October 31 2008

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmmongolia.org
info@bcmmongolia.org
Issue 44, October 31, 2008
SPECIAL „DISCOVER MONGOLIA 2008‟ ISSUE
NEWS HIGHLIGHTS:
Business: More participation expected in this year's "Discover Mongolia"; Mining industry sees no
need to amend 2006 Minerals Law; Mongolia fares badly in international mining
report; Members show unanimity of approach, says draft group leader; Copper miners
may not need to pay any windfall tax in 2009; Talks fail, Western to pursue legal
action against Tinpo; Measures to reduce delays in Zamiin Uud; Eznis adding to fleet
strength; Entrée to spend more on coal exploration; Ivanhoe spreads health services in
remote soums; Polo begins mining in Ereen; MPs visit drilling site on study tour;
Company to recycle petroleum products; Golomt Bank launches EMV chip card; Anod
Bank to cooperate with Korean investment firm.
Economy: Bank bailout plan approved, but kept on hold; Central Bank totally rejects MP’s views;
Government program sets out priorities; Ways to keep financial crisis at bay;
Committed expenses impacting economy, says President; Mongolia 100th in
competitive index; Railway to increase all tariff; Another fall in fuel prices likely;
Mongolia asks for World Bank aid to build new railway; Trade union leader spreads the
message; Pasture mapping and management workshop held.
Politics: Draft 4-year action plan ready; Cabinet reviews goals of action plan; MPs want separate
ministry for development; Mongolians abroad will also receive MNT1.5 million;
Luxembourg appoints Honorary Consul in Mongolia; Jet from Alaska to Ulaanbaatar
sets speed record.
RECAP OF BCM MONTHLY MEETING
With Mr. Alain V. Fontaine leaving Mongolia, the annual general meeting of the BCM on October 23
chose Mr. J. Peter Morrow to resume the Chair until January. It also confirmed Mr. Sumati
Luvsandendev to continue as Vice Chairman and inducted Mr. Ts.Boldbaatar, Chairman of Newcom,
into the Board of Directors.
As Mr. Morrow could not attend the monthly meeting on October 27, this was held with Mr. Layton
Croft, a BCM Executive Committee member, in the chair. Recounting developments since the last
meeting, he said a BCM group had called on Sharavdorj, the Secretary General of the Parliament’s
Secretariat, who agreed to pass on comments and recommendations from the BCM to the concerned
Working Groups of Parliament and, if necessary, to all individual MPs. This is a significant gain in
the Council’s advocacy program. In addition BCM began cooperation with the Ministry of Foreign
Affairs & Trade after meeting with MFAT’s State Secretary, D.Tsogtbaatar. Two new members have
joined BCM, taking total 2008 membership to 111. They are the Mongolian Employers Federation
(MONEF), and Eagle TV.
This meeting introduced a new practice. Two member organizations, Eznis Airways and Petrovis,
talked briefly of their business issues, not just as something that affects them individually but as
the general experience of everybody doing business here. The newly appointed Canadian
ambassador, Mrs. Anna Biolik, at her first BCM meeting, talked about 35 years of successful
Canadian-Mongolian diplomatic relationship and hoped this would grow deeper and the partnership
richer. The South Korean ambassador, Mr. Jin-ho Park, gave information about Prime Minister
S.Bayar’s recent visit to Seoul and his talks there with Government and business leaders.
Mr. D.Tsogtbaatar, State Secretary at the Ministry of Foreign Affairs & Trade, told the meeting of

2. the present Government’s commitment to being “open and professional” in all spheres of policy
making and decision taking. He assured members that pragmatism, and not sentiment, would
govern Government actions and there would be “no saying one thing and doing another”.
For a fuller report on the monthly meeting, please visit BCM’s website, BCM News & Press.
BUSINESS
MORE PARTICIPATION EXPECTED IN THIS YEAR‟S “DISCOVER MONGOLIA”
Preparations are in full swing for the "Discover Mongolia - 2008" international mining investors'
forum scheduled for November 6 to 8 in Ulaanbaatar. According to B. Batbileg, Press Officer of the
Mongolian National Mining Association (MNMA), the forum will, as usual, have four major aspects:
the investors' conference, a "government hour", an exhibition and a trip to mining sites. The
Business Council of Mongolia is an official partner of the event.
At the conference, companies such as Areva and Khan Resources will give presentations on uranium
exploration in Mongolia while Pact Mongolia and the Asia Foundation will offer an account of their
activities in the responsible mining sector. The MNMA will organize a "Government Hour" in
association with the MRPAM, a session of direct industry-Government interaction. This year Minister
of Minerals and Energy, D.Zorgit, and MRPAM Director, J.Bilegsaikhan will present government
policies and then answer questions from mining investors.
The forum has become a major event in the international mining calendar. Rio Tinto is again the
premier sponsor. Other sponsors include BHP Billiton, Vale, Redpath Mongolia, Erdene Resources
Development, Oyu Tolgoi, Centerra Gold, Khan Resources, Areva, MAK, Adamas Mining, and Geosan.
Commemorative bags and badges are being sponsored by Alex Stewart, Cameco, and MSM. Khan
Bank is the banking partner of the event, and Mobicom the IT partner. Bloomberg and The Northern
Miner will be the official media partners as usual. They will this year be joined by the Mongolian
Mining Journal and the Asia Miner. The MRPAM is an official supporter of the forum, and BCM and
Breakthrough PR official partners.
Source: Zuuni shuudan
MINING INDUSTRY SEES NO NEED TO AMEND 2006 MINERALS LAW
Stressing the crucial importance of taking into account the views of the mining sector while
preparing the draft amendments to the Minerals Law, N. Algaa, Executive Director of the Mongolian
National Mining Association (MNMA), has revealed that Do. Ganbold, MNMA President, recently
talked with Kh. Badamsuren, leader of the MPs’ working group, and offered to meet with him.
Foreign and domestic investors with MNMA membership have met separately to discuss their
position on the amendments. They feel that it would be best to keep the 2006 Minerals Law intact.
This was adopted after two years of discussion and should be given a chance to show its merits.
Detailed reasons why the MNMA wants implementation of the 2006 law unchanged will be submitted
to the Government, Parliament, the Standing Committees as well as to the party groups in
Parliament.
Political parties and their leaders had to be sensitive to public opinion on anything as important as
the mining sector and since people have widely varying perceptions and expectations, parties have
not been able to reach a decision, Algaa said. However, because of this delay caused by “making
politics” Mongolia has “lost a golden chance”. International investors say in joke that there is “too
much democracy” in Mongolia’s political and business environment. Things move extremely slowly,
with politicians now trying to amend a law that hasn’t been implemented in two years. Investors
cannot be expected to wait indefinitely; they need to make their own long-term plans. People say
that Ivanhoe Mines made a lot of profit from the Oyu Tolgoi project, but in one year Ivanhoe stock
prices have fallen from around USD20 to USD2.
Algaa expressed confidence in the composition of the working group and discounted apprehensions
that some individuals with their own interests would influence its performance. He hoped the State
would confine its role to collecting taxes and ensuring that natural rehabilitation measures were
strictly followed. If it chooses to violate market principles by becoming an active participant, it will

3. merely “mess up business”.
The general taxation system has improved since 2007, with the exception of the 68% windfall profits
tax that violates principles of business logic and has forced huge losses on gold mining companies.
Several gold and copper mining companies have had to borrow money to pay their taxes. Small and
medium companies have been most affected, with the result that the number of companies selling
gold to the Mongol Bank has fallen from 130 to 4.
Source: www.olloo.mn
MONGOLIA FARES BADLY IN INTERNATIONAL MINING REPORT
This year’s Behre Dolbear Group report on political risk assessment of countries of import to the
mining industry ranks Mongolia last in the 'Tax Regime' criterion among the 25 countries surveyed.
Mongolia's overall 2008 ranking declined by one rank to 13th
, also because of its continued
unfavorable mining tax policies.
The full report can be seen on BCM’s website, Articles/Reports on Mongolia.
Source: www.dolbear.com
MEMBERS SHOW UNANIMITY OF APPROACH, SAYS DRAFT GROUP LEADER
Kh. Badamsuren, leader of the MPs’ group entrusted with drafting amendments to the Minerals Law,
has said their work so far has been marked by unanimity of views among members of the group on
what is to be done. They have made the “most realistic estimate” that five years have been lost in
beginning work on the Oyu Tolgoi and Tavan Tolgoi deposits. “In the process, we have lost a huge
amount of revenue, infrastructure development, and new jobs,” he has said, while expressing the
hope that political parties will now change the stand they have taken in the past four years. The
group has already heard the opinion of senior officials of the Ministry of Minerals and Energy.
He said the MPRP pledge to distribute MNT1.5 million to all Mongolian citizens could be honored
only after adequate revenue was earned from work in the strategic deposits. Now that the price of
raw materials is going down, there is “no time to waste”.
Source: Zuuni shuudan
COPPER MINERS MAY NOT NEED TO PAY ANY WINDFALL TAX IN 2009
B. Batjargal, Director of the Budget Policy and Regulatory Department in the Ministry of Finance,
has said copper exporters might not have to pay the windfall profits tax in 2009 if the price of
copper stays around the estimated USD3,200 per ton. This will mean a significant fall in revenue
collection as around 95% of the tax is collected from copper export.
Batjargal said when they prepared the draft State budget for 2009 at the beginning of October, the
estimate was that copper price would be around USD6,700 per ton. However, the past few weeks
have seen the price fall to USD3,721. "Of course this will have an impact. We revised our draft
estimating that the price would stabilize around USD3,200 per ton. This means there will be no
windfall profits tax applicable on copper next year," he said.
This is likely to decrease State revenue by MNT 422.8 billion. "In that case, we shall need to reduce
budget expenses by MNT205 billion. If the price of copper keeps falling until the end of this year,
the budget for 2008 will end up with a deficit of MNT179 billion. We cannot predict the movement
of global prices, so it is prudent to base budget proposals on lower prices," Batjargal said.
Source: www.olloo.mn
TALKS FAIL, WESTERN TO PURSUE LEGAL ACTION AGAINST TINPO
Tinpo has terminated discussions with Western Prospector concerning a proposal to make a renewed
offer to acquire all of the latter’s common shares. The original offer by Tinpo was made on July 15
and then withdrawn on September 30. Tinpo contacted Western again on October 2 and indicated
they would like to re-engage in discussions under similar terms. Western feels that Tinpo had no
right, contractual or otherwise, to withdraw the offer, and now intends to pursue vigorously all of
its rights and remedies against Tinpo for “breaching its obligations”.
Source: Marketwire

4. MEASURES TO REDUCE DELAYS IN ZAMIIN UUD
Reacting to complaints about delays and obstacles at the Zamiin uud station, Finance Minister S.
Bayartsogt has asked D. Sugar, Head of the State Property Committee, to take immediate steps to
establish an efficient transportation and logistics center there and to set up a world-standard
digital one-window service to minimize extra costs and procedures. The complaints were voiced at
a recent conference on improving the work environment for investors and private enterprises.
Export and import documents and duty payment procedures were found to take too much time,
leading to delays in goods reaching their destination, and to congestion at the Zamiin uud station.
In 2007, 11 Mongolian freight forwarders paid a total USD900,000 for such delays of between 23-43
hours. Another problem facing businesses is that railway tariffs have been increased three times
already in 2008.
Source: Odriin Sonin
EZNIS ADDING TO FLEET STRENGTH
Eznis Airways plans to augment its fleet strength by buying up to five turbo-prop aircraft, with
capacity between 46 and 66 seats. The first two of these are scheduled to arrive in Mongolia before
the middle of 2009. The airline has also signed a letter of intent to purchase or lease up to seven
Regional Jet aircraft with 100 plus seats, to operate services from Ulaanbaatar to various points in
neighboring countries.
Eznis also plans to build a hangar which, in addition to providing housing for all these new aircraft,
will have space for maintenance centers, and engineering and flight operations offices.
Source: www.eznisairways.com
ENTREE TO SPEND MORE ON COAL EXPLORATION
Entrée Gold Inc. will spend a further USD2 million on coal exploration at its Lookout Hill property.
This follows recent coal discoveries at the Nomkhon Bohr site, a geological rift known to host other
coal deposits in Mongolia, such as QGX's Baruun Naran, SouthGobi Energy Resources' Ovoot Tolgoi
and Energy Resources LLC's Tavan Tolgoi deposits.
Greg Crowe, CEO and President of Entrée, has said that their target at Nomkhon Bohr “is
progressing rapidly”. Drilling has shown that the Permian sequence exposed in the company's
Lookout Hill Property hosts potentially significant coal horizons. “We will move forward aggressively
to extend the Nomkhon Bohr target and to test the large, unexplored, Coking Flats area to the
west. We believe that these two targets represent an excellent opportunity for Entrée," he said.
Drilling has cut coal over a strike length of 600 meters so far. Initial findings indicate continuing
levels of coal deposits with added thickness as the deposit descends.
Source: www.mongolia-web.com
IVANHOE SPREADS HEALTH SERVICES IN REMOTE SOUMS
As part of its program to improve health services in remote soums of Umnugobi aimag, Ivanhoe
Mines Mongolia Inc. has provided extra salary for doctors of 9 soums, built an apartment for
doctors, and installed a diagnostic machine at the hospital of Dalanzadgad soum. Recently, the
company donated an ambulance to the hospital of the Khanbogd soum. It cost USD55,455 and is
equipped with oxygen apparatus and first aid equipment. It has also built apartments for two
doctors in Gurvantes and Sevrei soums.
Source: www.news.mn
POLO BEGINS MINING IN EREEN
Polo Resources Ltd. has begun coal mining operations in Mongolia. Already in a strong financial
position, with USD81 million in cash, the company expects the Ereen coal mine to start generating
income during the present quarter of 2008. Funds from Ereen are to be used for ongoing exploration
in the South Gobi Basin, according to officials of the company. The open pit coal mine is located
320 km north west of Ulaanbaatar, and high-quality, low-ash, and semi-bituminous coal from there

5. is being transported 122 km to its Erdenet Train Terminal by a fleet of 10 x 80t haulage trucks.
Continuing laboratory tests on the coal and recent high swell indexes of 5.5 FSI indicate the likely
existence of coking coal within the deposit. Neil Herbert, Deputy Chairman of Polo Resources, says,
"The start of production at the Ereen Coal Mine is an important milestone for Polo, providing
valuable operating experience in Mongolia and enhancing our already strong financial position. We
look forward to rising coal production leading to excellent growth prospects with the exploration
program in the South Gobi Coal Basin achieving results."
Source: Montsame, www.mongolia-web.com
MPs VISIT DRILLING SITE ON STUDY TOUR
A working group has been jointly set up by the standing committees on security and foreign policy
and on the economy to study aspects of implementation of product sharing agreements with oil
exploration and exploitation companies. It is led by Z.Enkhbold, MP. The group recently visited an
exploration site in Sainshand soum of Dornogobi province where the Donshen Company, owned 49%
by Mongolian interests, works in cooperation with the Australian Rock Oil Company. The site has so
far seen two drill holes, one 2,082 meters deep, and the other 2,844 meters. Since 2003 MN10
billion has accrued to the state budget from the work here. This year it plans to produce 485,000
barrels of oil. The total reserve of the deposit has not been calculated as yet.
Source: Udriin sonin
COMPANY TO RECYCLE PETROLEUM PRODUCTS
Mongolia uses more than 10,000 tons of petroleum products annually, 75 percent of which remains
in the environment, polluting the air and the soil, and making for overall ecological degradation. It
takes at least 40 years to restore the environmental balance, but by that time irreparable damage
might have been caused to the flora and fauna.
A company called Green has now come up in a suburb of Ulaanbaatar. It will buy waste lubricants in
order to recycle them and sell the purified product, using VSEP technology.
Source: Montsame
GOLOMT BANK LAUNCHES EMV CHIP CARD
Golomt Bank, the first card issuer and acquirer bank in Mongolia, has now launched the nation's first
EMV Chip Card compliant with the safest EMV card service standards worldwide. EMV is an acronym
for EuroPay, MasterCard and Visa, the three companies which originally cooperated to improve card
security. More than 25,000 banks around the world have changed from Magnetic Stripe Cards to EMV
standards, which enhance transaction security and operation efficiency, and boosts multi-
application capabilities.
Batbileg, Director of Golomt Bank Card Center, sees the completion of the EMV Card project as “not
only our success but as also indicating Mongolia's success in joining a global trend”. It has brought
“a revolution to Mongolia’ Card System," he says.
The Bank retains its leading position in the Card market of Mongolia by offering various types of
cards and issuing co-brand cards in cooperation with the leading companies of the nation. The
Bank’s current number of Cardholders exceeds 400,000, accounting for 60 percent of the market
share in transaction volume. More than 400,000 ATMs of 25,000 banks and 30 million Card
merchants in more than 210 countries of the world accept Golomt Bank MasterCard and Visa Cards.
Source: www.golomtbank.com
ANOD BANK TO COOPERATE WITH KOREAN INVESTMENT FIRM
A team from Anod Bank accompanied Prime Minister S.Bayar to South Korea and while there, L.
Ulambayar, the bank's CEO, signed a Memorandum of Understanding with Park Byung-sik, President
of KCH Industry Development Co., Korea's biggest investment company. KCH will now draw on the
resources of Anod Bank to study the possibilities of transferring investment financing in the mining,
banking and other business sectors in Mongolia.
Source: Onoodor; Anod Bank

6. ECONOMY
BANK BAILOUT PLAN APPROVED, BUT KEPT ON HOLD
In a development totally unreported in the Mongolian media, the Cabinet met on Tuesday to
authorize a capital injection into the nation's commercial banks but, government officials said, the
measure was not going to be implemented immediately. Finance Minister S. Bayartsogt said the
Central Bank had made a convincing case that there was no need for a bailout at this time.
Former Central Bank Governor O. Chuluunbat, now an MP, had said earlier that a rescue package of
around USD500 million could be ready as early as next week for the country's pressured banks,
struggling for months with a frozen mortgage market.
The Central Bank feels confident that the country's commercial banks meet its prudential
requirements, though other officials say the USD500 million is needed to allay public concerns and
ensure liquidity. "It depends, because if everything is safe you don't need to... We have already
discussed it in Cabinet, and I have the right (to act) if something is wrong," Bayartsogt said. "Now
all banks have fulfilled the requirement of the Central Bank, and (the Central Bank Governor) has
said everything is fine," Bayartsogt said.
He did not disclose the size of the capital injection authorized by the Government, but did say that
unofficial discussions with heads of banks had indicated they needed about MNT500 billion (USD437
million) to work "normally" for the next nine to 12 months. Ch. Khurelbaatar, head of Parliament's
standing committee on the budget, also said there was no need for a bailout in Mongolia because
fewer than 3 percent of bank loans had turned sour. "Maybe by the beginning of next year, the
monetary policy will be a little looser to fix the problem," he said.
Mongolia's banks have frozen most mortgage lending since May, as interest rates have risen and
concerns have grown about a rapid deterioration in their loan portfolios. That, in turn, has dried up
sales of apartments and squeezed the construction sector. Small businesses have also found it hard
to get credit.
Source: Reuters.com
CENTRAL BANK TOTALLY REJECTS MP‟S VIEWS
Reacting to the Reuters account of its correspondent’s talk with MP O.Chuluunbat, The Bank of
Mongolia issued a press release on October 28 clarifying that Chuluunbat’s views were those of a
private individual and did not reflect the official position of either the Government of Mongolia or
the Central Bank. There is no need or demand to bail out the Mongolian banking system by injecting
money into commercial banks' capital base.
The Mongolian banking system does not have any US sub-prime mortgage products, and is not under
any sort of repayment pressure to pay short-term foreign funding. It is a banking system mostly
funded by a domestic deposit base with consequent placement in domestic real projects or
consumption. The fundamentals of Mongolian banking system are sound and strong.
Afterwards, B Enhhuyag, first deputy governor of the Bank of Mongolia, told Reuters, "We are
officially stating: the banking system does not need any bailout. Our banks are adequately
capitalized." he said.
Source: www.mongolbank.mn, Reuters.com
GOVERNMENT PROGRAM SETS OUT PRIORITIES
First Vice Premier N. Altankhuyag has revealed some salient features of the draft government
program of action in the next four years. The draft awaits ratification by Parliament. The program
takes note of the world financial crisis even as it focuses on improving people's living conditions,
increasing incomes, creating jobs, increasing production, establishing manufacturing units in rural
areas, and in developing the civil society.
The promised “treasure share” will be distributed only after the Government has earned some
revenue from the mining sector. Before that, an appropriate legal framework for the project has to
be created. He expected the distribution to start in 2009.
The total cost of the government program has been estimated to be MNT31.5 trillion. The state
budget and the Mongolia Development Fund will provide 30 percent of this, another 33 percent will
come from private investments, foreign investments will cover 30 percent more, and the remaining
7 percent will be foreign aid and loans.

7. Source: Montsame
WAYS TO KEEP FINANCIAL CRISIS AT BAY
What do politicians and investors think of Mongolia’s economic prospects now that copper prices
have fallen to US$3,700 a ton and the global financial crisis is spreading to Asian markets and
economies as well? Below are some opinions on the best measures that should be taken by the
Government.
MP S. Oyun: We must reduce budget expenses and establish a risk fund. Copper plays a large role in
our state budget. We cannot control the price fluctuation and when it falls too much we must use
this risk fund. We cannot just bide our time until the Mining Law is finally amended, and must take
measures to start mining work so that revenue is generated without delay.
MP N. Batbayar: The fall in copper price is unlikely to affect our 2009 Budget or the general
economy of Mongolia immediately. The budget expenses will be met by this year’s tax revenues.
The negative effects will be seen in 2010, and there is every possibility that the children’s
allowance will be cut.
Director of Apartment Financing Corporation J. Aldarjavkhlan: It is certain that the economy
would slow down since copper price, Mongolia’s main revenue source, is falling. This will affect all
sectors and we need to reduce government expenses by strictly adhering to well considered
priorities. Building apartments must continue, even if the prices go up. We must end our absolute
reliance on the mining sector and seek out new financial sources.
President of the Mongolian National Mining Association Do. Ganbold: Our export revenues will
decrease as the copper price falls, and all previous gains will be negated. Investments are
decreasing because of the financial turmoil, and we must immediately eliminate the windfall
profits tax to restore investor confidence and interest.
Source: www.news.mn
COMMITTED EXPENSES IMPACTING ECONOMY, SAYS PRESIDENT
Wage increases, social assistance programs and infrastructure investments “have begun to influence
the overall macroeconomic situation," President N. Enkhbayar told the conference organized by the
World Bank on Tuesday. Minister of Finance S. Bayarsogt echoed his concern by saying copper prices
that have fallen well below Mongolia's budget estimate, coupled with inflation at over 30 percent,
are creating challenges for mining-dependent Mongolia. The country has to date been somewhat
shielded from the global financial crisis by its USD1 billion of foreign reserves and limited direct
exposure to foreign financial markets, said Bayarsogt.
Source: Reuters.com
MONGOLIA 100TH
IN COMPETITIVE INDEX
Mongolia has been ranked 100th in this year’s Global Competitiveness Index (GCI) by the World
Economic Forum. This is up one place from last year. The rankings are decided on the basis of both
publicly available data and the Executive Opinion Survey, a comprehensive annual survey which, in
Mongolia, is conducted by the Open Society Forum together with the World Economic Forum. The
survey is designed to reflect a broad range of factors affecting the business climate of a country.
The GCI is based on 12 pillars of competitiveness: Institutions, Infrastructure, Macroeconomic
Stability, Health and Primary Education, Higher Education and Training, Goods Market Efficiency,
Labor Market Efficiency, Financial Market Sophistication, Technological Readiness, Market Size,
Business Sophistication and Innovation.

8. The graphics below gives a summary of a part of the survey on Mongolia:
For the full report that includes comprehensive listings of the main strengths and weaknesses of
countries, please go to HTTP://WWW.WEFORUM.ORG/DOCUMENTS/GCR0809/INDEX.HTML
Source: Open Society Forum
RAILWAY TO INCREASE ALL TARIFF
After incurring a loss of more than Tg20 billion so far this year, Ulaanbaatar Railway Company has
decided to raise both domestic cargo tariff and passenger fares. The company says the increase will
not help them make a profit, but is aimed at recovering losses. The Railway used to make most of
its money from carrying transit cargo. This income has decreased, while the volume of low-rate
high-expense transport of domestic cargo has gone up. Maintenance costs have risen and the price
of diesel has increased 6.8 times since 2001, while freight rates have gone up only 82 percent
during the time.
The date and the extent of the freight rate raise are yet to be announced but passenger fates will
go up 50% from November 5.
Source: en.News.mn, Odriin sonin
ANOTHER FALL IN FUEL PRICES LIKELY
Sources in the Mineral and Oil Regulation Office say fuel prices should once again go down in mid-
November, when Russia is expected to lower its export rates. Considering that global prices have
dropped sharply, the rates at Mongolian petrol stations may go down by as much as 40 percent.
Negotiations are continuing with Russia, the main supplier to Mongolia.
Source: en.News.mn
MONGOLIA ASKS FOR WORLD BANK AID TO BUILD NEW RAILWAY
At a meeting with Mr. Jim Adams, Vice President of the East Asia and Pacific Region at the World
Bank, Mr. David Dollar, the World Bank's Director of Development Policy, and the World Bank's
Mongolia representative, Mr. Arshad Sayed, MP Kh. Battulga, the Minister for Roads, Transportation,
Construction and Urban Development, asked for World Bank assistance in extending the railway
network, improving its haulage capacity, and in building a new railway track that will link Russia
and China. This will help Mongolia earn revenue from transit trade in freight between the two large
economies. The World Bank team expressed interest in the idea and promised to explore it further
in cooperation with Mongolia.
Source: Ardiin Erkh, www. Olloo.mn

9. TRADE UNION LEADER SPREADS THE MESSAGE
The President of the Mongolian Federation of Trade Unions (MFTU), S. Ganbaatar, was in Zavkhan
aimag recently, meeting with members of the local trade unions and introducing MFTU policies,
activities and goals to them and others. "You cannot do without trade unions when confronting
problems as workers, and holding negotiations. You need them to be more powerful organizations.
We are working for this, so that we are better able to protect the interests of the employed
population," he explained.
Source: Montsame
PASTURE MAPPING AND MANAGEMENT WORKSHOP HELD
The Sustainable Livelihoods-2 project and Mongolia's Pastoral Management Association recently co-
hosted a workshop on "Pasture mapping and pastoral management plans". The participants
exchanged views on laying out pasture maps and formulating pastoral management. They also
discussed appropriate methodology and principles. The focus was on work in eight aimags as well as
on implementation of the Green Gold project funded by SDC, the UNDP project for desertification
reduction and sustainable land management, and an animal husbandry risk prediction project.
The "Sustainable livelihoods-2" project came out of an agreement between the Government of
Mongolia and the World Bank. It will have three stages spread over a 12-year term. The first stage
was implemented in 2002-2007.
Source: Montsame
POLITICS
DRAFT 4-YEAR ACTION PLAN READY
A group set up by the Prime Minister to prepare the Government’s action plan in the next four years
has finished work. The draft plan has been submitted to the Government and will soon be discussed
by Parliament before it is adopted. The draft has been prepared after considering Mongolia’s
Millennium Development Goals, its National Development Strategy, the agreement between the
MPRP and the DP when establishing the coalition government, suggestions from private entities, as
well as agreements between the Government and international organizations.
The draft envisages the Government amending the legal environment to promote the development
of the minerals sector within a short period of time, implementing measures to start operation of
major mining projects without delay, and distributing to Mongolian citizens between MNT1 and 1.5
million as dividend from strategic and major mineral deposits. It will also protect natural resources
and enforce their proper use to maintain balance in the ecosystem.
The Government will re-determine its mining policy and amend the present Minerals Law, start
mining operation in uranium deposits in association with strategic investors, implement projects to
extract crude oil, liquefy and gasify coal, and also undertake detailed studies on using nuclear
energy. It will start mining operations in the Tavan Tolgoi, Oyu Tolgoi, Tumurtei and other strategic
deposits, introducing latest techniques and technology to protect the Environment.
Heavy industry will be promoted, and industrial parks of hydro-metallurgy, cathode copper plants,
gold refineries, coking chemical plants, and metallurgical plants established. Oil exploration will
be intensified, and oil production increased by entering into product sharing agreements. Projects
will be taken up to provide electricity to areas with strategic deposits.
Source: Zuuni shuudan
CABINET REVIEWS GOALS OF ACTION PLAN
An extraordinary Cabinet meeting was held Monday to discuss the draft government action plan for
2008-2012. The program has three major parts, respectively setting out the Government's goals, the
means to be adopted to achieve these goals, and the sources of finance for their implementation.
The foremost of these goals are:
-To accelerate the development of the mining industry, establish the legal environment, put
strategic and larger deposits into economic circulation, and distribute incomes derived from this

10. sector to the population.
-To carry out an industrialization program, to develop mining-based manufacturing activities, and
to actively encourage small and medium-sized enterprises in rural areas.
-To satisfy fully the domestic demands for meat, milk, flour, potato, and vegetables.
-To create favorable conditions for every citizen to be healthy and be educated, to get a job and
make a living, and to develop vocational training facilities.
-To inculcate a transparent, open, efficient, fair, and responsible attitude among workers in the
state services and to strengthen the feeling of mutual trust between the State and its citizens.
Source: Montsame
MPs WANT SEPARATE MINISTRY FOR DEVELOPMENT
The MPRP group in Parliament has called for reducing the number of Government agencies from 60
at present to 11 regulatory and 30 implementing agencies. The land under the agencies that will be
abolished can then be used to set up factories. They also want an independent Ministry for National
Development. At present development projects are the Prime Minister’s responsibility. Another
proposal wants to make small and medium industries to be part of the Food, Agriculture and Light
Industry Minister’s work. There is a demand that construction and maintenance of roads should be
in a separate and independent agency.
Source: www.news.mn
MONGOLIANS ABROAD WILL ALSO RECEIVE MNT1.5 MILLION
Prime Minister S. Bayar had an interesting experience during his visit to Korea when he met with
Mongolians living and working there. He was asked many questions, but not a single one about the
MNT1.5 million of “wealth share”. Finally he raised the issue himself and told his audience that all
Mongolian nationals, living in the country or abroad, will receive the share. However, it will not be
given in cash. The Government is still not sure how the money will be distributed. It can be that
recipients would be asked if they needed the money for a specific immediate purpose, or an
apartment of equivalent value, or to pay children’s school fees, and then arrangements made to
adjust the payment against meeting the needs.
Source: Ardin Erkh
LUXEMBOURG APPOINTS HONORARY CONSUL IN MONGOLIA
Mrs. D.Khulan, senior vice president of the Tavan Bogd group, has been appointed Honorary Consul
for the Grand Duchy of Luxembourg in Mongolia. Her office in Tavan Bogd plaza was formally
opened in a ceremony attended by Prime Minister Jean-Claude Juncker during his visit to Mongolia
earlier this week. Mongolians will no longer have to approach the Luxembourg Embassy in Beijing
for their needs.
Mrs. Khulan feels cooperation between the two countries, now limited to the defense, health, and
banking and financial sectors, will expand to embrace areas like foreign trade, tourism, education,
technology and culture.
Source: Zuunii medee
JET FROM ALASKA TO ULAANBAATAR SETS SPEED RECORD
Flying inside Mongolia may not be an experience in speed, but a corporate jet recently arrived in
Ulaanbaatar, setting a new speed record on its way. Flying at an average 561 mph, a Gulfstream
G550 flew from Anchorage, Alaska to Ulaanbaatar in 7 hours and 57 minutes. The pilot was Karen F.
Tribbett, and there were eight passengers on board. Russian air space regulations added 500 miles
to the flight route.
Source: www.monglia-web.com

11. SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended October 24, 2008, trading activity on the Mongolian Stock Exchange (MSE)
totaled 346,300 shares with 37 companies traded. Total market value of transactions was MNT 80.3
million. Total market capitalization of the 358 stock companies listed on the MSE was MNT 603.9
billion, and decreased by MNT 38.1 billion or 5.9 % from the previous week.
The Top-20 Index decreased by 625.23 points or 8.0 % compared to the previous week closing at
7,162.38 points. The MSE Composite Index decreased by 237.86 points or 6.4 % compared to the
previous week, closing at 3,455.82 points.
Most active stocks traded were: Hermes Center (118,400 shares), Remicon (101,300 shares), Genco
Tur buro (25,600 shares), Khuh gan (25,400 shares), and Tuul songino (23,500 shares).
Major share price percentage gainers were: HB oil (14.8%), and Ikh barilga (14.1%). Major share
price percentage losers were: APU (25.4%), UID (16.0%), Mon.Tsakh.Kholboo (13.0%), Erdenet khivs
(12.9%), and UB buk (12.5%).

12. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 Avg. 9.0% [source: NSOM]
Year 2007 *15.1% [source: NSOM]
September 30, 2008 *32.2% [source: NSOM]
* year over year (yoy)
CURRENCY RATES – October 30, 2008
Currency name Currency Rate
US dollars US 1144.47
Euro EUR 1454.11
Japanese yen JPY 11.81
British pound GBP 1829.09
Hong Kong dollar HKD 147.62
Chinese yuan CNY 167.25
Russian ruble RUB 42.23
South Korean won KRW 0.81
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.