SlideShare a Scribd company logo
1 of 26
Download to read offline
BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 260 – February 8, 2013
NEWS HIGHLIGHTS:
Business
 Government talks with Rio on hold for Tsagaan Sar;
 Mongolia to press Rio over Oyu Tolgoi costs;
 Oyu Tolgoi clarifies Parliament's concerns;
 OT produces first concentrate;
 Operations on hold at MEC's Khushuut mine;
 MRC releases December 2012 Quarterly Activities Report;
 TDB signs MOU with Japanese bank for information dissemination;
 Mongolia Opportunities Fund partners with Japanese financial group;
 AUM contracted to research employment opportunities driven by OT;
 OBG releases Mongolia 2013 report;
 AUM to offer MBA from Indiana University;
 CapitalistExploits.at releases Mongolia country research;
 S&P affirms rating and negative outlook for Winsway;
 Doors open at Maternity Hospital No. 1;
 Rio looks to build after writedowns.
Economy
 Mongolia debt costs rise as government battles Rio Tinto;
 Legal uncertainty cuts minerals exploration and companies' stock performance;
 MSE board members appointed;
 Mongolia auctions MNT 25 billion bills;
 Energy grid links to Umnugobi;
 Crime spikes as Tsagaan Sar nears;
 85 mm;
 Capital Markets Day sees 180 new investors open securities accounts
 USD 1.25 a day labor amid USD 4,000 purses stirs discontent;
 Four pitfalls to Mongolia’s astonishing growth;
 Chinalco Mining IPO flops;
 China data points to moderate recovery.
Politics
 President makes public demands of OT investors;
 Cabinet orders inspection lab for OT copper concentrator;
 Miners air grievances on draft Minerals Law at open discussion;
 Former MRA head sentenced to 6 1/2 years;
 Parliament no longer to pursue privatization of MIAT;
 MP Ganbaatar submits new labor law;
 Bill allows citizens to submit draft legislation to Parliament;
 Parliament's fall session concludes Friday;
 Mongolia bans percentage of acetic acid in foods;
 Government officials travel to Russia to inquire on price hikes;
 Former ambassador rumored to have sold Moscow embassy;
 SouthGobi Sands president calls for help from U.S.;
 67-year old Mongolian woman sentenced to death in China for drug smuggling;
 Mongolia doesn’t have resource nationalism—for now;
 China, Mongolia seek to mend trade differences
 At odds with Mongolia’s modernity, a poet seeks another way.
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 Oxford Business Group
Major Drilling Techenomics Mongolia
Breakthrough PR International SOS
Mongolian National Broadcasting
BUSINESS
GOVERNMENT TALKS WITH RIO ON HOLD FOR TSAGAAN SAR
Government officials said its stakeholders meeting is ongoing, with talks to resume after Tsagaan
Sar, Mongolia's lunar new year celebration.
Government and Rio Tinto PLC officials met on Wednesday to discuss grievances regarding the
project at the Ikh Tenger complex in Ulaanbaatar. Government representatives included Mining
Minister D. Gankhuyag, Environment and Green Development Minister S. Oyun, Erdenes Oyu Tolgoi
LLC Director Ts. Sedvanching while Oyu Tolgoi President and Chief Executive Officer Cameron
McRae and other Rio Tinto officials came to represent private interests.
―We have requested an explanation to why the initial investments had been increased by USD 2
billion, after which we would discuss the next financial issues,‖ said Gankhuyag. ―Parties have
agreed to resolve the issues based on scientific research and narrow estimations. We only demand
what is in compliance with Mongolia's regulations.‖
Economic Development Minister N. Batbayar noted Oyu Tolgoi's investors had grown worried over
President Ts. Elbegdorj's statements on Friday when he said Mongolians should take back control of
the project. He said the Rio Tinto officials had asked that members rescind their comments, to
which they replied, ―Mongolia is a state with a parliamentary republic. The people of Mongolia love
and respect their land. You will be allowed to operate on the territory of Mongolia if you
understand this point.‖ He added that the investment agreement must be proven to be of benefit
to Mongolians.
Source: Info Mongolia
MONGOLIA TO PRESS RIO OVER OYU TOLGOI COSTS
Mongolia will press Rio Tinto PLC to explain a spike in costs at the Oyu Tolgoi copper-gold mine, a
government source said, warning that it could threaten efforts to finance other projects in the
country.
"We would like to have some mechanism where we can control such cost increases. We do not know
if they are justified," said the source, who requested anonymity and said that the cost of the first
phase of the mine was around USD 2 billion higher than originally stated in the project's feasibility
study.
"We also want to know why our share of the revenues from the project has fallen so much, so at
least we can understand it and explain it to the people," he said.
A statement issued on Oyu Tolgoi's website late on Tuesday put the total capital required for the
project's first phase at USD 6.6 billion, compared to USD 5.7 billion in the original 2010 approved
feasibility study. It said concerns about the costs of the project had already been addressed in a
series of meetings between both sides.
The government source said the increased costs would have a considerable impact on the long-term
sustainability of Oyu Tolgoi, and on Mongolia's efforts to raise funds for other projects, including
the massive Tavan Tolgoi coal mine and a billion-dollar railway building program.
"We cannot have major financial institutions investing in a project that is not sustainable," he said,
adding that the higher costs meant Mongolia would not receive dividends from the project until
2033, far beyond the original schedule of 2019. Given that the project is financed by debt not
equity, you can imagine the financial costs will be tremendous and have an impact on the project's
revenues for the government," he said.
The project cost was initially estimated at around USD 4 billion, roughly the same as Mongolia's
gross domestic product in 2009, and was also expected to pave the way for other huge mining
deals, including Tavan Tolgoi. But Mongolia has struggled to find the capital required not only to
build the mines, but also the infrastructure required to get minerals to market.
Source: Reuters
OYU TOLGOI CLARIFIES PARLIAMENT'S CONCERNS
Oyu Tolgoi LLC released an official statement in response to President Ts. Elbegdorj's
message to Parliament where he asked for more control of Oyu Tolgoi by Mongolian
interests.
The statement directly responded to the criticisms from the president and elsewhere
regarding overblown costs for the mine's development. As of 31 December 2012, Oyu
Tolgoi had reported USD 7.4 billion comprising USD 6.6 billion of phase one development
costs, plus interest costs on loans USD 500 million, early phase two capital of USD 200
million and further exploration of USD 100 million.
The government purchased 34 percent in the company with borrowed money for other
shareholders. State-owned Erdenes Oyu Tolgoi, which holds the 34 percent stake, is not
required to repay the loan unless the business becomes profitable. Currently investors are
seeking to raise project financing from international banking and financial institutions to
enable the next stage of development. Project financing would lower the interest rate the
government is paying with the opportunity to bring forward shareholder dividends. Project
financing is expected to decrease the total cost of the business to all stakeholders.
Rio Tinto PLC provides Oyu Tolgoi with ―highly valuable skills, systems and processes‖ for
the benefit of the project. When Oyu Tolgoi reaches commercial production, management
fee payments are expected to be in the range of USD 60 million to USD 80 million a year.
While capital cost increases also increase management fee payments, Rio Tinto has no
incentive to increase costs. Loss of dividends and higher financing costs erode a far
greater value for Rio Tinto that it receives in increased management service fee
payments.
Oyu Tolgoi was the country's sixth biggest taxpayer in 2011, according to the General Tax
Office. This was before the mine was even operational. From January 2010 through
November 2012, Oyu Tolgoi had paid USD 803 million in taxes and payments to the
government. Between 2010 and 2011, Oyu Tolgoi loaned USD 250 million to the
government. Part of that was a USD 150 loan in the form of a tax prepayment with
repayment coming in tax credits. Under the prepayment agreement Oyu Tolgoi was
entitled to use these tax credits from 2012.
Building Oyu Tolgoi has been a joint effort between Mongolians and workers from 44
nations. At the end of 2012, the Oyu Tolgoi project directly employed around 13,000
people, 85 percent of whom were Mongolians. During the operational phase, more than 90
percent of the Oyu Tolgoi total workforce would be Mongolian. Both foreign and Mongolian
workers are paid commensurate with prevailing market conditions in their home countries.
This is standard across the world.
Source: Oyu Tolgoi LLC
OT PRODUCES FIRST CONCENTRATE
Turquoise Hill Resources Ltd. last week on Thursday announced that its 66 percent-owned Oyu
Tolgoi copper and coal project had produced its first copper-gold concentrate after it processed
first ore through the concentrators in early January.
The start of concentrate production signaled that production ramp-up is expected to achieve
commercial production rates within the next three to five months.
―Oyu Tolgoi continues to progressively ramp up the mine and the production of first concentrate is
another important milestone. We are making good progress on our timetable leading to the start of
commercial operation,‖ Turquoise Hill Chief Executive Officer Kay Priestly said.
Turquoise Hill celebrated the commissioning of the Oyu Tolgoi mine's concentrator on 27 December
2012. Activating the concentrator's ore-processing circuit for the first time commemorated the
occasion. Under the common start-up plan, ore will be initially sourced from the open-pit mine on
the Southern Oyu deposits, while the adjacent higher-grade underground mine on the Hugo North
deposit will be developed to full production of 85,000 tons a day.
The mine is expected to produce more than 1.2 billion pounds (544,000 tons) of copper, three-
million ounces of silver and 650,000 ounces per year of gold in the first ten years of operation and,
seven years later, at its peak it is expected to produce about 1.7 billion pounds of copper and one
million ounces of gold.
Source: Mining Weekly
OPERATIONS ON HOLD AT MEC'S KHUSHUUT MINE
Mongolia Energy Corp. Ltd. (MEC) reported the halt of operations at its coal-producing Khushuut
coal mine. Resumption will depend on the selection of a suitable coal extraction contractor to
perform the coal extraction work and the improvement of coal processing issues by the installation
of a dry coal processing system.
MoEnCo LLC, the company's indirect subsidiary, is in the final round of negotiation with two
potential contractors for the provision of coal extraction work and the process is at an advanced
stage. MoEnCo is discussing the commercial terms of the services with the potential contractors and
hopes to finalize the process as soon as possible. During this period, the mining operation at
Khushuut is still continuing, though on a smaller scale, for preparation such as stripping of the top
soil and extraction. MoEnCo has hired the excavators, dozers, loaders and other necessary
equipment from the equipment providers and operates them through MoEnCo's own operation team
on site.
Also, the company's dry-coal processing system will enhance the quality of coal in the screen
process. Otherwise, its coal haulage and operation costs would remain expensive for commercial
production. The foundation work of the dry-coal processing system was completed in the middle of
January 2013.
Source: Mongolia Energy Corp. Ltd.
MRC RELEASES 4Q QUARTERLY ACTIVITIES REPORT
Mongolian Resources Corp. (MRC) reported spending USD 677,000 on operations in Mongolia and
maintaining the corporate headquarters in Australia in its December 2012 Quarterly Activities
Report.
MRC received an offer for a subscription agreement to provide AUD 589,000 (USD 613,502) by way
of issue of 5.9 million new shares at 10 cents a share from AR Management Co., Pty. Ltd., which is
currently under review by its board. The company is currently seeking further financing and is
discussing project financing with banks and private equity holders to continue its operations.
During this period, costs were incurred on completion of the 2013 mine plan for submission to
government and for completion of the exploration work to remain compliant with the government
on licensing regulations. The company shares during the quarter ranged from AUD 0.07 to AUD
0.0086 cents.
Late in this quarter, the Sujigtei gold project was put on care and maintenance for the winter
period. MRC continues to review its ongoing financing options. Continued delays in the Sujigtei
operational approval, which includes the permission for cyanide operations, continues to hamper
the company moving forward. Resolution No. 154 issued from the 2009 Law for the prohibition of
Mineral Exploration in Water Basin Areas and Forest Areas restricted some mining and exploration
activities in 254 licensed areas of Mongolia. Gunbileg Gold LLC, the subsidiary of MRC that owns the
Sujigtei project, had an exemption, but a second resolution, No. 194, was issued in 2012 to expand
upon the area covered.
Read more.
One matter of confusion is the fact that although the Sujigtei project awaits a decision for approval
for the cyanide operations, MRC's Blue Eyes Mine has been granted approval. This processing plant
is a common plant for both the Blue Eyes and Sujigtei mine operations, and its approval at Blue
Eyes but not Sujigtei is being discussed by government authorities. A review of all the company's
licenses was conducted this quarter and the Minerals Authority reconfirmed that all licenses of MRC
are in good standing.
Source: Mongolian Resources Corp.
TDB SIGNS MOU WITH JAPANESE BANK FOR INFORMATION DISSEMINATION
Mizuho Corporate Bank Ltd. signed a memorandum of understanding with Trade and Development
Bank (TDB) LLC on 29 January.
The memorandum aims to enhance Mizuho's ability to provide information to Japanese corporations
that are considering expanding their businesses into Mongolia and enhance its service structure for
them when they do. Mizuho will offer local currency services, exchange information regarding local
financial markets and regulations, and conduct training and seminars.
Source: Mizuho Corporate Bank Ltd.
MONGOLIA OPPORTUNITIES FUND PARTNERS WITH JAPANESE FINANCIAL GROUP
Japan's ORIX Corp. has partnered with the Mongolia Opportunities Fund I, aiming to use the fund as
a vehicle to make its first investment in Mongolia.
The fund was established in June 2011 with the aim of investing in high-growth sectors of the
Mongolian economy such as mining, infrastructure, and export-related areas. Mongolia
Opportunities Partners, the fund operator, is comprised of staff with experience in mergers and
acquisitions, investment and asset management at international financial institutions and major
foreign capital consulting firms.
ORIX is aggressively pursuing investment in growth areas in the high-growth Asian market. Through
this investment, ORIX aims to create a local network and contribute to the development of the
Mongolian economy by capitalizing on its financial services know-how and client base accumulated
in Japan.
Source: ORIX Corp.
AUM CONTRACTED TO RESEARCH EMPLOYMENT OPPORTUNITIES DRIVEN BY OT
The American University of Mongolia (AUM) has been awarded a contract by Oyu Tolgoi LLC to study
ways the Oyu Tolgoi copper-gold mine can positively influence and contribute to labor support
sources, in order both to improve Mongolia's educational landscape while also meeting Oyu Tolgoi's
need for Mongolian executives, staff and workers. Oyu Tolgoi recently produced the first ore
concentrate at its mine in the south Gobi and, as it moves towards full production later this year, is
committed to increasing employment of Mongolians at all levels in the company.
The study is being led by Dr. R. Bat-Erdene, the university's executive director, formerly director of
the higher education department in Mongolia, to recommend how the mine could help enhance this
sector.
Source: American University of Mongolia
OBG RELEASES MONGOLIA 2013 REPORT
The Business Council of Mongolia's (BCM's) media group partner Oxford Business Group (OBG) has
released its Mongolia 2013 report.
The reports features the country's Foreign Investment Law, which have been the subject of much
debate at the political level, affecting the interest from international players in key areas such as
infrastructure, capital and expertise. In the report Mongolia's plans to extract investors who can
help the country tap its vast quantities of mineral reserves are put under scrutiny. It discusses the
challenges the country faces in its endeavors to ride the commodities boom while trying to retain
age-old traditions. Detailed analysis of the efforts to resolve issues at the country's two largest
mines, Oyu Tolgoi and Tavan Tolgoi, is included, which will be of key interest to prospective
investors, together with in-depth coverage of changes to the country's legal, environmental and tax
regimes.
The report also explores the government's plans to drive through legislative reforms which will pave
the way for new public-private partnerships in electricity generation. The country's bid to revive
manufacturing through domestic processing is also given wide-ranging coverage.
―This should help stabilize government finances, whilst increasing foreign reserves and also play a
part in improving fragile investment confidence,‖ said Regional Editor Paulius Kuncinas. ―The most
significant milestone in 2013 remains the launch of commercial production at Rio's copper mine, set
to become the largest in the world.
Interviews with President Ts. Elbegdorj, Prime Minister N. Altankhuyag, U.S. Secretary of State
Hillary Clinton, and Australia's Foreign Affairs Minister Bob Carr are included in the report.
Source: Business Mongolia
AUM TO OFFER MBA FROM INDIANA UNIVERSITY
Indiana University's Kelley School of Business has entered into a partnership with the newly formed
American University of Mongolia (AUM) to offer an MBA for global executives beginning in
September.
A recently signed memorandum of understanding between the two institutions builds on long-
running ties between the university and Mongolia. Indiana University is a center of academic
expertise in Mongolian Studies, and its Department of Central Eurasian Studies in the College of
Arts and Sciences is the sole independent, degree-granting academic unit in the United States,
staffed with its own faculty of specialists in the region.
―This new program signifies our commitment to partnering with American University of Mongolia to
offer new and innovative business education programs to meet the needs of this dynamic country,‖
said Idalene Kesner, interim dean of the Kelley School and the Frank P. Popoff Chair of Strategic
Management. ―The growth that is occurring in Mongolia is exciting, and we are proud to be working
to support the economic potential of the country through education.‖
The degree program will be a blend of classes taught on the American University of Mongolia
campus in Ulaanbaatar and online instruction. With a focus on growing international opportunities
in Mongolia, the curriculum will focus on four themes that emphasize a global managerial
perspective. It will include a one-week residency at Indiana University Bloomington and a one-week
program at the Washington Campus in Washington, D.C.
Source: Newswise
CAPITALISTEXPLOITS.AT RELEASES MONGOLIA COUNTRY RESEARCH
CapitalistExploits.at has released a comprehensive collection of video interviews, special reports
and country research targeting equity and real estate investors.
The package, aptly named ―Mongolia: Boots on the Ground‖, is available for purchase as a digital
download containing over three hours of video with 13 chief executives, investment bankers, real
estate professional and entrepreneurs focused on Mongolia. The package includes USD 1,500 in
bonus content, including the R2 Research Mongolia Real Estate Report 2012, the Oxford Business
Group Mongolia country report, and Resource Investment Capital's Mongolia 101 report. Video
interviews include Christopher de Gruben, Chief Executive Officer of M.A.D. Investment Solutions,
Harris Kupperman, Chief Executive Officer of Mongolia Growth Group, Nick Cousyn, Chief Operating
Officer of BDSec JSC, and Jim Dwyer, Executive Director of the Business Council of Mongolia (BCM).
―We are proud to be bringing this product to investors looking to deploy their capital into one of, if
not the fastest-growing, economies in the planet,‖ said Chris Tell, co-founder of
CapitalistExploits.at.
Please contact Saruul at saruul@bcmongolia.org or at 317027 on how to purchase the package.
Source: CapitalistExploits.at
S&P AFFIRMS RATING AND NEGATIVE OUTLOOK FOR WINSWAY
Standard & Poor's (S&P) Rating Services said it had affirmed its 'B' long-term corporate credit rating
on China-based Winsway Coking Coal Holdings Ltd. The outlook is negative.
It also affirmed its ―cnB+‖ long term Greater China regional scale rating on the coking coal supply
and logistics provider. At the same time, S&P lowered its issue rating on Winsway's senior unsecured
debt to ―B-‖ from ―B,‖ and its Greater China regional scale rating to ―cnB‖ from ―cnB+.‖ All the
ratings were removed from CreditWatch, where they were place with negative implications on 21
January.
―We affirmed the corporate credit rating on Winsway because we expect the company's operating
performance to improve in the next 12 months after a loss in 2012,‖ said S&P's credit analyst Huma
Shi. ―We also anticipate that Winsway can continue to access bank facilities for its short-term
financing needs.‖
Source: ETNet
DOORS OPEN AT MATERNITY HOSPITAL NO. 1
Construction has finished on the renovations financed by Centerra Gold Inc. to Maternity Hospital
No. 1.
―I would like to call this building a palace for mothers and children,‖ said Health Minister N. Udval
at the opening ceremony. ―Today we are witnessing a very important historic moment. This is
definitely an important event for the health sector of Mongolia.‖
Boroo Gold President John Kazakoff signed a project agreement with former Minister of Health S.
Lambaa to provide MNT 10 billion in funding to renovate the hospital, first constructed in 1963. The
hospital had not been used for maternity purposes for a long time, said the State Specialized
Inspection Agency, as the government lacked the funds to restore it. Project planners developed
the project taking examples from hospitals in Korea to construct a hospital that met international
standards.
The hospital is equipped with an air ventilation and oxygen system and a diesel generator that
could supply power within three seconds of a power outage. A new annex was also built that will
hold pathology, infant and delivery units. Each of the three units will have separate reception,
operating and intensive care units, including four vacuum-sealed operating rooms.
―My son was born in this maternity hospital three years ago,‖ said Kazakoff. ―We paid for not only
the building, but also the medical and non-medical equipment.‖ He added, ―We invested into the
hospital's construction because the birth of a new person is the greatest treasure in life.‖
The new hospital wing will require an additional 200 additional workers, which the Ministry of
Health had already approved. Hires will include physicians, pediatricians, pathologists, hygiene
specialists, laboratory staff, pharmacists, and pediatric nurses, in addition to a host of maintenance
engineers.
Source: Ardchilal
RIO LOOKS TO BUILD AFTER WRITEDOWNS
The message from Jan du Plessis, chairman of Oyu Tolgoi copper-gold mine developer Rio Tinto
PLC, following two failed attempts to branch out from Australian iron ore is that the strategy
remains unchanged. Putting it into action will now fall to Sam Walsh, the Australian head of iron
ore who has been with Rio since 1991. At 63, Walsh has only committed to three years at the helm,
reinforcing the impression that his elevation to the top job was a sudden decision.
Rio Tinto is forecast to report full-year underlying earnings of USD 9.3 billion, down from a record
USD 15.5 billion in 2011. But analysts hope the latest writedowns will give the new chief executive
a solid base from which to tackle Rio Tinto's challenges.
"It is a big cut to the aluminum business, but brings the carrying value down to where we value the
assets," said Rob Clifford, analyst at Deutsche Bank. "We did not expect them to do that in one fell
swoop."
The writedowns, too, may help Rio Tinto offload its Pacific Aluminum operations, which have been
tagged for a sale on a listing for nearly a year. Other loose ends for the new boss include the
diamond business, which is earmarked to go.
Among Walsh's priorities will be ensuring that Rio's big development project in copper, Oyu Tolgoi
in Mongolia, reaches commercial production on schedule in the first half of this year and that
political debate in the country about how to secure its fair share from minerals extraction does not
endanger further progress.
More fundamentally, according to Clifford, shareholders will be looking for a new approach from
Rio's top managers after a series of spending blunders, for which the board too must take
responsibility.
"For a full re-rating of the mining sector, we need to see better capital allocation. The clear
message from the Rio board to its team is that you had better not come asking for capital unless
you are sure you can show returns," he said.
Source: Financial Times
ECONOMY
MONGOLIA DEBT COSTS RISE AS GOVERNMENT BATTLES RIO TINTO
The yield on Mongolia's global sovereign notes rose to the highest since the debt was sold in
November as the government battles for control over a mining contract with Rio Tinto plc, the
nation's biggest investor.
The yield on the 5.125 percent dollar-denominated notes due 2022 climbed 20 basis points this
month to 5.85 percent. The rate has jumped 41 basis points, or 0.41 percentage points, in 2013.
Mongolia may seek to borrow as much as USD 5 billion from international markets, according to the
limit of the medium-term note program the country agreed on with the four banks in November.
President Ts. Elbegdorj last week called for Mongolia to have greater control of the Rio Tinto-
operated Oyu Tolgoi copper and gold project, which will account for almost a third of the nation's
economy once in full production. Rio Tinto has rebuffed at least two attempts in the past 18
months by Mongolia to redraw the investment agreement, which gives the world's second-largest
miner a 64 percent stake in the mine, with the government holding the rest.
―The bonds are reflecting investors' shrinking confidence in the direction of the current
administration,‖ Travis Hamilton, founder of Singapore-based Khan Investment Management Ltd.
Mongolia raised about USD 1.5 billion from the November debt sale that was managed by Bank of
America Corp., Deutsche Bank AG, HSBC Holdings PLC and JPMorgan Chase & Co. The notes are
rated ―BB-‖ by Standard & Poor's Investors Services, or three steps below investment grade. The
yield on state-controlled Development Bank of Mongolia LLC's 5.75 percent bonds due 2017
increased 26 basis points this month to 5.13 percent.
Oyu Tolgoi held a shareholder meeting in Mongolia on Thursday, where it was expected to address
concerns held by the government.
―It's going to be extremely important to see the outcome of [Thursday's] meeting with Rio Tinto on
Oyu Tolgoi,‖ said Hamilton. Favorable pricing at its last bond sale ―gave the government the
impression that they could walk on water. But I think they'll get a rude surprise the next time they
go to the market unless they get their act together.‖
Source: Bloomberg
LEGAL UNCERTAINTY CUTS MINERALS EXPLORATION AND COMPANIES' STOCK PERFORMANCE
Altan Dornod Mongol's chief executive presented a poignant case against the proposed draft of the
Minerals Law at a session last Friday to discuss the legislation.
Focusing on the economic importance of sound legislation within Mongolia's mining industry, B.
Bold, who is also a former chair of the Mongolian Stock Exchange (MSE), presented several key
arguments, in particular the rate at which minerals exploration has declined in country and the
overwhelming dependence on foreign investments into Mongolia and on the Oyu Tolgoi project. This
was perpetuated by highlighting the 60 to 70 percent drop in Mongolian mining companies on
international exchanges in the past 12 months, a 67 percent drop in the MICC index over the same
period, and an overwhelming amount of non-mining listed companies also seeing negative
performance.
The message was non-political and clear: if the uncertainty regarding foreign investment and
mining legislation remains, foreign investment will leave Mongolia.
Source: Mongolia Investment Group
MSE BOARD MEMBERS APPOINTED
New board members of Mongolian Stock Exchange JSC have been appointed in accordance with an
order from the State Property Commission (SPC).
M. Batgerel, chairman of the Policy and Implementation Department of SPC, was appointed as
Board Director. Government board members selected were B. Daajamba, deputy chairman of the
Financial Regulatory Commission (FRC); G. Batkhurel, director of the general planning sector at the
Development Policy and Strategy Department of the Ministry of Economic Development (MED); B.
Bayar, director of Legal Sector Under Public Administration Implementation on Heavy Industry of
the Ministry of Industry and Agriculture (MIA). Independent board members selected were D.
Dolgormaa, director of sustainable development for social responsibility for Mongolyn Alt (MAK)
Group; Ch. Ganbat, executive director of Liberty Partners LLC, and J. Maizorig, general partner of
law firm MDS & Associates LLP.
Source: Business Mongolia
MONGOLIA AUCTIONS MNT 25 BILLION BILLS
The Ministry of Finance reported a total of MNT 25 billion sales by auction of 25,000 bills with 12-
week maturity. Bids received totaled MNT 67 billion and MNT 25 billion, with a weighted average
interest rate of 11.23 percent.
Source: Cover Mongolia
ENERGY GRID LINKS TO UMNUGOBI
The power lines and power-generation substations linking Mandalgobi, Tavan Tolgoi and Oyu Tolgoi
were commissioned on 28 January.
Energy Minister and MP M. Sonompil was in attendance at an event to observe the importance of
bringing energy to Umnugobi Aimag, which has had continuous electrical problems and energy
shortages. Sonompil said that future plans include connecting a power line from Tavan Tolgoi to
Dalanzadgad Soum, the provincial capital of Umnugobi Aimag.
MCS International led the project to bring power to the south Gobi with the installation of 220
kilovolt transmission lines and the substation. Although a six-megawatt thermal power station with
equipment from South Korea, India, and Japan was built 12 years ago in Dalanzadgad with
international aid largely from South Korea, the generator has experienced frequent breakdowns and
technical failures. The substation has reportedly never operated at full capacity.
Umnugobi reportedly has a demand for seven to eight megawatts of electricity and is set to grow
compared with three to four megawatts on average for the rest of Mongolia's provinces.
Source: Business Mongolia
CRIME SPIKES AS TSAGAAN SAR NEARS
Mongolia has seen a recent rise in crime.
The Center for Information and Urgent Management reported 38 cases of theft, six robberies, 21
incidents of violence, 106 traffic accidents, and 14 cases of death between 1 to 4 February. Cases
of stolen meat and dairy products from storage containers, apartments balconies and households in
ger districts has soared due to the upcoming Mongolian lunar new year celebration, Tsagaan Sar.
Police officials have also warned about increased theft from cars, pick pocketing and robbery.
Source: Udriin Sonin
85 MM
About a century has passed since Mongolia was first introduced to the world of the railway
networks. Unfortunately not much has changed since then due to political games. Now there are
questions over whether Mongolia should fully adopt the wide rail gauge used by Russia or transition
to the more narrow Chinese gauge for more streamlined export to China.
The current railroad network accounts for 90 percent of cargo transport in Mongolia. But specialists
say the network lacks the capacity to support the ever-growing economy. Government policy calls
for ―broad‖ 1,520-millimeter (4 ft., 11 5/6 inch) gauge rather than the ―international‖ gauge of
1,435 millimeters (4 ft., 8 ½ inch), which is also the system adopted by China, the destination for
nearly all of Mongolia's mineral exports.
Now the government plans to provide USD 55 million from the Development Bank of Mongolia to
finance the construction of railway with the broad gauge. The plan will require about 60 percent of
the USD 3 billion from a private partner and remaining 40 percent to come from equity financing.
According to the plan, repayment would take over nine years after transport began, with the
transport of 47 million tons of coking coal and 20 million tons of thermal coal per year.
However M. Enksaikhan, the former director of Mongolian Railway has argued for the narrow gauge
because it would mean greater efficiency and speed for border crossing. Using China's gauge would
mean less time spent unloading and reloading cargo to another train. It would also reduce
pollution, he said, as moving the cargo leaves a great deal of coal dust in the air.
―For example,‖ said Enkhsaikhan, ―loading and unloading 20 million tons of coal leaves around
500,000 tons of dust in the air.‖
Despite the cost, the government argues the rail gauge is a matter of national security and a rail
link is needed from Mongolia's eastern region and the planned Sainshand industrial complex. For
now, that sentiment has taken priority over cost.
Source: Mongolian Economy
CAPITAL MARKETS DAY SEES 180 NEW INVESTORS OPEN SECURITIES ACCOUNTS
Mongolia observed its first Capital Markets Day on 26 January, seeing the emergence of 180 new
investors in Ulaanbaatar.
Initiated by the Mongolian Stock Exchange, the day is meant to recognize the achievements of
organizations such as the Financial Regulatory Committee (FRC), the Securities Clearing House and
Central Depository, and Mongolian Association of Securities Dealers, Brokerages and Clearing Banks.
More than 500 citizens attended an event to learn more about the securities markets and the
services available to them.
Following the event, 180 new investors opened securities and clearing accounts.
Source: Mongolian Stock Exchange
USD 1.25 A DAY LABOR AMID USD 4,000 PURSES STIRS DISCONTENT
As companies such as Rio Tinto PLC, Peabody Energy Corp., and Mitsui & Co. plan to keep the
mining momentum going by exporting more of Mongolia's USD 1.3 trillion troves of resources, about
a fifth of the population of 3 million are getting by on USD 1.25 a day.
The gold, copper and coal rush earning the country the nickname ―Minegolia‖ made the nation
China's top supplier of coking coal, and spawned sushi bars, USD 3,500-a-night hotel suites and a
Bayerische Motoren Werke AG car dealership. In the meantime, Mongolians have flocked to
Ulaanbaatar in search of work.
―People are not convinced it's going to help the country to develop,‖ as concepts such as property
ownership and land exploitation rights are literally foreign, said Jack Weatherford, best-selling
author of Genghis Khan and the Making of the Modern World.
Investment has been good for some Mongolians. O. Jambaljamts is chairman of Mongolian Mining
Corp. (MMC) and was the country's richest man with a net worth of USD 2.3 billion in 2011,
according to rankings by local publication Hero Magazine, though a spokeswoman of MMC denied
the accuracy of the report. Former Prime Minister S. Batbold is fifth on Hero's list with USD 1 billion
from stakes in Altai Holdings LLC. Number eight is current Foreign Minister. B. Luvsanvandan with
USD 800 million from Bodi Group.
Mongolia may have between 60,000 and 100,000 subsistence miners, according to Patience Singo,
manager of the Swiss state-funded SAM project that aids the workers. Ninja miners outnumber
those working in large mines two-to-one and operate in 18 of Mongolia's 21 provinces. They are
estimated to support 13 percent of the national population. In rural Mongolia, subsistence miners
account for a fifth of the economy, earning an average of USD 176 a month, or 57 percent more
than the country's minimum wage. Still, ninja mining is a one-way street that doesn't lead to better
jobs with bigger companies that rely on machinery for mining, Singo, a mining engineer and a
Zimbabwe native, said.
―Most of them don't have the necessary skills to switch over,‖ he said.
Source: Bloomberg
FOUR PITFALLS TO MONGOLIA‟S ASTONISHING GROWTH
Despite Mongolia's rise to the world's fifth fastest-growing economy, with a 12.3 percent gross
domestic product growth rate in 2012 that would make today's anemic Western economies salivate,
several recent reports indicate that Mongolia's economic success story may turn out not to be all
that it seems.
Here are four ways its meteoric growth could go awry:
1. The ninjas: Though they sound like some sort of ore-hunting SWAT team, the herders who have
recently sought their fortunes in freelance mining are actually a bit of a drag on the mining
economy. They do not pay taxes while contributing to prostitution, gambling and other illegal
activities. Also herders who resisted mining complain that mining companies have undermined their
way of life, forcing them to migrate.
2. Dependence on China: China's demand for Mongolian minerals has already slumped somewhat,
and most analysts say Mongolia needs to diversify its economy away from just one main trading
partner.
3. Mongolia's "resource nationalists" have made it difficult for mining projects to get off the ground.
Nationalist policymakers worried about foreign influence over Mongolia's resources and want to
amend the agreement for the Oyu Tolgoi copper mine, so that Mongolia gets a bigger share. The
massive Tavan Tolgoi mine has also suffered a number of setbacks, including halted exports to
China.
4. Mongolia is still pretty corrupt: Transparency International ranks Mongolia as the 94th most
corrupt of 176—not as bad as 120th most corrupt in 2011, but still not great. Either way, this is
hardly the sort of environment where dramatic, sudden economic growth can be expected to
improve quality of life for citizens.
Source: Washington Post
CHINALCO MINING IPO FLOPS
Mining has not been the flavor of the month for investors, with big writedowns from Oyu Tolgoi
copper mine developer Rio Tinto PLC and Anglo American PLC. But it is still a shock to witness the
poor stock market debut of Chinalco Mining Corp. International, the copper company spun out of
state-run Chinalco, China's biggest aluminum group. Chinalco has interests in Mongolia‘s resources
but has as of late had difficulty, with subsidiary Aluminum Corp. of China‘s (Chalco‘s) blocked
proposal to purchase large stakes in SouthGobi Resources Ltd. and Winsway Coking Coal Holdings
Ltd. and most recently in a contract squabble over an USD 350 million offtake agreement with
Erdenes Tavan Tolgoi LLC.
The shares slumped by up to 11 percent in Hong Kong on Thursday, even though the initial public
offering (IPO) was priced in the middle of the indicative range and cornerstone investors bought
nearly half the USD 400 million offering. The stock later recovered, but still closed 6.3 percent
down. Clearly the recent equities rally has not restored investors' appetites for IPOs.
The banks behind the IPO were a bit unlucky in their timing, as the market debut came just as
investors were absorbing the latest news from the U.S. Federal Reserve, which said American
economic growth had stalled in recent months. That raised worries about demand for commodities.
Chinalco plans to use the IPO funds to develop a copper-molybdenum silver mine in Peru—a
somewhat unusual project for a company listed in Hong Kong. But it will still do little to encourage
future IPOs. According to Bloomberg, companies raised USD 8 billion through IPOs in Hong Kong last
year, the lowest since 2003 and down 63 percent from 2011.
Source: Financial Times
CHINA DATA POINTS TO MODERATE RECOVERY
You might be forgiven for thinking that in China, where most of Mongolia‘s mining resources are
delivered, PMI stands for ―purposefully misleading indicator.‖
On Friday, the government's official purchasing managers' index (PMI) came in at 50.4 for January,
below expectations and down from 50.6 in December—pointing to a tepid recovery. About 45
minutes later, the unofficial HSNC PMI came in at 52.3, up from 51.1, suggesting accelerating
growth. In fact, two surveys have much in common. Both are slightly above the 50 mark that
separates growth from contraction, pointing to a continued moderate recovery in China's
manufacturing sector. Both also show particular strength in the new-orders sub-index. The official
PMI showed new orders at their strongest level since May 2012 and the HSBC index showed them
rising at the sharpest pace in two years. That's a hopeful sign for continued growth in output.
Other data points in the same direction. A business-sentiment survey from Market News
International indicates improving conditions in January, also with new orders strengthening.
Another positive sign is that steel prices on the Shanghai Futures Exchange edged up—extending a
recovery that started in September. Investors are optimistic. The Shanghai Composite Index gained
5.1 percent for the month as equity markets bet on higher profits to come.
The reason the two PMI surveys differ is likely that they rely on different samples and take
different approaches to adjusting the data for seasonal effects. A sharp increase in the sample size
for the official survey—to 3,000 businesses, from 820 in January--should improve its accuracy.
Chinese New Year, which fell in January last year but takes place in February this year, also
complicates the picture.
Source: Wall Street Journal
POLITICS
PRESIDENT MAKES PUBLIC DEMANDS OF OT INVESTORS
President Ts. Elbegdorj made demands to the investors of the Oyu Tolgoi copper-gold
project at an open meeting of Parliament last Friday, saying Mongolians had to take the
project back in their hands.
Elbegdorj took issue with the ever-growing spending costs of the project. The Mongolian
government has yet to approve the spending plan for Oyu Tolgoi for 2013 as spending has
exceeded Turquoise Hill Resources Ltd.'s projections. He said the company requested and
additional USD 2 billion, a 47 percent increase from the original prediction of USD 5.1
billion.
―The initial estimate for the underground mine's financing was USD 14.6 billion, but the
company is planning to spend USD 24.4 billion,‖ said the president. He added, ―The
investment agreement is that the initial investment will be used to produce ore
concentrate and the commercial profit will be used for operational expenses... The time
has come for the Mongolian government to take Oyu Tolgoi matters into its own hands.‖
Elbegdorj said the government was not made aware of these facts, despite its position as a
34 percent stakeholder in the project. He demanded a Mongolian representative sit on the
managing board and an audit of the project, saying Turquoise Hill delays its reports for
months at a time. The government approved USD 153 million for management expenses on
31 January 2013, he said, by that time having spent USD 3.2 billion in total. The president
also took issue with management costs, which he said comprised 6 percent of the total
investment and was 2.5 times higher than the international rate. He said this was
unacceptable as Mongolia comparatively only receives 5 percent in royalties for minerals
produced from the project.
He also pushed for greater participation from Mongolian companies to provide support to
the project and transactions via Mongolia's banks. Furthermore he noted that Oyu Tolgoi
has still yet to meet the 90 percent mark for Mongolian employees at Oyu Tolgoi and
foreign wages almost double that of Mongolian workers. The investment agreement calls
for 90 percent Mongolian personnel after development begins, with commercial production
slated to begin by June this year.
―We must learn from the mistakes of Oyu Tolgoi,‖ said the president. ―Mongolia has laws
and they must be upheld. They must realize that they cannot just take our wealth and go.
They must realize that they are investing in a country with laws.‖
Source: UB Post
CABINET ORDERS INSPECTION LAB FOR OT COPPER CONCENTRATOR
The Cabinet of Ministries at a regular meeting ordered an independent inspection laboratory for the
Oyu Tolgoi copper concentrator.
The laboratory would perform testing under the lead of the Central Geological Laboratory to
reduce costs and redundant services.
Source: Business Mongolia
MINERS AIR GRIEVANCES ON DRAFT MINERALS LAW AT OPEN DISCUSSION
Some 150 members of the mining industry and concerned members of the business sector attended
the open discussion hosted by the Mongolian National Mining Association (MNMA) and the Business
Council of Mongolia (BCM) last Friday to listen to analysis of the current draft law and air their own
concerns. Speakers were largely critical of the vagueness of the law and how little it explained how
the law would be implemented. Though people were divided on how much authority the
government needed over the industry, there was some consensus that the law was incomplete and
would make it impossible for mining companies—foreign and domestic—to remain profitable in
Mongolia.
―The government is making it impossible for a company to start work,‖ said E. Batmunkh, Executive
Manager of Magma Mining.
―Terms have been confusing, some new ones invented. The draft law says there is no need for
strategic deposits, but its call for strategic minerals—what is this?‖ he added.
Last Friday's meeting followed an open hearing between the government, civil organizations,
academics and the private sector where stakeholders had the opportunity to share their thoughts
on the law with the working group from the Office of the President that drafted it. That first
meeting was pre-empted by an open letter from BCM to the President's Office that included a
point-by-point critique of the law. According to the event's moderator, MNMA Executive Director N.
Algaa, President's Office head P. Tsagaan divided the letter into seven parts and distributed them
among his working group for careful study and analysis.
Brian Fisher of BAEconomics is scheduled for March to present quantitative models of how the
Mongolian economy would be impacted. Though the current form of the bill is admittedly
unacceptable to many who work in the mining industry, some form of the law must appear to keep
the gears turning in the Mongolian minerals extraction and exploration sector. Without it, said BCM
Executive Director Jim Dwyer, most all of Mongolia‘s mining operations would cease, with some
presumed exceptions for the Tavan Tolgoi coking coal mine, the Oyu Tolgoi copper-gold mine, the
Erdenet copper mine, and a handful of other large mines.
Source: BCM
FORMER MRA HEAD SENTENCED TO 6 1/2 YEARS
Former director of the Mineral Resource Authority, D. Batkhuyag, and three other officials were
found guilty of abusing their authority to illegally issue 106 mineral licenses.
The judge found the former officials guilty of renewing three licenses to SouthGobi Sands LLC and
transferring a license for a territory of 72,499 hectares of land in Umnugobi with a reported 42.9
million tons of coal to a company run by friends. Batkhuyag was sentenced to 6 1/2 years in prison
and has been barred from ever working in public work for three years.
The government has revoked 107 licenses related to the case.
Source: Udriin Sonin
PARLIAMENT NO LONGER TO PURSUE PRIVATIZATION OF MIAT
Parliament has decided not to move forward with a motion to privatize MIAT Mongolian Airlines
following the recent embezzling scheme allegedly perpetuated by the company's management.
During the discussion of the company, Parliament approved motions to double flight frequency and
the number of routes by 2016 and to focus on making Mongolia a transit destination between Russia
and China. They also approved the motion for special flight services for use by government
officials, to begin in 2014. Parliament hopes for the new airport now being planned at Zuun Mod
Soum will become a central destination point for north Asian flight passengers and freight.
Legislators have dropped the proposition of privatizing the state-owned airline, however, given the
recent scandal where upper management stole millions.
Source: Zuunii Medee
MP GANBAATAR SUBMITS NEW LABOR LAW
MP S. Ganbaatar said a revised Labor Law is ready for submission for the spring session of
Parliament.
―The market economy has many side effects for people and nature. The Labor Law in part protects
them.‖
Ganbaatar noted the thousands of young people looking for work in the private sector and the
growing disparity between rich and poor in Mongolia. He specifically pointed to Oyu Tolgoi LLC,
saying the gap between a Mongolian and foreign worker was huge. He said while a Mongolia worker
might take USD 1,500, a foreign worker might take USD 30,000 for the same task.
―This unfair treatment should not exist and we will demand a change,‖ he said.
The new law would give workers the right to negotiate and create mutual labor contracts. He cited
the case of his sister, S. Gantuya, who is suing Oyu Tolgoi for worker discrimination for this reason.
He further remarked that the Mongolian Labor Union could win 93 percent of the cases where
workers had been illegally fired.
Source: Zuunii Medee
BILL ALLOWS CITIZENS TO SUBMIT DRAFT LEGISLATION TO PARLIAMENT
MP J. Batzandan has initiated a bill that would permit citizens to submit bills to Parliament.
―Citizens write draft bills about their social issues. However, government officials do not accept
them because they hurt officials' interests.‖
The bill would allow a citizen to submit any legislation that is able to gather 100,000 signatures in
support to Parliament from 13 of Mongolia's 21 provinces.
Source: Udriin Sonin
PARLIAMENT'S FALL SESSION CONCLUDES FRIDAY
A spokesperson of Parliament said the Autumn Plenary Session would conclude on 8 February.
D. Enkhtuya, the head of Parliament‘s press and public relations department, recounted the
approved motions during the last session of Parliament, including the formation of the Mining
Development Acting Committee, ambassador appointments, and approval for appointments to the
National Human Rights Commission.
Parliament Speaker Z. Enkhbold is expected to deliver a closing speech summarizing Parliament's
achievements in the new government's first session and issues scheduled for the Spring Plenary
Session.
Source: Info Mongolia
MONGOLIA BANS PERCENTAGE OF ACETIC ACID IN FOODS
The government has added acetic acid to its list of prohibited chemicals for use in Mongolia.
The Ministry of Environment and Green Development and Ministry of Health announced a ban on the
use of more than 25 percent concentrate acetic acid of up to 500 milliliters for food consumption
beginning 1 January 2013. According to a report by the World Health Organization (WHO), food
poisoning and chemical misuse is a major cause for health disorders among the world population.
Deaths from acute food poisoning and the misuse of chemicals have increased in Mongolia. Acute
poisoning from chemicals is listed as the fifth-highest reason for death in the country.
The misuse of acetic acid with concentrates of 50 to 80 percent is reportedly most frequently
related to incidents. It is also often used as a means for committing suicide. A total of 4,436
incidents of chemical poisoning were registered at the Emergency Center between 2003 and 2011.
Over 5011 of those incidents were caused by acetic acid acute poisoning. Every year 50 to 60
people suffer from acetic acid poisoning and three to nine die because of it. A total of 479 children
were brought to the Center for Maternal and Child Health over the last decade.
Source: News.mn
GOVERNMENT OFFICIALS TRAVEL TO RUSSIA TO INQUIRE ON PRICE HIKES
The deputy minister of mining and other state officials visited Russia to discuss the recent rises in
fuel prices in Russia.
Mongolian officials met with members of Russia's Ministry of Russia and oil importer Rosneft to
discuss Russia's decision to increasing the export tax to Mongolia, while taxes on exports elsewhere
have fallen by up to 40 percent over the past four months. According to statistics from the Central
Bank of Russia, Rosneft's price for fuel to Mongolia is USD 300 more than to other countries.
Officials hope to find an explanation for Russia‘s decision to target Mongolia for higher prices,
renegotiate its agreement with Russia on the purchase of fuel products and stabilize price for the
next six months, and to purchase two million tons of crude oil for Mongolia's planned oil refinery in
Darkhan.
Source: News.mn
FOREIGN MINISTRY DENIES RUMORED OF SOLD EMBASSY PROPERTY IN MOSCOW
A Foreign Affairs Ministry official denied reports that Mongolia's embassy building in Moscow had
been sold.
―The building still belongs to Mongolia. It has not been sold,‖ said B. Mandakhbayar, director of the
Department of Law and Treaty. He said, ―The Mongolian Embassy to Russia owns a number of
properties in Moscow. The building that is claimed to be sold was formerly the Trade Mission house
whose current address at Spasoleskovskii Pereulok 7/1 is being rented for 10 years with permission
from the Ministry of Foreign Affairs of Mongolia and State Property Committee in 2007 to 2008.‖
A rumor that the Mongolian Embassy in Moscow might have been sold spread just days after names
of the new ambassadors from Mongolia to other countries have been approved by Parliament
according to local newspaper Mongol News.
The newspaper said the 10-story building of the Mongolian Embassy in Moscow might have been sold
to Chechnya. An unconfirmed source said that the former Ambassador L. Khangai sold the embassy
building during his term from 2005 to 2009.
The former ambassador, diplomats and their families used to stay at the Embassy building II.
Mongolian Embassy building II is located at the center of Moscow near to the U.S. Embassy.
Mongolia used to own the whole building, but now the Mongolian Consulate occupies only a few
offices in the building.
Mandakhbayar added that the move to rent the property was legal by under both countries' laws,
and the decision was made because of the small number of diplomats operating there.
Source: News.mn
SOUTHGOBI SANDS PRESIDENT CALLS FOR HELP FROM U.S.
SouthGobi Sands LLC's president has asked for help from the congressional delegation in his home
state of Minnesota with an exit ban imposed on him by the Mongolian government.
Justin Kapla, who is also executive director at SouthGobi Sands and a board member of the Business
Council of Mongolia, asked delegation members for assistance in lifting his travel ban, which he said
was imposed because investigators considered him a witness in a corruption investigation of
government officials involving the transfer of some of his company's minerals exploration licenses.
―They're all working on it. All three of their offices are great,‖ said Justin's father, William Kapla,
speaking of the assistance U.S. government offices had provided. He also said the U.S. Embassy has
been talking to Mongolian officials.
Kapla wrote that the events in question happened well before he went to work for SouthGobi
Sands. He said the Mongolian agency conducting the investigation, the Independent Authority
Against Corruption (IAAC), has acknowledged that but told him he could not leave because it would
need to hold someone responsible if the investigation finds any wrongdoing by the company.
Kapla, 39, grew up in Elk River, Minneapolis, is married to a Mongolian woman and has two
children, all of whom are with him. He is reportedly free to work and move around Mongolia but
cannot leave.
Last year, following a strong reaction from government opposing the proposed takeover of parent
company SouthGobi Resources Ltd. by Aluminum Corp. of China Ltd. (Chalco), the government's
Mineral Resources Authority (MRA) and its former chairman, D. Batkhuyag, an advisor to a former
prime minister whose party lost power in the June election. Batkhuyag was accused of bribery and
other corruption, and convicted this week and sentenced to six and a half years in prison. Among
Batkhuyag's misdeeds, the authority alleged, were dealings with SouthGobi Sands. Five of the
company's licenses were to have been suspended because the company failed to spend sufficient
funds exploring the areas, but instead Batkhuyag's office returned most of the licenses to SouthGobi
and transferred one to a private Mongolian company controlled by friends.
Kapla's case was first reported by Jon Springer, a freelance journalist and financial blogger.
Source: Associated Press
67-YEAR OLD MONGOLIAN WOMAN SENTENCED TO DEATH IN CHINA FOR DRUG SMUGGLING
A 67-year old Mongolian woman was sentenced to death for attempting to smuggle an undisclosed
amount of marijuana and drugs in China.
The woman claimed she was carrying two bags for another person who asked her to do so at
customs at the airport when she was arrested by Chinese custom officials last December.
―I was not aware that the bag contained marijuana and drugs. I was used as a victim for
smuggling,‖ she said.
The convicted woman first traveled to Beijing for the 2008 Olympic Games and visit many times
afterwards for business, she said.
The judge sentenced the woman to death under the belief she was involved with a drug smuggling
ring. The Mongolian Consulate in China has contacted her family to inform them of the news.
Source: News.mn
MONGOLIA DOESN‟T HAVE RESOURCE NATIONALISM – FOR NOW
With the increased level of interest the world has taken in Mongolia, given its blistering economic
growth rate, resource nationalism is mentioned more and more often as a threat. But lumping
different streams of slogans and platforms together into a single category suggests there is a
coherent ideology that unites them. This is not the case.
Mineral resources in Mongolia are afforded constitutional protection. Although this is not an unusual
attitude, Mongolia's mineral boom is often portrayed abroad as a Hugo Chavez-like nationalism that
ignores the important role that foreign investors can play and should play in maximizing benefits to
local populations. At present, there is no political movement or anti-mining party that espouses a
coherent ideology of autarky on the basis of the exploitation of natural resources in Mongolia. A
massive flow of in-bound investment gives Mongolian decision makers very little time and
opportunity for reasoned and careful choices.
Mongolia was hurt in the 1990s by the shock therapy policies advised by international institutions.
Amplified by the effects of calamitous winters that followed, most Mongolians concluded that
following international advice provided them with few benefits. After 2005, the prospect of
development on the basis of mineral wealth suddenly emerged as tantalizing possibility.
Mongolians are now clamoring for immediate benefits, partly rooted in promises that politicians
echoed on the basis of foreign investor claims. Mongolian decision makers, by contrast, have
neither the information nor the experience on which to base crucial decisions. It is easy for
opposition politicians and even members of the government to claim that the Oyu Tolgoi agreement
benefits foreign investors more than Mongolians. These voices do not offer specific alternative
arrangements other than to demand a greater share in ownership, but their claims are not rooted in
any kind of consistent resource nationalism.
Threats by foreign investors, including the currently rumored threat by Rio Tinto to suspend
operations, are more likely to give rise to true resource nationalism than to force populist
politicians to abandon their ad-hoc positions and statements.
Julian Dierkes is an associate professor at the University of British Columbia's Institute of Asian
Research.
Source: Financial Times
CHINA, MONGOLIA SEEK TO MEND TRADE DIFFERENCES
The kabuki-style dance of trade partners Mongolia and China began again in earnest when on 15
January the third meeting of the Mongolia-China Cooperation Commission on Mineral Resources and
Energy met in Ulaanbaatar.
Although China and Mongolia see great benefits in continuing their vibrant trade in minerals, each
side has a different vision on how to proceed. This has led to a tense relationship that often,
mistakenly, is described by global financial commentators as resource nationalist sentiment in
Parliament and the populace.
Two of the prime goals of the Mongolian side during the consultations were to renegotiate upwards
the prices the Chinese pay for Mongolian raw minerals and lessen transit tariffs for Mongolian
shipments destined for third nations such as South Korea and Japan.
Mongolia raised the issue of China‘s mining operations failing to obey Mongolian environmental and
safety laws. They demanded the employment of more Mongolian workers and discussed plans for
construction of mineral processing plants in Mongolia. China pressed for more stability in the legal
environment for bilateral trade and foreign investment. Zhang also suggested that their countries
focus on developing large mining projects and constructing railway and coal transport border
infrastructure.
The Chinese government has been very circumspect in commenting on recent trade disputes with
Mongolia. This is far different from the 1990s when rail freight traffic often was severed to punish
Mongolian actions or influence decision making. This change in strategy may reflect the realization
that a hard-line approach with Mongolia was counterproductive and that Inner Mongolian factories
have become more dependent on Mongolian minerals.
The visit by Wu Banggu, chairman of the Standing Committee of the National People's Congress, is
another sign that Sino-Mongolian relations will continue to be played out in Asia at the very highest
level as 2013 progresses. The lack of clarity of how bilateral mineral trade will proceed, however,
reflects both Mongolian domestic political sensitivity over Chinese predominance among foreign
investors and a growing Mongolian desire to develop mineral deposits more slowly under their own
auspices.
Author Alicia Campi has a PhD in Mongolian Studies, was involved in the preliminary negotiations
to establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a
Mongolian consultancy company (US-Mongolia Advisory Group), and writes and speaks extensively
on Mongolian issues.
Source: Asia Times
AT ODDS WITH MONGOLIA‟S MODERNITY, A POET SEEKS ANOTHER WAY
G. Mend-Ooyo is considered Mongolia''s poet laureate, and an important figure in the fight to retain
its traditional culture. As the fast-growing economy puts its modernization into overdrive and draws
its population away from its nomadic roots, he has his work cut out for him.
―It is a big shame for us that the country is so focused on mining, to the detriment of herders and
the traditional ways of life,‖ said Mend-Ooyo, sitting behind his cluttered desk in an old Soviet
building in Ulaanbaatar. ―It's really difficult to bring back lost culture once it's gone.‖
Born into a nomadic family, in youth he moved across the steppe. Herding goats and sheep
throughout the day and listening to his elders play traditional music on horse-head fiddles at night.
Riding horses since the age of three, Mend-Ooyo grew up when Mongolia was under Russian control.
His father taught him the indigenous Mongolia script by drawing it in the snow that fell outside
their ger during the long winter months. The family prayed nightly in secret, hiding their Buddhist
statues in a box during the day.
In the 1970s, Mend-Ooyo moved to Ulaanbaatar for university and formed the underground literary
group Fire, and in the 1980s he published some of his poetry after it was vetted by officials. When
single-party communist rule ended in 1990, he began publishing more of his work, including the
writing that espoused his pastoral roots and eventually became his best-known poems.
Mend-Ooyo is now channeling his energy into rethinking the modern Mongolian way of life. He
envisions a 21st-century nomadic community in which schools, health care, and markets move with
the people, allowing them to maintain their mobility while providing some of the benefits of
contemporary society. He is starting small, beginning in his home province some 600 kilometers
from Ulaanbaatar where he writes in the summer and where much of his family still lives and herds.
There, he is discussing his plans with others in the community, as well as experts who can advise on
ways to realize it.
―It is my dream to build it,‖ he said.
Source: Wall Street Journal
_______________________________________________________________________________________________
NEW MONGOLIAN LAWS
The following laws, amendments and addenda to laws were published in the latest weekly
Government bulletin. Unless otherwise decided by Parliament, they will take effect ten (10) days
after publication.
Date Laws
01.02.2013 Law on Bank Deposit Insurance
Amendments and Addendum to Law on Central Bank /Mongolbank/
Amendments and Addendum to Law on Bank
Amendments and Addendum to Law on Citizen
Amendments and Addendum to Law on Insurance
Amendments and Addendum to Law on Corporate Income Taxation
Amendments to Law on Government and Local Property
Law on Abiding the Package of Laws on Justice
Amendments and Addendum to Law on Mongolian Justice
Amendments and Addendum to Law on Judicial Administration
Amendments and Addendum to Law on Judge's Legal Situation
Amendments and Addendum to Law on Reconciliation
Amendments to Law on Legal Situation of Judicial Citizen's Representative
Amendments and Addendum to Law on Lawyer's Legal Situation
Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM
members who wish to access complete versions of the laws and regulations in Mongolian language
are welcome to email the BCM office: info@bcmongolia.org.
08.02.2013, NEWSWIRE, Issue 260
ANNOUNCEMENTS
“COAL MONGOLIA-2013” THE THIRD COAL INVESTOR‟S INTERNATIONAL CONFERENCE AND
EXHIBITION AGENDA IS NOW AVAILABLE
Organized by Ministry of Mining and Mining.mn the third Coal Mongolia 2013 international
conference and exhibition will be held from 21-22 February at the SS Convention Center.
At this time conference programmed seven parts.
Part 1 is ―COAL MARKET AND MONGOLIA‘S COMPETITIVENESS‖
Part 2 is ―MONGOLIAN BUSINESS ENVIRONMENT FOR COAL MINERS‖
Part 3 is ―COAL MARKET OUTLOOK‖
Part 4 is ―ENVIRONMENT AND SOCIAL ISSUES-HOW MONGOLIA EFFECTED BY COAL MINING‖
Part 5 is ―COAL MINING INFRASTRUCTURE-BRINGING BEST PRACTICE‖
Part 6 is ―INVESTMENT PROJECTS AND NEW TECHNOLOGIES‖
Part 7 is ―SECTOR LEADER DISCUSSIONS‖
And also conference featured speakers and panelists from the mining sector leaders. Such as:
GANKHUYAG Davaajav, Minister of Mining,
OYUN Sanjaasuren, Minister of Environment and Green Environment
BATTSENGEL Gotov, CEO and Executive Director of Mongolian Mining Corporation
NARANBAATAR Lundeg, President of Glogex Holding.
As usual, BCM is supporting this event and members will get a 10% discount for registration.
Please contact Saruul at saruul@bcmongolia.org or 317027 to get a special discount code.
And download the agenda, log on http://www.coalmongolia.mn/index.php/conferene/download-
agenda Contact us: Tel: 976+70115590; Email: info@coalmongolia.mn.
____________________________________________________________________________
MINER & SUPPLIER CONFERENCE, 14-15 MARCH, ULAANBAATAR
The Third Annual Miner & Supplier Conference will be held at Chinggis Khan Hotel from 14 to 15
March. BCM members will receive a 10 percent discount for registration.
This year the forum will be organized under the slogan ―Maximizing Mining Capabilities with
Effective Procurement Strategies.‖ It several goals include improving contributions to society and
the national economy, promoting environmentally friendly products and technology and increasing
business coherence between suppliers and mining businessmen.
Contact Saruul at saruul@bcmongolia.org or at 317027 for a special discount code. For more
information visit minerandsupplier.com.
____________________________________________________________________________
MINES AND MONEY HONG KONG, 18-22 MARCH
Mines and Money Hong Kong is where mining companies from around the world come to raise
capital in Asia and meet with investors from Hong Kong and mainland China.
Cementing its position as a major fixture on the global mining investment circuit, Mines and Money
Hong Kong 2013 will bring together over 3500 institutional investors, mining entrepreneurs, brokers
and investment analysts for five days of high-value networking, investment analysis and deal-
making, from 18-22 March.
Click here to read delegate feedback on the 2012 event and learn why the industry views Mines and
Money Hong Kong as a ―must-attend‖ event.
The exhibition floorplan for Mines and Money Hong Kong 2013 is already filling up fast – click here
to see the list of mining companies already signed up to showcase their projects and investment
opportunities at the event.
Bringing together more investors and investment opportunities than ever before, Mines and Money
Hong Kong 2013 is an event you will benefit from attending.
What‟s new in 2013?
 Enhanced pre-event networking to facilitate meeting arrangement
More in-show meeting rooms to facilitate one-2-one meetings onsite – (sold out in 2012)
 Extended exhibition toprovide space for 320+ mining companies to showcase their projects and
growth prospects – (sold out in 2012)
 Larger venue for the black tie Mines and Money Hong Kong 2013 Asia Mining Awards Gala Dinner–
(sold out in 2012)
 Dedicated investor invitation team to ensure maximum investor attendance
Mines and Money Hong Kong will also provide…
 A high-level conference covering the most relevant topics for your business
 Leading international speakers from across the mining and investment sectors
 Project spotlight presentations showcasing a wide array of mining investment opportunities
 Superb networking opportunities with decision-makers at the highest level
 A bustling exhibition offering business opportunities at every turn
 The largest gathering of investors focused on the mining sector in the Asia-Pacific region
As usual, BCM is supporting this event and members will get 15% discount for registration.
____________________________________________________________________________
MONGOLIA INVESTMENT SUMMIT 2013, APRIL 16-18, LONDON
Business Council of Mongolia members are invited to attend the Mongolia Investment Summit
London 2013 and receive a 15 percent discount on their registration fee.
With significant amounts of investment in Mongolia traditionally coming from Asia there are new
opportunities to be explored in the Western Hemisphere. Investor interest is high from the west and
fund managers, private investors and financiers want to gain exposure to Mongolian growth.
Mongolia Investment Summit London in April will provide an important opportunity to meet these
investors, raise the profile of Mongolia and promote your business.
The event provides an excellent opportunity to meet with major investors, mining groups,
government officials and real estate specialists to identify new business partners. At the event, the
views on the country will be discussed by investors from companies such as Barclays Natural
Resource Investments, HSBC Global Asset Management, Collabrium Capital and more. The event
provides an opportunity not to be missed.
Enter the discount code “Business-Council-Mongolia-Special” when you register to receive the
early bird discount plus an additional 15percent off.
____________________________________________________________________________
THIRD ANNUAL RISK FORUM, 1 MAY, ULAANBAATAR
The third annual Risk Forum of Mongolia will be held on 1 May 2013 in Ulaanbaatar.
This is the largest risk event in Mongolia, co-organized by the Business Council of Mongolia and
Mandal General Insurance. The Risk Forum will provide the most comprehensive overview of risks
that Mongolia faces today and the status of risk management all under one roof. Risk management
techniques and tools will be shared and best practices promoted across industries.
Last year, the event had attracted over 250 representatives of Mongolia's top corporations and
government agencies and resulted in the formation of Risk Institute of Mongolia. This year, the
expert speakers will be address topics concerning Macro Risks, Business Risks, and Community Risks.
For more information, visit RiskForum.mn.
____________________________________________________________________________
“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‟S MINING SUPPLY CHAIN DATABASE
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.
As of December 31, suppliers registered on the database totaled 1,405. During 2012, 251 new
supplier entities joined the Database and 236 prior supplier registrants updated their company
profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted.
We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain
Database. Please visit here for registration—FREE!
If you have any questions regarding the database, please contact Undral at undral@bcmongolia.org
or 317027.
____________________________________________________________________________
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.
__________________________________________________________
ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟,
„PHOTO GALLERY‟
On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available.
Note the presentation by Bold Baatar, CEO of Altan Dornod Mongol, “Mongolian Mining
Investment Environment” at the Mining Industry Open Discussion on February 1, 2013, at
Kempinski Khan Palace Hotel.
The following 3 presentations were added from the BCM 28 January monthly meeting:
Dr. Katsuhide Nagayama, JICA Team Leader, JICA Project Team – ―The UB-Metro toward a
world competitive city - Ulaanbaatar‖
 Chris Adsett, Chief Executive Officer, Techenomics Mongolia – ―Importance of Oil Analysis to
Industry‖
Mandar Jayawant, Managing Director, Mongolian Opportunities Fund – ―The Value of Private
Equity for Mongolian Companies‖
Please also note 25 presentations from the Mongolian Investment Summit 2012 on 30-31 October in
Hong Kong; recent postings from BCM‘s 11 December, 5 November and 24 September monthly
meetings; and 9 presentations from Discover Mongolia 2012.
The ―Mongolia Reports‖ section includes the ―2013 Mongolia Investment Climate Statement‖ by the
Economic and Commercial Section of the U.S. Embassy; ―How Mongolia will perform in 2013?‖ by
Mandal Asset Management; ―Mongolia Business Owner and CFO Survey result‖ 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.
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.
We have now 922 fans on our Facebook fans page, 1,090 connections on LinkedIn network, and 593
followers 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.
__________________________________________________________
BCM WORKING GROUP MEETINGS
The BCM Education Working Group met on Tuesday, February 5, with 11 members attending.
Saha Meyanathan/DAS/, Robin Charpentier/AUM/ moderated the session.
New Member: Mitsuaki Toyoda, Gereltuya Tsegmid /Save the Children/was welcomed.
Speakers and topics were:
-Government Plan in the Higher Education Sector.
Baterdene R. /Chair, Ministry of Education Working Group on Higher Education; CEO, American
University of Mongolia.
-Update of American University of Mongolia activities-
Ms Robin Charpentier / Director, Academic Programs, American University of Mongolia/
-BCM Resource Pool of Consultants in Higher Education-
Ms Robin Charpentier./Director, Academic programs, American University Mongolia/
-Update on TVET Partner Consultative Committee Meetings-Dr Kern Von Hagen /Manager,
Pipeline Talent OT/
_____________________________________________________________
The BCM Capital Markets Working Group met on Thursday, February 7, with 12 members attending.
Howard Lambert /ING Bank/, Nick Cousyn /BDSec/ co-chairs, moderated the session.
New Member: Dale Choi /Origo/ was welcomed.
Speakers and topics were:
-Road show in USA. -Nick Cousyn /BCSec, Chief Operating Officer/
-MoF bond auctions that are managed by the Central Bank.-Howard Lambert /Head of
Corporate and Investment Banking, ING Bank Mongolia/
-Update on draft Minerals Law -Jim Dwyer /Executive Director, Business Council of
Mongolia/
Next meeting: 11th
of April 2013 at BPI meeting room 12th
floor Express Tower
Please contact: erka@bcmongolia.org
_______________________________________________________________________________
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]
December 31, 2012 *14.0% [source: NSOM]
*Year-over-year (y-o-y), nationwide
Note: 14.2% y-o-y, Ulaanbaatar city, December 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]
January 25, 2013 12.50% [source: Mongol Bank]
CURRENCY RATES – February 7, 2013
Currency Name Currency Rate
US dollar USD 1,391.63
Euro EUR 1,882.81
Japanese yen JPY 14.84
British pound GBP 2,179.78
Hong Kong dollar HKD 179.60
Chinese Yuan CNY 223.24
Russian Ruble RUB 46.32
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.

More Related Content

What's hot

What's hot (20)

19.11.2010, NEWSWIRE, Issue 145
19.11.2010, NEWSWIRE, Issue 14519.11.2010, NEWSWIRE, Issue 145
19.11.2010, NEWSWIRE, Issue 145
 
18.06.2010, NEWSWIRE, Issue 123
18.06.2010, NEWSWIRE, Issue 12318.06.2010, NEWSWIRE, Issue 123
18.06.2010, NEWSWIRE, Issue 123
 
26.09.2008, NEWSWIRE, Issue 39
26.09.2008, NEWSWIRE, Issue 3926.09.2008, NEWSWIRE, Issue 39
26.09.2008, NEWSWIRE, Issue 39
 
13.03.2009, NEWSWIRE, Issue 60
13.03.2009, NEWSWIRE, Issue 6013.03.2009, NEWSWIRE, Issue 60
13.03.2009, NEWSWIRE, Issue 60
 
22.03.2013, NEWSWIRE, Issue 266
22.03.2013, NEWSWIRE, Issue 26622.03.2013, NEWSWIRE, Issue 266
22.03.2013, NEWSWIRE, Issue 266
 
17.05.2013, NEWSWIRE, Issue 274
17.05.2013, NEWSWIRE, Issue 27417.05.2013, NEWSWIRE, Issue 274
17.05.2013, NEWSWIRE, Issue 274
 
26.06.2009, NEWSWIRE, Issue 75
26.06.2009, NEWSWIRE, Issue 7526.06.2009, NEWSWIRE, Issue 75
26.06.2009, NEWSWIRE, Issue 75
 
15.03.2013, NEWSWIRE, Issue 265
15.03.2013, NEWSWIRE, Issue 26515.03.2013, NEWSWIRE, Issue 265
15.03.2013, NEWSWIRE, Issue 265
 
10.12.2010, NEWSWIRE, Issue 148
10.12.2010, NEWSWIRE, Issue 14810.12.2010, NEWSWIRE, Issue 148
10.12.2010, NEWSWIRE, Issue 148
 
19.06.2009, NEWSWIRE, Issue 74
19.06.2009, NEWSWIRE, Issue 7419.06.2009, NEWSWIRE, Issue 74
19.06.2009, NEWSWIRE, Issue 74
 
19.04.2013, NEWSWIRE, Issue 270
19.04.2013, NEWSWIRE, Issue 27019.04.2013, NEWSWIRE, Issue 270
19.04.2013, NEWSWIRE, Issue 270
 
19.02.2010, NEWSWIRE, Issue 106
19.02.2010, NEWSWIRE, Issue 10619.02.2010, NEWSWIRE, Issue 106
19.02.2010, NEWSWIRE, Issue 106
 
16.01.2009, NEWSWIRE, Issue 53
16.01.2009, NEWSWIRE, Issue 5316.01.2009, NEWSWIRE, Issue 53
16.01.2009, NEWSWIRE, Issue 53
 
12.06.2009, NEWSWIRE, Issue 73
12.06.2009, NEWSWIRE, Issue 7312.06.2009, NEWSWIRE, Issue 73
12.06.2009, NEWSWIRE, Issue 73
 
03.07.2009, NEWSWIRE, Issue 76
03.07.2009, NEWSWIRE, Issue 7603.07.2009, NEWSWIRE, Issue 76
03.07.2009, NEWSWIRE, Issue 76
 
22.11.2013, NEWSWIRE, Issue301
22.11.2013, NEWSWIRE, Issue30122.11.2013, NEWSWIRE, Issue301
22.11.2013, NEWSWIRE, Issue301
 
29.11.2013, NEWSWIRE, Issue 302
29.11.2013, NEWSWIRE, Issue 30229.11.2013, NEWSWIRE, Issue 302
29.11.2013, NEWSWIRE, Issue 302
 
07.10.2011, NEWSWIRE, Issue 188
07.10.2011, NEWSWIRE, Issue 18807.10.2011, NEWSWIRE, Issue 188
07.10.2011, NEWSWIRE, Issue 188
 
21.11.2008, NEWSWIRE, Issue 47
21.11.2008, NEWSWIRE, Issue 4721.11.2008, NEWSWIRE, Issue 47
21.11.2008, NEWSWIRE, Issue 47
 
13.11.2009, NEWSWIRE, Issue 94
13.11.2009, NEWSWIRE, Issue 9413.11.2009, NEWSWIRE, Issue 94
13.11.2009, NEWSWIRE, Issue 94
 

Viewers also liked

10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...
10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...
10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...The Business Council of Mongolia
 
30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch
30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch
30.10.2013 Mongolia’s minerals future and development, Otgochuluu ChThe Business Council of Mongolia
 
31.08.2012 Oyu Tolgoi partnership breeds success, Cameron McRae
31.08.2012 Oyu Tolgoi  partnership breeds success, Cameron McRae31.08.2012 Oyu Tolgoi  partnership breeds success, Cameron McRae
31.08.2012 Oyu Tolgoi partnership breeds success, Cameron McRaeThe Business Council of Mongolia
 
23.05.2013, Inclusive growth and employability, Saha Meyanathan
23.05.2013, Inclusive growth and employability, Saha Meyanathan23.05.2013, Inclusive growth and employability, Saha Meyanathan
23.05.2013, Inclusive growth and employability, Saha MeyanathanThe Business Council of Mongolia
 
06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets
06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets
06.2012, PRESENTATION, The World's strongest banks, Bloomberg MarketsThe Business Council of Mongolia
 
01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...
01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...
01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...The Business Council of Mongolia
 
30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...
30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...
30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...The Business Council of Mongolia
 
26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig
26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig
26.08.2013, Tree Global Mongolia Overview Presentation, G. ZorigThe Business Council of Mongolia
 

Viewers also liked (19)

29.03.2013, NEWSWIRE, Issue 267
29.03.2013, NEWSWIRE, Issue 26729.03.2013, NEWSWIRE, Issue 267
29.03.2013, NEWSWIRE, Issue 267
 
10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...
10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...
10.29-31.2013, PRESENTATION, Mongolian Economy Investment Opportunities Chall...
 
30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch
30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch
30.10.2013 Mongolia’s minerals future and development, Otgochuluu Ch
 
31.08.2012 Oyu Tolgoi partnership breeds success, Cameron McRae
31.08.2012 Oyu Tolgoi  partnership breeds success, Cameron McRae31.08.2012 Oyu Tolgoi  partnership breeds success, Cameron McRae
31.08.2012 Oyu Tolgoi partnership breeds success, Cameron McRae
 
Club Coworking, 29 Sep 2016
Club Coworking, 29 Sep 2016Club Coworking, 29 Sep 2016
Club Coworking, 29 Sep 2016
 
28.12.2012, NEWSWIRE, 2012 YearEnd Issue
28.12.2012, NEWSWIRE, 2012 YearEnd Issue28.12.2012, NEWSWIRE, 2012 YearEnd Issue
28.12.2012, NEWSWIRE, 2012 YearEnd Issue
 
27.09.2013, NEWSWIRE, Issue 293
27.09.2013, NEWSWIRE, Issue 29327.09.2013, NEWSWIRE, Issue 293
27.09.2013, NEWSWIRE, Issue 293
 
23.03.2012 Powering Asia's future, John Lee
23.03.2012 Powering Asia's future, John Lee23.03.2012 Powering Asia's future, John Lee
23.03.2012 Powering Asia's future, John Lee
 
23.05.2013, Inclusive growth and employability, Saha Meyanathan
23.05.2013, Inclusive growth and employability, Saha Meyanathan23.05.2013, Inclusive growth and employability, Saha Meyanathan
23.05.2013, Inclusive growth and employability, Saha Meyanathan
 
12.11.2010, NEWSWIRE, Issue 144
12.11.2010, NEWSWIRE, Issue 14412.11.2010, NEWSWIRE, Issue 144
12.11.2010, NEWSWIRE, Issue 144
 
06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets
06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets
06.2012, PRESENTATION, The World's strongest banks, Bloomberg Markets
 
01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...
01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...
01.25.2010, PRESENTATION, The Development bank of Mongolia today tomorrow and...
 
31.05.2013, NEWSWIRE, Issue 276
31.05.2013, NEWSWIRE, Issue 27631.05.2013, NEWSWIRE, Issue 276
31.05.2013, NEWSWIRE, Issue 276
 
19.11.2013 Berkh Uul, Jimmie Wilde
19.11.2013 Berkh Uul, Jimmie Wilde19.11.2013 Berkh Uul, Jimmie Wilde
19.11.2013 Berkh Uul, Jimmie Wilde
 
01.03.2013, NEWSWIRE, Issue 263
01.03.2013, NEWSWIRE, Issue 26301.03.2013, NEWSWIRE, Issue 263
01.03.2013, NEWSWIRE, Issue 263
 
30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...
30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...
30.10.2012 Mongolia's Macro Economic Outlook: Challenges and Opportunities, B...
 
26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig
26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig
26.08.2013, Tree Global Mongolia Overview Presentation, G. Zorig
 
10.05.2013, NEWSWIRE, Issue 273
10.05.2013, NEWSWIRE, Issue 27310.05.2013, NEWSWIRE, Issue 273
10.05.2013, NEWSWIRE, Issue 273
 
22.06.2015 Mastering Our Mind, Mr. U.Ganzorig
22.06.2015 Mastering Our Mind, Mr. U.Ganzorig22.06.2015 Mastering Our Mind, Mr. U.Ganzorig
22.06.2015 Mastering Our Mind, Mr. U.Ganzorig
 

Similar to 08.02.2013, NEWSWIRE, Issue 260

Similar to 08.02.2013, NEWSWIRE, Issue 260 (20)

16.08.2013, NEWSWIRE, Issue 287
16.08.2013, NEWSWIRE, Issue 28716.08.2013, NEWSWIRE, Issue 287
16.08.2013, NEWSWIRE, Issue 287
 
19.10.2012, NEWSWIRE, Issue 244
19.10.2012, NEWSWIRE, Issue 24419.10.2012, NEWSWIRE, Issue 244
19.10.2012, NEWSWIRE, Issue 244
 
06.02.2009, NEWSWIRE, Issue 56
06.02.2009, NEWSWIRE, Issue 5606.02.2009, NEWSWIRE, Issue 56
06.02.2009, NEWSWIRE, Issue 56
 
21.03.2014, NEWSWIRE, Issue 317
21.03.2014, NEWSWIRE, Issue 31721.03.2014, NEWSWIRE, Issue 317
21.03.2014, NEWSWIRE, Issue 317
 
21.06.2013, NEWSWIRE, Issue 279
21.06.2013, NEWSWIRE, Issue 27921.06.2013, NEWSWIRE, Issue 279
21.06.2013, NEWSWIRE, Issue 279
 
27.06.2014, NEWSWIRE, Issue331
27.06.2014, NEWSWIRE, Issue33127.06.2014, NEWSWIRE, Issue331
27.06.2014, NEWSWIRE, Issue331
 
18.04.2014, NEWSWIRE, Issue 321
18.04.2014, NEWSWIRE, Issue 32118.04.2014, NEWSWIRE, Issue 321
18.04.2014, NEWSWIRE, Issue 321
 
26.03.2010, NEWSWIRE, Issue 112
26.03.2010, NEWSWIRE, Issue 11226.03.2010, NEWSWIRE, Issue 112
26.03.2010, NEWSWIRE, Issue 112
 
02.04.2010, NEWSWIRE, Issue 112
02.04.2010, NEWSWIRE, Issue 11202.04.2010, NEWSWIRE, Issue 112
02.04.2010, NEWSWIRE, Issue 112
 
BCM NewsWire Issue 458
BCM NewsWire Issue 458BCM NewsWire Issue 458
BCM NewsWire Issue 458
 
26.08.2011, NEWSWIRE, Issue 182
26.08.2011, NEWSWIRE, Issue 18226.08.2011, NEWSWIRE, Issue 182
26.08.2011, NEWSWIRE, Issue 182
 
16.09.2011, NEWSWIRE, Issue 185
16.09.2011, NEWSWIRE, Issue 18516.09.2011, NEWSWIRE, Issue 185
16.09.2011, NEWSWIRE, Issue 185
 
04.10.2013, NEWSWIRE, Issue 294
04.10.2013, NEWSWIRE, Issue 29404.10.2013, NEWSWIRE, Issue 294
04.10.2013, NEWSWIRE, Issue 294
 
28.03.2014, NEWSWIRE, Issue 318
28.03.2014, NEWSWIRE, Issue 31828.03.2014, NEWSWIRE, Issue 318
28.03.2014, NEWSWIRE, Issue 318
 
18.10.2013, NEWSWIRE, Issue 296
18.10.2013, NEWSWIRE, Issue 29618.10.2013, NEWSWIRE, Issue 296
18.10.2013, NEWSWIRE, Issue 296
 
14.06.2013, NEWSWIRE, Issue 278
14.06.2013, NEWSWIRE, Issue 27814.06.2013, NEWSWIRE, Issue 278
14.06.2013, NEWSWIRE, Issue 278
 
21.12.2012, NEWSWIRE, Issue 253
21.12.2012, NEWSWIRE, Issue 25321.12.2012, NEWSWIRE, Issue 253
21.12.2012, NEWSWIRE, Issue 253
 
04.09.2009, NEWSWIRE, Issue 84
04.09.2009, NEWSWIRE, Issue 8404.09.2009, NEWSWIRE, Issue 84
04.09.2009, NEWSWIRE, Issue 84
 
10.07.2014, NEWSWIRE, Issue 333
10.07.2014, NEWSWIRE, Issue 33310.07.2014, NEWSWIRE, Issue 333
10.07.2014, NEWSWIRE, Issue 333
 
15.05.2009, NEWSWIRE, Issue 69
15.05.2009, NEWSWIRE, Issue 6915.05.2009, NEWSWIRE, Issue 69
15.05.2009, NEWSWIRE, Issue 69
 

More from The Business Council of Mongolia

N. Chimguundari economic corridor and investment research center Nov 12
N. Chimguundari economic corridor and investment research center Nov 12N. Chimguundari economic corridor and investment research center Nov 12
N. Chimguundari economic corridor and investment research center Nov 12The Business Council of Mongolia
 

More from The Business Council of Mongolia (20)

Three Camel Lodge 3 days itinerary
Three Camel Lodge 3 days itineraryThree Camel Lodge 3 days itinerary
Three Camel Lodge 3 days itinerary
 
Three Camel Lodge 4 days itinerary
Three Camel Lodge 4 days itineraryThree Camel Lodge 4 days itinerary
Three Camel Lodge 4 days itinerary
 
BCM Macroeconomic Updates January 2020
BCM Macroeconomic Updates January 2020BCM Macroeconomic Updates January 2020
BCM Macroeconomic Updates January 2020
 
Digital Enterprise 2019
Digital Enterprise 2019Digital Enterprise 2019
Digital Enterprise 2019
 
Faro Foundation presentation
Faro Foundation presentationFaro Foundation presentation
Faro Foundation presentation
 
Business Council of Mongolia presentation
Business Council of Mongolia presentationBusiness Council of Mongolia presentation
Business Council of Mongolia presentation
 
National Development Association of Mongolia presentation
National Development Association of Mongolia presentationNational Development Association of Mongolia presentation
National Development Association of Mongolia presentation
 
Gobi Green Energy Gankhuyag
Gobi Green Energy GankhuyagGobi Green Energy Gankhuyag
Gobi Green Energy Gankhuyag
 
Ch.Anar Competitiveness of the fintech sector
Ch.Anar Competitiveness of the fintech sectorCh.Anar Competitiveness of the fintech sector
Ch.Anar Competitiveness of the fintech sector
 
A.Bilguun Competitiveness of Mongolia's resource sector
A.Bilguun Competitiveness of Mongolia's resource sectorA.Bilguun Competitiveness of Mongolia's resource sector
A.Bilguun Competitiveness of Mongolia's resource sector
 
B.Lakshmi EPCRC Competitiveness of Mongolia
B.Lakshmi EPCRC Competitiveness of MongoliaB.Lakshmi EPCRC Competitiveness of Mongolia
B.Lakshmi EPCRC Competitiveness of Mongolia
 
Munkhzorig - Digital Transformation
Munkhzorig - Digital TransformationMunkhzorig - Digital Transformation
Munkhzorig - Digital Transformation
 
Tseesuren - Data is the Key for Innovation
Tseesuren - Data is the Key for InnovationTseesuren - Data is the Key for Innovation
Tseesuren - Data is the Key for Innovation
 
System analysis study on the Constitution of Mongolia
System analysis study on the Constitution of MongoliaSystem analysis study on the Constitution of Mongolia
System analysis study on the Constitution of Mongolia
 
Kincora Copper March 2019
Kincora Copper March 2019Kincora Copper March 2019
Kincora Copper March 2019
 
Erdenes Mongol presentation
Erdenes Mongol presentationErdenes Mongol presentation
Erdenes Mongol presentation
 
Tatsuya Hamada presentation
Tatsuya Hamada presentationTatsuya Hamada presentation
Tatsuya Hamada presentation
 
BCM Monthly Meeting BCM updates January 30, 2019
BCM Monthly Meeting BCM updates January 30, 2019BCM Monthly Meeting BCM updates January 30, 2019
BCM Monthly Meeting BCM updates January 30, 2019
 
N. Chimguundari economic corridor and investment research center Nov 12
N. Chimguundari economic corridor and investment research center Nov 12N. Chimguundari economic corridor and investment research center Nov 12
N. Chimguundari economic corridor and investment research center Nov 12
 
Procurement mca-compact-ii-presentation-bcm
Procurement mca-compact-ii-presentation-bcmProcurement mca-compact-ii-presentation-bcm
Procurement mca-compact-ii-presentation-bcm
 

Recently uploaded

Por estos dos motivos, defensa de JOH solicita repetir juicio
Por estos dos motivos, defensa de JOH solicita repetir juicioPor estos dos motivos, defensa de JOH solicita repetir juicio
Por estos dos motivos, defensa de JOH solicita repetir juicioAlexisTorres963861
 
19032024_First India Newspaper Jaipur.pdf
19032024_First India Newspaper Jaipur.pdf19032024_First India Newspaper Jaipur.pdf
19032024_First India Newspaper Jaipur.pdfFIRST INDIA
 
Européennes 2024 : projection du Parlement européen à trois mois du scrutin
Européennes 2024 : projection du Parlement européen à trois mois du scrutinEuropéennes 2024 : projection du Parlement européen à trois mois du scrutin
Européennes 2024 : projection du Parlement européen à trois mois du scrutinIpsos France
 
Another Day, Another Default Judgment Against Gabe Whitley
Another Day, Another Default Judgment Against Gabe WhitleyAnother Day, Another Default Judgment Against Gabe Whitley
Another Day, Another Default Judgment Against Gabe WhitleyAbdul-Hakim Shabazz
 
Ministry of Justice Extradition Eswatini 3.pdf
Ministry of Justice Extradition Eswatini 3.pdfMinistry of Justice Extradition Eswatini 3.pdf
Ministry of Justice Extradition Eswatini 3.pdfSABC News
 
One India vs United India by Dream Tamilnadu
One India vs United India by Dream TamilnaduOne India vs United India by Dream Tamilnadu
One India vs United India by Dream TamilnaduDreamTamilnadu
 
Light Rail in Canberra: Too much, too little, too late: Is the price worth th...
Light Rail in Canberra: Too much, too little, too late: Is the price worth th...Light Rail in Canberra: Too much, too little, too late: Is the price worth th...
Light Rail in Canberra: Too much, too little, too late: Is the price worth th...University of Canberra
 
Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...
Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...
Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...virgfern3011
 
Anantkumar Hegde
Anantkumar Hegde  Anantkumar Hegde
Anantkumar Hegde NewsFeed1
 

Recently uploaded (9)

Por estos dos motivos, defensa de JOH solicita repetir juicio
Por estos dos motivos, defensa de JOH solicita repetir juicioPor estos dos motivos, defensa de JOH solicita repetir juicio
Por estos dos motivos, defensa de JOH solicita repetir juicio
 
19032024_First India Newspaper Jaipur.pdf
19032024_First India Newspaper Jaipur.pdf19032024_First India Newspaper Jaipur.pdf
19032024_First India Newspaper Jaipur.pdf
 
Européennes 2024 : projection du Parlement européen à trois mois du scrutin
Européennes 2024 : projection du Parlement européen à trois mois du scrutinEuropéennes 2024 : projection du Parlement européen à trois mois du scrutin
Européennes 2024 : projection du Parlement européen à trois mois du scrutin
 
Another Day, Another Default Judgment Against Gabe Whitley
Another Day, Another Default Judgment Against Gabe WhitleyAnother Day, Another Default Judgment Against Gabe Whitley
Another Day, Another Default Judgment Against Gabe Whitley
 
Ministry of Justice Extradition Eswatini 3.pdf
Ministry of Justice Extradition Eswatini 3.pdfMinistry of Justice Extradition Eswatini 3.pdf
Ministry of Justice Extradition Eswatini 3.pdf
 
One India vs United India by Dream Tamilnadu
One India vs United India by Dream TamilnaduOne India vs United India by Dream Tamilnadu
One India vs United India by Dream Tamilnadu
 
Light Rail in Canberra: Too much, too little, too late: Is the price worth th...
Light Rail in Canberra: Too much, too little, too late: Is the price worth th...Light Rail in Canberra: Too much, too little, too late: Is the price worth th...
Light Rail in Canberra: Too much, too little, too late: Is the price worth th...
 
Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...
Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...
Green Aesthetic Ripped Paper Thesis Defense Presentation_20240311_111012_0000...
 
Anantkumar Hegde
Anantkumar Hegde  Anantkumar Hegde
Anantkumar Hegde
 

08.02.2013, NEWSWIRE, Issue 260

  • 1. BUSINESS COUNCIL of MONGOLIA NewsWire www.bcmongolia.org info@bcmongolia.org Issue 260 – February 8, 2013 NEWS HIGHLIGHTS: Business  Government talks with Rio on hold for Tsagaan Sar;  Mongolia to press Rio over Oyu Tolgoi costs;  Oyu Tolgoi clarifies Parliament's concerns;  OT produces first concentrate;  Operations on hold at MEC's Khushuut mine;  MRC releases December 2012 Quarterly Activities Report;  TDB signs MOU with Japanese bank for information dissemination;  Mongolia Opportunities Fund partners with Japanese financial group;  AUM contracted to research employment opportunities driven by OT;  OBG releases Mongolia 2013 report;  AUM to offer MBA from Indiana University;  CapitalistExploits.at releases Mongolia country research;  S&P affirms rating and negative outlook for Winsway;  Doors open at Maternity Hospital No. 1;  Rio looks to build after writedowns. Economy  Mongolia debt costs rise as government battles Rio Tinto;  Legal uncertainty cuts minerals exploration and companies' stock performance;  MSE board members appointed;  Mongolia auctions MNT 25 billion bills;  Energy grid links to Umnugobi;  Crime spikes as Tsagaan Sar nears;  85 mm;  Capital Markets Day sees 180 new investors open securities accounts  USD 1.25 a day labor amid USD 4,000 purses stirs discontent;  Four pitfalls to Mongolia’s astonishing growth;  Chinalco Mining IPO flops;  China data points to moderate recovery. Politics  President makes public demands of OT investors;  Cabinet orders inspection lab for OT copper concentrator;  Miners air grievances on draft Minerals Law at open discussion;  Former MRA head sentenced to 6 1/2 years;  Parliament no longer to pursue privatization of MIAT;  MP Ganbaatar submits new labor law;  Bill allows citizens to submit draft legislation to Parliament;  Parliament's fall session concludes Friday;  Mongolia bans percentage of acetic acid in foods;  Government officials travel to Russia to inquire on price hikes;  Former ambassador rumored to have sold Moscow embassy;  SouthGobi Sands president calls for help from U.S.;  67-year old Mongolian woman sentenced to death in China for drug smuggling;  Mongolia doesn’t have resource nationalism—for now;  China, Mongolia seek to mend trade differences  At odds with Mongolia’s modernity, a poet seeks another way.
  • 2. 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 Oxford Business Group Major Drilling Techenomics Mongolia Breakthrough PR International SOS Mongolian National Broadcasting BUSINESS GOVERNMENT TALKS WITH RIO ON HOLD FOR TSAGAAN SAR Government officials said its stakeholders meeting is ongoing, with talks to resume after Tsagaan Sar, Mongolia's lunar new year celebration. Government and Rio Tinto PLC officials met on Wednesday to discuss grievances regarding the project at the Ikh Tenger complex in Ulaanbaatar. Government representatives included Mining Minister D. Gankhuyag, Environment and Green Development Minister S. Oyun, Erdenes Oyu Tolgoi LLC Director Ts. Sedvanching while Oyu Tolgoi President and Chief Executive Officer Cameron McRae and other Rio Tinto officials came to represent private interests. ―We have requested an explanation to why the initial investments had been increased by USD 2 billion, after which we would discuss the next financial issues,‖ said Gankhuyag. ―Parties have agreed to resolve the issues based on scientific research and narrow estimations. We only demand what is in compliance with Mongolia's regulations.‖
  • 3. Economic Development Minister N. Batbayar noted Oyu Tolgoi's investors had grown worried over President Ts. Elbegdorj's statements on Friday when he said Mongolians should take back control of the project. He said the Rio Tinto officials had asked that members rescind their comments, to which they replied, ―Mongolia is a state with a parliamentary republic. The people of Mongolia love and respect their land. You will be allowed to operate on the territory of Mongolia if you understand this point.‖ He added that the investment agreement must be proven to be of benefit to Mongolians. Source: Info Mongolia MONGOLIA TO PRESS RIO OVER OYU TOLGOI COSTS Mongolia will press Rio Tinto PLC to explain a spike in costs at the Oyu Tolgoi copper-gold mine, a government source said, warning that it could threaten efforts to finance other projects in the country. "We would like to have some mechanism where we can control such cost increases. We do not know if they are justified," said the source, who requested anonymity and said that the cost of the first phase of the mine was around USD 2 billion higher than originally stated in the project's feasibility study. "We also want to know why our share of the revenues from the project has fallen so much, so at least we can understand it and explain it to the people," he said. A statement issued on Oyu Tolgoi's website late on Tuesday put the total capital required for the project's first phase at USD 6.6 billion, compared to USD 5.7 billion in the original 2010 approved feasibility study. It said concerns about the costs of the project had already been addressed in a series of meetings between both sides. The government source said the increased costs would have a considerable impact on the long-term sustainability of Oyu Tolgoi, and on Mongolia's efforts to raise funds for other projects, including the massive Tavan Tolgoi coal mine and a billion-dollar railway building program. "We cannot have major financial institutions investing in a project that is not sustainable," he said, adding that the higher costs meant Mongolia would not receive dividends from the project until 2033, far beyond the original schedule of 2019. Given that the project is financed by debt not equity, you can imagine the financial costs will be tremendous and have an impact on the project's revenues for the government," he said. The project cost was initially estimated at around USD 4 billion, roughly the same as Mongolia's gross domestic product in 2009, and was also expected to pave the way for other huge mining deals, including Tavan Tolgoi. But Mongolia has struggled to find the capital required not only to build the mines, but also the infrastructure required to get minerals to market. Source: Reuters OYU TOLGOI CLARIFIES PARLIAMENT'S CONCERNS Oyu Tolgoi LLC released an official statement in response to President Ts. Elbegdorj's message to Parliament where he asked for more control of Oyu Tolgoi by Mongolian interests. The statement directly responded to the criticisms from the president and elsewhere regarding overblown costs for the mine's development. As of 31 December 2012, Oyu Tolgoi had reported USD 7.4 billion comprising USD 6.6 billion of phase one development costs, plus interest costs on loans USD 500 million, early phase two capital of USD 200 million and further exploration of USD 100 million. The government purchased 34 percent in the company with borrowed money for other shareholders. State-owned Erdenes Oyu Tolgoi, which holds the 34 percent stake, is not required to repay the loan unless the business becomes profitable. Currently investors are seeking to raise project financing from international banking and financial institutions to enable the next stage of development. Project financing would lower the interest rate the government is paying with the opportunity to bring forward shareholder dividends. Project financing is expected to decrease the total cost of the business to all stakeholders. Rio Tinto PLC provides Oyu Tolgoi with ―highly valuable skills, systems and processes‖ for the benefit of the project. When Oyu Tolgoi reaches commercial production, management
  • 4. fee payments are expected to be in the range of USD 60 million to USD 80 million a year. While capital cost increases also increase management fee payments, Rio Tinto has no incentive to increase costs. Loss of dividends and higher financing costs erode a far greater value for Rio Tinto that it receives in increased management service fee payments. Oyu Tolgoi was the country's sixth biggest taxpayer in 2011, according to the General Tax Office. This was before the mine was even operational. From January 2010 through November 2012, Oyu Tolgoi had paid USD 803 million in taxes and payments to the government. Between 2010 and 2011, Oyu Tolgoi loaned USD 250 million to the government. Part of that was a USD 150 loan in the form of a tax prepayment with repayment coming in tax credits. Under the prepayment agreement Oyu Tolgoi was entitled to use these tax credits from 2012. Building Oyu Tolgoi has been a joint effort between Mongolians and workers from 44 nations. At the end of 2012, the Oyu Tolgoi project directly employed around 13,000 people, 85 percent of whom were Mongolians. During the operational phase, more than 90 percent of the Oyu Tolgoi total workforce would be Mongolian. Both foreign and Mongolian workers are paid commensurate with prevailing market conditions in their home countries. This is standard across the world. Source: Oyu Tolgoi LLC OT PRODUCES FIRST CONCENTRATE Turquoise Hill Resources Ltd. last week on Thursday announced that its 66 percent-owned Oyu Tolgoi copper and coal project had produced its first copper-gold concentrate after it processed first ore through the concentrators in early January. The start of concentrate production signaled that production ramp-up is expected to achieve commercial production rates within the next three to five months. ―Oyu Tolgoi continues to progressively ramp up the mine and the production of first concentrate is another important milestone. We are making good progress on our timetable leading to the start of commercial operation,‖ Turquoise Hill Chief Executive Officer Kay Priestly said. Turquoise Hill celebrated the commissioning of the Oyu Tolgoi mine's concentrator on 27 December 2012. Activating the concentrator's ore-processing circuit for the first time commemorated the occasion. Under the common start-up plan, ore will be initially sourced from the open-pit mine on the Southern Oyu deposits, while the adjacent higher-grade underground mine on the Hugo North deposit will be developed to full production of 85,000 tons a day. The mine is expected to produce more than 1.2 billion pounds (544,000 tons) of copper, three- million ounces of silver and 650,000 ounces per year of gold in the first ten years of operation and, seven years later, at its peak it is expected to produce about 1.7 billion pounds of copper and one million ounces of gold. Source: Mining Weekly OPERATIONS ON HOLD AT MEC'S KHUSHUUT MINE Mongolia Energy Corp. Ltd. (MEC) reported the halt of operations at its coal-producing Khushuut coal mine. Resumption will depend on the selection of a suitable coal extraction contractor to perform the coal extraction work and the improvement of coal processing issues by the installation of a dry coal processing system. MoEnCo LLC, the company's indirect subsidiary, is in the final round of negotiation with two potential contractors for the provision of coal extraction work and the process is at an advanced stage. MoEnCo is discussing the commercial terms of the services with the potential contractors and hopes to finalize the process as soon as possible. During this period, the mining operation at Khushuut is still continuing, though on a smaller scale, for preparation such as stripping of the top soil and extraction. MoEnCo has hired the excavators, dozers, loaders and other necessary equipment from the equipment providers and operates them through MoEnCo's own operation team on site. Also, the company's dry-coal processing system will enhance the quality of coal in the screen process. Otherwise, its coal haulage and operation costs would remain expensive for commercial
  • 5. production. The foundation work of the dry-coal processing system was completed in the middle of January 2013. Source: Mongolia Energy Corp. Ltd. MRC RELEASES 4Q QUARTERLY ACTIVITIES REPORT Mongolian Resources Corp. (MRC) reported spending USD 677,000 on operations in Mongolia and maintaining the corporate headquarters in Australia in its December 2012 Quarterly Activities Report. MRC received an offer for a subscription agreement to provide AUD 589,000 (USD 613,502) by way of issue of 5.9 million new shares at 10 cents a share from AR Management Co., Pty. Ltd., which is currently under review by its board. The company is currently seeking further financing and is discussing project financing with banks and private equity holders to continue its operations. During this period, costs were incurred on completion of the 2013 mine plan for submission to government and for completion of the exploration work to remain compliant with the government on licensing regulations. The company shares during the quarter ranged from AUD 0.07 to AUD 0.0086 cents. Late in this quarter, the Sujigtei gold project was put on care and maintenance for the winter period. MRC continues to review its ongoing financing options. Continued delays in the Sujigtei operational approval, which includes the permission for cyanide operations, continues to hamper the company moving forward. Resolution No. 154 issued from the 2009 Law for the prohibition of Mineral Exploration in Water Basin Areas and Forest Areas restricted some mining and exploration activities in 254 licensed areas of Mongolia. Gunbileg Gold LLC, the subsidiary of MRC that owns the Sujigtei project, had an exemption, but a second resolution, No. 194, was issued in 2012 to expand upon the area covered. Read more. One matter of confusion is the fact that although the Sujigtei project awaits a decision for approval for the cyanide operations, MRC's Blue Eyes Mine has been granted approval. This processing plant is a common plant for both the Blue Eyes and Sujigtei mine operations, and its approval at Blue Eyes but not Sujigtei is being discussed by government authorities. A review of all the company's licenses was conducted this quarter and the Minerals Authority reconfirmed that all licenses of MRC are in good standing. Source: Mongolian Resources Corp. TDB SIGNS MOU WITH JAPANESE BANK FOR INFORMATION DISSEMINATION Mizuho Corporate Bank Ltd. signed a memorandum of understanding with Trade and Development Bank (TDB) LLC on 29 January. The memorandum aims to enhance Mizuho's ability to provide information to Japanese corporations that are considering expanding their businesses into Mongolia and enhance its service structure for them when they do. Mizuho will offer local currency services, exchange information regarding local financial markets and regulations, and conduct training and seminars. Source: Mizuho Corporate Bank Ltd. MONGOLIA OPPORTUNITIES FUND PARTNERS WITH JAPANESE FINANCIAL GROUP Japan's ORIX Corp. has partnered with the Mongolia Opportunities Fund I, aiming to use the fund as a vehicle to make its first investment in Mongolia. The fund was established in June 2011 with the aim of investing in high-growth sectors of the Mongolian economy such as mining, infrastructure, and export-related areas. Mongolia Opportunities Partners, the fund operator, is comprised of staff with experience in mergers and acquisitions, investment and asset management at international financial institutions and major foreign capital consulting firms. ORIX is aggressively pursuing investment in growth areas in the high-growth Asian market. Through this investment, ORIX aims to create a local network and contribute to the development of the Mongolian economy by capitalizing on its financial services know-how and client base accumulated in Japan. Source: ORIX Corp.
  • 6. AUM CONTRACTED TO RESEARCH EMPLOYMENT OPPORTUNITIES DRIVEN BY OT The American University of Mongolia (AUM) has been awarded a contract by Oyu Tolgoi LLC to study ways the Oyu Tolgoi copper-gold mine can positively influence and contribute to labor support sources, in order both to improve Mongolia's educational landscape while also meeting Oyu Tolgoi's need for Mongolian executives, staff and workers. Oyu Tolgoi recently produced the first ore concentrate at its mine in the south Gobi and, as it moves towards full production later this year, is committed to increasing employment of Mongolians at all levels in the company. The study is being led by Dr. R. Bat-Erdene, the university's executive director, formerly director of the higher education department in Mongolia, to recommend how the mine could help enhance this sector. Source: American University of Mongolia OBG RELEASES MONGOLIA 2013 REPORT The Business Council of Mongolia's (BCM's) media group partner Oxford Business Group (OBG) has released its Mongolia 2013 report. The reports features the country's Foreign Investment Law, which have been the subject of much debate at the political level, affecting the interest from international players in key areas such as infrastructure, capital and expertise. In the report Mongolia's plans to extract investors who can help the country tap its vast quantities of mineral reserves are put under scrutiny. It discusses the challenges the country faces in its endeavors to ride the commodities boom while trying to retain age-old traditions. Detailed analysis of the efforts to resolve issues at the country's two largest mines, Oyu Tolgoi and Tavan Tolgoi, is included, which will be of key interest to prospective investors, together with in-depth coverage of changes to the country's legal, environmental and tax regimes. The report also explores the government's plans to drive through legislative reforms which will pave the way for new public-private partnerships in electricity generation. The country's bid to revive manufacturing through domestic processing is also given wide-ranging coverage. ―This should help stabilize government finances, whilst increasing foreign reserves and also play a part in improving fragile investment confidence,‖ said Regional Editor Paulius Kuncinas. ―The most significant milestone in 2013 remains the launch of commercial production at Rio's copper mine, set to become the largest in the world. Interviews with President Ts. Elbegdorj, Prime Minister N. Altankhuyag, U.S. Secretary of State Hillary Clinton, and Australia's Foreign Affairs Minister Bob Carr are included in the report. Source: Business Mongolia AUM TO OFFER MBA FROM INDIANA UNIVERSITY Indiana University's Kelley School of Business has entered into a partnership with the newly formed American University of Mongolia (AUM) to offer an MBA for global executives beginning in September. A recently signed memorandum of understanding between the two institutions builds on long- running ties between the university and Mongolia. Indiana University is a center of academic expertise in Mongolian Studies, and its Department of Central Eurasian Studies in the College of Arts and Sciences is the sole independent, degree-granting academic unit in the United States, staffed with its own faculty of specialists in the region. ―This new program signifies our commitment to partnering with American University of Mongolia to offer new and innovative business education programs to meet the needs of this dynamic country,‖ said Idalene Kesner, interim dean of the Kelley School and the Frank P. Popoff Chair of Strategic Management. ―The growth that is occurring in Mongolia is exciting, and we are proud to be working to support the economic potential of the country through education.‖ The degree program will be a blend of classes taught on the American University of Mongolia campus in Ulaanbaatar and online instruction. With a focus on growing international opportunities in Mongolia, the curriculum will focus on four themes that emphasize a global managerial
  • 7. perspective. It will include a one-week residency at Indiana University Bloomington and a one-week program at the Washington Campus in Washington, D.C. Source: Newswise CAPITALISTEXPLOITS.AT RELEASES MONGOLIA COUNTRY RESEARCH CapitalistExploits.at has released a comprehensive collection of video interviews, special reports and country research targeting equity and real estate investors. The package, aptly named ―Mongolia: Boots on the Ground‖, is available for purchase as a digital download containing over three hours of video with 13 chief executives, investment bankers, real estate professional and entrepreneurs focused on Mongolia. The package includes USD 1,500 in bonus content, including the R2 Research Mongolia Real Estate Report 2012, the Oxford Business Group Mongolia country report, and Resource Investment Capital's Mongolia 101 report. Video interviews include Christopher de Gruben, Chief Executive Officer of M.A.D. Investment Solutions, Harris Kupperman, Chief Executive Officer of Mongolia Growth Group, Nick Cousyn, Chief Operating Officer of BDSec JSC, and Jim Dwyer, Executive Director of the Business Council of Mongolia (BCM). ―We are proud to be bringing this product to investors looking to deploy their capital into one of, if not the fastest-growing, economies in the planet,‖ said Chris Tell, co-founder of CapitalistExploits.at. Please contact Saruul at saruul@bcmongolia.org or at 317027 on how to purchase the package. Source: CapitalistExploits.at S&P AFFIRMS RATING AND NEGATIVE OUTLOOK FOR WINSWAY Standard & Poor's (S&P) Rating Services said it had affirmed its 'B' long-term corporate credit rating on China-based Winsway Coking Coal Holdings Ltd. The outlook is negative. It also affirmed its ―cnB+‖ long term Greater China regional scale rating on the coking coal supply and logistics provider. At the same time, S&P lowered its issue rating on Winsway's senior unsecured debt to ―B-‖ from ―B,‖ and its Greater China regional scale rating to ―cnB‖ from ―cnB+.‖ All the ratings were removed from CreditWatch, where they were place with negative implications on 21 January. ―We affirmed the corporate credit rating on Winsway because we expect the company's operating performance to improve in the next 12 months after a loss in 2012,‖ said S&P's credit analyst Huma Shi. ―We also anticipate that Winsway can continue to access bank facilities for its short-term financing needs.‖ Source: ETNet DOORS OPEN AT MATERNITY HOSPITAL NO. 1 Construction has finished on the renovations financed by Centerra Gold Inc. to Maternity Hospital No. 1. ―I would like to call this building a palace for mothers and children,‖ said Health Minister N. Udval at the opening ceremony. ―Today we are witnessing a very important historic moment. This is definitely an important event for the health sector of Mongolia.‖ Boroo Gold President John Kazakoff signed a project agreement with former Minister of Health S. Lambaa to provide MNT 10 billion in funding to renovate the hospital, first constructed in 1963. The hospital had not been used for maternity purposes for a long time, said the State Specialized Inspection Agency, as the government lacked the funds to restore it. Project planners developed the project taking examples from hospitals in Korea to construct a hospital that met international standards. The hospital is equipped with an air ventilation and oxygen system and a diesel generator that could supply power within three seconds of a power outage. A new annex was also built that will hold pathology, infant and delivery units. Each of the three units will have separate reception, operating and intensive care units, including four vacuum-sealed operating rooms. ―My son was born in this maternity hospital three years ago,‖ said Kazakoff. ―We paid for not only the building, but also the medical and non-medical equipment.‖ He added, ―We invested into the hospital's construction because the birth of a new person is the greatest treasure in life.‖
  • 8. The new hospital wing will require an additional 200 additional workers, which the Ministry of Health had already approved. Hires will include physicians, pediatricians, pathologists, hygiene specialists, laboratory staff, pharmacists, and pediatric nurses, in addition to a host of maintenance engineers. Source: Ardchilal RIO LOOKS TO BUILD AFTER WRITEDOWNS The message from Jan du Plessis, chairman of Oyu Tolgoi copper-gold mine developer Rio Tinto PLC, following two failed attempts to branch out from Australian iron ore is that the strategy remains unchanged. Putting it into action will now fall to Sam Walsh, the Australian head of iron ore who has been with Rio since 1991. At 63, Walsh has only committed to three years at the helm, reinforcing the impression that his elevation to the top job was a sudden decision. Rio Tinto is forecast to report full-year underlying earnings of USD 9.3 billion, down from a record USD 15.5 billion in 2011. But analysts hope the latest writedowns will give the new chief executive a solid base from which to tackle Rio Tinto's challenges. "It is a big cut to the aluminum business, but brings the carrying value down to where we value the assets," said Rob Clifford, analyst at Deutsche Bank. "We did not expect them to do that in one fell swoop." The writedowns, too, may help Rio Tinto offload its Pacific Aluminum operations, which have been tagged for a sale on a listing for nearly a year. Other loose ends for the new boss include the diamond business, which is earmarked to go. Among Walsh's priorities will be ensuring that Rio's big development project in copper, Oyu Tolgoi in Mongolia, reaches commercial production on schedule in the first half of this year and that political debate in the country about how to secure its fair share from minerals extraction does not endanger further progress. More fundamentally, according to Clifford, shareholders will be looking for a new approach from Rio's top managers after a series of spending blunders, for which the board too must take responsibility. "For a full re-rating of the mining sector, we need to see better capital allocation. The clear message from the Rio board to its team is that you had better not come asking for capital unless you are sure you can show returns," he said. Source: Financial Times ECONOMY MONGOLIA DEBT COSTS RISE AS GOVERNMENT BATTLES RIO TINTO The yield on Mongolia's global sovereign notes rose to the highest since the debt was sold in November as the government battles for control over a mining contract with Rio Tinto plc, the nation's biggest investor. The yield on the 5.125 percent dollar-denominated notes due 2022 climbed 20 basis points this month to 5.85 percent. The rate has jumped 41 basis points, or 0.41 percentage points, in 2013. Mongolia may seek to borrow as much as USD 5 billion from international markets, according to the limit of the medium-term note program the country agreed on with the four banks in November. President Ts. Elbegdorj last week called for Mongolia to have greater control of the Rio Tinto- operated Oyu Tolgoi copper and gold project, which will account for almost a third of the nation's economy once in full production. Rio Tinto has rebuffed at least two attempts in the past 18 months by Mongolia to redraw the investment agreement, which gives the world's second-largest miner a 64 percent stake in the mine, with the government holding the rest. ―The bonds are reflecting investors' shrinking confidence in the direction of the current administration,‖ Travis Hamilton, founder of Singapore-based Khan Investment Management Ltd. Mongolia raised about USD 1.5 billion from the November debt sale that was managed by Bank of America Corp., Deutsche Bank AG, HSBC Holdings PLC and JPMorgan Chase & Co. The notes are rated ―BB-‖ by Standard & Poor's Investors Services, or three steps below investment grade. The
  • 9. yield on state-controlled Development Bank of Mongolia LLC's 5.75 percent bonds due 2017 increased 26 basis points this month to 5.13 percent. Oyu Tolgoi held a shareholder meeting in Mongolia on Thursday, where it was expected to address concerns held by the government. ―It's going to be extremely important to see the outcome of [Thursday's] meeting with Rio Tinto on Oyu Tolgoi,‖ said Hamilton. Favorable pricing at its last bond sale ―gave the government the impression that they could walk on water. But I think they'll get a rude surprise the next time they go to the market unless they get their act together.‖ Source: Bloomberg LEGAL UNCERTAINTY CUTS MINERALS EXPLORATION AND COMPANIES' STOCK PERFORMANCE Altan Dornod Mongol's chief executive presented a poignant case against the proposed draft of the Minerals Law at a session last Friday to discuss the legislation. Focusing on the economic importance of sound legislation within Mongolia's mining industry, B. Bold, who is also a former chair of the Mongolian Stock Exchange (MSE), presented several key arguments, in particular the rate at which minerals exploration has declined in country and the overwhelming dependence on foreign investments into Mongolia and on the Oyu Tolgoi project. This was perpetuated by highlighting the 60 to 70 percent drop in Mongolian mining companies on international exchanges in the past 12 months, a 67 percent drop in the MICC index over the same period, and an overwhelming amount of non-mining listed companies also seeing negative performance. The message was non-political and clear: if the uncertainty regarding foreign investment and mining legislation remains, foreign investment will leave Mongolia. Source: Mongolia Investment Group MSE BOARD MEMBERS APPOINTED New board members of Mongolian Stock Exchange JSC have been appointed in accordance with an order from the State Property Commission (SPC). M. Batgerel, chairman of the Policy and Implementation Department of SPC, was appointed as Board Director. Government board members selected were B. Daajamba, deputy chairman of the Financial Regulatory Commission (FRC); G. Batkhurel, director of the general planning sector at the Development Policy and Strategy Department of the Ministry of Economic Development (MED); B. Bayar, director of Legal Sector Under Public Administration Implementation on Heavy Industry of the Ministry of Industry and Agriculture (MIA). Independent board members selected were D. Dolgormaa, director of sustainable development for social responsibility for Mongolyn Alt (MAK) Group; Ch. Ganbat, executive director of Liberty Partners LLC, and J. Maizorig, general partner of law firm MDS & Associates LLP. Source: Business Mongolia MONGOLIA AUCTIONS MNT 25 BILLION BILLS The Ministry of Finance reported a total of MNT 25 billion sales by auction of 25,000 bills with 12- week maturity. Bids received totaled MNT 67 billion and MNT 25 billion, with a weighted average interest rate of 11.23 percent. Source: Cover Mongolia ENERGY GRID LINKS TO UMNUGOBI The power lines and power-generation substations linking Mandalgobi, Tavan Tolgoi and Oyu Tolgoi were commissioned on 28 January. Energy Minister and MP M. Sonompil was in attendance at an event to observe the importance of bringing energy to Umnugobi Aimag, which has had continuous electrical problems and energy shortages. Sonompil said that future plans include connecting a power line from Tavan Tolgoi to Dalanzadgad Soum, the provincial capital of Umnugobi Aimag. MCS International led the project to bring power to the south Gobi with the installation of 220 kilovolt transmission lines and the substation. Although a six-megawatt thermal power station with equipment from South Korea, India, and Japan was built 12 years ago in Dalanzadgad with international aid largely from South Korea, the generator has experienced frequent breakdowns and technical failures. The substation has reportedly never operated at full capacity.
  • 10. Umnugobi reportedly has a demand for seven to eight megawatts of electricity and is set to grow compared with three to four megawatts on average for the rest of Mongolia's provinces. Source: Business Mongolia CRIME SPIKES AS TSAGAAN SAR NEARS Mongolia has seen a recent rise in crime. The Center for Information and Urgent Management reported 38 cases of theft, six robberies, 21 incidents of violence, 106 traffic accidents, and 14 cases of death between 1 to 4 February. Cases of stolen meat and dairy products from storage containers, apartments balconies and households in ger districts has soared due to the upcoming Mongolian lunar new year celebration, Tsagaan Sar. Police officials have also warned about increased theft from cars, pick pocketing and robbery. Source: Udriin Sonin 85 MM About a century has passed since Mongolia was first introduced to the world of the railway networks. Unfortunately not much has changed since then due to political games. Now there are questions over whether Mongolia should fully adopt the wide rail gauge used by Russia or transition to the more narrow Chinese gauge for more streamlined export to China. The current railroad network accounts for 90 percent of cargo transport in Mongolia. But specialists say the network lacks the capacity to support the ever-growing economy. Government policy calls for ―broad‖ 1,520-millimeter (4 ft., 11 5/6 inch) gauge rather than the ―international‖ gauge of 1,435 millimeters (4 ft., 8 ½ inch), which is also the system adopted by China, the destination for nearly all of Mongolia's mineral exports. Now the government plans to provide USD 55 million from the Development Bank of Mongolia to finance the construction of railway with the broad gauge. The plan will require about 60 percent of the USD 3 billion from a private partner and remaining 40 percent to come from equity financing. According to the plan, repayment would take over nine years after transport began, with the transport of 47 million tons of coking coal and 20 million tons of thermal coal per year. However M. Enksaikhan, the former director of Mongolian Railway has argued for the narrow gauge because it would mean greater efficiency and speed for border crossing. Using China's gauge would mean less time spent unloading and reloading cargo to another train. It would also reduce pollution, he said, as moving the cargo leaves a great deal of coal dust in the air. ―For example,‖ said Enkhsaikhan, ―loading and unloading 20 million tons of coal leaves around 500,000 tons of dust in the air.‖ Despite the cost, the government argues the rail gauge is a matter of national security and a rail link is needed from Mongolia's eastern region and the planned Sainshand industrial complex. For now, that sentiment has taken priority over cost. Source: Mongolian Economy CAPITAL MARKETS DAY SEES 180 NEW INVESTORS OPEN SECURITIES ACCOUNTS Mongolia observed its first Capital Markets Day on 26 January, seeing the emergence of 180 new investors in Ulaanbaatar. Initiated by the Mongolian Stock Exchange, the day is meant to recognize the achievements of organizations such as the Financial Regulatory Committee (FRC), the Securities Clearing House and Central Depository, and Mongolian Association of Securities Dealers, Brokerages and Clearing Banks. More than 500 citizens attended an event to learn more about the securities markets and the services available to them. Following the event, 180 new investors opened securities and clearing accounts. Source: Mongolian Stock Exchange USD 1.25 A DAY LABOR AMID USD 4,000 PURSES STIRS DISCONTENT As companies such as Rio Tinto PLC, Peabody Energy Corp., and Mitsui & Co. plan to keep the mining momentum going by exporting more of Mongolia's USD 1.3 trillion troves of resources, about a fifth of the population of 3 million are getting by on USD 1.25 a day. The gold, copper and coal rush earning the country the nickname ―Minegolia‖ made the nation China's top supplier of coking coal, and spawned sushi bars, USD 3,500-a-night hotel suites and a
  • 11. Bayerische Motoren Werke AG car dealership. In the meantime, Mongolians have flocked to Ulaanbaatar in search of work. ―People are not convinced it's going to help the country to develop,‖ as concepts such as property ownership and land exploitation rights are literally foreign, said Jack Weatherford, best-selling author of Genghis Khan and the Making of the Modern World. Investment has been good for some Mongolians. O. Jambaljamts is chairman of Mongolian Mining Corp. (MMC) and was the country's richest man with a net worth of USD 2.3 billion in 2011, according to rankings by local publication Hero Magazine, though a spokeswoman of MMC denied the accuracy of the report. Former Prime Minister S. Batbold is fifth on Hero's list with USD 1 billion from stakes in Altai Holdings LLC. Number eight is current Foreign Minister. B. Luvsanvandan with USD 800 million from Bodi Group. Mongolia may have between 60,000 and 100,000 subsistence miners, according to Patience Singo, manager of the Swiss state-funded SAM project that aids the workers. Ninja miners outnumber those working in large mines two-to-one and operate in 18 of Mongolia's 21 provinces. They are estimated to support 13 percent of the national population. In rural Mongolia, subsistence miners account for a fifth of the economy, earning an average of USD 176 a month, or 57 percent more than the country's minimum wage. Still, ninja mining is a one-way street that doesn't lead to better jobs with bigger companies that rely on machinery for mining, Singo, a mining engineer and a Zimbabwe native, said. ―Most of them don't have the necessary skills to switch over,‖ he said. Source: Bloomberg FOUR PITFALLS TO MONGOLIA‟S ASTONISHING GROWTH Despite Mongolia's rise to the world's fifth fastest-growing economy, with a 12.3 percent gross domestic product growth rate in 2012 that would make today's anemic Western economies salivate, several recent reports indicate that Mongolia's economic success story may turn out not to be all that it seems. Here are four ways its meteoric growth could go awry: 1. The ninjas: Though they sound like some sort of ore-hunting SWAT team, the herders who have recently sought their fortunes in freelance mining are actually a bit of a drag on the mining economy. They do not pay taxes while contributing to prostitution, gambling and other illegal activities. Also herders who resisted mining complain that mining companies have undermined their way of life, forcing them to migrate. 2. Dependence on China: China's demand for Mongolian minerals has already slumped somewhat, and most analysts say Mongolia needs to diversify its economy away from just one main trading partner. 3. Mongolia's "resource nationalists" have made it difficult for mining projects to get off the ground. Nationalist policymakers worried about foreign influence over Mongolia's resources and want to amend the agreement for the Oyu Tolgoi copper mine, so that Mongolia gets a bigger share. The massive Tavan Tolgoi mine has also suffered a number of setbacks, including halted exports to China. 4. Mongolia is still pretty corrupt: Transparency International ranks Mongolia as the 94th most corrupt of 176—not as bad as 120th most corrupt in 2011, but still not great. Either way, this is hardly the sort of environment where dramatic, sudden economic growth can be expected to improve quality of life for citizens. Source: Washington Post CHINALCO MINING IPO FLOPS Mining has not been the flavor of the month for investors, with big writedowns from Oyu Tolgoi copper mine developer Rio Tinto PLC and Anglo American PLC. But it is still a shock to witness the poor stock market debut of Chinalco Mining Corp. International, the copper company spun out of state-run Chinalco, China's biggest aluminum group. Chinalco has interests in Mongolia‘s resources but has as of late had difficulty, with subsidiary Aluminum Corp. of China‘s (Chalco‘s) blocked proposal to purchase large stakes in SouthGobi Resources Ltd. and Winsway Coking Coal Holdings
  • 12. Ltd. and most recently in a contract squabble over an USD 350 million offtake agreement with Erdenes Tavan Tolgoi LLC. The shares slumped by up to 11 percent in Hong Kong on Thursday, even though the initial public offering (IPO) was priced in the middle of the indicative range and cornerstone investors bought nearly half the USD 400 million offering. The stock later recovered, but still closed 6.3 percent down. Clearly the recent equities rally has not restored investors' appetites for IPOs. The banks behind the IPO were a bit unlucky in their timing, as the market debut came just as investors were absorbing the latest news from the U.S. Federal Reserve, which said American economic growth had stalled in recent months. That raised worries about demand for commodities. Chinalco plans to use the IPO funds to develop a copper-molybdenum silver mine in Peru—a somewhat unusual project for a company listed in Hong Kong. But it will still do little to encourage future IPOs. According to Bloomberg, companies raised USD 8 billion through IPOs in Hong Kong last year, the lowest since 2003 and down 63 percent from 2011. Source: Financial Times CHINA DATA POINTS TO MODERATE RECOVERY You might be forgiven for thinking that in China, where most of Mongolia‘s mining resources are delivered, PMI stands for ―purposefully misleading indicator.‖ On Friday, the government's official purchasing managers' index (PMI) came in at 50.4 for January, below expectations and down from 50.6 in December—pointing to a tepid recovery. About 45 minutes later, the unofficial HSNC PMI came in at 52.3, up from 51.1, suggesting accelerating growth. In fact, two surveys have much in common. Both are slightly above the 50 mark that separates growth from contraction, pointing to a continued moderate recovery in China's manufacturing sector. Both also show particular strength in the new-orders sub-index. The official PMI showed new orders at their strongest level since May 2012 and the HSBC index showed them rising at the sharpest pace in two years. That's a hopeful sign for continued growth in output. Other data points in the same direction. A business-sentiment survey from Market News International indicates improving conditions in January, also with new orders strengthening. Another positive sign is that steel prices on the Shanghai Futures Exchange edged up—extending a recovery that started in September. Investors are optimistic. The Shanghai Composite Index gained 5.1 percent for the month as equity markets bet on higher profits to come. The reason the two PMI surveys differ is likely that they rely on different samples and take different approaches to adjusting the data for seasonal effects. A sharp increase in the sample size for the official survey—to 3,000 businesses, from 820 in January--should improve its accuracy. Chinese New Year, which fell in January last year but takes place in February this year, also complicates the picture. Source: Wall Street Journal POLITICS PRESIDENT MAKES PUBLIC DEMANDS OF OT INVESTORS President Ts. Elbegdorj made demands to the investors of the Oyu Tolgoi copper-gold project at an open meeting of Parliament last Friday, saying Mongolians had to take the project back in their hands. Elbegdorj took issue with the ever-growing spending costs of the project. The Mongolian government has yet to approve the spending plan for Oyu Tolgoi for 2013 as spending has exceeded Turquoise Hill Resources Ltd.'s projections. He said the company requested and additional USD 2 billion, a 47 percent increase from the original prediction of USD 5.1 billion. ―The initial estimate for the underground mine's financing was USD 14.6 billion, but the company is planning to spend USD 24.4 billion,‖ said the president. He added, ―The investment agreement is that the initial investment will be used to produce ore concentrate and the commercial profit will be used for operational expenses... The time has come for the Mongolian government to take Oyu Tolgoi matters into its own hands.‖
  • 13. Elbegdorj said the government was not made aware of these facts, despite its position as a 34 percent stakeholder in the project. He demanded a Mongolian representative sit on the managing board and an audit of the project, saying Turquoise Hill delays its reports for months at a time. The government approved USD 153 million for management expenses on 31 January 2013, he said, by that time having spent USD 3.2 billion in total. The president also took issue with management costs, which he said comprised 6 percent of the total investment and was 2.5 times higher than the international rate. He said this was unacceptable as Mongolia comparatively only receives 5 percent in royalties for minerals produced from the project. He also pushed for greater participation from Mongolian companies to provide support to the project and transactions via Mongolia's banks. Furthermore he noted that Oyu Tolgoi has still yet to meet the 90 percent mark for Mongolian employees at Oyu Tolgoi and foreign wages almost double that of Mongolian workers. The investment agreement calls for 90 percent Mongolian personnel after development begins, with commercial production slated to begin by June this year. ―We must learn from the mistakes of Oyu Tolgoi,‖ said the president. ―Mongolia has laws and they must be upheld. They must realize that they cannot just take our wealth and go. They must realize that they are investing in a country with laws.‖ Source: UB Post CABINET ORDERS INSPECTION LAB FOR OT COPPER CONCENTRATOR The Cabinet of Ministries at a regular meeting ordered an independent inspection laboratory for the Oyu Tolgoi copper concentrator. The laboratory would perform testing under the lead of the Central Geological Laboratory to reduce costs and redundant services. Source: Business Mongolia MINERS AIR GRIEVANCES ON DRAFT MINERALS LAW AT OPEN DISCUSSION Some 150 members of the mining industry and concerned members of the business sector attended the open discussion hosted by the Mongolian National Mining Association (MNMA) and the Business Council of Mongolia (BCM) last Friday to listen to analysis of the current draft law and air their own concerns. Speakers were largely critical of the vagueness of the law and how little it explained how the law would be implemented. Though people were divided on how much authority the government needed over the industry, there was some consensus that the law was incomplete and would make it impossible for mining companies—foreign and domestic—to remain profitable in Mongolia. ―The government is making it impossible for a company to start work,‖ said E. Batmunkh, Executive Manager of Magma Mining. ―Terms have been confusing, some new ones invented. The draft law says there is no need for strategic deposits, but its call for strategic minerals—what is this?‖ he added. Last Friday's meeting followed an open hearing between the government, civil organizations, academics and the private sector where stakeholders had the opportunity to share their thoughts on the law with the working group from the Office of the President that drafted it. That first meeting was pre-empted by an open letter from BCM to the President's Office that included a point-by-point critique of the law. According to the event's moderator, MNMA Executive Director N. Algaa, President's Office head P. Tsagaan divided the letter into seven parts and distributed them among his working group for careful study and analysis. Brian Fisher of BAEconomics is scheduled for March to present quantitative models of how the Mongolian economy would be impacted. Though the current form of the bill is admittedly unacceptable to many who work in the mining industry, some form of the law must appear to keep the gears turning in the Mongolian minerals extraction and exploration sector. Without it, said BCM Executive Director Jim Dwyer, most all of Mongolia‘s mining operations would cease, with some presumed exceptions for the Tavan Tolgoi coking coal mine, the Oyu Tolgoi copper-gold mine, the Erdenet copper mine, and a handful of other large mines. Source: BCM
  • 14. FORMER MRA HEAD SENTENCED TO 6 1/2 YEARS Former director of the Mineral Resource Authority, D. Batkhuyag, and three other officials were found guilty of abusing their authority to illegally issue 106 mineral licenses. The judge found the former officials guilty of renewing three licenses to SouthGobi Sands LLC and transferring a license for a territory of 72,499 hectares of land in Umnugobi with a reported 42.9 million tons of coal to a company run by friends. Batkhuyag was sentenced to 6 1/2 years in prison and has been barred from ever working in public work for three years. The government has revoked 107 licenses related to the case. Source: Udriin Sonin PARLIAMENT NO LONGER TO PURSUE PRIVATIZATION OF MIAT Parliament has decided not to move forward with a motion to privatize MIAT Mongolian Airlines following the recent embezzling scheme allegedly perpetuated by the company's management. During the discussion of the company, Parliament approved motions to double flight frequency and the number of routes by 2016 and to focus on making Mongolia a transit destination between Russia and China. They also approved the motion for special flight services for use by government officials, to begin in 2014. Parliament hopes for the new airport now being planned at Zuun Mod Soum will become a central destination point for north Asian flight passengers and freight. Legislators have dropped the proposition of privatizing the state-owned airline, however, given the recent scandal where upper management stole millions. Source: Zuunii Medee MP GANBAATAR SUBMITS NEW LABOR LAW MP S. Ganbaatar said a revised Labor Law is ready for submission for the spring session of Parliament. ―The market economy has many side effects for people and nature. The Labor Law in part protects them.‖ Ganbaatar noted the thousands of young people looking for work in the private sector and the growing disparity between rich and poor in Mongolia. He specifically pointed to Oyu Tolgoi LLC, saying the gap between a Mongolian and foreign worker was huge. He said while a Mongolia worker might take USD 1,500, a foreign worker might take USD 30,000 for the same task. ―This unfair treatment should not exist and we will demand a change,‖ he said. The new law would give workers the right to negotiate and create mutual labor contracts. He cited the case of his sister, S. Gantuya, who is suing Oyu Tolgoi for worker discrimination for this reason. He further remarked that the Mongolian Labor Union could win 93 percent of the cases where workers had been illegally fired. Source: Zuunii Medee BILL ALLOWS CITIZENS TO SUBMIT DRAFT LEGISLATION TO PARLIAMENT MP J. Batzandan has initiated a bill that would permit citizens to submit bills to Parliament. ―Citizens write draft bills about their social issues. However, government officials do not accept them because they hurt officials' interests.‖ The bill would allow a citizen to submit any legislation that is able to gather 100,000 signatures in support to Parliament from 13 of Mongolia's 21 provinces. Source: Udriin Sonin PARLIAMENT'S FALL SESSION CONCLUDES FRIDAY A spokesperson of Parliament said the Autumn Plenary Session would conclude on 8 February. D. Enkhtuya, the head of Parliament‘s press and public relations department, recounted the approved motions during the last session of Parliament, including the formation of the Mining Development Acting Committee, ambassador appointments, and approval for appointments to the National Human Rights Commission. Parliament Speaker Z. Enkhbold is expected to deliver a closing speech summarizing Parliament's achievements in the new government's first session and issues scheduled for the Spring Plenary Session. Source: Info Mongolia
  • 15. MONGOLIA BANS PERCENTAGE OF ACETIC ACID IN FOODS The government has added acetic acid to its list of prohibited chemicals for use in Mongolia. The Ministry of Environment and Green Development and Ministry of Health announced a ban on the use of more than 25 percent concentrate acetic acid of up to 500 milliliters for food consumption beginning 1 January 2013. According to a report by the World Health Organization (WHO), food poisoning and chemical misuse is a major cause for health disorders among the world population. Deaths from acute food poisoning and the misuse of chemicals have increased in Mongolia. Acute poisoning from chemicals is listed as the fifth-highest reason for death in the country. The misuse of acetic acid with concentrates of 50 to 80 percent is reportedly most frequently related to incidents. It is also often used as a means for committing suicide. A total of 4,436 incidents of chemical poisoning were registered at the Emergency Center between 2003 and 2011. Over 5011 of those incidents were caused by acetic acid acute poisoning. Every year 50 to 60 people suffer from acetic acid poisoning and three to nine die because of it. A total of 479 children were brought to the Center for Maternal and Child Health over the last decade. Source: News.mn GOVERNMENT OFFICIALS TRAVEL TO RUSSIA TO INQUIRE ON PRICE HIKES The deputy minister of mining and other state officials visited Russia to discuss the recent rises in fuel prices in Russia. Mongolian officials met with members of Russia's Ministry of Russia and oil importer Rosneft to discuss Russia's decision to increasing the export tax to Mongolia, while taxes on exports elsewhere have fallen by up to 40 percent over the past four months. According to statistics from the Central Bank of Russia, Rosneft's price for fuel to Mongolia is USD 300 more than to other countries. Officials hope to find an explanation for Russia‘s decision to target Mongolia for higher prices, renegotiate its agreement with Russia on the purchase of fuel products and stabilize price for the next six months, and to purchase two million tons of crude oil for Mongolia's planned oil refinery in Darkhan. Source: News.mn FOREIGN MINISTRY DENIES RUMORED OF SOLD EMBASSY PROPERTY IN MOSCOW A Foreign Affairs Ministry official denied reports that Mongolia's embassy building in Moscow had been sold. ―The building still belongs to Mongolia. It has not been sold,‖ said B. Mandakhbayar, director of the Department of Law and Treaty. He said, ―The Mongolian Embassy to Russia owns a number of properties in Moscow. The building that is claimed to be sold was formerly the Trade Mission house whose current address at Spasoleskovskii Pereulok 7/1 is being rented for 10 years with permission from the Ministry of Foreign Affairs of Mongolia and State Property Committee in 2007 to 2008.‖ A rumor that the Mongolian Embassy in Moscow might have been sold spread just days after names of the new ambassadors from Mongolia to other countries have been approved by Parliament according to local newspaper Mongol News. The newspaper said the 10-story building of the Mongolian Embassy in Moscow might have been sold to Chechnya. An unconfirmed source said that the former Ambassador L. Khangai sold the embassy building during his term from 2005 to 2009. The former ambassador, diplomats and their families used to stay at the Embassy building II. Mongolian Embassy building II is located at the center of Moscow near to the U.S. Embassy. Mongolia used to own the whole building, but now the Mongolian Consulate occupies only a few offices in the building. Mandakhbayar added that the move to rent the property was legal by under both countries' laws, and the decision was made because of the small number of diplomats operating there. Source: News.mn SOUTHGOBI SANDS PRESIDENT CALLS FOR HELP FROM U.S. SouthGobi Sands LLC's president has asked for help from the congressional delegation in his home state of Minnesota with an exit ban imposed on him by the Mongolian government. Justin Kapla, who is also executive director at SouthGobi Sands and a board member of the Business Council of Mongolia, asked delegation members for assistance in lifting his travel ban, which he said
  • 16. was imposed because investigators considered him a witness in a corruption investigation of government officials involving the transfer of some of his company's minerals exploration licenses. ―They're all working on it. All three of their offices are great,‖ said Justin's father, William Kapla, speaking of the assistance U.S. government offices had provided. He also said the U.S. Embassy has been talking to Mongolian officials. Kapla wrote that the events in question happened well before he went to work for SouthGobi Sands. He said the Mongolian agency conducting the investigation, the Independent Authority Against Corruption (IAAC), has acknowledged that but told him he could not leave because it would need to hold someone responsible if the investigation finds any wrongdoing by the company. Kapla, 39, grew up in Elk River, Minneapolis, is married to a Mongolian woman and has two children, all of whom are with him. He is reportedly free to work and move around Mongolia but cannot leave. Last year, following a strong reaction from government opposing the proposed takeover of parent company SouthGobi Resources Ltd. by Aluminum Corp. of China Ltd. (Chalco), the government's Mineral Resources Authority (MRA) and its former chairman, D. Batkhuyag, an advisor to a former prime minister whose party lost power in the June election. Batkhuyag was accused of bribery and other corruption, and convicted this week and sentenced to six and a half years in prison. Among Batkhuyag's misdeeds, the authority alleged, were dealings with SouthGobi Sands. Five of the company's licenses were to have been suspended because the company failed to spend sufficient funds exploring the areas, but instead Batkhuyag's office returned most of the licenses to SouthGobi and transferred one to a private Mongolian company controlled by friends. Kapla's case was first reported by Jon Springer, a freelance journalist and financial blogger. Source: Associated Press 67-YEAR OLD MONGOLIAN WOMAN SENTENCED TO DEATH IN CHINA FOR DRUG SMUGGLING A 67-year old Mongolian woman was sentenced to death for attempting to smuggle an undisclosed amount of marijuana and drugs in China. The woman claimed she was carrying two bags for another person who asked her to do so at customs at the airport when she was arrested by Chinese custom officials last December. ―I was not aware that the bag contained marijuana and drugs. I was used as a victim for smuggling,‖ she said. The convicted woman first traveled to Beijing for the 2008 Olympic Games and visit many times afterwards for business, she said. The judge sentenced the woman to death under the belief she was involved with a drug smuggling ring. The Mongolian Consulate in China has contacted her family to inform them of the news. Source: News.mn MONGOLIA DOESN‟T HAVE RESOURCE NATIONALISM – FOR NOW With the increased level of interest the world has taken in Mongolia, given its blistering economic growth rate, resource nationalism is mentioned more and more often as a threat. But lumping different streams of slogans and platforms together into a single category suggests there is a coherent ideology that unites them. This is not the case. Mineral resources in Mongolia are afforded constitutional protection. Although this is not an unusual attitude, Mongolia's mineral boom is often portrayed abroad as a Hugo Chavez-like nationalism that ignores the important role that foreign investors can play and should play in maximizing benefits to local populations. At present, there is no political movement or anti-mining party that espouses a coherent ideology of autarky on the basis of the exploitation of natural resources in Mongolia. A massive flow of in-bound investment gives Mongolian decision makers very little time and opportunity for reasoned and careful choices. Mongolia was hurt in the 1990s by the shock therapy policies advised by international institutions. Amplified by the effects of calamitous winters that followed, most Mongolians concluded that following international advice provided them with few benefits. After 2005, the prospect of development on the basis of mineral wealth suddenly emerged as tantalizing possibility. Mongolians are now clamoring for immediate benefits, partly rooted in promises that politicians echoed on the basis of foreign investor claims. Mongolian decision makers, by contrast, have
  • 17. neither the information nor the experience on which to base crucial decisions. It is easy for opposition politicians and even members of the government to claim that the Oyu Tolgoi agreement benefits foreign investors more than Mongolians. These voices do not offer specific alternative arrangements other than to demand a greater share in ownership, but their claims are not rooted in any kind of consistent resource nationalism. Threats by foreign investors, including the currently rumored threat by Rio Tinto to suspend operations, are more likely to give rise to true resource nationalism than to force populist politicians to abandon their ad-hoc positions and statements. Julian Dierkes is an associate professor at the University of British Columbia's Institute of Asian Research. Source: Financial Times CHINA, MONGOLIA SEEK TO MEND TRADE DIFFERENCES The kabuki-style dance of trade partners Mongolia and China began again in earnest when on 15 January the third meeting of the Mongolia-China Cooperation Commission on Mineral Resources and Energy met in Ulaanbaatar. Although China and Mongolia see great benefits in continuing their vibrant trade in minerals, each side has a different vision on how to proceed. This has led to a tense relationship that often, mistakenly, is described by global financial commentators as resource nationalist sentiment in Parliament and the populace. Two of the prime goals of the Mongolian side during the consultations were to renegotiate upwards the prices the Chinese pay for Mongolian raw minerals and lessen transit tariffs for Mongolian shipments destined for third nations such as South Korea and Japan. Mongolia raised the issue of China‘s mining operations failing to obey Mongolian environmental and safety laws. They demanded the employment of more Mongolian workers and discussed plans for construction of mineral processing plants in Mongolia. China pressed for more stability in the legal environment for bilateral trade and foreign investment. Zhang also suggested that their countries focus on developing large mining projects and constructing railway and coal transport border infrastructure. The Chinese government has been very circumspect in commenting on recent trade disputes with Mongolia. This is far different from the 1990s when rail freight traffic often was severed to punish Mongolian actions or influence decision making. This change in strategy may reflect the realization that a hard-line approach with Mongolia was counterproductive and that Inner Mongolian factories have become more dependent on Mongolian minerals. The visit by Wu Banggu, chairman of the Standing Committee of the National People's Congress, is another sign that Sino-Mongolian relations will continue to be played out in Asia at the very highest level as 2013 progresses. The lack of clarity of how bilateral mineral trade will proceed, however, reflects both Mongolian domestic political sensitivity over Chinese predominance among foreign investors and a growing Mongolian desire to develop mineral deposits more slowly under their own auspices. Author Alicia Campi has a PhD in Mongolian Studies, was involved in the preliminary negotiations to establish bilateral relations in the 1980s, and served as a diplomat in Ulaanbaatar. She has a Mongolian consultancy company (US-Mongolia Advisory Group), and writes and speaks extensively on Mongolian issues. Source: Asia Times AT ODDS WITH MONGOLIA‟S MODERNITY, A POET SEEKS ANOTHER WAY G. Mend-Ooyo is considered Mongolia''s poet laureate, and an important figure in the fight to retain its traditional culture. As the fast-growing economy puts its modernization into overdrive and draws its population away from its nomadic roots, he has his work cut out for him. ―It is a big shame for us that the country is so focused on mining, to the detriment of herders and the traditional ways of life,‖ said Mend-Ooyo, sitting behind his cluttered desk in an old Soviet building in Ulaanbaatar. ―It's really difficult to bring back lost culture once it's gone.‖ Born into a nomadic family, in youth he moved across the steppe. Herding goats and sheep throughout the day and listening to his elders play traditional music on horse-head fiddles at night.
  • 18. Riding horses since the age of three, Mend-Ooyo grew up when Mongolia was under Russian control. His father taught him the indigenous Mongolia script by drawing it in the snow that fell outside their ger during the long winter months. The family prayed nightly in secret, hiding their Buddhist statues in a box during the day. In the 1970s, Mend-Ooyo moved to Ulaanbaatar for university and formed the underground literary group Fire, and in the 1980s he published some of his poetry after it was vetted by officials. When single-party communist rule ended in 1990, he began publishing more of his work, including the writing that espoused his pastoral roots and eventually became his best-known poems. Mend-Ooyo is now channeling his energy into rethinking the modern Mongolian way of life. He envisions a 21st-century nomadic community in which schools, health care, and markets move with the people, allowing them to maintain their mobility while providing some of the benefits of contemporary society. He is starting small, beginning in his home province some 600 kilometers from Ulaanbaatar where he writes in the summer and where much of his family still lives and herds. There, he is discussing his plans with others in the community, as well as experts who can advise on ways to realize it. ―It is my dream to build it,‖ he said. Source: Wall Street Journal _______________________________________________________________________________________________ NEW MONGOLIAN LAWS The following laws, amendments and addenda to laws were published in the latest weekly Government bulletin. Unless otherwise decided by Parliament, they will take effect ten (10) days after publication. Date Laws 01.02.2013 Law on Bank Deposit Insurance Amendments and Addendum to Law on Central Bank /Mongolbank/ Amendments and Addendum to Law on Bank Amendments and Addendum to Law on Citizen Amendments and Addendum to Law on Insurance Amendments and Addendum to Law on Corporate Income Taxation Amendments to Law on Government and Local Property Law on Abiding the Package of Laws on Justice Amendments and Addendum to Law on Mongolian Justice Amendments and Addendum to Law on Judicial Administration Amendments and Addendum to Law on Judge's Legal Situation Amendments and Addendum to Law on Reconciliation Amendments to Law on Legal Situation of Judicial Citizen's Representative Amendments and Addendum to Law on Lawyer's Legal Situation Please visit BCM's website, Legislative Working Group, for a summary of new Mongolian laws. BCM members who wish to access complete versions of the laws and regulations in Mongolian language are welcome to email the BCM office: info@bcmongolia.org.
  • 20. ANNOUNCEMENTS “COAL MONGOLIA-2013” THE THIRD COAL INVESTOR‟S INTERNATIONAL CONFERENCE AND EXHIBITION AGENDA IS NOW AVAILABLE Organized by Ministry of Mining and Mining.mn the third Coal Mongolia 2013 international conference and exhibition will be held from 21-22 February at the SS Convention Center. At this time conference programmed seven parts. Part 1 is ―COAL MARKET AND MONGOLIA‘S COMPETITIVENESS‖ Part 2 is ―MONGOLIAN BUSINESS ENVIRONMENT FOR COAL MINERS‖ Part 3 is ―COAL MARKET OUTLOOK‖ Part 4 is ―ENVIRONMENT AND SOCIAL ISSUES-HOW MONGOLIA EFFECTED BY COAL MINING‖ Part 5 is ―COAL MINING INFRASTRUCTURE-BRINGING BEST PRACTICE‖ Part 6 is ―INVESTMENT PROJECTS AND NEW TECHNOLOGIES‖ Part 7 is ―SECTOR LEADER DISCUSSIONS‖ And also conference featured speakers and panelists from the mining sector leaders. Such as: GANKHUYAG Davaajav, Minister of Mining, OYUN Sanjaasuren, Minister of Environment and Green Environment BATTSENGEL Gotov, CEO and Executive Director of Mongolian Mining Corporation NARANBAATAR Lundeg, President of Glogex Holding. As usual, BCM is supporting this event and members will get a 10% discount for registration. Please contact Saruul at saruul@bcmongolia.org or 317027 to get a special discount code. And download the agenda, log on http://www.coalmongolia.mn/index.php/conferene/download- agenda Contact us: Tel: 976+70115590; Email: info@coalmongolia.mn. ____________________________________________________________________________ MINER & SUPPLIER CONFERENCE, 14-15 MARCH, ULAANBAATAR The Third Annual Miner & Supplier Conference will be held at Chinggis Khan Hotel from 14 to 15 March. BCM members will receive a 10 percent discount for registration. This year the forum will be organized under the slogan ―Maximizing Mining Capabilities with Effective Procurement Strategies.‖ It several goals include improving contributions to society and the national economy, promoting environmentally friendly products and technology and increasing business coherence between suppliers and mining businessmen. Contact Saruul at saruul@bcmongolia.org or at 317027 for a special discount code. For more information visit minerandsupplier.com. ____________________________________________________________________________ MINES AND MONEY HONG KONG, 18-22 MARCH Mines and Money Hong Kong is where mining companies from around the world come to raise capital in Asia and meet with investors from Hong Kong and mainland China. Cementing its position as a major fixture on the global mining investment circuit, Mines and Money Hong Kong 2013 will bring together over 3500 institutional investors, mining entrepreneurs, brokers and investment analysts for five days of high-value networking, investment analysis and deal- making, from 18-22 March. Click here to read delegate feedback on the 2012 event and learn why the industry views Mines and Money Hong Kong as a ―must-attend‖ event.
  • 21. The exhibition floorplan for Mines and Money Hong Kong 2013 is already filling up fast – click here to see the list of mining companies already signed up to showcase their projects and investment opportunities at the event. Bringing together more investors and investment opportunities than ever before, Mines and Money Hong Kong 2013 is an event you will benefit from attending. What‟s new in 2013?  Enhanced pre-event networking to facilitate meeting arrangement More in-show meeting rooms to facilitate one-2-one meetings onsite – (sold out in 2012)  Extended exhibition toprovide space for 320+ mining companies to showcase their projects and growth prospects – (sold out in 2012)  Larger venue for the black tie Mines and Money Hong Kong 2013 Asia Mining Awards Gala Dinner– (sold out in 2012)  Dedicated investor invitation team to ensure maximum investor attendance Mines and Money Hong Kong will also provide…  A high-level conference covering the most relevant topics for your business  Leading international speakers from across the mining and investment sectors  Project spotlight presentations showcasing a wide array of mining investment opportunities  Superb networking opportunities with decision-makers at the highest level  A bustling exhibition offering business opportunities at every turn  The largest gathering of investors focused on the mining sector in the Asia-Pacific region As usual, BCM is supporting this event and members will get 15% discount for registration. ____________________________________________________________________________ MONGOLIA INVESTMENT SUMMIT 2013, APRIL 16-18, LONDON Business Council of Mongolia members are invited to attend the Mongolia Investment Summit London 2013 and receive a 15 percent discount on their registration fee. With significant amounts of investment in Mongolia traditionally coming from Asia there are new opportunities to be explored in the Western Hemisphere. Investor interest is high from the west and fund managers, private investors and financiers want to gain exposure to Mongolian growth. Mongolia Investment Summit London in April will provide an important opportunity to meet these investors, raise the profile of Mongolia and promote your business. The event provides an excellent opportunity to meet with major investors, mining groups, government officials and real estate specialists to identify new business partners. At the event, the views on the country will be discussed by investors from companies such as Barclays Natural Resource Investments, HSBC Global Asset Management, Collabrium Capital and more. The event provides an opportunity not to be missed. Enter the discount code “Business-Council-Mongolia-Special” when you register to receive the early bird discount plus an additional 15percent off. ____________________________________________________________________________ THIRD ANNUAL RISK FORUM, 1 MAY, ULAANBAATAR The third annual Risk Forum of Mongolia will be held on 1 May 2013 in Ulaanbaatar. This is the largest risk event in Mongolia, co-organized by the Business Council of Mongolia and Mandal General Insurance. The Risk Forum will provide the most comprehensive overview of risks that Mongolia faces today and the status of risk management all under one roof. Risk management techniques and tools will be shared and best practices promoted across industries. Last year, the event had attracted over 250 representatives of Mongolia's top corporations and government agencies and resulted in the formation of Risk Institute of Mongolia. This year, the expert speakers will be address topics concerning Macro Risks, Business Risks, and Community Risks. For more information, visit RiskForum.mn. ____________________________________________________________________________
  • 22. “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‟S MINING SUPPLY CHAIN DATABASE 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. As of December 31, suppliers registered on the database totaled 1,405. During 2012, 251 new supplier entities joined the Database and 236 prior supplier registrants updated their company profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted. We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain Database. Please visit here for registration—FREE! If you have any questions regarding the database, please contact Undral at undral@bcmongolia.org or 317027. ____________________________________________________________________________ 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. __________________________________________________________ ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟, „PHOTO GALLERY‟ On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available. Note the presentation by Bold Baatar, CEO of Altan Dornod Mongol, “Mongolian Mining Investment Environment” at the Mining Industry Open Discussion on February 1, 2013, at Kempinski Khan Palace Hotel. The following 3 presentations were added from the BCM 28 January monthly meeting: Dr. Katsuhide Nagayama, JICA Team Leader, JICA Project Team – ―The UB-Metro toward a world competitive city - Ulaanbaatar‖  Chris Adsett, Chief Executive Officer, Techenomics Mongolia – ―Importance of Oil Analysis to Industry‖ Mandar Jayawant, Managing Director, Mongolian Opportunities Fund – ―The Value of Private Equity for Mongolian Companies‖ Please also note 25 presentations from the Mongolian Investment Summit 2012 on 30-31 October in Hong Kong; recent postings from BCM‘s 11 December, 5 November and 24 September monthly meetings; and 9 presentations from Discover Mongolia 2012.
  • 23. The ―Mongolia Reports‖ section includes the ―2013 Mongolia Investment Climate Statement‖ by the Economic and Commercial Section of the U.S. Embassy; ―How Mongolia will perform in 2013?‖ by Mandal Asset Management; ―Mongolia Business Owner and CFO Survey result‖ 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. 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. We have now 922 fans on our Facebook fans page, 1,090 connections on LinkedIn network, and 593 followers 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. __________________________________________________________ BCM WORKING GROUP MEETINGS The BCM Education Working Group met on Tuesday, February 5, with 11 members attending. Saha Meyanathan/DAS/, Robin Charpentier/AUM/ moderated the session. New Member: Mitsuaki Toyoda, Gereltuya Tsegmid /Save the Children/was welcomed. Speakers and topics were: -Government Plan in the Higher Education Sector. Baterdene R. /Chair, Ministry of Education Working Group on Higher Education; CEO, American University of Mongolia. -Update of American University of Mongolia activities- Ms Robin Charpentier / Director, Academic Programs, American University of Mongolia/
  • 24. -BCM Resource Pool of Consultants in Higher Education- Ms Robin Charpentier./Director, Academic programs, American University Mongolia/ -Update on TVET Partner Consultative Committee Meetings-Dr Kern Von Hagen /Manager, Pipeline Talent OT/ _____________________________________________________________ The BCM Capital Markets Working Group met on Thursday, February 7, with 12 members attending. Howard Lambert /ING Bank/, Nick Cousyn /BDSec/ co-chairs, moderated the session. New Member: Dale Choi /Origo/ was welcomed. Speakers and topics were: -Road show in USA. -Nick Cousyn /BCSec, Chief Operating Officer/ -MoF bond auctions that are managed by the Central Bank.-Howard Lambert /Head of Corporate and Investment Banking, ING Bank Mongolia/ -Update on draft Minerals Law -Jim Dwyer /Executive Director, Business Council of Mongolia/ Next meeting: 11th of April 2013 at BPI meeting room 12th floor Express Tower Please contact: erka@bcmongolia.org _______________________________________________________________________________ ECONOMIC INDICATORS
  • 25. 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] December 31, 2012 *14.0% [source: NSOM] *Year-over-year (y-o-y), nationwide Note: 14.2% y-o-y, Ulaanbaatar city, December 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] January 25, 2013 12.50% [source: Mongol Bank]
  • 26. CURRENCY RATES – February 7, 2013 Currency Name Currency Rate US dollar USD 1,391.63 Euro EUR 1,882.81 Japanese yen JPY 14.84 British pound GBP 2,179.78 Hong Kong dollar HKD 179.60 Chinese Yuan CNY 223.24 Russian Ruble RUB 46.32 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.