14.02.2014, newswire, issue 312

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BUSINESS COUNCIL of MONGOLIA NewsWire www.bcmongolia.org [email protected] Issue 312 February 14, 2014 NEWS HIGHLIGHTS: Business Tavan Tolgoi to expand coal wash plant; MMC receives USD 90 MN for transfer of UHG-GS road assets; Golomt affirms governance after ’misleading’ reports; Bank profits up markedly in 2013; Guildford receives greenlight for operations and sales at Baruun Noyon Uul; Prophecy Coal reports Q4 coal production and sales; Oil firm signs production sharing agreement for Umnugobi oil field; ChTZ-URALTRAC is increasing its export of spare parts to Mongolia; Sharyn Gol shares rise after EBRD loan announcement; Mongolia to manufacture value-added products from ash; Mongolian canola oil factory opens; Paralympic athletes to wear Gobi Cashmere at opening ceremony; Australia-Mongolia Business Council established; Road conference outlines 2014 construction plans; Altan Nar mine development to cost up to $80m, says Erdene president; Oyu Tolgoi cuts down on plastic; New graduates to learn from Rio's Kennecott mine; Mongolian actor in Hollywood series; Mongolian school to open on Castle Boulevard in Nottingham; Rio Tinto’s M&A head, Philip Mitchell, departs. Economy Bank of Mongolia maintains Policy Rate at 10.5%; 2014 Budget summary; Development Bank CEO summarizes bond spending; Petrol prices increase by 40 MNT; Cargo, passengers via air and rail decline; Mongolia's gold-reserve boosting experiment; Government to distribute MNT 20 billion in wool bonuses; Government to grant 60% of Buyant-Ukhaa housing to civil servants; Foot-and-mouth epidemic spreads to gazelle habitat; UC Merced heating up Mongolia’s harsh winter; Mongolians create smart phone; Mongolia pushing North Korean ties; Mongolian miners ‘too cheap to be ignored,' says ResCap; Corrosive inflation eats at developing world. Politics Parliament to end rail gauge dispute in spring session; Cabinet to convene every Friday; Mongolian Immigration Agency implements reforms; Elders complaint can't see added retirement pensions benefits; Korea, Mongolia agree on greater cooperation on DPRK;

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Page 1: 14.02.2014, NEWSWIRE, Issue 312

BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org [email protected]

Issue 312 – February 14, 2014

NEWS HIGHLIGHTS:

Business

Tavan Tolgoi to expand coal wash plant;

MMC receives USD 90 MN for transfer of UHG-GS road assets;

Golomt affirms governance after ’misleading’ reports;

Bank profits up markedly in 2013;

Guildford receives greenlight for operations and sales at Baruun Noyon Uul;

Prophecy Coal reports Q4 coal production and sales;

Oil firm signs production sharing agreement for Umnugobi oil field;

ChTZ-URALTRAC is increasing its export of spare parts to Mongolia;

Sharyn Gol shares rise after EBRD loan announcement;

Mongolia to manufacture value-added products from ash;

Mongolian canola oil factory opens;

Paralympic athletes to wear Gobi Cashmere at opening ceremony;

Australia-Mongolia Business Council established;

Road conference outlines 2014 construction plans;

Altan Nar mine development to cost up to $80m, says Erdene president;

Oyu Tolgoi cuts down on plastic;

New graduates to learn from Rio's Kennecott mine;

Mongolian actor in Hollywood series;

Mongolian school to open on Castle Boulevard in Nottingham;

Rio Tinto’s M&A head, Philip Mitchell, departs.

Economy

Bank of Mongolia maintains Policy Rate at 10.5%;

2014 Budget summary;

Development Bank CEO summarizes bond spending;

Petrol prices increase by 40 MNT;

Cargo, passengers via air and rail decline;

Mongolia's gold-reserve boosting experiment;

Government to distribute MNT 20 billion in wool bonuses;

Government to grant 60% of Buyant-Ukhaa housing to civil servants;

Foot-and-mouth epidemic spreads to gazelle habitat;

UC Merced heating up Mongolia’s harsh winter;

Mongolians create smart phone;

Mongolia pushing North Korean ties;

Mongolian miners ‘too cheap to be ignored,' says ResCap;

Corrosive inflation eats at developing world.

Politics

Parliament to end rail gauge dispute in spring session;

Cabinet to convene every Friday;

Mongolian Immigration Agency implements reforms;

Elders complaint can't see added retirement pensions benefits;

Korea, Mongolia agree on greater cooperation on DPRK;

Page 2: 14.02.2014, NEWSWIRE, Issue 312

Mongolia expresses intent to join Antarctic Treaty System;

Two Mongolian skiers represent Mongolia at Sochi;

Mongolia to open honorary consulate in Bulgaria;

Belarus to open Mongolian embassy;

Dinosaur bone case from Wyoming moves to federal court;

UB Council bans signs displaying foreign languages;

Mongolia's first lady talks family values;

Kazakhstan plays the name game to bring in investor interest like Mongolia.

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

International SOS

Mongolian National Broadcasting

Oxford Business Group

BUSINESS

TAVAN TOLGOI TO EXPAND COAL WASH PLANT

The Tavan Tolgoi East Tsankhi site will have a coal enrichment plant operational at full capacity by

late 2015.

The second of four modules is expected to commission this year. The added infrastructure will

improve coal washing capacity for up to 10 million tons annual production. The plant is expected to

produce 7.1 million tons of coking coal and 6.8 million ton of lignite, or brown coal.

Source: Montsame

MMC RECEIVES USD 90 MN FOR TRANSFER OF UHG-GS ROAD ASSETS

Mongolian Mining Corp. (MMC) has transferred rights to the Mongolia government of the Ukhaa

Khudag-Gashuun Sukhait (UHG-GS) paved road, which is used for coal transport to China.

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MMC's subsidiary for the Ukhaa Khudag coal mine, Energy Resources LLC, 13 February received

payment of MNT 157.85 billion (USD 90.32 million) from State owned Erdenes MGL LLC for the rights

trasfer. The UHG-GS road was constructed under the license awarded to Energy Resources wholly

owned indirect subsidiary Gobi Road LLC. Thereafter entered into a Build-Operate-Transfer (BOT)

Agreement with the former Ministry of Road, Transportation and Urban Development (now the

Ministry of Transportation and Roads) 9 June 2010. The agreement granted Gobi Road the right to

build, operate and maintain the UHG-GS Road for a period of ten years after the roads

commissioning. The BOT Agreement required that Gobi Road transfer all of its rights and obligations

with respect to the operation and maintenance of the UHG-GS road to the Mongolian government

once the agreement expired or if the government made payment of compensation at any time

beforehand.

Upon completion of the transfer of the UHG-GS Road assets, MMC will continue to have unrestricted

access to the UHG-GS road by paying tariff.

Source: Mongolian Mining Corp.

GOLOMT AFFIRMS GOVERNANCE AFTER ‟MISLEADING‟ REPORTS

Mongolia‘s Golomt Bank LLC does not have any shareholders seeking loan repayments, according to

a press release from the bank.

In a response to ―misleading and false allegations‖ in recent press articles, Golomt said its

corporate governance is sound. The bank did say it is in a legal dispute with Stanhope Investments

involving a USD 25 million loan, which represents about 1 percent of its assets and does not affect

its financial health. Golomt said it is confident it can resolve the dispute ―swiftly and amicably.‖

Bloomberg News and Reuters have reported on disputes at the bank involving Credit Suisse Group

AG (CSGN) and Abu Dhabi‘s sovereign wealth fund. In its release today, Golomt said it has ―no

obligation with Credit Suisse, whether in the form of loans or otherwise.‖

Credit Suisse and Stanhope, a unit of the Abu Dhabi fund, invested in Golomt in the past half

decade. Both are seeking the return of loans and have engaged in arbitration proceedings over loans

to the lender.

Source: Bloomberg

BANK PROFITS UP MARKEDLY IN 2013

Mongolia‘s commercial banks saw profits rise at least 10 percent each in 2013, according to

financial reports submitted by seven of Mongolia‘s 13 banks.

Khan Bank LLC saw pretax profit rise 39.1 percent, XacBank LLC saw a 48.4 percent increase, and

Golomt Bank LLC saw profits increase fourfold. Trade Development Bank saw profits of MNT 111.9

billion. Erel Bank LLC earned over MNT 1 billion.

Source: Zuunii Medee

GUILDFORD RECEIVES GREENLIGHT FOR OPERATIONS AND SALES AT BARUUN NOYON UUL

Guildford Coal Ltd. announced that the company‘s Baruun Noyon Uul (BNU) mine, formerly North

Pit, has received permission for its operations and sales by the Mongolian government.

―This is a significant development milestone that enables the BNU mine to extract coal in readiness

for first sale. We now await final permitting of the coal transport company that will deliver first

sales from the mine to the coal distribution hub at Ceke, on the China border, approximately 130

km from the project,‖ said Guildford.

Source: UB Post

PROPHECY COAL REPORTS Q4 COAL PRODUCTION AND SALES

Prophecy Coal Corp. reported preliminary figures on total coal production and sales volumes of

66,869 tons and USD 69,296, respectively, from its Ulaan Ovoo mine in Mongolia for the fourth

quarter ended December 31, 2013.

In early November 2013, Prophecy resumed mining operations at the Ulaan Ovoo mine. Mining and

road conditions to the Sukhbaatar rail siding are reportedly currently normal and coal is being sold

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on a continual basis to a number of Prophecy customers. In 2014, Prophecy sold a coal shipment

from Sukhbaatar to a Russian customer. In addition, the Mongolia Ministry of Road and

Transportation recently issued the terms of reference for the Zeltura Road feasibility study,

allowing it to begins its feasibility study on upgrading the road from Ulaan Ovoo to the Zeltura

border. The four months of construction needed can begin once the study is complete, targeted for

May 2014, but will depend on approval from the Ministry of Road and Transportation. Concurrently,

Prophecy is working with the Ministry of Finance on creating a customs clearing zone at Ulaan Ovoo

for Russian exports.

The Chandgana Power Plant received Mongolian Cabinet approval as a concession project in January

2014 and may be entitled to stable tax rates, favorable value-added tax and customs duties, as well

as other forms of government subsidies, endorsement and support.

Source: Prophecy Coal Corp.

OIL FIRM SIGNS PRODUCTION SHARING AGREEMENT FOR UMNUGOBI OIL FIELD

The Cabinet of Ministers on 7 February approved a production sharing contract for oil extraction at

the Nomgon IX site between Sansryn Geologi Khaiguul LLC and the Government Implementing

Agency which the Petroleum Authority had signed on 20 January.

The contract charts out an average daily volume of 5,000 barrels of crude oil drilled each month.

That average is set to increase by another 5,000 barrels. The contractors are to receive 35 percent

of dividends with the government to receiving the remaining 65 percent. The contract sets a

premium output of USD 5000,000, which is set to increase by USD 300,000 following the completion

of each stage of development.

The Nomgon IX site spans a total 29,866 square kilometers across the territories of Tsogttsetsii,

Manlai, Khanbogd, Dalanzadgad, and Nomgon Soums of Umnugobi Aimag. Sansryn Geologi Khaiguul

is committed to an investment of USD 26.8 million in the first five years of the contract.

Source: Info Mongolia

CHTZ-URALTRAC IS INCREASING ITS EXPORT OF SPARE PARTS TO MONGOLIA

ChTZ-URALTRAC LLC reported 15 percent more exports of machinery parts to Mongolia in January,

year-on-year. ChTZ-URALTRAC, a subsidiary of Russia's Uralvagonzavod (UVZ) Research and

Production Corp., plans to ship its products to its official dealer in Ulaanbaatar—Promtechservice.

UVZ's press office said ChTZ-URALTRAC's equipment is popular in Mongolia. A significant percentage

of the local fleet of track-laying vehicles consists of B170 and B10 bulldozers that are used at

infrastructure facilities and mineral deposits.

Earlier it was reported that in 2012, businesses in Mongolia purchased parts and assemblies from

ChTZ- URALTRAC worth USD 72,000, plus USD 35,000 for spare parts in 2013.

Source: Rus Business News

SHARYN GOL SHARES RISE AFTER EBRD LOAN ANNOUNCEMENT

Sharyn Gold JSC‘s stock price rose after the release of news that European Bank for Reconstruction

and Development (EBRD) would lend USD 10 million to the company for the development plants for

coal washing and smokeless briquettes.

Source: Standard Investment

MONGOLIA TO MANUFACTURE VALUE-ADDED PRODUCTS FROM ASH

Mongolia, in partnership with South Africa, is planning to launch research work for production of

geopolymer cement from ash.

A South African delegation led by Joe Mapiravana, a lead researcher at the Council for Scientific

and Industrial Research (CSIR), will arrive in Ulaanbaatar to start a joint research project to explore

ways to produce geopolymer cement from industrial waste and ash disposed from power stations.

The delegation also plans to organize a meeting to preset their project to the Chemistry Institution

of the Science Academy next Monday.

Mongolia and South Africa both heavily depend on mining to drive development. Although diamond

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and gold production may now be well down from their peaks, South Africa is still number five for

gold production and remains a cornucopia of mineral riches. It is the world's largest producer of

chrome, manganese, platinum, vanadium and vermiculate.

Source: Montsame

MONGOLIAN CANOLA OIL FACTORY OPENS

Selenge Aimag's Arvin Khur LLC is set to begin canola oil production with the completion of a new

factory in 2013.

The Arvin Khur plant uses German technology and has the capacity for one ton of production per

day. The oil is produced using a ―cold pressure‖ method that includes neither chemicals nor

thinners.

Source: Zuunii Medee

PARALYMPIC ATHLETES TO WEAR GOBI CASHMERE AT OPENING CEREMONY

The Mongolian Paralympic Games team will wear Gobi Cashmere outerwear at the opening and

closing ceremonies of the games in Sochi in March.

Gobi Cashmere concluded a deal Monday to provide the National Olympic Committee cashmere

shirts, trousers, berets, scarves, and waistcoats—each in matching red and blue patterns to reflect

the Mongolian flag—for the 10 Paralympics competitors.

The Paralympics Games will be held 7 to 16 March.

Source: Montsame

AUSTRALIA-MONGOLIA BUSINESS COUNCIL ESTABLISHED

The Australia-Mongolia Business Council was registered by the Australian Securities and Investments

Commission on 28 January.

The Council‘s main aims are to promote mutually beneficial economic, investment and business

interests for Mongolia and Australia. Mark Green, international managing partner of the Minter

Ellison law firm, has been elected the Council's chairman.

Investment from Australia has seen a dramatic rise in the recent years of the mining boom. Some 30

Australian companies have opened local offices in Mongolia in addition to 170 small companies with

Mongolian interests.

Source: Montsame

ROAD CONFERENCE OUTLINES 2014 CONSTRUCTION PLANS

The Autoroad-2014 conference held 11 February saw more than 100 delegates from road companies

in attendance.

Mongolia plans to construct 2,200 kilometers of paved roads between Ulaanbaatar and six provincial

capitals this year, said Minister of Road and Transportation A. Ganske. Roads to Droned, Umnugobi

and Khuvsgul Aimag are expected to complete by August while roads to Zavkhan, Gobi-Altai, and

Sukhbaatar Aimag roads are scheduled for completion by October.

Mongolia built 1,560 kilometers of paved road at a cost of MNT 974 billion in 2013. Construction was

financed by the Development Bank of Mongolia LLC, foreign aid, and the state budget. Prime

Minister Norov Altankhuyag last year announced plans to build a road network that connects every

provincial capital to Ulaanbaatar by 2016. Many companies had failed to deliver the roads built to

the specifications agreed upon, however, delaying the project.

Source: Zuunii Medee

ALTAN NAR MINE DEVELOPMENT TO COST UP TO $80M, SAYS ERDENE PRESIDENT

Erdene Resource Development Ltd. is hoping to develop a gold mine to rival that of the Centerra

Gold Inc.‘s Boroo mine, said Erdene‘s president.

―Our company has worked in Mongolia for 13 years and invested USD 30 million most of which was

spent for exploration,‖ said Peter Akerley. ―Finally we found high concentration gold occurrence

there and it is too early to say it‘s a deposit. However, we are hoping that it has the potential of

Page 6: 14.02.2014, NEWSWIRE, Issue 312

becoming another Boroo deposit.‖

Altan Nar can produce 20 grams of gold per ton of ore, said Akerley, calling it a ―high

concentration‖ of the precious metal. He said a mine would cost between USD 40 million and USD

80 million. Although raising capital had been difficult in recent years, Erdene has found investors

such as Tech Resources Ltd. to help drive the mine‘s development.

―Recently there are positive changes in Mongolia for mining including new Investment Law and the

reduction of gold tax.‖

Source: Unuudur

OYU TOLGOI CUTS DOWN ON PLASTIC

Oyu Tolgoi LLC has taken steps to reduce the environmental impact of its Ulaanbaatar offices by

replacing individual bottled water with dispensers with reusable water containers.

Everyday more than 100 million plastic water bottles are used worldwide and most are not

recycled. Plastic takes up to one thousand years to fully decompose and the amount of water used

to make one plastic bottle can be more than ten times the amount of fluid it contains. Oyu Tolgoi

provides bottled water to promote good health and hydration amongst its workforce, with more

than 90,000 bottles used each month. As well as protecting the environment, the new water

dispensers will save the company money.

―The most environmentally friendly waste management thing we can do is not to produce any waste

at all. In particular plastic takes a very long time to decompose and even if recycled, they pollute

the environment,‖ said R. Bumdari, compliance superintendent at Oyu Tolgoi.

Oyu Tolgoi began replacing bottled water with dispensers at its mine site last year.

Source: Oyu Tolgoi LLC

NEW GRADUATES TO LEARN FROM RIO'S KENNECOTT MINE

Oyu Tolgoi LLC brought 16 new graduates to a U.S. facility on 29 January as part of its graduate

development program.

The Mongolian visitors are set to undergo industrial training at Rio Tinto Group's Kennecott mine in

Utah for one year. These recent graduates have worked in various departments at Oyu Tolgoi,

including at the concentrator, the open pit, in asset management, in environment and in security.

―Young people like me are sincerely grateful to Oyu Tolgoi for the opportunity given us to

undertake industrial training both inside and outside of the country and learn in new trade and

profession,‖ said program participant Kh. Unurmunkh. ―I will try my level best to accomplish high

professionalism.‖

The graduate development program was launched in 2011 with the aim to train qualified

professionals for the company. As of today, 83 new graduates have taken part in this program and

are working in Australia, United State, Britain, and Singapore as well as in Ulaanbaatar and Oyu

Tolgoi.

Source: Oyu Tolgoi LLC

MONGOLIAN ACTOR IN HOLLYWOOD SERIES

Mongolian actor B. Amarsaikhan has landed a role in a U.S. drama series based on that travels of

Marco Polo

Amarsaikhan has taken a role as the Mongolian warrior Arga Bokh in a show scheduled to premier in

late 2014 on the U.S. streaming media distributor Netflix. Created by John Fusco, ―Marco Polo‖ is a

nine-episode series that focuses on the famed explorer‘s journey that took him to the center of a

brutal war in 13th century China—a world replete with martial arts, intrigue, political skullduggery

and battles.

"Kon-Tiki" directors Joachim Ronning and Espen Sandberg will direct alongside Dan Minahan.

Source: Montsame

MONGOLIAN SCHOOL TO OPEN ON CASTLE BOULEVARD IN NOTTINGHAM

With 36 symbols instead of English's 26 letters—Mongolian Cyrillic is no easy read. But for children

Page 7: 14.02.2014, NEWSWIRE, Issue 312

born into Nottingham‘s tiny and tight-knit Mongol community it provides a valuable link with their

homeland more than 4,000 miles away.

A new Mongolian education center is about to be launched at a city church and will be the first

place of its kind in the East Midlands. It has already begun hosting weekly language classes for

primary-aged children whose parents traveled from Mongolia to settle in Nottingham. Nineteen

families have been taking part in the pilot and parents have expressed their delight over the

opportunity.

It is thought that there are around 7,000 Mongolians living in Britain, but retired teacher Francis

Luckcock, who is the acting center director, said he did not know how many had settled in

Nottingham. ―Mongolian parents want their children to be global citizens and have opportunities of

following their careers in the UK or in Mongolia,‖ he said. ―Because these families are first

generation they don‘t have the background in the UK so we want to help and support them to

succeed within Nottingham.‖

The center hopes to teach young Mongolian children about their heritage and welcome Nottingham

residents from all backgrounds into the school to learn about the nation‘s history and culture. The

project has been two years in the making and was originally the brainchild of a former caterer at

Nottingham‘s Masonic Hall, in Goldsmith Street. Jamts Chimedbaldir has now returned to Mongolia

after 30 years in Britain.

Source: Nottingham Post

RIO TINTO‟S M&A HEAD, PHILIP MITCHELL, DEPARTS

Rio Tinto Group head of mergers and acquisitions (M&A) Philip Mitchell has left the world‘s second-

largest mining company.

Mitchell had the title of head of business development and had been in the role for the past six

years. He was replaced on an acting basis by Matt Halliday, Rio‘s director of business development

for Australia, according to a company memo obtained by Bloomberg News. Mitchell, who had been

with Rio for more than 30 years, left the company last month, according to two people with

knowledge of the situation who asked not to be identified as his departure hadn‘t been made

public. Mitchell declined to comment on his exit, as did a Rio spokesman.

Rio is among mining companies that are reining in spending and acquisitions after a decline in

commodity prices that followed a decade-long boom. The London-based company‘s appetite for

M&A is diminished following ―dreadful mistakes‖ in the past, Chief Executive Officer Sam Walsh said

in December. His predecessor, Tom Albanese, left a year ago after the London- based company

announced $14 billion of writedowns on aluminum and coal deals.

Rio has written down by more than half the valuation of its $38 billion takeover of Canadian

aluminum producer Alcan Inc. a deal that was announced in 2007, before Mitchell became head of

M&A. It also wrote down 70 percent of the value of its AUD 3.9 billion (USD 3.5 billion) purchase of

coal producer Riversdale Mining Ltd.

Source: Mine Web

ECONOMY

BANK OF MONGOLIA MAINTAINS POLICY RATE AT 10.5%

The Bank of Mongolia announced 11 February that it had maintained its policy rate at 10.5 percent.

Separately the central bank decided to exempt foreign currency sourced from overseas via bonds to

last three-year or longer bonds as well as loans from the mandatory reserve requirements.

Source: Cover Mongolia

2014 BUDGET SUMMARY

Revenue and grants allotted in the 2014 General Government Budget totaled MNT 348.4 billion, as

of January 2014. Total expenditures and net lending totaled MNT 413.1 billion, representing a

deficit of MNT 64.7 billion.

Page 8: 14.02.2014, NEWSWIRE, Issue 312

Projected tax revenue increased 0.2 percent by MNT 600 million, year-on-year. The small growth is

mostly attributed to a 42.6 percent projected decrease in the collection of some tax revenue and

20.9 percent in income tax revenue. Collected tax on domestic goods and services is expected to

rise, however, by 11.8 percent, alongside a rise of 15.7 percent in taxes collected from foreign

trade. Social Insurance payments are projected to rise 18.6 percent.

Total expenditures and net lending increased 54.6 percent to MNT 413.1 billion year-on-year. That

includes MNT 65.5 billion in additional capital expenditures from last year and MNT 59.8 billion in

additional subsidies and transfers. Non-repayable lending, however, fell by MNT 15.5 billion.

Source: Montsame

DEVELOPMENT BANK CEO SUMMARIZES BOND SPENDING

Development Bank of Mongolia LLC's chief executive officer, N. Munkhbat, summarized some of the

spending from the proceeds collected from Mongolia‘s debt offerings:

2012 Development Bank offering (USD 580 million)

• Erdenes Tavan Tolgoi LLC received a USD 200 million loan with repayment due 2017

• The New Railway project received USD 55 million for preliminary research, feasibility study

• Khutul cement factory expansion

2012 Chinggis bond (USD 1.5 billion)

•Companies operating within agriculture and light industry received USD 270 million, including

producers goods made of wool, cashmere, milk, green house vegetable, and textiles

• The New Railway project received USD 200

• Tavan Tolgoi received USD 50 million for studies

• The Egiin Gol water power station developers received USD 50 million for studies

• The Gudamj Project received USD 200 million, of which USD 30 million has been spent

• Road projects to connect Ulaanbaatar to six provincial capitals

• Ulaanbaatar city infrastructure projects

• Building part construction project

• Boeing 767 plane purchase

• Iron enrichment project

USD 300 million remains for planned spending, and USD 230 million remains unallocated. Prime

Minister Norov Altankhuyag has said these funds would be used to support domestic production, but

no projects have been chosen yet.

Samurai bond (MNT 400 billion)

These funds will be spent to drive the industrialization of Mongolia. Altankhuyag said the

government has received 1,151 loan applications.

Source: Undesnii Shuudan

PETROL PRICES INCREASE BY 40 MNT

The price of fuel increased MNT 40 across Ulaanbaatar Wednesday evening. That day Petrovis LLC

fuel stations charged MNT 1,550 per liter for А80 petrol, 1,660 MNT АИ-92 for, MNT 1,890 for АИ-95,

and MNT 1,790 for diesel. Just Oil LLC increased petrol prices at fuel stations by 50 MNT per liter.

Earlier this week local media reported that several gas stations halted the sale of АИ-92 petrol due

to dwindling supply, but the Petroleum Authority of Mongolia denied these reports. Petrol prices

have increased as a result of a closed-door meeting with the Petroleum Authority of Mongolia and

petrol importers.

Source: News.mn

CARGO, PASSENGERS VIA AIR AND RAIL DECLINE

Mongolia saw falls in cargo and passengers by both rail and air transport last month compared with

the same period in 2013.

Last month saw 257.6 tons of cargo and 57,100 passengers transported by air. Cargo declined by

13.9 percent to 41.7 tons year-on-year, while the number of passengers declined 4.5 percent by

2,700 year-on-year. The fall in the number of passengers and volume of cargo resulted in a MNT 1

Page 9: 14.02.2014, NEWSWIRE, Issue 312

billion decline compared with the same period of last year, totaling MNT 16.1 billion.

Mongolia‘s rails saw 1,549 tons of cargo and 282,400 thousand passengers last month. Cargo

declined 4.3 percent by 69,000 year-on-year while the number of passengers declined 8.9 percent

by 27,500 year-on-year. Railway transport earnings increased 0.9 percent, however, for a total MNT

30 billion.

Source: Zuunii Medee

MONGOLIA'S GOLD-RESERVE BOOSTING EXPERIMENT

In late January Mongolia made law an amended gold royalty regime that lowers a gross tax on gold

sales to 2.5 percent from up to 10 percent if a gold miner sells its production to the central bank.

It's a fascinating gambit by Mongolia to boost the size of its gold reserves, confidence in its inflating

currency and growth of its official gold mining industry, which, according to reports, produced a

modest 290,000 ounces gold in 2013, the vast majority of it exported.

Already one of Mongolia's top gold miners, Canadian-based Centerra Gold Inc., has put the new law

to work. Centerra Gold spokesperson John Pearson, the company's vice president of investor

relations, confirmed a research report by Dale Choi, who runs the firm Independent Mongolia Metals

& Mining Research, that it has sold 100 kilograms gold to the Mongolian central bank under the new

tax regime last week (this is roughly 3,200 ounces or USD 4 million worth of gold at press time).

But as Choi put it, the law and its implications are not "straightforward." Gold miners, especially

foreign ones, will want to convert a good portion of proceeds from gold sales to U.S. dollars out of

Mongolian tugrug, with which the Mongolian central bank pays. The dollar to tugrug exchange rate

has been volatile for many months. In this respect, Centerra's Pearson said the gold miner had

tested this aspect, and it worked very well. There is also the question of Mongolia funding gold

purchases, especially if they grow. Mongolia wants to boost confidence in its currency, turning to

gold, but to do so it may have to dilute its cash pool, that is, as Choi noted, print money; and this

in a country fighting inflation, often in the teens, with a depreciating currency and a bond market

skeptical of government issues.

"I'm not quite sure what's going to happen," Choi said in context of how the amended mineral law

would unfold in practice. Still, he was optimistic. Mongolians love gold, Choi said, and increasing

reserves would boost faith in the Mongolian tugrug.

Source: Mine Web

GOVERNMENT TO DISTRIBUTE MNT 20 BILLION IN WOOL BONUSES

The Government is set to grant MNT 20 billion in bonuses to herder cooperatives who opt to sell

their wool to domestic companies.

The government is taking a new approach to supporting local production by granting the MNT 20

billion to cooperatives rather than individuals. The cooperatives will be responsible for transferring

that money to its members. It differs from past initiatives that since 2012 had provided herders

with an additional MNT 2,000 per kilogram of wool sold.

Source: Montsame

GOVERNMENT TO GRANT 60% OF BUYANT-UKHAA HOUSING TO CIVIL SERVANTS

Prime Minister Norov Altankhuyag explained government plans to distribute housing to citizens at

the Buyant-Ukhaa apartment complex at Khan-Uul District during his weekly news conference 6

February.

Buyant Ukhaa project developers plan to construct 28 apartment blocks containing a total 49,392

homes at a size between 32 to 68 square meters each by May this year. Authorities said the unit

price per square meter would be under MNT 1.28 million (USD 740), compared with the current

average price of MNT 2 million per square meter. They said 60 percent of total housing would be

distributed to government workers with the remaining 40 percent to be sold to senior and disabled

citizens as well as young families.

The premier said anyone purchasing an apartment would be prohibited from selling until after 15

years. Home buyers must make their purchase using the government backed 8 percent mortgage

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program. Anyone who received an 8 percent mortgage or a previously offered 6 percent mortgage,

he said, will be unable to make a purchase.

The first block of the complex, Buyant-Ukhaa 1, opened its 567 households on 27 January, said

officials.

Source: Info Mongolia

FOOT-AND-MOUTH EPIDEMIC SPREADS TO GAZELLE HABITAT

Foot and mouth disease continues to spread among livestock despite the efforts of locals and the

National Emergency Management Agency.

As of 9 February, 286 out of 290 cattle with foot-and-mouth in Sukhbaatar Aimag had been

destroyed. According to a report from 9 February, almost 217,000 livestock had been vaccinated in

Ongon, Naran, Dariganga, Bayandelger and Tuvshinshiree Soums in Sukhbaatar. A total of 160,670

livestock, including 333 camels, 14,451 cattle, 65,585 sheep and 47,142 goats, have been

quarantined and are receiving examinations.

Provincial emergency authorities have set high alerts to prevent an epidemic within Sukhbaatar and

Dornogobi Aimags, as well Bayankhutag, Bayanmunkh, Darkhan, Bayan-Ovoo, Kherlen and Bor-Undur

Soums, which neighbor Galshar Soum, Khentii Aimag. Galshar is reportedly inhabited by over 11,000

Mongolian gazelle. The governors of Galshar, Bayan-Ovoo, Darkhan, Bayankhutagt and Bayanmunkh

have been ordered to conduct surveys of gazelle habitats in order to study their populations and

remove any infected animals.

The General Agency for Specialized Inspection has warned citizens against any unnecessary travel to

the quarantined zones.

Source: News.mn

UC MERCED HEATING UP MONGOLIA‟S HARSH WINTER

One of the world‘s oldest civilizations—with the worst air pollution and the coldest capital city—will

employ cutting-edge technology from the newest University of California (UC) campus starting in

February.

Professor Roland Winston, who leads the UC Merced-based UC Solar Institute, just returned from a

trip to Ulaanbaatar. He met with officials at Mongolia National University, a 15-year-old institution

with about 9,000 students, to discuss installing a solar-thermal unit on one of the campus buildings

to generate 3 kilowatts of steam heat for a portion of the campus. The thermo-solar unit is being

installed on a university rooftop.

The primary source of heat in Ulaanbaatar, Mongolia is burning coal, and, more recently, chopped-

up tires—both highly pollutant. The World Health Organization in 2011 said the country‘s air is the

poorest in the world, filled with particles that can cause serious health problems. The annual

average temperature in Ulaanbaatar is 0 Celsius, and the country is subject to some of the harshest

winter weather anywhere with temperatures often well below zero.

―If it will work there, it will work anywhere,‖ Winston said of the XCPC solar-thermal unit. Typical

solar collectors likely wouldn‘t work as well because they require tracking equipment that is

affected by extreme temperatures. Winston, a pioneer in non-imaging optics, and his students have

developed a unit that doesn‘t track and can generate high heat.

Former UC Merced student Bennett Widyolar, originally from Irvine, California and now a research

scientist with UC Solar, is in Mongolia installing the unit. He will complete a series of tests to make

sure it performs as promised before returning home. The system will be turned on in mid-February.

If the XCPC provides steady, reliable heat despite the extreme climate, the university will seek

funding for about 33 other units in hopes of generating 100 kilowatts of heat, which could heat a

large five-story building, Winston said.

Source: University of California, Merced

MONGOLIANS CREATE SMART PHONE

Five young Mongolians have developed their own smart phone that could reach mass production.

Their phone is the culmination of three years of work, reported MNB. The phone features a touch-

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screen that recognizes the owners fingerprint, new programs for cleaning and formatting, and

louder speakers. The developers are students at the Moscow State Technical University, majoring in

information technologies. Scientists of the university said success testing would support the

possibility for mass production.

Source: Montsame

MONGOLIA PUSHING NORTH KOREAN TIES

Mongolia on 7 February ratified a raft of deals to increase economic ties with North Korea. The

agreement is part of an ongoing push to boost cooperation with the isolated state.

Under the agreement given approval by the Mongolian government, the two countries will increase

their economic ties, with a focus on industry and agriculture, Montsame reported. Mongolia will

help North Korea develop livestock husbandry, while Pyongyang will offer assistance in setting up

industries utilizing Mongolia's raw materials, such as wool and coal.

The deal was initially signed during Mongolia Industry and Agriculture Minister Khaltmaa Battulga's

visit to Pyongyang in October. The Central Asian state eyes its reclusive neighbor as an aid to

improving energy security and diversifying market reach for its growing mining output. According to

the Mongolian presidential website, agreements were signed on cooperation in the roads and

transport sector, as well as culture, sport and tourism. A 2013-15 cooperation plan between the

Postal Authority of Mongolia and the North Korean Computer and ICT Center was also agreed.

Mongolia has relatively good relations with the pariah state, given the two countries' shared

communist history, and Mongolia has often supplied food aid to North Korea in recent years.

Meanwhile, somewhat ironically, it's the potential access to international markets that cooperation

with the closed-off country could offer that is enticing to Mongolia. Mongolia, which is increasing

production of coal, copper and other commodities, has expressed an interest in gaining access to

North Korea's ports. The two countries are already linked by a rail line connecting Mongolia to the

port of Rason. Last year, Mongolian oil trading and processing company HBOil acquired a 20 percent

stake in the operator of North Korea's Sungri refinery. HBOil will supply crude oil to the refinery for

processing, then re-import the products.

Therefore, alongside growing ties to the North, Mongolia is also looking to build its relations with

South Korea. Foreign Minister Luvsanvandan Bold plans to pay an official visit to Seoul on 12 to 14

February.

Source: BNE

MONGOLIAN MINERS „TOO CHEAP TO BE IGNORED,' SAYS RESCAP

After a period of misguided nationalistic policy, Mongolia could be on the cusp of ―another

significant growth period in foreign direct investment and asset valuations‖, according to a

cautiously optimistic note this week from private Mongolian-based investment bank, Resource

Capital (ResCap) Corp.

The Mongolian government‘s nationalistic policy across 2012 and into 2013 has had a tangibly

negative effect on the economic fortunes of the burgeoning resource powerhouse, the note said.

―The recent contraction cycle of a more and unsustainable State environment commenced in mid-

2012 and has seen private sector contribution to GDP collapse from an estimated plus-80% to less

than 50%, FDI back to pre-Oyu Tolgoi (OT) levels, and the currency near historical lows – and at

lower levels than when the IMF last bailed out the government,‖ ResCap analysts wrote.

This damaging policy was embodied in an emboldened and ultimately non-constructive stance in its

negotiations with project partners Rio Tinto Group and Ivanhoe Mines Ltd. (now Turquoise Hill

Resources Ltd.) over the development of Oyu Tolgoi; along with nationalistic and protectionist

legislation and a poorly handled case of in-house corruption that concluded with more than 100

exploration licenses being revoked. The government is also being pursued in an international court

for more than USD 300 million by a uranium junior over an expropriated license from 2009. As FDI

and the Mongolian currency suffered, and intervention from the International Monetary Fund

loomed large, the government changed tack in the second half of last year. The first tangible result

of that about face has been a new, fairer Investment Law. A poor effort at a mining bill has also

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been pulled and is being revisited with help from mining companies.

ResCap postulated that the only way was up and the investment law was an early sign that private

companies can expect more than just rhetoric. This current environment presents an investment

opportunity, particularly to buy mining equities. ResCap also warned that Mongolia was at risk of

over-correcting and allowing legislation to become too liberal, giving way to an unsustainable

boom. This would no doubt lead to another nationalistic backlash and the cycle would continue.

Source: Mining Journal

CORROSIVE INFLATION EATS AT DEVELOPING WORLD

Soaring inflation in large emerging markets risks destabilizing the global economy, just as the

picture for the United States and Europe is starting to brighten.

Weak currencies in Asia, Africa and South America are exacerbating the inflation problem and

forcing central banks in several countries to raise interest rates even as economic growth slows.

Inflation data for Thailand, Indonesia and the Philippines for January came in stronger than

expected. Along with Brazil, South Africa, Turkey and India have raised rates in recent weeks. The

inflationary pressures contrast with advanced economies, where authorities are hoping years of

loose monetary policy will finally kick-start torpid growth and low inflation rates. The risk is that

problems in developing nations, which account for half of global output, could undermine that

scenario. Japan, which is recovering after years of growth-killing deflation, counts emerging

markets as a major export destination. China, too, increasingly sells its goods to other developing

countries.

"The emerging-market growth story is no longer as reassuring as it used to be," said Frederic

Neumann, an economist with HSBC Holdings in Hong Kong.

Fears of a nascent emerging-markets crisis led global investors to dump stocks and bonds in those

countries this year, although the selling has abated in recent days. According to Barclays, investors

yanked USD 18.6 billion from emerging-market equity markets since the start of 2014, compared

with USD 15 billion for the whole of last year. Outflows of bonds have totaled USD 6.6 billion versus

USD 14.3 billion in 2013, the bank said.

Stephen Schwartz, chief Asia economist for Spain's Banco Bilbao Vizcaya Argentaria SA, points out

that China accounts for a third of global growth and is still expanding at 7.7 percent. "The sudden

pessimism about emerging markets is overdone," he said.

The International Monetary Fund expects emerging markets to grow 5.1 percent this year, up from

4.7 percent in 2013. It forecasts advanced economies to grow 2.2 percent, much higher than 1.3

percent last year. Still, Neumann at HSBC estimates that global growth could fall by 0.5 percentage

point this year because of emerging-market weakness.

Source: Wall Street Journal

POLITICS

PARLIAMENT TO END RAIL GAUGE DISPUTE IN SPRING SESSION

Parliament is expected to put to rest the debate over which rail it will choose in the upcoming

spring parliamentary election, said Cabinet Secretary Ch. Saikhanbileg.

This year Mongolia will see the construction of 267 kilometers of rail. The government plans to

finance the rail project using funds from the state budget as well as proceeds from the 2012

Chinggis bond and 2013 Samurai bond.

Source: Zuunii Medee

CABINET TO CONVENE EVERY FRIDAY

Cabinet of Ministers has changed the meeting day of the cabinet to Friday from Saturday,

commencing from this Friday. The schedule change will be in force until the beginning of the spring

plenary session of parliament.

The Democratic Party rescheduled Cabinet meetings from each Wednesday to Saturday after

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forming its coalition government in 2012 Wednesday. As many of the Cabinet members are also

seatholders in Parliament, the intent was to remove any conflicts in schedules.

Source: Montsame

MONGOLIAN IMMIGRATION AGENCY IMPLEMENTS REFORMS

The Mongolian Immigration Agency announced 10 February several changes to procedures for ports

of entry in line with the recently passed Law on Border Checkpoints.

The technical reforms include online visas as well as invitation certificates and residence permission

application forms. Immigration is also considering the introduction of fingerprint checks for

Mongolian citizens at borders with frequently high traffic, such as the Buyant-Ukhaa and Zamyn-Uud

ports.

Officials said it now takes only 15 seconds per passenger at the border per each entry compared

with two minutes beforehand. Introducing fingerprint checks at the larger border points would

hasten the process even further, they said.

Source: News.mn

ELDERS COMPLAINT CAN'T SEE ADDED RETIREMENT PENSIONS BENEFITS

The Ministry of Human Development and Social Welfare on 10 February responded to criticism

regarding misunderstandings to of a resolution that took effect on 1 February to increase pension

payments by 15 to 30 percent that took.

The ministry said it was responding to complaints received that elder citizens were not seeing the

15 to 30 percent raises in pension payments. Parliament on 18 January approved an allotment of

MNT 89 billion to the 2014 Fund of Social Insurance for pension increases. An announcement was not

made until January 30, however, to avoid price growth during the already expensive Tsagaan Sar

holiday season. The Resolution increases pension payments by MNT 27,000 to all elders who used to

receive up to MNT 200,000 a month. An additional MNT 22,000 has been granted to pensioners

receiving between MNT 201,000 and MNT 600,000 MNT, and MNT 20,000 to pensioners receiving

over MNT 600,000.

The ministry authorities said the 15 to 30 percent increases were a minimum for full retirement

pension who were earning MNT 180,300. Pensions of MNT 145,200 were to receive an additional

MNT 27,000, or an 18.6 percent raise in payments. Furthermore, a resolution passed 18 January—

the same day as the resolution that introduced the raise in pension payments—brought social

welfare payments from MNT 103,600 to MNT 115,000. Benefits for caring for elderly individuals

increased from MNT 48,000 to MNT 52,800. [the Source's explanation of the controversy was

unclear. See the original for details -ed]

Source: Info Mongolia

S. KOREA, MONGOLIA AGREE ON GREATER COOPERATION ON DPRK

The top diplomats of South Korea and Mongolia agreed Wednesday to broaden their cooperation in

inducing change in North Korea, Seoul's foreign ministry said.

Mongolian Foreign Minister Luvsanvandan Bold also expressed his country's support for Seoul's push

to build trustworthy ties with North Korea and to unify the two Koreas in his bilateral meeting with

his counterpart Yun Byung-se in Seoul, the Ministry of Foreign Affairs said. Their cooperation on

North Korea will include sharing intelligence on the communist country, it also said.

Mongolia has achieved advances in democratization and the economy since its economic reform and

transition to a market economy in the early 1990s, and "Mongolia's efforts can hopefully set a good

example to North Korea," Yun was quoted as saying in the talks.

Since establishing diplomatic ties with Seoul in 1990, the countries have steadily increased their

exchanges in the fields of human resources, trade and national security, the ministry said, adding

that the ministers agreed to further upgrade such cooperation. The officials also agreed to expedite

their efforts to establish channels of consultation for a closer relationship, it noted. In the bilateral

talks, the Mongolian minister issued an invitation to President Park Geun-hye to the central Asian

country next year while Yun also expressed hope for Mongolian President Tsakhia Elbegdorj to visit

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South Korea.

Source: Yonhap News Agency

MONGOLIA EXPRESSES INTENT TO JOIN ANTARCTIC TREATY SYSTEM

The Cabinet of Ministers agreed to engage for membership in the Antarctic Treaty System (ATS).

The Cabinet decision is based on the belief that joining the ATS would provide the opportunity for

Mongolia to send an independent research group to Antarctica and establish a station there, where

there are several kinds of minerals such as coal, uranium, oil and iron. Mongolian scientists had a

research team in Antarctica from 1972 to 1974. In more recent years Mongolian scholars have

participated in research in Antarctica within international research team. Their work includes study

of weather, the sea water and minerals to observe trends related to climate change.

Source: Montsame

TWO MONGOLIAN SKIERS REPRESENT MONGOLIA AT SOCHI

Two Mongolian athletes will compete in cross-country skiing from the Sochi Winter Olympics 14 and

15 February.

Olympic skiers B. Byambadorj and Ch. Otgontsetseg arrived 30 January to compete in the Olympic

games this year, as Mongolia marks its 50th Anniversary competing in Winter Olympics.

In attendance at the Olympic Games was President Tsakhia Elbegdorj.

Source: UB Post

MONGOLIA TO OPEN HONORARY CONSULATE IN BULGARIA

Bulgaria's government has officially given its agreement to Mongolia's request to open a honorary

consular position in Bulgaria.

The honorary consulate will have a seat in Bulgarian capital Sofia and will also encompass the

territory of the southwestern Blagoevgrad region. The Mongolian government has determined

Bulgarian citizen Pencho Ivankin to be appointed to the position. It is expected that the new

consulate will intensify cooperation between the two countries in the field of trade, education,

research and culture.

Source: Novinite

BELARUS TO OPEN MONGOLIAN EMBASSY

Belarus plans to open five embassies this year, including in Mongolia.

In addition to Mongolia, Belarus will open embassies in Australia, Qatar, Pakistan and Ecuador in

2014. Also among the plans are the opening of diplomatic missions in Iraq and Angola, reads the

Belarusian Foreign Ministry's foreign policy review 2013. Today, Belarus maintains diplomatic

relations with 173 countries, or 90 percent of the United Nations' membership.

Source: Belarusian Telegraph Agency

DINOSAUR BONE CASE FROM WYOMING MOVES TO FEDERAL COURT

A lawsuit in Denver's U.S. District Court names a "fossilized Tyrannosaurus bataar skull" as the

defendant.

The legal maneuver essentially repatriates the skull, 67 million years after the dinosaur's demise, as

if it were a living, breathing Mongolian citizen. The giant oval skull with long razor teeth will soon

join a world-wide migration of dinosaur bones to a museum in the Mongolian capital city of

Ulaanbaatar. U.S. judges began ordering the return of dinosaur bones to Mongolia after U.S.

Department of Homeland Security officials and President Tsakhia Elbegdorj came to an

understanding about how to redress fossil smuggling two years ago, said Houston attorney Robert

Painter, who represents Elbegdorj in his quest to repatriate Mongolian dinosaur bones.

The lawsuit against the skull of a T. bataar, a dinosaur cousin of T. rex, came on the heels of a

guilty plea in a criminal case against 69-year-old Eagle dinosaur vendor Rick Rolater in federal

court. Rolater sells rare gems, petrified wood tables and mammoth tusks in his pricey Jackson Hole

and Beaver Creek shops. Over the past 20 years, dinosaur bones stolen from the Gobi Desert's

Nemegt Basin, sometimes in midnight smuggling raids, eventually found their way to buyers.

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Wealthy private collectors were willing to pay up to USD 1 million for a full T. rex skeleton.

Another debate is raging over another T. bataar fossil, one bought by "National Treasure" actor

Nicolas Cage for USD 267,000 after he outbid actor Leonardo DiCaprio at a Beverly Hills auction

house in 2007.

Source: Associated Press

UB COUNCIL BANS SIGNS DISPLAYING FOREIGN LANGUAGES

An ordinance by the Ulaanbaatar Citizens Representatives Khural passed in January that bans

businesses from using foreign alphabets in public signs takes effect this month.

The regulation calls for businesses to maintain the surrounding area of their businesses and hang

clearly visible and illuminated signs that only use Mongolian Cyrillic. The ordinance also prohibits

service fees for the use of public restrooms in commercial and medical service buildings.

Source: Info Mongolia

MONGOLIA'S FIRST LADY TALKS FAMILY VALUES

Mongolia's first lady has taken up a number of social causes during her husband's political career,

establishing two foundations in Mongolia. The inspiration for her charity comes from her culture and

her and the president's traditional roots.

―My husband is the son of a herder‘s family. He has seven elder brothers and is the youngest of

eight boys,‖ said President Tsakhia Elbegdorj's wife, Khajidsuren Bolormaa. ―The value we try to

instill in my children is to live their life with dignity and integrity, and prioritize education. Be

ethical and morally upright and to always try to be helpful to others.‖

Bolormaa established the Bolor Foundation in 2006 after she adopted an entire class of orphans to

fulfill the desire for a daughter. ―All the children, some 20 plus children stood around and encircled

me and were looking at me as if asking for care, asking for love. And I really wanted to embrace

them all. Not just one single child but all two dozens of them.‖ She hired staff and teachers to

assist in their children's care, and today they all live together in a single home. Eventually she

would go on to adopt a total 24 children.

―Some of them didn‘t have both parents, and some had only either a mother or father. They all had

lived hard lives and had been sent to the orphanage.

She said 11 of her 24 children were eventually reunited with their birth families, and foundation

helped those parent find employment.

She also runs the Hope Foundation which aims to combat cancer in Mongolia. The foundation works

closely with the national center for cancer, she said, helping to retrain nurses and medical staff in

courses at home and overseas.

―Mongolians have a culture of taking good care of those who are sick and need care and assistance.

We do not abandon our sick people. That culture is now at the heart of the philosophy of the Hope

Foundation.‖

Source: World Folio

KAZAKHSTAN PLAYS THE NAME GAME TO BRING IN INVESTOR INTEREST LIKE MONGOLIA

The Kazakh people would support the idea of renaming the country, as proposed by President

Nursultan Nazarbayev, according to the Russian expert on Central Asia, Azhdar Kurtov.

During a visit to the Intellectual School in the city of Atryau and meetings with representatives of

the public on 6 February, Nazarbayev proposed changing the country's official name to "Kazakh Eli"

("Country of Kazakhs" or "Kazakh people"). "Our country's name has the ending 'stan', as in the other

Central Asian states. Meanwhile, the foreigners are showing interest in Mongolia, which has a

population of only three million people, while its name lacks the ending "stan". Perhaps, it is

necessary to consider over time the issue of changing the name of our country to "Kazakh Eli", but

this first needs to be discussed with the people," the president said.

However, the renaming of the country would entail a number of difficulties, the chief editor of the

'Problems of National Strategy' journal of the Russian Institute of Strategic Studies, Azhdar Kurtov

told Trend on Friday. He said first of all the change in the country's name would entail very high

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expenditures. The expert said that secondly, the wording "Kazakh Eli" conceals some ethical

problems, as it says that it is the state of the Kazakhs, and not some other ethnic group. And

Kazakhstan is a home to many other nationalities.

"I believe it is wrong to emphasize the priority of only one ethnic group," said Kurtov. However, he

agreed renaming Kazakhstan could bring it the same kind of global attention that Mongolia receives.

Source: Trend

NEW MONGOLIAN LAWS

The following laws and amendments to laws were published in the latest weekly Government

bulletin. Unless otherwise decided by Parliament, they will take effect ten (10) days after

publication.

Date Laws

10.02.2014 Amendments to Law on Criminal procedure

Law on Exemption from Customs tax

Law on Exemption from Value added tax

Law on Ratification of Loan Agreement

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

members who wish to access complete versions of thelaws and regulations in Mongolian language

are welcome to email the BCM office: [email protected].

ANNOUNCEMENTS

“COAL MONGOLIA 2014”, 20-21 FEBRUARY, SS CONVENTION CENTER

"Coal Mongolia- 2014" the annual coal sector investor 4th International Conference shall be

organized from 20th to 21st of February 2014. The scope of this forum has been expanding every

year also has earned a reputation as one of the global leading and ingenuity forum in the coal

sector and became the largest international Coal Investors Conference and Exhibition.

The objective of this forum is to discussing key topics such as attracting foreign investment for coal

exploration, mining and processing projects in Mongolia. The current development trends in the

coal sector, future perspectives, investment, legal environment, infrastructure and latest

technologies also it is designed to increasing the competitiveness of Mongolian coal in the Asian

market.

As of 2013, it was a challenging and difficult year for the Mongolian sector despite the fact that the

mining companies made a historical record exploring 28.6 million tons of coal by November last

year and exported 16 million tons of coal.

Please note that BCM members will have 10% discount to register for the event. Please contact

[email protected] to get a special discount code. For more information, call 70115590 or

www.coalmongolia.mn, www.mining.mn.

___________________________________________

FRANCHISING & BUSINESS OPPORTUNITIES EXPO AND BUSINESS TOUR

The Business Council of Mongolia and Australia Mongolia Business Council are organizing the second

Mongolian business mission for ‖Franchising & Business Opportunities Expo‖ in Sydney, March 27 to 1

April.

The Franchise Expo will feature over 100 businesses: Internet and telecommunication, printing,

health and fitness, landscaping, leisure and travel, cafes and fast food, business and financial

services, retail, packaging and delivery, services, vending, domestic and commercial services, and

restaurants. By joining the official delegation to the Franchising and Business Opportunities Expo

Page 17: 14.02.2014, NEWSWIRE, Issue 312

guests will receive free business support as an international buyer.

For more information call 11-317027 or 94092113, or email [email protected], for registration

and additional information about the event. The registration deadline is February 28.

___________________________________________

BCM MEMBERS RECEIVE 15% DISCOUNT FOR OIL AND OIL SHALE MONGOLIA 2014

The Oil and Oil Shale Mongolia 2014 international investment conference, hosted by the Petroleum

Authority of Mongolia, will be held in Ulaanbaatar from 9 to 10 April 2014.

The event will be attended by international investors, oil, gas, and oil shale companies, service

providers, consultancies, equipment suppliers, and traders.

Delegates will have a unique opportunity to network with industry's key contacts at the country's

first international investment conference on oil, gas, and oil shale. They will have the opportunity

to obtain vital information on legislation and policies on oil, gas, and oil shale exploration and

production regulations from the officials of the Ministry of Mining and Petroleum Authority of

Mongolia. Moreover, projects on oil refinery, exploration, production, plus oil shale projects will be

presented.

BCM members will receive an exclusive 15 percent discount. For more information cal +976 9909-

1765 or 9910-5877, email [email protected] or logon to OilMongolia.com.

___________________________________________

CELEBRATE THOUSAND CAMEL FESTIVAL, 6-8 MARCH, DALANZADGAD

Nomadic Expeditions, one of the top travel specialists for Mongolia since 1992, is organizing the

Thousand Camel Festival scheduled for 6 to 8 March in Dalanzadgad, Umnugobi – a pristine and

remote countryside desert location.

Accommodations will be arranged at the award-winning Three Camel Lodge during the festival.

Don't miss this opportunity and enjoy a short winter escapade outside of Ulaanbaatar this coming

March.

For more information, click here to see a detailed Itinerary of the events scheduled as well as

prices. To register, email your name, title, company name & contact info to [email protected]

to register for the Festival.

___________________________________________

“MINER AND SUPPLIER-2014” TO BE HELD FOR 4TH YEAR, 13-14 MARCH 2014. CHINGGIS KHAAN

HOTEL

BCM members will have 10% discount to register for the event. To get the discount code, please

contact [email protected].

It is single and larger event which is going to be held in the sector of Mongolian mining supply and

executive officers, supply managers, financial directors and engineers have great expectations for

this event which influences goods and service research that is broadly familiar within the sector.

It will be organized under the slogan ―LET‘S MOVE TO THE DEVELOPMENT NEW STAGE!‖ where

mining companies will share their experiences, introduce with advanced technique, technology and

management. Upon your participation at our meeting and exhibitions, you will be provided with the

chance to share your experiences, conclude your achievement and successes, introduce with

advanced technique, technology and management, determine your resources and chances, properly

adjust your supply and establish relationship with new customers.

For more information please contact [email protected] or 70116009.

___________________________________________

“MM TODAY” ON MNB-TV, FRIDAY, 19:00 TO 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.

Page 18: 14.02.2014, NEWSWIRE, Issue 312

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.

The below presentation is from the January 27 BCM monthly meeting:

•ОЙ ХАМГААЛАЛД СУУРИЛСАН БИЗНЕС, Цэсэдийн БАНЗРАГЧ /Ph.D/, БОНЯ- ны ОЙ ХАМГААЛАЛ,

ОЙЖУУЛАЛТЫГ ЗОХИЦУУЛАХ ХЭЛТЭСИЙН ДАРГА, МБЗ-ийн 1 сарын 27-ны гишүүдийн сарын

хурал дээр

___________________________________________

ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „INTERVIEWS„, MONGOLIAN

BUSINESS NEWS‟, „PHOTO GALLERY‟

The following presentations are from the January 27 BCM monthly meeting:

- "The year 2014 starts with new IPO on the Mongolian Stock Exchange", Richard Kobayashi, CEO,

Standard Investment LLC

- "IMA Consultancy Services for Investors and Account Manager's Role" D. Irmuun, Director of Division

for Promotion and Consultancy Services, Invest Mongolia Agency

The following presentations were made at the BCM monthly meeting on December 9, 2013:

- ―Why Real Estate is the Road to Riches in Mongolia,‖ Harris Kupperman: Why Real Estate is the

Road to Riches in Mongolia

- ―Business Council Promoting Private-Sector Growth,‖ B.Byambasaikhan: Business Council

Promoting Private-Sector Growth

- ―Quality Supplier Development Center: Your partner for doing business in Mongolia‖, J.

Bayarmagnai, Executive Director, Quality Supplier Development Center /USAID Grantee;

- ―Impact of Corruption in Mongolia‖, L. Sumati, Director, Sant Maral Foundation;

-―Investment Protection Issues in Mongolia‖, D. Jigjidmaa, Investment Promotion Program Manager,

IFC Mongolia;

-Presentation of ―Win Win with Mongolia‖.

The following 13 presentations are from the Mongolia Investment Summit- 2013 in Hong Kong, Nov

18-20:

- Regulatory Update: Navigating Mongolia‘s legal framework for foreign direct investment,

Javkhlanbaatar Sereeter, Director General, Foreign Investment Regulations and Registration

Department, MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA;

- Investment keynote: Investing into Mongolia in 2013 – Where do the opportunities lie?, James

Passin, Co-Founder and Manager, FIREBIRD MONGOLIA FUND;

- Development keynote: Key challenges and opportunities for continued growth in Mongolia,

Randolph Koppa, President, TRADE AND DEVELOPMENT BANK OF MONGOLIA;

- Outlining government policies and long-term plans for Mongolia‘s mining sector, Amarjargal

Khurelbat, Head of International Cooperation Division, MINISTRY OF MINING OF MONGOLIA;

- From copper to met coal: Demand and price outlook and expected impact on Mongolia‘s economy,

Ghee Peh, Managing Director, Metals and Mining Research, UBS SECURITIES ASIA;

- How Mongolian banks and financial institutions are dealing with the challenges and opportunities

of a fast growing economy, Norihiko Kato, Chief Executive Officer, KHAN BANK;

- Update on the Mongolian stock market – Impact of the new Securities Law, Altai Khangai, Chief

Executive Officer, MONGOLIAN STOCK EXCHANGE;

- From investment banking to trade finance to micro credits to insurance, Amartuvshin Hanibal,

Managing Director, TENGER FINANCIAL GROUP LLC

- Spotlight presentations: Showcasing Mongolian investment opportunities, Peter Morrow, Board

Director, ASIA PACIFIC INVESTMENT PARTNERS;

Page 19: 14.02.2014, NEWSWIRE, Issue 312

- Spotlight presentation: Showcasing Mongolian investment opportunities, Munkhbat Davaatseren,

CEO of Golomt Securities, GOLOMT BANK;

- Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources,

Batmunkh Batkhuu, Chairman, SHARYN GOL JSC;

- Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources,

Jimmie Wilde, Chief Operating Officer, BERKH UUL JSC;

- Spotlight presentation: Showcasing Mongolian investment opportunities – Natural Resources, Mona

Forster, Executive VP, ENTRÉE GOLD INC;

The following two presentations are from the ―ANTI-CORRUPTION LEGISLATION/POLICY,

INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ training seminar for businesses, in

Ulaanbaatar, November 18, 2013:

-―International business standard on transparency‖ by Jelena Pesic, Director, PwC;

-―Finland‘s best practice on transparency and anti corruption‖ by Dr. Pekka Hallberg (as it is

world‘s number one), Emeritus President of the Supreme Administrative Court of Finland;

The following 15 presentations are from the Mongolia Mining Summit, Perth, Australia, October 29-

31, 2013:

• Mongolia‘s Minerals Future and Development by Otgochuluu Ch, Director General, Department of

strategic policy and planning at Ministry of Mining, Mongolia at the Mongolian Mining Summit 2013,

Perth, Australia, Oct 29-31, 2013

• Mongolian Economy: Investment Opportunities/Challenges, Jim Dwyer, Executive Director,

Business Council of Mongolia at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31,

2013

• Oyu Tolgoi: Lessons from the Gobi, Houston Spencer Vice President, Communications and Media

Relations, Oyu Tolgoi at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

• Market dynamics for Mongolian coking coal in the Chinese market, Graeme Hancock, President

and Chief Representative at Anglo American, Mongolia at the Mongolian Mining Summit 2013, Perth,

Australia, Oct 29-31, 2013

• Speech by Mr. Ariunbold Byamba, Deputy Director, Erdenes MGL LLC at the Mongolian Mining

Summit 2013, Perth, Australia, Oct 29-31, 2013

• Launching Mining Projects in Mongolia–A Major Contractor‘s Perspective, Eric Erdenebat

Tseveendorj, Country Manager, Orica Limited at the Mongolian Mining Summit 2013, Perth,

Australia, Oct 29-31, 2013

• Investing in a dynamic legislative environment, Elisabeth Ellis, Managing Partner Ulaanbaatar,

Minter Ellison at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

• Sandvik In Pit Crushing & Conveying (IPCC), Doug Turnbull, Principal Mining Engineer, Sandvik

Mining Systems, at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

• Ovoot Coking Coal Project, David Paull, Managing Director Aspire Mining, at the Mongolian Mining

Summit 2013, Perth, Australia, Oct 29-31, 2013

• The business of being a third neighbor, David Landers, General Manager, East Asian Growth

Markets at the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

• Nuurst Thermal Coal Project, Daniel Rohr, Chief Financial Officer, Modun Resources Ltd, at the

Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

• Culture matters in building sustainable long-term business relationships, Hana Tserenkhand

Byambadash Business Development Consultant. AusMon Consulting and Dr Christine Hogan Adjunct

Professor, Curtin University. Consultant & Author at the Mongolian Mining Summit 2013, Perth,

Australia, Oct 29-31, 2013

• Maximizing Business Benefits from Your IT Investment, Brad Skeggs, Executive Director, COSOL, at

the Mongolian Mining Summit 2013, Perth, Australia, Oct 29-31, 2013

• Presentation by Battsengel Gotov, CEO, Mongolian Mining Corporation, at the Mongolian Mining

Summit 2013, Perth, Australia, Oct 29-31, 2013

Page 20: 14.02.2014, NEWSWIRE, Issue 312

• Mongolian Mining Sector "Present and Future Developments", N.Algaa, Executive Director,

Mongolian National Mining Association, at the Mongolian Mining Summit 2013, Perth, Australia, Oct

29-31, 2013

The ―Mongolia Reports‖ section includes the following:

- ―Selected Macroeconomic Indicators, December 18, 2013‖ by International Monetary Fund;

- ―Ministry of Finance of Mongolia, 2013 Government Debt Auctions‖ by Bank of Mongolia;

- ―Doing Business in Mongolia: 2013 Country Commercial Guide for U.S. Companies‖ by U.S.

Embassy;

- ―Real Estate Report 2013‖ by Mongolian Properties;

- ―Selected Macroeconomic Indicators, November 20, 2013‖ by International Monetary Fund‖

- ―2013 Second Annual Mongolian CEO Survey‖ from PricewaterhouseCoopers Audit LLC;

- ―Selected Macroeconomic Indicators; data through October 16, 2013‖ by International Monetary

Fund;

- ―IMF Completes 2013 Article IV Mission to Mongolia‖ by International Monetary Fund;

The following are added to Interview Section from the Oxford Business Group, Mongolia Reports

2013 book:

• B. Byambasaikhan, Chairman, Business Council of Mongolia: ―Talk is cheap‖;

• President Ts. Elbegdorj: ―Diversifying for growth‖

• Jim Dwyer, Executive Director, Business Council of Mongolia: ―Non-mining sectors budding‖;

• Peter Morrow, Chairman, American University of Mongolia: ―Filling in the blanks‖;

• N. Zoljargal, Governor, Bank of Mongolia: ―Sustainable vision‖;

• Gansukh, Minister of Roads and Transportation: ―Accessing new markets‖;

• J. Od, President, MCS Group: ―Building interest‖;

• B. Chuluunbaatar, President and CEO of Monnis Group: ―Climbing the ranks‖;

• Cameron McRae, President and CEO, Oyu Tolgoi: ―Sitting on a copper mine‖.

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 6th Anniversary BCM Renewal dinner on November

11, 2013.

BCM Football Cup 2013 pictures are posted to the website - http://bcmongolia.org/en/photos/350-

en/album?albumid=200

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

BCM LAUNCHES NEW LINKED-IN COMPANY PAGE

The Business Council of Mongolia has launched a new company page on the social networking

website LinkedIn to network its members and followers including small-medium enterprises (SMEs).

The new page will allow BCM to alert followers to the latest news and information critical to their

businesses. Members‘ businesses will be promoted. Additionally, BCM plans to deliver monthly

infographics on the latest data as well as videos and other media content as they come. The bulk of

the content on the new page will be in Mongolian language to better cater to BCM's Mongolian-

speaking audience and members. The following link can direct you to the New BCM's Linked-in page.

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

Page 21: 14.02.2014, NEWSWIRE, Issue 312

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 NewsWire with the community.

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

https://twitter.com/bcmongolia

We have now 2,992 fans on our Facebook fans page, 1,550 connections on LinkedIn network, and

876 followers on Twitter. Social Stats as of today: BCM now has 3,081 fans on our Facebook fans

page, 1,598 connections on LinkedIn network, and 900 followers on Twitter.

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

organization, visit the official BCM website at http://bcmongolia.org/en/

ECONOMIC INDICATORS

Page 22: 14.02.2014, NEWSWIRE, Issue 312

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]

January 31, 2014 *12.3% [source: NSOM]

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

Note: 12.2% y-o-y, Ulaanbaatar city, January 31, 2014

Page 23: 14.02.2014, NEWSWIRE, Issue 312

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 – FEBRUARY 14, 2014

Currency Name Currency Rate

US dollar USD 1,747.58

Euro EUR 2,382.21

Japanese yen JPY 17.05

British pound GBP 2,873.11

Hong Kong dollar HKD 225.34

Chinese Yuan CNY 288.29

Russian Ruble RUB 50.30

South Korean won KRW 1.64

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.