BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org

info@bcmongolia.org

Issue 118, May 14 2010

NEWS HIGHLIGHTS:

Business:

Ivanhoe names G. Batsukh as Chairman of OT Board, and 5 other directors;

Ivanhoe Mines releases new plan to make OT an industry model;

State support will favor foreign bidders for Tavan Tolgoi;

Private sector presents participation plan on TT to PM;

Mongolia 999+ holds first meeting;

Prophecy contracts Leighton for Q3 production at Ulaan Ovoo;

Erdene Resource plans regional coal exploration drill program;

MCS-made Mogul computers go on sale;

U.S. investment bank to help MRAM in developing mining sector;

Wagner Asia holds two apprentice training programs;

MCS Brewery chosen 2009 Reliable Taxpayer;

Just Group chief says workers brought honor to company;

Don't just accept role of 'villain', miners told;

Rio denies plans to shelve Australian projects.

Economy:

Inflation worries lead Central Bank to raise policy loan rate by 1%;

Government approves proposals to restructure Stock Exchange;

Democratic Party favors cuts in infrastructure to pay for child allowance;

Central Bank chief’s plan to raise banks’ capital;

PM urges immediate work on developing securities market;

Parliament should give clear directions on mining, official feels:

MSE takes steps to protect investors;

Khovd people want Khushuut to be designated a strategic deposit;

Romania to tighten belt for IMF credit;

Gold reaches record;

China imports less copper in April;

Zambia rejects call to reintroduce higher mining taxes;

Australian government may budge on mine tax;

China inflation rate accelerates;

Chinese trade returns to surplus; Chinese IPOs will test 'decoupling';

China, India doubt climate deal is near;

Red China, Green China;

Record amounts pour into emerging markets’ bonds;

Shale gas: the energy revolution brewing right under our feet.

Politics:

China studying free trade pact with Mongolia;

Officials blame ignorance for failure to declare correct income;

Mongolia gives China USD50,000 as earthquake relief aid;

Majority in Sant Maral survey says unemployment is the main problem;

President’s visit to USA postponed;

Former Kazakh nuclear chief given long jail term;

Elbegdorj receives Green delegates to Taipei conference;

Group finds air pollution has increased by 28%;

Elbegdorj invited to Moscow parade;

Tavan Tolgoi villagers demand 1,000 hectares of coal area;

President discusses legal reforms with U.S. team;

Dalai Lama writes to Elbegdorj supporting move on death sentence.

*Click on titles above to link to articles.

BUSINESS IVANHOE NAMES G. BATSUKH AS CHAIRMAN OF OT BOARD, AND 5 OTHER DIRECTORS Ivanhoe Mines has nominated former Mongolian ambassador to China G. Batsukh to become Chairman of the Board of Directors of Oyu Tolgoi LLC. "Mr. Batsukh has been closely associated with the Oyu Tolgoi story virtually since it began with Ivanhoe's exploration drilling in 2001, when he was appointed Mongolia's first ambassador to Canada. Now we are proud to nominate him for this key role with the team that is building the mining complex, which is the largest industrial development in Mongolia's history," Mr. Peter Meredith, Deputy Chairman of Ivanhoe Mines said, making the announcement. "Mr. Batsukh's experience in international affairs and consensus building, and his understanding of the expectations that the Mongolian people have in supporting the development of their resources, will be an invaluable asset to the company and the process," the statement said. Ivanhoe Mines appoints six of the nine members of the Oyu Tolgoi LLC Board of Directors and also nominates the Chairman. The Mongolian Government appoints three Directors. Mr. Batsukh's nomination as Chairman will be confirmed at the first meeting of the Board being planned for June. The other Ivanhoe Mines appointees for directorships are Mr. Meredith, Deputy Chairman of Ivanhoe Mines since 2006 and Chairman of Ivanhoe subsidiary SouthGobi Resources; Mr. John Macken, Chief Executive Officer, President and a Director of Ivanhoe Mines; Mr. Sam Riggall, who joined the Ivanhoe Mines subsidiary, Ivanhoe Australia, earlier this year as Executive General Manager– Commercial, after having served as General Manager of Business Evaluation for Rio Tinto; Mr. William (Bill) Weld, international business adviser to the Ivanhoe group of companies and a former Governor of Massachusetts; and Mr. Andrew Harding, Rio Tinto's Chief Executive, Copper, and a member of the Ivanhoe Mines Board of Directors. The Mongolian Government's representatives on the Board, as reported in the NewsWire last week, are Mr. N. Bagabandi, Mongolia's second President; Mr. P. Tsagaan, an adviser to President Ts. Elbegdorj on minerals, energy and infrastructure policies, and a former Minister of Finance; and Mr. Ch. Ganbold, Chairman of the Board of XacBank and Tenger Financial Group. Source: Ivanhoe Mines

IVANHOE MINES RELEASES NEW PLAN TO MAKE OT AN INDUSTRY MODEL A new, independent Integrated Development Plan confirms that the Oyu Tolgoi project has the mineral resources to become one of the world's top three copper-gold producers and an industry model of responsible, environmentally-sound mineral development, Ivanhoe Mines Executive Chairman Robert Friedland and President and Chief Executive Officer John Macken have said. The new plan is a comprehensive update of the original 2005 plan and supports Ivanhoe Mines' commitment to advance Oyu Tolgoi into full construction, with production of copper and gold expected to begin in 2013. The development blueprint contains the first published declaration of underground reserves for the planned Hugo Dummett block-cave mine. It also presents the results of extensive studies of two complementary development scenarios: 1. A Reserve Case, based only on proven & probable mineral reserves established to this point in time, which would sustain mining for a projected 27 years. 2. A Life-of-Mine Sensitivity Case, which adds to the Reserve Case a large base of resources identified through exploration to date but currently classified only to the level of inferred resources. These are considered too speculative geologically to have the economic considerations applied to them that would allow them to be categorized as mineral reserves. The new plan

estimates that the Life-of-Mine Sensitivity Case would sustain mining at Oyu Tolgoi for a projected 59 years. In both cases, the average production at Oyu Tolgoi over the first ten years would exceed 544,000 tons of copper and 650,000 ounces of gold. The plan, prepared independently of Rio Tinto and the joint Ivanhoe Mines-Rio Tinto Oyu Tolgoi Technical Committee, recommends that Oyu Tolgoi LLC, the Mongolian company that is developing and will operate the mining complex, conduct a comprehensive review to establish a baseline for the project with a goal of improving or optimizing value. Mr. Macken said, ―The plan is further confirmation that Oyu Tolgoi will positively and significantly contribute to Mongolia's economic growth and social development for generations to come." Mr. Friedland added, "Ivanhoe Mines believes that Oyu Tolgoi will stand tall in the pantheon of the world's greatest mines." Source: Ivanhoe Mines

STATE SUPPORT WILL FAVOR FOREIGN BIDDERS FOR TAVAN TOLGOI The Prime Minister has made it clear that the Oyu Tolgoi agreement is not an inviolate template and the decision on Tavan Tolgoi will stay clear of the mistakes in it. He has identified the principal areas where the departure will be seen. Mongolian companies and individuals will play a larger role in developing the project in cooperation with foreign investors and operators, and the benefit to national interests will be the main criterion for selection of the investor(s). Preference will be given to companies and consortiums with their national Government behind them. Not only will the ―advance payment‖ demanded be ―much more than in the case of Oyu Tolgoi‖, but the Prime Minister has indicated that selection of their companies would be conditional on Russia and China agreeing to reduce transit transport rates and, in the case of Russia, on its agreeing to buy more meat from Mongolia. With regard to the USA, the demand will extend to a free trade agreement and offering opportunities for young Mongolians to study in the USA. Advance payment will thus not be in cash only. There would be other demands also, such as a USD2 billion fund for the infrastructure projects in the southern Gobi region, setting up of value added production plants, and import of advanced technology. Source: The Mongolian Mining Journal

PRIVATE SECTOR PRESENTS PARTICIPATION PLAN ON TT TO PM The Mongolian National Chamber of Commerce and Industry submitted on Monday their business plan to work on the Tavan Tolgoi project to Prime Minister S.Batbold who has assured Mongolian companies that the Government would encourage their participation. Receiving the proposal, Mr. Batbold said, ―We are striving to promote the interests of not just a few companies, but of all our 2.7 million people‖ he told the MNCCI team. The proposal divides Tavan Tolgoi into six sections and allocates both Mongolian and foreign companies to every section. It includes development of an industrial complex, a plant to produce liquid fuel from coal, a power plant, infrastructure and construction of 30,000 household apartments in Ulaanbaatar. The national business entrepreneurs who jointly developed the plan with the MNCCI include Oyunii Undraa Group, Nomin Holding Group, Naran Trade Group, Sergen Mandalt Group, Erel Group, Bridge Group, Monos Group, CFC Group, Sodmongol Group, Mongol Daatgal, Vitafit, Gan Khiits, Itgelt Audit, Material Impex, Eermel, Golomt Bank, XacBank, Khan Bank, and MAK Corporation. The team which called on the Prime Minister included Mr. S.Demberel, chairman of MNCCI, Mr. B.Erdenebat, president of Erel Group, Mr. Sh.Bayarsaikhan, president of Nomin Holding, Mr. Tumurchuluun, president of Sergen Mandalt Group, Mr. S.Amarsaikhan, executive director of Oyunii Undraa, Mr. Davaasuren, director of Gan Khiits, Mr. S.Boldkhet of Naran Trade Group, and Mr. Batsaikhan of Khan Bank.

Source: Ardiin Erkh

MONGOLIA 999+ HOLDS FIRST MEETING The first meeting of Mongolia 999 LLC last week was a resounding success, with almost 1,600 domestic companies signing up to form a consortium laying claim to exploiting the Tavan Tolgoi deposit. Before the meeting, 1,283 members had registered within 12 days of announcing its intentions, already many more than the 999 in its name, and 1,206 of them had paid the MNT1 million enrolment fee. This is the first time Mongolian companies are aiming to collaborate at such a massive scale. At the meeting, participants were upbeat that their long experience in coal extraction and access to skilled manpower would get them a contract. Deliberations continuing well after the three days

of the formal meeting finally selected a 15-member Governing Board. Source: Udriin Sonin, Montsame

PROPHECY CONTRACTS LEIGHTON FOR Q3 PRODUCTION AT ULAAN OVOO Prophecy Resource Corp. has entered into a Mine Services Agreement with Leighton Asia Limited for the infrastructure establishment, equipment leasing, and mining operation at the Ulaan Ovoo coal deposit in northern Mongolia. Work begins in July to ensure that the commissioning of the 250,000-ton starter pit will take place as planned in August, with 57,500 tons in the first month ramping up to 100,000 tons per month by December. The Mongolian government has granted the project a 30-year mining license that can be extended by an additional 40 years. The project has met Mongolian environmental approvals as per the Mongolian Ministry of Nature and the Environment which approved a Detailed Environmental Impact Assessment (DEIA) and Environmental Protection Plan (EPP). As the last step to commence mining, Prophecy filed for its Ulaan Ovoo operating permit in April including necessary license, mine plan, and environmental approvals. Prophecy is advised by its Mongolia counsel and the Minerals Resources and Petroleum Authority that current minerals licenses and operating permits are not affected by the President's recent order to freeze exploration license grants. The company expects to obtain the permit by summer.

Source: www.prophecyresource.com

ERDENE RESOURCE PLANS REGIONAL COAL EXPLORATION DRILL PROGRAM In an update on its coal exploration activities in Mongolia, Erdene Resource Development Corp. has said over the past few years the company has evaluated every known coal occurrence in Mongolia and completed over 250 site evaluations. Through that process, it has narrowed its focus to certain prospective areas and potential acquisitions that are now the target of its 2010 field exploration activities and additional due diligence projects. Mr. Peter Akerley, President and CEO of Erdene, has said with Chinese coal consumption and imports growing significantly, Mongolia is experiencing rapid development in the coal mining sector and Erdene ―is well positioned to be a part of that growth through its direct holdings, royalty interest and partnerships". In southwest Mongolia, the company’s focus is on an exploration program that includes a ground-based geophysical program and a two to three thousand meter exploration drill program. This exploration drill program commences in May and will continue throughout the 2010 field season. A significant part of the 2010 field season will also focus on targets in western and eastern Mongolia where new transportation links are planned in areas with limited, previous coal exploration. Erdene has been awarded one license in the eastern part of the country with license applications pending in both regions. Erdene is also conducting due diligence evaluations on newly discovered coal deposits for potential joint venture or purchase opportunities. Read more… Erdene plans to continue regional property evaluations in 2010 as well as increased license staking and acquisition activity to identify and secure large-tonnage metallurgical, high-quality thermal coal deposits. A budget of USD1.9 million is in place for 2010 coal exploration programs in Mongolia.

Source: Erdene Resource Development Corporation

MCS-MADE MOGUL COMPUTERS GO ON SALE Five designs of desktop and two of laptop computers under the brand name Mogul are now on sale in Mongolia. The MCS Group began work on their manufacture in 2008. These national brand computers of world class quality are sold at competitive prices and should contribute to import substitution efforts. Source: Onoodor

U.S. INVESTMENT BANK TO HELP MRAM IN DEVELOPING MINING SECTOR Rodman & Renshaw, a U.S.-based full-service investment bank, has signed a Memorandum of Understanding (MoU) with the Mineral Resources Authority of Mongolia (MRAM) to cooperate in efforts aimed at improving Mongolian mining companies’ understanding of issues pertaining to mining financing and their access to outside capital sources. The parties will also work to facilitate efficient and transparent flows of information and knowledge in the country’s overall mineral sector. An inaugural investment seminar will be held in June in Ulaanbaatar, and several additional events and activities are expected to take place this year within the framework of the partnership. Mr. D. Batkhuyag, Chairman of MRAM, has said the partnership will foster the growth of domestic mining companies. Mr. Edward Rubin, CEO of Rodman & Renshaw, believes that the company’s

―dual expertise in servicing growth companies in Asia and mining reinforce our ability to fulfill the objectives of this partnership‖. Source: Rodman & Renshaw Capital Group, Inc.

WAGNER ASIA HOLDS TWO APPRENTICE TRAINING PROGRAMS Wagner Asia Equipment, the Caterpillar dealer for Mongolia, has begun two consecutive apprentice training programs with 30 students in each. The company has trained a total of about 150 students in six such programs in the past five years. Wagner partnered with the Mongolian Korean Technical College for the last two programs and this will continue in the upcoming two classes. Wagner Asia’s program is arguably the most successful example of vocational education in Mongolia today, as evidenced by the fact that all the graduates have found employment. Source: www.wagnerasia.com

MCS BREWERY CHOSEN 2009 RELIABLE TAXPAYER MCS Asia Pacific Brewery Co. was named ―2009 Reliable Taxpayer‖ by the National Taxation Office at a recent ceremony to mark the 11th Taxpayers’ Day. The honor was in recognition of the company’s prompt payment of all dues without protest in compliance with the law and of its substantial contribution to state and local budgets.

Source: Udriin Sonin

JUST GROUP CHIEF SAYS WORKERS BROUGHT HONOR TO COMPANY Expressing his happiness that Just Group has been named one of the best five enterprises of 2009, its General Director, Mr. Sh.Batkhuu, said this was recognition of the skills and commitment of the more than 3,300 people who work there. Every year the government and the Ministry of Finance prepare a list of the ―Top 100 Enterprises‖ after detailed evaluation of their performance according to several criteria. Mr. Batkhuu said the group is called Just because it wants to be fair in all its practices. The group, founded in 1999, had sales figures of MNT1 billion, which grew to MNT200 billion last year.

Source: Udriin Sonin

DON‟T JUST ACCEPT ROLE OF „VILLAIN‟, MINERS TOLD Speaking at a panel discussion on community relations in project development at the Canadian Institute of Mining, Metallurgy and Petroleum conference, journalist and commentator Rex Murphy said from references to mining in John Milton's Paradise Lost, to James Cameron's blockbuster film, Avatar, to real-life situations, mining is invariably cast as the villain of the piece. There is no question that the sector has got its hands dirty in all kinds of ways over many years, all over the world, Mr. Murphy conceded, but that does not mean that ―mining companies of today must put their tails between their legs and take responsibility for the ills of the world‖. Arguing that ―the idea that this industry somehow or other is the predetermined villain in every tale is self-contradictory,‖ Mr. Murphy stressed ―the absolute centrality and essence of what harvesting the resources of the earth does to advance the cause of human development, of relief from disease, of increasing the access to food, of accommodation, of lifting up societies to a reasonable standard of wealth‖. Mr. Murphy's statements followed earlier comments by Teck Resources CEO Don Lindsay, who said, ―Our products and services are essential to sustaining quality of life. The copper that we produce certainly drives the Internet, energy lights our homes and so on. If you look around you, and whether you are working for a mining company, working for the government, working for an NGO, everything that you use in your life comes from just one of two sources: if you can't grow it, you have to mine it. But the key is that you have to do it in as a sustainable fashion as we possibly can. We always have to have in mind to reduce our footprint to the smallest possible.‖ During the discussion, a key theme to emerge was the need for companies to talk to communities about their plans from the start, sometimes even before there are actual plans to discuss. Source: www.miningweekly.com

RIO DENIES PLANS TO SHELVE AUSTRALIAN PROJECTS Diversified giant Rio Tinto has denied media reports that it would shelve some of its Australian projects, following a review of mining taxes in the country. In an announcement to the Australian Stock Exchange, the company said that it had made no decision to put any projects on hold as a result of the 40% super profits tax on resources projects, which will be introduced in 2012. However, it was reviewing the potential impact of the tax changes on all its operations, as well as

its new projects in Australia. ―The feasibility study into the proposed 330-million tons a year expansion of Rio Tinto’s iron-ore operations in Western Australia, is continuing as previously advised,‖ the company said.

Source: www.miningweekly.com

ECONOMY INFLATION WORRIES LEAD CENTRAL BANK TO RAISE POLICY LOAN RATE BY 1% The Central Bank raised on Monday its policy loan interest rate from 10% to 11% with effect from May 12, to counter inflation which now stands at 11.4 percent as against 8.4 percent in January. The rising inflation has been attributed to the distribution of MNT70,000 to every citizen, to the massive loss of livestock that has raised the price of meat by 64 percent, and to the announcement that salaries would go up by 30 percent. Economists have been worrying that if the Central Bank does not act, inflation might reach 30-40 percent by the end of this year. The Bank raised its policy loan rate to 14 percent in the fourth quarter of 2008. Since May 2009 it brought this down three times bringing it to the present 10%. The reduced money supply may protect the economy from hyper inflation, but it is certain to hamper development of small and medium enterprises. Mr. B.Lkhagvajav, press representative of Mongol Bank, told media the decision aimed at reducing money supply to the market. Commercial banks will need to raise their interest rate by at least one percent, so there will be fewer loans. He said this was also a pre-emptive move as the announced salary rise and possible restoration of some welfare allowances might lead to further inflation. The Bank feels there will be no negative effect if allowances are paid to not more than one third of the population. He did not rule out another increase after watching how this decision affects the economy.

Source: Ardiin Erkh

GOVERNMENT APPROVES PROPOSALS TO RESTRUCTURE STOCK EXCHANGE The Government yesterday approved draft proposals on selecting a management team to restructure the operating procedures of the Mongolian Stock Exchange (MSE). They have been forwarded to the State Property Committee for beginning the tender process of selection. The bidders have to be a legal entity or a consortium of such entities. Members of the administrative team must have experience of working in the securities and capital market, especially in countries that have made the transition to a market economy in the recent past and that still do not have a comprehensive securities market environment in place. A bidder will have to submit a detailed 3-year business plan to cover four principal areas: Facilitating a sustainable securities market; facilitating efficient operation of the securities market; establishment of a fair market; and protecting investors’ interest. The State Property Committee has been asked to complete the competitive selection process within 3 months. There will be no dilution of state ownership, and the management team will run the MSE on the basis of an administrative contract. Source: www.gogo.mn

DEMOCRATIC PARTY FAVORS CUTS IN INFRASTRUCTURE TO PAY FOR CHILD ALLOWANCE Democratic Party MPs have decided to press for reinstatement of the child allowance in the proposed revised budget. Among their suggestions on how to get the money was using parts of the budget allocation for other projects. Some MPs proposed cuts in the construction sector, while some others targeted the Smokeless Ulaanbaatar program. Some also suggested that Minister of Road, Transportation, Construction and Urban Development Kh.Battulga be approached to spare some money from the MNT150 billion that has been budgeted for transportation. Mr. Ch.Saikhanbileg urged the party not to support the proposal now before the Standing Committee on Social Policy to pay the child allowance selectively. He said restricting payment only to the poor would violate children’s right to equal treatment. He also wondered if this was not a government ploy to increase poverty, as ―if only the poor were to be paid, all citizens would demand listing as poor‖. He also wanted to raise the allowance to MNT20,000, ―if the financial situation permitted‖.

Source: English.News.mn

CENTRAL BANK CHIEF‟S PLAN TO RAISE BANKS‟ CAPITAL

Central Bank President L. Purevdorj has often been criticized as an ad hoc firefighter without any long-term vision, but now he has come out with a bold program for raising funds in banks that demands close attention. Mr. Purevdorj’s Plan B, as it is being called, would be jointly implemented by the government and the Central Bank. He is confident he would be able to persuade the government to come on board if the Central Bank is with it, and hopes Parliament’s endorsement can also be easily gained. The first step of the program would be asking banks to increase their equity capital within 90 days. That will not be possible with funds available in Mongolia, so the banks that wish to remain in business would obviously seek foreign partners. Foreign investors have been eyeing an entry into Mongolia because of its mining future. This all seems logical and Mr. Purevdorj’s scheme may very well be successful. But who will these investors be? Chinese and South Koreans are already interested in our banking sector, are close to us, and would love to get a chance to fill the vacuum. In fact, the scheme seems designed for them, and not for foreigners in general. The whole program to restructure and recapitalize the banking sector will be overseen by an administrative committee to be set up jointly by the government and the Central Bank. It will have 3-5 members, apart from the President of the Central Bank and the Minister of Finance. The Prime Minister’s Office will possibly be offered a seat, but the Bank chief and the Minister will be calling the shots. The plan also sees the State Property Committee as holding the shares in banks that belong to the state.

Source: Udriin Sonin

PM URGES IMMEDIATE WORK ON DEVELOPING SECURITIES MARKET A working group set up by the Prime Minister has prepared a list of measures to be implemented to develop the securities market. The measures are aimed at improving the legal environment to put in place a medium-term plan for a securities market with centralized administration. Some of these will be implemented in 2011 and the rest in 2012, depending on the availability of budgetary support. The Prime Minister has now instructed Mr. Ch.Khurelbaatar to coordinate progress on implementation. Minister of Finance S.Bayartsogt has been asked to arrange for adequate allocation for the work in the 2011 budget.

Source: www.news.gogo.mn

PARLIAMENT SHOULD GIVE CLEAR DIRECTIONS ON MINING, OFFICIAL FEELS A senior official at the Ministry of Mineral Resources and Energy, Mr. B.Batkhuu, has said Parliament needs to give a clear direction on the extent and nature of State participation in mining, and on the status, quality, and exact nature of private-public partnership. The 2006 Minerals Law has laid down the general concept, but ―now we need to establish specifics so that foreign and local investors know exactly where they stand and what to expect‖, he said. Defending the now-to-be-repealed windfall profits tax, he said many other countries also impose taxes on high revenues, ―but our application of the principle was not very efficient‖. It brought revenue ―which allowed us to address some pressing issues such as providing electricity connection to all provinces and introducing a number of social welfare programs, but finally turned out to be a step backward for the mineral sector‖. He regretted that the ―irresponsible behavior‖ of a few companies taints the popular perception of the entire mining sector. People are also unhappy when proceeds from taxes are not utilized for the benefit of local development. The minerals sector has been making wide and rapid expansion in the last few years and deserves a research institution to serve its needs. Source: The Mongolian Mining Journal

MSE TAKES STEPS TO PROTECT INVESTORS Several new procedures have been incorporated in the rules of business of the Mongolian Stock Exchange to safeguard investors’ interest, according to Mr. E.Ganbat, Head of its Securities Department. At present, investors access their money only through brokers, but from this month, all payment will be directly made by the Securities Clearing House and Central Depository Company (SCHCDC) to investors’ bank accounts. Brokers with weak financial capacities have been temporarily divested of their authority to act as proxy. The risk fund of brokers is to be placed at SHCCDC, instead of with a bank. The fund will no longer be 100% in cash, and will include liquid stocks. Arrangements will also be made so that a bank gets the client to approve any proposed transaction before it is finally made.

Source: economy.news.mn

KHOVD PEOPLE WANT KHUSHUUT TO BE DESIGNATED A STRATEGIC DEPOSIT The people of Khovd province are urging the government to include the Khushuut coking coal mine in the list of strategically important deposits. A community movement told a press conference last week that the mine, operated by Hong Kong-listed Mongolia Energy Corporation since 2007, has been deliberately kept out of the list. They charge local authorities with fudging the figures for its total reserves, and also with violating a number of laws. The movement has sent an open letter to the authorities saying they would block the main road through the extracted coal is transported if their demand is not met. The government may claim a minimum of 34 percent of ownership in the project if the deposit is listed as strategically significant. The high grade Permian age coking coal mine is located 1,500 kilometer from Ulaanbaatar and 310 km from the Chinese border.

Source: MongolNews.mn

ROMANIA TO TIGHTEN BELT FOR IMF CREDIT Romania will have to enact sweeping austerity measures to avoid raising taxes and ensure delivery of the next installment of a USD25 billion International Monetary Fund standby credit, the country’s president has warned. Mr. Traian Basescu said Romania’s centrist government would slash public sector wages by 25 percent from June, while pensions and jobless benefits would fall by 15 percent. ―This plan was inevitable,‖ he said following talks with the IMF, European Union and World Bank representatives in Bucharest. ―The state sector is like a fat man of 200kg sitting on the back of a 50kg little man who is the real economy.‖ The IMF is now expected to delay payment of the next USD850 million loan tranche from June until July, in order to give Romania time to make the cuts. The IMF had earlier announced it would extend its visit to Bucharest by two days more, amid signs that negotiations were proving tense. Speculation had intensified in the days preceding the talks about how Romania was planning to meet this year’s budget deficit target, given its increasingly dismal growth prospects and political foot-dragging over reform. Read more… Bucharest had originally pledged to cut the budget deficit from 7.2 percent last year to 5.9 percent this year. But the IMF’s projection that the economy would grow by 1.3 percent this year has since been revised down to 0.8 percent. Local media reports suggest a new budget deficit target of around 6.8 percent is being negotiated. Mr. Mugur Isarescu, central bank governor, warned that the country could no longer afford to delay cuts. ―We are witnessing an extreme social and political resistance to the adjustment of public expenses and particularly of the civil servants’ payroll,‖ he said. Source: The Financial Times

GOLD REACHES RECORD Alarmed at the plunging value of their currency, Europeans are leading an exodus out of the euro and into gold. The burgeoning demand pushed gold for delivery this month up 1.6% on Tuesday to settle at an exchange-record USD1,219.90 on the Comex division of the New York Mercantile Exchange. The gains continued in electronic trading after the close, where gold reached USD1,233.50 an ounce. Source: The Wall Street Journal Asia

CHINA IMPORTS LESS COPPER IN APRIL China's April imports of copper slipped to 436,345 tons versus 456,240 tons in the previous month, data from the General Administration of Customs showed on Monday. Copper imports to China, the world's leading copper consumer, include anode, refined, alloy and semi-finished copper products. Source: Reuters.com

ZAMBIA REJECTS CALL TO REINTRODUCE HIGHER MINING TAXES Zambia has reiterated it will not reintroduce the controversial mining windfall tax it scrapped in 2009, despite pressure from opposition parties to do so. The introduction of a 25% windfall tax and other taxes when copper prices rose sharply in 2008 was backed by the World Bank to help Zambia raise funds required to build schools, roads and provide health and education services in the poor southern African country.

Mines Minister Maxwell Mwale said although countries like Australia had introduced a tax similar to windfall tax, Zambia would not do so, and he hoped investors leaving Australia would explore mining opportunities in Africa's top copper producer. "Those calling for the reintroduction of windfall tax do not know what it takes to run a government," Mr. Mwale said. "In 2008 when we imposed windfall tax we saw a decline in mineral exploration and we don't want that to happen, we need to attract investors." Zambia's main opposition leader has said the country is forfeiting revenue after the tax was scrapped and asked the government to ―listen to the cry of the people of Zambia and reintroduce the tax for the benefit of the country. We need the revenue to improve the lives of the Zambian people’," In 2008, Zambia introduced a 15% profit variable tax, 25% mineral windfall tax and raised corporate tax to 30 percent from 25% and mineral royalty to 3% from 0.6%, upsetting foreign mining firms. Copper mining is Zambia's economic mainstay and the mines are a major employer for many of its 12 million people. Source: www.miningweekly.com AUSTRALIAN GOVERNMENT MAY BUDGE ON MINE TAX Australia is willing to negotiate on the details of its "super profits" tax on mining firms, a government minister said on Tuesday, after complaints from miners that the tax could stop billions of dollars in investments. Prime Minister Kevin Rudd has so far resisted making concessions over the 40% levy on profits to help fund social programs that some miners have compared to a near-nationalization of the sector. "In every reform proposal, there's actually room for negotiation around the details," Resources Minister Martin Ferguson told Parliament. He added the tax, aimed at raising AUD12 million in its first two years, was better than the existing regime where mining companies pay royalties directly to the states they operate in. The nation's biggest miners have threatened to cancel expansion plans in everything from iron ore, copper and uranium mining to gas and gold unless the government rethinks its plan to introduce the tax in 2012. "Take the time, do the modeling and sit down with the tax consultation committee," Mr. Ferguson said. "Run the ruler over the new proposal, project by project." Mr. Rudd has so far labeled the actions by miners as scare-mongering, saying Australians deserved to benefit more from the global recovery in commodities markets powering the national economy. Read more… Earlier media reports said the government was looking at concessions on transitional arrangements and there was scope to move on the definition of a "super" profit which under the plan would be anything above the government 10-year bond yield, now at 5.5%. The super profit mark for the similar petroleum resource rent tax is at least five percentage points higher. Mr. Rudd, favored to win another term, played down talk he might water down his proposed tax, saying, "We want to make sure that by imposing a super tax on the resources of Australia's most profitable mining companies that the Australian people are getting their fair share of the resources that they themselves own." Rio Tinto said the tax could erode Australia's competitiveness, severely curtail investment, and limit jobs growth. "And just as importantly, altering the rules for existing multibillion dollar projects in midstream - after large amounts of capital have already been put at risk over many years - would be the worst possible message Australia could send to investors,", a senior official said. ―Other countries are more than willing to take advantage of Rudd’s blunder and entice business away from Australia.‖ Miners ramped up their fight against the tax with full-page newspaper ads, to be followed by a television campaign. "The minerals resources industry paid USD70.9 billion in taxes and royalties in the past decade. The resources sector pays Australia's highest tax rate. That's a fair share," the advertisement read.

Source: www.miningweekly.com

CHINA INFLATION RATE ACCELERATES Chinese inflation and housing prices continued to accelerate last month, underlining the difficult judgments the Chinese authorities face as they try to engineer a modest cooling in economic activity. Consumer price inflation increased to 2.8 percent in April from 2.4 percent the month before, its highest level in 18 months although still below the government’s target of 3 percent. Factory gate inflation jumped to 6.8 percent from 5.9 percent. Adding to the fears of overheating, house prices increased by 12.8 percent in April from a year

earlier, the fastest rate of increase since records began five years ago, although sales volumes in many cities have already slowed dramatically in recent weeks as a result of government policies aimed at discouraging property speculation. While the government has taken steps to slow the housing market, the authorities have so far avoided raising interest rates or appreciating the currency in order to tighten policy for the broader economy, preferring more modest tools such as lifting bank reserve requirements. Source: The Financial Times

CHINA‟S TRADE RETURNS TO SURPLUS China’s trade balance nudged back into surplus in April after recording a deficit in March. The relatively modest USD1.7 billion surplus will ease some of the pressure on Beijing to appreciate its currency. The trade surplus announced on Monday was down 87 percent from the same month last year and followed an unexpected deficit of USD7.2 billion in March, which was the first month in six years that imports had exceeded exports. Although the headline figure for exports showed a 30.5 percent increase compared with the same month last year, the tendency in recent months towards a much lower trade surplus could make it harder for other governments to argue that the Chinese currency is substantially undervalued. Moreover, some economists say that Chinese officials will want to observe the impact of the Greek crisis on the European economy, which is China’s biggest export market, before they agree to begin appreciating the currency, which has been pegged to the US dollar since mid-2008. In the past, Chinese leaders have said they want to be sure that external demand has recovered before shifting currency policy. Source: The Financial Times

CHINESE IPOs WILL TEST „DECOUPLING‟ China's top bankers and their regulators have to be hoping that the old "decoupling" thesis still has some legs. In coming months, Chinese banks are hoping to raise some USD74 billion in the stock market, according to data from Dealogic. That includes an initial public offering for Agricultural Bank of China Ltd. aimed at raising up to USD30 billion, an IPO for China Everbright Bank Co. expected to raise USD1 billion or more, and follow-on offerings for Bank of China Ltd. and Bank of Communications Ltd. Big debt issues are in the pipeline, too. Those are very ambitious numbers given the state of global capital markets. IPOs are falling like flies, even in Asia, which has hosted more and bigger offerings than anywhere in the world this year. The ability to push through fund-raising plans for China's banks may hinge on the belief that the country's economy is sufficiently isolated, or "decoupled", from the tumult buffeting euro-zone markets. Clearly, China's economic cycle has been far out of whack with that of Europe and the U.S. for close to 18 months now. Its recovery since 2008, fueled by more than half a trillion dollars in stimulus spending and a flood of easy credit, has been so rapid that China's biggest concern since last fall has been putting on the brakes. It has done that by repeatedly ratcheting up bank-reserve requirements and tightening rules on mortgage lending. Read more… It is possible market turmoil might delay some of China's stock offerings, but not others. And China's government has tricks up its sleeve that could make fund raising less dependent on the vagaries of overseas sentiment. But if things get worse in Europe, the decoupling thesis will be tested. Europe is the biggest market for Chinese exports, making up 20% of the total. A dropoff in trade finance from European banks writing down the value of their sovereign-bond holdings would worsen the impact. The rebound in Asia's growth makes it tempting to believe risk in global markets remains isolated to one region such as Europe. Some go further and argue that in the new world order, Asia's solid fundamentals make it a haven for the risk-averse. Unfortunately, last week's turmoil suggests the whole world remains a risky place. Source: The Wall Street Journal Asia

CHINA, INDIA DOUBT CLIMATE DEAL IS NEAR Top climate-change officials from China and India expressed pessimism at a Beijing conference over the weekend about reaching a binding global deal at a United Nations Climate Summit in Cancun, Mexico, at the end of the year. China hosted the high profile global-warming forum that brought together key negotiating blocs in the developing world, including fellow basic group members Brazil, South Africa and India.

Beijing is trying to strengthen its role as leader of the developing world in climate-change talks after accusations it sabotaged efforts to reach a binding deal at a U.N.-backed summit in Copenhagen last December. China's climate-change czar said at the conference that a binding pact on tackling global warming remains out of reach until several big issues are settled, including how to handle USD100 billion in funds for developing nations to rein in greenhouse gases over the next decade. Officials at the conference said a binding climate-change deal is more likely at a 2011 U.N. meeting in Cape Town, than in Cancun. Mr. Jairam Ramesh, India's minister for environment and forests, said the Cancun meeting could still yield "a series of building-block sub-agreements like forestry, like technology, like finance". Read more… The Beijing meeting didn't result in any conclusive statement, but aimed to provide a channel to promote larger climate-change talks. Analysts say Beijing also wanted to use the conference to send a strong signal to the nation's local governments that it is serious about reaching energy-efficiency targets. Such a signal is especially urgent after news that China's infrastructure and housing-led economic recovery increased the country's energy intensity 3.2% in the first quarter compared with a year earlier, reversing a steady decline in the amount of energy used to produce each dollar of gross domestic product. China, the world's largest emitter of greenhouse gases in absolute terms, has said it would cut energy intensity 20% by the end of this year, a goal that is closely tied to the country's pledge to reduce its carbon intensity—the amount of carbon emitted per dollar of GDP—by 40% to 45% by 2020. Source: The Wall Street Journal Asia

RED CHINA, GREEN CHINA The booming demand for everything from solar panels to energy-efficient light bulbs meant worldwide USD162 billion was spent in new clean-tech investments in 2009 alone. The United States, with its expertise, capital and entrepreneurial spirit, is well positioned to dominate what could easily be the biggest market of the 21st century, but the longer America drags its feet, the more it cedes this enormous potential source of national wealth to the only other country able to capture it — China. True, China has a long way to go before it can claim the mantle of global market leadership in clean technology. Unlike the USA, however, it has spent the last few years shaping its industrial policy to achieve precisely that goal. China’s determination to become the global leader in clean tech has little to do with concerns for the environment and everything to do with jobs. For the foreseeable future, the greatest challenge for Beijing is to ensure full employment and rising income levels. The rapidly growing clean-technology sector is one of the few that can provide a sufficient number of new jobs. This wouldn’t be the first time China has taken economic advantage of opportunities resulting from climate change. The Kyoto Protocol, which caps greenhouse-gas emissions in Europe and Japan up to 2012, includes market-based mechanisms to promote the reduction of emissions at the lowest cost. The largest of these is the Clean Development Mechanism, which allows developing countries like China to generate credits from cuts in their greenhouse-gas emissions that are then sold to developed countries. Read more… Beijing was initially slow to establish the domestic regulatory structures and develop the expertise needed to compete in this new market. In a 2004 analysis, the World Bank determined that China accounted for a mere 5 percent of clean-development projects globally. But by 2008, the most recent year for which annual data is available, the bank reported that China’s market share had climbed to an astounding 84 percent. Beijing is about to do the same with clean technology. In 2009, its investment in clean energy reached nearly USD35 billion, almost double America’s USD19 billion, primarily due to domestic policies that promote the use of renewable energy. And the strategy is working. In 1999 China made 1 percent of the world’s solar panels; by 2008 it was the world’s leading producer, with a 32 percent market share, and its solar-panel exports were valued at USD15 billion. To put that in perspective, in 2009 America’s No. 1 export product by far was civilian aircraft, with exports of USD35 billion. China is busy turning the global challenge of climate change into a national opportunity, but it needs another decade to advance its technology to the point where superior manufacturing and

lower costs will secure its dominance of the clean-tech sector. By giving China more time to develop its capacity while neglecting our own, America is not just losing the clean-tech race, it’s forfeiting it.

Source: The New York Times

RECORD AMOUNTS POUR INTO EMERGING MARKETS‟ BONDS Even as investors flee the sovereign debt of developed countries, they are pouring record amounts into the bonds of emerging-market economies. In part it is an effort to increase investment returns, but it is also a calculated bet these countries' economies will remain stronger. The flood of money into emerging markets has been pushing prices up—and yields down—on even some of the riskiest developing countries' debt. Some say some yields have gotten to questionable levels. In the past, emerging markets have suffered worse than developed markets during financial crises. But that dynamic is changing. An analyst at Western Asset Management feels emerging-market debt ―is not immune to a global crisis", but, thanks to their stronger fundamental outlooks, "they should perform much better than historically has been the case‖. Money heading to emerging-market-bond funds has already hit an annual record at USD24 billion and is on track to top USD40 billion this year. Part of the reason for the seeming frothiness in the market is that there just isn't enough debt being issued relative to how much money is flowing in. Total sovereign issuance is only likely to total USD69 billion this year. When the proceeds of maturing debt are factored in, net issuance is likely to be just USD13 billion, J.P. Morgan estimates. "Emerging-market financing needs are very modest," it says. Investors also have been lured by rising credit quality. In 2004, the average rating on countries in J.P. Morgan's emerging-markets diversified global bond index was below investment grade, at "Ba2" on the scale from Moody's Investors Service. This year, it moved into investment-grade territory. Fund managers say there are signs that, against this backdrop, investors are becoming less discriminating in their buying. Source: The Wall Street Journal Asia

SHALE GAS: THE ENERGY REVOLUTION BREWING RIGHT UNDER OUR FEET Over the past decade, a wave of drilling around the world has uncovered giant supplies of natural gas in shale rock. By some estimates, there's 1,000 trillion cubic feet recoverable in North America alone—enough to supply the nation's natural-gas needs for the next 45 years. Europe may have nearly 200 trillion cubic feet of its own. We've always known the potential of shale; we just didn't have the technology to get to it at a low enough cost. Now new techniques have driven down the price tag—and set the stage for shale gas to become what will be the game-changing resource of the decade. Shale gas will revolutionize the industry—and change the world—in the coming decades. It will prevent the rise of any new cartels. It will alter geopolitics. And it will slow the transition to renewable energy. Even before the shale discoveries, natural gas was destined to play a big role in our future. As environmental concerns have grown, nations have leaned more heavily on the fuel, which gives off just half the carbon dioxide of coal. But the rise of gas power seemed likely to doom the world's consumers to a repeat of OPEC, with gas producers like Russia, Iran and Venezuela coming together in a cartel and dictating terms to the rest of the world. The advent of abundant, low-cost gas will throw all that out the window—so long as the recent drilling catastrophe doesn't curtail offshore oil and gas activity and push up the price of oil and eventually other forms of energy. Not only will the shale discoveries prevent a cartel from forming, but the petro-states will lose lots of the muscle they now have in world affairs, as customers over time cut them loose and turn to cheap fuel produced closer to home. Read more… The shale boom also is likely to upend the economics of renewable energy. It may be a lot harder to persuade people to adopt green power that needs heavy subsidies when there's a cheap, plentiful fuel out there that's a lot cleaner than coal, even if gas isn't as politically popular as wind or solar. But that's not the end of the story: I also believe this offers a tremendous new longer-term opportunity for alternative fuels. Since there's no longer an urgent need to make them competitive immediately through subsidies, since we can use natural gas now, we can pour that money into R&D—so renewables will be ready to compete without lots of help when shale supplies run low, decades from now. Source: The Wall Street Journal Asia

POLITICS

CHINA STUDYING FREE TRADE PACT WITH MONGOLIA China has initiated feasibility studies for a free trade agreement (FTA) with Mongolia to further strengthen bilateral trade ties between the two nations, a top official from the Ministry of Commerce in Beijing said on Tuesday. "We're still in very initial stages of discussions," said Mr. Zhou Changting, counselor of the Asian affairs department under the Commerce Ministry, adding that the plan was proposed to cement trade ties between the two nations, especially in the mining sector. According to figures from the ministry, bilateral trade between the two countries reached USD2.4 billion in 2009, 50 times higher than 1991 and accounted for 47.4 percent of Mongolia's total foreign trade. China has been the largest trade partner of the country for 11 consecutive years. Mongolia has some of Asia's richest deposits of 80 minerals including coal, copper, iron ore and zinc, but most remain largely unexploited due to the undeveloped economy. China, which is the main importer of mineral products from Mongolia, has speeded up its cooperation with Mongolia in the natural resources sector given the huge domestic demand. According to Mr. Zhou, Chinese companies' investment scale in the neighboring country, especially in mining and oil exploration, has grown rapidly in recent years. The total capital invested by Chinese companies last year in Mongolia was 7.9 times higher than a year earlier and stood at USD120 million spread over 4,000 projects. "We're actively seeking equity investment in Mongolian companies for minerals like iron ore, zinc and lead," said an investment manager at Western Mining, China's seventh-largest copper miner. Read more… "The proposed China-Mongolia FTA will benefit both countries by facilitating more cross-border trade and easing increasing trade frictions when more Chinese enterprises enter the country for business opportunities," said Mr. Huang Ying, an associate researcher at China Institute of Contemporary International Relations. Mongolia is reliant on China's light industry exports, and hopes to optimize its infrastructure construction through Chinese investments in the country, he said. Mr. Zhou said the two countries will diversify their cooperation to sectors like telecommunications, environment protection and high-tech. Over 5,000 foreign firms from more than 20 countries have currently invested in Mongolia's mining industry so far, according to the Mongolia National Mining Association. Source: China Daily

OFFICIALS BLAME IGNORANCE FOR FAILURE TO DECLARE CORRECT INCOME All 13 high officials questioned about submitting incorrect or incomplete information in their declaration of income and assets to the Anti-Corruption Agency (ACA) told an open hearing on May 13 they had not withheld any information deliberately. The mistakes, they said, had occurred as they did not clearly understand what they had to do. They criticized the ACA for not giving clearer guidelines. The 13 included the Governor of Bayangol district, Mrs. L.Amgalan, the Governor of Dornod province, Mr. Ts.Janlav, the head of MIAT, Mr. R.Bat-Erdene, the head of administration at the National Security Council, Mr. B.Khurts, the head of the City Customs, Mrs. S.Tsetsgee, and the head of the City Inspection Office, Mr. D.Tumurbaatar. The open hearing, organized by the Standing Committee on Justice, was the brainchild of three of its members, Mr. Kh.Temuujin (DP), Mr. J.Sukhbaatar (MPRP) and Mr. J.Enkhbayar (MPRP). Notices to attend the hearing had been sent to, besides those named above, former Prime Minister S.Bayar, Minister of Mineral Resources and Energy D.Zorigt, Chairman of the State Property Committee B.Sugar, and Chairman of the Mineral Authority B.Erdenebileg. It was explained that Mr. Sugar and Mr. Zorigt would be questioned on why they had taken no action against Mr. Bat-Erdene and Mr. Erdenebileg respectively for violation of the law. It is not clear why the committee summoned Mr. Bayar. In any case, he is abroad for medical treatment, and it was said Mr. Ch.Khurelbaatar, head of the Government Office, would represent him. The committee collected from the ACA the names of all who had submitted false statements or no statement at all. The penalty for incorrect declaration by a public official is dismissal from service. According to Mr. J.Batsaikhan of the ACA, 53,016 officials submitted the mandatory declaration for 2009. The statements of 255 were scrutinized. The total number of those whose statements were found unacceptable and those who did not submit any declaration by the stipulated date was 42. Source: English.News.mn

MONGOLIA GIVES CHINA USD50,000 AS EARTHQUAKE RELIEF AID

Mongolia has given China USD50,000 to assist in the relief work in the aftermath of the earthquake which hit Qinhai province in April. Handing over a check to Ambassador Yu Hongyao, Deputy Premier M.Enkhbold recalled China’s aid to Mongolia to overcome difficulties brought about by the dzud, and said, "Our countries have always rendered assistance to each other in difficult times."

Source: Montsame

MAJORITY IN SANT MARAL SURVEY SAYS UNEMPLOYMENT IS THE MAIN PROBLEM The majority of respondents in a survey carried out by Sant Maral Foundation in April said unemployment is the main problem in Mongolia today. While 38.6 percent held this view, 21.1 percent said the standard of living is the main problem, while 8 percent believe inflation is the key issue. The representative sample of 1,200 respondents from Ulaanbaatar and from Dornogobi, Dundgobi, Zavkhan, Khentii and Arkhangai aimags was collected from April 16 to April 23. The survey is sponsored by the Konrad Adenauer Foundation of Germany. Asked about the present economic situation in the country, 42.8 percent of the respondents said it was "bad", 36.3 percent "not good, nor bad", 3.8 percent answered "good" and 6 percent said "very good". While 29.5 percent consider the economic situation to be ―in decline‖, 47.5 percent said it is ―in stagnation‖, while 14.3 percent said it is ―improving‖. In five years, the economic situation will be ―slightly better‖, said 40.2 percent, ―much better‖ according to 4.4 percent and 20.2 percent thought it will remain ―the same‖. To the question "How satisfied are you with democracy and the present political system?", 18.8 percent said they are ―satisfied‖, 39.4 percent ―rather satisfied‖, 22.2 percent ―rather not satisfied‖ and 16.7 percent were ―not satisfied‖. Replying to a question on which party they would you vote for if parliament elections were held tomorrow, 35.1 percent favored the MPRP, 39.5 percent the DP, 4.5 percent the Civil Will Party and 5 percent the New National Party. Asked to choose a country as the best partner for Mongolia, 75.7 percent favored Russia, 18.8 percent China, 27.4 percent the USA, 10.6 percent the European Union, 15.8 percent Japan, and 11.4 percent South Korea. Source: Montsame For the complete Sant Maral Foundation April 2010 survey, see BCM website–Resources, Mongolia Reports. PRESIDENT‟S VISIT TO USA POSTPONED President Elbegdorj’s visit to the U.S. in mid-May has been postponed because of scheduling difficulties at the White House. There are no policy reasons for the postponement, which was caused simply by complications in President Obama’s schedule. Source: Business-mongolia.com

FORMER KAZAKH NUCLEAR CHIEF GIVEN LONG JAIL TERM A closed court in Kazakhstan has handed a harsh sentence of 14 years in a maximum security prison to Mr. Mukhtar Dzhakishev, the former president of Kazatomprom, the national atomic power company, for stealing uranium assets. The case, handled by the secret police, has upset investor confidence in Kazakhstan where foreign mining companies are jostling for access to vast uranium resources. In a video leaked to the Internet last year, Mr. Dzhakishev linked his arrest to a struggle between Russia and Kazakhstan for uranium assets and global nuclear fuel markets. He said he had opposed a move by Rosatom, Russia’s state nuclear power company, to buy a share in Uranium One, a Canadian-listed mining company, which has uranium assets in Kazakhstan. Mr. Dzhakishev was arrested last May and accused of embezzling state shares in uranium mines in collusion with Mr. Mukhtar Ablyazov, the former chairman of BTA, one of Kazakhstan’s top banks. Kazakh law enforcers later added new charges, including money-laundering and bribe-taking. Mr. Dzhakishev pleaded not guilty to all the accusations. Under Mr. Dzhakishev’s leadership, Kazatomprom was transformed from a bankrupt Soviet mining behemoth into a global nuclear power company with partners in North America, Europe, Japan, China and Russia. Kazakhstan overtook Canada and Australia to become the world’s biggest uranium producer last year and is poised to gain strategic importance as a source of nuclear fuel as global interest in atomic energy revives. Source: The Financial Times

ELBEGDORJ RECEIVES GREEN DELEGATES TO TAIPEI CONFERENCE

President Ts.Elbegdorj last week received three leaders of the Green movement of Mongolia on their return from the recent second conference of Green networks in the Asia-Pacific region in Taipei, attended by some 150 organizations from the region and the European Union. Its main purpose was to discuss issues of environmental protection, ecological crisis, restoration of nature and resource allocation. The Mongolian delegates talked about the dangers of uncontrolled mining and the ―yellow plague of gold mining‖, and detailed the damage being caused to the population and the environment by practices such as indiscriminate use of chemicals, inadequate environmental restoration and artisanal mining. The Chinese representatives refused to sign a joint appeal by all participants to the President and the Speaker of the Mongolian Parliament demanding immediate humanitarian assistance to the people of Khongor soum, an end to artisanal gold mining, and joining the international convention against environmental crimes. The final document prepared at the conference had a special reference to the situation in Mongolia.

Source: Montsame, English.News.mn

GROUP FINDS AIR POLLUTION HAS INCREASED BY 28% A working group led by MP D.Terbishdagva has found during its evaluation of the impact of programs aimed at reducing air pollution that only MNT8.2 billion was spent on them last year, despite a Parliamentary resolution in 2007 allocating MNT50 billion annually from the State budget. It also found that the pollution level, far from going down, has actually increased by 28%. The group has recommended more coordination among the organizations responsible for the work and has also called for more accountability.

Source: Onoodor

ELBEGDORJ INVITED TO MOSCOW PARADE President Ts.Elbegdorj was among the world leaders invited to watch Sunday’s parade in Moscow on the 65th anniversary of victory in World War II. After the parade he joined them in laying flowers at the Monument for the Anonymous Soldier. Minister of Defense L.Bold, and Mongolian Ambassador to Russia D.Idevkhten were with him. The Mongolian team returned on Monday.

Source: Ardiin Erkh

TAVAN TOLGOI VILLAGERS DEMAND 1,000 HECTARES OF COAL AREA Residents of Tavan Tolgoi village in Tsogttsetsii district of Umnugovi province has written to the Prime Minister demanding that at least 1,000 hectares of coal mines should be set aside for their use. The area from which they took coal has come down to just 169 hectares and the resources are likely to get exhausted in 3-4 years, thus seriously threatening their survival. The government owns 68,532 hectares of coal area there.

Source: Zuunii Medee PRESIDENT DISCUSSES LEGAL REFORMS WITH U.S. TEAM President Ts.Elbegdorj last week received Mr. Joe Spurlock, a Texas judge, and Mr. Frank Hoffman and Mr. Paul Belew, both lawyers at a private firm and discussed judicial reforms in Mongolia. The U.S. team has been invited to Mongolia by Mr. D.Dorligjav, head of the Presidential Office, and has met with members of the working group which has drawn up several draft amendments to present laws in the judicial sector.

Source: Montsame

DALAI LAMA WRITES TO ELBEGDORJ SUPPORTING MOVE ON DEATH SENTENCE President Ts.Elbegdorj has received a letter from the Dalai Lama expressing his happiness that a moratorium on the death sentence has been declared in Mongolia. The letter from the spiritual leader said he had for many years been writing to world leaders to stop the practice and hoped the Mongolian Parliament will follow the President’s lead and permanently revoke the provision. The Dalai Lama refers to Mongolia’s Buddhist tradition which will help its people ―to better appreciate your efforts not to harm human life‖ and says, ―As time goes by, the spirit of compassion will spread among humankind and lead society to real progress.‖

Source: Udriin Sonin

NEW MONGOLIAN REGULATION

The following amendments were published in a recent weekly Government bulletin. Unless otherwise decided by Parliament, it will take effect (10) days after publication.

Date Law

12.05.2010 Amendments to Law on Family

Please visit BCM’s website, Legislative Working Group, for a summary of new Mongolian laws. BCM members who wish complete versions of the laws and regulations in Mongolian language are welcome to call or email the BCM office: 332345 or info@bcmongolia.org.

ANNOUNCEMENTS

“BSPOT" on B-TV

BTV (Business TV) now telecasts a 10-minute English-language news program called BSPOT every evening from Monday to Friday at 21:30, taking most of the stories from the BCM NewsWire.

____________________________________

“MM TODAY” on MNB-TV 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 for 21:15 tonight. Tune in to watch this program that reports stories from today’s BCM NewsWire

SPONSORS

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]

April 30, 2010 *8.3% [source: NSOM]

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

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]

CURRENCY RATES – May 13, 2010

Currency name Currency Rate

US dollars USD 1,384.21

Euro EUR 1,753.45

Japanese yen JPY 14.88

British pound GBP 2,073.27

Hong Kong dollar HKD 177.89

Chinese yuan CNY 202.72

Russian ruble RUB 45.97

South Korean won KRW 1.21

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.