05.07.2013, newswire, issue 281

22
BUSINESS COUNCIL of MONGOLIA NewsWire www.bcmongolia.org [email protected] Issue 281 July 5, 2013 NEWS HIGHLIGHTS: Business Mongolia said to demand Rio Tinto keep mine revenue in country; Turquoise Hill secures USD 225mn bridge facility from Rio Tinto; MMC expands to total processing capacity of 15mn tons a year; Aspire Mining stock up sharply following president's re-election; Wolf Petroleum encouraged by oil potential; Hunnu Air opens direct flight to Bangkok; EBRD loan to Remicon to produce more concrete; Frontiers Capital signs agreement with construction materials producer; Construction company builds model home for ger districts; Golomt founder to sue bank over management quarrel; Entree Gold appoints non-executive chairman; New guide covers tourism and travel in Mongolia; New guide covers insurance industry in Mongolia; Mongolian investor heads for the final frontier; Invest Mongolia to highlight green development in September 2013; China-Russia-Mongolia trade and commodities fair opens. Economy OT uncertainty creates stock market slump abroad for Mongolian assets; MIBG notes market reforms with Securities Law effective January, 2014; OT to represent over half of copper production by 2015; Mining minister takes credit for drop in fuel prices; Petroleum generates over 2 times more tax revenue; Ukhaa Khudag-Gashuun Sukhait rail 24 percent complete; Shine Asia signs concession agreement on power plant project; EBRD to support private sector infrastructure; UB launches new shuttle bus to airport; Hunting permits approved; Over 1,700 N. Korean workers employed in Mongolia; Anglo American CEO sees grim outlook for mine sector; Chinese coking coal imports up nearly 70 percent year-on-year in May; Coal shares tumble as investors see no sign of turnaround; Gold bears eye fall toward USD 1,000 level; Australia remains a top investment destination, says minister. Politics Mongolia election makes space for greater policy clarity, says Fitch; Oil bill would generate more tax revenue, says mining minister; Mongolia election fair and effective, yet restrictive, says OSCE; Putin, Obama congratulate Elbegdorj on re-election; Elbegdorj receives parliamentary confirmation of re-election; Members shake things up in the MPP; Authorities lead nationwide mining inspections;

Upload: the-business-council-of-mongolia

Post on 23-Jan-2018

220 views

Category:

News & Politics


0 download

TRANSCRIPT

BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org [email protected]

Issue 281 – July 5, 2013

NEWS HIGHLIGHTS:

Business

Mongolia said to demand Rio Tinto keep mine revenue in country;

Turquoise Hill secures USD 225mn bridge facility from Rio Tinto;

MMC expands to total processing capacity of 15mn tons a year;

Aspire Mining stock up sharply following president's re-election;

Wolf Petroleum encouraged by oil potential;

Hunnu Air opens direct flight to Bangkok;

EBRD loan to Remicon to produce more concrete;

Frontiers Capital signs agreement with construction materials producer;

Construction company builds model home for ger districts;

Golomt founder to sue bank over management quarrel;

Entree Gold appoints non-executive chairman;

New guide covers tourism and travel in Mongolia;

New guide covers insurance industry in Mongolia;

Mongolian investor heads for the final frontier;

Invest Mongolia to highlight green development in September 2013;

China-Russia-Mongolia trade and commodities fair opens.

Economy

OT uncertainty creates stock market slump abroad for Mongolian assets;

MIBG notes market reforms with Securities Law effective January, 2014;

OT to represent over half of copper production by 2015;

Mining minister takes credit for drop in fuel prices;

Petroleum generates over 2 times more tax revenue;

Ukhaa Khudag-Gashuun Sukhait rail 24 percent complete;

Shine Asia signs concession agreement on power plant project;

EBRD to support private sector infrastructure;

UB launches new shuttle bus to airport;

Hunting permits approved;

Over 1,700 N. Korean workers employed in Mongolia;

Anglo American CEO sees grim outlook for mine sector;

Chinese coking coal imports up nearly 70 percent year-on-year in May;

Coal shares tumble as investors see no sign of turnaround;

Gold bears eye fall toward USD 1,000 level;

Australia remains a top investment destination, says minister.

Politics

Mongolia election makes space for greater policy clarity, says Fitch;

Oil bill would generate more tax revenue, says mining minister;

Mongolia election fair and effective, yet restrictive, says OSCE;

Putin, Obama congratulate Elbegdorj on re-election;

Elbegdorj receives parliamentary confirmation of re-election;

Members shake things up in the MPP;

Authorities lead nationwide mining inspections;

Mongolia seeks NATO support in defense education;

Chinese minister vows for further cooperation;

Memorial held for July 2008 riot victims;

Mongolian tablets added to World Heritage List;

Neo-Nazis announce a change of tack - pollution control;

A second chance for the president.

ECONOMIC INDICATORS

MSE Top 20 Index by market Capitalization;

Foreign-listed Companies with Mongolian Assets;

Inflation;

Central bank policy rate;

Currency rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank

Major Drilling

International SOS

Wagner Asia Automotive

Wagner Asia Equipment

Oxford Business Group

Mongolian National Broadcasting

Breakthrough PR

BUSINESS

MONGOLIA SAID TO DEMAND RIO TINTO KEEP MINE REVENUE IN COUNTRY

Mongolia is insisting that revenue from Rio Tinto PLC's USD 6.6 billion Oyu Tolgoi copper and gold

mine be kept in the country before it will allow sales to start, according to a government official

with knowledge of the matter.

Government officials want revenue from the mine to be held at a Mongolia-based bank, a decision

that Rio Tinto rejects, said the person, who asked not be identified as the talks are private.

London-based Rio postponed an event scheduled for today that was to mark the first shipment of

copper concentrate from the mine to China, citing a ―request from the government of Mongolia.‖

The standoff threatened Rio's June deadline for shipments and revived a dispute over the mine that

will account for 35 percent of Mongolia's GDP when fully operational in 2020. The Manhattan-sized

deposit will produce 450,000 metric tons of copper and 330,000 ounces of gold a year, as well as

silver and molybdenum. With fees, royalties and the 34 percent stake held by the government, as

much as 71 percent of the profits will to go the Mongolians, the International Monetary Fund

estimates.

Rio would not comment on whether the banking issue caused the delay to the first shipment, or

specify the reason for the postponement, with Melbourne-based spokesperson Bruce Tobin saying

the mine is ready to start shipments.

―Rio Tinto is keen to start shipping as soon as possible in order for the benefits from Oyu Tolgoi to

start flowing to all parties, including the people of Mongolia.‖ Tobin said in an emailed statement.

―Shipping will commence as soon as the government indicates its support for us to do so.‖

In February the Mongolian government blocked some of Rio's bank accounts in Ulaanbaatar over

unpaid tax claims, said three people familiar with the situation. While the accounts were unfrozen,

the two sides remained in protracted talks over how to solve a raft of issues, including management

control.

Source: Bloomberg

TURQUOISE HILL SECURES USD 225MN BRIDGE FACILITY FROM RIO TINTO

New York-and Toronto-listed Turquoise Hill Resources Ltd. on Monday said it had secured a USD 225

million non-revolving bridge facility from majority shareholder Rio Tinto PLC.

The facility, which would mature on 12 August and which replaced a previous, now expired, facility,

would be used to fund the operations and current underground development of Turquoise Hill's 66

percent owned Oyu Tolgoi copper-gold mine. Turquoise Hill pointed out that, should it default

under the terms of the bridge facility, Rio Tinto would be entitled to convert any outstanding

amounts into common shares at a price per share equal to 85 percent of the then-prevailing five-

day volume-weighted average trading price of the share on the New York Stock Exchange (NYSE).

―The company continues to explore various financing alternatives which would allow it to repay the

bridge facility in full prior to maturity and fund the operations at Oyu Tolgoi, pending receipt of

USD 300 million in proceeds from the sale of its 50 percent interest in Altynalmas Gold and the

completion of project financing,‖ the company said in a statement.

Source: Mining Weekly

MMC EXPANDS TO TOTAL PROCESSING CAPACITY OF 15MN TONS A YEAR

Mongolia Mining Corp. (MMC) announced the commissioning of its third module of the coal handling

and preparation plant at the Ukhaa Khudag coal mine on 13 June.

The expansion will boost processing capacity to 15 million tons a year, with the ability to process

around 5 million tons of run-of-mine coal a year. The module has the capacity to process 850-tons

per hour of run-of-mine coal with an in-feed operating rate of a minimum 6,000 operating hours a

year. The coal procession operations and full production capacity is expected to be available from

the third quarter of 2013..

The expansion work under design, procurement and construction management contract was

undertaken by Sedgman Ltd. All inclusive capital expenditures for the third module of the plant

totaled approximately USD 76 million, in line with the company's original estimates.

Source: Mongolian Mining Corp.

ASPIRE MINING STOCK UP SHARPLY FOLLOWING PRESIDENT'S RE-ELECTION

Aspire Mining Ltd. shares soared 80 percent to USD 0.06 intra-day on Monday, compared to their

closing price on Wednesday 26 June, with the company receiving an Australian Securities Exchange

(ASX) price query.

The re-election is a positive for mining and resource companies operating within Mongolia, which in

recent years has seen an influx of mining from foreign mining companies. Elbegdorj's re-election is

viewed as a reassurance to foreign investors that conditions will remain basically stable in the

country. Elbegdorj is likely to continue on with his growth policies that have seen the country's

economy expand by 12 percent last year and 17 percent in 2011, along with an anti-corruption

agenda.

Aspire said in response to the ASX: ―The company is continuing to work on completing its own

developed modeling of the Ovoot coal deposit with the aim of identifying opportunities to

significantly extend Mineral Resources and Ore Reserves estimates within the Ovoot coking coal

project. That work remains ongoing, and it remains uncertain as to whether it will result in any

material change to the Current Mineral Resources and Ore Reserves estimate in relation to this

company.‖

Source: Proactive Investors

WOLF PETROLEUM ENCOURAGED BY OIL POTENTIAL

Wolf Petroleum Ltd.'s geophysical survey at its Sukhbaatar block in Mongolia has indicated that the

oil generative sediment pile is up to 9,600 meters thick, the largest and thickest in Eastern

Mongolia.

This is up from the previous estimate of 4,000 meters and has led the company to suggest that the

sub basins at Sukhbaatar are a potential main petroleum generation source in the region. The

average depth of current producing basins in Eastern Mongolia, a prove petroleum producing

regions, ranges from 2,000 to 3,000 meters.

Wolf has completed preparation works to shoot 441 kilometers of 2D data on Sukhbaatar and has

received the necessary approvals from both the Petroleum Authority and the regional

administrations. In addition, the company plans to collect more than 7,350 new samples from all

the shot holes for the seismic program at a target depth of 15 meters and analyze every eighth-shot

hole, or about 920 samples. The first exploration well is currently scheduled to spud towards the

end of 2013.

Source: Proactive Investors

HUNNU AIR OPENS DIRECT FLIGHT TO BANGKOK

Hunnu Air LLC launched direct flights every Sunday from Ulaanbaatar to Bangkok, Thailand on 23

June. The direct flight follows an announcement by Mongolian state-owned news website Montsame

that the Cabinet of Ministers had approved an action plan to reform development of the country's

air transport.

Source: Bernama

EBRD LOAN TO REMICON TO PRODUCE MORE CONCRETE

The European Bank for Reconstruction and Development continues its support of local

manufacturers of building materials with a new USD 5 million loan to Remicon JSC, a Mongolian

producer of ready-mixed concrete.

The loan will finance the expansion of the company's production facilities, namely the installment

of a second production line and a mobile concrete batching plant, including distribution mixer

trucks.

―Remicon is just the type of company we want to see grow in Mongolia: a local, dynamic medium-

sized business which takes advantages of the mining boom to increase production and create jobs,‖

said the EBRD's first vice president and chief operating officer, Phil Bennett, signing the deal in

Ulaanbaatar. ―Mongolia is ready to build and produce more locally; the EBRD is supporting the

drive, with the highest number of our projects in the country being in the manufacturing sector,‖

he added.

Remicon is a leading ready-mixed concrete producer based in Ulaanbaatar that began operating in

2008. It is the subsidiary of Hera Holding LLC, a construction and mining holding company, and is

publicly traded on the Mongolian Stock Exchange (MSE).

Source: European Bank for Reconstruction and Development

FRONTIERS CAPITAL SIGNS AGREEMENT WITH CONSTRUCTION MATERIALS PRODUCER

Frontiers Capital Mongolia signed an exclusive license to sell Prekons' construction products in

Mongolia.

Prekons produces pre-fabricated structures to serve a wider range of sectors such as oil and gas,

housing, education, health, aviation, military, social and commercial.

―Its main competitive advantage is time, since their steel-frame modular construction does not

require the drying of cement, an important quality as Mongolia's weather limits the construction

period to only four months a year.‖

Source: Frontiers Capital Mongolia

CONSTRUCTION COMPANY BUILDS MODEL HOME FOR GER DISTRICTS

A Mongolian firm utilizing German technology will construct model homes in the Yarmag district to

serve as the design for ger district houses for the redevelopment project.

Isorast Mongolia, the construction company building the homes, will build the 95 square meters

home and will include the company‘s proprietary insulation materials and concrete cast formwork.

―The German-quality construction being introduce to Mongolia, which features a design to prevent

heat loss at each end of the building, will cost MNT 1.4 million per meter,‖ said M. Tsogtgerel,

manager of Isorast. ―But a branch of our factory which supplies materials for us in Germany is

planned for construction in Mongolia next year to cut the price by 50 percent.‖

Source: UB Post

GOLOMT FOUNDER TO SUE BANK OVER MANAGEMENT QUARREL

Golomt Bank founder Luvsanvandam Bold's attorney said his client intended to sue Golomt Bank LLC

over a dispute with management.

―This letter was about the Golomt Bank problems only, not about Bodi International,‖ said Attorney

Z. Sukhbaatar regarding a letter written last year in May but released publicly last month.

He said that the letter written by his client, who is also minister of foreign affairs, followed reports

from auditors FSI Capital and Ernst & Young that Golomt Bank had ―serious problems.‖ He said Bold

acted under the presumption that the Bank of Mongolia had failed to uphold to its responsibilities of

regulating the commercial banks and allowed Golomt's management to go unchecked.

―Remember the sad history of Anod and Zoos Banks,‖ said Sukhbaatar. ―Before this official letter, I

handed in more than 10 official requests to foreign and national officials of the central bank, but no

actions were taken by either Golomt Bank or the Mongol Bank.‖

Sukhbaatar said he and his client would go forward with a law suit against the central bank at a city

court.

Source: Udriin Sonin

ENTREE GOLD APPOINTS NON-EXECUTIVE CHAIRMAN

Entree Gold Inc. announced the appointment of Michael Howard as non-executive chairman of the

company's board of directors.

Howard, who holds the title of lord, served as a director and non-executive deputy chairman of the

company since 2007. He is the former leader of the Conservative Party in Britain, a distinguished

lawyer, and served as a member of British Parliament for 27 years. He will work closely with

Entree's management and board as the company progresses through milestones in the advancement

of its global mining projects.

―We are very pleased that Lord Howard has assumed the role of non-executive chairman. Lord

Howard has been a valued member of our board for many years now and we have benefited from his

years of experience and strong understanding of the financial markets.‖

Also announced was that all nominees proposed by management were elected as directors. Peter

Meredith did not stand for re-election to the company's board.

Source: Entree Gold Inc.

NEW GUIDE COVERS TOURISM AND TRAVEL IN MONGOLIA

The newly released ―Travel and Tourism‖ report in Mongolia offers a guide to the size and shape of

the tourism market at a national level.

Domestic tourism has proven to be one of the brighter spots in travel and tourism in Mongolia.

Locals are making a higher number of business tourism trips within the country, as local businesses

attempted to keep up with economic growth and capitalize on new opportunities.

The new report provides recent market size data from 2007 to 2011, allowing readers to identify

the sectors driving growth, leading companies and strategic analysis of key factors influencing the

market. Background information on disposable income, annual leave and holiday taking habits are

also included. Forecasts to 2016 illustrate how the market is set to change.

Source: Bharat Book Bureau

NEW GUIDE COVERS INSURANCE INDUSTRY IN MONGOLIA

Research and Markets announced the addition of a new report covering the insurance industry and

Media.

The report titled ―The Insurance Industry in Mongolia, Key Trends and Opportunities to 2017‖

provides market analysis, information and insights into the insurance industry in Mongolia. Led by

economic growth, the Mongolian insurance industry registered a compound annual growth rate of

26.7 percent during the review period of between 2008 and 2012. However, the industry is

relatively small and in its development stages. Indeed, its first life insurance company, National

Life Insurance Company LLC, was established in 2008.

Included in the report regarding the insurance industry are growth prospects by segments and

categories, the competitive landscape, the current trends and drivers, challenges, and regulatory

framework.

Source: Research and Markets

MONGOLIAN INVESTOR HEADS FOR THE FINAL FRONTIER

A small yet bold Mongolian firm is preparing to launch a new oil enterprise in North Korea. It is an

unlikely pairing, but the firm is betting it has the key ingredients to make this gamble pay.

As Mongolia sputters away from frontier-economy status into the territory of middle-developed,

Mongolia Stock Exchange-listed HBOil has hopes to tap into one of the world's last remaining true

frontier markets. The company is counting on Mongolia's close relations with the neighboring hermit

kingdom to help serve as a base to launch the country's first home-grown multi-national.

―It's a big opportunity, especially having ownership in a foreign company,‖ said Ulziisaikhan

Khudree, chief executive of HBOil, which has chiefly functioned within oil-waste recycling.

North Korea has 24 times the reserves of South Korea and 360 varieties, according to the Korea

Energy Economics Institute. A 2012 report by the Asia Pacific-focused think tank Nautilus Institute

suggests the best indicator of potential onshore production is reports from 2006 of up to 300,000

tons of crude oil a year, while Pyongyang is said to be eyeing the West Sea (the Korean name for

the Yellow Sea), which is said to hold 12 billion barrels of oil.

Dependence on foreign fuel has built a strong desire in Mongolia to develop the country's own

production capabilities. A key point in the deal for HBOil then is the interest it offers in the Sungri

Oil Refinery at the Rason Special Economic Zone on the northeast tip of North Korea. Although the

facility is under refurbishment currently, HBOil hopes it will eventually win the right to deliver all

of Sungri's output to Mongolia. With rail already linking Rason and Mongolia, the deal also hints at

future access to North Korean ports, which would offer Mongolia growing minerals output to reach

new international markets.

High possibilities for disruption stemming from broken agreements and political instability, with the

potential that expanded international sanctions could make it impossible to operate, left Khudree

unfazed.

―DPRK is neither unstable nor isolated; instead it is engaged in a complex geopolitical tension,

which has become more complicated over time,‖ Khudree insists.

Source: BNE

INVEST MONGOLIA TO HIGHLIGHT GREEN DEVELOPMENT IN SEPTEMBER 2013

Frontier Securities will host the seventh annual Invest Mongolia conference from 2 to 3 September

in Ulaanbaatar, with a focus on Green Development.

Representatives of Mongolia‘s Mining, Environment and Green Development, and Economic

Development Ministries will be in attendance. Giving the keynote address will be Environment and

Green Development Minister Sanjaasuren Oyun. Other prominent speakers include Chandran Nair,

founder and chief executive of the Global Institute for Tomorrow and David Rohanna, executive

director of Quintana Minerals Asia.

Source: Frontier Securities

CHINA-RUSSIA-MONGOLIA TRADE & COMMODITIES FAIR OPENS

More than 50,000 people attended the opening day of the ninth annual China-Russia-Mongolia Trade

& Commodities Fair in Hailar, a district of Hulubuir in the northeast of Inner Mongolia autonomous

region.

The 10-day fair with over 600 booths opened on Sunday and attracted 300 enterprises, mostly from

the three countries, but exhibitors from other countries including Nepal, South Korea, and

Singapore also participated. An international economic forum gathering decision makers and

enterprises from China, Russia and Mongolia was also held on Sunday, with the aim of exploring the

development of trilateral trade.

The event was first begun for real estate but has now covered a wider range, and become one of

the country's major economic events, among the three neighboring countries. Hulubuir has seven

border crossings with Russia and Mongolia, and the district of Hailar has become a major

international trade hub in northeast China.

Source: China Daily

ECONOMY

OT UNCERTAINTY CREATES STOCK MARKET SLUMP ABROAD FOR MONGOLIAN ASSETS

Two Hong Kong-listed Mongolian miners saw their stock prices fall to record lows this week.

Mongolia Mining Corp. (MMC) fell 5.95 percent on 27 June, closing at HKD 1.42 for the day.

SouthGobi Resources Ltd. stock fell 6.23 percent. Turquoise Hill Resources Ltd. stocks fell 10

percent on the New York Stock Exchange. Analysts have pointed to the uncertainty concerning the

Oyu Tolgoi copper-gold mine as the chief cause for the fall in stock prices.

Source: Udriin Sonin

MIBG NOTES MARKET REFORMS WITH SECURITIES LAW EFFECTIVE JANUARY, 2014

Mongolian Investment Banking Group highlighted some of the important changes that the Securities

Law will deliver to Mongolia's capital markets beginning January 1, 2014.

The definition of securities has been broadened to include the addition of depository receipts,

provincial government securities, and warrants. In doing so, the Financial Regulatory Commission

and the Mongolian Stock Exchange (MSE) have essentially strengthened the market by extending

new investment opportunities to Mongolian investors while also providing additional sources of

capital for companies and local governments. The law also introduced a new article addressing

mergers and acquisitions (M&A) that would allow for reverse listings or reverse takeovers. The

added detail provides greater clarity that could lead to more companies listing in that manner,

taking advantage of the number of stocks or company shells remaining inactive.

The legislation provides multiple additions to the subjects that the Securities Law regulates,

including open-and closed-ended responsibilities, lawyers, evaluators, auditors, and accredited

professionals. The previous law enacted in 2002 omitted mention of these subjects, leaving their

responsibilities unclear. Also, the expanded reporting requirements will designate the specific

responsibilities and limitations of those subjects with access to material information. The expansion

of activities related to trading securities adds clarity for market participants in understanding their

responsibilities in registrations, holdings, reporting, transacting, and payment of securities. Also

included are a separation of regulatory responsibilities and recognition of underwriters as securities

companies.

There is also reason to believe that the current regulations will be loosened in anticipation that

junior mining companies and other mineral-resource-related groups will be looking to access the

exchange. This will support growth across multiple sectors and will allow for foreign companies to

more easily access the domestic market.

―Overall we believe that the new law is a crucial step forward for Mongolia's investment

environment,‖ said the Source. ―The provision of clear and professional regulations as well as

increased access to capital will ensure that this piece of legislation is not overlooked by foreign

investors.

Source: Mongolian Investment Banking Group

OT TO REPRESENT OVER HALF OF COPPER PRODUCTION BY 2015

The Oyu Tolgoi mine is expected to nearly double copper production by 2015, accounting for 52

percent of all copper reserves.

Oyu Tolgoi is expected to produce 205,000 tons of copper in 2015, bringing total copper production

to 396,000 tons. If production begins at the Tsagaan Suvaraga deposit, it would produce an

estimated 50,000 tons of copper in 2015. By 2020, Oyu Tolgoi would have increased copper

production by six times, producing 775,000 tons, and would represent over three quarters of all

copper production in the country if no other mines begin operations. Remaining production would

be a projected 70,000 tons from Tsagaan Suvarga and 135,000 tons from Erdenet. Total copper

production for the nation is expected to reach 980,000 tons in 2020.

Mongolia currently has estimated reserves of 36 million tons, including Oyu Tolgoi.

Source: Udriin Sonin

MINING MINISTER TAKES CREDIT FOR DROP IN FUEL PRICES

Mining Minister Davaajav Gankhuyag reported to Parliament that fuel prices in Mongolia have

stabilized due to changes made to oil customs and tax.

The Mining Ministry and Bank of Mongolia partnered to stabilize fuel prices via a financing scheme

based on the size of oil companies and the number of gas stations. The 12 companies that have

applied so far for the financing have received MNT 105.3 billion thus far with interest of 3.8

percent.

In the two months since the launch of the financing deal Mongolia's gasoline capacity grew by two

to three times, while introducing greater competition into the market place. The current price for

the AI-94 type gasoline is MNT 1,650.

Source: Udriin Sonin

PETROLEUM GENERATES OVER 2 TIMES MORE TAX REVENUE

Mongolia received 2.3 times more in taxes for petroleum sales this year than a year ago, reported

the National Statistical Office.

The NSO reported total state revenue of MNT 2.01 trillion, a ten percent gain over last year. Oil

generated MNT 30.3 billion more in tax revenue, while organization earned 15.4 percent more, and

income from penalty fees earned 36.3 percent more.

Non-tax generated revenue, however, fell MNT 32.4 billion, while another unspecified source of

income fell 22.7 percent to MNT 5.6 billion.

Source: Zuunii Medee

UKHAA KHUDAG-GASHUUN SUKHAIT RAIL 24 PERCENT COMPLETE

Work is 24 percent complete on the Ukhaa Khudag-Gashuun Sukhait railway, said a ministry of

Transportation official.

Samsung S&T is leading construction with the 1,520-millimeter Russian gauge, said head of policy

implementation and regulation department at the Transportation Ministry, B. Artur. The

government allotted a total of USD 200 million from last year's USD 1.5 billion Chinggis bond to fund

development and construction for the New Railroad Project. The government hopes to bring

another USD 200 million to complete financing.

―After construction is complete, the investment return will take nine years, four months,‖ said

Artur.

The government will own 51 percent of the rail company established with 49 percent ownership by

foreign investors.

Source: Undesnii Shuudan

SHINE ASIA SIGNS CONCESSION AGREEMENT ON POWER PLANT PROJECT

Mongolia signed a concession agreement with Shine Asia Group for the construction of a 100-

megawatt power station in Telmen Soum, Zavkhan Aimag.

Signing the agreement was Economic Development Minister N. Batbayar and Shine Asia Executive

Director L. Turbayar. Construction is set to begin this quarter and will span 15 months, said the

officials.

Officials said the project was part of national efforts to build up the capacities of the national

power grid.

Source: Undesnii Shuudan

EBRD TO SUPPORT PRIVATE SECTOR INFRASTRUCTURE

The European Bank for Reconstruction and Development (EBRD) board of directors approved a new

three-year strategy for Mongolia.

The strategy, which was approved on the eve of the presidential election in the country, notes that

Mongolia remains committed to democratic values, developed a competitive political party system

and has established a vibrant civil society, although challenges on the path to a consolidated

democracy remain. One of the priorities for the EBRD in Mongolia over the next three years will be

to support infrastructure projects with private sector participation, including public-private

partnerships. The EBRD is prepared to finance new projects in the energy and rail sectors, including

in the south Gobi region.

The main challenges identified by the EBRD strategy are fair, efficient, and transparent

management of the wealth generated by the natural resources boom and a sustainable development

model. The main priorities outlined in the strategy are diversification, sustainable growth,

responsible mining and institutions, and infrastructure and private sector development.

The EBRD has invested USD 955 million in 55 projects in Mongolia, while also mobilizing

approximately USD 2 billion from other sources of financing. Some 18 transactions were made in the

natural resources sectors and two in the energy sector. The majority of projects (35) have been in

manufacturing and services.

Source: European Bank for Reconstruction and Development

UB LAUNCHES NEW SHUTTLE BUS TO AIRPORT

A new express shuttle bus servicing a direct to Chinggis Khan International Airport launched on 3

July.

The bus will run once every hour between 5:30 a.m. and 11:30 p.m. at between MNT 1,000 to MNT

2,000 a ticket, picking up travelers at the Mongolian State University of Education and State Central

Library. The bus lowers the cost of transport by a least six times, as the studied showed that

individuals were paying about MNT 12,000 per trip.

The Ulaanbaatar City Transport Authority and the airport hired Lototo LLC to run the public

transport line. A study showed that 67 percent of people heading to the airport had taken their own

vehicle to make the 16-kilometer trip to the airport, whereas 23 percent took taxis.

Source: News.mn

HUNTING PERMITS APPROVED

The Ministry has Environment and Green Development has made its approvals for the hunting of

certain protected species this year.

The hunting permits have been made the hunting of two wild sheep at Sagil and Bukhmurun Soums

in Hovd, two wild sheep for most of the province, and one wild sheep in Altai Soum, Hovd Aimag

and one wild sheep each in Altai and Duut Soums of Hovd. Also in Hovd was permission granted for

10 Ibex for most of the province and two Ibex in Tsetseg Soum.

Permissions granted for Tuv Aimag were two wild sheep and four deer in Undurshireet Soum, one

wild sheep and four deer in Lun Soum, and two deer in Bayan-Unjuul Soum. Additional permissions

were made for the hunting of two wild sheep in Delgerkhaan Soum, Khentii Aimag, two wild sheep

in Khatanbulag Soum, Dornogobi Aimag, and one wild sheep at Baruunbayan-Ulaan, Uvurkhangai

Aimag.

Source: Undesnii Shuudan

OVER 1,700 N. KOREAN WORKERS EMPLOYED IN MONGOLIA

A total of 1,749 North Koreans are working in Mongolia with most of them employed in the

construction sector, according to a news report.

The number of North Korean workers, tallied at the end of April, accounts for the second-largest

foreign workers' group in the central Asian country, after the Chinese, the Washington-based Radio

Free Asia said, citing the Ministry of Labor. The figure represents North Koreans legally working in

the country. Chinese workers in Mongolia stood at 5,976 as of end-April, it said.

Given that most foreign workers in Mongolia are employed in the construction industry, the

majority of the North Korean workers are presumed to also work in the sector, the report said. A

previous report by a Mongolian newspaper has quoted a North Korean laborer in the country as

saying that an average North Korean worker receives USD 600 to USD 700 in monthly wages.

The report reflects the two countries' recent efforts to tighten economic ties.

Source: Global Post

ANGLO AMERICAN CEO SEES GRIM OUTLOOK FOR MINE SECTOR

Anglo American PLC Chief Executive Officer Mark Cutifani said the outlook is grim for mining as

companies adapt to lower prices and weakening demand.

―It does look pretty grim, certainly for the thermal coal industry,‖ Cutifani said in a speech to a

mining industry forum in Canberra today.

Anglo is cutting jobs and halting production at its Aquila coal mine in Australia‘s Central

Queensland, while Glencore Xstrata PLC, the world‘s largest exporter of power-station coal, is

shedding staff at its Ravensworth mine in New South Wales, Australia, the company said in a

statement on 25 June. Peabody Energy Corp., the largest U.S. coal company by sales, is cutting 450

contractors in New South Wales, the Australian Financial Review newspaper reported 25 June. Rio

Tinto PLC, the world‘s second-largest mining company, has cut about 40 managers and senior staff

in its iron ore division in Western Australia, as it seeks to cut USD 2 billion in costs this year across

its mining and corporate offices.

Source: Bloomberg

CHINESE COKING COAL IMPORTS UP NEARLY 70 PERCENT YEAR-ON-YEAR IN MAY

China‘s latest customs data showed that China imported 6.49 million tons of coking coal in May, up

68 percent from a year earlier while 6.6 percent less than the previous month.

According to the data, China imported 2.16 million tons of coking coal from Australia, 1.25 million

tons from Mongolia and 979,000 tons from Canada. Coking coal imports in the first five months

totaled 30.62 million tons, up 44.5 percent from the same period last year. Due to widening

differences between prices at home and abroad, China saw mounting imports of coking coal and hit

a monthly high of 7.58 million tons in December last year.

Source: Steel Guru

COAL SHARES TUMBLE AS INVESTORS SEE NO SIGN OF TURNAROUND

Dave Steinberg often feels like one of the last remaining bulls in the tumbling U.S. coal market, and

even he struggles to put a happy face on the industry.

Coal stocks ―have been terrible,‖ said Steinberg, a managing partner at Chicago-based DLS Capital

Management, which oversees USD 350 million in assets and owns positions in coal producers such as

Peabody Energy Corp., Arch Coal and Alpha Natural Resources. Even stock had fallen more than 40

percent for the year at Thursday's close, and was down at least 24 percent this month, to levels

Steinberg calls ―absurd.‖ All told, Steinberg has lost ―more than I would like to admit,‖ he said.

Despite the gloom, he said he thinks each company is worth ―at least double‖ its current trading

prices with rising consumption and falling inventories stabilizing prices over the next year.

Despite their relative optimism, Steinberg and other coal bulls have a tough road ahead, with few

believing they have seen the bottom for coal stocks even as some hit ten-year lows. Most U.S. coal

miners sell a mixture of thermal coal, used to generate electricity, and higher-margin metallurgical

coal, used to make steel. Right now, both markets are under pressure. With the shale gas revolution

cutting the price of natural gas, U.S. power plants have been burning less coal. And the threat of

regulation that could discourage coal generation--like the carbon rules promised by President

Barack Obama on Tuesday—has cast a shadow over the U.S. thermal industry.

Investors that are bullish on the emerging economies see long-term potential in steel, and thus in

metallurgical coal. But right now the slowdown in Chinese growth, paired with a glut of capacity, is

weighing on the steel market.

Source: Reuters

GOLD BEARS EYE FALL TOWARD USD 1,000 LEVEL

And the riot shows few signs of slowing down: Gold touched a fresh three-year low of USD 1,180 a

troy ounce on 1 July.

―At the moment gold shares are not far off pricing in the end of the world,‖ says Envy Hambro, who

as head of Black Rock's gold and mining funds is among the world's largest gold investors.

The slide, which began in earnest in April, has accelerated in the past fortnight after Ben Bernake,

U.S. Federal Reserve chairman, set out for the first time a framework for the U.S. central bank to

exit its program of ―quantitative easing.‖ Hedge funds, inspired by a strengthening U.S. dollar and

declining inflation expectations, have been betting against gold for some time. But bankers say that

Bernake's remarks helped to trigger a wave of selling by supposedly longer term investors—the

wealthy individuals with Swiss bank accounts and pension fund managers who have been

instrumental in fueling gold's decade-long bull market.

―What was a long-term holding, now that the price is USD 300 lower does not look so long-term

anymore,‖ says one senior precious metal banker.

Worrying for gold bulls, Asian buyers—a key source of support in previous price declines—have been

quiet as prices slid in recent weeks. Indian demand has been tempered by government moves to

restrict gold imports; and Chinese investors appear to be waiting it out after buying when prices fell

in April only to see them plunge even further. Instead, investors are looking at the cost of producing

the metal. According to William Tankard a researcher director at Thomson Reuters GFMS, at prices

of USD 1,200 a troy ounce roughly half the gold mining industry is losing money. But mines take

time to close and miners are likely to find ways to reduce costs. And even if some mines do close

down, the amount of supply affected is likely to be small relative to the potential sales by

investors.

To arrest gold's decline, the decline in gold prices would have to stimulate a recovery in jewelry

demand and trigger a sharp reduction in sales of gold for scrap.

Source: Financial Times

AUSTRALIA REMAINS A TOP INVESTMENT DESTINATION, SAYS MINISTER

Australian Federal Resources and Energy Minister Gary Gray has reprimanded critics of Australia's

investment climate, saying criticisms leveled at high wages, taxation rates and over regulation and

concerns about sovereignty were ―plainly wrong.‖ Australia is a competitor to Mongolia as well as a

model for its burgeoning mining industry.

―The reality is a combination of factors influence the decision to invest, and when all of those

factors are weighed up, on any objective assessment, Australia remains at the top of the list of

attractive investment destinations,‖ Gray said.

―Our reputation is unequivocally demonstrated by our significant remaining pipeline of

investment.‖

Gray said that 11 committed ―mega projects‖ currently accounted for 80 percent of AUD 212

billion, of total committed project expenditure, adding that in the six months to April, some 21

resources and energy projects, with a combined investment of USD 15.3 billion, were completed in

Australia. The minister admitted that while the weaker commodity prices may affect the resources

sector, miners had to renew their focus on productivity at both mine and business level. Critical to

this was unlocking the capacity of already invested capital and bringing mines to optimal capacity.

Gray added that as commodity prices flattened, technology and the country's infrastructure would

play and increasingly important role in maximizing efficiency and maintaining competitiveness.

Improving business processes and reducing input costs would also increase productivity.

Source: Mining Weekly

POLITICS

MONGOLIA ELECTION MAKES SPACE FOR GREATER POLICY CLARITY, SAYS FITCH

President Tsakhia Elbegdorj's victory in last week's Mongolian presidential election creates space for

the authorities to reduce policy uncertainty, particularly around foreign investment in mining and

macroeconomic management, Fitch Ratings said. This could potentially result in higher growth and

improved fiscal performance and external finances, which would support Mongolia's sovereign credit

profile.

Elbegdorj's victory should consolidate the hold on power by the Democratic Party, the largest

member of the coalition government. A period of political stability could allow the Mongolian

authorities to clarify their plans for the country's mining regime through a new mining law, and its

foreign investment regime through amendments to existing laws. These key policy areas have been

subject to some uncertainty in recent months, against a backdrop of populist pressure to reassert

Mongolian ownership of resource assets, especially since last year's parliamentary elections.

Since the Source affirmed Mongolia's ―B+‖ rating the ―Stable Outlook‖ in November 2012, some

credit negative policy uncertainty has emerged. The biggest and most visible example has been the

delay of copper exports from the huge Oyu Tolgoi mine jointly owned by the Mongolian government

and Rio Tinto PLC beyond their scheduled start date in mid-June. Mongolia's fiscal deficit

deteriorated sharply from 4.8 percent of GDP in 2011 to 8.4 percent in 2012, as revenue intake fell

short of expectations and was far outpaced by expenditure growth (despite capex being under-

executed).

The government's ability to comply with the Financial Stability Law, which caps the structural

deficit at 2 percent of gross domestic product and limits expenditure growth from this year, will be

severely tested as the law implies significant tightening of spending. The Bank of Mongolia has cut

its policy rate and credit growth has begun accelerating again, reaching 34.4 percent in May from

23.9 percent in December. This has contributed to market pressure on the tugrug, which has

depreciated by 3.7 percent so far this year against the dollar.

The Source expects an improvement in the balance of payments once the Oyu Tolgoi mine comes on

stream, while further unexpected delays could intensify pressure on Mongolia's external finances.

Source: Reuters

OIL BILL WOULD GENERATE MORE TAX REVENUE, SAYS MINING MINISTER

Mining Minister Davaajav Gankhuyag said Mongolia would receive more in tax from oil thanks to new

tax hikes in the oil bill he introduced to Parliament.

Gankhuyag said oil reserves would be taxed an additional 15 percent while traditional oils would see

10 percent added tax in the draft Law on Oil. The 10 percent earned from special licenses will be

divided 20 percent to the town presiding over the deposit and 70 percent to the state government.

Exploration and development tax will be 50 percent before purchasing is made and 60 percent

afterwards.

The legislation includes several other amendments to the 1991 Law on Oil to allow for greater

investment than is provided internationally and create a better environment for competition,

Gankhuyag said. This year there are plans to extract 608,000 tons of oil worth MNT 145.9 billion in

government revenue. Thus far this year, Mongolia has earned 64.6 billion in tax from the extraction

of 293,000 tons, of which 286,000 tons was sent to China for refinement. Mongolia holds an

estimated 332.6 million tons of oil.

Other amendments to the legislation include new royalties, government rights to extracted oil,

cooperation agreements between companies and local governments while extraction is taking

place, and transferring proceeds into local development funds.

Source: Zuunii Medee

MONGOLIA ELECTION FAIR AND EFFECTIVE, YET RESTRICTIVE, SAYS OSCE

Mongolia's presidential election was characterized by a competitive campaign conducted in an

environment that respected fundamental freedoms, concluded the Organization for Security and

Co-operation in Europe (OSCE) election observation mission in a statement released today. At the

same time, restrictive legal provisions prevented the media from providing sufficient information to

voters.

―On election day, voters were able to cast their votes freely, and voting was assessed positively in

99 percent of the cases observed,‖ said Ambassador Audrey Glover, the head of the election

observation mission of the OSCE Office for Democratic Institutions and Human Rights (OSCE/ODIHR).

―However, secrecy of the vote was not always safeguarded.‖ She added, ―Election commissions of

all levels administered the technical aspects of the election effectively, but not always in an open

and transparent manner, nor did the General Election Commission always take the necessary steps

to ensure the consistent and uniform implementation of the election legislation.‖

The three candidates contested the presidential election without hindrance. Among the concerns

identified in the statement, however, was that the legal framework provided only parliamentary

parties and coalitions the right to nominate presidential candidates. This and other eligibility

requirements are overly restrictive and not in line with OSCE commitments and other international

standards, the statement said.

The campaign environment was characterized by respect for fundamental freedoms and the legal

framework generally provides for freedom of expression, the statement said. At the same time, it

noted that media ownership is not transparent and that interference in the content of new

programs undermines the media's independence.

Source: OSCE

PUTIN, OBAMA CONGRATULATE ELBEGDORJ ON RE-ELECTION

President Tsakhia Elbegdorj received congratulatory statements from the United States and Russia's

heads of state.

Both U.S. President Barack Obama and Russian President Vladimir Putin sent their regards to

Elbegdorj on his victory at last week's election. Putin wrote that he hoped Mongolia's social and

economic life would develop further while expressing readiness to collaborate with his Mongolian

counterpart in comprehensively activating the bilateral partnership and cooperation at

international and regional arenas.

Obama said he looked forward to working with Elbegdorj ―to further strengthen the friendship and

ties between our two countries.‖ He added, ―President Elbegdorj has been an important leader in

advancing democracy and freedom in his country and a key partner for the United States in Asia and

globally.‖

Also notable were congratulatory remarks from the Dalai Lama: ―Mongolia has made impressive

progress and this advancement will become increasingly meaningful as it results in direct

improvement in the lives of ordinary people.‖

Source: Montsame, Zeenews, Sun Daily

ELBEGDORJ RECEIVES PARLIAMENTARY CONFIRMATION OF RE-ELECTION

Tsakhia Elbegdorj on Wednesday received 94.4 percent confirmation from Parliament for his re-

election in the presidential race last week. An inaugural ceremony will be held on Wednesday, 10

July.

Source: Montsame

MEMBERS SHAKE THINGS UP IN THE MPP

Younger members of the Mongolian People's Party (MPP) have established a sect to promote their

―Let's Renovate‖ campaign to make the party more appealing to voters.

Led by N. Nomtoibayar and O. Sodbileg, the group announced that it had partnered with some 10

organizations to address issues such as the loss of respect for the party among voters and

destabilization within the party. The group plans to assemble on 8 July to demand from the party

leaders a party congress for the selection of party heads.

The group has called for the party to revise some of its principles and ideology as well as the

inherent party structure, financing, and ethics. They say that the charges of corruption against

high-ranking party members have tarnished the party's reputation in society and it is now time to

rebuild morale and political responsibility in a corruption-free environment.

Source: Zuunii Medee

AUTHORITIES LEAD NATIONWIDE MINING INSPECTIONS

The Specialized Inspection Agency halted the operations of five mining companies and delivered

fines totaling MNT 24.2 million during nationwide inspections.

From 8 to 31 May inspectors visited 32 entities and 19 companies in Gobi-Altai, Bayankhongor,

Uvurkhangai, Tuv, Selenge, Gobisumber, Dornogobi, Khentii, and Dornod Aimags. It deemed that six

companies were at ―high risk,‖ three had ―medium risk,‖ and 10 had ―low risk.‖ Two companies

were employing reclamation work and one company was under court investigation. Another 15

entities have not yet begun operations.

Training activities were held to cover topics on the environment, geology and mining for staff

engineers and technical companies at 22 licensed companies. The agency also organized a workshop

for state inspectors to explain how to maintain environmental control in areas under special

protection.

Source: Undesnii Shuudan

MONGOLIA SEEKS NATO SUPPORT IN DEFENSE EDUCATION

A multinational team of experts from NATO professional military education institutions visited the

Defense University of Mongolia from 24 to 29 June to discuss their most critical academic needs.

The visit followed a request for support from the Mongolian Ministry of Defense, which would like to

initiate a defense education enhancement program (DEEP) with NATO.

The programs are tailored through which the NATO alliance advised partners on how to build,

develop and reform educational institutions in the security, defense and military domain. They

focus in particular on faculty building and curriculum development, covering areas such as teaching

methodology, leadership and operational planning.

Building on cooperation in peace-support operations that has developed since 2005, NATO and

Mongolia agreed to further develop relations by launching an individual partnership and cooperation

program in March 2012.

Source: NATO

CHINESE MINISTER VOWS FOR FURTHER COOPERATION

Chinese Foreign Minister Wang Yi said Tuesday that China will advance its mutual cooperation with

Mongolia, India, and Pakistan. Wang spoke about the cooperation while meeting separately with his

counterparts from those countries on the sidelines of the ASEAN Regional Forum (ARF).

When Wang met with Mongolian Foreign Minister Luvsanvandam Bold, both pledged to deepen

mutual cooperation and coordination in various areas. During his meeting with Indian Foreign

Minister Salman Khurshid, Wang said the visit to India recently made by Chinese Premier Li Keqiang

laid out the strategic plan for the two countries' relations. The meeting also sent a positive signal of

the cooperation and coordination between China and India to the world. When meeting with Sartaz

Ajiz, the advisor to the Pakistani prime minister of foreign affairs, and national security, Wang said

China is happy to see that Pakistan has finished a smooth transition of power.

Source: Xinhua

MEMORIAL HELD FOR 1 JULY 2008 RIOT VICTIMS

A memorial was held on 1 July for the victims of the 1 July 2008 riots.

The memorial comes five years since riots erupted in Sukhbaatar Square after allegations were

made that the Mongolian People's Party (MPP) had fixed the election. The violence that took place

that day resulted in the death of four young men, the arrest of 1,000 civilians, injuries to 220

citizens and 180 service members, and the torching of the MPP's headquarters.

The Civilian Alliance Center has submitted petitions for the protection of the 200 individuals they

say were sentenced to prison unjustly four times to the Prosecutor General and twice to the

president of the United Nations Human Rights Council. Thus far no case has been made in the

interest of those arrested.

In 2012 senior police officers were sentenced to prison for three years, six months for abuse of

power and ordering the firing of live rounds into a crowd.

Source: News.mn

MONGOLIAN TABLETS ADDED TO WORLD HERITAGE LIST

A collection of stone tablets containing ancient religious texts from Mongolia have been accepted

into the World Heritage List.

Mongolia submitted to U.N. Education, Science and Communications Organization (UNESCO) the

Ganjur, which compiles a collection of over 1,161 written works on nine stones. The writing covers

topics from the Buddhist religion such as philosophy, technology, rhetoric, and medicine. It was

created by ancient Indian and Tibetan scientists and scholars. It also includes drawn depictions of

deities, people, and animals such as birds, tigers and tortoises.

Fifty-four new additions have been made to UNESCO's Memory of the World Register, including

documentation of Holocaust victims, a collection of Buddhist scriptures written on stones from

Myanmar, two rare manuscripts from Nepal and diaries belonging to the Latin American

revolutionist Ernesto Che Guevara.

Source: News.mn

NEO-NAZIS ANNOUNCE A CHANGE OF TACK - POLLUTION CONTROL

A Mongolian neo-Nazi group has re-branded itself as an environmentalist organization fighting

pollution by foreign-owned mines, seeking legitimacy as it sends Swastika-wearing members to

check mining permits.

Tsagaan Khass, or White Swastika, has only 100-plus members but it is one of several groups with

names such as Dayar Mongol (Whole Mongolia), Gal Undesten (Fire Nation) and Khukh Mongol (Blue

Mongolia), expanding a wave of resource nationalism as foreign firms seeks to exploit the mineral

wealth of the vast country. From an office behind a lingerie store in the Mongolian capital, the

shaven-headed, jackbooted Tsagaan Khass storm-troopers launch bizarre raids on mining projects,

demanding paperwork or soil samples to be studied for contaminants.

―Before we used to work in a harsh way, like breaking down doors, but now we have changed and

we use other approaches, like demonstrations,‖ the group's leader, Ariunbold Altankhuum, said.

Some observers, however, dismiss groups such as Tsagaan Khass as self-serving and irrelevant.

―Mongolia's neo-Nazis have been receiving too much attention from global media, and they've

obviously been enjoying it,‖ said Tal Liron, a PhD candidate at the University of Chicago who

specializes in national identity. ―They do not, however, represent Mongolia as a whole, any more

than neo-Nazis in Britain represent the Brits.‖

Source: Reuters

A SECOND CHANCE FOR THE PRESIDENT

President Tsakhia Elbegdorj won a second and final term in office in a close race on 26 June,

becoming the second president to be re-elected in the country's democratic history. The result

signals stability and offers hope for new investment and improved citizen welfare in a country that

has recently captured the attention of investors and analysts around the world.

During Elbegdorj's last term, the giant Oyu Tolgoi gold and copper mining project, in which the

government owns a minority stake, has moved rapidly toward production. The project contributes

greatly to Mongolia's growth. The president is likely to continue discussions regarding the specifics

of the country's relationship with the multinational mining company Rio Tinto PLC, who controls the

Oyu Tolgoi project.

Over the past 12 months, foreign investors' interest in Mongolia remained strong outside the country

but much more muted inside. The sale of the USD 1.5 billion Chinggis bond had financial advisors

around the world add Mongolia to their watch list. By contrast, many investors who are directly

involved in Mongolia have been scared away by legislation concerning foreign investment, mining

and other related areas. The perception of increasing risks in Mongolia has caused many projects to

be scaled back or rethought. But Elbegdorj is likely to attack necessary tasks with vigor.

Beside economic growth, Elbegdorj has also focused on judicial reform and the battle against

corruption. Together with Minister of Justice Khishigdemberel Temujin, he has pursued reforms

through legislative initiatives, such as assigning more specific definitions of conflict of interest. He

has also actively used his presidential powers to appoint trusted Democratic Party members to

positions of power in the judicial system. But this does not necessarily guarantee a clean

government. Proof will be whether examinations are made to the records of fellow party members

as well as political opponents.

Difficulty lies ahead, but there are signs that a re-elected and reinvigorated president will help

bring about positive changes for Mongolian citizens and foreign investors alike.

Author Julian Dierkes is an associate professor at the University of British Columbia's Institute of

Asian Research and blogs at MongoliaFocus.com.

Source: Wall Street Journal

ANNOUNCEMENTS

BCM FOOTBALL CUP – 2013, SATURDAY, 6 JULY, SCHOOL NUMBER 5 FIELD – 09:00-20:00

Dear Members,

We are pleased to invite you to the second "BCM Football Cup 2013 Tournament" sponsored by

Golomt Bank which will be held at School Number 5 on Saturday, 6 July, from 09.00-20.00.

The annual event is becoming one of the prestigious football tournaments among the non-

professional players in the private sector. We apologize that we could not include the all of the

interested companies which initially registered, but did not follow up with registration.

These 13 teams are ready to go for the Cup:

BCM

Golomt Bank /Sponsor of BCM Football Cup 2012, 2013/

Summit Computer Technology

Transwest

Mining National Operator

Xac Bank

Standard Investment

Wagner Asia

G and DS

MICC

Mongolian Star Melchers

Khan Bank

Oyu Tolgoi /Champion of BCM Football Cup 2012/

Please come and watch with us even if you are not from the companies in the tournament.

___________________________________________

MINING MONGOLIA AND POWER AND RENEWABLE ENERGY MONGOLIA, 19-21 SEPTEMBER

Mining Mongolia and Power and Renewable Energy Mongolia will be held from 19 to 21 September at

the Buyant-Ukhaa Sports Complex in Ulaanbaatar.

120 companies from 18 countries including pavilions from Australia, Canada, Korea and Germany

will deisplay a wide range of technology, supplies and services for the mining and electric power

generation and transmission sector; on a scale never before seen in Mongolia. Inside and outside

displays, providing a first opportunity for buyers to see technology and learn about new mining and

electric engineering service from industry experts.

Register at miningandconstructionmongolia.com or for priority books email:

[email protected].

___________________________________________

BCM LINKS UP WITH RAFFLES HOSPITAL SINGAPORE

Raffles Hospital is a tertiary care hospital and the flagship facility of Raffles Medical Group, a

leading private integrated healthcare provider in Singapore and South East Asia since 1976. Backed

with 30 years of delivering quality medical care, the Raffles brand name is synonymous with quality

and trust and offers a patient centric approach in delivering healthcare services.

The hospital gives a special condition for BCM members to enjoy discounts for treatment at Raffles

Hospital, Singapore:

• 10% discounts on Raffles Enhanced 2013 packages (medical checkup)

• 10% discounts on consultation fee (Raffles Specialist Centre)

• 10% discounts on ward room rates (Raffles Hospital Inpatient)

• 10% discounts on regular-priced Raffles Health Supplements and Raffles Kids Supplements

For further enquiries or to make appointment, please email

[email protected] and for more information about Raffles Hospital, visit our

website at www.raffleshospital.com.

___________________________________________

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

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

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

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

today‘s BCM NewsWire.

___________________________________________

BCM‟S MINING SUPPLY CHAIN DATABASE

The BCM Mining Supply Chain Database is in use. Following the initiative of Oyu Tolgoi LLC, the BCM

has maintained the Mining Supply Chain Database since March 2009. It is an honor to introduce you

to the new version of the database which is totally upgraded as to its content and use of

information technology opportunities.

As of December 31, 2012 suppliers registered on the database totaled 1,405. During 2012, 251 new

supplier entities joined the Database and 236 prior supplier registrants updated their company

profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted.

We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain

Database. Please visit here for registration—FREE!

If you have any questions regarding the database, please contact 317027.

BCM WEBSITES

MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS

The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.

As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the

government website Open-Government.mn are regularly updated.

S. Oyun, Minister of Environment and Green Development, presentation at BCM monthly meeting on

May 27 added to Mongolian website, bcmongolia.org/mn/илтгэлүүд.

- Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн

бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013

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

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

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

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

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

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

19

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

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

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

хурал, 2013 оны 4 дүгээр сарын 19

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

Монгол банкны Ерөнхийлөгчийн зөвлөх, санхүүгийн тогтвортой байдлын зөвлөлийн ажлын

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

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

дүгээр сарын 19

___________________________________________

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

„PHOTO GALLERY‟

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

Presentations from the MSE-BCM Securities Law Overview Session, July 4, 2013

• MIBG Review- MSE, BCM Securities Law Overview Session, Bilguun Ankhbayar, Chief Executive,

Mongolian Investment Banking Group LLC at the MSE-BCM Securities Law Overview Session, July 4,

2013

• A brief overview of Custody Services, Robert Rooks, Director, PwC Hong Kong, at the MSE-BCM

Securities Law Overview Session, July 4, 2013

• The Revised Securities Market Law, Anthony Woolley, Senior Associate, Hogan Lovells, at the MSE-

BCM Securities Law Overview Session, July 4, 2013

• SECURITIES MARKETS LAW–PATH TO MARKET REFORMS, B.SARUUL, Director General, Securities

Department Financial Regulatory Commission of Mongolia

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

April 22, 2013

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

BCM Monthly meeting Apr 22, 2013

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

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

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

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

the Kempinski Hotel.

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

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

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

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

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

on April 19, 2013 at the Kempinski Hotel.

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

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

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

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

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

Kempinski Hotel.

• ―Market Update‖ by Mandal General Insurance LLC

• ―Annual Report 2012‖ by International Monetary Fund

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

Kempinski Hotel, March 18, 2013, Ulaanbaatar

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

The ―Mongolia Reports‖ section includes the following:

-―Mongolia Macro Flash‖, Adrienne Lui, Asia Pacific Economics Research, Citigroup Global Markets

Asia;

- ―Selected Macroeconomic Indicators for Mongolia, as of June 2013‖ by International Monetary

Fund;

-―Polit Barometer April, 2013‖ by Sant Maral Foundation;

-―Regional Economic Outlook: Asia and Pacific‖, April 2013 by International Monetary Fund;

-―Highlights of 2012, Mongolia‖ by European Bank for Reconstruction and Development (EBRD);

- The ―Official statement of Oyu Tolgoi LLC in relation to information, data and facts related to

Oyu Tolgoi discussed during open session of the State Great Khural‖, dated 1 February, 2013‖;

-―2013 Mongolia Investment Climate Statement‖, by the Economic and Commercial Section-U.S.

Embassy;

-―Mongolia Foreign Labor Force Ratio for 2013‖ by Hogan Lovells International LLP;

-―How Mongolia will perform in 2013?‖ by Mandal Asset Management;

-―Mongolia Business Owner and CFO Survey result‖ by BDSec JSC;

-―The fiscal regime for mining-a way forward‖ by IMF Fiscal Affairs Department;

-―Taxes for Expatriates in Mongolia‖ by PricewaterhouseCoopers.

BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to

Parliament and Government is available for download.

BCM continuously posts news stories and analysis of relevance to Mongolia at ‗Mongolian Business

News‖ before they are all put together each week for Friday's weekly NewsWire.

The ―Photo Gallery‖ contains photos from the 5th Anniversary BCM Gala dinner on November 5.

The BCM NewsWire will continue to be issued each Friday, incorporating items already on the home

page for a consolidated account of the week‘s events.

___________________________________________

SOCIAL NETWORK WITH BCM

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

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

improving each day with BCM.

Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better

business environment in Mongolia today.

Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-

MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in

the NewsWire with the community.

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

http://twitter.com/#!/bcMongolia.

We have now 1,235 fans on our Facebook fans page, 1,303 connections on LinkedIn network, and

709 followers on Twitter.

Of course for news information, interviews, event photos, and announcements regarding our

organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.

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]

May 31, 2013 *9.7% [source: NSOM]

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

Note: 8.4% y-o-y, Ulaanbaatar city, May 31, 2013

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 9.75% [source: IMF]

March 11, 2009 14.00% [source: IMF]

May 12, 2009 12.75% [source: IMF]

June 12, 2009 11.50% [source: IMF]

September 30, 2009 10.00% [source: IMF]

May 12, 2010 11.00% [source: IMF]

April 28, 2011 11.50% [source: IMF]

August 25, 2011 11.75% [source: IMF]

October 25, 2011 12.25% [source: IMF]

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

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

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

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

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

CURRENCY RATES – JULY 4, 2013

Currency Name Currency Rate

US dollar USD 1,456.60

Euro EUR 1,891.90

Japanese yen JPY 14.49

British pound GBP 2,220.73

Hong Kong dollar HKD 187.16

Chinese Yuan CNY 237.79

Russian Ruble RUB 43.90

South Korean won KRW 1.27

Disclaimer: Except for reporting on BCM‘s activities, all information in the BCM NewsWire is

selected from various news sources. Opinions are those of the respective news sources.