BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 418 – March 11, 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:

Ferrostaal and Outotec to build modern copper plant;

Mongolia ends fight with Khan Resources over USD100 mn mining license arbitration;

Mongolian group wins contract for Uvs power plant;

Erdenet Mining Corporation reports MNT 9 bn profits for 2015;

Parliament ratifies ADB loan to improve credit guarantee system;

PM backs locally-produced heating unit producer;

State Bank partners with Hungarian trade house for expanded trade;

Khan Bank cards now accepted in Inner Mongolia;

University of Humanities and 10 Asian foreign language universities form network;

Construction Ulaanbaatar 2016 trade exhibition;

60 students complete Oyu Tolgoi Youth Development Programme;

Robbers jack bank for love and money;

“I know who started the fire,” says Narantuul boss;

Rio Tinto chief executive Sam Walsh received smaller remuneration package.

Economy:

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

Mongolian bonds bounce to 4-week high as copper extends rally;

80% of all company shares on MSE owned by less than 5 individuals;

Unemployment rate increases to 8.3% at start of 2016;

Transport minister expects freight volume to double;

Cost and time for obtaining an electricity connection will be reduced;

Government set to cut cost and time for electricity delivery;

Extreme weather alert: NEMA rescues 638 from freezing;

Nearly 250,000 livestock lost in dzud;

Air service agreement inked with Cambodia;

Registration initiative claims 84% of all firearms;

Azerbaijan cedes only to Mongolia in growth of HNWIs;

For Mongolians, climate change is as personal as it gets;

Drexel researcher proves Mongolian herders right in climate research;

UB property auction attracts just two bidders;

60 percent of all motor vehicles registered in UB;

Subsidized apartment rentals to be chosen by lottery;

Copper bears turn into bulls before prices rally most since 2011;

Metallurgical coal prices may do the unexpected: rise;

Iron ore jumps by record 19% on China stimulus hopes.

Politics:

Enkhbold faces petitions for his dismissal;

ASEP9 organizing committee calls first meeting;

CW-GP leaders refuse to support merger with Democrats;

National Labor Party (KhUN) divided;

Former MP, minister, central banker dies;

Polish Embassy to re-open in UB;

Mongolia's coal exporters could face fallout from latest U.N. sanctions on N. Korea;

N. Korean diplomats smuggling luxury goods through Mongolia;

Camel race in Umnugobi sets new Guinness record;

Mongolia suspects nabbed in Taipei NTD1 mn theft;

The most dangerous music in the world is—surprise—made by angry young men;

Silk Road initiative no 'Monroe Doctrine': China;

Mongolia and the new Russian petrol diplomacy—EDITORIAL.

BCM Updates:

Announcements;

BCM BGI Q4-2015;

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

FERROSTAAL AND OUTOTEC TO BUILD MODERN COPPER PLANT

Germany's Ferrostaal Group and Finland's Outotec will be lead contractors in the construction of a

copper smelting plant to launch in May. Zes Erdeniin Khuvi JSC has hired Ferrostaal as general

contractor to build the plant for an estimated USD45 million, while Outotec will run equipment

procurement. Plans include production of grade A copper, as per the London Metals Exchange

designation, and 99.95% purity copper cathode for export.

The plant would recuperate costs within four years, according to plans, while paying MNT7.084

billion in taxes annually.

Source: News.mn

MONGOLIA ENDS FIGHT WITH KHAN RESOURCES OVER USD100 MN MINING LICENSE ARBITRATION

Mongolia has settled a dispute over an arbitration award that required it to pay more than USD100

million last year to a Canadian miner for revoking a uranium mining license, just as it launches a

push this week to attract new exploration interest. Khan Resources Ltd. said in a statement that

the government agreed to pay it USD70 million by May 15 and to withdraw efforts to annul the

award in a French court. In exchange, Khan said it would stop pursuing court certification of its

award in the United States, which may allow it to seize Mongolian commercial assets there.

The agreement was seen helping investment in Mongolia. "I think it helps the foreign investment

case for Canadians and any foreign investor," said Jim Dwyer, executive director of the Business

Council of Mongolia.

Source: Reuters

MONGOLIAN GROUP WINS CONTRACT FOR UVS POWER PLANT

Baruun Mongol LLC will lead the development of a new power plant to provide energy to some of

Mongolia's most remote provinces in the west as the country looks to expand its energy grid

nationwide. The Cabinet Secretariat on 7 March approved a concession contract with Baruun Mongol

to lead development and construction of the power plant at Uvs Aimag, under its ownership for

some years before transferring it to the government [Source does not include length of ownership

before transfer -ed]

Source: Montsame

ERDENET MINING CORPORATION REPORTS MNT9 BN PROFITS FOR 2015

Erdenet Mining Corp. has reported MNT9 billion in profits after raking in total revenue of MNT1.05

trillion. Erdenet Mining last year launched a cost-savings strategy amid declining prices for copper

products. By cutting down production costs it saved USD100 million last year.

Profits between 2012 and 2015 totaled MNT26 billion, it reported.

Source: Zuunii Medee

PARLIAMENT RATIFIES ADB LOAN TO IMPROVE CREDIT GUARANTEE SYSTEM

Parliament has ratified a loan agreement with the Asian Development Bank (ADB) for a project to

improve the credit guarantee system. “The project will help Mongolian small- and medium-sized

enterprises (SMEs) get more access to finance from commercial banks which will help diversify the

economy, which in recent years has been dominated by the mining sector,” said Robert

Schoellhammer, ADB Country Director in Mongolia.

The assistance will help SMEs access the collateral they need—but often lack—to obtain loans

through commercial banks by offering the businesses an alternative to the use of real estate. The

project is funded by a USD60 million loan from ADB, with an initial portion of USD6 million expected

to be made available in March 2016. Accompanying the loan, a technical assistance project will be

financed with an USD800,000 ADB grant.

Source: Asian Development Bank

PM BACKS LOCALLY PRODUCED HEATING UNIT PRODUCER

Prime Minister Chimed Saikhanbileg has thrown government support behind a start-up producing

more efficient heaters for ger residents. The energy-efficient heater by Best Energy Savings is four

times more efficient than stoves, says company head N. Davaa, consuming MNT50 of energy an hour

to heat up spaces to 75 Celsius. Seen as a device that can help reduce air pollution in Mongolia from

the heavy concentration of smoke from ger stoves, Saikhanbileg has ordered Development Bank of

Mongolia Director N. Munkhbat to deliver financing to the company so that it can produce 45,000

heaters by September. Mayor Erdene-Bat-Uul also received orders to help with sales and

distribution.

Source: Unuudur

STATE BANK PARTNERS WITH HUNGARIAN TRADE HOUSE FOR EXPANDED TRADE

Turiin Bank (State Bank) LLC has inked a cooperation agreement with Hungary's Magyar Trade House

LLC to open up international business partnership opportunities between their two countries.

Hungary is a supplier of agriculture products, foods, architecture, IT and more.

Source: Montsame

KHAN BANK CARDS NOW ACCEPTED IN INNER MONGOLIA

Khan Bank LLC's UnionPay-backed debit cards can now retrieve cash from banks in the China Inner

Mongolia Autonomous Region.

Source: Khan Bank

UNIVERSITY OF HUMANITIES AND 10 ASIAN FOREIGN LANGUAGE UNIVERSITIES FORM NETWORK

The University of Humanities and 10 other foreign language universities in Asia have formed a

consultative body to step up cooperation and exchanges. Leaders of the 11 universities launched

the body during the Presidential Forum for Universities of Foreign Studies in Asia at Westin Chosun

Seoul on 9 March, where ambassadors of China, Japan, Mongolia and Vietnam gave congratulatory

speeches at the forum.

The 10 other universities are Hankuk University of Foreign Studies (HUFS), Cyber Hankuk University

of Foreign Studies, Busan University of Foreign Studies, Daegu University of Foreign Studies, Tokyo

University of Foreign Studies, Kyoto University of Foreign Studies, Beijing Foreign Studies

University, Shanghai International Studies University, Samarkand State Institute of Foreign

Languages and University of Languages and International Studies-Vietnam National University.

Source: Korea Times

CONSTRUCTION ULAANBAATAR 2016 TRADE EXHIBITION

The 10-day Construction Ulaanbaatar expo opened with over 100 exhibiting construction companies

on 4 March at the Misheel expo center. The expo is held to promote the products of Mongolian

building material manufacturers and suppliers, while expanding cooperation between industries and

introducing the latest technologies to the public.

Source: Mongolia.GoGo.mn

60 STUDENTS COMPLETE OYU TOLGOI YOUTH DEVELOPMENT PROGRAMME

Sixty young people from 44 Ulaanbaatar schools on 7 March graduated from the Oyu Tolgoi LLC’s

Youth Development Programme, a three-month-long intensive leadership and capacity development

course. The graduates on 7 March received their certificates, with a small group of high-performing

participants receiving scholarships to study at university. “The program taught us to be team

players and showed the importance of each individual contribution to team successes,” said G.

Enkhzaya, student from 24th school in her speech.

This year, 239 applications arrived from 36 public and 8 private schools in Ulaanbaatar, with 60

students selected to take part in the program. It is jointly organized with the Mongolia chapter of

AIESEC, an international independent, not-for-profit organization run by students and recent

graduates of institutions of higher education.

Source: Oyu Tolgoi LLC

ROBBERS JACK BANK FOR LOVE AND MONEY

Police apprehended two love-struck gunmen attempting to rob a branch of Toriin Bank (State Bank)

LLC in Bayanzurkh District during the International Women's Day holiday. During the heist, police

almost immediately encircled and captured the suspects, who said they needed the money to buy

gifts for their sweethearts on the holiday. “To celebrate the Women’s Day, we decided to rob. With

our robbed money we were intending to make gifts for our girlfriends.”

The heist is one of a series hitting the capital this year, as well as the nation. On 6 March, five

young men who robbed a gasoline station in Argalant Soum, Tuv Aimag were later caught in

Erdenebulgan Soum, Arkhangai Aimag. They, too, said that they wanted to give gifts to girlfriends.

Two suspects are still at large after robbing a non-banking organization and pawnshop in Bayangol

district on 5 March.

Source: Udriin Sonin

“I KNOW WHO STARTED THE FIRE,” SAYS NARANTUUL BOSS

The head of the so-called “black market” for cheap clothing, electronics and more in Ulaanbaatar

said he will not pay any compensation to the vendors who lost their goods in a recent fire. Last

week's fire at Narantuul market was the fourth in recent years, putting its owner Sh. Saikhansambuu

on edge about what he said are arsonists trying to intimidate him with fires while costing him and

his tenants billions of tugrug. Vendors' reports suggest the total loss of goods from the fire could be

as much as MNT40 billion worth of goods. “I have never made any contracts with a renter. I have

always said to traders not to leave your goods outside,” he said.

On Twitter, Saikhansambuu wrote that the fire was deliberate, and that “I know who started the

fire.” He added, “If you want to attack me, just face me directly. Don’t play with the people, who

are laboring to make a living to support their children and families.”

Source: News.mn, 2

RIO TINTO CHIEF EXECUTIVE SAM WALSH RECEIVED SMALLER REMUNERATION PACKAGE

The crash in commodity prices has claimed a new victim: the remuneration package afforded to Rio

Tinto Group chief executive Sam Walsh. Walsh took home a total package of USD10.41 million for

the 2014 calendar year, but had to make do with USD9.12 million in the 2015 calendar year. But the

12 percent slide in the size of his package was better than Rio's Australian shares fared during the

2015 calendar year; the stock declined by 23 percent over the year.

Walsh's base salary was higher in 2015 than in 2014, but the commodities rout ensured his short-

term incentives and long-term incentives were lower than the previous year. The "other benefits"

segment of Walsh's remuneration package, which covers his car allowance, his house rental in

London and his personal tax costs, amounted to USD1.2 million. Rio's chief financial officer Chris

Lynch's remuneration package also declined, and was lower in both 2014 and 2015.

Source: Sydney Morning Herald

ECONOMY

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

The Bank of Mongolia on 10 March sold USD20.1 million and CNY30.4 million to commercial banks in

currency auctions for closing exchange rates of MNT2,048 and MNT314.05, respectively. Also that

day, it accepted tugrug swaps with commercial banks for an equivalent of USD6.65 million. It

rejected U.S. dollar swaps totaling USD20 million.

The Bank of Mongolia on 9 March issued 1-week bills worth MNT216 billion at a weighted interest

rate of 12 percent. Also that day, the central bank canceled auctions for treasury 39-week and two-

year treasury bills with face values of MNT25 billion and MNT15 billion, respectively, because of a

lack of bids.

Source: Bank of Mongolia

MONGOLIAN BONDS BOUNCE TO 4-WEEK HIGH AS COPPER EXTENDS RALLY

Mongolia’s dollar bond prices rose to the highest level in four weeks, extending their recovery from

a record low, as copper rallied and investors looked for bargains. The securities gained for a fifth

day as copper prices advanced for a third session. A rebound in commodities has boosted optimism

in an economy that relies on minerals for more than 75 percent of exports. “The recent selloff in

Mongolian sovereign debt and yield curve inversion was pricing in a chance for default in 2017,

which is simply not going to happen,’’ Nick Cousyn, chief operating officer for BDSec, Mongolia’s

largest brokerage, wrote in an e-mail from Ulaanbaatar. Despite the recent rally, bond yields

remain attractive, he wrote.

Source: Cover Mongolia, Bloomberg

80% OF ALL COMPANY SHARES ON MSE OWNED BY LESS THAN 5 INDIVIDUALS

Over 80 percent of all company shares on the Mongolian Stock Exchange are in just a few

individuals' hands, according to a report from the Mongolian Securities Clearing House and Central

Depository Co., Ltd. (MSCHCD). A majority of the 300 company shares listed on the local bourse is

held by 1,000 people, while 80 percent belong to up to 4 individuals, according to the report.

Source: Unuudur

UNEMPLOYMENT RATE INCREASES TO 8.3% AT START OF 2016

Unemployment in Mongolia was up to 8.3%, a 1.8 percent increase in February from the year

before, according to government statistics, despite some 3,000 jobs reportedly available.

Unemployment is usually highest in the first two months of the year, just before seasonal

construction launches for the year, according to the national employment center. Construction is

the largest sector for employment, surpassing mining in 2015 where the number of jobs fell 22

percent.

Source: Montsame

TRANSPORT MINISTER EXPECTS FREIGHT VOLUME TO DOUBLE

Mongolia will more than double its total freight volume to China this year as it seeks to earn higher

revenue from the facilitation of trade between Russia and China, said Road and Transportation

Minister M. Zorigt. “We negotiated to increase the freight amount in transit by 2.1 times. Total

freight amount in transit from Russia through Mongolia to China is set at 4.102 million tons,” he

said.

The facilitation of trains could bring an extra MNT150 million worth of government revenue.

Mongolia plans to send more than 6 million tons of freight to China in 2016, including 1.574 million

tons of freight from Russia to China and 875,000 from China to Russia.

Source: Undesnii Shuudan

GOVERNMENT SET TO CUT COST AND TIME FOR ELECTRICITY DELIVERY

Power outages and a lack of access to energy are one of the biggest obstacles facing the country,

according to a World Bank report. Building new power plants has been planned for decades,

although none of the projects including Combined Heat and Thermal Plant No. 5 has even broken

ground. Mongolia ranked 56th out of 189 countries on the World Bank’s annual ease of doing

business measurement which uses ten methodologies. It ranked 134th in Getting Electricity

methodology, which means the electricity is the most serious obstacle to business in Mongolia.

City officials have promised to reduce costs for transmitting energy by 20 percent on 15 April, which

will be transferred over to residents' energy bills.

Source: Mongolia.GoGo.mn

EXTREME WEATHER ALERT: NEMA RESCUES 638 FROM FREEZING

Emergency officials are now acting to save people from freezing winter conditions. The National

Emergency Management Agency (NEMA) is on full alert after nearly 200,000 animals were reported

dead in February from the harsh winter conditions known locally as a “dzud” natural disaster.

Approximately 150 rescue officers have saved 638 people and dragged 152 cars out of snow drifts.

Source: News.mn

NEARLY 250,000 LIVESTOCK LOST IN DZUD

The death toll of livestock succumbing to harsh winter conditions has climbed to nearly 250,000 as

of 1 March, according to the National Emergency Management Association (NEMA). Mongolia has

asked international groups to help manage the delivery of supplies to prevent a dzud, a national

disaster unique to Mongolia where animals die from harsh winter conditions. The 2015-2016 winter

has so far seen the loss of 34,764 horses, cows and camels and 214,146 sheep and goats. The death

impact is far lighter than 2010, when more than 9 million livestock died, although some individuals’

livelihoods are no better off.

Over 70 percent of the country’s territory is covered with snow, causing white-dzud conditions

throughout 18 provinces. At the moment, 113 counties in those provinces are in critical wintering

conditions, NEMA reported.

Source: Montsame

AIR SERVICE AGREEMENT INKED WITH CAMBODIA

Cambodia has signed a bilateral air service agreement with Mongolia that could pave the way for

direct flights and increased tourist traffic between the two Asian countries, and open opportunities

for investment, a government official said on Thursday. Sinn Chanserey Vutha, spokesman for the

State Civil Aviation Secretariat, said the agreement was an international obligation for bilateral air

service and creates more opportunity for investors and tourists. “If an investor sees this as a

potential investment on both sides, they can take advantage of it,” Vutha said. “The agreement

would also attract more Mongolian tourists to visit Angkor Wat and our beaches, as Mongolia has no

coastline.”

The number of Mongolians visiting Cambodia remains extremely low, with less than 500 visiting the

Kingdom last year, according to Tourism Ministry statistics.

Source: Phnompenh Post

REGISTRATION INITIATIVE CLAIMS 84% OF ALL FIREARMS

Mongolia closed its so-call Weapon-2015 initiative this week to register all unclaimed guns. As of

last December, the country had registered 84.2% of all guns known to be in the country, although

2,204 remain undeclared. In January, officials launched a second phase to register the remaining

fire arms, which closed on 10 March.

Source: News.mn

AZERBAIJAN CEDES ONLY TO MONGOLIA IN GROWTH OF HNWIS

Azerbaijan cedes only to Mongolia in the growth of ultra-high-net-worth individuals—holders of

wealth of USD30 million or more. The Wealth Report 2016, published by Knight Franc, says that

from 2005 to 2015 the number of HNWIs in Azerbaijan rose by 444 percent, while in Mongolia the

increase amounted to 475 percent.

Source: ABC.az

FOR MONGOLIANS, CLIMATE CHANGE IS AS PERSONAL AS IT GETS

The newest climate agreement reached during the United Nations climate change conference—or

COP21—in Paris, France, last December, sounded an urgent warning: The effects of climate change

will only worsen if nothing is done to address the problem. It included restrictions on the global

temperature increases, targeting 1.5 degrees Celsius as the limit; climate financing needs may top

USD100 billion per year by 2020; and countries are now required to create detailed plans towards

an emission-free future, among other key points in the 31-page document.

The effects of climate change have been severe in Mongolia. Since November 2015, large parts of

the country have been experiencing very low temperatures of up to minus 40 degrees Celsius,

followed by heavy snowfall covering about 90 percent of Mongolia's territory. “Herders and livestock

were used to warmer winters … so now with colder winters, it makes it hard to cope with the

temperature,” said Tsedensednom, governor of Ulziit Soum.

Source: DEVEX

DREXEL RESEARCHER PROVES MONGOLIAN HERDERS RIGHT IN CLIMATE RESEARCH

Scientists are well aware that a 1 degree Celsius increase in temperature is having enormous

impacts on the globe, but Clyde Goulden, PhD, director of the Asia Center at the Academy of

Natural Sciences of Drexel University, decided he could glean from those outside the scientific

community in Mongolia: the nomadic herders. “It was very, very clear talking to the herders that

they’re very sensitive to their environment and changes to it,” Goulden said. “We knew they would

be able to tell us a lot about it.”

Herders told Goulden that they had seen intense, new rainstorms that were rare when they were

young, called aadar, but scientists had somehow missed them. The problem, Goulden said, was they

only measured rain for four-hour periods, mostly manually. But when they began automatically

recording rain in five minute intervals, the data revealed an increase in the short, damaging rains

and a decrease in more benevolent forms of rain.

Source: Drexel University

UB PROPERTY AUCTION ATTRACTS JUST TWO BIDDERS

Ulaanbaatar's City Property Authority saw a dismal turnout for its latest property auction, with only

two bidders. Ulaanbaatar is privatizing some of its land to raise MNT46 billion this year along with

larger national efforts to sell off state assets during this period of continued economic slowdown

and dwindling government revenue. Last year, Ulaanbaatar failed to sell enough properties to raise

MNT93 billion from auctions, and has put up the unsold land for auction again this year.

Source: News.mn

60 PERCENT OF ALL MOTOR VEHICLES REGISTERED IN UB

Sixty percent of Mongolia's less than a million cars are in the capital, bringing in some revenue from

the tax put on by the city, according to data from the National Auto Vehicles Center. Ulaanbaatar

has 469,335 of Mongolia's total 795,754 registered vehicles, according to data from 29 February.

Over the last four years, the owners of 95,770 registered vehicles have failed to pay the tax.

Source: Montsame

SUBSIDIZED APARTMENT RENTAL SCHEME: TENANTS TO BE CHOSEN BY LOTTERY

A state agency is enrolling 27,000 individuals into a lottery for low-cost rental apartments. The

hitch? There are only 350 units available.

On 7 March, the State Apartment Cooperation will announce winners of the subsidized rental

apartments over 14 days. The winners will be able to rent for 5 years before they are rotated to a

new family. They will also be subject to annual review where the agency is able to evict anyone

who fails to comply with the regulations it sets.

Source: News.mn

COPPER BEARS TURN INTO BULLS BEFORE PRICES RALLY MOST SINCE 2011

Copper investors turned bullish for the first time in four months on optimism that a stabilizing

global economy will help demand recover. Stockpiles of copper, Mongolia's number-one commodity

for trade, are shrinking, signaling tighter supplies at a time when a robust U.S. labor market is

helping to support the consumption outlook. In January, copper futures were trading at the lowest

since 2009 as growth weakened in China, the world’s biggest user. Since then, prices have

rebounded 17 percent on optimism that mine owners have announced enough cutbacks to help

erode a global production surplus.

“The market is not too worried about surpluses, but we are very worried about the Chinese macro

story,” said Harish Sundaresh, a portfolio manager and commodities analyst in Boston for the

Loomis Sayles Alpha Strategies team. “I am actually fairly bullish on copper with a two-to-three

year outlook. But in the near term, there will be a very wide-range trade, just driven by Chinese

sentiment.’’

Source: Bloomberg

METALLURGICAL COAL PRICES MAY DO THE UNEXPECTED: RISE

Potential supply cuts have the price of metallurgical coal—the kind used to make steel—poised to do

something it hasn’t done since October 2013: rise. Coal is an important minerals commodity for

Mongolia, despite a steep fall in prices. The benchmark contract for the coal may gain by a few

dollars in the second quarter amid speculation that China is curtailing supply amid high costs, Mark

Levin, a coal analyst at BB&T Capital Markets in Richmond, Virginia, said.

Metallurgical coal prices have plunged due to a global oversupply and slowing demand out of China.

Levin said a “significant” amount of Chinese metallurgical coal is expected to come out of the

market because of high costs and the government’s push to close up to 150 million metric tons of

annual crude-steel production capacity by 2020. If the prices don’t rise, they’ll at least “end up

being no worse than flat,” he said.

Source: Economic Times

IRON ORE JUMPS BY RECORD 19% ON CHINA STIMULUS HOPES

Prices for Mongolia's number-five export commodity, iron ore, surged by a record 19 percent

Monday, marking a dramatic turnaround in sentiment amid hopes that China’s government will

further stimulate the economy. The price for physical iron ore for delivery to China rose to

USD62.60 a ton on Monday, according to the Steel Index, the biggest one-day rise since the index

began in 2009. The bounce came after China’s Premier Li Keqiang announced a growth target range

for this year of 6.5 to 7 percent, higher than many international economists have forecast.

Monday’s rise reflected real customer demand for shipments of iron ore, as well as speculation

activity. But analysts cautioned that the long-term picture of China’s steel demand has not

changed, meaning the rally could prove fleeting.

Source: Financial Times

POLITICS

ENKHBOLD FACES PETITIONS FOR HIS DISMISSAL

Parliament Speaker Zandaakhuu Enkhbold's interference with other branches of government may

have gotten him into hot water as he now faces two petitions before the Constitutional Court

calling for his resignation. The legislative head has not been hesitant to block the decisions from

the executive and judicial branches of government, including that of Prime Minister Chimed

Saikhanbileg when he tried to broker an investment agreement for the Tavan Tolgoi coking coal

mine. The Constitutional Court this month has received two petitions from citizens B. Enkhbayar

and D. Lkhamjav for Enkhbold's dismissal after leading an initiative to relieve former Constitutional

Court justice J. Amarsanaa of his position. Amarsanaa was removed by Parliament after a court

ruling suspended the government's 8 percent mortgage program for about a month earlier this year.

If the judges rule in favor of the petitions, Amarsanaa may return to the court while Enkhbold

would be ousted as Parliament speaker.

Source: Undesnii Shuudan

ASEP9 ORGANIZING COMMITTEE CALLS FIRST MEETING

Mongolia will host the ninth Asia-Europe Parliament Partnership (ASEP9) from 21 to 23 April as a

precursor to the Asia-Europe Meeting summit in July. Leading the committee for the event is MP R.

Gonchigdorj.

Source: Montsame

CW-GP LEADERS REFUSE TO SUPPORT MERGER WITH DEMOCRATS

Lead officials from the Civil Will-Green Party (CW-GP) have blocked an attempt by members to

merge with the Democratic Party. The Democrats are consolidating their ranks ahead of the 29 June

election, where they will face stiff competition from the opposition Mongolian People's Party after

four years of slowing economic growth and dwindling foreign investment.

“All units (in Ulaanbaatar) made the conclusion that we will not support the merger,” said a party

spokesperson in Ulaanbaatar, adding that a majority of leaders outside the city also rejected the

merger.

Source: Unuudur

NATIONAL LABOR PARTY (KHUN) DIVIDED

The National Labor Party (KhUN), though young, has not proven immune to the fracturing elements

that have hurt the country's two major parties. KhUN has split into two factions over the selection

of a party leader, after some at a 2 March meeting demanded current head, Sainkhuu Ganbaatar,

be replaced while facing some scandal over his resume. The reformists have suggested Party

Chairman B. Naidalaa as the replacement, while others have strongly objected.

Last month, reporters confronted Ganbaatar with information that he did not attend a university in

London as his resume stated.

Source: Unuudur

FORMER MP, MINISTER, CENTRAL BANKER DIES

Former central banker and parliamentarian Ochirbat Chuluunbat

died on 6 March while in Japan receiving medical treatment.

Chuluunbat was deputy minister of economic development from

2012 to 2014 and then chief economic advisor to Prime Minister

Chimed Saikhanbileg. He was also a regularly featured speaker at

global conferences where he would pitch Mongolia as an

investment destination. In addition to his time served as an

elected official from 2008 to 2012, he worked as the president of

the Bank of Mongolia from 2000 to 2006.

“Chuka (Chuluunbat) was an exceptionally smart, experienced

and candid speaker with respect to the financial markets and the

Mongolian economy,” said Business Council of Mongolia Executive

Director Jim Dwyer.

Source: Ikon.mn, BCM

POLISH EMBASSY TO RE-OPEN IN UB

Poland has promised to re-open an embassy in Ulaanbaatar as it prepares to attend the Asia-Europe

Summit in Ulaanbaatar in July. Poland's top diplomat Witold Waszczykowski at the U.N. office in

Geneva promised to re-open the embassy during a meeting with his Mongolian counterpart L.

Purevsuren in a meeting at the U.N. office in Geneva.

Mongolia and Poland first established diplomatic relations in 1950, but Poland closed its embassy in

2009 after 49 years of operation.

Source: Montsame

MONGOLIA'S COAL EXPORTERS COULD FACE FALLOUT FROM LATEST U.N. SANCTIONS ON N.

KOREA

New sanctions on North Korea imposed by the U.N. Security Council are the toughest in two decades

and could impact Mongolia and Russia's use of the Rajin port for coal shipments. Sharyn Gol JSC last

year announced plans to begin coal shipments to overseas buyers through the port, opening the

door for others to act similarly. But now the United Nations is introducing sanctions in response to

the North's recent nuclear test and rocket launch, chipping away at its limited trade and economic

ties, to the extent they are implemented.

The ban on North Korean exports of coal, iron and iron ore, mainly to China, will hit one of the

country's major sources of revenue. An exception was made for coal transshipments through the

port of Rajin, mostly from Mongolia to Russia.

Source: Newsmax

N. KOREAN DIPLOMATS SMUGGLING LUXURY GOODS THROUGH MONGOLIA

North Korean diplomats in charge of smuggling sanctioned goods into the country are using a route

via Mongolia to transport the items. The route is being used to send banned luxury goods to

Pyongyang, and operates mostly under the international radar, Radio Free Asia reported Friday. The

United Nations Security Council sanctions resolution that passed Wednesday targets non-weapons

trade, and provisions include bans on North Korean imports of luxury watches, jet skis and

snowmobiles valued at more than USD2,000.

The goods are sometimes listed under a third-party firm or individual to cross into Mongolia from

China, and the illegal goods movement is concealed by legitimate businesses. North Korea illicit

trade in other parts of the world, however, is taking a blow ahead of sanctions implementation.

Last October, two North Korean diplomats in Sao Paulo were arrested for attempting to smuggle

3,800 Cuban cigars into Brazil, Yonhap reported.

Source: UPI

CAMEL RACE IN UMNUGOBI SETS NEW GUINNESS RECORD

Mongolia has set another Guinness World Record by organizing the largest-ever camel race. A total

of 1,108 camels arrived at the finish line in Dalanzadgad, Umnugobi on 6 and 7 March. Umnugobi

has Mongolia’s and the world's largest population of Bactrian camels, with herders bringing together

2,000 of them for the event.

The previous record for the largest camel race belonged to Inner Mongolia, China, where 550

camels raced.

Source: Montsame

MONGOLIA SUSPECTS NABBED IN TAIPEI NTD1 MN THEFT

Six Mongolians who entered Taiwan as tourists earlier this month were arrested Tuesday on

suspicion of stealing mobile phones and other products worth about NTD1 million (USD30,447) from

shopping centers around Taipei, police said Wednesday. Police at the Zhongxiao W. Rd. police

station received a tip-off on Monday that a cellphone store in the Taipei Main Station Underground

Mall had fallen victim to phone theft and discovered based on a surveillance video that three young

men and three young women were suspected of having stolen the phones, according to Taipei City

Police Department's Zhongzheng First Precinct.

A task force formed by the police station then launched an investigation and found that the

burglary ring of six 20-somethings were staying at a hotel on Nanjing West Road. They were

arrested during a raid at the hotel at around 03:00 on 8 March as they were preparing to check out,

according to the police.

Source: China Post

THE MOST DANGEROUS MUSIC IN THE WORLD IS—SURPRISE—MADE BY ANGRY YOUNG MEN

The rap scene in Mongolia offers an example of how intense social conflict can transform music

from subversive to hateful. After the collapse of the Mongolian People's Republic in 1990, rock and

rap groups sprouted up across the country. By the 2000s, however, friction with China created a

market for artists with xenophobic messages. In a 2012 interview with U.S. filmmaker Lauren

Knapp, the popular Mongolian rapper Gee explained his position. "I’m not racist toward anybody…

except the Chinese," said Gee. "I hate the Chinese."

This kind of anti-Chinese and anti-foreigner sentiment taints an otherwise remarkable musical

renaissance in the country, says Peter Marsh, a musicologist at Cal State-East Bay and longtime

Mongolia music scene-watcher. Not exclusively, but mostly, turbo-folk has been dominated by

women, and Knapp, the filmmaker, spent time with a trailblazing female rapper in Mongolia.

Source: Atlas Obscura

SILK ROAD INITIATIVE NO 'MONROE DOCTRINE,' SAYS CHINA

Refuting criticism that the mega-Silk Road initiative is aimed at expanding China's interests abroad,

Beijing today said its multi-billion dollar project is an “open initiative” and not a form of “Monroe

Doctrine” to expand its dominance. Beijing is denying comparisons of the Silk Road initiative to link

China with Europe to the Monroe Doctrine, which was a U.S. foreign policy regarding domination of

the American continent in 1823. The Silk Road initiative which is officially termed as Belt and Road

projects is “an open initiative, not some form of Monroe Doctrine or expansionism,” Chinese

Foreign Minister Wang Yi said in Beijing.

A connectivity network has taken shape, most notably the CPEC and the China-Mongolia-Russia

Economic Corridor, Wang said. A freight train now links China with Europe. All-round progress has

been made in industrial capacity cooperation.

Source: Economic Times

MONGOLIA AND THE NEW RUSSIAN PETROL DIPLOMACY—EDITORIAL

Russia signed an inter-governmental agreement in early late January 2016 that would resettle

Mongolia’s debt to Russia which totaled USD172 million, 97 percent of Mongolia’s total debt. The

debt forgiveness signals Moscow is moving closer to Ulaanbaatar as it slowly loses its grip on other

former Soviet Union Republics economically. Mongolia also presents an increased market

opportunity for Russia and its petrol products. The use of financial instruments and debts to bring

countries closer to Russia and to gain political concessions are a mainstay in Russia’s diplomatic

toolkit.

The crashing oil market impacted Russia’s economy by shrinking Russia’s GDP and the regional

economy causing many former Soviet Republics to rethink their economic policies and alliances.

Internally, the resettlement of the debt favors Mongolia’s government. Debt forgiveness may be a

way to lure Mongolia to import more energy from Russia. Mongolia, to avoid energy dependence,

needs to expand the “third neighbor policy” to avoid over-dependence.

Samantha Brletich specializes in Central Asia Affairs with a focus on regional security, terrorism,

economics, and culture. She possesses a Master’s Degree in Peace Operations Policy from George

Mason University in the United States.

Source: Diplomatic Intelligence

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.

ANNOUNCEMENTS

ASEM FUNDRAISING RECEPTION, 16 MARCH

Prime Minister Chimed Saikhanbileg initiated a fundraising reception to be held on March 16 to

request the participation and assistance of the community and the public for the organization of

the 11th high-level ASEM meetings. "Mongolia has been given the privilege and responsible duty to

host and organize the 11th high-level Asia-Europe Meetings in 2016,” said the Prime Minister

Chimed Saikhanbileg. “Organizing this event successfully would have positive implications on

Mongolia’s reputation on the world stage and has a broad range of benefits."

Click here for more information.

_________________________________________

BCM KNOWLEDGE SHARING SESSION, 21 MARCH

The BCM Knowledge Sharing Session will be held at 17:00 on Monday, 21 March 2016, organized in

partnership with BCM member, the Corporate Governance Development Center (CGDC), to present

"Methods for analyzing current organizational strategy and identifying strategic vision." The session

will be led by Enkhbold Chuluunbaatar, Ph.D., a consultant at CGDC and a senior lecturer in the

Department of Business Administration at the Institute of Finance and Economics. His research

interests include entrepreneurship, culture and creativity, and strategy management. The CGDC is a

non-governmental and non-profit organization, providing teaching, consultancy, research and

advocacy services to clients, members and partners since 2009.

The Corporate Governance Development Center offers 20 percent discounts to BCM members for its

training activities.

_________________________________________

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, the elections and issues and

recommendations targeted to political parties, 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 member 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.

_________________________________________

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 Speakers: 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

Risk Working Group

BCM’s Risk Working Group’s meeting was held on Wednesday, 9 March at Suite 101, 12th floor

Express Tower, with 9 members in attendance, representing Mandal General Insurance, MIG

Insurance, XacBank, Wagner Asia, Bagatumurch LLC, State-owned Agricultural Reinsurance JSC and

National Emergency Management Agency.

Agenda of the meeting:

16:00-16:10 Introduction and Opening remarks by Risk WG Co-Chairs

16:10-16:50 Status Report on dzud condition in the countryside, Tuya Ch., Specialist, National

Emergency Management Authority of Mongolia/NEMA/

16:50-17:20 "Index-based livestock insurance scheme and Introduction of state-owned Agricultural

Reinsurance JSC", Enkhtaivan G., CEO of Agricultural Reinsurance JSC

Captain Tuya Ch., NEMA, gave the members a comprehensive overview of the dzud and dzud-like

situation in 18 aimags and 98 soums of Mongolia. As of 9 March 2016, the total tally of perished

livestock is 360,000. While this number is incomparable to the 2010’s record high loss of 6,310,800

livestock, Captain Tuya emphasized that at any dzud situation, it is the herders that are afflicted

the most as they are faced with enduring long cold days without basic medical assistance and the

ever-increasing need to tend after their cattle, their main source of income. Captain Tuya’s

presentation was complimented with a weather assessment presentation, which can be found here.

Specialist Oyunbat N., Agricultural Reinsurance JSC, presented the index-based livestock insurance

scheme and how it evolved into laying the very foundation of the state-owned Agricultural

Reinsurance JSC. Members were interested in knowing the reason behind the decline in the number

of policyholders, if the Agricultural Reinsurance JSC is exploring the bloodline insurance and the

JCS’s global reinsurers. Members in attendance were distributed “Mongolia: Dzud Emergency

Response Preparedness” snapshot by OCHA (Office for the Coordination of Humanitarian Affairs)

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

Coordinator of BCM at khulangoo@bcmongolia.org.

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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 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.

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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.

_________________________________________

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:

- Corporate Governance Development Center (CGDC) offers 20% discount on all of its trainings to

BCM members

- 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 11,439 fans on our Facebook fans page, 1,982 connections on

LinkedIn network, and 2,003 followers on Twitter.

_________________________________________

MEMBERS’ VACANCIES

- Transwest Mongolia LLC is hiring a Service Manager, Warehouse Supervisor and Welding Supervisor:

Deadline for application is 5:00pm, 16 March 2016. For more information, contact:

edorjragchaa@transwest.mn

- World Vision is hiring an Advocacy Officer: Deadline for application is 5:00pm, 23 March 2016. For

more information, contact70155323 (Ext: 124, 125 & 128)

- SD Guard at U.S. Mission in Ulaanbaatar: Deadline for applications 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."

Elisabeth Ellis, a partner at Minter Ellison LLP was featured in November 2015 edition in the article

titled "In Order to Make the Labour Law More Effective."

_________________________________________

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 – 10 March 2016

Currency

US dollar USD 2,047.00

Euro EUR 2,244.13

Japanese yen JPY 18.20

British pound GBP 2,904.28

Hong Kong dollar HKD 263.61

Chinese Yuan CNY 314.17

Russian Ruble RUB 28.24

South Korean won KRW 1.69