BUSINESS COUNCIL of MONGOLIA NewsWire

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Issue 164, April 22 2011

NEWS HIGHLIGHTS: Business:

Prophecy Resource sees its fortunes inextricably linked with Mongolia’s;

MIAT to fly twice a week to Hong Kong from June 2;

Rio Tinto regains single 'A' status from major credit rating agencies;

Erdene provides project updates and reports year-end financial results;

Voyager Resources lists Khongor highlights;

General Mining Corp. preparing for drilling at potash project;

Kerry Gold Mines appoints new CEO and MD;

Haranga Resources appoints Chief Operating Officer;

Metals X acquires 17.1% interest in Alamar Resources;

Origo in Kincora deal with Brazilian Diamonds for a reverse takeover;

C @ Limited has option to acquire Mongolian coal asset;

Khan Resources applies to Ontario court regarding ARMZ litigation;

Bodi Group and Worley Parsons form alliance;

Rosenblatt & Co. allies with Ulaanbaatar law firm;

MCA team studies how Energy Resource is building its road;

Eurasia Capital opens three new Mongolian branch offices.

Economy: Hong Kong firms explain securities market;

SPC chief hints shares to businesses may not be sold immediately;

Rush to own or buy companies to claim shares;

PM among those blamed most by National Audit Office;

Some social and economic data released;

Success stories in Mongolian investment keep growing;

Minister promises better use of Employment Support Fund;

Official explains draft law on employment support;

MPs do not want Government control over raw material exchange;

Investors need to be bold to accept Mongolia’s challenge;

Foreign firms find the times “exciting” in Mongolia;

Mongolia targets global mining role as investments soar;

Royal Bank of Scotland index taps Mongolian growth potential;

Austrian business team coming in July to study investment opportunities;

Master plan to introduce single window for foreign trade;

Dorngobi to attract foreign investment, hopes forum;

More foreigners coming to Mongolia;

Mineral law amendments put human security, ecology before profit;

Mining fatalities rise;

HKEx's allure, and some quirks, for resource firms;

Standard & Poor’s sounds alarm on U.S. debt;

China's Wealth Fund chief warns on global growth;

China imposes strict price controls on basic consumer items;

China’s first-quarter GDP grows 9.7%, inflation 5.4%.

Politics: Mongolia halts coal movement, after China closes border post;

Herders ride into capital to demand elections in protest over foreign miners;

Prime Minister’s income rises, President loses car;

Top bankers being investigated;

8 senior appointments canceled because of irregularity;

Communication services spread to hitherto unconnected areas;

DP MP wants coalition dissolved to provide for “alert opposition”;

Wide participation at National Forum on Judicial Reform and Justice;

Khuvsgul Governor spends as he wants;

Film made on man who duped President, and stole MNT90 million;

Landlocked countries reaffirm right of access to and from sea;

Uranium policy shows Mongolia's diplomatic savvy;

China’s influence on car design for global sale accelerates.

*Click on titles above to link to articles.

BCM MONTHLY MEETING NOTICE

BCM‘s next monthly meeting for members will be Monday, April 25, at 5 PM at the KEMPINSKI HOTEL KHAN PALACE, 2nd floor, Altai Ballroom. Parking will be reserved in front of the hotel for BCM Members. The bilingual meeting will feature the following presentations: - Ch.Otgochuluu, Director, Economic Policy and Competitiveness Research Center – ―Introduction of Mongolia in World Competitiveness‖; - G. Temuulin, Deputy Director, Erdenes Tavan Tolgoi - ―Briefing - Erdenes Tavan Tolgoi Project‖; - Graeme Hancock, Senior Mining Sector Specialist, The World Bank – ―Mining in Mongolia: Challenges and Opportunities‖. A networking reception will be held for all attendees immediately following the business portion of the meeting in rooms “Khuvsgul” and “Hustai”, also on the 2nd floor, Kempinski Hotel Khan Palace. The City Club bar membership cards will be handed out at the meeting for all paid individual BCMers.

BUSINESS PROPHECY RESOURCE SEES ITS FORTUNES INEXTRICABLY LINKED WITH MONGOLIA‟S Mr. John Lee, CEO of Prophecy Resource Corp., has asserted that his company‘s fortunes and Mongolia‘s are inextricably linked. ―We really care for Mongolia and think of Mongolians first, simply because we know we cannot prosper if Mongolia itself does not prosper. We have to grow together with this country,‖ he has said in an interview. Asked about conditions in the country, he said ―infrastructure improvement takes time and cannot come overnight‖. In any case, Prophecy Resource is ―very fortunate that it does not need to use the overloaded‖ Mongolian railway system much to transport the coal from its Ulaan Ovoo deposit. As regards its other asset, ―our plans for the Chandgana coal is not to sell it, but to use it in the power plant we expect to build at the mine site. We shall need to build transmission lines, but not roads.‖ Commenting on the business environment in Mongolia, Mr. Lee said ―every country has its own risks and rewards‖ and Mongolia is no exception. ―Investors do not mind risks that are understandable, measurable and predictable‖, and in all this he thinks the legal framework in Mongolia is ―quite sound‖, with some improvements needed in issues relating to investment agreement, and ―some of the steps leading to commissioning are not so clearly defined‖. Foreign companies extracting mineral resources always have ―some uncertainty about what the Government response would be‖. Mr. Lee said, ―We‘ve made it very clear to the Mongolian Government that we want to be its

partner in growth and are committed to working for a successful Mongolia. We are subsidizing some local production to shift to Erdenet and the power to be produced at Chandgana will first be given to Mongolia before being exported. I think the initial hesitation and uncertainty have now passed, and we are developing a professional rapport with people in the ministry. We are confident the understanding will grow stronger, and the relationship will go forward. We have found that the Government listens to our concerns and plans.‖ The company, he said, stresses local employment, and over 90 per cent of its staff are Mongolian, including the chief geologist and all engineers. Apart from creating employment opportunities, ―we try to improve the infrastructure, and have allocated over USD300,000 for community programs. We support hospitals and schools in Selenge province, grant scholarships to university students, and hire interns from universities. And we shall be paying 25 per cent tax on our profits as we go into full steam,‖ he said. Also, the company ―plans to be listed on the MSE as quickly as possible, and offer shares at a discount to Mongolians.

Source: The Mongolian Mining Journal

MIAT TO FLY TWICE A WEEK TO HONG KONG FROM JUNE 2 Mongolia just got a little bit closer to Hong Kong, partly thanks to the city‘s banking community. MIAT Mongolian Airlines says it will start flying direct from Hong Kong to Ulaanbaatar. The new schedule—with flights Thursday and Sunday—will go into effect June 2. MIAT, whose executives have been talking about the possibility of a direct route for at least a year, says the decision was driven by the growing business connections between Hong Kong and Mongolia. ―Emerging development in the mining sector creates a huge interest of foreign investment and mining associated trade in Mongolia,‖ a MIAT representative said. ―In this regard, there is a potential demand on business travel between Mongolia and Hong Kong.‖ Hong Kong Exchanges and Clearing Ltd. has made a big push to lure resource firms onto the HKEx recently, with executives touring resource-rich destinations, including Mongolia. With companies such as Mongolian Mining Corp. and SouthGobi Resources now listed in Hong Kong, resource-sector bankers from the city have been making regular trips north to Ulaanbaatar. And starting June 2, they will be able to do that without having to change planes in Seoul or Beijing.

Source: The Wall Street Journal blogs

RIO TINTO REGAINS SINGLE „A‟ STATUS FROM MAJOR CREDIT RATING AGENCIES International credit rating agency Standard & Poor‘s has raised its long-term corporate credit rating on diversified giant Rio Tinto to A- from BBB+. At the same time, it affirmed the A-2 short-term corporate credit rating, indicating that the outlook for Rio Tinto was now stable. Prior to this upgrade, Rio Tinto‘s credit rating was assessed by S&P as BBB+ for long-term debt and A-2 for short-term debt, with a positive outlook. Rio Tinto‘s CFO Guy Elliott said the decision to upgrade Rio‘s credit rating acknowledged the financial strength of the group. ―Rio Tinto has now regained single A status from all major international credit rating agencies, thus achieving a key corporate target. We will retain a prudent balance sheet, which will allow us to continue to invest, as appropriate, in our first-class growth projects and in other opportunities as they arise,‖ Mr. Elliot said.

Source: Mining Weekly

ERDENE PROVIDES PROJECT UPDATES AND REPORTS YEAR-END FINANCIAL RESULTS Erdene Resource Development Corp. has listed the following as highlights in its latest update on the company's principal projects in conjunction with the release of its year-end financial results. - Drilling commences on Khuvyn Khar copper discovery - Zuun Mod resource report initiated by Runge (Minarco-MineConsult) incorporating new results - Copper-gold drill targets established at Nomin - Aggressive drill program underway by Xanadu on Galshar coal project; Xstrata Alliance coal evaluations continue. Following the recent drilling results indicating higher molybdenum and copper grades in the South Racetrack deposit at Zuun Mod, a new NI 43-101 compliant resource estimate is now being completed by Minarco Mine Consult. Anticipated to be delivered during the second quarter, this new resource estimate and the recommended follow-up will be the basis for the next stage of development. Drilling commenced on April 5 at the Khuvyn Khar porphyry copper project as part of a 4,000-meter exploration program. A geophysical program over the Nomin copper-gold prospect was successful in identifying drill targets including anomalies coincident with the areas of mineralization on surface.

It is anticipated that the target will be drill tested during the second quarter. Erdene is involved in a comprehensive coal generative and acquisition program in Mongolia that evaluates numerous prospective metallurgical and high-quality thermal coal deposits. The program is being fully funded by the company's partner, Xstrata Coal, with whom it is coordinating operations. On March 8, Xanadu Mines Ltd. commenced an extensive drilling program at its Galshar coal project. Erdene holds a royalty interest from any coal mined from the property. Read more… The Company recorded a loss of USD3,567,559 in fiscal 2010 compared with a loss of USD2,177,057 in fiscal 2009. At December 31, 2010, Erdene had approximately USD8.3 million in working capital, including that of its controlled subsidiary APM, compared to USD14.0 million at December 31, 2009.

Source: Erdene Resource Development Corp.

VOYAGER RESOURCES LISTS KHONGOR HIGHLGHTS Voyager Resources Limited has listed the following highlights in a presentation on its 100% owned Khongor asset. - Potential world class copper-gold property - High grade surface oxide zone with 18m at 1.84% copper & 0.43 g/t gold in trenching - Extensive drill intercepts including 50m at 1.0% copper and 0.3 g/t gold - High Grade structural zones, including 14.1m at 2.4% copper & 0.64 g/t gold - Geologically similar to Oyu Tolgoi (3.75 billion tons at 0.98% copper and 0.38 g/t gold).

Source: Voyager Resources

GENERAL MINING CORP. PREPARING FOR DRILLING AT POTASH PROJECT General Mining Corporation has said in its March 2011 Quarterly Report that preparations are under way for deep potash exploratory drilling at its 100% owned Uvs project in Mongolia. The project comprises 5 granted exploration licenses covering more than 2,000 sq. km within the Uvs Nuur Basin that is considered prospective for bedded and domal (salt diapir) potash deposits as well as for lithium and potassium brines. During the 2011 field season, the company plans to drill from 3 to 5 potash exploratory holes to an average depth of 1,000 meters, targeting bedded potash as a primary exploration target as well as lithium brines. Negotiations with drilling contractors are currently under way and the company is also obtaining all necessary approvals to start drilling without delays. Planning is also under way to continue exploration at the company‘s Khangai Project during the 2011 field season and to follow up on some known copper and nickel occurrences as well as to investigate gold and lithium brine potential at the company‘s tenements.

Source: General Mining Corporation

KERRY GOLD MINES APPOINTS NEW CEO AND MD Mongolia-focused exploration and development company, Kerry Gold Mines Limited (KGM) has appointed Mr. Bill Colvin as CEO and Managing Director. KGM is a privately held company that has been established by the Kuok Group of Hong Kong to explore and develop mineral resources in Mongolia. The appointment of Mr. Colvin highlights the company‘s strategy to progress its open-cut gold and underground copper-gold projects into production. Source: Kerry Gold Mines Ltd.

HARANGA RESOURCES APPOINTS CHIEF OPERATING OFFICER Haranga Resources Limited has appointed Mr. E. Tsengelbayar its Chief Operating Officer. A Mongolian national, Mr. Tsengelbayar has more than 16 years‘ experience in mineral economics and consulting, mineral asset assessment, mineral project finance and M&A advisory for both the public and private sector in Mongolia. He joins Haranga Resources from a Mongolian investment bank, and had earlier worked for both the Mineral Resource Authority of Mongolia and the former Ministry of Industry and Trade. He previously acted in an advisory role for Haranga and assisted in the acquisition of a number of the company‘s current projects. Mr. Tsengelbayar will also act as Executive Director of the company‘s Mongolian subsidiaries. Source: Haranga Resources Limited

METALS X ACQUIRES 17.1% INTEREST IN ALAMAR RESOURCES Metals X Limited has increased its holding in Alamar Resources Limited to 17.1% from 3.5% following its participation in Alamar‘s recent capital raising and acquisition of exciting gold assets in Mongolia. Alamar has acquired all the issued capital and assets of MRCMGL LLC to make it a wholly

owned subsidiary. Alamar has advised its initial focus is to upgrade and increase production from its gold assets located within the North Khentei gold belt of Mongolia. This gold belt includes several historical mines and deposits including the Boroo and Gatsuurt gold mines, Bumbat, Erren, Khargant and Sujigtei gold deposits. Alamar‘s two key projects are: Kargana (Blue Eyes) Gold Project (85%), and the Sujigtei Gold Project (90%). In addition to the gold prospects, MRC holds exploration permits covering the Barglit Iron Ore Prospect and the Doshin Thermal Coal Prospect. No JORC compliant resources currently exist at either of the projects. A detailed drilling and sampling program is planned to begin in the near future to define JORC compliant resource estimates. Metals X has said in a statement, ―Following a recent visit to the projects in Mongolia, Metals X considers the projects to have outstanding potential for significant gold discoveries and low cost production. We are pleased to join with the majority Mongolian ownership in Alamar as a platform to build a specialist Mongolian focused gold company.‖ Source: Metals X

ORIGO IN KINCORA DEAL WITH BRAZILIAN DIAMONDS FOR REVERSE TAKEOVER Private equity investor Origo Partners plc has reached agreement with Toronto-listed Brazilian Diamonds Limited for the acquisition of Origo's interest in Kincora Group. Kincora, a BVI-registered copper and gold exploration company focused on Mongolia, owns a 100% stake in the Bronze Fox copper-gold prospect through a Mongolian subsidiary. Brazilian Diamonds will acquire Origo's 25% stake, the loan and option in return for shares representing an equity interest in the company of 31-35%. BZD will also provide funding required to exercise the option immediately on completion of the agreement. The transaction constitutes a reverse takeover under Toronto Venture Exchange rules. Origo CEO Chris Rynning said, ―We believe this proposed transaction will enable Kincora to establish itself as a first-tier copper and gold explorer and consolidator in Mongolia, with Bronze Fox as its flagship project. Bronze Fox is an advanced exploration project where the initial exploration focus remains on a known and large copper-gold feature at the surface. The license is over 22,000 hectares and features numerous highly prospective target zones.‖ Source: StockMarketWire.com

C @ LIMITED HAS OPTION TO ACQUIRE MONGOLIAN COAL ASSET C @ Limited (CEO) has entered into a binding and exclusive agreement with an international coal developer that has a significant position in the coking and thermal coal industry in Mongolia, providing CEO with an option to acquire eight highly prospective coal exploration licenses in the South Gobi, near the Chinese border, and adjoining Ovorhangai province in southern Mongolia. The licenses in Ovorhangai are close to existing mining operations. The option period commenced on April 19, 2011 and will continue for a period of 10 weeks, during which time CEO will complete due diligence on them. Source: Reuters Key Development

KHAN RESOURCES APPLIES TO ONTARIO COURT REGARDING ARMZ LITIGATION Khan Resources Inc. last week filed materials with the Ontario Superior Court of Justice on a motion to dispense with or order substitute service on Atomredmetzoloto JSC (ARMZ) in respect of Khan's USD300-million lawsuit for damages against ARMZ. The application to the Court follows Khan's announcement on February 7 that the Russian Ministry of Justice refused to effect service on ARMZ. The Ministry of Justice cited Article 13 of the Hague Convention that provides that "the State addressed may refuse to comply only if it deems that compliance would infringe its sovereignty or security".

Source: Khan Resources

BODI GROUP AND WORLEY PARSONS FORM ALLIANCE Bodi Group and Worley Parsons of Australia have signed a Strategic Alliance Agreement to work together on a preferential basis to utilize the strengths of both sides to pursue projects in energy, infrastructure and construction sectors. Worley Parsons has been providing professional service in the engineering, procurement, and construction management of various projects throughout the world for many years.

Source: Bodi Group

ROSENBLATT & CO. ALLIES WITH ULAANBAATAR LAW FIRM No longer known simply for its unique history and tourism, Mongolia is quickly becoming a magnet for new investment with its strategic location next to Kazakhstan, Russia and China, substantial natural resources reserves, and market reforms that puts it at number 73 on Word Bank‘s Doing Business report, ahead of Greece, Vietnam, Egypt and China. In reaction to the rapid need, Rosenblatt & Company has launched an office in Ulaanbaatar as of April 1, 2011. ―We are pleased to announce our alliance with the respected Zata Law Firm, and look forward to assisting clients in our expanding cross-border transactional practice, with a focus on emerging markets,‖ said Mr. Phillip Rosenblatt, Managing Partner. ―The addition of Batbileg and Yesudei, leading Mongolian practitioners, to our team, will help us provide top-notch integrated international advice to key foreign and Mongolian investors on in-bound and out-bound transactions.‖ The alliance will help to meet the expanding needs of the natural resources, finance and capital markets sectors. Additionally, as manufacturing and services sectors are expected to grow, the Mongolian partners look to benefit from Rosenblatt & Company‘s long-term expertise in markets such as Turkey and Emerging Europe, Egypt and the Middle East and Kazakhstan and Central Asia.

Source: Rosenblatt & Company

MCA TEAM STUDIES HOW ENERGY RESOURCE IS BUILDING ITS ROAD Officials of the Road Project in the Millennium Challenge Account – Mongolia recently met with an Energy Resource Company team to find out how they have managed to achieve such quick progress in constructing a 245-km-long asphalt road from Ukhaa Khudag to Gashuun Sukhait. They asked detailed questions on overall management of the project, particularly how material and equipment were delivered to sites, how competent construction contractors were selected, and how their work was monitored and supervised.

Source: Montsame

EURASIA CAPITAL OPENS THREE NEW MONGOLIAN BRANCH OFFICES Eurasia Capital Mongolia has received approval from the Financial Regulatory Authority (FRA) to open branch offices in Erdenet, Darkhan and Dalanzadgad which are capitals of Orkhon, Darkhan-Uul and South Gobi provinces respectively. It thus becomes the first brokerage firm to launch a branch network in Mongolia, covering three important regions along with its headquarters in Ulaanbaatar. It believes that rapid economic growth in Mongolia will have a strong positive impact on regions where companies and individuals will be increasingly seeking brokerage and investment banking services. Eurasia Capital intends to open more offices throughout Mongolia in 2011-2012. Its Chairman, Mr. Alisher Ali, stressed, "We view it as our mission to bring international standard investment banking and brokerage services to regions in Mongolia." Mrs. G. Oyunbold, Executive Director, stated, "We are delighted to have an opportunity to provide access to capital for Mongolian regional companies and contribute to emergence of an equity culture in Mongolia through our expanding nationwide branch presence. We are committed to training our local staff in new branches to build their professional skills and expertise." Erdenet is the second largest city in Mongolia, with an estimated USD6,400 GDP per capita, the highest in Mongolia. It is home to Erdenet Mining Corp., Mongolia's largest company, biggest taxpayer and exporter, and accounts for 13% of the country's GDP. Darkhan is the country‘s third largest city and home to many Mongolian companies in mining, manufacturing, construction materials and agriculture products. Dalanzadgad is the fastest growing provincial capital in Mongolia and by 2015 is expected to enjoy the highest GDP per capita in Mongolia. Source: Eurasia Capital

SPONSORS

Khan Bank Eznis Airways

Kempinski Hotel Khan Palace Mongolian National Broadcasting

Mongolian Star Melchers

ECONOMY HONG KONG FIRMS EXPLAIN SECURITIES MARKET Two conferences organized last week by The Foreign Investment and Foreign Trade Agency (FIFTA) in Ulaanbaatar generated considerable interest among officials, brokers and dealers. In the first, Sentinel Group of Hong Kong explained on April 14 all aspects of selling securities at the Hong Kong Stock Exchange. Next day, it was the turn of KPMG from Hong Kong to offer training on how to prepare financial statements according to international standards. Apart from about 200 organizations and entities interested to know more about trading in securities at the Hong Kong Stock Exchange, the others present on Thursday included senior officials of the Hong Kong Exchange, Мacquarie Capital Advisers, and the New York Mellon Bank.

Source: Montsame

SPC CHIEF HINTS SHARES TO BUSINESSES MAY NOT BE SOLD IMMEDIATELY In a recent wide-ranging interview with the Mongolian National Broadcasting Channel, Mr. D.Sugar, Chairman of the State Property Committee (SPC), has said each of the 53,336 local business entities will get 28,123 shares in Erdenes Tavan Tolgoi, but ―sale of these shares may be held back, as our consultants say 10% is too high a figure to be distributed that way‖. Their concern is that ―so many shares put cheaply into the market could affect the general share value, as they can be privately traded before offered on the secondary market‖, he said. He has heard that deals are being made to acquire small companies so as to claim shares at a cheap price, and said, ―This is not how we intend things to go and I warn companies acquiring small companies that they are taking a big risk. Several authorities will check everything thoroughly. Any suspicious transaction will mean cancellation of the shares issued.‖ He also advised the selling companies ―to be patient‖, as these shares will be ―more profitable in the long run than opting for quick money now‖. Mr. Sugar rejected any suggestion that politicians put pressure on the SPC. At one level it is true that ―all decisions are in fact taken at the political level, as it is politicians who are in Parliament and in government‖, and Mr. Sugar admitted it will be correct to say ―just 5 Ministers are involved in taking all major decisions‖ on Tavan Tolgoi. ―That is the way it works and it has to be so as it is not possible to call a Cabinet meeting every day,‖ he said, explaining that accordingly the Government set up a working group of 5 Ministers headed by the Prime Minister to work on the job. ―We report to them, but the Ministers do not tell us what to report, and a charge of political interference can be made only if someone pressures us to include or omit any specific candidate. Nothing like that has happened so far, but I can‘t say what will happen in the future.‖

Source: The Mongolian Mining Journal

RUSH TO OWN OR BUY COMPANIES TO CLAIM SHARES Ever since it has been clear that businesses fulfilling certain conditions will be eligible to buy cheap shares in Erdenes Tavan Tolgoi, there has been a spate of advertisements in newspapers and on radio and TV offering to arrange for registration certificates to show that a company was doing business on the cut-off date. Usually this ―mediation service‖ costs anything up to MNT800,000. Advertisements seeking to buy a company are also common. Offices that issue the relevant papers are full of people and much money is changing hands to show that a company was registered on a certain date and has no unpaid taxes.

Source: Zuunii Medee

PM AMONG THOSE BLAMED MOST BY NATIONAL AUDIT OFFICE Prime Minister S.Batbold and Minister for Mineral Resources and Energy D.Zorigt are among those the National Audit Office has blamed most for accounts irregularities and faulty reporting in Ministries and Agencies under them. The audit has found many instances of incorrect reporting, inflated expenses, failure to record income, diversion of budget money, unauthorized spending, and issue of bad loans. Among the others blamed for the way accounts have been kept in organizations under them are Ministers for Foreign Affairs G.Zandanshatar, for Road, Transportation and Urban Development Kh.Battulga, and for Food, Agriculture and Light Industry T.Badamjunai. The auditors have also expressed displeasure at the way things functioned under the Chief of the Financial Regulatory Authority, Mr. D.Bayarsaikhan, and the Secretary of the National Security Council, Mr. Ts.Enkhtuvshin. The audit was satisfied with the performance of organizations under Speaker D.Demberel, Ministers for Defense L.Bold, and for Education, Culture and Science Yo.Otgonbayar, the Chief of the Human Rights Commission, the Chief of the State Service Council and the Judge General of the Supreme Court.

Source: Ardiin Erkh

SOME SOCIAL AND ECONOMIC DATA RELEASED Unemployment: The number of job seekers registered in Social Welfare and Labor Offices all over the nation reached 40,800 in March. This was 3,649 or 9.8% more than in the same period in 2010. Of them, 53% had held a job before while 47% had no experience. Altogether 11,600 citizens registered themselves in the first three months of 2011, while the names of 2,600 were struck off for failing to show they were actively seeking jobs. Also, 6,500 got jobs through the employment office. Of the total registered unemployed, 22,500 are between 16 and 34, 19.5% have post-school diplomas while 0.6% did not graduate from school. Budget, foreign trade: The figures indicate increased mineral resources exploitation has begun to show a positive impact on the economy. The budget deficit has turned into a surplus at the end of March. Revenue, including aid, stood at MNT925.4 billion, while expenses, including loan repayment, totaled MNT821.5 billion, making for a surplus of MNT103.9 billion. Turnover of trade with 101 countries reached USD1,830 million, with exports accounting for USD742.1 million and imports for USD1,087.8 million.

Source: News.mn SUCCESS STORIES IN MONGOLIAN INVESTMENT KEEP GROWING The Mongolian development profile is not without its challenges. Logistics, both rail and longer term for pipelines, call for thousands of kilometers of infrastructure to be built. Maintaining stability across a very young political system of only 20 years is paramount. And managing the overwhelming dependence on a key customer – China – that last year accounted for 80% of exported goods may not be without some volatility going forward. Managing the risks is part of the Mongolian investment story and the success stories keep growing. This week a company named Brazilian Diamonds on the TSX (renamed Kincora Copper) is acquiring one of Ivanhoe‘s former top 3 high priority targets called Bronze Fox along the world-class Oyu Tolgoi copper belt through an RTO. The known deposit is in the right location (along the Chinese border and within proximity to existing rail), backed by the right team who understand the Mongolian political landscape (international and on-the-ground experts in Ulaanbaatar), and in the right commodity (copper, feeding China‘s insatiable appetite for infrastructure growth). Later in the year, we expect to see a very large coking coal IPO, again along the Chinese border corridor backed by a local and international team and within the right commodity group feeding insatiable Chinese demand for steel. And finally Firebird Mongolia Fund continues to grab headlines as one of the key consolidators in Mongolia smartly acquiring positions on the domestic Mongolian Stock Exchange in well established long lasting domestic companies. Some of the challenges of Mongolia‘s development only highlight the opportunities that are available for investors to ―play‖ now, in a smart and tidy way. Source: www.resource-cap.com

MINISTER PROMISES BETTER USE OF EMPLOYMENT SUPPORT FUND Replying to members‘ allegations at a meeting of the Standing Committee on Social Policy, Education, Culture, and Science that money in the Employment Support Fund was being misused in a number of ways, Finance Minister S. Byambatsogt, himself a member of the committee, revealed that various measures have been put in place to ensure fraudulent claims for payment were detected early. All District Employment Support Agencies will submit a quarterly report, and people claiming financial aid for attending training in areas which are not in demand will be identified. There have been regular cases of employment providers receiving incentive for creating positions that turned out to be temporary. The people employed were quickly laid off, then new people taken in, and incentives claimed again. The Minister said from now on incentive will be paid only after ascertaining that a position has been held for at least one year by the person newly employed. The MPs urged the Minister to resolve the present anomalous situation where unemployed Mongolians rush overseas while people have to be imported to work at projects in Mongolia. The Minister said this happened because the vocational training institutes in the country did not offer courses in the special skills demanded for the projects coming up and gave an assurance that ―this distortion has to be rectified without delay‖.

Source: Unuudur

OFFICIAL EXPLAINS DRAFT LAW ON EMPLOYMENT SUPPORT The Chief of Labor and Social Welfare Office, Mr. D.Bayarsaikhan, has told media that the present law on employment support was passed in 2001 and the Government wants to update it in line with the considerable changes that have taken place in society and the economy. The amendments it has proposed seek to encourage more local initiative for programs and projects appropriate to that area‘s particular conditions and resources. The present law is not very flexible in such matters. Also the draft identifies certain sections of the population as having special difficulty to find jobs. They are citizens between 35 and 60, ex-convicts, and those without any special skills. The state will provide help to them to be valued in the job market. Told of criticism that the draft supports unemployed citizens more than those who work, Mr. Bayarsaikhan expressed wonder why people who already have a salaried job should feel the need for any further special Government support. ―Unemployed citizens are the obvious target of a law on employment support. We do not mean it for all citizens,‖ he said. He also said he did not support some MPs‘ demand to raise the incentive for employers who give a job to those between 35 and 60 to 12 times the minimum salary from the present 5 times. Source: Undesnii Shuudan

MPs DO NOT WANT GOVERNMENT CONTROL OVER RAW MATERIAL EXCHANGE Representatives of the Ministry of Food, Agriculture and Light Industry and the National Chamber of Commerce and Industry attended a discussion on the proposed raw material exchange on Monday, organized by the Standing Committee on Nature, Environment, Food and Agriculture. There were suggestions view that the Government should prepare a list of goods and semi-processed products to be traded on the exchange. MPP MP N.Ganbyamba was quick to oppose this, saying the Government should stay away from the exchange and allow trade there to follow the law of demand and supply. DP MP Ts.Sedvanchig supported him, noting that the experience of other countries showed that when a government regulated an exchange, trade there was limited to goods that were not acceptable in any other market. This would surely lead to the failure of the proposed market, he said.

Source: Undesnii Shuudan

INVESTORS NEED TO BE BOLD TO ACCEPT MONGOLIA‟S CHALLENGE ―The undeveloped mineral wealth in Mongolia is spectacular – this is a country that really is sitting on a pot of gold. It has one of the largest undeveloped copper, gold and uranium deposits in the world and is believed to have the largest untapped supply of coal,‖ says Edison Research in a briefing on the country. ―Thanks to positive recent political and economic developments, Mongolia is set for spectacular growth which is becoming noticed globally. And backed by its resource-rich landscape of world class deposits, Mongolia has been coined the ‗Saudi Arabia of Coal‘ with strong parallels to previous natural resource booms around the world,‖ it adds. Getting all those minerals out of the ground and onto the Chinese and world markets is going to be a major challenge. With no sea port and major infrastructure spending needed it could be years before Mongolia can cash in on its untapped wealth. ―The challenge is going to be getting it out. Funding the development of the mines and constructing the necessary infrastructure will take large

investment, which will have to come from outside the country,‖ says Edison Research. ―Mongolia needs an upgrade – it needs new housing, new roads, new electricity and water processing networks and all the support functions that massive investment in the country will require.‖ Mr. B. Bold is a former Wall Street banker and now the chairman of the Mongolian Stock Exchange. He says the challenge for Mongolia is to use the country‘s huge natural resources to drive sustainable development. ―The Mongolian people are now all watching the copper price and are excited about cashing in on their country‘s new found wealth,‖ he said in an interview in London. ―Whilst Australia needs a rail road, a port, a ship and another port to get raw materials to China, we can simply drive it into China over 300 kilometers of desert,‖ said Mr. Bold, who admits big investment is needed to help get its huge natural resources to market. ―Access to ports in China and Russia will be important to help us diversify our buyers,‖ he said. ―We want to target markets like India, Japan and South Korea.‖ Read more… Mongolia plans to create national champions equivalent to Brazil‘s Vale and predicts a national champion with a market cap of between USD30-60 billion listed in London. ―In coal and copper and gold we will be producing enough to be taken very seriously by the global markets. Outside of our coal and copper reserves that are being developed we have 13 other major strategic reserves with minerals like molybdenum, fluorspar, uranium, tin and tungsten. There is a huge opportunity for Mongolia,‖ said Mr. Bold. ―Much progress has been made but it is still in transition to a market economy. This is evident both from the debate between the ―new‖ breed of politicians that embrace globalization and the still-strong nationalists that believe in protectionism and full state ownership of assets, and in the underdeveloped legislative infrastructure to support a free market,‖ says Edison Research. Clearly the nationalists are a risk to foreign investment, but if the so-called new breed can make the most of its opportunity, higher standards of living and quality of life for the locals could help entrench the rule of law and protection of foreign investors.

Source: CNBC.com

FOREIGN FIRMS FIND THE TIMES “EXCITING” IN MONGOLIA Mongolian authorities are hoping the nascent mining industry -- and the deep-pocketed foreign firms interested in it -- can help pull thousands of people out of poverty in the mineral-rich but still undeveloped country. "It‘s an exciting time. It‘s like being in the beginning of the gold rush in the Yukon in Canada," an industry analyst says. The government will announce the results of the bidding on Tavan Tolgoi "as soon as possible, certainly this year", Mr. Ts. Tsenguun, head of investment at state-run Erdenes MGL LCC, the parent of Erdenes Tavan Tolgoi (ETT), said. ETT owns the rights to mine the Tsankhi block of Tavan Tolgoi, which contains 2.2 billion tons of coal. It will be developed by a number of companies working in conjunction with the government. Mr. D. Damba, president of the Mongolian National Mining Association, said it was "possible that more than one of the mining companies would be selected, as choosing more than one is the best at the moment". "The fact that all the coal mining giants are here stresses what is going on. A lot has been learned about the Government‘s approach to its resources and the way it is tackling this industry," an analyst said. An initial public offering of ETT slated for early next year is expected to raise up to USD2 billion and includes a plan to distribute shares to every Mongolian. "The distribution of shares is a good idea for Mongolia," Mr. Bold, chief executive of investment firm Newcom Group, told a recent coal conference. "Mongolians like to share and we intend to share the wealth among all Mongolians. From an economic point of view, it makes sense when you have thousands of shareholders standing behind you."

Source: AFP

MONGOLIA TARGETS GLOBAL MINING ROLE AS INVESTMENTS SOAR Mongolia's vast mineral resources are transforming the country into a global mining powerhouse. The Gobi is now seeing a flood of geologists, miners, investors and speculators, all in search of the enormous mineral wealth lying below its desolate surface. "Mongolia has finally arrived on the global mining scene," investment banker B. Bold recently told a delegation of coal mining executives attending a conference in Ulaanbaatar. "Over the next five to 10 years we are going to produce a world class mining industry that will rival Chile or Brazil." Until recently, Mongolia's nascent mining industry had been based on artisanal gold mining, small-scale oil joint ventures with China and a 50-year-old copper mine built by the Soviets. But a tidal

wave of bigger deals is transforming the entire industry. The supply chain is lining up to fill in gaps in Mongolia's basic infrastructure. Power plants, coal washing plants and oil refineries are planned. Banking, transport and service industries are all just waking up to the potential. "Mongolia lags behind in many areas, but the government is striving to offer a favorable investment environment. We are reducing bureaucracy, building up mining-related infrastructure and striving to ensure transparency and international standards," Deputy Prime Minister N. Altankhuyag told the conference delegates. "There is no question that GDP will double in five years and triple in 10 years," says Mr. Bold, a one-time Wall Street banker who recently returned to Mongolia to explore new opportunities here. He predicts that in a decade per capita income could exceed USD10,000, well above the current per capita GDP of about USD3,200. Read more… But as a developing country with entrenched graft and an inexperienced democracy, there are clear obstacles ahead. Many fear the nation's wealth will remain in the hands of a small class of the mega-rich. "Whether we end up as Norway or Nigeria remains an open question," says Mr. Bold, referring to oil-based wealth distribution schemes developed by the Norwegian government. The key, says Mr. Bold, is to avoid rash decisions. "It's not a slam dunk - but I think over the long term as long as we are not rushing to develop these resources, I think the country will be prosperous."

Source: BBC

ROYAL BANK OF SCOTLAND INDEX TAPS MONGOLIAN GROWTH POTENTIAL Royal Bank of Scotland (RBS) has launched an index and a certificate listed on the Frankfurt, Stuttgart, and the Six Swiss Exchange, that provide access to Mongolia, home to the world‘s fourth-largest copper reserves and ninth-largest coal reserves, as well as substantial deposits of gold, uranium, rare earths and zinc. The RBS Mongolia Opportunity (TR) Index targets companies that conduct most of their business in Mongolia but are listed abroad. Constituents must generate at least 50% of their revenue in Mongolia or focus at least 50% of their business activities on the Mongolian commodities sector. ―Prices are quite high for commodities and the country itself is still very poorly developed. We are trying to generate access to its economic development,‖ says Mr. Kemal Bagci, director of equity derivatives and structured retail at RBS in Frankfurt. The equities initially included in the index are listed on stock exchanges in Canada, Australia, Hong Kong and the UK, and denominated in Canadian, Australian and Hong Kong dollars and UK sterling, respectively. ―We had to create a concept that contains enough constituents to make it diversified and fulfill the liquidity criteria so that we can market it and investors can get in and out as they please,‖ says Mr. Bagci. The index is calculated by Standard & Poor‘s and comprises nine equities from the mining sector, which are weighted initially according to their market capitalization at flotation, then re-weighted twice a year. New companies can be added: ―if the local companies in Mongolia get bigger and more liquid, we can include them,‖ says Mr. Bagci. The bank has seen demand for the index from insurance companies and asset managers, as well as retail investors. Mongolia‘s gross domestic product (GDP) of just USD5.8 billion and population of three million translates into per-capita income of USD3,300, placing it in the poorest quarter of world economies, according to RBS research.

Source: Risk.net

AUSTRIAN BUSINESS TEAM COMING IN JULY TO STUDY INVESTMENT OPPORTUNITIES A representative team from the Austrian Chamber of Commerce will be in Mongolia from July 2 and 6 to make an on-the-spot study of investment opportunities. This was decided after Mongolian and Austrian businessmen held a round table meeting in Vienna last week. The Mongolian Ambassador to Austria, Mr. J.Enkhsaikhan, pointed out to participants that while mining was the major attraction for foreign investors, Mongolia also offered opportunities in agriculture, light industry and tourism.

Source: English.News.mn

MASTER PLAN TO INTRODUCE SINGLE WINDOW FOR FOREIGN TRADE Delegates from Ministries and Agencies that work in foreign trade, exporters, importers, transportation operators, banks, and insurance providers recently attended a meeting with representatives of foreign partners to discuss a master plan on how to set up a single-window service to facilitate all work related to foreign trade of Mongolia at the Ministry of Foreign Affairs and Trade. The meeting discussed how the single-window service would benefit importers and

exporters, by reducing the role of state officials in business, by helping find partners, and save time. The foreign partners included the UN Economic and Social Commission for Asia and the Pacific, the Swiss Agency for Development and Cooperation, the World Bank, the Asian Development Bank, JICA, the Japanese Embassy, and KOIKA.

Source: News.mn

DORNGOBI TO ATTRACT FOREIGN INVESTMENT, HOPES FORUM Last week‘s two-day investment forum aimed at boosting development in Dornogobi province will be a new start to attract investors to the nation, a senior Mongolian official has said. "Many companies are interested in investing in our province as we are going to have a large infrastructure project," Dornogobi governor P. Gankhuyag said at the forum. He was referring to the Mongolian Government's plan to develop a heavy-industrial park in Sainshand that includes a cooking coal plant, a copper smelter plant and an oil refinery. Dornogobi, which borders China, has Mongolia's only railroad running through its provincial capital Sainshand to China. Known for its rich mineral resources, the province has seen operations of many international companies such as Dongsheng Petroleum of China and Areva Group of France. As Mongolia is also going to build new railways from large mining sites in South Gobi region to the eastern province, "Sainshand is going to be a key hub of railroad and motor-road," Mr. Gankhuyag added. Chinese Ambassador to Mongolia Wang Xiaolong, who also attended the forum, hailed Dornogobi's rich natural resources, saying he believed the province would have a bright future. "Development of the province not only contributes to Mongolian economy, but also to the development of China and strengthening of friendly relations between China and Mongolia," Mr. Wang said. Cooperation between the two sides goes beyond the mining sector, said the ambassador, adding it has also covered humanitarian and other valued-added production fields.

Source: Xinhua

MORE FOREIGNERS COMING TO MONGOLIA The first three months of the year are usually not the time when foreigners prefer to come to Mongolia, but things are changing with so much international attention now focused on the country‘s mineral resources and various aspects of their commercial exploitation. The number of foreigners, including tourists, arriving between January and March was approximately 8,000 more than in the first quarter of 2010. The number of people going from Mongolia to Asian and Pacific countries has also increased, but there have been fewer travelers to Russia.

Source: Unuudur

MINERAL LAW AMENDMENTS PUT HUMAN SECURITY, ECOLOGY BEFORE PROFIT A member of the working group that is preparing amendments to the law on mineral resources, MP D.Gankhuyag, has said that the group wants the amended law to focus on mine workers‘ security and health first, then on protection to nature and ecology, and only thereafter on profit. The group has also discussed the role in mining of local authorities and concession claimants. The new law should be adopted before April 30 when the term for suspension of granting mineral resources exploration and exploitation licenses ends. The working group is coordinating with the Office of the President and the Mineral Resources Authority to make this possible.

Source: Udriin Sonin

MINING FATALITIES RISE The State Specialized Inspection Agency has found that fatalities from mining accidents have been increasing every year. Altogether 1,223 industrial accidents were registered between 2008 and 2010, killing or injuring 1,479 people. The mining sector accounted for 302 of these accidents and for 83 or 80% of the deaths. The Agency also says working conditions in mines are getting worse and posing more long-term dangers to miners‘ safety and health, making them especially vulnerable to respiratory diseases.

Source: News.mn

HKEx‟S ALLURE, AND SOME QUIRKS. FOR RESOURCE FIRMS Resource companies are flocking to Hong Kong to raise capital. Are they coming to the right place? One large deal Hong Kong would gladly add to its trophy wall is the IPO of the world's largest coking-coal deposit in Mongolia, due in late 2011 or early 2012. The Mongolian Government is

expected to announce the listing venue for state-owned Erdenes Tavan Tolgoi Co., which controls a giant coal deposit in the South Gobi desert, in the coming months and Hong Kong Exchanges & Clearing Ltd. is a leading candidate. HKEx, as it is known, is keen to attract resource companies away from other venues and increase its own earnings from new listings. It is already a powerhouse in initial public offerings: It attracted more of them than any other market last year for a second year running. The drive for resource-related business has become a theme in consolidation of the global exchange industry. Part of the rationale behind Singapore Exchange Ltd.'s USD8.88-billion bid for Australia's ASX Ltd. was to make itself more attractive to mining companies of the kind that dominate Australia's market. Australian regulators dashed Singapore's aspirations when they ruled recently the purchase was against their nation's interest. London Stock Exchange Group PLC, already the primary listing choice for many resource companies, is looking to convince miners they will benefit from the extra liquidity if it succeeds in taking over Toronto Stock Exchange owner TMX Group Inc., another market popular with the minerals and metals sector. Read more… Resource companies have not traditionally thronged to HKEx, but the exchange is actively trying to change that. Last June, it changed its listing rules to make it easier for mining companies to raise capital for discoveries they have already made. A total of 82 metal and mining companies are listed in Hong Kong, with a collective market capitalization of USD122 billion, the exchange said. Weighing in Hong Kong's favor is its appeal for commodities companies as a gateway to China, a dominant global consumer of energy, minerals, metals and foodstuffs. "This is one of the major focuses for this year," said Mr. Eric Landheer, head of issuer marketing for HKEx. He has gone on roadshows promoting Hong Kong in Canada, Australia, Indonesia, Europe, Japan, Mongolia, Russia, Taiwan, Kazakhstan and the U.S. "We're seeing a lot of portfolio managers coming here to be closer to the demand side of the equation, which is China," Mr. Landheer said, noting for example that China now accounts for 50% of global iron-ore demand. He points to the success of the October 2010 listing of Mongolian Mining Corp., which produces coal used in steel production, that raised USD746 million). The stock has risen 35% since then. Not all of the Hong Kong exchange's customers are happy. G-Resources Group Ltd., a Hong Kong-listed gold-mining company that owns the Martabe gold and silver mine in Indonesia's Sumatra island, believes it is undervalued. "We're slaving away as the pioneers," says company Chief Executive Owen Hegarty. "We're taking the bullets for the rest." It estimates its cash flow from Martabe will be USD300 million a year once production starts, based on current gold prices. That means the company is now trading at roughly three times earnings—about half of what a company in a comparable stage of development would trade in Toronto, London or Australia, where investors are more familiar with how to value mining companies, Mr. Hegarty says. Bankers note that Hong Kong retail investors generally know little about exploration companies and don't know how to analyze them. Some 35% of Hong Kong's stock market investors are retail investors, compared with only 10% in the U.S. market. In mainland China, the reverse is true: Only 10% are professional institutional investors. "There are some quirks in listing rules how reserves and resources are characterized, and Hong Kong investors are not as familiar with resource stocks as, say, investors in Toronto, Johannesburg or London have been," said Mr. Andrew Michelmore, chief executive of Minmetals Resources Ltd., the Hong Kong-listed arm of a Chinese state-owned mining and metals company. "But in the long run we have a very robust view of Hong Kong in the global market. It won't happen overnight by waving a magic wand. People will get frustrated, but longer term we can see a very attractive market."

Source: The Wall Street Journal

STANDARD & POOR‟S SOUNDS ALARM ON U.S. DEBT Standard & Poor‘s issued a stark warning to Washington on Monday, cutting its outlook on U.S. sovereign debt for the first time and throwing more fuel on the raging debate over America‘s swollen deficits. The agency kept America‘s credit rating at triple A but for the first time since it started rating U.S. debt 70 years ago, cut its outlook from ―stable‖ to ―negative‖. A negative outlook means there is a one-third chance of a downgrade in the next two years. Doubts about U.S. creditworthiness could threaten the dollar‘s use as a global reserve currency amid the rise of rivals such as China that have better growth prospects and fewer fiscal challenges. The outlook cut highlights the damage to U.S. creditworthiness from a decade of unfunded tax cuts and spending increases followed by massive fiscal stimulus during the recession. The U.S. will have

a deficit of 10.8 per cent of gross domestic product during 2011, according to the International Monetary Fund, and net government debt will exceed 70 per cent of GDP. The cut also reflects deep uncertainty about whether the polarized U.S. political system is capable of thrashing out a deal to tackle the long-term fiscal costs of an ageing population.

Source: The Financial Times

CHINA‟S WEALTH FUND CHIEF WARNS ON GLOBAL GROWTH The head of China's sovereign wealth fund, China Investment Corp., has said he sees gathering clouds over the global economy, with the continuing debt crisis in Europe, no end in sight to the U.S. property slump and natural disasters that have set back a nascent recovery in Japan. Mr. Lou Jiwei's generally pessimistic outlook for the developed world summed up a broad theme of anxiety at two high-level meetings on the Chinese tropical island of Hainan in recent days: the Boao Forum for Asia, which brings together Asian business and political elites, and a summit of the Brics economies of Brazil, Russia, India, China and South Africa. Both sessions gave vent to growing resentments among emerging economies—the new engines of global growth—that feel the rich world is imposing undue burdens on them, without giving them a sufficient voice in global financial decision-making. Emerging economies are particularly concerned about the effects of the loose monetary policy in developed economies that is driving capital to their shores in search of higher returns, boosting inflation and creating volatility in commodities markets. Policy makers in these economies are struggling to balance the need to propel domestic growth amid an uncertain international environment against the dangers of mounting inflation. Addressing the Boao Forum, Mr. Lou said that measures to combat inflation in emerging countries will likely lead to a slowdown in their growth. Emerging markets would carry the global economy along this year, but the momentum could slow in 2012. That could threaten growth in Europe in particular, he said, because it is increasingly reliant on exports to emerging markets even as it grapples with a sovereign debt crisis. The difficulties would be exacerbated if the U.S. started to withdraw its fiscal stimulus at the same time, Mr. Lou said. "We are optimistic about the near-term global economic situation, but over the long term we are a little pessimistic," Mr. Lou added. CIC, established in 2007, has invested a chunk of China's enormous foreign-exchange reserves to try to achieve higher returns than the sovereign debt China had traditionally bought with its hard currency. According to the latest financial reports available, CIC had total assets of USD332 billion at the end of 2009. Source: The Wall Street Journal

CHINA IMPOSES STRICT PRICE CONTROLS ON BASIC CONSUMER ITEMS China has imposed strict price controls on basic consumer items and is expected to allow faster appreciation of its currency in the coming months after annual inflation in the country reached its highest level in nearly three years in March. In a speech last week to the governing State Council, Chinese Premier Wen Jiabao said Beijing would, along with other policy measures, ―further improve the yuan exchange rate mechanism and increase yuan exchange rate flexibility to eliminate inflationary monetary conditions‖. Analysts said this was the first time Mr. Wen had publicly and explicitly mentioned the renminbi exchange rate as a tool for fighting inflation, and this reference meant Beijing was likely to allow faster appreciation to counter rising global prices of oil and other commodities. Chinese consumer prices rose faster than at any time in the past 32 months in March, jumping 5.4 per cent from a year earlier, compared with a 4.9 per cent increase in February. The economy grew a faster-than-expected 9.7 per cent from a year earlier in the first quarter, only fractionally slower than 9.8 per cent in the fourth quarter of 2010, suggesting that six months of government efforts to cool growth have been largely ineffective. The price department of China‘s powerful state planning agency – the National Development and Reform Commission – met earlier this month with 17 industry associations and ordered them to delay or cancel planned price increases. The quasi-government industry associations included those overseeing agriculture, pharmaceuticals, fisheries, home appliances, cosmetics, meat, vegetables and many other basic consumer items. In the past week or so the NDRC has also directly ordered flour and cooking oil producers to delay price increases, according to state media reports, and has even applied price controls to large global groups operating in China, such as Unilever. Data released on Friday showed food prices jumped 11.7 per cent in March from a year earlier, up from a rise of 11 per cent in February, 10.3 per cent in January and 9.6 per cent in December. Source: The Financial Times

CHINA‟S FIRST-QUARTER GDP GROWS 9.7%, INFLATION 5.4% The Chinese economy grew faster than expected in the first quarter and inflation rose to its highest level in almost three years despite months of government attempts to slow surging growth. China‘s gross domestic product increased 9.7 per cent in the first quarter from a year earlier, down slightly from 9.8 per cent growth in the fourth quarter of 2010, but still faster than most economists had predicted. Meanwhile, benchmark consumer prices rose 5.4 per cent from the same period a year earlier in March, a big increase over February‘s 4.9 per cent and the highest reading in 32 months. The stronger than expected readings came despite six months of tightening efforts in which the government has raised benchmark interest rates four times. Beijing has also increased the ratio of deposits that banks must hold in reserve six times, to 20 per cent for China‘s largest lenders. Many economists said the data showed that the economy had not slowed meaningfully, and that Beijing would likely continue its tightening efforts to rein in excess liquidity and slow rapid price rises that the Communist Party fears could damage social stability. High oil and commodity prices are complicating the government‘s attempts to tackle inflation at home, where two years of unprecedented growth in bank lending have left the economy awash with cash. Last week, China also released its first ever official estimate of quarter-on-quarter growth, which showed the economy expanded 2.1 per cent in the first quarter from the fourth quarter of last year. Quarter-on-quarter growth is the preferred measure in most major economies but China‘s statistics bureau did not specify whether its figure was seasonally adjusted.

Source: The Financial Times

POLITICS MONGOLIA HALTS COAL MOVEMENT, AFTER CHINA CLOSES BORDER POST Mongolia halted truck deliveries of coal from the South Gobi region to China on Tuesday, with the ban expected to be a temporary measure, after China closed a part of the border citing a technical glitch, a lobby group for the Mongolian mining sector said. The South Gobi region is the location of the Tavan Tolgoi property, one of the world's biggest coal deposits. Mongolia has yet to build railway infrastructure in the region and exporters continue to depend on trucks. "The Chinese side said they had some problems (at the border crossing of Zamiin Uud) with their computer software registering the vehicles," said Mr. B. Enkhbaatar, chairman of the Mongolian Mining Club. "It affected all traders in Mongolia and so the Mongolian Government is taking countermeasures." Official Chinese news agency Xinhua said Mongolia suspended coal deliveries following a spate of accidents on a dirt road running from Tavan Tolgoi. Citing local media, it said 23 people were killed in 31 road accidents on the Tavan Tolgoi highway in 2010, with another three fatalities in the first quarter of 2011. The closure of work at the Chinese customs post at Ereen for an entire day put about 2,000 Mongolians to much difficulty. They were mostly traders who could not receive their import consignments and many of them complained that the long wait was very inconvenient as there was not even any drinking water available. Both the Mongolian Consul in Ereen and the First Secretary in the Chinese Embassy in Ulaanbaatar said strong winds had disrupted power transmission and brought operations at the Chinese customs point to a halt. This being the official reason behind the Chinese action, the Mongolian decision to close the 245-km road from Ukhaa Khudag to Gashuunsukhait is also being explained away as not being a countermeasure, even though many saw it as a tit for tat, denying China the coal that 400 trucks carry every day. More than 60% of these vehicles are driven by Chinese, who are legally employed, with the Mongolian Government charging MNT210,000 every month for every non-Mongolian worker. Read more… "The Mongolian government does close off shipments for a day or two when there has been an accident -- sometimes there is so much dust caused by the trucks and local herds or herdsmen are hit," said Mr. Jim Reichert, senior infrastructure specialist with the World Bank in Ulaanbaatar. ―They need to build a railway as soon as possible to transport the coal -- there are any number of reasons to do that," he said. Private financing was available to build railways south to China, but the Mongolian Government blocked construction in order to concentrate on a cross-country rail network that would link Tavan Tolgoi with Russia and the Pacific coast. The Mongolian Mining Corp. and South Gobi Resources also have mining operations in the South Gobi region. Mr. David Bartel, Vice President in charge of Mongolian operations at South Gobi Resources,

said deliveries from the company's mine were not affected. "The block is just from the Tavan Tolgoi area -- they have not stopped shipments from our mine," he said.

Source: Reuters, Unuudur

HERDERS RIDE INTO CAPITAL TO DEMAND ELECTIONS IN PROTEST OVER FOREIGN MINERS About 200 Mongolian herders on horseback and horse-drawn carts set up camp in Ulaanbaatar with environmental activists on Tuesday to protest international mining deals and demand elections. The herders swept into the central Sukhbaatar Square abutting the Parliament building and erected gers for what activists said would be a lengthy protest. They say deals with international mine companies have spoiled grazing lands and political parties have sacrificed the national interest to please the mining firms. Herders have become increasingly hard-pressed in largely poor, landlocked Mongolia as overgrazing, rough winters and industrialization degrade grasslands. ―More and more people are coming from rural areas of Mongolia to support us,‖ said environmental activist Ts. Munkhbayar. ―We all want same thing: dismissal of the Parliament and government and elections. We will camp here until our demands are met. ― Mining Mongolia‘s rich deposits of copper, gold and coal has been a source of growth in the landlocked country where nearly a third of the people live in poverty. But herders are a powerful constituency in a nation that traces its origins to Chinggis Khaan‘s uniting of nomadic tribes 800 years ago.

Source: The Washington Post

PRIME MINISTER‟S INCOME RISES, PRESIDENT LOSES CAR The statement of income and assets submitted by high government officials to the Anti-Corruption Agency makes interesting reading. Among the 242 who have this year filed the mandatory returns are the President, the Parliament Speaker, the Prime Minister, Parliament and Cabinet members, the Ulaanbaatar Mayor, Governors of provinces and heads of Agencies. One MP‘s personal income was MNT40.8 million, while his family income was anther MNT116.8 million. The Prime Minister‘s personal income for 2010 was MNT193.3 million, more than what he had earned in the previous year, but his family income fell to MNT96.2 million. The President owned a Lexus-470 in 2009, but had no car in 2010.

Source: Zuunii Medee

TOP BANKERS BEING INVESTIGATED Senior bankers are under interrogation by both the Anti-Corruption Agency and the State Investigation Authority, local media have reported. Central Bank Governor L.Purevdorj and officials under him are suspected of illegal transfer of funds from Zoos Bank, a private commercial bank that went into liquidation, and is now under government management. Mr. N.Ariunbat, top managing official of the newly named State Bank, is also reported to be connected with ―unauthorized‖ return of large sums of money to Mr. D.Batbayar, a former member of the Zoos Bank board of directors. Assets worth more than MNT3.6 billion are believed to have been returned to Mr. Batbayar, who held 51 percent shares of Zoos Bank.

Source: The UB Post

8 SENIOR APPOINTMENTS CANCELED BECAUSE OF IRREGULARITY The State Service Council has canceled the appointment of eight senior officials at the Financial Regulatory Authority as the proper selection process had not been followed. These include the Deputy Chiefs of Finance, Cooperation and Bonds. The Council will issue advertisements to fill the vacancies in May.

Source: News.mn

COMMUNICATION SERVICES SPREAD TO HITHERTO UNCONNECTED AREAS The World Bank has been funding a project to improve the information and telecommunication infrastructure in Mongolia, with the Communication Regulatory Office responsible for its implementation. Mobile telephone service centers are now operating in 131 districts, and special communication service centers for herders have been established in 184 small settlements in 82 districts. The national transmission network now runs over 3,200 km, connecting 40 district centers with one another and with the bigger cities. All provinces now have at least one automobile to run postal services so delivery of letters and packets sent by mail is more timely and regular. Broadband internet service is available in 34

districts and cities. The coordination capacity in the communication sector has improved with the spread of public-private partnership, with 290 enterprises now holding licenses to provide communication services in the provinces. The number of mobile phone users jumped from 441,000 in 2004 to 2.5 million in 2010, which means 90.2% of the Mongolian population have a mobile telephone, which is higher than in many countries much more developed.

Source: Udriin Sonin

DP MP WANTS COALITION DISSOLVED TO PROVIDE FOR “ALERT OPPOSITION” Mr. E.Munkh-Ochir created a storm at this week‘s meeting of the DP group in Parliament by demanding the Government‘s resignation. Later, he explained to journalists that this was his personal view and he did not have any agenda to press for the dissolution of the coalition. He did not regret that he had supported the idea of a coalition ―as that would expedite decisions on large mineral deposits‖. But, with that achieved, ―we now need adequate monitoring of projects and an alert opposition is essential‖ for this, he felt. ―The DP served the nation well by joining the coalition when it was necessary, but now it is time to get out, again in the nation‘s and the people‘s interest, so that we can act as a watchdog,‖ he added. He was unhappy that with the two major parties sharing power, there is ―no effective monitoring and criticism‖ of the Government in Parliament. ―Let the MPP rule and let us be a responsible opposition,‖ he said. He called the prevailing atmosphere in Parliament ―very strange‖, and added, ―MPs are making deals with one another all the time on appointment of officials, on which draft laws will be supported, and such things, instead of working to meet the needs of people. It‘s all quid pro quo now under the coalition Government, with no thought of what the country needs.‖

Source: News.mn

WIDE PARTICIPATION AT NATIONAL FORUM ON JUDICIAL REFORM AND JUSTICE Last week‘s two-day National Forum on Judicial Reform and Justice, both avowed priorities of President Ts. Elbegdorj, was attended by around 1,000 delegates who discussed issues relating to independence of courts, civil and administrative court procedures, the way prosecutors‘ organizations work, legal education, structure of courts, the role of police, selection of judges, protection of the rights of victims, enforcement of court rulings etc. There were speeches from various sections of society and panel discussions. Among those who spoke were legal scholar Dr. B. Delgermaa; Mr. D.Naranchimeg, a member of the Constitutional Court; Mr. B.Lkhagvajav, Head of National Soyombo movement; Mr. D.Ganzorig, a lecturer at the Justice Institute of the National University of Mongolia; MPs; representatives of state organizations and NGOs, courts, prosecutors, international organizations, scholars and citizens. Advisor to the National Security Council Ch.Unurbayar traced how the Constitutional principle safeguarding judges‘ independence has been diluted by administrative and procedural decisions. The head of the Free Union of the Elderly, Ms. G.Baasan, said reforms should have been initiated much earlier. She said honest lawyers are outnumbered and called for more judges to be appointed as the work load is too much for the 400 judges at present. Reforms should start with the primary courts, she said. Source: Ardiin Erkh URANIUM POLICY SHOWS MONGOLIA‟S DIPLOMATIC SAVVY In March, a few international media outlets quietly reported that Mongolia and the U.S. had been holding informal discussions on a proposal that would have Mongolia serve as a regional depository of spent nuclear fuel. The arrangement would allow South Korea and Taiwan, which the U.S. supplies with nuclear rods, to dispose of their spent fuel, resolving what has become an increasingly thorny problem for the U.S. News of the story spread quickly in the Mongolian press, and public opinion came out decidedly against the proposal. The Japanese nuclear crisis in Fukushima has compounded opposition in Mongolia to nuclear energy. Whether popular concerns are realistic or not is irrelevant to most Mongolians. The Mongolian Foreign Ministry officially denied the reports of the talks over the spent fuel depository, claiming that it was inconsistent with the country's laws "prohibiting the import of dangerous waste to Mongolian territory." However, while the Mongolian government remains publicly adamant that it will reject such a depository, it has demonstrated its diplomatic savvy by approaching the issue as a legal constraint rather than a strategic decision. By framing the discussion around legal principles, the government has avoided disappointing its emerging strategic partners in Washington and Moscow.

Read more… The administration also made sure not to let its repudiation of the proposal cast any doubt on its interest in the continued growth of its uranium exports. Mining is Mongolia's largest export sector, accounting for nearly half its outgoing trade. While its most heralded industries are coal, copper and gold, Mongolia also has a substantial investment and industrial vision attached to uranium exploration. The country's most important uranium mine is located in Dornod province, in the easternmost region of Mongolia. Despite its isolation from the capital, Dornod's population has boomed as a result of economic opportunities attached to the mine. There are now several daily flights between the national capital, Ulaanbaatar, and Dornod's capital, Choibalsan, to accommodate investors and workers. Uranium exploration is not a recent development in Mongolia. After the conclusion of World War II, the Soviet Union carried out geological studies to determine and identify regions for uranium extraction. The context of the Cold War and the nuclear arms race contributed to drive the hunt for uranium in Mongolia. Subsequent tests in the 1960s and 1970s identified four provinces in northern Mongolia, including Dornod, as having potential for future mining production. Ironically, it was not until 1989, with the Soviet Union in its final days, that uranium production began in Dornod. It is estimated that Russia spent more than USD500 million on developing Mongolia's uranium infrastructure since its early involvement after World War II. In mid-2009, the Russian-Mongolian partnership was codified when both governments signed a high-level agreement to cooperate in identifying and developing Mongolia's uranium resources, with special reference to Dornod. Russia's state nuclear energy corporation, Rosatom, continues to maintain an exclusive and cozy relationship with the Mongolian Nuclear Energy Agency (MNEA), despite the efforts and presence in the country of international suitors such as Canada, France, Japan, South Korea and China. In addition to MNEA, Mongolian state-owned uranium corporation Monatom LLC maintains a big stake in the country's nuclear future and continues to express interest in finding global business partners and investors. Nevertheless, further strengthening Moscow's hand is its friendly posture toward Mongolia's declared intention to construct its first nuclear reactor by 2020. Despite this, Rosatom will have to compete with international companies such as French nuclear giant Areva, which recently signed an agreement authorizing it to explore and mine uranium in Mongolia. South Korea has also demonstrated an interest in Mongolia's nuclear industry, as evidenced by a memorandum of understanding on peaceful uses of nuclear energy, inked on March 25. Mongolia's geostrategic location has prompted some observers to suggest that it might be interested in developing a nuclear weapons program or in housing strategic warheads of allied nations. However, this scenario seems highly unlikely considering that Mongolia has little capacity or desire to project force outside of its borders. Mongolia unilaterally declared its territory a nuclear-weapons-free zone in 1992, 14 years before the five Central Asian post-Soviet republics -- Kyrgyzstan, Uzbekistan, Turkmenistan, Tajikistan and Kazakhstan -- followed suit by formally declaring their territories a nuclear-weapons-free zone in 2006. The treaty formalizing the Central Asian Nuclear-Weapons-Free Zone was ratified in May 2009. While Mongolia has yet to institutionalize its zone, it is clear that it intends to remain outside the nuclear fray. Mongolia is also a strong proponent of the nonproliferation regime as a state party to the Nuclear Non-Proliferation Treaty. Furthermore, the Additional Protocol to its safeguards agreement with International Atomic Energy Agency (IAEA) -- ensuring more robust verification standards -- has been in force since 2003. The Additional Protocol will also help to ensure that the construction of any nuclear reactors in Mongolia is consistent with IAEA standards for safety and monitoring. Through continued coordination with the IAEA and respected international investors, Mongolia can successfully continue its march toward nuclear power. While the recent events in Japan are sure to shape public opinion, this is unlikely to change the administration's calculus that nuclear energy will enhance Mongolia's economic and energy security in the future. Moreover, debate surrounding Mongolia's willingness to house spent fuel remains a peripheral issue in the context of its greater strategic vision on nuclear energy. Attracting international investment in its nuclear sector will continue to be a priority for Ulaanbaatar as it seeks to exploit its substantial uranium reserves.

Source: World Press Review

KHUVSGUL GOVERNOR SPENDS AS HE WANTS Khuvsgul Governor L.Tserenjav has long run the province as a personal fiefdom and pays little heed to what Ulaanbaatar officials say. The MPP, which appointed him, has been concerned at receiving regular reports from the province on how citizens‘ interests are ignored and recently the party Chairman, who is also the Prime Minister, called him for a meeting and instructed him to mend his

ways and to work more efficiently. However, the situation has not changed. Mr. Tserenjav has now announced that he would spend MNT1 billion on celebrations to mark the 80th anniversary of the establishment of the province, even though the Government wants the expenses not to exceed MNT10 million.

Source: Zuunii Medee

FILM MADE ON MAN WHO DUPED PRESIDENT, AND STOLE MNT90 MILLION The life of one of Mongolia‘s most notorious con men has now been made into a film. Mr. B.Gansukh was a sensation in 1992 when he duped then President P.Ochirbat and the President of The Central Bank and stole MNT90 million of public money. He was sentenced to several years in prison, but managed to escape. He was caught and his sentence was extended. Since his release a few years ago he has worked for The Church of Jesus Christ of Latter-day Saints, after expressing contrition for his actions. Journalist D.Turmunkh wrote a film story of Mr. Gansukh‘s life and Mr. J.Sengedorj has now made it into a film called Thief. Mr. Turmunkh is well known for his work on the film State of Dogs and for his translation of Movie Makers‘ Bible. Thief will be shown in cinemas soon. Source: Ardiin Erkh

LANDLOCKED COUNTRIES REAFFIRM RIGHT OF ACCESS TO AND FROM SEA Landlocked developing countries (LLDCs) in the Asia-Pacific region pledged during a three-day UN-backed meeting in Ulaanbaatar to promote greater cooperation and to reduce trade and transport barriers in an effort to achieve mutual sustainable development. ―Landlocked developing countries, made most vulnerable by their geographical isolation, are often the hardest hit by rapid global economic swings,‖ said Ms. Noeleen Heyzer, Executive Secretary of the UN Economic and Social Commission for Asia and the Pacific (ESCAP). Ministers and senior government officials from Afghanistan, Armenia, Azerbaijan, Bhutan, Kazakhstan, Kyrgyzstan, Laos, Mongolia, Nepal and Tajikistan met to review progress in implementing the Almaty Program of Action and assess challenges arising from the severe socio-economic impact of the food, fuel and financial crises on the LLDCs. The eight-year-old program of action reaffirms the LLDCs‘ right of access to and from the sea, urging cooperation between LLDCs and transit countries for that purpose. The high-level meeting adopted an Ulaanbaatar Declaration and requested Dr. Heyzer to submit it to ESCAP Member States to recommend necessary measures for its speedy implementation. The declaration recognized that non-physical barriers such as customs clearance and border crossing procedures, as well as red tape, were major impediments to efforts by LLDCs to reach their full potential for growth and development. Stressing that the interests of LLDCs should be taken fully into account to ensure that they have free access to international waters, delegates at the meeting resolved to work together to establish transit transport systems to benefit from the region‘s dynamism. Source: UN News Center

CHINA‟S INFLUENCE ON CAR DESIGN FOR GLOBAL SALE ACCELERATES At the Shanghai car show that opened on Tuesday, General Motors and PSA Peugeot Citroën both launched global models for the first time in China, a symbol of how the car industry‘s center of gravity continues to shift to the mainland, the largest car market. But it is not just about launching the new-generation Chevrolet Malibu or Citroën DS-5 first in China, to attract more Chinese buyers. The shift goes both ways. When GM on Monday unveiled its Buick Envision SUV concept car, it revealed a car designed in China, for the world. Chinese tastes are increasingly influencing the design of cars driven not just in China, but around the world. And it is having the greatest influence on luxury cars. Demand for premium cars is soaring in China, making it crucial for luxury carmakers to satisfy them first. When Mercedes-Benz set out to design a new S-Class luxury saloon, to hit showrooms in 2014, Daimler flew 100 Chinese consumers to customer clinics in Germany and the US to ensure they had input in the car‘s design. But the Chinese car boom is shaping the look of some mass-market cars too. When General Motors designed its LaCrosse saloon, the brand, which is popular in China, devised a roomy and plush rear seat of the kind that Chinese owners – many of whom have chauffeurs – prefer. Read more… Mr. Ed Welburn, GM head of global design, says, ―The trends here in China are having an influence on the design of our brands, but it is not a case of China dictating what cars are driven in Detroit.

The influence is more subtle.‖ Mr. Welburn says one of the reasons Buick has become so successful in China – where owning a Buick is a status symbol – is that its fluid lines are more oriental in feel than the angular shapes of some other global auto models. ―China connected with Buick in a very positive way because ... Buicks have a lot of flow in their design and Chinese artwork and calligraphy have a lot of flow,‖ he says. ―I‘ve encouraged the design team here to ... continue to play that up, and they have used that aesthetic in every detail [of the Envision SUV concept car], to give the same kind of feeling you get with a jade sculpture.‖ Beijing is intent on transforming China from the world‘s sweatshop to its design studio, with its increasing focus on encouraging innovation rather than mere copying of Western products. Towards that end, Beijing is pressing western carmakers such as GM to launch indigenous brands, with their local joint venture partners. GM on Monday launched such a brand, the Baojun, or ―treasured horse‖, with partners SAIC and Wuling. One joint venture official said the car‘s front end is meant to look like a smile – perhaps another sign of the shape of cars to come. Source: The Financial Times

ANNOUNCEMENTS MONTPELIER GROUP‟S WEALTH MANAGEMENT EVENING, ULAANBAATAR, MAY 4 The Montpelier Group is holding a Wealth Management Evening on May 4 at The Corporate Hotel between 6 pm and 8 pm. Mr. Peter Davies, Managing Director of the Group will present ―An Introduction to Montpelier‖, outlining the Group‘s presence in Mongolia and how it can benefit expatriates living here. Mr. Matthew White. Regional Sales Manager, Friends Provident International, calls his presentation ―Saving for the Future – The Cost of Delay‖, and will cover important and fundamental areas of financial planning for expatriates. Mr. Chris Ivinson, Area Manager, Royal Skandia, will give ―A Global Account for Mobile Investors‖, explaining how investors can avoid the currency trap and plan their taxation issues. Reservations The numbers of seats for this event is limited. For reservations please email jmeaburn@montpeliergroup.com or call +66 (0)2 661 5150. There is no charge for this event. ___________________________________________ RUNGE‟S COURSE ON „MINING FOR NON-MINERS‟, ULAANBAATAR, MAY 19-20 Runge is planning a course on ‗Mining for Non-Miners‘ in Ulaanbaatar, designed for people of a non-mining background who interact with mining personnel. The tentative dates are May 19 and 20, with one day focusing on coal mining and the other on metal mining. The course is aimed at providing those from a non-mining background with a comprehensive understanding of the mining industry. After attending it, participants will have a greater understanding of the operational practices pivotal to the mining industry, and will be able to interpret essential terminology and feel more comfortable interacting with core mining staff. Runge is a world class mining consulting, software and training company with an office in Ulaanbaatar with expat and local staff. The course fee for non-members is USD2,000, but Runge is offering a massive 50% discount to BCM members who pay USD1,000. Initial response has been extremely positive. The number of participants is limited. Please send your expression of interest via return email by Monday, May 2, if you are interested in attending this course to saruul@bcmongolia.org, or telephone 332345. ___________________________________________ GLOBAL ALLIANCE PARTNERS and MONGOLIA INVESTMENT CONFERENCE, ULAANBAATAR, MAY 24-26 Eurasia Capital is hosting the Global Alliance Partners Conference and the Mongolia Investment Conference on May 24-26 in Ulaanbaatar. Through these back-to-back events, Eurasia Capital seeks to draw attention of international and regional investors to Mongolia and its diverse range of investment opportunities. Mongolia has recently experienced impressive economic growth, become the best-performing stock market globally and received record levels of foreign investments. As a result of pro-business reforms pursued by the Government, this resource-rich country has emerged as an attractive investment destination for global strategic and portfolio investors. The two events are intended to increase the awareness of the international investor community about emerging opportunities in this new Asian resource powerhouse. High level government officials, representatives of local business groups, international financial institutions, CEOs of mining and non-resource companies will be among the speakers at the 2nd

Annual Mongolia Investment Conference on May 25. They will - provide information on the current market environment and outlook for the Mongolian economy - offer insight into industries that are attracting growing interest - assess the risks and rewards - evaluate the comparative advantages of various business opportunities - present a clear understanding of opportunities worth investing in. To download the preliminary agenda please click here http://enews.eurasiac.com/cgi-bin19/DM/t/hIEW0CUnT0Ddg0PLK60EM. For more information and applications please contact: Ms. Zhyldyz Sadyralieva by email: zhyldyz.sadyralieva@eurasiac.com or phone: +976 9906 1673 ___________________________________________ “MM TODAY” on MNB-TV, Fridays at 21:15 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 for 21:15 tonight. Tune in to watch this program that reports stories from today‘s BCM NewsWire. ___________________________________________ “BSPOT” on B-TV, Monday to Friday at 21:30 BTV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire. ___________________________________________ NEW POSTINGS ON BCM WEBSITE'S 'PRESENTATIONS' AND 'MONGOLIA REPORTS' Presentations from BCM‘s monthly meetings in the 2011 first quarter, several from the very successful Mines and Money Hong Kong‘s ‗Mongolia Investment Summit Morning‘ on March 25, and by Voyager Resources‘ CEO in both English and Mongolian at a March 16 MICC-sponsored gathering. In addition Mongolia Reports including the U.S. Embassy Mongolia‘s Commercial Section‘s ―2011 Mongolia Investment Climate Statement‖ are among the presentations posted on BCM's website (www.bcmongolia.org) in the "Resource, Presentations" and ―Resource, Mongolia Reports‖ sections for your review. We are now posting some news stories and analyses relevant to Mongolia on the BCM website's ‗Mongolian Business News‘ as they come, instead of waiting until Friday to put them all together in the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday, and will incorporate items that are already on the home page, so that it presents a consolidated account of the week‘s events.

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]

March 31, 2011 *8.0% [source: NSOM]

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

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]

CURRENCY RATES - April 21, 2011 Currency Name Currency Rate US dollar USD 1,230.42

Euro EUR 1,799.00

Japanese yen JPY 14.99

British pound GBP 2,029.45

Hong Kong dollar HKD 158.33

Chinese Yuan CNY 188.76

Russian Ruble RUB 44.12

South Korean won KRW 1.14

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.