BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 319 – April 4, 2014

NEWS HIGHLIGHTS:

Business

Rio Tinto: Mongolian game theory;

Erdenes MGL to undergo reshuffle;

MMC seeks debt extension amid record-low coal prices;

Independent advisors back Xanadu's play on Kharmagtai copper project;

Dulaan Khar for sale at MNT 50 billion;

Bumrungrad Hospital acquires control of UB Songdo Hospital;

Three more wind farm projects to go online in Mongolia;

Hot-filling in cold, cold Mongolia;

UK retailer Karen Millen moves upmarket—all the way to Mongolia;

MUST to test electric cars;

Bicycle factory to open in May;

BCM rolls out Green Office initiative;

U.S. Embassy hosts Khaan Quest supplier conference;

M.A.D.'s April Fools.

Economy

8% mortgage program update;

Mongol Bank: FX auctions, treasury bills, 1-week bills;

Coal prices to be set by contracts between buyers and sellers;

Energy sector deficit climbs to MNT 65 billion;

Cashmere prices driven up by Chinese currency rate, says exchange official;

Crude oil production to grow 23%, says Petroleum Authority head;

Parliament to put a plug on superfluous investments;

Government to support fruit farms;

Chinggis bond finances production expansions in cashmere;

Diagnostic centers in 11 provinces opened;

Clinics look to inject overseas talent for cosmetic surgery;

Secondary school teachers to receive long-promised laptops;

MNT 74 to be spend on UB road work in 2014;

UB apartments average MNT 2.26 million per square meter;

Earthquake early warning system tested in UB;

Mongolia eyes wind energy potential;

WTO rules against China on rare earths export restrictions;

Miners favoring JVs over takeovers – PwC.

Politics

Parliament's spring session agenda;

Prime Minister sums up March projects and plans for April;

Foot and mouth quarantine to be lifted;

Vehicle weight limits in place to protect local roads;

Mongolia abstains from U.N. resolution declaring Crimea referendum invalid;

U.S. defense secretary to visit Mongolia;

Mongolia negotiates for eased visa regulations with Lithuania;

Belarus, Mongolia mull over student exchange programs;

Bayanzurkh residents approve land trade for apartments;

UB Procurement agency bans 27 companies from tender bidding;

Deputy Justice Minister sentenced for interfering with Interpol investigation;

Civil Aviation Authority tops public corruption research;

Activists' families to hunger strike;

The most dangerous coal mine in the world: Mongolia's illegal Nalaikh pits;

IFC supports secured transactions reform;

Prague zoo to send more Przewalski’s horses to Mongolia;

Let's kick start our coal policy.

ECONOMIC INDICATORS

MSE Top 20 Index by market Capitalization;

Foreign-listed Companies with Mongolian Assets;

Monthly Macroeconomic Overview – February 2014;

Inflation;

Central bank policy rate;

Currency rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank

International SOS

Invest Mongolia Agency

Mongolian Economy Magazine

Oxford Business Group

Milestone GRP

BUSINESS

RIO TINTO: MONGOLIAN GAME THEORY

It will produce for half a century or more. By the end of the 2010s, it may well make up almost a

third of Mongolia's economy. So it is very big. Whether the project will prove to be a beacon for

future foreign investment, or a warning against it, is another matter altogether.

There are reasons for Mongolia‘s government to keep delaying approval of further mining at Oyu

Tolgoi, then. It is one of the largest and highest-quality copper reserves in the world at a time when

ore grades are dropping at many of the world‘s flagship mines. It is conveniently located just 50

miles from the Chinese border. The Anglo-Australian producer Rio Tinto PLC has taken a big stake.

So why not move slowly, and get it right?

There are deadlines on USD 4 billion worth of project funding for underground expansion of Oyu

Tolgoi which arrive on Monday. But deadlines can be rolled when ―shareholder issues,‖ as Turquoise

Hill Resources Ltd. delicately calls them, arise. The Toronto-listed, Rio-controlled company has

two-thirds of the mine. The shareholder Turquoise Hill refers to is the government, owner of the

remaining third of the mine. The authorities in Ulaanbaatar want another feasibility study to be

finished before the underground work is approved. This is political, in some large part. The

government might prefer to wait for a calmer political climate, or for concessions from Rio, before

acting further.

Except that pressure is building on Mongolia‘s reputation among foreign investors. Bonds sold

abroad by the state in 2012 at a yield of 4.5 per cent now trade much higher, at 7 percent. If Oyu

Tolgoi really is a beacon, this is hardly the time to dim it. Rio can play waiting games here too. The

project remains a long-term option for it rather than an urgent priority, given that its workhorse

iron ore mines provide four-fifths of earnings. And as the commodity supercycle turns over, Rio

might be just as happy to bide its time and keep its capital spending under control. Game theory in

the Gobi desert, anyone?

Source: Financial Times

ERDENES MGL TO UNDERGO RESHUFFLE

State-owned mining holding company Erdenes MGL LLC will undergo restructuring as the company

prepares for an eventual public offering.

Erdenes MGL will restructure so that it falls in line with Singaporean corporate standards. That

includes board appointments so that 30 percent are foreign experts, 30 percent native Mongolian

managers, and 30 percent former senior government officials. O. Sainbuyan, the Erdenes MGL chief

executive officer, said the restructuring would take the company towards a public listing, although

it is no hurry since Mongolia's legal environment needs more fine-tuning and the current market is

not likely to be receptive enough to public offerings for mining companies.

Erdenes MGL represents the Mongolian government‘s interests in strategic mineral deposits and

exploration projects. Sainbuyan said Erdenes MGL has plans to put multiple mining projects into

operation this year.

Source: News.mn

MMC SEEKS DEBT EXTENSION AMID RECORD-LOW COAL PRICES

Mongolian Mining Corp. (MMC) is looking to extend the maturity of a note due today as expanding

supplies of coking coal push prices to record lows.

―It‘s still not finalized but definitely we will not be paying on the current maturity date,‖ said Chief

Executive Gotov Battsengel, speaking on March 28 about a promissory note issued to QGX Holdings

Ltd. in November 2012. ―They understand our position and we‘re telling them that ‗OK, one day

we‘ll pay but maybe not today.‘‖

The Ulaanbaatar-based miner has already amended the maturity of its USD 52.5 million promissory

note once before, postponing repayment from 22 November 2013, until today, according to the

company‘s annual results. Gotov declined to comment on the length of the latest extension, saying

it was still being discussed. MMC last year rescheduled payment of a second USD 52.5 million

promissory note until December 2014, the earnings announcement shows.

The company paid the latest coupon on USD 600 million of 8.875 percent dollar-denominated bonds

last week, Gotov said. The debt‘s interest rate is still more attractive than on loans from domestic

banks, he said. MMC plans to start building a 15-kilometer railway across the Chinese border in May

to reduce its transportation costs, according to Gotov. The miner agreed in October to work with

Shenhua Group Corp., Erdenes Tavan Tolgoi LLC and Tavan Tolgoi JSC on the project, according to a

company press release.

―I believe that any meaningful cost savings really will come from infrastructure,‖ he said. ―We will

continue to put an accent on improving efficiencies and maintaining our competitive cost

structure.‖

The rail link will cut the cost of transporting coal, which is now trucked into China, to USD 1 to USD

2 per ton from USD 8.8 last year. The consortium plans to finalize its agreement next month, said

Gotov, declining to provide an estimate of the project‘s expense because feasibility studies are

under way.

Source: Business Week

INDEPENDENT ADVISORS BACK XANADU'S PLAY ON KHARMAGTAI COPPER PROJECT

Xanadu Mines Ltd. has received support from independent experts for the proposed purchase of the

Kharmagtai porphyry copper-gold project for up to USD 10 million, noting a valuation ranging

between USD 15 million and USD 29 million.

Advisory firm Grant Thornton has concluded that the proposed transaction of USD 4 million and a

deferred consideration of USD 10 million for up to 18 months is ―fair and reasonable‖ to Xanadu‘s

non-associated shareholders. In preparing their report, Grant Thornton noted that the present value

of the total consideration to be paid by Mongol Metals LLCs falls towards the low end of the

valuation range of the Oyut Ulaan shares. Grant Thornton has also voiced favor for the guarantee of

Mongol Metals‘ obligations to pay deferred consideration and the free carry of a portion of

Lkhagvasuren Ganbayar‘s interest prior to the decision to mine.

On 3 February 2014, Xanadu announced that Mongolian Metals had entered into definitive

agreements with Oyu Tolgoi Ltd.—not to be confused with the Mongolian government-Rio Tinto PLC

joint venture Oyu Tolgoi LLC—to acquire a 90 percent interest in the shares of Oyut Ulaan LLC. Oyut

Ulaan's primary assets include the Kharmagtai prophyry copper-gold project and property, plant and

equipment including equipment related to exploration and core sampling. It also includes the

Kharmagtai mine camp, which has been winterized and is suitable for use year round. An

independent valuation report noted that three historic mineral resource estimates have been

undertaken at Kharmagtai that provide support to Xanadu‘s exploration target. Xanadu‘s

exploration activities have commenced including core re-logging, magnetic acquisition and

alteration analysis.

Xanadu is preparing for drilling to commence as soon as possible upon completion of the

transaction.

Source: Xanadu Mines Ltd.

DULAAN KHAR FOR SALE AT MNT 50 BILLION

The Dulaan Khar mine has been announced for sale for MNT 50 billion.

The Dulaan Khar zinc and lead mine is equipped with a plant able to process 300,000 tons of ore

concentrate a year annually. It is the biggest plant in Mongolia's western region, located in Nogoon

Nuur Soum, Bayan-Ulgii Aimag. The Chinese company that previously owned the mine planned to

process 84,000 tons of ore for sales of MNT 50 billion in 2014. Annual ore sales were projected at

MNT 170 billion by 2016.

Source: Zuunii Medee

BUMRUNGRAD HOSPITAL ACQUIRES CONTROL OF UB SONGDO HOSPITAL

Bumrungrad Hospital (BH) PLC, Thailand's second-largest listed hospital operator, will be counting

on Health Horizons Enterprises (HHE) Pte Ltd, its new investment arm, to spearhead overseas

investment in locations following its failed attempt to gain management control in Bumrungrad

Hospital International.

According to a BH source, the Thai hospital plans to dilute its 30 percent stake in BHI, which has

been instrumental to the group's international expansion. BHI used to hold a 40 percent stake in

Manila-based Asian Hospital (AHI), but later divested its stake. Health Horizons Enterprises was set

up last month in Singapore with registered capital of USD 20,000. HHE, in which BH holds an 80

percent stake, last Friday acquired a controlling interest in Ulaanbaatar Songdo Hospital, a leading

hospital in the Mongolian capital. HHE owns 100 percent of the common shares of Bumrungrad

Mongolia LLC (BML), which holds 51 percent of the common shares of Seoul Seniors Tower LLC

(SST). SST owns and operates Ulaanbaatar Songdo Hospital.

BML issued share capital of MNT 4.08 billion at a par value of MNT 1,000 per share. BH set capital

expenditures this year at 1.2 billion baht (USD 37 million) excluding mergers and acquisitions.

"Hospitals in South Korea and Singapore have targeted it for referrals," said Dennis Brown,

Bumrungrad‘s corporate chief executive. "Most Mongolians with serious medical problems who can

afford overseas treatment would be seen at UBSD [Songdu), since it is the leading private hospital

in the country. This gives us an excellent opportunity to work with UB Songdo Hospital to expand

their diagnostic and treatment services and coordinate tertiary referrals at the source."

BH remains upbeat about revenue growth of 10 to 15 percent this year from 14.65 billion baht (USD

452 million) in 2013. Foreign patients make up 61% of the company's revenue.

Source: Bangkok Post

THREE MORE WIND FARM PROJECTS TO GO ONLINE IN MONGOLIA

Mongolia stands to see three wind farm projects begin development this year, said the Mongolian

Wind Energy Association, as the country aims to generate a fifth of its energy from wind energy by

2020.

Aydiner Global LLC of Turkey plans to bring the 50 megawatt Choir wind farm project online in

central Gobisumber Aimag in 2016. Aydiner plans to obtain 50 to 70 percent of the project financing

costs of USD 95 million via bank loans. Also, the 52-megawatt Sainshand wind farm is scheduled to

go online late 2015. Ferrostaal Industrial Projects GmbH, a German industrial services company is

set to take a major stake in wind farm.

Last year, Mongolia opened its first wind farm, a 50 megawatt facility at Salkhit, located 70

kilometers south of Ulaanbaatar.

Source: Montsame

HOT-FILLING IN COLD, COLD MONGOLIA

Vitafit has installed hot-filling equipment from German manufacturing and bottling company Krones

as it moves to expand its soft-drink beverages operation in Mongolia.

Established in 1997 by three siblings who combined forces with a German investor, Vitafit now

controls a third of the soft-drink market share. The German investor has since sold his stake in the

company to the family and now competes alongside a major international competitor from Atlanta

with roughly equal sales. The remaining third of the market is divided up among several smaller

national vendors.

―As late as the 1990s, 80 to 90 percent of beverages with juice content were imported in Mongolia,

whereas nowadays the figure is in the low single-figure range,‖ said Director S. Bolorsaikhan, the

middle one of the three siblings.

In the summer of 2013, Vitafit expanded its equipment portfolio to include a hot-fill PET line from

Krones. It is the fastest production line employed by Vitafit, at 18,000 bottles an hour. Krones

provided a variety of equipment including a flash pasteurizer in the syrup kitchen and controls for

cleaning procedures. The first delivery package included four mold sets from Krones, for volumes

ranging between 250 and 1,250 milliliters. At the plant Krone's equipment is used to bottle eleven

different products, what are essentially the variants of the ―Multi‖ and ―Anar‖ brand juices in hot-

fill bottles

―For the closure, the market trend is moving towards narrower mouths‖, says Director Bolorsaikhan.

Lightweighting is another topical issue for Vitafit: ―We know we have to make the bottles lighter,

and that‘s one of our prioritized goals.‖

Vitafit now employs 700 workers and aims to expand its current annual sales of 80 million fills with

the Krones line. ―It depends on the market, of course‖, admits Bolorsaikhan noting that the market

could be saturated as soon as five years from today. ―This is why we are developing new brands

very quickly.‖

Source: Beverage Manager

UK RETAILER KAREN MILLEN MOVES UPMARKET—ALL THE WAY TO MONGOLIA

As booming fashion chain Karen Millen heads upmarket with new stores for New York‘s Fifth Avenue

and London‘s Knightsbridge, it comes as a surprise to hear chief executive Mike Shearwood also talk

enthusiastically about a launch in Ulaanbaatar.

―In emerging markets there is a growing number of independent women with access to money— and

they want to wear brands like ours. In any country with natural resources in abundance, there‘s

newly generated wealth,‖ he said.

Shearwood said 70 percent of the firm‘s GBP 300 million (USD 499.44 million) sales are overseas. It

trades in 66 countries and was among the first British fashion brands in Russia—still its second-

biggest market. In the long run, Karen Millen‘s 90 percent shareholder, Icelandic bank Kaupthing,

will almost certainly sell or list the firm. But Shearwood says that is not a short-term prospect. In

the meantime there is a question mark over some of its 48 UK stores and 40 concessions.

‗We‘re not in a position to have vanity stores. Our pockets aren‘t deep enough. They all have to

work and they all have to make money.‘

Including the one in Ulaanbaatar.

Source: This is Money

MUST TO TEST ELECTRIC CARS

The Mongolian University of Science and Technology (MUST) has partnered with Korea International

Cooperation Agency (KOICA) to test the use of electric cars in Mongolia. The joint project will see

six electric cars made by the United States' Vantage Vehicle International tested under Mongolia's

climate and terrain conditions. Vantage automobiles can travel up to a speed of 100 kilometers an

hour after four to six hours of charge.

Source: Montsame

BICYCLE FACTORY TO OPEN IN MAY

The company Nikel Ganbaa will open a factory for bicycle production in May.

Nikel Ganbaa plans to produce four different types of bicycles for young people and adults and

tricycles for young children. Consumer can choose the bicycle's body design and color before

purchasing, with adult-sized bicycles to sell for MNT 333,000.

Nikel Ganbaa's factory will be able to produce 100 bicycles per day with 70 workers. Their next plan

is to produce motorbikes, but must wait until national bike standards are approved by the Agency

for Standardization and Meteorology.

Source: Udriin Sonin

BCM ROLLS OUT GREEN OFFICE INITIATIVE

The Business Council of Mongolia's (BCM's) Environmental Working Group has initiated a pilot project

to have local businesses sort plastic, glass and can waste at their offices.

The working group will be partnering with various organizations such as the Arts Council of Mongolia

and the National University of Mongolia and the National Waste Recycling Association to design a

suitable bin for distribution. Agreements will be made for waste storage and collection, which will

be transported to centers of Secondary Raw Materials according to a fixed timetable. Once the pilot

project will be operational, more organizations with other recyclable waste will be encouraged to

join the waste separation for recycling and re-processing initiative.

The volume of solid waste amount at disposal sites in Ulaanbaatar is growing by 500,000 tons per

year, but only 3.2 to 6.4 percent of this waste is being re-processed while the rest goes to landfill

sites. Although the government spent MNT 7 billion in 2011 to build a waste recycling facility, the

plant was never built. Development of the waste plant was postponed to 2016, and Ulaanbaatar city

authorities are still working to attain land permissions. One waste separation and recycling facility

was built at the Narangiin Enger disposal site in December 2011, but was never put into operation

because the by-product it was supposed to produce was neither marketable nor practical for the

Mongolian setting.

Source: BCM

U.S. EMBASSY HOSTS KHAAN QUEST SUPPLIER CONFERENCE

The U.S. Embassy to Mongolia will host a conference at the Corporate Hotel in Ulaanbaatar 11 April

for vendors interested in supplying Khaan Quest 2014, the annual multi-national military exercise in

Mongolia. All businesses interested in supporting the exercise for services such as life support,

portable latrines, portable shower trailers, construction materials, heavy equipment, cell phone

vendors, magazine and printing services are encouraged to attend.

Source: NAMBC

M.A.D.'S APRIL FOOLS

M.A.D. Investment Solutions released its annual April Fools newsletter this year, presenting an

assortment of outlandish news stories on Mongolia.

―Dear Friends and Clients,‖ reads the news letter, ―Please find below our traditional 1st of April

news articles, we hope that the exciting new projects focused on Mongolia and explained in this

page, will shed a new light on the country and its limitless potential. Mongolia is truly a land where

anything can happen and some of the news below may not be as outlandish as initially thought...‖

Headlines included ―Ulaanbaatar‘s Ger District Residents to Temporarily Populate Chinese Ghost

Town of Ordos, only to be replaced by workers from Pyongyang,‖ ―Louis Vuitton to produce

monogrammed Gers,‖ ―Mongolia Announces Chinggis-Style Investor Roadshow,‖ and ―Mongolia and

Chili to work together on the world's first trans-world high speed tunnel.‖

M.A.D. provided a disclaimer to alert readers that the newsletter was in jest: ―The event or

situations it depicts are purely fictional and bear no resemblance to any real life situation.‖

Source: M.A.D. Investment Solutions

ECONOMY

8% MORTGAGE PROGRAM UPDATE

Commercial banks have continued to provide more refinanced and new housing mortgages for the

state-backed 8 percent mortgage program.

MNT 499.7 billion in existing mortgages loaned to 17,614 citizens were refinanced at 8 percent out

of MNT 845 billion in requests, as of 27 March. Also, MNT 930 billion in new mortgages loaned to

16,715 citizens were issued out of MNT 1 trillion in requests.

Source: Cover Mongolia

MONGOL BANK: FX AUCTIONS, TREASURY BILLS, 1-WEEK BILLS

The Bank of Mongolia on 3 April1 sold USD 16.4 million at auction for a closing rate of MNT

1,784.00. On the same day, the Bank of Mongolia received an equivalent of USD 73 million from

currency swap transactions with local banks.

On 2 April the central bank held its regular auction for 12-week maturity government treasury bills

at a face value MNT 30 billion out of MNT 63 billion, with each unit worth MNT 1 million. Treasury

bills were sold to commercial banks at a discounted price and with a weighted average yield of

10.54 percent.

Also on 2 April, the central bank auctioned one-week bills worth MNT 407.6 billion at a weighted

interest rate of 10.5 percent a year.

Source: Bank of Mongolia

COAL PRICES TO BE SET BY CONTRACTS BETWEEN BUYERS AND SELLERS

The Ministry of Mining on 1 April launched a new regulation that has coal prices set by contracts

concluded between buyers and suppliers.

The change is being implemented to mitigate losses from the prior practice of miners selling coal to

Chinese buyers at prices below the international market value. Five Mongolian companies currently

export coal to China.

Source: Montsame

ENERGY SECTOR DEFICIT CLIMBS TO MNT 65 BILLION

Mongolia is exploring ways to mitigate losses in energy generation as the sector faces a sum total of

MNT 65 billion in losses.

Last year energy producers introduced payment categories for customers to reduce debt by MNT 37

billion, but saw losses climb again due to the depreciation of the tugrug against the U.S. dollar

exchange rate. The Energy Regulation Committee on 31 March signed an agreement with the

Professional Inspection Department to explore ways to mitigate losses seen in the energy sector and

implement more controls over it. The department will begin by inspecting the financial records and

production standards of companies with special energy usage licenses.

Source: Zuunii Medee

CASHMERE PRICES DRIVEN UP BY CHINESE CURRENCY RATE, SAYS EXCHANGE OFFICIAL

The value of cashmere grew to MNT 89,000 per kilogram on the Mongolian Agricultural Exchange on

1 April.

The gain seen in the cost for unprocessed fur known as greasy cashmere was 30 percent over that of

last year, which was likely a result of an appreciation in foreign exchange rates, said the chief

executive officer of Agricultural Exchange Market, J. Erdenebat. Last year cashmere was valued at

CNY 300 a kilogram (MNT 68,000) compared with CHY 312 this year.

Mongolia has banned the export of cashmere that has not passed through the Agricultural Exchange

since 2013. Last year at the Agricultural Exchange Market 6,382 tons of cashmere was sold worth

MNT 385.2 billion.

Source: Unuudur

CRUDE OIL PRODUCTION TO GROW 23%, SAYS PETROLEUM AUTHORITY HEAD

Mongolia will extract 800,000 tons of crude oil this year, up 23 percent from the year before,

reported the Petroleum Authority head.

Mongolia has the current potential to produce 1.5 million tons of crude oil a year from PetroChina

Dachin Tamsag LLC's Toson-Uul oil field in Dornod Aimag, said G. Ulziburen. Mongolia registered 14

petroleum blocks from Toson-Uul with a resource of 119 million tons of crude oil in 2010.

Last year Mongolia imported 1.2 million tons of gasoline from Russia, China and South Korea.

Mongolia hopes to refine its own oil to ease its dependence on foreign imports.

Source: Unuudur

PARLIAMENT TO PUT A PLUG ON SUPERFLUOUS INVESTMENTS

Parliament ordered that responsibility be given to a government working group to draw up a

parliamentary resolution to amend the 2014 budget at a 6 March meeting of Parliament's Standing

Committee on budget on projects receiving state funding.

The National Audit Committee reported that Mongolia could fund 146 out of the 240 projects

audited, for total spending of MNT 518.3 billion in 2014. That would include the commissioning of

37 buildings at a cost of MNT 79.2 billion. MNT 121.6 billion in financing from the Development Bank

of Mongolia could be used to finance 15 projects for the construction of roads and bridges, said A.

Zangad, the NAO chief. Another 81 projects would have to be transferred to the 2015 budget for

funding, he recommended, while 23 projects worth MNT 24.7 billion could be cut.

―Now, people have to take appropriate action,‖ said Parliament Speaker Z. Enkhbold. ―A

construction company that started a building in November must purchase that building. The state

does not need that building. Construction companies who exceed the given terms have to be black-

listed and not allowed to build again.‖ He added that companies that provided incomplete

blueprints or construction plans would see their operations suspended and agencies should weed out

any civil servants that illegally helped companies win construction tenders.

Parliament froze 240 construction projects after the passage of the 2014 budget review following

three months of auditing of each of the projects. The NAO audited 272 projects for the construction

of roads, bridges, equipment, and land reclamation in 130 Soums in 21 provinces and nine districts

of Ulaanbaatar.

NAO recommended that Parliament raise the budget for construction, adding that Mongolia would

require a regulatory framework for planning investments. Oversight was needed in areas such as

technical review, contractor selection, construction, and financing, it said. Bureaucrats have taken

advantage of the lax controls, said the Zangad, allowing for inefficient spending and slow

operations.

Source: Montsame

GOVERNMENT TO SUPPORT FRUIT FARMS

The government will finance the construction of greenhouses and provide seeds to boost Mongolian

agriculture production as part of its wider initiative to drive domestic production toward increased

exports and to replace imports.

Farmers will receive sea buckthorn seeds from the government for its efforts to support production

of the tiny orange berry. The government also plans to finance the construction of winter

greenhouses for the growth of fruits such as apple, plum, cherry, raspberry, strawberry and

blackcurrant year round. The construction of winter solar-heated glasshouses in Ulaanbaatar for the

growth of plant cucumber, sweet pepper, leafy green vegetables, and fruits will also be receiving

government financing.

Source: Montsame

CHINGGIS BOND FINANCES PRODUCTION EXPANSIONS IN CASHMERE

Cashmere garments producer Exclusive saw production grow five-fold with the expansion of

operations financed by the ―Let's Create in Mongolia‖ initiative, said the company director.

―We got MNT 750 million from a low interest loan from the Chinggis bond,‖ said Director G.

Maytsetseg. ―With the financing we bought new sewing machines which increased our productivity

by five times.‖

Maytsetseg said her plan for the company was to establish a new factory in Uvs Aimag staffed by up

to 50 personnel that would supply demand in Mongolia's western region. However, she said for

standards to be raised Mongolia will have to continue training workers.

―Everybody talks as if sewing factories luck out with specialized sewers, but we have a lot of

vocational training schools. The problem is the schools and industries should work together to

provide more practice to students. The next step for the development of the sewing sector is to

establish a national cloth factory; then our production costs will be reduced.‖

Source: Udriin Sonin

DIAGNOSTIC CENTERS IN 11 PROVINCES OPENED

Prime Minister Norov Altankhuyag attended the opening ceremony in Khentii Aimag for of one of 11

diagnostic centers to open in Mongolia on 1 April.

Diagnostic centers opened in Arkhangai, Bayan-Ulgii, Bayankhongor, Dornogobi, Gobi-Altai,

Zavkhan, Selenge, Sukhbaatar, Uvs, Khuvsgul and Khentii Aimags. The Prime Minister's Office spent

MNT 50 billion from its budget for the repairs and purchase of equipment at the diagnostic centers.

MNT 148 million in repairs and MNT 1.2 billion in purchases and installations was made in the

Khentii diagnostic center alone. The new equipment bought is under three-year warranty.

The prime minister purchased 240 pieces of 27 types of machinery from Japan, Korea, France,

Germany, Italy, China and Brazil. Results from the analyses made at these provincial diagnostic

centers can be brought to hospitals in Ulaanbaatar for further analysis from specialist doctors in the

capital.

Source: Unuudur

CLINICS LOOK TO INJECT OVERSEAS TALENT FOR COSMETIC SURGERY

Greater competition and the development of standards would help provide greater faith in

Mongolia's cosmetic surgery practices, said a surgeon based in Ulaanbaatar.

―Unfortunately, here [in Mongolia] there are no specialists and schools in this field of medical

science,‖ said D. Todnombat, operating surgeon of Tod Kannam Cosmetic Surgery Hospital.

Introducing greater quality can address complaints of mistakes made during surgical procedures

made in Mongolia via a more competitive market and improved standards, said Todnombat, whose

hospital provides cosmetic surgery services such as re-constructive surgery, skin-tightening

injections, and face lifts. He said his practice hoped to employ foreign specialists for procedures

such as re-constructive surgery to the jaw or cheekbone or repair birth defects.

―These difficulties are faced because of the lack of specialists and equipment. So, we have to

prepare trained staff and specialists overseas.‖

Source: UB Post

SECONDARY SCHOOL TEACHERS TO RECEIVE LONG-PROMISED LAPTOPS

The Education Ministry is set to install computer labs and distribute laptops for all 26,000 of

Mongolia's secondary school teachers by September this year, said a ministry official.

The government will provide some 30,000 computers in total to teachers for the laptop distribution

program as well as an initiative to establish a computer lab stocked with 18 computers at secondary

schools, said L. Luvsanjamts, head of the monitoring and internal audit department. The

government plans to sign a final agreement with the World Bank to provide the USD 45.6 million in

funding needed for the project.

A similar program that would have provided laptop computers to teachers was initiated during the

last government but was never completed.

Source: Unuudur

MNT 74 BILLION TO BE SPEND ON UB ROAD WORK IN 2014

MNT 74.13 billion will be spent on road work in Ulaanbaatar to run between 1 April and 5 July this

year.

Construction teams will build 40.4 kilometers of new roads, in addition to 54.9 kilometers of roads

to be widened. Repairs will be made to 243.2 meters of bridges and water drains will be installed at

nine locations, one car tunnel, two pedestrian crossing bridges. Also to be built is 1.84 kilometers of

stone roads.

Ulaanbaatar will provide MNT 34 billion in total spending this year, with MNT 40 billion being rolled

over from last year's budget. Trade and Development Bank (TDB) of Mongolia LLC and foreign

lenders will reportedly provide the remaining financing at a low interest rate.

Source: Udriin Sonin

UB APARTMENTS AVERAGE MNT 2.26 MILLION PER SQUARE METER

Ulaanbaatar saw real estate prices fall slightly in two of its main central districts, according a

Master Properties survey.

Master Properties reported that apartment prices in Chingeltei District decreased 0.5 percent and

0.6 percent in Sukhbaatar District. Prices fell even more slightly in Nalaikh by 0.1 percent.

Prices grew, however, for apartment further away from the city center. Songinokhairkhan District

saw apartment prices spike 9.6 percent, 4.3 percent in Khan-Uul District, 3.7 percent in Bayangol

District, and 3 percent in Bayanzurkh District. Prices increased 2.7 percent on average from

February, at an average price of MNT 2.26 million per square meter.

Source: Udriin Sonin

EARTHQUAKE EARLY WARNING SYSTEM TESTED IN UB

The National Emergency Management Agency (NEMA) on 27 March tested its new earthquake early

warning system in Ulaanbaatar

Sirens were sounded at 16:00 that day while authorities instructed citizens on how to protect

themselves during an earthquake. This year's drill was NEMA‘s third, but was the first time it

employed a new early warning system for earthquakes installed three months before for a total cost

of MNT 11.6 billion. South Korea assisted Mongolia in making the upgrades and built 40 new siren

towers on the roofs of tall buildings throughout the city. The training included broadcasts by NEMA

officials, as well as the employment of emergency management vehicles, police cars and ambulance

to outlying districts of the city without siren towers.

Additional testing on Saturday proved that the siren towers were fully operational. The system

allows NEMA to deliver warnings to siren towers, Mongolian National Broadcasting (MNB), radio

stations, and the telecoms companies Mobicom, Skytel, Unitel, G-Mobile and Orbitnet.

Source: UB Post

MONGOLIA EYES WIND ENERGY POTENTIAL

With demand for electricity on the rise, and a national drive to boost renewable power production

gathering strength, investor interest in Mongolia‘s fledgling wind energy industry looks set to grow.

The government aims for renewable sources to account for at least 20 percent of power generation

capacity by 2020, up from three percent today. It is also keen to export renewable energy. On

February 19, the German firm Ferrostaal Industrial Projects announced plans to invest 120 million

USD in the Sainshand wind farm project, which is located in Mongolia‘s Gobi Desert. Operations at

the wind farm, Mongolia‘s second such venture, are expected to begin in late 2015. The country‘s

first wind energy facility, a 50-MW farm located to the south of the capital in Salkhit, is run by

Clean Energy, a renewable energy company jointly owned by Mongolian conglomerate Newcom

Group, General Electric Pacific, the European Bank for Reconstruction and Development, and the

Netherlands Development Finance Company. The 120 million USD venture began operating in mid-

2013 and feeds into the national grid.

Wind and solar combined account for around five percent of Mongolia‘s 955-megawatt installed

capacity, Ministry of Energy figures show. With the ministry forecasting peak demand to reach 2,321

megawatts by 2020, the country will require significant investments in generation capacity over the

coming several years.

Mongolia has set its sights on carving a niche as a distribution center for renewable energy for

nations such as China. And Mongolia‘s drive to diversify its energy sources stems from both rising

demand and an awareness of the damage inflicted on the country‘s ecosystem by fossil fuels. Many

Mongolians use coal for household heating, which exacerbates the problem. The World Bank

estimates that pollution rates in the capital of Ulaanbaatar are among the highest in the world.

A drive to boost growth across Mongolia‘s renewable energy sector will help address these issues,

while providing opportunities for companies along the supply and management chain.

Source: Oxford Business Group

WTO RULES AGAINST CHINA ON RARE EARTHS EXPORT RESTRICTIONS

The World Trade Organization (WTO) has ruled against China and its export restrictions on rare

minerals vital to the production of smartphones, cameras, steel and hybrid cars in a significant

victory for the US, EU, and Japan—a decision that has broader implications on nations' sovereignty

over minerals.

―Today‘s ruling by the WTO on rare earths shows that no one country can hoard its raw materials

from the global marketplace at the expense of its other WTO partners,‖ said Karel De Gucht, EU

trade commissioner.

China accounts for 90 percent of the world‘s production of the 17 elements—including lanthanum,

tungsten, neodymium and molybdenum—collectively known as rare earths. Beijing‘s export

restriction, first introduced in 2009, caused a surge in prices around the world in 2011. The cost of

some rare earths soared by as much as 500 percent amid fears of global shortages. The Chinese

restrictions also prompted a flurry of new investment in rare earths mines in places such as the

United States and Australia, aimed at breaking Beijing‘s stranglehold. Some have looked to a

Mongolia as a potential source for some rare earths.

The China ruling has broader implications, however. The WTO panel said it had sought to reconcile

the U.N. principle of countries‘ ―permanent sovereignty‖ over natural resources with global trade

rules. It concluded that once they were extracted from the ground and put on to the market for

sale, natural resources should be subject to WTO rules. This could make it harder for other

countries to impose or maintain export restrictions on raw materials. The latest finding follows an

earlier ruling in which the WTO said China‘s export restrictions on nine more common commodities,

including bauxite and zinc, violated global trade rules. It was widely seen as laying the groundwork

for the rare earths case, especially as China has since complied with the ruling.

Wednesday‘s WTO ruling—part of which was first reported in October—was greeted with dismay by

an official at the Chinese Society for Rare Earths, which helps set government policy for the

minerals. ―I think China will definitely appeal because the WTO ruling is unfair,‖ said a member of

the Chinese Society for Rare Earths [Source omits the name of the speaker -ed].

Source: Financial Times

MINERS FAVORING JVS OVER TAKEOVERS - PWC

A PricewaterhouseCoopers (PwC) report released this week suggests that, in the coming year,

miners will avoid outright takeovers and seek safer transactions, such as joint ventures (JVs).

―In recent years, JVs have taken on special significance given the restriction in availability of

capital and debt finance, increased capital costs for projects, and treat complexity of mining prices

in an environment of heightened commodity price volatility,‖ said PwC in its report.

PwC suggested that while there is a derisking taking place across the global mining industries,

companies still need to grow their reserves and secure future production. By advancing a joint

venture project, individuals don‘t have to assume all risks associated with making a full acquisition

on their own. However, the report observed that there are still potential risks for mining and

exploration companies to consider when entering into a joint venture.

―For example, when entering into a JV, companies run a significant risk that the project will not

proceed due to the involvement of two boards. There is a greater potential for disagreement in

such situations, which can lead to delays in project planning and execution.‖

PwC Canada‘s Mining Deals leader, Stephen Mullowney, observed, ―When a 50-50 JV is formed,

there is usually a lot of discussions on who retain the ultimate veto on major decisions such as mine

plans, capex spend and capital calls.‖ He added, ―As there is usually a dilution mechanism, this

can lead to potential problems down road if one party is not able to make capital calls.‖

The report further advised more diversity in investment partners, such as sovereign wealth funds

and other downstream players, for miners wishing to retain control of a mining project. It also

recommended private-equity investments. ―The large amounts of capital raised by dedicated

private equity funds in 2013 will need to be deployed in the near future or risk being returned to

shareholders. Co-investing with a major will provide private equity with both technical expertise as

well as a possible exit.‖

Source: Mine Web

POLITICS

PARLIAMENT'S SPRING SESSION AGENDA

The following is Parliament's agenda for the spring session scheduled to begin 7 April:.

1. "Approval of the 2013 budget execution of Mongolia," 2013 consolidated financial report of the

government of Mongolia, draft resolution of the Parliament;

2. "2015 Budget Statement Outline and Projected 2016-2017 Budget‖ draft law;

3. "Measures on Economic Activation" draft resolution of Parliament;

4. "Approval of the 2015 Main Guidelines of Economic and Social Development" draft resolution of

Parliament;

5. Implementation of the 2013 guideline of economic and social development;

6. "Approval of a Projects and Programs to be funded by the Development Bank" draft resolution of

Parliament;

7. Draft Law on Land (revised);

8. "Approval of the Green Development Concept and Medium-term Program" draft resolution of

Parliament;

9. Amendment to the Law on the Prohibition of Mineral Exploration and Mining Operations at the

Headwaters of Rivers, Water Protection Zones and Forested Areas;

10. Draft Law on Index-based Livestock Insurance;

11. Amendment to the Law on Civil Service;

12. Draft Law on Joint Pensions;

13. Draft Law on Investigation Services;

14. Draft law on Criminal Procedures;

15. Draft Law on the Legal Status of Law Enforcement Officers;

16. Draft Law on Fire Arms (revised);

17. Draft Law on the State Registration of Legal Entities (revised);

18. Draft Law on the Restriction on State Business;

19. Draft Law on Transparent Accounts;

20. "Approval of the Government Policy on the Auto Roads" draft resolution of Parliament;

21. Draft Law on Trade;

22. Amendment to the Law on the Government;

23. Draft Law on Pre-school Education and amendment to the Law on Education;

24. Draft Law on Act of Grace;

25. Other

Source: Udriin Sonin

PRIME MINISTER SUMS UP MARCH PROJECTS AND PLANS FOR APRIL

Prime Minister Norov Altankhuyag discussed efforts by government to encourage industrial

production in Mongolia during his weekly address to the press last week on Thursday.

Altankhuyag said he was working in February and March to introduce projects that aim to increase

Mongolia's exports. He said he planned to meet with delegates from multiple sectors of the

economy on this matter and that those businesses or individuals whose projects were approved for a

national endorsement program had been approved by commercial banks to receive loans from the

Development Bank of Mongolia.

Mongolia is currently importing most of its construction materials as well as many consumer goods

from abroad. The fifth Mongolian Economic Forum held last week focused on creating Mongolian

production while last year's focused on how to define a national brand. Many businesses such as

textile companies have received loans using proceeds from the 2012 USD 1.5 billion Chinggis bond.

Many projects are also planned for April for worker trainings.

Source: UB Post

FOOT AND MOUTH QUARANTINE TO BE LIFTED

Authorities have lifted the quarantine set in Khentii, Dornod and Sukhbaatar Aimags that were set

in place to curb the spread of foot-and-mouth disease.

The State Emergency Commission organized a meeting to discuss the current situation regarding

foot-and-mouth disease in the eastern provinces and what measures should be taken to prevent the

spread of the disease on 2 April. They ordered that domestic migration is prohibited for at least two

months and the transport of animal products will be allowed if treated.

Thirteen counties in three provinces have seen cases of foot-and-mouth since the first infection was

discovered in Ongon Soum, Sukhbaatar Aimag. So far, 3,454 cattle have been destroyed and 4.5

million livestock have been vaccinated because of infections. No cattle have been found to carry

the disease in the past 11 to 41 days from the publishing of this article on 3 April. Despite the lifting

of the quarantines, restrictions will still be in place by the Dornogobi Emergency Commission at

Ikhkhet and Dalanjargalan Soums.

Source: News.mn

VEHICLE WEIGHT LIMITS IN PLACE TO PROTECT LOCAL ROADS

The Road Authority of Mongolia has put in place two annual month-long bans on the use of heavy

trucks and machinery on its roads to maintain road integrity.

The temporary bans will run between 20 March to 20 April and 20 October to 20 November each

year. The ruling is based on the fact that heavy vehicles can damage paved roads during thaw in

spring and frost in autumn.

In 2008 Ulaanbaatar passed a resolution that put in place an 18-ton weight limit for double-cab

trailers, and 24 tons for triple-cabs.

Source: News.mn

MONGOLIA ABSTAINS FROM U.N. RESOLUTION DECLARING CRIMEA REFERENDUM INVALID

Mongolia chose to abstain from a U.N. vote that saw Ukraine and its backers win support from little

more than half of members of the U.N. General Assembly to declare invalid Crimea‘s referendum to

secede.

The 193-member General Assembly voted 100-11 on 27 March to pass a non-binding resolution

describing the Crimean referendum as ―having no validity‖ and calling on all states and agencies to

not recognize ―any alteration of the status‖ of Crimea, as Russia wielded diplomatic and economic

pressure for 48 members to abstain and 24 to cast no ballot. While the resolution makes no mention

of Russia for its invasion or annexation of the peninsula, the 46 sponsors sought to win a clear

majority as a symbol of the country‘s isolation from the international community. Instead, many

members averted a commitment after aggressive lobbying by Russia.

The resolution‘s adoption could be cited as proof against Russian claims for international

recognition of Crimea as Russian territory. Russian Ambassador to the United Nations Vitaly Churkin

framed the crisis in Ukraine as provocation by the United States and Europe in seeking to break

enduring ties between Crimea and Russia. The Russian envoy called today‘s results ―a moral

victory‖ for his nation‘s diplomacy. ‗The fact that almost half of the members of the United Nations

refused to support this resolution, I think, is very encouraging,‘‘ he said.

Armenia, Belarus, Bolivia, Cuba, North Korea, Nicaragua, Sudan, Syria, Venezuela and Zimbabwe

joined Russia in objecting to the text, while Serbia, Iran, Bosnia and Yemen didn‘t cast ballots. The

abstentions included China, Egypt, India, Iraq, Mongolia, Myanmar and other African nations. China

said its abstention stemmed from its longstanding foreign policy of not getting involved in internal

affairs of other nations and respecting the sovereignty and territorial integrity of all countries.

Ukraine turned to the General Assembly to send ―an essential message that the international

community will not allow what has happened in Crimea to set a precedent for further challenges to

our rules-based international framework,‖ Ukrainian Foreign Minister Andriy Deshchytsia told the

General Assembly before the vote. ―I am convinced that a strong vote today will help deter further

aggressive moves.‖

Source: Bloomberg

U.S. DEFENSE SECRETARY TO VISIT MONGOLIA

U.S. Defense Secretary Chuck Hagel will make a stop to Mongolia while make a tour through Asia to

convene the first U.S.-hosted meeting of the Association of Southeast Asian Nations, Defense

Department Press Secretary Navy Rear Admiral John Kirby said today in a press briefing.

Following the meeting, Hagel will travel to the Asia-Pacific region for visits with his counterparts in

Japan, China and Mongolia, Kirby added. The trip will be Hagel‘s fourth official visit to the Asia-

Pacific, a region of growing importance and emphasis for U.S. foreign policy and its defense

strategy, the press secretary said.

―The secretary extended this invitation to ASEAN ministers in his speech at the Shangri-La Dialogue

last June [and] participated in the ASEAN Defense Ministers Meeting-Plus last August,‖ Kirby told

reporters.

Increased and expanded DOD engagement with ASEAN members has been a priority for Hagel, the

admiral noted. Kirby said the ASEAN meeting will identify ways to strengthen multilateral security

cooperation in the region and build more robust partnerships between military and civilian agencies

to improve humanitarian assistance and disaster relief efforts.

Hagel‘s final stop will be in Mongolia, the first visit there by a U.S. defense secretary in nearly 10

years. Mongolia is becoming a more important security partner for the United States, having

deployed forces to Iraq and Afghanistan and in peacekeeping operations worldwide, Kirby said, and

during the visit Hagel will thank Mongolia for its contributions and discuss ways to enhance future

U.S.-Mongolian cooperation. Kirby said that, as one of the world‘s fastest-growing economies,

Mongolia has a growing stake in stability across the Asia-Pacific region and he expects Hagel and the

leaders there also to discuss regional security matters.

Source: Eurasia Review

MONGOLIA NEGOTIATES FOR EASED VISA REGULATIONS WITH LITHUANIA

Mongolia signed a memorandum of understanding with Lithuania for eased visa regulations between

their citizens.

Deputy Foreign Minister D. Gankhuyag visited Lithuania 28 March, where the memorandum he

signed provided visa exemptions to official and diplomatic passport holders. Also negotiated upon

were issues of bilateral cooperation on politics, the economy, roads and transport, as well as

sports. Parties also emphasized the importance of collaborating in the agricultural sector for the

benefit of both their economies. Mongolian and Lithuania also agreed to seek mutual cooperation in

the scope of President Tsakhia Elbegdorj's ―From Big Government to Smart Government‖ initiative.

Source: News.mn

BELARUS, MONGOLIA MULL OVER STUDENT EXCHANGE PROGRAMS

The House of Representatives of the National Assembly of Belarus plans to adopt a bill on the

ratification of the intergovernmental agreement with Mongolia on cooperation in education,

reported a member of the House.

The agreement envisages an exchange in students and postgraduates in the equivalent number (up

to three people) for university studies, said Deputy Chairperson of the House of Representatives‘

permanent commission on education, culture and science Taisa Danilevich. The hosting party

provides free education and scholarships in the amount set by the national legislation of the

country. The countries will agree on such exchanges before 15 May each year. If necessary, students

and postgraduates will get one-year, paid language courses.

The bill would also provide an exchange of experience in planning the national education system,

the organization of joint conferences, seminars, symposiums and academic competitions. The

agreement also foresees an exchange of delegations once in two years to discuss the results and

cooperation prospects.

Source: Belarusian Telegraph Agency

BAYANZURKH RESIDENTS APPROVE LAND TRADE FOR APARTMENTS

Residents of the Bayanzurkh District of Ulaanbaatar have granted a construction company the rights

to build apartment buildings in an area of 110 acres in return for apartments to those residents.

Bayanzurkh's 12th Khoroo residents met with representatives of Jiguur Grand Group Company to

discuss the trade of 0.07 hectares of land for 120 square-meter apartments. The ger district area

will be cleared to make way for new apartment buildings. Jiguur Grand estimates that construction

will require four to five years to build the apartments for the 1,250 families while developing the

entire 110-acre area would take between 15 and 20 years.

The Ulaanbaatar City Council is expected to make a final decision on this project, while 92 percent

of the area residents support the apartment project.

Source: Udriin Sonin

UB PROCUREMENT AGENCY BANS 27 COMPANIES FROM TENDER BIDDING

The Ulaanbaatar Procurement Agency has banned 27 companies from participating in tenders

bidding for city projects for three years.

The banned companies were found to have submitted false information when participating in

tender bids. Also to be announced are the names of officials responsible for selecting those

companies and monitoring the procurement.

Source: Unuudur

DEPUTY JUSTICE MINISTER SENTENCED FOR INTERFERING WITH INTERPOL INVESTIGATION

Deputy Justice Minister E. Erdenejamiyan on 31 March was sentenced to two years of community

service and fines 60 times that of the minimum wage after being found guilty of interfering with

Mongolia's pursuit of the sister of the formerly incarcerated former president Nambar Enkhbayar.

The Independent Authority Against Corruption opened an investigation because of a letter sent by

the Deputy Justice Minister to Interpol last year that asked that the agency discontinue its

investigation into Enkhbaybar's sister Nambar Enkhtuya and her assistant B. Khuyag. Interpol

responded by halting its investigation but later resumed its investigation, per Mongolia's request.

The Secretary General of the Mongolian People`s Revolutionary Party, G. Shiilegdamba, Tuesday

during a press conference voiced disagreement with the court's decision and announced an intention

to appeal.

Source: News.mn

CIVIL AVIATION AUTHORITY TOPS PUBLIC CORRUPTION RESEARCH

Joint research conducted by the Independent Agency Against Corruption and private law firm MDS

reveals that one in every 200 civil servants is guilty of corruption.

The research involving 50 state agencies found that 24 civil servants were connected to 16

corruption cases, with the Civil Aviation Authority leading the pack with five personnel found to be

involved in corruption scandals. Other agencies where civil servants were found to be involved in

cases of corruption were the Mineral Resource Authority, the Petroleum Authority, and the General

Department of Taxation.

The report suggested that the lack of investment by state agencies in combating corruption was a

main reason that corruption remains strong.

Source: News.mn

ACTIVISTS' FAMILIES TO HUNGER STRIKE

The families of the Gal Undesten environmental members sent to prison on charges of firing gun

shots during a protest and placing a bomb are planning to protest their prison sentences with a

hunger strike.

An appeal is scheduled to be heard by the Ulaanbaatar Appellate Court 8 April for members of Gal

Undesten (tr: Fire nation). A court sentenced the group's leader, Ts. Munkhbayar, and his followers

to 21 and half years in prison on counts of a gunshot in a public space, a bomb set in state-

protected area, assault to civil servants, and threatening public security.

Family members of the environmentalists have called a hunger strike to be staged at the front of

the court building if it does not offer those sentenced a plea bargain.

―I believe the Appellate Court panel will be fair and not be influenced by State Prosecutor General

D. Dorligjav,‖ said the wife of convicted activist Z. Enkhsaikhan Tuesday. ―If the Appeal Court does

not offer a plea to our husbands, fathers and sons, we will call a hunger strike. We will do it until

justice wins.‖

The environmental group in September last year protested proposed amendments to be made to the

Law on the Prohibition of Mineral Exploration and Mining Operations at the Headwaters of Rivers,

Protected Zones of Water Reservoirs and Forested Areas. The protest ended up with the arrest of

key members of the group. The two-day trial last January ended with a decision to sentence Ts.

Munkhbayar, G. Boldbaatar, D. Tumurbaatar and J. Ganbold each to 21 years and six months in jail

and two years to M. Munkhbold. O. Sambuuyondon and B. Gantulga, who also stood trial, were

acquitted.

Source: News.mn

THE MOST DANGEROUS COAL MINE IN THE WORLD: MONGOLIA'S ILLEGAL NALAIKH PITS

Deep inside the earth, the eyes of blackened miners shimmer under spotlights as they hammer

endlessly upon rock, tapping the vein of Mongolia's largest illegal coal mine. The Nalaikh mine, 40

kilometers (25 miles) from Ulaanbaatar, is both a vision from the past and a rogue operation from

the present.

They risk their lives every time they go into the pits. Frequently, theirs is a losing bet. Every year,

about a dozen miners die here. That's the official figure. In reality, nobody knows how many people

are buried in the makeshift pits, as Nalaikh largely lies beyond the authorities' control.

Up to 2,000 "hand miners" work at Nalaikh from October to May supplying around 70 percent of the

one million tons of coal burned every year in Ulaanbaatar‘s ger districts. The smoke has turned the

city, once known for its blue skies, into one of the world's most polluted. Famous for its high

calorific value, Nalaikh coal is sold at any corner in 15-kilogram yellow bags for no more than MNT

2,000. It's a huge black market trade that happens mostly in plain view.

―Authorities just cannot control it,‖ middleman D. Khashkhuu said with a grin on his face. He had

just paid the usual MNT 5,000 bribe to a police patrol that stopped his truck loaded with coal along

the highway to Ulaanbaatar.

Soon after shutting down the state mine, authorities divided it into small plots and privatized them.

But demand from the capital's burgeoning ger districts kept growing, and the government failed to

crack down on the expansion of illegal mining at Nalaikh. With monthly earnings reaching MNT 1.5

million, Nalaikh's miners make far more money than most Mongolians—the national average income

is MNT 631,000—during the winter months.

With winter nearly over, Ganzorig and his fellow miners will soon seal off their mine shafts and

empty out the site, leaving behind their old picks and mountains of trash. But they may not need

return. The mine site will not be utterly abandoned, as engineers from a Mongolian private mining

company, Tsagaan Shonkhoor, are expected to camp out here while conducting surveys for its

purchase.

Source: International Business Times

IFC SUPPORTS SECURED TRANSACTIONS REFORM

International Finance Corp. (IFC), a member of the World Bank Group, has signed a cooperation

agreement with the Ministry of Justice to help reform the country‘s secured transactions system, a

move that aims to unlock affordable financing for micro, small, and medium enterprises, and help

them grow.

Access to finance is a challenge faced by many smaller Mongolian businesses, which struggle to get

bank loans as they do not own land or buildings that can be easily accepted as collateral. Because

of the lack of a centralized registry system and functioning laws, banks are reluctant to take

movable assets, such as accounts receivable, inventory, and equipment, as collateral. The reform

will pave the way for Mongolian lenders to provide movable-asset financing to smaller businesses.

―Supporting small and medium enterprise development is one of the government‘s top priorities,‖

said Bayartsetseg Jigmiddash state secretary of the Ministry of Justice. ―With IFC‘s help, we will be

able to build a modern secured transactions system, which is a critical financial infrastructure that

helps small businesses expand and create jobs.‖

IFC and the Ministry of Justice will collaborate to establish a proper legal framework for secured

transactions through a new Pledge Law, develop an online registry, and work with the Mongolian

Bankers Association to raise awareness and train industry professionals. This new project in

Mongolia is carried out in partnership with Japan‘s Ministry of Finance, the Swiss State Secretariat

for Economic Affairs, and the Canada Department of Foreign Affairs, Trade and Development.

Previously, IFC has helped develop modern secured financing systems in more than 20 emerging

markets including China, Ghana, and Vietnam. In China alone, more than USD 3 trillion in loans

backed by movable assets as security have been granted between 2007 and 2011 and many of the

beneficiaries are small businesses.

In addition to investments across multiple sectors in Mongolia, IFC‘s Advisory Services Program has

worked closely with the Mongolian government to support the development of company law and

corporate governance, food safety law, investment law, sustainable banking, and business

inspection and permit reforms.

Source: International Finance Corp.

PRAGUE ZOO TO SEND MORE PRZEWALSKI‘S HORSES TO MONGOLIA

The Prague zoo plans to transfer 4 more Przewalski‘s horses to Mongolia, their country of origin, in

June and release them to the wild, the zoo‘s director, Miroslav Bobek, told journalists today.

The zoo, which focuses on breeding the dramatically endangered Przewalski‘s horse, has released a

total of 12 of them in Mongolia since 2011.

The institutions assisting in the project are the Czech Environment Ministry and the military, which

provides its transport planes. Mongolia‘s Environment and Green Development Minister

Sanjaasürengiin Oyun, a graduate of Prague‘s Charles University, expressed her appreciation at a

joint press conference with Bobek in the Czech Capital.

The 4 horses to be flown to Mongolia in June have been chosen from a Czech center to which they

were brought from several European zoos. The military plane will land directly in the Gobi Desert,

outside regular airports, so that the horses need not undergo a many-hour journey to the

acclimatization enclosure.

The Prague zoo is one of the main organizers of the transfers of the Przewalski‘s horse, which was

extinguished from the wild 40 years ago, back to its original homeland. The transfers from Western

Europe started in the 1990s and more than a hundred horses have returned to Mongolia since.

At present, about 1,900 Przewalski‘s horses live all over the world, including some 300 heads in two

national parks in Mongolia. The Prague zoo started breeding the Przewalski‘s horse in 1932. It has

kept the international pedigree book of this species since 1959.

Source: Prague Post

LET'S KICK START OUR COAL POLICY

It was clear at the fourth global coking coal summit held last week in Taiyuan—in the Shanxi

Province of China—that Mongolia has many opportunities for deal making with China.

China leads the world in coal production, producing 3.6 billion tons of coal last year. Meanwhile it

consumed 3.65 billion tons of coal that year. It is projected that China will increase its coal

production by 2.5 percent to reach 3.8 billion tons in 2014. Almost half of coking coal imports were

supplied by Australia while 20 percent came from Mongolia. In 2014, China‘s coking coal production

is expected to increase by 3 percent to reach 490 million tons, which will account for 70 percent of

global coking coal production.

Coal is a resource that will have a very significant role in the development of Mongolia for the next

20 years. It is time for Mongolia to introduce specific standards to create standards of high quality

for coal from the Tavan Tolgoi deposits. Such a ―TT‖ brand could be developed through the

blending of coals from several mines to be sold internationally.

A 360-kilometer long railroad from Bugat to Gants Mod was commissioned last year. Shenhua

company is going to extend this railroad by 16 kilometers over the border and build a narrow gauge

railway. The rail will bring structural change to the coal supply chain. That means the surrounding

the Gashuun Sukhait-Gants Mod port resolved to cut away at the numerous local taxes applied to

Mongolia's coal by the local authorities in Inner Mongolia.

Despite the risks posed by the coal industry, the government is looking to add to what already

amounts to USD 400 million in debt for the construction of coal washing and power plants at

Erdenes Tavan Tolgoi LLC facilities. This decision needs to be reconsidered so that the private

sector can control those risks.

It is time for Mongolia to kick start its coal policy.

Dambadarjaa ―De Facto‖ Jargalsaikhan is an independent media representative: a columnist and

TV host of the De Facto television program on NTV. Jargalsaikhan is an economist with an MBA in

finance and has acted as a management consultant in banking, marketing, strategic planning,

competitiveness and human resource management.

Source: UB Post

ANNOUNCEMENTS

MINEINFO'S MONGOLIA ORIENTATION CULTURAL ADJUSTMENT COURSE, 10 APRIL

Mine Info is hosting the Mongolia Orientation training 10 April at the Continental Hotel in

Ulaanbaatar.

Once again, Mongolia has become an attractive destination for foreign investors. It is important to

give foreigners a correct understanding about Mongolia, the Mongolian people, culture and

traditions. The Orientation Training will provide foreigners and expats living and working in

Mongolia with a full range of information about the country and its people, with the aim to ensure

an easier and softer adaptation to a new and completely different environment.

The training is delivered by renowned researchers and lecturers from the Mongolian Universities,

organized in a comfortable and luxury environment.

The cost is MNT 940,000 per student. For more information call 99053285 or 99098223.

___________________________________________

CSR FORUM, KEMPINSKY HOTEL, 21 APRIL

The U.S. Embassy and the Business Council of Mongolia will host the Corporate Social Responsibility

(CSR) Forum on 21 April from 09:00 to 12:00 at the Kempinski Hotel.

The Forum will include presentations on CSR practices at leading U.S. companies working in

Mongolia followed by Q&A and discussion. This CSR event is free of charge.

For more information or to attend, please RSVP with the U.S. Embassy by contacting Daria

Purevsuren at DarisurenP@state.gov or calling 7007-6105.

___________________________________________

MONGOLIA INVESTMENT SUMMIT, LONDON, 30 APRIL-1 MAY

The second annual Mongolia Investment Summit in London will be 30 April and 1 May.

An additional post-summit workshop will be held, giving participants presentations, discussions,

panels and networking opportunities. Keynote speakers include Ochirbat Chuluunbat, vice minister

for economic development, Dorjpurev Dulamsuren, vice minister for energy, and Clemente

Cappello, chief investment officer at Sturgeon Capital

BCM members can take advantage of a special 25 percent discount by using the offer code

UL912BCM when registering. Register online at mongoliainvestmentsummit.com/London, call +44

(0) 207 216 6056, or email cs@resourcefulevents.com

___________________________________________

GTR‘S 3RD ANNUAL MONGOLIA TRADE & COMMODITY FINANCE CONFERENCE, BLUE SKY HOTEL,

13 MAY

The Business Council of Mongolia is offering members a limited number of free corporate passes

available (reserved for exporters, traders, manufacturers and producers of physical goods) and a 10

percent discount to GTR's 3rd Annual Mongolia Trade & Commodity Finance Conference 13 May at

the Blue Sky Hotel

With its focus on Mongolia‘s mining, minerals and vast commodity-led growth, this will be the key

trade gathering for the country‘s senior business leaders, providing timely insight on the challenges

facing the local banking and private sectors, as well as offering perspectives from the industry‘s key

supporting actors.

BCM is an institutional partner for the event, and so is offering members a 10 percent discount

when they enter the code BCM10. Contact Grant Naughton at gnaughton@exportagroup.com for

more information.

___________________________________________

BCM MEMBERS RECEIVE 15% DISCOUNT FOR OIL AND OIL SHALE MONGOLIA , 14-15 MAY

The Oil and Oil Shale Mongolia 2014 international investment conference, hosted by the Petroleum

Authority of Mongolia, will be held in Ulaanbaatar on 14 and 15 May.

The event will be attended by international investors, oil, gas, and oil shale companies, service

providers, consultancies, equipment suppliers, and traders.

Delegates will have a unique opportunity to network with industry's key contacts at the country's

first international investment conference on oil, gas, and oil shale. They will have the opportunity

to obtain vital information on legislation and policies on oil, gas, and oil shale exploration and

production regulations from the officials of the Ministry of Mining and Petroleum Authority of

Mongolia. Moreover, projects on oil refinery, exploration, production, plus oil shale projects will be

presented.

BCM members will receive an exclusive 15 percent discount. For more information call +976 9909-

1765 or 9910-5877, email info@oilmongolia.com or logon to OilMongolia.com.

___________________________________________

―MM TODAY‖ ON MNB-TV, FRIDAY, 19:00 TO 19:10

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

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

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

today‘s BCM NewsWire.

BCM WORKING GROUP NEWS

The BCM Environmental Working Group met on Friday, 28 March 2014 with 65 members attending.

This was BCM‘s largest working group meeting ever with a myriad of interested participants and

several potential outcomes to be followed up.

Bayarmaa A, of Clean Energy, Newcom Group moderated the session.

Media: Shuurkhai TV, Star TV, Parliament TV, SBN TV, Mongol HD TV, Ekh-Oron TV, Like TV, Eagle

TV, TV9, Za TV, Olloo TV, C1 TV, National Radio, Mongolian Economy journal, Green further

journal.

Speakers and topics were:

Solid Waste Processing and Recycling in Mongolia

- Existing and planned waste management and recycling activities in Ulaanbaatar by Ch. Enkhjargal

Ulaanbaatar public service union.

- State Policy Implementation on Solid Waste Management, Recycling and Opportunities of Finance

by S. Boldkhuyag, Specialist of Waste Management, MEGD

- Activities of National Waste Recycling Association, introduction of members and waste exportation

D. Byambasaikhan, Head of the National Waste Recycling Association

- Introduction of Mongolia‘s Waste Management Association /mon/ and waste recycling activities

combined with landfill technology Ts. Erdene, Mongolia‘s Waste Management

- Model Khoroo Project on Solid Waste Management: Waste Sorting and Recycling activities in the

ger areas by N.Ariunaa, Asia Foundation

- 3R lessons learnt from Japan and the first steps for applying it in Mongolia by Ts.

Uranchimeg,Specialist of Green Development and Planning Division, MEGD

Initiatives on Waste Processing and Recycling

- Culture-environment-public by Tse. Ariunaa, Arts Council of Mongolia

- Introduction of Oyu Tolgoi waste recycling program and opportunities for replication by Mark

Newby, Environmental Manager, Oyu Tolgoi

- Newcom‘s waste separation initiative at office for processing and recycling by D. Saruul, ESMS

Manager, Newcom

Other initiatives:

- Waste paper recycling in Mongolia-by b. Sarantuya, Environment Education Officer, The Fresh

Water Resource and Nature Conservation Center.

- Sale of waste by Onon, New Era School

- Eco solution from waste /mon/by Tsomirlog, National University of Mongolia

- High school № 65 /mon/

___________________________________________

BCM LAUNCHING ITS LOGISTICS WORKING GROUP

More than 20 individuals with members have indicated interest in joining this new WG. The initial

meeting of the Logistics WG will be held on Tuesday, April 15, at 4 pm at BPI/USAID conference

room, 12th floor, Express Tower. Members with interest in joining the WG can still contact

Erdenetsetseg at erka@bcmongolia.org to join this WG or for more information.

Given the makeup of BCM's membership, we welcome individual volunteers from our logistics,

mining, transport, university and other interested members to join our new Logistics Working

Group. This BCM Working Group (WG) can lead private sector input and recommendations in this

critical area for Mongolia and make a real and meaningful impact.

If you have interest in joining this new working group, please contact erka@bcmongolia.org.

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.

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

Public Awareness Department, Senior Commissioner, Independent Authority Against Corruption

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

ON TRANSPARENCY‖ Training seminar, Mar 06, 2014

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

University Classroom series‖ on February 27, 2014:

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

(Mongolian)

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

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

сарын 24-ний сарын хурал

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

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

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

дэмжих үндэсний зөвлөлийн гүйцэтгэх захирал 2014.02.19

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

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

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

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

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

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

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

• НҮҮРСНИЙ АЖ ҮЙЛДВЭРЛЭЛИЙГ ХӨГЖҮҮЛЭХ ТЭЭВЭР ЛОЖИСТИКИЙН АСУУДЛУУД:

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

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

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

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

сарын 20-21.

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

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

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

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

сарын 20-21.

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

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

21.

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

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

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

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

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

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

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

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

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

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

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

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

Коал Монголиа 2014, 2 сарын 20-21.

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

БУЮУ АНГИЛАН ОЛБОРЛОГЧИЙН ТЕХНОЛОГИ БОЛОН АШИГЛАХ БОЛОМЖУУД, Коал Монголиа

2014, 2 сарын 20-21.

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

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

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

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

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

ХИЙГДЭХЭЭР ТӨЛӨВЛӨСӨН АЖЛУУД БОЛОН ТӨРӨӨС БАРИМТАЛЖ БУЙ БОДЛОГО, Коал

Монголиа 2014, 2 сарын 20-21.

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

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

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

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

гишүүдийн сарын хурал дээр

___________________________________________

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

BUSINESS NEWS‘, ‗PHOTO GALLERY‘

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

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

at BCM monthly meeting, March 24, 2014;

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

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

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

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

seminar, Mar 06, 2014;

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

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

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

seminar, Mar 06, 2014;

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

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

2014;

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

Monthly Meeting, Feb 24, 2014

15 Presentations at Coal Mongolia, February 20-21:

•Impact of Coal Sector on Government's Budget and the Taxation Regime , Ch. Ulaan, Minister of

Finance, MINISTRY OF FINANCE OF MONGOLIA

•Environmental issues in Mongolian coal mining sector, D.Enkhbat Ministry of Environment and

Green Development, Head of Environment and Natural Resources Department

•COAL INDUSTRIAL DEVELOPMENT, TRANSPORT AND LOGISTICS ISSUES: PRESENTATION TOPIC:

TRANSPORTATION OF THE MINING PRODUCT" Purevbaatar Luvsandagva, Head, Association of Railway

Engineering of Mongolia

•INVESTMENT INTO MONGOLIAN COAL MINING SECTOR AND CREATING AN ATTRACTIVE ENVIRONMENT

FOR INTERNATIONAL TRADE, VICE MINISTER OF ECONOMIC DEVELOPMENT, O. Chuluunbat, Vice

Minister, Ministry of Economic Development

•Government Involvement and Support to Enhance the Mongolian Competitiveness in Coal Sector,

O. Erdenebulgan, Vice Minister of Mining

•MONGOLIAN COAL INDUSTRY, Overcoming challenges in volatile market conditions, G.Battsengel,

Director, Mongolian Mining Corporation

•Global Coal Markets and Implications for Mongolia , Arshad Sayed, President of Mongolia & India,

Peabody Energy

• Introduction of CTL Plant Project, T. Munkhtur, Baganuur Energy Corporation

• ADUUNCHULUUN POWER AND CTL PROJECT, J.Zoljargal, Project Manager, MAK

• OIL SHALE OPPORTUNITIES IN MONGOLIA, Ts.Gantsog, Executive Director, Genie Oil Shale

Mongolia

• China Coal Market Lookout 2014, Fenwei Energy Consulting

• Erdenes Tavan Tolgoi JSC, Y. Batsuuri, CEO

• WIRTGEN SURFACE MINING TECHNOLOGY AND CHALLENGES IN COAL IN MONGOLIA by Wirtgen

Group

• "MINING INFRASTRUCTURE INVESTMENT SUPPORT PROJECT", Project Coordinator, B. Enkhbaatar at

the Coal Mongolia 2014, Feb 20-21.

• Coal Processing by IMC Montan.

The following presentations are from the January 27 BCM monthly meeting:

- "The year 2014 starts with new IPO on the Mongolian Stock Exchange", Richard Kobayashi, CEO,

Standard Investment LLC

- "IMA Consultancy Services for Investors and Account Manager's Role", D. Irmuun, Director of

Division for Promotion and Consultancy Services, Invest Mongolia Agency

The following have been added to Interview Section:

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

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

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

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

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

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

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

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

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

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

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

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

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

of Mining, February, 2014;

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

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

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

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

11, 2013.

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

en/album?albumid=200

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

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

SOCIAL NETWORK WITH BCM

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 allows BCM to alert followers to the latest news and information critical to their

businesses. Members‘ businesses will be promoted. Additionally, BCM is delivering 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.

Social stats:

BCM now has 5,287 fans on our Facebook fans page, 1,643 connections on LinkedIn network,

and1,008 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 IN THE UNIVERSITY CLASSROOM NEWS

Business Council of Mongolia (BCM) has been progressing with its BCM in the University Classroom

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

universities to help inspire students and give them direction for their future careers. The series has

grown to include an average of 10 lectures per academic year. Now 1,293 students and teachers

have participated with BCM in the University Classroom Project.

Next BCM in the University Classroom series on 8 April at the (IF&E). Mr. Nick Cousyn, COO, BDSec

will speak --"Update of Mongolian Capital Markets".

ECONOMIC INDICATORS

INFLATION

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

Year 2007 *15.1% [source: NSOM]

Year 2008 *22.1% [source: NSOM]

Year 2009 *4.2% [source: NSOM]

Year 2010 *13.0% [source: NSOM]

Year 2011 *10.2% [source: NSOM]

Year 2012 *14.0% [source: NSOM]

Year 2013 *12.5% [source: NSOM]

February 28, 2014 *12.2% [source: NSOM]

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

Note: 12.0% y-o-y, Ulaanbaatar city, February 28, 2014

CENTRAL BANK POLICY LOAN RATE

December 31, 2008 9.75% [source: IMF]

March 11, 2009 14.00% [source: IMF]

May 12, 2009 12.75% [source: IMF]

June 12, 2009 11.50% [source: IMF]

September 30, 2009 10.00% [source: IMF]

May 12, 2010 11.00% [source: IMF]

April 28, 2011 11.50% [source: IMF]

August 25, 2011 11.75% [source: IMF]

October 25, 2011 12.25% [source: IMF]

March 19, 2012 12.75% [source: Mongol Bank]

April 18, 2012 13.25% [source: Mongol Bank]

January 25, 2013 12.50% [source: Mongol Bank]

April 8, 2013 11.50% [source: Mongol Bank]

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

CURRENCY RATES – 3 APRIL 2014

Currency Name Currency Rate

US dollar USD 1,784.49

Euro EUR 2,456.17

Japanese yen JPY 17.17

British pound GBP 2,969.39

Hong Kong dollar HKD 230.04

Chinese Yuan CNY 287.45

Russian Ruble RUB 50.23

South Korean won KRW 1.69

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.