. AUSTRADE CHIEF EXPLAINS SHIFT IN FOCUS TO EMERGING MARKETS
Austrade chief executive Peter Grey sees his job as guiding Australian companies into some of the
more difficult but higher growth economies of the world -- from Mongolia to Central Asia, and Latin
America to Africa. After taking over as chief executive last year after a stint in Geneva as
Australia's ambassador to the World Trade Organization, Mr. Grey commissioned the first major
review of Austrade's operations in 20 years. Following its report, Federal Trade Minister Craig
Emerson announced a comprehensive reform of Austrade, whose annual budget of almost AUD200
million will be focused more on emerging markets.
"We want to end up with a more contemporary version of Austrade, one which is focused on those
markets which are important for Australia in 2011 and onwards," Mr. Grey said. "We are looking at
emerging markets, frontier markets. As a government agency we have to look at where we can add
the most value -- and that is in the more difficult markets, where there are cultural or linguistic
differences."
Mr. Grey took as example Europe and North America. ―They may provide potentially greater
opportunities -- and business should and will continue to exploit those opportunities, but Austrade
can add less value there because businesses themselves can navigate their way around Europe and
North America. They can do much better there than they can in western China or parts of India or
Mongolia, or even throughout Southeast Asia. So it is a question of the combination of market
potential and of trying to focus very clearly on where Austrade, as an organization, can add the
most value."
Resource-rich Mongolia, a new hot spot for big miners, including BHP Billiton and Rio Tinto, is a
case in point. Austrade has serviced the country on a fly-in, fly-out basis during the summer
months. Now it plans to boost its commitment to help Australian companies benefit from business
opportunities in the rapidly growing economy.
"There is huge potential in Mongolia," says Mr. Grey. "A lot of it will be driven by mining, but there
will be opportunities for education services, law firms, financial companies and the engineering and
construction companies, which will follow on behind the mining companies which are now up
there."
Source: The Australian
AGREEMENT WITH CW-GP PARTY GIVES MNCCI CHANCE TO LOBBY FOR BUSINESS
An agreement between the Civil Will-Green Party alliance and the Mongolian National Chamber of
Commerce and Industry (MNCCI) on sharing economic and business information and data paves the
way for the latter to formally act as a lobby for the private sector. The MNCCI will represent the
views and feelings of the private sector regarding draft laws and proposals before Parliament,
submit research data and analytical reports, and organize meetings and discussions among MPs and
business persons. The CW-GP will forward to the MNCCI business related items on the agenda of
Parliament, and ask it to seek the views of its members on these. It will also expect the MNCCI to
regularly organize meetings, discussions and seminars to keep business persons in touch with
politicians.
Source: Unuduur
COMMITTEE WANTS WOOL SECTOR AND SME LOANS TO CARRY 7% INTEREST
The Standing Committee on the Economy has said the Government should not charge more than 7%
interest on all loans it gives from the proceeds of sale of bonds worth MNT300 billion with a five-
year maturity period. The committee agreed with the Government proposal that MNT100 billion of
the money will go to the cashmere sector, MNT50 billion to lamb and camel wool factories and to
pay incentives to herders to supply wool to local factories, and the remaining MNT150 billion will be
for SME support. The committee also agreed to a proposal to pay a bonus of MNT2,000 for each kilo
of Grade 1 lamb and camel wool to members of cooperatives. The committee will prepare the
necessary rules by July 1 so that the money can come from the state budget.
Source: Ardiin Erkh
PLAN BEING READIED TO TRAIN WORKERS ON THE JOB
Some time ago, the Ministry of Social Welfare and Labor drew up an estimate of likely demand for
skilled workers and asked the Ministries of Road, Transportation and Urban Development and of
Mineral Resources and Energy to identify companies willing to train workers on the job. It has now
received the lists and has selected 45 construction organizations in Ulaanbaatar and 19 in the
provinces to train 1,660 and 625 workers respectively. Similarly, 10 road repairing organizations will
train 304 workers and 19 mining organizations 750.

14. Source: News.mn
HAPPY TO BE SERVING THE COUNTRY, SAYS DEVELOPMENT BANK DEPUTY DIRECTOR
Ms. L.Bolormaa has returned home from a successful career abroad to be appointed the First
Deputy Director of the Development Bank, an institution to the concept and creation of which she
contributed significantly. She graduated from the National University of Mongolia in 1992 and
worked for the then People‘s Bank for three years, before going to the US to study for a Master's
degree. Afterwards she got a second master's degree, in business administration, from Japan. She
joined Deutsche Bank in Japan and after three years was sent to its New York office, where she
stayed six years, ―working hard, trying out new ideas and learning something new from every
challenge‖.
In 2009, she read a book about a development bank, and began thinking how such an institution
could be used to help the financial system and the economy in Mongolia. Some influential people
with whom she talked about setting up a development bank referred her to Mr. Ch.Khashchuluun,
who was leaving his job as Director of the Economics School of the NUM, to become head of the
National Development and Innovation Committee. She discussed her concept with him, and is happy
to get a chance to work for her country, using her skills and experience gained from years of being
in banking abroad.
Source: Udriin Sonin
ZINC MINE AGREES TO RECYCLE WATER IT USES AS CITIZENS COMPLAIN
Mr. Ch.Jargalsaikhan, Deputy Minister of Nature, Environment and Tourism, has expressed the fear
that the huge volume of Mongolia‘s inferred/proven mineral deposits could be laying the country
open to the threat of ecological devastation from extensive and indiscriminate mining. Talk of coal,
uranium and oil hogs the limelight but Sukhbaatar province is rich in zinc and molybdenum. Miners
will before long rush in to develop these deposits, complementing the present operations by just
one company. The drinking water source of the province lies in the site of the zinc deposit and local
residents recently complained about the water level falling because the mining company used an
enormous amount of water for their work. Some tests were made by experts of the Mongolian
University of Science and Technology. These concluded that with strict control placed on its use in
mining, the water will last for the next 25 years. The company has said it is working on installing
technology allowing recycling of at least 50% of the water it uses.
Source: Zuunii Medee
PLANNED NEW INTERNATIONAL AIRPORT WILL REDUCE FLIGHT CANCELLATIONS AND DELAYS
The Mongolian Government has agreed with the Government of Japan on a USD270-million soft
loan, repayable over 40 years at a rate of just 0.2 percent, to build a new airport to service
Ulaanbaatar. The city‘s current airport suffers from occasional high winds and has a relatively short
runway unsuitable for 747s and larger aircraft.
The new facility, to be built and completed by 2015, will be able to service all larger modern
aircraft and affords better protection from windshear. It should reduce annual flight cancellations
and delays from the current level of 2.5 percent down to 0.5 percent. The airport will be built in
the Khoshigt Valley, near Terelj in Tov Aimag, about 54 kilometers from the capital. Construction
on the new airport – together with a high speed motorway that will connect Ulaanbaatar with the
airport – is expected to be started later this year. The loan was agreed on condition that Japanese
contractors and suppliers were used.
International air traffic to Mongolia has been increasing and is expected that the rate will continue
to increase. Capacity is set to rise from the current level of 600,000 passengers annually to roughly
2.5 million. That is about the same as the total national population. Cargo capacity is set to
increase 10-fold.
Improvements in air travel go hand in hand with plans to lessen dependence on rail links to China.
Mongolia will also see the development and construction of an eastern spur from the Trans-
Mongolian line heading east from Ulaanbaatar to the eastern Trans-Siberia route which will link
Mongolia directly to a sea port for the first time – circumnavigating the current need for Mongolian
raw materials, goods and products to pass through China prior to export. China has a history of
closing the border with Mongolia at times of political and religious tensions such as the Dalai Lama‘s
visits to the country, so increasing alternative transportation routes to provide options other than
reliance on China are increasingly being seen as a desirable policy.
Source: www.2point6billion.com

15. FREIGHT TRAIN FROM ANTWERP TO CHINESE HEARTLAND PASSES THROUGH MONGOLIA
A new freight train route has recently gone into operation connecting Antwerp in Belgium to the
western Chinese city of Chongqing, 11,000 kilometers away. It provides an alternative to air and sea
shipping. Five times a week, a freight train leaves the harbor of Antwerp on the start of an
extremely long journey. It passes through Germany, Poland, Ukraine, Russia and Mongolia before
reaching its final destination: Chongqing, a city of 32 million people in western China.
The train is part of a multinational project that aims to provide a new transportation option and
connect a major European port with a fast-growing industrial center in the Chinese interior. "In
addition to rapid, but expensive air freight and the inexpensive but slow ocean shipping, now there
is a relatively quick and cheap alternative," said Mr. Zeng Su, the chief representative in Chongqing
for the Antwerp region's development authority.
The first train rolled out of the Port of Antwerp on May 9. The train travels along existing tracks,
and although it crosses six national borders, Belgian authorities are working with officials along the
route, trying to avoid delays due to customs formalities. "We want to establish a 'green lane' where
there are agreements between customs authorities of the individual nations involved," said Mr. Mark
van Peel, president of the Antwerp Port Authority. He said he hopes to have the agreements in
place by October and shorten a 20- to 25-day journey down to one that takes between 15 and 20
days.
Source: Deutsche Welle (www.dw-world.de)
QUEENSLAND MAKES GRANTS AVAILABLE FOR SKILLS DEVELOPMENT
Queensland would set aside grants of up to AUD2 million for industry groups and individual
companies to support training programs aimed at heading off a future skills shortage, Premier Anna
Bligh said on Tuesday. The grants would be available through Skills Queensland, the industry-led
statutory authority established by the Queensland government in December 2010, ―to respond to
the skills need and to lead the nation with the concept of an industry-driven system‖.
The Premier said the Skills Queensland Strategic Investment Fund would have AUD50 million
provided by the state government each year, along with the complementary funding contributed by
industry. The fund was aimed at plugging skills gaps and at supporting growing industries like
mining. ―When industry sees a need we can target that area with training programs funded in
partnership with industry through Skills Queensland. This is about investing in the emerging skills
and workforce development needs of Queensland," Ms. Bligh said.
Skills Minister Stirling Hinchliffe said, ―The fund will be used to support workforce development of
Queenslanders aged 15 years or older to receive skills training from a registered training
organization.‖ He noted that the increased demand for resources has extended to other industries
including construction, health and community services, information media and telecommunications,
with these industries also being targeted for skills development.
Source: Mining Weekly
CHINESE DATA ADD TO FEARS OF SLOWDOWN
A business survey showing China's manufacturing in May expanding at its slowest pace in 10 months
drove Chinese stocks down sharply, and added to concerns over a slowdown in the world's second-
largest economy after months of inflation fears. The HSBC preliminary purchasing managers' index
for China, an early read on manufacturing activity in May that was released Monday, fell to 51.1 in
May from 51.8 in April. A reading above 50 indicates continued growth, but the decline in the index
shows that the pace of growth is slowing.
Other recent data, including industrial production growth in April and manufacturer surveys from
the last few months, have showed activity to be slowing more than many analysts predicted, even
as inflation remains stubbornly high. "The market certainly is worried about growth slowing, that's
been apparent, but it's also worried about inflation. Previously the worry was inflation alone. That's
what's changed," said UBS Securities economist Wang Tao. She noted that even inflation concerns
are ultimately about growth, as the real worry has been that the Government's anti-inflation
tightening measures—a series of interest-rate increases, credit curbs and other measures—could
lead to a sharp downturn in economic activity.
The lower preliminary reading in HSBC's survey on Monday "heralds further cooldown" in China "as
both domestic tightening and external supply disruptions kick in," Mr. Qu Hongbin, HSBC chief
economist for China, said in a research note. Still, Mr. Qu said there is no need worry about a "hard
landing" for the Chinese economy. "Cooling growth is not all bad news as it also helps to tame
inflation."
Read more…

16. The preliminary China PMI figure is based on 85% to 90% of total responses to HSBC's PMI survey
each month and is issued about one week before the final PMI reading for the month. The bank's
final May China PMI reading is due June 1, as is the official PMI released by the China Federation of
Logistics and Purchasing. The official PMI for April, released May 1, also showed a slowdown, falling
to 52.9 from 53.4 in March.
Industrial-production growth also slowed more rapidly than expected in April, according to data
released earlier this month, rising 13.4% in April compared with 14.8% increase in March. "In the
next couple of months, we do expect some softness in the industrial-production numbers, and
continued decline in the PMIs," said Ms. Wang. Inventories of finished goods have built up, and they
aren't meeting the expected level of final demand in some sectors such as autos, she added.
Auto sales, a closely watched indicator of consumer activity in China, have been disappointing this
year. In April, auto sales fell 0.25% from a year earlier, the first such decline in two years. The
semiofficial China Association of Automobile Manufacturers now says its earlier forecast of 10%-15%
growth in auto sales this year is in doubt, an especially underwhelming performance compared with
32% growth in 2010.
Still, economists don't see any serious risk of a damaging slowdown in China. HSBC's Mr. Qu said
fighting inflation is likely to remain Beijing's focus in the coming months. Ms. Wang from UBS said
she expects China's gross domestic product growth to come in at 9.3% this year, down from 10% in
2010, but still robust compared with most economies in the world.
In a survey of economists by Dow Jones last week, six out of 10 said they expect one more interest-
rate increase this year, of a quarter of a percentage point, to both lending and deposit rates. The
People's Bank of China is also likely to raise banks' reserve requirement ratio by half a percentage
point next month, continuing its pattern so far this year of raising the ratio once a month,
according to the survey.
To combat inflation, the central bank announced increases in its benchmark lending and deposit
rates on April 5 and Feb. 8, following two similar moves in 2010, while also raising banks' required
reserve ratio six times in 2010 and five times so far this year.
"It is likely that coming months will see a classic neurotic market mood swing towards China where
investors stop worrying about inflation and start worrying about the opposite," said a strategist at
brokerage CLSA Asia-Pacific Markets. "Still the authorities have complete freedom to turn the
liquidity tap back on should they want to."
Source: The Wall Street Journal
POLITICS
ACA OFFICIALS LOSE APPEAL AGAINST JAIL TERMS
The Ulaanbaatar City Court sat for eight hours on Tuesday and then rejected all appeals by three
Anti-Corruption Authority (ACA) officials and upheld the sentences passed against them by a lower
court. The lawyer for ACA chief Ch.Sangaragchaa told media after the court decision that they will
now appeal to the Supreme Court. Mr. Sangaragchaa is serving 2.4 years in prison, while both his
Deputy, Mr. D.Sunduisuren, and the Chief of the ACA Executive Board, Mr. U.Altangadas, were
sentenced to 2 year prison terms. The jury had rejected Mr. Sangaragchaa‘s request to be present
in court when his appeal was heard.
Source: Udriin Sonin
JUDGE-GENERAL APPEALS TO ALL COURT OFFICIALS TO BE INDEPENDENT
In a message to judges and employees of all courts, Mr. Ts.Zorig, Judge-General of the Supreme
Court and also Chief of the General Court Council, has expressed the hope that they would at all
times try to dispense justice and fairness according to law, to expedite judicial reforms and to keep
courts‘ activity beyond disputes. He has said judicial initiatives and independent thinking are
essential to increase courts‘ effectiveness and quality of work.
Source: Mongoliin Medee
DEMANDS UNACCEPTABLE, PRESIDENT TELLS CIVIL MOVEMENTS
The leader of the Ongi River Movement, Mr. Ts.Munkhbayar, has said that President Ts.Elbegdorj
has told them it was not possible to accept the demands put forward by the alliance of two civil
movements, Gal Undesten Union and United Movements for Rivers and Lakes. This was a
disappointment but more so was the fact that the President‘s response had come by post, while the
protesters had hoped Mr. Elbegdorj would appear before them in Sukhbaatar Square. Not a single
MP has replied to their charter of demands and Mr. Munkhbayar said their movements would now

17. have to decide on the next step of their fight for justice to the people. They were planning to
organize a fresh demonstration bringing in more herders on horseback to Ulaanbaatar.
Source: English.News.mn
TWO DIE IN ACCIDENT SOON AFTER COAL ROAD REOPENS
The relief at the reopening on May 14 of the gravel road for coal trucks from Umnugobi Province to
the border with China, after the Government had ordered it closed for about three weeks insisting
on improvements, was short-lived as an accident two days later left two drivers dead and another
seriously injured. Three trucks laden with coal crashed into one another at a point three kilometers
south of Javkhlant in Khanbogd district in Umnugobi Province, instantaneously killing the drivers of
two, one Chinese and another Mongolian. The gravely injured Mongolian driver of the third truck is
making a slow recovery in hospital.
The road is mainly used by Mongolian Mining Corporation to carry coal from its open-pit mine at
Ukhaa Khudag in the Tavan Tolgoi area. The MMC improvements had satisfied the safety
requirements of officials, but local people said they were not surprised by the new accident as
much of the repairs was patchwork. MMC is building a 245-km paved road parallel to the gravel road
and expects it to be ready this summer. In 2010 alone, 23 people died in 31 accidents on the gravel
road, while the present year has seen five more deaths.
Source: Unuudur
EX-PRESIDENT DEFENDS “GOLD” PROGRAM
Stung by media criticism, former President P.Ochirbat has said, ―Newspapers calling me ‗the
grandfather of oligarchy in Mongolia‘ should move on in time and reveal how Mr. N.Enkhbayar
fathered the rest of the oligarchy.‖ His guess is that he owes his sobriquet to a popular
misperception of his motives behind launching the "Gold" program, and he has sought to set the
record straight. ―Let me explain one thing. During my presidency, our country was in extreme
poverty, and my priority was to secure enough food for everybody. The gold program was taken up
as this was the only way then to save the people from hunger and it was certainly successful. Gold
production rose 37 times from 620 kg a year to 23,000 kg in 2005,‖ he said, adding, ―We also set
clear and detailed terms for environmental reclamation, for use of water, and such things but many
companies later chose to ignore these, and the local governments failed to ensure or enforce
compliance.‖
Source: Udriin Sonin
MAYOR’S OFFICE SUGGESTS NEW SITE FOR PARLIAMENT COMPLEX
The garden to the north of Government House was formally announced last year as the site where
the Kuwait-funded new Parliament complex will come up, but there has been no sign of work there
so far. Now the Mayor‘s Office has proposed a new site for the complex. This is where the printing
press is, east of Government House and north of the Culture Palace. The Property Privatization
Group in the Mayor‘s Office recently cancelled the lease of Ulaanbaatar Times on the press, and the
land and the building are open to fresh use now. The Mayor‘s office feels the central location would
be less contentious than the garden.
Source: Udriin Sonin
ELECTRONIC VOTING SYSTEM HAS TO BE ADAPTED TO THE ELECTION SYSTEM, MPs TOLD
Monday‘s regular weekly meeting of the Democratic Party group in Parliament spent its entire time
discussing use of the electronic voting system, and found no time to review the draft law on a new
election system. The General Election Committee briefed the meeting on how the system works and
explained how it would have to be adapted to the election system. The DP MPs urged the election
committee to take quick steps to installing the system, to select the best provider, and to prepare
a detailed budget with the MNT24 million allocated in the 2011 budget for installation of the
automatic vote counting system. The committee, however, pleaded that it cannot proceed far
without knowing which election system was to be followed.
Source: News.mn
RUSSIA PRESSES FOR MINING TO START IN ASGAT
Last week‘s annual meeting of the Shareholders‘ Committee in the three Mongolia-Russia joint
ventures -- Ulaanbaatar Railway, Mongolrostsvetmet and Erdenet Copper – saw some serious
differences of opinion on exploitation of the Asgat and Bargilt silver deposits. Peeved with
Mongolia‘s delay in taking a decision, the Russians insisted on starting mining operations on their

18. own, even though Mongolia holds 51% of the shares. It was finally decided to make a further study
of the exploitation prospects of the two deposits and to arrive at a decision acceptable to both
sides.
Source: Ardiin Erkh
MONGOLIA BALANCES PUBLIC OPINION WITH NUCLEAR AMBITIONS
In recent months, news outlets in Japan and the U.S. have reported that Mongolia is negotiating
with those two countries to serve as a regional depository for spent nuclear fuel. The proposed plan
would permit geographically constrained countries in the region, such as Japan, South Korea and
Taiwan, to dispose of their spent fuel in the spacious Central Asian state.
The veracity of the reporting on the negotiations is still unknown. When the story first broke in
March, the Mongolian Foreign Ministry was quick to dismiss the notion that Mongolia would host
Asia's nuclear waste. The statement went on to declare that Mongolia's constitution prohibits the
"import of dangerous waste to Mongolian territory". Mongolia has good reason to take such a stance,
especially in light of the nuclear shadow cast by the recent events in Fukushima, Japan. Whether
the Government's position is cosmetic or genuine has yet to be comprehensively determined.
Recently, only a month after the depository claims were dismissed by Mongolian officials, the
Mainichi Daily News, a Japanese newspaper, reported that the "secret deal" was advancing between
the U.S. Department of Energy and the Mongolian Government. The discussions highlight a larger
struggle over global nuclear market share, with the U.S. and Japan positioned against industry rivals
Russia and France. Russia's state-owned nuclear-energy corporation Rosatom continues to serve as a
potent competitor in Mongolia to the U.S.-Japan nuclear alliance. Russia has the advantage of
having established a historical record with Mongolia on nuclear energy matters, including a legally
binding partnership and significant economic investment. France is a relatively new player in
Mongolia's nuclear industry, but its multinational nuclear corporation Areva has plenty of resources
and expertise as well as global reach.
Japan and the U.S. are reportedly seeking to present Mongolia with a "package deal" that would
provide the country with its first nuclear reactor in exchange for also hosting spent nuclear fuel
from the region. Negotiations have most likely been going on for some time now, but Fukushima has
muddied the waters for Mongolia, which is seeking to defuse popular discontent with the idea of
building what would be the country's first nuclear reactor.
Read more…
While the three parties may have been close to a deal before the March 11 earthquake in Japan,
currently there seems to be little appetite in Mongolia for a nuclear agreement. In response to the
most recent reporting, the Mongolian Embassy in Vienna -- and Mongolia's Permanent Mission to the
International Atomic Energy Agency (IAEA) -- restated that "there have not been any talks with
foreign organizations or individuals on the issue of accepting nuclear waste of other countries since
there are no legal grounds for such talks".
The Mongolian statement did qualify its dismissal, however, by noting that Ulaanbaatar has been in
discussion with countries interested in "the exploitation of uranium". According to the IAEA,
Mongolia has more than 1.5 million tons of uranium deposits, which it is eager to profit from with
the help of foreign investors. It seems that the Mongolian government is being forced to walk a
tightrope by trumpeting its sovereignty and laws on one hand while tacitly acknowledging its desire
to exploit its uranium reserves on the other.
American officials have thus far not verified that negotiations are ongoing either. The U.S. Embassy
in Japan released a statement immediately after the Mainichi report went to press declaring that
there were "a number of inaccuracies in the stories being reported today in Japanese newspapers
about a spent nuclear fuel facility in Mongolia". The statement continued by noting that "the U.S.
government is not negotiating a deal to send spent nuclear fuel to Mongolia" and "fully respects that
it is the sovereign decision of any government whether and under what terms they participate in
nuclear energy activities, including nuclear fuel leasing". Despite this, the U.S. statement can be
read more as a criticism of the story than a blanket denial of the proposed deal.
The reaction in Japan has not been so dismissive. A senior Japanese official from the Foreign
Ministry confirmed "there have in fact been informal talks with both the United States and Mongolia
on the issue". It is possible that the Mainichi report was the result of a leak from the Japanese
government, which has a significant corporate interest in exporting its nuclear expertise. Japan has
one of the largest nuclear industries in the world and produces an incredible amount of spent fuel
annually. It is having an increasingly difficult time storing this waste domestically and would
welcome such a partnership with a nearby country. Moreover, huge Japanese corporations such as
Toshiba and Hitachi are hoping to capitalize on any "package deal" with Mongolia by potentially

19. helping to build nuclear reactors.
While Mongolia continues to release enigmatic statements on its nuclear future, internally it
continues to strategize how best to take advantage of its uranium resources. As talks with Japan
and the U.S. continue to evolve, expect further seemingly contradictory stories to surface for two
reasons. First, the Mongolian Government needs to approach the idea of housing spent nuclear fuel
carefully due to public opinion after Fukushima. Second -- and more importantly -- as Mongolia
continues its negotiations, it will use the presence of other potential investors such as France and
Russia as a hedge in order to secure the best possible deal from the U.S. and Japan.
Source: World Politics Review
FOREIGN MINISTER TO SUBMIT DRAFT LAW BANNING IMPORT OF SPENT NUCLEAR FUEL
Minister for Foreign Affairs and Trade G.Zandanshatar is preparing a draft law to prohibit storage or
reprocessing of any other country‘s spent nuclear fuel in Mongolia. The present law is also quite
categorical about this, but the Minister feels further assertion of Mongolia‘s stance is needed in the
wake of several reports in foreign media suggesting the country was agreeable to act as a dumping
site.
Source: News.mn
OSCE-MONGOLIA CONFERENCE STRESSES COOPERATION WITH ASIAN PARTNERS
Representatives from Organization for Security and Cooperation in Europe (OSCE) countries and its
Asian Partners as well as many other international organizations took part in a two-day meeting
themed "OSCE-Mongolia Conference on Strengthening the Cooperative Security between OSCE and
the Asian Partners of Cooperation", co-organized by the OSCE and the Mongolian Government in
Ulaanbaatar this week. Mongolian Foreign Minister G. Zandanshatar and director of the office of the
OSCE Secretary General Paul Fritch attended the event.
They stressed the need to strengthen synergies between the OSCE and its Asian Partners for Co-
operation in addressing transnational threats, such as illicit drug trafficking. Advancing
international economic co-operation, in particular on transport and energy security, as well as
promoting human rights and fundamental freedoms in the whole OSCE area, were other key topics.
The meeting also looked at how six Asian Partners for Co-operation – Afghanistan, Australia, Japan,
Mongolia, South Korea, and Thailand – can further benefit from the engagement with the OSCE.
The OSCE is a pan-security body whose 56 participating states span the geographical area from
Vancouver to Vladivostok. As a regional arrangement under the UN Chapter, the OSCE is a primary
instrument for early warning, conflict prevention, crisis management and post-conflict
rehabilitation.
Addressing the participants, Mr. Zandanshatar said, ―The OSCE security activities across all three
dimensions – the politico-military, the economic and environmental and the human – could serve as
examples for security co-operation in Northeast Asia. OSCE‘s unique features, including its co-
operative and comprehensive approach to security, conflict prevention instruments, well-
established confidence and security-building measures, large operational network of field missions,
are valuable assets to be drawn on in terms of practical application in Northeast Asia.‖
He stressed the importance of enhancing transit co-operation – one of the topics on the
Conference‘s agenda, and called on OSCE participating States and Partners to increase financial and
technical assistance to landlocked developing countries to ―help them overcome the impediments
of geography by improving their transit transport systems‖.
Source: Xinhua, The FINANCIAL
CHINA STRUTS LARGER ON WORLD STAGE
Hitherto, the default position for Asian nations has been to draw closer to China economically, but
huddle under the US defense umbrella. Pakistan shows that China‘s rise – as a military as well as an
economic power – is making that calculation more complex. Within days of Pakistan‘s humiliation
over the killing of Osama bin Laden, Mr. Yusuf Raza Gilani, the Prime Minister, traveled to Beijing.
He came back with a Chinese commitment to take over the operation of Gwadar port, close to the
Iranian border. Islamabad has asked Beijing to upgrade the facility to a naval base. The message is
clear. If Washington scales back its support for Pakistan, there is more than one game in town.
In one sense, this is a dangerous ploy. Islamabad is using anxiety about China to keep US military
aid flowing. Washington does not generally react well to blackmail. Indeed, it should judge
continuing support for the Pakistani military on its own merits, not by what China might do in its
absence. New Delhi, too, is nervous about closeness between Pakistan and China. It regards Gwadar
port as part of China‘s so-called string of pearls, a chain of ports in Bangladesh, Burma, Sri Lanka

20. and Pakistan that New Delhi thinks is designed to encircle India.
Yet it would be equally dangerous to overreact to Beijing‘s tighter links with Islamabad. As China‘s
trade and investment ties with the outside world deepen, it will inevitably seek to protect its
interests. Officially, China‘s policy is non-interventionist. But that stance is being tested by its
ever-closer integration in the global economy. Witness Libya, where Beijing was obliged to rescue
more than 30,000 Chinese workers.
In some ways, China‘s greater international involvement is to be welcomed. China, too, has an
interest in stable and open trade. As such, it is playing a constructive role in anti-piracy operations.
That is not to say that China‘s rise is without danger. The world has a sorry record of
accommodating rising powers. It is in China‘s interests to be more transparent about its intentions,
and to assure the international community – in deeds as well as words – that its rise is benign. By
the same token, the world needs to draw China into dialogue and international commitments. Mr.
Robert Zoellick, former US Deputy Secretary of State, articulated the idea of making China a
―responsible stakeholder‖. The term has a patronizing ring. But it remains the best framework for
dealing with the rising Chinese superpower.
Source: An editorial in The Financial Times
NEW MONGOLIAN LAWS AND REGULATIONS
The following new laws, amendments, regulations and annulments were published in the latest two
weekly Government bulletins. Unless otherwise decided by Parliament, they will take effect ten
(10) days after publication.
Date Law
18.05.2011 Addendum to Law on Regulation on drafting, submitting laws, Parliament other
decisions
Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish to access complete versions of the laws and regulations in Mongolian language
are welcome to call or email the BCM office: 332345 or info@bcmongolia.org.
ANNOUNCEMENTS
TRADE MONGOLIA 2011, ULAANBAATAR, JUNE 3
The State Property Committee, the Mongolian Stock Exchange, the Financial Regulatory Commission
and Mongolian Mining Exchange NGO will be holding Trade Mongolia – 2011 on June 3 in
Ulaanbaatar. The aim of the forum on capital and securities market is to attract more domestic and
foreign investors to the Mongolian capital market and to set up a platform where key players will
be able to network. Business Council of Mongolia is an official Supporting Organization for the
forum.
More information can be had by calling Tel/Fax: 976-70116009; Mobile: 976-99081050, 91927088,
88097675; E-mail: info@trademongolia.mn, buyanaa@trademongolia.mn; and at
www.trademongolia.mn.
________________________________________________
"MONGOLIA: CAPITAL RAISING AND INVESTMENT", ULAANBAATAR, JUNE 7-8
This annual Frontier Securities conference provides a perfect opportunity for those interested in
exploring the latest developments in Mongolia's business environment to receive direct information
from key sources. Investors will be able to discover lucrative opportunities and Mongolian
companies will learn of various methods of raising capital abroad. Senior managers from the Korea
Stock Exchange, the Hong Kong Stock Exchange, the Australian Securities Exchange, Deutsche Börse
AG and Tokyo AIM will share their knowledge and insights regarding capital raising with the
audience.
The other major theme at the event will be investment opportunities in Mongolian mining, real
estate and other expanding sectors. Confirmed participants include investment banks and investors
such as BOCI, CICC, Citigroup, J.P. Morgan, Quam Asset Management Fund, as well as professional
entities such as Hogan Lovells, American Appraisal, Moody's Investors Service and CRU International.
________________________________________________

21. CORPORATE GOVERNANCE FORUM, ULAANBAATAR, JUNE 13
The Fourth Annual Corporate Governance Forum, organized by the Corporate Governance
Development Center will bring together Mongolian business leaders and policy makers to identify
and stress the linkages between corporate governance and capital market development. It will also
present an open platform to discuss a number of topical issues relevant to the current state of
corporate governance reform, and to help reach al consensus on the necessary policy and corporate
level reform agenda. The forum will end with a resolution and an action statement by the
participating business leaders on policies and legal and regulatory frameworks to remedy the
current corporate governance challenges in Mongolia.
The key discussion points would be:
- Country experiences on the role of stock exchanges in corporate governance
- Corporate governance reform process: progress and challenges for State-owned enterprises
- Corporate governance in the banking sector: Impact of the new Banking Act, issues in CG
assessment.
Business Council of Mongolia is an Organizing Partner of this forum. Requests for registration should
be made to Ms. Tsend-Ayush Tel: 99105111, Email: tsendee51@yahoo.com or tsend-
ayush.t@cgdc.org.mn.
___________________________________________
CHURCHILL’S TRAINING WORKSHOP, ULAANBAATAR, JUNE 14, 15, 28
Churchill's is organizing, with BCM support, a training workshop on how to develop and implement
the Environmental Management System and the Occupational Health & Safety Administration
System. Designed for company directors and senior managers, the seminar will provide an overview
of the two international standards, and include templates and procedures from both standards for
use in the development of working company systems.
Delegate registration fee for three days is MNT120,000 (including refreshments). The Seminar dates
will be June 14,15 and 28, 2011. It will be conducted in English & Mongolian at the Ministry of
Agriculture Training Center. Registration: by email, churchills@magicnet.mn, Online
http://www.isochurchills.com, Tel: 976-70111956 – 99731454 (E-M), 99151124 (E).
_________________________________________________
COALTRANS MONGOLIA, ULAANBAATAR, JUNE 21-22
Coaltrans Mongolia will be a unique opportunity to see and understand at first hand the
development of one of the last remaining coal frontiers. It will address:
- Spectacular growth prospects for the Mongolian economy, coming on the back of the development
of the country‘s wealth of mineral assets with reserves estimated in value of USD1.3 trillion.
- Opportunities that many large scale coal investments offer – in particular the Tavan Tolgoi coal
deposit containing 6.4bt of coking and thermal coal which will be privatized.
- The prospects for exports of 25-40mt per annum of coal into China and in the longer term through
Russia to Pacific markets.
- The considerable challenges facing Mongolian transport infrastructure in delivering coal exports
across the border into China‘s burgeoning steel industry and power sector.
- The challenge of operating coal mines in extreme weather conditions as well as the scarcity of
water supply.
Among the speakers will be:
- D. Zorigt, Minister of Mineral Resources and Energy
- B.Enebish, Executive Director, Erdenes MGL
- D.Batkhuyag, Chairman, The Minerals Authority of Mongolia
- G.Battsengel, Chief Executive Officer, Mongolian Mining Corporation.
Business Council of Mongolia is a Supporting Organization of the event.
Enquiries about speaking opportunities are to be addressed to Gerard Strahan at
gstrahan@euromoneyplc.com, and about benefits available in relation to sponsorship opportunities
to David-Griffiths, at cdavid-griffiths@euromoneyplc.com.
________________________________________________
“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.

22. ___________________________________________
“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.
___________________________________________
NEW POSTINGS ON BCM WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIA REPORTS'
‗Presentations‘ from BCM‘s 5 monthly meetings in 2011, from Jim Dwyer of BCM‘s interview on
Mongolian National Broadcasting‘s ―Face to Face‖ on May 16, from the very successful Mines and
Money Hong Kong‘s ‗Mongolia Investment Summit Morning‘ on March 25, and from Voyager
Resources‘ CEO in both English and Mongolian at a March 16 MICC-sponsored gathering as well as
‗Mongolia Reports‘ including 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 presentations posted on BCM's website (www.bcmongolia.org) in the "Resource,
Presentations" and ―Resource, Mongolia Reports‖ sections for your review.
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.
ECONOMIC INDICATORS

23. 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]
April 30, 2011 *5.5% [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 – May 25, 2011 (The Central Bank rates for May 26 were not posted until the
time work on this issue was completed.)
Currency Name Currency Rate
US dollar USD 1,229.31
Euro EUR 1,725.64
Japanese yen JPY 14.98
British pound GBP 1,986.87

24. Hong Kong dollar HKD 158.05
Chinese Yuan CNY 189.35
Russian Ruble RUB 43.17
South Korean won KRW 1.12
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.