BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 417 – March 4, 2016

BCM NewsWire provides short summaries of news collected from around the world. Each article is

kept to a maximum of 150 words for brevity, but click on the link next to “Source” to read the full

article.

NEWS HIGHLIGHTS:

Business:

Khan Resources asks Ottawa to stop Mongolian aid pending settlement;

Xanadu Mines on bonanza gold discovery streak in Mongolia;

Gobi Coal & Energy to expand across energy resources value chain;

Kincora focuses on new license after ‘dropping’ another;

MIAT to launch local flights in mid-April;

Air Astana flies to Mongolia, Iran;

Flights between Manzhouli and UB resumes;

Mongolian engineers create a residential hybrid energy system;

MNB cancels Jargal de Facto’s show after interview with dismissed judge;

Hogan Lovells, 5.11 execs join NAMBC board;

Narantuul catches fire again;

Turquoise Hill could be the new black for acquisitive miner Rio Tinto;

Oyu Tolgoi builds sports hall at Manlai Soum.

Economy:

Mongol Bank: currency auctions, swaps, 1-week bills, T-bills;

Modi’s USD1 bn credit line to Mongolia to start rolling soon;

Mongolia in the clear from Russian debt;

Parties allowed up to MNT3.4 bn for campaign budgets;

Government lists mining products exempt from VAT;

Government tax revenue falls by a quarter;

Khushig Valley airport on track to finish for ASEM;

Sudden cold and snow storm expected from 4 March;

Livestock in danger after drought, harsh winter;

Traffic accidents fall by 40%;

ASEM info center opens at Montsame;

Mongolia to hire students to work ASEM;

Livestock smallpox outbreak spreads to the capital;

PM orders expanded Internet access, lower prices;

ADB experiments with TV drama to promote financial education;

Mongolia and China unite efforts against desertification;

UB needs USD400 mn for water plant;

Gers a growing part of urban landscape;

Child jockeys injured at horse race;

Moody’s cuts China outlook and affirms rating.

Politics:

Fines to be handed out for spitting in public;

Health Ministry to be party to construction concession;

MRA head, top nuclear inspector appointed;

Olympic team leaders chosen;

Baasankhuu vows to resign if loses his proposed debate with PM;

Education, defense to improve with help from Italy and France;

Mongolia seeks help from U.N. to combat drug trade;

Young members of the MPRP protest actions of the IAAC;

Suspects arrested for carrying ‘ice’;

Mayor's office issues decree to prevent crime;

Khentii province clamps down on the “colored stone” trade;

New details revealed on death of Mining Journal's editor-in-chief;

Mongolia: time to rethink your risk assessment?—EDITORIAL.

BCM Updates:

Announcements;

BCM BGI Q4-2015;

New Mongolian Laws;

Knowledge Sharing Sessions;

Advocacy Notes;

Working Groups News

BCM in the University Classroom Series;

Cooperation & Member discounts;

Websites Update - Presentations, Mongolia Reports, Interviews;

Social Networks;

Member Vacancies.

Economic Indicators:

Inflation;

Central Bank Policy Rate;

Currency Rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank Invest Mongolia Agency

Mongolian Business Database

BUSINESS

KHAN RESOURCES ASKS OTTAWA TO STOP MONGOLIAN AID PENDING SETTLEMENT

A Canadian mining company wants the federal government to suspend millions of dollars in foreign

aid to Mongolia until the Asian country pays for taking the firm’s uranium mine and giving it to the

Russians. The request, made Tuesday, comes exactly one year after an international trade tribunal

told Mongolia to give Toronto-based Khan Resources Inc. more than USD100 million in compensation

for the lost uranium mine, and is the latest gambit in a long-running dispute sparked by cold war-

era geopolitics. It also coincides with a major mining convention in Toronto next week, where

Mongolian officials plan to pitch their country as a great place for Canadian and other global mining

companies to invest.

“Why is the government of Canada continuing to invest and prioritize Mongolia for foreign aid?”

Khan president Grant Edey said. “They kicked us out. And expropriation without compensation is

against international law. So why should we promote bad actors?”

Source: Financial Post

XANADU MINES ON BONANZA GOLD DISCOVERY STREAK IN MONGOLIA

Xanadu Mines Ltd. has revealed some spectacular rock chips from the newly discovered quartz-

carbonate-sulphide veins at Oyut Ulaan copper-gold project in Dornogobi Aimag. Bonanza grade

results—a gold industry term given to samples returning high grades of gold—from the project 90

percent owned by Xanadu includes 305.8 grams per ton of gold, 171.6 grams and 123.2grams. The

multiple high-grade rock chip samples define three parallel epithermal lode structures within 1.5

kilometers.

“We had the belief the geology displayed all the ingredients required for significant shallow high-

grade gold mineralization, which has been confirmed by this surface sampling,” said Andrew

Stewart, chief executive officer. “The team is now developing plans for accelerated exploration as

there is tremendous scope for a very significant discovery in this area.”

Source: Proactive Investors

GOBI COAL & ENERGY TO EXPAND ACROSS ENERGY RESOURCES VALUE CHAIN

Gobi Coal & Energy LLC is exploring opportunities throughout the energy resources value chain in

hard coking coal, coking coal mine consolidation, and graphite and uranium development and

mining both inside and outside of Mongolia. "We are excited about the progress our company has

achieved since 2014 towards expanding into other energy resources in a weak coal price

environment,” said Gobi Coal Chairman Mohammed Munshi.

During 2015, Gobi Coal completed a drilling program at its primary coking coal mine, Shinejinst,

revealing a 44-meter thick coal seam with low volatile materials. Lab testing of samples confirmed

hard coking coal properties and the potential for a new sub-basin at Shinejinst. Successful water

testing confirmed that the area has significant water potential, which is important for future mine

development. Beginning in 2015, Gobi Coal analyzed numerous uranium acquisition opportunities

with a focus on the China market.

Source: Gobi Coal & Energy

KINCORA FOCUSES ON NEW LICENSE AFTER 'DROPPING' ANOTHER

Kincora Copper Ltd. will discontinue work at one of its licenses after securing a new license where

its sees more promise, it said in a 1 March statement. Kincora secured a new license, called Ulaan

Khudag, that has shown 2 percent copper and 0.25 grams per ton of gold from samples. The

Northern license, also recovered from the government, “has been dropped,” said the company, as

it “continues to review prospective Mongolian opportunities.

“The Company continues to seek to advance our existing prospects in a capital responsible manner,

further expand our Mongolian footprint and aggressively pursue more advanced opportunities in

other jurisdictions where we feel we have a competitive advantage to create shareholder value,”

said Sam Spring, president and chief executive officer.

Source: Kincora Copper Ltd.

MIAT TO LAUNCH LOCAL FLIGHTS IN MID-APRIL

MIAT Mongolian Airlines has received orders from the government to work out a plan to serve

regular flights to western Mongolia by mid-April, said Prime Minister Chimed Saikhanbileg at a 24

February press conference. Flights would travel between Ulaanbaatar and Bayan-Ulgii, Uvs and

Gobi-Altai Aimags said Saikhanbileg in a joint statement with MIAT's chief executive officer, T.

Tamir, who said he would work with the Civil Aviation Authority to provide flights by 15 April. He

added that it would work with the smaller private airline, Aero Mongolia LLC, to service the routes.

The air routes are meant to be complementary to the roads paved between the western provinces

in recent years. Although they allow for more travel and expanded trade, it is still a long arduous

journey for passengers traveling on land.

Source: Montsame

AIR ASTANA FLIES TO MONGOLIA, IRAN

Kazakhstan’s Air Astana will launch its first flights to Mongolia and Iran this summer. Commencing in

early June, the airline will offer three weekly flights from Kazakhstan’s capital city, Astana, to

Ulaanbaatar. Services will operate every Monday, Thursday and Sunday using a 97-seat Embraer

E190 aircraft.

Also in June, Air Astana will commence its first ever flights to Iran. The new route from

Kazakhstan’s largest city, Almaty, to the Iranian capital Tehran will run three times a week. Air

Astana has also announced that it will launch a fourth daily frequency on its Astana-London route in

June.

Source: Travel Daily Media

FLIGHTS BETWEEN MANZHOULI AND UB RESUMES

A direct flight linking Manzhouli, China's largest land port with Russia, with Ulaanbaatar resumed on

29 February. Flights between the two localities were launched in October 2013 by a Mongolian

airline. Due to a drop in interest for flights the route was halted during the Chinese Lunar New Year

holiday this year, according to an official with Manzhouli's Xijiao International Airport.

Manzhouli City, which borders Mongolia and Russia, in north China's Inner Mongolia Autonomous

Region, processes more than 70 percent of all the land cargo between China and Russia.

Source: Xinhua

MONGOLIAN ENGINEERS CREATE HYBRID ENERGY SYSTEM FOR GERS

Mongolian engineers at the Organic Energy Group and Green City Association on 26 February

unveiled a new hybrid energy system for informal housing that they claim will cut down on air

pollution. The air pollution from coal burned at the power plant located in Ulaanbaatar and in the

ger districts that lack access to Mongolia's central heating system have caused severe health effects

in Mongolia. Organic Energy hopes to cut down on the amount of coal families must burn for

warmth, while saving money using their hybrid system powered by renewable sources [Source does

not specify what kinds -ed] and electricity.

“It takes 14,380 kilowatts of energy per year to heat a ger with five walls, and those households pay

MNT301,000 annually to the Ulaanbaatar Electricity Distribution Network,” said project engineer

Kh. Unur-Otgon. “By using this equipment, the cost of power per kilowatt can reach MNT25, or

paying MNT63,000 per household.”

Source: UB Post

MNB CANCELS JARGAL DE FACTO’S SHOW AFTER INTERVIEWING DISMISSED JUDGE

Mongolian National Broadcaster (MNB) has canceled an interview program hosted by the economist

and television personality D. Jargalsaikhan after his interview with a dismissed court official caught

up in a political storm. Jargalsaikhan's show broadcast an interview with the former head of the

Constitutional Court, J. Amarsanaa, on 22 February on Mongolian Medee—a branch of MNB. The

former judge was dismissed in January after a court decision that suspended the government's 8

percent subsidized mortgage lending program. Parliament Speaker Zandaakhuu Enkhbold, who

vowed to punish those responsible for halting the program, called a special session of Parliament

during a legislative recess in February to confirm the resignation.

The Mongolian People’s Party have been vocal critics against Amarsanaa's dismissal and boycotted

the special session where lawmaker's confirmed his resignation.

Source: UB Post

HOGAN LOVELLS, 5.11 EXECS JOIN NAMBC BOARD

Executives from the Ulaanbaatar branch of global legal practice Hogan Lovells LLP and an American

brand for technical work wear have joined the board of the North America-Mongolia Business

Council. Hogan Lovell's managing partner, Chris Melville, and managing director of sales at 5.11,

Brian Tipp, “bring important new strengths and experience to our board, and we’re delighted to

welcome them,” said NAMBC Chair Pamela Slutz.

Melville has been based in Mongolia since 2012. He has a broad-based practice, including advising

foreign investors, Mongolian clients and the Mongolian government on corporate, joint venture,

banking and finance, and infrastructure projects. Brian Tripp is managing director of sales and

marketing for Asia Pacific at 5.11 Tactical, a manufacturer, marketer and supplier of innovative

purpose built apparel and gear to public safety, military, industrial and retail sectors.

Source: NAMBC

NARANTUUL CATCHES FIRE AGAIN

Narantuul international market caught fire at around 02:00, the National Emergency Management

Agency (NEMA) reported. The market will be closed for three days after a fire went ablaze at a

section where silk and other fabrics are sold. The flames were fully extinguished by NEMA staff at

around 07:00 on 3 March.

Traders at the market have complained about troubles at the market for over a decade, including

another fire back in 2013. This is the second time the market has caught fire during the middle of

the night, and none of the six or seven guard stations there noticed the fire as it occurred.

Source: Mongolia.GoGo.mn

TURQUOISE HILL COULD BE THE NEW BLACK FOR ACQUISITIVE MINER RIO TINTO

Almost a decade after Rio Tinto Group took its first bite of Ivanhoe Mines Ltd., speculation is

building that Rio may seek to grow its stake in the company now known as Turquoise Hill Resources.

Increasing a company's stake in a jointly-owned mine is one of the lowest-risk acquisitions, given

the buyer already has full knowledge of the asset it is bidding for. Goldman Sachs banker Luke

Gordon is rumored to be advising Rio on a process to increase its stake in Turquoise Hill, but Fairfax

Media was unable to confirm that because Gordon declined to speak from his Toronto office on

Wednesday.

But Mongolia remains a risky place to invest in, and the Oyu Tolgoi copper-gold mine remains the

focus of fierce public debate in the developing nation. Rio may want to know the outcome of the

June elections before deciding whether it is ready to take another bite of Turquoise Hill.

Source: Sydney Morning Herald

OYU TOLGOI BUILDS SPORTS HALL AT MANLAI SOUM

Residents of Manlai Soum, Umnugobi, have access to a new sports hall as it officially opens on 26

February. The modern facility funded by Oyu Tolgoi LLC will be used by the local school for physical

education classes, for hosting regional sporting competitions, and be open to local residents for

leisure activities.

“By supporting education, health and wellbeing, and skills development, particularly through our

Cooperation Agreement with our partner communities, we can ensure that human development

flows from the region’s natural wealth,” said Oyu Tolgoi President and Chief Executive Officer

Andrew Woodley. “The sports hall is another example of this sustainable and long term

relationship.”

Source: Oyu Tolgoi LLC

SPONSORS

Oxford Business Group The New Media Group

Mongolian Economy Magazine

ECONOMY

MONGOL BANK: CURRENCY AUCTIONS, SWAPS, 1-WEEK BILLS, T-BILLS

The Bank of Mongolia on 1 March sold USD8.25 million (out of USD31.55 million in bids) and CNY17.5

million to central banks in currency auctions for closing exchange rates of MNT2,035 and

MNT310.59, respectively. Also that day, it accepted tugrug swaps with commercial banks for an

equivalent of USD20 million. It rejected U.S. dollar swaps totaling USD20 million.

The Bank of Mongolia on 2 March issued 1-week bills worth MNT62 billion at a weighted interest rate

of 12 percent. Also that day, the central bank received MNT7.5 billion in bids for the auction of 28-

week treasury bills with a face value of MNT7.5 billion (compared with an original value of MNT15

billion) that were sold at a discounted price with an average weighted yield of 14.93 percent.

Source: Bank of Mongolia

MODI’S USD1 BN CREDIT LINE TO MONGOLIA TO START ROLLING SOON

India and Mongolia are likely to kick off talks in March on the USD1 billion credit line, which Prime

Minister Narendra Modi announced during his visit to the country in May 2015. “We are expecting a

delegation from Mongolia to arrive in India in March, to lay down the priority areas for the mega-

credit line as declared by Prime Minister Modi,” an official familiar with India’s policy for Mongolia

said. The official added that the talks would likely focus on infrastructure, IT, and educational

projects.

India has an operational credit line of USD20 million for Mongolia and out of that USD1.5 million is

being utilized for an IT consultancy project. The credit line is part of a strategy to emerge as the

“third pole” in Mongolia’s international relations which so far have been dominated by China and

Russia.

Source: The Hindu

MONGOLIA IN THE CLEAR FROM RUSSIAN DEBT

Mongolia this week has resolved all of its debt obligations to its northern neighbor, Russia. Prime

Minister Chimed Saikhanbileg handed over a document to Russian Ambassador I. I. Azizov that made

official Mongolia's full repayment of its debt on 29 February after the Ministry of Finance repaid

Mongolia's remaining USD3.8 million in debt. “By extinguishing this debt, I believe that many

economic opportunities are opening,” said Saikhanbileg.

Source: Mongolia.GoGo.mn

PARTIES ALLOWED UP TO MNT3.4 BN FOR CAMPAIGN BUDGETS

Parties will be permitted to spend up to MNT3.4 billion in this year's election. Voters will be

heading to the polls on 29 June in what is expected to be a close race between Prime Minister

Chimed Saikhanbileg's Democrats and the opposition Mongolian People's Party. The budget was set

by the Mongolian National Audit Office.

Source: Mongolia.GoGo.mn

GOVERNMENT LISTS MINING PRODUCTS EXEMPT FROM VAT

Mongolia has revealed a list of upstream mineral goods, or “final mining products”, that will be

exempt from value-added tax. A government resolution lists five types of washed and enriched coal

to receive zero VAT during trade.

Source: PricewaterhouseCoopers

GOVERNMENT TAX REVENUE FALLS BY A QUARTER

Individuals' contributions to government tax revenue have fallen about 10 percent as incomes fell

during this period of slowing growth. In January, General Government Budget saw a deficit of

MNT79.8 billion, according to the State Registration and Statistics Office, or 5.5 percent less than

the same period in 2016. Tax revenue fell 25.2 percent, with individual tax payers' contributions

falling 9.9 percent.

Source: Montsame

KHUSHIG VALLEY AIRPORT ON TRACK TO FINISH FOR ASEM

The new international airport set to replace Chinggis Khan airport is on track to finish before the

arrival of guests for the Asia-Europe Meeting summit to be held in Ulaanbaatar in July. The project

to build the new international airport at Khushig Valley is 5 percent ahead of schedule, said lead

project planner N. Enkhbat, and is due to complete by 1 July. “We are working to complete our job

within this year,” he said.

Contractors have thus far been paid JPY30 billion (USD264 mn) for the airport's construction.

Mongolia received JPY28.8 billion (USD253 mn) with 0.2 percent interest over 40 years in 2008 and

JPY36.8 billion (USD 324 mn) with 0.1 percent annual interest over 20 years to finance the airport.

A Japanese consortium that includes the Narita and Haneda airports, Mitsubishi Group and Japanese

Airlines have submitted a proposal for running the airport, but timing is running out before

government must decide, said Enkhbat. “If we do not decide, the airport management team soon

will be late,” he said.

Source: Undesnii Shuudan

SUDDEN COLD AND SNOW STORM EXPECTED FROM MARCH 4

Chilling temperatures and snow storms are expected to return after a week's reprieve from difficult

weather conditions that threaten a natural disaster for the country. Mongolia's government is on

alert to protect its nomadic herders from widespread animal deaths as a result of the tough winter

conditions seen this year—a regular natural disaster called a “dzud” by locals. The Information and

Research Institute of Meteorology this week warned of snow and dust storms expected across the

country for 3 and 4 March that would likely make travel difficult.

Weather forecasters predicted snow storms in western Mongolia until 5 March, with night

temperatures falling up to 24Celsius in the west and 19Celsius in the east.

Source: Mongolia.GoGo.mn

LIVESTOCK IN DANGER AFTER DROUGHT, HARSH WINTER

The Mongolian herder gazed out of his felt tent at the half-eaten carcass of what was his riding

horse, now lying in blood-stained snow and being devoured by hungry dogs. "I had 700 head of

cattle," Huyag Tserennyam said while staring out into the white wilderness in the remote

mountainous area of Ulziit. "I've lost 150 so far."

It has been a harsh winter in Mongolia following an especially dry summer — a weather pattern

unique to the country and known here as a "dzud" (pronounced "dzuhd")—killing tens of thousands of

livestock and prompting the Mongolian government this week to formally launch a dzud appeal,

seeking foreign aid, for the first time in six years. Mongolia's government announced its dzud appeal

on Tuesday. The Asian Development Bank is contributing USD3 million in assistance toward local

infrastructure and risk management plans, including helping districts prepare shelters for herders,

as well as emergency training. Further assistance is coming from Red Cross societies of Britain,

Japan and Finland, said Purevjav Jambalragchaa, a coordinator with the Mongolian Red Cross

Society.

Source: AP

TRAFFIC ACCIDENTS FALL BY 40%

The number of fatalities from traffic accidents has fallen 40.7 percent for the month of January

compared with last year, according to statistics [Source does not cite details -ed]. Mongolia

registered 174 traffic accidents in January 2015 compared with 114 this year, while the number of

deaths were 27 and 16, respectively. Injuries are also down, falling 43.5 percent.

Source: News.mn

ASEM INFO-CENTER OPENS AT MONTSAME

Montsame News Agency is hosting a new information center for the upcoming Asia-Europe Meeting

(ASEM) summit scheduled for 15 and 16 July. Mongolia is making careful preparations for the ASEM

event, which is expected to be one of the biggest in Mongolia's history. The information center that

opened at the Montsame building on 1 March will serve as an information hub for journalists, said

the chairman of the ASEM Preparation Office, D. Gankhuyag.

Source: Montsame

MONGOLIA TO HIRE STUDENTS TO WORK ASEM

Students will be able to earn wages by helping the government make its preparations for the Asia-

Europe Meeting (ASEM) summit scheduled for July, the Mongolian Students Federation announced on

29 February. A survey [Source does not cite details -ed] shows that 72 percent of students would

like some form of employment, with many claiming that since September 2015 they have not

received the MNT70,000 a month allowance promised by government. Positions as guides

interpreters and coordinators for cultural events will be available to students.

The Ministry of Finance has stated that it has not been able to finance the allowances, but budget

approval may come in April.

Source: News.mn

LIVESTOCK SMALLPOX OUTBREAK SPREADS TO THE CAPITAL

Authorities have put a quarantine in Ulaanbaatar's Bayanzurkh District following an outbreak of a

form of small pox that affects livestock. The smallpox that spreads between goat and sheep, but

not humans, has spread throughout Mongolia's eastern provinces, according to the Ulaanbaatar

Emergency Commission, to Sukhbaatar, Khentii, Dornod, Dornogobi and Tuv Aimags. The governor

of Bayanzurkh issued a 21-day quarantine in the 20th khoroo, warning against travel to the area.

The district has also banned the sale of animal hides and other raw materials.

Source: Undesnii Shuudan, Udriin Sonin

PM ORDERS EXPANDED INTERNET ACCESS, LOWER PRICES

Prime Minister Chimed Saikhanbileg has promised to put Internet costs in rural Mongolia on par with

that of Ulaanbaatar. Mongolia has done well bringing digital access to nomads and residents of rural

towns throughout the country, but the scarcity of users and a lack of infrastructure means higher

costs and slower digital speeds. Saikhanbileg in a 2 March press conference said he had given orders

to improve service in the countryside as well as roll out the 4G digital Internet service that the

government has promised to put online this year. He told the heads of the IT, Post and

Communication Authority and Communication Network LLC to begin employing these developments

by 15 March.

Source: Montsame

ADB EXPERIMENTS WITH TV DRAMA TO PROMOTE FINANCIAL EDUCATION

People get hooked on stories. The multi-billion dollar film and video industries have gotten this

down to a profit-making science. Development agencies have also maximized this penchant for

stories to promote behavior changes by couching information in compelling narratives. In Mongolia,

a project assisted by Asian Development Bank (ADB) and the Japan Fund for Poverty Reduction used

storytelling to help people protect themselves through saving and financial planning.

After reviewing survey results that showed 80 percent of the population cited television as their

main source of information and widespread popularity for soap operas, the project developed a

drama called A Course that Helps You Become a Millionaire. The 24-episode show that was last

year's most-watch program showed six figures from different socio-economic backgrounds striving to

enhance their personal financial management skills by attending the course. Throughout the

episodes, the characters faced and solved financial challenges, mostly related to bank loans and

savings.

Source: Montsame

MONGOLIA AND CHINA UNITE EFFORTS AGAINST DESERTIFICATION

Mongolia and China are partnering against the so-called yellow storms expanding Mongolia's arid

territory. Mongolia has been especially vulnerable to the effects of climate change, which is a key

component for desertification here, in addition to human activities. Mongolia and China are now

planning to spend CNY3.9 million monitoring and evaluating the situation as chemicals from

industrial production adds to the problem.

Environment, Tourism and Green Development Minister N. Battsereg in a meeting with his Chinese

counterpart Chin Jining during a visit suggested they work together for the disposal of chemical

waste exacerbating desertification in Mongolia. The chemicals are mostly a byproduct of oil

production from PetroChina Daqing Tamsag LLC, as well as Zongheutian, which together produced

500 tons of chemical waste in 2014, said Battsereg.

Source: Montsame

UB NEEDS USD400 MN FOR WATER PLANT

A water treatment complex planned will cost up to USD400 million and the relocation of several

families between Gachuurt and Nalaikh, according to the Ulaanbaatar administration. The Ministry

of Environment, Green Development and Tourism will meet with locals before deciding on the

project, which is expected to span three years. The issue of financing has also yet to be resolved.

Source: News.mn

GERS A GROWING PART OF URBAN LANDSCAPE

The suburbs of Mongolia’s capital, Ulaanbaatar, has seen a steady increase in construction of

traditional nomadic Mongolian gers, or yurts. The problem is, they were never designed for city

living. Many of the city’s migrants are former nomadic herders who lost their animals over a series

of harsh winters. From 1998-2002, more than 11 million livestock — including goats, yaks, horses

and cows—died, leaving many nomadic families without a livelihood. The gers were originally built

for the remoteness of Mongolia’s vast steppe, but today, hundreds of thousands can be seen in the

suburbs of capital Ulaanbaatar.

In the past, the government thought the problem could be solved by moving the residents into

apartments, but apartments are often still too expensive for many. Ger residents are excited about

the government’s new policy, saying the plan is more practical than moving them into apartments.

Source: CCTV America

CHILD JOCKEYS INJURED AT HORSE RACE

More than 10 children were injured at a horse race in Tuv Aimag amid growing concerns for the

safety of child jockeys. Tuv Aimag's governor in February ordered the ban of races this winter out of

concern for the safety of children younger than 10 years old riding in them. At the race held on 28

February accidents occurred because of the snow on the ground and patches of ice that led to

injuries for 10 children and 3 horses. Organizers said the injuries were not serious, although some

children were seen riding without the proper protective equipment.

Source: Unuudur

MOODY’S CUTS CHINA OUTLOOK AND AFFIRMS RATING

Moody’s Investors Service cut its outlook for the Chinese government’s credit rating, due to growing

concerns about a slowing economy, shrinking foreign reserves and a weakening currency. China is

Mongolia's top trade partner and has helped the country avoid a currency crisis with a currency

swap between the People's Bank of China and the Bank of Mongolia. The U.S. ratings firm said it

lowered its outlook on China’s credit rating to negative from stable, while affirming the still-

respectable Aa3 grade on its sovereign debt. Moody’s cited China’s rising debt, the continuing

depletion of its foreign reserves, and doubts about Beijing’s ability to carry out economic reforms

as reasons for its move.

A negative outlook typically indicates a higher chance of a rating change over the medium term

and, on average, a rating change follows within a year. About half of the time, issuers are

downgraded or put on review for downgrade.

Source: Wall Street Journal

POLITICS

FINES TO BE HANDED OUT FOR SPITTING IN PUBLIC

Frog in your throat? Got a cold? Keep your fluids to yourself or you may face a fine. Parliament on

29 February passed a new law that orders fines of between MNT5,000 and MNT1 million to

individuals caught spitting in the streets. Enforcing the law will be police as well as a coalition of

activists and volunteers.

Source: News.mn

HEALTH MINISTRY TO BE PARTY TO CONSTRUCTION CONCESSION

The Ministry of Health and Sports will see to completion a project to build a new hospital

specifically for treating civil servants as patients. The ministry will utilize a build-operate transfer

agreement for the hospital with private partner, University Hospital LLC.

Source: Montsame

MRA HEAD, TOP NUCLEAR INSPECTOR APPOINTED

Mongolia has appointed D. Uuriintuya as the new head of the agency responsible for approving

licenses for minerals exploration and mining, the Mineral Resource Authority. Also receiving

appointment was acting head of the General Agency for Specialized Inspections, Ts. Sharavdorj, as

the general inspector for nuclear and radioactive monitoring.

Source: Montsame

OLYMPIC TEAM LEADERS CHOSEN

The Mongolian National Olympic Committee has appointed its deputy president, J. Khatanbaatar, to

lead the Mongolia team for the Rio games in 2016. Khatanbaatar holds the title of “Doctor of the

People” as well as being a medical practitioner and professor. The deputy leader will be Ts.

Damdin, a silver medalist from the 1980 Moscow Olympics, who is also deputy president of the

Mongolian National Olympic Committee.

Source: News.mn

BAASANKHUU VOWS TO RESIGN IF LOSES HIS PROPOSED DEBATE WITH PM

Prime Minister Chimed Saikhanbileg's most outspoken critic has promised to put his job on the line

with his challenge for a public debate. The Mongolian People's Revolutionary Party's O. Baasankhuu

campaigned in Parliament all last year for Saikhanbileg's resignation, but failed when the vote

finally came to legislators. He has now called the prime minister out for a debate after seeing all of

the 32 bills he's proposed denied by the Cabinet Secretariat. Those bills included one he said would

have supported industry in Erdenet as well as another for protecting the heritage of cities and

villages. “I want to prove that my bills should be accepted by the government,” he said.

“I will reject my seat as MP,” if he loses the debate, said Baasankhuu, adding that he still has a law

career to fall back on. “It is no big deal to become politically “dead”, if I reject my seat. I am a

trained lawyer and have worked in this profession. I was not born a politician.”

Source: News.mn

EDUCATION, DEFENSE TO IMPROVE WITH HELP FROM ITALY AND FRANCE

Mongolia has made official partnership agreements with European partners, France and Italy, to

develop areas such as education and defense. The Cabinet Secretary on 29 February approved

intergovernmental agreements with France to cooperate in the fields of education, culture, science

and ICT as well as plans for a joint-scholarship program. The agreement with Italy will see

cooperation in defense, but will also require a signature from Prime Minister Chimed Saikhanbileg.

Source: Montsame

MONGOLIA SEEKS HELP FROM U.N. TO COMBAT DRUG TRADE

A U.N. official has discussed the possibility of sending officers who specialize in combating narcotics

trade to Mongolia. The executive director for the U.N. Office on Drug Crimes, Yuri Fedotov,

discussed sending crime-fighting representatives during a meeting with the State Secretary for

Justice, J. Bayartsetseg, while in Vienna.

Source: Zuunii Medee

YOUNG MEMBERS OF THE MPRP PROTEST ACTIONS OF THE IAAC

Members of a youth group associated with the Mongolian People's Revolutionary Party (MPRP) held

demonstrations last week against the Independent Authority Against Corruption's (IAAC)

investigations into members of the party. The IAAC last month arrested multiple MPRP members, as

well as opened an investigation into the former prime minister and president Nambar Enkhbayar to

rule whether he should be allowed to hold office after being found guilty of corruption in 2012. The

protesters from the Mongolia Democracy and Justice Youth Federation gathered outside the IAAC

headquarters on 26 February to protest, accusing the agency of being tarnished by political

influences and persecuting members of the party.

“It is not 1937, it is 2016,” said P. Amar, the protesting group's general secretary. “The IAAC’s well

organized persecution, targeting one political party and one person, proves that it has already been

exposed to political intervention. Therefore, we believe that it cannot carry out independent

operations further.”

Source: UB Post

SUSPECTS ARRESTED FOR CARRYING 'ICE'

Mongolia's police have arrested two suspects caught with nearly 20 grams of illegal

methamphetamine drugs. Police said they arrested the two outside the Peace Bridge Hotel parking

lot for carrying on their persons 18.7 grams and 0.5 grams of ice, the street name for the stimulant

drug methamphetamine. Another 1.1 grams were found inside their car.

Source: News.mn

MAYOR'S OFFICE ISSUES DECREE TO PREVENT CRIME

Ulaanbaatar's Mayor's Office plans to launch an anti-crime program to improve the monitoring of

dangerous areas and prevent crimes such as theft in the city. N. Bataa, the deputy for finance and

economic matters, will lead the city's “Neighborhood Watch” program to bring government officials

and police authorities together to install better lighting and cameras in ger districts and parking

lots.

Source: Mongolia.GoGo.mn

KHENTII PROVINCE CLAMPS DOWN ON THE “COLORED STONE” TRADE

Local authorities at Khentii Aimag are banning the sale and cracking down on the trade of precious

gemstones seen to be destroying the environment. Most of the stones from Mongolia are sent to be

sold in China, where there is greater demand for turquoise and other colorful stones. Critics say the

practice is overly destructive to pasture land and ruins the idyllic scenes of unspoiled wilderness

that tourists come to Mongolia to see.

The smuggling of precious stones has grown common in several counties throughout Khentii, police

said, including Bor-Undur, Darkhan, Galshar, Bayanmunkh, Batnorov and Binder.

Source: News.mn

NEW DETAILS REVEALED ON DEATH OF MINING JOURNAL'S EDITOR-IN-CHIEF

Foul play may have been involved in the death of journalist and head of the trade magazine,

Mongolian Mining Journal, L. Bolormaa. The investigation into the death in November originally

concluding that Bolormaa's death was a stroke saw many people calling for a second opinion

because of her investigations into politically sensitive topics. The medicine court has found that the

stroke resulted from a concussion.

Source: Udriin Sonin

MONGOLIA: TIME TO RETHINK YOUR RISK ASSESSMENT?

Four years ago, Mongolia’s economy was the fastest growing in the world, the stock market was

booming and the future looked very bright. This year, the consensus is for growth at no more than 1

percent and all of the rating agencies have sovereign risk at speculative grade. But, while accepting

that Mongolia is certainly not for the risk averse, the investment case is worth a second look. This

year, with the Oyu Tolgoi project expected to move forward, even USD2 billion of FDI in two years

would have a very significant positive impact on the economy.

Chris Weaver is a partner at Macro-Advisory, a Moscow-based consultancy.

Source: Financial Times

BCM UPDATES:

BCM BGI Q4-2015

The BCM Business Growth Index is a regular Centigrade thermometer of business climate in Mongolia

which tracks movements in business confidence quarterly. This is a third release of the Business

Growth Index which relates to the Fourth Quarter of 2015. The overall BCM Business Growth Index

Temperature for Q4-2015 is -3C. It is 3 degrees warmer than the previous quarter. The highest

temperature is shown for the “Expectation of your business investment plan for the next year” to

be +6C, which increased by 4C from Q3. The lowest temperature is shown for the “Business

situation in your enterprise compared to last year” to be -15C, which is exactly the same as in Q3.

The total sample size of BCM BGI Q4-2015 is 80. All respondents are BCM member organizations.

More detailed information about methodology and results of BCM BGI Q4-2015 are available in the

report here. The pie charts for each indicator results compared to the BCM BGI Q3-2015 are

available here in Mongolian and English.

NEW MONGOLIAN LAWS The following law as well as amendments, addenda and annulments to/of laws were published in

the latest weekly Government bulletin. Unless otherwise decided by Parliament, it will take effect

ten (10) days after publication.

Date Laws

19.02.2016 Criminal Code /revised version/

Amendments to Law on Fight against alcoholism

Amendments to Law on Issuing guarantee on money savings in banks

Amendments to Law on Prevention of crimes

Amendments to Law on Fight against domestic violence

Amendments to Law on Government Special Fund

Amendments to Civil code

Amendments to Law on Fight against terrorism

Amendments to Law on State and local property

Amendments to Law on Court decision implementation

Annulment of some provisions of law on Presidential elections of Mongolia

Annulment of some provisions of law on Parliament elections of Mongolia

Annulment of some provisions of law on Capital city civil representatives council

elections

Annulment of some provisions of law on aimag, soum, district civil representatives

council elections

Annulment of some provisions of law on civil service

Amendments to Law on Human development fund

Law on hygiene

Amendments to Law on Petroleum products

Amendments to Law on Immunization

Amendments to Law on Ensuring food safety

Annulment of Law on Sanitation

Amendments to Law on Employment promotion

Addendum to Law on Small, medium industry

Addendum to Law on Minerals

Amendments to Law on Vocational Education, training

Amendments to Law on Employment promotion

Addendum to Higher education

Amendments to Law on Legislation

Amendments to Law on Administrative case settlement

Annulment of some provision of Law on Civil case settlement at court

Amendments to Law on Criminal procedure

Please visit BCM's website, Legislative Working Group, for a summary of 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.

ANNOUNCEMENTS

1ST ANNUAL BCM SUMMIT, 21 APRIL, BLUE SKY HOTEL

The Business Council of Mongolia (BCM) will host its 1st Annual BCM Summit on 21 April at Blue Sky

Hotel and Tower in Ulaanbaatar. The forum will provide a venue for a wide spectrum of

informative, meaningful and innovative topics important to Mongolia's business community. The

focus will be on business strategies to cope with survival in an economic downturn, mining and

industrial supply, capital markets, innovative business trends and more.

BCM continues to maintain a strong membership base consisting of nearly 240 business

stakeholders—both national and international—including international financial institutions,

embassies and educational institutions. BCM has more than 350 volunteers in its 8 working groups

lending their wealth of experience in recommendations used by BCM to advocate for a better

business climate.

Registration is MNT100,000 per head for members, compared with the regular fee of MNT120,000.

Save money with the early bird rate of MNT80,000 for members and MNT100,000 for non-members

by registering before 21 March. For more information, email Saruul at saruul@bcmongolia.org.

The cost for booking a booth to exhibit your company or brand at the event is USD500.

_________________________________________

MONGOLIA MINING FORUM, 8 MARCH, AT PDAC, TORONTO

Mongolia will promote the progress made in its mining and geology sectors in recent years on 8

March at PDAC, the world’s leading annual International Convention, Trade Show & Investors

Exchange for minerals exploration and mining scheduled on 6 to 9 March in Toronto.

The Mongolian delegation led by the Ministry of Mining and Mineral Resources Authority (MRA) will

consist of representatives of the ministry, major mining companies including Erdenes Mongol, MRA,

Invest Mongolia Agency, the Petroleum Authority, and more. A working group led by MRA will

provide Mongolian businesses the opportunity to promote their projects to investors and have one-

to-one meetings with potential investors during this world leading international mining investors’

conference.

For more information, call Tsetsegmaa, the senior manager at Invest Mongolia, at +976 88008161,

or email tsetsegmaa@investmongolia.com. You can also reach MRA External Affairs Officer Chinzorig

at +976 99000357 or cmunhuu@yahoo.com.

_________________________________________

MONGOLIA ECONOMIC FORUM 2016, 30-31 MARCH, GOVERNMENT PALACE

Over 1,000 guests are expected for the 2016 Mongolia Economic Forum to be held at the

Government Palace on 30-31 March.

This year's two-day event will be held under the theme “Lessons learned, Facing challenges and

Solutions pending,” where participants will seek to define the country’s current national and global

context, as well as outline alternatives for the promotion of future economic and social prosperity

in Mongolia.

BCM members will have a 30 percent discount on registration. Register here, and send an email to

info@meforum.mn mentioning your BCM membership to receive your discount. For more

information email the same address or call 11 321051.

_________________________________________

MONGOLIA MINING 2016, 6-8 APRIL, BUYANT UKHAA SPORT COMPLEX

The 2016 Mongolia Mining International Mining & Oil Expo will be held for the 6th consecutive year

from 6 to 8 April 2016 at the Buyant Ukhaa Sports Palace in Ulaanbaatar. This year's expo will

feature traditional mining and emerging oil industries of Mongolia with exhibitors and visitors

representing the industry's major companies. Guest speakers from the government, universities, and

companies will lead seminars of the government policy for mineral resources and new laws focused

on mining and infrastructure in Mongolia.

For more information, contact Munkh-Erdene via email at munkh@minex.mn or call at 344488.

_________________________________________

7TH ANNUAL NATIONAL FORUM FOR RENEWABLE ENERGY, 6 APRIL, CORPORATE HOTEL AND

CONVENTION CENTER

The National Renewable Energy Forum, Mongolia's premier conference on the renewable energy

sector since 2008, will open on 6 April at the Hotel and Convention Center in Ulaanbaatar. At the

forum, speakers will review the initiatives and activities that address key issues for the renewable

energy sector.

Registration is MNT35,000, and there is no limit to the number of registrations. For more

information, email Myagmardorj at e.myagmardorj@gmail.com.

‘BCM IN THE UNIVERSITY CLASSROOM’ SERIES

Guest Speaker: Anthony Willoughby and Josephine Stoker, Nomadic School of Business

Presentation topic: "Organizational Leadership"

Where & When: University of the Humanities, 25 February 2016

Anthony Willoughby and Josephine Stoker, Nomadic School of Business co-delivered a presentation

titled "Organizational Leadership" at the University of the Humanities (UH) on 25 February. The

lecture, which consisted of an individual exercise of mapping one's life journey, was attended by

138 students.

Both Anthony and Josie began the lecture by sharing their own life journeys, which fascinated many

students in the audience. Students were asked to share their life journey map with neighbors, as

said by many students was the highlight of the lecture.

For more information about the lecture, please contact Khulangoo P, Working Group Coordinator at

khulangoo@bcmongolia.org

_________________________________________

Guest Speaker: Gerelt-Od Ts, Ministry of Environment, Green Development and Tourism (MoEGDT)

Presentation topic: "Climate Change of Mongolia & COP21"

Where & When: National University of Mongolia, 23 February 2016

Mr. Gerelt-Od Ts, MoEGDT, delivered a presentation titled "Climate Change of Mongolia & COP21".

Over 50 students attended the lecture.

Mr. Gerelt-Od was one of the three representatives from Mongolia to enter into the negotiations at

the 2015 United Nations Climate Change Conference, COP 21 held in Paris, France, from 30

November to 12 December 2015. Mr. Gerelt-Od's comprehensive presentation covered Mongolia's

historic engagement in the global movement against climate change to recent highlight of

Mongolia's pledge of 50'000 US dollar to the Green Climate Fund. The presentation is available here.

_________________________________________

Guest Speaker: Amartuvshin Sh, CEO-AFAcademy

Presentation topic: "Personal development: New season"

Where & When: The Institute of Finance and Economics, 18 February 2016

Amartuvshin Sh, CEO of AFAcademy, delivered a presentation titled "Personal Development: New

season" at the Institute of Finance and Economics (IFE) on 18 February. Over 60 senior students

attended the lecture.

Mr. Amartuvshin, an experienced motivational speaker and family counselor, shared a success

formula, which he has been using for his lectures to CEOs of key businesses in Mongolia. Students

expressed their gratitude to Mr. Amartuvshin and expressed their interest in various tools that can

be used for personal development.

For more information about the lectures, please contact Khulangoo, Working Group Coordinator at

khulangoo@bcmongolia.org

KNOWLEDGE SHARING SESSIONS

A BCM Knowledge Sharing Session was organized on 24 February in partnership with our member,

The Nomadic School of Business LLC, on the topic "Exploring your career, purpose, and the leader

within you". A total of 42 people attended the training session representing 26 member

organizations. The directors of The Nomadic School of Business - Anthony Willoughby, who first

visited Ulan Bator in 1975, has over 30 years of experience pioneering leadership development in

Asia, working with executives in Google, Coca Cola, Morgan Stanley and many other frontier

thinking companies – and Josephine Stoker, who has worked in one of the leading strategic

consultancy companies in Singapore, guided the participants through a unique process of

development. Included were a new way of looking at your career; exploring your life plan, purpose

and motivation; working out where you want to focus and the skills you need to develop; and

understanding a simple and creative tool, which you can use to gain insights into your priorities.

BCM ADVOCACY NOTES

Latest draft of Labor Law bill - Government working group

An open discussion was held between the Ministry of Labor and the private sector on the draft Labor

Law on 16 February. The December draft is reflective of many of the recommendations proposed by

the BCM's Legislative Working Group. Labor Minister G. Bayarsaikhan reported that the draft will be

submitted in April for the autumn Parliamentary session. New Working Group members assigned by

the Labor Minister to draft the bill were introduced and promised to review further comments from

the private sector.

For more information, please contact Working Group Coordinator at khulangoo@bcmongolia.org.

Click here to read the latest draft of the bill.

BCM WORKING GROUP NEWS

Tax Working Group

BCM’s Tax Working Group’s 2016 kick-off meeting was held on Wednesday, 2 March at Suite 101,

12th floor Express Tower, with 16 members in attendance, representing Oyu Tolgoi, PwC, Deloitte

Onch Audit, Sumitomo Corporation Mongolia office, International SOS, WCS, MahoneyLiotta, Lehman

Lee & Xu and PATC.

Agenda of the meeting: 16:00 - 16:10 Opening remarks (Chair, Tsendmaa Choijamts, PwC) 16:10 -

17:00 Introducing new VAT law (Altankhorol O, Senior state tax inspector, Revenue department of

the General Department of Customs and Taxation) 17:00-17:30 Q&A session and discussion on TWG

plans for 2016 (Members, state tax inspector)

Ms. Altankhorol, General Department of Customs and Taxation of Mongolia, reviewed the newly

adopted Value-Added Tax (VAT) law of Mongolia, which took effect on 1 January 2016. The

presentation covered key policy changes, changes in the other related regulations and frequently

asked questions from businesses. Members in attendance were interested in the procedural changes

in the new VAT law, such as the registration and de-registration as a VAT payer, VAT-exempt goods

and services and VAT zero-rated goods and services.

Ms. Tsendmaa Ch, Tax Executive Director of PwC Mongolia, shared with the members Tax Working

Group’s draft plan for 2016. As Chair of Tax Working Group, Ms Tsendmaa, informed the members

of the intent of engaging representatives from the government entities to the WG meetings in order

to learn more about legal and procedural changes and to exchange expert views with

representatives from government bodies.

Next meeting is scheduled for May. For more information about this meeting, please contact

Khulangoo Purevjav, Working Group Coordinator of BCM at khulangoo@bcmongolia.org.

_________________________________________

Business Ethics Working Group

Business Ethics Working Group meeting was held on 1 March 2016 at Express Tower from 16:00 to

17:30 with 12 members in attendance representing Atlas Copco, Transparency International, Mandal

General Insurance, US Embassy, Wagner Asia, Deloitte Onch Audit, Asia Foundation, Valliant Art and

Interiors, World Vision and the Institute of Finance and Economics.

Agenda of the meeting: - Introduction of members and guests (Anders Berglund, Atlas Copco) -

Recap from the last meeting (Christine Hudetz, TI Mongolia) - Insurance sector transparency (Zaya

Bolorbold, Mandal Insurance) - Discussion on topics and plan for 2016 (Christine Hudetz, TI

Mongolia).

The meeting begun with recap of the last meeting: development of the draft plan for 2016 and

collective agreement on the need to reach-out for more local companies as members of the

Working Group. Given the delicacy of the issues the WG intends to cover at its meetings and the

subsequent low interest from BCM members to sign-up for this WG, nonetheless members have

agreed to continue with its meetings and aim to draw more attention from local companies.

Ms Zaya, Mandal Insurance, presented an overview of the insurance industry and Mandal fight

against kickbacks and the adverse effects of kick-back culture within the industry. Attendees were

highly impressed with Mandal’s meticulous top-down approach against kick-backs, from its

philosophy to its hiring procedure. During the discussion time on plan for 2016, Wagner Asia has

volunteered for a presentation in November and Asia Foundation offered to share its study findings

on corruption in Mongolia.

Co-Chair reminded the members of the next meeting topic item: Gift giving policy on Tuesday, first

week of May. For more information about this event, please contact Khulangoo Purevjav, Working

Group Coordinator of BCM at khulangoo@bcmongolia.org.

_________________________________________

Energy & Environment Working Group

BCM’s Energy and Environment Working Group’s kick-off meeting was held on Thursday, 25 February

at the Open Society Forum’s meeting room with 17 members in attendance. Represented were

GGGI, US Embassy, XacBank, Mongolian Bankers’ Association, Arig Bank, Invest Mongolia, Wildlife

Conservation Society, Techenomics, Mongolian National Mining Association, Mongolian Wind

Association, Newcom Group, Economic Development Center and the newest addition to the Working

Group, the Institute of Energy Economics.

The meeting was organized under the theme of: "Green credit - private and public initiatives".

Agenda of the meeting:

- Sustainable Finance Initiative: Latest developments, progress towards private fund establishment,

Mr. Tumurkhuu, Head of Sustainable Finance Initiative Steering Committee and CEO of Arig Bank

- National concessions list: Latest developments, quick look at near-term projects, Mr. Ts.

Batbayar, Head of Concessions Division, Invest Mongolia

- Facilitated discussion on business implications of green finance and concessions opportunities in

Mongolia, Mr. Tumurkhuu, CEO of Arig Bank.

Mr. Tumurkhuu emphasized that the Sustainable Finance Initiative is in full swing with initial loans

being issued at 14 commercial banks of Mongolia since 2015. Mr. Batbayar, Division Head at Invest

Mongolia, shared latest developments on concession and the Agency’s efforts in improving the legal

environment for regulating concession issues in Mongolia. Mr. Jon Lyons, co-chair of the Energy &

Environment WG (EEWG,) facilitated the discussion on green finance and concessions opportunities

in Mongolia. Working Group members were mostly interest in the government’s guarantee to the

concessionaire and the updates of the Water Treatment Facility and CHP-ͷ concessions. As part of

BCM’s effort in increasing stakeholders from the government entities, Mr. Amarsanaa, Head of the

Institute of Energy Economics (IEE), an institute under the Ministry of Energy, attended the meeting

and agreed to introduce the IEE at the next Working Group meeting. For more information about

this meeting, please contact Khulangoo Purevjav, Working Group Coordinator of BCM at

khulangoo@bcmongolia.org.

_________________________________________

Capital Markets Working Group

BCM’s Capital Markets Working Group’s meeting was held on Friday, 22 January at Suite 101, 12th

floor Express Tower, with 12 members in attendance, representing BDSec, ING Bank Mongolia, Khan

Bank, Golomt Bank, Oyu Tolgoi, Ernst & Young Mongolia Audit, Mahoney Liotta, Asian Real Estate

Capital Ltd and Mongolian Bankers’ Association.

Purpose of the meeting was to introduce the new meeting format, soft ideas on core themes

proposed by Co-Chairs, including ideas from members and brainstorm on Capital Markets WG

(CMWG) mission and objectives. It was agreed in the meeting on a common theme of ‘working

towards increased foreign investment in Mongolia’. It was suggested by members to include more

emerging players in the capital markets such as the insurance industry and most importantly engage

other stakeholders from government entities with the Working Group. Updates were given on the

development of ‘custodian banking’ and how the WG can leverage its efforts towards sound

regulations for custodian banks.

On the next scheduled Capital Markets Working Group meeting, Dorjpalam Kh, Office of the

Treasury, Oyu Tolgoi will deliver a presentation on project financing.

For more information about this meeting, please contact Khulangoo Purevjav, Working Group

Coordinator of BCM at khulangoo@bcmongolia.org.

_________________________________________

Risk Working Group

BCM’s Risk Working Group’s 2016 kick-off meeting was held on Thursday, 21 January at Suite 101,

12th floor Express Tower, with 14 members in attendance, representing Mandal General Insurance,

MIG Insurance, Deloitte Onch Audit, XacBank, Wagner Asia, Iarudi, Golomt Bank and Bagatumurch

LLC.

Agenda of the meeting:

•16:00-16:10 Introduction and Opening remarks by Working Group Co-Chairs

•16:10-16:50 "Case studies on tax related cases tried at the Supreme Court of Mongolia"

(Bolorchimeg Kh, Lawyer, ELC LLP)

•16:50-17:35 Discussion on proposed topics and finalize plan for 2016

Guest speaker, Bolorchimeg of ELC LLP, emphasized that her presentation was illustrative only and

did not go into details or the legal implications. The presentation focused on: (i) Tax cases resolved

by the Supreme Court - last 3 years, (ii) Tax Dispute Resolution Process and (iii) Case Study of

Tuushin LLC vs Tax Inspectors of General Tax Authority. Members in attendance were interested in

the tax inspectors’ inspection process and what it entails, and in the statistics of the tax-related

cases resolved by the Supreme Court.

Zaya Bolorbold, co-chair of the Risk WG (RWG), presented an overview of the last year’s activities

and introduced proposed plans for 2016. Working group members supported the draft plan for 2016,

with some members volunteering as main speakers from Deloitte Onch Audit, Bagatumurch LLC.

Given the current weather conditions in Mongolia, it was decided that BCM should reach-out to the

NEMA and/or State Emergency Commission to request a presentation on the 'dzud* situation; it was

also agreed that the presentation can be complimented with Risk Working Group members’

presentation on how the impacts of the dzud will be translated into insurance claims. Next meeting

is scheduled for 3rd week of February.

For more information about this meeting, please contact Khulangoo Purevjav, Working Group

Coordinator of BCM at khulangoo@bcmongolia.org.

_________________________________________

BCM’s Logistics Working Group

BCM’s Logistics Working Group (LoWG) met on Tuesday, 8 December at MonEx office, 6F Vista Office

Building with 7 people in attendance representing Monex, Representative Office of Mitsui & Co.,

Ltd. in Ulaanbaatar, Khaan Shorgoolj LLC and KGB TEGBE-Dolgoon Delgerekh LLC.

Agenda of the meeting:

• Featured guest speaker: Bayarbat – “From Hand to Hand; Challenges Faced”

• Discuss and plan WG’s 2016 activities

Upon introducing new members, Enkhbat D.-Logistics WG Chair, invited the featured speaker, Mr.

Bayarbat, to deliver a presentation about KGB TEGBE-delivery services. Other than introducing the

company, Bayarbat’s presentation touched on wider aspects such as the culture of delivery service

in Mongolia at large, challenges his new up-and-coming company is facing and possible solutions in

the delivery logistics within Ulaanbaatar.

Meeting participants were interested in the expansion plans of the company, such as delivery

services within Mongolia, cargo service between USA and Mongolia, to which Bayarbat gave

comprehensive answers about the company’s plan for establishing cargo service between South

Korea and Mongolia initially and delving into other markets.

Enkhbat D., Chair of the Logistics WG (LoWG), presented his plan for reviving WG activities in 2016.

He again encouraged our members to read through the soft ideas laid out and provide comments.

Since logistics fosters many elements, it was decided to focus on a certain theme for each meeting,

so that members interested or operating in that topic area can actively participate and bring in

more insight.

The meeting was concluded with an action item for the BCM WG Coordinator to follow-up the

questionnaire and request customers to provide comments on the 2016 plan by COB 28 December.

For more information about this meeting, please contact Khulangoo Purevjav, Working Group

Coordinator of BCM, at khulangoo@bcmongolia.org.

_________________________________________

BCM Education Working Group

BCM’s Education Working Group was held on 26 November at the Executive Excellence International

Business Center, 10F Galaxy Tower from 16:00 to 18:00. Fifteen people attended the event

representing foreign mission in Mongolia, private sector, universities and consultants of donor

funded projects:

Foreign Mission: Canadian Embassy;

Universities: National University of Mongolia, Mongolian University of Science and Technology

Private sector: PwC, Minter Ellison

Donor organizations: Save the Children, Support to Mongolia’s Technical and Vocational Education

and Training Sector-EU, Cooperative Vocational Training in the Mineral Resource Sector-GIZ, The

Global Fund;

Meeting minutes summary:

Opening remarks by Education Working Group Chair - Saha Meyanathan. Saha related information

about being selected as the best Working Group of the year 2015.

Status update by Manlaibaatar Z., Deputy Director of IRIM on the pilot project results of the ADB

funded Higher Education Reform Project (HERP). The dissemination workshop for the Universities

will be organized first week of December.

During the Q&A session, Professor Purevdorj of MUST highly emphasized on the importance of

building the capacity of the professors, as they are the ultimate knowledge givers to the students.

The WG members were given a matrix developed by Dr. Saha, on three draft laws: TVET, Higher

education and Labor law. During a Q&A session, participants made remarks related to the Matrix, to

highlight a few:

For more information about this event, please contact Khulangoo Purevjav, Working Group

Coordinator of BCM at khulangoo@bcmongolia.org.

COOPERATION & MEMBER DISCOUNTS:

Discounts:

- News.mn offers 20% discount of its products and services for BCM members

- Mongolian Economy offers 50% discount for its advertisements & paid articles on website and 55%

subscription discount on its online magazine for BCM members

- NPC&Mandal offers 20% discount to BCM members

- Birches Group offers 10% discount on Mongolia Compensation and Benefits Survey for BCM

members

- New Media offers 25-50% discounts to BCM members on its online accounting software, E-

commerce platform, web & mobile application development and job searching software.

For more information about announcements and discounts, click here or contact Otgongerel,

Partnership Manager at otgongerel@bcmongolia.org.

WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS, INTERVIEWS

Presentations:

BCM Monthly Meeting, 22 February:

- A. Baatarpurev, Director of Markets Development Department, Financial Regulatory Commission -

"Financial Market Developments in Mongolia"

- Jennifer Bielman, Country Director, MercyCorps Mongolia - "Mercy Corps: Building Resilience in

Mongolia"

- D. Uuriintuya, Chairman, Mineral Resources Authority of Mongolia - "Mongolian Events during PDAC

2016 in Toronto"

- N. Munkhnasan, General Director, Monpolyment - "Overview of Monpolyment"

_________________________________________

BCM Monthly Meeting, 25 January:

- Sodontogos Erdenetsogt , Chief/National Coordinator of National Secretariat for Development of

the Second Compact agreement between Government of Mongolia and the USA Millennium

Challenge Corporation -

“Development process of the second compact agreement between government of Mongolia and USA

Millennium Challenge Corporation”

- Gantugs D, CEO, Mongolian Mortgage Corporation - “MIK Holding IPO and RMBS Issuance”

_________________________________________

BCM Monthly meeting on December 7:

- Mergen Chuluun, Managing Director, Nomadic Expeditions - “YPO Mongolia: Building Better

Leaders Through Education & Idea Exchange”

- Meloney C Lindberg, Country Representative, The Asia Foundation and L. Sumati, Director, Sant

Maral Foundation - “Introduction and Key Findings of Private Sector Corruption Perception Survey –

STOPP”

- S. Galbadrakh, Specialist at Prevention and Education Department, Independent Authority Against

Corruption (IAAC) of Mongolia - “Introduction of IAAC”

- Terrence Edwards, Editor-in-Chief, BCM NewsWire - “Overview of the BCM NewsWire”

_________________________________________

Mongolia Projects & Investment Summit Hong Kong, 16-17 November:

- Zoljargal Naidansuren, Governor, Bank of Mongolia, “The new equilibrium: reforms to sustainable

growth and savings"

- Narantuya Zagdkhuu, Chair, Financial Regulatory Commission of Mongolia, "Making Mongolia a

frontier again: financial market developments"

- Norihiko Kato, CEO, Khan Bank, "Where does the banking sector fit it?"

- Munkhsukh Sukhbaatar, Rio Tinto, "The way forward for Oyu Tolgoi underground"

- Bat-Uul Erdene, Mayor of Ulaanbaatar city, "City of Ulaanbaatar-2030"

- Matthieu Le Blan, EBRD Head office in Mongolia, "The importance of economic diversification and

import replacement opportunities EBRD's role in enabling progress"

- Tuvshintugs Batdelger, Economic Research Institute, "Transaction Cost of Conducting Business in

Mongolia: SME perspective"

- Oliver Thirlwall, Asian Real Estate Capital, "Distressed opportunities-banking and real estate"

- Kevin Trzcinski, Vice President Corporate Development at Worldwide Power & Technology (HK)

Ltd., "Mongolia as a destination for Scientific Research & Development"

- Randolph Koppa, President, Trade and Development Bank, "Challenges and Opportunities for

Growth"

_________________________________________

Mongolian Annual Risk Management Forum, 11 November:

- “A Practical Case Of Implementing A Risk Management Strategy In Corporate Governance” -

Garrett Wilson Director, Risk Management, Compliance & Outsourced Services Wagner Asia Group

- “Public Buildings And Disaster Risk Management” - Sam Sallam, President, Best Western

International Mongolia

- "Organization Psychological Management" - Delgermend.Ts, Organizational Psychologist,

NPC&Mandal LLC

- "New macroeconomic balance A shift from consumption to saving" - Munkhbayar Tedevsuren, Head

Of The Coordination And Analytic Unit Under Financial Stability Council Advisor To The Governor

- "Macro-Economic Outlook 2016" - Ankhbayar Chuluunbat, Senior economist, Mandal General

Insurance

- "Global Perspective On Risk Management During Economic Slowdown" - Matthew Pottle, PwC

Mongolia

- "Corporate Crises Management" - G.Odbayar, Mining National Operator

_________________________________________

BCM Monthly Meeting on 2 November:

- Andrew Woodley, CEO, Oyu Tolgoi LLC -“Oyu Tolgoi: Delivering globally competitive copper

business”

- Susan Cote-Freeman, Program Manager Private Sector Team, Transparency International -

“Introduction to Transparency International’s Business Principles for Countering Bribery”

- Elisabeth Ellis, Partner, Minter Ellison LLP - “Impact on your business of the proposed new Labor

Law”

_________________________________________

Mongolia Reports:

- IMF, “World Economic Outlook, October 2015: Adjusting to Lower Commodity Prices”

- ADB, Financial Systems of Financially Less Developed Asian Economies: Key Features and Reform

Priorities (Sep 2015)

- Hogan Lovells, "Legislative update: 2015 Spring session of the Parliament of Mongolia"

- Oyu Tolgoi, "Scorecard July 2015 - Monitoring Our Performance"

- Sant Maral Foundation, "Survey on Perceptions and Knowledge of Corruption"

- Jim Dwyer, Executive Director, BCM, Rumsfeld Foundation’s, CAMCA Regional Forum, UB, June 20,

2015, “FDI Environment in Mongolia”

- Hogan Lovells, “Law on State Registration of Legal Entities”

_________________________________________

Interviews:

- Mongolian Economy Magazine, November 2015 issue - "In Order to Make the Labor Law More

Effective"

- Mongolia President Ts. Elbegdorj: Charlie Rose Show (PBS/Bloomberg TV-New York)

- BCM Monthly Meeting news coverage on Bloomberg TV, August 24, 2015;

- Jim Dwyer, Executive Director, BCM, Interview re BCM Business Growth Index, on Star TV News,

August 20, 2015;

- Jim Dwyer, Executive Director, BCM, Interview re BCM Business Growth Index, on Bloomberg TV

News, August 20, 2015;

- B.Byambasaikhan, CEO, Erdenes Mongol and Chairman, Business Council of Mongolia, INS interview

______________________________________________

Website:

According to Google Analytics report, as of 24 February, the daily web traffic to BCM website was

65 visitors with 93 sessions. 83% were from Mongolia, 4% from Japan and 2% from Hong Kong and

United States each.

SOCIAL NETWORKS

The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.

Keep up to date on the latest business deals in Mongolia and how the climate for investment is

improving each day with BCM.

Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the

latest announcements and comment on events carried in the BCM NewsWire with the community.

Hear breaking news and announcements as they happen when you follow BCM on Twitter at

https://twitter.com/bcmongolia.

The bulk of the content on BCM’s new LinkedIn page is Mongolian language to better cater to BCM's

Mongolian-speaking audience and members. Please click on the below link to follow us on our new

LinkedIn page.

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

Social stats: BCM now has 11,419 fans on our Facebook fans page, 1,979 connections on

LinkedIn network, and 1,981 followers on Twitter.

_________________________________________

MEMBER’S VACANCIES

- SD Guard at U.S. Mission in Ulaanbaatar: Deadline for application is 16 March 2016

For more information about vacancies, click here. To post your vacancy on BCM website, contact

Dolgorsuren at dolgorsuren@bcmongolia.org.

_________________________________________

BCM’s column in the Mongolian Economy Magazine began in Edition 12, May 2015. The first column

featured an interview with Mr. I. Ser-Od: "Times like these demand that we be more creative and

proactive." The second column was published in Edition 15, July 2015: “Entrepreneurs Set Up Study

Tours of Businesses.” The third column was in the edition, September 2015: "Wagner Asia

Technology Innovations."

_________________________________________

The BCM NewsWire is used as source for the "MM Today" News program in English aired by Mongolia

National Broadcasting (MNB) on Fridays at 19:00.

_________________________________________

BCM now has a profile page at VIP76, one of the major online information networks in Mongolia.

From January 2013 to February 2016 we posted a total of 110 news items related to BCM activities,

economic and business related updates.

_________________________________________

The "Photo Gallery" in Knowledge Hub section of the new BCM website has the most recent photos

from BCM events.

As a BCM member you can now visit the official BCM website at http://bcmongolia.org to enjoy

newly introduced interactive features such as: edit your organization's profile information; post

vacancy notices from your organization; post cooperation proposals with other members or deals

you would like to offer to other BCM members; and start a forum and ask questions directly on the

web platform. Of course you can also visit our website for news information, interviews, event

photos, videos and announcements regarding BCM.

ECONOMIC INDICATORS

INFLATION

Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]

Year 2007 *15.1% [source: NSOM]

Year 2008 *22.1% [source: NSOM]

Year 2009 *4.2% [source: NSOM]

Year 2010 *13.0% [source: NSOM]

Year 2011 *10.2% [source: NSOM]

Year 2012 *14.0% [source: NSOM]

Year 2013 *12.5% [source: NSOM]

Year 2014 *11.0% [source: NSOM]

January 31, 2016 *1.7% [source: NSOM]

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

Note: 1.0% y-o-y, 4.0% Core - Ulaanbaatar City, January 31, 2016

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 9.75% [source: IMF]

March 11, 2009 14.00% [source: IMF]

May 12, 2009 12.75% [source: IMF]

June 12, 2009 11.50% [source: IMF]

September 30, 2009 10.00% [source: IMF]

May 12, 2010 11.00% [source: IMF]

April 28, 2011 11.50% [source: IMF]

August 25, 2011 11.75% [source: IMF]

October 25, 2011 12.25% [source: IMF]

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

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

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

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

June 25, 2013 10.50% [source: Mongol Bank]

July 30, 2014 12.00% {source: Mongol Bank}

January 14, 2015 13.00% {source: Mongol Bank}

January 14, 2016 12.00% [source: Mongol Bank]

CURRENCY RATES – 3 March 2016

Currency Rate

US dollar USD 2,040.97

Euro EUR 2,218.13

Japanese yen JPY 17.88

British pound GBP 2,877.05

Hong Kong dollar HKD 262.51

Chinese Yuan CNY 311.90

Russian Ruble RUB 27.55

South Korean won KRW 1.68