BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 276 – May 31, 2013

NEWS HIGHLIGHTS:

Business

Oyu Tolgoi declares good standing on water fees;

Japan’s Orix announces capital participation in TenGer;

Havoc breaks out at Golomt;

PetroChina workers on strike;

KFC opens in UB;

How Benoy is helping shape the new Mongolia;

Genie Oil pitches oil shale plan to standing committee;

Newera targets new coal areas at Shanagan;

Development Bank hires Korean Development Bank as advisor;

Alaska university to design AUM's engineering school;

MCC chief receives Peace medal;

Peru urges new OT-sized copper mine owner to stick to Xstrata blueprint.

Economy

China copper smelters count on Oyu Tolgoi for concentrate supply;

Mongolia Stock Exchange seeks deeper ties with LSE;

Tax avoidance: Developing countries take on multinationals;

USD 400 mn awaits appropriation from Chinggis bond;

Power Plant No. 5 planned for Khulyn Gol;

Mongol Bank to introduce online securities trade;

Central Bank receives bids of MNT 89 bn at auction;

Population to hit 2.9 million in July;

Russian universities beckon again to young scholars;

Mongolia's economic growth must also include the poor, says UN;

Traditional cultures offer lessons for wasteful world;

Australia can extend helping hand to resource countries;

MP announces plans for dinosaur park in Dundgobi;

China eyes cap on carbon emissions by 2016.

Politics

Securities Law passed by Parliament;

The race is on in Mongolia;

Presidential candidates open campaign funds;

Two more parties back Elbegdorj;

Democratic Party or National Wrestling Party?

Court rules former GEC chairman dismissal was illegal;

Study shows slight fall in underage drinking violations in 2013;

International borders closed on 1 June;

Mongolia marks International Day of U.N. Peacekeepers;

Mongolia to open interpreters' school;

Germany, Mongolia renew promise for transportation cooperation;

Mongolia requests aid from Austria for renewable energy aspirations;

France's Geological Survey to support MRA in capacities;

Government promises full tuition for students entering top universities;

Dino display delays public unveiling.

ECONOMIC INDICATORS

MSE Top 20 Index by market Capitalization;

Foreign-listed Companies with Mongolian Assets;

Supermarket Price Comparison – April/May 2013;

Inflation;

Central bank policy rate;

Currency rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank

Major Drilling

International SOS

Wagner Asia Automotive

Wagner Asia Equipment

Oxford Business Group

Mongolian National Broadcasting

Breakthrough PR

BCM MONTHLY MEETING RECAP

The BCM meeting on 27 May, with Bayanjargal Byambasaikhan in the chair, was attended by 85

members and invited guests. Executive Director Jim Dwyer reported that the Environment Working

Group, chaired by Amarjargal Bayarmaa of Clean Energy LLC, has added 16 new volunteers, bringing

the total to 35. The Working Group is currently awaiting the celebration of World Environment Day

on 5 June.

BCM membership now stands at 256, an all-time high, compared with 223 in May 2012.

―For every additional new member, we set a new record,‖ said Dwyer.

The four most recently joined members are:

1. Cover Mongolia is an Ulaanbaatar-based news service and consulting firm focused on Mongolia. It

was founded by Munkhdul ‗Mogi‘ Badral with the vision of providing accurate and timely information

to private, public and social stakeholders of Mongolia.

Cover Mongolia is a culmination of Mogi‘s five years of experience in the financial and brokerage

industry in Mongolia. Cover Mongolia‘s news service comprises of CoverMongolia NewsWire email

newsletter, as well as its Cover Mongolia Facebook (/CoverMongolia) and Twitter (@CoverMongolia)

feeds.

2. Khan Investment Management Ltd. is a single-country Mongolia-focused investment house with

offices in Ulaanbaatar, Singapore and Grand Cayman. Khan Investment Management is the

Investment Adviser to the Khan Mongolia Equity Fund.

Conceived to create, structure and promote the Khan Mongolia Equity Fund, Khan provides global

investors with access to a wide range of investment opportunities in fast growing Mongolia.

3. The Mongolian Exporters‘ Association is a non-Governmental organization, established in 2006. It

aims to connect local producers and exporters with the international market, assist producers with

trading export commodities, assist in networking with regional and international commodity

exchanges and specialized research companies, arrange training on mineral economics, design,

technology, operations and management, and teach mining business English.

The Association has been actively helping the Mongolian mineral exporters to enter the

international market since 2006. It is also providing supply and demand analysis of the mineral

products as well as price forecasts.

4. Very Important News aims to improve the state governing system using information technology to

increase the involvement of civil society organizations and provide conditions to organist their

activities openly to the public.

―Speaker Group‖ Co., Ltd. was founded in 2001 and operates in software and media relations. It has

operated Vip76.mn for five years with the aim to act as a bridge between government officials,

citizens, professional experts and civil society representatives.

The first speaker of the evening was Stephan A. Fischer, managing director of VF Messen GmbH, to

update members on the Future Mongolia 2013 Expo. The event is scheduled for 19 to 22 June at the

Buyant Ukhaa Sport Complex, located near the Chinggis Khaan International Airport.

―We are not just a mining exhibition or for infrastructure development. We cover the entire

spectrum of development,‖ said Fischer.

Fischer said vendors and company representatives from around the world would come to Mongolia

to share their know-how and build partnerships.

―We do not want to teach everyone how to do everything. We want to do it together with the

industry.‖

Jonathan Addleton, former U.S. ambassador to Mongolia, spoke next on his new book Mongolia and

the United States: A Diplomatic History. Addleton came to Mongolia in two separate roles, the first

from 2001 to 2004 with USAID, and again from 2009 to 2011 as ambassador.

Addleton took listeners back through Mongolia's history of diplomacy with the United States. U.S.-

Mongolian relations stretch as far as 150 years ago in 1863 when the first U.S. citizen traveled to

Mongolia.

―Actually the 1900s had much more vibrant U.S. Mongolian commercial relations than people

realize,‖ said Addleton.

He recalled that in 1919, when the United States was in the midst of the Jazz Age, it imported

silent films and Harley Davidson motorcycles to Mongolia. He also noted that in 1921 the U.S. had

one million rabbit skins arrive from Mongolia. Noting how much has remained the same, he

commented, ―Some of the issued faced now were faced back then.‖

However, the most important events in history of the United States and Mongolia's partnership took

place in the 1990s and 2000s, when USAID took action to create deep roots through Khan Bank and

XacBank. Also it was during this time, in 2007, that the Business Council of Mongolia spun off from

the North America-Mongolia Business Council and was established.

―Over the long-term, people to people relations are vital, but long-term commercial ties are just as

much so,‖ said Addleton.

Ulaanbaatar Deputy Mayor T. Bat-Erdene spoke next to share with members the city's landscaping

development plans. Bat-Erdene noted that currently UB has a population of 1.1 million with

expected growth to bring that figure to 1.7 million by 2020. With that in mind the city's urban

planners hope to utilize Ulaanbaatar's 470,000 hectares of land by dividing it into 4 zones:

protected areas, commercial business, parks green space, and animal husbandry.

Planners hope an expansion of 800 hectares of green space will help tourism, with plans for a 960-

hectare national park in southern Ulaanbaatar. There are also plans to bring greenery to 109

streets, including in the city's ger districts. To finance the work, the government is hoping to utilize

public-private partnerships.

―PPP is a very positive approach to using resources effectively,‖ said Bat-Erdene. ―Last week

consultations were held with NGOs and environmental representatives for landscape planning. ―We

hope these partnerships will continue.‖

Landscaping activities are expected to begin in June this year.

Environment and Green Development Minister Sanjaasuren Oyun gave the final presentation of the

evening, noting that she would discuss a similar topic to Bat-Erdene's: policy reform for Mongolia's

environment. Today, the 8 percent of forest-covered territory is shrinking due to development

throughout the country. The government is now implementing reforestation plans to revitalize aging

forests by planting younger trees and maintaining the environment.

One step the government is taking is the privatization of forested land, where people can build a

home and employ some commercial activity and eventually resell to the government at a profit.

The government is offering land at MNT 200,000 per hectare for eventual sale of MNT 350,000, said

Oyun.

―This week we discuss the plan with the Cabinet. It could sound ambitious, but we have rich

traditions of co-existing with the environment so that traditions should be intertwined with modern

technology and breakthroughs,‖ said Oyun.

She noted that Mongolia had seen tremendous environmental change for the worse in the last two

decades, as miners have failed to hold to their reclamation responsibilities, the air in the capital

has grown toxic, and authorities struggle with garbage and toxic material waste management.

However, the government is becoming more proactive, first by replacing stoves with more efficient

models in 120,000 homes, and raising the standards of its fuel. In the near term the government

plans to revisit the so-called ―Long Name Law,‖ which in 2009 halted the exploration activities of

mines located near forested areas and headwaters, and a new payment scheme for water

management.

BUSINESS

OYU TOLGOI DECLARES GOOD STANDING ON WATER FEES

Oyu Tolgoi LLC denied reports that it had fallen behind on payments for water fees incurred during

its operations.

―Recent media reports stating that OT's water supply has been stopped due to a tax dispute are

incorrect,‖ said a statement from Oyu Tolgoi. ― Oyu Tolgoi LLC has always operated in good faith in

accordance with all relevant laws and regulations.‖

The statement further stated that on 25 May the company received from the Ministry of

Environment Economic Development a notice that a new water fee scheme had been approved and

that it ―looked forward to reaching a mutually acceptable solution.‖

Source: News.mn

JAPAN‟S ORIX ANNOUNCES CAPITAL PARTICIPATION IN TENGER

Orix Corp., a leading integrated financial services group of Japan, has announced its decision to

foray into the Mongolian financial services business through an alliance with TenGer Financial

Group.

The Japanese investment giant has reached an agreement to purchase about 16 percent of shares in

TenGer for USD 24 million, valuing TenGer at USD 150 million, and could obtain the necessary

permits for the investment in June. Orix plans to expand into new areas of business such as card

loans and Internet banking and use its experience in financial services business to expand and

strengthen TenGer‘s existing businesses. It will seek to capitalize on TenGer‘s business platform to

obtain new investment opportunities and expand its assets within Mongolia, which is estimated to

have an average annual economic growth rate of 20 percent in the next five years.

Source: ANI

HAVOC BREAKS OUT AT GOLOMT

Foreign Minister and MP L. Bold has sparked a public feud with management at Golomt Bank LLC.

Bold, who is a major shareholder of Golomt, publicly voiced his frustrations with management via

his Twitter account, publishing a letter from his lawyer to the president of the Bank of Mongolia.

The letter clearly describes a deteriorating situation at Golomt and included images of a

demolished office room for his representatives at the bank's office.

The letter said the banked had failed to hold its annual shareholders' meeting, which is mandated

by Mongolia's Company Law. Bold requested that Central Bank President N. Zoljargal take punitive

measures against the bank, suggesting it suspend or dismiss the executive power of the bank, which

is a power granted by the Banking Law.

Source: Business-Mongolia

PETROCHINA WORKERS ON STRIKE

One-hundred sixty workers from PetroChina Daqing Tamsag Mongol LLC began a strike on 25 May.

Workers are demanding salary raises, arguing none have seen a raise in the past year. They claim

the average salary at PetroChina is USD 300 to USD 400 compared with an average of USD 1,000.

Striking workers are also requesting reduced work loans and improved living conditions. Workers say

they work 40 days in camping-like conditions, with eight Mongolians living in one dormitory.

According to one unnamed source, a strike extending past 50 days would halt the shipment of the

Mongol 93 fuel.

Source: Undesnii Shuudan

KFC OPENS IN UB

Newly tapped mines beneath the Gobi desert and elsewhere, rich in copper, coal and gold, have

resulted in a surge of wealth that has brought electricity, cars and now the nation's first Western

food chain: KFC.

The outposts, located in the Mongolian capital of Ulaanbaatar, opened Wednesday with fanfare that

attracted the U.S. ambassador to Mongolia and the country's trade minister. Muktesh ―Mickey‖

Pant, chief executive officer of KFC's parent company, Yum! Restaurants International Inc.,

estimated that the eatery served up to 3,000 people between Wednesday's grand opening and a soft

opening the day before.

―I think for Mongolia, [KFC] is like a sign of arrival in a sense,‖ Pant told the Huffington Post, adding

that he had also met with the country's prime minister, Norov Altankhuyag. ―It's unusual for a fast

food concept to attract that kind of interest,‖ he mused.

Pant sees ―tremendous potential‖ for KFC in Mongolia—he said that the chain plans to open 15 more

locations over the next five years, with the second coming in June. The third, which will likely open

in a few months, will feature the nation's first drive-thru—a trickier notion than it sounds. Half of

all cars in Mongolia feature a right-side steering wheel, the remainder a mirror opposite. ―We don't

know where to put the window,‖ Pant said of the drive-thru, with a laugh.

Such issues seem infinitesimal compared to the difficulty of establishing reliable supply lines in the

landlocked nation, although Pant was adamant that this challenge has been met. Chicken, for now,

will be imported—for the launch, it came from Japan and the United States—which is perhaps

because the Mongolian diet traditionally consists of red meats. In the long-term, Pant envisions

bringing 50 and 100 KFC locations to Mongolia, including rural regions. Once KFC gains a foothold,

he said, ―We're thinking of bringing in Pizza Hut.‖

Source: Huffington Post

HOW BENOY IS HELPING SHAPE THE NEW MONGOLIA

It's good to be hot in your job and cool under pressure, but for one leading British architectural and

design firm the temperature gauge swung a staggering amount in the search for business. When

Benoy, which employs a team of 500 worldwide, was finalizing the deal to help design the swankiest

new building in Mongolia, its far east delegation went from the 35 degree Celsius of Kuala Lumpur

to the -35 degrees of Ulaanbaatar within 24 hours.

In the spring, Benoy, which is headquartered in the United Kingdom and has studios in Hong Kong,

Shanghai, Beijing, Kuala Lumpur, Singapore, Abu Dhabi, Mumbai, and Newark, picked up a second

successive Queen's Award for Enterprise thanks to its international trade success, especially in

emerging markets such as India, China—and now Mongolia. The company has been appointed as the

interior designers for the entrance lobby, residential apartments and the private leisure clubhouse

at the Olympic Residence, a high-rise, multi-use development in the center of the city that is

backed by Asia Pacific Investment Partners (APIP). John Denton, who leads the interior design team

for Benoy in Asia, believes that work in China swayed the deal.

―Our client had seen our recent EAST Hotel projects in Beijing, which they really like—this was our

best advertisement in order to be selected for the job,‖ Denton said. He said, ―The local culture is

very important to the destinations we create and each project we work on is specifically designed

for its own unique local region and characteristics, adding genuine personality to our designs.

Now John sees the Ulaanbaatar project as the springboard for a great adventure in the country,

believing it is an ―exciting time‖ for Mongolia and Benoy. And Benoy—along with every other

consultant—will be able to start with a relatively blank canvas, as Mongolia's cityscape have a long

way to catch up the pace of development in the minerals industries, which are generating much of

the wealth.

Source: Global Trader

GENIE OIL PITCHES OIL SHALE PLAN TO STANDING COMMITTEE

Genie Oil Shale Mongolia LLC presented to the Standing Committee on Economy its shale technology

and capabilities.

Harold Winiger, a senior expert of the company, presented company research on shale

opportunities in Mongolia, saying on-going study has shown that Mongolia has a large resource. He

said his company could provide the extraction technology Mongolia would need to burrow deep into

the earth without opening a mine. He added that Jenny's technology would impose a minimum

impact on the environment while making it possible to produce high quality fuels such as diesel, jet

fuel and liquid gas.

He said Mongolia's production of refined shale fuel would be twice that of Israel's. After a few years'

research, said Winiger, Mongolia could construct a refinement plant able to produce 50,000 barrels

of fuel a day.

Source: Udriin Sonin

NEWERA TARGETS NEW COAL AREAS AT SHANAGAN

Newera Resources will test for extensions of known coal seams with a new drilling program at the

Shanagan East coal project.

The previous drilling programs at Shanagan have confirmed a near surface-deposit of high calorific

value black coal. There have also been reports of coking coal from other explorers to the north of

Newera's permit—increasing the prospectivity of the area. The third round program will comprise six

holes for around 600 meters. Newera has an exploration target of between 66 million and 111

million tons of coal at Shanagan.

The importance of the new drilling program is the potential to increase the exploration target and

completed a maiden JORC Resource. Newera will also drill into the potential new coal zones

identified from the interpretation and modeling of the recently completed 15 line-kilometer

induced polarization survey which highlighted several drilling targets.

Source: Proactive Investors

DEVELOPMENT BANK HIRES KOREAN DEVELOPMENT BANK AS ADVISOR

The Cabinet of Ministers has permitted the Development Bank of Mongolia to move forward with

hiring the Korean Development Bank as a consultant.

The Cabinet ruled in favor of the proposal for a contract between the Mongolia and South Korea's

development banks on 25 May. The contract follows the termination of a of management contract

between the Development Bank of Mongolia and the Korean Development Bank's management.

Source: Montsame

ALASKA UNIVERSITY TO DESIGN AUM'S ENGINEERING SCHOOL

The American University of Mongolia (AUM) has announced the signing of an agreement with the

University of Alaska Fairbanks (UAF) that will create the designs of AUM's School of Engineering. The

agreement proposes that UAF deliver a comprehensive overview of the accreditation requirements,

curriculum, faculty and staff, laboratories and space required for the school.

Rajive Ganguli, chair of the department of mining and geological engineering at UAF, will lead a

team of seven engineering professors from the fields of mining, geological, petroleum, mechanical

and civil engineering in completing the work. The new partnership is the latest in a trend of

increased collaboration between UAF and Mongolia, including an academic and research agreement

with Erdenet Mining Co. and an agreement that allows undergraduate engineering students to spend

the first half of their studies at the Mongolian University of Science and Technology and the final

half at UAF.

―Though a research-intensive university, the teaching mission is taken seriously at UAF. This is

reflected in the fact that we place our graduates not only with Alaska employers, but also with

large international companies such as BP, Freeport McMoRan and BHP Billiton,‖ Ganguli said. ―With

AUM emphasizing good quality education above everything else, I was very happy to participate.

Just like Alaska kids, Mongolians will have access to great engineering education in their own

backyard.‖

A key element in AUM's engineering program will be accreditation from the Accreditation Board for

Engineering and Technology (ABET).

Source: American University of Mongolia

MCC CHIEF RECEIVES PEACE MEDAL

Mongolia has awarded the resident country director of the Millennium Challenge Corp. (MCC) the

Peace medal.

Head of the Office of the President P. Tsagaan presented Country Directory Robert Reid with his

award on 28 May for his role in the improvement of the Mongolian economy and society through the

MCC.

The MCC participates in and leads projects regarding infrastructure, education, and the

environment, aiming to help spur sustainable growth.

Source: News.mn

PERU URGES NEW OT-SIZED COPPER MINE OWNER TO STICK TO XSTRATA BLUEPRINT

Peru expects any new owner of one of the largest copper deposits in the world, comparable in size

to the Oyu Tolgoi copper-gold mine, to stick to development plans set out by Xstrata before it was

acquired by tradinghouse Glencore.

Glencore has agreed to sell the Las Bambas project in Peru's Cotabambas and Grau Provinces to a

buyer approved by China's monopoly watchdog by 15 September 2014 in exchange for Beijing's

blessing over Glencore's USD 35 billion acquisition of Xstrata completed in April. Demand for copper

has since waned, with the metal's price down about 8 percent this year.

―We are very happy with the quality of the investment and the standards... that have been

developed by Xstrata,‖ Jorge Humberto Merino Tafur, Peru's minister of mines said on the side of a

conference promoting Latin American mining projects. ―We expect as a government to keep that

standard.‖

Las Bambas is slated to produce a minimum of 400,000 tons of copper a year, with commissioning to

start in late 2014. At that rate, it would be close in production to Rio Tinto PLC's Oyu Tolgoi mine

under development in Mongolia and about half the size of the BHP Billiton-controlled Escondida

mine in Chile, the world's largest.

Source: Reuters

ECONOMY

CHINA COPPER SMELTERS COUNT ON OYU TOLGOI FOR CONCENTRATE SUPPLY

Chinese copper smelters are turning to Rio Tinto PLC's Oyu Tolgoi mine in Mongolia for concentrates

in the spot market as a regional oversupply situation in the raw material is easing after a key

Indonesian mine halted operations this month.

China has boosted purchases of spot concentrate in the Asia market to benefit from a regional

oversupply after India closed its top smelter run by Sterlite Industries around end-March over

environmental concerns. But the extra supply was drying up now, traders said.

―Trading houses are no longer desperate to sell,‖ said a trader at an international trading firm, who

declined to be named.

The huge Oyu Tolgoi mine is expected to start shipments of copper concentrates to China around

the end of June, said a source at a Chinese smelter, which will receive term shipments of Oyu

Tolgoi concentrates. Logistics for transporting concentrates to China have been completed mostly,

said two sources at a Chinese smelter, which will receive term shipments of Oyu Tolgoi

concentrates

Separate smelters attended a presentation by Rio Tinto earlier this month. Copper concentrates to

be shipped to China will be examined by officials of China's quarantine authority at the mine and

will be packed in bags, with three tons per bag. The bagged concentrates will be transported to a

bonded warehouse in the Chinese border for deliveries to buyers, the sources said. Rio Tinto is

believed to have signed term contracts with three Chinese firms and at least on international

trading house for providing Oyu Tolgoi concentrates, sources at Chinese smelters said.

Source: Reuters

MONGOLIA STOCK EXCHANGE SEEKS DEEPER TIES WITH LSE

Mongolia Stock Exchange (MSE) is seeking to attract foreign investors to its fast-growing economy

with plans to broaden cooperation with the London Stock Exchange (LSE).

Altai Khangai, chief executive of the Mongolian Stock Exchange, said it hoped to promote dual

listings and create a ―FTSE Mongolia‖ index, after Mongolia's new Securities Law, approved by

Parliament last week, paved the way for deeper collaboration with the LSE. Mongolia has been

working for years on modernizing its capital markets to help develop its USD 12 billion economy.

However, MSE's Top 20 Index performed relatively poorly during the past two years as investors

interest cooled in the face of slowing growth in the region. The Top 20 Index has fallen more than

20 percent since the end of January. Altai said the new Securities Law, which takes effect on 1

January 2014, would ―open up a new era of development in the capital markets in the country,‖

making it easier for international investors to invest in Mongolia.

The exchange is tiny by global standards, with a total market capitalization of about USD 1.3

billion. Although 328 companies are listed, more are dominant shells left over from an earlier era of

privatization, and fewer than two dozen stocks are actively traded. MSE started working with the

LSE in 2011, hiring the London group to advise on installing the Millennium trading platform, which

went online in July last year. But liquidity problems remain and traders warn the new Securities

Law will not resolve these issues in the near term.

―It is a step in the right direction, but doesn't provide any immediate solutions to the lack of

liquidity,‖ said Eric Zurrin, director at Resource Investment Capital.

An LSE spokesman added that the passage of the Securities Law was the ―first and most important

step toward giving access to Mongolia for international investors,‖ and that shared trading

technology would make closer cooperation possible in the future.

Source: Financial Times

TAX AVOIDANCE: DEVELOPING COUNTRIES TAKE ON MULTINATIONALS

Zambia and Mongolia want to stop mining companies shifting profits out of their countries before

they can be taxed.

Both countries are major producers of minerals and say they lose billions of dollars a year in much-

needed tax revenue. However, the Organization for Economic Co-operation and Development has

warned this could be dangerous. The Paris-based developing nations' club thinks unilateral action by

individual countries could lead to a confused, fragmented set of rules with no clear standards.

―Tax must be paid where the real business is located,‖ Enkhbold said, ―not in offshore countries.‖

Mongolian officials they are acting in an attempt to stem large future tax losses in their rapidly

growing mining sector.

―Almost 70 percent of all major foreign direct investments are coming through the Netherlands, as

a tax shield,‖ said B. Batjargal, former Mongolian finance ministry official. The former minister said

Mongolia stands to lose around USD 5.5 billion in tax revenue over the lifetime of the country's

single biggest project, the giant Oyu Tolgoi copper mine.

The greatest threat to Mongolia's tax revenues is posed by its bilateral double taxation treaty with

the Netherlands, signed by the two countries in 2002. Under this treaty, if a Dutch company invests

in Mongolia it is entitled to pay dividends back to the Netherlands free of any Mongolian tax.

Records for Oyu Tolgoi Netherlands BV show it has no employees. It is one of over 1,000 similar

companies at a company formation service located in a single building in Prins Bernharplein in

Amsterdam.

―The risk you face is that we will end up with double taxation, triple taxation which is also

detrimental to investment and growth and employment.‖

Pascal Saint-Amans, who oversees tax treaties and international tax negotiations for the

organization said he regards unilateral actions such as the Mongolian treaty cancellations as

―dangerous.‖ It is further reason, he said, why the leaders of the countries in the G8 and G20 need

to reach agreement on how to deal with corporate tax avoidance, when they meet this summer.

Source: BBC

USD 400 MN AWAITS APPROPRIATION FROM CHINGGIS BOND

Prime Minister Norov Altankhuyag said USD 400 million from the proceeds of last year's USD 1.5

billion Chinggis bond remains.

―There are certain projects that are being implemented under the control and policy of the

Development Bank,‖ said Altankhuyag during his now-regular weekly 30-minute address to the

public. ―Additionally it needs a labor control organization to be involved. USD 400 million is left

from the bond.‖

Source: Business-Mongolia.com

POWER PLANT NO. 5 PLANNED FOR KHULYN GOL

Government has selected the Khulyn Gol river valley as the site for Power Plant No. 5.

The Ulaanbaatar mayor made an official decree for the site, which is located near Urgakh Naran

Soum in the 11th district of Bayanzurkh in April. The Ministry of Energy was granted the right to

acquire 43 hectares of land for 15 years for construction there in December last year. A tender bid

for the concession right to develop blueprints, raise finance, construction, daily maintenance, and

lead of the project for the 450-megawatt power plant was announced in 2012.

A consortium including Samsung C&T Corp., Korea Southern Power Co. Ltd, Ochir Tuv Co, Ltd., and

another including International Power PLC, Sojitz Corp., Posco Energy, and Newcom LLC were

selected.

Source: News.mn

MONGOL BANK TO INTRODUCE ONLINE SECURITIES TRADE

The Bank of Mongolia intends to make online securities trade possible. The Central Bank hopes to

introduce a secondary market via online trade.

Source: Zuunii Medee

CENTRAL BANK RECEIVES BIDS OF MNT 89 BN AT AUCTION

Bank of Mongolia had received MNT 89 billion in bids for 28-week government bills on behalf of the

Ministry of Finance.

Six domestic banks submitted eight bids in the auction. The Finance Ministry accepted MNT 40

billion in bids, with winning bids ranged from 9.7 percent (the lowest bid received to date in a

government bill auction) to 10.4 percent. The auction will settle on Monday, 3 June (T+3). Bills will

be held in the names of the purchasers at the Securities Clearing House and Central Depository.

In a previous auction from the Central Bank of 28-week bills on 1 May, the winning bids ranged from

10.5 percent to 10.8 percents.

Since the beginning of 2013, the Finance Ministry has successfully auctioned MNT 740 billion of

government bills. This week's 28-week government bill auction is part of the ministry's second-

quarter 2013 auction program. Auctions generally take place every Wednesday, with 12-week bills

every other week, 28-week bills on every second Wednesday and 52-week bills on every fourth

Wednesday. The next auction, of 12-week bills, will be held on Wednesday, 5 June for settlement

on Monday, 10 June (T+3).

Source: Ministry of Finance

POPULATION TO HIT 2.9 MILLION IN JULY

The National Statistical Office reported that Mongolia's population would grow to 2.9 million by July

this year.

Mongolia's population was estimated at a total of 2,892,992 people as of 30 May, with a global

population of some 7.09 billion. Mongolia's population reached two million in 1988, showing a

growth of 900,000 people in a quarter of a century.

In 1918, Mongolia had a population of 647,500 and reached one million in 1962. The population is

projected to reach three million by 2015.

Source: Info Mongolia

RUSSIAN UNIVERSITIES BECKON AGAIN TO YOUNG SCHOLARS

Russian universities are finding it more difficult to attract Mongolian students as English becomes a

preferred language and Mongolians look elsewhere abroad for their educations.

Russia has traditionally been a magnet for Mongolian students seeking a higher education. Since

1922, over 60,000 Mongolians have obtained degrees in Russia, according to the Kremlin-sponsored

Russian Center of Science and Culture in Ulaanbaatar. But since the collapse of communism these

ties have frayed. These days in Mongolia, English has replaced Russian as the main foreign language

taught in schools and universities. In the 1990s, the country began retraining Russian-language

teachers to teach English. In 2004, then-Mongolian-Premier Tsakhia Elbegdorj, now president,

expressed a desire for everyone in the country to speak English. He later refined this idea into a

more realistic national English curriculum, but the message was clear: English, not Russian, was the

language of the future.

Despite these changes, Russia remains a destination for some Mongolians seeking an affordable

higher education. The Russian government has increased the number of scholarships it provides

Mongolian students to 300 annually (250 for undergraduates and 50 for graduate students). At any

given moment, there are approximately 2,000 Mongolians studying in universities across Russia, for

free. But for Mongolian students there are practical difficulties when studying in Russia. Russian

cities are expensive and students struggle to stretch their stipends to cover basic needs. They are

not allowed to work while studying either. China, where students can work while having a

scholarship, is much more affordable in comparison.

The main test of Russian education, however, may not be the cost or the popularity of the

language, but whether the students feel they are getting a good education.

Source: Eurasianet

MONGOLIA'S ECONOMIC GROWTH MUST ALSO INCLUDE THE POOR, SAYS UN

With rising inequality and entrenched poverty in rural and urban areas, the poorest sectors of

Mongolian society have yet to benefit from the country's new found wealth, a United Nations expert

on poverty said.

―While some are reaping the benefits of the current economic boom, the most vulnerable continue

to struggle to make ends meet, with women and children often faring the worst,‖ warned the U.N.

special rapporteur on extreme poverty and human rights, Magdalena Sepúlveda. ―To ensure a future

where everyone will benefit from Mongolia's economic growth, immediate action must be taken to

implement poverty reduction strategies more effectively.‖

Recognizing the progress the country has made, she called on the state to concentrate on

developing economic and social strategies aimed at ensuring enjoyment of human rights by all.

Sepúlveda's findings are drawn from a report on the situation of persons living in extreme poverty in

Mongolia that was presented at the U.N. Human Rights Council in Geneva on 28 May. The report

recognizes important steps already taken by the government to implement poverty reduction

measures and highlights a number of recommendations for consideration by all stakeholders. She

urged government to tackle income disparity as well as its continued fight against corruption.

Source: Scoop

TRADITIONAL CULTURES OFFER LESSONS FOR WASTEFUL WORLD

World Environment Day on 5 June, whose global host is Mongolia, is focused on the new U.N.

Environment Program and U.N. Food and Agriculture Organization (FAO) campaign ―Think. Eat.

Save. Reduce Your Foodprint,‖ which is aimed at slashing wastage.

Mongolia aims to ensure its growth goes hand in hand with a green economy and civilization. It

neither wastes nor loses food at any significant level, but the nomadic life of many of its people

does offer some ancient answers to the modern-day challenge of food waste.

―Reducing food waste and loss is an economic, ethical and environmental challenge that links to

some of the greatest challenges of today, from hunger and nutrition to climate change,

deforestation and land degradation,‖ said Achim Steiner, U.N. under secretary general and UNEP

executive director. ―One of the ways everyone can contribute to these twin challenges is by looking

at how less-wasteful cultures place value on every morsel of food, and considering how to emulate

them.‖

The ways that indigenous people create preserved dishes are as many and varied as the cultures and

food sources that form the basis of the recipes. Mongolian general Chinggis Khan and his troops

utilized a traditional food called borts to gallop across Asia without depending on elaborate supply

chains. Borts is basically concentrated beef equal to the protein of an entire cow condensed and

grown down to the size of a human fist. This remarkable method of food preservation, without

refrigeration, produced a meal equivalent to several steaks when the protein was shaved into hot

water to make soup.

In industrialized regions, almost half of the total food squandered, around 300 million tons

annually, occurs because producers, retailers and consumers discard food that is still fit for

consumption—more than the net food production of Sub-Saharan African and enough to feed the

world's hungry. These figures demonstrate just how much room there is for individual consumers to

take the lead from their forebears and change the way they buy, store and consume food.

Source: Nation Multimedia

AUSTRALIA CAN EXTEND HELPING HAND TO RESOURCE COUNTRIES

Australian Federal Resources Minister Gary Gray last week released an assessment of how Australia

could assist other countries, such as Mongolia, to sustainably develop their mineral and energy

resources.

A report by Geoscience Australia details the known mineral and energy resources of 138 developing

countries, along with insights into other factors that could influence investment, such as political,

operational, security, and terrorism risks. Gray said several of Australia's development partners

were endowed with substantial mineral and energy resources that could propel them on a path to

inclusive and sustainable development.

―Poor management of resources can initiate a wave of economic stagnation, corruption and

conflict—resulting in what is known as the ―resource curse.‖ Australian development assistance can

assist developing countries grasp the opportunities afforded to them through mining. We are,

therefore, well placed to share our skills and knowledge to help developing countries use their

resource endowment to stimulate inclusive and sustainable growth, leading to a reduction in aid

dependence. When developing nations have an improved understanding of their often substantial

mineral and energy resource potential, better skilled [their] workforces and [begun to apply]

stronger governance practices, the likelihood of attracting mining exploration and investment is

vastly improved.‖

Source: Mining Weekly

MP ANNOUNCES PLANS FOR DINOSAUR PARK IN DUNDGOBI

MP B. Narankhuu announced the government's decision to help establish a new dinosaur park at

Mandalgobi Soum, Dundgobi Aimag.

During a visit to meet with Mandalgobi's denizens, the parliamentarian said the government had

decided to launch construction next year in spring. He said a German company would help build the

park at the Sum Kokh Burd natural resort.

Source: Montsame

CHINA EYES CAP ON CARBON EMISSIONS BY 2016

China is looking at introducing tough controls on its carbon pollution as soon as 2016, in a shift that

could boost talks on a global agreement to curb greenhouse gas emissions, an official at the heart

of state carbon policy has said. As Mongolia increasingly looks to develop its own renewable

energies industry and carbon credit trade, China's interest in Mongolia may go beyond minerals.

China, which accounts for nearly a quarter of global carbon dioxide emissions, has resisted

international pressure to commit to absolute cuts in its emissions, which are the world's highest.

Instead it has said it will lower its ―carbon intensity‖ ore emissions relative to economic output.

However, the powerful economic planning ministry is considering an outright cap on emissions for

its next five-year plan (2016-20) and its studying what level would be appropriate, Jiang Kejun said.

That could help break a deadlock at the heart of U.N. climate talks. Jiang, a carbon policy

researcher at the National Development and Reform Commission, said: ―I am sure China will have a

total emissions target during the 13th five-year plan.‖ Jiang said a target for total emissions would

be ―more effective‖ than the previous intensity target.

China's leaders, Xi Jingpin and Li Keqiang, have forged ahead with efforts to control carbon

emissions since they took office in March. After several years of preparation, China is this year

launching seven pilot carbon exchanges, which are envisioned as a testing ground for a possible

national emissions tradition scheme later. Policy makers see these controls as a way to re-balance

China's economy away from energy-intensive, resource-intensive sectors and toward ―cleaner‖

sectors such as services and technology. It is still unclear how China's carbon cap would be

enforced, and whether it would be a firm limit or a loose target. A second policy maker who works

on carbon policy at the NDRC declined to comment on the carbon cap, saying only that ―no

announcement has been made so far.‖

Source: Financial Times

POLITICS

SECURITIES LAW PASSED BY PARLIAMENT

Parliament finally passed the long-awaited Securities Law on Friday, 24 May.

Khangai Altai, the chief executive of the fledgling Mongolian Stock Exchange (MSE), said the new

law would also help attract more companies to the exchange by introducing international standards

such as depository receipts, adding that it could eventually bring total market capitalization to USD

30 billion to USD 40 billion, from only USD 1.3 billion at present.

The new legislation is also an essential part in allowing Erdenes Tavan Tolgoi LLC, the state-owned

miner of the coveted Tavan Tolgoi coking coal project, to list in London and possibly Hong Kong.

The cash-strapped state-owned developer, Erdenes Tavan Tolgoi, have been planning to list the

eastern Tsankhi block of the Tavan Tolgoi project for years, but the fundraising has been repeatedly

delayed. That company said in January that it would not happen this year.

The London Stock Exchange signed a deal with its counterpart in Mongolia in 2011 to introduce new

software, advise on capital market training, and bring its market rules up to date. Although the

Mongolian stock market was ranked as one of the world's best performing markets in 2010 and 2011,

it suffered in 2012 largely as a result of slow growth in China, falling commodity prices, and the

introduction of new regulations and taxes that deterred foreign investment. The Mongolian Top-20

index, a measure of Mongolia's top 20 best-performing companies, fell 34.6 percent between 3

January 2012 and 23 May 2013, according to the stock exchange's website.

Khangai said the law would become effective on January 2014, and that the Mongolian Stock

Exchange would in the meantime make the necessary preparations.

―The reason for setting the January date is to prepare the infrastructure as far as introducing

custodians and other necessities not yet present here in the market,‖ he said. ―We'll be working

with regulators to bring in the custodians globally. There's quite a large amount of work to do.‖

Source: Mining Weekly

THE RACE IS ON IN MONGOLIA

Investors are watching the presidential race in Mongolia closely for a clue to what coming years

have in store for them.

―Previous presidents never dealt with billion-dollar projects before,‖ said Otgonshar Nagi, vice

president of Ulaanbaatar's Resource Investment Capital. ―Mongolia is heading towards a

development phase where it is seeing significant projects heading its way.‖

The main contest will be between the current president and favorite, Tsakhia Elbegdorj, and the

opposition Mongolian People's Party (MPP) celebrity wrestler candidate, Badmaanyambuu Bat-

Erdene. Elbegdorj is regarded as one of the founders of Mongolian democracy, someone who rallied

the public to demand a new, democratic government in 1990. He is also one of Mongolia's educated

elite, having worked as a journalist and political activist in his youth before entering politics, and

claims Harvard University as his alma mater. He is also likely to be the candidate investors will be

cheering on.

Bat-Erdene, on the other hand, is known for his highly critical position toward protecting the

environment. Bat Erdene's celebrity factor is an important element to his campaign, as wrestling is

an important facet of Mongolian culture and its champions are adored nationwide. His most notable

political feat to date was his introduction of a 2009 environmental law that interfered with the

operations of both domestic and foreign firms, such as Toronto-listed Centerra Gold Inc. The gold

miner was looking towards shutting down its current Boroo mine and replacing it with another in

Mongolia, the Gatsuurt gold project, but Bat-Erdene's law has prevented it from getting permission

to do so.

One other contender has stepped into the fray: Natsag Udval—who currently serves as health

minister as a member of the Mongolian People's Revolutionary Party (MPRP). She is notable as the

country's first female candidate to run for president and is regarded as the proxy vote for

incarcerated former President Nambar Enkhbayar. Enkhbayar still remains the MPRP leader and has

been a vocal proponent of the nationalization of Mongolia's mines. It's entirely conceivable that

Enkhbayar's supporters will cast their votes for Udval instead of Bat-Erdene.

There's little polling data available in Mongolia, so a report from the Sant Maral Foundation in

April—released before Elbegdorj's opponents were announced—offers some clues as to how the

election will go. The most relevant question asked was who would make the best president for

Mongolia: 19.2 percent named Elbegdorj, while just 2.2 percent said Bat-Erdene. Although Bat-

Erdene and Elbegdorj were not directly compared, Sant Maral head Luvsanvandan Sumati still thinks

the data gives strong indications about the electorate's intentions: ―[Elbegdorj] has a much better

chance than the two others. ―If he doesn't make a mistake, he should win without problem.‖

Source: BNE

PRESIDENTIAL CANDIDATES OPEN CAMPAIGN FUNDS

The three presidential candidates have launched their campaign financing funds.

Mongolian law prevented campaign funding to begin before 27 May, and then required the opening

of an account five days after registering with the General Election Commission via a written notice.

Campaign funds are to be funded from his or her personal finances or via donations from supporters

and the party.

Source: News.mn

TWO MORE PARTIES BACK ELBEGDORJ

The Republican Party and Motherland Party have both thrown their support behind Democratic

Party (DP) incumbent President Tsakhia Elbegdorj.

Prime Minister Norov Altankhuyag signed a memorandum of cooperation on Wednesday at the

Government Palace with B. Jargalsaikhan, chairman of the Republican Party, and B. Erdenebat,

head of the Motherland Party. Both parties have promised to back the DP candidate in the election

for his platform in support of ensuring continued development in Mongolia, develop society,

development planning, and protections of society's common interests.

Source: Montsame

DEMOCRATIC PARTY OR NATIONAL WRESTLING PARTY?

Another famed Mongolian wrestler has received credentials for membership into the Democratic

Party (DP), following the addition of former sumo yokozuna Dolgorsuren ―Asashoryu‖ Dagvadorj.

―I had chosen to support democracy and respect the principles when I was young, two decades ago.

I think President [Tsakhia] Elbegdorj, who is being supported by the DP in the presidential election,

is the best politician who has been in charge of a high-ranking position for the country,‖ said former

wrestling champion A. Sukhbat.

Sukhbat announced his inauguration into the DP on Wednesday. The fledgling politician said he

would like to focus on legislation pertaining to the national Naadam festival that would target

specifically the children jockeys participating in horse-racing competitions. He also said he wanted

to focus on the development of communities outside of Ulaanbaatar, naming Sergelen Sum, Tuv

Aimag as one place needing assistance in the development of its infrastructure.

Source: News.mn

COURT RULES FORMER GEC CHAIRMAN DISMISSAL WAS ILLEGAL

A court has ruled that the dismissal of a former chairman of the General Election Commission was

illegal.

Former Chairman Ts. Nanzaddorj and Deputy Head of the General Intelligence Agency Ch.

Chullunbaatar had been dismissed on 12 January. Nanzaddorj disputed the decision at the

Sukhbaatar District Court, which eventually ruled in his favor.

Source: News.mn

STUDY SHOWS SLIGHT FALL IN UNDERAGE DRINKING VIOLATIONS IN 2013

A study led by the State Supreme Court has found that 570 individuals were charged with underage

drinking.

Over 400 children have received jail time for drinking under the age of 18, while 132 were ordered

to attend educational seminars and the remainder received other punishments. According to the

study, the number of underage drinkers has increased continuously in the past four years, but a

trend indicating that it was decreasing was found in the first quarter of 2013. The study showed

that there were 17 less individuals convicted of underage drinking, or 10.8 percent less.

Reports show that 386 underage drinkers received sentences in 2009, 541 in 2010, 542 in 2011, and

570 in 2012.

Source: News.mn

INTERNATIONAL BORDERS CLOSED ON 1 JUNE

Mongolia's automobile ports to Russia and China will close on 1 June in observance of International

Children's Day.

Despite the holiday, airways and railway transportation are expected to operate on schedule. Under

an agreement that declares the close of ports, Mongolia is also permitted port closures on 1

January, the first two days of Tsagaan Sar, 8 March for International Women's Day, and 11 to 12

July for the Naadam Festival.

Source: Info Mongolia

MONGOLIA MARKS INTERNATIONAL DAY OF U.N. PEACEKEEPERS

Mongolia began holding activities to celebrate the International Day of United Nations Peacekeepers

on 29 May.

Mongolia, which set the day of 29 May as Mongolian Peacekeepers Day last year, launched activities

Monday to mark its 11th anniversary of participating in U.N. peacekeeping operations. Mongolia

sent 150 soldiers for the first time to the U.N. peacekeeping mission in Iraq 10 years ago. More than

5,000 soldiers have participated in 14 international peacekeeping missions over the past 11 years,

and currently there are more than 800 soldiers in South Sudan.

Source: Global Times

MONGOLIA TO OPEN INTERPRETERS' SCHOOL

The Cabinet of Minister has approved the proposal for a vocational center for the training of

interpreting professionals.

The Cabinet ordered Foreign Affairs Minister L. Bold on 25 May to lead the center's establishment. It

will be used to train interpreters in the five United Nation's official languages. He is also responsible

for compiling and releasing a list of upcoming international events to be held in Ulaanbaatar until

2016.

Source: Info Mongolia

GERMANY, MONGOLIA RENEW PROMISE FOR TRANSPORTATION COOPERATION

Road and Transportation Minister A. Ganksukh had bilateral talks with German private and public

sector officials to discuss cooperation in transportation.

Gansukh traveled to Leipzig, Germany from 22 to 24 May at the invitation of the German federal

minister of transport, buildings and urban affairs, Peter Ramsauer. In addition to Ramsauer,

Gansukh met with the chief executive of Deutsche Bahn AG, Rudiger Grube. Representatives of

each ministry signed a memorandum of cooperation on 23 May.

Source: Info Mongolia

MONGOLIA REQUESTS AID FROM AUSTRIA FOR RENEWABLE ENERGY ASPIRATIONS

Energy Minister M. Sonompil visited Austria to discuss partnership opportunities to develop

Mongolia's renewable energies industry.

Austria's federal minister of economy, family and youth, Reinhold Mitterlehner sent an invitation to

Mongolia for the event. There he discussed with Sonompil Austria's willingness to develop an

economic partnership. Sonompil, who is also the chairman of the Mongolia-Austria

Intergovernmental Commission, requested a EUR 40 million (USD 51.7 million) soft loan and

proposed launching a project to develop a power plant using Austrian technology.

Source: Austrian Tribune

FRANCE'S GEOLOGICAL SURVEY TO SUPPORT MRA IN CAPACITIES

The Mineral Resources Authority (MRA) has partnered with France's Geological Survey (BRGM) for

cooperation in support of scientific and technical capacities in Mongolia.

MRA Deputy Director D. Uuriintuya and BRGM President Jean-Francois Rocchi signed a memorandum

of partnership for the BRGM to provide training assistance to Mongolian staff, improve impact

assessments for mining operations, and develop mining-closure standards.

The MRA and BRGM first established a partnership in 1997, and since then until 2002 BRGM assisted

in geological mapping in Mongolia.

Source: Undesnii Shuudan

GOVERNMENT PROMISES FULL TUITION FOR STUDENTS ENTERING TOP UNIVERSITIES

The government has instituted a new program to provide full tuition to any student accepted into

one of the world's top-100 universities. Students who receive acceptance from any of those

universities may request their tuition assistance from the Ministry of Education.

Source: Zuunii Medee

DINO DISPLAY DELAYS PUBLIC UNVEILING

A dispute over the ownership of the Lenin Museum has delayed a plan to showcase on 10 June the

Tyrannosaurus bataar recently arrived from the United States.

Three court hearings to decide on ownership of the museum have been postponed, with the last

scheduled for 31 May. The Tyrannosaurus arrived in Mongolia on 17 May. The government hopes to

turn the Lenin museum into a dinosaur museum.

The nearly skeleton came following the U.S. Department of Homeland Security's decision to hand

over the smuggled artifact to the Mongolian government. This followed a legal battle over the origin

of the skeleton and Mongolia's claim over the 70-million dinosaur, which was auctioned off in New

York for a little over USD 1 million.

Source: News.mn

ANNOUNCEMENTS

MONGOLIA RENEWABLE ENERGY FUTURES & GREEN DEVELOPMENT, 4 JUNE, UB

Mongolia Renewable Energy Futures & Green Development will be held on 4 June in Ulaanbaatar.

BCM is supporting this conference and its members will receive a 10 percent discount for admission.

Selected to be part of the United Nations Environment Program‘s events to promote the 2013 World

Environment Day, Mongolia Renewable Energy Futures & Green Development will demonstrate to

the world Mongolia‘s commitment to the environment and clean, renewable energy. Keynote

addresses from distinguished local government officials, senior industry executives and noteworthy

speakers from throughout the region will reveal and promote emerging green energy development

opportunities. This one day event on June 4th will take place at Salkhit wind farm, Blue Sky Tower

and the Mongolia State House, with a limited attendance to invited VIP diplomats, government

officials and partners of ORRO.CO.

Contact chris@orro.co for more information and remember to let him know that you are a member

of the Business Council Mongolia to get a special 10% discount.

___________________________________________

COAL PROCESSING & MINING TECHNOLOGY EXPO, 4-5 JUNE, ULAANBAATAR

The Coal Processing & Mining Technology Expo will be held in Ulaanbaatar from 4 to 5 June 2013.

The expo is co-located with the Transportation & Logistics Expo, and because of this co-location you

will be able to meet with a more diverse and broader group of attendees. With many international

as well as local Mongolian companies already signed up to exhibit, you will be a part of what is

becoming the premier event for the mining and transportation industries serving Mongolia.

BCM members will receive a special 10 percent discount. To register and receive your discount

email Saruul at saruul@bcmongolia.org. For more information about the exhibition, contact Glenn

Scott atgscott@uexpos.com or visit the website coalexpomongolia.com.

___________________________________________

COALTRANS MONGOLIA, 19-20 JUNE, ULAANBAATAR

The Coaltrans Mongolia conference will be held at the Blue Sky Tower from 19 to 20 June. BCM

members will receive a 15% discount to attend the event, please use the discount code BCM.

Coaltrans Mongolia will explore the development of coal projects in the country and offer an insight

into what level of influence Mongolia will have over future international coal prices. Join us as we

return to this exciting market for the third year, to have an impact on how this new coal frontier

evolves and cement your position as a leading player in the market.

Speakers will include Batsuuri Yaichil, chief executive officer of Erdenes Tavan Tolgoi LLC, Graeme

Hancock, president and chief representative of Anglo American Development, and Bayanjargal

Byambasaikhan, chairman of the Business Council of Mongolia.

For more information, email coaltrans@euromoneyplc.com.

___________________________________________

FUTURE MONGOLIA, 19-22 JUNE, ULAANBAATAR

The Future Mongolia international trade fair will be held at the Buyant Ukhaa Sport Palace in

Ulaanbaatar, near the Chinggis Khaan International Airport, from 19 to 22 June, 2013.

After the successful premier with nearly 100 exhibitors from 14 nations and some 4,200 visitors, we

cordially invite you to the second Future Mongolia. This international trade fair offers the

opportunity on an enlarged exhibition space to present modern and sustainable solutions and

responses to the present needs of Mongolia and its population.

BCM members will get 5% discount on raw space. Please contact Saruul at saruul@bcmongolia.org to

get a special discount code. For more information, visit Future-Mongolia.com.

___________________________________________

“MM TODAY” on MNB-TV, Friday, 19:00-19:10

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‟S MINING SUPPLY CHAIN DATABASE

The new version of BCM‘s Mining Supply Chain Database is in use. Following the initiative of Oyu

Tolgoi LLC, the BCM has maintained the Mining Supply Chain Database since March 2009. It is an

honor to introduce you to the new version of the database which is totally upgraded as to its

content and use of information technology opportunities.

As of December 31, 2012 suppliers registered on the database totaled 1,405. During 2012, 251 new

supplier entities joined the Database and 236 prior supplier registrants updated their company

profiles. In addition, 22 buyers were also registered and 82 tender announcements were posted.

We are inviting all Mongolian mining suppliers and buyer companies to join the Mining Supply Chain

Database. Please visit here for registration—FREE!

If you have any questions regarding the database, please contact 317027.

BCM WEBSITES

MONGOLIAN WEBSITE „PRESENTATIONS‟ AND „NEWS‟ SECTIONS

The ‗Presentations‘ section on BCM‘s Mongolian website can be reached via bcm.mn/itgeluud.

As a key component of BCM‘s Mongolian website, articles from the ‗News‘ section and the

government website Open-Government.mn are regularly updated.

The following presentations were added from "Foreign Investment in Mongolia: Challenges, Risks

and Solutions" conference (in Mongolian) on April 19 at the Kempinski Hotel organized by the

Business Council of Mongolia (BCM) and UB Risk Management Consulting:

• Гадаадын хөрөнгө оруулалтын өнөөгийн байдал, хэтийн төлөв, Төв банкны ерөнхий эдийн

засагч С.Болд, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ,

ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4 дүгээр сарын

19

• Шууд хөрөнгө оруулалтын өнөөгийн байдал, тулгамдсан асуудал, шийдвэрлэх арга зам,

Монголын Бизнесийн зөвлөлийн дэд дарга И.Сэр-Од, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ

ОРУУЛАЛТ –ЭРСДЭЛ, СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага

хурал, 2013 оны 4 дүгээр сарын 19

• Үнэт цаас, хувьцааны зах зээлийн хөрөнгө оруулалт: эрсдэл, сорилт, цаашдын хандлага,

Монгол банкны Ерөнхийлөгчийн зөвлөх, санхүүгийн тогтвортой байдлын зөвлөлийн ажлын

албаны дарга Д. Ган-Очир, ―МОНГОЛ УЛСДАХ ГАДААДЫН ХӨРӨНГӨ ОРУУЛАЛТ –ЭРСДЭЛ,

СОРИЛТ, ШИЙДВЭРЛЭХ АРГА ЗАМУУД‖сэдэвт эрдэм шинжилгээний бага хурал, 2013 оны 4

дүгээр сарын 19

___________________________________________

ENGLISH WEBSITE: 'PRESENTATIONS', 'MONGOLIA REPORTS', „MONGOLIAN BUSINESS NEWS‟,

„PHOTO GALLERY‟

On BCM‘s English website, the ―Resources‖ and ―Presentations‖ sections are available.

• Nick Cousyn, Chief Operating Officer, BDSec JSC, ―Gobi‘s Resort‖ at the BCM Monthly meeting

April 22, 2013

• Brian White, Editor, The Mongolist – ―Analyzing Mongolian Politics from the ‗Middle Layer‘", at the

BCM Monthly meeting Apr 22, 2013

• Ch. Otgochuluu, Head of Strategic Policy and Planning Department, Ministry of Mining, ―Brief

introduction on mining policy‖ at the BCM monthly meeting Apr 22, 2013

• ―The current flow of investment into Mongolia‖, S. Bold, Chief Economist, Central Bank, at the

"Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at

the Kempinski Hotel.

• ―About regulation on FDI‖, S. Javkhlanbaatar, Foreign Investment Regulations and Registration

Department Head, Ministry of Economic Development of Mongolia, at the "Foreign Investment in

Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.

• ―Legal issues of regulation of foreign investment‖, B. Amarsanaa, Academic Secretary of National

Legal Institute, at the "Foreign Investment in Mongolia: Challenges, Risks and Solutions" conference

on April 19, 2013 at the Kempinski Hotel.

• ―Investment in stocks and equities in Mongolia: risks, challenges and trends‖, D. Gan-Ochir, Head

of Financial Stability Council, Advisor to President of Central Bank, at the "Foreign Investment in

Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the Kempinski Hotel.

• ―On current state of equities foreign investment‖, D. Achit-Erdene, CEO, MICC, at the "Foreign

Investment in Mongolia: Challenges, Risks and Solutions" conference on April 19, 2013 at the

Kempinski Hotel.

• ―Market Update‖ by Mandal General Insurance LLC

• ―Annual Report 2012‖ by International Monetary Fund

• Ruth Pulaski, Director Marketing & Development, American University of Mongolia – ―American

University of Mongolia: Integrating a Liberal Education Approach to Learning‖ at the BCM monthly

meeting, March 25, 2013

• B. Bayar, Managing Director, ELC LLC – ―Update on Legal Developments Regarding Foreign

Investment‖ at the BCM monthly meeting, March 25, 2013

• Tony Burchill, Australian Consul-General & Trade Commissioner, Austrade – ―The Business of Being

a Third Neighbor‖ at the BCM monthly meeting, March 25, 2013

Other recently added presentations:

• Dr. Brian Fisher, Managing Director, BAEconomics, "Economic Impact of draft Minerals Law" at the

Kempinski Hotel, March 18, 2013, Ulaanbaatar

• Dr. Ch. Khashchuluun, CEO of UBRM Consulting, ―Mongolia and Mining, The policy evolution:

What's the next?‖ at the Kempinski Hotel, March 18, 2013, Ulaanbaatar

• Martin Pow, Partner, Enterprise Risk Services and Learning Leader, Deloitte Onch LLC, ―Black

Swans: Fact or Fiction,‖ A different risk management philosophy at the BCM Risk Management

Working Group meeting, March 14, 2013

The following 3 presentations were added from Coal Mongolia, 21-22 February:

• ―Current state of coal sector of Mongolia and future trends‖ by Minister of Mining D. Gankhuyag at

the Coal Mongolia 2013, Feb 21, SS Convention Center, Ulaanbaatar;

• ―Economic Reform Objectives‖ by Vice Minister, Economic Development, H.E. Mr. O. Chuluunbat

at the Coal Mongolia 2013, Feb 21, SS Convention center, Ulaanbaatar;

• ―Presentation for Coal Mongolia 2013‖, Norihiko Kato, CEO of Khan Bank, Feb 21 at the SS

Convention Center, Ulaanbaatar, Mongolia.

• Presentation by Bold Baatar, CEO of Altan Dornod Mongol, ―Mongolian Mining Investment

Environment‖ at the Mining Industry Open Discussion, February 1, 2013, at Kempinski Khan Palace

Hotel.

Please note the presentations from each of the BCM monthly meetings.

The ―Mongolia Reports‖ section includes the following: ―Polit Barometer April, 2013‖ by Sant Maral

Foundation; ―Regional Economic Outlook: Asia and Pacific‖, April 2013 by International Monetary

Fund; ―Highlights of 2012, Mongolia‖ by European Bank for Reconstruction and Development

(EBRD); the ―Official statement of Oyu Tolgoi LLC in relation to information, data and facts related

to Oyu Tolgoi discussed during open session of the State Great Khural‖, dated 1 February, 2013‖;

―2013 Mongolia Investment Climate Statement‖, by the Economic and Commercial Section of the

U.S. Embassy; ―Mongolia Foreign Labor Force Ratio for 2013‖ by Hogan Lovells International LLP;

―How Mongolia will perform in 2013‖ by Mandal Asset Management; ―Mongolia Business Owner and

CFO Survey result‖ by BDSec JSC; ―The fiscal regime for mining-a way forward‖ by IMF Fiscal Affairs

Department; ―Taxes for Expatriates in Mongolia‖ by PricewaterhouseCoopers.

BCM's English website includes the ―Mongolia Business News‖ section where the Open Letter to

Parliament and Government is available for download.

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

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

The ―Photo Gallery‖ contains photos from the 5th Anniversary BCM Gala dinner on November 5.

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.

Connect with BCM on Linked-in to join the diverse group of professional contacts creating a better

business environment in Mongolia today.

Add BCM on Facebook at http://www.facebook.com/pages/THE-BUSINESS-COUNCIL-OF-

MONGOLIA/129826330435540 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

http://twitter.com/#!/bcMongolia.

We have now 1,164 fans on our Facebook fans page, 1,239 connections on LinkedIn network, and

689 followers on Twitter.

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

organization, visit the official BCM website at www.bcmongolia.org and www.bcm.mn.

BCM WORKING GROUP MEETINGS

The BCM Education Working Group met on Tuesday, May 23, with 19 members attending.

Moderator: Saha Meyanathan.

New Member: Jeanne Bartholomew, was welcomed.

Participants: Bolormaa G and Orkhon G from Ministry of Education, Tuya T from VETC NGO, Satsuki

Majima and Gerelyuya Ts from Save the Children.

Speakers and topics:

1. Inclusive Growth and Employability - Saha Meyanathan

2. Business Education & Career Guidance Program for high-school age children in Mongolia - Mituki

Toyada, Save the Children

3. International Finance Corporation - Tuyen D.Nguyen

4. Introduction of Wagner Asia Equipment Training Department - Battulga B.

5. SDC‘s interventions in support of inclusive growth, life skills, youth programs and employability -

Diepak Elmer

6. Mercy Corps activity - Jennifer Bielmen

7. Cooperative Vocational Training in the Mineral Resource Sector in Mongolia - Pascal Houben,GIZ

8. Building Mongolian Talent Pipeline - Enkhbaater D, OT LLC

9. Skills for Employment Project Preparatory Technical Assistance - Melanie Stallen, ADB-PPTA

10 Update of VDMA - Klaus Stockmann

All presentations are available on BCM‘s Education Working Group web page.

Please contact: erka@bcmongolia.org

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]

April 30, 2013 *10.4% [source: NSOM]

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

Note: 9.8% y-o-y, Ulaanbaatar city, April 30, 2013

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]

CURRENCY RATES – MAY 30, 2013

Currency Name Currency Rate

US dollar USD 1,442.73

Euro EUR 1,870.72

Japanese yen JPY 14.18

British pound GBP 2,187.25

Hong Kong dollar HKD 185.74

Chinese Yuan CNY 235.37

Russian Ruble RUB 45.65

South Korean won KRW 1.27

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.