BUSINESS COUNCIL of MONGOLIA NewsWire

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Issue 315 – March 7, 2014

NEWS HIGHLIGHTS: Business

Rio Tinto closer to striking a deal on Mongolia mine;

MMC secures $150m pre-export loan facility and $50m greenshoe;

MGG appoints Paul Byrne as CEO to lead next phase;

Khovd Council greenlights MEC to commission Khushuut in 2014;

Baotou Steel to establish steel JV in Mongolia;

Vossloh wins first rail contract in Mongolia;

Zinc, lead plant to open in March;

Kincora announces non-brokered financing of up to $5 million;

Government revokes Asia Coal's Saikhan Uul license;

Khan Bank introduces “contactless” payment card;

Xanadu Mines’ Brian Thornton retires as director;

Premier makes site visit to Erdenet Copper;

U.S. EPA stalls Alaska copper mine plans;

PDAC welcomes Prime Minister Harper to talk mining. Economy

MNT 1,700 is “appropriate” exchange rate, says Zoljargal;

Tugrug may appreciate after June, says government working group head;

Exchange rate is best gauge on health of economy, says MBA president;

Mongol Bank: 12-week bills, foreign exchange and swap agreements;

8% refinancing totals MNT 486.7 billion, MNT 897.5 billion for new financing;

Rural counties to receive MNT 5bn in aid from government;

888 projects are selected for “Made in Mongolia” initiative;

Mongolia negotiates with China for overhaul of operations at border;

Program launched to support middle-age employment;

More than $11m pledged to develop green economies;

Mongolia’s supply of FMD vaccines wears thin;

Cow-pox disease occurred in Khuvsgul province;

150 students will receive Indian Government scholarships;

University in London to grant 10 Mongolian students scholarships;

Cabinet approves construction of winter sports complex;

Mongolia's water scarcity could threaten its economic boom;

Tobacco smoking in Mongolia;

Mongolia can grow iron ore revenue 50%, research shows;

Gold claims biggest monthly gain since July;

Uranium market in doldrums as upside creeps closer, says Cameco at PDAC;

China's economic growth forecast at 7.5% this year, says premier. Politics

Mongolia may lift ban on new mining exploration permits – Minister;

Parliament to consider amendment to IMF agreements;

Belarus, Mongolia to step up cooperation in transport;

S. Korea to ship used military equipment to Mongolia;

Minister Oyun ranks among world’s top performing females in mining;

Ambassadors’ Club becomes operational;

Civil servants submit declarations to IAAC;

IAAC investigates Defense Ministry officials;

National team heads to Sochi 2014 Paralympics with Mongolian flag. *Click on titles above to link to articles.

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BUSINESS RIO TINTO CLOSER TO STRIKING A DEAL ON MONGOLIA MINE Signs that Rio Tinto PLC is close to striking a deal with the Mongolian government to develop the second stage of the huge Oyu Tolgoi mine continue to mount, with an engineering contractor advertising for workers on what appears to be the famous copper and gold mine. Progress on the USD 6 billion second stage of Oyu Tolgoi—which arguably ranks as Rio's most important growth project—has been frozen due to Rio's inability to strike an investment agreement with the Mongolian government. But expectations that a deal will be sealed before the end of this month were heightened on Wednesday when it emerged the company that helped build stage one of the mine—UK engineering and project management company AMEC—had started hiring workers for a major underground, copper and gold mining expansion in Mongolia.

Source: Sydney Morning Herald MMC SECURES $150M PRE-EXPORT LOAN FACILITY AND $50M GREENSHOE OPTION Mongolian Mining Corporation (MMC) on 5 March announced it negotiated with one or more banks for a coal pre-export loan facility of USD 150 million, and a greenshoe option for a possible additional USD 50 million. The facilities will be used to refinance the existing term loan facilities for up to USD 300 million granted 8 March 2012. MMC said it had ―drawn down‖ USD 200 million of that facility and that it had canceled the remaining USD 100 million facility for an outstanding balance of USD 130 million. The funds will allow MMC to extend maturity of funding facilities and finance its general working capital as well as its capital expenditure requirements.

MMC is scheduled to repay the facilities in installments, with the last repayment date on 1 December 2016. The facilities will be considered in default if MMC's parent company, MCS Ltd., and shareholders Odjargal Jambaljamts and Od Jambaljamts who between them hold at least 30 percent of the issued share capital of the Hong Kong-listed company, breach that ownership position. If a breach, the bank may cancel the total commitments of up to USD 200 million; declare that all or part of the loans be immediately due and payable to the bank; or direct the security agent to exercise any or all of its rights, remedies, powers or discretions under the finance documents.

Source: Mongolian Mining Corp. MGG APPOINTS PAUL BYRNE AS CEO TO LEAD NEXT PHASE Mongolia Growth Group Ltd. 3 March announced the appointment of Paul Byrne as chief executive officer. Former Chief Executive Harris Kupperman will remain actively involved in the oversight of the company, as he transitions into the newly created role of executive chairman. Byrne has nearly three decades of experience with real estate developments and investment portfolios, various consortia and joint venture projects, combined with organizational leadership experience at the highest levels of market leading property companies in both the private and the public sectors. Most recently, Byrne served as a board member and chief executive officer of Majid Al Futtaim (MAF) Properties, headquartered in Dubai, a USD 6 billion property company with developments and property assets in 10 countries. The MAF portfolio includes four million square meters of land for mixed use developments, 11 hotels and resorts, 16 major shopping malls including the iconic Mall of the Emirates with its famous indoor ski slope and a subsidiary in the property funds management business. ―While in Dubai and the MENA Region, I witnessed how the resource wealth of the Gulf created robust and sustainable consumer spending. In addition, I observed, how being a pioneer in high quality retail and commercial properties allowed MAF to unlock pent-up consumer spending in previously untapped markets,‖ said Byrne. ―It seems inevitable that Mongolia will witness a confluence of these two trends.‖ Additionally, Byrne spent eight years leading all commercial real estate development activities at the new Hong Kong International Airport, which include 35 commercial projects, totaling approximately USD 3.2 billion. Byrne was client representative for the New York Port Authority in planning the redevelopment of the new World Trade Center and Rail Terminal hub, a world renowned mixed-use real estate development (approximately USD 12 billion). Over the course of Paul‘s career, he has successfully overseen initiatives that have raised approximately USD 10 billion in combined debt and equity.

Source: Mongolian Growth Group Ltd. KHOVD COUNCIL GREENLIGHTS MEC TO COMMISSION KHUSHUUT IN 2014 The Khovd Aimag Citizens` Representatives Khural on 20 February approved Mongolia Energy Corporation‘s (MEC) request to launch mining operations at the Khushuut coal mine project this year. The provincial council met with 6,000 residents of seven counties of the province to hear their opinions, requests and ideas for the agreement. MEC agreed to pay MNT 1 billion per year to the Khovd-Khushuut Development initiative in addition to USD 1 per ton of coal it exports from Khushuut, but an agreement was set at MNT 600 million plus USD 0.6 per tons of exported coal for the first year. MEC also agreed to put 10 million tons of coal on reserve for the province.

Source: Unuudur BAOTOU STEEL TO ESTABLISH STEEL JV IN MONGOLIA Chinese steelmaker Inner Mongolia Baotou Steel Union Co., Ltd. plans to build a joint-venture steel plant with an annual production capacity of five million tons in Mongolia. Liu Jinyi, deputy general manager with Baotou Steel, reiterated that as planned, Baotou Steel would build a joint-venture steel plant in Mongolia and the annual production capacity was five million tons. He said the plant could be completed within two to three years, and a major rare

earth mine of it would be shut down. And by then, it would see rare earth raw materials mainly from the development of tailings dams. People in the know disclosed that it was in close talks with the Mongolian party and provided that everything went on well, the steel plant would be completed in two phases within three years and production capacity of the phase. In order to ease pressure from rising demand for iron ores, it planned to use pig iron as raw materials in the phase-two project and the annual production capacity would be two million tons. Liu pointed out that this was actually a win-win deal and in addition to the Chinese firm, Mongolia would benefit much from it. Mongolia had only one steel plant currently and the annual production capacity was only about 300,000 tons. Steel turned out by the plant could not have well satisfied the demand of the nation. In addition, it had had a plan to develop its own mineral resources. The deputy general added that the cooperation involved an iron ore mine, too, and so far both sides had almost reached agreement over most of the details. They were busy negotiating major ones including investment proportion and management mode currently and the worst result would be that they would jointly operate the plant. After that, the Shanghai-listed firm would kick off the construction. Baotou Steel plans to import about 4.5 million tons of iron ore this year, up three million tons from a year ago.

Source: MENAFN VOSSLOH WINS FIRST RAIL CONTRACT IN MONGOLIA German rail technology provider Vossloh won a contract to supply fastening systems for 270 kilometers (168 miles) of rail lines in Mongolia. The contract, which is Vossloh‘s first with Mongolia, is worth only EUR 20 million (USD 27 million), Vossloh said on Thursday, but added that it hopes it will be the first of many contracts from Mongolia. The country is planning new rail lines with a total length of 5,500 kilometers in the coming years. Delivery of fastening systems for the route connecting Mongolia's massive Tavan Tolgoi coal mine with the Chinese border will begin in a few weeks and be completed in the first half of 2015.

Source: Reuters ZINC, LEAD PLANT TO OPEN IN MARCH China is investing in a plant [the Source does not specify the type of investor] in minerals in Western Mongolia. The plant, which is due to open 10 March at Nogoonnuur Soum, Bayan-Ulgii Aimag, would have the capacity to process 300,000 tons of lead and zinc each year. The facility will be located at the site of an underground mine and nearby another concentrator in the Dulaan Har Uul mountain area. The plant will create 600 new jobs.

Source: Zuunii Medee KINCORA ANNOUNCES NON-BROKERED FINANCING OF UP TO $5 MILLION Kincora Copper Ltd. announces a non-brokered private placement of up to USD 5 million through the issuance of up to 100 million units at a price of USD 0.05 per unit. Each unit will be comprised of one common share and one share purchase warrant. Each warrant is exercisable to purchase a common share at a price of USD 0.105 per share for a period of two years from the date of the close of the financing. Proceeds from this financing will be used for further exploration of Kincora's mineral properties in Mongolia and general working capital.

Source: Kincora Copper Ltd. GOVERNMENT REVOKES ASIA COAL'S SAIKHAN UUL LICENSE Asia Coal Ltd. announced it received notice from the Minerals Authority of Mongolia that the mining license for the Saikan Uul deposit had been revoked.

The license was revoked initially on 22 September 2008 because the annual license fee was paid on 17 September 2008, a few days after the due date of 5 September 2008. However, the license was subsequently restored by an order of the then director of Minerals Authority on 13 November 2008. Asia Coal said its subsidiary holding the license, SMI LLC, has paid the relevant annual license fee in a timely manner since 2008. The notice from the MRA states that the restoration order had been invalidated and that the initial decision to revoke the license has been restored. Asia Coal is seeking to dispute the revocation of the license and has submitted a formal request to the Cabinet of Ministers and Ministry of Mining to cancel the decision to revoke the license.

Source: Asia Coal Ltd. KHAN BANK INTRODUCES “CONTACTLESS” PAYMENT CARD Khan Bank LLC is introducing the ―contactless payment card,‖ for the first time in Mongolia, which it says will make purchases quicker and more convenient for consumers. The contactless card, named ―Kiss‖, features a chip which emits radio waves and communicates with the card reader through induction technology and requires only close proximity to an antenna to complete a transaction. They are often used when transactions need to be processed quickly or hands-free such as on mass transit systems, where a smart card can be used without even removing it from a wallet and payments can go through at very close distances. So far, a total of 1,400 Point-of-Sale terminals have been installed in merchants. Besides delivering fast, secure transactions such as fare payments, the card itself protects personal information. The contactless Kiss card is offered as part of a package service which also includes Internet banking and SMS Alert service, loyalty service and delivery of statements via email. Furthermore, Kiss cardholders will receive certain discounts from loyalty merchants.

Source: Khan Bank LLC XANADU MINES‟ BRIAN THORNTON RETIRES AS DIRECTOR Xanadu Mines Ltd. announced 28 February that the impending retirement of Director Brian Thorton, first announced 22 October 2013, had gone into effect. Thornton founded Xanadu in 2005 with Ganbayar Lkhagvasuren and was instrumental in the company establishing operations in Mongolia. Since then, Xanadu has been active in the exploration of gold, copper and coal in Mongolia. ―Brian has built a strong corporate presence and professional exploration team in Mongolia to support the company‘s project portfolio and remains a substantial shareholder,‖ said Xanadu‘s managing director, George Lloyd. ―As a result the company is in an excellent position to capitalize on its opportunities and we are all indebted for his hard work and vision.‖

Source: Xanadu Mines Ltd. PREMIER MAKES SITE VISIT TO ERDENET COPPER Prime Minister Norov Altankhuyag made a visit to the Erdenet copper mine in Orkhon Aimag. The visit began with a meeting with local business people where they discussed a recently announced industrialization project by the government and how it could support local small business. Afterwards Altankhuyag met with employees of the Russian-Mongolian joint venture Erdenet Mining Corp. for an update on the achievements made in 2013 as well as plans for 2014. In 2014, Erdenet plans to procure 13 types of products worth MNT 40.3 billion. Altankhuyag praised the plant for its support of domestic production and transparent procurement. Erdenet is leading a project for the opening of a regional diagnosis center able to receive 500 people a day. With government funding, the project could come to service in 2015, said officials.

Source: Montsame U.S. EPA STALLS ALASKA COPPER MINE PLANS A controversial plan to mine the world‘s largest undeveloped copper deposit in Alaska—a deposit if developed would rival Mongolia‘s Oyu Tolgoi mine—is facing action from the U.S. Environmental Protection Agency (EPA) that could result in the project being blocked.

The EPA said on Friday it was exercising rarely-used powers under the Clean Water Act to investigate how to protect the abundant salmon fisheries of Bristol Bay on Alaska‘s south coast from being harmed by waste from the proposed Pebble copper and gold mine. The project is led by Northern Dynasty, a Canadian company in which Oyu Tolgoi lead mining agent Rio Tinto PLC has a 19.1 percent stake. While the investigation is under way, the U.S. Army Corps of Engineers, which is responsible for approving waste disposal at the planned mine, cannot award any permits. At the end of the process, which could last into next year, the EPA has the power to block the project by denying permission for waste disposal. Gina McCarthy, the agency‘s administrator, said that the action was ―not the end of the road‖ for the project, but studies of the area had shown that the mine ―would likely have significant and irreversible negative impacts‖ on Bristol Bay. The area provides almost half the world‘s supply of wild sockeye salmon. Pebble is one of the world‘s most significant undeveloped deposits, with its estimated 25 million tons of copper compared with Oyu Tolgoi‘s estimated 37 million tons of recoverable copper. The world‘s biggest mining companies have been shying away from the project. Last year Anglo American PLC withdrew from a joint venture to develop Pebble, taking a USD 300 million charge and handing the project over to its former partner Northern Dynasty. Rio Tinto said in December it was reviewing its shareholding, bought for more than USD 200 million, with a view to a possible sale. It took a writedown of USD 131 million on the value of its stake last year, and last week a Rio executive stepped down from Northern Dynasty‘s board. Rio said in December it was focusing on other copper mines, including Grasberg, and two development projects, one in Peru and one in Arizona.

Source: Financial Times PDAC WELCOMES PRIME MINISTER HARPER TO TALK MINING Canadian Prime Minister Stephen Harper on Monday became the first-ever prime minister to attend the Prospectors and Developers Association of Canada's (PDAC's) International Convention, Trade Show and Investors Exchange, where BCM has sent a mission of 10 Mongolian businesspeople to engage potential Canadian counterparts. Harper's attendance is a testament to the growing clout the once-modest yearly gathering of explorers and miners has. In a moderated question and answer session with incoming PDAC president Rodney Thomas, Harper focused on the strength of the economy and on measures the government was taking to help Canadian companies engaged in the mining and extractive industries flourish, both at home and abroad. ―Canada is one of the world‘s leading mining nations. The sector employs tens of thousands of Canadians both in communities across this country and around the world. Our government recognizes the importance of the industry and has been taking important steps to help make it more competitive and productive,‖ the prime minister told about 600 delegates in a special presentation on the government's support for the mineral industry. These measures included supporting junior mineral exploration in ―Economic Action Plan 2014,‖ streamlining the review process for major economic natural resource projects, lowering taxes and keeping them low, opening international market access like never before, and working to match skills training with employer needs. The prime minister also discussed the government‘s efforts to promote access to international markets, including the agreement-in-principle reached with the European Union on a comprehensive trade agreement that would be of great benefit to Canadian businesses.

Source: Mining Weekly

ECONOMY MNT 1,700 IS “APPROPRIATE” EXCHANGE RATE, SAYS ZOLJARGAL Central bank Governor Naidansuren Zoljargal called the MNT 1,700 exchange rate against the dollar ―appropriate,‖ and said the bank had the resources to maintain the tugrug at that rate. Mongolia saw its trade balance come out of deficit for the first time in five years in January, said Zoljargal. He said the negative trade balance and weak coal prices have put a significant

burden on the economy, but an exchange rate of MNT 1,700 would be enough to maintain a positive foreign trade balance. Mongolia received USD 280 million in foreign investment for the first two months of the year. Gold purchases by the central bank have risen from 500 kilograms to 1,300 kilograms year-on-year. He said gold purchases could make up for the losses seen in the coal market. Zoljargal said the bank had enough foreign currency reserves and tools to maintain the current exchange rate.

Source: Business-Mongolia.com TUGRUG MAY APPRECIATE AFTER JUNE, SAYS GOVERNMENT WORKING GROUP HEAD A government working group has predicted that the exchange rate for the tugrug will hold steady before possibly appreciating in July, but warned the economic conditions will not improve unless the government is able to address issues related to Oyu Tolgoi and bring in investment. The working group, which was established by the Economic Standing Committee to monitor the economy, found that the fall in the exchange rate was largely due to stagnating business activity in recent months, a low flow of foreign investment, and the dwindling supply of foreign currencies circulating in the market, said working group head B. Garamgaibaatar. Although the working group predicts that the tugrug will not make any drastic movements over the next four months, after July the currency could appreciate if progress is made regarding the phase two financing for Oyu Tolgoi. Garamgaibaatar, who is also a member Parliament, said other events to possibly benefit the economy would be any address to the transportation bottlenecks preventing larger volumes of coal exports to China and effective enforcement of the 2013 Investment Law. The 2013 budget was drafted with an exchange rate for the tugrug against the dollar of MNT 1,384, as the currency hovers above MNT 1,700 for one U.S. dollar. Lackluster coal export data and no signs of resolution between Oyu Tolgoi lead investor Rio Tinto PLC and the government provide little optimism for the economic turnaround Garamgaibaatar predicted.

Source: Udriin Sonin EXCHANGE RATE IS BEST GAUGE ON HEALTH OF ECONOMY, SAYS MBA PRESIDENT The exchange rate for the tugrug is the best measure of the strength of Mongolia's economy, said the head of the Mongolian Banking Association (MBA), and that promoting the domestic production of goods is the best option Mongolia has at its disposal to protect itself against currency fluctuations. ―In our economy, USD can be a indicator how well we are doing economically,‖ said M. Bold, president of the MBA. ―One of the outcomes of having weak export production and a weak food and service industry is the current situation.‖ Bold said Mongolia's reliance on its mines and dependence on foreign imports have put the country in a vulnerable position. He added that intervention by the Bank of Mongolia only exacerbates the country's weaknesses by creating an unsustainable safety net for the economy. ―Intervening with the real exchange rate will create depravity.‖ The banking industry representative said that what was most important was that the government did not stand in the way of advancements being made by private business. ―Government should not intervene or conduct private business,‖ he said, adding, ―It needs to stop putting barriers and excessive taxes on business.‖ He went on to laud the government for amending the Minerals Law to cut the royalty on gold to 2.5 percent, and said the move could help bolster the tugrug against foreign currencies.

Source: Business-Mongolia.com MONGOL BANK: 12-WEEK BILLS, FOREIGN EXCHANGE AND SWAP AGREEMENTS The 12-week maturity government treasury bill was announced at face value of MNT 40 billion and each unit was worth MNT 1 million. With a face value of a MNT 40 billion out of MNT 48 billion in bids, the government treasury bills were sold to the banks at a discounted price and with weighted average yield of 10.60 percent.

The Foreign Exchange Auction held on 4 March saw the Bank of Mongolia sell USD 5 million at a closing rate of MNT 1,749.90 to local commercial banks. Also on 4 March, the central bank accepted a tugrug-dollar swap agreement offer for an equivalent of USD 12.3 million from local commercial banks.

Source: Bank of Mongolia 8% REFINANCING TOTALS MNT 486.7 BILLION, MNT 897.5 BILLION OF NEW FINANCING The government-backed 8 percent mortgage program had released a total MNT 486.7 billion worth of refinanced mortgages to 17,233 citizens and MNT 897.5 billion in new mortgages for 15,867 citizens, as of 4 March. That total is out of MNT 844.8 billion of requests for refinancing and MNT 926.9 billion for new mortgages.

Source: Cover Mongolia RURAL COUNTIES TO RECEIVE MNT 5BN IN AID FROM GOVERNMENT Sixteen counties of 16 provinces will receive MNT 5 billion each to as part of the government's Soums Center Reform Program. The government plans to spend a total MNT 80 billion for the program that would see these counties create comfortable living conditions, renovate existing infrastructure, and establish fixtures for social services such as schools, hospitals, or cultural centers. Additionally, the U.N. Development Programme (UNDP) plans to launch a USD 200,000 project for improving water sanitation in eight counties in 2014.

Source: Montsame 888 PROJECTS ARE SELECTED FOR “MADE IN MONGOLIA” INITIATIVE Mongolia has selected 888 project proposals to finance in its program to encourage domestic production, reported the minister of economic development. The Ministry of Economic Development has rejected 200 proposals that failed to meet the government's objects as well as an additional 63 from a total 1,151 submitted proposals for funding, said Minister of Economic Development N. Batbayar. The government last month announced it would use the remaining proceeds from the 2012 USD 1.5 billion Chinggis bond to fund projects that would help Mongolia increase the number of exports and replace imports with domestically produced goods. The government has a budget of MNT 7.3 trillion for the initiative, of which 57 percent was included in the 2014 budget for investments. The kind of projects to encourage export fall into the categories of minerals processing, heavy industry, raw agriculture production, food production, light industry, and the production of construction materials. Meanwhile, the bulk of the kinds of production for the second goal to stimulate at-home production to replace imported goods are in the categories of construction materials, foods, as well as heavy and light industry. Of the proposals selected, 524 will be launched in Ulaanbaatar. The second-most popular location was Dornogobi Aimag, followed by Tuv Aimag. Khentii Aimag was the location least chosen for projects. The financing will arrive to project planners in the form of tugrug-denominated, five-year loans at an interest rate of 9 percent. The companies leading the projects have the authority to choose which bank they deal with, which will be responsible for managing any risks associated with the projects.

Source: Zuunii Medee MONGOLIA NEGOTIATES WITH CHINA FOR OVERHAUL OF OPERATIONS AT BORDER A Mongolian delegation led by Cabinet Minister Ch. Saikhanbileg visited the Gashuun Sukhait and Gants Mod border points between China and Mongolia to negotiate for better conditions with the Bayanuur province of Inner Mongolia. The cabinet minister said he made the visit so he could familiarize himself with the site and negotiate with Chinese officials for the terms set out by Mongolia‘s Parliament for international trade. Parliament last December approved a new border control law to take effect 1 April to reform daily procedures for registration, as well as streamlined controls and monitoring procedures. That includes a new network linking Mongolia‘s border, customs, inspection and

immigration offices as well as the removal of 10 levels of border procedures to bring the duration for customs clearance to 7 days. Mongolia has also installed a 12-lane toll road to allow for 1,500 passing vehicles each day at the Gashuun Sukhait border point on Mongolian soil. Also planned for the site are the construction of four control platforms to reduce wait times at customs as well as a soon-to-appear e-pass procedure to allow truck driver‘s to expedite visas and registration using only fingerprints. The government hoped to negotiate for expanded hours of operation at Gants Mod border in China. Currently the port closes from 11 a.m. to 2 p.m. each day for break and the facility closes for the day at 5:30 p.m. The Source reported the work hour constraints as a main contributor to the delay of copper concentrate exports from Oyu Tolgoi. Mongolian officials said it would be necessary to have the port operating 24-7 and introduce more tolls so that each of the 12 roads had a toll booth for traffic to pass through, rather than the current 8 toll booths. An electronic registration system, similar to the one introduced at Gashuun Sukhait, for Gants Mod would also make services more effective, said officials. Mongolia also negotiated to remove fees placed on Mongolian goods entering China, such as a CNY 20 ―pollution‖ fee for every ton of coal and CNY 4 for road use. The Mongolian and Chinese authorities reportedly came to an agreement on some of the items discussed, including the electronic registration, but Bayanuur officials said the 24-7 hours of operation and removal of fees would have to be discussed internally with higher authorities of the province. Last year, Mongolia exported 18 million tons of coal, of which over 60 percent passed through Gashuun Sukhait and 65,000 tons of copper concentrate. Statistics show, however, that the volume of exports fell 10 percent compared to the year before, which officials explained was due to heavy traffic at the border ports. For 2014, Mongolia plans to export twice as much coal as 2013, and last year Prime Minister Norov Altankhuyag negotiated for the export of one billion tons of coal deliveries annually for the next 20 years.

Source: Info Mongolia PROGRAM LAUNCHED TO SUPPORT MIDDLE-AGED EMPLOYMENT Prime Minister Norov Altankhuyag introduced in a speech Wednesday a new program to help middle-aged workers find employment. ―The government has been paying attention to employment support programs dedicated to target groups,‖ said Altankhuyag. The program is one of nine projects the government has planned that targets specific groups who may face discrimination in employment. Mongolia currently has 12,000 people nationwide who are above forty years old and are actively seeking employment, with 3,500 of them in Ulaanbaatar, said the prime minister. The program would see the Employment Service Center offer civil service jobs to jobseekers, such as crossing guards, school patrol officers, and nature conservancy assistants. The program will also provide assistance to middle-aged individuals interested in sales or operating businesses.

Source: Montsame MORE THAN $11M PLEDGED TO DEVELOP GREEN ECONOMIES Economic growth for developing countries such as Mongolia can—and must—be achieved without damage to the environment, a U.N. official said in Dubai on Tuesday. Achim Steiner, U.N. under secretary general and executive director of the U.N. Environment Program (UNEP), was speaking at the first day of the Partnership for Action on a Green Economy. Ministers of finance, environment, labor and trade from more than 30 countries attended the event, which aims to encourage efficient use of resources through government policies. The first day saw more than USD 11 million pledged by donors including Finland, Norway, South Korea, Sweden and Switzerland to help governments develop strategies for green economies. In addition to Mongolia, countries such as Burkina Faso, Peru, Mauritius, and Senegal have expressed an interest in the scheme.

―It is becoming increasingly evident that generating growth and prosperity can and must be achieved within the ecological boundaries of a resource-constrained world,‖ said Steiner. He said one way to encourage green growth would be to show the price paid for unrestrained use of natural resources. ―How do you price roughly four to five million people dying each year prematurely due to indoor and outdoor pollution?‖ said Steiner. ―What is the cost or what is the benefit of avoiding that kind of price?‖ Sanjaasuren Oyun, Mongolia's minister of environment, said that was the reason for her country joining the partnership. After nearly a decade of steady economic growth, Mongolia is about to invest a large amount in new infrastructure, Oyun said. Two hundred new schools, dormitories and kindergartens will be built this year. The government wants to make them green buildings, but will need much help to do so. ―We are actually not asking for investment, we are asking for the knowledge before we invest. We are very excited to be part of this partnership and we have huge expectations in its outcome,‖ she said.

Source: Eco Business MONGOLIA‟S SUPPLY OF FMD VACCINES WEARS THIN A recent shipment of vaccines for Foot and Mouth Disease (FMD) from Russia has arrived frozen and unusable. The company that bid on the purchase and delivery of MNT 2.5 billion in vaccines was reportedly 20 days late in its deliveries by rail to Mongolia, while supplies arrived frozen and without the necessary paperwork indicating their origin. The 1.6 units of the vaccine were an emergency purchase from China. Russia and China provided the vaccines as aid. While Mongolia has exhausted it supply of vaccine reserves at the Veterinarian and Breeding Department in the month since the quarantine of three provinces to prevent against outbreaks of Hoof and Mouth Disease, a recent shipment from Russia of 9.3 units of the vaccine was enough to inoculate up to 18,000 sheep. The government has spent MNT 5.8 billion to finance the employee salaries working in 12 counties throughout the provinces as well as for vaccines, syringes, disinfection solutions and gasoline. Meanwhile, the disease has spread to Zamyn Uud and Sainshand Soums of Dornogobi Aimag. Organizations met last Saturday to discuss what to do next, but they were not able to resolve any issues.

Source: Undesnii Shuudan COW-POX DISEASE OCCURRED IN KHUVSGUL PROVINCE The provincial capital of Khuvsgul Aimag was quarantined for 14 days following an outbreak of cowpox. Officials put Murun Soum under quarantine beginning 26 February after a cow died of cow-pox four days prior in Murun's eighth micro district. Since then, 9 people, 4 horses, 61 cows, 41 sheep, 17 goats and 3 dogs have received treatment for the illness.

Source: Unuudur 150 STUDENTS WILL RECEIVE INDIAN GOVERNMENT SCHOLARSHIPS India's charge d'affaires to Mongolia agreed to provide 150 scholarships to Mongolian students to universities in India during a visit to Darkhan Uul 26 February. Indian Charge d'Affaires Shailish Lahtakia agreed to the scholarships to be financed by the Indian government during a meeting with Darkhan Governor S. Nasanbat.

Source: Montsame UNIVERSITY IN LONDON TO GRANT 10 MONGOLIAN STUDENTS SCHOLARSHIPS Mongolia's Ambassador to Britain and Northern Ireland N. Tulga signed a memorandum in London with Limkokwing University that commits it to provide 10 Mongolian students with scholarships each year. The scholarships will be available to students pursuing their Bachelors‘ or Masters‘ degrees, with preference given to students with economic need.

Source: Montsame

CABINET APPROVES CONSTRUCTION OF WINTER SPORTS COMPLEX The Cabinet of Ministers approved a new project for the construction of a Winter Sport Palace to help train Mongolian athletes for winter sports in the Olympics and other international sporting competitions. Minister of Economic Development N. Batbayar received orders to organize bidding for the project via a ―build-use-own‖ concession agreement. Although Mongolia has participated in the Winter Olympics since 1964, none of its athletes has ever won a medal.

Source: Udriin Sonin MONGOLIA'S WATER SCARCITY COULD THREATEN ITS ECONOMIC BOOM Impinging on the rapid economic growth of Mongolia is the tricky question of water availability, as Mongolia suffers from extremes in seasonal runoff, local water stress and chronic deficits. "In the coming two decades, water demand is expected to triple even as water suppliers are shrinking," states 2030 Waterway Recovery Group (WRG) report, which predicts a 244,000 cubic meter per day water deficit by the end of the next decade. The link between water stress and mineral exploitation is where much of the concern currently lies. A substantial proportion of Mongolia's copper and gold reserves are in the south Gobi where rainfall ranges between zero and a measly 50 millimeters per year. One of the most ambitious possible solutions would see the country pump in water via a 600 kilometers pipeline from the Orkhon River in the country's north. At USD 550 million, the project's price tag puts its viability in doubt. Desalination is another, but whether landlocked Mongolia has the deep pockets or indeed the hydrological conditions to make it happen is questionable. "There's a lot to be shared and gained by visiting each another's projects and setting among ourselves the height of each other's bar," said Mark Newby, environment manager for Rio Tinto PLC's huge Oyu Tolgoi copper-and-gold mine in Umnugobi Aimag. From the "get-go", Oyu Tolgoi realized water efficiency would be make or break for the project, said Newby. Campaign groups have claimed that Oyu Tolgoi could jeopardize local water availability. Rio Tinto maintains that an impermeable layer above its main aquifer separates the brackish water that it extracts from the cleaner, shallower water on which local communities depend. The company has also installed sensors in over 30 wells in the area and has trained local herders in their use, promising them real-time data on water levels. The most pressing water-related headache facing Mongolia relates to Ulaanbaatar itself. With around 1.3 million people, the city's infrastructure is already under huge strain. Rural-urban migration is set to exacerbate this further in the coming years.

Source: The Guardian TOBACCO SMOKING IN MONGOLIA Findings in a survey identify males, urban dwellers and Mongolian youth as groups that should be targeted by public health measures on tobacco consumption. The study corroborated results found in a 2009 survey that found 48 percent of males aged 15 or over in Mongolia consumed tobacco, placing Mongolia among the countries with the highest prevalence of male smokers in the world. The 2010 study found that 46.3 percent of males surveyed and 6.8 percent of females were smokers. This practice was especially dominant among males and urban dwellers, and more so among the middle-aged (45 to 54 years old) while still displaying a high prevalence among Mongolian youth (15.5 percent). The probability of smoking was independent of the level of education. Although the level of awareness of the health hazards related to tobacco smoking was generally very high in the population, this was influenced by the level of education as more people with a primary and secondary level of education believed that smoking at least one pack of cigarette per day was required to harm one's health. Finally, this knowledge did not necessarily translate into a behavioral outcome as 15.5 percent of the population did not object to people smoking in their house, and especially so among males. Tobacco use is one of the four major risk factors contributing to the global burden of non-communicable diseases (NCDs)—the leading cause of mortality in Mongolia. However, the

knowledge, attitudes and practices of the Mongolian population with regards to smoking are largely unmeasured.

Source: BMC Public Health MONGOLIA CAN GROW IRON ORE REVENUE 50%, RESEARCH SHOWS Mongolia could increase revenue from iron ore by 50 percent with downstream processing, according to research from Glogex LLC. Mongolia could increase iron ore revenue from USD 867 million to USD 1.3 billion, according to the Glogex research. For years Mongolia has exported raw iron ore to China's Inner Mongolia Autonomous Region for USD 65 to USD 70 a ton. Mongolia hopes to add value to its iron ore minerals with the production of 10.8 million tons of processed minerals a year, beginning 2016. Mongolia's volume of iron ore exports has increased 6.5 times in the last five years, and is likely to continue to grow. Mongolia currently exports 6.5 million tons of the steelmaking ingredient a year. Mongolia has an estimated total resource of 985 million tons of iron ore, or 0.6 percent of the world's reserves, according to research by the Glogex. The Mongolian company estimated that Mongolia has over 56 deposits of iron ore, of which 32 are located in the central region, 13 in the east, 6 in the southwest mountainous area, and 5 in the west. The iron ore content of Mongolia's minerals typically meets the commercial reserve standard of 25 to 60 percent metal.

Source: Montsame GOLD CLAIMS BIGGEST MONTHLY GAIN SINCE JULY Gold held firm above USD 1,320 a troy ounce to register its biggest monthly gain since July as concerns about the United States and Chinese economies persisted. Bullion rose 7 percent during February and is up 10 percent since the start of the year. Weak economic data, a lower dollar and the political crisis in Ukraine have all supported the price of the yellow metal since December. ―The gold market continues to show its ability to recover,‖ said James Steel, precious metals analyst at HSBC. ―While sentiment is not bullish, the fact that the price is holding above USD 1,300 shows that we are moving towards neutral.‖ Following a decade-long surge, the bullion price plummeted 28 percent last year—the most since 1981. The fall was sparked by North American and European investors selling holdings in gold-backed exchange traded funds. With the precious metal having fallen so out of favor as a store of wealth and Western economies appearing to move on to a sounder footing, few analysts expected gold to rise this year. But the price hit USD 1,345 on Wednesday—a four-month high. Spot gold traded at USD 1,326 on Friday afternoon. With some investor confidence now returning, gold exchange-traded funds (ETFs) have stabilized and funds were on track to have a net inflow in February for the first time in more than a year. Though modest in volume, ―the direction of the flow is very important,‖ UBS noted this week. But demand for physical gold in Asia, by far the world‘s biggest market, has slowed. Consumers in India and China, who invest in gold coins, small bars and jewelry, appear to have been put off by the higher prices. On the Shanghai Gold Exchange, the traditional premium—the difference between the locally quoted price and the global spot price for bullion—turned into a discount this week, suggesting that buying appetite has tailed off. ―We are now past the traditional seasonal weakness in China but demand has not picked up,‖ said Walter de Wet, analyst at Standard Bank in South Africa. ―Year-to-date volumes there are below what they were in 2013.‖

Source: Financial Times URANIUM MARKET IN DOLDRUMS AS UPSIDE CREEPS CLOSER, SAYS CAMECO AT PDAC The continued shuttering of Japan‘s reactor fleet, low prices and a supply overhang continue to weigh on the uranium market, Cameco vice president, marketing strategy and administration Tim Gabruch told delegates at the Prospectors and Developers Association Conference (PDAC) on Sunday. But the positive, long-term fundamentals, mainly driven by China bringing new reactors on stream, remain robust and will start to be felt in the next few years, he added, as Mongolia prepares to build up its uranium industry.

―The demand for electricity is increasing at a rapid pace. In fact, according to the International Energy Agency, global electricity consumption will be 70 percent higher in 2035 than it is today,‖ he said. ―We believe nuclear energy will be an important part of that mix.‖ ―[But] the Japanese situation remains unclear. The restart of its shuttered fleet of reactors is experiencing further delays,‖ he added. ―There‘s also been more uranium than expected from secondary sources; these are the previously mined and milled sources of uranium sitting in inventory ready to come to market,‖ he explained. ―Much of this has been the result of the uranium enrichment market, which is also facing post-Fukushima challenges. [They have been] using underutilized operations to essentially create a surplus of uranium that they are then able to sell into the market,‖ he continued. Gabruch also noted the closure of four reactors in the U.S. and the temporary shutdown on six reactors in South Korea during 2013. The effects of supply overhang and subdued demand has been witnessed most notably in long-term contracting. But with Japan, the significant cost of imported energy is starting to bite. Gabruch also explored the positive mid- to long-term factors, including the conclusion of the Megatons to Megawatts Programme with Russia at end-2013. He also explained that about 15 reactors are expected to be connected to the grid in 2014, with the growth being led by China. ―So while the long-term fundamentals of our industry, and the outlook for uranium remain positive, the continuing saga of the uranium market [means] that there remains uncertainty in the near-term,‖ he concluded.

Source: Mining Weekly CHINA'S ECONOMIC GROWTH FORECAST AT 7.5% THIS YEAR, SAYS PREMIER The government of Mongolia's number-one trade partner, China, aims to deliver economic growth of about 7.5 percent this year, Premier Li Keqiang said in a report to China's legislature released on Wednesday. Gross domestic product growth has repeatedly outpaced the official target, coming in at 7.7 percent last year. But economists say that achieving that rate of growth is becoming more difficult as the economy matures. The National People's Congress (NPC) provides an opportunity to push its reforms ahead. In his first report as premier to the National People's Congress, Li said China would pursue a "balanced monetary policy." Last year, the then-premier, Wen Jiabao, called for a "prudent monetary policy." The change suggests Beijing may be more willing to shift monetary policy as a way to address any sharper-than-expected slowdown in economic growth. The NPC Is China's largely symbolic legislature. Li said the government aims to contain consumer price inflation within 3.5 percent, unchanged from last year. Inflation in 2013 stayed well within the government's tolerance, with the consumer price index up just 2.6 percent. Li also set a 13 percent target for the growth of M2, China's broadest measure of money supply, unchanged from last year. In 2013 the measure grew 13.6 percent, slightly faster than the government planned. Li reiterated Beijing's calls to continue to liberalize interest rates, expand the trading band for the tightly controlled Chinese currency and to move toward capital-account convertibility. He also reiterated calls for China to implement a bank-deposit insurance system, a prerequisite for easing the country's capital controls.

Source: Wall Street Journal

POLITICS MONGOLIA MAY LIFT BAN ON NEW MINING EXPLORATION PERMITS - MINISTER A moratorium on new mining exploration licenses in Mongolia could be lifted during the spring session of Parliament, Mongolia's mines minister said, as the Asian country works to lure back foreign investment after a slump last year. A ban on the issuing and processing of licenses has been in place since June 2010, leaving in limbo many projects in the mineral-rich country wedged between China and Russia. But that could change for some if parliament addresses "many discrepancies" in previous mining laws next month, Mines Minister Davaajav Gankhuyag said late on Tuesday.

"I do believe that ... in the spring session we should be able to have this resolved," Gankhuyag told Reuters following a Mongolia business conference in Toronto. Ganhuyag said Mongolia had made mistakes in the past but that it would "never repeat" them. His speech at the seminar was entitled "Mongolia is open for business". He did not, however, directly address the issue of 106 exploration licenses that were annulled last year as part of an investigation into mining sector corruption. Canadian mining company Centerra Gold Inc. said in January that it was "quite optimistic" it would be able to get back to work soon on its Gatsuurt exploration project in Mongolia, which has been suspended since 2010. Gatsuurt has been included on a list of mineral deposits of "strategic importance" for the Mongolian government to consider. Centerra is hopeful that Parliament will approve the list this year, opening the door for it to resume exploration on the property.

Source: Reuters PARLIAMENT TO CONSIDER AMENDMENT TO IMF AGREEMENT The Cabinet of Ministers on 28 February pushed forward to Parliament for approval an amendment to legislation concerning Mongolia's general agreement with the International Monetary Fund (IMF). In accordance with the general agreement, the special drawing rights‘ size for Mongolia is augmented to USD 72.3 million from USD 51.1 million.

Source: Montsame BELARUS, MONGOLIA TO STEP UP COOPERATION IN TRANSPORT Belarus and Mongolia have committed to invigorating bilateral cooperation in the field of transport and the construction of road facilities, said Belarus' Transport and Communications Ministry in a press release. Heads of both countries' transport ministries, Belarus' Anatoly Sivak and Mongolia's Amarjargal Gansukh, on 3 March signed a cooperation memorandum for the initiative. Mongolia and Belarus have promised to work to simplify rules governing international transportation of people and cargos, including transit through Belarus and Mongolia. Transport specialists from the two countries will exchange experience in road construction. Belarusian and Ulaanbaatar railways have agreed to cooperate in capital repairs and modernization of railway equipment and junctions, cooperation in the field of technical regulations and standardization. The sides will also render mutual assistance in road haulage from Mongolia to Belarus and transit from China to Western Europe and back. The Belarusian officials told their Mongolian counterparts about OAO Stadler Minsk‘s readiness to introduce a tram service in Ulaanbaatar in line with a turn-key contract. In the field of air transport the Mongolian and Belarusian officials said they would continue to work to finish intrastate procedures required for the entry into force of the agreement on flight connections. ―The Mongolian side is open to the use of the railway corridor which links Russia and China,‖ said Minister of Roads and Transportation Gansukh. He said Mongolia plans to build 1,800 kilometers of railways and about 5,000 kilometers of motor ways. Sivak also offered Belarusian services for Mongolia's planned construction of a 1,000 kilometer-long motorway that would link Russia and China.

Source: Belarusian Telegraph Agency S. KOREA TO SHIP USED MILITARY EQUIPMENT TO MONGOLIA South Korea on Wednesday signed an agreement to ship used military vehicles to Mongolia as part of efforts to expand defense cooperation between the two nations, Korea's defense ministry said. South Korean vice defense minister Baek Seung-joo held a meeting with his Mongolian counterpart Battus Avirmid to discuss regional security issues and signed a deal to hand over 15 used military vehicles, including excavators, bulldozers and cranes. "The military equipment is expected to support the Mongolian forces' U.N. peacekeeping operations and the nation's efforts to build the infrastructure for economic development," the ministry said in a release.

Source: Yonhap News

MINISTER OYUN RANKS AMONG WORLD‟S TOP PERFORMING FEMALES IN MINING Minister of Environment and Green Development Sanjaasuren Oyun was included in the 100 Global Inspirational—Women in Mining list by the British organization Women in Mining (WIM). ―The mining industry had fewer women on its boards and in its senior executive positions than any other major global industry, and by a considerable margin,‖ said WIM Chairwoman Amanda Van Dyke. She said, ―They [women] have a lasting impact on the industry. They support other women in mining, and the communities and environments impacted by the industry. We wanted to make sure that regardless of career stage, discipline or jurisdiction, the end result also encapsulated how diverse and high achieving women in our industry are.‖ Oyun was the only Mongolian to make the list, said Van Dyke, highlighting her achievements in the mining industry as an employee and in government. Most of the women who made the list have had at least 20 years‘ experience in mining. Many women were noted for their work in non-government organizations to support women in mining, the rights of mine employees, supporting legislature concerning flexible work hours, supporting the local communities residing nearby mines and assisting women who planned to work in the mining industry.

Source: Mongolian Economy AMBASSADORS‟ CLUB BECOMES OPERATIONAL The Ambassador‘s Club of Mongolia (ACM) celebrated its launch on 3 March. At the opening ceremony, president of ACM and Permanent Representative of Mongolia to ASEAN Ts. Jambaldorj delivered a speech to detail the club's plans to join forces with current and former diplomats to provide support, consultations, and disperse information to the public to promote Mongolia and its foreign agenda. The club also plans to maintain close cooperation with the heads of foreign diplomatic missions and develop foreign cooperation by creating a network with organizations with similar aims around the world.

Source: Montsame CIVIL SERVANTS SUBMIT DECLARATIONS TO IAAC The Independent Authority Against Corruption (IAAC) announced it had finished collection of the declaration of assets from 51,000 civil servants. This year IAAC collected declarations from 99.98 percent of civil servants, as required by Mongolia law. The collected data will be published sometime between April and June on the IAAC's official website.

Source: News.mn IAAC INVESTIGATES DEFENSE MINISTRY OFFICIALS The Independent Agency Against Corruption (IAAC) has opened an investigation into authorities at the Defense Ministry. The IAAC investigation includes the former head of the State Administration and Defense Ministry's management division, Sh. Sukhbaatar, who current serves as the Foreign Affairs Ministry's consular department director. The investigation is related to the hiring of KhuMoTe LLC to construct a 380-home apartment building for ministry employees. After four years of waiting, the building has still yet to complete. KhuMoTe is owned by the son of former parliamentarian B. Batbayar. The company has allegedly cost the government MNT 1 billion for the failed project. The Ministry of Finance reportedly warned the Defense Ministry not to enter into a contract with KhuMoTe for the construction of the building.

Source: Unuudur NATIONAL TEAM HEADS TO SOCHI 2014 PARALYMPICS WITH MONGOLIAN FLAG State Secretary General of the Ministry of Culture, Sport and Tourism P. Altangerel 28 February met with the Mongolian national team to represent their country at the Sochi 2014 Paralympics to hand over the state flag of Mongolia, attire and equipment designed for the team.

The national team has five members, including vice president of the Mongolian Paralympics Committee D. Surenkhorloo, Coach J. Dashdondog, Technical Coach N. Sandagdorj, MNB media representative D. Batjargal, and athlete B. Ganbold. Ganbold will compete in cross country skiing in the men‘s one kilometer race on 10 March, in the men‘s 10-kilometer on 12 March, and the 20-kilometer on 16 March. Gobi JSC designed and provided cashmere outfits for the Mongolian national team for the opening and closing ceremonies on 26 February. Gobi designer B. Bolormaa used the red, yellow and blue colors of Mongolian flag when designing the outfits. Mongolia participated in the Winter Paralympics for the first time in 2006 in Turin, Italy. At the Vancouver Winter Paralympics in 2010 two Mongolian athletes, N. Sukhbaatar and E. Zorig, took part. This year, 1,600 athletes from 44 nations are competing in 72 events at Sochi 2014.

Source: UB Post

ANNOUNCEMENTS MONGOLIA ECONOMIC FORUM 2014, ULAANBAATAR, 24-25 MARCH The fifth annual meeting of Mongolia Economic Forum will be held on 24 and 25 March at the State Palace in Ulaanbaatar. During this two day meeting participants will discuss topics related to future of Mongolia and many more social and economical hot topics. The World Economic Forum project team will also present The Scenarios for Mongolia during the meeting. BCM members will receive an exclusive 10 percent discount. For enquiries regarding participation and press, please call 976-11-321051 or email info@meforum.mn or visit www.meforum.mn. Please register at http://meforum.mn/registration/. Registration will be closed 5 pm, 21 March. __________________________________________________________________________________ “MINER AND SUPPLIER-2014” TO BE HELD FOR 4TH YEAR, 13-14 MARCH 2014, CHINGGIS KHAAN HOTEL BCM members will have 10% discount to register for the event. To get the discount code, please contact saruul@bcmongolia.org. It is single and largest event which is going to be held in the sector of Mongolian mining supply. Executive officers, supply managers, financial directors and engineers have great expectations for this event which influences goods and service research that is broadly familiar within the sector. It will be organized under the slogan ―LET‘S MOVE TO THE DEVELOPMENT NEW STAGE!‖ where mining companies will share their experiences and introduce advanced techniques, technology and management. Upon your participation at our meeting and exhibitions, you will be provided with the chance to share your experiences, conclude your achievement and successes, introduce advanced techniques, technology and management, determine your resources and chances, properly adjust your supply and establish relationship with new customers. For more information please contact naranbat@infomine.mn or 70116009. ______________________________________________________________________ BCM MEMBERS RECEIVE 15% DISCOUNT FOR OIL AND OIL SHALE MONGOLIA, 9-10 APRIL The Oil and Oil Shale Mongolia 2014 international investment conference, hosted by the Petroleum Authority of Mongolia, will be held in Ulaanbaatar from 9 to 10 April 2014. 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. ____________________________________________________________ MONGOLIA INVESTMENT SUMMIT, LONDON, 29 APRIL-2 MAY The second annual Mongolia Investment Summit in London will be 29 April to 2 May. An additional post-summit workshop will be held, giving participants four whole days of 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 All 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 ______________________________________________________________________ PPP HANDBOOK FOR PUBLIC AND PRIVATE STAKEHOLDERS LAUNCHED Mongolia‘s Ministry of Economic Development launched the PPP manual on 19 February 2014. Prepared with ADB support, the manual guides public and private stakeholders in the preparation of PPPs. ADB Principal PPP Specialist, Craig Sugden, stressed that Mongolian PPP environment has three strengths now: the Concession Law, the PPP implementing unit, and the handbook. In addition, the first in a series of Public Private Partnership Stakeholders Consultative Meetings to be organized quarterly by MOED was held on 21 Feb in Best Western Tuushin Hotel. Contact Innovation and PPP Department, MOED, Tel: 264726 for the manual. ADB has supported Mongolia‘s PPP work since 2009 and was appointed as the mandated advisor to the PPP for Combined Heat and Power Plant 5. ______________________________________________________________________ “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 MEETING The BCM Tax Working Group and the National Council of Private Sector Support (NCPSS) jointly hosted a meeting Wednesday, February 19, with 22 members attending. Co-chair Onchinsuren D., Deloitte Onch, and Dr. Khashchuluun, Executive Director of NCPSS, moderated the session. Participants: BCM`s Tax WG members and Baigalmaa Gankhuu, Narankhuu Tumurchudur-Silk Road Foundation, Bat-Oyun Sanj-Bodi Financial Advisory Services, Bolormaa Khalzan, Tsolmon Bereeter-Austraining International, Batgerel and Dr. Uyanga-Newcom Group, Bat B and Kh. Tsevelmaa-National University of Mongolia. Meeting discussion was on the following topics: 1.Taxation impact research, Dr. Khashchuluun, Executive Director, NCPSS 2. Issues and concerns over VAT and BCM response Please see following link to Khashchuluun`s presentation in Mongolian - http://bcmongolia.org/images/files/mn/Iltgeluud/Khashchuluun.pdf. English translation - "Change of the package of Taxation Laws private sector" posted to BCM English website. BCM`s Tax Working Group is planning to request an "open discussion" of proposed tax law changes to the Government in early May. If you have any comments on the proposed tax laws, please send to 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. 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‖ The presentation below is from the February 24 BCM monthly meeting by Nick Cousyn, COO, BD Sec:

• О. Зоригт, Гүйцэтгэх захирал, Майн Инфо "Майн Инфо ХХК-ний товч танилцуулга", МБЗ-ийн 2 сарын 24-ний сарын хурал Dr. Khashchuluun's, 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‟ • CHANGE OF THE PACKAGE OF TAXATION LAWS: PRIVATE SECTOR NATIONAL COUNCIL FOR PRIVATE SECTOR SUPPORT, Ch. Khashchuluun, Executive Director, NCPSS 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, Business Council of Mongolia: ―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‖; • Cameron McRae, President and CEO, Oyu Tolgoi: ―Sitting on a copper mine‖. BCM's English website includes the ―Mongolia Business News‖ section: • 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 (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. BCM has also 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 Social stats: BCM now has 4,434 fans on our Facebook fans page, 1,609 connections on LinkedIn network, and 942 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 1,213 students and teachers have participated with BCM in the University Classroom Project. Next BCM in the University Classroom series will be held on 18 March at the Institute of Finance & Economics. Ms. Zaya B., consultant at World Bank, has been invited to speak. Presentation title: ―Insurance Market in Mongolia‖.

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] January 31, 2014 *12.3% [source: NSOM] *Year-over-year (y-o-y), nationwide Note: 12.2% y-o-y, Ulaanbaatar city, January 31, 2014 CENTRAL BANK POLICY LOAN RATE December 31, 2008 9.75% [source: IMF] March 11, 2009 14.00% [source: IMF] May 12, 2009 12.75% [source: IMF] June 12, 2009 11.50% [source: IMF] September 30, 2009 10.00% [source: IMF] May 12, 2010 11.00% [source: IMF] April 28, 2011 11.50% [source: IMF] August 25, 2011 11.75% [source: IMF] October 25, 2011 12.25% [source: IMF] March 19, 2012 12.75% [source: Mongol Bank] April 18, 2012 13.25% [source: Mongol Bank] January 25, 2013 12.50% [source: Mongol Bank] April 8, 2013 11.50% [source: Mongol Bank] June 25, 2013 10.50% [source: Mongol Bank] CURRENCY RATES – 6 MARCH 2014 Currency Name Currency Rate US dollar USD 1,770.73 Euro EUR 2,431.83 Japanese yen JPY 17.23 British pound GBP 2,959.60 Hong Kong dollar HKD 228.16 Chinese Yuan CNY 48.97 Russian Ruble RUB 289.38 South Korean won KRW 1.66 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. To stop receiving these emails: unsubscribelink