BCM NewsWireBUSINESS COUNCIL of MONGOLIAwww.bcmmongolia.org

October 12 2007

NEWS HIGHLIGHTS:__Business:  Business Council opens doors; Company wins bid for new TVchannel; New copper gold discovery’s huge potential for joint partners.

__Economy:  US's biggest single aid grant to Mongolia means more privateinvestment; Ninja mining disputes.

__Politics:  Politicians face wide gamut of decision-making in fall session ofParliament _

BCM Monthly Meeting

The first monthly meeting under the auspices of the newly formed BCM willbe held on Monday, October 29, at 5 PM in the Open Society Forum.Featured presentation will be an "Ambassadors Panel”.

BUSINESS COUNCIL OPENS DOORS FOR INVESTORS

WELCOME to Issue One of the Business Council of Mongolia’s – BCMNewsWire. The newswire will provide on-the-ground information aboutMongolia’s business climate, business activities and the Government in Mongoliaand links to relevant sites.

The BCM has been set up as a non-government organization and will provideimproved advocacy for business issues in Mongolia focusing on taxation,investment, regulation, business climate, employment and the environment.

The BCM will lobby specific business legal and regulatory issues in the interestsof local and foreign investors in Mongolia's rapid economic growth to a freemarket economy.

BCM’s structure includes a Board experienced in Mongolian business with KhanBank CEO, Pete Morrow as Chair and former NAMBC Vice President and ChiefOperating Officer in Mongolia, Jim Dwyer, as Executive Director, to providemanagement of the Council. Mr. Morrow and Mr. Dwyer have 13 yearsexperience in the Mongolian business environment between them, at a time ofvolatility, economic reform and social change.

Membership is open to all Mongolian and foreign companies.

COMPANY WINS BID FOR NEW TV CHANNEL

A domestic company specializing in road construction; property construction andforeign trade has won the rights through auction to launch a new TV channel forMongolian viewers.

In winning from 14 competitors, Fonema Company will diversify intocommunications with its successful Tgs810 million bid for the channel. Thechannel broadcasts using an analogue system but company officials said theyplan to introduce a digital system.

By Law, they must start broadcasting within one year of the purchase of thechannel.

NEW COPPER GOLD DISCOVERY’S HUGE POTENTIAL FOR JOINTPARTNERS

JOINT MINING Companies, Ivanhoe Mines and Entree Gold announced apotentially huge copper and gold discovery along the Oyu Tolgoi Project inMongolia’s Gobi region.

The site along the southern rim of Ivanhoe’s Oyu Tolgoi Project initially indicateda 1,100-meter zone of copper and gold deposits. Previously named ‘JavkhlantDeposit’ it has been renamed ‘Heruga Deposit' as suggested by Buddhist HamboLama of Mongolia.

Nineteen drill holes at Heruga Deposit have been completed or are in progress,totaling 21,000 meters on six sections at the discovery site, spaced at 200 to 300m intervals along a 1,400-meter stretch.

Significant copper, gold and molybdenum deposits have been found in drill holeson five contiguous sections, representing 1,100 meters of continuous strikelength.

Read more: http://www.montsame.mn/newsdetail.php

US's BIGGEST SINGLE AID GRANT TO MONGOLIA MEANSMORE PRIVATE INVESTMENT 

INVESTORS looking to Mongolia should keep their eye on an agreement to besigned between the US and Mongolia in mid-October.

President N. Enkhbayar will visit the US to meet US President, George Bush and

sign the ‘Millennium Challenge Account Compact’ (MCC) worth US $285 millionin development over five years.

The grant will fund improvements to the railway system; healthcare; vocationaltraining and land registration. It will be a catalyst to stimulate greater privatesector success in Mongolia and is expected to lead to increased revenues andprovide efficient sustainable services based on a market economy model

US Ambassador to Mongolia, Mark Minton, told media at a press conferenceOctober 7, the completion of the MCC projects was expected to attract privateinvestment for further development. He said, “For example, the US$188 millionfunded railway project will strengthen the company and attract private investmentto develop the railway further.” It is the largest single aid grant ever given toMongolia by the US.

 THE GUARDIAN ARTICLE ON 'NINJA' MINING DISPUTES. 

The UK's leading paper, The Guardian, has written there is a dark side toMongolia's much-feted economic boom.  If left to fester, writes the paper'sjournalist, Jonathan Watts, it could make investors reconsider doing business inthe country's rapidly growing economy. 

Disputes, sparked in Ogomoor Town in the remote Zamaar Valley, a seven-hourdrive west from Ulaanbaatar, between mining companies and illegal minerscalled "ninjas," have led to deplorable conditions raised in The Guardian onWednesday October 10, 2007 article. The report described the ninjas claim thegovernment is victimizing them because it cares more about foreign investmentand lucrative concession deals than its own people.

Read more:

http//www.guardian.co.uk/international/story/0,,2187212,00.html.

POLITICIANS FACE GAMUT OF DECISION-MAKING IN FALL SESSION OFPARLIAMENTParliament’s fall session (October) is expected to determine a new policy inMongolia’s development and produce decisions that will play a historical role instrengthening the country’s economy and social renaissance.

Central to the decisions for investors will be the mining sector draft investmentagreements for Mongolia's two largest deposits - Oyu Tolgoi and Tavan Tolgoideposits.  After five years of negotiations, Parliament is expected to consider andapprove the agreement for Oyu Tolgoi with two companies at the heart of the

agreement, Ivanhoe Mines Mongolia Inc. and Rio Tinto to consider their positionin light of conditions approved in the agreements.

At the opening of the fall session on October 1, Parliamentary Speaker, D.Lundeejantsan said, “Amendments to be made to the law on social welfare, thepackage of social insurance law, the law on population and housing census, thebuilding law, programs to ensure population with apartment houses and toincrease the workforce in the building section, would facilitate solutions toimportant social issues and create favorable conditions for sustainable urbandevelopment."

As well as these, and the draft investment agreements, the session would alsodeal with the 2008 state budget, the main guidelines for Mongolia’s economicand social development, the monetary policy, issues facing plant protection, theanimal hereditary fund, health protection, natural resources and the environment,agricultural sector issues and others.

MPs were expected to debate over 40 draft laws related to free access toinformation, freedom and liberty and to the legal status of production andTechnology Park.

Read more: _http://www.mongolmessenger.mn/

  MONGOLIA STOCK EXCHANGEFROM October 1 to 5, 2007, trading activity on the Mongolian Stock Exchange(MSE) totaled 1.5 million shares. Total market value of transactions was 4.9million MNT. __The "Top 20" index increased by 314.7 points (2.6%) over theprior week and closed at 11,499.69. __Share prices rose for: APU. UID, TalkhChiher, BD Securities, and Mongolian Tsahilgaan Kholboo. __Most active stockstraded were: Gobi Sumber (798,500 shares); Genko Tour Bureau (228,900shares); Tegsh (161,900 shares); Monojbar (66,400 shares); UID (63,300shares) __Total market capitalization of 361 companies listed on the MSEreached 727.1 billion MNT.

BUSINESS COUNCIL  of MongoliaCONTACT DETAILS:Seoul Street, PO Box 492Ulaanbaatar, MongoliaTel + 976 9191 3321Email: Jim@bcmmongolia.orgWebsite:bcmmongolia.org                                         Copyright © www.bcmmongolia.org