BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 351 – November 14, 2014

NEWS HIGHLIGHTS:

Business

Turquoise Hill outlines conditions for OT agreement;

Oyu Tolgoi announces 9 percent sales increase for Q3;

Rio hopeful Mongolia premier change will unblock OT;

Deutsche Bank upbeat about Rio breaking logjam on OT;

Turquoise Hill surges after DP taps Amarjargal for PM;

No details on Oyu Tolgoi tax issues, says tax head;

Rio jobs go in Mongolian mining shake-up for Turquoise Hill;

SouthGobi Resources announces Q3 results;

Khan Bank introduces ISO 27001:2013 standard;

XacBank upgrades banking system;

ADB finances 'Glass Account' initiative;

American University of Mongolia to open branch in Umnugobi;

Emzeg Steppe brings luxury cashmere from Mongolia to U.S. mall;

SouthGobi Resources announces board changes;

Mongolia Holdings appoints U.S. firm as new auditor;

Gal Undesten threatens legal suit against COGEGOBI;

Rio Tinto CEO defends iron-ore supply expansion.

Economy

Mongol Bank: 1-week bills, treasury bills;

S&P: Premier's removal has no material impact on sovereign rating;

Moody's: Political upheaval leaves policy-making in a lurch from credit outlook;

Moody's: Growing debt and weak external liquidity constrain credit profile;

State budget debate leaves Parliament desperate to find MNT 40bn;

8% mortgage program amended to allow for purchasing larger homes;

Mongolia, U.N. extend Food Security program;

Crime rate increases;

Mongolia's dairy sector offers opportunity;

Mongolia leads former USSR republics in 2014 Prosperity Index;

New auto market delayed by financing challenges;

Commodity traders: what they really mean;

Xi Jinping: China’s economic risks ‘not that scary’;

China to establish $40bn Silk Road infrastructure fund;

Putin snubs Europe with Siberian gas deal that bolsters China ties;

Frantic taxers – EDITORIAL;

Turning coal into gold – EDITORIAL.

Politics

Democrats nominate Amarjargal for premier;

Parliament approves guidelines for monetary policy;

China supports Mongolia’s joining APEC;

Visa-free travels between Mongolia, Russia launched;

Mongolia and Czech agree on cooperation in social welfare;

Kuwaiti ambassador discusses economic cooperation with Mongolian official;

Mongolia agrees to conservation efforts for great bustard;

India's dud MoUs with Mongolia and others under lens;

Police investigate Civil Aviation Authority for fraud;

UB City Council reps also being held to ‘Double Deel’ standard;

Recalled black-market fossils remain outside of exhibition places;

Kyushu Basho 2014: A tale of two Mongolians;

Chill lingers as China, Japan leaders meet.

Others

Announcements;

BCM Updates - Working Groups; Websites; Social Networks; Photo Gallery.

ECONOMIC INDICATORS

Weekly Market Indicators from MIBG;

Inflation;

Central bank Policy Rate;

Currency Rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank

International SOS

Wagner Asia Automotive

Invest Mongolia Agency

BCM MONTHLY MEETING SUMMARY, MEMBERSHIP RENEWAL DINNER

The BCM meeting on 10 November was held in the Crystal conference room in Blue Sky Tower and

Hotel with Bayanjargal Byambasaikhan in the chair. In attendance were 200 members and invited

guests—an all-time record turnout—to celebrate BCM's 7th anniversary and Membership Renewal

Dinner.

BCM currently has 269 members. The five newest members are:

1. Corsec is a member of QMC Group and is a privately-held small business that provides a range of

corporate governance, listing and business support services to a diversified national and foreign

client base.

2. Founded in 1912, Dale Carnegie Training has evolved from one man's belief in the power of self-

improvement to a performance-based training company with offices worldwide.

3. Groundwater Management Solutions (GWMS) provides specialist water supply and water

management consultancy services to partners and pride itself on delivering practical, cost effective

and high quality solutions.

4. Tenger Insurance was established by investment from TenGer Financial Group LLC and Petrovis

Company in 2001. It has operated in the Mongolian insurance industry for over a decade,

recommending complex risk solution to clients.

5. XacLeasing was founded in 2007 as a wholly-owned subsidiary of TenGer Financial Group with the

aim of developing the leasing sector in Mongolia.

Matthew Pottle, managing partner of PricewaterhouseCoopers (PWC) in Mongolia, kicked off the

evening presentations with a summary of the “PwC Global CEO Survey.” This year 40 of Mongolia's

chief executive officers (CEOs) responded compared with 30 last year, to which Pottle credited

BCM's assistance.

“Historically, Mongolian CEOs have been much more optimistic about their own economy compared

with the global economy,” said Pottle. But this year saw respondents distinguish less between the

two. They were also less hopeful for 2015 than their international counterparts,” he said. “CEOs

globally are much more optimistic than Mongolian. I don't have an answer, but I suspect it has to do

with cooling down with the Chinese economy.

Only 10 percent of respondents replied they were “very confident” about growth compared with 40

percent of their global counterparts, or 60 percent for Mongolia's CEO's in 2012. Mongolia's CEOs are

hoping to find growth by expanding into new markets, forming new alliances and introducing new

products, said Pottle.

The full report will become available on 30 November.

Japanese Ambassador Takenori Shimizu gave the second speech of the evening, presenting on

Japan-Mongolia relations, as well as the whirlwind political situation Mongolia stands at today

following the ousting of former Prime Minister Norov Altankhuyag.

“Mongolian politics now faces the most difficult but very interesting time since the democratic

government was established in 2012. Political instability is not good for an economy, so I simply

hope that a new government will be established as soon as possible so that we can continue

cooperation.”

Shimizu reminded guests of the multiple diplomatic meetings held between Japanese Prime

Minister Shinzo Abe and President Tsakhia Elbegdorj, and how much closer they've brought

relations. Together, he said, they are working to promote democracy, economic benefits and

resolve disagreements through peaceful means, he said. “Building this kind of relationship between

country leaders sometimes play an important role in promoting bilateral relations.”

Trade has grown only modestly, he said, although the economic partnership agreement (EPA) that

they've been negotiating for the last two years could expand it greatly. Mongolia and Japan have

agreed on the principles, including the removal of duties on 96 percent of Japanese imports to

Mongolia and 100 percent of Mongolian export goods to Japan. Such agreements have been a

tremendous boost for other Asia nations, including Vietnam and Indonesia, which saw trade growth

1.6 times and 4 times, respectively.

U.S. Ambassador Piper Campbell followed Shimizu with a similar speech on U.S.-Mongolian

relationship: “Rather than a U.S. version of Shimizu's presentation, I'd like to complement that

presentation with recall of another conversation 10 days ago when asking the question of what kind

of trade do Mongolians want,” she said, adding “ I sometimes feel I get mixed answers to that

question.”

The United States has its own path open for an EPA that begins with a Transparency Agreement,

said Campbell. Although the transparency deal is on Parliament's agenda, it has fallen to the

wayside because of the government restructuring and ousting of the prime minister. It's also

become controversial because of the misconception that it would provide business with the means

to have ultimate control over political matters, rather than just grant access to politicians to

provide input. “It does not obligate Mongolian Parliament to vote in a different way, or decide in a

different way,” she said.

“It does suggest more information. The more points of view you gather, the better informed they

will be when decisions will be made.”

Guests were next invited into the Diamond reception hall for a four-course meal and a series of

performances. The master of ceremonies for the evening was Mr. Mergen Chuluun, who introduced

a ballet duo and then musical performances by Clifton Hurt and national philharmonic orchestra

singer Khulan. Artistic performances and music proceeded throughout the evening. Highlights

included an Arts Council of Mongolia performance comprised of a fushion of costumes and sculpture

which was preceded by 6 lively cabaret dancers.

BCM also presented awards to its most outstanding member entities and working group for 2014.

Asia Pacific Investment Partners and Tavan Bogd Group received the “Best Company of 2014”

awards, while James Liotta and B. Bayar accepted awards as co-chairs of the Legislative Working

Group for the “Best Working Group of 2014.”

BUSINESS

TURQUOISE HILL OUTLINES CONDITIONS FOR OT AGREEMENT

Turquoise Hill Resources Ltd., the Rio Tinto PLC-controlled operator and developer of Mongolia's

flagship copper and gold mine Oyu Tolgoi, has outlined four major conditions to be met by local

authorities for further developments in the negotiations for the mine's planned underground

expansion to "commence," the company said in its quarterly report released on 11 November.

The company called for a "successful resolution" of the pending tax dispute with the country's

General Taxation Authority; an agreement on a comprehensive funding plan, including project

finance; approval of the Oyu Tolgoi's underground feasibility study by all shareholders and

acceptance by the Mongolian Minerals Council; and issuance of all the necessary permits for the

mine's operations development.

The Mongolian Tax Authority launched a tax review into Oyu Tolgoi operations earlier this year.

That brought to light unpaid taxes, penalties and disallowed entitlements worth some USD 127

million. The amount, notified to the company in June 2014, was reduced to USD 30 million in

September 2014. "There are aspects of the ruling that require 'further clarification'," the company

said in the report, adding that it is appealing against the tax authority's ruling to a local

administrative court.

With regard to the project's funding plan, a pool of international financial institutions and

commercial banks had already committed to providing financing for the project, although the offer

officially expired on 30 September. "The lending group continues to be supportive of Oyu Tolgoi's

project finance and current indications are that a suitable project finance package would be

available upon resolution of the shareholders matters; however this is not guaranteed," the

company report reads. The negotiations risk new delays as the country headed for a political crisis

following the resignation of Prime Minister Norov Altankhuyag on 5 November amid concerns over

the country's weakening economy and mounting opposition from within his Democratic Party (DP).

Parliament has 30 days to find a replacement, who will be in charge of forming a new government.

"Last week's resignation of the Mongolian prime minister, an announcement that a new cabinet

would be formed will likely impact the timing of those discussions," CEO Priestly said.

"We are not in a position to make any predictions or comment on the political environment. We are

monitoring the situation and we have to wait and see how the political process unfolds. We stand

ready and are willing to work with the new leadership when in place and continue our

engagement."

Source: BNE

OYU TOLGOI ANNOUNCES 9 PERCENT SALES INCREASE FOR Q3

Oyu Tolgoi LLC on 11 November, through its parent company Turquoise Hill Resources Ltd.,

reported that concentrate sales were up 9 percent from the second quarter.

Net revenue was USD 466.1 million on sales of approximately 220,300 tons of copper-gold

concentrate. By metals in concentrates: there was approximately 53,600 tons of copper for USD

302.6 million, approximately 144,000 ounces of gold for USD 158.5 million and approximately

323,000 ounces of silver for USD 5 million. The cost of sales was USD 380 million. Sales exceeded

production, resulting in a planned inventory drawdown for the quarter.

“The third quarter’s results show once again the steady progress we are making in safely optimizing

production and ramping up sales from the open-pit mine,” said Oyu Tolgoi Chief Financial Officer

Steve Duggan

Oyu Tolgoi paid USD 25.5 million in royalties to the government. As the open pit deepens into the

high-grade zone in the fourth quarter of this year and the first quarter of 2015, copper and gold

head grades are expected to increase. The mine is expected to produce between 135,000 to

150,000 tons of copper and 550,000 to 600,000 ounces of gold in concentrates for 2014.

Source: Oyu Tolgoi LLC

RIO HOPEFUL MONGOLIA PREMIER CHANGE WILL UNBLOCK OT

Rio Tinto Group sees a change of leadership in Mongolia as potentially positive for the stalled USD

5.4 billion expansion of the Oyu Tolgoi project, while leaving open the prospect for another write-

down at the mine.

The ouster of former Prime Minister Altankhuyag Norov last week comes as London-based Rio and

Mongolia’s government continue negotiations on disputes around taxes and costs that have held up

progress for more than 18 months on an underground extension to the copper and gold mine.

“I’m hoping it will be a positive sign,” Chief Executive Officer Sam Walsh said 11 November in

Beijing, in an interview with Bloomberg Television, at the Asia-Pacific Economic Cooperation

forum. “Certainly there are a lot of things that are indicating that people want the project to

proceed.”

Commitments from lenders for USD 4.2 billion needed to help fund the development expired after a

30 September deadline to reach an agreement was missed, Rio-controlled unit Turquoise Hill

Resources Ltd. said last month in a statement. The company wrote down the value of the mine by

USD 4.7 billion in March. Rio may need to consider a write-down of the mine if delays to the

expansion continue, according to CLSA Asia-Pacific Markets. The project had a book value of USD

4.96 billion at the end of June, Rio said in an August filing.

“Time will tell with that and standing here today, and not actually understanding how quickly we

may move to getting the project approved, that’s not possible for me to say,” Walsh said on the

prospects of impairment.

Mongolia’s ruling Democratic Party is seeking a permanent replacement for Altankhuyag. Rio Tinto

is continuing negotiations with officials within the government, Walsh said. “I’m willing to be

patiently impatient as we wait for the approval,” he said. “I’d love to get things going, but I

understand their need to get things right and we will wait.” The savings measure “give us the

opportunity to continue our growth, it will also give us the opportunity to materially increase our

returns to shareholders,” Walsh said in the interview.

Source: BusinessWeek

DEUTSCHE BANK UPBEAT ABOUT RIO BREAKING LOGJAM ON OT

Deutsche Bank is confident the dispute between Rio Tinto PLC and the Mongolian government over

the company’s Oyu Tolgoi copper and gold project could be resolved as early as next quarter.

“While the political delays have been disappointing, the time has been spent upgrading the

underground mine plan including the addition of a decline which will increase the potential mine

output and increase the project options,” Deutsche Bank said in a 12 November research note. It

adds: “Meetings with a number of government representatives also lead us to believe that the

dispute resolution could occur within the next quarter and lead to additional value for all

stakeholders.”

Rio is also making changes to the existing operation to cut USD 200 million from its costs to around

USD 1 billion, a move Deutsche said it believes seems achievable. With the delays, first ore is now

expected to be delivered from Oyu Tolgoi’s underground operation in 2019. However the

government still needs to sign off on the mine’s feasibility study before mining can be restarted.

“While it is disappointing that the underground development is still not progressing, the time spent

in negotiation with Government has been put to good use with a number of changes made to the

site development plan,” Deutsche said, adding, “We think all approvals will be received by the end

of 1Q15.”

The bank has also increased its valuation of Rio’s 33.5% stake in the project from USD 5.8 billion to

USD 6.8 billion. The bank’s total valuation of USD 11.9 billion remains well above the independent

valuation of USD 7.4 billion. Deutsche’s increased valuation was the result of its assumption the

mine will expand from 100,000 tons to 200,000 tons per day, its long run copper price is higher at

USD 3.22 a pound than listed Canadian company Turquoise Hill’s forecast of USD 3.08 a pound, and

that the inclusion of a second lift and lower capex will boost revenues and productivity. The bank

expects Oyu Tolgoi to make up between USD 1 billion to USD 1.2 billion a year or between 5 to 7

percent of Rio’s earnings over the next decade.

Source: Business Insider

TURQUOISE HILL SURGES AFTER DP TAPS AMARJARGAL FOR PM

Shares in Turquoise Hill Resources Ltd. gained sharply for a second day in a row after reports that

Mongolian politicians were moving quickly to end a political crisis following the ouster of Prime

Minister Altankhuyag Norov last week.

Vancouver-based Turquoise Hill gained 5.6 percent in massive volumes on Wednesday moving back

into positive territory for the year following news that Mongolia's Democratic Party caucus had

tapped Renchinnyam Amarjargal to become the new Prime Minister. Amarjagal is a former PM who

served from 1999 to 2000, a respected economist and is seen as something of a pragmatist within

Mongolia's sometimes shambolic political environment.

Turquoise Hill, worth USD 6.9 billion on the New York Stock Exchange, is controlled by world

number two miner Rio Tinto and owns 66 percent of the massive project in the Gobi Desert and the

Mongolian government the rest. Turquoise and Mongolia have been at loggerheads over funding for

the more than USD 5 billion underground expansion—where 80 percent of the resource is located—

for over a year.

Source: Mining.com

NO DETAILS ON OYU TOLGOI TAX ISSUES, SAYS TAX HEAD

Mongolia is still resolving payment from Oyu Tolgoi for the USD 30 million in tax the Mongolian Tax

Authority says is owed, said top Mongolian tax official.

“People in charge of the issue are working on it. So I do not have to give details on the issue.” said

T. Batmagnai, commissioner of the General Tax Authority.

Batmagnai said his aim was to collect at least as much tax as last year, when it saw revenues of

MNT 1.98 trillion, but denied accusations from businesses that it was doing so by bending Mongolia's

tax code or raising taxes. “There is no tax increase caused by the economic situation. We work here

to collect tax payers' reported taxes. There is no means of collecting tax illegally or collecting

more,” he said, adding that any tax the General Tax Authority said was owed was the fault of the

company. “Tax payment delays or laziness for tax payment have been popular lately.”

Source: News.mn

RIO JOBS GO IN MONGOLIAN MINING SHAKE-UP FOR TURQUOISE HILL

Rio Tinto PLC's relationship with the Mongolian government faces an even bigger test than first

thought, with the two of the company's most senior executives in the developing country following

the Mongolian Prime Minister's lead by standing down.

Less than 48 hours after Mongolian Prime Minister Norov Altankhuyag was squeezed out of the top

job by a no-confidence vote in parliament, the Rio subsidiary that controls the miner's interests in

Mongolia announced that its chief executive and chairman were standing down. The subsidiary,

Toronto-listed Turquoise Hill Resources Ltd., announced on Friday that long-serving Rio executive

Jeff Tygesen would replace Kay Priestley as chief executive of the subsidiary, which is 50.79

percent owned by Rio.

Priestley has served just over two years in the role, which has been dominated by conflict with the

Mongolian government over a number of issues, including the cost of building the second stage of

the Oyu Tolgoi project and the share of the project that will come back to Mongolian taxpayers.

Priestley's chairman, David Klingner, has also stood down, prompting a complete refresh of the

company's executive ranks.

"The appointments are the result of an extensive succession planning program that has been under

way for several months," the company said in a statement.

Priestley will remain on the board until 31 December, when she will be replaced by Craig Stegman,

who was working on Rio's Northparkes copper and gold mine in New South Whales, Australia until it

was sold one year ago.

Source: The Age

SOUTHGOBI RESOURCES ANNOUNCES Q3 RESULTS

Ovoot coal miner operator SouthGobi Resources Ltd. on November 10 announced a 69 percent

decline in raw coal production in the third quarter of 2014 from the second quarter due to the soft

copper market.

Coal production fell to 0.17 million tons from 0.55 million tons in the second quarter of 2014 as it

reduced its production and place approximately half of its workforce on furlough. This furlough is

anticipated to remain in place until the end of November 2014, subject to market conditions.

SouthGobi continues to operate under difficult market conditions resulting from strong seaborne

and domestic supply coupled with soft demand in China. As a result, coal prices in China declined

further in the third quarter compared to the second quarter of 2014.

SouthGobi said it was actively seeking sources of financing to pay the interest due on China

Investment Corporation's (CIC's) convertible debenture on 19 November. The company is also

actively seeking additional sources of financing to maintain liquidity to fund its operations and

meet its obligations.

Source: Montsame

KHAN BANK INTRODUCES ISO 27001:2013 STANDARD

Khan Bank LLC on 11 November reported that it was the first bank in Mongolia to receive ISO/IEC

27001:2013 standard certification with the installation of a new information security management

system (ISMS) that will give the bank greater protection of its information.

Source: Khan Bank LLC

XACBANK UPGRADES BANKING SYSTEM

XacBank LLC suspended banking services from 7 to 10 November while it upgraded its core banking

system to Oracle FLEXCUBE 12.0 from an earlier version, 10.2, said the bank in an October

statement.

Source: XacBank LLC

ADB FINANCES 'GLASS ACCOUNT' INITIATIVE

Asian Development Bank (ADB) is providing financial assistance for Mongolia's attempt to increase

transparency in its budgets.

ADB and Japan are providing a grant of USD 1.1 for a poverty reduction initiative. The project will

run over two years, until November 2016, through two phases. The Ministry of Finance will oversee

the first, which aims to improve the management of funds. The General Tax Authority will run the

second phase to improve online payment system for taxes. The government is providing USD 55,000

to fund the initiative.

“Modern public investment management and e-taxation systems will make the Government of

Mongolia more accountable, build trust among citizens, and ensure public financial management is

more by enabling better budgeting for limited public resources”, said Ayumi Konishi.

Parliament on 1 July ratified the Budget Transparency Law dubbed the “Glass Account” law, which

was introduced by President Tsakhia Elbegdorj to give citizens more information on how their

taxpayer money was being spent by government.

Source: InfoMongolia

AMERICAN UNIVERSITY OF MONGOLIA TO OPEN BRANCH IN UMNUGOBI

The American University of Mongolia plans to open a school in Umnugobi Aimag for mining

engineering study. The university is working with the Ministry of Education and Oyu Tolgoi LLC to

open the school, with development already underway. Construction is set to begin next year and

finish within a year.

Source: Unuudur

EMZEG STEPPE BRINGS LUXURY CASHMERE FROM MONGOLIA TO U.S. MALL

The Peace Corps took Jon Hetts to Mongolia to aid with business development. Unexpectedly, the

country helped him develop his own business, too.

Hetts, 27, of Cranberry, Pennsylvania, United States is the founder of Emzeg Steppe luxury

cashmere clothing, made with raw materials from Mongolia. He sells everything from scarves and

shawls to fashion ponchos for adults and pieces for babies online at emzegsteppe.com and at select

shops across the country and abroad. He now also stocks selections at a kiosk at Ross Park Mall

(near Kate Spade and Burberry) that will be there through mid-January while supplies last.

Emzeg Steppe, which loosely translates to mean “delicate plains,” came about two and half years

ago, by accident, in a way. “As a gift for my mom I bought a cashmere scarf from Mongolia. When I

gave it to her she was blown away by it, loved it and how luxurious it was,” Hetts said. “My mom

kind of got the idea in my head. ... It’s a way to stay in touch with Mongolia.”

With no background in the apparel industry (his time at the University of Pittsburgh was spent

studying finance), it took some time for him to find his fashion footing, but his Mongolian language

teacher helped him connect with a production facility in Ulaanbaatar. With its owner, as well as

with input from shoppers, Hetts designs the collection made with materials that are picked,

cleaned, spun, dyed and made in Mongolia. The cashmere facility has about 30 full-time female

employees. The cashmere comes from free-range goat herds that inhabit some of the highest

elevations of Mongolia during its bitterly cold winters. To survive these conditions, the animals

grow fine downy coats that make for some of the world’s highest quality cashmere.

Opening up his own shop in the region is another possibility someday, he said, but in the meantime

the kiosk at Ross Park Mall is a way he can get a taste of retail life. At the kiosk, shoppers can find

items that average about USD 120 to USD 150, with headbands and hats typically less than USD 100.

Hetts mans the stand, with assistance from his mom, Janet. (He’s named the cashmere scarf he

sells Le Janette Shawl, in honor of the type of scarf he gave his mother)

Source: Pittsburgh Post-Gazette

SOUTHGOBI RESOURCES ANNOUNCES BOARD CHANGES

SouthGobi Resources Ltd. on 13 November announced the retirement of its chair, Kay Priestly,

effective 1 December. Current independent Director Gordon Lancaster has been appointed interim

chair and Jeff Tygesen will join the board as director, effective 1 December. “It has been a

privilege to serve SouthGobi’s shareholders and work with the Board and management team over

the last two years. I am pleased that Gord will serve as interim chair and I am confident that the

Board will benefit from his leadership and vast experience in the resources industry and finance

sector,” said Priestly.

Lancaster has been director of SouthGobi since 2010. He is chair of the compensation and benefits

committee and a member of the audit committee and the nominating and corporate governance

committee. Tygesen has been appointed as chief executive officer and director of Turquoise Hill

Resources, effective 1 December, and brings an extensive operational background to the board.

Previously Tygesen spent more than 30 years with Rio Tinto in operational roles across multiple

product groups as well as technology and innovation and strategic planning. Most recently, he was

vice-president of copper development at Rio Tinto PLC's Copper Group and was responsible for

overseeing Rio's joint venture interests at its Chilean and Indonesian copper operations. SouthGobi

also announced that Allison Snetsinger had been appointed corporate secretary, effective 14

November. Snetsinger was the corporate secretary at SouthGobi from 17 May 2012 to 31 March

2014. Since then, she has been assisting on corporate matters. Prior to her position as corporate

secretary, she held the position of assistant corporate secretary since SouthGobi's Canadian initial

public offering in December 2003.

Source: SouthGobi Resources Ltd.

MONGOLIA HOLDINGS APPOINTS U.S. FIRM AS NEW AUDITOR

Mongolia Holdings, Inc. announced on 11 November the appointment of Marcum LLP as its new

auditor to replace GBH CPA's PC. Marcum LLP is one of the largest independent public accounting

and advisory services firms in the United States. Ranked number 15 nationally, Marcum has 1,300

professionals, including over 160 partners, on staff in 22 offices throughout the United States.

"As the only PCAOB authorized and GAAP qualified public company auditing firm in the region and

with a full staff in Beijing, a short flight from Mongolia's capital city of Ulaanbaatar, they were the

best choice," said former U.S. Ambassador E. Michael Ussery, the company's chairman.

Source: Mongolia Holdings Inc.

GAL UNDESTEN THREATENS LEGAL SUIT AGAINST COGEGOBI

The environmental activism group "Gal Undesten" (tr: Fire Nation) has announced its plans to sue

Areva SA's Mongolian subsidiary COGEGOBI LLC in the International Court of Justice (ICJ) if it does

not heed its demands to halt operations.

Fire Nation demanded that the company halt its operations within 72 hours of its complaint and

that it leave the country. It argues that COGEGOBI has ignored Mongolian laws and the decisions

made by local authorities [the Source provides not detail to what those laws are or their names -ed]

and that its activities are causing irreparable harm to the environment and area residents.

Source: News.mn

RIO TINTO CEO DEFENDS IRON-ORE SUPPLY EXPANSION

Rio Tinto PLC Chief Executive Sam Walsh on Saturday, 8 November defended the Anglo-Australian

mining giant’s iron-ore supply expansion and dismissed criticism that the strategy was coordinated

among global producers to drive out competition as “absolute nonsense.”

Walsh said in an interview that claims the company wants to push iron-ore prices down, along with

other major producers, had “no truth.” Rio Tinto and the world’s other big mining companies are

adding hundreds of millions of tons of new production capacity to their operations, sending prices

of the steelmaking mineral to their lowest in five years and taking a toll on smaller, higher-cost ore

producers. Rio Tinto, the world’s number-two iron-ore miner, is one among a trio of global

producers, including BHP Billiton Ltd. and Brazil’s Vale SA, often accused—including by Chinese

government agencies—of working together to affect market prices. All three companies have

denied such activities. Analysts have suggested that the trio’s simultaneous supply expansion is part

of efforts to crowd out smaller competitors, including Chinese companies that have invested in

iron-ore plants abroad.

“There have been some comments that we’re doing this to affect others,” Walsh said. “That’s not

true. We’re doing this because it makes sound economic sense for Rio Tinto.” Walsh said Rio’s

strength lay in its ability to survive narrowing margins. “We are the lowest-cost producer in the

world. If you’re the lowest-cost producer, you will be in a particularly privileged position, so we’re

continuing to invest on that basis,” he said.

Walsh said, despite an economic slowdown, Chinese demand still underpins a robust outlook for

iron ore. A transition by China to an economy more driven by consumption means more demand for

Rio-produced commodities to make cars and refrigerators, he said. China’s efforts to combat

pollution will also mean higher demand for the sort of cleaner-burning ore Rio can produce, he

said.

Source: Wall Street Journal

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ECONOMY

MONGOL BANK: 1-WEEK BILLS, TREASURY BILLS

The Bank of Mongolia on 11 November announced the issue of one-week bills worth MNT 133 billion

at a weighted interest of 12 percent a year.

On 12 November, the Bank of Mongolia reported MNT 30 billion in bids for 12-week treasury bills

with a face value of MNT 10 billion. The treasury bills were sold at a discounted price with a

weighted average yield of 15.99 percent.

Source: Bank of Mongolia

S&P: PREMIER'S REMOVAL HAS NO MATERIAL IMPACT ON SOVEREIGN RATING

Standard & Poor's Ratings Services said on 7 November that Parliament's removal of Norov

Altankhuyag as prime minister on 5 November, has had no material impact on the sovereign credit

ratings (B+/Stable/B).

“We believe the dismissal of Mr. Altankhuyag partly reflects the legislature's greater focus on

effective policymaking and better governance, and increases the likelihood that these areas will

improve in the coming year,” reads the statement. “Charges of poor management amidst

deteriorating economic conditions and delays in key projects led to the vote against the prime

minister.” The Source pointed to Mongolia's renewed ties with neighbors Russia and China as cause

for some optimism for Mongolia's future and that the change up was not inherently bad.

“We do not see a high likelihood that political uncertainty ahead of the appointment of a new

prime minister could significantly increase external risk. Mongolia's international reserves rose 17%

in the third quarter this year, while exports increased by 30% year-over-year in the first three

quarters of 2014. Moreover, the central bank can tap its Chinese renminbi (RMB) 15 billion (about

US$2.4 billion) currency swap arrangement with the People's Bank of China if external liquidity is

tight.”

Source: Standard and Poor's

MOODY'S: POLITICAL UPHEAVAL LEAVES POLICY- MAKING IN A LURCH FROM CREDIT OUTLOOK

Moody's Investors Services has deemed the removal of Norov Altankhuyag as prime minister a credit

negative.

The action adds a high degree of uncertainty about the passage of the government’s 2015 budget,

and amendments to the Fiscal Stability Law that would raise Mongolia’s (B2 negative) debt ceiling,

said Moody's. The 2015 budget, in addition to laying out revenue and expenditure targets for 2015

and amending original fiscal targets for 2014 to avoid slippages, seeks to include spending from off-

budget sources and subject it to greater oversight. The state-owned Development Bank of Mongolia

is largely responsible for such spending, which is building up infrastructure and will benefit the

economy. However, heavy spending has contributed to demand-pull inflationary pressures, which

the Bank of Mongolia’s policies have largely accommodated. The World Bank estimates that

Mongolia’s consolidated fiscal deficit, including off-budget spending, was 10.9 percent of gross

domestic product (GDP) in 2013, compared with a small budget surplus of 0.5 percent of GDP in

2010. Amendments to the Financial Stability Law would increase Mongolia’s debt ceiling and change

the way it is calculated. Under current stipulations, the net present value of debt is capped at 40

percent of GDP for 2014. However, this target will likely be breached given increased foreign

borrowing, which markedly increased Mongolia’s public debt to 41 percent of GDP in 2013 from 24

percent in 2011. Both the 2015 budget and Financial Stability Law amendment would provide more

clarity on Mongolia’s fiscal position and outlook, but they have already been subject to delays given

that they were withdrawn (and re-submitted) following structural changes in parliament in

October.

Source: Moody's Investors Services

MOODY'S: GROWING DEBT AND WEAK EXTERNAL LIQUIDITY CONSTRAIN CREDIT PROFILE

Moody's Investors Services says that Mongolia's strong growth potential, based on its abundant

natural resources, support its B2 senior unsecured government bond and long term issuer ratings.

However, a fragile external liquidity position, growing debt burden, and persistent inflationary

pressures constrain the country's credit profile.

The rating outlook is negative, reflecting the risk that Mongolia's rundown in international reserves

has increased its vulnerability to external shocks and reduced its buffer to fiscal risks. Moody's

conclusions were contained in its just-released credit analysis "Mongolia", which looks at the

country's credit profile in terms of Economic Strength (assessed as "low (+)"); Institutional Strength

("very low"); Fiscal Strength ("moderate (-)"); and Susceptibility to Event Risk ("high"). These

represent the four main analytic factors in Moody's Sovereign Bond Rating Methodology.

Expansionary measures pursued by the Bank of Mongolia helped mitigate the growth down-turn, but

also spurred an increase in credit growth, even while pressures on the balance of payments and a

sharp currency depreciation continued to keep prices high. International reserves have, however,

stabilized in recent months on account of Mongolia's local currency swap line with the People's Bank

of China, a decline in imports, and a pick-up in exports. Other credit constraints include fiscal

imbalances and a rising debt burden. Although expansionary fiscal and monetary policies over the

last two years are being gradually unwound, economic imbalances have persisted.

Factors that could lead to an upgrade of Mongolia's rating include: (1) a replenishment of

international reserves, (2) a strengthening of government finances, (3) greater price stability, and

(4) mineral resource development that bolsters the external payments position, strengthens

economic prospects, and facilitates fiscal consolidation. Triggers for a downward movement in the

rating include: (1) a decline in international reserves that significantly weakens further the

external payments position, (2) a further rise in inflationary pressures, and (3) a continued rise in

government debt that results in heightened funding pressures.

Source: Moody's Investors Services

STATE BUDGET DEBATE LEAVES PARLIAMENT DESPERATE TO FIND MNT 40BN

With just a few days left before the 15 November deadline, there are still many obstacles in the

way of a budget passage for next year.

The budget is projecting revenue of MNT 7.2 trillion MNT and expenditures of 7.6 trillion.

Parliament will allow for a deficit of some MNT 490 billion, or two percent of gross domestic

product (GDP). The Altankhuyag government proposed amendments to the 2015 budget along with

ways to narrow the deficit, but Parliament ultimately rejected them.

“Bond debt was issued as expenditure in next year’s budget,” said Minister of Finance S. Purev.

“This made GDP loss seem as if it had reached seven percent so the parliament rejected. This was

included in related laws, but to do this, it’s necessary to make changes to the Fiscal Stability Law.”

General Auditor of the Mongolian National Audit Office (MNAO) A. Zangad said his agency has found

that the 2015 budget would violate the law on fiscal stability, although it was possible to correct

this, he said. Parliament is now demanding that the government find ways to raise an additional

MNT 40 billion for next year. MP S. Demberel, however, has warned that raising an extra MNT 40

billion will not be easy, and that the potential risk of revenue shortfall if the situation continued on

this way.

Purev said Mongolia would have to find USD 500 billion to pay off bond debt for 2018. Eight

percent, or USD 56.4 million, will come from the budget while the remainder would come from

earnings on investments made by the Development Bank of Mongolia.

Source: UB Post, Mongol News

8% MORTGAGE PROGRAM AMENDED TO ALLOW FOR PURCHASING LARGER HOMES

The Bank of Mongolia has announced new conditions to its 8 percent mortgage lending program for

borrowers in the countryside. Mortgages will be able to be taken out for apartments of any size

rather than the previous limit for apartments no larger than 80 square meters.

Mortgages for apartments in the city are scheduled to be issued again as well. Central bank

President Naidansuren Zoljargal said that the aim of the new loan program was to reduce the

pollution in the air from the city's ger districts, which rely on burning coal for heat.

Source: News.mn

MONGOLIA, U.N. EXTEND FOOD SECURITY PROGRAM

The Ministry of Industry and Agriculture announced the launch of the second phase of Mongolia's

Food Security program beginning this month at a press conference on Wednesday.

The program will run until 2016 with six staff members from China to provide consulting on animal

farms, livestock fodder, vegetable harvesting, bee farms, fisheries, and chicken farms. The U.N.

Food and Agriculture Organization (FAO) is providing its assistance for the program through its

“South-South Cooperation,” for which China has allocated USD 30 million in the U.N. Trust Fund.

Mongolia joined the General Agreement on the U.N. Trust Fund in 2009 in order to realize the

National program “Food Security.” As a result of this, China and the FAO decided to give technical

assistance to Mongolia and ran a first phase of the program in 2010-2013.

Source: Montsame

CRIME RATE INCREASES

Nationwide crime is up 6.1 percent for the first 10 months of 2014 from the year before, according

to the National Statistical Office. Police received 22,476 reported crimes during that period, which

resulted in 12 percent more injuries and 13 percent more deaths than the same period in the year

before.

Source: Montsame

MONGOLIA'S DAIRY SECTOR OFFERS OPPORTUNITY

Strong demand at home and abroad could prompt higher investment in Mongolia’s dairy industry as

the country strives to return to self-sufficiency in milk, as well as capitalize on export potential in

the region.

Mongolia’s agricultural industry remains key to the economy, with farming production accounting

for 16.5 percent of gross domestic product. Although it is gradually being supplanted by the mining

sector, agriculture is the greatest single employer in the economy, representing 27.7 percent of the

total labor pool, according to a recent report by the World Bank. The dairy and associated livestock

segment is the greatest contributor to the sector, comprising around 50 percent of its workers and

more than half its annual output in terms of value.

Self sufficient in milk production during the socialist era, the country suffered a downturn in the

1990s, due to a fall in state support and extensive livestock losses. Extreme climatic conditions at

the turn of the century saw up to 30 percent of farm animals perish, including nearly all the dairy

cows. This loss in production capacity, combined with a lack of investment in processing technology

in existing plants, saw the gap in supplies made up with imported materials.

Under the 2007-16 National Dairy Plan the government set the target of boosting production

capacity to meet 90 percent of domestic milk demand. While it is unlikely this goal can be

achieved, with imports still necessary to bridge the supply gap, producers are looking for

technological solutions, such as keeping products fresher for longer, and improving processing and

quality, as well as local initiatives to promote small-scale, organic producers.

In Mongolia, the dairy segment has the potential to grow its exports market, particularly in

neighboring countries like Russia, said B. Gantulga, the chief executive officer of dairy producer

Suu. “The eastern region of Russia suffers from a deficit in fresh milk,” he said. “If Mongolia were

able to effectively develop its domestic production capacity, it could begin exporting considerable

quantities of milk to the country.”

Source: Oxford Business Group

MONGOLIA LEADS FORMER USSR REPUBLICS IN 2014 PROSPERITY INDEX

Mongolia topped the list out of all the former Soviet republics in the 2014 Prosperity Index.

Former Soviet republics have improved their positions in the 2014 Prosperity Index, namely in the

economic and governance areas. The index, compiled by the London-based Legatum Institute, is an

annual ranking of 142 countries that covers 96 percent of the world's population and 99 percent of

global gross domestic product (GDP). The index analyses the countries across eight sub-indices

including - “Economy,” “Entrepreneurship & Opportunity,” “Governance, Education, Health, Safety

& Security,” “Personal Freedom” and Social Capital.” It is unique in defining prosperity as a

combination of wealth and wellbeing.

The best performer in the Central Asia and Caucasus region is Kazakhstan which ranks 55th, minus

eight places compared to the 2013 index, while Armenia remains the least prosperous country at

95th. The oil and gas-rich Central Asian nation's best performance is in the Social Capital sub-index

(35th), its worst is in the Governance sub-index (106th). The landlocked South Caucasus country

settled at 49th in the Education sub-index, but dropped to 29th in the Economy one, the worst

position in the economic section.

The best improvers are Uzbekistan, which climbed six places to 57th; the Kyrgyz Republic, which

moved up from 80th to 74th and Georgia which gained four places up to 80th. Azerbaijan's position

didn't change and it ranks 79th globally—65th in the Economy sub-index, 105th in the Governance

one, while Tajikistan remains at 74th, up 20 places from the previous index's 94th place.

At 52nd Mongolia is the best performer in the region (52nd in 2013). Turkmenistan is missing,

featuring among the countries where there is a lack of available data. Worldwide, Norway is a

repeated leader, followed by Switzerland and New Zealand. The top 10 most prosperous countries

in the world also include Denmark, Canada, Sweden, Australia, Finland, the Netherlands and the

United States.

Source: BNE

NEW AUTO MARKET DELAYED BY FINANCING CHALLENGES

Financial difficulties are holding up progress on the construction of a new auto sales complex

planned to replace markets near Narantuul Market, in Bayanzurkh District.

Nearly MNT 20 billion has spent on construction, while project developers have only received MNT 3

billion from the purchase of space at the new complex. In addition to the lack of financing, poor

weather conditions has kept the project at just 80 percent complete. Currently construction

companies are operating based on an agreement for them to receive payment after construction is

finished. Dealers from the Bayanzurkh auto markets will be moved to a new location planned for an

auto market at Songinokhairkhan District, where 130 hectares of land is free for development.

When finished, the complex will includes 20 cafes, eight toilettes, structures for services such as

car registration, diagnosing mechanical issues, and applying for insurance.

Source: Unuudur

COMMODITY TRADERS: WHAT THEY REALLY MEAN

Commodity trading is defined as moving something from a surplus region to a deficit region—and

hopefully making a profit in the process. But for some traders, what this really means is: “Selling

something that you don’t own to someone who doesn’t want it.” So what do commodity traders

really mean when they talk about the markets? Here we try to decipher some of the codes.

If you buy more of a commodity than exists—or can be physically delivered—it is called a

“squeeze.” If you sell more of a commodity than anyone can take delivery of, it’s called a “reverse

squeeze.” But as it’s illegal to squeeze a market, no trader will ever call it that. When a trader

says “there’s a fundamental tightness in the market,” he really means “I was clever enough to see

it coming and I squeezed the market.” Or when a trader says “there’s a technical tightness in the

market,” he really means “we may have lost money but it’s not my fault, I didn’t see it coming.”

Traders spend most of their time trying to hide their trading positions from their competitors and

customers. When a trader calls and begins a conversation with “what this market doesn’t

understand is (fill in the blank),” he really means “I have a position that is beginning to show a loss,

but if you help me spread this particular piece of rubbish news around the market might just move

enough to let me out without too big a loss.”

A trader should take responsibility for closing out losing positions, but sometimes it becomes a

personal issue. It is a point of shame for a trader when he is “stopped out,” or forced to close his

position by his boss or the risk manager. When a trader says “this market just doesn’t make any

sense,” he really means “my losing position is getting so big that my boss is about to stop me out.”

And when he says “fancy a drink?” he really means “my boss has stopped me out.” When a trader

tells his boss “the market is not following the fundamentals,” he means “the market is not going

the way I thought it would.” If a trader tells you “I am really in tune with this market,” he means

“I’ve had a series of winning trades that I can’t tell you about for reasons of confidentiality—but I’d

like you to know how clever I am anyway.”

If he says “this is like taking candy from babies,” he means “everyone in this market apart from me

is a complete idiot.” And if the trader gets up from his chair and dances around the office chanting

“I am the master of the universe,” he probably means what he says. But any boss should be hearing

this as “I am suffering from hubris, please close out all my positions before I lose everything I have

gained—and then more”.

Source: Financial Times

XI JINPING: CHINA’S ECONOMIC RISKS ‘NOT THAT SCARY’

China’s economic risks are manageable, President Xi Jinping told business leaders Sunday.

While some people are worried about the Chinese economy, Beijing has the tools to address

perceived risks, Xi told executives at the Asia-Pacific Economic Cooperation meeting. The meeting

of 21 regional economies hosted by China runs through Tuesday. “Indeed there are risks, but not

that scary,” Xi said in a speech. “Resilience best equips the Chinese economy against risks.”

Momentum in the world’s second-largest economy has slipped this year amid slower growth in

investment and a slumping real-estate market. China’s gross domestic product grew by 7.3 percent

year over year in the third quarter, its slowest pace in five years, down from 7.5 percent growth in

the second quarter, fueling concern that China could miss its annual growth target of about 7.5

percent. But Xi played down concerns. Economic data in the first nine months remained in a

reasonable range, he said, adding that slower growth is a “new normal,” and annual growth above

7 percent still puts China’s economy among global leaders in speed and size.

Xi said China will be an engine of economic growth for the Asia-Pacific region. Over the next five

years, China’s imports are projected to exceed USD 10 trillion and the number of outbound Chinese

tourists is expected to top 500 million, he said. China’s outbound foreign direct investment over

the next decade is expected to reach USD 1.25 trillion, he added. These projections aren't a huge

increase from current Chinese levels. In 2013, imports were USD 1.95 trillion and outbound tourists

were 98.2 million, according to Chinese government figures, while total non-financial direct foreign

investment abroad had reached USD 525.7 billion at the end of 2013. The Ministry of Commerce

said outbound investment in 2013 was USD 90.2 billion, up 16.8 percent from the 2012 level.

Source: Wall Street Journal

CHINA TO ESTABLISH $40BN SILK ROAD INFRASTRUCTURE FUND

China will contribute USD 40 billion to set up a Silk Road infrastructure fund to boost connectivity

across Asia, President Xi Jinping announced on Saturday, the latest Chinese project to spread the

largesse of its own economic growth.

China has dangled financial and trade incentives before, mostly to Central Asia but also to countries

in South Asia, backing efforts to resurrect the old Silk Road trading route that once carried

treasures between China and the Mediterranean. The fund will be for investing in infrastructure,

resources and industrial and financial cooperation, among other projects, Xi said, according to

Xinhua.

The goal of the fund is to "break the connectivity bottleneck" in Asia, state media quoted Xi as

saying during a meeting in Beijing with leaders from Bangladesh, Cambodia, Laos, Mongolia,

Myanmar, Pakistan and Tajikistan. The Silk Road Fund will be "open" and welcome investors from

Asia and beyond to "actively" take part in the project, Xi was cited as saying, ahead of a separate

summit of the Asia Pacific Economic Cooperation (APEC) grouping, also being held in the Chinese

capital.

It was not immediately clear precisely how the fund would work, when it would start operations or

where it would be based, though in all likelihood it would be China. But Xinhua said it would focus

on China's Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative, which aim to

build roads, railways, ports and airports across Central Asia and South Asia. "Such a framework

accommodates the needs of various countries and covers both land and sea-related projects," Xi

said, adding China is ready to welcome its neighbors "to get on board the train of China's

development."

Source: Reuters

PUTIN SNUBS EUROPE WITH SIBERIAN GAS DEAL THAT BOLSTERS CHINA TIES

Moscow and Beijing signed an agreement to supply gas from western Siberia to China, in a deal that

could eventually see more of Russia’s gas flowing to its vast eastern neighbor than to its traditional

European markets.

The deal would mark another big step in President Vladimir Putin’s efforts to build a closer energy

relationship with China to offset increasing isolation from the west. Chafing under U.S. and E.U.

sanctions imposed over its support for Russian separatists in Ukraine, Russia has long sought to

reduce its dependence on Europe as a customer for its gas and diversify its export markets, as well

as boost its strategic ties with China. This latest deal goes some way to meeting those goals.

Putin and his Chinese counterpart Xi Jinping signed it on the sidelines of the APEC summit in Beijing

just as President Barack Obama arrived in the capital for the meeting. It would see Gazprom, the

Kremlin-controlled energy group, supply China’s state oil company CNPC with 30 billion cubic

meters of gas per year. That would be on top of the 38 billion cubic meters a year Russia agreed to

sell China in a USD 400 billion agreement signed in May.

“Taking into account the increase in gas supplies along the western route, the overall volumes of

gas exported to China might exceed supplies to Europe in the medium term,” said Alexei Miller,

chief executive of Gazprom.

An initial map released by Gazprom to Russian media indicates the western gas pipeline would cross

the narrow and environmentally sensitive border in China’s far western region of Xinjiang. Earlier

negotiations had opened the possibility of a longer route through Kazakhstan or Mongolia. The

Kazakh route would have allowed that country to purchase up to a third of the gas, addressing

Chinese concerns about finding a market for all the contracted gas. However, some people in

Kazakhstan opposed the idea of becoming dependent for energy on their larger neighbor to the

north. Another route, through landlocked Mongolia, was eagerly sought by Ulaanbaatar. Russia has

in the past supported building pipelines to China through Mongolia, but China has blocked the idea.

Source: Financial Times

FRANTIC TAXERS - EDITORIAL

Why must there be taxes? It’s because it was decided that citizens should finance the government,

whose primary role is to bring security and protect the three basic rights of people: life, liberty,

and property.

Currently, the Mongolian government is looking for ways to increase tax revenue. Mongolia is a

country with a heavy tax burden. Every company pays 10 percent of their income in value-added

tax (VAT), 10 percent of their payroll goes to income tax, another 20 percent to Social Security and

health insurance, and finally, 10 percent of their net revenue. This comes out to a total tax burden

of 47 percent of a company’s income. This tax rate has become too heavy a burden on the nation’s

roughly 90,000 enterprises and most can no longer afford to pay.

The Mongolian Chamber of Commerce and the Business Council of Mongolia have urged authorities

to cut taxes in half. Tax Authority staff work long hours on little pay in order to deliver bonuses for

their directors. In the last several governments, they are racing to increase government earnings so

that they can exceed budget projections, bringing private businesses to resort to bribery.

Bureaucrats working in oversight stand to earn much more than other civil servants because they

abuse their powers. Politicians hand such positions out to friends in thanks for their generous

political contributions during elections.

The Independent Authority against Corruption has reported that 60 percent of the tax revenue

collected in Ulaanbaatar was used to pay for bonuses. For example, in 2013, the Sukhbaatar District

tax officials collected in excess of MNT 4.2 billion, subsequently granting MNT 800 million in

bonuses. The General Taxation Authority received 40 percent, or MNT 360 million, of that to hand

out bonuses to its head bureaucrats, including MNT 40 million given to the head of the tax division,

MNT 40 million to the head of the finance and treasury division, MNT 54 million to the head of the

tax collection department, and MNT 2.2 million to each officer. Not only are these bonuses

exorbitant, they violate Mongolia's tax laws, which prohibit bonuses exceeding one's monthly salary.

Taxes should be low, and everyone should pay them without being forced to do so. Let us

Mongolians unite for fair taxes and intelligent taxes.

Source: UB Post

TURNING COAL INTO GOLD - EDITORIAL

One of the most important concepts for a country rich in natural resources is to understand added

value. Another is employment generation. Mongolia could dig out its coal and send it to the Chinese

and others and create a lot of wealth in the process. It could also create some jobs in the coal

extraction and transport industries. However, it could create a lot more wealth and jobs if it

focused on the processing of that coal, and also changing that coal into other products.

Coal is not just a dirty, hard, and polluting fossil fuel. It is a fuel source for electricity production

for many places, including Mongolia where about 99 percent of its electricity is made with coal.

One project Mongolia may consider is a combination of many coal gasification facilities and a

significant pipeline system bringing the syngas to synfuels factories. Synfuels are a result of some

fairly complex chemical, pressure and heat processes that can produce diesel fuel, petrol, and

other products from the original syngas. Is this not amazing? Coal can produce fuel for a car or

truck?

With the right training, education, investment and equipment—and this is really amazing—

Mongolians could also turn coal into a huge list of products most would never even consider to be

from coal: soaps, aspirin, dyes, plastics, fibers like nylon and rayon, carbon fiber for car

manufacturing, benzene, coke for steel production, ammonia, fertilizers, ingredients for cosmetics,

resins and even ingredients to toothpastes and shampoos. This is just a partial list of the things that

coal could make.

Why just export the raw coal? In the medium-to-long run Mongolia could develop a series of

industries based on its huge coal reserves that would help capture the value added of those

industries. It could also in a few decades be an invention hub for coal-based industries. Imagine all

of this. Now think of a palm-sized piece of coal and what could be done with it—and for the

Mongolian people.

Paul Sullivan is a professor of economics at Georgetown University.

Source: UB Post

POLITICS

DEMOCRATS NOMINATE AMARJARGAL FOR PREMIER

The Democratic Party nominated parliamentarian Renchinnyam Amarjargal as prime minister at the

party caucus on 12 November. Amarjargal was one of three options, with the other two being

Cabinet Minister Saikhanbileg and MP D. Ganbat. Amarjargal will have to be approved by President

Tsakhia Elbegdorj before it can be voted on in Parliament.

Source: News.mn

PARLIAMENT APPROVES GUIDELINES FOR 2015 MONETARY POLICY

Mongolia on 13 November approved the general directives for the 2015 monetary policy with a

majority vote. Parliamentarian S. Demberel introduced the policy saying that amendments had

been made regarding obligations to the Bank of Mongolia to maintain a stable exchange rate for the

tugrug and insulate the banking sector from risk. The central bank will also have to cooperate with

the government to taper out programs for the subsidization of consumer goods that have been used

to maintain their consistent prices.

Source: Montsame

CHINA SUPPORTS MONGOLIA’S JOINING APEC

Chinese President Xi Jinping voiced support for Mongolia to join the Asia-Pacific Economic

Cooperation (APEC) during a meeting with Mongolian President Tsakhia Elbegdorj on Saturday.

China welcomes Mongolia's entry into the Asian Infrastructure Investment Bank (AIIB) and backs its

participation in international and regional affairs, including joining the APEC, Xi said. China is also

willing to work with Mongolia and Russia to build the economic corridor linking the three countries,

he said. Xi visited Mongolia in August and the two countries upgraded their bilateral ties to a

comprehensive strategic partnership.

“I would like to keep a close contact with you. Legislatures, governments, parties, armed forces

and civilian sectors of the two countries should enhance exchanges and cooperation," Xi said.

China and Mongolia should sign the free trade treaty "as early as possible" and speed up the

program to build a cross-border economic cooperation zone, he said. Xi noted that the primary

cooperation areas should involve connectivity development, mining, power and agriculture.

Elbegdorj, who has met Xi for five times this year, said that Mongolia would like to push forward

major cooperation programs in railway, mining and energy as well as cultural and people-to-people

exchanges. Mongolia expects to strengthen the three-party cooperation with China and Russia, he

said.

Source: Xinhua

VISA-FREE TRAVELS BETWEEN MONGOLIA, RUSSIA LAUNCHED

Mongolia launched 90-day visa-free travel with Russia on 14 November. Citizens of each nation may

visit each other's countries for up to three months over a period of 180 days.

Source: Montsame

MONGOLIA AND CZECH AGREE ON COOPERATION IN SOCIAL WELFARE

Mongolia and the Czech Republic on 5 November signed a memorandum of understanding for

cooperation between Mongolia's Ministry of Population Development and Social Welfare and Czech's

Ministry of Labour and Social Affairs.

The memorandum was signed by Ministry of Population Development and Social Welfare State

Secretary B. Otgonjargal while in Prague, along with Czech's First Deputy Minister of Labour and

Social Affairs Petr Šimerka. “This [memorandum] will play an essential role in extending bilateral

cooperation in social welfare between the two countries, and play an active role in building an

intergovernmental agreement on bilateral cooperation in welfare,” said Otgonjargal.

Source: News.mn

KUWAITI AMBASSADOR DISCUSSES ECONOMIC COOPERATION WITH MONGOLIAN OFFICIAL

The Kuwaiti ambassador discussed areas of cooperation with the governor of Darkhan-Uul on 11

November amid a visit to the country.

Ambassador Khaled Al-Fadhli discussed several issues of mutual importance between the two

countries, primarily investment opportunities on infrastructure in the province. The Kuwaiti

government, through funding from the Kuwait Fund for Arab Economic Development, is currently

involved in four infrastructure projects in Mongolia, and the local official praised the level of

bilateral ties. He discussed with senior officials the ways of strengthening cooperation between the

two countries, notably in developmental projects. l-Fadhli paid a field visit to a number of facilities

in the city, including Darkhan iron and steel factory, the country's largest one, and Darkhan leather

factory.

Darkhan Governor Sh. Nasanbat commended Kuwaiti aid to Mongolia and said he was looking

forward to further joint developmental projects.

Source: Kuwait News Agency

MONGOLIA AGREES TO CONSERVATION EFFORTS FOR GREAT BUSTARD

Mongolia has committed to a three-year international program for the protection of a species of

bird found within its borders.

The Environment and Green Development Ministry's foreign cooperation head, D. Batbold, attended

the Convention on the Conservation of Migratory Species of Wild Animals from 3 to 9 November in

Quito, Ecuador, where it was proposed that Mongolia act to protect the great bustard species of

bird. The bird reportedly had a population of 2,000 left in Russia, Mongolia, China, with another

300 throughout Central Asia. It needs protection partly because it reproduces only once every ten

years. Batbold has also agreed to participate in annual meetings for the conservation program.

Source: Montsame

INDIA'S DUD MOUS WITH MONGOLIA AND OTHERS UNDER LENS

India is preparing to review the number of MoUs it has signed with foreign nations such as Mongolia

to cancel those that have not stimulated cooperation efforts.

India's Cabinet Secretariat called a meeting this week with key ministries to review all memoranda

of understanding (MoUs) signed with foreign governments that are over five years old but have

registered little progress. The aim is to decide if these should be kept alive. Departments will have

to prepare detailed notes on the total number of MoUs, which are over five years old, how many

are inactive, new ones in the pipeline and their suggestions.

India signed 82 MoUs between 2005 and 2009, according to data from the ministry of external

affairs. The countries include Mongolia, France, Germany, the United States, Spain, Australia,

United Arab Emirates, South Korea and Britain. Another 130-odd MoUs were signed between 2010

and now. All MoUs need to be made into more concrete agreements. China dominates with around

20 MoUs signed in the five years till 2009, plus another 12 since then. The subjects for the older

MoUs are varied—traditional medicine, housing, land resource management, scientific cooperation.

Source: Business Standard

POLICE INVESTIGATE CIVIL AVIATION AUTHORITY FOR FRAUD

Authorities have accused Mongolia's Civil Aviation Authority (CAA) of fraud for an alleged scheme

that saw it overcharge students for tuition to training institutes abroad.

An organized crime unit at the General Police Department found in its investigation of the CAA an

alleged embezzlement ring run through a program meant for the training of students abroad that

was closed in 2011. CAA sent 45 students to Canada and United States while the program was active

and collected USD 81,000 per student for tuition into a company account for an entity called SOBA.

At the time the Canadian Sineca College was charging USD 56,000 per student for tuition.

The police unit is also investigating the student selection process CAA used for the program.

Source: Undesnii Shuudan

UB CITY COUNCIL REPS ALSO BEING HELD TO ‘DOUBLE DEEL’ STANDARD

Representatives in the Ulaanbaatar City Council will soon be held the same so-called “double deel”

standard taking effect in government that bans elected officials from acting as ministers.

More than half of the 45 Ulaanbaatar City Council members either work in other governance roles

or own businesses. For instance, Ulaanbaatar Mayor Erdene Bat-Uul has five deputies and advisors

who work on the council. Meanwhile, those same City Council representatives receive monthly cash

bonuses and the government pays for expenditures such as the purchase of private cars, cell

phones, assistants, and advisors.

The council has the authority to approve mayoral programs, discuss and evaluate reports, approve

the city budget, and set taxes and fees. However, today many representatives are also leading

executive-level government organizations that must report their activities to the council.

The following is a list of the so-called Double Deel wearing city representatives:

Ulaanbaatar City Governor E.Bat-Uul

Deputy Head of Roads, Transportation and Infrastructure of the Ulaanbaatar Governor N.Gantumur

Deputy Head of Employment and Social Protection of the Ulaanbaatar Governor Ts. Buyandalai

Deputy Head of Ecology and Green Development of the Ulaanbaatar Governor T. Bat-Erdene

Deputy Head of Urban Development and Investment of the Ulaanbaatar Governor S. Ochirbat

Deputy Head of Social Development of the Ulaanbaatar Governor Ts. Enkhgerel

Director of the State Housing Corporation A. Gantulga

Deputy Head of Trade and Development Bank D. Khurelbaatar

Head of Water Supply and Sewage of Ulaanbaatar S. Unen

Deputy Minister of Health and Interim Advisor of Ulaanbaatar Governor J. Amarsanaa

Sukhbaatar District Governor D. Badarsan

Ulaanbaatar Heating Network Company Deputy Head and Executive Committee Member of Ger

District Re-planning L. Naranbaatar

Ulaanbaatar City Investment Authority Head L. Narantuya

Bayangol District Governor D. Orosoo

Public Transportation Corporation Head Ts. Odontungalag

Interim Advisor of Domestic Inspection to the Ulaanbaatar Mayor Ts. Altantsetseg

Director of the National Auto Transportation Center T. Boldbaatar

Ulaanbaatar Inc. Head D. Enkhsaikhan

APU General Director Trading D. Enkkhsaikhan

Auto Trade Complex Head D. Baidrag

Head of Finance Department at APU Trading B.Tuvshin

Urban Services and Ger Area Development Program Project Manager and Khan Ger Resort Manager

L. Saintugs

Chingeltei District Governor D. Ganbold

Songinokhairkahn District Deputy Governor R. Dagva

National Park Director B. Saranchimeg

Source: UB Post, Mongol News

RECALLED BLACK-MARKET FOSSILS REMAIN OUTSIDE OF EXHIBITION PLACES

Mongolia's dinosaurs fossils are remaining in their crates because of financial difficulties in

renovating museum space, said the culture minister.

“It is still unknown where to store the 70-million-year-old Mongolian Tarbosaurus bataar fossil and

the other 22 dinosaurs of six different kinds brought in last month,” said Culture, Tourism and Sport

Minister Ts. Oyungerel. “At the moment they are kept unpacked at the Central Museum for

Dinosaurs,” she said, adding that 186 skeletons and bones had recently returned from exhibition in

Japan.

Renovating the Natural History Museum will cost at least MNT 5 billion, she said while plans for the

new Dinosaur Museum have not yet been finished.

Source: Zuunii Medee

KYUSHU BASHO 2014: A TALE OF TWO MONGOLIANS

There are two men to watch when the action gets underway at sumo’s final basho of 2014, down in

Fukuoka on Sunday. Both are Mongolian.

One, in just his first tournament in the top division so very nearly upstaged the other, arguably the

greatest wrestler who ever lived, when he scored an incredible 13-2 in his makunouchi debut. His

name is Ichinojo. The other, yokozuna Hakuho, matched the newcomer before calmly sending him

to the dirt with a wonderful pulling over-arm throw on Day 14, going on to notch up his 31st career

title a day later.

Truth be told, few in sumo expected Ichinojo would be promoted quite as high as sekiwake when

the Kyushu tournament rankings were announced recently. In being promoted to sumo’s third

highest rank ahead of Fukuoka, however, he is the first man since the Showa Era (1926-89) to be

promoted so fast following a debut tournament in the top flight. Yet, while he is clearly the one to

watch for so many, sumo’s 199 kilogram, 192 centimeter darling of the media looks to be struggling

to regain the form that saw him tear up the rankings just six weeks ago. Hospitalized in October

with a bout of shingles, he has, at time of typing, yet to embark on any degeiko sessions at other

stables with men of comparable ability.

Of course all of the current media hullabaloo surrounding Ichinojo will be suiting one man right

down to the ground. That man is yokozuna Hakuho who will be chasing his 32nd career yusho to

equal the all-time record set by former yokozuna Taiho between 1960 and 1971. He is increasingly

being lauded as the greatest of all time, and if the quality of his sumo and the fact he has achieved

similar numbers to Taiho in a much shorter time are anything to go by, his fans are right.

Sumo history of this magnitude is penned just one or twice a century. We are watching perhaps the

greatest ever preparing a bid to secure for himself the single most important achievement in this

257-year-old sport.

Source: Japan Times

CHILL LINGERS AS CHINA, JAPAN LEADERS MEET

The chilly handshake with which Chinese President Xi Jinping and Japanese Prime Minister Shinzo

Abe started a potential thaw in their countries’ ties said much about the challenges Asia’s two

largest economies face as they vie for a decisive leadership role in the region.

The meeting Monday raised hopes for improvements in the relationship, which has veered close to

open conflict in the past two years over a set of disputed islands in the East China Sea. The two

leaders agreed to start preparing a crisis-management system to prevent accidents at sea—a step

long called for by Japanese and U.S. officials after several incidents when ships and fighter jets

from the two countries have come dangerously close to each other around the East China Sea. They

also agreed to resume dialogue gradually on bilateral and regional issues.

But the signs of strain were palpable. The meeting at Beijing’s Great Hall of the People lasted less

than 30 minutes, and footage of it contained no evidence of warmth or even diplomatic chitchat,

showing the two leaders shaking hands with stiff expressions. That the encounter was a proper

meeting—rather than a mere exchange of greetings—could boost the credentials of both leaders.

Abe has long sought a meeting with Xi. His failure to engage the leaders of China and South Korea,

two close neighbors with significant economic ties, has been criticized as a weakness in his

otherwise largely successful diplomatic policy. Meanwhile, agreeing to the meeting, which China

said came at Japan’s request, allowed Xi to appear magnanimous at an event attended by leaders

including U.S. President Barack Obama and Russia’s Vladimir Putin that diplomats say is meant to

highlight China’s pre-eminent position in the region.

But the lack of warmth, especially from Xi toward his rival, illustrated dynamics between the two

countries, characterized by China’s rapid economic rise and military buildup and Japan’s struggle

to maintain its influence even as its economic power declines. Abe proposed that the two nations

promote mutual understanding between their people, further develop economic ties, cooperate in

the East China Sea and stabilize the security environment in East Asia, according to Katsunobu

Kato, a close Abe aide.

The encounter followed a surprise announcement from the two governments on Friday that they

will gradually resume political, diplomatic and security dialogues. Both Xi and Abe are seen as more

forceful than their respective predecessors. In the two years since they took power, Xi has launched

a nationalistic campaign for China’s rejuvenation. Abe has charted a more assertive foreign policy,

in part to counter China.

“The relationship will remain unpredictable and one cannot be too optimistic,” said Koji Murata,

president of Doshisha University in Kyoto and an expert on international politics.. Murata said

concern remains over hundreds of Chinese ships that Japan says have been illegally poaching

precious corals in Japanese waters in recent weeks, as well as over the disputed East China Sea

islands. “It won’t be easy to improve overall bilateral relations significantly,” he said.

Source: Wall Street Journal

___________________________________________________________

ANNOUNCEMENTS

2014 RISK FORUM CONFERENCE, 27 NOVEMBER, UB

The 2014 Risk Forum will be held at the Tuushin Hotel on 27 November.

This year is the conference's fifth to bring together professionals from the local insurance industry,

local business representatives, and government leaders to present an analysis of the economic and

social risks and have an opportunity to share the best risk management practices. The event will be

organized by Mandal General Insurance, the leading provider of the risk management solutions.

“This is the biggest business lobby event in Mongolia with regard to improvement of risk

management framework” said Ganzorig Ulziibayar, chairman of Mandal, who is also chairman of

BCM risk management working group.

The morning session of the forum will put a focus on current political and economic situation and

risks that threatens businesses and companies. It includes key highlights from the Risk report

published by Mandal Insurance, currency rate fluctuation risks, and other impacts caused by

economic downturn.

Speakers during the second session will be focusing on social risks that are caused mainly because

of flawed planning for a catastrophic event in UB. Presentations from NEMA, UB City authority will

give a comprehensive overview on the current situation and effective solutions to businesses that

operate in UB as well as municipal agencies involved in home rule of UB City.

_____________________________________________________________________

MONGOLIA PROJECTS & INVESTMENT SUMMIT, 18-19 NOVEMBER, HONG KONG

The Mongolia Projects & Investment Summit will be held in Hong Kong from 18 to 19 November.

The context of the Summit will be a constructive, productive and sincere appraisal of Mongolia as a

place for FDI, given the current circumstances, and what is being done to strengthen its

attractiveness to the international investment community. The Mongolia Projects & Investment

Summit Hong Kong will bring together leading business, investment and governmental figureheads

in an environment of progressive discussion and action.

The implementation of the new Investment Law, amendments made to the Mining Law, a realized

dedication to PPP and more do show that the government is moving in the right direction. The

question on investors’ minds is what tangible progress has been made since last November which

would warrant a return of FDI?

BCM members are eligible for a 15 percent early bird special. Download the brochure for the

conference agenda here. For registration logon here, or for more information email

info@beaconevents.com or call: +852 2219 0111.

__________________________________________________________________

‘BCM IN THE UNIVERSITY CLASSROOM’ NEWS

Business Council of Mongolia (BCM) has been pushing forward with its ‘BCM in the University

Classroom’ series since March 2012. Led by BCM’s Education Working Group, the program provides

lectures at universities to help inspire students and give them direction for their future careers.

The series has grown to include an average of 10 lectures per academic year. Now 2,045 students

and teachers have participated with BCM in the University Classroom Project.

Most recently Bulganmurun Tsevegjav, senior officer at GGGI and BCM`s Environmental Working

Group chair, gave a presentation entitled “Role of International Organizations in Mongolia’s Path to

Green Growth: Global Green Growth Institute” to an audience of 33 students, postgraduate

students and teachers at department of Geo ecology and environmental study, National University

of Mongolia on 23 October.

The next ‘BCM in the University`s Classroom’ series lecture will be held on 20 November at the

Institute of Finance and Economics. GTs Advocates will be invited to speak. Presentation title:

"Corporate Business Law in Mongolia". For further details, please contact Erdenetsetseg T, BCM

Working Group Coordinator at erka@bcmongolia.org

______________________________________________________________________________________

BCM WORKING GROUP MEETINGS

BCM Environmental WG meeting

The BCM Environmental Working Group met on Thursday, 13 November with 11 members attending.

Bulganmurun Ts, Senior Officer at GGGI, Chair of BCM`s Environmental Working Group moderated

the session.

New Participants: Baymbasuren Lkhamsuren.

Guests: Erdenechimeg B-Snow Leopard Conservation Foundation, Batbayar Ch, Bayarsaihan D-

Power trading strategy for Mongolia (Asian Super Grid & Gobitec)

Speakers and topics were:

1.Green Development Policy and its plan

Ms. Khishigjargal Kharkhuu, Senior Officer at the Ministry of Environment and Green Development

(MEGD)

2.Power trading strategy for Mongolia (Asian Super Grid & Gobitec)

Mr. Jambaa Lkhagva, Research Engineer at Ministerial Task Team on Asian Super Grid, Ministry of

Energy

3. Discussion of adding Energy sector into the Environment Working Group (EWG)

BCM has 6 Working Groups covering variety of sectors. To add more value into it, BCM decided to

create an Energy Working Group which is a growing big sector for Mongolia. As many of the energy

topics are related to environment, members discussed whether or not to add Energy into the EWG

instead of keeping the new group separate. All attending members agreed to add energy sector and

start with “Energy and Environment Working Group”. Later if the group becomes large, separation

can be made. Due to low number of attendants, we are circulating this memo.

If you have any comments, concerns as a member of EWG about this integration, please inform

Erka, our WG Coordinator at erka@bcmongolia.org.

Education Working Group

The BCM Education Working Group met on Wednesday, October 15, with 21 members attending.

Saha Meyanathan-/DAS/ moderated the session.

New Members: Tsetsentsolmon Baatarnaran-Higher Education Reform Project, Uyen Ganzorigt-PwC,

Battuvshin Chuluundorj-University of the Humanities, Ph.D Dorjderem Nyamjav-Mongolian Institute

for Resources and Technology.

New Participants: Telmen Erdenebileg, Owen Roach, Mark Dvorak -Save the Children, Shinbayar

Gan and Battugs B-Labor Exchange Central Office of Mongolia, Julian Woll-GIZ were welcomed.

Guest: Peter McLinton-STVET project Support to Mongolia's Technical and Vocational Education and

Training Sector.

Speakers and topics were:

1.Update on Higher Education

-Update on Higher Education Reform Project activities (Ms B.Tsetsentsolmon-Higher Education

Specialist at Higher Education Reform Project)

-International Accreditation Process of the ISU (Dr Robert Stearns)

-German-Mongolian Institute for Resources and Technology (Ph.D Dorjderem Nyamjav)

-Higher Education Update from PwC Academy-(Uyen Ganzorigt)

-List of best University's in Mongolia (Mr.Misheel Dashdavaa, Mr.Undral A- Forbes Mongolia)

2. VETC Update

-Update on VETC partnerships by (Mr.Pascal Houben-GIZ)

Please contact:erka@bcmongolia.org

Tax Working Group

BCM`s Tax Working Group met on 1 October with 14 people attending.

Co-chair Tsendmaa Ch, Tax Executive Director of PwC, moderated the meeting.

New members: Rentsenkhand D - BDO, Nyamdulam N and Zoljargal Ch - PATC.

New Participants: Enkhmaa D, Munkhtsetseg S from MSM.

Speakers and topics were:

1."The changes to tax regulations" in 2014 by Azzaya L, Senior Tax Consultant of PwC, and

Tsendaa Ch, Tax Executive Director of PwC

2. Open discussion

Members discussed various tax law applications in Mongolia and asked any agenda topics for next

WG meeting.

If you have any suggestions for the next Tax WG meeting agenda, please send it to

erka@bcmongolia.org.

Logistics Working Group

BCM`s Logistics Working Group met on 30 September with 9 people attending.

Chairman Tengis G, Chief Executive Officer of Monroad, moderated the meeting.

New Participant: Inca Bataa from Santa Fe Relocation Services

Speakers and topics were:

1. "Mongolian Customs"- Amgalan N, Regulatory Reform Manager at Business Plus Initiative (USAID).

2. Defining the mission in a position paper of the Working Group.

Members discussed the Logistics WG mission and suggested it include the following key areas:

1. Logistics policies-influence

2. Transparent customs-inspection agency

3. Logistics routes

4. Logistics centers

5. Transport insurance

6. Transportation cost (import, export, nationwide)

If you have any comments or suggestions on the Logistics WG mission, please send them to

erka@bcmongolia.org.

The next working group meeting is scheduled on 25 November with the following agenda:

1. Discussion of Logistics WG Mission statement

2. Guest: Federation of Freight Forwarder of Mongolia.

We still welcome those who have interest to join our BCM`s Logistics Working Group.

______________________________________________________________________________________

BCM WEBSITES

MONGOLIAN WEBSITE: ‘PRESENTATIONS’

The following statistics and reports posted on Presentations section in Mongolian:

http://bcmongolia.org/mn/илтгэлүүд

6 Presentations at Discover Mongolia, Children’s Palace, UB, 4-5 September, 2014 (MNG)

• Б.Оюунгэрэл - "Монголын Геологи, Уул уурхайн Мэргэжлийн Институт" Дисковер

Монголиа 2014

• Б.БААТАРЦОГТ ГЕОЛОГИЙН БОДЛОГЫН ХЭЛТСИЙН ДАРГА - "ГЕОЛОГИ ХАЙГУУЛЫН

ТАЛААР ТӨРӨӨС АВЧ ХЭРЭГЖҮҮЛЭХ АРГА ХЭМЖЭЭ" Дисковер Монголиа

• Монголын алт үйлдвэрлэгчдийн холбооны Удирдах зөвлөлийн дарга Т.Ганболд - "АЛТНЫ

САЛБАРЫН ӨНӨӨГИЙН БАЙДАЛ, ЦААШДЫН ЗОРИЛТ" Дисковер Монголиа 2014

• Лхамаасүрэнгийн Раднаасүрэн УУЯ-ны СБТГ-ын ТБХ-ийн дарга "МОНГОЛ УЛСЫН

НҮҮРСНИЙ ЭКСПОРТЫН ӨНӨӨГИЙН БАЙДАЛ" Дисковер Монголиа 2014

• Г. Эрдэнэбилгүүн "Ашигт малтмалын нөөц ашигласны төлбөр, холбогдох асуудлууд,

боломжит шийдлүүд" Дисковер Монголиа 2014

• УИХ, ЗАСГИЙН ГАЗРЫН ГИШҮҮН Д.ГАНХУЯГ "ЭРДЭС БАЯЛГИЙН САЛБАРЫН ЭРХ З ҮЙН

ОРЧНЫ ШИНЭЧЛЭЛ"2014 ОНЫ 09 ДҮГЭЭР САРЫН 04 ДИСКОВЕР МОНГОЛИА

________________________________________________________________

• U.S. Ambassador Piper Campbell's speech at Invest Mongolia 2014

__________________________________________

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

BUSINESS NEWS’, ‘PHOTO GALLERY’

2 Presentations at BCM Monthly Meeting on November 10, 2014:

• Ambassador Takenori Shimizu, "Economic relations between Japan and Mongolia: Latest

trends and developments"

• Matthew Pottle, Country Managing Partner, PricewaterhouseCoopers, "Global CEO Survey

2014"

3 Presentations at Risk Management and Insurance Solutions conference, Corporate Hotel, 16

October, 2014

• Vlad Bobko, Chief Broking Officer, Director Large Accounts and Specialty, Aon CEE, CIS and

Mongolia - "Political Risks and Trade Credit Workshop"

• Munich Re Group - "MINING RISKS - insuring the un-insurable?"

• Vlad Bobko, Chief Broking Officer, Director Large Accounts and Specialty, Aon CEE, CIS and

Mongolia "Risk Management and Insurance Solutions Conference for Mongolian Industries"

2 Presentations at BCM Monthly Meeting on September 22, 2014:

• Peter A. Markey, Managing Partner, Ernst & Young Mongolia – "Business Risks in the Mining

and Metal sector"

• Kh. Dorjpalam, Officer Treasury, Oyu Tolgoi - "Overview of the Risk Management and

Insurance Conference in October in UB"

9 Presentations at Discover Mongolia, Children’s Palace, 4-5 September, 2014 (ENG)

• Cameron McRae, Executive Chairman, SkyPath Partners LLC, Mr. Geoff McNamara, Pacific

Road Capital, Financial Regulation Committee, Ministry of Economic Development, Moderator: Jim

Dwyer, Executive Director, Business Council of Mongolia - "Panel Discussion"

• Amarbayasgalan.E, Director, Investment Banking Division, Golomt Bank - "Banking and

Mining" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014

• Neil Ashdown, Deputy Head of Asia, IHS - "Mongolian Competitiveness among Asian

Emerging Market" Discover Mongolia 2014 International Mining Investors Forum, September 4-5,

2014

• Paul Cromie, Chief Geoscientist for Asia Pacific, Anglo American - "Anglo American Global

Exploration" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014

• Peter Akerley, President & CEO, Erdene Resource Development - "Mining Exploration

Project" Discover Mongolia 2014 International Mining Investors Forum ,September 4-5, 2014

• George Lloyd, CEO, Xanadu Mines - "Mining Exploration Project" Discover Mongolia 2014

International Mining Investors Forum, September 4-5, 2014

• Adrian Buck, Geo Consultant - "TSIM Geophysics: Mongolian Case Studies" Discover Mongolia

2014

• Sebastian Rosholt, Senior Associate, Minter Ellison LLP - "Amendments to the 2006 Mineral

Law of Mongolia: Private sector overview" Discover Mongolia 2014 International Mining Investors,

September 4-5, 2014

• Bilguun Ankhbayar, CEO, MIBG LLC - "Review and Outlook of Mongolian Investment

Environment" Discover Mongolia 2014 International Mining Investors Forum, September 4-5, 2014

12 Presentations at Invest Mongolia, Blue Sky Hotel, 2-3 September, 2014 (ENG)

• APIP - "Trends and Dynamics of the Real Estate Market in UB" Invest Mongolia 2014

• "Mongolian Cashmere Industry Overview" Invest Mongolia 2014

• B.Tsogtgerel, Vice Minister - "MINISTRY OF INDUSTRY AND AGRICULTURE" Invest Mongolia

2014

• Toshinobu KATO, JICA Mongolia - "Perspective on Long-term Development Strategy in

Mongolia～Japanese experience and cooperation" Invest Mongolia 2014

• Tokyo Stock Exchange - "Opportunities for Mongolian Companies to Raise Capital in Japan"

Invest Mongolia 2014

• Matthew Pottle, Country Managing Partner, PwC - "Mongolia: capitalising on the

megatrends" Invest Mongolia 2014

• Graeme Hancock, President, Anglo American Mongolia - "ANGLO AMERICAN AN

INTRODUCTION" Invest Mongolia 2014

• John Johnson, CEO, CRU China-"China's top commodity trends and what this means for

Mongolia" Invest Mongolia 2014

• Batsukh Galsan, Chairman, "OYU TOLGOI" PROJECT" Invest Mongolia 2014

• Ya. Batsuuri, CEO, Erdenes Tavan Tolgoi JSC - "Largest developing coking coal deposit in the

world" Invest Mongolia 2014

• Graeme Knowd, Associate Managing Director - "Mongolia Banking System Outlook Mongolian

Banks Face Cyclical and Structural Challenges " Invest Mongolia 2014

• Erdenedalai Odkhuu, Associate; Bolormaa Gulguu, Associate, Hogan Lovells (Mongolia) LLP -

"Legal Developments in 2014 :Changes and Future Developments" Invest Mongolia 2014

2 presentations from BCM monthly meeting on June 23, 2014:

• T. Gansuld, Executive Director, Outotec Mongolia – “Outotec Mineral Processing Solutions

and Experience in Mongolia”

• Lisa Gardner, Journalist & Media Trainer – “Mongolia’s Media Laws: Defamation, Libel and

Threats to Press Freedom”

3 presentations from BCM monthly meeting on May 26, 2014:

• B. Lakshmi, Director, Mongolia Economic Forum – “Why Mongolia Business Summit?”

• Nick Cousyn, Co-chair, BCM Capital Markets Working Group – “Use of MSE for State

Privatizations”

• Peter Benson, VicRoads Team Leader, ADB Capacity Building Project – “Mongolia Roads –

Achievements and Challenges”

• China Metals & Mining Thermal Coal, Coking Coal, Copper, Gold, Steel by Macquarie Capital

Securities Limited

Mongolia Reports: http://bcmongolia.org/en/mongolia-reports

• Mongolia Economic Report – August 2014 by BCM;

• World Investment Report 2014 by United Nations Conference on Trade and Development ;

• Social and economic situation of Mongolia as of May 2014 by National Statistical Office of

Mongolia; (available in Mongolian language - Монгол улсын нийгэм эдийн засгийн байдал 2014

оны 3 сарын байдлаар, Үндэсний статистикийн хороо);

• Real Estate Report 2014 by Mongolia Properties;

• ASIA Reaching for the Top by International Monetary Fund, June 2014;

• ASIA Achieving Its Potential by International Monetary Fund, June 2014;

• Mongolia: Economy outlook 2014, by Asian Development Bank;

• Polit Barometer by Sant Maral Foundation, March 2014.

Interview Section: http://bcmongolia.org/en/interviews

• Peabody Energy's Greg Boyce Says Don't Write Off Coal

• Talking to United World, the Executive Director of the Mongolian Drilling Association (MDA)

Professor J. Tseveenjav. Source: http://www.worldfolio.co.uk/;

• Jim Dwyer, Executive Director, BCM – “Business need more business”;

• Damshnamjil Tsogtbaatar, Chairman of the SPC: “Privatizing Mongolia”;

• Jan Hansen, Economist, ADB: “The depreciation should help to increase the

competitiveness and to develop the non-mining industrial sector”.

The “Photo Gallery” contains photos from the 6th Anniversary BCM Renewal dinner on November

11, 2013.

___________________________________________

SOCIAL NETWORK WITH BCM

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

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

improving each day with BCM.

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.

The bulk of the content on BCM’s new LinkedIn page is Mongolian language to better cater to BCM's

Mongolian-speaking audience and members. Please click on the below link to follow us on our new

LinkedIn page.

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

Social stats: BCM now has 6,438 fans on our Facebook fans page, 1,778 connections on LinkedIn

network, and 1,316 followers on Twitter.

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

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

________________________________________________

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]

October 31, 2014 *12.1% [source: NSOM]

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

Note: 12.7% y-o-y, Ulaanbaatar City, October 31, 2014

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 9.75% [source: IMF]

March 11, 2009 14.00% [source: IMF]

May 12, 2009 12.75% [source: IMF]

June 12, 2009 11.50% [source: IMF]

September 30, 2009 10.00% [source: IMF]

May 12, 2010 11.00% [source: IMF]

April 28, 2011 11.50% [source: IMF]

August 25, 2011 11.75% [source: IMF]

October 25, 2011 12.25% [source: IMF]

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

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

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

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

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

July 30, 2014 12.00% {source: Mongol Bank}

CURRENCY RATES – 13 NOVEMBER 2014

Currency Name Currency Rate

US Dollar USD 1,876.90

Euro EUR 2,337.21

Japanese yen JPY 16.21

British pound GBP 2,958.46

Hong Kong dollar HKD 242.04

Chinese Yuan CNY 306.40

Russian Ruble RUB 40.66

South Korean won KRW 1.71

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.

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