BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 303 – December 6, 2013

NEWS HIGHLIGHTS:

Business

“Idiots in Canada do not understand rights offerings,’’ says Friedland;

Turquoise Hill sinks 26% as rights begin trading;

Kincora announces significant write-down following license revocations;

Aspire inks two memoranda for 3.3 million tons a year coal sales;

Wolf highly encouraged by geochemical results;

Newera Resources eyes large coking coal deposit in Mongolia;

Petrovis Nano raises 92 fuel price by MNT 50;

Fuel importers win lawsuit against Fair Competition Agency;

International Investment Bank expands TDB partnership;

G-Mobile given MNT 1.9bn debt repayment deadline by year end;

Turkish-Mongolian consortium wins apartment contract;

DW’s flagship channel now available on SkyMedia in Mongolia;

UB considers sale of Tengis Cinema minority stake;

MNU founder announces technology center for UB;

Guildford Coal appoints interim CEO as managing director;

XacBank wins 2013 “Best Bank” in Mongolia award;

Rio Tinto pledges to cut capex by $6bn in two years;

Miners preach gospel of restraint.

Economy

Mongolia’s FDI in October declines 30% year-on-year, says Mongol Bank;

Mongolia gains in corruption perception index as Central Asia flounders;

Elbegdorj wants to cut state-owned firms by one-third;

Mongolia looks to stock trading as trade with China sinks;

Erenhot to Zamyn-Uud cargo road in service;

China, Mongolia to open two more joint-supervision pilot ports;

Mongolia calls on Russia to build roads, pipelines through to China;

Employment is the focus at Mongolia Talent Network;

Construction companies see ease in government relations;

Mongolia sees 34 mines open since 2012 parliamentary elections;

Tourist numbers fall 12.1%;

Gold tax cut would bolster Mongol Bank reserves by $10bn, says mines minister;

UB to begin collecting taxes for road maintenance;

Meteorologist predicts warm temperatures to break next week;

Chinese firms want to buy coal assets overseas, but on the cheap;

A commodities rally isn't carved in stone.

Politics

Herders demand new Tavan Tolgoi-Sainshand railroad plans;

Mongolia doubles vocational student stipends;

Foreign Minister attends NATO meeting;

President awards Mongolian peacekeepers;

Defense Minister visits Qatar;

Mongolian National Broadcasting under investigation by state auditors;

UB water agency falls into over MNT 10bn in debt;

Open and smart government is for everyone, says Altankhuyag;

Mongolia takes third, breaks records at World Memory Championship;

First day of teachings for Mongolian Buddhists in Delhi;

Potential Mongolian-Myanmar relations.

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

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Oxford Business Group

Mongolian National Broadcasting

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BCM MONTHLY MEETING NOTICE

BCM‘s monthly meeting for members will be on Monday, December 9, 2013 at 5PM at the KEMPINSKI

HOTEL KHAN PALACE, 2nd floor, Altai Ballroom.

The bilingual meeting will feature the following presentations:

- Call to Order/Business Council of Mongolia: B. Byambasaikhan, Chairman, BCM

- BCM Report: Jim Dwyer, Executive Director, BCM

- J. Bayarmagnai, Executive Director, Quality Supplier Development Center/USAID Grantee/ –

―Quality Supplier Development Center: Your partner for doing business in Mongolia‖

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

- D. Jigjidmaa, Investment Promotion Program Manager, IFC Mongolia – ―Investment Protection

Issues in Mongolia‖

- Presentation of ―Win Win with Mongolia‖ (www.Mongolia) Video

A networking reception will be held for all attendees immediately following the business portion of

the meeting, in the "Tenger" Restaurant, 1st floor of Kempinski Hotel.

BUSINESS

“IDIOTS IN CANADA DO NOT UNDERSTAND RIGHTS OFFERINGS,‟‟ SAYS FRIEDLAND

Financier Robert Friedland has made some highly frothy comments in connection with a Turquoise

Hill Resources Ltd. rights offering.

In an email, Friedland said Turquoise Hill shareholders should participate in the rights offering,

which aims to raise USD 2.4 billion, money that will be used to repay amounts owed to the

company‘s majority shareholder Rio Tinto PLC. Friedland‘s spokesman in Vancouver said the

financier owns 8 percent of Turquoise Hill, which in turn holds a 66 percent stake in the massive

Oyu Tolgoi copper-gold-silver mine in Mongolia. Turquoise Hill said last week the company has filed

a final prospectus with securities regulators, outlining details of a rights offering.

Under the terms of the offering, each Turquoise Hill shareholder will receive one transferrable right

for each common share held as of December 6, 2013. Each right entitles the holder to purchase one

common share of the company at either USD 2.40 per share or CAD 2.53 per share, an amount that

represents a discount of approximately 42 percent to the closing prices on the New York Stock

Exchange and Toronto Stock Exchange on 25 November.

Turquoise Hill shares rose 3.6 percent to USD 4.27 Tuesday, leaving a market cap of USD 4.3 billion,

based on over one billion shares outstanding. The 52-week range is USD 9.62 and USD 3.81. Under

an earlier agreement Rio Tinto is required to acquire any shares not taken up under the rights

offering.

―People should buy the rights and exercise them hand over fist,‘‘ Friedland said.

He went on to say in the email that ―post the rights issue, the company is in full commercial

production, the company will be debt free and have $750+ million in copper-gold inventory and a

sales pipeline, plus a $2 billion receivable from the Mongolian government.‖

―Idiots in Canada do not understand rights offerings are not dilution…everyone participates

equally…rights offerings are the fairest form of equity finance ever developed by the human mind,‘‘

he said.

Turquoise Hill has said over one billion shares are expected to be issued under the rights offering.

Source: Stockhouse.com

TURQUOISE HILL SINKS 26% AS RIGHTS BEGIN TRADING

Shares in Turquoise Hill Ltd., operator of the massive Oyu Tolgoi copper and gold mine, dropped

sharply on Wednesday as the rights issued under its recent USD 2.4 billion offering began trading in

Toronto.

By midday Rio Tinto PLC-majority owned Turquoise Hill stock was changing hands at USD 3.44, down

26 percent in an anticipation of the more than one billion shares to be issued under the rights

offering, doubling the number of shares outstanding. The Vancouver-based firm decided on the

rights offering to help the company repay a USD 600 million bridge loan and a USD 1.8 billion

interim funding facility after talks with the Mongolian government over financing for the mine went

nowhere. Investor confidence in Mongolia has been shaken by the impasse over Oyu Tolgoi with

foreign direct investment in the country dropping by almost half this year compared to last year.

Talks over Oyu Tolgoi's expansion and the reworking of the initial 2009 deal which first unleashed

the Mongolian investment boom have dragged on for the better part of a year. Both sides provided

fresh faces for the Oyu Tolgoi board in September to break the impasse. Talks on financing

arrangements with the Mongolian government including a World Bank-led USD 4.5 billion debt

package—the largest project financing in the history of mining—have gone nowhere forcing

Turquoise Hill's hand to launch the right offer. The disputes are centered on costs, with Rio's

management fees and the Mongolian government's share of funding of surrounding infrastructure

proving particular sticking points.

Source: Mining.com

KINCORA ANNOUNCES SIGNIFICANT WRITE-DOWN FOLLOWING LICENSE REVOCATIONS

In the latest fallout from Mongolia's recent decision to revoke 106 mineral exploration licenses,

copper junior, Kincora Copper Ltd. announced a write-down of CAD 7 million (USD 6.6 million)

which is greater than its current market capitalization.

In a release issued on 6 November, the copper explorer said it received official notification that the

Mineral Resources Authority had revoked its licenses for its Tourmaline Hills and North Fox

properties, which are wholly owned by its subsidiary company, Golden Grouse LLC. Kincora paid

USD 5 million for the two licenses in 2012 and has subsequently spent almost USD 1.9 million on

further exploration. The company is currently valued at around USD 5 million. Asked about a time

line for the resolution of the license issue, Kincora's chief executive officer, Sam Spring says at

present there is very little certainty.

"We are told that the licenses should be reissued according to a competitive tender process,‖ Spring

said. ―If you speak to the various government agencies privately, you are told that under the new

minerals law, there will be a issuance of licenses and these 106 will be reissued at that time and

that we will probably have some preferential rights, but at the same time it will be a competitive

tender process, so it is hard to gain too much comfort from that and nothing is yet documented."

While the news is disheartening, Spring remained upbeat, saying the license for the group's flagship

asset, Bronze Fox, remains in good standing and at an operational level the asset keeps getting

better the more work gets done on it—according to Spring, it has a number of similarities to a pre-

discovery hole Oyu Tolgoi.

Source: Mineweb

ASPIRE INKS TWO MEMORANDA FOR 3.3 MILLION TONS A YEAR COAL SALES

Aspire Mining Ltd. announced the receipt of two non-binding memoranda of understanding from

large Russian coking coal end users for the potential purchase of coking coal to be produced from

the Ovoot coking coal project.

The two memoranda cover an initial commitment to potentially purchase up to 1.3 million tons a

year of coking coal, over a minimum period of five years. Additional interest received from other

Russian and Eastern European users indicates that Ovoot coking coal will have a significant

customer base in the blast and foundry furnace steel making industries outside of China.

Aspire also announced that through its Russian marketing agent, it has secured a non-binding

Memorandum of Understanding to secure up to two million tons a year rail and port capacity

through the Russian Far East coast at competitive tariffs. Russia is an important transit country for

Aspire having recently announced non-binding memoranda of understanding for Aspire to access

port capacity in the Black Sea and Russia‘s Far East. The ability to deliver from these seaports has

generated additional interest from users, particularly in Eastern Europe.

―We are very pleased with the initial interest received in Ovoot coking coal, given the relatively

short time that preliminary marketing of the coal has been undertaken,‖ said Aspire‘s managing

director, David Paull. ―We are pleased that we have been able to also now generate buying interest

in Russia which has a significant steel making industry and where Ovoot Project coking coal

compliments product offerings from established Russian coal miners. We have also been successful

at expanding rail and port capacity through Russia to other markets.‖

Source: Aspire Mining Ltd.

WOLF HIGHLY ENCOURAGED BY GEOCHEMICAL RESULTS

Wolf Petroleum Ltd. announced that additional geochemical analysis on samples taken from seismic

shot holes has identified additional abundant light crude oil seeps and gaseous hydrocarbon

anomalies.

Wolf‘s recent geochemical results have reaffirmed its previous results that had identified the

existence of an active petroleum system within the Toson Tolgoi and Talbulag Basins located on its

Sukhbaatar Block. High gravity oil seeps have now been identified in 90 out of 522 samples

analyzed. Medium gravity oil seeps have been identified in 32 out of 522 samples analyzed.

Source: Wolf Petroleum Ltd.

NEWERA RESOURCES EYES LARGE COKING COAL DEPOSIT IN MONGOLIA

Newera Resources Ltd. should trade higher after revealing results from a mini-seismic survey

conducted over sections of its Ulaan Tolgoi coking coal joint venture in Mongolia which indicate it

could have a significant deposit on its hands.

While early days, consulting seismic geophysicists, Logantek, identified multiple locations

considered to have high coal-bearing potential. Notably, the reflectors are considered consistent

with seismic reflectors from previous substantial coal discoveries in the South Gobi basin. Given the

interpretive results of the seismic survey within Ulaan Tolgoi, Newera has every chance of

discovering the next significant deposit in the region. Logantek and Nordic Geological Solutions

have outlined initial drill hole collar locations designed to test the interpreted coal reflectors in a

drilling program to commence in early 2014.

In addition, Newera has entered into a series of convertible loans with various parties for a total

value of USD 500,000, which includes a first right of refusal for Cygnet Capital to manage a future

capital raising which is likely by mid-2014. The various loan agreements, which have been finalized,

will be converted to convertible notes at USD 0.004 per Newera share or 80 percent of the

subscription price of the anticipated capital raising. Newera looks as if it could be sitting on a

significant coking coal deposit, and Cygnet's eagerness to manage the future capital raising is

indicative of the obvious potential.

Source: Proactive Investors

PETROVIS NANO RAISES 92 FUEL PRICE BY MNT 50

Petrovis LLC increased the price of its Nano-92 type gasoline by MNT 50.

The recent price increase was because it was initially selling fuel at a MNT 50 discount to entice

customers into first time use.

Nano 92 was introduced by Petrovis in July this year. The price stood at MNT 1,620 for five months.

Source: Zuunii Medee

FUEL IMPORTERS WIN LAWSUIT AGAINST FAIR COMPETITION AGENCY

The Supreme Court has ruled in favor of three fuel importers in a law suit against the Agency for

Fair Competition and Consumer Protections (AFCCP), ruling fines against them were unlawful.

Shunkhlai, Just Oil and Sod Mongol Group sued the AFCCP last year in December after receiving

fines on 3 December for allegedly influencing the market to create a fuel shortage in the country.

AFCCP fined NIC MNT 6 billion, Magnai Trade MNT 4.5 billion, Sod Mongol MNT 2 billion, and Just

Oil, Oin Birj, Shunkklai Trade, M Oil and Petrojump LLC MNT 1 billion.

Source: Udriin Sonin

INTERNATIONAL INVESTMENT BANK EXPANDS TDB PARTNERSHIP

The International Investment Bank (IIB) and Trade and Development Bank (TDB) of Mongolia LLC

concluded an agreement on strategic cooperation.

The agreement provides for a large variety of spheres of cooperation on mutually beneficial terms—

including organization of syndicated financing of investment projects, extending credit lines for

small-medium enterprises (SMEs) support, insuring warranties, including financing of export-import

operations and other spheres of interbank cooperation. Regular consultations regarding bank

practices, information exchange, and organization of training courses for employees were

envisaged. Nikolay Kosov noted that cooperation with TDB is one of the important components of

building strong partnership network of financial institutions for the achieving of IIB‘s strategic

objectives of the support of SMEs in member states.

The signed agreement strengthens the cooperation between the two banks, which started in

September this year. IIB jointly with FMO (Nederlandse Financierings-Maatschappij voor

Ontwikkelingslanden N.V.) participated in extending a syndicated credit to TDB for financing credit

activities, including the SME sector. The total amount of financing is USD 82 million; IIB‘s part is

USD 10 million.

The regular session of the Russian-Mongolian Intergovernmental Commission also took place in

Moscow. The bank‘s delegation traditionally took active part in the session.

Source: International Investment Bank

G-MOBILE GIVEN MNT 1.9BN DEBT REPAYMENT DEADLINE BY YEAR END

Local mobile telecommunications company G-Mobile LLC may have to raise its prices to pay for MNT

1.9 billion in debt owed to state-owned Information and Communication Network by the end of the

month, or else see its services cut off.

―We haven‘t increased our prices, which is a reason that our company collected the heavy debt of

MNT 1.9 million to the state company,‖ said D. Basbish, chief executive of G-Mobile.

Also, he said G-Mobile is expected to pay for the connection points that link Mongolia‘s provinces to

the network. That is unusual, he said, compared with other countries. He said rent-free usage was

in the interest of end-users, as it is reflected in a lighter bill for them.

―If we calculate the expenses paid in five years, the reality is we still didn‘t reach a profit because

communications is a quickly developing area which requires many additional expenses,‖ he said.

He said repaying the debt owed by the deadline would be impossible and the 150,000 G-Mobile

users with services cut through no fault of their own would be the ones to bear the greatest burden.

Source: Udriin Sonin

TURKISH-MONGOLIAN CONSORTIUM WINS APARTMENT CONTRACT

Mongolian firm Grand Line Co. Tuesday signed a cooperation agreement with Turkey's 216 Yapi Co.

Tuesday for the joint construction of a new complex of apartments in Ulaanbaatar after winning a

tender bid for a government contract for Bayanzurkh District. The companies plan to build 3,000

apartments and 2,300 garages for the Tumen Amgalan. The contract is part of the government's

urban re-planning program for Ulaanbaatar's ger districts.

Source: Montsame

DW‟S FLAGSHIP CHANNEL NOW AVAILABLE ON SKYMEDIA IN MONGOLIA

Deutsche Welle (DW) became available to viewers in Mongolia via SkyMedia on 25 November,

broadcasting on channel 205.

DW‘s flagship channel with 24 hours of English programming is available on SkyMedia, a subsidiary

of number-two mobile operator Skytel Group, to viewers in Ulaanbaatar, Mongolia. This new

agreement with SkyMedia is just further proof of how DW has expanded its reach in the market via

new IPTV platforms.

―DW‘s continuous support and commitment has made DW an invaluable partner to SkyMedia. We are

pleased to welcome DW English to the SkyMedia family,‖ added D. Byambatseren, chief executive

at SkyMedia.

DW‘s English channel will be available in the ―News‖ bouquet of channels accessible to all

subscribers of SkyMedia on channel 205. In addition, DW‘s German program DW (Asien) is available

in Mongolia on channel 702.

Source: Deutsche Welle

UB CONSIDERS SALE OF ITS TENGIS CINEMA MINORITY STAKE

The Ulaanbaatar city administration has proposed the privatization of 100 percent of Tengis Cinema

through a private bidding process.

Ulaanbaatar would see the sale take place in 2014, but will need approval from the Ulaanbaatar

Citizens' Council. The city owns 34 percent of the movie theater while former Prime Minister

Sukhbaatar Batbold and APU JSC Chairman P. Batsaikhan own the remaining 66 percent. The two

shareholders purchased the three-screen movie theater from South Korea's Wayrich Resource Asia

Co., Ltd. and restored it in 2003.

Tengis sees 800,000 visitors each year.

Source: News.mn

MNU FOUNDER ANNOUNCES TECHNOLOGY CENTER FOR UB

Founder and chairman of Mongolian National University (MNU), Munkhbat Lkhagvasuren, has

introduced a new initiative to establish the Mongolian Innovation & Technology Centre to

incorporate the best elements of acclaimed innovation centers such as Silicon Valley and bring high-

tech employment to the Mongolia's youth.

―Information technology is a natural fit for a country where education is the buzz-word and where

52 percent of the three million population count is under 25 years-old,‖ says Munkhbat, who has

just signed off on construction of the 17-story Mongolian Innovation & Technology Centre annexed

to MNU.

MNU has also established co-operative international relationships with 18 universities and research

institutions in countries including Poland, India, China, Japan, Russia, Indonesia and Korea.

Source: Mongolian National University

GUILDFORD COAL APPOINTS INTERIM CEO AS MANAGING DIRECTOR

Guildford Coal announced that its interim Chief Executive Officer Peter Kane has accepted the role

of group managing director.

Kane held chief executive officer roles at both Boardwalk Resources and Aston Resources before

being appointed chief operating officer. Previously, Kane spent three years as chief operating

officer with Macarthur Coal, leading the company‘s mines and project developments in Queensland

prior to the purchase of Macarthur by Peabody. During his tenure at Macarthur Coal and Aston, Kane

also covered the role of joint venture chair on multiple operations with numerous joint-venture

partners. Prior to that, Kane spent 10 years with Leighton (contractors) in various roles including

general manager of the Australian mining contractor business. His earlier career included 10 years

with BHP Billiton, in their iron ore and coal divisions.

Guildford also announced that Gary Humphreys recently advised that he would not be seeking a

further term as a non‐executive director.

Source: Guildford Coal Ltd.

XACBANK WINS 2013 “BEST BANK” IN MONGOLIA AWARD

XacBank LLC took the ―Best Bank‖ award this year from The Banker magazine.

One challenge for Mongolia's banks is keeping up with the pace of growth. In line with this trend,

XacBank has modified its strategy to adjust to the changes in the domestic market and has been

working on improving its service as well as enhancing its electronic channels.

―The main challenges were advancing institutional transformation in our business processes, IT

infrastructure, and delivery channels,‖ said Bat-Ochir Dugersuren, chief executive of XacBank.

XacBank had additional challenges in the context of the slowdown in the global economy and weak

investor confidence. The bank was able to maintain its market share in challenging conditions and

maintain a higher growth in its retail deposits when compared to the rest of the market in

Mongolia, said Bat-Ochir.

―The bank wants to build scalable and efficient institutional capacity to expand both in the small

and medium enterprise [SME] and corporate and retail segments,‖ he said of XacBank's plans for

2014.

He sees high growth potential in the SME and corporate segment once a stable investment

environment in Mongolia has been established and confidence has returned to the market. The SME

sector is expected to expand alongside Mongolia‘s mining boom, as it is hoped that smaller

companies will benefit in the supply chain of the mining industry. In recent months, XacBank has

increased its SME loan book as well as its foreign exchange trading volume. The bank is also notable

for its emphasis on corporate governance and has a three-pronged philosophy of ‗planet, people

and profit‘ as well as a focus on financial inclusion.

Source: The Banker

RIO TINTO PLEDGES TO CUT CAPEX BY $6BN IN TWO YEARS

Rio Tinto PLC pledged to cut capital spending by at least 20 percent in each of the next two years in

an attempt to woo back investors dismayed by the miner‘s misguided investments during the

resources boom.

The Anglo-Australian mining group said its capital expenditure would fall from USD 14 billion this

year to USD 11 billion next year and to USD 8 billion in 2015. The anticipated reductions come after

Rio said last week that one of its biggest investment projects—to raise the output from its iron ore

mines in Australia‘s Pilbara region by almost a quarter—could be completed much more cheaply

than previously predicted.

Rio and many of its peers have been out of favor with shareholders after overspending on new

projects and acquisitions. Rio‘s Sam Walsh is one of many recently installed chief executives at

leading miners, following a cull of previous leaders amid shareholder anger at industry under-

performance.

―We lost our way…we are taking decisive action,‖ Walsh said in Australia last week on Tuesday.

―Don‘t get me wrong, we do have more to do.‖

Rio‘s capital spending soared to more than USD 17 billion last year, part of a splurge of investment

in response to a period of strong demand for commodities led by China‘s economic growth. The

miner needs to cut spending and sell some marginal assets in order to try to maintain its credit

rating after net debt rose to more than USD 19 billion last year. It has been unable to sell some

businesses, including some aluminum assets and its diamonds business, but has announced or

completed USD 3.3 billion of sales this year. Rio said it had cut spending on exploring and

evaluating new projects by USD 800,000 this year, exceeding a USD 750 million target.

Source: Financial Times

MINERS PREACH GOSPEL OF RESTRAINT

Big miners, who were too loose with their spending in the boom years, are all now preaching a

gospel of restraint, capital-discipline and cost-cutting. But when your sins against shareholders are

as grave as Rio Tinto PLC's, you are obliged to be doubly repentant.

Chief Executive Sam Walsh, the iron ore boss promoted after Tom Albanese did one duff deal too

many, is making a reasonable fist of the task. Capital expenditure will fall 20 percent to USD 14

billion this year and continue to fall at the same rate to USD 8 billion in 2015.

Of course, the sums are still huge. But there is no point slamming on the brakes entirely when iron

ore can be dug out of the Australian desert for USD 25 a ton, shipped for China for another USD 20

and sold to steel-makers for USD 135. You've got to chase those prices while they are there. And if,

as Walsh says, production can be ramped up more cheaply than thought, shareholders should

approve.

Iron ore represents about 80 percent of Rio's profits, making the company the most unbalanced of

the big miners (the massive Oyu Tolgoi copper mine in Mongolia is currently a sideshow in valuation

terms). But that's the nature of the beast. At least this time around, the board appears to accept

the duty to protect investors.

Source: The Guardian

ECONOMY

MONGOLIA„S FDI IN OCTOBER DECLINES 30% YEAR-ON-YEAR, SAYS MONGOL BANK

Mongolia‘s foreign direct investment (FDI) in October declined to USD 148.2m from USD 211.2m a

year earlier, according to the nation‘s central bank.

January-October foreign direct investment was USD 1.966 billion compared with USD 3.995 billion a

year earlier, the Bank of Mongolia said in statement. FDI for the first nine months was revised to

USD 1.818 billion from a preliminary figure of USD 1.923 billion, according to the Bank of Mongolia.

Source: Bloomberg First Word, Cover Mongolia

MONGOLIA GAINS IN CORRUPTION PERCEPTION INDEX AS CENTRAL ASIA FLOUNDERS

Mongolia saw itself gain 11 spots on this year's Corruption Perceptions Index released by

Transparency International on 3 December while five Central Asian republics remained close to the

bottom.

Both Armenia and Mongolia performed well, each rising 11 places to 94th and 83rd place

respectively while Turkmenistan and Uzbekistan were, as usual, among the worst performers on the

index—which ranks countries and territories based on how corrupt their public sector is perceived to

be. Turkmenistan and Uzbekistan were in 168th place on the index of 177 countries, rising two

places since last year, but remaining among the top 10 most corrupt countries worldwide. Georgia—

the highest ranked country across Central Asia and the Caucasus—was in 55th place on the index,

down from 51st in 2012.

As well as ranking countries, Transparency International also assigned a score on a scale of 0-100

based on perceived level of public sector corruption, with 0 meaning that a country is perceived as

highly corrupt and a 100 means that it is perceived as very clean. While other republics in the

region did somewhat better, neither Kazakhstan, Kyrgyzstan nor Tajikistan managed to gain more

than 26 points. According to Transparency International's report, any score of less than 50 points

indicates "a serious corruption problem."

"Corruption continues to have a devastating impact on societies and individuals around the world,"

said Transparency International.

Globally, the best performing countries were Denmark and New Zealand, which tied in first place,

with other countries from the European Union and Western European also continuing to perform

well. At the other end of the scale, Sub-Saharan African countries had the highest level of

perceived public sector corruption.

Source: BNE

ELBEGDORJ WANTS TO CUT STATE-OWNED FIRMS BY ONE-THIRD

The government plans to slash the number of state-owned enterprises (SOEs) by one-third to

encourage private investment and set up a sovereign wealth fund, said President Tsakhia Elbegdorj

last week in Hong Kong.

Mongolia will also enact a law that will discourage companies owned by Mongolian ministers from

competing with foreign and private firms, he said. Competition between Mongolian SOEs and private

firms is "not good", Elbegdorj told a Hong Kong Trade Development Council (TDC) luncheon audience

that included Hong Kong businessmen.

"The Mongolian government should serve your interests, not challenge your interests. We have to

create that favorable environment in Mongolia. In two years, we will have in Mongolia full rule of

law," Elbegdorj said.

The government plans more laws to foster privatization and reduce state ownership, said

Javkhlanbaatar Sereeter, acting director general of the Invest Mongolia Agency of Mongolia's

Ministry of Economic Development. The elimination or privatization of one-third of Mongolian SOEs

will be "a long process", said Javhklanbaatar. Tsogsaikhan Chagnaadorj, an executive with Eagle

Group, a private Mongolian construction firm, welcomed Elbegdorj's plan to privatize Mongolian

SOEs.

"It's hard to compete with government companies as they have government funding and monopoly

power," he said.

At the TDC luncheon yesterday, Elbegdorj witnessed the signing of two memorandums of

understanding. One was between the TDC and the Mongolian National Chamber of Commerce and

Industry, to strengthen economic and trade ties between Mongolia and Hong Kong. Another was

between InvestHK and Invest Mongolia, to boost investment between Hong Kong and Mongolia.

"This is the largest Mongolian delegation ever to Hong Kong," said TDC Council Member Benjamin

Hung.

Source: Southern China Morning Post

MONGOLIA LOOKS TO STOCK TRADING AS TRADE WITH CHINA SINKS

For decades Mongolia has relied upon what is underground to feed its contemporary economy. The

effort has brought new prosperity to a nation where a large sector of its population is still nomadic,

with the extraction of rich deposits of coal, gold and other minerals has brought a sevenfold

increase in per capita income during the last 10 years alone. Lately, though, things have taken an

unexpected twist for the worse. Commodity prices have dropped; Chinese demand is slowing. As a

result, Mongolians are going from boom to bust.

―With the coal sector going through the floor, I'm almost out of business,‖ Batorchiriin Ariguun, the

founder of a local marketing research firm, said. ―I might freeze the company for one year waiting

for the economy to bounce back in 2015.‖

The government wants to diversify away from China and commodities. Undercapitalized and

illiquid, the Mongolian Stock Exchange (MSE) is still a relative minor player, but the government has

big plans. In a push to make long-term equity capital available for businesses other than mining,

Parliament passed two sweeping laws overhauling the stock market which will take effect in

January 2014.

With better rules and the liquidity coming from investment funds, public offerings are expected to

pick up and stir the appetite of financial investors. Mongolia's overall economy is currently worth

just over USD 10 billion; it‘s unlikely that the MSE will reach a total market cap of USD 45 billion in

five years, as its former chairman had predicted. Established local conglomerates such as MCS

Group and Tavan Bogd, with a presence in a wide range of industries from real estate to food and

beverage, and telecommunications firm Mobicom, have long been on the list of possible candidates

for a market debut compiled by local and international analysts.

If the government‘s stock market plan succeeds, the Mongolian economy may become less of a one-

trick pony. A friendlier investment law could also help bring in capital.

Source: International Business Times

ERENHOT TO ZAMYN-UUD CARGO ROAD IN SERVICE

A cargo transport road for a joint inspection area between China's Erenhot and Mongolia's Zamyn-

Uud has come into service.

The road, which was built with assistance by Inner Mongolia, will separate passenger transport and

cargo transport with an additional road. The new road is 21 meters wide and 1.15 kilometers long

and can serve trucks with loading capacity being 30 tons. Total investment in the project is CNY 13

million; investment by Inner Mongolia is CNY 9.7 million.

Erenhot is China's biggest land port to Mongolia.

Source: MENAFN.com

CHINA, MONGOLIA TO OPEN TWO MORE JOINT-SUPERVISION PILOT PORTS

Officials agreed to add the Qeh and Zhuengadadbqui ports as joint-supervision pilot ports for 2014

at the sixth Sino-Mongolian customs joint-supervision meeting on 11 November, disclosed Hohhot

customs on 26 November.

Mongolia is the second neighboring country conducting customs joint-supervision with China

following Kazakhstan. Previously, Erenhot, Ganqimao and other border ports between China and

Mongolia had been included as pilot ports.

Source: MENAFN.com

MONGOLIA CALLS ON RUSSIA TO BUILD ROADS, PIPELINES THROUGH TO CHINA

Mongolia has proposed that Russia should build rail and automobile roads, oil and gas pipelines, and

power transmission lines through its territory to China, the Natural Resources and Environment

Protection Ministry said in a statement Wednesday following an intergovernmental commission

meeting.

The countries have also agreed to further consider the possibility of Mongolian exports to third

parties via ports at the Russia‘s Far East. Mongolia has also asked Russia to maintain supplies of oil

products at one million tons in 2014 and consider the creation of a joint working group to discuss

annual oil supplies.

Source: Prime Business News Agency

EMPLOYMENT IS THE FOCUS AT MONGOLIA TALENT NETWORK

The downturn in the Mongolian economy has made job hunting a more difficult task, said an

executive of a leading executive recruiting firm, making specialization a greater priority for job

seekers.

―In the last 12 months the job market has switched from being a candidate‘s market, to an

employer‘s market,‖ said Adrienne Youngman, a founding partner of Mongolia Talent Network,

speaking on the higher tiers of the job market rather than total employment. ―I know that there are

reportedly pockets of growth (apparently the construction industry took on 15,000 more jobs this

year versus last year, for example) but my gut feel is that the overall impact is negative.‖

She said the strongest employment prospects were in human resources, accounting, engineering,

and other similar while-collar professions. Looking at data from university graduates, 25 percent of

students graduated with degrees in business administration and 17 percent in teaching, compared

with more competitive degrees such as 5 percent in law, 6 percent in engineering, and less than 2

percent in geology.

―Mining will lead the way but will be swiftly followed by associated services such as mining services,

law firms and professional service firms,‖ she said.

Source: EmergingFrontiers.com

CONSTRUCTION COMPANIES SEE EASE IN GOVERNMENT RELATIONS

The Center for Receiving City Residents reported improved conditions for construction workers

since its establishment in December 2012.

The center said it had addressed the requests of 6,674 residents and issued over 1,000 construction

permits since opening. It said it was able to settle matters brought to them in 23 days compared

with wait times of some 107 days before its establishment. Officials noted that having all

construction related matters settled under one roof had boosted productivity of the various

construction authorities and eased the process for construction firms looking for approvals.

The center is in charge of nine services related to construction, mostly providing permits for the

commencement of construction operations, resuming construction, or inspections by the State

Special Commission for approval.

Mongolia jumped 25 places from last year, landing at 107th place, in the ―Dealing with Construction

Permits‖ section of the ―Doing Business 2014 Report‖ by the World Bank.

Source: UB Post

MONGOLIA SEES 34 MINES OPEN SINCE 2012 PARLIAMENTARY ELECTIONS

Thirty-four mines and mining ventures have opened since the new Democratic Party-led coalition

government was elected into office. Those include mines for coal and copper ore, two fluorspar

mines, two open-cut coal mines, 14 gold and iron ore open-cut mines, five aggregate mines for

construction materials, and two brick-earth mines

Source: Undesnii Shuudan

TOURIST NUMBERS FALL 12.1%

A monthly report by the U.N. World Tourism Organization shows that the number of tourists in

Mongolia fell to 333,000 or by 12.1 percent compared to last year.

July and August are peak tourist moths for Mongolia, when, according to the report, tourists from

China fell by 23.5 percent in the first nine months of 2013. The report showed that 48.3 percent of

foreigners who were allowed to enter Mongolia were Chinese visitors, while 14.1 percent were from

Russia, 9.8 percent from South Korea, 4 percent from Japan and 3.5 percent from the United

States. However, even though the total number of tourists who visited Mongolia declined, the

number of visitors from Turkey increased.

There are also rises in the numbers of visitors from India, Kazakhstan and South Korea. For the first

nine months of this year 405,500 foreigners gained permission to enter Mongolia, with 82.1 percent

of them visiting on tourist visas. As to in-transit visitors, 84 percent of the 1.2 million traveled for

private purposes. A report by the General Authority for Border Protection noted that one of every

three foreign visitors was from the East Asia and Pacific region while 24.3 percent were from

Europe. Nearly 74 percent of all foreign visitors who entered Mongolia were male.

Source: News.mn

GOLD TAX CUT WOULD BOLSTER MONGOL BANK RESERVES BY $10BN, SAYS MINES MINISTER

A new bill that would cut taxes on the sale of gold would provide up to USD 10 billion in additional

reserves for the central bank, said Mining Minister Davaajav Gankhuyag.

The bill, which aims to provide greater transparency in gold transactions, would reduce the tax on

gold to 2.5 percent plus a 5 percent royalty for five years. The law would apply to all companies,

big and small, operating in Mongolia.

―This law is not aimed at any particular company,‖ he said, adding, ―If the law is passed in its

current form, Oyu Tolgoi, just like any other company, would qualify for the reduced 2.5 percent

royalty rate for the next five years if it sells its gold to the Bank of Mongolia.‖

The Minister noted that the tax cut would likely cut government revenue from gold by as much as

USD 50 million a year, but would bolster the government‘s foreign exchange and gold reserves by

USD 1.7 billion to USD 2.5 billion for a sum of up to USD 10 billion.

Source: Zuunii Medee

UB TO BEGIN COLLECTING TAXES FOR ROAD MAINTENANCE

Ulaanbaatar will begin charging Ulaanbaatar residents once a year for exiting and entering the city

beginning 1 January 2014.

The owners of the 264,000 cars registered in Ulaanbaatar will pay a one-time annual fee of MNT

30,000 for taxis, between MNT 20,000 and 40,000 for passenger vehicles, MNT 40,000 for large

automobiles, MNT 70,000 for commercial trucks over 10 tons, MNT 60,000 for buses, and between

MNT 30,000 and MNT 60,000 for vehicles with special permits.

Those taxes collected will reportedly be used to provide MNT 8.8 billion to the city fund for road

maintenance and repairs.

Source: Undesnii Shuudan

METEOROLOGIST PREDICTS WARM TEMPERATURES TO BREAK NEXT WEEK

The unusually warm weather this year has caused great disturbances for herders throughout the

country where there is low snow cover but is likely to break this week, said a state meteorologist.

Unusually high air pressure conditions in northern Mongolia have caused the unseasonably warm

winter this year for Mongolia, said J. Tsogt, Head of the Weather Forecasting Section of the

Institute of Hydrology, Meteorology and Environmental Monitoring. However, the warm winter

conditions will likely end after 7 December, he said. Unfortunately, however, the warm spring

water has put a burden on herders, due to the lack of snow on the ground.

―The livestock in the regions are facing water scarcity issues, as snow is a significant water resource

in winter,‖ he said. The snow cover this year is similar to last year, but the snow depth is quite

thin.

Over 60 percent of Mongolian territory has snow coverage, with the Gobi Desert and Mongolia's

southern and southwestern region accounting for the most territory without snow. The warm

temperatures are creating a cycle of water freezing at night and then melting in the day that is

creating greater-than-normal humidity. That could create troubles when winter has fully hit.

―This may result in a harsher winter in several soums in Uvs and Zavkhan Provinces, because mist

and fog during daytime makes it impossible for livestock to feed on forage.‖

Source: UB Post

CHINESE FIRMS WANT TO BUY COAL ASSETS OVERSEAS, BUT ON THE CHEAP

Chinese companies are on the hunt to buy overseas coal mines as Beijing's switch to cleaner fuels

stokes demand for higher-quality coal produced in countries such as Australia, according to people

familiar with the firms' strategies.

A renewed appetite for acquisitions by the world's biggest coal consumer will be a big boost for

miners who are trying to dispose of assets worth billions of dollars to boost shareholder returns.

These include Rio Tinto PLC, which has put Australian and Mozambique coal operations on the

block, and Linc Energy, which is selling its New Emerald Coal business. The Chinese, however, are

not rushing to buy. They see asset values coming under further pressure as coal prices remain

depressed amid a supply glut that has already driven prices down about a third since 2011.

"We have clients who are interested in taking stakes in coal assets. But the view is the market's not

going to get any better for two years. So why buy something today when it's going to be a lot

cheaper in eight months' time," said Sam Farrands, a Hong Kong-based partner at law firm Minter

Ellison.

Plans to curb air pollution have raised the prospect of a long-term decline in China's need for

thermal coal, with Beijing aiming to reduce coal's share of the energy mix to 65 percent or less by

2017 from 73 percent this year. The lower share, though, will be within an expanding base and it

will take a long time to wean China away from coal as it is the cheapest source of fuel for power.

Aluminum Corp of China (Chalco) has long eyed coal assets in Mongolia, though it ended up dropping

a USD 926 million bid for SouthGobi Resources Ltd. last year due to political opposition there.

"There's probably been a pullback in looking at Mongolia after that. Everywhere else is still in the

game," said Ken Su, China metals and mining leader at consultants PricewaterhouseCoopers in

Beijing, referring to Chinese appetite for coal assets.

Source: Reuters

A COMMODITIES RALLY ISN'T CARVED IN STONE

If the market had its own Ten Commandments, near the top would be "thou shalt revert to the

mean"—or, what goes up must come down and vice versa. Commodities bulls betting on this lifting

their favorite investment out of its funk need to ask themselves where that mean is, though.

It looks like commodities in 2013 will rack up their second consecutive year as the worst-performing

asset class in terms of risk-adjusted returns, according to Deutsche Bank. The Dow Jones DJ-UBS

Commodity index is down 10 percent so far this year. But hope is one commodity that never runs

out on Wall Street. As Deutsche Bank noted Monday: "Given the tendency of past losers to become

future winners, this might imply a more constructive outlook" for next year.

There is little fundamental support for a recovery, though. U.S. natural gas, oil and related

products, copper, aluminum, gold and silver account for 6 percent of the DJ-UBS index. Aluminum

is chronically oversupplied and copper looks set to join it at least for a few years as mining

expansions reach fruition. As for gold and silver, 2014 will likely see the Federal Reserve rein in its

bond-buying program, suggesting real interest rates will rise, pressuring precious-metal prices

further.

Above all, in historical terms, prices for copper, oil and gold aren't even that cheap—they only look

so compared to recent dizzy peaks. Somewhere in those alternative commandments is another

instruction for investors: Thou shalt not catch a falling knife.

Source: Wall Street Journal

POLITICS

HERDERS DEMAND NEW TAVAN TOLGOI-SAINSHAND RAILROAD PLANS

The local residents of Tsogttsetsii Soum, Umnugobi Aimag held a press conference last week on

Thursday to announce their opposition to the ―New Railway Network‖ project for the construction

of a 468 kilometer rail track on the Tavan Tolgoi-Sainshand route.

Local residents, mostly herders, urged the government to preserve their homeland as a preserved

wildlife site. Plans for the Tavan Tolgoi-Sainshand railway have it running through the northern part

of Tsogttsetsii, where the majority of the local population is settled. Local residents demanded that

project developers reconsider the location decided on for the railway, instead building on the

southern end of the county.

In addition to wild grasslands, the area decided for the railway is also the habitat of the Mongolian

antelope. The local residents said they would like for Minister of Road and Transport A. Gansukh to

see the area for himself. They added that they do not oppose the Tavan Tolgoi-Sainshand railroad

itself, but wish the government would reconsideration the location due to the social, ecological and

environmental impacts it would have.

Source: News.mn

MONGOLIA DOUBLES VOCATIONAL STUDENT STIPENDS

A Labor Ministry official announced that monthly stipends for vocational students will double to

MNT 70,000, effective 1 January 2014.

The government-backed vocational training program trained 3,300 individuals in 2011 and 2012, and

6,600 in 2013. For 2014, vocational training centers hope to train 6,600 individuals. The government

is currently running a survey to find where demand is strongest in the labor market. There are no

restrictions for entree such as age for admittance into the programs.

The Ministry of Labor said Mongolia has 78 vocational training facilities nationwide, 33.3 percent of

which are state-owned.

Source: News.mn

FOREIGN MINISTER ATTENDS NATO MEETING

Foreign Minister Luvansandan Bold attended a meeting of foreign ministers from NATO member

countries last week on Tuesday at the NATO headquarters in Brussels.

On the second day of the meeting Bold met with NATO Deputy Secretary General Ambassador

Alexander Vershbow for bilateral talks. Bold said he was satisfied with the bilateral partnership

programs and shared ideas for bilateral cooperation, including Mongolia`s role to ISAF, future

participation, planned efforts for 2014 and security in the Northeastern Asian region.

Mongolia is NATO‘s latest Asia-Pacific partner country, having only become a member in March

2012, after the signing of an Individual Partnership and Cooperation Program.

Source: News.mn

PRESIDENT AWARDS MONGOLIAN PEACEKEEPERS

President Tsakhia Elbegdorj awarded medals to Mongolian peacekeepers returned from South Sudan

November 30th, 2013.

A ceremony for the return of the soldiers took place at the air training base in Ulaanbaatar that

day. The president congratulated the soldiers for completing their missions successfully and

awarded them medals for keeping the peace. One of those troops was the president‘s own son.

Enkhbayar Erdene.

Mongolia has sent 850 troops to the Motorized Infantry battalion in the U.N Mission in South Sudan

(UNMISS). In recent years Mongolian soldiers have participated in peacekeeping activities in Sierra

Leone, Chad, Sudan, Ethiopia, Kosovo, Georgia, Iraq and South Sudan.

Source: News.mn

DEFENSE MINISTER VISITS QATAR

A defense delegation led by Minister for Defense D. Bat-Erdene made an official visit to Qatar

between 3 and 7 December, at the invitation of Qatar's minister of state for defense affairs.

Bat-Erdene was first received by Emir Sheikh Tamim bin Hamad bin Khalifa Al Thani. The Mongolian

minister said Mongolia was satisfied with the deepened relations between the two nations. They

spoke on the significance of bilateral cooperation for large scale projects and expanding relations

for defense. At the end of the meeting Bat-Erdene delivered President Tsakhia Elbegdorj's invitation

to the emir to visit Mongolia.

Bat-Erdene also met with Minister of State for Defense Affairs of Qatar Hamad bin Ali Al Attiyah to

discuss global and regional security issues, current trends of bilateral defense cooperation, future

perspectives and issues for cooperation between the two countries.

Mongolia established diplomatic relations with Qatar in 1998. Bilateral defense relations and

cooperation between Mongolia and Qatar were formalized when the Mongolian Armed Forces and

the Qatar Armed Forces signed a cooperation agreement in 2007.

Source: News.mn

MONGOLIAN NATIONAL BROADCASTING UNDER INVESTIGATION BY STATE AUDITORS

State auditors have opened an investigation for corruption into former and current executives from

Mongolian National Broadcasting (MNB).

The National Audit Office opened their investigation of former director Ch. Davaabayar and others

following negative reports surrounding the broadcast company. The announcement of the audit has

reportedly prompted some mid-level executives to flee the country. That includes G. Gerel, a

former head who fled to the United States, and a group of 10 executives who reportedly fled to

India.

Source: Zuunii Medee

UB WATER AGENCY FALLS INTO OVER MNT 10BN IN DEBT

The Water Supply and Sewerage Authority of Ulaanbaatar has fallen into debt of MNT 10.8 billion.

The government agency reportedly spent MNT 37.6 billion this year while only collecting MNT 25.9

billion. Authority head S. Unen said that the prices for water usage are too low. He recommended

hiking fees from MNT 0.25 to MNT 0.55 for apartment residents, from MNT 555 to MNT 810 for

cashmere and wool, leather and gut processing factories, and MNT 1,000 for alcoholic beverages,

purified water plants and car washes.

Source: Udriin Sonin

OPEN AND SMART GOVERNMENT IS FOR EVERYONE, SAYS ALTANKHUYAG

Prime Minister Norov Altanhuyag delivered a presentation regarding the government‘s aim to

deliver open and smart governance.

The premier focused on the projects the government is implementing to build governance without

bureaucratic obstructions or corruption. The first project forming a website that would allow

citizens to access information regarding government activities, programs, and plans from the

capital city and province organizations, ministries, and agencies. The government initiative is the

Government Service E-Machines that have been accessed by 54,000 people and saved MNT 1 billion

since they were rolled out last June he added. Another was the 1111 call center where nearly

70,000 people had called in.

The Premier also mentioned a weekly online meeting with ministries, agencies and provincial

administrations. A similar meeting has twice been held with Mongolian Ambassadors abroad.

Source: Montsame

MONGOLIA TAKES THIRD, BREAKS RECORDS AT WORLD MEMORY CHAMPIONSHIP

Mongolia came in third place in an international competition for memory, with two team members

taking high honors.

Mongolia competed for the first time in the 22nd World Memory Championship, which measures

memory skills in 10 disciplines. Mongolia sent six contestants aged between 12 and 21 to take third

place behind the German and Swedish teams. The Mongolian team broke six world records, with

Sengesamdan Uliikhutag and Namuuntuul Bat-Erdene each taking the titles of ―Grand Master of

Memory.‖ The honor is given for those who can successfully memorize 1,000 random digits and the

order of ten decks of cards in an hour each, and the order of one deck of 52 cards in under two

minutes.

Source: World Memory Championship

FIRST DAY OF TEACHINGS FOR MONGOLIAN BUDDHISTS IN DELHI

A group of 818 Buddhists from Mongolia converged on the Kempinski Ambience Hotel in New Delhi,

where they were joined by 60 Koreans and 15 Tibetans to listen to teachings by the Dalai Lama.

The Dalai Lama observed that there have been many ups and downs in Mongolia, but now, in the

21st century, Mongolians are reviving their Buddhist traditions that earlier flourished for 1,000

years. Although the Sanskrit tradition of Buddhism entered China from the Silk Road and spread to

Korea and Japan, it reached Tibet later. And despite having special links to China, the Tibetan

emperor decided to seek Buddhism in India, the land of its origin.

The Dalai Lama said he had heard that there had been an early transmission of Buddhism in

Mongolia from the Silk Road, and then a later transmission from Tibet. It was during the time of

Sonam Gyatso, the third Dalai Lama, that the Gelug tradition came to the fore.

Source: EIN Newsdesk

POTENTIAL MONGOLIAN-MYANMAR RELATIONS

In November, Mongolian President Tsakhia Elbegdorj made an official trip to Myanmar as part of his

tour of Southeast Asia. This was the first trip by a Mongolian head of state to Myanmar since

diplomatic relations were established in 1956. This visit will likely serve as a starting point to

increased Mongolia-Myanmar cooperation, and support the deepening of diplomatic and economic

ties.

Mongolia and Myanmar are leading emerging markets for natural resources. Mongolia‘s Oyu Tolgoi

mine is one of the largest cooper deposits currently under development, while Myanmar‘s largely

untapped supplies of natural gas and metals has already attracted the attention of international

businesses, not to mention governments eager to access these reserves. However, both

governments are also keen to balance international investors‘ influence in the economy and both

have had to respond to public demands for transparency and environmental protections.

The potential for Mongolia and Myanmar to not only learn from each other in the field of resource

management, but also to coordinate their policy decisions, was pointed out by recent pushes for an

―M3 alliance‖ between Mongolia, Myanmar and Mozambique as three countries with quickly growing

economies, bordering BRICS nations, keen to balance resource investment against political and

societal concerns. Both are relatively small states when compared to their large neighbors.

Mongolia has to contend with its two powerful neighbors: China and Russia. Myanmar also borders

two great power neighbors–India and China–but also a number of smaller states–Thailand,

Bangladesh, and Laos–that give it more options than Mongolia has in this regard. Both Mongolia and

Myanmar will have to balance the influence of their larger neighbors by cultivating relations with

other states, including North America, Europe and Australia.

There are important differences between these two countries, but there are also many potential

venues for increased cooperation and mutual policy learning and coordination. Whether it will be

their differences, the space between them, or the similarities that define Mongolian-Myanmar

relations ultimately remains to be seen, but recent developments suggest cause for optimism.

Author Brandon Miliate is a PhD Student in Political Science at Indiana University – Bloomington.

He is a regular contributor to Mongolia Focus, a well-read Mongolian policy blog.

Source: The Diplomat

ANNOUNCEMENTS

“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 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.

S. Oyun, Minister of Environment and Green Development, presentation at BCM monthly meeting on

May 27 added to Mongolian website, bcmongolia.org/mn/илтгэлүүд.

- Байгаль орчин, ногоон хөгжлийн сайд С.Оюун, Байгаль орчин, ногоон хөгжлийн шинэчлэлийн

бодлого, үйл ажиллагаа, МБЗ-ийн сарын уулзалт 5 сарын 27, 2013

___________________________________________

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

BUSINESS NEWS‟, „PHOTO GALLERY‟

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

November 18-20:

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

Javkhlanbaatar Sereeter, Director General, Foreign Investment Regulations and Registration

Department, MINISTRY OF ECONOMIC DEVELOPMENT OF MONGOLIA;

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

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

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

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

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

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

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

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

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

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

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

Executive Officer, MONGOLIAN STOCK EXCHANGE;

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

Managing Director, TENGER FINANCIAL GROUP LLC

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

Director, ASIA PACIFIC INVESTMENT PARTNERS;

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

CEO of Golomt Securities, GOLOMT BANK;

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

Batmunkh Batkhuu, Chairman, SHARYN GOL JSC;

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

Jimmie Wilde, Chief Operating Officer, BERKH UUL JSC;

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

Forster, Executive VP, ENTRÉE GOLD INC;

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

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

Ulaanbaatar, November 18, 2013:

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

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

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

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

31, 2013:

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

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

Perth, Australia, Oct 29-31, 2013

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

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

2013

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

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

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

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

Australia, Oct 29-31, 2013

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

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

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

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

Australia, Oct 29-31, 2013

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

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

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

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

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

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

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

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

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

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

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

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

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

Australia, Oct 29-31, 2013

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

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

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

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

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

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

29-31, 2013

The ―Mongolia Reports‖ section includes the following:

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

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

Embassy;

- ―Real Estate Report 2013‖ by Mongolian Properties;

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

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

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

Fund;

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

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

2013 book:

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

• President Ts. Elbegdorj: ―Diversifying for growth‖

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

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

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

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

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

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

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

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

Parliament and Government is available for download.

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

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

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

11, 2013.

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

en/album?albumid=200

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

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

SOCIAL NETWORK WITH BCM

BCM LAUNCHES NEW LINKED-IN COMPANY PAGE

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

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

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

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

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

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

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

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

The Business Council of Mongolia (BCM) has expanded its reach to your favorite social networks.

Keep up to date on the latest business deals in Mongolia and how the climate for investment is

improving each day with BCM.

Add BCM on Facebook at https://www.facebook.com/TheBusinessCouncilOfMongolia to read the

latest announcements and comment on events carried in the NewsWire with the community.

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

https://twitter.com/bcmongolia

We have now 2,482 fans on our Facebook fans page, 1,527 connections on LinkedIn network, and

835 followers on Twitter.

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

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

___________________________________________

BCM WORKING GROUP NEWS

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

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

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

The series has grown to include an average of 10 lectures per academic year. Now 1,123 students

and teachers participate with BCM in the University Classroom Project.

Mr. Achit-Erdene Darambazar, President of Mongolian International Capital Corporation, gave a

presentation entitled ―Investment Environment‖ to an audience of more than 90 students and

teachers at the Institute of Finance and Economics, on 5 December 2013.

The presentation was very interesting and comprehensive with many, many questions from the

students. Mr. Achit-Erdene reviewed the importance of foreign investment to the future growth of

the Mongolian economy and provided the history of foreign investment in the country. Students

were most interested about foreign Investment in the future. He answered students‘ questions for

40 minutes.

The next ‗BCM in the University Classroom series‘ will be held in February at Mongolian National

University. Mr. Ser-Od Inchinkhorloo, Vice Director of BCM, will be invited to speak. Presentation

title: ―Economy and the Business Environment‖.

ECONONIC 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]

October 31, 2013 *10.8% [source: NSOM]

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

Note: 9.5% y-o-y, Ulaanbaatar city, October 31, 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]

June 25, 2013 10.50% [source: Mongol Bank]

CURRENCY RATES – DECEMBER 5, 2013

Currency Name Currency Rate

US dollar USD 1,730.61

Euro EUR 2,357.52

Japanese yen JPY 16.97

British pound GBP 2,837.94

Hong Kong dollar HKD 223.21

Chinese Yuan CNY 284.10

Russian Ruble RUB 52.37

South Korean won KRW 1.63

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.