BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 273 – May 10, 2013

NEWS HIGHLIGHTS:

Business

Rio firming up USD 2.5 billion financing for OT;

Rio Tinto expects Government approval to ship copper in weeks;

Oyu Tolgoi appoints new Executive Committee members;

Erdenes TT offers one-year contract for West Tsankhi coal field;

TT tender to help secure new customers;

Erdenes TT holds USD 257 million in total debt, says Mining minister;

MMC to get USD 59 million compensation for rail pact;

Aspire appoints railway engineer partner;

Haranga Resources ups resource at Selenge project;

United Tractors keen on Mongolian coal;

Hitachi, SMBC ink Mongolia accord;

Government remains silent on Centerra’s Gatsuurt project;

Skytel expands mobile access and plans 4G roll-out;

Tulga delisted by FRC from MSE;

Nearly half of all chickens die at major poultry, egg producer's farm;

Alaska professors to help create AUM's engineering school;

Berkh Uul makes appointments as it relaunches Delgerkhaan mine;

Guildford appoints non-executive director;

GE adds energy storage to its Brilliant wind energy turbine.

Economy

Tugrug tumbles as confidence in Mongolian economy wavers;

Meat prices remain high despite fall in inflation;

74 forest fires reported in 2013;

Mongolia seeks to rebuild agriculture to combat malnutrition trends;

Commodities hedge fund industry is bleeding money;

China coking coal price drops;

China’s economy unexpectedly stumbles again on weak export data;

Kazakhstan leads Central Asia in trade to China;

Regional Economic Outlook for Asia and Pacific, April 2013.

Politics

Elbegdorj leads in re-election bid, poll shows;

DP backs Elbegdorj's re-election candidacy;

MPP names wrestling champion as presidential candidate;

MNDP poised to nominate Enkhsaikhan as presidential candidate;

CW-GP members abandon ship;

Mongolians living abroad to vote 14-16 June;

SMEs to receive tax breaks for computer parts;

Mongolia takes step towards U.S. FTA with transparency initiative;

Mongolia to lease land at Tianjin free-trade zone;

Mongolia signs Partnership Agreement with EU;

Irish minister visits Mongolia to discuss business opportunities;

China-Mongolia Friendship School becomes bridge: educator;

NUM to establish Indonesia study center;

World Press Freedom Day in Mongolia;

Officials consider Enkhbayar's plea;

Dinosaur skeleton to be returned to Mongolia;

Mongolian contortionist breaks Guinness world record;

Setting the stage for a presidential election.

ECONOMIC INDICATORS

Inflation;

Central bank policy rate;

Currency rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank

Major Drilling

International SOS

Wagner Asia Automotive

Wagner Asia Equipment

Oxford Business Group

Mongolian National Broadcasting

Breakthrough PR

BUSINESS

RIO FIRMING UP USD 2.5 BILLION FINANCING FOR OT

Global miner Rio Tinto PLC has attracted strong interest for a USD 2.5 billion loan to expand its Oyu

Tolgoi copper and gold mine in Mongolia, in one of the largest resource financings in Asia this year,

banking sources said.

The financing is key for Rio Tinto to go ahead with the construction of an estimated USD 5.1 billion

underground mine at Oyu Tolgoi, following the start of commercial sales mid-year from an open-cut

mine. The project loan and the start of commercial sales both hinge on Rio Tinto resolving a dispute

with the Mongolian government over management of the mine, spiraling costs, and taxes. Both sides

have said talks were progressing.

Lenders were scaled back due to strong demand, with 14 lenders submitting credit-approved

commitments ranging from USD 50 million to USD 250 million. Those who submitted commitments

of USD 300 million were scaled back by USD 50 to USD 100 million. Initial mandated lead arrangers

BNP Paribas and Standard Chartered Bank were allocated USD 250 million each.

Australia and New Zealand Banking Group, Credit Agricole CIB, HSBC, ING Bank, Natixis, Societe

Generale and Sumitomo Mitsui Banking Corp. were allocated USD 200 million each. Three other

banks have been allocated USD 150 million and Germany's export credit agency KfW IPEX and Dutch

development bank FMO are also lending.

The project financing has been split into two tranches, with 60 percent in a B-loan tranche with

International Finance Corp. and the European Bank for Reconstruction and Development, and 40

percent through a Multilateral Investment Guarantee Agency (MIGA)-guaranteed tranche. The

margin for the B-loan tranche is 340 basis points over Libor, and GBP 264 over Libor for the MIGA

tranche. Lenders will also earn a flat GBP 250 upfront fee. Lenders are waiting for Rio Tinto and

financial advisor Rothschild to finalize the split.

The project is also heavily backed by USD 1.95 billion in direct loans from Australia, European, U.S.,

and Canadian export credit agencies. Due to the high level of investment, Rio will have the option

to raise more debt at a later stage and re-gear the project.

Source: Reuters

RIO TINTO EXPECTS GOVERNMENT APPROVAL TO SHIP COPPER IN WEEKS

Rio Tinto PLC said it expects to win approval from the Mongolian government in the next two weeks

to transport copper out of its USD 6.2 billion Oyu Tolgoi mine, a key project for the company as it

reins in spending in other areas.

The opening of the mine hinges on resolving issues over transport and shipping with the

government, and discussions were progressing well, Chief Executive Sam Walsh told reporters after

Rio Tinto‘s annual meeting in Sydney.

―We are still looking for some approvals in relation to exactly how we transport and ship the

material… that we expect to receive in the next couple of weeks,‖ Walsh said.

Walsh was speaking at his first annual meeting in Australia since taking over as chief executive from

Tom Albanese, who was dumped in January after the company announced USD 14 billion in

writedowns on its Alcan aluminum and Mozambique coal acquisitions.

Source: Reuters

OYU TOLGOI APPOINTS NEW EXECUTIVE COMMITTEE MEMBERS

Oyu Tolgoi LLC announced the expansion of its Executive Committee with four new members.

Munkh-Ochir Tsogoo was named as general counsel and head of legal and compliance; Munksukh

Sukhbaatar as head of power strategy development; Tserenkhuu Tserevsuren as head of corporate

affairs; and Dulamsuren Begzjav as head of business analysis and planning. Tsogoo will assume his

role as general counsel from 1 June 2013.

―The expansion of our Executive Committee goes hand in hand with the evolution of Oyu Tolgoi

from a development and construction project to an operating business,‖ said Cameron McRae,

president and chief executive. ―The vast experience and expertise of the new members will

strengthen the Executive Committee, and I look forward to their contribution.‖

Source: Oyu Tolgoi LLC

ERDENES TT OFFERS ONE-YEAR CONTRACT FOR WEST TSANKI AREA

Erdenes Tavan Tolgoi LLC, Mongolia's largest state-owned coal company, offered a one-year

contract to develop a part of the nation's biggest coalfield, aiming to revive interest among global

mining companies.

The contract will be for mining as much as two million metric tons of coking coal in the West

Tsankhi area of Tavan Tolgoi, Delgersaikhan Tsagaan-Uvgun, head of mining planning and technical

coordination at Erdenes, said. The output will be sold to Chinese buyers, he said. The offer for West

Tsankhi is aimed at raising cash for the company and is not a substitute for a bigger agreement that

could involve some of the world's largest mining companies, Tsagaan-Uvgun said.

―It's a small amount of coal,‖ Tsagaan-Uvgun said. ―It's a temporary measure.‖

Source: Bloomberg

TT TENDER TO HELP SECURE NEW CUSTOMERS

Mongolia's plan to develop the untapped western block of its massive Tavan Tolgoi coal mine will

help raise cash from new customers to offset an exclusive but loss-making supply deal with China's

Aluminum Corp of China Ltd. (Chalco), an official with the mine's developer said.

The mine's state-owned operator, Erdenes Tavan Tolgoi LLC, expects to begin exporting coal from

the West Tsankhi coal field in the third quarter of this year after opening it up to tender last week,

said Delgersaikhan Tsagaan-Uvgun, head of mine planning at the firm.

―The bid is for one year, but we have to complete it quickly, hopefully in six months. We just want

to make some coal available to sell to some other customers besides Chalco, which may give some

extra cash,‖ Tsagaan-Uvgun told Reuters.

Mongolia is under pressure to raise funds to plug a budget gap and stave off a credit downgrade.

Chalco has exclusive rights to purchase coal from the East Tsankhi coal field via a USD 250 million

offtake agreement signed in 2011.

"The government instructed us to increase the number of customers, so we will go and ask some

other customers to buy it," Tsagaan-Uvgun said.

Source: Reuters

ERDENES TT HOLDS USD 257 MILLION IN TOTAL DEBT, SAYS MINING MINISTER

Mining Minister D. Gankhuyag revealed on 1 May that Erdenes Tavan Tolgoi LLC held total debt of

USD 257 million.

Erdenes TT borrowed USD 131 million from Golomt Bank LLC and Trade and Development Bank of

Mongolia LLC in addition to debt of USD 350 million from Aluminum Corp. of China Ltd. (Chalco),

which is to be paid back in coal. The last government took MNT 418 billion from Erdenes TT to stock

its Human Development Fund so it could continue its monthly cash allowance program. The state-

owned mining unit still owes Chalco USD 186 million as well as USD 34 million to Golomt and USD 37

million to other local financial institutions. The government has estimated that it must deliver coal

to Chalco for another four to five months to repay its debt owed.

―Erdenes Tavan Tolgoi has just one buyer, Chalco, due to the agreement established by the USD 350

million to be repaid with coking coal.‖

With a price base of USD 70 per ton, based on China's Local IV index, the selling price changed

quarterly and set the price USD 53.60 in the first quarter of 2013. Current costs are USD 55.9.‖

He added that Mongolia negotiated with Chalco authorities for inland customs near the Tavan Tolgoi

site and a new location for the sales terminals for greater savings.

Source: Info Mongolia

MMC TO GET USD 59 MILLION COMPENSATION FOR RAIL PACT

Mongolia Mining Corp. (MMC) will receive MNT 84.3 billion in compensation as part of a pact with

the government to terminate a rail-concession agreement.

The company and its units will enter talks with the government and may convert some of the

payment into equity in a venture that will build a railway line to the Chinese border, according to a

filing by MMC to the Hong Kong stock exchange yesterday. As part of the agreement, the company

will be granted access to 50 percent of the railway's capacity and state-owned Mongolian Railway

will take over existing construction contracts and obligations, MMC said.

The Mongolian government is seeking a non-state partner to build a 260-kilometer railway to the

Chinese border from the Tavan Tolgoi coal field, and had accepted bids from 20 companies, the

state-run news agency Montsame said in March. Tavan Tolgoi, one of the largest coal deposits in

Mongolia, has an estimated 6.4 billion metric tons of reserves, 70 percent of it coking coal for

steelmaking. Mining companies at the site, including Ulaanbaatar-based MMC, currently deliver

supplies to the border by truck.

MMC is negotiating with the government to take as much as a 10 percent stake in a unified railway

development project, according to Chief Executive Officer Battsengel Gotov.

Source: Bloomberg

ASPIRE APPOINTS RAILWAY ENGINEER PARTNER

Northern Railways Pte Ltd., a subsidiary of Aspire Mining Ltd., has appointed Snowy Mountains

Engineering Corp. to provide a range of services to advance the planning and development of the

Erdenet-Ovoot railway.

Snowy Mountains, who has completed the detailed design for the 225-kilometer coal haul railway

for Mongolian Mining Corp., has been contracted to complete a full re-optimization of the Erdenet-

Ovoot rail alignment including site visits, risk and constraint analysis, permitting and government

approvals, including a rail concession, engineering and design to allow for an energy, procurement

and construction tendering, and a bankable feasibility study. The work has been broken up into

phases with discrete decision points and performance milestones before the next phase of work

commences.

―This agreement marks an important milestone in the development of the Erdenet-to-Ovoot

railway,‖ said Managing Director David Paull. ―We have been working with SMEC for six months on

addressing critical rail project risks and it makes sense, with their in-country expertise and

experience, for [Snowy Mountains) to become our rail engineering partner for what will be a large

and important project for Mongolia.‖

The value of the work by Snowy Mountains is approximately USD 9.9 million in total to be extended

in two stages over 12 months. The cost will be funded from the USD 5 million Noble Group loan

facility and cash resources.

Source: Aspire Mining Ltd.

HARANGA RESOURCES UPS RESOURCE AT SELENGE PROJECT

Haranga Resources Ltd. has significantly increased the value of its Selenge iron ore project in

Mongolia, upgrading its JORC resource by 675 percent to 254 million tons at 17.2 percent iron.

Notably, 99.8 percent of this is in the measured and indicated categories while initial David Tube

Recovery results indicate that a high quality 66 percent iron concentrate is attainable from the

project. The upgrade is based on the drilling carried out by the company in 2011 and 2012, which

defined the resource at the Bayantsogt, Dund Bulag and Undur Ukhaa deposits.

Drilling also discovered additional iron mineralization at the nearby Huiten Gol prospect. An

additional exploration target of 50 million tons to 100 million tons exists on these four targets.

Source: Proactive Investors

UNITED TRACTORS KEEN ON MONGOLIAN COAL

United Tractors & Equipment Ltd., the heavy equipment unit of Astra International of Indonesia, is

looking to tap opportunities in the coal industry in Mongolia, the company's president director said.

Djoko Pranoto, United Tractors' president director, said Mongolia's huge coal reserves and proximity

to major coal-consuming countries have driven the company to explore opportunities in the nation.

―In terms of quantity, coal resources and reserves in Mongolia are very attractive,‖ he said over the

weekend.

Djoko added that the coal industries in Indonesia and Mongolia had similar characteristics as mines

in both countries were generally open-pit and produced steelmaking coking coal. Export markets

will be widely available should United Tractors decide to invest in the Mongolian coal industry,

Djoko said.

―The distance between Mongolia and two [major] coal-consuming nations, China and Russia, is

small,‖ he said.

However, Djoko said United Tractors is focusing current efforts on expanding its business in

Indonesia. United Tractors currently owns nine coal mining concessions across the country with

combined estimated reserves of around 424 million metric tons.

Source: Jakarta Globe

HITACHI, SMBC INK MONGOLIA ACCORD

Hitachi Ltd. and Sumitomo Mitsui Banking Corp. (SMBC) announced on Tuesday that they had

reached a comprehensive accord with the Mongolian Ministry of Energy on power-related projects.

Under the agreement Hitachi will consider assisting the construction of power transmission lines and

generation facilities in Mongolia. SMBC, the core bank of Sumitomo Mitsui Financial Group Inc., will

meanwhile examine possible financing schemes for possible projects through consultations with

Hitachi and the ministry.

Source: Japan Times

GOVERNMENT REMAINS SILENT ON CENTERRA‟S GATSUURT PROJECT

Centerra Gold Inc.‘s Boroo gold mine approaches closure.

Centerra has had to hold off on beginning operations at its Gatsuurt project after legislation

prohibiting exploration at particular areas of forestry and headwaters resulted in the suspension of

activity there. The original plan was to mine ore at Gatsuurt with transport to Boroo for processing,

but Centerra is still waiting on a final decision from government regarding the mine.

Centerra purchased a license from Koje Govi, a subsidiary of Areva, for the Altan Tsagaan Ovoo

(ATO) deposit, which was first discovered in May 2010 with the agreement to pay 1.75 percent of

net profits gained from this deposit to Areva.

In addition to the ATO deposit are four licenses for nearby land covering 77,000 hectares, where the

environmental legislation does not currently take effect.

Source: Zindaa.mn

SKYTEL EXPANDS MOBILE ACCESS AND PLANS 4G ROLL-OUT

Holding a quarter of Mongolia's telecom market and the largest CDMA 3G network in the country,

Skytel Group is one of the industry's leaders and going to great lengths to get Mongolians connected.

According to Chief Executive D. Bolor, the Skytel is focusing on rolling out 4G technology as part of

its strategy to lead mobile communications in Mongolia.

―Along with our emphasis on the latest technology, we are also placing greater attention on

customer service, opening new customer service branches, revamping our customer service

training, and communicating our marketing messages that are simple and acceptable by the

market,‖ Bolor said.

The chief executive said that given its low-penetration rate over Mongolia's vast rural areas (just 20

percent, he said), Skytel plans to roll out a CDMA 3G technology network in all of Mongolia's

provincial capitals. It also hopes to begin launching 4G technology beginning from 2014.

Source: Worldfolio

NEARLY HALF OF ALL CHICKENS DIE AT MAJOR POULTRY, EGG PRODUCER'S FARM

Thousands of chickens died at the Tumen Shuvuut chicken farm on 5 May, reported the General

Agency for Specialized Inspection.

According to the company director, J. Bold, a fan at the chicken facility had failed that night,

which caused the death of 18,000 chickens. That was nearly half of the 37,000 chickens at the

facility and has cost the company MNT 400 million, he said.

A final analysis has shown that the disease was not a factor in the cause of death. The company

plans to resume the sale of its poultry meats and eggs soon.

Tumen Shuvuut has a 30 percent market share in egg production in Mongolia.

Source: Unuudur

ALASKA PROFESSORS TO HELP CREATE AUM'S ENGINEERING SCHOOL

A team of professors from the University of Alaska Fairbanks (UAF) will spend the next several years

working with the newly formed American University of Mongolia (AUM) to create an engineering

school.

UAF recently signed a contract with AUM, which is under development in Ulaanbaatar. Under the

terms of the contract, a team of seven engineering professors, led by mining and geological

engineering chairman Rajive Ganguli, will create a comprehensive design for the school. Their work

will include creating curricula, identifying faculty and staff needs, exploring accreditation

requirements and designing space for classrooms and laboratories. Their work will also include

planning for a cold weather engineering research and training center.

―Though a research-intensive university, the teaching mission is taken seriously at UAF. This is

reflected in the fact that we place our graduates not only with Alaska employers, but also with

large, international companies such as BP, Freeport, McMoRan and BHP Billiton,‖ Ganguli said.

―With AUM emphasizing good quality education above everything else, I was very happy to

participate. Just like Alaska kids, Mongolians will have access to great engineering education in

their own backyard.‖

The new engineering program at AUM will be designed to be able to receive accreditation from the

Accreditation Board for Engineering and Technology. Through its four commissions ABET accredits

3,100 engineering, science and technology programs in 600 colleges worldwide.

Source: UAF Corner

TULGA DELISTED BY FRC FROM MSE

The Financial Regulatory Commission announced the delisting of Tulga JSC from the Mongolian

Stock Exchange (MSE). Tulga delisted a total of 131,620 shares from the MSE list, reorganizing itself

into a limited liability company (LLC).

Source: Mongolian Stock Exchange

BERKH UUL MAKES APPOINTMENTS AS IT RELAUNCHES DELGERKHAAN MINE

Berkh Uul JSC announced the appointments of Jimmie Wilde as chief operating officer and Jim

Flores as chief financial officer as the company aims to enhance the executive team and advances

the restart of operations at the former producing Delgerkhaan fluorspar mine.

―We are excited to quickly advance planning of the rehabilitation of our Mongolian fluorspar mine,‖

said Mendsaikhan Bold, chief executive officer. ―The appointments of Mr. Wilde to oversee the

rehabilitation program and Mr. Flores to oversee the company's accounts will greatly increase the

strength and depth of our management team.‖

Wilde has over 35 years experience in open-cut and underground mining around the world. He

began his career with Rio Tinto PLC in Zimbabwe before moving to deep level underground mines in

South Africa. He has participated in mining projects in Africa, the Middle East, and Russia. In 2012

Wilde was appointed as a board member of Berkh Uul.

Flores has over 30 years' experience in financial services including 18 years in the energy industry.

Immediately prior to joining Berkh Uul he was chief financial officer of Colombia Energy Resources

Inc.

The Delgerkhaan deposit has a stated resource of 9.6 million tons of fluorspar having an average

grade of 33.7 percent.

Source: BDSec JSC

GUILDFORD APPOINTS NON-EXECUTIVE DIRECTOR

Guildford Coal Ltd. announced the resignation of Craig Ransley as non-executive director with Kon

Tsiakis to replace him.

With Guildford making the transition from explorer to producer and seller with a new team in place

for management, it was Ransley's belief his energies were better directed at other opportunities,

said the Source.

―Without Craig's vision, leadership, entrepreneurial skills and perseverance Guildford would not be

on the verge of imminent coal production in Mongolia...‖ said Guildford Chairman Peter Lindsay.

Tsiakis, a commercial litigation partner with HWL Ebsworth, has wide experience advising directors

and companies on regulatory compliance and statutory corporate obligations as a commercial

litigator. He also spent a number of years as a senior enforcement analyst with the Australian

Securities and Investments Commission.

Source: Guildford Coal Ltd.

GE ADDS ENERGY STORAGE TO ITS BRILLIANT WIND ENERGY TURBINE

After premiering its 2.5-megawatt, 120-meter rotor Brilliant wind turbine in February, General

Electric Co. is now announcing the commercial installation of the first three models that will

integrate energy storage capability. General Electric is the supplier of wind turbines to Newcom

LLC's Salkhit wind farm.

General Electric's engineering advances have long been moving toward two broad objectives:

achieving a more rapid and comprehensive automated response by the turbine's multiple on-board

computer systems to the enormous amounts of data the machine's network of sensors can deliver,

and allowing its centralized operations centers to wirelessly control variables that the turbine's

automated response fails to manage. The variables range from a change in wind or local grid

conditions to a lightning strike. The new height, rotor length and data analytics makes the Brilliant

turbine 25 percent more efficient than its previous 2.5-megawatt machine, according to General

Electric.

General Electric also announced that Brilliant turbines will be installed by Invenergy at a Texas

wind project by the end of 2013. Each will integrate 50 kilowatt hours of battery storage, allowing

the individual turbines to add a set of three possible functions. The batteries, situated on a nearby

ground pad, are integrated by the turbine's intelligent operating system.

The Invenergy turbines' storage will be used for three applications. The first, labeled ―predictable

power‖ is short-term storage to ―sure‖ the delivery of committed output, explained General

Electric Wind Product Line General Manager Keith Longtin. Stored electricity can also be sold to

grid operators to regulate frequency variations that can disrupt service. Selling into frequency

regulation markets adds a revenue stream for a wind developer, Longtin said. Third, storage allows

―ramp control.‖ Electricity generated when the blowing wind allows production but the grid is not

buying can be sold when it is needed, Longtin said, increasing developers' returns on investment.

Source: The Energy Collective

ECONOMY

TUGRUG TUMBLES AS CONFIDENCE IN MONGOLIAN ECONOMY WAVERS

The Mongolian tugrug has flagged against the U.S. dollar due to increasing demand for the latter

currency.

On 2 May the central bank posted an exchange rate of 1,433.84, compared with MNT 1,426 from a

week prior, while the Naiman Sharga exchange market traded at MNT 1,438. The tugrug is expected

to depreciate further, while some economists warn that inflation is expected to rise once again,

too. This would be likely due to increased construction activity with the warmer months and a lack

of confidence in the tugrug.

The Bank of Mongolia has hosted its currency swap auction, at the request of commercial banks, in

a bid to strengthen the Mongolian currency. A request for a yuan currency swap was denied,

however, by the central bank.

Source: Udriin Sonin

MEAT PRICES REMAIN HIGH DESPITE FALL IN INFLATION

Meat prices have remained stable yet high, ranging between MNT 9,500 to MNT 10,000 a kilogram

for beef.

Horse meat prices are the lowest among meats at MNT 5,500, with goat meat just a little higher at

MNT 6,000 a kilogram. Mutton prices ranged from MNT 11,000 to 12,000.

Source: Undesnii Shuudan

74 FOREST FIRES REPORTED IN 2013

Mongolia has seen 74 forest fires reported in 47 towns in 15 provinces in the first five months of

2013. Almost 80 percent of high-risk provinces to fire are too dry or at dangerous levels of dryness.

The National Emergency Management Agency (NEMA) is giving warnings to prevent possible forest

fires during this particularly dry period of the year. The warnings included avoiding ash leakages

and making open fires, leaving small children with caretakers or prohibiting them to play with fire

and avoiding any picnics or tours in the forest.

Over 100 people including NEMA staff and local residents in Khutag-Undur Soum in Bulgan Aimag

were struggling to extinguish a fire. The battle had been going on for days at the time of this

report. Over 60 NEMA staff and 167 local residents cut off a forest fire at Bat-Uul of Bulgan Soum,

Dornod Aimag. There were also fires in Tenkhleg of Dadal Soum, Khentii Aimag, Kharzad of

Dashbalbar Soum, Dornod Aimag, and Bayandelger Soum, Tuv Aimag. Fire spread from a garbage

dump in Kherlen Soum, Dornod Aimag, and a fire from Russia blew over to Dashbalbar Soum, Dornod

Aimag. Residents and emergency officials helped extinguish fires reported in Khalzan Soum,

Sukhbaatar Aimag as well as Maldvai, Doctor and Zeregeen of Chuluunkhoroot Soum, Dornod Aimag.

Source: News.mn

MONGOLIA SEEKS TO REBUILD AGRICULTURE TO COMBAT MALNUTRITION TRENDS

Most Mongolians dismiss fruits, vegetables and cultivation as ―unmanly,‖ according to Marissa

Markowitz, a food security consultant with the Ministry of Industry and Agriculture (MIA), creating a

malnutrition epidemic in the country.

Less than 1 percent of the country's land is used for production. Mongolians rely on livestock for

their food needs, guiding massive herds across the vast grasslands of the Central Asian Steppes.

One-third of households in Ulaanbaatar were found to be food insecure in 2009, according to Mercy

Corps. The standard diet here is comprised of wheat, meat and rice, said Markowitz, citing reports

by the United Nations Food and Agriculture Organization (FAO). Research released by the Ministry of

Health in 2008 and 2010 revealed that a full third of the country's population of nearly three million

eat no fruits or vegetables at all.

Vegetables and fruits are expensive compared to the monthly minimum wage of about USD 100

dollars. Spring is a particularly difficult period, when national food stores are depleted and prices

skyrocket—during this time, local sea buckthorn berries sell for about USD 3 to 4 dollars a kilogram;

carrots for roughly USD 2 a kilogram and tomatoes for nearly USD 4 a kilogram.

In light of these alarming trends, the country has recently embarked on the slow process of

rebuilding its agriculture sector. The Mongolian Women Farmers Association (MWFA) is a volunteer-

led non-government organization (NGO) that works in all 21 of Mongolia's provinces to promote

vegetable and fruit cultivation among poor families. MWFA has worked with 4,500 families on

establishing vegetable gardens as well as cooking and preserving vegetables by canning.

Source: Inter Press Service

COMMODITIES HEDGE FUND INDUSTRY IS BLEEDING MONEY

The average fund lost 0.8 percent in the first quarter of the year, according to a closely watched

index compiled by brokerage Newedge. The losses came after commodities hedge funds lost 3.7

percent in 2012, the biggest decline in more than a decade, according to the Newedge Commodity

Trading Index. The average commodities hedge fund already lost 1.4 percent in 2011, a significant

change from the typical gains of 20 to 40 percent per year from 2000 to 2008.

―We are witnessing the implosion of a large chunk of the commodities hedge fund industry,‖ said

the chief executive of one of the world's largest commodities trading house, echoing a widely held

view across the natural resources sector. ―The sector is, on average, performing badly and investors

are taking note,‖ the executive said.

Commodities hedge funds surrendered at least 20 percent of their assets last year after investors

pulled out large sums following the sector's worst annual performance in more than a decade,

according to fund managers and investors.

The withdrawals of roughly USD 5 billion last year are the largest since the commodities hedge fund

sector became fashionable in the early 2000s. The trend of falling assets under management is

worsening this year as some investors used the end of the previous year to withdraw assets and

others plan to do so after losses in the sector continued in the first quarter.

Source: Financial Times

CHINA COKING COAL PRICE DROPS

Weakening prices ended a three-day flat streak as the price of Chinese coking coal fell 4.7 percent

on Tuesday, 7 May. After two changeless days, the price of Chinese slab fell 0.3 percent. Chinese

HRC stayed flat. The price of iron ore 58 percent fines from India drifted a tiny bit lower, but still

held above the USD 136-per-dry-metric ton mark. The cash price of steel billet studied at USD 130

per metric ton following two-days of increased on the London Metals Exchange (LME).

On the LME, the steel billet three-month price held steady around USD 150 per metric ton. The U.S.

HRC futures contract three-month price was unchanged at USD 607 per short ton. The U.S. HRC

futures contract spot price saw little change in its process on 7 May at USD 595 per ton.

Source: AG Metal Miner

CHINA‟S ECONOMY UNEXPECTEDLY STUMBLES AGAIN ON WEAK EXPORT DATA

After a powerful recovery through the autumn and winter from a V-shaped downturn last summer,

China‘s economy—which is a direct driver for Mongolia‘s own—is unexpectedly faltering once again.

Exports are weak. The country‘s domestic economy is still growing mostly because of huge increases

in lending by state-controlled banks and a surge in off-balance sheet lending. Consumer spending is

rising, but not fast enough to offset weakness in other sectors. That combination has promoted

growing concerns among economists and business executives about the sustainability of even 7.5

percent growth in China in the coming years, the government‘s current goal after three decades of

double-digit growth with only a few interruptions.

Over the last few years, economists have tended to pay less attention to China‘s exports because

they were declining as a share of the country‘s total economic output, because of weak overseas

demand. But newer research suggests that China may still be dependent on exports. Louis Kuijis, an

economist in the Hong Kong office of the Royal Bank of Scotland, estimated that 20.7 percent of

China‘s economic output came from exports last year, a figure that had bottomed out in 2009 at

19.7 percent. Foreign investment in China has also begun to level off, while surging in lower-wage

countries in the region, such as Cambodia and Vietnam.

What has kept the economy running is the huge volume of cash pumped into it. Total social

financing—a measure of all non-government borrowing from banks, bond markets, trusts and other

sources—surged 58 percent in the first quarter of this year from the same period last year.

Borrowing is increasingly a concern. It has already climbed roughly 200 percent now from 120

percent in 2007. China‘s current economic model, with its swift buildup of debt to stave off a

steeper decline in economic growth rates ―can probably go on for a while, certainly through this

year and into 2014, but the potential stress in this is clearly going to rise,‖ said George Magnus, a

senior economic adviser to UBS.

Source: New York Times

KAZAKHSTAN LEADS CENTRAL ASIA IN TRADE TO CHINA

Kazakhstan is China's main commercial partner in the Central Asian region, China's Minister of

Commerce Gao Hucheng said 7 May.

At a meeting with Kazakhstan's minister of economy and budget planning, Erbolat Dossayev in

Beijing, Gao said that commercial and economic relations between the two countries were making

―headway in all spheres.‖

China and Kazakhstan agreed to increase trade ties during Kazakh President Nursultan Nazarbayev's

visit to Beijing in April, and the issue is due to be discussed during Chinese President Xi Jinping's

upcoming visit to Kazakhstan, Kazinform reports.

The two countries expect to increase mutual trade from USD 24 billion in 2012 to USD 40 billion by

2015.

Source: BNE

REGIONAL ECONOMIC OUTLOOK FOR ASIA AND PACIFIC, APRIL 2013

The global economy shows signs of improving as major tail risks emanating from advanced

economies have receded. Asia also faces better prospects. After a year of subdued economic

performance, growth in Asia is set to pick up gradually in the course of 2013, to about 5.75 percent,

on strengthening external demand and continued robust domestic demand.

Consumption and private investment are expected to be supported by favorable labor market

conditions—unemployment is at multi-year lows in several economies—and relatively easy financial

conditions. The latter reflects a combination of accommodation monetary policies; rapid credit

growth, particularly in China and some ASEAN economies; and the rebound of capital inflows since

the summer of 2012. Asia is also expected to benefit from intraregional demand spillovers; they

mainly reflect growing Chinese demand and the near-term fiscal stimulus in Japan but also

integration incurred by the ASEAN network.

In emerging Asia, macro-prudential measures will have to play an important role where credit

growth remains too rapid and could pose problems for financial stability, especially if accompanies

by persistently strong capital inflows. In general, Asia has buffers to cope with such risks, as

banking and corporate sector balance sheets remain generally sound, but these imbalances require

careful monitoring and adequate supervision.

In many Asian economies, structural deficits that are higher than pre-crisis levels imply the need for

greater efforts to rebuild fiscal space, especially as projected improvements in structural fiscal

balances remain small on currently policy. There is growing need to make revenue and expenditure

policies more growth-friendly, make growth more resilient through automatic stabilizers, and

ensure that Asia's growing prosperity is shared across all income groups.

Furthermore, emerging Asia is potentially susceptible to the ―middle-income trap,‖ a phenomenon

whereby economies risk stagnation at middle-income levels and fail to graduate into the ranks of

advanced economies. To sustain high rates of per capita income growth across the region, the

policy agenda will have to vary by jurisdiction across a range of priorities, including economic re-

balancing, strengthening infrastructure investment, reforms in goods and labor markets, and

meeting the challenges from rapid demographic change.

Source: International Monetary Foundation

POLITICS

ELBEGDORJ LEADS IN RE-ELECTION BID, POLL SHOWS

President Tsakhia Elbegdorj leads his nearest rival by 13 percentage points heading into June 26

elections, according to a new poll from the Sant Maral Foundation, making it unlikely that he will

face a serious challenge as he seeks a second terms.

Asked whom they would choose as president, 19.2 percent of respondents named Elbegdorj, the

Sant Maral Foundation poll said. In second with 6.2 percent was Nambar Enkhbayar, the head of the

Mongolian People's Party, who serves a two-and-a-half-year jail term on corruption charges. No one

else received more than 3.2 percent.

A win for Elbegdorj, president since 2009, may ensure continuity as Mongolian leaders debate the

role of foreign investors in exploiting the country's mineral resources. While Elbegdorj has made

conflicting statements on whether the government should take greater control of strategic mines,

he is seen as a known quantity, consultant Dale Choi said.

―Elbegdorj has shown himself to be a very inconsistent,‖ Choi, founder of Ulaanbaatar-based

Independent Mongolian Metals and Mining Research, said in an email. ―Even in view of these

shortcomings, it would be good if he were re-elected because it would mean the government

authorities can continue functioning as they are.‖

The Sant Maral poll, which did not give a margin for error, said 53.2 percent of respondents were

fairly satisfied or very satisfied with the current government.

―Elbegdorj has no rival and it will be quite problematic for anyone to stand against him in the time

remaining,‖ Sant Maral Foundation Director Luvsandendev Sumati said. ―If he does not make some

major mistake, he should get through.‖

For the complete Sant Maral April 2013 Politbarometer, see BCM website Mongolia Reports section.

Source: Bloomberg

DP BACKS ELBEGDORJ'S RE-ELECTION CANDIDACY

President Tsakhia Elbegdorj received 100 percent confirmation from his Democratic Party for the

president's candidacy to run for re-election in the 2013 presidential election. The president

received confirmation at a party meeting on Tuesday.

Source: Montsame

MPP NAMES WRESTLING CHAMPION AS PRESIDENTIAL CANDIDATE

The Mongolian People's Party (MPP) has nominated a former champion wrestler as its standard-

bearer for the June presidential election.

Party members voted at a weekend conference to name Bat-Erdene Badmaanyambuu as presidential

candidate to challenge incumbent president Tsahkia Elbegdorj from the ruling Democratic Party in

the 26 June vote.

As a lawmaker, Badmaanyambuu was instrumental in the passing of a controversial law to ban

mining along river and water basins in 2009 and demanded revision of the multi-billion U.S. dollar

investment with Anglo-Australian mining giant Rio Tinto PLC.

Source: Xinhuanet

MNDP POISED TO NOMINATE ENKHSAIKHAN AS PRESIDENTIAL CANDIDATE

The Mongolian National Democratic Party (MNDP), the partner to the Mongolian People's

Revolutionary Party (MPRP) to form the Justice Coalition, is poised to nominate M. Enkhsaikhan as

its candidate for the presidential election.

The Administrative board of the MNDP consists of 11 members who agreed to discuss the issue at an

assembly meeting on Friday, 10 May, said MP D. Battsogt.

Source: News.mn

CW-GP MEMBERS ABANDON SHIP

All 40 of the Civil Will-Green Party's members have left the party, saying that there was no internal

democracy in the party.

Party Deputy Chairman Kh. Bat-Yalalt led the mass exit, saying that the party's decisions were

dictated by a single person's will and that there was a lack of transparency regarding the party's

inner workings. Members of the CW-GP, which has two of its members sitting in Parliament, said

fraudulent methods were being utilized within the party.

Bat-Yalalt said the party members would start a new movement called Neg Mongol, which translates

to one Mongolia in English, to represent their interests.

Source: Unuudur

MONGOLIANS LIVING ABROAD TO VOTE 14-16 JUNE

Mongolian citizens living in foreign countries will be able to vote for the 2013 election from 14 to 16

June, announced the Working Group on Elections.

An election committee made up of 39 Mongolian diplomatic representatives has been formed to

register citizens living in foreign countries in person or by fax, email or phone.

The state registration committee has submitted a list of 39,800 Mongolian citizens living abroad to

the election committee.

Source: Udriin Sonin

SMES TO RECEIVE TAX BREAKS FOR COMPUTER PARTS

The Cabinet of Ministers approved a motion on 3 May to provide exemptions for small business from

customs taxes for computer hardware parts and equipment. In 1999 Parliament voted in favor in

providing tax exemptions for computers, but did not for parts.

Source: Zuunii Medee

MONGOLIA TAKES STEP TOWARDS U.S. FTA WITH TRANSPARENCY INITIATIVE

A majority in Parliament supported a transparency initiative for trade between the United States

and Mongolia.

Mongolia proposed to the United States a free trade agreement during the third conference for the

American Trade and Investments Council held in Ulaanbaatar in March 2007. The United States,

however, said Mongolia needed major reform in terms of trade orders, legal structure, and the

labor environment. However, this initiative would be a check mark next to one of the points the

United States said would be necessary to move forward with this aim.

Source: Udriin Sonin

MONGOLIA TO LEASE LAND IN TIANJIN FREE-TRADE ZONE

The Cabinet of Ministers has ordered the 50-year lease of 10 hectares of land in the Tianjin free-

trade zone.

During a regular meeting on 27 April, the Cabinet approved the motion to lease the land through

Mongolian Railway JSC as part of its logistics project. Financial matters concerning the lease will be

managed by the Bank of Mongolia and Ministry of Roads and Transportation.

The Cabinet also ordered the minister of road and transportation to negotiate with Chinese

authorities for increased capacity for freight transport via road and rail between the Mongolian

border port and the Tianjin port. Tianjin is Mongolia's nearest sea outlet and is where over 70

percent of Mongolia's import-export goods are transferred.

Source: Info Mongolia

MONGOLIA SIGNS PARTNERSHIP AGREEMENT WITH EU

European Commission Vice President Catherine Ashton signed the Agreement of Partnership and

Cooperation for boosted bilateral cooperation between Mongolia and Europe.

Ashton met with Foreign Minister Luvsanvandan Bold to discuss cooperation and the values of

democracy on 30 April during the Community of Democracies' seventh ministerial meeting. Also

signed was the Efforts for Cultivation of Mongolia Standardization memorandum.

Source: News.mn

IRISH MINISTER VISITS MONGOLIA TO DISCUSS BUSINESS OPPORTUNITIES

Ireland's trade and development minister, Joe Costello, became the first Irish minister to visit

Mongolia during his attendance at the seventh ministerial conference of the Community of

Democracies in Ulaanbaatar as part of an Asian tour.

―There is a great sense of excitement about development and how to maximize newfound wealth

from mineral extraction. It's a country very much in transition,‖ said Costello, who used the

opportunity to discuss business opportunities for Ireland with Mongolia's foreign minister,

Luvsanvandan Bold.

―We discussed various commercial opportunities between the two countries, in areas including

pharmaceuticals and education. We looked at how we might develop relations in term of the state

sector and the private sector. They are in need of expertise and they see us as a friendly country.‖

Source: Irish Times

CHINA-MONGOLIA FRIENDSHIP SCHOOL BECOMES BRIDGE: EDUCATOR

The China-Mongolia Friendship School has become a social bridge between China and Mongolia, a

Chinese educator said on Friday.

The school has trained students for 50 years and has laid a solid foundation for their lives, said

Principal Jiang Ximanmei. Jiang, speaking at the graduation ceremony for 11th-grade students, also

said that the students were an honor to the school and their presence in the classroom would be

remembered forever.

Wang Xiaolong, the Chinese ambassador to Mongolia, said at the ceremony that he hoped the new

graduates would continue to strive to learn, increase their abilities, become talents of the national

and social development, become friendly messengers of China and Mongolia, and make a positive

contribution to the friendship between the two countries.

Source: Xinuanet

NUM TO ESTABLISH INDONESIA STUDY CENTER

The National University of Mongolia (NUM) plans to set up a study center to introduce Indonesia to

the Mongolian public, said the university's vice president, Gerelt Od Lkhagvasuren.

He gave the news to Indonesian Ambassador to China and Mongolia Imron Cotan in Ulaanbaatar on

the sidelines of the seventh conference of the Community of Democracies on 30 April. The

university has prepared the building, lecturers and other facilities for the study center, the

Indonesian Embassy in Beijing said in a press statement on Friday.

Lkhagvasuren has asked for the ambassador's support for the establishment of the study center.

Ambassador Cotan said he was prepared to facilitate student-lecturer exchange programs between

Indonesia and Mongolia as well as offering the latest reference books to the university. The

Indonesian Embassy and NUM plan to organize seminars on the bilateral relationship between

Indonesia and Mongolia in June and September of this year. In return, NUM students will be offered

scholarships to study in Indonesia under the Developing Countries' Technical Cooperation program.

Source: Jarkata Post

WORLD PRESS FREEDOM DAY IN MONGOLIA

Globe International Centre, a Mongolian free expression NGO, and the Mongolian Journalists

Association with support from the Open Society Forum (OSF), Mongolia, marked World Press

Freedom Day 2013 on 1 May 2013 at the OSF Conference Hall. More than 75 politicians, officials,

international organizations, NGOs, journalists and media practitioners gathered at the event.

G. Jargalsaikhan, secretary general of the Mongolian National Commission for UNESCO, stressed in

his speech that Mongolia is in 98th place in the free press index of Reporters without Borders. He

introduced UNESCO's 2013 WPFD concept note ―Safe to Speak: Securing Freedom of Expression in All

Media‖ which focused on three sub-themes: Ensuring the Safety of Journalists and Media Workers,

Combating Impunity of Crimes against Press Freedom, and Online Safety.

Naranjargal Khashshkuu, president of Globe International, made a presentation on the present

media freedom situation and she highlighted, ―We are marking this year's WPFD with a number of

threats against media freedom.‖

Thirty-seven websites were closed and the licenses of 44 cable television stations terminated after

an inspection by the Communications Regulatory Commission (CRC). The government decided to

establish a United System of Comments on Websites on 5 January 2013 at its Cabinet meeting. This

decision obliges website owners ―to introduce software to stop comments containing slander or

threats, so the main websites operate under the Unified System of prohibited words introduced by

the CRD...‖

Global International registered in total 45 cases of free-expression violations, including assaults,

intimidation, threatening, detention and criminal defamation. The most sensational criminal

defamation case ended with an MNT 8.5 million fine imposed against female journalist D. Bolormaa

from the daily newspaper Zuunii Medee who wrote an article about human trafficking. The judicial

process was carried out very quickly after the plaintiff B. Narankhuu, a rich businessman who

became an MP, made the complaint.

Participants endorsed the Call to Parliament and Government of Mongolia to dissolve the decision,

to ensure the independence of the CRC, enact legislation for the protection of confidential sources

and to recognize the community media at policy, legal and regulatory levels.

Source: IFEX

OFFICIALS CONSIDER ENKHBAYAR'S PLEA

Former president Enkhbayar may yet attain release from prison due to his worsening health

conditions.

The Agency for the Enforcement of Court Orders reviewed a request from Enkhbayar for permission

to leave prison to seek medical help abroad.

Source: Zuunii Medee

DINOSAUR SKELETON TO BE RETURNED TO MONGOLIA

After a little detour through the American criminal justice system, Mongolia's celebrity dinosaur,

Tyrannosaurus bataar, is heading home, the most recent stage in a journey spanning some 70

million years.

At a ceremony last week on Monday near the United Nations, U.S. Homeland Security officials were

scheduled to turn over to Mongolian representatives the unusually complete skeleton of the giant

raptor, eight-feet high and 24-feet long. It was seized last year from a confessed looter and

commercial paleontologist, Eric Prokopi, who smuggled in the bones and sold the reassembled

creature at auction for just over USD 1 million. The sale was later canceled.

―In this business I hesitate to identify any particular return as the most unusual,‖ said John Morton,

director of U.S. Immigration and Customs Enforcement. Morton recalled in an interview that there

had been saber-toothed tiger fossils, Hitler's bookmark and Saddam Hussein's AK-47. ―But this is

clearly one of the most exceptional, if not the most exceptional, we've ever returned.‖

Prokopi, whose age was given as 38, is free on bail recently reduced to USD 100,000 from USD

250,000 and is awaiting sentencing, now rescheduled for 30 August. He faces up to 17 years in

prison and hundreds of thousands of dollars in fines. As part of his guilty plea on 27 December, he

agreed to forfeit the Tyrannosaurus skeleton; a second, slightly smaller T. bataar; and two

Saurolophus and two Oviraptor skeletons, among others he acknowledged illegally importing.

Morton said agents were pursuing other aspects of the smuggling.

―Think about it,‖ Morton said. ―Here's something that's been in the ground for 70 million years. This

was the last of the great living dinosaurs right before extinction, roaming the plains of what is now

Mongolia at the very end of the period of the dinosaurs. And here you have looters and black

marketeers exercising the level of arrogance that is unbelievable, that they're going to engage in

personal profit on something that has literally witnessed this span of time. It is shocking.‖

Source: New York Times

MONGOLIAN CONTORTIONIST BREAKS GUINNESS WORLD RECORD

Mongolian dancer Tsatsral Erdenebileg set a new Guinness World Record for ―longest time to hold

the Marinelli bend position.‖

Erdenbileg achieved the record in the theater of the Circus Maximus in Budapest, Hungary on 9

April. She attained the new record by holding the position for two minutes and 34 seconds.

The record was previously held by another Mongolian woman, Oyungerel Luvsandorj, who set the

Guinness record for 33 seconds, breaking the prior record by 11 seconds, in Great Britain in 2008.

Oyungerel then broke her own record, setting it at 50 seconds, in Italy.

Erdenbileg is an accomplished gymnastics competitor who took third place in a competition among

young circus artists in Paris, France in 2006.

Source: News.mn

SETTING THE STAGE FOR A PRESIDENTIAL ELECTION

The stage for this year's presidential election is set by a public battle between the government and

the private investors of the Oyu Tolgoi copper-gold project and widespread notions of prejudice

towards foreign investors. Now with a few candidates named, speculations can be made how the

election will ensue.

President Elbegdorj will likely be nominated for a re-election campaign by his Democratic Party

(DP), which currently also holds the posts of prime minister, chairman of parliament, and mayor of

Ulaanbaatar. [Elbegdorj has since the writing of this article been nominated -ed]. The opposition

Mongolian People's Party has selected B. Bat-Erdene as its nominee. Bat-Erdene has been a three-

term member of Parliament and continues to be personally famous for his status as one of the most

dominant Mongolian wrestlers.

While Bat-Erdene has not been a very active legislator, his most prominent initiative was the 2009

―Law with the Long Name,‖ which prohibited mineral exploration in certain waterways and

forestry. The law was intended to restrict mining licenses in areas of ecological fragility, but has

been controversial for the implied expropriation of previously granted licenses and the risk of an

uneven application of restrictions.

Bat-Erdene will likely use his role in the passage of this law to bolster his appeal to Mongolian

values and personal integrity as a potential president. While Elbegdorj has been an active politician

for much longer than Bat-Erdene, there are few specific policies that are directly associated with

him. He is thus likely to emphasize his personal charisma and lay claim to the DP's clean

government credentials that have been tarnished recently by the publication of information about

offshore accounts held by Sangajav Bayartsogt, who recently resigned as deputy speaker of

Parliament. Bat-Erdene and Elbegdorj thus look set to square off largely over personality rather

than specific policy proposals.

The Justice Coalition, the junior partner in the current government, may nominate M. Enkhsaikhan

who preceded Elbegdorj as prime minister in the mid-1990s. It is not clear what leverage the

Justice Coalition might expect from his candidacy and the threat of a nomination might also be a

bargaining chip in negotiations with the DP, but Enkhsaikhan would be likely to try to appeal to

voters who continue to be somewhat loyal to former president N. Enkhbayar who is serving a

corruption sentence in jail. Part of the appeal may be accusations against Elbegdorj and the DP

that they are not claiming enough benefits for Mongolians under the Oyu Tolgoi investment

agreement.

The Mongolian People's Revolutionary Party, the other half in the Justice Coalition, may not

nominate a candidate and throw their support behind the MPP's Bat-Erdene, though a decision has

not been announced.

The final announcement of candidates by the General Election Commission will come on 23 May. At

this early point, it is unclear whether an Enkhsaikhan candidacy is likely to have a disproportionate

impact on potential Elbegdorj or Bat-Erdene voters and thus lead to a more contested election than

is expected now. The election could turn into a three-way race. If no candidate wins more than 50

percent of the votes, a run-off election between the two candidates who received the most votes

will be held two weeks after the initial election.

Author Julian Dierkes is an associate professor and the coordinator of the program on Inner Asia at

the University of British Columbia's Institute of Asian Research. He is one of the principal authors

of the Mongolia Today blog.

Source: Mining.com

NEW MONGOLIAN LAW

The following amendment to a law was published in the latest weekly Government bulletin. Unless

otherwise decided by Parliament, it will take effect ten (10) days after publication.

Date Amendment to Law

06.05.2013 Amendment to Law on Regulation of Foreign Investment in Entities Operating in

Sector of Strategic Importance (SEFIL)

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.

ANNOUNCEMENTS

MONGOLIA RENEWABLE ENERGY FUTURES & GREEN DEVELOPMENT, JUNE 4, UB

Mongolia Renewable Energy Futures & Green Development will be held on 4 June in Ulaanbaatar.

BCM is supporting this conference and its members will receive a 10 percent discount for admission.

Selected to be part of the United Nations Environment Program‘s events to promote the 2013 World

Environment Day, Mongolia Renewable Energy Futures & Green Development will demonstrate to

the world Mongolia‘s commitment to the environment and clean, renewable energy. Keynote

addresses from distinguished local government officials, senior industry executives and noteworthy

speakers from throughout the region will reveal and promote emerging green energy development

opportunities. This one day event on June 4th will take place at Salkhit wind farm, Blue Sky Tower

and the Mongolia State House, with a limited attendance to invited VIP diplomats, government

officials and partners of ORRO.CO.

Contact chris@orro.co for more information and remember to let him know that you are a member

of the Business Council Mongolia to get a special 10% discount.

___________________________________________

MINING FOR NON-MINERS COURSE, 13-14 MAY, ULAANBAATAR

The next Mining for Non-Miners course will be held on 13-14 May. The aim of this course is to

provide those from a non-mining background with a comprehensive introductory understanding of

the mining industry. RPM is offering this two-day course for USD 1,000 for BCM members and

USD1,200 for non-members.

RungePincockMinarco(RPM), is a world class mining consulting, software and training company with

an established office in Ulaanbaatar. RPM has been successfully conducting Mining for Non-Miners

Training courses in Mongolia since 2011. The course will be delivered in Mongolian language. Please

click here to see the agenda.

The course duration is two days, with the first day focused on ―Coal Mining‖ and the second day on

―Metal Mining‖.

The number of participants is limited. Please send your expression of interest via return email if

you are interested in attending this course to me at saruul@bcmongolia.org, 317027.

___________________________________________

2nd MONGOLIA TRADE & COMMODITY FINANCE CONFERENCE, 14 MAY, ULAANBAATAR

Exporta's second Mongolia Trade & Commodity Finance Conference will be held at the Chinggis Khan

Hotel in Ulaanbaatar on 14 May. The Business Council of Mongolia (BCM) is acting as an institutional

partner for the event and has negotiated a 15 percent discount for its members to attend.

The Mongolia Trade & Commodity Finance Conference is the only specifically organized event for

the Mongolian trade and commodity finance community. It provides an unrivaled platform for

discussion and networking for leading local businesses and institutions, as well as those

international practitioners looking to tap into the huge potential of this rapidly developing market.

Speakers include Chuluunbat Orchirbat, vice minister of the Ministry of Economic Development,

Battsengel Gotov, chief executive of Mongolian Mining Corp., and Jim Dwyer, executive director of

BCM.

To receive the discount quote BCM15 when booking. Click here for more information and booking

___________________________________________

COAL PROCESSING & MINING TECHNOLOGY EXPO, 4-5 JUNE, ULAANBAATAR

The Coal Processing & Mining Technology Expo will be held in Ulaanbaatar from 4 to 5 June 2013.

The expo is co-located with the Transportation & Logistics Expo, and because of this co-location you

will be able to meet with a more diverse and broader group of attendees. With many international

as well as local Mongolian companies already signed up to exhibit, you will be a part of what is

becoming the premier event for the mining and transportation industries serving Mongolia.

BCM members will receive a special 10 percent discount. To register and receive your discount

email Saruul at saruul@bcmongolia.org. For more information about the exhibition, contact Glenn

Scott atgscott@uexpos.com or visit the website coalexpomongolia.com.

___________________________________________

COALTRANS MONGOLIA, 19-20 JUNE, ULAANBAATAR

The Coaltrans Mongolia conference will be held at the Blue Sky Tower from 19 to 20 June. BCM

members will receive a 15% discount to attend the event, please use the discount code BCM.

Coaltrans Mongolia will explore the development of coal projects in the country and offer an insight

into what level of influence Mongolia will have over future international coal prices. Join us as we

return to this exciting market for the third year, to have an impact on how this new coal frontier

evolves and cement your position as a leading player in the market.

Speakers will include Batsuuri Yaichil, chief executive officer of Erdenes Tavan Tolgoi LLC, Graeme

Hancock, president and chief representative of Anglo American Development, and Bayanjargal

Byambasaikhan, chairman of the Business Council of Mongolia.

For more information, email coaltrans@euromoneyplc.com.

___________________________________________

FUTURE MONGOLIA, 19-22 JUNE, ULAANBAATAR

The Future Mongolia international trade fair will be held at the Buyant Ukhaa Sport Palace in

Ulaanbaatar, near the Chinggis Khaan International Airport, from 19 to 22 June, 2013.

After the successful premier with nearly 100 exhibitors from 14 nations and some 4,200 visitors, we

cordially invite you to the second Future Mongolia. This international trade fair offers the

opportunity on an enlarged exhibition space to present modern and sustainable solutions and

responses to the present needs of Mongolia and its population.

BCM members will get 5% discount on raw space. Please contact Saruul at saruul@bcmongolia.org

to get a special discount code. For more information, visit Future-Mongolia.com.

___________________________________________

“MM TODAY” on MNB-TV, Friday, 19:00-19:10

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

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

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

today‘s BCM NewsWire.

___________________________________________

BCM‟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, 2012 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 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.

The following presentations were added from "Foreign Investment in Mongolia: Challenges, Risks

and Solutions" conference (in Mongolian) on April 19 at the Kempinski Hotel organized by the

Business Council of Mongolia (BCM) and UB Risk Management Consulting:

•Гадаадын хөрөнгө оруулалтын өнөөгийн байдал, хэтийн төлөв, Төв банкны ерөнхий эдийн

засагч С.Болд, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ,

ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4 дүгээр сарын

19

•Шууд хөрөнгө оруулалтын өнөөгийн байдал, тулгамдсан асуудал, шийдвэрлэх арга зам,

Монголын Бизнесийн зөвлөлийн дэд дарга И.Сэр-Од, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ

ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага

хурал, 2013 оны 4 дүгээр сарын 19

•Үнэт цаас, хувьцааны зах зээлийн хөрөнгө оруулалт: эрсдэл, сорилт, цаашдын хандлага,

Монгол банкны Ерөнхийлөгчийн зөвлөх, санхүүгийн тогтвортой байдлын зөвлөлийн ажлын

албаны дарга Д. Ган-Очир, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ,

СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4

дүгээр сарын 19

___________________________________________

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

„PHOTO GALLERY‟

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

• Nick Cousyn, Chief Operating Officer, BDSec JSC, ―Gobi‘s Resort‖ at the BCM Monthly meeting Apr

22, 2013

• Brian White, Editor, The Mongolist – ―Analyzing Mongolian Politics from the "Middle Layer", at the

BCM Monthly meeting Apr 22, 2013

• Ch. Otgochuluu, Head of Strategic Policy and Planning Department, Ministry of Mining, ―Brief

introduction on mining policy‖ at the BCM monthly meeting Apr 22, 2013

• ―The current flow of investment into Mongolia‖, S. Bold, Chief Economist, Central Bank, at the

"Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at

the Kempinski Hotel.

• ―About regulation on FDI‖, S. Javkhlanbaatar, Foreign Investment Regulations and Registration

Department Head, Ministry of Economic Development of Mongolia, at the "Foreign Investment in

Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.

• ―Legal issues of regulation of foreign investment‖, B. Amarsanaa, Academic Secretary of National

Legal Institute, at the "Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference

on April 19, 2013 at the Kempinski Hotel.

• ―Investment in stocks and equities in Mongolia: risks, challenges and trends‖, D. Gan-Ochir, Head

of Financial Stability Council, Advisor to President of Central Bank, at the "Foreign Investment in

Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.

• ―On current state of equities foreign investment‖, D. Achit-Erdene, CEO, MICC, at the "Foreign

Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the

Kempinski Hotel.

• ―Market Update‖ by Mandal General Insurance LLC

• ―Annual Report 2012‖ by International Monetary Fund

• Ruth Pulaski, Director Marketing & Development, American University of Mongolia – ―American

University of Mongolia: Integrating a Liberal Education Approach to Learning‖ at the BCM monthly

meeting, March 25, 2013

• B. Bayar, Managing Director, ELC LLC – ―Update on Legal Developments Regarding Foreign

Investment‖ at the BCM monthly meeting, March 25, 2013

• Tony Burchill, Australian Consul-General & Trade Commissioner, Austrade – ―The Business of Being

a Third Neighbour‖ at the BCM monthly meeting, March 25, 2013

Other recently added presentations:

• Dr. Brian Fisher, Managing Director, BAEconomics, "Economic Impact of draft Minerals Law" at the

Kempinski Hotel, March 18, 2013, Ulaanbaatar

• Dr. Ch. Khashchuluun, CEO of UBRM Consulting, ―Mongolia and Mining, The policy evolution:

What's the next?‖ at the Kempinski Hotel, March 18, 2013, Ulaanbaatar

• Martin Pow, Partner, Enterprise Risk Services and Learning Leader, Deloitte Onch LLC, ―Black

Swans: Fact or Fiction,‖ A different risk management philosophy at the BCM Risk Management

Working Group meeting, March 14, 2013

The following 3 presentations were added from Coal Mongolia, 21-22 February:

• ―Current state of coal sector of Mongolia and future trends‖ by Minister of Mining D. Gankhuyag at

the Coal Mongolia 2013, Feb 21, SS Convention Center, Ulaanbaatar;

• ―Economic Reform Objectives‖ by Vice Minister, Economic Development, H.E. Mr. O. Chuluunbat

at the Coal Mongolia 2013, Feb 21, SS Convention center, Ulaanbaatar;

• ―Presentation for Coal Mongolia 2013‖, Norihiko Kato, CEO of Khan Bank, Feb 21 at the SS

Convention Center, Ulaanbaatar, Mongolia.

• Presentation by Bold Baatar, CEO of Altan Dornod Mongol, ―Mongolian Mining Investment

Environment‖ at the Mining Industry Open Discussion, February 1, 2013, at Kempinski Khan Palace

Hotel.

Please note the presentations from each of the BCM monthly meetings.

The ―Mongolia Reports‖ section includes ―Regional Economic Outlook: Asia and Pacific‖, April 2013

by International Monetary Fund; ―Highlights of 2012, Mongolia‖ by European Bank for

Reconstruction and Development (EBRD); the ―Official statement of Oyu Tolgoi LLC in relation to

information, data and facts related to Oyu Tolgoi discussed during open session of the State Great

Khural‖, dated 1 February, 2013‖; ―2013 Mongolia Investment Climate Statement‖, by the

Economic and Commercial Section of the U.S. Embassy; ―Mongolia Foreign Labor Force Ratio for

2013‖ by Hogan Lovells International LLP; ―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; ―Taxes for Expatriates in Mongolia‖ by

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 1,126 fans on our Facebook fans page, 1,219 connections on LinkedIn network, and

673 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 MEETING: BCM's Legislative Working Group met on Wednesday, May 8, with 21 members attending.

New members: Pierre-Oliver Guy from Audier Partners, David Bekcstead andAmarbayasgalan

Dorjderem from Lehman Le&Xu, Anastasiya Zherbakhanova from Anderson and Anderson were

welcomed.

Co-chairs Bayar B, ELC LLC, and James Liotta, MahoneyLiotta, moderated the session.

Meeting discussion was on the following topic:

- Update of draft National Policy of the Minerals Development - Algaa O, Executive director of

MNMA.

- Amendment to the SEFIL and the approved Regulations and Application - James Liotta, Mahoney

Liotta

- Discussion on 108 license revocation - Bayar B, ELC LLC and Algaa O, MNMA

Note: Draft National Policy of Minerals Development will be put on BCM`s Legislative Working group

web page soon in Mongolian and English version.

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]

March 31, 2013 *9.8% [source: NSOM]

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

Note: 9.4% y-o-y, Ulaanbaatar city, March 31, 2013

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 9.75% [source: IMF]

March 11, 2009 14.00% [source: IMF]

May 12, 2009 12.75% [source: IMF]

June 12, 2009 11.50% [source: IMF]

September 30, 2009 10.00% [source: IMF]

May 12, 2010 11.00% [source: IMF]

April 28, 2011 11.50% [source: IMF]

August 25, 2011 11.75% [source: IMF]

October 25, 2011 12.25% [source: IMF]

March 19, 2012 12.75% [source: Mongol Bank]

April 18, 2012 13.25% [source: Mongol Bank]

January 25, 2013 12.50% [source: Mongol Bank]

April 8, 2013 11.50% [source: Mongol Bank]

CURRENCY RATES – MAY 9, 2013

Currency Name Currency Rate

US dollar USD 1,436.87

Euro EUR 1,891.28

Japanese yen JPY 14.53

British pound GBP 2,234.69

Hong Kong dollar HKD 185.07

Chinese Yuan CNY 234.26

Russian Ruble RUB 46.18

South Korean won KRW 1.32

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.