The document is a newsletter from the Business Council of Mongolia covering business and economic news from Mongolia. Some of the key stories covered include: - Mining contractor Macmahon flags potential legal action against Erdenes Tavan Tolgoi over a disputed mining contract worth hundreds of millions of dollars. - Turquoise Hill Resources files an updated technical report for the Oyu Tolgoi copper mine in Mongolia. - The Mongolian government approves plans to construct a $300-400 million copper smelting plant in Khentii province, choosing the location of Bor-Undur soum.

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 349 – October 31, 2014
NEWS HIGHLIGHTS:
Business
 Macmahon flags Mongolian fight;
 Macmahon didn't meet contractual obligations at East Tsankhi, says Erdenes TT;
 Turquoise Hill files 2014 Oyu Tolgoi Technical Report;
 Bor-Undur chosen for copper smelter site;
 New Asia Group to build agricultural industrial park in Zavkhan;
 TDB obtains custody service license;
 FRC revokes brokerage licenses;
 MSE launches iOS mobile app;
 Erdenet outpaces OT in tax payments;
 Nur Holdings acquires Mongolia coal logistics company for $150mn;
 Mongolian company sells fire-resistant insulation to Shangri-La;
 Round Table Pizza plans for second restaurant in Mongolia;
 Clean Energy plans for 50MW wind farm at Tsogttsetsii, Umnugobi;
 Newcom plans four more wind farms in Mongolia with 400MW capacity;
 Aspire Mining's Ovoot project set to gain from new rail policy;
 Cinematographer to work with Hollywood artists;
 Turquoise Hill appoints independent director;
 Rio's copper chief appointed as International Copper Association chair;
 Golomt Bank board appoints independent governor.
Economy
 Mongol Bank: FX auctions, swap agreements, 1 and 4-week bills, treasury bills;
 Mongolia to sell MNT 100 billion in additional treasury bills;
 Mongolia set to almost double minimum wage to MNT 380,000 a month;
 Political risk puts power plant project into question;
 Mongolia plans to export 5,000 tons of meat to Russia by end of 2015;
 ADB funds 3D body scan equipment for garment sizing;
 EU to launch project on improving Mongolia’s food and product standards;
 Ninjas mine tungsten in Khuvd;
 Mongolia's Sales Managers' Index declines sharply in October;
 Mongol Bank reports 4.1% m-o-m mortgage growth in September;
 Mongolia coal miners ‘burning cash’ as prices drop, Moody’s says;
 Wrestling with a mining slump, Mongolia plans for its next boom;
 Ruble faces new wave of pressure;
 Inclusive Economic Growth – EDITORIAL.
Politics
 Mongolia embraces standard gauge railway to lower transport costs;
 2015 monetary policy under review;
 Standing committee proposes return of 90% of taxes to small businesses;
 Chinese president vows to strengthen ties with Mongolia;
 Mobicom subscribers receive strange SMS messages linked to MPs' phones;
 State officials caught spending too much;
 'Secret' DP-MPRP treaty is a fake, says GIA;
 Enkhbayar returns to Korea;
 34 DP members call for UB mayor's resignation;
 GASI inspects food processing plants;
 Retailers convicted for sale of controlled substance;

2.  Two UB sewage treatment workers hospitalized from exposure to toxic substance;
 Auto markets scuffle due to failed city plan;
 Inner Mongolian herders forced off grazing lands by 'Ecological' policy.
Others
 Announcements;
 BCM Updates - Working Groups; Websites; Social Networks; Photo Gallery.
ECONOMIC INDICATORS
 Weekly Market Indicators from MIBG;
 Inflation;
 Central bank Policy Rate;
 Currency Rates.
*Click on titles above to link to articles.
SPONSORS
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BUSINESS
MACMAHON FLAGS MONGOLIAN FIGHT
Macmahon Holdings has raised the possibility of legal action against Erdenes Tavan Tolgoi LLC over
a disputed contract worth hundreds of millions of dollars.
Macmahon made the comments after announcing that a standstill agreement with Erdenes TT had
been extended for another two weeks. A Mongolian subsidiary of the contractor and Erdenes TT are
attempting to renegotiate the contract. "At this point there is no certainty that these efforts will
result in an agreed outcome," Macmahon said.
"However, for the time being, the judgment of the company is that further discussions should occur
before other options such as international arbitration are pursued. If it is ultimately necessary to
terminate the contract with Erdenes TT, Macmahon's Mongolian subsidiary will promptly commence
alternative processes to enforce its contractual entitlements against [Erdenes TT].”
By the end of August, the Australian company had unpaid progress claims of about USD 30 million.
Macmahon said Erdenes TT was obliged to buy USD 48 million in project equipment if the contract
was terminated. The Tavan Tolgoi project was forecast to contribute about USD 100 million to
Macmahon's revenue this financial year. The work was scheduled to run until 2017.
Source: Yahoo

3. MACMAHON DIDN'T MEET CONTRACTUAL OBLIGATIONS AT EAST TSANKHI, SAYS ERDENES TT
Erdenes Tavan Tolgoi LLC has explained its dispute with Macmahon Holdings as an argument over
the Australia miner's failure to meet contractual obligations.
Macmahon, which has a five-year contract with Erdenes TT to mine the East Tsankhi coal deposit,
put operations on suspension on 14 August after reporting in a statement it was owed USD 22
million for five-months payment from the state-owned miner. Macmahon this week extended the
suspension of mining at East Tsankhi for another half month while negotiations continue.
Erdenes TT, however, claims that Macmahon lacked “technical financing” to employ the mining
operation as they had agreed. Macmahon has only brought in 5 on the 17 trucks it promised to
bring in for hauling coal, Erdenes TT said, which contributed to putting the mine behind the
production schedule. Macmahon also failed to meet its contractual obligation to train the Mongolian
workforce, it said.
However, Macmahon appears still interested to continue working on at the mine.
“The contract was made when coal selling price was good, therefore loss was inevitable. Macmahon
is interested in continuing the work,” said T. Naran, executive director of the Coal Association of
Mongolia.
Source: Udriin Sonin
TURQUOISE HILL FILES 2014 OYU TOLGOI TECHNICAL REPORT
Turquoise Hill Resources on 28 October filed an updated compliant independently-prepared
technical report for the Oyu Tolgoi copper mine.
Prepared by OreWin Pty Ltd, the 2014 Oyu Tolgoi Technical Report (2014 OTTR) updates the Oyu
Tolgoi Technical Report dated 25 March 2013. On 22 September 2014, Turquoise Hill announced
that the 2014 Oyu Tolgoi feasibility study had been finalized and presented to the board of
directors of Oyu Tolgoi LLC. The feasibility study contains two production cases—the 2014 Reserve
Case and the 2014 Life of Mine (LOM) Case.
The 2014 Reserve Case includes mineral reserves from the Southern Oyu Tolgoi open pit and the
Hugo North Lift 1 block cave. It demonstrates that Oyu Tolgoi's large resource base represents
significant opportunities, not only as an exceptionally long-life project but also for production
expansion. The potential development flexibility that exists with respect to later phases of Oyu
Tolgoi will continue to be studied as part of the overall project strategy. Separate development
decisions will need to be made based on future prevailing conditions and the experience obtained
from developing and operating the initial phases of Oyu Tolgoi.
In August 2013, development of the underground mine was delayed to allow matters with the
government of Mongolia to be resolved. The 2014 OTTR updates Oyu Tolgoi's mineral resources and
mineral reserves and is now available under Turquoise Hill's profile at sedar.com.
Source: Turquoise Hill Resources Ltd.
BOR-UNDUR CHOSEN FOR COPPER SMELTER SITE
The Ministry of Industry and Agriculture plans to see the commissioning of a copper smelting plant
in Khentii Aimag by 2018.
First initiated by Vice Minister of Industry and Agriculture B. Tsogtgerel, the Cabinet Secretariat has
approved a proposal from the Ministry of Industry and Agriculture for the construction of a copper
smelting plant at Bor-Undur Soum, Khentii Aimag, beginning in 2015 and at a cost of between USD
300 million and USD 400 million. Bor-Undur was chosen over the other choices Choir and Khutul
Soums because of its close proximity to copper deposits.
Source: Montsame
NEW ASIA GROUP TO BUILD AGRICULTURAL INDUSTRIAL PARK IN ZAVKHAN
The Ministry of Industry and Agriculture has selected New Asia Group LLC to lead construction of a
new industrial park for the processing of agriculture goods in Zavkhan Aimag.

4. The ministry will provide low-interest financing for the plant’s construction at Telmen Soum, where
there will be production of leather, wool, fruit, dairy and meat goods. Zavkhan was chosen as a
central gathering point for herders' goods from five of the provinces in Mongolia, where there are
22.5 million livestock. Mongolia is subsidizing raw animal goods such as raw sheep or camel wool to
encourage herders to sell their goods to such domestic factories rather than foreign merchants. The
park would be located nearby a 100-megawatt power station that is also planned for construction.
Source: Business-Mongolia.com
TDB OBTAINS CUSTODY SERVICE LICENSE
Trade and Development Bank (TDB) of Mongolia LLC has received a custody service license from the
Financial Regulatory Commission, according to a 24 October statement from the Mongolian Stock
Exchange.
Source: Mongolian Stock Exchange
FRC REVOKES BROKERAGE LICENSES
The Financial Regulatory Committee (FRC) has revoked and suspended a handful of brokerage
licenses, according to 23 and 24 October statements from the Mongolian Stock Exchange.
The FRC has revoked the brokerage licenses of Munkh Otgorgui LLC, Grandlain LLC, and Tuushin
Invest LLC. It has also placed three-month suspensions on the licenses of ABJYA LLC, Tavantolgoi
Khishig LLC, I Trade LLC, Bumbat Shigtgee LLC, Capital Market Corporation LLC, Ochir Capital LLC,
and Sanlavmed LLC. The Source provided no explanations for the actions.
The FRC also restored the brokerage license of BBSB LLC.
Source: Mongolian Stock Exchange
MSE LAUNCHES IOS MOBILE APP
The Mongolian Stock Exchange on 24 October announced the launch of an iOS application to provide
updates for Apple iPhones on locally listed stocks. The application is available for download at the
Apple Store under the name “MN Stocks.”
Source: Mongolian Stock Exchange
ERDENET OUTPACES OT IN TAX PAYMENTS
The mining unit for the Erdenet copper mine has outpaced Oyu Tolgoi in taxes owed by 27.5
percent because of stabilities granted by the 2009 investment agreement.
Russian-Mongolian joint venture Erdenet JSC will pay MNT447.5 billion in taxes this year compared
with MNT 324.3 billion from Oyu Tolgoi LLC because of the investment agreement, said the Ministry
of Finance. Oyu Tolgoi produced more copper this year than Erdenet, but owed less because of tax
stabilities and exemption from progressive royalty tax in the investment agreement.
Mongolia will also collect MNT 98 billion from dividends issued by the state's joint venture
companies, including MNT 70 billion from Erdenet, and MNT 336 billion from fully state-owned
enterprises.
Source: Business-Mongolia.com
NUR HOLDINGS ACQUIRES MONGOLIA COAL LOGISTICS COMPANY FOR $150 MN
Nur Holdings announced the acquisition of a 90 percent indirect equity interest in
Takhidagkhairkhan LLC with foreign investment, which is principally engaged in the logistic and
storage management of coal in Mongolia. The consideration was reduced from the previous USD 290
million to USD 150 million, comprising cash of USD 75 million and the issue of USD 75 million six-
month, 6 percent promissory notes. The guaranteed profit for 2015 shall be not less than USD 36.3
million.
Source: AA Stocks
MONGOLIAN COMPANY SELLS FIRE-RESISTANT INSULATION TO SHANGRI-LA

5. Shangri-La Ulaanbaatar will purchase fire-resistant basalt wool to insulate its now-under
construction work site from the local company, Mongol Bazalit. The agreement follows a fire last
month authorities said started as an electrical fire. The insulation is resistant to up to 1,100C of
heat.
Source: Undesnii Shuudan
ROUND TABLE PIZZA PLANS FOR SECOND RESTAURANT IN MONGOLIA
U.S. restaurant franchise Round Table Pizza on 28 October announced plans to open of a second
restaurant in Mongolia in 2015.
The second Mongolian location will be accompanied by a restaurant in Ho Chi Minh City, Vietnam. In
addition, Round Table announced an exclusive agreement with Al Mahroos Foods W.L.L. to develop
restaurants in the Gulf Coast (excluding the United Arab Emirates). The first restaurant location
will be opening in Manama, Bahrain in the fourth quarter of 2014, with additional restaurants
expected to open in Bahrain and the wider the region throughout 2015.
Source: Yahoo Finance
CLEAN ENERGY PLANS FOR 50MW WIND FARM AT TSOGTTSETSII, UMNUGOBI
Clean Energy LLC is moving forward with plans to build a 50-megawatt wind farm at Tsogttsetsii
Soum, Umunugobi Aimag.
The Energy Regulatory Commission has met with the Japanese investors Mizhuo Bank and Softbank
Corp. to discuss the project. When finished, the power generation plant will supply 124.7 million
kilowatt hours of energy to the central energy grid while saving 180,000 tons of coal burning and
230,00 tons of greenhouse gas emissions as well as 1.2 million tons of water.
Clean Energy, a subsidiary of Newcom Group, put the 50-megawatt Salkhit wind farm online in
2013, the country's first wind farm.
Source: Undesnii Shuudan
NEWCOM PLANS FOUR MORE WIND FARMS IN MONGOLIA WITH 400MW CAPACITY
Newcom Group's Clean Energy LLC plans to build as much as 400 megawatts of wind-powered
energy capacity at four sites throughout Mongolia.
“There’s huge potential… we could supply electricity to Northeast Asia. That’s our goal,” said Clean
Energy chief executive Ts. Sukhbaatar, without revealing specific timelines.
The company’s most ambitious project is a 250-megawatt wind farm it wants to build in Khanbogd
Soum, near the massive Oyu Tolgoi gold and copper mine in Umnugobi Aimag. “The wind resources
are very high there,” Sukhbaatar said.
Clean Energy plans to build 50-megawatt wind farms at Tsogttsetsi Soum, Umnugobi Aimag,
Sainshand Soum, Dorngobi Aimag, and near the city of Choir, Dornod Aimag. Clean Energy switched
on the 50 megawatt Salkhit wind farm—the country’s first and only such installation—in June 2013,
where General Electric installed its 1.6 Megawatt turbines.
Last February, Germany’s Ferrostaal Industrial Projects revealed plans to invest approximately USD
120 million to purchase a majority stake in a 52 Megawatt wind farm at an undisclosed location in
the eastern Gobi Desert.
“The potential (in Mongolia) is enormous—it’s an issue of getting it to market," Steve Sawyer,
secretary general of the Global Wind Energy Council (GWEC), said earlier this month in Beijing.
Source: Recharge
ASPIRE MINING'S OVOOT PROJECT SET TO GAIN FROM NEW RAIL POLICY
Aspire Mining Ltd.’s Ovoot coking coal project may have just been given the key to unlocking the
coal riches within, from the Mongolian government's decision to approve the Erdenet–Ovoot–Arts
Suuri Railway as part of its new National Rail Policy.
Shares in the company should trade higher on the news, which should pave the way for a rail
solution connecting Ovoot with major international coal markets. It will also underpin economic
development and regional integration of Northern Mongolian Provinces.

6. Last Friday, Parliament approved the new National Rail Policy by a strong majority. The new policy
includes the extension of rail from Erdenet to Ovoot and on to the Russian border at Arts Suuri. This
represents a new important rail connection between Russia, Mongolia and through the Trans-
Mongolian Railway to China. The Mongolian government is now empowered to negotiate a
concession agreement for the railway between Erdenet to Ovoot as the first stage of the Northern
Rail Line.
“The Mongolian Parliament’s decision provides the rail solution to unlock the value of the Ovoot
Project,” managing director David Paull said.
The Mongolian government’s Rail Policy decision follows the recent addition of the Erdenet to
Ovoot railway onto the Mongolian Government’s Concession List of ‘”Approved Projects.” In the
medium term, the Erdenet-to-Ovoot railway is positioned to form a critical link within a highly
strategic rail network connecting the Ulug Khem coking coal basin in Russia’s south with the Trans-
Mongolian Railway through to China. The Ulug Khem coking coal basin is estimated to contain
approximately 2.5 billion tons of metallurgical coal reserves and when combined with Aspire’s
wholly-owned Ovoot coking coal project, will represent a major new long term source of high
quality coking coal.
Source: Proactive Investors
CINEMATOGRAPHER TO WORK WITH HOLLYWOOD ARTISTS
Mongolian cinematographer D. Angarag announced that he will produce a movie called “Precious”
with Hollywood artists.
Hollywood artists and Angarag met and discussed his movie on 21 October. Hollywood
cinematographer Peter Gray and writer Dianna Ismail are set to come to Mongolia with Angarag in
November. Angarag has previously worked on famous Mongolia movies such as “Minii Khursh
Chutgur” (My Neighbor is a Devil), “Bodliin Khulgaich” (Thief of the Mind), “Dev” and “Anu Khatan”
(Queen Anu).
The cinematographer was also involved in a professional cinematographer’s training by invitation of
the American Society of Cinematographers this month.
Source: UB Post
TURQUOISE HILL APPOINTS INDEPENDENT DIRECTOR
Turquoise Hill Resources Ltd. on 24 October announced the appointment of James Gill to its board
as an independent director, effective 1 November 2014.
Gill is an experienced explorer, developer and operator with more than 40 years of international
mining experience. From 1981 until 2007, he was president and chief executive of AUR Resources,
which was acquired by Teck Resources in August 2007. Gill currently serves as non-executive
chairman and director of Thundermin Resources Ltd. and as a technical advisor to Gowest Gold
Corp and Asset Chile's Fenex Fund.
Source: Turquoise Hill Resources Ltd.
RIO'S COPPER CHIEF APPOINTED AS INTERNATIONAL COPPER ASSOCIATION CHAIR
The International Copper Association (ICA) on 24 October announced the appointment of Rio Tinto
PLC's chief executive of copper, Jean-Sébastien Jacques, as its new chairman. Jacques had been
vice-chairman of the ICA since October 2013 and will replace the outgoing Chairman Peter Beaven,
chief financial officer of BHP Billiton. Jacques will assume the role for a two-year term.
“This is an exciting period for the industry, as we seek to drive forward strategic initiatives to
actively support the delivery of an additional one-million tons of copper demand over the next five
years.”
In his role at Rio Tinto, which heads operations at the Oyu Tolgoi copper mine, Jacques oversees a
diverse portfolio of tier-one copper assets in Chile, Indonesia, Mongolia, Papua New Guinea, Peru
and the United States.
ICA is an industry group that operates to promote awareness and usage of copper.
Source: International Copper Association

7. GOLOMT BANK BOARD APPOINTS INDEPENDENT GOVERNOR
Golomt Bank LLC on 23 October announced the appointment of Antonio López Abelló as an
independent governor, effective immediately. López Abelló’s appointment, expands the board of
governors at Golomt to six directors, two of who are independent.
Abelló’s is a career banker with two decades of experience with leading investment banks in
Singapore and London. At present, López Abelló is the managing partner of Turms Advisors LLP, a
Singapore-based investment banking firm, which specializes in providing financial advice to
corporations, institutional investors and high net worth individuals focused on Southeast Asia and
Mongolia. Prior to founding Turms Advisors in 2009, Abelló held senior roles in fixed-income and
equity structuring at Credit Suisse, Goldman Sachs and Paribas.
Source: Golomt Bank LLC
SPONSORS
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ECONOMY
MONGOL BANK: FX AUCTIONS, SWAP AGREEMENTS, 1 AND 4-WEEK BILLS, TREASURY BILLS
The Bank of Mongolia on 30 October reported the sale of USD 14 million CNY 81 million in currency
auctions for closing rates of MNT 1,861.59 and MNT 304.40, respectively. Also that day, the central
bank accepted USD 116 million from commercial banks' ask offers via a U.S. dollar swap agreement
and USD 9 million in bid offers.
The central bank reported on 29 October the issue of one-week bills worth MNT 198.9 billion at a
weighted interest of 12 percent a year. On 27 October the central bank reported the issue of MNT
100 million in four-week bills for a weighted interest of 12.49 percent.
On 29 October, the Bank of Mongolia reported MNT 45.1 billion in bids for 12-week treasury bills
with a face value of MNT 40 billion. The treasury bills were sold at a discounted price with an
average yield of 15.795 percent.
Source: Bank of Mongolia
MONGOLIA TO SELL MNT 100 BILLION IN ADDITIONAL TREASURY BILLS
The Financial Regulatory Committee on 21 October 2014 approved the trade of MNT 100 billion in
treasury bonds, according to a 23 October statement from the Mongolian Stock Exchange.

8. Treasury bonds valued at MNT 100,000 each have already been sold weekly. The government offers
the short-term bonds tax free, with maturity dates varying between three months, six months, and
a year. Trading will commence on 4 November.
Source: Mongolian Stock Exchange
MONGOLIA SET TO ALMOST DOUBLE MINIMUM WAGE TO MNT 380,000 A MONTH
Labor unions have negotiated with employers and the government to nearly double the minimum
wage to MNT 380,000 a month.
The national minimum wage saw a 36 percent increase last year when it was set at MNT 192,000 a
month. The proposed 2015 budget plans for MNT 320 billion in spending on government salaries and
MNT 170 billion MNT for pension and allowances.
Source: News.mn
POLITICAL RISK PUTS POWER PLANT PROJECT INTO QUESTION
Political risk could prevent construction of the power plant planned for Tavan Tolgoi, according to
a lead project developer.
The plant will be the source of energy for both the Tavan Tolgoi and Oyu Tolgoi mines, but
developers are having trouble convincing investors that the project is sound, according M.
Enkhsaikhan, head of the Tavan Tolgoi Power Plant project. Developers began seeking out
investment earlier this year, when the government first approved the project, but the public
arguments taking place within government is making Mongolia look like a difficult country to
partner with.
“Only a stable government will attract the billion dollar investment,” he said. He added, “The
current restructuring is a big mistake, and this restructuring was a result of a bad relationship
within the Democratic Party.”
Enkhsaikhan said he doubted that the recent agreement between the Mongolian People's
Revolutionary Party and Democratic Party counted for much, saying that it was just a show for the
public. Meanwhile 10 of the 25 companies that project developers approached to work together on
the project responded with interest. They will have until February to consider the project, he said.
Source: Udriin Sonin
MONGOLIA TO EXPORT 5,000 TONS OF MEAT TO RUSSIA BY END OF 2015
Prime Minister Norov Altankhuyag plans to expand the export quota for meat over 16-fold in the
coming years.
The visit by Russian President Vladmir Putin in September resulted in an agreement to purchase
meat from Mongolia for the first time since placing a ban on Mongolian meats because of spreading
animal diseases. The prime minister oversees a Food Safety Committee responsible for issuing an
export quota every six months, said N. Ganibal, head of the implementation Agency for Livestock
Policy, which could increase to up to 30,000 tons a year.
“In the second half of 2014, our quote was 1,800 tons of meat, but the ministry is now preparing a
proposal to expand the quote to 5,000 tons by end of 2014,” said Ganibal. “If Russia decides so,
then meat export could reach to an annual 30,000 tons.
Both Darkhan Max Foods and Baatruud Tenger have received the certification of standards for
Russia to purchase meat from them, he said, adding that another 10 companies are currently
applying for similar certifications.
“Right now we are only exporting beef and horse meat. The selling price for horse meat and beef,
respectively, are USD 2.8 and USD 3.4 per kilogram.”
Russia has no plans to import mutton, he said, because the imports will be mainly used for canned
goods, for which Russian manufacturers don't use mutton.
Source: Udriin Sonin
ADB FUNDS 3D BODY SCAN EQUIPMENT FOR GARMENT SIZING

9. The Asian Development Bank (ADB) has funded the purchase of 3D body scanning technology by the
Clothing Research Center at the Mongolian University of Science and Technology (MUST) to help
companies produce better-fitting garments for native Mongolians.
The Asian Development Bank funded the purchase of three types of body scanners that can be used
for clothing production, medical treatment, and archaeological study, but will be used by MUST's
research center for the development of a national database with measurements of the bodies, arms
and legs.
The new measurements will address complaints that student uniforms do not fit children by
providing more accurate measurements. Mongolia recorded Mongolians' body measurements in 1985
for clothing production, said a senior instructor at MUST's textile department, S. Tsetsgee, but
added that typical body shapes have changed considerably since then. Teachers at MUST received
training for how to operate the equipment in South Korea
“3D scanners provide 3D images, which is input into computers, and used for conducting all types of
measurement,” said department head of MUST's School of Industrial Technology and Design D.
Tumenbold. “A full body scan is beneficial for manufacturing clothes of appropriate sizes.
Measurements will also be used for producing furniture such as chairs, tables and closets, as well as
other articles used by people.”
Source: UB Post
EU TO LAUNCH PROJECT ON IMPROVING MONGOLIA’S FOOD AND PRODUCT STANDARDS
The European Union will kick off its initiative with Mongolia to improve food standards at the "Ikh
Tenger" State Complex in Ulaanbaatar on 28 October.
Over 150 participants are expected to attend the launching celebration for the EUR 3.7 million
initiative, which will focus on adopting E.U.-style standards, accreditation, market surveillance,
nationwide quality monitoring, and training of the workforce. Mongolia must adopt norms for the
movement of goods while setting in place quality controls and regulations as well as a monitoring
body that is compliant with World Trade Organization standards.
Source: InfoMongolia.com
NINJAS MINE TUNGSTEN IN KHUVD
A town in Khuvd Aimag has become the newest hot-spot for ninja miners because of tungsten
deposits discovered there.
About 5,000 ninjas with their 800 cars and trucks gathered in Tsetseg Soum, Khovd Aimag from
around the country last summer to mine tungsten. Today 300 people are camped out at the
Myangan Ulzat national park for tungsten mining. They dig between 2 and 12 meters deep and
panhandle for the metals, similar to how gold miners do. Others use electric fans, instead, to filter
out the precious metals from the grime.
“Most people left the area because the river is now frozen,” said O. Altantur, a resident of Tsetseg.
“At the site, one kilogram of tungsten is sold for MNT 15,000 or 20,000.
Most of the recovered precious metal is set to Ulaanbaatar and some is sent to Bayan-Ulgii, but
eventually all is sold to China, she said.
Source: Udriin Sonin
MONGOLIA'S SALES MANAGERS' INDEX DECLINES SHARPLY IN OCTOBER
Mongolia is seeing a faster deterioration of economic activity, according to averaged data in the
World Economy's Sales Managers' Index [SMI] for Mongolia in October.
The “Headline Index,” which is derived from an average of the “Business Confidence,” “Market
Growth,” “Sales,” “Prices,” and “Staffing” indexes) fell to 39.8, from 42.1 in September, remaining
well below the 50.0 (no-change) mark that separates growth from contraction.
“Mongolia’s SMI saw a sharper contraction in October compared to the previous month. All indexes
experienced a decline, with Market Growth and Product Sales registering the fastest month-on-
month decline. Business Confidence also fell sharply and Staffing levels fell for the seventh
successive month,” said World Economics Chief Executive Ed Jones.

10. “With a balance of payment crisis, a continuing fall in the price of coal due to slower demand from
China, and a significant decrease in foreign direct investment, Mongolia’s economy faces a
continuing decline in activity over the coming months. Also, the ongoing disputes between the
government and Rio Tinto Group about Oyu Tolgoi’s project are certainly not good news."
Read the full report here.
Source: World Economics
MONGOL BANK REPORTS 4.1% M-O-M MORTGAGE GROWTH IN SEPTEMBER
The number of mortgages issued grew 4.1 percent in September from August, the Bank of Mongolia
reported, with the Housing Mortgage Program making up 67.1 percent with its 8 percent refinancing
scheme.
The Bank of Mongolia reported MNT 92.1 billion in mortgages loaned to 1,872 borrowers in
September. The value of total outstanding mortgages was MNT 2.62 trillion, and the total number
of borrowers was 61,164. September saw mortgage repayment fall 7.4 percent from the year
before. The share of non-performing loans was “relatively stable,” at 0.5 percent. The average loan
size was MNT 49.2 million per borrower for the month.
The Housing Mortgage Program accounted for 70 percent of outstanding mortgages, including 8
percent refinanced mortgages, while commercial banks provided 27.3 percent. The remaining 2.7
percent came from unspecified sources.
Read the full report here.
Source: Bank of Mongolia
MONGOLIA COAL MINERS ‘BURNING CASH’ AS PRICES DROP, MOODY’S SAYS
Mongolian coal producers are “burning cash” and face pressure in the next 12 months because low
prices and weak demand from China will persist, according to Moody’s Investors Service.
“At current levels, many operators are not generating enough cash flow to service their debt and
capex,” Hong Kong-based senior credit officer Simon Wong said by phone on 24 October. “They are
burning cash. Liquidity will continue to be under pressure for these companies and they will need
to conserve cash for the next 12 months.”
Mongolia’s economic growth is set to cool to 6.3 percent this year versus 11.7 percent in 2013,
according to World Bank forecasts. The Asian nation is becoming more dependent on volatile mining
revenues amid rising government debt and foreign-currency borrowing, Moody’s said in a report on
24 October. The 2017 notes of Mongolian Mining Corp., an Ulaanbaatar-based miner listed in Hong
Kong, have lost 11.5 percent this year, according to Bloomberg-compiled prices. The company had
a USD 28 million net loss in the six months through June 30, following losses in 2013 and 2012.
Moody’s rates the securities Caa2 (975), or eight levels below investment grade. Standard & Poor’s
ranks the debt CCC+, or the seventh-highest junk rating.
Other Hong Kong-listed companies with coal operations in Mongolia have shown signs of financial
stress. SouthGobi Resources Ltd. said in September it was seeking more funding because it may run
out of money by December to remain a going concern. Mongolia Energy Corp. said on 24 October
it’s seeking to extend HKD 3.45 billion (USD 444.8 million) of debt by five years under a
restructuring to be voted by shareholders on 12 November. Hidili Industry International
Development Ltd. bought back some of its dollar-denominated notes this month, while Winsway
Enterprises Holdings Ltd. sold its stake in a Canadian coal unit to cut debt.
Apart from weak selling prices, land-locked Mongolia presents more challenges because in-land
producers are geared toward selling to the Chinese market, compared with other seaborne
producers that can ship to more countries, Moody’s Wong said.
Source: Bloomberg
WRESTLING WITH A MINING SLUMP, MONGOLIA PLANS FOR ITS NEXT BOOM
With copper prices expected to rebound by 2016, the current economic slump in Mongolia should be
temporary. Economic theory suggests that in an uncertain environment, the best possible response

11. to a temporary negative revenue shock is for the government to sustain or even increase spending,
which is exactly what Mongolia’s government has done.
Unfortunately that level of spending is unsustainable over the long term. The fiscal deficit,
including off-budget items like the national development bank, exceeds 12 percent of gross
domestic product (GDP). Public debt is growing quickly, breaking Mongolia’s own fiscal rules. The
International Monetary Fund (IMF) is already pressuring the government and the central bank to
tighten both fiscal and monetary policies.
In the short-term, the government can cut spending, or it can raise the debt ceiling and borrow
until mining investment rebounds. The Ministry of Finance tried to raise the ceiling last year and
was blocked by Parliament. It may try again. Alternatively, the central bank can accept a Chinese
bailout and pump money into the economy by purchasing assets or taking on projects normally
administered by the government, like subsidizing residential mortgages. A ready patron for this
mineral-rich country, the People’s Bank of China recently provided a USD 3.25 billion line of credit
to the Mongolian central bank.
Many believe that one of these “best practices” is to create a new sovereign wealth fund. In a draft
bill, the president has called for a corporation that would save more than 20 percent of mineral
revenues in any given year for the benefit of future generations. This “Future Heritage Fund” would
absorb an existing (and significantly indebted) fund for cash transfers.
But some ask why the government should invest revenues in foreign assets when spending on well-
trained teachers and infrastructure is urgently needed? And should the government invest mineral
revenues in foreign assets when the returns are likely to range from 3 to 6 percent and the
government is borrowing at 5 to 8 percent? A sovereign wealth fund may only make sense if the
economy improves and sovereign bond yields come down.
Read the full report here.
Source: Resource Governance
RUBLE FACES NEW WAVE OF PRESSURE
A new wave of pressure is hitting Russia’s ruble as the market is becoming convinced that the
central bank won’t be able to halt its slide, causing local companies to scramble for the dollars
they need before the rate falls further and speculators lay bets on a further decline.
The ruble fell to fresh lows of 42.01 versus the dollar and 53.24 versus the euro on Friday, as oil
hovered below USD 86 a barrel and investors were concerned about a possible cut to Russia’s
sovereign rating by Standard & Poor’s Inc, traders and analysts said. Speculators are also taking
part in the game against the ruble, which has lost more nearly 6 percent this month and more than
20 percent versus the dollar this year.
The ruble has been hitting fresh record lows almost daily since the beginning of the month after
prices of oil, one of Russia’s key exports, slipped below USD 90 a barrel. In three weeks of October,
the central bank spent as much as USD 18.2 billion from reserves, which marks the heaviest
interventions since March, when the central bank had to defend the ruble on the back of Moscow’s
plan to annex Ukraine’s region of Crimea. The minimum level of gold-forex should usually cover six
months of imports, which amounts to around a half of Russia’s gold and forex reserves, the
country’s former finance minister Alexei Kudrin said in his blog on Russia’s Kommersant daily
website late last week. If one deducts USD 167 billion of government’s funds incorporated into
reserves, Russia’s reserves will hardly exceed the bulk of goods and services that the country
imports in six months, Kudrin wrote.
According to Oleg Kouzmin, chief economist at Renaissance Capital, the ruble is likely to depreciate
further to 43 versus the dollar by the end of the year. If oil prices bounce back to USD 105 a barrel
next year, that may help the ruble to recover to 37.5 against the dollar, but if oil prices hover at
between USD 80 and USD 90, the ruble will be range-bound at 41-42 against the dollar, Kouzmin
said.
Source: Wall Street Journal
INCLUSIVE ECONOMIC GROWTH - EDITORIAL

12. Mongolians have translated the phrase "inclusive economic growth" to mean accessible, wide,
involved, and inclusive economic growth, and make use of it when discussing economic and social
government policies. Equal opportunity first and foremost means equal opportunities for market
entry, use of resources, and the same business environment. Inclusive growth means finding jobs to
increase the incomes of poor and low-income citizens and as such is a relatively long-term concept.
Stable economic growth requires inclusive growth, but it's not easy. Growth sometimes brings
negative side effects such as corruption and disparities in incomes, and Mongolia is a clear example
of this.
The gap between rich and poor is usually high for countries in the process of switching to
democracies and market economies, but the assumption is that it will decrease with economic
growth. Nobel Prize winning economist Kuznets said in 1955 that this gap provided the rich with the
opportunity to amass enough wealth and expand their businesses and through this investment the
economy would grow. The main issue is in how. Researchers at development organizations agree
inclusive economic growth requires accelerate political and economic reforms, strengthened
reforms at political and economic institutions, investment into the workforce, and equal
opportunities for everyone.
The performance of state-owned companies has been an area of great challenge for Mongolia.
Political parties after winning elections through corruption cannot manage others' affairs well. For
inclusive growth, Mongolia needs to support private enterprise, and end its subsidization programs.
D. Jargalsaikhan is host of the television show De Facto on NTV.
Source: Mongolian Economy
POLITICS
MONGOLIA EMBRACES STANDARD GAUGE RAILWAY TO LOWER TRANSPORT COSTS
Parliament on 24 October adopted for the first time a rail gauge compatible with China, to ease
transport of its second-biggest export, coal, to its largest customer.
Mongolia’s 1,900-kilometer (1,200 mile) rail network was built with help from the Soviet Union in
the last century, as Mongolia looked westward for markets and political support. Constructing the
240-kilometer railway from the Tavan Tolgoi coal basin using China’s standard gauge will save on
transportation costs, and helps draw a line under Mongolia’s historical mistrust of China. The
Chinese gauge was adopted for two routes to the border with 84 percent of votes in favor,
according to the parliament’s website. The passage follows years of discussion.
“With this debate now put to rest, investors are likely feeling a sense of relief,” Chris MacDougall,
managing director of Ulaanbaatar-based Mongolia Investment Banking Group (MIBG), said in an e-
mail.
Winners from the change will include the operator of projects at Tavan Tolgoi, Mongolia’s largest
coal deposit with 6.4 billion metric tons of reserves, including Hong Kong-listed Mongolian Mining
Corp. and state-owned Erdenes Tavan Tolgoi JSC. South Korea’s Samsung C&T Corp. was awarded a
USD 483 million contract in May 2013 to build the tracks. Securing power and building signaling and
maintenance depots will increase the costs of the project to USD 820 million. In May, Mongolia
Railway, the state-owned company overseeing the line, said construction was slated for completion
in late 2016, according to Zorig Alimaa, the head of the project department at the time.
Using standard gauge rail instead of the broad gauge used elsewhere in the country will reduce the
cost of transporting coal to China by USD 2 a ton to USD 4 a ton, Zorig said. Broad gauge adds costs
because of the need to unload and reload coal before it reaches China, he said. Imperial Russia
adopted a gauge of 1,524 millimeters in 1842 for military purposes, as a way to slow down an
invasion by rail. The gauge was built across the Soviet Union and many of its allies, including
Mongolia. Standard gauge, used in China and internationally, is 85 millimeters narrower.
Source: Bloomberg
2015 MONETARY POLICY UNDER REVIEW

13. Targeting the balance of payments and inflation will again be priorities for 2015, Bank of Mongolian
President Naidansuren Zoljargal in a speech said at a 22 October state address to Parliament
summarizing the planned monetary policy for 2015.
The foreign trade balance has narrowed, but alongside foreign investment, said Zoljargal. Mongolia
saw a deficit of MNT 6.1 trillion in 2013. The 2015 policy will focus on encouraging saving within the
middle class. The number of households with savings has doubled to 61,000 from last year.
This year and last the central bank has rolled out numerous programs to stimulate the economy,
but because foreign direct investment has not recovered as hoped, pressures on the balance of
payments pressure have not disappeared. This has resulted in slow economic growth, high inflation,
slower credit issuance, and less capital, he said.
For the near term, he said, the government must urgently pass new regulations for debt
management so that it does not violate its laws for total borrowing allowed and can continue to
borrow to continue its economic stimulus.
Source: UB Post
STANDING COMMITTEE PROPOSES RETURN OF 90% OF TAXES TO SMALL BUSINESSES
The State Budget Standing Committee on 28 October approved a bill that would see an annual 90
percent tax return to companies earning less than MNT 1.5 billion a year.
Source: Udriin Sonin
CHINESE PRESIDENT VOWS TO STRENGTHEN TIES WITH MONGOLIA
Chinese President Xi Jinping met with Parliament Speaker Zandaakhuu Enkhbold, vowing stronger
ties with Mongolia.
Xi recalled his state visit to Mongolia in August this year, during which both countries upgraded
their relations to an all-round strategic partnership reaching consensus on a range of issues. Calling
both countries good neighbors and partners, Xi said China always considers the development of
China-Mongolia ties as an important direction for its diplomacy towards neighboring countries.
China respects Mongolia's independence, sovereignty and territorial integrity, and respects the
developmental road that the Mongolian people choose for their country, Xi said.
"We are willing to work closely with Mongolia to further enhance political trust, substantial
cooperation and cultural exchanges, and inject new vitality and contents to our ties," said the
Chinese president.
Applauding Xi's fruitful visit to Mongolia, Enkhbold said his country is in close coordination with
China to implement the important consensus reached between their state leaders. Parliament as
well as other departments of Mongolia hope to join hands with China to cement cooperation and
push forward bilateral ties up to a new stage, he said. China's diplomacy towards its neighboring
countries, which features common development, has offered important opportunities for bilateral
cooperation, he said. Mongolia will firmly support China on issues regarding the country's core
interests including Taiwan, Tibet and Xinjiang, he said.
Enkhbold visited China on 27 and 28 October at the invitation of Zhang Dejiang, chairman of China's
National People's Congress Standing Committee, China's top legislature.
Source: Xinhua
MOBICOM SUBSCRIBERS RECEIVE STRANGE SMS MESSAGES LINKED TO MPS' PHONES
Members of Parliament may have had their phones hacked in a mass messaging scheme that saw
dozens of messages sent out to cell phones asking about hot-button political topics.
Speaker Zandaakhu Enkhbold has ordered General Intelligence Agency Chief B. Ariunsan to
investigate the dozens of SMS messages sent to Mobicom Corp. cellular service subscribers. The
messages, which seemed to come from the phone numbers of parliamentarians, asked about
whether Mongolia should allow for the Chinese standard rail gauge, Mongolia's deference to the
Bank of China, and the leasing of land to foreigners for 100 years. The Standing Committee on
Security and Foreign Affairs said they would also investigate the issue and document their findings
in a special report.

14. Mobicom held a press conference that same day where Chief Executive Officer David Holliday
issued a statement saying that the messages had been transmitted via multiple foreign
telecommunication services and that at least 20 customers' phone numbers were used for the mass
messaging. “MobiCom networking experts found that the anonymous SMS messages were sent from
Romanian mobile phone network operator Vodafone. Unitel customers also found the same
anonymous messages and the company discovered that they were sent from Malta. MobiCom is now
working to identify if they used SIM cards or electronic devices to send the messages.”
He said that staff was working to find the source of the messaging and that no customers' personal
data had been leaked.
“Experts have found that 20 customers' phone numbers were used. But how many messages were
sent is still unknown.”
Source: News.mn
STATE OFFICIALS CAUGHT SPENDING TOO MUCH
When the Democratic Party took control of government in 2012, Prime Minister Norov Altankhuyag
said ministers would work six days a week and that his government would not repeat the
misspending made by the Sukhbaatar Batbold government that preceded them. But, unfortunately,
much of the public is convinced of the opposite because of finding from the Mongolian National
Audit Office that in 2013 state officials spent far outside their budgets on international
assignments.
Foreign Affairs Minister Luvsanvandan Bold topped the list of egregious spending with MNT 558
million spent over budget, which have grown more expensive because of the depreciation of the
tugrug. The minister's budget planned for an exchange rate against the dollar of MNT 1,336 MNT
compared with over MNT 1,800 today. Other ministers behind Bold overspent by MNT 17.93 billion.
Meanwhile, members of Ulaanbaatar's City Council are believed to have misused state funds to
travel to Brazil. The official reason for the visit was for experience sharing with politicians, but
after it came out that much of that time was spent watching the FIFA World Cup the travelers
decided to pay for the expenses themselves.
Source: Undesnii Shuudan, UB Post
'SECRET' DP-MPRP TREATY IS A FAKE, SAYS GIA
The General Intelligence Agency (GIA) has reported that a “secret” treaty reported by media that
was allegedly made between the Democratic Party and Mongolian People’s Revolutionary Party
(MPRP) was doctored and disseminated by members of the Mongolian People’s Party (MPP).
The secret treat was alleged to be an unreleased addendum to the already controversial agreement
signed by the Democrats and MPRP this month. Prime Minister Norov Altankhuyag, however, denied
its existence and said he would pursue libel charges against those who spread the rumor. The GIA's
public affairs chair, J. Buyandalai, confirmed in a press conference that their investigation revealed
that the secret addendum was inauthentic and said the document could have come from the MPP's
media and public relations department.
The MPP held its own press conference at the State Palace, where MPP Secretary-General T.
Gantulga, and attorney Radnaased denied the allegations, saying the case against them was a
conspiracy. “On 22 October, at around 1:00 am, investigators entered the MPP’s central office and
took the computer’s hard drive. They investigated the MPP's press agents. The GIA is libeling
people. It’s not a private investigation bureau,” they said.
N. Demberel, who the GIA alleges coordinated the spread of the rumor, had already resigned from
his position at the MPP's press room, they said. Unnamed sources, however stated that Demberel
handed in paperwork last Thursday. The MPP officials said they would pursue an appeal to the libel
charges.
Source: UB Post
ENKHBAYAR RETURNS TO KOREA

15. Former President and Prime Minister Nambar Enkhbayar on 27 October left Mongolia to continue his
treatment for his ailing health in Seoul, South Korea.
While in Mongolia, Enkhbayar met with party officials and Prime Minister Norov Altankhuyag to
discuss the proposed restructuring of the government. Enkhbayar and Altankhuyag both signed an
agreement that would see their parties cooperate until 2020.
Source: Undesnii Shuudan
34 DP MEMBERS CALL FOR UB MAYOR'S RESIGNATION
Thirty-four members of the Democratic Party have signed a petition asking for the resignation of
Ulaanbaatar Mayor Erdene Bat-Uul because of his public criticisms of the prime minister.
Bat-Uul earlier this month spoke publicly about his opposition to the agreement recently made by
Prime Minister Norov Altankhuyag and leaders of the Mongolian People's Revolutionary Party
because he did not first gain consent within the party. He has also criticized the proposed 2015
budget, saying that the raise in salaries would bleed the city toward bankruptcy.
The petition lambasted the mayor for his public criticisms of the prime minister, saying they
threatened the integrity of the party. They have also come to the defense of the cross-party
agreement, saying that it bolsters the Democratic Party and its government against the opposition
Mongolian People's Party.
Source: Udriin Sonin
GASI INSPECTS FOOD PROCESSING PLANTS
The General Agency of Specialized Inspection (GASI) has revealed hundreds of violations in its
inspections of food processing plants.
GASI inspected 77 production facilities around the country, including 11 in Ulaanbaatar. Inspectors
found 272 instances where dairy factories failed to meet criteria. About half of the violations were
corrected on the spot, while for the rest the producers received citations. GASI reported that 75.2
percent of failures related to the incorrect methods for transporting and 72.7 percent related to
incorrect storage methods.
Inspectors found contaminations of stomach parasites in 189 of the 1,914 samples taken, bacteria
at 474 of the 1,532 smear tests, and mildew or fungus present on the premises of 14 grocery stores.
GASI also said they also found many instances of poor air quality and various safety violations.
Source: Undesnii Shuudan
RETAILERS CONVICTED FOR SALE OF CONTROLLED SUBSTANCE
Mongolia is cracking down on the sale by pharmacies of a drug called Luminal that is used to treat
epilepsy.
Pharmacists faced trial for charges that they were illegally selling the controlled substance without
licenses. The drug was banned after public uproar about a child who was allegedly poisoned from
its use earlier this year. The primary court has dismissed the case against the pharmacists, but
convicted the retailers for the sales.
The General Agency for Specialized Inspection (GASI) documented multiple instances of the
pharmacies Sulden and Noni selling the drug to customers in 2012, but they were not among the 9
pharmacies licensed to do so. GASI also accused a Monos Pharmacy pharmacist with the same crime
earlier this year.
Source: UB Post, Daily News
TWO UB SEWAGE TREATMENT WORKERS HOSPITALIZED FROM EXPOSURE TO TOXIC SUBSTANCE
Two sewage treatment workers in Ulaanbaatar are being monitored at healthcare facilities for at-
work exposure to toxic substances. The first employee affected at Ulaanbaatar's Central Sewage
Facility fainted while cleaning somewhere in the facility. Another worker who responded to the
fainting has also suffered from unspecified ailments because of poisonous substances.
Source: Udriin Sonin

16. AUTO MARKETS SCUFFLE DUE TO FAILED CITY PLAN
Car merchants and auto parts salespeople have protested against attempts by Ulaanbaatar to
relocate them to a yet-to-be-finished car market complex.
Tenants at the Da Khuree market went on a strike at the start of this month because of authorities
from the State Specialized Inspection Authority’s started to shut it down for relocation. The
complex will be built in five years and in its first stage a 14,000 car park will be rented to vendors
and entities, and the income from the rent will be used for the complex’s further development.
“Our dealers will become victims if the auto market moves,” said Chairman of the Trade Union
B.Enkhbaatar who is protecting renters’ interest. “Over 80 percent of the renters live in
Bayanzurkh District, where Da Khuree auto market is located. It will be tough for them to go to
their jobs every morning. They might have troubles such as getting their children from
kindergartens and schools.”
Some of the tenants who sell only a few cars a month and some spare parts complain that MNT 4
million for a small space and MNT 9 million for a large space is too expensive. They also complain
that the new location is too cold for them to work. And besides, moving the market won't have any
effect on traffic, they say.
Da Khuree is one of 9 auto markets and 34 dealerships. When first established, the auto market
centers were located at what was the outskirts of the city. But the city has expanded, and those
markets are now a part of the city center and are the source of traffic and safety issues.
The new market complex will be built past the 22nd road checkpoint in the 32nd khoroo of the
Songinokhairkhan District where there is 130 hectares of land free. However, it wasn't yet finished
when authorities came on 1 October to remove tenants and misunderstandings flared into anger.
Tenants said that they were told by Da Khuree's owners that they wouldn't have to move until it
was finished in 2015.
Source: UB Post
INNER MONGOLIAN HERDERS FORCED OFF GRAZING LANDS BY 'ECOLOGICAL' POLICY
Hundreds of ethnic Mongolian herding families in China's Inner Mongolia region are calling on the
international community for help following their forced eviction from a huge area of their
traditional grazing lands, local residents said on Thursday. The incident is as an example of how
government attempts to manage land with a nomadic population like Inner Mongolia's can end in
violent failure.
Several hundreds of people from Zaruud (in Chinese, Zalute) Banner demonstrated outside the
offices of the nearby Tongliao municipal government on Sunday over what they said were forced
and violent evictions from their homelands in June.
The evictions come as part of a widespread "ecological recovery" program under which officials
cordon off thousands of acres of valuable grasslands and forbid herders to graze their animals
there. But overseas rights groups say the government's ongoing land grabs have little to do with
environmental responsibility and everything to do with exploiting the land for lucrative strip-mining
and other natural resources.
Dagula, a resident of Heyehua village in Zaruud Banner, said local people no longer believe in the
"ecological" policy for managing the region's fragile grasslands.
"They are just using ecological protection as a pretext for evicting us," she said.
She said herders' attempts to petition the Tongliao authorities on Sunday had come to nothing.
One herder, Chenggal, was severely beaten and detained for five days, according to a report
paraphrasing the letter on the U.S.-based Mongolian News website. It said dozens of herders had
traveled to municipal government offices in Tongliao last month in a bid to return to their
traditional grazing lands. A second Heyehua resident, Galasang, said local people are also calling
on the government for greater compensation for the loss of their livelihoods.
The government has already paid out seven yuan per mu [0.165 acres] for the land, which works
out at around USD 1,800 per household for the whole five years, residents told RFA. "There are
about 100,000 mu (16,474 acres) involved, and they've been taking it over gradually since 2004,"
Galasang told RFA on Thursday.

17. Some local residents said they had received threatening SMS messages after the petitioning attempt
on Sunday. Earlier this month, authorities in Huvuut-shar (Xianghuang) Banner agreed to boost
subsidies to herding families after some 400 people protested the illegal confiscation of their
grazing land.
The herders told local ruling Communist Party officials they wanted something done about the
illegal confiscation of their grazing land, concerns over mining, official inaction following natural
disasters, and delays in compensation payments, the U.S.-based Southern Mongolia Human Rights
and Information Center (SMHRIC) reported.
Ethnic Mongolians, who make up almost 20 percent of Inner Mongolia's population of 23 million,
regularly complain about environmental destruction and unfair development policies in the region.
Clashes between Chinese companies and ethnic Mongolian herders protesting the exploitation of
their grasslands are increasingly common in the region, which borders Mongolia.
Rights activists say grasslands on which the herding communities depend for a living are constantly
being taken over for China’s mining and tourism industries and for national development projects,
forcing them to take action to stand up for their rights.
Source: Radio Free Asia
___________________________________________________________
ANNOUNCEMENTS
MONGOLIA PROJECTS & INVESTMENT SUMMIT, 17-19 NOVEMBER, HONG KONG
The Mongolia Projects & Investment Summit will be held in Hong Kong from 17 to 19 November,
where Prime Minister Norov Altankhuyag will present his vision to sustain Mongolia’s growth.
The context of the Summit will be a constructive, productive and sincere appraisal of Mongolia as a
place for FDI, given the current circumstances, and what is being done to strengthen its
attractiveness to the international investment community. The Mongolia Projects & Investment
Summit Hong Kong will bring together leading business, investment and governmental figureheads
in an environment of progressive discussion and action.
The implementation of the new Investment Law, amendments made to the Mining Law, a realized
dedication to PPP and more do show that the government is moving in the right direction. The
question on investors’ minds is what tangible progress has been made since last November which
would warrant a return of FDI?
BCM members are eligible for a 15 percent early bird special. Download the brochure for the
conference agenda here. For registration logon here, or for more information email
info@beaconevents.com or call: +852 2219 0111.
_____________________________________________________________________
‘BCM IN THE UNIVERSITY CLASSROOM’ NEWS
Business Council of Mongolia (BCM) has been pushing forward with its ‘BCM in the University
Classroom’ series since March 2012. Led by BCM’s Education Working Group, the program provides
lectures at universities to help inspire students and give them direction for their future careers.
The series has grown to include an average of 10 lectures per academic year. Now 2,045 students
and teachers have participated with BCM in the University Classroom Project.
Most recently on 23 October Bulganmurun Tsevegjav, senior officer at GGGI and BCM`s
Environmental Working Group chair, gave a presentation entitled “Role of International
Organizations in Mongolia’s Path to Green Growth: Global Green Growth Institute” to an audience
of 33 students, postgraduate students and teachers at the National University of Mongolia’s
department of Geo ecology and environmental study,.
The next ‘BCM in the University`s Classroom’ series lecture will be held on 20 November at the
Institute of Finance and Economics. GTs Advocates will be invited to speak. Presentation title:

18. "Corporate Business Law in Mongolia". For further details, please contact Erdenetsetseg T, BCM
Working Group Coordinator at erka@bcmongolia.org
______________________________________________________________________________________
BCM WORKING GROUP MEETINGS
Tax Working Group
BCM`s Tax Working Group met on 1 October with 14 people attending.
Co-chair Tsendmaa Ch, Tax Executive Director of PwC, moderated the meeting.
New members: Rentsenkhand D - BDO, Nyamdulam N and Zoljargal Ch - PATC.
New Participants: Enkhmaa D, Munkhtsetseg S from MSM.
Speakers and topics were:
1."The changes to tax regulations" in 2014 by Azzaya L, Senior Tax Consultant of PwC, and
Tsendaa Ch, Tax Executive Director of PwC
2. Open discussion
Members discussed various tax law applications in Mongolia and asked any agenda topics for next
WG meeting.
If you have any suggestions for the next Tax WG meeting agenda, please send it to
erka@bcmongolia.org.
Logistics Working Group
BCM`s Logistics Working Group met on 30 September with 9 people attending.
Chairman Tengis G, Chief Executive Officer of Monroad, moderated the meeting.
New Participant: Inca Bataa from Santa Fe Relocation Services
Speakers and topics were:
1. "Mongolian Customs"- Amgalan N, Regulatory Reform Manager at Business Plus Initiative (USAID).
2. Defining the mission in a position paper of the Working Group.
Members discussed the Logistics WG mission and suggested it include the following key areas:
1. Logistics policies-influence
2. Transparent customs-inspection agency
3. Logistics routes
4. Logistics centers
5. Transport insurance
6. Transportation cost (import, export, nationwide)
If you have any comments or suggestions on the Logistics WG mission, please send them to
erka@bcmongolia.org.
The next working group meeting is scheduled on 25 November with the following agenda:
1. Discussion of Logistics WG Mission statement
2. Guest: Federation of Freight Forwarder of Mongolia.
We still welcome those who have interest to join our BCM`s Logistics Working Group.
______________________________________________________________________________________
BCM WEBSITES
MONGOLIAN WEBSITE: ‘PRESENTATIONS’
The following statistics and reports posted on Presentations section in Mongolian:
http://bcmongolia.org/mn/илтгэлүүд
6 Presentations at Discover Mongolia, Children’s Palace, UB, 4-5 September, 2014 (MNG)
• Б.Оюунгэрэл - "Монголын Геологи, Уул уурхайн Мэргэжлийн Институт" Дисковер
Монголиа 2014

19. • Б.БААТАРЦОГТ ГЕОЛОГИЙН БОДЛОГЫН ХЭЛТСИЙН ДАРГА - "ГЕОЛОГИ ХАЙГУУЛЫН
ТАЛААР ТӨРӨӨС АВЧ ХЭРЭГЖҮҮЛЭХ АРГА ХЭМЖЭЭ" Дисковер Монголиа
• Монголын алт үйлдвэрлэгчдийн холбооны Удирдах зөвлөлийн дарга Т.Ганболд - "АЛТНЫ
САЛБАРЫН ӨНӨӨГИЙН БАЙДАЛ, ЦААШДЫН ЗОРИЛТ" Дисковер Монголиа 2014
• Лхамаасүрэнгийн Раднаасүрэн УУЯ-ны СБТГ-ын ТБХ-ийн дарга "МОНГОЛ УЛСЫН
НҮҮРСНИЙ ЭКСПОРТЫН ӨНӨӨГИЙН БАЙДАЛ" Дисковер Монголиа 2014
• Г. Эрдэнэбилгүүн "Ашигт малтмалын нөөц ашигласны төлбөр, холбогдох асуудлууд,
боломжит шийдлүүд" Дисковер Монголиа 2014
• УИХ, ЗАСГИЙН ГАЗРЫН ГИШҮҮН Д.ГАНХУЯГ "ЭРДЭС БАЯЛГИЙН САЛБАРЫН ЭРХ З ҮЙН
ОРЧНЫ ШИНЭЧЛЭЛ" 2014 ОНЫ 09 ДҮГЭЭР САРЫН 04 ДИСКОВЕР МОНГОЛИА
• U.S. Ambassador Piper Campbell's speech at Invest Mongolia
• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 4 сарын байдлаар, Үндэсний
статистикийн хороо
• Мандал Женерал Даатгал тайлан, 2014 оны 5 сар
• Сант марал сангаас гаргасан УЛС ТӨРИЙН БАРОМЕТР №13(47), 2014 ОН 3 САР
• Монгол улсын нийгэм эдийн засгийн байдал, 2014 оны 3 сарын байдлаар, Үндэсний
статистикийн хороо
• “Anti-Corruption legislation and State Policy” (Mongolian) by D. Munkhjargal, Prevention
and Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption
(IAAC) Mongolia at the “ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE
ON TRANSPARENCY” Training seminar, Mar 06, 2014
___________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', ‘INTERVIEWS‘, MONGOLIAN
BUSINESS NEWS’, ‘PHOTO GALLERY’
2 Presentations at BCM Monthly Meeting on September 22, 2014:
• Peter A. Markey, Managing Partner, Ernst & Young Mongolia – "Business Risks in the Mining
and Metal sector"
• Kh. Dorjpalam, Officer Treasury, Oyu Tolgoi - "Overview of the Risk Management and
Insurance Conference in October in UB"
9 Presentations at Discover Mongolia, Children’s Palace, 4-5 September, 2014 (ENG)
• Cameron McRae, Executive Chairman, SkyPath Partners LLC, Mr. Geoff McNamara, Pacific
Road Capital, Financial Regulation Committee, Ministry of Economic Development, Moderator: Jim
Dwyer, Executive Director, Business Council of Mongolia - "Panel Discussion"
• Amarbayasgalan.E, Director, Investment Banking Division, Golomt Bank - "Banking and
Mining" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014
• Neil Ashdown, Deputy Head of Asia, IHS - "Mongolian Competitiveness among Asian
Emerging Market" Discover Mongolia 2014 International Mining Investors Forum, September 4-5,
2014
• Paul Cromie, Chief Geoscientist for Asia Pacific, Anglo American - "Anglo American Global
Exploration" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014
• Peter Akerley, President & CEO, Erdene Resource Development - "Mining Exploration
Project" Discover Mongolia 2014 International Mining Investors Forum ,September 4-5, 2014
• George Lloyd, CEO, Xanadu Mines - "Mining Exploration Project" Discover Mongolia 2014
International Mining Investors Forum, September 4-5, 2014
• Adrian Buck, Geo Consultant - "TSIM Geophysics: Mongolian Case Studies" Discover Mongolia
2014

20. • Sebastian Rosholt, Senior Associate, Minter Ellison LLP - "Amendments to the 2006 Mineral
Law of Mongolia: Private sector overview" Discover Mongolia 2014 International Mining Investors,
September 4-5, 2014
• Bilguun Ankhbayar, CEO, MIBG LLC - "Review and Outlook of Mongolian Investment
Environment" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014
12 Presentations at Invest Mongolia, Blue Sky Hotel, 2-3 September, 2014 (ENG)
• APIP - "Trends and Dynamics of the Real Estate Market in UB" Invest Mongolia 2014
• "Mongolian Cashmere Industry Overview" Invest Mongolia 2014
• B.Tsogtgerel, Vice Minister - "MINISTRY OF INDUSTRY AND AGRICULTURE" Invest Mongolia
2014
• Toshinobu KATO, JICA Mongolia - "Perspective on Long-term Development Strategy in
Mongolia～Japanese experience and cooperation" Invest Mongolia 2014
• Tokyo Stock Exchange - "Opportunities for Mongolian Companies to Raise Capital in Japan"
Invest Mongolia 2014
• Matthew Pottle, Country Managing Partner, PwC - "Mongolia: capitalising on the
megatrends" Invest Mongolia 2014
• Graeme Hancock, President, Anglo American Mongolia - "ANGLO AMERICAN AN
INTRODUCTION" Invest Mongolia 2014
• John Johnson, CEO, CRU China-"China's top commodity trends and what this means for
Mongolia" Invest Mongolia 2014
• Batsukh Galsan, Chairman, "OYU TOLGOI" PROJECT" Invest Mongolia 2014
• Ya. Batsuuri, CEO, Erdenes Tavan Tolgoi JSC - "Largest developing coking coal deposit in the
world" Invest Mongolia 2014
• Graeme Knowd, Associate Managing Director - "Mongolia Banking System Outlook Mongolian
Banks Face Cyclical and Structural Challenges " Invest Mongolia 2014
• Erdenedalai Odkhuu, Associate; Bolormaa Gulguu, Associate, Hogan Lovells (Mongolia) LLP -
"Legal Developments in 2014 :Changes and Future Developments" Invest Mongolia 2014
2 presentations from BCM monthly meeting on June 23, 2014:
• T. Gansuld, Executive Director, Outotec Mongolia – “Outotec Mineral Processing Solutions
and Experience in Mongolia”
• Lisa Gardner, Journalist & Media Trainer – “Mongolia’s Media Laws: Defamation, Libel and
Threats to Press Freedom”
3 presentations from BCM monthly meeting on May 26, 2014:
• B. Lakshmi, Director, Mongolia Economic Forum – “Why Mongolia Business Summit?”
• Nick Cousyn, Co-chair, BCM Capital Markets Working Group – “Use of MSE for State
Privatizations”
• Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – “Mongolia Roads –
Achievements and Challenges”
• China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital
Securities Limited
Mongolia Reports: http://bcmongolia.org/en/mongolia-reports
• Mongolia Economic Report – August 2014 by BCM;
• World Investment Report 2014 by United Nations Conference on Trade and Development ;
• Social and economic situation of Mongolia as of May 2014 by National Statistical Office of
Mongolia; (available in Mongolian language - Монгол улсын нийгэм эдийн засгийн байдал 2014
оны 3 сарын байдлаар, Үндэсний статистикийн хороо);
• Real Estate Report 2014 by Mongolia Properties;

21. • ASIA Reaching for the Top by International Monetary Fund, June 2014;
• ASIA Achieving Its Potential by International Monetary Fund, June 2014;
• Mongolia: Economy outlook 2014, by Asian Development Bank;
• Polit Barometer by Sant Maral Foundation, March 2014.
Interview Section: http://bcmongolia.org/en/interviews
• Peabody Energy's Greg Boyce Says Don't Write Off Coal
• Talking to United World, the Executive Director of the Mongolian Drilling Association (MDA)
Professor J. Tseveenjav. Source: http://www.worldfolio.co.uk/;
• Jim Dwyer, Executive Director, BCM – “Business need more business”;
• Damshnamjil Tsogtbaatar, Chairman of the SPC: “Privatizing Mongolia”;
• Jan Hansen, Economist, ADB: “The depreciation should help to increase the
competitiveness and to develop the non-mining industrial sector”.
The “Photo Gallery” contains photos from the 6th Anniversary BCM Renewal dinner on November
11, 2013.
___________________________________________
SOCIAL NETWORK WITH BCM
The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.
Keep up to date on the latest business deals in Mongolia and how the climate for investment is
improving each day with BCM.
Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the
latest announcements and comment on events carried in the NewsWire with the community.
Hear breaking news and announcements as they happen when you follow BCM on Twitter at
https://twitter.com/bcmongolia.
The bulk of the content on BCM’s new LinkedIn page is Mongolian language to better cater to BCM's
Mongolian-speaking audience and members. Please click on the below link to follow us on our new
LinkedIn page.
http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo
Social stats: BCM now has 6,312 fans on our Facebook fans page, 1,742 connections on LinkedIn
network, and 1,283 followers on Twitter.
Of course for news information, interviews, event photos, videos and announcements regarding our
organization, visit the official BCM website at http://bcmongolia.org/en/
________________________________________________

23. INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]
Year 2009 *4.2% [source: NSOM]
Year 2010 *13.0% [source: NSOM]
Year 2011 *10.2% [source: NSOM]
Year 2012 *14.0% [source: NSOM]
Year 2013 *12.5% [source: NSOM]
September 30, 2014 *13.0% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 13.6% y-o-y, Ulaanbaatar city, September 30, 2014
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
July 30, 2014 12.00% {source: Mongol Bank}
CURRENCY RATES – 30 OCTOBER 2014
Currency Name Currency Rate
US Dollar USD 1,861.20
Euro EUR 2,343.06
Japanese yen JPY 17.05
British pound GBP 2,974.38
Hong Kong dollar HKD 239.99
Chinese Yuan CNY 42.81
Russian Ruble RUB 304.35
South Korean won KRW 1.76
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.
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