29.01.2016, NEWSWIRE, Issue 413

BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 413 – January 29, 2016
BCM NewsWire provides short summaries of news collected from around the world. Each article is
kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full
article.
NEWS HIGHLIGHTS:
Business:
 Franklin Templeton stumbles with Mongolian bet as bonds plunge;
 S&P lowers MMC rating to 'CCC-' from 'CCC'; Outlook Negative;
 MMC hires JP Morgan Securities, SC Lowy for possible debt restructuring;
 MEC makes partial payment to Monnis, warns of coal production shutdown;
 Prophecy closes USD200,000 private placement, settles debts;
 Unitel caps customers' Internet speeds;
 Domestically produced IV solutions to hit market in March;
 Sia records song for 'The Eagle Huntress' documentary;
 Leather producer targets Europe for export;
 Skytel provides free messaging, flat fees on calls;
 ADB grant of USD 7 million to implement three projects;
 EasyRide connecting passengers to drivers;
 Turquoise Hill appoints vice president for operations and development;
 Hungarian trade expo in UB;
 Ulaanbaatar Investment 2016;
 10,000 Camels Festival—an event not to be missed;
 Oyu Tolgoi recognizes best suppliers of 2015;
 Golomt Financial Group recognized as “Global Growth Company”;
 Financing Teso, a private sector champion in Mongolia;
 Shell wins investor approval to buy BG;
 The simple tools I’m using to disrupt a thousand-year-old industry—EDITORIAL.
Economy:
 Mongol Bank: currency auctions, swaps, 1-week bills, T-bills;
 Mongolia SMI hits new survey-low in January;
 Russia’s upper house ratifies deal to write off 97% of Mongolia’s debt;
 BCM Statement calls for government stability to avoid hurting the economy;
 Education minister promises MNT20 bn for scholarships in 2016;
 Government will lend MNT 20 billion for ASEM meeting;
 Mongolia pumps money into meat export development;
 Two more border points permitted for meat trade;
 Hungary to invest USD25 mn into institution for livestock health;
 50 prisoners/turned entrepreneurs businesses to receive MNT1 mn each;
 Former herders resort to dangerous illegal mining to earn a living;
 Classical swine fever reported in Mongolia;

 UB to spend MNT5.8 bn to dress up green ahead of ASEM;
 UB to develop standards for tourism;
 China builds Mongolian language corpus.
Politics:
 Justice Coalition rejects PM dismissal proposal;
 Bill proposes 40% subsidy on filmmaking;
 Licensing proposed to cut out unregistered activities of pawn shops;
 German-Mongolian mining university to help set education standards;
 New cut-off date proposed for public servants to run for office;
 CW-GP leader rejects Justice Coalition partnership offer;
 Saikhanbileg hires former Altankhuyag advisor;
 Mongolia and North Korea sign program on cultural exchange;
 Georgia offers cooperation for 'Silk Road' program;
 Battulga, Gansukh questioned about Samsung railway embezzlement scandal;
 Railway embezzlement suspect vows to return home and prove his innocence;
 Former MP flees to U.S. after arrested for drug possession;
 Fossil smugglers caught, say police;
 Sisters-in-crime arrested;
 Mongolia ranked 72nd in corruption perceptions index;
 Marathon man Andrew Murray takes on Mongolia test;
 The time Hillary Clinton drank horse milk in Mongolia.
BCM Updates:
 Announcemenyts;
 Knowledge Sharing Sessions;
 Advocacy Notes;
 Working Groups News
 BCM in the University Classroom Series;
 Websites Update - Presentations, Mongolia Reports, Interviews;
 Social Networks.
Economic Indicators:
 Churchill’s Supermarket Price Comparison
 Inflation;
 Central Bank Policy Rate;
 Currency Rates.
*Click on titles above to link to articles.
SPONSORS
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Mongolian Business Database
BCM MEETING RECAP
The BCM meeting on 25 January was held in the Crystal conference room in Blue Sky Tower and
Hotel to 110 members and invited guests with BCM's executive director, Jim Dwyer, and chairman,
Bayanjargal Byambasaikhan, as the meeting's hosts.
In working group news, reported Dwyer, Anthony Woolley of Hogan Lovells has been appointed as
the new chair to the Legislative Working Group. "It's been a key working group since BCM formed,"
said Dwyer. He added that Jay Liotta and Bayar, who were stepping down from the role, "had
worked on countless new laws and have had a tremendous impact on our advocacy. "
BCM's three newest members are:
1. Ikh Uilsiin Ereld - established in 2006 by operating foreign and domestic trade, construction,
manufacturing of constructing materials.
2. Nomadic School of Business - a management consulting and leadership development group
recently established in Mongolia.
3. Tarva Investment and Advisory - is focused on successful investing and providing high-level
advisory services to client firms working in mining and industry – both private enterprise and
government.
Michael D. Richmond, the senior commercial specialist for the U.S. Embassy in Mongolia, spoke first
to announce that guests would be invited to attend the 2016 MinExpo International convention in
Las Vegas, United States from 26 to 28 September. The event held every 4 years is the biggest for
the mining industry, attracting 40,000 guests in 2012. "BCM has taken the lead in organizing a
mission for those who'd like to come," said Richmond.
He also reminded members that registration would soon open to attend the annual Prospectors and
Developers Association of Canada (PDAC) convention to be held in Toronto from 6 to 9 March.
Second up was E. Sodontogos, national coordinator for the National Secretariat for Development of
the Second Compact agreement between the government of Mongolia and the U.S. Millennium
Challenge Corp. With the first compact now finished in Mongolia, the next step is to move forward
with identifying constraints to business that the Millennium Challenge Corp. could help eliminate
with the second compact. Having identified Macro-economic stability, micro-economic challenges
and health problems as targets, the government is now proposing concept papers to receive grants
to help resolve these issues. "MCC and the government are considering opportunities to engage the
private sector to resolve these binding constraints," said Sondontogos.
The evening's third speaker was a representative of one of Mongolia's newest political parties, the
National Labor Party. T. Bat-Orgil, the party secretary in charge of cooperation, spoke about the
widespread corruption in the political system, and how far the country's politics had fallen from the
aspirations of the people 25 years ago. "The 90s was a time of big hopes. We were poor, but very
hopeful," said Bat-Orgil. "We were hopeful that we'd bring something new and exciting, and we did
it; we brought freedom."
The National Labor Party, he said, is a direct response to "the criminal acts in the political
machine." He said the Labor Party stands for enriching the people, while the others stand to enrich

themselves. "To prevent bloody events, we need to come back to what we started in the 90s," said
Bat-Orgil.
Finally, the last speech from D. Gantugs, chief executive officer of Mongolian Mortgage Corp. (MIK)
introduced to members the growth of mortgage lending in the country through the state-backed 8
percent mortgage program it participates in. Ten years after its establishment, MIK launched 2015's
only initial public offering in December. With more homeowners in the country today than ever
before, the company boasts a portfolio worth MNT2 trillion of mortgages. "The government program
sharply increased the amount of affordable lending for many households in 2015," said Gantugs.
Gantugs said the program has also supported the construction and real estate sectors in Mongolia
while many other industries, including mining, suffer, and the economy as a whole stagnates.
BUSINESS
FRANKLIN TEMPLETON STUMBLES WITH MONGOLIAN BET AS BONDS PLUNGE
Franklin Templeton’s Michael Hasenstab, who made an outsized bet on Mongolian bonds, is feeling
the chill after tumbling commodity prices and rising political instability spurred a plunge in notes
issued. The USD1.09 billion Asian Bond Fund has declined 9.5 percent in the past year to lag behind
96 percent of its peers. Performance has been dragged down by junk-rated Mongolian notes
maturing in 2022, which accounted for 7.24 percent of the fund’s net assets as of 31 December and
was the largest single-credit bet.
The 2022 notes slumped to record-low levels this month, as Mongolian officials plan meetings with
global investors to discuss issuing more bonds. Coal exports slumped 24 percent last year to
USD555.9 million as prices fell while receipts from copper shipments dropped 11 percent to USD2.28
billion. Political risk at home is also escalating as Prime Minister Saikhanbileg Chimed faces a
leadership challenge in parliament.
Source: Bloomberg
S&P LOWERS MMC RATING TO 'CCC-' FROM 'CCC'; OUTLOOK NEGATIVE
Standard & Poor's Ratings Services on 27 January lowered its corporate credit rating on Mongolian
coal miner Mongolian Mining Corp. (MMC) to 'CCC-' from 'CCC'. At the same time, it lowered its issue
rating on the company's USD600 million senior unsecured notes to 'CCC-' from 'CCC'. The downgrade
follows MMC's announcement that it has hired advisors to provide advice on the potential
restructuring of the company's outstanding notes.
"We believe a default is likely within the next six months barring an agreement with the company's
creditors on a restructuring," said Standard & Poor's credit analyst Xavier Jean. "This is because
MMC needs to repay more than USD150 million in debt amortization and interests in 2016. The
company's USD600 million notes also mature in 2017. This compares with our estimate of cash
balance below USD50 million as of Dec. 31, 2015."
Source: Standard & Poor's Rating Services
MMC HIRES JP MORGAN SECURITIES, SC LOWY FOR POSSIBLE DEBT RESTRUCTURING
Mongolian Mining Corp. has appointed advisers in the expectation that debt restructuring will be
necessary without a contracting deal for the Tavan Tolgoi coal mines after repeated interventions
from lawmakers. MMC has failed to lock in an agreement with state-owned coal mine owner Erdenes
Tavan Tolgoi LLC after more than a year of negotiations. With USD600 million worth of senior notes
due to mature next year, it had hopes to overcome deteriorated coal market conditions by
contracting for coal mining, processing, transportation and exploration activities. “[T]he Company
does not currently expect any conclusion of such negotiations in the near future,” reads a 26
January statement.
J.P. Morgan Securities (Asia Pacific) Ltd. and S.C. Lowy Financial (HK) Ltd. have been retained as
restructuring advisers on the potential restructuring of the USD600 million worth of corporate

bonds.
Source: Mongolian Mining Corp.
MEC MAKES PARTIAL PAYMENT TO MONNIS, WARNS OF COAL PRODUCTION SHUTDOWN
Mongolian Energy Corp. Ltd. may be forced to suspend coking coal production from the Khushuut
coal mine if it fails to close a deal with an unnamed buyer, the miner reported on 25 January. MEC
has been in negotiations for the coal supply contract with one customer amid a weak market and
prices for coal. “[O]nly a minimum workforce will be maintained for domestic coal production in
the Khushuut coal mine to supply coal for the local community in Khuvd Aimag, Mongolia” if an
agreement is not reached, reads the statement.
Meanwhile, a court has ruled against MEC's operational subsidiary, MoEnCo LLC, in a MNT15.9 billion
lawsuit filed by contractor Monnis Mining Equipment LLC for outstanding fees. MoEnCo has made a
partial payment of USD500,000 to the contractor, which belongs to the holding company Monnis
Group, and is now in the final stage of settlement negotiations. If talks fall through, however,
Monnis may decide to seize MEC's assets.
Source: Mongolia Energy Corp. Ltd.
PROPHECY CLOSES USD200,000 PRIVATE PLACEMENT, SETTLES DEBTS
Prophecy Development Corp. has raised USD200,000 for mineral projects and for general working
capital purposes. The Toronto-listed coal mine and energy plant developer closed a non-brokered
private placement involving the issuance of 8 million units sold at a price of USD0.025 each. A unit
consists of one common share and one share purchase warrant that entitles the holder to an
additional Share for USD0.04 each for up to five year from the date of issuance.
Prophecy also stated that on 13 January it has agreed to issue as much as about 6.14 million
common shares priced at USD0.03 each to settle various debts with some officers, employees and
consultants.
Source: Prophecy Development Corp.
UNITEL CAPS CUSTOMERS' INTERNET SPEEDS
Some Unitel Internet and IPTV subscribers have expressed outrage from the company's decision to
cap bandwidth. The company is the first to introduce the practice of “capping” Internet, meaning
that download speeds customers buy will fall to about 512 kilobytes per second, or about the speed
of a dial-up connection, after a certain amount of bandwidth is consumed. Bandwidth limits
depending on plans purchased by costumers
“Now we are limiting the Internet speed because of too much cost,” said D. Jamiyansharav, deputy
director for business development and planning. “You can still use Internet, but with lower speed,”
he added.
Source: Udriin Sonin
DOMESTICALLY PRODUCED IV SOLUTIONS TO HIT MARKET IN MARCH
A pharmaceuticals company claims it will sell intravenous (IV) solutions used to treat illnesses such
as cancer at a discount of up to 20 percent compared with foreign competitors once its product hits
the market in March. Nakhia Impex is opening the country's first plant for IV solution that is able to
produce 24 million units compared with the national demand of 8 million.
In addition to Nakhia Impex, Monos Group, Munkhiin tun, Emiin uildver and Tsom have invested in
the plant. “Our investor companies have outlets all over the country and we will use them to
market our product,” said G. Taivanbat, production director at Nakhia Impex.
SIA RECORDS SONG FOR 'THE EAGLE HUNTRESS' DOCUMENTARY
The pop singer Sia is spreading her wings with the contribution of a “girl power anthem” for the
upcoming documentary film, The Eagle Huntress, featuring a Kazakh female eagle hunter from
Bayan-Ulgii. The Australian artist has recorded a new song, “Angel by the Wings,” specifically for

the coming-of-age film, which will earn its world premiere 24 January at the Sundance Film
Festival. “I'm incredibly grateful that Sia took the time to write and record this very special song,”
comments the film’s director, Otto Bell. “It's a wonderful vote of confidence for our documentary. I
could not have imagined a more fitting, timeless piece of music for the film—it's such a beautiful
girl power anthem!”
The Eagle Huntress follows the story of Aisholpan, a 13-year old Mongolian girl who is striving to
become the first female eagle hunter in 2,000 years of male-dominated history.
Source: Billboard
LEATHER PRODUCER TARGETS EUROPE FOR EXPORT
A leather-goods producer that has expanded its operations using government financing is on the
cusp of exporting to Europe. Darkhan Nekhii produces 500,000 leather and sheep skin products a
year as well as 500,000 shoes from a subsidiary boot-making factory. It hopes to begin shipping
semi-processed leather to producers in Italy, Spain and Thailand, as well as some European
countries. Also planned for exports are finished goods made at factories in Russia.
Industrial Minister D. Erdenebat visited Darkhan-Uul Aimag to meet Darkhan Nekhii and other
companies who have grown their operations using financing from the Development Bank of
Mongolia. Darkhan Nekhii received a five-year loan worth MNT14 billion with 4 percent annual
interest from the bank, which has transferred funds raised from bond offerings such as the 2012
Chinggis Bond.
Source: Undesnii Shuudan
SKYTEL PROVIDES FREE MESSAGING, FLAT FEES ON CALLS
Skytel has rolled out a new pricing scheme that is offering messaging for free and charging users a
flat rate for all calls with any service providers. “Our company is changing the old payment
system,” said Skytel Group Chief Executive Officer D. Bolor. The mobile telecommunications
company is forgoing the practice of offering cheaper rates when customers make calls to other
phones with the same service provider by offering flat fees. The rates also are unchanged when
calling landline phones.
Source: Unuudur
ADB GRANT OF USD7 MILLION TO IMPLEMENT THREE PROJECTS
Asian Development Bank (ADB) has committed to a grant of USD7 million to help build sustainable
tourism and improve livelihoods in Mongolia. Finance Minister B. Bolor and ADB Country Director
Robert Schoelhammer participated in a signing ceremony on 26 January to fund projects aiming to
facilitate sustainable tourism at Khuvsgul Lake, improve school dormitories in western Mongolia and
activities aimed at urban development. The grant is backed by funds from the Japan Fund for
Poverty Reduction.
Source: Mongolia.GoGo.mn
EASYRIDE CONNECTING PASSENGERS TO DRIVERS
A group of young people in Mongolia have launched a new taxi-calling app that mirrors popular
services in the West such as Uber and Lyft. Amar Baatartsogt is the co-founder and general
manager of EasyRide, an app that connects users with drivers. “Our goal is to improve urban
mobility through technology and assist the UB municipality in building a SMART city,” said
Baatartsogt.
The team currently doesn't have any plans to expand outside of Ulaanbaatar, but with more than
10,000 downloads already, they hope to gain 100,000 users within the next six months. “[D]rivers
are happy to be getting more ride requests than usual,” said Baatartsogt. “They understand how it
helps them save time, gas and money by not driving around in search of passengers.”

TURQUOISE HILL APPOINTS VICE PRESIDENT FOR OPERATIONS AND DEVELOPMENT
Turquoise Hill Resources Ltd. on 20 January announced the appointment of Brendan Lane as vice
president of operations and development effective 1 February. Lane brings 25 years of industry
experience including metallurgical, mine engineering and commercial roles at Rio Tinto Group,
Anglo American and BHP Billiton. Jeff Tygesen, Turquoise Hill Chief Executive Officer, said,
"Brendan's extensive engineering and commercial background will be extremely valuable to
Turquoise Hill and we are delighted to have him join our team. Working with the project team, he
will play a critical role in the further development of Oyu Tolgoi."
Since 2013, Lane has served as Minera Escondida Limitada and Grasberg Finance Director at Rio
Tinto Copper. Previously, he held a variety of commercial roles in the Rio Tinto copper and coal
business units as well as engineering positions at Anglo American and BHP Billiton.
Source: Turquoise Hill Resources Ltd.
HUNGARIAN TRADE EXPO IN UB
Forty Hungarian companies in various industries attended a trade expo held on 25 and 26 January to
open new relations with Mongolian businesses. The event, hosted by the Mongolian National
Chamber of Commerce and Industry and Hungarian National Trading House, was held in coordination
with a visit by Hungarian Prime Minister Viktor Orban. The companies included those operating in
tourism, dry cleaning, car manufacturing, IT, construction and architecture.
Source: News.mn
ULAANBAATAR INVESTMENT 2016
Ulaanbaatar can expect to see MNT 427 billion of public investment in 2016, said a government
official at an investment expo held on 20 January that hopes to attract billions more in private
investment. MNT59.3 billion for urban development was the biggest share of investment said the
city governor's deputy for finance and economic affairs, N. Bataa. Another MNT55.1 billion will be
spent on roads, 31.7 billion on repairs at schools and the construction of new schools, and MNT2.1
billion on health care infrastructure.
Presentations were made on the procurement of “green,” environmentally friendly projects, the
“Friendly Ulaanbaatar” program to improve services for the community and tourists, and public-
private partnerships for urban development.
10,000 CAMELS FESTIVAL—AN EVENT NOT TO BE MISSED
Conservationists are raising awareness for the need to protect the two-hump Bactrian camel in
March with a two-day festival. The 10,000 Camels Festival at Dalanzadgad Soum will hold events
including camel polo, song and dance presentation and even an award for the best-looking couple
riding on camel back. The two-day event on 6 and 7 March event is organized by the Amazing Gobi
tour group.
OYU TOLGOI RECOGNIZES BEST SUPPLIERS OF 2015
Oyu Tolgoi LLC held its annual Supplier Recognition ‘Gobi Gem’ Awards in Khanbogd Soum,
Umnugobi on 22 January, with government officials, local dignitaries, trade associations, and the
supplier community taking part in the ceremony. The awards recognized achievements of some of
its 989 suppliers in five main categories in 2015: “Safety and Business performance;” “National and
South Gobi suppliers,” and a “Grand Prix” category for the overall best-performer. The awards, in
addition to recognizing the five winners, celebrate the achievements of Mongolia’s business and
industrial community across sectors.
“The strength of our partnership will continue to grow–just as Oyu Tolgoi grows with the
underground development,” said Andrew Woodley, Oyu Tolgoi president and chief executive
officer. “I could not be more honored to be working with the people of Khanbogd and the South
Gobi to turn Oyu Tolgoi into one of the most important copper mines in the world in the coming

years.”
The winners were:
Best Supplier for Safety performance – NBIK LLC
Best Supplier for Delivery in Full and On Time – Mergen Chadvar LLC
Best South Gobi Supplier – Khanbogd Khurd LLC
Best National Supplier – Mineral Bag LLC
Grand Prix – Maxam Explosives LLC
Source: Oyu Tolgoi LLC
GOLOMT FINANCIAL GROUP RECOGNIZED AS “GLOBAL GROWTH COMPANY”
Global Growth Companies (GGC), a subsidiary organization of World Economic Forum consisting of
400 top enterprises from more than 65 countries around the world, has named Golomt Financial
Group the “Global Growth Company” from Mongolia for 2016. GGC makes its selections based on
innovative business models, dynamic and sustainable growth, corporate global citizenship and
visionary leadership as well as their influence in development of their respective industries, the
country and the region in which they operate.
Source: Montsame
FINANCING TESO, A PRIVATE SECTOR CHAMPION IN MONGOLIA
The European Bank for Reconstruction and Development (EBRD) and the donors of the Early
Transition Countries (ETC) Fund are supporting Teso, a Mongolian private sector champion who
started with a small ice-cream production and today provides jobs to over 1,000 people. When in
the late 1990s Damjin Odon and family left behind agricultural trading in their remote village of
western Mongolia for Ulaanbaatar, all they had was a second-hand ice-cream machine in a small
rented room—and many challenges. “During that time, some of my siblings were students working
as part-time salespeople, accountants and distributors,” recalled Odon, board chairman of
conglomerate Teso.
With the support of the ETC Fund, the EBRD helped the company improve its accounting through
business advice and provided a USD5.5 million-equivalent loan in local currency for purchasing new
equipment and installing a new production line for higher quality ice-cream.
Source: EBRD
SHELL WINS INVESTOR APPROVAL TO BUY BG
Royal Dutch Shell PLC won shareholder approval to buy BG Group PLC, an investing partner with
Mongolia-focused oil explorer Petro Matad LLC, sealing its biggest acquisition amid the worst oil-
industry slump since the global financial crisis. The approval vindicates Shell’s belief that it can
better ride out the market rout by combining with British oil and gas producer BG. Crude’s tumble
since the deal was announced in April prompted some shareholders to question whether it’s paying
too much, yet Chief Executive Officer Ben Van Beurden has said the acquisition will boost cash flow
and enhance Shell’s ability to pay dividends, while BG’s growing production will help bolster its
declining output.
“The enlarged group has stronger growth potential, will benefit from further synergies and cost
reductions, is more resilient in a lower price environment and can maintain the dividend,” Tudor,
Pickering, Holt & Co., the Houston-based oil investment bank, said in a note following the vote.
Source: Bloomberg
THE SIMPLE TOOLS I’M USING TO DISRUPT A THOUSAND-YEAR-OLD INDUSTRY—EDITORIAL
It’s not easy fostering relationships with nomadic herders in the middle of the Gobi desert, but my
experience is not entirely unique. Naadam Cashmere, a socially-conscious brand that sources
cashmere from local herders in Mongolia, doesn’t just do business—we build relationships. We look
very closely at the micro-economic impact we have on the people we work with.
Conversely, many traders come from outside regions with little interest in a community or its
people and force prices down. Their focus is often about marginalization and profit increase, when

profit increase can be a derivative of inclusion and collaboration. The industry focuses on the wrong
things: ignoring people and communities, using misinformation and a lack of consistent
communication, and forcing the bottom of the supply chain down to widen the margin. Our lesson is
a simple one: when you are nice to people, when you are thoughtful about their needs, they
reciprocate in kind.
Matt Scanlan is the CEO and co-founder of Naadam Cashmere, a socially-conscious brand that
sources cashmere from local herders in Mongolia.
Source: Fortune
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ECONOMY
MONGOL BANK: CURRENCY AUCTIONS, SWAPS, 1-WEEK BILLS, T-BILLS
The Bank of Mongolia on 28 January sold USD19 million and CNY8 million to central banks in
currency auctions (out of USD45.7 million and CNY23.7 million in bids, respectively) for closing
exchange rates of MNT2009.05 and MNT305, respectively. Also that day, it accepted tugrug swaps
with commercial banks for an equivalent of USD74,000, but rejected U.S. dollar swaps worth USD15
million.
The Bank of Mongolia on 27 January issued 1-week bills worth MNT210.4 billion at a weighted
interest rate of 12 percent. Also that day, the central bank received MNT25 billion in bids for the
auction of 28-week treasury bills with a face value of MNT15.3 billion and two-year bonds with a
face value of MNT15 billion because of a lack of bids at a discounted price and with a weighted
average yield of 14.108 percent.
Source: Bank of Mongolia
MONGOLIA SMI HITS SURVEY-LOW IN JANUARY
The World Economics ‘Sales Managers Index’ (SMI) for Mongolia registered 32.0 in January, down
from 32.4 in December, the lowest level in the survey history. The SMI is derived from an average
of the business confidence, market growth, product sales, prices charged and staffing indicators,
and indicates growth when above 50. “January’s SMI data indicated that Mongolian business
conditions deteriorated further as the economic situation remains challenging,” said the Source.
The World Economics ‘Business Confidence Index’ for Mongolia reported a more positive yet
nonetheless a strong decline in the level of business sentiment, rising from 27.9 in December to
31.4 in January. Weakening economic demand, high interest rates, declining oil and other
commodity prices, and harsh weather conditions were cited again by panelists as the main reasons
behind the negative business outlook.

Finally, the World Economics ‘Market Growth Index’ for Mongolia fell to the lowest level since
February 2015, as the poor economic environment continued to impact on growth.
Source: World Economics
RUSSIA’S UPPER HOUSE RATIFIES DEAL TO WRITE OFF 97% OF MONGOLIA’S DEBT
The Federation Council, the upper house of Russia’s parliament, has ratified an inter-governmental
agreement on settling Mongolia’s financial obligations to Russia. As of December 2010, Mongolia’s
unsettled financial obligations to Russia totaled USD174.2 million. The entire sum of these liabilities
was overdue debt.
"As a result of bilateral negotiations held in July 2010, the sides managed to reach an agreement,
under which Mongolia undertook to repay financial obligations worth 163.7 million convertible
rubles and 10.5 million clearing US dollars with a lump sum payment of USD3.8 million," an
explanatory note says.
Source: TASS
BCM STATEMENT CALLS FOR GOVERNMENT STABILITY TO AVOID HURTING THE ECONOMY
The Business Council of Mongolia (BCM) has appealed to lawmakers against casting out the prime
minister from office in a 26 January statement, warning it could have a heavy impact on the
country's borrowing costs. The statement was in response to a motion signed by 19 members of
Parliament calling for Prime Minister Chimed Saikhanbileg's dismissal for his part in the signing of an
agreement with Rio Tinto Group for the relaunch of an underground-mining expansion at the Oyu
Tolgoi copper mine.
Dismissing a second prime minister in four years would signal instability to investors, BCM warned,
which could reduce appetite for investment and hurt credit raters’ positions on the country.
“Political instability will result not only in higher cost for borrowing by the Government but equally
by private businesses too. Politics should not be a reason to down-grade the state sovereign credit
rating,” reads the statement that went out on behalf of BCM’s over-200 members and the business
community.
Source: Business Council of Mongolia
EDUCATION MINISTER PROMISES MNT20 BN FOR SCHOLARSHIPS IN 2016
Mongolia will spend MNT20 billion to fund scholarship for between 150 and 200 Mongolian students
studying abroad this year, said the education minister, as part of national efforts to improve the
technical and professional skills of its young working class. More than 20 countries offer scholarships
to Mongolian students, said P. Erkhembulgan, head of higher education for the Ministry of Education
and Science. Mongolian students have had access to scholarships to attain Master and Ph. D.
degrees from foreign institutions since 1997, he said. More recently, the government has offered
full-ride scholarships to any undergraduate students accepted at one of the world's top-100
universities. It has also provided scholarships through partnerships with Germany, the United
States, and Britain.
With up to 500 students studying in Russia and a promise from China to educate 1,000 students over
the next five years, Erkhembulgan said Mongolia has about 2,000 students studying abroad annually.
Source: Undesnii Shuudan
GOVERNMENT WILL LEND MNT 20 BILLION FOR ASEM MEETING
Ulaanbaatar is prepared to lend MNT20 billion to hotels in the capital to upgrade their services in
preparation for the Asia-Europe Meeting (ASEM) scheduled here in summer, said Foreign Affairs
State Secretary Gankhuyag. Funds would be used to install security cameras and bag-checking
equipment at 47 hotels chosen to best accommodate the hundreds of foreign dignitaries and heads
of state.
The government is holding back no expense to ensure that Mongolia makes a good impression on the
guests expected to visit. That includes exemptions on customs, excise and value-added taxes on
cars to serve high-ranking visiting officials to go before Parliament.

Source: Udriin Sonin, Montsame
MONGOLIA PUMPS MONEY INTO MEAT EXPORT DEVELOPMENT
Mongolia intends to increase the volume of meat exports to Russia, Vietnam, South Korea and China
in the next few years, according to a statement from Agricultural Minister Radnaa Burmaa.
According to Burmaa, the country will invest up to USD90 million in the development of meat
exports this year. “Now, we have established a contractual relationship with eight regions in the
Russian Federation. We also intend to increase supplies of meat products to China and South
Korea,” she said.
At the end of 2015, after a two-year ban, China resumed imports of Mongolian meat. Experts
suggested that, since 2013, the country had achieved real progress in terms of improving livestock
biosecurity. Previously, the Meat Union estimated Mongolia had the potential to establish export
supplies to Asia and Russia worth a total of MNT600 billion per year. Deliveries to Russia could reach
100,000 tons per year. Forecasts for Asian markets had not yet been estimated.
Source: Global Meat News
TWO MORE BORDER POINTS PERMITTED FOR MEAT TRADE
Two more border checkpoints have been approved for the movement of raw-meat and animal by-
product exports as Ulaanbaatar seeks to expand trade of agricultural goods. The Cabinet Secretary
on 25 January approved officials to allow the exports at Burgastai in Gobi Altai and Gashuun Sukhait
in Umnugobi.
Source: Montsame
HUNGARY TO INVEST USD25 MN INTO INSTITUTION FOR LIVESTOCK HEALTH
Hungary has committed to invest USD25 million to upgrade Mongolia's state-run institution for
improving the health of livestock and preventing epidemics of disease, the Biokombinat. The
investment agreement came as part of Hungarian Foreign Affairs and Trade Minister Peter Szijarto's
signing of an intergovernmental agreement for trade cooperation with Foreign Affairs Minister B.
Bolor on 25 January.
The signing took place during a visit by Hungarian Prime Minister Victor Orban.
Source: Montsame
50 PRISONERS/TURNED ENTREPRENEURS BUSINESSES TO RECEIVE MNT1 MN EACH
The Labor Ministry will award MNT1 million each to 50 new businesses launched by prisoners
released year from the Amnesty Law. The event is part of a campaign titled “The Good Life is in
Your Hands."
FORMER HERDERS RESORT TO DANGEROUS ILLEGAL MINING TO EARN A LIVING
In the illegal mining pits of Nalaikh, district miners without safety equipment use primitive methods
to mine low-grade coal, often more than a hundred meters underground. The Mongolian Red Cross
Society has made efforts to improve the safety of the workers, but the lack of resources makes
significant progress very difficult. “Every year 10 to 15 people die, and many more are seriously
injured from accidents in the mines,” said N. Altangerel, a miner in his forties. Dozens of children
from destitute families also work in the area.
Because of the high risk of accidents in the pits, the Red Cross has organized first aid and safety
awareness training courses for the miners. Meanwhile there is an urgent need for increased
intervention. Miners continue to suffer unacceptably high rates of injuries such as broken bones,
cuts and serious head injuries, many of these resulting from improper use of mining equipment.
Source: IFRC
CLASSICAL SWINE FEVER REPORTED IN MONGOLIA
Three outbreaks of classical swine fever have been reported on pig farms in Mongolia. In total, 272

cases were reported and 419 pigs died as a result of the outbreak. The two regions affected in the
outbreak-Dornod and Tuv-have now begun vaccinating pigs. In total, 710 swine have now been
vaccinated in Dornod and 4,900 in Tuv.
Source: The Pigs Site
UB TO SPEND MNT5.8 BN TO DRESS UP GREEN AHEAD OF ASEM
Ulaanbaatar this year is making plans to spend MNT5.8 billion on its annual beautification in
anticipation of the Asian-Europe Meeting (ASEM) scheduled to be held in the capital this summer.
Beautification in Ulaanbaatar is now common in spring and early summer, but this year the capital
plans to take those efforts further to welcome hundreds of foreign dignitaries and heads of states to
Ulaanbaatar to a city decorated by freshly-planted trees and flower.
“Despite the fact that in recent years Ulaanbaatar has been paying more attention to green areas,
it is still not enough in comparison with other foreign cities. In Ulaanbaatar buildings go up without
any good overall planning, this makes it pretty hard to create green areas and to make it more
pleasant,” said Japanese Ambassador Shimizu Takenori.
Source: News.mn
UB TO DEVELOP STANDARDS FOR TOURISM
A unified standard for tourism and trade will be developed for Ulaanbaatar as it targets growth for
the tourism industry. The Ulaanbaatar government signed a cooperation agreement with the
Ulaanbatar Chamber of Commerce and Mongolian Tourism Federation as it continues its “Friendly
Ulaanbaatar” program to improve services and living conditions for residents and visitors. The
standards include approved spelling for Mongolian branded products, a set time period for the
tourist season and a quota for the number of aircrafts to be chartered around the country. Also
planned are tourism expos and the establishment of information booths for tourists.
The program also includes plans to establish a “free tourism zone” in the community to be called
Khan City that will be established around the new international airport under current construction
in Khushig Valley. Ulaanbaatar's Tourism authority has also agreed to help improve hotels that
commit to cut rates by 50 percent in the off-season months, said department director E. Battulga in
a statement.
Source: News.mn, 2
CHINA BUILDS MONGOLIAN LANGUAGE CORPUS
A Mongolian language database containing 80 million words has been launched after ten years of
collection and research, the Inner Mongolia Academy of Social Sciences said. The program is
attempting to preserve the language by the Mongols in China's Inner Mongolia Autonomous Region,
Mongolia and parts of Russia, though dialects differ. The Mongolian corpus is a part of the 200
shared-million word corpora used by ethnic minorities in northern and northeastern China including
the Duar, Ewenk and Oroqen languages. The project is slated for completion in 20 years.
The compilers identified 97 locations across eight Chinese provincial regions that have a Mongolian
population as well as five provinces and cities in Mongolia, the Buryat Republic and the Republic of
Kalmykia in Russia. The project has two stages. The first stage, the Mongolian corpus, is finished
and the second stage, the database for the other three languages, is under way.
Source: China Daily
POLITICS
JUSTICE COALITION REJECTS PM DISMISSAL PROPOSAL
The Justice Coalition that makes up the minority leg of Prime Minister Chimed Saikhanbileg's
government has rejected MP G. Uyanga's motion to dissolve the government. Uyanga, who belongs
to Justice Coalition member the Mongolian People's Revolutionary Party (MPRP), collected 19
signatures to bring before a standing committee the motion to dismiss Saikhanbileg for his part in

the signing of an agreement that paved the way for an expansion project at Oyu Tolgoi, which she
and other members strongly rejected. “Dismissing the prime minister is the wrong choice, and this
is not the right time for such action,” was included in a statement following a morning party
meeting on 21 January.
Democratic Party Secretary L. Erkhembayar in an interview warned that Saikhanbileg's dismissal
could send out ripples of destabilization. Impacts, he said, would include a depreciation in the
tugrug and delays to pertinent legislation. If the Prime Minister is dismissed, Mongolia will lose,”
said Erkhembayar.
Source: News.mn, 2, 3
BILL PROPOSES 40% SUBSIDY ON FILMMAKING
Mongolia's filmmakers may receive 40 percent back from what they've invested into their movies
from the state if a new bill is passed by Parliament. The Cabinet Secretariat on 25 January
approved for a vote by Parliament on a bill that seeks to support Mongolia's small-but-growing film
industry. The bill would have the government return 40 percent of total expenses spent on film
productions in Mongolia.
Source: Montsame
LICENSING PROPOSED TO CUT OUT UNREGISTERED ACTIVITIES OF PAWN SHOPS
Pawn shops may require licensing from the government after authorities received numerous
complaints about predatory practices from angry clients. The new regulations are a result of the
grievances heard by the National Human Rights Commission and Authority for Consumer Protection
and Fair Competition on the harsh lending conditions put out by pawnbrokers. A new law approved
by the Cabinet Secretariat on 25 June to go before Parliament would require licensing of these
establishments to regulate their activities.
Pawnbrokers currently are not required to pay tax on the lending they provide and likely represent
a large portion of the so-called “shadow economy” that operates outside the financials reported to
the government. The licensing scheme proposed would appoint the Financial Regulatory Committee
as the overseer of these activities.
Source: Montsame
GERMAN-MONGOLIAN MINING UNIVERSITY TO HELP SET EDUCATION STANDARDS
A university using German education is set to help create standards for students who hope to enter
the mining industry. The Mining Ministry on 22 January signed a memorandum with the Mongolia-
Germany Joint University of Minerals and Technology to introduce standards for education on
mining engineering. Signing the document was Mining State Secretary D. Artag, and the university's
director, N. Dorjderem.
Source: Montsame
NEW CUT-OFF DATE PROPOSED FOR PUBLIC SERVANTS TO RUN FOR OFFICE
MP A. Bakei has submitted a bill that may open up campaigning for the parliamentary elections
scheduled for July to more candidates working in the public sector. The amendment to the Law on
Public Service would allow any civil servant who resigned by 1 April to take part in this year's
elections as opposed to current regulations that require them to resign before 1 January.
Source: Montsame
CW-GP LEADER REJECTS JUSTICE COALITION PARTNERSHIP OFFER
Civil Will-Green Party (CW-GP) leader Sanjaasuren Oyun has been left puzzled by a letter requesting
cooperation from the Justice Coalition that makes up a minority leg of the Chimed Saikhanbileg
government. On 19 January, Oyun received a letter asking that the CW-GP and the Justice Coalition
join forces in Parliament so that they can have a stronger voice on issues. The offer also comes
ahead of July parliamentary elections. “I do not understand it very well,” said Oyun. “I guess what
they mean is that the two MPs of the Civil Will-Green Party can attend their meetings because our

two members cannot implement our ideas in Parliament.”
Oyun said that she and her fellow CW-GP seatholder in Parliament, S. Demberel, had worked well
with the other members of Parliament and that a marriage with the Justice Coalition was
unnecessary. “After considering the matter, we've decided we will not join the Justice Coalition,”
Oyun said.
Source: News.mn
SAIKHANBILEG HIRES FORMER ALTANKHUYAG ADVISOR
With his own head on the chopping block, Prime Minister Chimed Saikhanbileg may be looking for
advice on what occurred at the dismissal of his predecessor, Norov Altankhuyag. Saikhanbileg has
appointed as an advisor M. Khuderbaatar, who advised Norov Altankhuyag before he was ousted in
2014. Both Democrats belong to the Polar Star faction within the party.
Source: News.mn
MONGOLIA AND NORTH KOREA SIGN PROGRAM ON CULTURAL EXCHANGE
Mongolia has agreed to a two-year cultural exchange program with North Korea. Mongolia's
ambassador to North Korea, M. Ganbold, has signed an agreement for the program at the People's
Cultural Palace in Pyongyang.
Source: Montsame
GEORGIA OFFERS COOPERATION FOR 'SILK ROAD' PROGRAM
Georgia's foreign minister has opened talks with Mongolia on the possibility of collaboration on the
so-called ‘Silk Road’ project to build a highway through Mongolia that would connect China and
Europe. On 21 January, in Davos, Georgian Foreign Minister Mikheil Janelidze met his Mongolian
counterpart, Lundeg Purevsuren, where they agreed to hold political consultations between their
respective ministries.
Source: The Financial
BATTULGA, GANSUKH QUESTIONED ABOUT SAMSUNG RAILWAY EMBEZZLEMENT SCANDAL
Former ministers Kh. Battulga and A. Gansukh have been called in for questioning by a working
group investigating officials that may have been involved with an embezzlement scandal for a
railway project to link the Tavan Tolgoi coal mines with China. Authorities say USD6.4 million had
been embezzled from an account with contractor Samsung C&T for the construction of the railway
line, which has languished because of a lack of funding.
Battulga has served as minister of roads and transportation as well as industry and agriculture, in
addition to being the millionaire former judo champion that owns Genco Group. Gansukh is known
to be a close associate of Battulga and served as minister of road and transportation from 2012 to
2014 under former prime minister Norov Altankhuyag.
RAILWAY EMBEZZLEMENT SUSPECT VOWS TO RETURN HOME AND PROVE HIS INNOCENCE
The director of Liberty Partners LLC, who police suspect took part in embezzling funds from a state
railway project, has vowed to return to Mongolia to prove his innocence. Authorities believe Ch.
Ganbat took part in the embezzlement of USD6.4 million in funds from an account connected to
Samsung C&T, which was contracted to build a railway line from the Ukhaa Khudag coal mine and
the Gashuun Sukhait border point to China. “I will go back to Mongolia to get my reputation
restored,” said Ganbat in a letter published by the Source.
Ganbat, who claims to have had American citizenship since 2012, said he returned to Mongolia in
2009 to work with former Road and Transportation Minister Khaltmaa Battulga and his then-advisor
A. Gansukh. In 2010, he established Liberty Partners where he advised the government at no charge
on projects such as the Sainshand Industrial Complex, as well as the railway project.

FORMER MP FLEES TO U.S. AFTER ARREST FOR DRUG POSSESSION
A. Murat, a former MP, has escaped to the United States with his wife and relatives after being
arrested in China. Murat was arrested near the border with Mongolia at Ereen China, for alleged
drug possession. Murat was part of a group caught carrying illegal drugs by Mongolian police, said
authorities [Source does not say where information is sourced from -ed]. Murat was also trying to
smuggle in a separate Mongolian visa, said authorities.
FOSSIL SMUGGLERS CAUGHT, SAY POLICE
Three suspects authorities allege dug up rare dinosaur articles to sell on the black market are facing
up to three years in prison if convicted. Authorities brought in the suspects on 17 January saying
they had dug up a horn and snout that they planned to smuggle out of the country. The fossils dug
up in the Tugrug Valley at Bulgan Soum, Umnugobi Aimag belong to dinosaurs that lived between 71
and 84 million years ago, authorities said.
SISTERS-IN-CRIME ARRESTED
Two suspects authorities say were attempting to smuggle rare antiques out of the country were
caught at the Zamyn-Uud border-cross point to China. The women caught by authorities with 27
separate antiques are sisters, said a spokesperson for the General Intelligence Agency. This was not
the first time the two had attempted such a crime, said the spokesperson, saying they had
committed a similar crime by sending antiques to the border-cross point by mail.
Source: News.mn
MONGOLIA RANKED 72ND IN CORRUPTION PERCEPTIONS INDEX
Transparency International put Mongolia ahead eight places in its annual Corruption Perception
Index (CPI), although its score remains the same. Mongolia ranked 72nd among 168 countries in the
2015 CPI. The forward-movement is Mongolia's third-consecutive year of improvement on the index.
In 2014, it ranked at 80 and at 94 in 2013.
Denmark took the top spot for the second year running, with North Korea and Somalia scoring as the
worst performers, with just 8 points each. Top performers share key characteristics: high levels of
press freedom; access to budget information so the public knows where money comes from and how
it is spent; high levels of integrity among people in power; and judiciaries that don’t differentiate
between rich and poor, and that are truly independent from other parts of government.
Source: Montsame
MARATHON MAN ANDREW MURRAY TAKES ON MONGOLIA TEST
There is, it seems, no expedition too challenging for Andrew Murray. Having already taken part in
the North Pole marathon, which he won, seven ultra-marathons in seven continents in under a
week, and run from the north of Scotland to the Sahara desert, the 35-year-old Aberdonian is now
taking on what could potentially be his toughest challenge yet. This week, Murray raced in the
inaugural Genghis Khan ice marathon in Mongolia, and then set off on a 100-mile run from Genghis
Khan’s birthplace to Ulaanbaatar.
Running is just one string to Murray’s bow. He is a sports and exercise medicine doctor, a general
practitioner, he works with the European and Challenge Tour Golf, the SportScotland Institute of
Sport, Scottish Rugby and is the Scottish Government’s “physical activity champion,” as well as
doing research with the University of Edinburgh. So, with so many things going on in his life, why
does Murray do these extraordinary expeditions?
Source: Herald Scotland
THE TIME HILLARY CLINTON DRANK HORSE MILK IN MONGOLIA
Hillary Clinton once drank warm horse milk in Mongolia—and it tasted "sort of like yogurt that you
would leave out for a week." And only afterward, the doctor traveling with her said he'd need to

monitor her to make sure she didn't contract "brucellosis"— a cattle disease (she didn't). Clinton told
the story during an interview with Des Moines-area WHO-TV political reporter Dave Price, who had
asked about the surprises she'd encountered during her travels abroad.
She'd visited Mongolia as first lady in 1995, visiting nomads there. In an effort to show hospitality, a
nomadic family had offered Clinton fermented mare's milk. "This was horse milk, and it was offered
with great hospitality and graciousness. And the whole family was looking at me," she said,
laughing. "And so, you know, I lifted it up and I took a little bit of it and it was quite challenging."
Source: CNN
BCM UPDATES:
ANNOUNCEMENTS
BCM MEMBERS INVITED TO JOIN MONGOLIA PROGRAM AT PDAC, 6-9 MARCH, TORONTO
Mongolia will promote the progress made in its mining and geology sectors in recent years at PDAC,
the world’s leading annual International Convention, Trade Show & Investors Exchange for minerals
exploration and mining scheduled on 6 to 9 March in Toronto.
The Mongolian delegation led by the Ministry of Mining and Mineral Resources Authority (MRA) will
consist of representatives of the ministry, major mining companies including Erdenes Mongol, MRA,
Invest Mongolia Agency, the Petroleum Authority, and more. A working group led by MRA will
provide Mongolian businesses the opportunity to promote their projects to investors and have one to
one meeting with potential investors during this world leading international mining investors’
conference.
For more information, call Tsetsegmaa, the senior manager at Invest Mongolia, at +976 88008161,
or email tsetsegmaa@investmongolia.com. You can also reach MRA External Affairs Officer Chinzorig
at +976 99000357 or cmunhuu@yahoo.com.
KNOWLEDGE SHARING SESSIONS
"BCM KNOWLEDGE SHARING SESSION", 27 JANUARY, at SANTIS EDUCATIONAL SERVICES
The session was organized in partnership with our member Santis Educational Services on the topic
"Benchmarking standards for language acquisition in the workplace" with 12 members attending.
The session was led by Andrew Orgill, President of Inlingua Mongolia. Language Benchmarking is
how governments, organizations, and industries support the language acquisition of individuals in a
meaningful way. By using an approved objective English-speaking test as part of the screening
process organizations can greatly enhance their chances of commercial success. This test must be
reliable and have a global benchmark. Andrew discussed about these tests, which are now available
here in Mongolia, and why they have become an imperative in today’s marketplaces. During the
session, participants had an on-line connection with Inlingua head office in Switzerland to see their
virtual training facilities.
A BCM Knowledge Sharing Session was organized on 24 December at the Ulaanbaatar City Public
Library with 31 people from 19 member companies attending. The topic of this month's session was
“Implementation of System Certification Standards and its Benefits” facilitated by D.Otgonbat,
Director of Observe Consulting LLC. The topic covered System Certification standards, why they are
important for business and how to adopt and implement SC standards in Mongolia. The feedback
collected from attendees showed that 95% informed that their training needs were met; 60% said
their expected topics were fully covered; the remaining 40% informed their expected topics were
partially covered. 25% of participants proffered to extend the duration of the session. Otgonbat D is
a Certified Management Consultant and Lead Auditor for QMS (ISO9001), EMS (ISO14001), OHSMS
(OHSAS18001) and EnMS (ISO50001) certified by the Professional Evaluation and Certification Board.
Mr. Otgonbat also works as a national trainer for Sustainable Finance Initiative.

BCM ADVOCACY NOTES
Majority supports review of the “Long-Term Sustainable Development Mission of Mongolia” in
Parliament
On 13 January the State Structure’s Standing Committee was convened to discuss whether to submit
the draft resolution regarding the Long-Term Sustainable Development Mission of Mongolia 2016-
2030, initiated by ten members of Parliament namely B.Garamgaibaatar, S.Byambatsogt and
N.Battseregby and others, to the parliamentary session for review. At the Standing Committee’s
meeting, MP S.Byambatsogt, one of the initiators of the draft law, delivered a presentation on the
draft resolution. 66.7 percent of the members who participated in the meeting agreed to submit
the draft resolution for review at the parliamentary session. Review of the draft resolution is billed
as the 10th issue on today’s parliamentary session.
Source: www.parliament.mn
Parliamentary draft resolution of “Long-Term Sustainable Development Mission of Mongolia”
On 4 January the Chairman of the State Great Khural (Parliament) Mr. Zandaakhuu Enkhbold was
presented a parliamentary draft resolution regarding the Long-Term Sustainable Development
Mission of Mongolia 2016-2030. The presenters were the Chairman of the State Structure’s Standing
Committee MP A. Bakei, Vice-Chair of the Democratic Party Caucus MP S. Odontuya, Chair of the
“Justice Coalition” at the Parliament MP N. Battsereg, and MP S. Demberel. To view the draft
resolution in Mongolian language, please click here.
Draft Labor Law (Draft Law) is returned to the Government
The Draft Labor Law (Draft Law) was returned to the Government by the Parliament. No further
meeting was convened by the Draft Law working group and the draft law is on hold. The Draft Law
working group is not intending to re-submit the Draft Law to the Parliament in the near future.
On 10 December in the plenary session of the Parliament it was decided to return the Draft Labor
Law (Draft Law) to the Government based on multiple conceptual and editorial comments provided
by a wide range of stakeholders. Furthermore, the working group is aiming to submit the amended
Draft Law to the spring session of Parliament, which will be held around April 2016.
The Economic Council, established by the decree of the Prime Minister Ch. Saikhanbileg in 2015, is
currently working on the draft Law on Arbitration. BCM’s Legislative Working Group reviewed the
draft law and provided key comments. In its scheduled meeting on Friday, December 11, the
Economic Council was positive toward BCM's comments.
For more information, please contact Working Group Coordinator at khulangoo@bcmongolia.org.
BCM WORKING GROUP NEWS
Capital Markets Working Group
BCM’s Capital Markets Working Group’s meeting was held on Friday, 22 January at Suite 101, 12th
floor Express Tower, with 12 members in attendance, representing BDSec, ING Bank Mongolia, Khan
Bank, Golomt Bank, Oyu Tolgoi, Ernst & Young Mongolia Audit, Mahoney Liotta, Asian Real Estate
Capital Ltd and Mongolian Bankers’ Association.
Purpose of the meeting was to introduce the new meeting format, soft ideas on core themes
proposed by Co-Chairs, including ideas from members and brainstorm on Capital Markets WG
(CMWG) mission and objectives. It was agreed in the meeting on a common theme of ‘working
towards increased foreign investment in Mongolia’. It was suggested by members to include more
emerging players in the capital markets such as the insurance industry and most importantly engage
other stakeholders from government entities with the Working Group. Updates were given on the

developments of ‘custodian banking’ and how the WG can leverage their efforts towards sound
regulations for custodian banks.
On the next scheduled Capital Markets Working Group meeting, Dorjpalam Kh, Office of the
Treasury, Oyu Tolgoi will deliver a presentation on project financing.
For more information about this meeting, please contact Khulangoo Purevjav, Working Group
Coordinator of BCM at khulangoo@bcmongolia.org.
_________________________________________
Risk Working Group
BCM’s Risk Working Group’s 2016 kick-off meeting was held on Thursday, 21 January at Suite 101,
12th floor Express Tower, with 14 members in attendance, representing Mandal General Insurance,
MIG Insurance, Deloitte Onch Audit, XacBank, Wagner Asia, Iarudi, Golomt Bank and Bagatumurch
LLC.
Agenda of the meeting:
•16:00-16:10 Introduction and Opening remarks by Working Group Co-Chairs
•16:10-16:50 "Case studies on tax related cases tried at the Supreme Court of Mongolia"
(Bolorchimeg Kh, Lawyer ELC LLP)
•16:50-17:35 Discussion on proposed topics and finalize plan for 2016
Guest speaker, Bolorchimeg of ELC LLP, emphasized that the presentation is illustrative only and it
does not go into details or the legal implications. The presentation focused on: (i) Tax cases
resolved by the Supreme Court - last 3 years, (ii) Tax Dispute Resolution Process and (iii) Case Study
of Tuushin LLC vs Tax Inspectors of General Tax Authority. Members in attendance were interested
in the tax inspectors’ inspection process and what it entails, and in the statistics of the tax related
cases resolved by the Supreme Court.
Zaya Bolorbold, co-chair of the Risk WG (RWG) presented an overview of the last year’s activities
and introduced proposed plans for 2016. Working group members have supported the draft plan for
2016, with some members volunteering as main speakers from Deloitte Onch Audit, Bagatumurch
LLC. Given the current weather condition in Mongolia, it was decided that BCM to reach-out to the
NEMA and/or State Emergency Commission to request a presentation on the 'dzud* situation; it was
also agreed that the presentation can be complimented with Risk Working Group members’
presentation on how the impacts of the dzud will be translated into insurance claim. Next meeting
is scheduled for 3rd week of February.
_________________________________________
Business Ethics Working Group
BCM’s newest and eighth Working Group, Business Ethic’s meeting was held on 18 January at the UN
House from 16:00 to 17:30 with 15 members in attendance.
Private sector: Atlas Copco, Mandal General Insurance; Government: Independent Agency against
Corruption (IAAC)
Other stakeholders: U.S. Embassy, UNICEF, Transparency International, World Vision, Extractive
Industry, Transparency International, Research Planning Institute;
- Introduction of Working Group’s objectives
- Featured guest speaker: Anders Berglund, “The Business Code of Practice at Atlas Copco Group”
- Proposed topics and plan for 2016
The formation meeting focused on identifying collective objectives for the group and finalizing
topics for 2016. At the meeting, members volunteered to speak and some have proposed specific
deliverables as milestones as a group achievement for the year. It was decided to meet once every
two months and attract more local companies to hear their challenges in maintaining their integrity

in their respective sector.
For more information about this event, please contact Khulangoo Purevjav, Working Group
_________________________________________
BCM’s Logistics Working Group
BCM’s Logistics Working Group (LoWG) met on Tuesday, 8 December at MonEx office, 6F Vista Office
Building with 7 people in attendance representing Mongolian Express Co., Ltd. (known as Monex),
Representative Office of Mitsui & Co., Ltd. in Ulaanbaatar, Khaan Shorgoolj LLC and KGB TEGBE-
Dolgoon Delgerekh LLC.
• Featured guest speaker: Bayarbat – “From Hand to Hand; Challenges Faced”
• Discuss and plan WG’s 2016 activities
Upon introducing new members, Enkhbat D.-Logistics WG Chair, invited the featured speaker, Mr.
Bayarbat, to deliver a presentation about KGB TEGBE-delivery services. Other than introducing the
company, Bayarbat’s presentation touched on wider aspects such as the culture of delivery service
in Mongolia at large, challenges his new up-and-coming company is facing and possible solutions in
the delivery logistics within Ulaanbaatar.
Meeting participants were interested in the expansion plans of the company, such as delivery
services within Mongolia, cargo service between USA and Mongolia, to which Bayarbat gave
comprehensive answers about the company’s plan for establishing cargo service between South
Korea and Mongolia initially and delving into other markets.
Enkhbat D., Chair of the Logistics WG (LoWG), presented his plan for reviving WG activities in 2016.
He again encouraged our members to read through the soft ideas laid out and provide comments.
Since logistics fosters many elements, it was decided to focus on a certain theme for each meeting,
so that members interested or operating in that topic area can actively participate and bring in
more insight.
The meeting was concluded with an action item for the BCM WG Coordinator to follow-up the
questionnaire and request customers to provide comments on the 2016 plan by COB 28 December.
Coordinator of BCM, at khulangoo@bcmongolia.org.
_________________________________________
BCM’s Energy and Environment Working Group
BCM's Energy and Environment WG meeting was held on 3 December, 2015 at EEIBC from 16:30-
18:30. The meeting was attended by 16 people with the following stakeholders:
Private sector: Newcom, Sopocco LLC, Areva Mongol LLC, Observe Consulting LLC, MCS Energy
Government: Ministry of Environment, Green Development and Tourism, Energy Development
Center of Ministry of Energy
Others: GGGI, WCS, French Embassy, Embassy of Canada
Guests: Sustainable Fiber Alliance
New members: D. Otgonbat, Observe Consulting LLC and Ch. Sarnai, Clean Energy Asia of Newcom
Group
Discussion Topic: What's happening in Paris during Climate change events: What are the implications
for private sector?
Introduction and Opening remarks by Working Group Chair
"Introduction about Climate Change Conference/21 and Mongolia's commitment status" by D.Saruul,
Project Manager, Biennal Update Report to UNFCCC.
"Introduction about French Embassy and Overview about COP21 in Paris" by Raphael Droszewski,
First Advisor, Chief Adjoint de mission et Consul, The Embassy of France in Mongolia
Discussion on the topic among participants
Meeting minutes summary:

Bulganmurun Tsevegjav, Senior Program Officer of GGGI-Mongolia and Chair of the BCM’s Energy &
Environment WG (EEWG), introduced Jon Lyons, GGGI’s Country Representative to Mongolia, as an
upcoming Chair of the EEWG for 2016 during her absence.
Key points agreed during the meeting was to organize the next meeting in Jan or Feb 2016 following
up on the COP21 outcomes, updates on financial mechanisms, available funds and incentives for
private sector to develop low-carbon projects and to discuss its implications for the private sector.
For more information, please contact Bayarmaa Amarjargal, Vice Director at
bayarmaa@bcmongolia.org.
_________________________________________
BCM Education Working Group
BCM’s Education Working Group was held on 26 November 2015 at Executive Excellence
International Business Center, 10F Galaxy Tower from16:00 to 18:00. Fifteen people attended the
event representing foreign mission in Mongolia, private sector, universities and consultants of donor
funded projects:
Foreign Mission: Canadian Embassy;
Universities: National University of Mongolia, Mongolian University of Science and Technology
Private sector: PwC, Minter Ellison
Donor organizations: Save the Children, Support to Mongolia’s Technical and Vocational Education
and Training Sector-EU, Cooperative Vocational Training in the Mineral Resource Sector-GIZ, The
Global Fund;
16:05-16.10 Introductions
16:10-16:25 Update on Higher Education Reform Project activities (IRIM/Saha)
16:25-16.40 Update on Vocational and Technical Education Activities (VETP/Pascal)
16:40-17:10 Update on Labor Law Amendments, TVET Law Amendments: Higher Education
Amendments (IRIM/Saha)
17:10-17:30 Updates by members (FLP, Mandal)
Meeting minutes summary:
Opening remarks by Education Working Group Chair-Saha Meyanathan with passing of the
information about being selected as the best Working Group of the year 2015.
Status update by Manlaibaatar Z., Deputy Director of IRIM on the pilot project results of the ADB
funded Higher Education Reform Project (HERP). The dissemination workshop for the Universities
will be organized first week of December.
During the Q&A session, Professor Purevdorj of MUST highly emphasized on the importance of
building the capacity of the professors, as they are the ultimate knowledge givers to the students.
The WG members were given a matrix developed by Dr. Saha, on three draft laws: TVET, Higher
education and Labor law. During a Q&A session, participants made remarks related to the Matrix, to
highlight a few:
For more information about this event, please contact Khulangoo Purevjav, Working Group
‘BCM IN THE UNIVERSITY CLASSROOM’ SERIES
Guest Speaker: Jon M. L. Lyons, Country Representative, GGGI,
Presentation topic: "Pathways to Greening Economic Growth in Mongolia and beyond"
Where & When: at the University of Humanities on 24 November 2015 and at the Institute of
Finance and Economics on 3 December 2015.
Jon M. L. Lyons, Country Representative, GGGI, gave presentation titled "Pathways to Greening
Economic Growth in Mongolia and beyond" at the University of Humanities (UoH) on 24 November
2015 and at the Institute of Finance and Economics (IFE) on 3 December 2015. Over 80 senior
students attended the lecture at the UoH and over 70 students at the IFE.

Mr. Lyons, fluent in Mongolian, delivered his presentations in Mongolian. The presentations were
followed by question and answer sessions. While students at the UoH were curious about his recent
project on model green public kindergarten to be built in Songinokhairkhan district of Ulaanbaatar,
students at IFE were asking questions about the size of projects eligible for green finance,
monitoring and reporting requirements for donor-funded projects and vacancy at GGGI or possibility
of doing an internship there.
For more information, please contact Khulangoo, Working Group Coordinator at
khulangoo@bcmongolia.org and Bayarmaa Amarjargal, Vice Director at bayarmaa@bcmongolia.org.
WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS, INTERVIEWS
Presentations (on web):
BCM Monthly Meeting, 25 January:
- Sodontogos Erdenetsogt , Chief/National Coordinator of National Secretariat for Development of
the Second Compact agreement between Government of Mongolia and the USA Millennium
Challenge Corporation -
“Development process of the second compact agreement between government of Mongolia and USA
Millennium Challenge Corporation”
- Gantugs D, CEO, Mongolian Mortgage Corporation - “MIK Holding IPO and RMBS Issuance”
_________________________________________
Presentations:
BCM Monthly meeting on December 7:
- Mergen Chuluun, Managing Director, Nomadic Expeditions - “YPO Mongolia: Building Better
Leaders Through Education & Idea Exchange”
- Meloney C Lindberg, Country Representative, The Asia Foundation and L. Sumati, Director, Sant
Maral Foundation - “Introduction and Key Findings of Private Sector Corruption Perception Survey –
STOPP”
- S. Galbadrakh, Specialist at Prevention and Education Department, Independent Authority Against
Corruption (IAAC) of Mongolia - “Introduction of IAAC”
- Terrence Edwards, Editor-in-Chief, BCM NewsWire - “Overview of the BCM NewsWire”
_________________________________________
Mongolia Projects & Investment Summit Hong Kong, 16-17 November:
- Zoljargal Naidansuren, Governor, Bank of Mongolia, “The new equilibrium: reforms to sustainable
growth and savings"
- Narantuya Zagdkhuu, Chair, Financial Regulatory Commission of Mongolia, "Making Mongolia a
frontier again: financial market developments"
- Norihiko Kato, CEO, Khan Bank, "Where does the banking sector fit it?"
- Munkhsukh Sukhbaatar, Rio Tinto, "The way forward for Oyu Tolgoi underground"
- Bat-Uul Erdene, Mayor of Ulaanbaatar city, "City of Ulaanbaatar-2030"
- Matthieu Le Blan, EBRD Head office in Mongolia, "The importance of economic diversification and
import replacement opportunities EBRD's role in enabling progress"
- Tuvshintugs Batdelger, Economic Research Institute, "Transaction Cost of Conducting Business in
Mongolia: SME perspective"
- Oliver Thirlwall, Asian Real Estate Capital, "Distressed opportunities-banking and real estate"
- Kevin Trzcinski, Vice President Corporate Development at Worldwide Power & Technology (HK)
Ltd., "Mongolia as a destination for Scientific Research & Development"
- Randolph Koppa, President, Trade and Development Bank, "Challenges and Opportunities for
Growth"
_________________________________________

Mongolian Annual Risk Management Forum, 11 November:
- “A Practical Case Of Implementing A Risk Management Strategy In Corporate Governance” -
Garrett Wilson Director, Risk Management, Compliance & Outsourced Services Wagner Asia Group
- “Public Buildings And Disaster Risk Management” - Sam Sallam, President, Best Western
International Mongolia
- "Organization Psychological Management" - Delgermend.Ts, Organizational Psychologist,
NPC&Mandal LLC
- "New macroeconomic balance A shift from consumption to saving" - Munkhbayar Tedevsuren, Head
Of The Coordination And Analytic Unit Under Financial Stability Council Advisor To The Governor
- "Macro-Economic Outlook 2016" - Ankhbayar Chuluunbat, Senior economist, Mandal General
Insurance
- "Global Perspective On Risk Management During Economic Slowdown" - Matthew Pottle, PwC
Mongolia
- "Corporate Crises Management" - G.Odbayar, Mining National Operator
_________________________________________
BCM Monthly Meeting on 2 November:
- Andrew Woodley, CEO, Oyu Tolgoi LLC -“Oyu Tolgoi: Delivering globally competitive copper
business”
- Susan Cote-Freeman, Program Manager Private Sector Team, Transparency International -
“Introduction to Transparency International’s Business Principles for Countering Bribery”
- Elisabeth Ellis, Partner, Minter Ellison LLP - “Impact on your business of the proposed new Labor
Law”
_________________________________________
BCM’s “Knowledge Sharing” event at EEIBC on October 9
- Dr. Nigel Finch, Managing Director, Saki Partners, “Strategically Managing Mongolia’s Sovereign
Credit and Perception Ratings”
_________________________________________
Presentations at BCM Monthly Meeting on 28 September:
- Mend-Orshikh, Founder & President, New Media Group, “Sales and business opportunities using
BCM online platform”
- Steve Potter, Executive Director, Wagner Asia Group, “Corporate Ownership vs. Corporate
Responsibility: How a foreign owned company can contribute to the well-being of Mongolia. Case
Study: WAGNER ASIA Group”
- Cameron McRae, Chief Executive Officer of Tarva Investment and former CEO of OT LLC,
“Competitiveness in Central Asia”
- Saha Meyanathan, CEO, EEIBC and Chairman of BCM Education Working Group, “BCM and
Mongolia's Education & Capabilities Agenda”
_________________________________________
Presentation at Discover Mongolia 2015 on 3 September:
- S. Javkhlanbaatar, General Director, Invest Mongolia Agency, “Opportunity to invest in the mining
industry”
_________________________________________
Presentations at BCM Monthly Meeting on 24 August:
- Jennifer Bielman, Country Director, Mercy Corps Mongolia, "Mercy Corps in Mongolia - 15 Years of
Progress"
- Lee Cashell, CEO, APIP, “Overview of the Property Development Market”
- Anthony Woolley, Senior Associate, Hogan Lovells, “Legislative Update - 2015”
_________________________________________

Mongolia Reports:
- IMF, “World Economic Outlook, October 2015: Adjusting to Lower Commodity Prices”
- ADB, Financial Systems of Financially Less Developed Asian Economies: Key Features and Reform
Priorities (Sep 2015)
- Hogan Lovells, "Legislative update: 2015 Spring session of the Parliament of Mongolia"
- Oyu Tolgoi, "Scorecard July 2015 - Monitoring Our Performance"
- Sant Maral Foundation, "Survey on Perceptions and Knowledge of Corruption"
- Jim Dwyer, Executive Director, BCM, Rumsfeld Foundation’s, CAMCA Regional Forum, UB, June 20,
2015, “FDI Environment in Mongolia”
- Hogan Lovells, “Law on State Registration of Legal Entities”
_________________________________________
Interviews:
- Mongolian Economy Magazine, November 2015 issue - "In Order to Make the Labor Law More
Effective"
- Mongolia President Ts. Elbegdorj: Charlie Rose Show (PBS/Bloomberg TV-New York)
- BCM Monthly Meeting news coverage on Bloomberg TV, August 24, 2015;
- Jim Dwyer, Executive Director, BCM, Interview re BCM Business Growth Index, on Star TV News,
August 20, 2015;
- Jim Dwyer, Executive Director, BCM, Interview re BCM Business Growth Index, on Bloomberg TV
News, August 20, 2015;
- B.Byambasaikhan, CEO, Erdenes Mongol and Chairman, Business Council of Mongolia, INS interview
SOCIAL NETWORKS
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the BCM NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
https://twitter.com/bcmongolia.
The bulk of the content on BCM’s new LinkedIn page is Mongolian language to better cater to BCM's
Mongolian-speaking audience and members. Please click on the below link to follow us on our new
LinkedIn page.
http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo.
Social stats: BCM now has 11,097 fans on our Facebook fans page, 1,961 connections on
LinkedIn network, and 1,955 followers on Twitter.
_________________________________________
Website: According to Google Analytics report as of 26 January, the daily web traffic to BCM
website was 50 visitors with 70 sessions. 80% were from Mongolia, 5% from the USA and 3% from
Canada.
_________________________________________
BCM’s column in the Mongolian Economy Magazine began in Edition 12, May 2015. The first column
featured an interview with Mr. I. Ser-Od: "Times like these demand that we be more creative and
proactive." The second column was published in Edition 15, July 2015: “Entrepreneurs Set Up Study
Tours of Businesses.” The third column was in the edition, September 2015: "Wagner Asia
Technology Innovations."
_________________________________________

The BCM NewsWire is used as source for the "MM Today" News program in English aired by Mongolia
National Broadcasting (MNB) on Fridays at 19:00.
_________________________________________
BCM now has a profile page at VIP76, one of the major online information networks in Mongolia.
From January 2013 to January 2016 we posted a total of 108 news items related to BCM activities,
economic and business related updates.
_________________________________________
The "Photo Gallery" in Knowledge Hub section of the new BCM website has the most recent photos
from BCM events.
As a BCM member you can now visit the official BCM website at http://bcmongolia.org to enjoy
newly introduced interactive features such as: edit your organization's profile information; post
vacancy notices from your organization; post cooperation proposals with other members or deals
you would like to offer to other BCM members; and start a forum and ask questions directly on the
web platform. Of course you can also visit our website for news information, interviews, event
photos, videos and announcements regarding BCM.
ECONOMIC INDICATORS

INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
December 31, 2015 *1.9% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 1.1% y-o-y; 4.8% Core, Ulaanbaatar City, December 31, 2015
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
July 30, 2014 12.00% {source: Mongol Bank}
January 14, 2015 13.00% {source: Mongol Bank}
January 14, 2016 12.00% [source: Mongol Bank]
CURRENCY RATES – 28 January 2016
Currency Rate
US dollar USD 2,008.59
Euro EUR 2,184.34
Japanese yen JPY 16.91
British pound GBP 2,864.35
Hong Kong dollar HKD 257.79
Chinese Yuan CNY 305.46
Russian Ruble RUB 26.07
South Korean won KRW 1.67

29.01.2016, NEWSWIRE, Issue 413

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29.01.2016, NEWSWIRE, Issue 413