BCM NewsWire Issue 450

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 450 – October 28, 2016
BCM NewsWire provides short summaries of news collected from around the world. Each
article is kept to a maximum of 150 words for brevity, but click on the link next to
“Source” to read the full article.
NEWS HIGHLIGHTS:
Business:
• Mongolia unlikely to receive dividends from OT until 2035, study says
• Rio Tinto upbeat on OT expansion
• Mongolian Railways submits feasibility study for OT route
• Entrée Gold welcomes expansion plans that includes its JV properties
• Kincora’s IBEX transaction passes key milestone
• Erdene makes new discovery at Bayan Khundii
• Aspire Mining sees potential for economic open pit coking coal mine
• Mongolian firm puts calcium vitamin on the market
• ABB Group donates MNT250 mn of equipment for university lab
• FMG Mongolia Fund lost 16.2% in the 3rd Quarter
• Xanadu Mines appoints Dr Andrew Stewart as managing director
• Government appoints members of EMC Board
• State-owned media group Montsame appoints director
• Done deal: Centerra Gold buys Thompson Creek for $1.1 billion
Economy:
• Mongol Bank: FX Auctions, swaps, 1-week bills, T-bills
• Production rises y-o-y, index shows
• Construction on TT-Gashuun Suhait railway to re-launch in 2017
• Solar plant to go online in December, says Energy Ministry
• New NBFIs subject to higher capital threshold
• Grain harvest triples in fall
• More households receiving electricity in UB
• Former ger dwellers move into their new apartments
• Government to lend MNT190 bn to students over next two year
• Hospitals to receive helicopters for emergency missions
• Germany donated 60 Benz cars to Mongolian Military Force
• Fossil poaching threatens scientific study, says University of Alberta researcher
• Over 200 snow leopards killed every year: new report
• How rats got from Mongolia to New York City subway tunnels
• Plentiful supplies limit scope for higher copper price
• Copper Futures Cap Longest Rally This Month as Stockpiles Fall
• Why we missed the coal spike

2. • China's steelmakers the relative winners in coking coal surge—EDITORIAL
Politics:
• MPP takes more UB districts in carry-over vote
• MPP promises pensioners a safety net with new bill
• Parliament considers tax discount for small businesses
• Mongol Bank and World Bank partner for National Payment System
• Former PM Saikhanbileg summoned to discuss Erdenet mine deal
• Despite poor economy, elections bring renewed hope in democracy, poll shows
• Bailing out Mongolia: A wrong direction in the steppe
BCM Updates:
• Working Groups News
• Job vacancies at member organizations
• Member-to-Member Special Offers & Benefits
• Websites Update - Presentations, Mongolia Reports, Interviews
Economic Indicators:
• Inflation
• Central Bank Policy Rate
• Currency Rates
*Click on titles above to link to articles.
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BUSINESS
MONGOLIA UNLIKELY TO RECEIVE DIVIDENDS FROM OT UNTIL 2035, STUDY SAYS
Oyu Tolgoi is the biggest foreign investment Mongolia’s history, but it probably won’t get
any dividends from its direct stake in this massive mining project for at least another
twenty years — if any at all. That’s according to a first-of-its-kind research project from

3. the Berlin-based consultancy OpenOil, which has developed a methodology to lift the
curtain on mining and energy, on a project-by-project basis. The base scenario of the
model estimates the government should have received up to USD1.1 billion since the mine
started up in 2010, and, depending on future market conditions, could earn many hundreds
of millions of dollars a year by the 2020s. But that would be as a result principally of
royalties, VAT, income tax and other revenue streams put in place when the project was
signed in 2002. Meanwhile, a 34 percent direct stake in the commercial operation is
unlikely to earn any extra revenues until well into the 2030s.
Source: Open Oil
RIO TINTO UPBEAT ON OT EXPANSION
An improved outlook for copper and gold has helped add USD1.3 billion to the value of the
USD5.3 billion expansion of Rio Tinto Groups’s Oyu Tolgoi copper and gold mine, which the
miner says could ramp up in seven years to release USD1.5 billion of annual free cash flow.
In preview reports, UBS analysts highlighted the risks of operating in Mongolia—where
disputes with the government set the project back two years—while Macquarie focused on
the potential for the mine to grow to beyond one million tons of copper production a year.
A technical report from last week, however, had more buoyant copper price assumptions—
up from USD2.86 a pound to USD3—and gold price assumptions—up from USD1,200 an
ounce to USD1,300. From 2025 to 2030, production is expected to average 524,000 tons a
year while peak annual free cash flow of USD2.82 billion will be reached two years after
full production is hit.
Source: The Australian
MONGOLIAN RAILWAYS SUBMITS FEASIBILITY STUDY FOR OT ROUTE
A feasibility study to build a railway line for transporting gold-and-copper concentrate
from the Oyu Tolgoi mine to China has been completed by Mongolia’s state-owned railway
developer, according to its new executive director. A railway from Oyu Tolgoi would make
deliveries more efficient as the mine run by Rio Tinto Group ramps up production from the
underground mine. Feasibility study has also been submitted to government authorities for
the railway line from the Tavan Tolgoi coking coal mine to the Gashuun Sukhait and Khuut-
Bichigt land ports to China, said recently appointed MTZ Executive Director Kh. Kherlen.
MTZ is also going forward with plans to build a logistics center at the Tianjin seaport in
China, he added. “Once investment is resolved, a joint company will be established and
construction will be started,” said Kherlen, who’s worked in government agencies
including the Mineral Resources Authority of Mongolia and State Properties Committee over
the last decade.
Source: UB Post
ENTRÉE GOLD WELCOMES EXPANSION PLANS THAT INCLUDES ITS JV PROPERTIES
Entrée Gold Inc. has been keen to point out that work on the underground mine at Oyu
Tolgoi is heading on track for the development of its jointly owned properties at the mine.
An update from the mine’s 66 percent shareholder, Turquoise Hill Resources, included an
preliminary economic assessment of the expansion at the Oyu Tolgoi copper-gold mine and
details concerning blocks where Entrée has interests. Those are the Hugo North Extension
that is part of the larger Hugo North Lift 1 block cave and Heruga. Those deposits could
bring the amount of ore brought to the concentrator to 120 million tons a year, Turquoise
reported.

4. “Although project partners Rio Tinto, Turquoise Hill, Oyu Tolgoi LLC and Entrée Gold have
for some time had a strategy for the development of all five deposits, this is the first time
since 2010 that investors have had access to an early-stage economic analysis that
highlights the development flexibility of potential later phases,” said Stephen Scott,
Entrée’s president and chief executive officer.
Source: Geology for Investors
KINCORA’S IBEX TRANSACTION PASSES KEY MILESTONE
The tax authorities in Mongolia have now approved the proposed transaction between High
Power Ventures and Kincora Copper, under which respective exploration acreage
prospective for copper in Mongolia will be merged. The transaction, which was first
mooted in May of this year, will create a consolidated landholding inside Kincora of over
1,500 square kilometers of ground. The majority of this ground lies across the geological
trend which hosts the massive Oyu Tolgoi copper mine found and developed by mining
legend Robert Friedland and now owned by Rio Tinto Group. The ground is also prospective
for gold.
“It is pleasing to pass this key milestone towards the completion of the IBEX transaction,”
said Kincora’s chief executive Sam Spring. He added, “This milestone supports the
transition to the next stages of completing the IBEX transaction.”
Source: Proactive Investors
ERDENE MAKES NEW DISCOVERY AT BAYAN KHUNDII
Erdene Resource Development has made a new discovery at its Bayan Khundii project,
hitting gold 170 meters north of its main Striker Zone. After more than doubling its original
5,000 meter drill program at the asset to 14,000 meters earlier this month, the company
has re-positioned the rig and discovered further consistent gold mineralization nearby. The
lone step-out hole returned 123 meters of mineralization grading 1.32 grams of gold per
ton of ore from 20 meters depth. Within this were some high-grade sections including 68
meters at 1.96 grams from 24 meters depth and 30 meters cutting 2.98 grams from 29
meters depth.
On top of this, the company published six assays in and around the Striker Zone, where it
has already defined high-grade mineralization over a 500 meters strike length. This
included a 90 meter interval averaging 2.51 grams from 36 meters depth. Another 12
assays are pending from previous drilling at Bayan Khundii.
Source: Mining Journal
ASPIRE MINING SEES POTENTIAL FOR ECONOMIC OPEN PIT COKING COAL MINE
Aspire Mining Ltd has completed preliminary pit optimization work that indicates a large
proportion of the current Nuurstei Coking Coal deposit could report to an economic open
pit. Aspire has a 45 percent ownership in Nuurstei located in Mongolia through its 50-50
Ekhgoviin Chuluu Joint Venture with Noble Group, which currently has a 90 percent
interest in Nuurstei. Planning is underway to complete additional drilling to convert
deposit tonnes from the Inferred to Indicated categories and to test deposit extensions.
The process is underway to convert exploration license to a mining license.
Nuurstei is viewed as a low capital cost starter project which could assist with the
development of the much larger Ovoot Coking Coal Project which is 160 kilometers further
to the west. While tonnage at Nuurstei are modest, the project presents as a commercial
scale pilot project for logistics and market development. It could also provide commercial

5. scale rail freight cargo’s onto the Northern Rail Line to iron out logistical teething
problems before the much larger volumes from the Ovoot coking coal project need to be
dealt with.
Source: Proactive Investors
MONGOLIAN FIRM PUTS CALCIUM VITAMIN ON THE MARKET
The company Monchemo has developed a new calcium supplement made from horse bones
that it says can be used for growing strong bones. Rich in calcium, phosphor,magnesium,
collagen, growth hormone, glucose, micro elements and minerals, the supplement is made
with a non-chemical process that uses low-temperature processing. The company
recommends its product for growing children and the elderly.
Source: Montsame
ABB GROUP DONATES MNT250 MN OF EQUIPMENT FOR UNIVERSITY LAB
ABB Group donated MNT250 million worth of energy efficient drives, motors and
automation equipment laboratory to School of Geology and Mining of Mongolian University
of Science & Technology (MUST). “This laboratory, will provide an actual hands on
experience for the students, and enable them to learn and design more greener and
energy efficient mines in the future” said Erdembayar Sukhee, Chief Representative of ABB
in Mongolia.
ABB hs also awarded full tuition scholarships to three students attending the School of
Geology and Mining and School of Power Engineering at MUST. “The awardees have been
chosen from among their peers due to exceptional educational, academic achievement and
capability, the will to develop themselves further and the need for financial assistance,”
said Sukhee.
Source: ABB Group
FMG MONGOLIA FUND LOST 16.2% IN THE 3RD QUARTER
FMG’s Mongolia fund reported a 16.2 percent loss for the third quarter despite on
improved conditions. “In the third quarter we reversed all those gains and more in the
worst quarter reported in many years,” reads a 13 October statement from the investor.
“Apart from the strength recorded in coal prices, all indicators pointed south.”
Losses were noted from both locally listed and offshore-listed shares. Share prices on the
Mongolian Stock Exchange fell 20 percent after a a 15 percent devaluation of the tugrik.
“The country’s fundamentals are weak, but with a new market-friendly government in
place committed to the task of improving the economy we are slightly optimistic. We also
note that that with Mongolian assets trading at or near multi-year lows, a small spark
could ignite a strong re-rating.”
Source: FMG Mongolia Fund
XANADU MINES APPOINTS DR ANDREW STEWART AS MANAGING DIRECTOR
Xanadu Mines Ltd. has appointed Andrew Stewart as managing director and chief executive
officer. Mark Wheatley, executive chairman, will move to non-executive chairman. "Over
the next few months, I will be appointing a highly experienced chief geologist to ensure a
seamless transition of the succession plan,” said Stewart. "This will complete a
reorganization of our exploration team in Mongolia to ensure our focus on exploration
success continues and will strengthen in-country capacity to support our well-funded
ongoing exploration programs across multiple projects.”

6. “My move to Australia will assist with promotion of the company and provide easier and
more regular access to important stakeholders and capital investment markets."
Source: Proactive Investors
GOVERNMENT APPOINTS MEMBERS OF EMC BOARD
The Mongolian government has appointed new four new board members to Erdenet Mining
Corp. The Agency for State Property Policy and Coordination called a meeting of
shareholders of the Erdenet Mining Corporation on 18 October for the appointments to the
joint venture between Mongolia and privately held company Mongolian Copper Corp. The
agency has appointed the deputy chief of the cabinet secretariat, U. Byambasuren, the
state secretary for mining, G. Nandinjargal, an adviser to the chairman of State Property
Policy and Adjustment Agency, former MP D. Demberel, and the head of department of the
Ministry of Finance, N. Dorjsembed, to the seven-member board.
Source: Montsame
STATE-OWNED MEDIA GROUP MONTSAME APPOINTS DIRECTOR
Montsame National News Agency has appointed B. Ganchimeg as its next director.
Ganchimeg was the editor-in-chief of the Open Door newspaper. She started her career in
journalism as a columnist for the newspapers Today and the Daily Newspaper as a
columnist. Honors she’s received include the First Prize of Baldorj Foundation and the title
Honored Figure of Culture.
She is the seventeenth director and the second woman leader of Mongolia’s first news
agency.
Source: Montsame
DONE DEAL: CENTERRA GOLD BUYS THOMPSON CREEK FOR $1.1 BILLION
Canada's Centerra Gold Inc. said Thursday it has completed an agreement to buy United
States-based Thompson Creek Metals in a USD1.1 billion deal that adds a new large asset
to Centerra’s growing portfolio. Centerra has been using the cash generated by Kumtor to
develop projects in Mongolia, Turkey and Canada, with the goal of becoming a 1 million
ounce per year producer. By acquiring Thompson Creek, a move first announced in July,
the Toronto-based miner gets its hands on Mount Milligan, a mine in British Columbia with
reserves estimated in 5.7 million ounces of gold rand 2.2 billion pounds of copper.
Through the deal, Centerra also reduces its reliance on Kumtor mine in Kyrgyzstan for cash
flow, as the associated risks to such operation have proved a drag on the company’s
market valuation. Perry noted the deal also adds to the company’s existing project
pipeline, which includes Oksut in Turkey, Gatsuurt in Mongolia, and Greenstone in Canada.
Source: Mining.com
ECONOMY
MONGOL BANK: FX AUCTIONS, SWAPS, 1-WEEK BILLS, T-BILLS
The Bank of Mongolia on 27 October sold CNY83.5 million to commercial banks at currency
auction (out of total bids for USD52.1 million and CNY83.5 million) for a closing rate of
MNT344.53. Also that day, it rejected an equivalent of USD16 million in tugrik swap
agreements.
On 24 October, the central bank issued MNT280 billion in one-week bills at a weighted
interest of 15 percent. On 26 October, it received MNT30 billion in bids for 28-week bills

7. with a face value of MNT20 billion at a discounted price and weighted average yield of
16.9 percent. It received MNT20 billion in bids for 52-week bonds with a face value of
MNT20 billion that was sold at a discounted price and weighted average yield of 17
percent.
Source: Bank of Mongolia
PRODUCTION RISES Y-O-Y, INDEX SHOWS
Mongolia’s economic troubles have not hindered industrial production this year, as an
index shows a 5 percent increase in September from the end of last year. The Industrial
production Index, which is adjusted seasonally, stood a 137.4 in September, demonstrating
a 2.4 percent increase from the same period in 2015. That was despite a month-on-month
fall of 7.5 percent spurred on by a 7.6 percent decline in mining and quarry production.
Construction output was down by MNT348.6 billion, or 23.2 percent from September 2015,
reflecting a 22.6 percent fall from local construction companies. Foreign companies
comprise 1.9 percent of the construction sector in Mongolia.
Source: Montsame
CONSTRUCTION ON TT-GASHUUN SUHAIT RAILWAY TO RE-LAUNCH IN 2017
Construction on the railway line from the Tavan Tolgoi coking coal mine to the border to
China is set to resume in April after years of stop-and-go because of financial difficulties.
The strategically important rail, which is expected to cut down on logistics cost on coal
transport as well as the environmental cost from trucks driving through the Gobi desert for
the deliveries, is scheduled to commission by the end of 2018. Construction is scheduled to
run from April 2017 on the railway, which is 51 percent complete.
In 2012, ICOM Australia began construction on the railway with a planned 1,520 millimeter
gauge that is standard to Russia. Since then, the government has revised it plan to build
the 1,435 millimeter gauge that most of the world, including China, utilizes.
Source: Montsame
SOLAR PLANT TO GO ONLINE IN DECEMBER, SAYS ENERGY MINISTRY
A new solar power plant under construction by Solar Power International LLC is to
commission on 15 December, according to the Ministry of Energy. Work is 65 percent
complete at the facility in Khongor Soum, Darkhan-Uul, the ministry reported in a
summary of its activities in the first 100 days of the new government under the Mongolian
People’s Party prime minister, Erdenbat Jargaltulga.
The company has installed 32,274 solar panels from Japan’s Sharp, in addition to a 110
kilowatt substation and power lines since work commenced last July.
Source: Montsame
NEW NBFIS SUBJECT TO HIGHER CAPITAL THRESHOLD
Mongolia has introduced a new minimum for launching lending businesses that will likely
cull the herd of lenders in Mongolia’s financial sector. The Financial Regulatory
commission now requires non-banking financial institution to hold minimum of MNT2.5
billion capital. That compares with between MNT20 million and MNT800 million as the
previous starting point for launching a business.
Source: Unuudur

8. GRAIN HARVEST TRIPLES IN FALL
Mongolia’s grain harvest tripled in October from 2015, when drought cut down animal feed
production that contributed to dzud-like conditions and killed off nearly a million
livestock. Farmers reported 292,100 thousand tons of crops, as of 1 October, including
122,000 thousand tons of potatoes, 69,700 tons of vegetable, 902,000 tons of hay, and
19,1000 thousand tons of fodder.
Source: Montsame
MORE HOUSEHOLDS RECEIVING ELECTRICITY IN UB
New infrastructure is coming online in Ulaanbaatar to bring light and energy to homes in
the city’s slum ger districts. An additional 1,562 households in Ulaanbaatar have been
linked to the city’s power grid in the last three months, but that still leaves 10,000 homes
that go without. The Ministry of Energy has a budget of MNT2 billion to allocate to the
Ulaanbaatar’s power company to bring more homes online.
Source: Montsame
FORMER GER DWELLERS MOVE INTO THEIR NEW APARTMENTS
More than 100 families have gotten the keys to their new apartments from Burd
Construction after striking a deal to give up their land where they lived in gers for new
formal housing. The company struck deals with more than 80 percent of the over 730,000
households to build housing projects at so-called ger districts in the 13th and 14th districts
of Bayanzurkh. The company has built 148 apartments for 120 household households, with
a total of 182 apartments on the way for the total 142 households. The remaining families
will receive their apartments within this month, with a choice of apartments at
Amartuvshin Town in 13th Khoroolol, Bayanzurkh District.
Families were paid MNT700,000 for their land during the time of construction.
Source: Mongolia.GoGo.mn
GOVERNMENT TO LEND MNT190 BN TO STUDENTS OVER NEXT TWO YEAR
An estimated 70,000 students will borrow MNT190 billion for university tuition over the the
next two years [Source does not cite where this data come from -ed]. Mongolia will lend
MNT90 billion this year and MNT100 billion in 2017.
Source: Udriin Sonin
HOSPITALS TO RECEIVE HELICOPTERS FOR EMERGENCY MISSIONS
Three state-owned medical facilities will receive a helicopter for emergency
transportation of patients in traffic jammed Ulaanbaatar. The National Center of Injury
and Disabilities and State Hospitals No. 1 and 3 will each receive a hospital and have
landing pads built. The government built six temporary landing ports for the Asia-Europe
Meeting held in June for the heads of state and government representatives who arrived in
the country. “We risk patients dying because of the traffic jam, when their lives are
counted by minutes and even seconds,” said S. Munkhsaikhan, chief of the department for
implementation regulation for air transportation policy at the Ministry for Road and
Transportation Development.
Munkhsaikhan added that companies including A JET and Mongolyn Alt Corporation (MAK)
had submitted proposals for the helicopters.
Source: Unuudur

9. GERMANY DONATED 60 BENZ CARS TO MONGOLIAN MILITARY FORCE
Germany has donated 60 Mercedes Benz vehicles to the Mongolian Armed Forces to help
with its peacekeeping missions in Afghanistan. The automobiles will be used for training of
the military, which has been working with German in Afghanistan since 2009. Since, 2006,
Germany has donated MNT1.3 billion worth of goods and training.
Source: Unuudur
FOSSIL POACHING THREATENS SCIENTIFIC STUDY, SAYS UNIVERSITY OF ALBERTA
RESEARCHER
A University of Alberta researcher who has been excavating a site in Mongolia says fossil
poaching threatens to destroy evidence central to scientific study. Researcher Gregory
Funston said public awareness about the active fossil trade is essential to preserving
historical data. Alberta has anti-poaching laws to protect vulnerable sites, but the global
fossil trade continues to flourish and skeletons are often dismantled. “It came to a head
last year when Nicolas Cage returned a (fossil),” he said, adding that it’s a rampant
problem in central Asia.
Funston said he saw the damage from poaching firsthand earlier this year during an
excavation in south central Mongolia. “When we found the bones, they were almost
completely destroyed,” Funston said.
Source: Edmonton Sun
PLENTIFUL SUPPLIES LIMIT SCOPE FOR HIGHER COPPER PRICE
Copper prices have rallied from their January lows, but investors looking for further hefty
gains may be disappointed as ample supplies are likely to more than offset stronger
demand in top-consumer China. Funds' net long position at 36,019 lots or more than
900,000 tons is down from 42,624 lots on 12 October, suggesting some are rethinking, but
it is still more than three times the 9,987 lots clocked on 12 September.
Fears about demand growth in China pushed copper to USD4,318 a ton in January, its
lowest since May 2009. Fiscal and monetary stimulus in China, spending on infrastructure
and a stronger property market helped prices recover to above USD5,000 a ton in July, and
since then copper has traded in a USD4,500 to USD5,000 range. Firm demand however is
unlikely to mean a deficit as supplies are high.
Source: Reuters
COPPER FUTURES CAP LONGEST RALLY THIS MONTH AS STOCKPILES FALL
Copper capped its longest stretch of gains this month as a run on stockpiles boosted
speculation that demand for the metal is increasing. Inventories tracked by the London
Metal Exchange fell for a fifth straight day, and have slid 11 percent from an almost three-
year high reached last month. Supplies on the Shanghai Futures Exchange posted the
eighth drop in nine days. Prices of the metal used in pipes and wiring also rose after a
report showed sales of new U.S. homes held close to an almost nine-year high. “We’re
starting to see a pretty consistent pattern of draws in the LME,” Frank Cholly, a senior
market strategist at RJO Futures in Chicago, said in a telephone interview. “When you get
some fundamentals that are supportive like copper-stock drop-downs, that’s going to make
the spike up so much sharper.”
Source: Bloomberg

10. WHY WE MISSED THE COAL SPIKE
We got it wrong on coal. Falling inventories at Chinese ports might not be sufficient to set
the market on fire, Gadfly argued in February. After prices instead rose about 42 percent,
China's economic planners last month ordered a ramp-up of production at local pits to
squash the boom. Lifting coal production isn't always as simple as turning a key or pressing
a button. Chinese miners are hemmed in by restrictions on the number of days they're
allowed to operate, as well as basic geology: If you're mining a narrow coal seam, you can't
necessarily just conjure a thicker one out of the rock.
Volatility is good news for traders, and there's probably a window in the coming months
when prices will remain buoyant before Chinese demand drops around Lunar New Year and
domestic mine supplies finally come on-stream. But hold on for a bumpy ride.
Source: Bloomberg
OVER 200 SNOW LEOPARDS KILLED EVERY YEAR: NEW REPORT
Between 220 to 450 snow leopards have been illegally killed every year since 2008, mostly
in retaliation for livestock depredation or for illegal trade, according to a new report.
According to the report, these numbers could be considerably higher since many illegal
killings in remote mountain areas go undetected. Five countries—China, India, Mongolia,
Pakistan and Tajikistan—account for more than 90 percent of the estimated snow leopard
poaching. Skins, usually used as wall displays in homes and restaurants, are the most
commonly seized snow leopard products, the report found.
Snow leopards may be hard to spot in the wild, but they make easy targets for poachers,
according to a new report by TRAFFIC, the wildlife trade monitoring network. With fewer
than 4,000 snow leopards estimated to remain in the wild, high levels of poaching could
spell trouble for the already dwindling populations of these secretive cats. “TRAFFIC’s
analysis confirms the worrying scale of illegal killing of snow leopards,” said James
Compton, Senior Program Director with TRAFFIC, in a statement.
Source: Mongabay
HOW RATS GOT FROM MONGOLIA TO NEW YORK CITY SUBWAY TUNNELS
City dwellers’ favorite scruffy friend, the brown rat causes USD19 billion dollars in
damages around the world every year. Yet for an animal that is responsible for so much
havoc, we know surprisingly little about it. A genomic analysis from Fordham University
has unveiled a story of brown rat migration that followed five major routes out of East
Asia. One wave cautiously sniffed its way down to Southeast Asia. Another traveled along
the Silk Road across Central Asia and into Europe. It established itself there by about
1,500. The Europeans probably didn’t expect to get a new rat in their trade deals.
By the 1750s, brown rats were in New York City, destined to be subway kings. Ironically,
for how widespread it is, the brown rat is a homebody. “All the movement was human-
mediated,” said Emily Pucket, the ecologist who led the study.
Source: Popular Science
CHINA'S STEELMAKERS THE RELATIVE WINNERS IN COKING COAL SURGE—EDITORIAL
While no steel maker will be happy with the explosion in coking coal prices, Chinese mills
are the best placed to deal with the impact, given they are nowhere near as exposed to
spot prices as competitors in the rest of Asia and Europe. While Australia is China's biggest
supplier, meeting almost half of import demand, the second biggest source is Mongolia.
China benefits as coking coal sourced from Mongolia is far less expensive than cargoes

11. from the seaborne market, given Mongolia's mines have effectively only one buyer for their
output, thereby cutting their pricing power.
Mongolia supply of coking coal to China in the first eight months of the year jumped of
51.7 percent from the same period in 2015. Overall, it seems very likely that Chinese
steelmakers are now enjoying a coking coal cost advantage not available to their
competitors, especially those located in the northeast, close to both domestic and
Mongolian mines.
Clyde Russell is an author and columnist for Reuters.
Source: Reuters
POLITICS
MPP TAKES MORE UB DISTRICTS IN CARRY-OVER VOTE
The Mongolian People’s Party won six additional districts in Ulaanbaatar in the carry-over
vote held on 23 October because of poor turn out on the first scheduled voting day. The
MPP took the Baganuur, Bagakhangai, Nalaikh, Songinokhairkhan, Khan-Uul and Chingeltei
districts of Ulaanbaatar, reported the General Election Committee on 24 October. The
Democrats, meanwhile, took Bayangol, Sukhbaatar and Bayanzurkh.
The official election day on 19 October failed to elect officials for some districts where
turnout was less than 50 percent. The extra day brought total voter turnout to 54 percent.
Elections will continue for 58 sets in 57 electoral districts that have still not reached the
50 percent voter attendance threshold. Winners will be chosen in a third contest, whether
or not the threshold is met.
Source: News.mn, Udriin Sonin
MPP PROMISES PENSIONERS A SAFETY NET WITH NEW BILL
The Jargaltulga Erdenebat government has promised a safety net for seniors despite
today’s economic gloom with a new bill. The bill would allocate MNT70 million of
government funds for promotion of government pensions for retired citizens above 65
years old, as well as broadening access to public services aimed at them.
Source: Montsame
PARLIAMENT CONSIDERS TAX DISCOUNT FOR SMALL BUSINESSES
Amendments before Parliament would reduce taxes for small businesses by 90 percent.
The legislation, which was read before the legislature on 27 October, would make
companies that work in business related to food, textiles, construction and animal
husbandry that earn less than MNT1.5 billion eligible for the tax cut. The tax reduction
would run for four years from from 1 January 2017.
Source: Montsame
MONGOL BANK AND WORLD BANK PARTNER FOR NATIONAL PAYMENT SYSTEM
The World Bank is working with central bank officials to help develop a National Payment
System. Bank of Mongolia officials introduced to Parliament on 26 October the proposal,
which would require amendments to several laws to create a fully integrated system.
World Bank Country Manager James Anderson said the global institution would provide its
expertise for the program for the next four years.
Source: Montsame

12. FORMER PM SAIKHANBILEG SUMMONED TO DISCUSS ERDENET MINE DEAL
Former prime minister Chimed Saikhanbileg was summoned by a group from Parliament to
clarify details about the controversial purchase of Russia’s shareholding in the Erdenet
copper mine by mysterious private companies with affiliations to Trade and Development
Bank of Mongolia LLC. According to an unnamed source, Saikhanbileg on 24 October
attended meetings called on by the Judicial Standing Committee to explain the purchase
by Mongolian Copper Corp. of MongolRosTsvetmet LLC’s 49 percent shareholding in the
mind. The government of Mongolia owns the majority 51 percent.
The deal was leaked by a Russian newspaper in June and formally announced by
Saikhanbileg’s Democratic Party a day before the elections. Some count the upset as the
reason for the Mongolian People’s Party’s landslide win in June.
Source: News.mn
DESPITE POOR ECONOMY, ELECTIONS BRING RENEWED HOPE IN DEMOCRACY, POLL
SHOWS
A new nationwide poll released on 26 October by International Republican Institute’s
(IRI’s) Center for Insights in Survey Research reveals high levels of optimism for the newly-
elected government and Mongolian democracy— despite the country’s continued poor
economic performance and popular concerns over corruption. IRI’s poll reflects enthusiasm
for the results of the June parliamentary elections, with 80 percent reporting they would
vote the same way today as on 29 June 29. More than half are either “very optimistic” (16
percent) or “somewhat optimistic” (40 percent) that the newly-elected parliamentarians
will fulfill their electoral promises.
Similarly, the poll shows a 12-point increase (up to 31 percent from 19 percent) of
respondents who feel the country is headed in the right direction, and a corresponding 14-
point decrease (down to 47 percent from 61 percent) of those who feel it is headed in the
wrong direction.
Source: IRI
BAILING OUT MONGOLIA: A WRONG DIRECTION IN THE STEPPE
“THINGS really get messy when politicians see money,” mused Tsakhia Elbegdorj,
Mongolia’s president, earlier this month. He was discussing his country’s request for an
emergency loan from the IMF to help ward off a balance-of-payments crisis. The messiness
might be avoided, Elbegdorj added, if the IMF forced Mongolia to observe a little more
budgetary discipline than it is used to.
It remains unclear just how severe the IMF might be. If its proposed terms seem too
onerous, Mongolia could always turn to China, which has extended it some credit in recent
years and seems prepared to offer more. Many Mongolians fret, however, over the political
and commercial leverage this would give their giant neighbor. Either way, Mongolia will
find itself beholden to China. In spite of all the upheaval, the share of Mongolia’s exports
going to China has hovered steadily between 80 percent and 90 percent over the past six
years.
Source: Economist

13. BCM WORKING GROUP NEWS
- Risk Working Group meeting on “Draft Amendments to Law on Disaster Protection” 13
October 2016
- Business Ethics Working Group meeting “Third Party Bribery Risks” 27 September 2016
- Education & Innovation Working Group Meeting on “Opportunities for Fostering
Innovation in the Mongolian Market” 22 September 2016
- Energy & Environment Working Group’s consultation meeting with J.Batbayasgalan,
Deputy Governor of Capital City on “MUNICIPALITY’S ACTION PLAN FOR THE NEXT 4
YEARS”, 15 September 2015
- Business Ethics Working Group Meeting on “CSR, GIFTS AND HOSPITALITY POLICY”, 7 June
2016
- Capital Markets Working Group Meeting on “OYU TOLGOI UNDERGROUND PROJECT
FINANCING”, 5 April 2016
- Tax Working Group Meeting on “VAT LAW”, 2 March 2016
JOB VACANCIES AT MEMBER ORGANIZATIONS
- University of Humanities is hiring English language Instructor, Accountant Instructor and
Economics Instructor. Deadline for application: Oct 24, 2016, for more information: please
contact at: humanresources@humanities.mn
- B Production is hiring Accountant. For more information, please contact at
azbayar@bproduction.mn
1. Transwest Mongolia LLC is hiring Project Product Support Representative. Deadline for
application: Nov 04, 2016. For more information, please contact at careers@transwest.mn
2. Sandvik Mongolia LLC is hiring Order Desk. Deadline for application: Nov 09, 2016. For
more information, please contact at +976 7012 1930
Please click here to view full list of Job Vacancies at member organizations.
MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:
- Orchuulga 24 is providing 15% discount on written translation services to BCM Members
- MNC HD TV offers BCM members 20% discount from the fee to be showcased in their “The
Story of Business/Бизнесийн түүх” TV program.
- American University of Mongolia is offering BCM members a 20% discount on all of ELI
Summer Courses.
- Matoza LLC is offering 15% special discount to BCM members on Intensive Business English
Language Course in Poland with a Sightseeing Trip.
Please click here to view full list of Member-to-Member special offers & Benefits.
WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS
PRESENTATIONS:
- Presentations from “Invest Mongolia 2016” Conference
Please click here to view full list of Presentations.

14. MONGOLIA REPORTS:
- World Bank, “Mongolia Economic Brief”, Sep 2016
- WPP and Y&R Mongolia, BradnZ’s first ever “Spotlight on Mongolia”, Sep 2016
- ADB, “Asian Development Outlook 2016: Asia’s Potential Growth” (forecasts of the next 2
years for the 45 economies in Asia and the Pacific including Mongolia)
- Invest Mongolia, “Your Guide to Invest in Mongolia” 2016
- BTI, “Mongolia Country Report” 2016
- World Bank, “Doing Business: Economic Profile of Mongolia 2016"
Please click here to view full list of Reports.
ECONOMIC INDICATORS
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]
Year 2014 *11.0% [source: NSOM]
September 30, 2016 *-0.1% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: -0.7% y-o-y - Ulaanbaatar City, September 30, 2016
CENTRAL BANK POLICY LOAN RATE
December 31, 2008 9.75% [source: IMF]
March 11, 2009 14.00% [source: IMF]
May 12, 2009 12.75% [source: IMF]
June 12, 2009 11.50% [source: IMF]
September 30, 2009 10.00% [source: IMF]
May 12, 2010 11.00% [source: IMF]
April 28, 2011 11.50% [source: IMF]
August 25, 2011 11.75% [source: IMF]
October 25, 2011 12.25% [source: IMF]
March 19, 2012 12.75% [source: Mongol Bank]
April 18, 2012 13.25% [source: Mongol Bank]
January 25, 2013 12.50% [source: Mongol Bank]
April 8, 2013 11.50% [source: Mongol Bank]
June 25, 2013 10.50% [source: Mongol Bank]
July 30, 2014 12.00% {source: Mongol Bank}
January 14, 2015 13.00% {source: Mongol Bank}
January 14, 2016 12.00% [source: Mongol Bank]

15. May 6, 2016 10.50% [source: Mongol Bank]
August 18, 2016 15.00% [source: Mongol Bank]
CURRENCY RATES – 20 October 2016
Currency Rate
U.S. dollar USD 2,363.10
Euro EUR 2,578.14
Japanese yen JPY 22.59
British pound GBP 2,884.16
Hong Kong dollar HKD 304.73
Chinese Yuan CNY 348.66
Russian Ruble RUB 37.46
South Korean Won KRW 2.07