BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 249 – November 23, 2012

NEWS HIGHLIGHTS:

Business

Oyu Tolgoi tests copper concentrator;

SouthGobi to lay off 200 workers;

Russia considers opening Erdenet Mining to strategic partner;

Mongolian firm announces plans to open synthetic diesel plant in 2013;

Fitch affirms XacBank's “B” rating, outlook stable;

Development Bank appoints deputy director;

Erdenet Mining director holds onto top position;

Prophecy makes management appointments;

Government looks to name Khushuut coal mine as strategic deposit;

Chinggis Khan brand vows to bring spirituality to vodka;

BCM talks Mongolian investment climate at IFE;

Landslide claims three lives at Nalaikh mine;

Entrée releases Q3 interim results;

GE's growth in wind reflects changing nature of world markets.

Economy

Mongolia government meeting investors for possible dollar bond sale;

Mining Ministry and Central Bank team up to stabilize fuel prices;

Don't be so hasty to throw out international tax agreements, says IMF;

Growing power usage weighs heavily on aging infrastructure;

BPI raises the bar for quality;

Erdenet to receive world-class stadium;

12 students win MNT 48 million in scholarships;

Poor harvesting spoils flour production following largest-ever harvest;

District government plans to convert Tourist Street into parking lot;

MNMA looks for investment into mining sector from Korea;

BPI leads trainings to get companies to meet environmental regulations;

Mining bonanza;

Water gone to waste;

Nomadic lifestyle under debate;

Holiday donations;

Investors make swift grab for gold.

Politics

DP claims victory in local elections;

Government and Mongol Bank target stable food prices;

Academics submit mine closure bill;

New tax on property used for business begins 2013;

Mongolia ascends in OSCE membership;

Japan, N. Korea begin new round of talks in Mongolia;

Mongolia, N. Korea pledge to boost cooperation;

President extends invitation to N. Korea's Kim Jong-Un;

Australian minister raises lawyer's detention with foreign minister;

Qatar's ambassador presents credentials;

Mongolia, India sign military cooperation agreement;

Soldier dies of health problems while serving in South Sudan;

Enkhbayar's son exits MPRP;

Call for Gobi bear's protection in 2013;

Mongolia-Tibet ties still strong, says Dalai Lama.

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.

SPONSORS

Khan Bank Eznis Airways

Kempinski Hotel Khan Palace Mongolian National Broadcasting

Breakthrough PR Oxford Business Group

BUSINESS

OYU TOLGOI TESTS COPPER CONCENTRATOR

Oyu Tolgoi LLC has begun testing of its copper concentrator plant now that electricity is being

delivered to the copper and gold mine from China.

Oyu Tolgoi will begin decommissioning its diesel generators with electricity from China now being

delivered to site. According to L. Tsend of Energy International, the site will receive electricity

from 220 kilowatt electrical lines already built and leading to the mining site. Electricity usage will

grow from 12 megawatts to 100 megawatts once the plant is commissioned.

For the next half month, the mining firm will test equipment at the plant. It expects tests will be

complete and the plant will be in full operation by 1 December.

The concentrator plant has the capacity to process 100,000 pounds a day and 35 million pounds a

year. Company officials said they expected export to China would begin in the first half of next

year.

Source: Udriin Sonin

SOUTHGOBI TO LAY OFF 200 WORKERS

SouthGobi Sands LLC announced that it will have to let go more than 200 employees. Company

employees have responded with an appeal to the Trade Union of Energy, Geology and Mining.

Source: Zuunii Medee

RUSSIA CONSIDERS OPENING ERDENET MINING TO STRATEGIC PARTNER

Rostechnology has proposed that Russia sell some of its interest in its joint venture with the

Mongolian government in Erdenet Mining Corp.

Russia currently holds a 49 percent stake in the projects, with the Mongolian government holding

the remaining majority stake. According to Rostechnology Director Sergei Chemezov, a strategic

partner might bring more capital to invest into modernizing Erdenet Mining's facilities and

extraction techniques.

Analyst Oleg Pterpovalovski suggested a number of global players such as Rio Tinto PLC, which is

currently leading the development of Oyu Tolgoi copper and gold mine, BHP Billiton Ltd., or

Glencore International PLC.

Source: Udriin Sonin

MONGOLIAN FIRM ANNOUNCES PLANS TO OPEN SYNTHETIC DIESEL PLANT IN 2013

The director of a Mongolian industrial firm told media he could have a plant producing synthetic

diesel from brown coal within a year.

Ulziit Center LLC Director N. Dash-Ulzii said he hoped to take coal from the Baganuur brown coal

deposit to produce synthetic diesel. He said the Ulziit Center had conducted a small-scale

experiment over the past three years to test this idea, having found in its latest experiment that it

is indeed possible.

"As an engineer, I examined the possibilities of converting brown coal to diesel in Mongolia over the

past 10 years. Mongolia depends on the import of diesel from abroad, but we have abundant

resources of brown coal."

The diesel produced at the Ulziit Center lab has been sent for further examination by another

facility, said Dash-Ulzii. Scholars, experts, and government viewed a demonstration, he said, adding

that he was confident in the results of the experiment.

The Ulziit Center is now in discussion with the government for a medium-scale plant near the

Baganuur mine. However, acquiring the necessary equipment, training, and supplies may be a

challenge down the road.

"Medium scale plants are rare in the world, so there is no ready-made machine or supplies. We can

order supplies and machines that would fit our model from abroad and assemble them in Mongolia."

The plant would be able to process some 8 million tons of coal for 2 million liters of fuel, said Dash-

Ulzii. He said such a project could be completed within a year.

Source: Udriin Sonin

FITCH AFFIRMS XACBANK'S “B” RATING, OUTLOOK STABLE

Fitch Ratings has affirmed XacBank LLC's long-term issuer default rating (IDR) at ―B‖ and its short-

term IDR at ―B.‖ The Outlook is stable.

The ratings capture XacBank's ongoing business model changes and the likely pressure this will bring

on its asset quality, liquidity and capital. XacBank, a traditional microfinance institution, is

increasing riskier small-medium enterprise (SME) lending, which will likely lead to higher loan

concentration and impairment rates. In addition, it increased XacBank's vulnerability to change in

the operating environment and the economy due to the nature of SME lending and the bank's

limited expertise in the area.

The bank continues to seek market funding, which in Fitch's view will accelerate the shift in its

business model to SME lending and its funding structure to market funding as well as increase its

funding costs. The bank had planned to issue up to USD 200 million in senior unsecured notes in

March and September 2012 to ease tight liquidity and support further credit growth, but this was

held back both times by difficult market conditions.

A negative rating could come of relaxed underwriting standards to grow its SME book rapidly

without bolstering capital and liquidity. Upgrade prospects are slim, given a limited scope for

improvement in the bank's loss-absorbing ability due to further credit growth and pressure on

profitability from higher funding and operating costs.

Source: Fitch Ratings

DEVELOPMENT BANK APPOINTS DEPUTY DIRECTOR

The Development Bank's board of directors has appointed S. Sandagdorj as its new Deputy Director.

Before his appointment at the bank, Sandagdorj worked as Deputy Director of Khadgalamj Bank

LLC. The position has remained opened since last July when L. Bolormaa was dismissed from the

post.

Source: Zuunii Medee

ERDENET MINING DIRECTOR HOLDS ONTO TOP POSITION

The head of Erdenet Mining Corp. has reportedly retained his position amid numerous changes in

the company's management.

Parliament Speaker Z. Enkhbold met with Russian officials last week to discuss changes in

management in the company. Before the meeting a rumor was reported by media that Director Ch.

Ganzorig would be replaced, but another unnamed source has said government found no reason to

do so. However, other top directors and vice directors were dismissed and replaced.

Source: Udriin Sonin

PROPHECY MAKES MANAGEMENT APPOINTMENTS

Prophecy Coal Corp. has announced the appointments of D. Bailikhuu as country advisor, D.

Damdinjav as a project manager, and K. Bekzod as business development manager.

Bailikhuu has over 29 years of privatization and deregulation policy experience in Mongolia. He is

currently advising the State Property Committee (SPC) on a range of issues including the

development of a policy on the restructuring and privatization of state-owned enterprises in

Mongolia, corporate governance, post-privatization restructuring of state-owned entities, and the

development of a regulation policy relating to Mongolia's infrastructure sector.

Damdinjav has 20 years of electrical engineering, power distribution, and generation experience in

Mongolia. Before joining Prophecy Coal, Damdinjav was the deputy director of the energy

department at Newcom Group, one of Mongolia's leading business groups, where he was responsible

for technical supervision, technical proposal development and project management of the Salkhit

wind farm and the Ulaanbaatar's Power Plant No. 5. Prior to that, Damdinjav worked as a consultant

for the World Bank and Asian Development Bank's (ADB's) energy projects in Mongolia and at the

Energy Authority and Central Energy System.

Bekzod has worked at Ulaanbaatar-based Eurasia Capital and was responsible for providing advice

on raising capital to international and local companies in Mongolia. He has served on the board of

directors of several Mongolia-focused companies.

Source: Prophecy Coal Corp.

GOVERNMENT LOOKS TO NAME KHUSHUUT COAL MINE AS STRATEGIC DEPOSIT

The government is targeting the nationalization of the Khushuut coal mine, which is currently

licensed to Hong Kong-listed Mongolian Energy Corp.

On a Saturday meeting of the Cabinet of Ministers, Minister of Mining D. Ganhuyag introduced a plan

to include Khushuut on the list of Mongolia's strategic deposits, reported local media. Ganhuyag

highlighted the fact that once the mine is operational, it would meet the requirements of a mine of

strategic importance.

Government ordered that Gankhuyag prepare the matter for discussion by Parliament.

Source: BDSec JSC

CHINGGIS KHAN BRAND VOWS TO BRING SPIRITUALITY TO VODKA

APU is set to launch a new high-end vodka brand from Mongolia into global travel retail in 2013.

Chinggis Khan Vodka is made with wheat grown on the Mongolian steppes, distilled six times with

pure alpha grain spirit, then filtered for over 500 hours through charcoal, quartz, diamonds, black

pearls, and silver, the company said. The vodka is finished with spring water from an ancient well—

melt water from the sacred Bogd Khan Mountains' snow.

Chinggis Khan Vodka was presented at the TFWA World Exhibition in Cannes last month, with the

―primary objective to raise interest in Mongolian vodka ahead of our 2013 launch,‖ said

International Sales and Marketing Director Jett Yang.

―We were very encouraged by the trade's reception to our unique product story and quality

credentials,‖ he continued. ―Most visitors had never heard of or experienced Mongolian vodka

before meeting us, so we were very excited to get our story to a wide audience. We will be the new

news in vodka in 2013.‖

Chinggis Khan Vodka will make its debut in global travel retail in 2013. The guide retail price is

described as 20 percent more than its rival Grey Goose, reflecting the high-end luxury positioning.

Source: Moodie Report

BCM TALKS MONGOLIAN INVESTMENT CLIMATE AT IFE

The Business Council of Mongolia (BCM) gave a presentation on investing in Mongolia at the Institute

of Finance and Economics (IFE) on 20 November.

Jim Dwyer delivered a presentation entitled ―Business Investment Environment in Mongolia‖ to an

audience of more than 80 graduate students. Dwyer ended his speech nothing Mongolia's greatest

assets are its human resources rather than the natural resources under the earth.

BCM has been pushing forward its ‗BCM in the 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 next ‗BCM in the Classroom‘ series event will be held on 30 November at the IFE with speaker

D. Achit-Erdene, president of Mongolian International Capital Corporation (MICC).

Source: BCM

LANDSLIDE CLAIMS THREE LIVES AT NALAIKH MINE

Three people died in a recent mining accident in Nalaikh Soum last week.

The deaths of the three individuals aged 50, 30, and 23 occurred as a result of a landslide at a

private micro mine. Although a rescue team of 150 personnel arrived to try to save them, they

could not reach the people, who were reportedly buried 60 meters underground.

The incident is currently under police investigation.

Source: Udriin Sonin

ENTRÉE RELEASES Q3 INTERIM RESULTS

Entrée Gold Inc. filed its interim operational and financial results for the quarter ended 30

September.

Development of the Oyu Tolgoi mining complex continues at a rapid pace, with Turquoise Hill

Resources Ltd. announcing on 5 November the power purchase agreement with Inner Mongolia

Power Corp. Phase one construction is essentially complete and the Oyu Tolgoi copper and gold

project is now on the verge of commercial production. Exploration of various targets continues on

the Entree-Oyu Tolgoi joint venture ground. One diamond drill is currently operating north of the

Hugo North extension deposit along the Oyu Tolgoi copper belt.

Entrée Gold has identified two gold zones, Zone II and the Argo Zone, on its licensed area.

Trenching in 2012 has confirmed and expanded the mineralization discovered last year by reverse

circulation drilling, returning up to 81.4 grams per ton of gold over three meters within a broader

mineralized zone approximately 400 meters long by 130 meters wide.

―During the most recently completed quarter, we focused on preparing a preliminary economic

assessment for our Ann Mason deposit in Nevada and completing our Shivee West work program in

Mongolia,‖ said Greg Crowe, President and Chief Executive Officer. He added, ―In Mongolia, a

power-purchase agreement between Oyu Tolgoi LLC and the Inner Mongolia Power Corporation has

been completed and commencement of phase 1 commercial production at Oyu Tolgoi is expected in

the coming months.‖

For the three months ended 30 September, net loss decreased to USD 1.9 million compared to a net

loss of USD 3.5 million in the three months ended 30 September. During that same period, Entrée

Gold incurred lower operating expenditures, primarily from decreased exploration expenses on the

Ann Mason Project.

Source: Entrée Gold Inc.

GE'S GROWTH IN WIND REFLECTS CHANGING NATURE OF WORLD MARKETS

General Electric Co., the wind turbine supplier to Newcom Group Ltd.'s Salkhit wind farm, is

celebrating the installation of its 20,000 turbines.

Taken together, all the turbines it has installed could power Hong Kong and London for an entire

year. In 2012 alone, General Electric shipped 5,000 turbines—double that over the previous two

years. Next year, General Electric expects to install 3,000 turbines worldwide, reflecting the drop

in the world markets that is affecting the industry.

General Electric has been focused on driving down costs and increasing the reliability of its

turbines, and it surely benefits from the conglomerate's extensive manufacturing, sourcing, and

logistics network.

Although General Electric is making headway in India, thanks to some policy shifts that favors

bigger, more efficient projects that can produce lots of energy in low-wind situations, it could be

muscled out of Latin America by China. China is promoting its home-grown turbine manufacturers

there by offering government-backed loans to developers that carry interest rates as much as 50

percent less than local banks.

Source: Sustainable Business

ECONOMY

MONGOLIA GOVERNMENT MEETING INVESTORS FOR POSSIBLE DOLLAR BOND SALE

The government began meeting investors Thursday for the possible sale of a dollar bond, a person

with knowledge of the matter said.

The person did not give further details about the investor roadshow or potential deal, but Mongolia's

Central Bank chief, N. Zoljargal, had said early this month that the landlocked Asian country plans

to raise USD 1.5 billion by selling government bonds to finance the development of its

infrastructure.

The government has mandated Bank of America Merrill Lynch, Deutsche Bank, HSBC, J.P. Morgan

and TDB Capital to arrange the investor meetings, the person said.

Source: Wall Street Journal

MINING MINISTRY AND CENTRAL BANK TEAM UP TO STABILIZE FUEL PRICES

The Ministry of Mining and Bank of Mongolia plan to cooperate to stabilize the price of petroleum

for the year.

Mining Minister D. Ganhuyag and Central Bank President N. Zoljargal signed a memorandum with the

director of the ministry's Petroleum Department, G. Uliziiburne, and other representatives of the

petroleum industry to maintain a constant price for fuels. Importers have agreed to sell their fuel at

a fixed currency rate established by the Bank of Mongolia. The Central Bank has in return agreed to

pay the difference in the event of a large discrepancy between the agreed upon and real current

exchange rate.

Source: Business Mongolia

DON'T BE SO HASTY TO THROW OUT INTERNATIONAL TAX AGREEMENTS, SAYS IMF

The International Monetary Fund (IMF) has advised the government to take a diplomatic approach in

its bid for new double taxation agreements.

The mining boom has forced policy makers to take another look at its taxation agreements with

foreign partners to ensure that Mongolia is getting its just income now that it has more leverage

than when the agreements were originally drafted. According to the IMF, some companies establish

offices in certain countries to lessen their tax burden. However, Mongolia should not be so quick to

simply renege on its past agreements.

―The current Mongolian DTA [double tax agreement] network is prone to international tax planning

as some DTAs contain favorable provisions allowing residents of other countries to substantially

reduce source taxation in Mongolia,‖ reads the report. ―For instance in some cases the Mongolian

withholding tax on dividends, interest, royalty, service fees, or lease payments is limited or even

prohibited. In other cases, capital gains on indirect transfers of mining licenses cannot be taxed in

Mongolia.‖

Instead of terminating it agreements, the IMF advocated an approach whereby Mongolia's double-

taxation network be selectively renegotiated or amended. The IMF said termination should only be

used as a last-case remedy if negotiations were unsuccessful.

―In the current situation, only a few DTAs can be considered potentially harmful as they

insufficiently protect the Mongolian tax base,‖ says the report. It adds, ―Most DTAs—although

slightly out of line with the proposed Mongolian DTA model—do not require immediate attention.‖

Source: News.mn

GROWING POWER USAGE WEIGHS HEAVILY ON AGING INFRASTRUCTURE

An energy official blamed Ulaanbaatar's outdated electrical infrastructure for the rash of power

outages experienced in the capital.

Ulaanbaatar experienced 33 power outages last week due to faulty cable lines, said S. Tumurkhuu,

chairman of the Ulaanbaatar Electrical Distribution Network. He added that accidents during

construction resulted in the cut of some cable lines and cold weather had also contributed to the

numerous power outages that had many Ulaanbaatar residents have complained about.

―When soil freezes, old cables are damaged because of the changes to the soil,‖ said Tumurkhuu.

The chairman said that its 50 electrical substations are overloaded and the company is working to

increase its capacity. Mongolia's electrical grid is growing increasingly more spread thin as usage

grows in Mongolia with the population. About 80 percent of all cable lines are over 20 years old, he

said, and only 10.9 percent of all cables have been replaced. Without the proper upgrades, these

issues are likely to only be more common.

―Electricity demands keep increasing. Currently, Ulaanbaatar thermal power plants cannot get rid

of the electrical cuts. We can only manage and repair the damage since the company does not have

the technical facility upgrades it needs.‖ Tumurkhuu added, ―We need to invest in the [energy]

sector and update the whole engineering system.

Source: News.mn

BPI RAISES THE BAR FOR QUALITY

The Ministry of Construction and Urban Development and the Ulaanbaatar city government plans to

work in coordination with USAID's Business Plus Initiative (BPI) to introduce reforms to reduce red

tape and corruption surrounding the attainment of construction permits.

The reforms would result in expanded and enhanced construction in Mongolia with improved quality

and safety standards. Reforms would cut by 80 percent the signatures needed for permission from

128 to 25 officials and a new division of project types. The ministry plans to introduce the three

categories for construction projects by size and establish a transparent set of standards for each.

The proposed reforms would require permission granted from the ministry for large projects such as

the construction of airports and bridges while municipalities would hold authority over medium-

sized and small projects. BPI has also proposed they set up a one-stop center for construction

permits to cut down on time and the number of procedures to attain permits. BPI also promises

these reforms would establish consistent standards of quality that would enable more effective

review of construction plans and inspection.

BPI held a video conference to demonstrate the world's best practices and regulation techniques

last month. Twenty-five high ranking construction ministry and city officials gathered to learn of

the progress made in Georgia's regulatory framework for construction. The working group for

construction is now looking to integrate these practices into Mongolia's own framework with the

continued assistance of BPI.

Source: Business Plus Initiative

ERDENET TO RECEIVE WORLD-CLASS STADIUM

The Mongolian Federal of Light Athletics plans to lead the construction of a new runway stadium in

Erdenet Soum.

Construction will be contracted to Mondo with support from Orkhon Aimag's Department of Sports

and the Governor Administration Department for specifications such as the asphalt and drainage.

The government plans to ensure that the stadium meets global standards.

The MNT 600 million needed to finance the project will come from the state budget. Construction is

planned for completion by July 2013.

Source: Udriin Sonin

12 STUDENTS WIN MNT 48 MILLION IN SCHOLARSHIPS

The Ministry of Education and Science awarded MNT 48 million worth of scholarships to students

who won an essay competition.

The ministry presented the scholarship to the writers of the best papers at the 12th "Khural Togoot"

annual young scholar's conference. Education Minister L. Gantumur said the government would

continue to support its young scholars, who will likely lead the development of science in Mongolia.

This year saw 12 winners compared with 10 last year and the scholarship prize grew to MNT 4

million from MNT 2 million. The conference had six divisions: technology; natural sciences;

geography and geology: biology and agriculture; social sciences; and health sciences.

Source: Unuudur

POOR HARVESTING SPOILS FLOUR PRODUCTION FOLLOWING LARGEST-EVER HARVEST

Flour producers have reported deteriorating quality of flour due to poor harvesting.

Although fair weather conditions resulted in Mongolia's biggest crop harvests yet, the weather

conditions may have also contributed to poor quality wheat for flour production. According to Ch.

Ayushjav, chief marketing officer at Altan Taria Co., the poorly harvested goods will have to be

supplemented with more recent crops.

"Our factory has produced flour with a new crop of wheat from 20 October. This year the wheat had

not matured because of frost at the end of August and beginning of September. Moreover, the

product became less soft because of rain when the crops were maturing."

Ayushjav said his company could produce better quality flour by mixing surplus from the last batch

with the newer crop if the Ministry of Industry and Agriculture allows.

Source: Unuudur

DISTRICT GOVERNMENT PLANS TO CONVERT TOURIST STREET INTO PARKING LOT

The Chingeltei District governor has announced plans to construct a paid parking lot at Juulchin (tr:

tourist) Street.

The parking lot would hold between 100 and 150 cars and four entrance points, said the governor. A

request was sent on 15 November to the Ulaanbaatar Properties Department for permission and to

send notices to street vendors to vacate the area.

The plan includes mandates that all statues be left intact. Development of the lot would include

the construction of fences to surround the area, painted markers, and signs.

Source: Unuudur

MNMA LOOKS FOR INVESTMENT INTO MINING SECTOR FROM KOREA

The president of the Mongolian National Mining Association (MNMA) met with a Korean trade

researcher to share ideas on greater cooperation between Mongolia and Korea's mining sector.

MNMA President D. Damba discussed opportunities for investment with the Korean International

Economy Policy Institute's head of the Commonwealth of Independent States (CIS) region. He also

met with directors of Chinese mining firms and service providers that could help lead the

development of Mongolia's mining sector.

Source: Mongolian National Mining Association

BPI LEADS TRAININGS TO GET COMPANIES TO MEET ENVIRONMENTAL REGULATIONS

USAID's Business Plus Initiative (BPI) held training sessions to help companies meet Mongolia's

increasingly more stringent environmental regulations.

Fears about how development is affecting Mongolia's fragile environment has given cause for private

businesses to take responsibility in ensuring appropriate protection of the environment. Thirty one

business people from Ulaanbaatar received training from BPI, with 85 percent of trainees reaching

successful completion. Those who passed the training course and examinations received certificates

for their achievements.

―We need to train new environmental auditors to create Mongolian professionals with qualifications

and certifications,‖ said SBS LLC Project Manager and trainee B. Nomin-Erdene. She added, ―Before

the training our company lacked the capacity to follow audit regulations, and many other

companies also sought to have similar trainings.‖

New laws have mandated that companies using Mongolia's natural resources must submit to an

environmental audit every two years. BPI will support additional trainings to build a cadre of quality

assurance auditing and management professionals in Mongolia.

Source: Business Plus Initiative

MINING BONANZA

Chinggis Khaan might be rolling in his grave, wherever he is. The all-conquering Mongol, laid to rest

in a secret location, would almost certainly disapprove of the foreigners coming to plunder his once

mighty domain. And with all the mining activity in Mongolia, you really want to hope he does not

get dug up in the frenzy.

Mongolia is the big new frontier for Australian giants such as miner Rio Tinto PLC and developer

Leighton Asia Ltd. Leighton Asia is operating a large joint-venture coal mine in the Gobi Desert

while Rio Tinto is about to open one of the biggest copper mines on the planet. It will soon account

for more than 30 percent of the country's entire gross domestic product (GDP).

―Some of the optimistic geologists we have say that this business could run for up to 100 years.

Those more conservatively say 50 years plus,‖ said Cameron McRae, president and chief executive

officer of Oyu Tolgoi LLC.

The Rio Tinto deal means the company keeps a large controlling stake in the operation and cedes

the Mongolian government a 34 percent stake. That has provoked widespread controversy and a

degree of resentment among locals who are worried about where the benefits of Mongolia's

resource wealth will go. There is concern the government is ill-equipped to strike complex and

sophisticated mining deals in the national interest.

―People have different views on the deal,‖ said Dorshteri, a member of the Responsible Mining

Initiative. ―My feeling is Mongolia made a political decision. After all, the deal is a financial

transaction and whether it's beneficial to Mongolia, I have many doubts about.‖

And it is not only the deals that are sounding alarm bells. Environmentalists worry the mining push

has come so fast and aggressively that proper checks and balances are not in place. The other big

question is how will the spread of mining and its use of scarce natural resources such as water

impact the range of proud Mongolian nomadic herders.

Source: ABC

WATER GONE TO WASTE

Research will begin for the introduction of a water system to Ulaanbaatar's ger district due to gross

misuse of water, said an official from the Water and Sanitation Recovery Committee (WSRC).

Research shows that water waste is high in Mongolia, with between 60 and 80 percent of water loss

caused by certain entities, said B. Dorjbat, a specialist at the WSRC. Water loss is either

categorized as physical loss, often due to leakage from technical problems or poor piping, or

through commercial loss, such as when water meters are illegally fixed to provide inaccurate

readings.

The total amount of water loss from 30 water distributors in Ulaanbaatar is 14.8 million cubic

meters," said Dorjbat. "That is enough to provide drinking water for 96 days to Ulaanbaatar

residents."

To be sure that it is only a few companies responsible for the most loss, he added that the loss from

just 20 companies amounts to just 4.3 million cubic meters. He also noted that Zavkhan Aimag is

responsible for the most loss in the country.

At the ger districts in Ulaanbaatar water is sold for just MNT 1 per liter compared with costs of up

to MNT 6 for pumping water. Apartment dwellers pay MNT 0.32 a liter.

A cubic meter of water costs MNT 325 in Mongolia compared with MNT 851 in China, MNT 1,082 in

Russia, and MNT 985 in South Korea. A household of four living in the ger district is likely to

consumer 1,200 liters of water for MNT 1,200, roughly the same price as a loaf of bread. With water

so cheap people pay little mind to its conservation, said Dorjbat.

Source: Udriin Sonin

NOMADIC LIFESTYLE UNDER DEBATE

Geographers from the University of Leicester are involved in research on pastoralism, environment

and livelihoods at a critical juncture in decision making over the future of Mongolia's rural areas.

The two-year study, Community, Place and Pastoralism: Nature and Society in Post-Soviet Central

Asia, funded by the Leverhulme Trust and involving work in both Mongolia and Kazakhstan, led to a

meeting in Ulaanbaatar in September 2012, organized by the University of Leicester team and their

Mongolian colleagues. At this meeting herders were able to discuss key land and livelihood issues

directly with ministers, donor and government advisors.

―Mongolian herders are facing multiple pressures on their livelihoods, traditionally based on

nomadic pastoralism, from climate change, mining, desertification and new policies on land.

Through our project, national decision makers were brought together with affected parties and

local stakeholders to debate some of the vital issues pertaining to nomadic culture, livelihoods and

identity in modern Mongolia.‖

In recent years Mongolian herders have been encouraged through government policy and donor

interventions to form herder groups. These groups are designed to collaborate in pasture

management, labor sharing and environmental conservation, as well as marketing of their livestock

products, thus improving local livelihood and resilience.

A long-debated pastureland law, to be considered by the government in the next session of

Parliament, seeks to strengthen rights to key seasonal pastures for families and herders groups.

Although this law focuses on possession rather than ownership rights, for some herders it has raised

fears over the ultimate privatization of pastureland and reduction in the ability to move,

particularly in times of need. Government policy is also promoting intensification of livestock

production, bringing tensions between mobile and more sedentary livestock production and raising

questions about identity in modern Mongolia.

The Leveler team is finalizing detailed reports and articles to share with herders, international

donors, and government policy makers, as part of their contribution to these vital, ongoing debates.

Results of the work have also been presented at this year's Royal Geographical Society.

Source: Science Daily

HOLIDAY DONATIONS

The Friends of Mongolia aid group, a U.S. based non-profit organization founded in the state of New

York in 1999 by a group of volunteers from the seventh training group of Peace Corps Mongolia

volunteers, will be collecting donations to benefit Mongolia's needy children in Choibalsan Soum this

holiday season.

―The period between Canadian Thanksgiving in October through American Thanksgiving this week

and the holidays at the end of December seems like a good time to consider opportunities to help

Mongolia's poorest children,‖ said Steve Saunders, president of the North American Mongolian

Business Council (NAMBC).

Friends of Mongolia collects donations of clothes, books and toys each year to ship to the Anna

Home: All for Children non-governmental organization in Choibalsan, Dornogobi Aimag. Dornod has

a history of high levels of poverty, alcoholism, and deaths due to preventable and treatable

diseases such as tuberculosis and influenza.

Source: NAMBC

INVESTORS MAKE SWIFT GRAB FOR GOLD

Gold, a strong export commodity for Mongolia, is back from the wilderness. There were moments

during the summer, as prices lurched down toward USD 1,500 a troy ounce, when investors began to

question whether the decade-long bull market in the precious metal had ended.

But since traders first began to anticipate the U.S. Federal Reserve's move to launch a fresh

program of ―quantitative easing‖ in mid-August, gold has barely paused for breath. Its price has

jumped 12.5 percent, last Friday touching the highest level in nearly a year of USD 1,795 a troy

ounce. Measured in euros or Swiss francs, gold has this week hit all-time highs.

―The swing is just remarkable in terms of sentiment,‖ said Philip Klapwijk, head of metals analytics

at Thomson Reuters GFMS.

Bill Gross of Pimco, the world's largest bond fund manager, this week warned that if the United

States failed to put its finances on a sustainable footing ―bonds would be burnt to a crisp and stocks

would certainly be singed.‖ He concluded: ―Only gold and real assets would thrive.‖

George Soros and John Paulson added to their gold holdings in the second quarter and bankers say

that large hedge funds have continued their gold buying spree in recent months. Also, investors

have lifted their gold holdings via exchange traded funds by 158 tons since the start of August to a

record level.

Read more…

But some traders are beginning to feel nervous, pointing to weak physical markets. Demand from

India and China, the two largest physical markets, remains unspectacular, even if it has bounced

back in the past fortnight as the rupee strengthened, making bullion more affordable. Moreover,

the rally appears to have stalled just below USD 1,800—a level that has proved a stubborn barrier

for several other rallies in the past year.

Yet, with the United States at risk of going over a ―fiscal cliff‖, the prospect of another round of

global ―currency wars,‖ and the possibility of further expansion of central bank balance sheets

leading to higher inflation expectations, it is difficult to find anyone who is bearish on gold.

Source: Financial Times

POLITICS

DP CLAIMS VICTORY IN LOCAL ELECTIONS

The Democratic Party (DP) has claimed victory in the local elections held on Wednesday.

Prime Minister N. Altankhuyag announced that according to data collected, the DP won 13 or 14 of

Mongolia‘s 21 provinces.

"This is the first time that the DP has won in Uvs, Tuv, Hovd, and Bulgan Aimags, and also they have

a clean lead in nine districts, except for Bagakhangai district, in Ulaanbaatar city."

Source: News.mn

GOVERNMENT AND MONGOL BANK TARGET STABLE FOOD PRICES

The government has made an agreement with the Bank of Mongolia to introduce a program to

stabilize food prices.

The program is one of four where the government is trying to introduce price controls. The program

will focus on maintaining consistent prices for meat, flour, rice, vegetables, and other food staples.

Source: Zuunii Medee

ACADEMICS SUBMIT MINE CLOSURE BILL

Members of the teach staff at the Mongolian University of Science and Technology (MUST) have

developed a bill that would regulate the closure of mines.

"At this time when the mining sector has changed, it is improper to follow the formal procedures,"

said M. Dagva, a professor at MUST. "We need a new regulation that covers a broader scale and

meets current requirements."

The legislation aims to regulate issues such as ensuring the safety of where mines have been closed

and where activities continue, ways for using infrastructure for the future, and minimizing the

impacts from the closure of mines. The legislation would also help clarify the regulations that must

be followed when closing a mine.

The bill would have to be considered after the draft Minerals Law is finished with its preparations

by the president and passed by Parliament.

Source: Centerra Gold Inc., Zuunii Medee

NEW TAX ON PROPERTY USED FOR BUSINESS BEGINS 2013

New property taxes for Ulaanbaatar will begin taking effect on 1 January next year.

Property taxes will vary between 0.6 and 1 percent depending on its use and location, said

Ulaanbaatar Deputy Mayor N. Bataa. Taxes will be due quarterly for businesses while individuals will

be responsible for annual payments. Only property used for business will be subject to the new

taxation, while residential properties are exempt.

In 2001 Parliament passed its first property tax of 0.6 percent on all properties used for business.

The current tax was passed in 2010, but will not take effect until the start of 2013.

The City of Ulaanbaatar is seeking ways to raise capital to finance the budget of coming years. City

authorities estimate that the tax will generate MNT 3.8 billion in revenue to the city government,

with current annual revenue at some MNT 390 billion.

Source: News.mn

MONGOLIA ASCENDS IN OSCE MEMBERSHIP

The Organization for Security and Co-operation in Europe (OSCE) has elevated Mongolia's position to

a member nation.

Mongolia becomes OSCE''s 57th participating state, said a statement from the transnational

organization. The decision to welcome Mongolia into the organization was taken by consensus.

―Mongolia has been a long-standing Asian partner for cooperation of the OSCE,‖ Deputy Prime

Minister Eamon Gilmore said. ―The OSCE is addressing the many transnational security challenges

we face across the Euro-Atlantic and Eurasian region and Mongolia's desire to join fully in our efforts

underlines the importance of our organization's work.‖

Mongolia will formally take its position at the OSCE Ministerial Council in Dubai on 6 December. The

event will signal a deepened partnership, said Gilmore. Mongolia has been a partner member of the

OSCE since 2004.

Source: Trend

JAPAN, N. KOREA BEGIN NEW ROUND OF TALKS IN MONGOLIA

Japan and North Korea held talks last week in Mongolia that Tokyo hopes will shed light on decades-

old abductions.

Japan wanted information on the abduction of Japanese citizens by North Korean agents in the

1970s and '80s. Japan believes at least one abducted citizen may still be alive in the north, though

North Korea denies this. Five abductees were returned to Japan in 2002.

Japan and North Korea do not have formal diplomatic relations. The abduction issues and concerns

over North Korea's nuclear and missile programs have long strained ties. Japanese officials indicated

before the start of the talks that they expected them to be tough and not likely to lead to any

immediate breakthroughs. North Korea's official media proved few details, reporting only that they

were intended to deal with issues of mutual interest.

Japan has imposed strict sanctions against North Korea and cut off most economic and cultural

exchanges in 2006 after a missile launch. Tensions heightened again earlier this year when the

North launched a rocket saying it carried a satellite, but that Japan and other countries criticized

as a thinly disguised test of long-range missile technology. The launch failed just after takeoff.

Source: Washington Post

MONGOLIA, N. KOREA PLEDGE TO BOOST COOPERATION

Mongolian and North Korean officials pledged for bilateral cooperation in various fields during the

recent visit by North Korean officials.

The two countries have been sharing traditional friendship since the establishment of diplomatic

relations in 1948, Z. Enkhbold, Parliament Speaker said during his meeting with Choe Tae-bok,

Chairman of the Supreme People's Assembly.

―I want to say that Mongolia is ready to cooperate with the new leader of the DPRK and continue

the traditional friendly relationship,‖ Enkhbold said.

He said he hoped the two countries can cooperate in trade, information technology, exchange of

workforce and lease of ocean ports as Mongolia is a landlocked country. Enkhbold noted Choe's visit

to Mongolia is very important in enhancing cooperation between their two respective legislative

bodies. The speaker also said the Mongolian government is currently making efforts to promote

economic development and raise the international competitiveness of Mongolia's economy. One

example he gave was the construction of an industrial park to help Mongolia reduce its dependency

on mining.

Choe, for his part, said, ―...our two countries are closely working together at international levels,

especially under the U.N. framework. This relationship is contributing to friendly and stable

development of Northeast Asia.‖

Source: Xinhuanet

PRESIDENT EXTENDS INVITATION TO N. KOREA'S KIM JONG-UN

President Ts. Elbegdorj said Mongolia would welcome a visit by North Korea's supreme leader, Kim

Jong-un, during a meeting with a top official.

Elbegdorj met with the Chairman of North Korea's Supreme People's Assembly, Choe Tae-bok during

his recent visit to have talks with Japanese officials. The president said he hoped the visit would

bring stronger relations between their respective nations. During their talks Elbegdorj invited North

Korea's leader to visit Mongolia.

―First, most important is the high-level mutual visits. Thereby, we are ready to welcome the

supreme leader to our country,‖ said Elbegdorj.

The president also discussed the need for economic cooperation for the exploitation of natural

resources and to build infrastructure. They also discussed the possibility of cooperating for sea

transport of Mongolian exports through North Korea's ports.

The president also noted an official discussion he had with Kim Yong-nam, Presidium of the

Supreme People's Assembly, where they discussed matters of aid for food to North Korea. He added

that Mongolia could be used as a setting for peace talks in the future, saying that Mongolia was

prepared to host six such official meetings in Ulaanbaatar.

―For the purpose of fostering peace in Asia, as well as expanding cooperation within the countries

in the East Asian region, Mongolia holds the position of using peaceful dialogues as a mean to

handles issues on the Korean Peninsula,‖ he said.

Source: Info Mongolia

AUSTRALIAN MINISTER RAISES LAWYER'S DETENTION WITH FOREIGN MINISTER

Foreign Minister Bob Carr said he's raised the case of an Australian lawyer prevented from leaving

Mongolia with the foreign minister.

Authorities stopped Sarah Armstrong at Ulaanbaatar airport from leaving in mid-October because

authorities wanted to question her over corruption allegations. The 32-year old is a lawyer for Rio

Tinto PLC‘s mining subsidiary SouthGobi Resources Ltd. Carr said the government has flagged its

concern over Armstrong's month-long detention and he hopes she will be allowed to leave Mongolia

soon.

―She's been interviewed as part of these corruption investigations, she's had daily contact from our

consulate general, David Lawson,‖ he said. ―We're taking a keen interest in her case. I raised it with

the foreign minister of Mongolia, who I met in Bali last week, and I asked him if he'd take an

interest in it.‖

If Armstrong were to seek more consular assistance the government was ready to give it, but it was

limited in what help it could offer, Carr added.

―We can offer consular assistance in these cases. We can't, however, have the government fight the

case for an Australian overseas in a foreign judicial system,‖ he said.

Source: Sky News

QATAR'S AMBASSADOR PRESENTS CREDENTIALS

Qatari Ambassador to China Hamad bin Mohamed Al-Khalifa presented his diplomatic credentials to

Mongolia this week.

The ambassador submitted his credentials as a non-resident ambassador extraordinary and

plenipotentiary of Qatar to Mongolia. The official act came during a meeting between the

ambassador and the Mongolian foreign ministry's protocols department director. He wished the

Qatari official success in his mission to contribute to the development of relations between their

two countries.

Source: The Peninsula Qatar

MONGOLIA, INDIA SIGN MILITARY COOPERATION AGREEMENT

Mongolian and Indian military officials have agreed to cooperate on military programs in 2013.

Brigadier General D. Bayarsaikhan and Indian defense ministry official Smita Nagaraj signed a

memorandum promising to collaborate for information technology between each nation's defense

ministries.

The agreement also plans for next year's joint military training codenamed Nomadic Elephant,

which was first held in 2004 in Mongolia. They also planned for next year's Khaan Quest military

exercise.

Source: Info Mongolia

SOLDIER DIES OF HEALTH PROBLEMS WHILE SERVING IN SOUTH SUDAN

A Mongolian peacekeeper serving in South Sudan died of health problems last week.

First Sergeant G. Munkh-Erdene served in the first round battalion under the U.N. mandate to

support peacekeeping missions as a driver for the transport division. According to Deputy Chief of

Staff N. Bayarmagnai, Munkh-Erdene suffered from epilepsy and fell down while serving in Juba,

South Sudan. The soldier was sent to Cambodia for treatment but eventually died of a stroke early

the next morning. Autopsy results said he died of a heart attack.

―Every peacekeeper has free medical checks‖, said Bayarmagnai, explaining the screening process

soldiers receive before being sent abroad. ―G. Munkh-Erdene did not have any health problems

when he was sent to South Sudan.‖

Munkh-Erdene arrived in Mongolia via Turkish Airlines from Istanbul last Saturday and was buried in

the town he was born in, at his family's request. He served 12 years in the Mongolian Armed Forces

where he worked in the 123rd military unit in Hovd before being sent to South Sudan. He also

completed missions in Sierra-Leone in 2006 and 2009. He received two medals from the United

Nations and a ―For the Motherland‖ honorary medal.

Source: News.mn

ENKHBAYAR'S SON EXITS MPRP

E. Batshugar, son of incarcerated former President and leader of the Mongolian People's

Revolutionary Party (MPRP) N. Enkhbayar, has withdrawn his membership from the party.

Some reports say the rising political figure stepped away from the party to step out of his father's

shadow. Many in government reportedly believe some political hopefuls hoped to use Batshugar's

family name as a political device. However, Batshugar said officially that he withdrew his party

membership because of his recent appointment as a vice president of the Bank of Mongolia.

―According to the law, it is not allowed for a member of state staff to be a member of a party,‖

said a statement. It added, ―There is no special reason behind this.‖

Source: News.mn

CALL FOR GOBI BEAR'S PROTECTION IN 2013

The Ministry of Environment and Green Development has designated 2013 as ―Year of Protecting the

Gobi Bear.‖

The ministry unveiled a series of protective measures, including the establishment of a nature

reserve to restore safe habitat for the rare wild species and the setup of a working group

immediately to explore ways of increasing their population. The Gobi bear is a subspecies of the

brown bear that is critically endangered in the Gobi Desert. A survey by environment officials and

wildlife experts on the bear's living conditions in their habitat has found that the numbers of the

animal had declined to the near-extinction of 22 heads.

The measures also include introduction of foreign expertise on wild animal protection and

reproduction, and the setup of a protection fund for the bear. Mongolian wildlife experts told local

media that environment degradation in the Gobi bear's habitat and the animal's long breading cycle

were the two major reasons for their population drop. The bear usually gives birth to one cub every

two years.

Mongolia has prohibited hunting of the Gobi bear since 1953.

Source: China Daily

MONGOLIA-TIBET TIES STILL STRONG, SAYS DALAI LAMA

The Dalai Lama acknowledged Mongolia as an important ally to the people of Tibet and a center for

Buddhist practices.

"When I first visited Mongolia in 1979, there was no religious freedom for Mongolians under the

communist rule, but I clearly realized at the time that people nurtured deep faith in Buddhism and

reverence for me," said that Dalai Lama during an ongoing discourse for Mongolian devotees in

Dharamsala, India. "We have met several times after Mongolians achieved freedom, and our

thousands-of-years-old historical bond continues to remain alive and strong."

The Dalai Lama launched a website in Mongolian language during his visit to Mongolia in 2011. It

offers visitors words about the Dalai Lama's teachings on Buddhism, environment, science, human

values, peace, and non-violence. He expressed hope that the website would be helpful to Mongolian

devotees.

"Technology has made tremendous progress, but it is being also used to create violence. In this new

century, we must use technology to promote love and compassion," he said.

Source: India Education Diary

ANNOUNCEMENTS

MONGOLIA INVESTMENT CONGRESS 2012, SHANGHAI, 10 December

Mongolian Investment Congress 2012 will be held in Shanghai, China on 10 December. The event is

presented by the Mongolian Stock Exchange and Mongolian National Mining Association, and INBC

Global.

From mining, export infrastructure, and power generation to financial services, energy projects,

property development and more, Mongolian Investment Congress 2012 offers investment and

development opportunities at every turn.

Highlights for topics of discussion include international investment opportunities in Mongolia,

challenges for foreign investors in the mining industry and the coal reserves and resources.

The Clean Coal Asia Summit 2012, Shanghai, 11-12 December

The event serves as the information and networking platform for commercializing clean coal

technologies in Asia and the world. Highlights for discussion include China's government policies in

the clear energy of China's 12th five-year plan (2011-2015) and innovation and new projects in coal

gasification and liquefaction.

___________________________________________

COAL MONGOLIA 2013, 21-22 FEBRUARY, SS CLUB

It is a great pleasure to announce that we are organizing the International Coal Investors

Conference and Exhibition ―COAL MONGOLIA-2013‖ on February 21-22, 2013, for the third time.

The International Conference and Exhibition ―Coal Mongolia‖ has become the biggest Conference in

Mongolia and it has been a great opportunity to explore the Mongolian coal industry. Mongolia‘s

total coal resource is 162.3 billion tons with 300 deposits and is one of the world‘s top 15 coal rich

countries. We had over 700 delegates from over 300 foreign and domestic companies, NGOs, and

Government officials in our last Conference.

BCM is supporting this event. BCM members will get special discount.

WHAT IS NEW THIS TIME

- New investment opportunities in coal exploration, production and processing projects in Mongolia

- the fastest growing economy in the world

- Partnerships – bringing Mongolian Coal Miners to the International Market

- Mongolian New Government Position, Investment policy and Environment

- Environmentally friendly, new and efficient technologies in Coal Industry

We invite you to participate in the conference and we hope that the conference theme will be the

source of knowledge and inspiration in your further activities. Please contact Oyun at

oyun@mining.mn or at 70115590.

www.coalmongolia.mn

___________________________________________

THIRD RISK FORUM, 27-28 FEBRUARY, BLUE SKY TOWER

BCM is hosting the third annual Risk Forum of Mongolia from 27 to 28 February at the Blue Sky

Tower.

The forum is co-organized by BCM and Mandal Insurance. It is the most focused and informative risk

management event in Mongolia. This year, the forum will feature excellent participation of key

stakeholders of risk management and aims to become the catapult of change in Risk Management

practice of Mongolia.

For more information call 11 317 027.

___________________________________________

REGISTER NOW FOR MONGOLIAN MINING DIRECTORY - 2013

Mongolian Mining Directory-2013 which provides information database for mining companies,

investors, suppliers, service companies, government and non government organizations will be

published for the fourth year to commemorate the 90th anniversary of the Mongolian mining

industry. The MMD is distributed free of charge to international and domestic mining companies,

international conferences and exhibition, embassy offices in Mongolia and foreign countries to

investors.

BCM is a Supporting Organization of the MMD and welcomes Mongolian mining industry participants

who are interested in advertising their products and services in Mongolian Mining Directory-2013.

For more information please visit: www.mining.mn, www.mongolianminingdirectory.mn or call

+976-7011 5590.

___________________________________________

REGISTER FOR BCM‟S MINING SUPPLY CHAIN DATABASE AT NO COST

The new version of BCM‘s Mining Supply Chain Database is in use. Following the initiative of Oyu

Tolgoi LLC, the BCM has maintained the Mining Supply Chain Database since March 2009. It is an

honor to introduce you to the new version of the database which is totally upgraded as to its

content and use of information technology opportunities.

Approximately 1,400 entities are registered, of which about 95 percent are Mongolian-owned

suppliers. We are inviting all Mongolian mining suppliers and buyer companies to join the Mining

Supply Chain Database. Please visit here for registration.

If you have any questions regarding the database, please contact Undral at undral@bcmongolia.org

or 317027.

___________________________________________

“MM TODAY” on MNB-TV, Friday‟s at 18:50

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 18:50 to 19:00 tonight. Tune in to watch this program that reports stories from

today‘s BCM NewsWire.

BCM WEBSITES

MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS

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

Several presentations already posted include the World Bank‘s Mongolia Quarterly Economic

Update–June 2012 and 11 speeches from the 2nd Coaltrans Forum, held on 23 to 24 May in

Ulaanbaatar.

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

government website Open-Government.mn are regularly updated.

___________________________________________

ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟,

„PHOTO GALLERY‟

On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available. Just

uploaded are 25 presentations from the Mongolian Investment Summit 2012 on 30-31 October in

Hong Kong; recent postings from BCM‘s 5 November and 24 September monthly meetings; and 9

presentations from Discover Mongolia 2012.

The ―Mongolia Reports‖ section includes ―Mongolia Business Owner and CFO Survey‖ by BDSec JSC;

―The fiscal regime for mining - a way forward‖ by IMF Fiscal Affairs Department; ―Mongolia-a

supplement to Mining Journal‖ from Mining Journal October, 2012; ―Macro Overview‖ September,

2012 by EPCRC; ―Taxes for Expatriates in Mongolia‖ from PricewaterhouseCoopers; and the ―2012

Mongolia Investment Climate Statement‖ by the Economic and Commercial Section of the U.S.

Embassy.

BCM's English website includes the ―Mongolia Business News‖ section where the 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 5th Anniversary BCM Gala dinner on November 5.

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

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.

Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better

business environment in Mongolia today.

Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-

MONGOLIA/129826330435540 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

http://twitter.com/#!/bcMongolia.

BCM now has 725 fans on our Facebook fans page, 888 connections on LinkedIn network, and 500+

followers following us on Twitter.

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

organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.

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]

October 31, 2012 *15.0% [source: NSOM]

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

Note: 15.0% y-o-y, Ulaanbaatar city, October 31, 2012

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]

CURRENCY RATES – NOVEMBER 22, 2012

Currency Name Currency Rate

US dollar USD 1,395.09

Euro EUR 1,792.34

Japanese yen JPY 17.15

British pound GBP 2,226.84

Hong Kong dollar HKD 179.86

Chinese Yuan CNY 223.96

Russian Ruble RUB 44.73

South Korean won KRW 1.28

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.