April 30 2010

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 116, April 30, 2010
NEWS HIGHLIGHTS:
Business:
 MCS and Erdenet lead 100 top national enterprises in 2009;
 Mongolian members to join OT board not yet named;
 Khan Bank named best bank once again;
 Centerra’s revenue soars in Q1;
 Ernst & Young denies all charges made in newspaper article;
 Khan Resources shareholder requisitions special meeting;
 Local experts’ views will help decide choice of TT investor, says Minister;
 Mongolian companies unite to work at Tavan Tolgoi;
 SouthGobi sands expects paved road to be ready by August;
 AIESEC Mongolia growing fast;
 Ivanhoe Mines amends shareholders’ rights plan;
 Busy time in Washington, D.C. for business mission;
 “Discover Mongolia” in early September;
 POSCO plans coke production, coal gasification in Mongolia;
 Mongolia approves Meritus’s acquisition of gold property from Troy Resources;
 Several injured in clashes as “Ninjas” raid Chinese mine.
Economy:
 President freezes new mining permits until new law is passed;
 Graduated royalty rates to replace windfall profits tax;
 Salaries, pensions for teachers and doctors to go up 30 percent from October 1;
 Wages must be related to productivity;
 MNMA chief wants professional involvement in framing mining laws;
 Ministry official favors comprehensive law, even at the cost of some delay;
 Animals for some herders, training for others;
 The main gain from OT and TT will be jobs, feels Mrs. Oyun;
 ADB funds for urban services project in mining areas;
 Three southern provinces seek investment;
 Mayor warns road builders of blacklisting;
 More border posts to be open 24 hours a day;
 China plans to build power transmission line from Mongolia;
 Russian bond success fuels spending fears;
 Chile to raise mining royalty to help fund reconstruction;
 World Bank gets more capital, China more voting power;
 More World Bank lending will not cure all ills;
 Dramatic increase in China’s coal import;
 Australia’s minerals sector unsustainable in long term, says report.
Politics:
 Elbegdorj in China;
 Protesters reach agreement with MPs’ group, call off hunger strike;
 Deputy Speaker feels political system is stalling economic growth;
 Diplomat stabbed in broad daylight;

2.  Minister unveils grand projects;
 Energy regulatory body to be reconstituted;
 South Korea to help build waste recycling plant;
 Tax official’s complaints of corruption found baseless;
 Draft wants doctors, not police, to take care of the drunk;
 French ambassador happy with state of bilateral relations;
 City engineer jailed for taking bribe;
 Shanghai Expo begins on Saturday.
*Click on titles above to link to articles.
BCM MONTHLY MEETING RECAP
The monthly meeting on April 26, attended by 89 members, began with Chairman Laurenz Melchers
mentioning several things that have happened since the last meeting such as the visit by former
Ambassador Michael Ussery, who has extensive experience in higher education, exploring whether
Mongolia is ready for an American University of Mongolia. Executive Director Jim Dwyer said
membership now stood at 138, the most recent 5 of whom are Marubeni, Talk Talk English,
Mitsubishi, Hunnu Coal, and State Bank of Mongolia. He also reported on the work of the seven
working groups, one of which has been renamed the Education Group, involving over 90 volunteers.
The presentation by the visiting Business and Biodiversity Offsets Program (BBOP) team was in two
parts. Ms. Kerry ten Kate said their work depends on collaboration between the public and private
sectors. Even well-intentioned and extensive restoration after industrial activity, especially mining,
leaves ―a significant residual impact‖ on biodiversity. The BBOP believes adherence to a
―mitigation hierarchy‖ can help turn this usually negative net impact into a positive one.
Mr. Ray Victurine said proper restoration, as practiced by Rio Tinto, among others, has shown that
developing biodiversity offsets goes beyond legal imperatives. Adoption of best practice principles
helps companies reduce operational and project development risks, at the same time forging good
relationships with regulators and stakeholders, which can contribute to securing permits and
broader social license to operate. The team hopes to persuade the Government of Mongolia to
become a partner, and companies to set up pilot projects, as has been successfully done in several
other countries.
Mr. D. Damba, President of the Mongolian National Mining Association (MNMA), then provided an
update on the mining sector. MNMA is not against regulations and laws as such, but want these to
be reasonable and prudent, shorn of negative impacts and helping in ―profitable and efficient
mining‖. MNMA has taken up with the Prime Minister and other authorities various issues that it
considers ―impractical‖, and has protested against Government action in certain cases, as in that of
Khan Resources. The Prime Minister has accepted in principle the MNMA stand that the General Tax
Authority should not be involved in either developing the methodology of calculating taxes or in the
actual determination of tax liabilities. Instead, its role should be restricted to collecting taxes.
Mr. Ben Turnbull, CEO, State Bank of Mongolia, said this new bank, wholly owned by the
Government, is ranked 6th
in terms of size among the 15 commercial banks in the country. The EBRD
and the World Bank have arranged to put in place an ex-pat management team. He made it clear
that the new bank is ―a bridge bank‖, and will be under State ownership only temporarily before
being privatized in around three years‘ time. In that period it will provide safe and stable banking
services to help tide over stressful times for the banking sector.
Mr. Martin Quick, CEO of beleaguered Khan Resources, made a statement when members in the
audience were asked to briefly comment on their businesses. He referred to the ―abrupt,
unilateral, and highly illegal‖ invalidation of the company‘s two licenses on the Dornod uranium
fields, and said the company‘s Board of Directors was determined to get justice for its
shareholders, in Mongolian or international courts, against the expropriation. He sought the full
support of the private sector, while acknowledging that companies have their own interests to

3. pursue.
BUSINESS
MCS AND ERDENET LEAD 100 TOP NATIONAL ENTERPRISES IN 2009
Erdenet Mining Corporation and MCS Group are on top of this year‘s list of the best 100 enterprises
in Mongolia. The present list for 2009 is the 9th
annual one the Government and the Mongolian
Chamber of Commerce and Industry have prepared, grading enterprises on the basis of their
contribution to national economic and social development. Among the criteria used in the
evaluation are the amount of taxes paid and of investment made, and the nature of the programs
showing a sense of social responsibility, the amount spent on them, and the results achieved.
MCS Group has headed the list for the fourth consecutive year. It paid MNT13.5 billion in taxes and
fees in 2004, MNT23.1 billion in 2005, MNT32.5 billion in 2006, MNT47.8 billion in 2007, MNT67.2
billion in 2008, and MNT66.6 billion in 2009, making up a total of MNT250.7 billion in the last 6
years. The group created 2,690 new jobs in the last three years -- 616 of them in 2007, 442 in 2008,
and 1,632 in 2009.
Source: Undesnii Shuudan
MONGOLIAN MEMBERS TO JOIN OT BOARD NOT YET NAMED
The three Mongolian members to sit on the Executive Board of Oyu Tolgoi LLC are yet to be named.
The State Property Committee‘s recent meeting on the issue was postponed without giving any
clear reason. The board will have nine members, three each from Mongolia, Rio Tinto and Ivanhoe
Mines.
There is considerable speculation over the choice. Deputy Finance Minister T.Ochirkhuu has said the
selection has already been made and the announcement is just a formality. Among those reported
to be lobbying to be chosen are former Ambassador to Canada and China Ch.Batsukh, and former
President N.Bagabandi. It may also be that the MPRP and the DP will nominate one member each,
while the third could be a Government official, or from Erdenes MGL or a civil society organization.
Source: Zuunii Medee, Ardin Erkh
KHAN BANK NAMED BEST BANK ONCE AGAIN
Khan Bank has been named the best commercial bank in the country in 2009. This is the sixth time
the bank has featured among the best 5 banks annually chosen jointly by the Government and the
National Chamber of Commerce and Industry, after assessing their contribution to the national
economy. Also considered were the banks‘ financial performance and the products and services
they offered.
Khan Bank‘s liquidity ratio increased from 21.8% in 2008 to 42.5% in 2009 while equity adequacy
rose from 12.7% in 2008 to 19.3% in 2009, much higher than the 12% considered prudent by the
Central Bank. Khan Bank‘s total deposits increased by 28% over 2008 and it became the first
Mongolian bank to have MNT1 trillion in total assets.
Khan Bank was also honored for ―Excellence in Corporate Social Responsibility‖, an award it has
won earlier, too. It spent over MNT768 million on programs of education, arts and culture, and rural
and economic development in 2009.
Source: Montsame
CENTERRA‟S REVENUE SOARS IN Q1
Centerra Gold reported a quarterly profit on Wednesday versus a year-earlier loss, helped by higher
production and gold prices, and affirmed its production outlook for the year. The Canadian gold
miner said it had net earnings of USD122.1 million in the first quarter, compared with a net loss of
USD20.3 million a year earlier. Revenue soared to USD255.5 million from USD98.4 million a year
earlier, reflecting a 114 percent increase in ounces sold and a 22 percent increase in price.
Gold production at Kumtor in Kyrgyzstan was significantly higher in the quarter, which more than
offset lower production at Centerra's smaller Boroo mine in Mongolia. The company said it still
expects to produce between 640,000 and 700,000 ounces of gold this year at cash costs of USD460
to USD505 per ounce.
Source: Reuters.com
ERNST & YOUNG DENIES ALL CHARGES MADE IN NEWSPAPER ARTICLE
Ernst & Young Mongolia Audit LLC has said certain statements made about it in the daily newspaper
Onoodor are incorrect and neither the journalist nor the editorial staff had verified them before

4. they were published. An unsigned article in the newspaper on April 13 had charged the firm with
concealing over USD500 million of revenue, with working in Mongolia without a proper license, and
with not paying USD50 million in taxes.
Asserting that ―not one of these statements is correct‖, the company says it has ―always conducted
its audit activities in Mongolia pursuant to a permit issued by the Ministry of Finance‖. The
publication of the article was ―irresponsible‖ and the company was forced to issue its statement
following ―the failure of the publisher and management to retract their errors‖. The company was
―proud that our firm is expanding our activities to match the positive development of the Mongolian
economy and will continue to build on the excellent relationship that it has established with its
clients, the business community, relevant regulatory bodies and authorities here over the years‖.
Source: Ernst & Young Mongolia Audit LLC
KHAN RESOURCES SHAREHOLDER REQUISITIONS SPECIAL MEETING
Laramide Resources, which owns about 13.2% of Khan Resources, has requisitioned a special
meeting of the uranium junior's board to introduce new directors to the firm's existing board ―to
facilitate the best shareholder outcome if the existing takeover offer fails to materialize‖.
Laramide said it has requested this meeting in consultation with other large institutional
shareholders, to respond to recent developments in Mongolia including the extension of the CNNC
Overseas Uranium Holding Ltd takeover offer.
Khan agreed earlier this year to be acquired by CNNC, as part of its defense against a hostile
takeover offer from Russia's Atmoredmetzoloto. Earlier this month, Khan said that it received
notification from the Mongolian Nuclear Energy Agency that mining and exploration licenses for the
company's flagship uranium project in the country had been invalidated.
Khan is challenging the decision in court, and has said that it does not expect the developments to
affect the takeover by CNNC, but shareholders are obviously concerned. Laramide said that it had
not entered into a lock-up agreement with CNNC, but agreed with Khan's board recommendation to
accept the CNNC offer, which has been extended to expire on May 25.
Source: www.miningweekly.com
LOCAL EXPERTS‟ VIEWS WILL HELP DECIDE CHOICE OF TT INVESTOR, SAYS MINISTER
Minerals and Energy Minister D. Zorigt has said the Government will present its concept document
on Tavan Tolgoi to Parliament for discussion as soon as it is approved by the National Security
Council. Asked about the criteria for choosing the investor(s), he said there would be several. Since
the Government will retain 100% ownership of the deposit, the investor(s) will be offered an
operating and marketing contract but will be expected to meet all investment expenses. He also
indicated that the opinion of national scientists will also be taken into account before a final choice
is made.
Source: Udriin Sonin
MONGOLIAN COMPANIES UNITE TO WORK AT TAVAN TOLGOI
Some 700 Mongolian companies have come together to stake their claim to work in Tavan Tolgoi in
the face of the Government‘s perceived lack of support to domestic enterprises. Every member of
―Mongol 999+‖ must pay MNT 1 million. The leadership is tentative about their course of action, but
has indicated that the total money collected will be used as capital for a company where all
members will have shares. However, they do not use the word ―consortium‖ for their union.
Source: Ardin Erkh
SOUTHGOBI SANDS EXPECTS PAVED ROAD TO BE READY BY AUGUST
SouthGobi sands expects the 18-meter wide paved road it is building to facilitate transportation of
coal from Ovoot Tolgoi and Tsagaan Tolgoi mines will be ready for use by August. Risks of accidents
will then be less. The company is at present focusing on extraction though it has 18 exploration
licenses in Umnugobi province.
Asked by media when the company will begin work on a coal refinery, its Public Relations Manager,
Mr.D.Bat-Erdene, said things move at a somewhat leisurely pace in Mongolia where permission has
to be taken from many ministries, agencies and government organizations. The company is buying
electricity from China at twice the domestic cost because there is no choice. It has proposed
setting up a power plant, but the Ministry is yet to respond.
Source: Ardin Erkh

5. AIESEC MONGOLIA GROWING FAST
Less than one year since formally joining the international student organization, AIESEC Mongolia
has been named the fastest growing branch in the entire 107-member network in the first quarter
of 2010 when it realized 15 international internships. AIESEC Mongolia has already moved to 66th
out of 107 countries. Currently there are also 35 Mongolian members involved in different projects
and events
Focused on providing a platform for youth leadership development, AIESEC offers students the
opportunity to be global citizens and to get experience and skills that matter today. Each year, it
provides over 7,500 students the challenging opportunity to live and work in a foreign country in
areas of management, technology, education, and development.
The key achievements of AIESEC Mongolia in the first quarter were:
 15 realized international internships,
 23 new Mongolian members,
 3 international members selected for the period July 2010 to June 2011,
 4 Mongolian members attended a national conference in China, and
 Global Village 2010 organized together with the students‗ union at the Mongolian University
of Science and Technology.
Source: AIESEC Mongolia
IVANHOE MINES AMENDS SHAREHOLDERS‟ RIGHTS PLAN
Ivanhoe Mines Ltd. has amended the shareholders‘ rights plan previously adopted on April 5. The
amendments can be summarized as follows:
 the definition of ―Acquiring Person‖ has been revised to enable a person who becomes the
beneficial owner of 20% or more of the common shares through a combination of listed
provisions to acquire an additional 1% of Ivanhoe‘s shares without triggering the plan;
 the definition of ―Beneficial Ownership‖ has been revised to delete the reference to
ownership by way of ―Derivative Contracts‖;
 the definition of ―Exempt Acquisition‖ has been revised to cap the exemption for issuances
under incentive plans and to modify the provision related to permitted treasury issuances;
and
 the shareholder approval provision has been revised to clarify that separate shareholder
approvals of the plan will exclude both ―Acquiring Persons‖ and ―Grandfathered Persons‖.
The amended plan currently is in effect, subject to confirmation through a vote of shareholders at
Ivanhoe Mines‘ annual general and special meeting to be held on May 7.
Source: www.ivanhoemines.com
BUSY TIME IN WASHINGTON, D.C. FOR BUSINESS MISSION
The Mongolian business mission to the International Franchising Exhibition in Washington, D.C. from
April 9-11 had a busy schedule. The group had several special meetings and a luncheon where the
guests included NAMBC President Steve Saunders; Mr. Eugene Theroux, Senior Partner at Baker &
McKenzie; Mr. Zheng Gong Cross, Chief of Mongolian Affairs at the U.S. Department of Commerce;
Mr. Daniel Keenaghan, International Trade Specialist at the U.S. Department of Commerce and one
of the Government's leading experts on international franchising; Ms. Lauren Schumer, Advisor on
Public Policy in Rio Tinto's Washington, DC office; Mr. Mark Wells, General of the Exhibition, and
Mr. Kh.Bekhbat, Mongolian Ambassador to the USA.
The group included representatives of the mining, heavy machinery, freight forwarding, geodesy,
pharmacy, warehousing, construction and restaurant businesses. The visit was hosted by BCM and
the Commercial Section of the U.S. Embassy Mongolia.
Source: BCM NewsWire
“DISCOVER MONGOLIA” IN EARLY SEPTEMBER
This year‘s ―Discover Mongolia‖, the important and popular annual international investors‘ forum,
will be held on September 8 to 10, according to the Mongolian National Mining Association. The
association has also announced that it, along with the World Bank, Oyu Tolgoi LLC, and GTZ, will
help the Mongolian National University organize a meeting on May 15 to discuss how good
governance can keep the resource curse at bay.
Source: The Mongolian National Mining Association

6. POSCO PLANS COKE PRODUCTION, COAL GASIFICATION IN MONGOLIA
POSCO, South Korea's leading steelmaker, will develop coke production and gasify coal in Mongolia.
It has said it has signed a preliminary agreement with the Mongolian Government for coke
production and coal gasification and help develop its steel industry. The company said CEO Chung
Joon-yang visited Mongolia earlier this week to discuss the project.
Source: TradingMarkets.com
MONGOLIA APPROVES MERITUS‟S ACQUISITION OF GOLD PROPERTY FROM TROY RESOURCES
Meritus Minerals has announced that the Mongolian Government has approved its acquisition of Troy
Resources Ltd's subsidiary in Mongolia. As required by law, the Mongolian Government has approved
the purchase of Troy's shares in Troy Mongolian Alt Resources LLC (TMAR) by Meritus and also the
name change of TMAR to Meritus MGL LLC. It has also ratified the appointment of new directors
representing Meritus.
All approvals to the transaction required by Mongolian law having been received, Meritus can now
commence exploration on the Gutain Davaa high grade gold project in northern Mongolia through
Meritus MGL LLC. The subsidiary holds an 80% interest in the Gutain Davaa project and has agreed
to purchase the remaining 20% of the shares held by a Mongolian company. Registration of this
share transaction is under way.
Source: Meritus Minerals Ltd.
SEVERAL INJURED IN CLASHES AS “NINJAS” RAID CHINESE MINE
More than 10 people were injured, some severely, when a group of artisanal miners or ―ninjas‖
attacked a fluoride mine run by Ejunmen, a Chinese company, in Khar-Airag district of Dornogovi
province, a little before midnight on April 23. The company‘s own security people were
outnumbered by the 30 or so attackers, and they called the police for help. By the time policemen
arrived to bring the situation under control, the violence had spread.
The police arrested several people for instigating the ―ninjas‖. After a short-lived lull the
excitement returned when one man was killed when he flung himself before a car to stop its
Chinese occupant from leaving the scene.
The company has over 30 employees and has been in business for three years.
Source: Undesnii Shuudan
ECONOMY
PRESIDENT FREEZES NEW MINING PERMITS UNTIL NEW IS PASSED
President Ts. Elbegdorj has ordered a halt to the issuance and transfer of mineral exploration
licenses, as also revalidation of revoked licenses, until the Government can enact a stricter law on
mining investment. The directive, posted on his website, may rekindle some of the uncertainty that
for years surrounded mining investment in the country.
The order came into force at 5 pm on April 20. The President had called the heads of Standing
Committees and the Director of the Mineral Department to a meeting earlier on the day to explain
his decision, calling it ―an extreme step taken after careful consideration‖. He said he had found
during his visits to the provinces that there was widespread anger over how petty violations had
taken on criminal proportions. Mineral resources are connected to national security, but holders of
almost half of the exploration licenses do not provide the mandatory annual information about their
work. Licenses are used less for exploration than as money-making tools.
The freeze on new mining permits will remain in place until a new law on mineral licenses is
adopted by the Government, according to the directive. It was not immediately clear how long it
would take to pass a new law, but the directive calls on the Government to hold public discussions
on the matter in June. "I order the Government to regularly report to me on the status of the
implementation and the ways it resolves the issues," said Mr. Elbegdorj, adding that a final report
has to be submitted to the National Security Council by May. In June, citizens will be given
information about this through the Civil Chamber. "It is important to urgently develop the law on
mineral licenses and have it publicly discussed." Mr. Elbegdorj said that while he remains focused
on the development and protection of natural resources, his directive seeks to ensure that that the
people of Mongolia remain the true owners of the countries mineral wealth.
Read more…
Right now, the Presidential directive apparently will not affect the operations of those companies
that have valid exploration permits. But it is unclear whether the Government intends to review the
validity of existing permits going forward. The new directive could hinder Khan Resources' efforts

7. to get its uranium mining and exploration licenses reinstated, as the Presidential order also applies
to any licenses that have been revoked.
―Our initial estimate is that this should not have any effect on overseas investors in Mongolia,
although we‘re still looking to clarify some details,‖ said Mr. Alisher Djumanov, the Beijing-based
chief executive officer of Eurasia Capital Management. ―The whole system for allocating licenses
does need streamlining and it may well be that there is corruption in the way some licenses are
given out.‖
Mining Minister Dashdorj Zorigt declined to make an immediate comment.
―I think this is just a temporary situation,‖ said Mr. Alexander Molyneux, chief executive officer of
SouthGobi Energy. ―The Government is checking mining licenses to make sure they are in order. If
your license is in order, like ours is, then there shouldn‘t be a problem.‖
Last year's signing of a long-awaited agreement with Rio Tinto and Ivanhoe Mines allowing them to
proceed with the USD5 billion Oyu Tolgoi copper and gold mine had paved the way for foreign
investment in the mining sector. Mongolia has thus far issued 4,706 valid mineral licenses of which
3,610 are exploration permits and 1,096 are mining licenses. The directive noted that most of the
permits currently held by companies and individuals operating in Mongolia are held in violation of
existing laws.
Source: Reuters, Bloomberg, Undesnii Shuudan
GRADUATED ROYALTY RATES TO REPLACE WINDFALL PROFITS TAX
The Finance Ministry intends to introduce, subject to approval by Parliament, a new form of
taxation from January 1, 2011, immediately after bidding farewell to the old year and with it the
68% windfall profits tax. Increased royalty fees are charged in many countries and the system comes
in several ways. It may be linked to the profit level of the companies, or can be imposed depending
on the volume of output and sales. The risk in linking it to the profits is that companies may utilize
their considerable accountancy skills to manipulate the statement of profit and thus pay less. That
is why countries less capable of monitoring complicated and convoluted financial records opt for
clearer specifics.
Mongolia has chosen the more certain method of computing the tax depending on the commodity
price in the global market. The higher the price, the more the tax. In this, it is almost the same as
the 68% tax. However, according to the preamble to the draft law on gradually increased royalty, it
is less stringent. The maximum graduated rise will be 5%, added to the basic 5% rate now in force.
This maximum total royalty charge of 10% will be collected from copper when its price is more than
USD 8,000 per ton, from gold when its price hits USD1,300 or more per ounce, and from coking coal
when its price is USD70 or more per ton. When prices are less than these, the rate will be
correspondingly less. This means when copper price is around USD7,000 in the world market,
according to the windfall profit tax law, a company is subject to payment of USD2,448 in tax, while
it is to pay USD280 according to the additional 4% of the gradually increased royalty applicable.
Similarly, if gold price in the world market is around USD1,100 per ounce, the windfall profit tax is
USD170, while the gradually increased 3% of royalty will be USD33. The Ministry estimates the
gradually increased royalty will earn the state budget MNT95 billion a year.
A windfall profits tax on copper was first proposed in 2006. Worried that the Russians would
perceive it as aimed at Erdenet, the Government got the ambit of the tax extended to cover gold as
well. This time the net is cast wider. Increased royalties are to be paid on gold, copper, zinc,
tungsten, molybdenum, coking coal, iron ore and fluorspar.
Source: The Mongolian Mining Journal
SALARIES, PENSIONS FOR TEACHERS AND DOCTORS TO GO UP 30 PERCENT FROM OCTOBER 1
Salaries and pensions for teachers, doctors and similar State employees will rise by 30 percent from
October 1. The tripartite negotiations between the Confederation of Mongolian Labor Unions, the
Ministry for Social Welfare and Labor, and the Union of Employers decided on this after four
prolonged sessions of talks.
Source: www.News.mn
WAGES MUST BE RELATED TO PRODUCTIVITY
Mr. Ch. Khashchuluun, Chairman of the National Development and Innovation Committee, feels that
prices having risen 20% since 2008, the wage increase was inevitable but steps have to be taken to
see that a 30% rise does not lead to inflation. The ultimate goal is to improve productivity and
industrial capacity by using modern technology which requires substantial investments.
This, however, applies only to industrial labor. The norms for determining the wage level of public

8. servants and employees in other social sectors are different and should reflect the average wages in
the overall economy and average national productivity.
Source: Undesnii Shuudan
MNMA CHIEF WANTS PROFESSIONAL INVOLVEMENT IN FRAMING MINING LAWS
Mr. D.Damba, President of the Mongolian National Mining Association, has said unwise laws harm
the mineral sector which is the mainstay of the national economy. The mining sector in Mongolia
has a history of 85 years, but the country is yet to not have a comprehensive mining law reflecting a
long-term policy. ―This will not do,‖ he has said, calling for ―a clear, realistic and sustainable
policy and a law that will both reflect and implement that policy in the mineral sector‖.
The present situation where, ―in the absence of an overall view‖ many laws are being passed that
are ―against the interests of the sector, leaving miners very frustrated‖, is possible ―only because
the state neither has nor can give a clear sense of direction‖. He singled out three recent laws that,
―individually and together, are seriously damaging business‖. Mr. Damba feels it is ―imperative that
the State formulates its policy on a priority basis, presents it to the public to allow all concerned,
especially our member companies, to review its provisions and make practical suggestions, and then
incorporate them on merit in the final draft that will become law‖.
Stressing the need for the involvement of professionals in the drafting of laws on technical matters,
Mr. Damba said, ―With all due respect to them, a group of MPs sitting together and drafting a
mining law cannot be the best way to do justice to issues technically complicated and with
ramifications hidden from the amateur eye.‖ The result of this practice has been the law banning
mining work in certain areas. ―Some in the Government have understood its huge negative impact
and are going slow. Can you imagine that we have a law that the Government is embarrassed to
enforce?‖ he said.
Source: The Mongolian Mining Journal
MINISTRY OFFICIAL FAVORS COMPREHENSIVE LAW, EVEN AT THE COST OF SOME DELAY
Mr. B.Batkhuu, Head of the Mining and Heavy Industry Department at the Ministry of Mineral
Resources and Energy, has said demands for a new mining law are nothing new. There has for long
been general agreement that the present law deals more with licensing and exploration of specific
deposits than with the many other aspects of mining operations. That is why it is often called the
law of bookkeeping or registration. Procedures and regulations are not clearly defined and
provisions in inter-related laws are often not compatible and in many cases contradict one another.
This inconsistency poses problems for both the operator and the regulator, affecting the whole
sector.
The Ministry has carefully studied laws in several other countries and would also like to compare
notes with research institutions. Mr. Batkhuu wants to submit a draft to Parliament only after
detailed and adequate preparation, instead of doing something in a hurry only to find that the law
has lacunae that would need fresh amendments. Implementation can always reveal unforeseen
problems and challenges, but mining is a long-term process and people investing in the sector have
to make long-term plans at high risk. Uncertainty in the legal environment does not help them.
Mr. Batkhuu said they have been impressed by how countries such as Canada and Australia have
elaborate and very detailed guidelines on all aspects and stages of the mining process, from
feasibility study to closure. They do not go along and devise solutions as problems arise. Even
before operations begin, every side knows what to do when the resources are exhausted, how the
mine should be handed over and what the closure procedure will be. Restoration not only has an
environmental side, its social aspect is no less important. Those who work at the mines should know
right from the beginning where they will stand when they find themselves without a job. That is
why he would prefer a well thought-out and comprehensive law to govern this most important
sector of the Mongolian economy. However, the cardinal principle of State control over the
strategic deposits should never be diluted, Mr. Batkhuu was certain.
Source: The Mongolian Mining Journal
ANIMALS FOR SOME HERDERS, TRAINING FOR OTHERS
Prime Minister S.Batbold has said 41.4 percent of the total spent so far on alleviating herders‘
distress has gone toward increasing food supply, 22.3 percent toward transportation, 18.8 percent
toward providing animal feed, and 17.5 percent toward removing animal carcasses. The
Government has asked for suggestions from provincial authorities on how best to meet the problem.
Altogether 8,711 herder families have lost all their livestock. The Government has presented a draft
law to Parliament to allocate the necessary funds to help them after a budget revision. Half or

9. 4,355 of the affected families will be offered animals to start afresh, while the other 4,356 families
will be absorbed in other economic sectors. They will receive training to help them take up another
profession.
All herders will receive medical attention to relieve stress-related symptoms. The authorities are
planning to implement the livestock indexed insurance in all provinces by 2012.
Source: Ardin Erkh
THE MAIN GAIN FROM OT AND TT WILL BE JOBS, FEELS Mrs. OYUN
Mrs. S. Oyun, MP and mining specialist, has said her main expectation from the Oyu Tolgoi project,
and the expansion of the infrastructure and service sectors that will certainly follow, is generation
of employment. Only creation of jobs for the ordinary people can reduce poverty. The social
stability factor also has to be considered as people‘s endurance levels are being tested. The
investment agreement could have been better, but it is acceptable and should not be dismissed out
of hand. It was more important to get the project started, she said, than to wait indefinitely to
reach an agreement that satisfied the hopes of all Mongolians.
Mrs. Oyun would not comment much about the possible selection of the investor(s) at Tavan Tolgoi
as she does not know details of what the Government thinks. Domestic companies cannot hope to
be the main contract operator because they lack the financial, technical, management, and
manpower resources to take up any job of the required magnitude, but they surely can hope to get
sub-contracts according to their capacity. Mining in Chile also passed through an initial phase when
operations were totally in the hands of foreign investors, but national companies associated with
them gradually grew stronger and now some of them are known worldwide. This may very well
happen here, she said.
Mrs. Oyun emphasized that all expectations and estimations based on mining must be tempered by
the fact that minerals prices always fluctuate. This affects not just the extracting companies who
employ people but also the State budget. ―It will not be wise for our economic policy planners to
have the irrational faith that the golden moment will last forever,‖ she said and hoped the
proposed fiscal stability law will be treated with proper respect. ―We cannot afford to repeat the
irresponsibility we displayed at the 2008 election. Of course people need more, but it will take
several years even after full revenues start coming in from both Oyu Tolgoi and Tavan Tolgoi for the
State to have the cash to distribute such huge amounts to each citizen. And all sorts of unwelcome
results may follow this inflow of money into the market. It makes much more sense to provide
unemployed people with opportunities to make money on a continuing basis than to put some cash
into their hands,‖ she said.
Mrs. Oyun felt one way to protect the environment would be to close down small mines and have
only large-scale operations which can afford to apply international standards in their operations.
Source: Onoodor
ADB FUNDS FOR URBAN SERVICES PROJECT IN MINING AREAS
The Asian Development Bank (ADB) Board of Directors has approved a USD15 million grant to help
improve urban infrastructure and services in the mining and border towns in Southeast Gobi. The
grant will directly benefit about 100,000 people in six towns of Omnogovi and Dornogovi provinces,
where around 31% of the people are below the poverty level now. Both provinces are poised for
rapid economic growth following expansion of mining and cross-border trade.
The population in urban centers is projected to more than double by 2020. "The provision of urban
infrastructure and services is currently poor. Many basic services are either inadequate or absent.
Insufficient and unreliable urban services add to business and household costs, damage the urban
environment, and diminish quality of life," the ADB has said in a statement announcing the grant.
Maximizing the benefits for the residents of Southeast Gobi will depend on effective urban
planning, management, and service delivery policies and structures being in place.
The project has two parts. The first will fund consultations to make way for infrastructure services
reforms, institutional development, and capacity building to strengthen urban planning and policy
making, regional cooperation, and project management and project performance monitoring. The
second will fund needed infrastructure improvements such as developing water sources,
transmission, storage, and distribution facilities, increasing connections to piped water supply and
reducing system leakages. Funding will also be provided to increase waste water collection, boost
waste water treatment capacity, and enhance other sanitation services.
The total cost of the project is USD21.9 million, with Mongolia providing USD6.8 million and local
governments contributing USD100,000 to complement the ADB grant.
Source: The Asian Development Bank

10. THREE SOUTHERN PROVINCES SEEK INVESTMENT
More than 450 participants attended the ―Southern (Gobi) Region: Investors‘ Forum-2010‖ in
Dalanzadgad in Umnugobi province on April 21, organized jointly by The Ministry of Foreign Affairs
and Trade and FIFTA. Participants included BCM members Newcom, MSM, MICC, Oyu Tolgoi,
Southgobi sands, and Khan Bank; the German, South Korean, Japanese and British Ambassadors; and
the heads of the IMF and GTZ country offices.
The forum gave them a platform to exchange views on how to attract foreign investment to help in
the region‘s development, and to learn more about the opportunities and advantages the region
offered. Among the speakers were Mineral Resources and Energy Minister D.Zorigt, three provincial
Governors, the FIFTA Vice Chairman, and Mr. D.Batsaikhan, Deputy CEO of Khan Bank. They
emphasized the need to change the authorities‘ regulatory-oriented mindset if investors‘ interests
were to be promoted and the three regional Governors – of Umnugobi, Dundgobi and Dornogobi –
were urged to follow up the ideas expressed and ensure that proposed projects conformed to
sustainable development criteria.
The provinces are seeking investment in road construction, power, meat, leather and milk
processing, public education and agriculture. Those interested in any of these investment areas can
contact the BCM office for more information and/or help.
The next regional investment forum, for the Northern region, will be held in Erdenet city in June.
Source: BCM NewsWire
MAYOR WARNS ROAD BUILDERS OF BLACKLISTING
Ulaanbaatar Mayor G. Munkhbayar has told road construction companies that their selection
through tenders would be henceforth followed by strict monitoring of the pace and quality of their
work. This would apply especially to companies that execute projects with State investments. In
recent years, the road construction sector has come in for much criticism. Inspections will be more
frequent and also more intensive to ensure that deadlines are not missed, and that the material
and technology used are not substandard. Any dereliction will lead to blacklisting, the Mayor
warned.
Source: Udriin Sonin
MORE BORDER POSTS TO BE OPEN 24 HOURS A DAY
The Government has decided that more border checkpoints, besides Gashuunsukhait and
Shiveekhuren, will be kept open for trade movement 24 hours a day. Burgastai will follow the
schedule from July 1, and Bulgan from 2011.
Source: Montsame
CHINA PLANS TO BUILD POWER TRANSMISSION LINE FROM MONGOLIA
An oil net importer, a coal net importer and a gas net importer, China has now become a net
importer for all the major fossil fuels. With the economic recovery and insufficient domestic
production, China is greatly raising fuel import for 2010. Oil, coal and gas net import is expected to
increase by near 10 percent, over 50 percent and more than twofold.
Less noticed but more stunning, China is also quietly but dramatically raising its electricity import
from northern and western neighbors, particularly Russia, Mongolia and Central Asian countries.
Electricity import approached 1 billion kwh in 2009. Although the volume was small compared to
the total power consumption, the trend of growth is overwhelming. While Northeast China is greatly
increasing power purchases from Russia, Tianjin is planning to build a 600 kv DC transmission line to
import a total of 2 trillion kwh electricity from Mongolia for 30 years.
China's energy import dependence will be quickly increasing in the coming years, and is expected to
go up over 14 percent from 12.7 percent in 2009. Foreign fuel dependence could approach 5
percent for coal and 56 percent for oil, and exceed 13 percent for gas for 2010.
Source: www.glgroup.com
RUSSIAN BOND SUCCESS FUELS SPENDING FEARS
Russia‘s return to the international debt markets for the first time in a decade, raising USD5.5
billion at rates far lower than its emerging market peers, underpins the country‘s turnaround from
just over a year ago when economic crisis was forcing it to use its hard currency reserves at an
alarming pace. Investors have jumped to participate in Russia‘s oil-fueled recovery. Reserves have
recovered to USD456.3 billion, as higher oil prices fuel ruble strengthening and boost budget
revenues by USD5 billion a month more than projected.

11. But despite the country‘s low public debt relative to gross domestic product and the modest sum
raised by the eurobond, some economists say Russia‘s return to international borrowing markets at
cheap rates could make it harder in future for the Government to rein in runaway spending – while
the budget is becoming ever more dependent on the oil price, making the economy more vulnerable
to the price shocks that helped send GDP growth down to minus 9 per cent last year.
Much of the Government‘s increased anti-crisis spending went towards permanent items such as
transfers to regions instead of toward anti-crisis projects such as infrastructure and targeted social
support that could be unwound once the economy recovered. This increased spending may prove
difficult to reverse or offset.
Read more…
Ever fearful of social backlash due to the economic crisis, Russia has increased pension spending 32
per cent per year in the last few years, while they are due to be increased another 42 per cent this
year. In a speech to the Russian parliament this week, Prime Minister Vladimir Putin also promised
salary increases.
In the meantime, State investment in ―the national economy‖, a murky line item in the budget that
designates State support for enterprises, has also climbed in the past few years (though spending
this year has declined slightly). Between 2005 and 2009, spending on the national economy
increased seven times.
The Finance Minister is moving to reduce the deficit. He is locking horns with the politically
entrenched state oil barons in an attempt to reduce tax holidays for the development of new fields,
which could win an extra USD4 billion in revenues this year. He is also considering an increase in
payroll tax.
Source: The Financial Times
CHILE TO RAISE MINING ROYALTY TO HELP FUND RECONSTRUCTION
The Government of Chile will increase royalty fees on mining companies and raise corporate taxes
for the next two years to help fund rebuilding of hospitals, schools and roads destroyed or damaged
after the February 27 earthquake. The Government may also sell USD1 billion in 10-year bonds and
borrow an undisclosed amount in the domestic market.
The Government estimates it will need USD8.4 billion for reconstruction of facilities.
Source: Bloomberg.com
WORLD BANK GETS MORE CAPITAL, CHINA MORE VOTING POWER
The World Bank has agreed to give emerging economies greater influence in the institution, a shift
that puts China third in voting power behind the United States and Japan. The agreement will
increase the votes of developing countries by 3.13 per cent, contributing USD1.6 billion to World
Bank resources. In addition, members agreed to a capital increase of USD3.5 billion for the bank —
the first in more than 20 years.
―We can feel proud that we have concluded agreements on a transformative financial and
governance reform agenda, along with new capital for the World Bank and a new and more
representative shareholding formula,‖ U.S. Treasury Secretary Timothy Geithner said in a
statement before the announcement. He also said that the US, which holds the largest voting share
in the World Bank at 16.4 per cent, would not seek any increase for itself under a revised voting
formula that is to better reflect developing countries‘ economic heft.
The World Bank had asked for a capital increase of USD3 billion to USD5 billion, allocated
proportionally among its members. Mr. Geithner said he would ask Congress to approve the US share
of it.
The talks were difficult because advanced economies, especially those in Europe, were unwilling to
give up some of their voting shares, and the US held on to its veto power. Smaller European
countries were concerned that even a small change in their voting power would mean a marked
reduction in their influence.
Source: Reuters
MORE WORLD BANK LENDING WILL NOT CURE ALL ILLS
There is no lack of rhetorical commitment to multilateral collaboration and proper participation by
emerging economies in the world‘s handling of its greatest challenges. More often than not it is
honored in the breach. So it is welcome that World Bank members have agreed a capital raise giving
emerging countries a little more space at the Bretton Woods table.
The new USD86 billion in capital for the World Bank‘s quasi-commercial lending arm – the
International Bank for Reconstruction and Development – no doubt makes a big difference to the

12. bank itself. It is its first capital injection in 20 years and raises its equity by half. Its president,
Robert Zoellick, had warned that without more capital, lending would soon hit a ceiling.
How it matters to global development is less clear. IBRD clients are middle-income States with
access to private capital markets. That access has, however, suffered from those markets‘ collapse,
and will continue to suffer as even recovering markets are swamped by rich-country borrowing
needs. So the IBRD plays a useful stopgap role.
But it was a salutary one. With talks on trade and climate change in disarray, it proved that the rich
and the emerging world can find common ground – even when governments are strapped for cash.
That is a political achievement, which the International Monetary Fund must now replicate.
Emerging states may then feel less bound to accumulate reserves to avoid any risk of asking it for
help. The more stable world that would result could save more people from misery than any World
Bank lending.
Read more…
Yet in the longer term IBRD funding is not the highest priority. Though the bank points out that
most of the world‘s poor live in IBRD client countries, these States have the means to address
domestic poverty. They should eventually be weaned off official support.
Money must not be pumped into IBRD at the expense of funds for the poorest countries, such as the
Bank‘s International Development Association. The signs are reassuring. Far from being crowded
out, other multilateral bodies have also got new cash: the African Development Bank is tripling its
capital.
What is more, emerging countries themselves are funding a large part of the IBRD capital injection,
in return for a move on their long-standing demand for greater vote shares. Rich countries are
giving up 3.1 percentage points of voting shares and will now hold 52.8 per cent. Cosmetic, yes; but
in global affairs cosmetics have political significance. The bargain was not reached without
resistance.
Source: The Financial Times
DRAMATIC INCREASE IN CHINA‟S COAL IMPORT
The world is watching another China moment nervously, as China dramatically raises its coal
import. During the first quarter of 2010, China imported 48.2 million tons coal, accounting for near
7 percent of its total coal consumption. A projected coal consumption of 3.2 to 3.3 billion tons for
2010 could put total net coal import at 150 to 200 million tons for the whole year.
The world was not so agitated at another such China moment in 1993, when the country became a
net oil importer. Since then, China has now contributed over one third of the global incremental oil
demand, and average crude oil import has reached around 4.5 million barrels per day. Now China
has become a net coal importer, and its import volumes continue rising rapidly. Import figures for
the first quarter of 2010, show an increase of over 2.4 times when compared with the same period
last year.
Import volumes of all types of coal except for anthracite that is heavily used as a feedstock for
fertilizer and other chemicals soared up dramatically. Coal import sources were extended to almost
all major coal producing regions of the world including the U.S., Canada, Columbia and South
Africa. Indonesia, Australia and Vietnam remained the leading sources, followed by Russia,
Mongolia, South Africa and Canada. Evidently, coastal provinces in China are increasingly relying on
import.
Source: The Garson Lehman Group
AUSTRALIA‟S MINERALS SECTOR UNSUSTAINABLE IN LONG TERM, SAYS REPORT
Australia‘s reputation as one of the world‘s foremost destinations for mineral exploration is under
threat from a critical market failure that discourages greenfield exploration, the Australian
Institute of Geoscientists (AIG) has reported. It has said that Australia‘s current precious and base-
metals mining production was increasingly reliant on a small number of major deposits which were
largely mature and in decline, presenting a clear threat to mine production and, in turn, the export
earnings of the Australian economy.
An AIG report has found that the heavy reliance of companies exploring in Australia on short-term
market capital has impeded their ability to undertake high-risk, but potentially high-reward
greenfield exploration capable of yielding the new major discoveries needed to sustain Australia‘s
precious and base-metals mining production.
Source: www.miningweekly.com

13. POLITICS
ELBEGDORJ IN CHINA
President Ts. Elbegdorj is paying a six-day state visit to China at the invitation of President Hu
Jintao. After arrival on April 28, Mr Elbegdorj met with Chinese Premier Wen Jiabao to exchange
views on bilateral relations and cooperation. Premier Wen proposed greater economic and trade
cooperation, especially in major industrial projects.
Mr. Elbegdorj thanked China for its support to Mongolia's social and economic progress, and
repeated his country‘s commitment to the one-China policy.
Earlier on the day, Mr. Elbegdorj attended a meeting of the China-Mongolia Business Forum. China
has been Mongolia's largest trade partner for 11 years. Representatives of 40 companies are in the
team accompanying him.
This is Mr. Elbegdorj‘s first visit to China since he took office in May 2009. Besides Beijing, he will
also visit Shanghai and attend the opening ceremony of the Shanghai World Expo on April 30.
Source: Montsame, Ardin Erkh
PROTESTERS REACH AGREEMENT WITH MPs‟ GROUP, CALL OFF HUNGER STRIKE
The hunger strike by some protesters was called off last week after a series of talks between
leaders of the movement and a MPs‘ group set up by Parliament to settle the issue. The parties
signed a memorandum incorporating the terms of agreement reached at the talks.
The hunger strike was to put pressure on Parliament to hold a referendum to ascertain people‘s
opinion on the protesters‘ demands. One of their leaders told media the civil movements will be
free to resume the protest if the agreement was not implemented. He said they would also be
watching how the election promise of a threefold rise in salaries and pensions is treated.
Asked how much money the civil movements had spent on the protest, another leader said he could
not give the exact figure. ―There was a donation box in Sukhbaatar Square and we used the money
people put in it,‖ he said.
Source: English.News.mn
DEPUTY SPEAKER FEELS POLITICAL SYSTEM IS STALLING ECONOMIC GROWTH
Deputy Speaker of Parliament N.Enkhbold has said the two draft laws recommending adoption of
the proportional system of representation when the next election to Parliament is held in 2012 are
likely to be discussed together in the Standing Committees as often happens with drafts with a
similar intent. The two differ on specifics, but their main concept is similar, and Mr. Enkhbold felt
that ―despite some opposition, the proportional system will be supported this time‖.
Saying that ―the consensus after our 20 years‘ experience of elections‖ is that ―the political system
is hindering our economic development‖, Mr. Enkhbold asserted that change must begin with the
manner in which Parliament is elected. Dismissing concerns that the proposed system will give
preference to people close to the Party leaders, he said there are ways to make sure this does not
happen. No leader will decide a party‘s list of candidates all by himself. They will be selected by a
board or at a general meeting.
Source: Ardin Erkh
DIPLOMAT STABBED IN BROAD DAYLIGHT
Mr. R.L. Negi, Charge d‘Affaires at the Indian Embassy, is recovering from injuries sustained when
he was attacked by two unknown assailants who shouted as they beat him, ―Go back to your own
country.‖ Mr. Negi‘s left eye was ―50 to 60 percent damaged and will take long to heal‖, according
to doctors.
The 56-year-old diplomat was returning home from his morning walk at around 9:45 on April 18
when two Mongolians pounced on him from behind, raining blows on his head, waist and legs. Mr.
Negi screamed for his life, but the attackers merely laughed, hit him in the eye, and left after
stabbing him in the stomach.
Police have arrested one man for the incident and have described it as an act of ―mindless and
spontaneous violence‖ without, however, any racial undertone. Expressing ―great concern‖, they
have asked for public assistance to stop any recurrence of such attacks.
Mr. Negi is not new in Ulaanbaatar. He was posted here in the 1990s, and returned as Counsellor
and Head of Chancery last year. His wife is Mongolian and they have two children. His faith that
the city is safe has now been shaken, and he is also convinced that he was attacked because he was
a foreigner.
Source: English.News.mn

14. MINISTER UNVEILS GRAND PROJECTS
Minister of Roads, Transport, and Urban Construction Kh.Battulga has said that the years since the
democratic revolution have seen a lot of gains in social and economic life, but have also been
marked by a singular absence of any grand project that can be held up as a national achievement.
Things are set to change, giving the lie to feelings that the coalition government‘s only success has
been its decision to allocate MNT1.5 million to each citizen. A long-term and visionary development
policy has been adopted. Some 100,000 apartments will be constructed, of which 75,000 are to be
in Ulaanbaatar. Migrants in the ger areas will be employed in this building program, thus giving
them income to repay loans taken to buy their own apartments, which they would also help build.
Another showpiece project will be the new railway routes, he said. They will ultimately connect
Oyu Tolgoi and Tavan Tolgoi in the southern Gobi region with the Trans-Siberian Railway, affording
direct access to export markets through Vladivostock. This will make Mongolia less dependent on
China, which would continue to offer access to other sea ports. ―A government cannot take
decisions,‖ he said, ―only on the basis of immediate economic benefits, nor can it allow the
demands of the market to dictate all our national choices.‖ Noting that ―70% of our foreign trade is
with China‖, most of it consisting of consumer goods and food, he asked, ―What would happen if
China closed its borders one day? Integrating our railway only with China‘s will make us 100%
economically dependent on one country. This is something no nation can afford to risk,‖ Mr.
Battulga said.
Source: Undesnii Shuudan
ENERGY REGULATORY BODY TO BE RECONSTITUTED
The Government has decided to remove Mr. R.Ganjuur from his position of head of the Energy
Regulatory Authority (ERA) for unsatisfactory performance. This follows a report from the Minister
of Mineral Resources and Energy that Mr. Ganjuur and all other members of the ERA Coordinators'
Council were responsible for the ERA‘s poor performance, especially in taking incorrect decisions
beginning from 2006 that led to problems in the power and heating sector. The Government will
totally reconstitute the Council under a new head.
Source: Montsame
SOUTH KOREA TO HELP BUILD WASTE RECYCLING PLANT
A solid waste recycling plant will be ready in a suburb of Ulaanbaatar next year with the Korea
International Cooperation Agency bearing the cost of USD3.5 million. The plant will sort, recycle
and burn household waste to generate power.
The project is part of a partnership program among East Asian countries on tackling problems of
global climate change.
Source: Xinhua, Montsame
TAX OFFICIAL‟S COMPLAINTS OF CORRUPTION FOUND BASELESS
Investigations made by the Anti-Corruption Agency have found little substance in several complaints
against some important people, including Deputy Prime Minister M. Enkhbold, the Prime Minister‘s
Legal Advisor B. Dolgor, and two senior tax officials. It is even rumored that the complaintant, Ms.
N. Enkhee, may face legal action for deliberately tarnishing the reputation of people in high
positions. Ms. Enkhee, herself a senior tax official, has several times told the media that she has
influential politicians behind her.
Source: Zuunii Medee
DRAFT WANTS DOCTORS, NOT POLICE, TO TAKE CARE OF THE DRUNK
Parliament has agreed to discuss in more detail a draft seeking to take away from the police the
responsibility of looking after drunken people and to hand over running of the night shelters to the
Ministry for Health. According to the head of the General Police Authority, Mr. D.Sandag-Ochir,
about 300 people are daily brought to the shelters. The draft wants hospitals to take care of them.
However, doctors will be free to call for police help if they cannot cope with the behavior of those
under care.
Some MPs wondered if it would be right to place a fresh responsibility on already overburdened
medical staff and hospitals. Minister for Health S.Lambaa said this provision was not in the draft
when it was discussed by the Government and ―has now appeared out of nowhere‖. He has sent a
note to Interior Minister Ts.Nyamdorj that hospitals will not be able to take the responsibility.
Source: www.News.mn

15. FRENCH AMBASSADOR HAPPY WITH STATE OF BILATERAL RELATIONS
French Ambassador Jean Paul Dumont, who had served here in 1971-1974 as attache to the very
first Ambassador of his country to Mongolia, says bilateral relations have changed radically in both
intent and contents from the time diplomatic relations were established in 1966. Following signing
of an agreement on collaboration in scientific, technical, and cultural areas, the stage is set for
exchange of teachers to teach Mongolian in France and French in Mongolia. Trade relations have
also expanded. About 600 Mongolians have enrolled for courses in French in four universities and
colleges and in three secondary schools.
Appreciating Mongolia‘s designation of France as a "third neighbor", Mr. Dumont said his country will
provide assistance to herders most affected by the dzud. French NGOs are active in the medical,
veterinary, and sewage cleaning areas. French firms are taking part in projects to reduce air
pollution in Ulaanbaatar. Areva has been participating for several years in development of uranium
mining. The ambassador was confident that relations will get stronger with the years.
Source: Montsame
CITY ENGINEER JAILED FOR TAKING BRIBE
Mr. U.Sukhbaatar has been sentenced to five years‘ imprisonment for accepting bribes when he was
an engineer with the Ulaanbaatar Urban Development, Construction, and Planning Office. He was
given a three-room apartment by the 100% Chinese invested Shundi Company in return for favors
shown to it in work. However, Mr. Van Sen Ton, Executive Director of the bribe-paying company and
a Chinese national, escaped punishment on technical grounds.
Source: Zuunii Medee
SHANGHAI EXPO BEGINS ON SATURDAY
Shanghai will unveil to the world on May 1 its six-month long World Expo, China's largest
international event since the 2008 Beijing Olympics. The country is trying to create an Expo on a
scale never seen before, spending vast sums of money to make the event a blow out extravaganza
for the expected 70 million visitors.
A World Expo is a fair where countries and companies display their latest scientific achievements
and technological advancements. Expos historically have been remembered for the creation of
landmarks like the Eiffel Tower and the introduction of television and the ice cream cone to mass
audiences.
While recent Expos have failed to fire the world's imagination much, Shanghai is creating great
fanfare to put them back on the map. China has officially spent USD4.2 billion, more than double
what it spent on the Olympics, but Chinese media report the actual cost could be up to USD58
billion. The Government is using the Expo as a means to highlight its authority and dominance
internally, showing its citizens it is powerful enough to host two international events on such a
grand scale and in such a short space of time.
Nearly 95 percent of visitors to the Expo are expected to be from China itself. Analysts say the Expo
serves as a platform for the Government to legitimize its role in power as well as exemplifying the
country's fast economic development.
Read more…
China has tried to raise its Expo's global profile by inviting state leaders to attend the biggest and
most expensive Expo in history, and countries and companies are making special efforts to improve
commercial and political ties with the world's third-largest economy. Mongolia is among the 191
countries attending, many of which have invested record amounts to build their pavilions. Saudi
Arabia, for instance, spent USD146 million to build its spaceship-like pavilion. Multinationals like
General Motors and Coca-Cola Co are also making record efforts to cement their presence in China
and using the Expo to target the huge domestic market
Countries are likely to reap only intangible gains by boosting their tourism appeal to the Chinese
public. But they will gain valuable goodwill with Beijing by attending, especially smaller countries
that rely on Chinese trade and aid.
Very few Expos in history have actually turned a profit, with the World Expo in Hanover in 2000
estimated to have lost USD1.1 billion, while Vancouver's World Expo held in 1986 was in the red by
USD33 million. Shanghai officials say they are not aiming to make a profit, but want instead to use
the Expo to show China's achievements to the world and let Chinese people experience different
cultures.
Source: Reuters.com

16. ANNOUNCEMENTS
CORPORATE GOVERNANCE FORUM ON MAY 27
The third annual Mongolia Corporate Governance Forum, to be held on May 27, will bring together,
as in earlier years, Mongolian business leaders and policy makers. The key discussion points will be:
 World Bank Report on Standards and Codes on Corporate Governance 2010;
 Corporate Governance reform process: Progress and challenges top investment
environment;
 Corporate Governance in banking sector in light of recent crises;
 Investors‘ perspectives on Mongolia: Expectations and requirements;
 Future corporate governance policy frameworks and regulation.
Corporate Governance Development Center is the organizer of the event, with BCM, IFC, Eurasia
Capital, USAID and EPRC-Chemonics acting as partners in arranging it. For information and
invitations, please contact Tsend-Ayush at tsendee51@yahoo.com, 9910-5111, or Mr. Unenbat at
unenbat.jigjid@yahoo.com, 9911-8745.
___________________________________
FRONTIER SECURITIES TO HOLD „MONGOLIA: CAPITAL RAISING‟ CONFERENCE
Frontier Securities will be holding a conference on capital raising in Mongolia at Chinggis Khaan
Hotel on June 15-16. Among those expected to speak are Mr. D. Sugar, Chairman of the State
Property Committee; Mr. Lawrence Fok, Executive Vice President, Hong Kong Exchanges and
Clearing Limited; and Mr. Naomitsu Abe, Senior Manager responsible for Japan, Korea and Mongolia
at the London Stock Exchange.
For inquiries and registration forms, contact staff@frontier.mn, 7011-9999.
____________________________________
“BSPOT" on B-TV
BTV (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.
____________________________________
“MM TODAY” on MNB-TV
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.

17. SPONSORS
ECONOMIC INDICATORS
MSE TOP 20 INDEX

18. ________________________________________
FOREIGN-LISTED COMPANIES WITH MONGOLIAN ASSETS
Following President Elbegdorj's order to halt the issuance and transfer of mineral exploration
licenses until mining license legislation is revised, several exploration companies experienced
sizable declines in share price. See table following:
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]
March 31, 2010 *8.5% [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]

19. CURRENCY RATES – April 29, 2010
Currency name Currency Rate
US dollars USD 1,373.24
Euro EUR 1,810.41
Japanese yen JPY 14.73
British pound GBP 2,090.35
Hong Kong dollar HKD 176.83
Chinese yuan CNY 201.19
Russian ruble RUB 46.79
South Korean won KRW 1.23
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.