BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 325 – May 16, 2014

NEWS HIGHLIGHTS:

Business

Banks to keep backing underground expansion of OT;

Erdenes Tavan Tolgoi reports Q1 sales of USD 50 million;

Group advocates against taking cash instead of Erdenes TT shares;

Petro Matad confirms 60-100 mln barrel prospect in seismic;

Xanadu’s Kharmagrtai is cashed up;

Consolidation Services recruits former Hertz employee;

MMC announces annual meeting results;

Green Development Ministry issues warning to Altain Khuder;

Mongolia Business Summit in UB in June;

'Wolf of Wall Street' to speak in Mongolia;

Turquoise Hill Resources short interest down 10.8% in April;

A quantitative look at Mongolian equities for 2014;

ADB hints at change to reform itself;

Kyrgyzstan withholds its support for Centerra Gold directors.

Economy

Mongol Bank: FX auctions, swap agreements, 4-week and 1-week bills, treasury bonds;

'Depreciation of tugrug is seasonal,' says Mongol Bank governor;

Agriculture Support Fund to sell wheat seeds;

Premier pledges support for domestic cell phone manufacturers;

New KOICA waste manufacturing factory to open soon;

Cabinet settles financing for Tuul River Highway;

HFA helps Mongolia reduce disaster deaths;

China's coal solution has carbon downside across globe;

China’s exports and imports return to slight growth;

Slowdown in Russia can be a drag on growth in Central Asia;

In April, eastern Russia and Mongolia got roasted like a Christmas turkey.

Politics

Mongolia in a 100-day sprint to revive economy;

Agriculture Minister’s resignation request approved by Parliament;

Parliament rejects dismissal request hearing for Justice Minister;

Parliament prohibits funding for Government media advertising;

Railway workers protest construction of new railway line;

Bill aims to exempt small businesses from VAT, customs;

Asian nations work together to stop desertification;

Mongolian sunken ship likely from Pyongyang;

Former Petroleum Authority director dies during prison detainment;

Premier's senior advisor flees Mongolia after corruption case opens;

IAAC investigates government agency for possibly illegal bank account;

Authorities issue warning to Narantuul owners for sale of illicit goods;

Stolen dinosaur head reveals weird hybrid species;

Participatory urban planning takes hold in Mongolia;

Tuva looks to Mongolia for investment in a post-Crimea world.

Others

New Mongolian Laws;

Announcements;

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

ECONOMIC INDICATORS

MSE Top 20 Index by Market Capitalization;

Foreign-listed Companies with Mongolian Assets;

Inflation;

Central bank Policy Rate;

Currency Rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank

International SOS

Invest Mongolia Agency

Mongolian Economy Magazine

Oxford Business Group

Milestone GRP

BUSINESS

BANKS TO KEEP BACKING UNDERGROUND EXPANSION OF OT

A group of banks has agreed to a six-month extension of a commitment to fund the underground

expansion of the Oyu Tolgoi copper-gold mine, the chief executive of mine owner Turquoise Hill

Resources Ltd. said on Tuesday.

The expansion still must be approved by the company and the Mongolian government after a new

feasibility study is done. Turquoise Hill Chief Executive Officer Kay Priestly said the study will be

finished by the end of June, contrary to an assertion by a Mongolian government official earlier this

month that it had already been completed. Fourteen of 15 banks have agreed to extend their

financing commitments to September 30, with a response from the final bank expected shortly,

Priestly said on a conference call held to discuss Turquoise Hill's first-quarter results.

"With this we now have sufficient commitments to reach our funding goal of approximately a USD 4

billion facility," she said.

Priestly said talks with the Mongolian government on restarting development of the underground

expansion have been "constructive". She also said that Turquoise Hill is considering selling its stake

in Mongolian coal miner SouthGobi Resources Ltd. as it focuses on Oyu Tolgoi.

Turquoise Hill owns about 58 percent of SouthGobi, which has a market value of around CAD 93

million (USD 85.29 million) and owns the Ovoot Tolgoi open pit coal mine and three coal projects in

Mongolia.

Source: Reuters

ERDENES TAVAN TOLGOI REPORTS Q1 SALES OF USD 50 MILLION

Erdenes Tavan Tolgoi LLC has reported sales of USD 50 million from the export of 1.3 million tons of

coal in the first quarter of this year.

Sales grew 13 percent from the same period in 2013, when the company could not make deliveries

because it had fallen behind on payments to transport companies.

Source: Montsame

GROUP ADVOCATES AGAINST TAKING CASH INSTEAD OF ERDENES TT SHARES

An investors' rights group is urging 1.2 million Mongolian citizens to reconsider their decision to

accept cash in lieu of shares of state-owned miner Erdenes Tavan Tolgoi LLC.

―We urge people to get the shares,‖ said A. Altanshagai, the head of a group to stand for

shareholders' rights for the project. ―We are ready to assist them with needed information and

advice.‖

One million people have requested shares of Erdenes Tavan Tolgoi compared with 1.5 million

requesting cash. The government has delivered MNT 300,000 to 300,000 senior and disabled

citizens. The value of that MNT 300,000 has already lessened, said the group. The remainder who

requested cash will be able to take their funds after Erdenes TT makes a public offering.

Source: Montsame

PETRO MATAD CONFIRMS 60-100 MLN BARREL PROSPECT IN SEISMIC

Petro Matad Ltd. told investors that a seismic shot last year has identified a new prospect in Block

IV which would have possible recoverable reserves between 60 million to 100 million barrels of oil.

A total of 65 kilometers of seismic data was shot in Block IV, over a thrusted anticlinal feature in

the western part of the block. Analysis of the data confirmed the sizeable feature as well as a

smaller, well imaged prospect with about 6 million barrels. Elsewhere, 155 kilometers of seismic

was shot on Block V. One prospect area within Block V was subsequently deemed high risk, while in

another area two new prospects were identified, each estimated in the range of 22 million to 24

million barrels of oil.

Petro Matad believes these two prospects represent excellent candidates for testing, to assess the

potential reservoir quality and source potential. It also highlighted that these are the only drillable

prospects identified in this frontier area of Central to Western Mongolia, where there have been no

explorations and only limited seismic. The company said it was confident there are many other

similar areas and prospects within its acreage, though its limited seismic coverage is insufficient to

confirm such expectations currently.

Petro Matad is now considering alternative methods to explore the area, airborne full tensor gravity

gradiometry (FTG) which has been used successful in areas of Africa. At the same time Petro Matad

continues an ongoing farm-out process. It said that its participation in a recent industry conference

generated renewed interest in the asset from a number of companies, and discussions continue.

Some parties have shown a high level of interest, though to date no agreements have been reached,

it added.

―Although there can be no guarantee that a farm-out deal will be forthcoming, the board believes

that these actions display significant confidence in the company's prospects and its future,‖ the

company said in a statement.

Source: Proactive Investors

XANADU‟S KHARMAGTAI IS CASHED UP

ASX-listed Xanadu Mines Ltd. has had a busy 2014 so far. Following the signing of a definitive

agreement to acquire 90 percent interest in the Kharmagtai project, the company successful

completed an AUS 1.47 million private placement. In combination with previous financing facilities

this provides Xanadu with USD 10 million to advance the project—including a USD 4 million loan

facility from the Noble Group and a USD 4 million equity facility from Mongol Metals LLC. The

company has stated that these facilities will allow exploration to accelerate, reducing the time

required to define a shallow high-grade JORC compliant copper and gold resource at Kharmagtai.

In March, Xanadu released an independent report on Kharmagtai, arriving at a preferred valuation

of USD 15 to USD 29 million. This conclusion was supported by three historical resource estimates

that have been undertaken at the project, providing justification for Xanadu‘s exploration target.

Xanadu has since started exploration works at site, including core re-logging, magnetic acquisition

and alteration analysis. Based on previously released information the company is set to begin a

drilling campaign this year.

―Through strategically positioning themselves alongside Noble and Mongol Metals, Xanadu has

secured medium term financing,‖ reads the Source. ―Combined with cash raised through the recent

private placement, the company will be able to progress with necessary exploration works. This

should be seen as a positive development for the company by investors, one that will likely make

Xanadu a strong performer in 2014.‖

Source: Mongolian Investment Banking Group

CONSOLIDATION SERVICES RECRUITS FORMER HERTZ EMPLOYEE

Consolidation Services Inc. announced the appointment of Hertz Equipment Rental Corporation

employee Brad Siniscalchi to its advisory board.

Siniscalchi worked at Hertz Equipment Rental from 1990 to 2013 in a variety of roles, culminating as

division manager of franchise operations from 2011 to 2013, where he became familiar with

Consolidation Service's large equipment rental opportunity to service the next phase of growth in

the construction sector of Mongolia. His career at Hertz Equipment Rental began as a sales

coordinator before progressing to branch manager and regional operations manager, a role he

fulfilled for 10 years.

In addition to his intimate knowledge and expertise in the deployment of Hertz Equipment Rental

operations and systems, he is a highly qualified sales and operational leader with expertise in all

aspects of business administration, including business development, P&L responsibility, fleet

management, cost controls and LEAN practices. Siniscalchi has hands-on experience in all aspects of

equipment rental and in overseeing multiple business units in seven American states.

Company Chairman and former US Ambassador, E. Michael Ussery stated: "The extensiveness of

Bradley's 23 years of experience at Hertz Equipment Rental is expected to be of immeasurable value

to the Company's management and Board, as we embark on the deployment of our franchise

operations throughout the rapidly developing nation of Mongolia."

Source: MENA FN

MMC ANNOUNCES ANNUAL MEETING RESULTS

Mongolia Mining Corp. (MMC) approved financial statements for 2013, re-elected three non-

executive directors and granted the company the right to issue additional shares upon the

discretion of the management, at its annual general meeting on 14 May.

―We note that the liquidity situation remains the main risk factor for MMC as it had USD 886.2mn in

outstanding debt at the end of 2013 and recently entered a JV with a 17% share on a railway project

in partnership with two Mongolian companies (also with a 17% share each) and a main partner from

China, Chinese Shenhua Overseas Development and Investment Co (49%),‖ reads the Source.

―Despite current liquidity constraints, we believe the Company will be able to meet its short and

medium term obligations in 2014-15 and view the risk of equity dilution as unlikely at this stage.‖

Source: Visor Capital

GREEN DEVELOPMENT MINISTRY ISSUES WARNING TO ALTAIN KHUDER

The Ministry of Environment and Green Development has taken a hard line with road construction

company Altain Khuder, promising repercussions if it fails to build roads on schedule.

The ministry's state secretary J. Batbold during a site visit warned that the ministry might suspend

Altai Khuder's operations if the 168.3-kilometer road it received rights to build was not completed

this year. The ministry last year granted construction rights to Altain Khuder for 168.3 kilometers of

paved road that would make way for the transport of iron ore to China's Burgaltai port.

The company has built just 3.1 kilometers of road compared with orders from the ministry for 40

percent completion by the end of 2013 and 60 percent in 2014. Another 104 kilometers of paved

road is planned for this year. Altain Khuder had plans to hire another company to build the

remaining 64 kilometers of road.

Source: Undesnii Shuudan

MONGOLIA BUSINESS SUMMIT IN UB IN JUNE

The Mongolia Business Summit will be held in Ulaanbaatar from 19 to 21 June.

Representatives from over 50 companies on 6 May attended a conference in Milan for Italian

businesspeople interested in making contacts with Mongolia at a conference hosted by the

Mongolian Embassy in Italy. During the conference, attendees received information on the summit

to be held in Mongolia next month.

See registration information in Announcements section of this NewsWire.

Source: Info Mongolia

'WOLF OF WALL STREET' TO SPEAK IN MONGOLIA

A well-known American motivational speaker and former stockbroker that was the basis for the

Oscar-winning film, ‗The Wolf of Wall Street‘, will speak in front of an audience of business

professionals on 6 June.

Jordan Ross Belfort, 52, will be visiting Mongolia upon the invitation of James Passin, chairman of

Khot Infrastructure Holdings, Ltd. and CBM, to speak on his experience. Belfort recounted his life in

his memoir, ‗The Wolf of Wall Street‘, which was adapted into the film of the same name where

Belfort was played by Hollywood actor Leonardo DiCaprio. Belfort was convicted of fraud crimes

related to stock market manipulation and running a penny stock boiler room, for which he spent 22

months in prison.

Belfort will discuss the art of persuasion, how to trade penny stocks, key elements of internal

development and how to develop a career. He is also expected to discuss how to trade with foreign

investors' raw materials, and how to avoid the dangers of alcohol and drugs.

Source: Info Mongolia

TURQUOISE HILL RESOURCES SHORT INTEREST DOWN 10.8% IN APRIL

Turquoise Hill Resources Ltd. was the target of a significant drop in short interest during the month

of April.

As of April 15, there was short interest totaling some 32.4 million shares, a drop of 10.8 percent

from the 31 March total of some 36.3 shares, Stock Ratings Network.com reports. Based on an

average trading volume of 3.6 million shares, the short-interest ratio is presently nine days.

Currently, 3.5 percent of the company‘s shares are sold short.

Turquoise Hills has been the subject of a number of recent research reports. Analysts at Zacks

downgraded shares of Turquoise Hill Resources from a ―neutral‖ rating to an ―underperform‖ rating

in a research note on 27 March. They now have a USD 3.20 price target on the stock. Separately,

analysts at Cowen and Company raised their price target on shares of Turquoise Hill from USD 8.35

to USD 8.69 in a research note on 21 March. Finally, analysts at UBS AG initiated coverage on shares

of Turquoise Hill Resources in a research note on Friday, 7 March. They set a ―buy‖ rating on the

stock. Two investment analysts have rated the stock with a sell rating, three have assigned a hold

rating and two have issued a buy rating to the company. The stock presently has a consensus rating

of ―Hold‖ and an average target price of USD 7.13.

Turquoise Hill Resources opened at 3.92 on Monday. Turquoise Hill Resources has a 52-week low of

USD 2.933 and a 52-week high of USD 5.9661. The stock‘s 50-day moving average is USD 3.6 and its

200-day moving average is USD 3.50. The company‘s market cap is USD 7.888 billion.

Source: American Banking News

A QUANTITATIVE LOOK AT MONGOLIAN EQUITIES FOR 2014

Mongolian stocks are seeing rapid growth, despite the slowdown in the Mongolian economy, said

local stockbroker BDSec JSC.

The economic challenges for the Mongolian economy worsened in 2013, as did the value of the

majority of Mongolian assets. Foreign listed Mongolian equities, Mongolian corporate and sovereign

bonds all posted negative returns for the year. Even investors who chose to buy tugrug-denominated

time deposits at local banks lost money, as their 13 to 15 percent interest rates were more than

consumed by over a 20 percent drop in tugrug versus the U.S. dollar and other major currencies.

While the Mongolian Stock Exchange (MSE) itself posted returns of -8 percent for 2013, the Source

made the case last year that investors should take advantage of the negative sentiment and buy

Mongolia‘s highest quality local stocks. The primary tool in defining ―quality‖ was to analyze their

financial results and then screen them based on proprietary quantitative criteria, focused on growth

and value investing disciplines. Three screens ran—growth, value and proprietary—produced average

returns of 38.3 percent (in tugrug) through 29 January. Even when adjusted for the steep drop in

the tugrug, the collective performance of the quantitative approach yielded returns of nearly 20

percent.

A great many MSE-listed stocks are growing rapidly while trading at rock bottom valuations. Several

others offer equally compelling value, which may be less apparent due to Mongolian IFRS

accounting, or large, unrecognized assets. In either case, the intrinsic value of these companies

remain quite high, both on a relative and absolute basis, especially in U.S. dollar terms. In addition

to valuation, investors should also consider both timing and liquidity when looking at MSE-listed

stocks. The average insider ownership of the above companies is nearly 85 percent, leaving very

little in the way of a ―practical free float‖ for investors to buy. Those who want exposure to these

companies need to buy shares when they can, since liquidity typically disappears quickly when

sentiment shifts.

Read the full report here.

Source: BDSec JSC

ADB HINTS AT CHANGE TO REFORM ITSELF

Less than a week ago, delegates attending the Asian Development Bank‘s (ADB's) annual meeting

gathered to listen to President Takehiko Nakao‘s inaugural address to the bank‘s board of governors

in Astana, Kazakhstan. The usual priorities—inclusive and sustainable growth, infrastructure

development and partnerships—were there, but the degree of introspection was noteworthy for an

institution that prefers to focus on its work rather than engage in internal debate over how that

work is done.

Aware of Asia-Pacific‘s rapidly evolving development landscape, and likely propelled by World Bank

President Jim Kim‘s ambitious reform agenda, the ADB chief acknowledged the bank needs to

―reform itself.‖ Nakao said the key is innovation, and he highlighted how the Manila-based

institution will pursue new paths to mobilize its financial resources by combining the Asian

Development Fund with the balance sheet of its ordinary capital resources, make its institutional

processes more efficient and effective, ―go local‖ by delegating more work to resident missions,

and empower employees to hone in on their talents to provide a better service to clients.

Source: Devex

KYRGYZSTAN WITHHOLDS ITS SUPPORT FOR CENTERRA GOLD DIRECTORS

Kyrgyzstan, which is in negotiations to take a stake in Centerra Gold Inc.‘s Kumtor gold mine,

withheld support for the Canadian company‘s chairman and two other directors at its annual

shareholders‘ meeting.

Kyrgyz state-owned miner Kyrgyzaltyn JSC, which has a 33 percent stake in Centerra, withheld its

votes for Chairman Steve Lang, Centerra said today in a statement. It did the same for Terry V.

Rogers, Centerra‘s lead director, and Vice Chairman Bruce V. Walter. Centerra does not have a

policy requiring successful nominees to receive a majority of votes. Forty-seven percent of the

votes for Lang were for his re-election. He was advised by the company‘s nominating and corporate

governance committee to stay on as chairman, according to Centerra.

In a speech at the 9 May meeting, Kylychbek Shakirov, deputy chairman of Kyrgyzaltyn‘s

management board, criticized Centerra‘s corporate governance and pay practices. ―The age profile

of the board of Centerra is mostly above 60 years,‖ Kylychbek Shakirov, deputy chairman of the

management board at Kyrgyzaltyn, said in a speech at today‘s meeting. ―There has been little

change over a number of years and there is strikingly little diversity.‖

In a repeat of comments made at last year‘s meeting, Shakirov said Centerra management‘s pay is

excessive by both Kyrgyz and international standards. He also said that a USD 200 million dividend

paid to Centerra from the fully owned subsidiary operating Kumtor was unexpected and ―caused

concern‖ because of its size and its timing, as it came during the government talks. ―One thing that

is clear from the past year is that Centerra is trusted too little in Kyrgyzstan,‖ Shakirov said.

Many of the issues raised by Shakirov are part of the talks with the Kyrgyz government, Centerra

Chief Executive Officer Ian Atkinson said at the meeting. ―Management has responded to the issues

raised in writing to the relevant Kyrgyz authorities,‖ Atkinson said. The dividend payment was ―a

matter of routine business,‖ he told reporters after the meeting.

Source: Mine Web

ECONOMY

MONGOL BANK: FX AUCTIONS; SWAP AGREEMENTS; 4-WEEK AND 1-WEEK BILLS; TREASURY

BONDS

The Bank of Mongolia on 15 May reported the currency auction of USD 20.4 million for a closing rate

of MNT 1,815.50 and CNY 57 million for a closing rate of MNT 291.61. Also on 6 May, the Bank of

Mongolia received an equivalent of USD 42.2 million from swap agreements with commercial banks.

The central bank reported on 12 May the issue of four-week bills worth MNT 200 billion at a

weighted interest rate of 10.89 percent a year. The central bank reported on 14 May the issue of

one-week bills worth MNT 234.6 billion at a weighted interest of 10.5 percent a year.

Also reported on 14 May was MNT 93 billion in bids for the auction of 12-week treasury bonds with a

face value of MNT 40 billion. Each unit was sold at a discounted price with a weighted average yield

of 9.32 percent.

Source: Bank of Mongolia

'DEPRECATION OF TUGRUG IS SEASONAL,' SAYS MONGOL BANK GOVERNOR

Mongolia is currently suffering from a seasonal depreciation of the tugrug, said the head of the

central bank, which is exacerbating weakness of what Bloomberg has reported as Asia's poorest

performing currency.

―Sixty percent of the U.S. dollars used in Mongolia is in the spring season,‖ said Bank of Mongolia

Governor Naidansuren Zoljargal. ―On the other hand, U.S. dollar inflow is in the second half of the

year.‖

He said revenue from cashmere typically appears about now, in May and June. Also, income from

coal sales is about USD 100 million less than last year because of the soft coal market. He said he

expected gold revenue to grow further following the government's USD 400 million in financing for

the development of gold-mining operations. Despite the poor performance of the tugrug, the

foreign trade balance is improving, said Zoljargal. The Q1 foreign trade deficit is USD 9 million this

year compared with USD 400 million last year.

Political risk stands to rock the economy further, he warned. He advised that government

concentrate on increasing exports and attracting foreign investment instead of short-term

interventionist strategies such as government lending to local producers to maintain stable prices.

Source: Undesnii Shuudan

AGRICULTURE SUPPORT FUND TO SELL WHEAT SEEDS

The Agriculture Support Fund is planning to offer farmers MNT 18 million in soft loans.

Mongolia has 1,180 active farmers this year, with over 1,000 of them planning to sow wheat. The

Agriculture Support Fund will provide grain seed to farmers able to pay 20 percent upfront. The

remainder will be collected after harvest time.

The fund will sell three types of seed, with the A-and B-class seeds to sell for MNT 880,000 and MNT

830,000 a ton, respectively. Flour is expected to sell for a minimum of MNT 460,000 a ton this year.

Source: Montsame

PREMIER PLEDGES SUPPORT FOR DOMESTIC CELL PHONE MANUFACTURERS

Prime Minister Norov Altankhuyag has pledged to support four Mongolian companies developing

cellphones and cellphone software that are requesting backing from government and local cellular

service providers for the development of their brands.

One representative said IT Zone had been developing its own brand of smart phone for the Android

4.1 Jelly Bean version operating system. The phone will feature a four-inch display and will be

available for MNT 150,000 compared with MNT 300,000 for competing imports.

A representative of Emondo introduced its project to produce a smart phone that would use the

latest operating system with pre-loaded Mongolian language apps. The phone's parts will be ordered

from abroad utilizing an existing network for domestically assembled goods, said the company

representative. The phone will hit the market once quality testing is complete, he said.

Darkhan Jonon presented its plans to import used devices to be refurbished and sold on the market

at a 30 percent discount price from the rest of the market and with a manufacturer‘s guarantee.

The business will operate 100 percent independently from Chinese companies, where most retailers

receive refurbished goods.

Migma Electronics announced that it was ready to introduce four types of phones, including one

that features large buttons for children and elderly users. It would also feature the ability to make

emergency calls to up to five separate individuals.

Source: Info Mongolia

NEW KOICA WASTE MANUFACTURING FACTORY TO OPEN SOON

Korean International Cooperation Agency (KOICA) is planning to commission a waste manufacturing

factory late this month.

The plant will recycle wastes such as plastic bags. Currently, two domestic companies, TChM and

San Orgiu, have this sort of operation for Ulaanbaatar, with one more plant expected to finish

construction by 2016.

Source: Montsame

CABINET SETTLES FINANCING FOR TUUL RIVER HIGHWAY

The Cabinet Secretariat on 10 May approved the spending of USD 193 million on the Ulaanbaatar

―Streets‖ program to build the Tuul River Highway.

Mongolia is utilizing MNT 500 million from a low-interest loan granted by China to build the road,

which will run through the center of the city and through to the Yarmag bridge in western

Ulaanbaatar.

The Cabinet assigned Economic Development Minister N. Batbayar to write up and sign the

necessary contracts with Chinese authorities for the supervision and implementation of the project.

Batbayar will also be responsible for giving the Cabinet progress reports and finding any additional

capital needed for the project.

Source: Montsame

HFA HELPS MONGOLIA REDUCE DISASTER DEATHS

Mongolia‘s Deputy Prime Minister Dendev Terbishdagva on 8 May identified the pressing need to

address escalating direct losses from disasters as vital to his country‘s ambitions for sustainable

development.

―Since implementing the Hyogo Framework for Action there has been some success in reducing the

mortality rate from disasters, but a new approach has to be considered because of the increasing

economic and ecological losses we are experiencing,‖ Terbishdagva said. ―Within the Hyogo

Framework the main principle is clear: if you invest one dollar on prevention ahead of disasters, it

is worth ten dollars after a disaster. Prevention is very important.‖

Terbishdagva outlined Mongolia‘s progress over the past decade: the amalgamation of disparate

departments into one National Emergency Management Agency (NEMA), which reports directly to

him, and a commitment to treat disaster risk reduction as a development issue. He identified local

capacity as a key constraint but said NEMA and government ministries were focusing their efforts on

this area.

The deputy prime minister called on the U.N. Office for Disaster Risk Reduction (UNISDR) to expand

its partnership with Mongolia to help bridge this gap in local capacity. Terbishdagva‘s focus on

disaster losses echoes UN Secretary-General Ban Ki-moon‘s warning at the launch of the 2013 Global

Assessment Report on Disaster Risk Reduction that ―economic losses from disasters are out of

control‖.

Source: U.N. Office for Disaster Risk Reduction

CHINA'S COAL SOLUTION HAS CARBON DOWNSIDE ACROSS GLOBE

The new coal plant at Hexigten Qi, China is an industrial fortress of boilers, tanks and towers that

stretches across a lonely plateau in Inner Mongolia. All day long and through the night, it vents huge

gray clouds of steam and emits an awful stench.

Though it may seem odd, this is part of China's campaign to combat the nation's notorious urban

smog. The plant transforms low-grade coal into a cleaner-burning methane gas that can be piped to

cities, replacing dirtier fuels that now are used to cook meals, heat homes and produce electricity.

The Chinese leadership has called for the accelerated development of these coal-to-gas plants, and

more are under construction in areas distant from major urban centers. But embracing this

technology to fight air pollution involves a serious environmental trade-off. The plants that produce

this gas spew far more carbon emissions than those that burn coal to generate electricity.

Air pollution is cutting an average of more than 5 years from the life expectancy of some 500

million northern Chinese people, according to data from the U.S. National Academy of Sciences.

Much of the urban smog comes from using coal to cook, heat homes, generate electricity and power

industry. By contrast, methane—the prime component of natural gas—burns much cleaner than coal.

But China's petroleum companies can't meet the demand for methane from traditional gas fields

and lag far behind their U.S. counterparts in developing new reserves through fracking.

China's environmentalists still hope the government will back away from greenlighting an industry

that emits so much carbon. The coal industry, however, is eager for new markets. Last year, the

Datang plant began buying coal from a mine at the edge of Xilinhot that was struggling with the

first downturn in sales in a decade. Despite pollution, carbon emissions and climate change, Cheng

Xiaoliang, the mine's vice general engineer, is confident about the future.

"I firmly believe that coal is going be the main generating source of energy at least for the next 50

years," he said. "No matter what, China still needs coal."

Source: The Seattle Times

CHINA‟S EXPORTS AND IMPORTS RETURN TO SLIGHT GROWTH

China‘s exports and imports returned to slight growth last month, beating market forecasts and

offering some positive signals for the country after a weaker-than-expected start to 2014.

Exports rose 0.9 percent in April, from a year earlier, following declines of 6.6 percent in March and

18.1 percent in February, the General Administration of Customs said on Thursday. Imports grew

0.8 percent from a year earlier, after an 11.3 percent fall in March, to produce a trade surplus of

USD 18.5 billion, more than double the USD 7.7 billion surplus in March. All three figures beat the

median forecasts in a Reuters poll, with exports and imports defying expectations of another fall.

―The external demand side is not such a big problem for China now, because the genuine recovery

is there,‖ said Wei Yao, the China economist at Societe Generale in Hong Kong. ―This is actually

offering some support to China‘s growth,‖ she added.

Official and private factory surveys for April have pointed to initial signs of stabilization after the

government unveiled targeted measures to bolster growth, although export orders were a weak

point. Last week Beijing acted to shore up trade, taking steps such as enacting quicker tax rebates

for exporters and encouraging more imports of high-technology equipment and consumer goods.

The April data showed that export growth was largely driven by demand from developed economies,

particularly the United States and the European Union, while numbers from emerging economies

remained soft. The government has set a target of 7.5 percent growth for exports and imports this

year. China missed its growth targets of 8 percent in 2013 and 10 percent in 2012, and some

analysts and officials think the target this year will also be tough to reach.

China‘s economy, the world‘s second largest, grew at its slowest pace in 18 months in the first

quarter, and a Reuters poll shows that analysts expect growth of 7.3 percent in 2014, the weakest

in 24 years.

Source: New York Times

SLOWDOWN IN RUSSIA CAN BE A DRAG ON GROWTH IN CENTRAL ASIA

The crisis in Russia and Ukraine is having a severe impact on the economies of the two countries

and is threatening to slow down the recovery in the wider European Bank for Reconstruction and

Development (EBRD) region—or even bring it to a complete halt.

EBRD‘s latest economic report predicts growth in the transition region of just 1.4 percent in 2014, a

sharp reduction from the rate of 2.7 percent forecast in January. A modest upturn of 1.9 percent in

2015 is possible, but only achievable if the crisis does not escalate. Russian downturn is likely to

constrain growth in Central Asia though the region on average will see good growth driven by major

natural resource projects. ―Most of the countries in Central Asia showed strong economic growth in

2013; however, the slowdown in Russia is expected to be a drag on growth in Central Asia in 2014,‖

said EBRD Lead Economist for Central Asia Agris Preimanis. ―The weakening of remittance flows, as

well as exports (to a lesser degree), are expected to be a factor. Any further escalation of the

Russia-Ukraine crisis poses significant downside risk to growth and would put downward pressure on

currencies in the Central Asian region.‖

The political tensions have already dashed hopes that a continuous decline in the growth rate in the

EBRD region since 2011 would be reversed this year. They are also outweighing the positive impact

of continued recovery in the eurozone and of a reduction of pressures from the unwinding of easy

monetary policy in the United States. The EBRD report says negative spillovers from the political

tensions have so far been largely contained to the neighborhood of Russia and Ukraine.

Source: European Bank for Reconstruction and Development

IN APRIL, EASTERN RUSSIA AND MONGOLIA GOT ROASTED LIKE A CHRISTMAS TURKEY

The United States had a relatively cold winter. April's temperature measurements were only about

average. However, if you look worldwide, it turns out April 2014 was the second-hottest April ever

recorded, according to preliminary measurements.

This discrepancy is because while some places were only average or below-average in temperature,

more places were above-average, some ludicrously so. This fact is brought home in the latest

temperature anomaly world map from NASA. Roughly speaking, eastern Russia, Mongolia, and

northeast China were getting absolutely fried last month, pegging the chart's maximum over an area

about the size of the whole United States. Remember that next time someone pulls the old "it's cold

where I can see, how about that global warming?!" routine.

Source: The Week

POLITICS

MONGOLIA IN A 100-DAY SPRINT TO REVIVE ECONOMY

Mongolian Prime Minister Norov Altankhuyag received approval from parliament on May 7 for his

100-day economic stimulus initiative. The premier is putting his energy behind promoting private

business and foreign investment to help remove some of the bitter taste left in investors' mouths

from the grief that the country's politicians have caused over recent years.

"These [initiatives] are all aimed to increase foreign direct investment to Mongolia because right

now one of the key problems is the inflow of foreign capital into Mongolia, and that can only be

revived once there are specific projects in place," says Bayanjargal Byambsaikhan, chairman of the

Business Council of Mongolia and now an advisor to the prime minister for the 100-day initiative.

"Mongolia is open for business" is the message that the government is eager to spread. The

economic deputy minister went into detail on Altankhuyag's plan at the Mongolian Investment

Summit in London, where he explained plans to invest in downstream production for the country's

vast coal reserves, such as coal washing and handling. Concession agreements between the

government and private investors would be a key mechanism to see such projects become a reality,

according to the presentation.

Most important will be the relaunch of the development of the Oyu Tolgoi mine, but Rio Tinto PLC

is in no rush to do so. "Only RT [Rio Tinto] and GOM [government of Mongolia] know exactly what's

going on but our understanding is that RT wants essentially sanctity of the multi-billion dollar

investment agreement, not the never-ending political debate with attempts to renegotiate it," said

Dale Choi, head of Independent Mongolian Metals & Mining Research in an email note to subscribers.

"Although this point is well understood by some GoM officials... at the moment there is a lack of

prominent national political consensus on sanctity of the Oyu Tolgoi Investment Agreement which

would be enabling for RT to proceed with underground development at OT."

Source: BNE

AGRICULTURE MINISTER‟S RESIGNATION REQUEST APPROVED BY PARLIAMENT

Parliament on 14 May approved Minister of Agriculture and Industry Kh. Battulga's resignation

request from his post at the Cabinet Secretariat.

Parliament voted 54 in favor out of a total 69 members in attendance. Battulga submitted a

resignation request because of his support for the so-called Double Deel bill that was struck down

by Parliament last week. The bill would have prohibited members of Parliament from taking on

most ministerial roles.

―It is inappropriate for me to hold this position as I supported the bill myself,‖ said Battulga in his

resignation.

Battulga will continue to act as a sitting member of Parliament

Source: News.mn

PARLIAMENT REJECTS DISMISSAL REQUEST HEARING FOR JUSTICE MINISTER

Parliament denied a petition led by parliamentarian O. Basankhuu for a hearing for the possible

dismissal of Justice Minister Kh. Temuujin.

Baasankhuu submitted a petition calling for the resignation of Justice Minister Kh. Temuujin for

what he claimed were serious cases of misconduct. Reasons for the need to dismiss Temuujin on the

petition were his breach of Mongolia's laws, his inability manage his ministry's responsibilities, and

poor ethical choices. Baasankhuu cited Temuujin's merging of the general hospital for the state

special servants with the hospital of Defense Ministry, which he claims is in breach of the Law on

Budget, and that his negligence is responsible for damage to a MNT 3.2 billion MRI machine. He also

pointed to a relationship between him and drug-addicted young woman that he finds inappropriate.

Baasankhuu also said Temuujin abused his position by having his child adopted by a diplomatic

official in Canada to give him the opportunity for an education in Canada. Temuujin later took

parental rights for his son back.

Local press reported on Wednesday Mongolian People`s Revolutionary Party leaders demanded that

Basaankhuu withdrawal his petition and that he may face possible dismissal from the party for

submitting the petition.

Sources: Undesnii Shuudan, Udriin Sonin, Shuurkhai.mn, Infomongolia.com

PARLIAMENT PROHIBITS FUNDING FOR GOVERNMENT MEDIA ADVERTISING

Parliament approved a resolution that prohibits government organizations from paying to advertise

in newspapers.

The ban on government advertising came in with Prime Minister Norov Altankhuyag's 100-day

economic stimulus that passed last week. Government agencies may only pay media for inclusion of

news on agency activities, says the resolution. The resolution was approved with 32 members for

and 28 against. MP Ts. Oyunbaatar proposed the inclusion of the regulation.

Source: Udriin Sonin

RAILWAY WORKERS PROTEST CONSTRUCTION OF NEW RAILWAY LINE

Mongolian railway workers held a press conference to announce their protest of plans to build

Chinese-gauge rail for the transport of coal from the Tavan Tolgoi coal fields to China.

"Narrow gauge will be built using foreign debt and will be used for coal transport, only,‖ said Ch.

Batchuluun, deputy head of Mongolia's railway workers' trade union. ―Who will pay for the debt

after finishing the coal? This is interest of only a few politicians and companies who wanted to

profit by building the railway.‖

Economic Development Minister N. Batbayar submitted a draft resolution to Parliament for the

construction of a new railway line between the Tavan Tolgoi deposit and the Gashuun Sukhait

railway port that would utilize China's standard gauge for rails.

―We do not need to build another railway to transport coal to China," said Batchuluun because

Ulaanbaatar Railways has the capacity for more rail transport.‖

Source: Udriin Sonin

BILL AIMS TO EXEMPT SMALL BUSINESSES FROM VAT, CUSTOMS

The Cabinet Secretariat on 10 May agreed to submit a bill that would provide exemptions from

value-added tax to small businesses.

Tax exemptions for small businesses would run through to the end of 2016. The aim for the bill is to

provide the effect of similar tax exemptions for small businesses in place between 2010 and 2012.

Government aimed to expand the capacities and quality of domestic products with exemptions to

789 kinds of equipment to be utilized by small businesses.

Source: Montsame

ASIAN NATIONS WORK TOGETHER TO STOP DESERTIFICATION

Asian countries, including Korea, China, Cambodia and Mongolia, have joined forces to combat

desertification and to beef up cooperation in the forestry sector.

As part of a series of joint efforts, the Korea Forest Service and the secretariat of the U.N.

Convention to Combat Desertification (UNCCD) jointly held their Asian Region Workshop in Songdo,

Incheon, on 7 May. The UNCCD is an international agreement adopted in 1994 to combat

desertification caused by indiscriminate forest development and land abuse. It is one of the United

Nation's three major environmental accords, along with the U.N. Framework Convention on Climate

Change (UNFCCC) and the Convention on Biological Diversity (CBD).

Throughout the three-day workshop, more than 90 representatives from UNCCD branches across the

Asian and Pacific regions reviewed reports on desertification from Asian countries, especially those

heavily struck by land degradation. They also held in-depth discussions on how to deal with the

problem.

In China, the Korean forestry body has been lending a helping hand to prevent that country‘s rapid

desertification. To this end, more than 3.2 million desert willows and poplar trees, both known to

be well-adjusted to desert environments, were planted across 1,200 hectares of the Gobi Desert in

Inner Mongolia, China, the origin of East Asia‘s ―yellow dust‖ weather phenomenon.

―We will continue to carry out a series of cooperative projects to help China combat desertification

and ‗yellow dust,‘‖ said Choi Young-tae, director of the International Cooperation Division of the

Korea Forest Service. Such efforts, he hopes, will improve the ecological environment across

China‘s arid regions.

Similar efforts are underway in other Asian nations, such as Indonesia and Mongolia, as well. The

Korea-Mongolia Greenbelt Forestation Project is an anti-desertification effort being made in

Mongolia, which has 70 percent of its territory at risk of desertification. The project, initiated in

2007, has had millions of poplar trees planted throughout the Lun Soum region and the Gobi Desert.

With the effort, a 3,000-hectare forest will be created in the area by 2016.

Source: The Inside Korean

MONGOLIAN SUNKEN SHIP LIKELY FROM PYONGYANG

The Mongolia-flagged vessel that sank earlier this month in waters off South Korea while sailing

from the North to China was owned by a company in Hong Kong, Seoul officials said, raising

suspicion that the ship could be part of the regime‘s attempt to evade U.N. sanctions banning any

illicit trade of weapons, luxury goods or other related material.

On 4 April, the Grand Fortune 1, a 4,300-ton cargo ship flying the Mongolia state flag, sank in

international waters off the coast of Yeosu in the southwestern part of South Korea. The vessel was

carrying 16 North Korean crew members, 50 metric tons of heavy fuel oil and 6,500 tons of iron ore

and copper powder, according to the Korea Coast Guard, which would have earned the Communist

state hard-sought foreign currencies amid crushing international sanctions on its economy. The ship

was bound for Jiangdu Port, eastern China, from the North Korean port city of Cheongjin.

The fact that the vessel flew a Mongolian flag when all its crew members were North Korean

nationals sparked suspicions that Pyongyang was using the Mongolian ship to avoid South Korea‘s

scrutiny. Questions remain over the ship‘s owner, reportedly a company based in Hong Kong, Seoul

officials told the JoongAng Ilbo yesterday. According to officials from South Korea‘s Ministry of

Oceans and Fisheries, the owner is believed to have registered the ship in the Mongolian

government‘s database to evade taxes and hired North Korean crew members for their cheap labor.

Under international law, it is not illegal for a commercial vessel in a state to be registered to a

country different than that of its owner. A practice called ―flag of convenience,‖ the system is

often employed to evade regulations in the owner‘s country of origin or to lessen operating

expenses.

Although Mongolia is a land-locked country, it has accepted dozens of foreign vessels to be flagged

under its system since 2003. In return, the country can boost its shipping industry. Seoul officials

suspect there is a possibility that North Korea registered the ship in Mongolia by using a fake owner

or company.

Source: Korea Joongang Daily

FORMER PETROLEUM AUTHORITY DIRECTOR DIES DURING PRISON DETAINMENT

Former Director of the Petroleum Authority D. Amarsaikhan died 13 May while being detained at a

Mongolian prison facility.

Amarsaikhan never recovered after fainting while walking to a meeting room to meet his lawyer.

His death came after authorities denied his request for release from his detainment through his

lawyer because his failing health. Amarsaikhan had been detained at Prison No. 461 while

authorities were conduction an investigation into him for allegedly accepting bribes.

Amarsaikhan oversaw the approval of a production sharing agreement between the Mongolian

government and Petrochina Dachin Tamsag LLC. Mongolia held 24 percent interest while PetroChina

had the remaining 76 percent.

Amarsaikhan's case had been transferred to the courts before his sudden death.

Source: Udriin Sonin

PREMIER'S SENIOR ADVISOR FLEES MONGOLIA AFTER CORRUPTION CASE OPENS

A senior advisor to the prime minister, L. Gansukh, fled the country following the opening of

investigations into him and his daughter by the Independent Agency Against Corruption (IAAC), said

an unnamed staff member at the General Prosecutor's Office.

Gansukh was leading a government project that aimed to distribute high-quality, low-cost coal to

Ulaanbaatar's denizens. A company owned by Gansukh's daughter, Gansukh Tserenjagtsan, received

the rights to distribute the coal without participating in any formal bidding process. The company

was buying coal at MNT 27,500 a ton while selling it for MNT 80,000 on the market. The government

paid MNT 854 million into the project to cover losses.

The Source said the Prosecutor's office had proof that Tserenjagtsan's company illegally sold some

of the coal meant for the project to other companies at a higher price.

Source: Udriin Sonin

IAAC INVESTIGATES GOVERNMENT AGENCY FOR POSSIBLY ILLEGAL BANK ACCOUNT

The Independent Agency Against Corruption (IAAC) is investigating the Court Decision Enforcement

Agency (CDEA) for a undisclosed bank account holding MNT 2.5 billion.

The two main subjects for the investigation are M. Khuyagbaatar, head of finance and planning at

the agency, and S. Batbyamba, a specialist for that department. The two officials allegedly opened

a savings account at Golomt Bank LLC in October 2012 to hold funds that came from the state

budget, without proper authorization.

Reasons for the authority‘s suspicions arise from the opaque source of the funds, and it is illegal to

open an account to hold money from the state budget. Investigators also alleged that the money

was never returned to the state budget, as is the practice by law for all unspent funds. An alleged

transfer and spending of MNT 1.1 billion could have done for the purpose of embezzlement, said

investigators, and interest earned from the deposit was transferred to a personal account.

Source: Undesnii Shuudan

AUTHORITIES ISSUE WARNING TO NARANTUUL OWNERS FOR SALE OF ILLICIT GOODS

Authorities from the General Agency for Specialized Inspection have ordered owners to cease and

desist in the sale illegal goods at the Narantuul ―black‖ market this week.

An inspection at the market revealed the sale of illegal items, including prescription drugs and

illegal animal products such as fur, pelts, and feathers. The General Agency for Specialized

Inspection has issued a warning to the owners of the market, which is the biggest in Ulaanbaatar.

They have also been ordered to strengthen regulations at the market and educate merchants there

on Mongolia's laws and regulations.

Source: News.mn

STOLEN DINOSAUR HEAD REVEALS WEIRD HYBRID SPECIES

Palaeontologists have recovered the stolen head and feet of one of the world's weirdest dinosaurs.

The fossils were somehow smuggled out of Mongolia, but have now been returned. They reveal that

Deinocheirus, already known for its massive arms and the hump on its back, had a peculiar skull

that looked like a cross between an ostrich and a duck.

In 1965, the first remains of Deinocheirus were found in the Gobi desert by Zofia Kielan-

Jaworowska, now at the Institute of Paleobiology in Warsaw, Poland. All she found was a pair of

2.4-meter arms with fearsome claws. These arms were unlike any seen before, and earned the

fossil its name, which means "terrible hands". Kielan-Jaworowska realized the bones belonged to a

two-legged theropod, the family that includes Tyrannosaurus rex and birds.

Decades of searching for the rest of the bizarre beast yielded nothing until 2006, when the Korea-

Mongolia International Dinosaur Project found a 70-million-year-old skeleton in the Gobi desert.

Another followed in 2009. Between them they contained most of the major bones, except the head

and feet.

Last year François Escuillié, director of fossil dealership Eldonia in Gannat, France, spotted a

strange skull and associated feet in a private European collection. In 2011, he asked Pascal

Godefroit of the Royal Belgian Institute of Natural Sciences in Brussels to take a look. Suspecting

the bones might be the missing pieces of Deinocheirus, the two checked with the Korean-Mongolian

team and found that the skull fit perfectly with the body found in 2006. It remains unknown how

the fossils were smuggled out of Mongolia and made their way to Europe. The collector has not

been identified.

Escuillié eventually acquired the fossil and donated it to the Royal Belgian Institute. Then, on 1

May, he and Godefroit presented it to the Mongolian government. The bones will be deposited at

the Central Museum of Mongolian Dinosaurs in Ulaanbaatar, along with the rest of the Deinocheirus

skeleton, and a Tarbosaurus that was also previously stolen.

Source: New Scientist

PARTICIPATORY URBAN PLANNING TAKES HOLD IN MONGOLIA

Potential community development solutions for Ulaanbaatar have come from Solo, Indonesia, in the

form of a community mapping initiative.

In March 2013, a Mongolian delegation made up of Ulaanbaatar City Municipality staff visited Solo in

Central Java to learn from an innovative community mapping initiative, pioneered in 2009 by local

non-government organization Yayasan Kota Kita (YKK). For the first time, the mapping project

enabled citizens to interact in participatory planning, budgeting, and urban development decisions

in this city of over 500,000.

Although the two cities appear to be very different, Solo and Ulaanbaatar share similarities,

including rapid population growth. In both places, governance has traditionally been top-down, and

collecting accurate social and welfare data has historically not been a priority. Both cities also

share similarities in their local administrative structure—Indonesia has a RT (neighborhood

association) system that is based on 30 to 50 households that act as community leaders at the

lowest level in the administrative system. Ulaanbaatar has khoroos, under which there are

community leaders similar to RT leaders who are involved in decision-making at the local level.

Important to both cities is the need to identify community solutions that stem from a lack of

government capacity, and the need for citizens and community organizations to engage in

discussions to find effective mechanisms for infrastructure maintenance. The information generated

for the maps helps bring people together to discuss how best to share their resources. The data

collected are linked to the local budget process, which informs a series of maps that show services

such as the provision of schools and health clinics graphically.

In February 2014, a second delegation from Mongolia, this time including representatives of

Ulaanbaatar‘s district governments and the city municipality, visited Solo to learn more about

participatory budgeting and planning policies, how urban redevelopment and planning processes can

spur economic development, and how community savings schemes such as revolving funds can

support community-level development and employment. If applied in Ulaanbaatar, these could

make an important contribution to the lives of some of its most vulnerable residents living in the

ger districts.

The author Jeremy Gross previously served as The Asia Foundation’s election program manager in

Indonesia, and currently works as occasional consultant for the Foundation.

Source: Asia Foundation

TUVA LOOKS TO MONGOLIA FOR INVESTMENT IN A POST-CRIMEA WORLD

In the early 2000s, while doing research for a book on Siberian identity and traditional spirituality,

British journalist Anna Reid asked a Tuvan minority faction politician, Kadyr-ool Bicheldei, why Tuva

was still ruled by Moscow when it had been a nominally independent nation between the two world

wars. Bicheldei insisted independence was impossible for a tiny nation of only 300,000 people.

When Reid pressed on about the appeal of pan-Mongol unity (Tuvans speak a Turkic language, but

are culturally similar to Mongolians and were once ruled by them), Bicheldei was equally

categorical: ―A union with Mongolia to share poverty? Where‘s the sense in that?‖

But times have changed. A mineral mining boom and close proximity to resource-hungry China have

made Mongolia one of the fastest growing economies in the world, with gross domestic product

growth peaking at a staggering 17.5 percent in 2011, then dropping to a still impressive 12.4

percent in 2012, and 11.7 percent in 2013. The Russian-language news website Mangezeya reported

that the Tuva Republic‘s representation office in Ulaanbaatar is enticing Mongolian businesspeople

into investing in Tuva. The company Monlans is studying in great detail the possibility of opening a

processing plant for hides and furs in the republic using local materials. Mongolian businesspeople

are also attracted by plans for the development of granite deposits on the territory of Tuva.

Recent events in the post-Soviet sphere have set a dangerous precedent. Russia‘s annexation of

Crimea struck a clear blow against the post-World War II international order. It also set the Russia-

watcher community a-titter with speculation that the Crimean referendum that preceded the

annexation could provoke similar demands for referendums on autonomy in Russia‘s minority

regions. A handful of protesters in Buryatia came out in support of Ukraine, with one calling Ukraine

―an example and hope for Buryatia to also obtain its freedom and independence.‖ But true

separatism seems unlikely.

Tuva is growing more Tuvan while Russia appears to be getting more Russian. Russian President

Vladimir Putin increasingly positions himself as the defender of conservative values, and the official

role of Orthodox Christianity in society is growing. Meanwhile, Russia‘s actions in Crimea and

Ukraine emphasize the idea of a ―greater Russia‖ made up of ethnic Russians and Russian-speakers

abroad. Much interpretation of Putin‘s 18 March speech on the annexation of Crimea in the Russian

Duma has focused on nationalism, particularly Putin‘s usage of the word ―russkiy/russkaya,‖ which

emphasizes Russian ethnicity, to describe Crimea and the city of Sevastopol. Taken together, this

all suggests a shift toward a much more ethnicity-based conception of Russia.

And if Tuvans aren‘t the only ones who feel this way—say Tatars increasingly look to Turkey or the

Republic of Karelia to Finland—then Russia could be in for some very big changes.

The author Matthew Kupfer is a writer focusing on Russia and Central Asia. A graduate of Brandeis

University, he is a student of the Russian language and an enthusiast for the politics, cultures, and

histories of the post-Soviet region.

Source: Registan

NEW MONGOLIAN LAWS

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

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

publication.

Date Laws

12.05.2014 Amendments to Law on Indemnification of Damage on Repay Condition;

Law on Ratification of Protocol on Elimination of Illegal Trade of Tobacco Products.

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

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

are welcome to email the BCM office: info@bcmongolia.org.

ANNOUNCEMENTS

MONGOLIA BUSINESS SUMMIT 2014, JUNE 19-21, ULAANBAATAR

The non-government organization Mongolia Economic Forum will organize the Mongolia Business

Summit to be held from 19 to 21 June in Ulaanbaatar.

The event is receiving support from the Office of the President to provide information on the

foreign investment environment for various economic sectors in Mongolia. Also to be discussed will

be private-sector projects and Public-Private-Partnership projects in mining, infrastructure,

processing, agriculture, wool and cashmere, food and the production of building materials.

The three-day deal-driven event will serve as an excellent platform for participants to interact

directly with government officials, international investors, Mongolia's leading domestic companies,

as well as deliver promising business opportunities.

During the Summit, optional tours including visits to mine sites, cashmere factory, agricultural,

food and processing facilities and cultural destinations, will be offered.

Register at http://meforum.mn/mongolia-business-summit-2014.

___________________________________________

“MM TODAY” ON MNB-TV, FRIDAY, 19:00 TO 19:10

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

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

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

today‘s BCM NewsWire.

BCM WORKING GROUP NEWS

The BCM Legislative Working Group (LWG's) Memorandum based upon the expanded LWG meeting

on 28 April was delivered to Mining Minister Gankhuyag on 8 May.

The group had steered away from a line-item review and pushed for higher level comments. This

was in part due to timing, and in part what is stated below (can't do a sufficient line item review as

the draft amendments are presented).

The key themes picked up in the Memorandum were (1) unclear rational impacting ability to

comment and (2) unclear public consultation with stakeholders from which to "group think" the

amendments. Are they really best for Mongolia? Are they really best for business/commercial use?

Do they fit the purported goals of the Minerals Policy? All questions unknown without items 1 and 2

being properly addressed.

Even though the group agreed not to do a line item review, there were some specific comments

which were shared with BCM‘s partner, the MNMA, and brought to the attention of a key Mining

Ministry official. But noted that they did not substitute for the general higher level comments

delivered to the Mining Minster on 8 May.

„BCM IN THE UNIVERSITY CLASSROOM‟ NEWS

Business Council of Mongolia (BCM) has been progressing 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 1,544 students and teachers

have participated to BCM in the University Classroom Project.

Last speaker was Ms. Unurjargal, consultant of Mongolian Talent Network. The lecture was very

fruitful to the students.

Thank you to all who participated in BCM in the University Classroom project. We are now collecting

specific lecture topics for the next year academic year until 1 of June 2015.

University of the Humanities joined our BCM in the University Classroom project in May. So BCM‘s

project has expanded to 4 of Mongolia‘s biggest Universities -- National University of Mongolia,

Institute of Finance and Economics, Mongolian National University and University of the Humanities

-- with over 40.000 students collectively.

If you like to share your experience on some specific topic, you can discuss with us for the next

school term. Please contact: erka@bcmongolia.org

BCM WEBSITES

PRESENTATIONS (in Mongolian):

• ―Anti-Corruption legislation and State Policy‖ (Mongolian) by D. Munkhjargal, Prevention and

Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption

(IAAC) Mongolia at the ―ANTI-CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE

ON TRANSPARENCY‖ Training seminar, Mar 06, 2014

The presentation below was made at Mongolian National University as part of the ―BCM in the

University Classroom series‖ on February 27, 2014:

• Ser-Od Inchinkhorloo, Vice Director, BCM, ―Investment environment: Past, Present, Future‖

(Mongolian)

The presentation below is from the February 24 BCM monthly meeting:

• О. Зоригт, Гүйцэтгэх захирал, Майн Инфо "Майн Инфо ХХК-ний товч танилцуулга", МБЗ-ийн 2

сарын 24-ний сарын хурал

Dr. Khashchuluun, Executive Director, National Council of Private Sector Support, ―Taxation Impact

Research‖ to BCM Tax Working Group, February 19, 2014

• ТАТВАРЫН БАГЦ ХУУЛИЙН ӨӨРЧЛӨЛТ: ХУВИЙН ХЭВШИЛД, Ч. Хашчулуун, Хувийн хэвшлийг

дэмжих үндэсний зөвлөлийн гүйцэтгэх захирал 2014.02.19

20 Presentations from Coal Mongolia, 20-21 February, 2014:

• Уул уурхайн сайд Д. Ганхуяг, Төрөөс Эрдэс Баялгийн Салбарт Баримтлах Бодлого, Нүүрсний

Салбарыг Хөгжүүлэх Стратегийн Чиг Хандлага, Коал Монголиа 2014, 2 сарын 20-21.

• Сангийн сайд Ч.Улаан, МОНГОЛ УЛСЫН САНГИЙН ЯАМ, Улсын төсөвт нүүрсний салбарын

үзүүлэх нөлөө, татварын орчин шинэчлэл, Коал Монголиа 2014, 2 сарын 20-21.

• Монгол орны нүүрсний салбар дахь байгаль орчны асуудал, Байгаль орчин, ногоон хөгжлийн

яам, ХБОБНГ-ын дарга Д.Энхбат Коал Монголиа 2014, 2 сарын 20-21.

• НҮҮРСНИЙ АЖ ҮЙЛДВЭРЛЭЛИЙГ ХӨГЖҮҮЛЭХ ТЭЭВЭР ЛОЖИСТИКИЙН АСУУДЛУУД:

Л.ПҮРЭВБААТАР ТӨМӨР ЗАМЫН ИНЖЕНЕРҮҮДИЙН ХОЛБООНЫ ЕРӨНХИЙЛӨГЧ, ―УУЛ УУРХАЙН

БҮТЭЭГДЭХҮҮНИЙ ТЭЭВЭРЛЭЛТ‖ Коал Монголиа 2014, 2 сарын 20-21.

• МОНГОЛ УЛСЫН НҮҮРСНИЙ САЛБАР ДАХЬ ХӨРӨНГӨ ОРУУЛАЛТ, ХУДАЛДААНЫ ТААТАЙ ОРЧИН

БҮРДҮҮЛЭХ НЬ,ЭДИЙН ЗАСГИЙН ХӨГЖЛИЙН ДЭД САЙД О.ЧУЛУУНБАТ Коал Монголиа 2014, 2

сарын 20-21.

• Уул уурхайн дэд сайд О. Эрдэнэбулган, Олон улсын нүүрсний зах зээл дэх Монгол улсын

өрсөлдөх чадварыг нэмэгдүүлэхэд төрийн оролцоо Коал Монголиа 2014, 2 сарын 20-21.

• Ж. Батцэнгэл, Монголын Уул Уурхайн Корпорацийн дарга, МОНГОЛЫН НҮҮРСНИЙ САЛБАРЫН

ӨНӨӨГИЙН НӨХЦӨЛ БАЙДАЛ, Тулгарч буй бэрхшээл ба шийдэх боломж Коал Монголиа 2014, 2

сарын 20-21.

• Аршад Саеид, Пийбоди Энержи компанийн Монгол ба Энэтхэг улсыг хариуцсан Ерөнхийлөгч,

Дэлхийн нүүрсний зах зээл, Монгол улсад үзүүлэх нөлөөлөл, Коал Монголиа 2014, 2 сарын 20-

21.

• МОЗА гүйцэтгэх захирал Ч. Хашчулуун, Занарын дэлхии ̆н хувьсгал ба Монголын эдии ̆н засагт

үр нөлөө, Коал Монголиа 2014, 2 сарын 20-21.

• Багануур Энержи Корпорэйшн ХХК, Нүүрс хийжүүлэх, шингэрүүлэх цогцолбор парк төслийн

товч танилцуулга, Коал Монголиа 2014, 2 сарын 20-21.

• АДУУНЧУЛУУНЫ ЦАХИЛГААН СТАНЦ, БЕНЗИНИЙ ҮЙЛДВЭРИЙН ТӨСӨЛ, Ж.Золжаргал –

Төслийн удирдагч, Коал Монголиа 2014, 2 сарын 20-21.

• Ц.Ганцог, Жени Ойл Шэйл Монголиа ХХК Гүйцэтгэх захирал, ШАТДАГ ЗАНАРЫГ АШИГЛАХ

БОЛОМЖ, Коал Монголиа 2014, 2 сарын 20-21.

• Фэн Вэй эрчим хүчний зөвлөгөө өгөх компани, 2014 оны хятадын нүүрсний зах зээлийн

шинжилгээ болон үнийн таамаглал, Коал Монголиа 2014, 2 сарын 20-21.

• Я. Батсуурь, Эрдэнэс Таван Толгой ХК, Танилцуулга, Коал Монголиа 2014, 2 сарын 20-21.

• Хишиг Арвин Индустриал ХХК, ҮНДЭСНИЙ КОМПАНИУДЫН ТӨЛӨВШИЛ, ӨРСӨЛДӨХ ЧАДВАР,

Коал Монголиа 2014, 2 сарын 20-21.

• Виртген Групп, МОНГОЛЫН НҮҮРСНИЙ ЗАХ ЗЭЭЛ ДЭХ WIRTGEN БРЭНДИЙН SURFACE MINER

БУЮУ АНГИЛАН ОЛБОРЛОГЧИЙН ТЕХНОЛОГИ БОЛОН АШИГЛАХ БОЛОМЖУУД, Коал Монголиа

2014, 2 сарын 20-21.

• ―Тавантолгой‖ ХК-ийн Гүйцэтгэх захирал Р.Сэддорж, Дэвшилтэт технологи ба инновацийг

нутагшуулах нь, Коал Монголиа 2014, 2 сарын 20-21.

• ―УУЛ УУРХАЙН ДЭД БҮТЦИЙН ХӨРӨНГӨ ОРУУЛАЛТЫГ ДЭМЖИХ ТӨСӨЛ‖ Төслийн Зохицуулагч

Б.Энхбаатар,Коал Монголиа 2014, 2 сарын 20-21.

• ДЭД САЙД Д.ДОРЖПҮРЭВ, Эрчим Хүчний Яам, 2014 ОНД ЭРЧИМ ХҮЧНИЙ САЛБАРЫН

ХИЙГДЭХЭЭР ТӨЛӨВЛӨСӨН АЖЛУУД БОЛОН ТӨРӨӨС БАРИМТАЛЖ БУЙ БОДЛОГО, Коал

Монголиа 2014, 2 сарын 20-21.

• Ай Эм Си Монтан Компани, Нүүрс баяжуулах талаар, Коал Монголиа 2014, 2 сарын 20-21.

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

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

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

гишүүдийн сарын хурал дээр

___________________________________________

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

BUSINESS NEWS‟, „PHOTO GALLERY‟

4 presentations from 3rd Mongolia Trade and Commodity Finance Conference, May 13, Blue Sky-UB:

• Mongolia – New Investment Laws, Stephen Tricks, Consultant, Clyde & Co;

• Mongolia Investment Law: select issues, B. Enkhbat, Partner, MDS & KhanLex Law Firm;

• Mongolia‘s promise of mineral wealth, Arnout van Heukelem, Head of Metals & Mining Asia ING;

• Utilising international partnerships to extend access to trade finance, Marco Nindl, Trade Finance

Banker, EBRD.

16 Presentations at 2014 Mongolia Investment Summit London, April 30-May1:

• Assessing developments in current economic policy and how the government will manage and

improve existing regulations, Ochirbat Chuluunbat, Vice Minister for Economic Development,

Ministry of Economic Development, Mongolia

• How should investors interpret the shift in government policy and the introduction of the new

investment law?, Andrew Danenza, Founder and Managing Partner, Melbury Capital, UK

• Examining legal developments and what this means for the stimulation of FDI, Chris Melville,

Partner, Hogan Lovells, Mongolia

• Examining Mongolian mining policy and how it could benefit the production and export of mineral

resources, Rentsendoo Jigjid, State Secretary, Ministry of Mining, Mongolia

• Analyzing the Mongolian coal market: how could mining companies best respond to the operating

environment and fluctuations in demand?, Battsengel Gotov, Executive Director and CEO, Mongolian

Mining Corporation, Mongolia

• Examining how Mongolian banks and financial institutions are dealing with the challenges and

opportunities of a fast growing economy, Norihiko Kato, CEO, Khan Bank, Mongolia

• Spotlight presentations: a chance to showcase your services and projects to a wide investor

audience, Leading bank of Mongolia: Golomt Bank - Munkhbat Davaatseren CEO, Golomt Securities

LLC, Mongolia

• To what extent has Mongolia retained its previously high levels of investment appeal? Alisher Ali

Chairman, Eurasia Capital, Mongolia

• How can Mongolia attract private investment in power development? Philip Lam, Senior Banker,

Power and Energy Utilities, EBRD, UK

• Examining the potential for successful renewable energy projects in Mongolia and the benefits

cleaner energy will bring for foreign investors, Bolor J. Artan, Deputy CEO, Newcom Group,

Mongolia

• Spotlight presentations: a chance to showcase your services and projects to a wide investor

audience, Michael Jonas Director, Genie Mongolia and Executive Vice President, Genie Oil and Gas,

Mongolia

• Assessing the Mongolian Stocks Exchange‘s cooperation with the London Stock Exchange and how

this can benefit investors, Jon Edwards Deputy Head of Primary Markets- Emerging Markets, London

Stock Exchange, UK

• Spotlight presentations: a chance to showcase your services and projects to a wide investor

audience, Boldbaatar Lamjav, Board Member, Nuudelchin, Mongolia

• Mining infrastructure case study: examining the development of infrastructure to support Erdenes

Tavan Tolgoi and how a continuation will bring, Badarch Enkhbat, CFO, Erdenes Tavan Tolgoi,

Mongolia

• Developing strategic mineral assets and infrastructure in Mongolia: Examining the timescales and

how obstacles can be overcome, Sainbuyan Odon CEO, Erdenes MGL LLC, Mongolia

• How could you ensure an effective IPO and the raising of the necessary capital for your business?,

Ayuna Nechaeva, Business Development Manager – Russia, CIS and Mongolia, London Stock

Exchange, UK.

___________________________________________

• ―Public-Private Partnership in Mongolia: Now and Future Prospects‖, E. Enerelt, Investment

Officer, ADB and Ts. Batbayar, Director of Concession Division, Ministry of Economic Development

at BCM monthly meeting, March 24, 2014;

• ―Areva in Mongolia: 15 years of presence – New perspectives in uranium mining‖, Thierry Plaisant,

General Director, Areva Mongol at BCM monthly meeting, March 24, 2014;

• ―Impact of Corruption in Mongolia‖ by L. Sumati, Director of Sant Maral Foundation at the ―ANTI-

CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training

seminar, Mar 06, 2014;

• ―Anglo American Business Integrity policy and its application within the Business Globally‖ , Dr.

Graeme Hancock, President and Chief Representative Mongolia of Anglo American at the ―ANTI-

CORRUPTION LEGISLATION/POLICY, INTERNATIONAL BEST PRACTICE ON TRANSPARENCY‖ Training

seminar, Mar 06, 2014;

• Change of the package of taxation laws: private sector, Dr. Ch. Khashchuluun, Executive Director,

National Council for Private Sector Support, at the BCM`s Tax working group's meeting Feb 19,

2014;

• Economic and Capital Markets Update, Nick Cousyn, Chief Operating Officer, BDSec at the BCM

Monthly Meeting, Feb 24, 2014

Mongolia reports: http://bcmongolia.org/en/mongolia-reports

• Mongolia: Economy outlook 2014, by Asian Development Bank;

• Selected Macroeconomic Indicators as of Jan 2014, by International Monetary Fund;

• Monthly statistical bulletin, March, 2014 , by Mongol Bank;

• Social and economic situation of Mongolia as of March 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)

• Polit Barometer, March 2014, by Sant Maral Foundation.

Interview Section: http://bcmongolia.org/en/interviews

• 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‖;

• Jim Dwyer, Executive Director, BCM: ―Minerals Policy‖;

• D. Bayasgalan, Director of Golomt Bank: ―Golomt has no problem‖;

• From the Oxford Business Group, Mongolia Reports 2013 book;

• B. Byambasaikhan, Chairman, BCM: ―Talk is cheap‖;

• President Ts. Elbegdorj: ―Diversifying for growth‖;

• Jim Dwyer, Executive Director, BCM: ―Non-mining sectors budding‖;

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

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

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

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

BCM's English website includes the ―Mongolia Business News‖ section.

• 2014 Article IV staff report for Mongolia by International Monetary Fund;

• BCM comments on draft Amendments to the Minerals Law made to Mr. D.Gankhuyag, the Minister

of Mining, February, 2014;

• BCM Open Letter to Parliament and Government is available for download.

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

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

The ―Photo Gallery‖ contains photos from the 6th Anniversary BCM Renewal dinner on November

11, 2013.

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

en/album?albumid=200

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

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

___________________________________________

SOCIAL NETWORK WITH BCM

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 5,496 fans on our Facebook fans page, 577 connections on LinkedIn

network, and 1,058 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/

ECONOMIC INDICATORS

INFLATION

Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]

Year 2007 *15.1% [source: NSOM]

Year 2008 *22.1% [source: NSOM]

Year 2009 *4.2% [source: NSOM]

Year 2010 *13.0% [source: NSOM]

Year 2011 *10.2% [source: NSOM]

Year 2012 *14.0% [source: NSOM]

Year 2013 *12.5% [source: NSOM]

April 30, 2014 *12.3% [source: NSOM]

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

Note: 12.0% y-o-y, Ulaanbaatar city, April 30, 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]

CURRENCY RATES – 15 MAY 2014

Currency Name Currency Rate

US Dollar USD 1,813.99

Euro EUR 2,488.07

Japanese yen JPY 17.77

British pound GBP 3,058.84

Hong Kong dollar HKD 234.02

Chinese Yuan CNY 291.03

Russian Ruble RUB 52.24

South Korean won KRW 1.77

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.