BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 317 – March 21, 2014

NEWS HIGHLIGHTS:

Business

Mongolia seeks to end Oyu Tolgoi impasse at parliament session;

Rio writes down $4.7 billion of unit operating Mongolia mine;

Rio flags $800 million hit for further OT delays;

Rio Tinto faces expiry of Mongolian mine loan commitments;

Russia ready for oil pipeline, says Rosneft president;

Newera commences drilling at Ulaan Tolgoi;

Gurvan Bulag feasibility study in final stages, says SPC;

Viking Ashanti announces 38.3Mt initial coal resource at Berkh Uul;

Zinc, lead enrichment plant opens as largest facility in Mongolia's west;

Hunnu Air plans to open direct flight between Novosibirsk and UB;

FRC grants new rights to NBFI association;

Modun subscribes for $510,000 private placement;

MGG’s newly appointed CEO announces North American roadshow;

MNU to host job fair;

Global Science and Technology improves aviation meteorology;

Kyrgyzstan's ruling bloc collapses over corruption charges.

Economy

Mongol Bank: currency swaps, 1-week bills, 4-week bills, treasury bills;

Mongol Bank plans to double currency swap line with China;

Longer-term for government bond auctions are a “capital” idea;

Mongolia may raise debt amid outflows, Moody’s says;

8% mortgage program continues;

Mongol Bank to introduce new interbank payment scheme;

Mongolia boosts support for SMEs;

UHG-Gashuun Sukhait rail line to complete November 2015, says rail official;

UB redevelopment plans;

UB road construction to launch 1 April;

Two overpass pedestrian bridges to open in May in UB;

Livestock protection fund to put Mongolian milk on UB store shelves;

Mongolia's property boom set to cool;

UB seeks Aussie funds for resources sector;

Aussie juniors jump at chance in Mongolia;

Dr. Copper catches a dose of Chinese flu;

Gold pricing scrutiny widens.

Politics

Mongolia requests renewed China border agreement;

South Korea’s president seeks Mongolia's support for 'Eurasian initiative';

Mongolian diplomats to receive visa-free travel to Poland, Turkey in April;

Mongolia-Cuba consultative meeting held;

Kuwaiti official, Mongolian diplomat discuss joint interest issues;

Ho Chi Minh City offers strong ties with UB;

Economic Development minister meets head of ECP;

Student-Soldier program launches 1 April;

FAO urges Asia Pacific governments to up food production;

Mongolia strengthens efforts against human trafficking;

Central Dinosaur Museum to open 1 June;

Years after kidnapping, a Japanese reunion in Mongolia.

ECONOMIC INDICATORS

MSE Top 20 Index by market Capitalization;

Foreign-listed Companies with Mongolian Assets;

Inflation;

Central bank policy rate;

Currency rates.

*Click on titles above to link to articles.

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Mongolian Economy Magazine

BUSINESS

MONGOLIA SAYS SEEKS TO END OYU TOLGOI IMPASSE AT PARLIAMENT SESSION

Mongolia will seek to resolve an impasse with mining group Rio Tinto PLC over the USD 6 billion Oyu

Tolgoi copper and gold project during a parliamentary session starting next month, a senior

government official said on Thursday.

The three-month session begins on 5 April, five days after Rio Tinto has warned that lender

commitments on existing project finance arrangements expire.

"It will all come together then," Mongolia's Minister for Foreign Affairs Bold Luvsanvandan said in

Sydney, when asked if the impasse was slated for discussion during the session.

Rio Tinto has warned the finance agreement is due to expire 31 March, after having been extended

last year by lenders, which include International Finance Corp. and European Bank for

Reconstruction and Development. A major hurdle to getting Mongolia's largest foreign investment

project back on track has been USD 4 billion in financing. There is also disagreement over

compensation for cost overruns from an earlier stage of development.

Rio Tinto booked a USD 1.49 billion writedown post-tax on Oyu Tolgoi in its 2013 results, largely due

to the delay in expanding the mine underground. It has also warned investors to brace for a further

USD 800 million writedown unless development work resumes after being halted in August.

The Parliamentary session is scheduled to run from April 5 to early July, according to the minister.

Source: Reuters

RIO WRITES DOWN $4.7 BILLION OF UNIT OPERATING MONGOLIA MINE

Rio Tinto PLC wrote down the value of a ―cash-generating‖ unit developing Mongolia‘s Oyu Tolgoi

copper and gold mine by USD 4.7 billion as an impasse with the government persisted over starting

underground operations.

The USD 1.1 billion pretax impairment of goodwill and USD 3.6 billion property and equipment

writedown are the result of Oyu Tolgoi remaining an open-pit only operation, Rio Tinto said in its

annual report published yesterday. A further USD 800 million may be written down should

underground mining fail to begin in the next 12 months, Rio said.

―Given the delays, this move should have been widely anticipated by the market, with the caveat

being that if things get back on track the value of those assets could also be written up,‖ said Nick

Cousyn, chief operating officer of Ulaanbaatar-based brokerage BDSec.

The suspension of the mine‘s expansion led to 1,700 staff layoffs at the site, Rio said 15 August. The

company‘s post-tax discount rate on cash flow from Mongolia rose to 8.7 percent last year from 8.3

percent in 2012, Rio said in the annual report.

―A slightly higher discount rate is probably justified,‖ Cousyn said. ―Frankly, 8.7 is not overly high,

but increasing the discount rate is a reasonable thing to do considering how long the dispute

between Rio and the government has gone on.‖

Source: Bloomberg

RIO FLAGS $800 MILLION HIT FOR FURTHER OT DELAYS

Rio Tinto PLC has warned it faces a USD 800 million write-down of the Oyu Tolgoi copper and gold

project in Mongolia this year if it cannot start an expansion held up by a dispute with the

government.

The big miner also revealed that most of a USD 4.72 billion pre-tax writedown on the project

announced in last month's 2013 earnings report was due to delays starting the stalled underground

mine expansion, which is where most of the value at Oyu Tolgoi sits. Rio chief Sam Walsh warned

last month that further delays to the project could occur if agreement with the Mongolian

government, which has a 34 percent stake in Oyu Tolgoi, was not reached by the end of this month,

when project finance commitments expire. In Rio's annual report, released late on Friday, the

miner laid out the potential balance sheet repercussions of what is likely to be a missed project

finance deadline.

"If this [underground development] is further delayed, it would have an adverse impact on the

recoverable amount [from any sale of Oyu Tolgoi] due to the delay in commencing full production,"

Rio said. "A further 12-month delay in the timing of cashflows related to the underground would

decrease fair value less costs of disposal by USD 800 million."

The annual report also said a 2013 pre-tax impairment of USD 1.15 billion of Oyu Tolgoi goodwill

and USD 3.57 billion of the project's plant, property and equipment were primarily a result of the

delay to the underground. Rio and its subsidiary Turquoise Hill Resources Ltd. have stalled

development of the expansion until they settle what they are calling "shareholder issues" with the

government.

The dispute is over benefits the government will receive from the project and compensation around

cost overruns at the recently started open pit operations. Turquoise Hill revealed last month that

access to water in the Gobi desert, where Oyu Tolgoi is located, also had become an issue. Last

week Walsh said Rio would not be rushed into agreement by the looming deadline.

"We've learnt that when you build a mine you need to get things right upfront because you are going

to have to live with it for a long time," Walsh said. "It would be nice to bring the discussions with

the government of Mongolia to a conclusion but I'm not going to speculate whether the government

is ready to bring that to a conclusion."

The mining boss said the discussions were amicable and focused on long-term issues.

Source: The Australian

RIO TINTO FACES EXPIRY OF MONGOLIAN MINE LOAN COMMITMENTS

Australia's export credit agency is one of nearly 20 banks whose commitment to fund Rio Tinto PLC's

Oyu Tolgoi mine in Mongolia is close to expiring, demonstrating the impact that delays are having

on the giant copper and gold project.

A plan to expand Oyu Tolgoi has been delayed by disagreements with the Mongolian government,

and funding commitments from some commercial banks for stage two of the mine are due to expire

within a fortnight. Rio Tinto secured USD 4.2 billion worth of funding for the project from a

collection of development banks and commercial banks last year, with the World Bank's

International Finance Corporation leading the way with a commitment to lend USD 1.4 billion.

The IFC told Fairfax Media this week that its USD 1.4 billion pledge was not subject to an expiry

date. ''We stand ready to support the project with our approved financing,'' said spokesman Tom

Butler.

But commitments from 15 commercial banks are believed to expire on 31 March and it is understood

that involvement from Australia's export credit agency EFIC is not open-ended either. EFIC was

unable to comment on the expiry date for its funding pledge, but it is believed it expects an

investment agreement between Rio and Mongolia to be resolved before June. Like this week's USD

100 million loan to Rio Tinto and BHP Billiton for the Escondida mine, EFIC's involvement with Oyu

Tolgoi is believed to be predicated on Australian businesses winning work on the massive project.

Batsukh Galsan, chairman of Rio's Mongolian subsidiary, told reporters in Singapore on Tuesday that

''very few'' issues remained between the Mongolian government and Rio Tinto. ''We remain very

optimistic,'' he said.

Source: Sydney Morning Herald

RUSSIA READY FOR OIL PIPELINE, SAYS ROSNEFT PRESIDENT

Russia is ready to sign a long-term contract to supply petroleum products via a pipeline to Mongolia,

said Rosneft President Igor Sechin during a three-hour working visit in Ulaanbaatar.

Russia is interested in the pipeline as the costs for oil transport by railway was high, said Sechin

during his meeting with President Tsaskhia Elbegdorj, Prime Minister Norov Altankhuyag and Mining

Minister Davaajav Gankhuyag. Gankhuyag said Mongolia would allow the transport of crude oil from

Russia to China via Mongolian territory and also noted that there was opportunity to establish a

natural gas pipeline through Mongolia.

Russian has long been the sole supplier of petroleum to Mongolia, and this year Russia agreed to

deliver up to one million tons a year to Mongolia at the 17th Intergovernmental Committee meeting

held in Moscow last November. The mining minister said Mongolia was grateful for its fuel

partnership with Russia and for Russia's research support to help establish Mongolia's first refinery in

Darkhan.

The president and prime minister negotiated for more imports from Rosneft and cooperation in the

development of Mongolia's logistics and the Mongolian production of packed bitumen, a type of

black asphalt.

Source: Info Mongolia

NEWERA COMMENCES DRILLING AT ULAAN TOLGOI

Newera Resources Ltd. advised that it has commenced drilling on its phase-one drilling program at

the Ulaan Tolgoi project located in the South Gobi basin.

Plans for phase one are to drill two diamond holes of approximately 300 meters depth each, into

two separate near surface seismic anomalies identified by Logantek and Nordic Geological

Solutions. Successful completion of phase one will be a pre-curser to commencing phase two of a

further 1,400 meters of diamond drilling at three separate locations along the seismic survey lines

identified to have strong underlying seismic anomalies.

Newera has commenced drilling on UTPDH01 (line A) first, to be followed by UTPDH03 (line B). At

least the first 50 meters of each hole will be drilled using PCD (open hole diamond-no core) to be

followed by cored diamond drilling to the bottom of hole.

Source: Newera Resources Ltd.

GURVAN BULAG FEASIBILITY STUDY IN FINAL STAGES, SAYS SPC

The feasibility study for the development of the Gurvan Bulag uranium deposit in Dornod Aimag is in

its final stages, said the State Property Committee (SPC) in a statement 13 March.

Commencement of site development will be decided once the feasibility study is ready, said the

SPC statement. Gurvan Bulag has a proven reserve of 63,000 tons of uranium. State-owned Mon-

Atom LLC has the special permissions from the government to explore and operate uranium

deposits.

Source: Business Mongolia

VIKING ASHANTI ANNOUNCES 38.3MT INITIAL COAL RESOURCE AT BERKH UUL

A new coal resource of 38.3 million tons has been reported for one of the principal projects in

Mongolia, owned by unlisted Auminco Mines Ltd, the subject of an agreed merger with Viking

Ashanti Ltd.

The resource estimate, completed for Auminco by internationally recognized consultancy

RungePincockMinarco Ltd (RPM), totals 38.3 million tons of which 21.4 million tons is indicated and

16.9 million tons is classified as inferred, for the Berkh Uul deposit. The new resource estimate is

based on geological, geophysical, drilling and coal quality information available up to February

2014. It includes results from 45 diamond drill holes, completed by Berkh Uul‘s previous Russian

owners, and Auminco.

The resource model has outlined multiple shallow dipping sub-parallel coal seams on the eastern

limb of a gently folded syncline, with individual seams varying from 0.6 to 4.5 meters thick over a

strike length of three kilometers, extending to a maximum depth of 200 meters below surface. The

coal is bituminous in rank.

―Berkh Uul provides a perfect start up project in Mongolia for the merged entity, with anticipated

low capital cost, low initial operating cost and no infrastructure needs,‖ said Viking Ashanti

Chairman Jack Gardner. ―Close to the Russian border and with rail access within 40 kilometers, the

existing Mongolian and Russian markets for our good quality, unwashed coal are readily available.

We expect that the resource will be increased by further step-out drilling, which would provide the

basis for a long life open cut mining operation.‖

RPM has estimated an exploration target covering the area down dip beyond the current resource

boundary, where future planned exploration drilling will be concentrated in the next 12 months. A

further extrapolation of 1,000 meters from points of observation has been applied for estimating an

exploration target range of zero up to 23 million. It is likely that the quality of the exploration

target tonnages will be similar to that of the estimated resource. In addition, step-out drilling,

planned to be completed in the next 12 months, along strike to the south will target near surface

extensions of the current resource, where approximately two strike kilometers of the prospective

coal horizons have yet to be drill tested.

Source: Viking Ashanti Ltd.

ZINC, LEAD ENRICHMENT PLANT OPENS AS LARGEST FACILITY IN MONGOLIA'S WEST

Mining Minister Davaajav Gankhuyag attended an opening ceremony for Dulaankhar zinc and lead

enrichment plant in Bayan-Ulgii Aimag.

The plant is now the western region's largest and most advanced manufacturing facility plant. The

Dulaankhar zinc and lead mine located within the territory of Nogoonnuur Soum is expected to have

a 16-year mine life for total concentrate of 128.06 thousand tons of lead and 456.81 thousand tons

of zinc, and 0.083 tons of silver.

The mining minister also visited the Asgat silver deposit while in Bayan-Ulgii. Mongolia negotiated

for a Russian-Mongolian joint venture for the deposit during the 17th Intergovernmental Committee

meeting. The agreement leaves Mongolia to own 51 percent and Russian to own the remaining 49

percent.

Source: Info Mongolia

HUNNU AIR PLANS TO OPEN DIRECT FLIGHT BETWEEN NOVOSIBIRSK AND UB

Hunnu Air LLC hopes to open a new route from the Novosibirsk Tolmachevo Airport in Russia to the

Chinggis Khaan International Airport in Ulaanbaatar, according to a 17 March press release.

Hunnu Air is still in negotiations for the route, but discussed the matter in March last week during

the 2014 Routes Asia forum, the largest air-traffic routes gathering for Asia. The release further

stated that the direct flight between Ulaanbaatar and Novosibirsk will serve as a stopover between

Russia and China to replace an existing route the required two stopover in Russia and China and

travel time of some 24 hours for approximately 25,000 RUB (683 USD). Novosibirsk authorities

believe a stopover in Ulaanbaatar will be more cost effective for travel to Beijing and Dubai.

Source: Info Mongolia

FRC GRANTS NEW RIGHTS TO NBFI ASSOCIATION

The Financial Regulatory Commission (FRC) has signed a memorandum of cooperation with the

Association of Non-banking Financial Institutions that grants its new powers for licensing and

training.

The financial group is now permitted to train its members and provide 10 licenses for non-banking

institutions, whereas it used to be that only the FRC could provide this. About 281 non-banking

financial institutions with sum total capital of MNT 400 billion currently operate in Mongolia.

Source: Unuudur

MODUN SUBSCRIBES FOR $510,000 PRIVATE PLACEMENT

Modun Resources Ltd. announced that it had entered into placement agreements to raise USD

510,000 via the issue of 255 million shares at the current market price of USD 0.002 each.

Subscribers include a number of existing shareholders. Family interests associated with the director

Hugh Warner have agreed to subscribe for USD 200,000.

Source: Modun Resources Ltd.

MGG‟S NEWLY APPOINTED CEO ANNOUNCES NORTH AMERICAN ROADSHOW

Mongolia Growth Group Ltd. (MGG) Executive Chairman Harris Kupperman and the newly appointed

chief executive officer, Paul Byrne, will be heading a multi-city road show to introduce Byrne to

shareholders and potential investors in North America. As part of this roadshow, MGG will host

presentations in New York City, Los Angeles, Chicago, and Toronto between 31 March and 15 April.

Source: Mongolia Growth Group Ltd.

MNU TO HOST JOB FAIR

Mongolian National University (MNU) Job Fair will be held 28 March at the main campus building.

Over 1,000 students are anticipated to graduate from MNU at the end of this semester. These

undergraduate students are graduating with a four-year degree from the seven faculties at MNU,

such as mining, engineering and construction, law, business, information technology, tourism and

business.

The job fair is an annual event and will provide the opportunity for companies to interview students

on campus during this event.

Source: Mongolian National University

GLOBAL SCIENCE AND TECHNOLOGY IMPROVES AVIATION METEOROLOGY

Global Science and Technology, Inc. (GST), a weather forecasting products and services company,

announced the signing of a contract to provide WAFS-METLAB2 weather workstation technology to

the Mongolia Aviation Meteorological Center (AMC) at the Chinggis Khan International Airport in

Ulaanbataar.

Together, with partner WeatherLink of South Korea and the cooperation of the Korea

Meteorological Agency, GST completed an on-site installation to modernize the weather data

information processing capability at the Mongolia AMC in support of aviation meteorology. GST also

conducted on-site testing and training for the aviation and center staff on the new technology.

"This is an important expansion of our international portfolio of providing weather workstations for

the global market,‖ said Chieh-san Cheng, GST‘s chief executive.

The provision of equipment and technical expertise in Mongolia helps to advance aviation

meteorology in a growing Mongolian economy. Our WAFS-METLAB2 installation in Mongolia builds on

GST's recent international successes in Cambodia, the Philippines, and the Caribbean and further

demonstrates the effectiveness and adaptability of the WAFS-METLAB2 system."

The Source describes the WAFS-METLAB2 system as ―a powerful, yet flexible integrated workstation

to visualize and process weather data and information for a wide range of weather professionals in

commercial, government, and military markets. The workstation is highly adaptable to various

users, data sources, and formats to support near real-time weather forecasting.‖

Source: Global Science and Technology, Inc.

KYRGYZSTAN'S RULING BLOC COLLAPSES OVER CORRUPTION CHARGES

Kyrgyzstan's ruling coalition fell apart on Tuesday, depriving Prime Minister Zhantoro Satybaldiyev

of his parliamentary majority, in a row over alleged corruption in the Central Asian nation and in

the face of opposition forces that would nationalize Centerra Gold Inc.'s Kumtor mine there.

The prime minister enjoys significant executive powers in Kyrgyzstan, which remains volatile after

two popular uprisings that have deposed two presidents since 2005.

"The majority coalition is now disbanded," Felix Kulov, the majority bloc's leader, said, adding that

he had informed the president and parliament speaker in writing. "The president is now to

announce that the government is an acting one," he said, "and he has three days to task a

parliamentary faction to form a majority coalition and propose a nominee for prime minister."

The Ata Meken party left the ruling coalition earlier on Tuesday, accusing the prime minister of

abuse of office and misappropriation of state and foreign funds and aid when he was in charge of

helping the south recover from bloody ethnic clashes in June 2010. Satybaldiyev, who has led the

cabinet since September 2012, and his spokesman could not be immediately reached for comment.

Under the constitution, President Almazbek Atambayev can disband parliament and call an early

election if the assembly fails to elect a new premier in three consecutive votes.

Ata Meken is the smallest of parliament's five factions, but its support was crucial to Saybaldiyev's

majority bloc. Satybaldiyev, 58, a soft-spoken technocrat who says he is non-partisan, is a key

figure in talks with Canada's Centerra Gold, Kyrgyzstan's main foreign investor, to form a new gold

venture to develop the Kumtor gold mine near the border with China. He has rejected opposition

calls to nationalize the mine, which alone accounted for 7.7 percent of Kyrgyzstan's economic

output, 24 percent of industrial production and 36.5 percent of all exports last year.

Last month parliament gave the government up to four months to complete a draft deal with

Centerra Gold on forming a new, 50-50 joint venture.

Source: Reuters

ECONOMY

MONGOL BANK: CURRENCY SWAPS, 1-WEEK BILLS, 4-WEEK BILLS, TREASURY BILLS

The Bank of Mongolia on 18 March received an equivalent of USD 76.5 million and CNY 10 million

from currency swap transactions with local banks.

On 17 March the central bank auctioned one-week bills worth MNT 461.4 billion at a weighted

interest of 10.5 percent and four-week bills worth MNT 157.5 billion at a weighted interest rate of

10.89 percent a year.

On 19 March 12-week maturity government treasury bills were sold at a face value of MNT 50

billion, at a discount from MNT 85 billion, with a weighted average yield of 10.65 percent. Each unit

was worth MNT 1 million.

Source: Bank of Mongolia

MONGOL BANK PLANS TO DOUBLE CURRENCY SWAP LINE WITH CHINA

Mongolia‘s central bank said it intends to extend a bilateral local currency-swap line with the

People‘s Bank of China for three years and double its size to 20 billion yuan.

―This will clearly increase confidence in the foreign-exchange market and strengthen the off-

balance‖ reserves buffer, Bank of Mongolia Chief Economist Bold Sandagdorj said in an e-mail

yesterday. The three-year period will begin in May, he wrote.

The nation‘s foreign reserves have fallen amid lower prices for copper and coal, its main exports.

Currency holdings stood at USD 2.44 billion at the end of January, according to the central bank‘s

website, and were 40 percent lower than a year earlier. Mongolia‘s tugrik has declined 20 percent

in the past 12 months to 1,767.50 per dollar, the sixth worst performance among more than 100

exchange rates tracked by Bloomberg.

The currency-swap line with China will give Mongolia ―an adequate reserve buffer to maintain

overall macro balance,‖ he said. The authority expects a substantial decline in Mongolia‘s trade-

and current-account deficits this year, which will reduce demand for foreign exchange, according to

Bold.

In the first two months of 2014, Mongolia‘s exports rose almost 18 percent to USD 594.6 million,

while imports fell about 24 percent to USD 613.9 million, according to the National Statistical

Office. The trade deficit of USD 19.3 million was 94 percent lower than a year earlier.

The deficit has narrowed due to ―recovered exports and adjustments of the flexible exchange

rate,‖ Bold said.

Source: Bloomberg

LONGER-TERM FOR GOVERNMENT BOND AUCTIONS ARE A “CAPITAL” IDEA

Mongolia‘s Budget Law allows the government to issue up to MNT 1.4 trillion (USD 792 million) in

tugrug-denominated bonds, with durations ranging from 12 weeks to 10 years. The Ministry of

Finance and the Bank of Mongolia will introduce a ―Primary Dealer System‖ designed to support

these auctions, which will be the basis for the beginning of a true government bond market.

While the government conducted regular auctions in 2013, duration was limited to one year and

participants were almost always the banks themselves buying on their own behalf. Of the up to MNT

1.4 trillion in bonds the government intends to auction MNT 400 billion in 2014 for maturities,

leaving MNT 1 trillion ―new money‖ which needs to be found to support the GOM‘s plans.

Debt can be floating or fixed rate, bonds or bilateral loan and potential lenders can of course be

local or foreign. Foreign bond buyers can come in several forms, from passive retail buying into a

fixed income fund holding Mongolian sovereign bonds, to sophisticated high-net-worth investors,

hedge funds, banks and sovereign wealth or supranational funds.

Investors would have to assume the full risk of further tugrug depreciation. In the long run, few

dispute the idea that Mongolia will be running large budget surpluses for years to come, as more

mines come online, generating significant royalty income. So for the same accepted risk of

depreciation, foreign investors could lock in higher return with sovereign tugrug-denominated bonds

versus short-term bank deposits.

As commodity exports grow and those markets improve, the tugrug may not only stabilize, but

appreciate, which will eventually allow Mongolia to be an exporter of capital. Long term interest

rates would also drop as Mongolia‘s finances improve, all of which is quite beneficial to longer-term

holders of the currency.

Source: BDSec JSC

MONGOLIA MAY RAISE DEBT AMID OUTFLOWS, MOODY‟S SAYS

Mongolia‘s foreign currency reserves, down 40 percent in the last year, are on pace to run out by

the end of 2014 unless the country can sell more debt, according to Moody‘s Investors Service.

Should reserves expire, Mongolia could ―issue another bond and that would buffer reserves for an

extent,‖ Anushka Shah, Moody‘s lead analyst on the Central Asian nation, said.

Currency reserves have dwindled amid falling prices for copper and coal, Mongolia‘s main exports.

Foreign investment has also fared poorly, falling by half last year during a protracted dispute with

Rio Tinto PLC, which operates the Oyu Tolgoi copper and gold mine. Foreign currency reserves at

the end of January were USD 2.44 billion, according to the Bank of Mongolia website.

Mongolia has raised about USD 2.3 billion in sovereign debt since March 2012, including a USD 600

million bond issued by the Development Bank of Mongolia, a 30 billion yen (USD 296 million)

Samurai bond and a USD 1.5 billion Chinggis bond. Moody‘s, which has a B1 rating on Mongolia with

a stable outlook, sees the country‘s expansionary economy as a risk.

―If you look at monetary policy it has been very expansionary over the past year,‖ said Shah. ―The

central bank has been running a number of programs that have injected a large amount of liquidity

into the system.‖

Programs to stabilize prices, finance mortgages and boost construction injected MNT 3.4 trillion

(USD 1.9 billion) into the economy over the past year, according to Moody‘s. However, issuing debt

to tide over the deceleration in foreign investment and exports is not sustainable in the long term,

said Shah. ―It would be more favorable from a credit perspective if they can shore up FDI with

improved export growth, which should happen once Oyu Tolgoi comes onstream,‖ said Shah,

referring to the halted work on the mine‘s underground expansion. ―But in the meantime it seems

like they will tide things over by raising more debt.‖

Any bond sale is expected to be dollar denominated, said Shah. That would happen amid a declining

tugrug, which has seen a year-on-year depreciation of 26 percent against the dollar.

Source: Bloomberg

8% MORTGAGE PROGRAM CONTINUES

Commercial banks lent MNT 919.6 billion in new mortgages to 16,307 borrowers for the

government-backed 8 percent mortgage program. Banks also refinanced MNT 487.6 billion in

existing mortgages held by 17,241 borrowers for the same program. Total requests for refinancing

was MNT 845 billion.

Source: Cover Mongolia

MONGOL BANK TO INTRODUCE NEW INTERBANK PAYMENT SCHEME

Economic Development Minister N. Batbayar and Asian Development Bank (ADB) Country Director

Robert Schoellhammer on 14 March signed a USD 20 million loan agreement to introduce a new

payment mechanism for interbank transactions.

The agreement will see strengthened inter-bank payment infrastructures, technical support

provided to personnel, and enhanced regulations over banks and consumer protects. The central

bank will lead the project for two years for a completion date of 31 December 2016.

Mongolia has promised to pay a commitment charge of 0.15 percent a year for a loan with 15 years

of repayment of the principal. Interest and other charges will payable semiannually on 15 February

and 15 August between 2019 and 2033.

Source: Info Mongolia

MONGOLIA BOOSTS SUPPORT FOR SMEs

New measures announced by the government aimed at lowering the tax burden for small and

medium-sized enterprises (SMEs) should serve as an incentive for private sector operators to

expand, but businesses may still face challenges in obtaining the credit they need to sustain

growth.

In mid-January, the government announced it would submit a plan to parliament to amend tax

regulations regarding the payment of value-added tax (VAT) by SMEs. Under the proposal,

companies with revenues of less than USD 29,000 would be exempt from VAT. At present, the

exemption ceiling for VAT payments is set at USD 5,800, a level put in place when the existing tax

law was enacted 15 years ago and left unchanged since.

The draft legislation also contains an amendment that would establish a 90 percent rebate on

income taxes for businesses with revenues of less than USD 875,000, another measure that would

help SMEs. This amendment, unlike that on VAT, excludes companies operating in certain sectors,

including minerals, petroleum products imports, oil exports and communications, as well as the

production and distribution of alcoholic beverages and cigarettes.

Mongolia‘s SMEs represent a large and growing segment of the economy. According to data provided

by the Ministry of Labor at the end of November, of the just over 90,000 businesses registered in

Mongolia, more than two-thirds are classified as SMEs. Small companies generate around 20 percent

of Mongolia‘s GDP and provide employment to almost 750,000 people, representing 70 percent of

the national workforce.

As is the case in many emerging markets, one of the barriers to growth for smaller businesses in

Mongolia is access to credit. International agencies and the government have already taken some

steps to address this issue, and SME funding to Mongolia has increased in the past several years.

Combined with tax breaks and better financing, efforts to build human capital could help diversify

Mongolia‘s economic base beyond the mining sector and ensure more inclusive growth.

Source: Oxford Business Group

UHG-GASHUUN SUKHAIT RAIL LINE TO COMPLETE NOVEMBER 2015, SAYS RAIL OFFICIAL

Mongolia‘s rail construction between Mongolian Mining Corp.‘s Ukhaa Khudag mine site and the

Chinese border is nearly a quarter of the way finished, but additional rail lines to run are still are a

long way from being funded and years from being finished, said a Mongolian rail official.

According to A. Zorigt, who is leading the project for state-owned Mongolian Rail, last year saw the

completion of 24 percent of the 267 kilometers of rail to be built – including 70 percent of the soil

prep work. Korea‘s Samsung C&T is leading the construction work of railroad from Ukhaa Khudag to

Gashuun Sukhait. ―The earth work will start again in the end of this month, and we plan to get the

finished railroad by November 2015,‖ said Zorigt.

Samsung has contracted 11 Mongolian firms and one Chinese for 267 kilometers between Ukhaa

Khudag and Gashuun Sukhait, as well 1,600 kilometers to Mongolia‘s eastern region. With

investment costs totaling between USD 5 billion and USD 6 billion, the private-public partnership

agreement made will leave the state with 51 percent ownership of the railway built, with foreign

partners to own the remaining 49 percent—including Britain‘s Ashmore Group and a Russian firm

[Source cites the company ―Eurasia‖ -ed]. Mongolia will utilize USD 200 million from the Chinggis

bond to finance its portion of the costs, he said. Construction is expected to complete three or four

years after investment is made.

―Before raising the foreign investment the remaining USD 200 million from the Chinggis Bond is

essential now for continuation of our project, said Zorigt.

Zorigt said he expected returns on investment to arrive after nine years, with 13 percent annual

profits to follow. However, before Mongolia can reach that point it will have to figure out how to

sell the project to the local communities. ―Currently the main obstacle for the railway projects is

financing, resistance on freeing the land and the wrong understanding of the people, and issues of

land payment.‖

He said costs to local authorities would likely be up to MNT 7 million per cubic meter of land for

around MNT 10.4 billion. He added that local governments reduced costs 65 percent for roads, but

did not support a proposal for a similar scheme for the rails.

Source: Undesnii Shuudan

UB REDEVELOPMENT PLANS

Mayor Erdene Bat-Uul summarized plans for the redevelopment of Mongolia‘s ger districts.

Bat-Uul said Ulaanbaatar has partnered with the Asian Development Bank (ADB) for the launch of

the ger district redevelopment program. The program will roll out in three phases, with the first

being MNT 16.6 billion in construction to establish community centers near Bayankhoshoo and the

Selbe River. Work will cover 970 hectares areas at 12 locations in the city‘s five districts for this

first phase, Bat-Uul said.

After redevelopment work is finished the city will privatize 15,309 hectares of land at 52 locations,

said the mayor. He also said that he had plans to direct MNT 15.2 billion to create a foundation to

support small business and small-scale production in the city.

Source: Montsame

UB ROAD CONSTRUCTION TO LAUNCH 1 APRIL

Road construction this year in Ulaanbaatar will begin 1 April and finish by 5 July, said D.

Nanzaddorj, head of Ulaanbaatar‘s Road Authority.

About 60 percent of the work planned for this year is unfinished construction and repairs from 2013,

with about MNT 74.1 billion budgeted this year for road work. Planned construction is for 40.4

kilometers of roads, water drainage systems at nine locations, one car tunnel, and two bridge

crossings for pedestrians, while planned renovations are for 54.9 kilometers of roads and 243.2

meters of bridges. Additionally are plans for 1.84 kilometers of stone paths.

Construction costs have risen from last year due to the depreciation of the tugrug, said Nanzaddorj.

He said one kilometer of road 15 meters wide currently costs MNT 1.2 billion. [Source does not

provide comparative costs from 2013 -ed]

Source: Unuudur

TWO OVERPASS PEDESTRIAN BRIDGES TO OPEN IN MAY IN UB

Two overpass pedestrian bridges in Ulaanbaatar are expected to see construction complete 20 May.

The intent of the overpass bridges is to decrease traffic at the busiest points in Ulaanbaatar. Last

year the city built one pedestrian overpass near the Bumburger shopping area and this year two

more pedestrian bridges are to open in the 8th Khoroo of Khan-Uul District and the 10th Khoroo of

Sukhbaatar District.

Source: Undesnii Shuudan

LIVESTOCK PROTECTION FUND TO PUT MONGOLIAN MILK ON UB STORE SHELVES

Ulaanbaatar Mayor Erdene Bat-Uul has ordered the creation of the Ulaanbaatar Livestock Protection

Fund that would bring more locally produced milk to consumers.

The fund is in line with the mayor‘s 2012-2016 initiative to meet 80% of Ulaanbaatar‘s demand for

milk with domestically produced goods. Bat-Uul appointed T. Bat-Erdene, the deputy mayor for

ecology and green development, to lead the fund. Bat-Uul said the fund is in line with national

agenda to develop agriculture in Mongolia.

Source: Montsame

MONGOLIA'S PROPERTY BOOM SET TO COOL

Dozens of dusty residential and retail construction zones straddle the road connecting Chinggis

Khaan International Airport with downtown Ulaanbaatar. As the surrounding steppe gives way to the

city, new condo towers poke out among Soviet-era-style apartment blocks.

"Construction has become a better business than mining," said Lkhagvasuren Odsuren, a former

mining executive now developing a 315-unit apartment building. "Mining is a risky game. In

construction, you need less money, but you can still get a return on investment of up to 50 percent

depending on how good your project is."

The construction sector has been a key boomtown beneficiary as gross domestic product (GDP) per

person has grown nearly fourfold since 2005. Previously home to around 350,000 residents,

Ulaanbaatar is now short on living space as an influx of migrants from the countryside helped swell

the capital's population to 1.3 million. The demand pushed residential property prices up almost 20

percent annually over each of the last eight years to an average USD 1,500 per square meter,

according to local property investment services company M.A.D. Investment Solutions.

But supply growth now looks to be overtaking demand, and the feasibility of many new

developments is coming into question. Sensing the shift in momentum, hotel developers have been

canceling projects that were to house outposts of international brands such as Hilton. The World

Bank has warned of a possible property bubble. Outstanding loans by Mongolian banks grew 54

percent last year, with growth concentrated in the construction sector, according to Moody's

Investors Service.

"Landlords have no incentive to lower prices because they are generally not mortgaged," said

Christopher de Gruben, a managing partner of M.A.D. "Mortgages still account for only 10 percent

of purchases. But the next 18 months will be painful for the most amateurish developers. Some 30

percent of them will go bankrupt."

Harris Kupperman, Executive Chairman of Mongolia Growth Group, expects a similar shakeout with

office space. "Buildings that are built well and offer international standards of quality will still

receive good pricing, as opposed to many of the speculative office buildings thrown together with

cheap labor and material in the last years," he said.

Source: Nikkei Asian Review

UB SEEKS AUSSIE FUNDS FOR RESOURCES SECTOR

The Australian resources sector is the main target of a more investor-friendly redraft of Mongolia's

foreign investment rules, says Mongolian Foreign Minister Luvsanvandan Bold.

Bold, who will sign a consular memorandum of understanding with his Australian counterpart Julie

Bishop 18 March, said Mongolia expected to grow at an annual rate of more than 15 percent for the

next decade. "Our new model for foreign direct investment is very much designed for Australian

businesses—we're offering stability, openness and lower tax,‖ said Bold. "We believe this should be

the beginning of a boom for Australian investment in Mongolia, not just in resources but also in

other areas like infrastructure, financial services and insurance."

Bold joined Ravdan Bold, Mongolia's ambassador to Australia, in launching the Australia Mongolia

Business Council. The chairman of the council is law firm Minter Ellison's international partner Mark

Green, who set up the firm's office in Mongolia. It now employs 15 people including eight locals.

The council's mission is to facilitate business and bilateral trade between the two countries.

While 170 Australian companies are already doing business in the central Asian country, two-way

trade is starting from a small annual base of about USD 50 million.

Australian companies to show interest in Mongolia include Leighton Holdings and explorer Xanadu

Mines Ltd. ANZ Bank said in 2012 it would open a representative office in Ulaanbaatar as part of a

long-term strategy to play a bigger role in financing the country's resources industry. Green said

Australian mining services companies were becoming increasingly active there.

"Many of the Australian companies have slightly different operational tasks in that they have to

maintain and operate their own roads, so the mining services companies are enjoying it," he said.

Mongolia, he said, was drawing on best practices from offshore to build its legal infrastructure. "So

Australia's corporate law is starting to be used as the model for Mongolian corporate law; tax is

pretty much a New Zealand system," he said.

Source: The Australian

AUSSIE JUNIORS JUMP AT CHANCE IN MONGOLIA

After years of largely being ignored by foreign investors, Mongolia is trying to win favor with the

global resources sector with another change of its rules—but this time in a move to say it is open for

business.

David Paull, who heads junior Aspire Mining Ltd., has witnessed the rise and fall of Mongolia's

appeal in the competitive global resources space. Having penned an exploration deal in the country

in October 2009, just weeks before a government agreement for the massive Oyu Tolgoi project was

signed, Paull has been front row for the roller-coaster ride. The dramatic change in investment

came when the government changed the investment rules in mid-2012, a directive it is now trying

to reverse. Foreign Minister Bold Luvsanvandan will visit Sydney on Thursday to explain the new

laws and system, and sell the story to Australia's miners and investment community.

China and Russia already invest heavily in Mongolia, but it is what the country refers to as its "third

neighbor" that it is now actively targeting, which includes Australia, Japan, Korea, Canada and the

United States. A positive signal on talks with mining giant Rio Tinto PLC over the development of

stage two of the Oyu Tolgoi copper and gold mine is another indicator the sector is waiting before

advancements are made to enter the country. Paull says that when he is talking to potential

investors about his Mongolian coal project there is significant interest, but one of the first

comments he receives is on Oyu Tolgoi. Once the all-clear is given and the project goes ahead it

will be a catalyst to look at the next project in Mongolia that they can support. Paull said the word

in Mongolia was the parties are close to signing off on stage two.

Another catalyst to kickstart investment in the country again is when a moratorium on new

exploration licenses is lifted. Changes to the minerals law, to ensure it is consistent with the new

investment laws, could be introduced as early as the spring session of parliament, which starts on

24 March.

Source: The Australian

DR. COPPER CATCHES A DOSE OF CHINESE FLU

―Dr. Copper‖ is doing poorly. And the prognosis isn‘t clear.

The red metal suffered a brutal sell-off last week that pushed the price of the world‘s oldest mined

commodity to its lowest level in almost four years. Fears that China‘s copper inventory will flood

into the market as well as concerns about slowing growth have been at the heart of the steep

decline in prices.

―We think that these fears of physical liquidation may be overblown,‖ says Gayle Berry, director of

base metals research at Barclays. ―Trading houses sources we spoke with indicate that while falling

prices would force the closure of hedges on the LME [London Metals Exchange], exacerbating the

drop in prices, there have been few signs of large-scale physical selling.‖

Financing deals that use copper as collateral are a hot topic in the market. Many traders believe

that up to half China‘s copper imports are used as collateral to raise cheap U.S. dollar loans which

are then lent on in the shadow banking sector or invested in high yielding assets. However,

seasoned observers say the reality is different and that financing is something that happens before

imported copper is released into China.

At the end of February, CRU estimates stocks in bonded warehouses had grown to 770,000 tons,

close to the historical high of 825,000 tons recorded in late 2012. Another factor in this week‘s sell

off was the activity of speculative Chinese funds, which are becoming increasingly powerful players

in commodity markets.

Until those concerns ease, copper and other industrial commodities are likely to remain volatile,

especially if the Chinese authorities continue to allow defaults on bonds and other financial

products.

However, there are signs of physical support for copper at current prices,‖ said Matthew

Wonnacott, consultant at CRU.

―We learnt through calls with fabricators that end users placed orders this week after the LME price

tumbled below USD 6,500‖, he says. ―We also believe it is possible that [China‘s] strategic reserve

board is buying at the current price level, given last year‘s rumors of buying interest at USD 6,800.‖

Source: Financial Times

GOLD PRICING SCRUTINY WIDENS

The global regulatory scrutiny of benchmarks is shifting from interest rates and foreign exchange to

commodities.

In particular, the focus on bullion looks set to intensify following Friday‘s admission by UBS in its

2013 annual report: that a review of its foreign exchange operations have been widened to include

its precious metals business. In the report, the Swiss bank said: ―Following an initial media report in

June 2013 of widespread irregularities in the foreign exchange markets, UBS immediately

commenced an internal review of its foreign exchange business, which includes our precious metals

business.‖ It added: ―A number of authorities also are reportedly investigating potential

manipulation of precious metal prices. UBS has taken and will take appropriate action with respect

to certain personnel as a result of its ongoing review.‖

UBS has been in front of its peers in revealing important details about various regulatory probes.

Until Friday the bank had not mentioned its precious metals business was included in its review of

trading practices. This suggests the concerns about gold could extend beyond the London gold

fixing—the twice-daily benchmark used by miners, jewelers and central banks to value bullion. The

Swiss bank is not one of the five financial institutions that oversee the 95-year-old London gold fix.

They are Barclays, Deutsche Bank, Bank of Nova Scotia, HSBC and Société Générale—and all strongly

reject any wrongdoing.

The lawsuits filed so far by American class action lawyers broadly allege collusion among the five

fixing members, although Germany‘s financial regulator has also demanded documents from

Deutsche Bank as part of an investigation into potential manipulation of gold and silver prices.

UBS‘s involvement in the London gold trade is as one of the 11 market-making members of the

London Bullion Market Association. This means it is required to quote prices throughout the London

business day for the three main gold and silver products: spot, forwards and options.

Source: Financial Times

POLITICS

MONGOLIA REQUESTS RENEWED CHINA BORDER AGREEMENT

Cabinet Minister Ch. Saikhanbileg led a delegation to Beijing 13 March to negotiate for Mongolia and

China's cross-border trade and travel.

Saikhanbileg negotiated for a renewed partnership from an original agreement made in 2004.

Mongolian government representatives and Mongolian Ambassador Ts. Sukhbaatar negotiated for

improvements in management and infrastructure of the Mongolia-China border ports.

Source: Info Mongolia

SOUTH KOREA‟S PRESIDENT SEEKS MONGOLIA'S SUPPORT FOR 'EURASIAN INITIATIVE'

South Korean President Park Geun-hye sought Mongolia's support for her vision to bind Asia and

Europe closer together as she met with the country's parliamentary speaker on Friday.

Park's "Eurasian initiative" was a key topic during her talks with parliamentary speaker Zandaakhuu

Enkhbold. She has been on a four-day visit to South Korea since Tuesday at the invitation of his

South Korean counterpart and National Assembly Speaker Kang Chang-hee. The initiative calls for

binding Eurasian nations closely together by linking roads and railways to realize what she called

the "Silk Road Express" that runs from South Korea to Europe via North Korea, Russia and China.

Park said Mongolia is a key partner for the vision and asked for support, officials said. Enkhbold said

he supports the vision "200 percent." Park said that it was meaningful that Elbegdorj urged North

Korea to become a responsible member of the international community when he visited Pyongyang

in October. The four-day trip made Elbegdorj the first foreign head of state to visit Pyongyang since

North Korean leader Kim Jong-un took power after the death of his father Kim Jong-il in late 2011.

Enkhbold said Mongolia is ready to share its reform experiences with North Korea.

Park also called for Mongolia's support for unification between the two Koreas, saying it will not

only contribute to peace and stability on the Korean Peninsula and in Northeast Asia, but will also

provide a fresh growth engine for countries in the region. She also asked for support for South

Korean firms trying to take part in infrastructure construction projects in Mongolia, officials said.

Source: Yonhap News

MONGOLIAN DIPLOMATS TO RECEIVE VISA-FREE TRAVEL TO POLAND, TURKEY IN APRIL

Mongolian diplomats will be able to receive visa-free entrance to Turkey and Poland beginning

April.

The visa-free agreements Mongolia signed with Poland June 2011 take effect 4 April and correct

misunderstandings from the previous agreement. The original agreement required that ―official

passport‖ be printed on diplomats‘ passports, but instead was translated and printed into English as

―service passport.‖ This led to confusion when Mongolian diplomats arrived at Polish customs.

For Turkey, Mongolia on 13 October signed a visa agreement in Ankara that take effect 11 April. The

new terms will grant Mongolian diplomats 30-day visa within 180 days at a time.

Source: News.mn

MONGOLIA-CUBA CONSULTATIVE MEETING HELD

Mongolia and Cuba promised to strengthen diplomatic ties at the second consultative meeting

between the ministries of Foreign Affairs in Ulaanbaatar on 17 April.

Mongolia and Cuba vowed to strengthen bilateral traditional cooperate in the fields of education,

sports, agriculture, and health. Cuba‘s Foreign Ministry director, Miguel Ramos, had plans to meet

parliamentarian A. Bakei, who serves on the Mongolia-Cuba Friendship Group in Parliament, Vice

Minister of Culture Sport and Tourism L. Tumenjargal, and officials from the Ministry of Health and

General Prosecutors Office.

Source: Montsame

KUWAITI OFFICIAL, MONGOLIAN DIPLOMAT DISCUSS JOINT INTEREST ISSUES

Kuwait Minister of Amiri Diwan Affairs Sheikh Nasser Sabah Al-Ahmad Al-Sabah received on Sunday

Mongolia Ambassador to Kuwait Sodnom Ekhbat.

Ambassador Ekhbat was accompanied by a delegation representing the Mongolian prince, Hentai,

currently on a visit to the country. The two sides discussed issues of common concern for the two

friendly countries.

Source: Kuwait News Agency

HO CHI MINH CITY OFFERS STRONG TIES WITH UB

Chairman of the Ho Chi Minh City People‘s Committee Le Hoang Quan has pledged that his city

would work to foster ties with Ulaanbaatar.

Ulaanbaatar City Council Chairman Dashjamts Battulga met with Quan 14 March, where the Ho Chi

Minh official pledged to participate in experience sharing and boost cooperation. Over the past six

decades, Mongolia and Vietnam have had a sound relationship, he said, which is a firm foundation

for them to build strong relations in economics, trade and education and training.

Battulga said he was impressed at the strong development of Ho Chi Minh, and that he too hoped to

foster greater ties between their two municipalities, especially in urban planning and education. He

also promised that Ulaanbaatar would spare no effort to fully commemorate the importance of

their upcoming 60th anniversary of diplomatic ties this year. Ulaanbaatar will organize a number of

cultural exchange events for Vietnam and Mongolia, said Battulga.

Source: VietNamNet

ECONOMIC DEVELOPMENT MINISTER MEETS HEAD OF ECP

The Minister of Economic Development Nyamjav Batbayar 12 March received Antonio Somma, a

head of the Eurasia Competitiveness Programme at the Organization for Economic Co-operation and

Development (OECD) where they discussed development strategies.

Somma proposed a partnership with Mongolia for the launch of projects to increase competitiveness

within the mining sector, economic diversification and combating corruption. Batbayar asked that

the OECD cooperate with Mongolia to prevent the usual negative side effects that come with a

resource-based economy such as income disparity, or what is known as the resource curse. He also

asked for help regarding the threat of Dutch disease, which is when a resource sector negatively

impacts other industries within an economy, such as when likely currency appreciation driven by a

resource boom makes goods across the board more expensive, and rapid increases in wages that

companies cannot afford.

Source: Montsame

STUDENT-SOLDIER PROGRAM LAUNCHES 1 APRIL

The National University of Mongolia held an opening ceremony on 17 March for the launch of its ―Student-Solider‖ program, which allows students to earn army accreditations in concurrence with earning their degrees. Mongolia on 14 February introduced a new provision to allow students to serve in the army to earn

their service member certificates and university degree at the same time. Students taking part in

the program will serve in the army during their summer vacation. The service certificate can be

used as job accreditation for graduates while looking for employment.

Source: News.mn

FAO URGES ASIA PACIFIC GOVERNMENTS TO UP FOOD PRODUCTION

At the ongoing Food and Agriculture Organisation (FAO) regional conference of Asia and the Pacific

in Mongolia, the governments of the forty nations constituting it were urged to increase food

production and building inclusive and efficient food chains.

The U.N. agency warned about possible social unrest or even civil wars in the region, if

governments failed to take major and fundamental decisions to increase food production and

address undernourishment. The report released at the conference said more than 550 million

people in the Asia Pacific region were hungry, and improving production and distribution systems

was the need of the hour. It stressed on the need to modernize farming, fishing and forestry

practices to increase profitability and encourage industries to reach a larger population with

offerings of a higher quality.

―Technical assistance and guidance must be provided to enable farmers and distributors to adopt

good agricultural practices using the local knowledge and promote modernization and profitability

to ensure food security in the region,‖ said Allan Dow, information officer, FAO Regional Office of

Asia and the Pacific. ―We need more major and fundamental decisions to be taken by governments

to increase food production and avoid unrest in the region,‖ he added.

FAO also highlighted the wastage of food and nutritional deficiency as a threat to both health and

the economy. Its report said that most people were not eating the right foods, and 30 to 40 percent

of grains, fruit and vegetables were getting wasted in the region. The conference also raised

concerns over the scant progress made to reduce Vitamin A deficiency.

One point made in the report was that Asian animal agriculture is adapting to the rapid increase in

demand as well as numbers. The conference raised concerns about increased risks to human health

from pathogens harbored by both wildlife and livestock. More private investment is needed for the

development of the animal agriculture and food industry.

Source: F&B News

MONGOLIA STRENGTHENS EFFORTS AGAINST HUMAN TRAFFICKING

Mongolia is no stranger to the scourge of human trafficking. As a source, transit, and destination for

victims of human trafficking, Mongolia remains a Tier 2 country on the U.S. Department of State‘s

annual Trafficking in Persons (TIP) Report, which reported that Mongolia ―does not fully comply

with the minimum standards for the elimination of trafficking; however, it is making significant

efforts to do so.‖

In January 2012, Mongolia‘s Parliament adopted a standalone Law on Combating Trafficking in

Persons (Anti-TIP), a milestone in the country‘s anti-trafficking efforts, and the culmination of more

than three years of intense advocacy by civil society organizations. Two years after the law was

adopted, a new law on Victim and Witness Protection passed by Parliament in 2013 has entered into

force in January of this year.

Government established a National Sub-Council on Combating Trafficking in Persons, made up of

ministries, government agencies, and civil society organizations coordinates efforts to prevent and

combat trafficking. A main priority for the group has been revision of the National Program on

Combating TIP, which outlines the actions needed to implement the anti-TIP law. The Asia

Foundation is working with the Ministry of Justice to train the sub-council‘s new staff members.

Asia Foundation also partnered with the ministry last year to establish an interim trafficking in

persons legal defense fund for victims. Currently seven victims of trafficking for sexual and labor

exploitation—most of whom do not have the financial means to hire lawyers or defend themselves—

are receiving legal assistance from lawyers specializing in human trafficking cases through the fund.

And for the last three years Asia Foundation has supported the Gender Equality Center to keep the

nationwide, 24-hour anti-trafficking hotline established in 2006 operational.

Mongolia still has a long way to go for preventing and combating trafficking in persons, but progress

is being made and cooperation among stakeholders is increasing. In April, The Asia Foundation is

planning to organize a visit by a delegation of Nepali officials to Mongolia, where they will exchange

views on some of the common challenges as well as their experiences and good practices.

Source: The Asia Foundation

CENTRAL DINOSAUR MUSEUM TO OPEN 1 JUNE

The Mongolian dinosaur museum set to house the Tyrannosaurus bataar repatriated after President

Tsakhia Elbegdorj stepped in to prevent its auctioning in New York City is due to open 1 June.

Minister of Culture, Sport and Tourism Ts. Oyungerel and Chief of the State Property Committee

(SPC) D. Tsogtbaatar officially reported that the Supreme Court ruled that ownership of the former

Lenin Memorial Museum belongs to the state on 13 March. It is the only building originally intended

as a museum in operation in Mongolia and will be the location for the Central Dinosaur Museum on 1

June.

The ministry and SPC have been trying to take back the former Lenin Memorial Museum from the

Mongolian People‘s Party (MPP) through a series of court trials over the last year. The MPP

postponed court hearings 11 times.

―We will immediately start our work to make the building a museum filled with magnificent,

Mongolia-originated dinosaur fossils and related artifacts once we are handed the key,‖ said Oyun.

She added, ―Despite many time-consuming overhauls and redesign projects, we are planning to

open the museum by Children‘s Day on 1 June, this year. I am sure that young children are looking

forward to seeing the Tyrannosaurus bataar fossil.‖

Oyun said that there was not yet an estimate for the cost of renovations to the museum, but a

public tender offering would be announced once preparations were made. The museum will feature

the ―Bataar and his Dad‖ exhibit, featuring the returned T. Bataar and a large dinosaur skeleton

previously on display at the Mongolian Natural History Museum but now currently under renovation.

Photos, too, will be on display, as well as 100 dinosaur fossils and other archaeological findings

from Mongolia.

Source: UB Post

YEARS AFTER KIDNAPPING, A JAPANESE REUNION IN MONGOLIA

The parents of a Japanese woman abducted by North Korea in 1977 were allowed to see their North

Korean-born granddaughter for the first time last week at a secret meeting in Mongolia, Japan‘s

Foreign Ministry said on Sunday.

The meeting in Ulaanbaatar between the parents of Megumi Yokota, who disappeared in Japan on

her way home from school when she was 13, and her daughter, Kim Eun-gyong, now reportedly 26,

appeared to be a good-will gesture by North Korea toward Japan. Yokota, who died in 1994,

according to North Korea, has been the subject of foreign and Japanese documentary films and also

manga comics, making her perhaps the best-known of more than a dozen Japanese citizens known

to have been kidnapped by North Korean agents in the 1970s and ‘80s.

Japanese news media said the meeting was agreed upon during informal talks between Japanese

and North Korean officials this month in Shenyang, China. Those talks, on the sidelines of a meeting

of the two nations‘ Red Cross societies, were aimed at restarting an official dialogue between the

two estranged nations, which was frozen after North Korea launched a large rocket over Japan in

December 2012. Prime Minister Shinzo Abe of Japan has reached out to North Korea, sending a top

aide to Pyongyang, the North‘s capital, last year in an effort to resolve lingering questions over the

fate of the abductees.

In 2002, North Korea returned five of the abductees but said the others had died, in some cases

under circumstances that the Japanese considered to be mysterious or far-fetched. The lack of

information has fostered a feeling in Japan that some of the abductees may still be alive. The

Yokotas have said that they do not believe North Korea‘s account that their daughter committed

suicide in a mental hospital in 1994. The Yokotas‘ long and often-lonely search to discover the fate

of their missing daughter eventually captured the hearts of many Japanese, galvanizing anger at

North Korea over the abductions.

Source: New York Times

ANNOUNCEMENTS

MONGOLIA ECONOMIC FORUM 2014, ULAANBAATAR, 24-25 MARCH

The fifth annual meeting of Mongolia Economic Forum will be held on 24 and 25 March at the State

Palace in Ulaanbaatar.

During this two day event participants will discuss topics related to future of Mongolia and many

more social and economical hot topics. The World Economic Forum project team will also present

‗The Scenarios for Mongolia‘ during the meeting.

BCM members will receive an exclusive 10 percent discount.

For enquiries regarding participation and press, please call 976-11-321051 or email

info@meforum.mn or visit www.meforum.mn. Please register at http://meforum.mn/registration/.

Registration will be closed 5 pm, 21 March.

___________________________________________

INTERNATIONAL CONFERENCE ON COMMERCIAL ARBITRATION, 27 MARCH, BLUE SKY TOWER

The International Conference on Commercial Arbitration will be held Thursday, 27 March from 08:30

to 18:00 at the Blue Sky Tower Ulaanbaatar, Mongolia

Lunch will be provided to attendees. Registration to this conference is free and will be at first come

first serve basis.

To RSVP email support@bpi-chemonics.biz or call 32-13-75 by Friday, 21 March.

___________________________________________

BCM MEMBERS RECEIVE 15% DISCOUNT FOR OIL AND OIL SHALE MONGOLIA , 9-10 APRIL

The Oil and Oil Shale Mongolia 2014 international investment conference, hosted by the Petroleum

Authority of Mongolia, will be held in Ulaanbaatar from 9 to 10 April 2014.

The event will be attended by international investors, oil, gas, and oil shale companies, service

providers, consultancies, equipment suppliers, and traders.

Delegates will have a unique opportunity to network with industry's key contacts at the country's

first international investment conference on oil, gas, and oil shale. They will have the opportunity

to obtain vital information on legislation and policies on oil, gas, and oil shale exploration and

production regulations from the officials of the Ministry of Mining and Petroleum Authority of

Mongolia. Moreover, projects on oil refinery, exploration, production, plus oil shale projects will be

presented.

BCM members will receive an exclusive 15 percent discount. For more information call +976 9909-

1765 or 9910-5877, email info@oilmongolia.com or logon to OilMongolia.com.

___________________________________________

MONGOLIA INVESTMENT SUMMIT, LONDON, 29 APRIL-2 MAY

The second annual Mongolia Investment Summit in London will be 29 April to 2 May.

An additional post-summit workshop will be held, giving participants four whole days of

presentations, discussions, panels and networking opportunities. Keynote speakers include Ochirbat

Chuluunbat, vice minister for economic development, Dorjpurev Dulamsuren, vice minister for

energy, and Clemente Cappello, chief investment officer at Sturgeon Capital

BCM members can take advantage of a special 25 percent discount by using the offer code

UL912BCM when registering. Register online at mongoliainvestmentsummit.com/London, call +44

(0) 207 216 6056, or email cs@resourcefulevents.com

___________________________________________

GTR‟S 3RD ANNUAL MONGOLIA TRADE & COMMODITY FINANCE CONFERENCE, BLUE SKY HOTEL,

13 MAY

GTR announces that the Mongolia Trade & Commodity Finance Conference will return to

Ulaanbaatar on May 13, 2014 for the third edition of this annual series.

The Mongolia Trade & Commodity Finance Conference is the only event of its kind. Building on the

success of the 2013 conference, which welcomed 175 delegates from 13 different countries, the

2014 event will once again provide an unrivaled platform for discussion and debate with the

region‘s leading local businesses and trade finance practitioners.

With its focus on Mongolia‘s mining, minerals and vast commodity-led growth, this will be the key

trade gathering for the country‘s senior business leaders, providing timely insight on the challenges

facing the local banking and private sectors, as well as offering perspectives from the industry‘s key

supporting actors.

BCM members will receive a 10% discount at registration. Please contact saruul@bcmongolia.org to

get a special discount code. Click here to register, or visit exportagroup.com for more information.

___________________________________________

PPP HANDBOOK FOR PUBLIC AND PRIVATE STAKEHOLDERS LAUNCHED

Mongolia‘s Ministry of Economic Development launched the PPP manual on 19 February 2014.

Prepared with ADB support, the manual guides public and private stakeholders in the preparation of

PPPs. ADB Principal PPP Specialist, Craig Sugden, stressed that Mongolian PPP environment has

three strengths now: the Concession Law, the PPP implementing unit, and the handbook. In

addition, the first in a series of Public Private Partnership Stakeholders Consultative Meetings to be

organized quarterly by MOED was held on 21 Feb in Best Western Tuushin Hotel. Contact Innovation

and PPP Department, MOED, Tel: 264726 for the manual.

ADB has supported Mongolia‘s PPP work since 2009 and was appointed as the mandated advisor to

the PPP for Combined Heat and Power Plant 5.

___________________________________________

“MM TODAY” ON MNB-TV, FRIDAY, 19:00 TO 19:10

BCM is pleased to announce that Mongolian National Broadcasting continues its cooperation with

BCM on ―MM Today‖. This English news program is aired every Friday for 10 minutes and is

scheduled from 19:00 to 19:10 tonight. Tune in to watch this program that reports stories from

today‘s BCM NewsWire.

BCM WORKING GROUP NEWS

BCM is launching its LOGISTICS WORKING GROUP.

The following statement was made at Coal Mongolia by O. Chuluunbat, Vice Minister of Economic

Development -- "Transport is the most pressing issue in Mongolia!" There appears to be an urgent

need for greater focus on logistics. This need is at all levels from the university up through

vocational job training to business and government policies and strategies.

Given the makeup of BCM's membership, we welcome individual volunteers from our logistics,

mining, transport, university and other interested members to join our new Logistics Working

Group. This BCM Working Group (WG) can lead private sector input and recommendations in this

critical area for Mongolia and make a real and meaningful impact.

Approximately 20 individuals with members have indicated interest in joining this new WG. We will

be scheduling our initial WG meeting shortly. Members with interest can still contact Erdenetsetseg

at erka@bcmongolia.org; to join this WG or for more information.

___________________________________________

The BCM Capital Markets Working Group met on Wednesday, 19 March, with 17 members attending.

Howard Lambert /ING Bank/ and Nick Cousyn /BDSec/ moderated the session.

New Member: Bolor J, Newcom; Och O, Golomt Bank

Participants: Nandin-Erdene, MGG Properties.

Guest: Hajime Uchida, Sumitomo Mitsui Banking Corporation.

Speakers and topics were:

1. Update of Mongolia Growth Group

Paul Byrne, CEO, Mongolia Growth Group

2. ―Hunting for Mongolia‘s Multi Billion Barrel Oil Fields‖.

Bataa Tumur-Ochir, CEO and Director of Wolf Petroleum

3. MIBG`s update on Kincora Copper and Turquoise Hill

Chris MacDougall, Managing Director, MIBG

___________________________________________________

We would like to announce BCM Tax Working Group`s new co-chair, Khulan P.

Khulan joined Oyu Tolgoi in September 2010 as a tax specialist and prior to that she worked as tax

advisor at Rio Tinto Australia and tax officer at Mongolian Taxation Authority.

Congratulations to her for new role with BCM.

BCM`s Tax Working Group on March 11 requested an "open discussion" of proposed tax law changes

in an official letter to MP Ch. Saikanbileg, chief of the Mongolian cabinet secretariat.

Please see following link to Dr. Khashchuluun, Executive Director of the National Council of Private

Sector Support (NCPSS), and the NCPSS’s “Taxation Impact Research” presentation to the BCM Tax

Working Group on February 19, 2014 in Mongolian -

http://bcmongolia.org/images/files/mn/Iltgeluud/Khashchuluun.pdf.

English translation - "Change of the package of Taxation Laws private sector" posted to BCM English

website.

If you have any comments on the proposed tax laws, please send to erka@bcmongolia.org

BCM WEBSITES

MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS

The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.

As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the

government website Open-Government.mn are regularly updated.

•―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

The presentation below was made at Mongolian National University as part of the ―BCM in the

University Classroom series‖ on February 27, 2014:

•Ser-Od Inchinkhorloo, Vice Director, BCM, ―Investment environment: Past, Present, Future‖

The presentation below is from the February 24 BCM monthly meeting:

•О. Зоригт, Гүйцэтгэх захирал, Майн Инфо "Майн Инфо ХХК-ний товч танилцуулга", МБЗ-ийн 2

сарын 24-ний сарын хурал

Dr. Khashchuluun, Executive Director, National Council of Private Sector Support, ―Taxation Impact

Research‖ to BCM Tax Working Group, February 19, 2014

•ТАТВАРЫН БАГЦ ХУУЛИЙН ӨӨРЧЛӨЛТ: ХУВИЙН ХЭВШИЛД, Ч. Хашчулуун, Хувийн хэвшлийг

дэмжих үндэсний зөвлөлийн гүйцэтгэх захирал 2014.02.19

20 Presentations from Coal Mongolia, 20-21 February, 2014:

• Уул уурхайн сайд Д. Ганхуяг, Төрөөс Эрдэс Баялгийн Салбарт Баримтлах Бодлого, Нүүрсний

Салбарыг Хөгжүүлэх Стратегийн Чиг Хандлага, Коал Монголиа 2014, 2 сарын 20-21.

• Сангийн сайд Ч.Улаан, МОНГОЛ УЛСЫН САНГИЙН ЯАМ, Улсын төсөвт нүүрсний салбарын

үзүүлэх нөлөө, татварын орчин шинэчлэл, Коал Монголиа 2014, 2 сарын 20-21.

• Монгол орны нүүрсний салбар дахь байгаль орчны асуудал, Байгаль орчин, ногоон хөгжлийн

яам, ХБОБНГ-ын дарга Д.Энхбат Коал Монголиа 2014, 2 сарын 20-21.

• НҮҮРСНИЙ АЖ ҮЙЛДВЭРЛЭЛИЙГ ХӨГЖҮҮЛЭХ ТЭЭВЭР ЛОЖИСТИКИЙН АСУУДЛУУД:

Л.ПҮРЭВБААТАР ТӨМӨР ЗАМЫН ИНЖЕНЕРҮҮДИЙН ХОЛБООНЫ ЕРӨНХИЙЛӨГЧ, ―УУЛ УУРХАЙН

БҮТЭЭГДЭХҮҮНИЙ ТЭЭВЭРЛЭЛТ‖ Коал Монголиа 2014, 2 сарын 20-21.

• МОНГОЛ УЛСЫН НҮҮРСНИЙ САЛБАР ДАХЬ ХӨРӨНГӨ ОРУУЛАЛТ, ХУДАЛДААНЫ ТААТАЙ ОРЧИН

БҮРДҮҮЛЭХ НЬ,ЭДИЙН ЗАСГИЙН ХӨГЖЛИЙН ДЭД САЙД О.ЧУЛУУНБАТ Коал Монголиа 2014, 2

сарын 20-21.

• Уул уурхайн дэд сайд О. Эрдэнэбулган, Олон улсын нүүрсний зах зээл дэх Монгол улсын

өрсөлдөх чадварыг нэмэгдүүлэхэд төрийн оролцоо Коал Монголиа 2014, 2 сарын 20-21.

• Ж. Батцэнгэл, Монголын Уул Уурхайн Корпорацийн дарга, МОНГОЛЫН НҮҮРСНИЙ САЛБАРЫН

ӨНӨӨГИЙН НӨХЦӨЛ БАЙДАЛ, Тулгарч буй бэрхшээл ба шийдэх боломж Коал Монголиа 2014, 2

сарын 20-21.

• Аршад Саеид, Пийбоди Энержи компанийн Монгол ба Энэтхэг улсыг хариуцсан Ерөнхийлөгч,

Дэлхийн нүүрсний зах зээл, Монгол улсад үзүүлэх нөлөөлөл, Коал Монголиа 2014, 2 сарын 20-

21.

• МОЗА гүйцэтгэх захирал Ч. Хашчулуун, Занарын дэлхии ̆н хувьсгал ба Монголын эдии ̆н засагт

үр нөлөө, Коал Монголиа 2014, 2 сарын 20-21.

• Багануур Энержи Корпорэйшн ХХК, Нүүрс хийжүүлэх, шингэрүүлэх цогцолбор парк төслийн

товч танилцуулга, Коал Монголиа 2014, 2 сарын 20-21.

• АДУУНЧУЛУУНЫ ЦАХИЛГААН СТАНЦ, БЕНЗИНИЙ ҮЙЛДВЭРИЙН ТӨСӨЛ, Ж.Золжаргал –

Төслийн удирдагч, Коал Монголиа 2014, 2 сарын 20-21.

• Ц.Ганцог, Жени Ойл Шэйл Монголиа ХХК Гүйцэтгэх захирал, ШАТДАГ ЗАНАРЫГ АШИГЛАХ

БОЛОМЖ, Коал Монголиа 2014, 2 сарын 20-21.

• Фэн Вэй эрчим хүчний зөвлөгөө өгөх компани, 2014 оны хятадын нүүрсний зах зээлийн

шинжилгээ болон үнийн таамаглал, Коал Монголиа 2014, 2 сарын 20-21.

• Я. Батсуурь, Эрдэнэс Таван Толгой ХК, Танилцуулга, Коал Монголиа 2014, 2 сарын 20-21.

• Хишиг Арвин Индустриал ХХК, ҮНДЭСНИЙ КОМПАНИУДЫН ТӨЛӨВШИЛ, ӨРСӨЛДӨХ ЧАДВАР,

Коал Монголиа 2014, 2 сарын 20-21.

• Виртген Групп, МОНГОЛЫН НҮҮРСНИЙ ЗАХ ЗЭЭЛ ДЭХ WIRTGEN БРЭНДИЙН SURFACE MINER

БУЮУ АНГИЛАН ОЛБОРЛОГЧИЙН ТЕХНОЛОГИ БОЛОН АШИГЛАХ БОЛОМЖУУД, Коал Монголиа

2014, 2 сарын 20-21.

• ―Тавантолгой‖ ХК-ийн Гүйцэтгэх захирал Р.Сэддорж, Дэвшилтэт технологи ба инновацийг

нутагшуулах нь, Коал Монголиа 2014, 2 сарын 20-21.

• ―УУЛ УУРХАЙН ДЭД БҮТЦИЙН ХӨРӨНГӨ ОРУУЛАЛТЫГ ДЭМЖИХ ТӨСӨЛ‖ Төслийн Зохицуулагч

Б.Энхбаатар,Коал Монголиа 2014, 2 сарын 20-21.

• ДЭД САЙД Д.ДОРЖПҮРЭВ, Эрчим Хүчний Яам, 2014 ОНД ЭРЧИМ ХҮЧНИЙ САЛБАРЫН

ХИЙГДЭХЭЭР ТӨЛӨВЛӨСӨН АЖЛУУД БОЛОН ТӨРӨӨС БАРИМТАЛЖ БУЙ БОДЛОГО, Коал

Монголиа 2014, 2 сарын 20-21.

• Ай Эм Си Монтан Компани, Нүүрс баяжуулах талаар, Коал Монголиа 2014, 2 сарын 20-21.

The below presentation is from the January 27 BCM monthly meeting:

•ОЙ ХАМГААЛАЛД СУУРИЛСАН БИЗНЕС, Цэсэдийн БАНЗРАГЧ /Ph.D/, БОНЯ- ны ОЙ ХАМГААЛАЛ,

ОЙЖУУЛАЛТЫГ ЗОХИЦУУЛАХ ХЭЛТЭСИЙН ДАРГА, МБЗ-ийн 1 сарын 27-ны гишүүдийн сарын

хурал дээр

___________________________________________

ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN

BUSINESS NEWS‟, „PHOTO GALLERY‟

•―Impact of Corruption in Mongolia‖ by L. Sumati, Director of Sant Maral Foundation at the ―ANTI-

CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training

seminar, Mar 06, 2014;

•―Anglo American Business Integrity policy and its application within the Business Globally‖ , Dr.

Graeme Hancock, President and Chief Representative Mongolia of Anglo American at the ―ANTI-

CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training

seminar, Mar 06, 2014;

•Change of the package of taxation laws: private sector, Dr. Ch. Khashchuluun, Executive Director,

National Council for Private Sector Support, at the BCM`s Tax working group's meeting Feb 19,

2014;

•Economic and Capital Markets Update, Nick Cousyn, Chief Operating Officer, BDSec at the BCM

Monthly Meeting, Feb 24, 2014

15 Presentations at Coal Mongolia, February 20-21:

•Impact of Coal Sector on Government's Budget and the Taxation Regime , Ch. Ulaan, Minister of

Finance, MINISTRY OF FINANCE OF MONGOLIA

•Environmental issues in Mongolian coal mining sector, D.Enkhbat Ministry of Environment and

Green Development, Head of Environment and Natural Resources Department

•COAL INDUSTRIAL DEVELOPMENT, TRANSPORT AND LOGISTICS ISSUES: PRESENTATION TOPIC:

TRANSPORTATION OF THE MINING PRODUCT" Purevbaatar Luvsandagva, Head, Association of Railway

Engineering of Mongolia

•INVESTMENT INTO MONGOLIAN COAL MINING SECTOR AND CREATING AN ATTRACTIVE ENVIRONMENT

FOR INTERNATIONAL TRADE, VICE MINISTER OF ECONOMIC DEVELOPMENT, O. Chuluunbat, Vice

Minister, Ministry of Economic Development

•Government Involvement and Support to Enhance the Mongolian Competitiveness in Coal Sector,

O. Erdenebulgan, Vice Minister of Mining

•MONGOLIAN COAL INDUSTRY, Overcoming challenges in volatile market conditions, G.Battsengel,

Director, Mongolian Mining Corporation

•Global Coal Markets and Implications for Mongolia , Arshad Sayed, President of Mongolia & India,

Peabody Energy

• Introduction of CTL Plant Project, T. Munkhtur, Baganuur Energy Corporation

• ADUUNCHULUUN POWER AND CTL PROJECT, J.Zoljargal, Project Manager, MAK

• OIL SHALE OPPORTUNITIES IN MONGOLIA, Ts.Gantsog, Executive Director, Genie Oil Shale

Mongolia

• China Coal Market Lookout 2014, Fenwei Energy Consulting

• Erdenes Tavan Tolgoi JSC, Y. Batsuuri, CEO

• WIRTGEN SURFACE MINING TECHNOLOGY AND CHALLENGES IN COAL IN MONGOLIA by Wirtgen

Group

• "MINING INFRASTRUCTURE INVESTMENT SUPPORT PROJECT", Project Coordinator, B. Enkhbaatar at

the Coal Mongolia 2014, Feb 20-21.

• Coal Processing by IMC Montan.

The following presentations are from the January 27 BCM monthly meeting:

- "The year 2014 starts with new IPO on the Mongolian Stock Exchange", Richard Kobayashi, CEO,

Standard Investment LLC

- "IMA Consultancy Services for Investors and Account Manager's Role", D. Irmuun, Director of

Division for Promotion and Consultancy Services, Invest Mongolia Agency

The following have been added to Interview Section:

• Jim Dwyer, Executive Director, BCM: ―Minerals Policy‖;

• D. Bayasgalan, Director of Golomt Bank: ―Golomt has no problem‖;

• From the Oxford Business Group, Mongolia Reports 2013 book;

• B. Byambasaikhan, Chairman, Business Council of Mongolia: ―Talk is cheap‖;

• President Ts. Elbegdorj: ―Diversifying for growth‖;

• Jim Dwyer, Executive Director, BCM: ―Non-mining sectors budding‖;

• Peter Morrow, Chairman, American University of Mongolia: ―Filling in the blanks‖;

• N. Zoljargal, Governor, Bank of Mongolia: ―Sustainable vision‖;

• Gansukh, Minister of Roads and Transportation: ―Accessing new markets‖;

• J. Od, President, MCS Group: ―Building interest‖.

BCM's English website includes the ―Mongolia Business News‖ section.

Mongolia Reports section:

• 2014 Article IV staff report for Mongolia by International Monetary Fund;

• BCM comments on draft Amendments to the Minerals Law made to Mr. D.Gankhuyag, the Minister

of Mining, February, 2014;

• BCM Open Letter to Parliament and Government is available for download.

BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business

News‖ before they are all put together each week for Friday's weekly NewsWire.

The ―Photo Gallery‖ contains photos from the 6th Anniversary BCM Renewal dinner on November

11, 2013.

BCM Football Cup 2013 pictures are posted to the website - http://bcmongolia.org/en/photos/350-

en/album?albumid=200

The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home

page for a consolidated account of the week‘s events.

SOCIAL NETWORK WITH BCM

BCM LAUNCHES NEW LINKED-IN COMPANY PAGE

The Business Council of Mongolia has launched a new company page on the social networking

website LinkedIn to network its members and followers including small-medium enterprises (SMEs).

The new page will allow BCM to alert followers to the latest news and information critical to their

businesses. Members‘ businesses will be promoted. Additionally, BCM plans to deliver monthly

infographics on the latest data as well as videos and other media content as they come. The bulk of

the content on the new page will be in Mongolian language to better cater to BCM's Mongolian-

speaking audience and members. The following link can direct you to the new BCM's Linked-in page.

http://www.linkedin.com/company/business-council-of-mongolia?trk=company_logo

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.

Social stats:

BCM now has 5,018 fans on our Facebook fans page, 1,614 connections on LinkedIn network,

and 979 followers on Twitter.

Of course for news information, interviews, event photos, and announcements regarding our

organization, visit the official BCM website at http://bcmongolia.org/en/

BCM IN THE UNIVERSITY CLASSROOM NEWS

Business Council of Mongolia (BCM) has been progressing 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 1,293 students and teachers

have participated with BCM in the University Classroom Project.

• Ms Nanjidgundegmaa, officer with Public Relations Department of Anti-Corruption Agency, gave a

presentation entitled ―Attitude and our future‖ to an audience of 50 students of Customs class at

Mongolian National University, on 17th of February 2014.Ms Najidgundegmaa presented a theme

identifying conflicts of interest and harm of corruption within the public authority to manage public

and private interests, and gave a brief overview of the law on the prevention of conflicts of

interest.

• Ms. Zaya B, consultant at World Bank gave a presentation entitled "Insurance Market in Mongolia"

on 18 March at the Institute of Finance & Economics(IF&E). She spoke the about current situation

and prospects for the Mongolian insurance market, comparison of the Mongolian insurance market

to the world insurance market and she answered students‘ questions for 40 minutes. 73 students

attended her presentation. Presentation was very fruitful to the students.

Next BCM in the University Classroom series 8 April at the (IF&E). Mr. Nick Cousyn, COO, BDSec will

speak --"Update of Mongolian Capital Markets".

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]

February 28, 2014 *12.2% [source: NSOM]

*Year-over-year (y-o-y), nationwide

Note: 12.0% y-o-y, Ulaanbaatar city, February 28, 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]

CURRENCY RATES – 21 MARCH 2014

Currency Name Currency Rate

US dollar USD 1,773.96

Euro EUR 2,454.89

Japanese yen JPY 17.33

British pound GBP 2,014.38

Hong Kong dollar HKD 228.48

Chinese Yuan CNY 284.86

Russian Ruble RUB 49.04

South Korean won KRW 1.65

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.