BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 238 – September 7, 2012

NEWS HIGHLIGHTS:

Business

Group of Parliament members make another attempt to renegotiate OT agreement;

Erdenes-TT denies claims of sold property;

Chalco drops SouthGobi bid;

PetroChina Daqing workers threaten to strike;

Kincora announces assay results from Bronze Fox;

SouthGobi cancels coal property sale to Modun;

Discover Mongolia: Day Two;

Petro Matad attempts a comeback;

SouthGobi appoints new directors;

Benetton head visits Mongolia operations;

Scotch-whiskey distiller targets Mongolia;

USAID presents quality management training, supplier development forum;

GE celebrates 300 wind turbines installed in Brazil;

Rio, Areva to fuel UAE nuclear power ambitions.

Economy

Inspectors investigate 2,000 individuals for corporate tax fraud;

City breaks up traffic congestion;

Parliament confirms veto regarding court structure;

Budgetary standing committee considers higher excise taxes;

Radiation detected at abandoned uranium mine;

Accident pushes UB government to crack down on illegal construction projects;

Schools open for new academic year;

Levying the “foreigner tax”;

Ban on exploration licenses likely to be lifted in 2013, says De Facto;

Telecom reform brings greater competition;

Breaking the binds of gender equality;

Coal comprises nearly half of all exports;

Coal miners—stop digging;

China coal under more pressure as demand falters;

Manufacturing data shows China may be heading for a landing;

Teenage angst: implications of China's slowdown;

Russian banks: worries over exit of foreign banks, Nomos takeover;

Australian mining industry not down and out, says Premier.

Politics

Minister squanders chance to ease investors' fears, says MNMA president;

Cabinet appoints new police chairman;

President inspects Iran’s nuclear facilities;

Elbegdorj meets with Iranian leaders;

Speaker receives Australian delegation;

Indonesian president arrives in UB;

Fossil dealer submits evidence of fossils sold in Mongolia;

Children promote world peace and friendship;

Ethnic Mongols gather for Chinggis memorial in Inner Mongolia;

Nuclear-weapon-free status: recognition vs. institutionalization.

ECONOMIC INDICATORS:

MSE Top 20 Index by Market Capitalization;

Foreign-listed Companies with Mongolian Assets;

Inflation;

Central Bank policy rate;

Currency rates.

*Click on titles above to link to articles.

SPONSORS

Khan Bank Eznis Airways

Kempinski Hotel Khan Palace Mongolian National Broadcasting

Breakthrough PR Oxford Business Group

BUSINESS

GROUP OF PARLIAMENT MEMBERS MAKE ANOTHER ATTEMPT TO RENEGOTIATE OT AGREEMENT

Mongolia's parliament is making another go at renegotiating the investment agreement to the Oyu

Tolgoi copper and gold project, with a faction of 24 members submitting a petition to the prime

minister.

In a petition entitled ―Demands to the Prime Minister,‖ a group of members are requesting the

enforcement of Resolution 57, a decree that states that the Mongolian government may own 51

percent of a project once the initial payment had been recuperated by its investors. The 2009 OT

investment agreement, however, states that an initial period of 30 years must pass before Mongolia

can purchase a larger stake in the project.

It was October last year when Mongolia's parliament made its first attempt to renegotiate the Oyu

Tolgoi investment agreement with investors Ivanhoe Mines, since renamed Turquoise Hill Resources,

and Rio Tinto PLC.

Leading the charge are MPs Ts. Dawaasuren, G. Uyanga, D. Battsogt, and Kh. Bolorchuluun.

However, there are conflicting reports as to the number of MPs backing the petition and the

number of signatures it actually has.

―The reported comments of the petitioners do not reflect the reality of the agreement between

investors and the government. Rio Tinto, and we are sure all potential investors, are looking to the

Government of Mongolia for leadership on this matter,‖ said Oyu Tolgoi LLC in a statement by

email.

―In a note to investors, Dale Choi of Origo Partners recommended investors react cautiously to the

news, but said he was confident the government would not escalate the matter further.

―In any event, a potential parliamentary motion to renegotiate the Oyu Tolgoi Investment

Agreement will require the support of a majority of 36 MPs out of a total of 71 sworn-in MPs or a

quorum of MPs present on that day.‖

Source: BCM

ERDENES-TT DENIES CLAIMS OF SOLD PROPERTY

Erdenes Tavan Tolgoi JSC has denied reports spread by newspaper Ardyn Erkh that it had sold a part

of its deposit to recover from debt.

Erdenes-TT issued an official statement denying a sale of property to a third party. The licensed

fields of Erdenes-TT are still registered under the name of the company and no such sale has

occurred or could be as it is property belonging to the Mongolian government. The coal miner also

added some internal financial information as proof of its statement.

Erdenes-TT requested in the statement that the newspaper name its source, while admitting,

however, that the firm is temporarily experiencing financial difficulties because of its contribution

to the Human Development Fund (HDF). However, it said the firm has no reason to suspend or

interrupt operations at Tavan Tolgoi.

Source: Business Mongolia

CHALCO DROPS SOUTHGOBI BID

Chalco has dropped its USD 926 million offer for a majority stake in Mongolia-focused coal miner

SouthGobi Resources Ltd. in the face of stiff political opposition.

The state-controlled Chinese aluminum giant‘s April bid triggered a sharp backlash in Mongolia,

which in May passed a law limiting foreign ownership to 49 percent for companies in strategic

sectors including mining. Turquoise Hills Resources Ltd., which owns a 58 percent stake in

SouthGobi Resources, said in a statement that there was ―minimal prospect of obtaining the

necessary regulatory approvals within an acceptable timeframe.‖

Shares of SouthGobi Resources have wilted since April as the CAD 8.48 (USD 10.68) per share bid by

state-controlled Aluminum Corp. of China Ltd. (Chalco) ran into opposition from the Mongolian

government. The firm‘s Hong Kong-listed shares slumped 5.57 percent on Monday ahead of the

widely expected announcement to close at HKD 20.35. The Toronto listed shares last traded at CAD

2.69.

―This is good news for both Chalco and SouthGobi,‖ said Helen Lau, analyst at UOB Kay Hian. ―For

Chalco it wouldn‘t need to pay such a high premium for SouthGobi shares and for SouthGobi now

the political risk has been removed and that probably will see the company returning to normal

production and sales.‖

SouthGobi‘s second-quarter profit plunged after Mongolia suspended its mining license following

Chalco‘s bid. Operations at its flagship Ovoot Tolgoi mine in the south of the country had been

―fully curtailed‖ since 30 June and were not expected to resume in the third quarter, SouthGobi

said last month.

The proposed deal had the backing of Turquoise Hill, but Mongolia is becoming wary about the

growing Chinese presence in its mining sector. Mongolia passed a controversial law in May aimed at

capping foreign ownership in the mining, finance, media and telecommunications sectors. Bids

above USD 75 million or involving state-owned firms like Chalco that aim for majority control are

subject to scrutiny by a government panel.

Source: Reuters

PETROCHINA DAQING WORKERS THREATEN TO STRIKE

The Union of Mongolian Transportation, Refinery Trade Unions of Mongolia and the Trade Union of

PetroChina Daqing Tamsag LLC have made a call for strike.

The workers of the Chinese oil extractor, a subsidiary of Daqing Oilfield Co. Ltd., have requested

salary increases. Currently over 300 Mongolian workers are employed there.

―The basic pay for our employees has not been increased in the last five years,‖ said company trade

union representative S. Erdenbat. ―However, the crude oil price in the world market has increased

two or three times. Moreover, the wages of state servants in Mongolia also has increased two to

three times, and other local mining workers‘ average salary is above USD 1,000 per month.‖

Erdenbat said the Confederation of Trade Unions (CTU) and the company union had requested 50

percent salary wages four months ago. The unions are now demanding the proposed salary wage as

well as longer vacation time and accommodations. If the workers go through with the strike,

Erdenbat promised that ―not a single liter of petroleum would be exported.‖

On 29 August, independent MPs Kh. Bolorchuluun, S. Ganbaatar, and Ts. Davaasuren delivered a

statement to PetroChina Daqing requesting that workers be given 20 days work followed by 10 days

vacation as well as provide other social needs.

The oil firm is also still facing allegations of its failing to meet environmental requirements for land

restoration at Bayan Undur Bag at Matad Soum. Although the case has not yet been resolved,

PetroChina Daqing is being asked to pay MNT 1.3 billion for environmental damages to Matad Soum.

Source: Info Mongolia

KINCORA ANNOUNCES ASSAY RESULTS FROM BRONZE FOX

Kincora Copper Ltd. announced the remaining assay results from a hole in the West Kasulu zone at

its Bronze Fox project in southeast Mongolia which show an ―extensive‖ copper and gold zone.

The company said the copper and gold mineralized zone has occasional elevated molybdenum

intersections, with mineralization open in all directions. The hole, F62, from the West Kasulu zone,

returned 3 meters averaging 0.82 percent copper equivalent, and up to 661 meters averaging 0.44

percent copper equivalent. The hole also intercepted 9 meters averaging 1.07 percent copper

equivalent. These intercepts include grades as high as 3.1 percent copper equivalent over 1 meter

from 929 to 930 meters.

―The exploration results continue to demonstrate the extent of the mineralization at Kincora

Copper's properties,‖ said John Rickus, President and Chief Executive Officer. ―The 2012

exploration program remains on track for the season and we continue to improve our understanding

of the extent of the high-grade system while adding new targets to be explored at a later stage.‖

The company said the soil geochemistry program for the current work concentration area has been

completed and further high gold anomalies are evident.

Source: Proactive Investors

SOUTHGOBI CANCELS COAL PROPERTY SALE TO MODUN

SouthGobi Resources Ltd. said the proposed sale of the Tsagaan Tolgoi thermal coal project in

Mongolia to Australian-listed Modun Resources Ltd. has been cancelled.

The coal miner said it was evaluating options for the deposit, which remained non-core to its

operations. The clear value was estimated at USD 30 million.

Source: Reuters

DISCOVER MONGOLIA: DAY TWO

With 1,400 visitors in attendance, the second day of the Discover Mongolia investment forum

concluded the event with reports on infrastructure from the government and progress to the

development of Mongolia's mineral sector.

The day featured a number of reports on the development of shale extraction, processing waste

coke-oven gas, and steel production in Mongolia.

During a panel discussion on Mongolia's legal and tax environment, panel chair Jim Dwyer, Executive

Director of the Business Council of Mongolia (BCM), noted that all foreign investment has been on

hold since the foreign investment law was passed in June. He said initial public offerings (IPOs) by

banks was one of the areas that could be affected given the lack of clarity in the law. It could also

prevent brokerage firms from getting foreign capital required to register with the Mongolian Stock

Exchange (MSE).

Dwyer added that BCM is currently drafting an investment support law, at the request of its

members, that would feature regulations for both domestic and foreign investors in all sectors and

which could cause the new foreign investment law to be modified.

During the discussion Jay Liotta, a partner of MahoneyLiotta LLC, stressed the importance of making

draft laws available for public review. David Wyche, Chief of the U.S. Embassy‘s Economic and

Commercial section, noted several points in the new foreign investment law that could deter

foreign investors. Economist and television personality Dambadarjaa ―De Facto‖ Jargalsaikhan

noted that corruption has been a major impediment to economic growth in Mongolia.

The day ended with a ―Government Hour‖ session where representatives of various ministries

answered the questions of audience members. Some in the audience expressed their unhappiness

with the fact that many ministries were left unrepresented, however. Issues discussed included the

opening of access to new ports for Mongolia and the use of mining funds to help diversify Mongolia's

economy.

Source: BCM

PETRO MATAD ATTEMPTS A COMEBACK

While larger companies can afford an exploration disappointment, juniors operating on threadbare

budgets with fewer assets such as Petro Matad Ltd. have more on the line. It is here that the

Mongolia-focused oil explorer has existed since it met resistance at Davsan Tolgoi in 2011.

Davsan Tolgoi, located in Block XX in eastern Mongolia, overlays the Tamsag basin—a basin it shares

with the adjacent and producing Tolson Uul oil field. The earlier unsuccessful drilling took part in

one area covering approximately 100 square kilometers, so with literally thousands of square

kilometers as yet unexplored, Petro Matad still believes it can strike black gold.

Petrol Matad has suspended any drill plans for the rest of the year in the hope of developing a more

balanced and lower-risk exploration drilling campaign for 2013. A second, smaller area of potential

hydrocarbon maturity east of Davsan Tolgoi (East Tolgoi) was identified and exploration is focused

on confirming these leads as potential drill targets. The Lag Nuur thrust fault, even further to the

east, has also shown promise and will likely figure in the options for drilling next year.

Blocks IV and V are located at the Valley of Lakes in Central Mongolia. Both have oil potential, with

Block V having seen more activity. Additional studies are scheduled for winter as well as initial

drilling next year. Block V has attracted more attention for its oil shale potential. Jeremy Boak has

been appointed as the leading authority on oil shale as its prime consultant.

―...[T]he potential of the resource and the energy needs of the region compel us to continue

evaluating it,‖ said Chief Executive Douglas McGay. ―The company has taken care not to detract

from its conventional oil exploration efforts in this and other blocks.‖

As Petro Matad's share price has shown, there is a lack of confidence in its ability to achieve its

goals. However, with fresh faces focusing on more manageable objectives, even the prospect of

defining commercial resources in frontier land can become less daunting.

Source: Oil Barrel

SOUTHGOBI APPOINTS NEW DIRECTORS

SouthGobi Resources Ltd. has made changes to the company's board of directors, including the

resignation of three existing directors and the appointment of five new directors.

The board accepted the resignation of directors Edward Floor, Robert Hanson, and Chairman Peter

Meredith. Subsequently it appointed Lindsay Dove, Sean Hilton, Kay Priestly, Brett Salt and Kelly

Sanders as directors of the company. Pierre Lebel, Andre Deepwell, Gordon Lancaster and

Alexander Molyneux continue to serve as directors of SouthGobi Resources.

Priestly, chief executive officer of Turquoise Hill Resources, has been appointed chairman of the

board. She has more than 30-years experience in the financial, mining and energy sectors. Hilton

has been appointed as Deputy Chairman and will play an active role in supporting the management

team. Hinton has more than 23 years of experience in Mongolia and China, including as an advisor

to Rio Tinto PLC, Oyu Tolgoi LLC and Goldman Sachs (Asia).

―Peter, Ed, and Robert have been longstanding directors and have been instrumental in providing

outstanding guidance in discovering, developing and successfully operating the SouthGobi's flagship

Ovoot Tolgoi mine.‖

Dove spent more than 30 years in the international oil, coal and shipping industries with BP PLC and

Rio Tinto, where he held a variety of senior management positions. Salt was appointed senior vice

president of strategy and development at Turquoise Hill and previously had 15 years' experience

with a variety of positions at Rio Tinto. Sanders currently is president and chief executive of

Kennecott Utah Copper and has been working in the mining industry for 32 years, including 28 years

with coal mining operations.

Source: SouthGobi Resources Ltd.

BENETTON HEAD VISITS MONGOLIAN OPERATIONS

Founder and non-executive Director of the Benetton Group, Luciano Benetton, landed at the

Chinggis Khan International Airport via private aircraft on 3 September.

The founder of the global fashion brand travels each year to the countries where his United Colors

of Benetton chain stores are located. During these trips he visits the stores and acquaints himself

with their operations. Moreover, Benetton is preparing to pass on the mantle to his son Alessandro

Benetton, who is currently chairman of the Benetton Group.

This is Luciano's fourth visit to Mongolia since 2007, this time accompanied by his regional and

continental directors as well as childhood friends.

Source: Info Mongolia

SCOTCH-WHISKEY DISTILLER TARGETS MONGOLIA

A Scotch-whiskey firm has set its sights on Mongolia as it bids to make further inroads into new and

emerging markets.

BenRiach Distillery Co. managing director Bill Walker is to hold tastings in the central Asian country

as part of a trade mission next week. Walker said there were opportunities worldwide for the

Scotch-whiskey industry, which had entered "a golden age." He added that "east of Beirut, the world

is booming."

"Mongolia, where I'll be next week, is absolutely in its infancy, but there will be opportunities, as

there are with places like Kazakhstan and Azerbaijan."

Edinburgh-based BenRiach already supplies a range of 12 to 15-year old single malt whiskies, along

with more mature and premium varieties, to markets including western Europe, Asia, North America

and, increasingly, Brazil and other Latin American economies.

Source: BBC

USAID PRESENTS QUALITY MANAGEMENT TRAINING, SUPPLIER DEVELOPMENT FORUM

USAID‘s Business Plus Initiative (BPI) is partnering with the Mongolian Quality Management Center of

Excellence and the Business Council of Mongolia (BCM) for two separate events in September and

October.

BPI and QMCE will present the first five-day Lead Auditor training series in Mongolia from 8 to 15

October. The event aims to build the awareness and capacity of professionals seeking to become

quality assurance managers, auditors and others responsible for quality, environment, and food

safety for businesses. Upon completion, trainees will have a full understanding of the principles and

practices of executing management system audits. Global Certi Co., a fully accredited and licensed

South Korean training and certification provider registered with global trading body RAB-QSA, will

facilitate the courses.

BCM and BPI will host a Roundtable series to present Supplier Development best practices and

proven experiences as realized by industry experts on September 21, 2012. Keynoted speakers

James Riordan and Fernando Bertoli will highlight specific buyer-led approaches to supplier

development that have been successful among extractive and other industries worldwide.

Source: USAID

GE CELEBRATES 300 WIND TURBINES INSTALLED IN BRAZIL

Salkhit wind farm turbine supplier General Electric Co., which this year is celebrating its 10th

anniversary in the wind industry, today announced that it has installed 300 wind turbines in Brazil.

Over the next two years, General Electric will install more than 600 additional units in Brazil as it

continues to grow in the region, said the company.

―We have delivered all our projects on schedule, which allows our customers to meet their PPA

[power purchase agreement] requirements.‖

As the General Electric fleet expands, the company also is announcing its plans to open two local

service centers by 2014, representing a USD 1.5 million investment in Brazil.

Source: General Electric Co.

RIO, AREVA TO FUEL UAE NUCLEAR POWER AMBITIONS

The Emirates Nuclear Energy Corp. the company developing nuclear power in the United Arab

Emirates (UAE), awarded fuel supply contracts worth some USD 3 billion to two of Mongolia's major

players in the extraction sector.

Rio Tinto PLC and Uranium Ore Inc. will supply natural uranium and Urenco Ltd. will provide

enrichment services, Emirates Nuclear said. OAO Techsnabexport and Areva SA, which is currently

exploring for uranium in Mongolia, will supply uranium concentrates.

The United Arab Emirates is aiming to be the first Gulf Arab nation to develop nuclear power, with

the first of four 1,400 megawatt reactors scheduled to start operating in 2017.

Source: Bloomberg

ECONOMY

INSPECTORS INVESTIGATE 2,000 INDIVIDUALS FOR CORPORATE TAX FRAUD

The State Investigation Office (SIO) has opened investigations of fraud into more than 2,000

directors and accounts who may have avoided paying taxes.

According to an official from the SIO, the heads of the companies may have used forged invoices

regarding valued added tax (VAT) to commit the crimes. Police officials have so far completed

questioning as part of their investigations.

Source: Udriin Sonin

CITY BREAKS UP TRAFFIC CONGESTION

Ulaanbaatar authorities have begun their implementation of a campaign to reduce traffic

congestion, already with some signs of success.

―Since the start of the new traffic arrangements, traffic congestion has decreased by 20 percent,‖

said Head of the Public Communications Department of the Traffic Police S. Enkhbat. ―City dwellers

are positive about the traffic arrangement.‖

The most sweeping regulation is a system that prohibits certain cars from driving on particular

roads, depending on the final digit of their license plates. Another is changes made to the schedules

of major trade centers. Inner lanes have been designated exclusively for public transportation as

well.

Officials and traffic police are working from 7 a.m. until 10 p.m. on weekdays with no days off. A

total of 150 assistant workers are also working on the roads. These restrictions are set to last until

27 October, when city officials will decide if they should be extended.

―Before the start of the arrangement, it took hours to get your desired place by bus‖, said Enkhbat.

―But now buses have become the fastest transportation means in the city and more people are

using public transportation to get to work and home. Buses have grown noticeably overcrowded in

mornings and evenings.‖

First offenders are banned from driving that day and are hit with a MNT 5,000 fine. On the first day

of traffic restrictions, 2,165 drivers were banned. As a result, the number of offenders has

decreased daily, with the number of drivers breaking the ordinance falling to 617 a week later.

Source: UB Post

PARLIAMENT CONFIRMS VETO REGARDING COURT STRUCTURE

Parliament has confirmed the president's veto on a portion of the Law on Court Administration.

The ban is directed at the 13th article of the Law on Court Administration, which was passed by

Parliament on 22 May, 2012.

Explaining the reason for the interdiction of the article, an MP said it was ―because it does not fit in

our court traditions, development trend, and international standards, in that the General Council

will consist of a head and another four members appointed by Parliament, the president, the

Cabinet of Ministries, and Supreme Court."

The decision was made after a full discussion by MPs and a vote for the ban's approval.

Source: Zuunii Medee

BUDGETARY STANDING COMMITTEE CONSIDERS HIGHER EXCISE TAXES

Deficits have the Standing Committee on Budgets considering higher taxes on alcohol and tobacco

products, said the committee chief.

The split of the Ministry of Education, Culture and Science into the Ministry of Education and

Science and Ministry of Culture, Sport and Tourism has led to cuts in budget expenses due to a MNT

1.3 billion deficit predicted to emerge. The MNT 500 billion advanced payment from the Oyu Tolgoi

copper-gold project was never transferred, said Ts. Davaasuren, chief of the Standing Committee

for Budgets. They payment would have made up for the deficit, he said.

―We did not even reach an agreement with investors,‖ said Davaasuren.

He added that the standing committee is now considering proposing an excise tax on goods such as

alcohol, tobacco and transportation to make up the deficit.

Source: Undesnii Shuudan

RADIATION DETECTED AT ABANDONED URANIUM MINE

An anti-nuclear organization claims that a former uranium mine is radioactive.

Rioka Imaoka, an instructor at the University of Tokyo, conducted radiation tests with the group in

Bayandun, Dashbalbar and Serelen Soums in Dornod Aimag. The tests came positive at Mardai mine,

a now-closed uranium mine from the Soviet era.

Located at the border of the three districts, there is currently no one living at the mine site except

for a herding family that was located 5 kilometers from where the radiation was detected. No fence

was posted around the mine site, making it possible for livestock to graze nearby.

The concentration of radiation detected ranged between 0.17 to 0.25 microsieverts an hour. In

some places where people used construction materials from the mine site, the group said it

detected radiation levels of 0.4 to 1 microsieverts. The group said it found levels 0.25 to 0.39

microsieverts of radiation at a kindergarten made from such materials.

Japanese regulations demand response to levels above 0.23 microsieverts.

Source: Udriin Sonin

ACCIDENT PUSHES UB GOVERNMENT TO CRACK DOWN ON ILLEGAL CONSTRUCTION PROJECTS

The Ulaanbaatar government has halted the activities of 60 construction projects following the

accidental death of a young girl.

This week a heavy pipe from a cement mixer fell, killing a 13-year old girl. In response the city

council ordered the Office of Policies and Professional Inspection Agency (PIA) to freeze the

construction operations of any project without official permits. Electricity and heating will not be

provided to these construction works until inspections are carried out.

Source: Unuudur

SCHOOLS OPEN FOR NEW ACADEMIC YEAR

The 2012-2013 school year began on Monday, 3 September this year, following opening ceremonies

on the previous Saturday.

Nationwide, 168,000 school children will study in 927 kindergartens and 506,000 students at 763

secondary schools. Mongolia spent 20 percent of its state budget on education this year. Another

175,000 students will study in Mongolia‘s 98 universities and institutes.

As per tradition, President Ts. Elbegdorj began the first day of school with a nationwide televised

lesson via the Mongolia National Broadcasting television network and radio. The president has

offered these lessons annually since first taking office in 2009.

Source: News.mn

LEVYING THE ―FOREIGNER TAX‖

The practice of offering discriminative prices to tourists in Mongolia for goods is growing more

widespread, even among state service organizations.

The so-called ―foreigner tax,‖ added onto everything from khuushur sold during Naadam to

entrance into Mongolia‘s national parks, is a fact of life in Mongolia. Tour guides have little more

explanation than this is how things work in Mongolia in response to complaints from clients.

Complaints include the MNT 3,000 fee foreign tourists must pay before entering state-protected

areas compared with MNT 300 for Mongolians, according to the a regulation ratified by the Ministry

of Nature and Environment. Foreigners are also required to pay USD 25 to view the opening

ceremony of the Naadam festival. It is also common for Mongolian vendors to refuse to return

change after receiving payment. The Chinggis Khan XIII Century Complex at Tsonjinboldog, one of

the few tourist attractions near Ulaanbaatar, forces tourists to pay MNT 10,000, double what

Mongolian natives pay.

When asked about the differing admission prices for foreigners and nationals at the Ensemble

Concert (MNT 25,000 compared with MNT 10,000), its manager said, ―Our ensemble is capable of

earning money only during summer. We set the ticket price after discussing it with tourism

agencies. Tourists traveling with agencies that signed a contract with the ensemble may enjoy a

discount.‖

Mongolia experienced only a 0.2 percent increase in tourism in 2011 compared with the year

before. Earning a bad reputation due to poor business practices will not likely help this situation.

The development of infrastructure is one way to target greater tourism in Mongolia, but Mongolia

may have to develop a better attitude as well.

Source: UB Post

BAN ON EXPLORATION LICENSES LIKELY TO BE LIFTED IN 2013, SAYS DE FACTO

Economic columnist and television host D. ―De Facto‖ Jargalsaikhan commented that the ban on the

issuance of exploration licenses would not likely extend past 2012 during the Discover Mongolia

international mining investment forum.

Jargalsaikhan commended that he learned this information from an inside source that he could not

disclose. The ban, initiated by President Ts. Elbegdorj, has prevailed since 2011. Since then

companies have only traded existing licenses.

Source: Business Mongolia

TELECOM REFORM BRINGS GREATER COMPETITION

Since the Mongolian government's telecommunications reform program in the mid 1990s, there has

been effective liberalization of all market segments, party privatization of the fixed-line incumbent

operation (Mongolia Telecom), and establishment of an independent regulators

Competition is in place for both fixed and mobile telephony including local, long-distance, and

international, internet, VoIP, and VSATs. The internet mobile phone market has undergone a

remarkable boom. The national policy has been to have a competitive telecommunications segment

with two CDMA and two GSM mobile telephone operators. Accordingly, two additional mobile

licenses were awarded in 2005 and 2006 to United (GSM) and rural mobile operator G-Mobile

(CDMA).

As part of the transition to a market-based economy, Mongolia committed itself to modernizing its

telecommunications network and steadily introducing advanced communications services.

Source: Herald Online

BREAKING THE BINDS OF GENDER EQUALITY

Mongolia lags in its efforts to promote gender equality, one of the three U.N. Millennium

Development Goals (MDG).

Gender equality and women's empowerment uses the guidelines of political representation,

education and economic earnings to help gage how countries are progressing. Statistics for Mongolia

show that women tend to be more educated than men, according the U.N. Development Project

2012-2016 report. Boys in the countryside are expected to work in the fields, while studying is

prioritized for girls.

This trend extends into the university years, with more women in college (60 to 70 percent) than

men. Yet, despite their more educated status, economically women are still at a disadvantage to

men, earning less. Mongolian women also have had historically low political representation.

Before the 2012 elections, political representation for women was 3.9 percent, one of the lowest

rates globally. Owing to the newly established quota system of 20 percent, nine women were voted

into seats in Parliament in June this year—tripling women's political representation to 12 percent.

Though this current figure represents an improvement, in some ways it is a regaining of political

powers. Ten years ago representation was at 12 percent but declining by 2008 to 3.9 percent. The

MDG for gender equality has a benchmark of 30 percent representation for women in government.

The global average is 19.7 percent.

Source: UB Post

COAL COMPRISES NEARLY HALF OF ALL EXPORTS

Last month coal constituted 44.6 percent of total exports in Mongolia.

Other minerals exported included copper concentrate (19.2 percent of exports), iron ore (12.1

percent), crude oil (7 percent), and zinc ore (2.4 percent).

Mongolia exported 20 million tons of coal last year. Xinhua news agency reported last month that

coal prices had fallen by 1.96 percent, to CNY 641 (USD 101) per ton in China.

Source: Zuunii Medee

COAL MINERS—STOP DIGGING

In China, prices at Qinhuangdao, the world's largest coal port by capacity, have dropped by about a

quarter this year. Higher-cost mines in China, Mongolia and Indonesia have reportedly slowed or

stopped producing. Stabilizing prices is one thing, but outside a few big operators (Yanzhou Coal,

China Shenhua), China's myriad of smaller miners are not known for their discipline. Any price rise

will probably be met by a pick-up in production.

There is also the need to find buyers. In theory, thermal coal prices will climb as power stations

stock up for the winter. Yet power station inventories are half as high again as their usual August

levels, limiting further demand. One big generator, China Resource Power, said two weeks ago that

it expects further falls in spot prices. China's ongoing economic slowdown does not suggest that

anyone else is standing by to pick up the slack.

There are importers. Coal supplies globally are at record levels following years of heavy investment.

U.S. mining companies are seeking new markets as home demand is hurt by falling shale gas prices.

Indonesia and Australia are also exporting record amounts of coal. Weak seaborne prices have

almost dragged China's domestic prices down to their level. That would usually mark a domestic

price floor. But miners the world over are just as keen to ship more coal on any sign that prices are

perking up.

Source: Financial Times

CHINA COAL UNDER MORE PRESSURE AS DEMAND FALTERS

Benchmark prices in China, the world's top producer and importer of the fuel, have been rolling at

two-year lows of 626 yuan ($98.50) a ton since end-July amid a global supply glut.

Beijing's coal prices, already near a two-year low, are likely to fall further as industrial demand

growths slows and imports add to pressure on domestic stocks, industry officials said. In recent

years coal has over taken copper as the largest export from Mongolia to Chinese buyers.

Hou Wenjin, a coal industry official with the Shanxi government, the country's second-biggest coal-

producing region, predicted China's 2012 imports could top 200 million tons as coastal utilities lock

in cheaper foreign supplies. Imports of more than 200 million tons would compare with 2011

imports of 182.4 million tons. Imports from January to July totaled 133 million tons, a 51.8 percent

rise from a year earlier.

Chen Ze, deputy director with the coal industry department of the government of Inner Mongolia,

China's biggest coal producing region, said demand growth from key industrial users such as those in

steel and cement sectors would ―most likely slow.‖ Dong Yueying, secretary general of the China

Coal Transportation and Distribution Association, said a slump in the Chinese steel sector has also

put coking coal prices under pressure, and this will have knock-on effects for coal for a while, said.

―Falling prices mean it is no longer economical for mines to wash the coal to get higher

specifications. So mines will sell into thermal markets,‖ he said.

Source: Reuters

MANUFACTURING DATA SHOWS CHINA MAY BE HEADING FOR A LANDING

Chinese manufacturing contracted in August as new orders fell, but the slowdown shows signs of

bottoming out, an industry group said Saturday. Chinese manufacturing activity may have a direct

impact on Mongolia's economy, as the latter depends on China's consumption of raw materials.

The report by the state-authorized China Federation of Logistics and Purchasing added to mixed

signals about whether China was starting to recover from its deepest downturn since the 2008

global financial crisis. It is a delicate time for the Communist Party, which is preparing to hand over

power to younger leaders this year.

The federation said its purchasing managers index (PMI) fell to 49.2 in August, from 50.1 in July on

a 100-point scale on which numbers below 50 show a contraction. It was the group's weakest

reading to date.

―It shows the economy is moving downward,‖ the report said, ―but is bottoming out considering

changes in the major subindex's.‖

An analyst, Zhang Liqun, said government policies were taking effect with domestic investment and

consumption growing steadily since June. China's economic growth fell to a three-year low of 7.6

percent in the quarter that ended in June, and corporate profits and other indicators have fallen

despite government stimulus measures. A preliminary version of a separate PMI by HSBC Corp. also

showed August manufacturing weakened, falling to 48.7, down 0.3 from July.

The logistic federation's survey showed all indexes—except for manufacturing—were either at or

below 50.

Source: New York Times

TEENAGE ANGST: IMPLICATIONS OF CHINA'S SLOWDOWN

China, an ancient civilization, is still in its economic adolescence, a phase marked by growth spurts

and mood swings. Other emerging economies endure this awkward period in relative obscurity,

attracting only cursory attention. China has no such luck. It has become big before becoming rich,

inviting scrutiny typically reserved for mature economies.

China may not be a member of the Group of Seven (G7), but is already a member of the so-called

System of Five (S5), a group of economies subject to extra attention from the International

Monetary Fund (IMF) because of their systematic significance. China, according to the fund, is the

most ―central‖ trading power in the world, based on its extensive trade links to other economies

that are themselves tightly interwoven. It is the biggest or second-biggest trading partner for 79

countries. Its appetite for imports, especially for base metals and oil, flatters the exports of

countries such as Mongolia.

China's precocious economy has, however, turned sullen and morose of late. The preliminary results

of HSBC PLC's August survey of over 420 manufacturing firms, many of them private, showed orders

falling and inventories backing up. The ratio of orders to inventories was at its worst since

December 2008. This disappointment followed the announcement that house prices rose in 49 out of

70 cities last month, a revival deemed bad news as it may delay further monetary easing.

The ―Sinodependency‖ index has massively outperformed the S&P 500 in recent years, climbing by

almost 129 percent since the beginning of 2009, compared with the S&P 500's gain of 57 percent. It

has also performed far better than China's own stock markets.

A hard landing would hobble South Korea and bring Taiwan's growth to a shuddering halt. But

growth in Brazil and Australia would hold up surprisingly well, perhaps because their currencies

would fall, absorbing some of the shock. However, these estimates capture only the direct impact

of the Chinese slowdown.

Adolescents have an uncanny ability to spoil things for everybody.

Source: The Economist

RUSSIAN BANKS: WORRIES OVER EXIT OF FOREIGN BANKS, NOMOS TAKEOVER

Sweden‘s Handelsbanken said it was the latest foreign bank to be leaving Russia, joining HSBC,

Barclays, Santander, Swedbank and Rabobank, which have all departed in the last few years

following the announcement of a controversial takeover of Nomos bank, which is removing the

Russian market one of the few independent privately-held lenders. Russia, Mongolia‘s neighbor to

the north, is an important trading partner to Mongolia, and this instance serves as an example of

how state control over banking, one of the ―strategically important sectors‖ listed in the foreign

investment law passed last May, can sour foreign interest.

The proposed takeover of Nomos has irritated its foreign minority shareholders to no small degree.

The bank was seen by investors as one of the few ways to enter the Russian banking sector bar the

two state-owned behemoths, VTB and Sberbank.

But 16 months after the offering, Nesis and his fellow controlling investors are suddenly selling out

to mid-ranking Otkritie Financial Corp., and taking the minorities and the London listing with it. For

investors, it looks like another abject lesson on Russian IPO, and a reason not to buy again when

Otkritie comes to the market as it plans in around three years.

An unnamed associate of Nesis said,‖the Russian financial markets are monstrously deformed. It‘s

difficult to compete with the state banks.‖

Although Vadim Belyaev, Otkrities‘ chief executive, insists the deal is part of a plan to scale up the

bank, it is clear he could not without state backing. Some market players suggest VTB could in fact

be using Otkritie to front the acquisition for itself, as it owns capital constraints mean it can‘t make

any more purchases for now. Only time will tell if the bid is legitimate in the hopes of creating a

bigger, modern, more universal privately held banking group that can take on state giants. Russia

needs more diversity in banking, including strong independent Russian banks and effective foreign

leaders.

Source: Financial Times

AUSTRALIAN MINING INDUSTRY NOT DOWN AND OUT, SAYS PREMIER

Australian Prime Minister Julia Gillard on Tuesday state in no uncertain terms that the so-called

death of the Australian mining boom had been exaggerated. Australia is Mongolia's top competitor

for coal exports to China.

Speaking at the Association of Mining and Exploration Companies convention, in Perth, she

conceded that the ―price boom‖ was passing, but said that the ―investment boom‖ was still to

reach its peak, which would be followed by a ―production boom.‖ Despite capital expenditure

delays, mining investment amounted to some AUD 47 billion for the 2010-2011 period, increasing to

AUD 82 billion in 2011-2012 period.

―It's set to hit AUD 119 billion by the end of this financial year. This is 13 times higher than before

the mining boom and much of this investment is coming from overseas,‖ Gillard said.

Australian exploration expenditure is also on the rise, increasing by 3.1 percent quarter-on-quarter

by 23 percent year-on-year in the three months ended June.

Source: Mining Weekly

POLITICS

MINISTER SQUANDERS CHANCE TO EASE INVESTORS' FEARS, SAYS MNMA PRESIDENT

The president of the Mongolian National Mining Association (MNMA) said the Discover Mongolia

conference did little to answer investors' questions regarding the Mongolian government's policy for

the mining sector.

Although recently installed Minister of Minerals D. Gankhuyag gave a speech, it revealed very little

about the direction he would take his ministry other than his intention to continue the policies of

the last government, said D. Damba, the President of the MNMA.

―This ambiguous position of the government is a bad message for investors, but it should be noted

that the timing was not good,‖ said Damba.

Damba added that more time was needed for the new government to set its agenda before the

government could make any concrete statements about its policies, for minerals or otherwise. He

went on to further criticize a recent amendment to the Law on Minerals that requires foreign

investors in the minerals sector to work with a Mongolian partner.

―I think that we may ban the monopoly of foreign state-owned companies, but there is no need for

such measures in cases of private companies.

Source: Udriin Sonin

CABINET APPOINTS NEW POLICE CHAIRMAN

The Cabinet of Ministries appointed B. Bilegt as Chairman of the General Policy Authority during an

irregular meeting held on 3 September.

Bilegt, 52, was one of the democratic activists of 1990. He served as chairman of National

Television and Radio, chairman of the General Intelligence Authority, and chairman of the

Administrative Office of the National Security Commission.

Source: News.mn

PRESIDENT INSPECTS IRAN‘S NUCLEAR FACILITIES

Iran on Monday gave President Ts. Elbegdorj a tour of its main uranium enrichment plant, the first

time that it has opened the site to a foreign leader.

The visit followed a summit of nonaligned nations in Tehran that Iranian officials hoped would show

the failure of Western sanctions to isolate Iran diplomatically. State TV showed Elbegdorj inspecting

centrifuges used to enrich uranium at the facility in the central Iranian town of Natanz. The West

says Iran‘s nuclear program aims at developing weapons technology, but Iran says it is for peaceful

purposes such as power generation and cancer treatment.

Iran has often said it is willing to transfer its nuclear expertise to other countries. The television

broadcast said that Elbegdorj was allowed to visit whatever he wanted in the plant. It suggested

that he endorsed the Iranian claim about the peacefully purposes of its nuclear program.

―This site is a unique place. Maybe in other countries it is not possible to visit such a sensitive

place,‖ he said. ―I found out how the enriched uranium is being used for peacefully energy.‖

Inspectors from the U.N. nuclear agency visit the site regularly, and Iran has in the past allowed

foreign diplomats and reporters to enter it as well. Mongolia is one of the 120 members of the

Nonaligned Movement of emerging nations, which held its summit in Tehran last week. Iran said

during the meeting that it would open its nuclear sites to participating delegates.

Source: Associated Press

ELBEGDORJ MEETS WITH IRANIAN LEADERS

First Iranian Vice President Mohammad Reza Rahimi called for closer friendly ties with Mongolia in

addition to expanded trade and economic relations.

According to a report by Iran‘s presidential office website, Rahimi, in a meeting with President Ts.

Elbegdorj, said that Iran is ready to take steps towards closer relations with Mongolia. Rahimi said

that ruling powers of the world are to invade the culture of civilized countries and encouraged

those affected to resist that intervention by hegemonic powers.

Referring to Iran‘s progress and achievements in different fields of science and technology, Rahimi

said that Iranians, by relying on their own capabilities against sanctions and enemies‘ conspiracies,

have resisted, and the self-efficiency of Iranians can be a role model for other independent nations.

President Elbegdorj praised Iran‘s Supreme Leader Ayatollah Seyed Ali Kamenei, saying that his

knowledge and mastery over culture and history is excellent. He also praised Iran‘s hosting of the

16th Nonaligned Movement summit in Tehran and called for strengthened bilateral ties between

Tehran and Ulaanbaatar. Elbegdorj said his country is planning to promote culture and the

prevention and cultural invasion and conspiracies of enemies while underlining the necessity for the

expansion of cultural cooperation and relations with Iran.

Elbegdorj also met with Iranian President Mahmoud Ahmadinejad, who said to Elbegdorj that

independent nations should stand together to influence future developments. Ahmadinejad

described Mongolian-Iranian relations as ―positive‖ while expressing his hope that the two nations

could cooperate.

Source: ABNA

SPEAKER RECEIVES AUSTRALIAN DELEGATION

Parliament Speaker Z. Enkhbold received a delegation of Australian MPs. MP Toni Windsor,

representative for New England in Australia, led the delegation, hoping to expand diplomatic

relations between the two nations.

―I am satisfied with the two countries relationship which is deepening in recent years and I will put

all my efforts in order to strengthen the relation of the two countries,‖ said Windsor.

Enkhbold noted that the visit comes near the 40th anniversary of diplomatic relations between the

countries. Australia established its consulate general in Ulaanbaatar last May, he said, adding that

he hoped Australia would soon establish a formal embassy.

Windsor told the speaker about Australia's interest in cooperating with Mongolia to develop its

mineral industry and the restoration of mined earth.

―In recent years Mongolia has entered too much into the minerals industry. As a result of this, there

is much soil left not restored and much more damaged. Hence, we are developing responsible

mining and are ready to study the Australian experience on such matters.‖

Source: Info Mongolia

INDONESIAN PRESIDENT ARRIVES IN UB

President Susilo Bambang Yudhoyono arrived in Ulaanbaatar with a delegation comprising the first

lady and members of Indonesia's cabinet this week.

Yudhoyono is slated to have a bilateral meeting with President Ts. Elbegdorj in the capital of the

resource-rich nation on Thursday. He will also meet with Prime Minister N. Altankhuyag and

Parliament Speaker Z. Enkhbold.

―Yudhoyono will conclude his visit to the country by attending a business forum, which will be

attended by dozens of Mongolian and Indonesian businesspeople,‖ said a press release.

The presidential spokesperson for foreign affairs, Teuku Faizasyah, said the Mongolian visit was

aimed at enhancing bilateral trade and investment. The Indonesian officials were treated to a

traditional welcoming ceremony by young Mongolians wearing traditional outfits upon his arrival.

Source: Jakarta Post

FOSSIL DEALER SUBMITS EVIDENCE OF FOSSILS SOLD IN MONGOLIA

The Mongolian government has no claim on a fossilized tyrannosaur skeleton at the center of an

international ownership dispute, say attorneys for the Florida fossil dealer who wants the specimen

back. There is now new evidence of fossils sold in one of Mongolia's museums, further complicating

matters.

The Manhattan U.S. attorney is seeking to seize the 75 percent-complete dinosaur on behalf of

Mongolia, making the legal argument that fossil dealer Eric Prokopi imported it knowing it was

stolen and provided a false description of it on customs forms. Prokopi and his legal counsel

contend, however, that the U.S. attorney does not have a legal basis to seize the fossils and there is

no conclusive evidence the fossils came from Mongolia about 10 years ago, as paleontologists have

said. They also argue Mongolia law does not clearly declare all fossils state property.

Separately from their formal attempt to end the case, the legal counsel released a photo showing

what appears to be a fossilized dinosaur tooth. This photo, they said, undercuts the Mongolian claim

on the dinosaur because it shows a fossil from the same species of dinosaur, a Tarbosaurus bataar,

on sale for tourists in a Mongolian-run museum. Mongolian law does not allow private ownership of

fossils, so they cannot be sold legally within the country.

―If it is illegal to sell fossils in Mongolia, then why are fossils being sold in the Natural History

Museum? We plan to introduce the photograph, along with other evidence, as this case goes

forward,‖ Prokopi's attorney said.

The Mongolian government maintains that its law is clear when it comes to the state ownership of

fossils, and that it has a history of enforcing this law. Records provided by President Ts. Elbegdorj's

attorney, Robert Painter, show several seizures of fossils nearly every year. As for the alleged sale

of a fossil in the museum, the museum leases the space for souvenir shops to private retailers, and

museum curators have said that no tenant in those spaces has sold fossils.

On Wednesday, Prokopi's attorney said that about half the reconstruction—fossilized bones welded

onto a metal frame—came from one creature and the other half from ―at least two, most likely

many‖ creatures.

―It's kind of a Frankenstein model of a dinosaur parts,‖ a somewhat surprised U.S. District Judge P.

Kevin Castel noted.

Government paleontologist experts apparently believe that the reconstruction came from a single

creature.

Source: MSNBC, Reuters

CHILDREN PROMOTE WORLD PEACE AND FRIENDSHIP

A total of 104 children from Japan, China, Russia, South Korea, North Korea and Mongolia gathered

together to celebrate world peace and friendship for the Kids‘ Asian Union Camp 2012 assembly,

held in Mongolia for the 12th time.

JCI in Mongolia organized the event, aiming to promote peace and understanding as well as

solidarity and friendship among young people from the nations involved. JCI Board Member T.

Odnyam said that children attending the event aged between six and 12, lived together and helped

each other while making friends. The children made and offered each other their country‘s

traditional meals while the Mongolian children introduced their foreign counterparts to Mongolia‘s

customs, traditions and lifestyle.

―I am attending this activity for the second time,‖ said Ts. Enkhjin, a student from Orchlon

secondary school. ―I lived together with kids from Japan and South Korea and we made very good

friends. Being friends means not quarreling. Let‘s create good things together.‖

Source: UB Post

ETHNIC MONGOLS GATHER FOR CHINGGIS MEMORIAL IN INNER MONGOLIA

Tens of thousands of ethnic Mongolians flocked to the shrine of the 13th-century conqueror Chinggis

Khaan for a grand memorial ritual.

At the round altar near the shrine in Ordos, Inner Mongolia autonomous region, worshippers knelt

and prayed while others offered blue khadags--a ceremonial silk scarf. Adults also sprinkled water

on the foreheads of children as a form of blessing.

The ritual, in honor of Chinggis Khaan's magical spear used in battle, is held annually but only

reaches its grandest form in the Year of the Dragon in the traditional celestial calendar every

twelve years, news reports said. Ethnic Mongolians claim themselves as offspring of Chinggis Khan,

who united the Mongol tribes and founded an empire. Chinggis Khaan memorial rituals are

protected as a state intangible cultural heritage.

Source: Bikya Masr

NUCLEAR-WEAPON-FREE STATUS: RECOGNITION VS. INSTITUTIONALIZATION

Mongolia's nuclear legacy has been one with many geopolitical motives as well as domestic

concerns.

In September 1992, in an address to the United Nations, the president of Mongolia declared his

country's territory a nuclear-weapon-free zone. The political context at the time was quite

dramatic: the announcement came on the heels of the completion of the Soviet-Russian troop

withdrawal from Mongolia, the collapse of the Soviet Union and the demise of communism in both

Russia and Mongolia. Decades of dependence on the Soviet Union and hostility toward China were

about to become history, as it set out to normalize its relations with China and revamp those with

its new old northern neighbor.

In geopolitical terms, it spoke to the country's unique location. Its two neighbors, Russia and China,

also happen to be two of the world's five acknowledged superpowers. The declaration at the United

Nations was one of the first independent moves made by Mongolia in formulating its own policy

goals. The concept of a nuclear-weapon-free zone had a great deal of appeal to Mongolia. Six zones

currently exist in Latin America, the Caribbean, the South Pacific, Southeast Asia, Central Asia, and

Africa. The Antarctic could also qualify.

As a policy the Mongolian initiative reflected the country's resolve to never let its territory be used

as a stationing ground for nuclear weapons. During the Sino-Soviet split the Soviet had reportedly

kept nuclear capable missiles in Mongolia. Ensuring its security by avoiding taking sides, Mongolia

welcomes the normalization of relations between Russia and China in the late 1980s and

endeavored to pursue greater balance and good neighborliness in its own relations with these two

countries.

Source: Brookings

ANNOUNCEMENTS

THE WORLD'S LARGEST FOOD EXHIBITION, "SIAL 2012" October 21-25, Paris, FRANCE

The Business Council of Mongolia with support from the French Embassy in Ulaanbaatar is now

registering Mongolian business delegation to participate to THE WORLD'S LARGEST FOOD

EXHIBITION, "SIAL 2012", which will be organized in Paris, France from October 21 to 25, 2012.

Totally 5,838 exhibitors from 200 countries will participate to this 25th world‘s leading food

exhibition. As a multi-specialist exhibition, it brings all the food channels together under one roof,

in 19 clearly identified sectors: bakery, beverages, dairy products, organic products, and wine.

Benefits available to delegation members are:

- Free participation in the program of conferences on semi-processed food products and

ingredients;

- Possibility to participate in a one-day retail study tour organized by MMM, leader in worldwide

retail benchmarking and trends;

- Free assistance in arranging and scheduling appointments with French exhibitors;

- Possibility to visit "Autumn Fair 2012" - 400 exhibitors under three categories: interior design,

food and restaurants, decoration accessories;

- Possibility to visit art-inspired exhibition on Champs-Elysees avenue (architecture, books, and

paintings);

- Free travel arrangements and hotel bookings;

- Entertainment programs in Paris: Eiffel Tower, Louvre Museum, Champs-Elysees Avenue, and

"Tosca" opera.

Please contact 317027, 99131377 or saruul@bcmongolia.org for registration or for additional

information.

Registration deadline is 6:00PM, September 20, 2012.

___________________________________________

MONGOLIA INVESTMENT SUMMIT 2012, HONG KONG, OCTOBER 30-31

The Mongolia Investment Summit 2012 will be held from 29 to 30 October at the Four Seasons Hotel

in Hong Kong to once again bring the best of Mongolia's investment opportunities to Asia's leading

investment hub.

Now in its third year, the summit has strongly cemented its position as the largest Mongolian

investment event outside of Ulaanbaatar, providing foreign investors with the most comprehensive

overview of Mongolia's key economic growth sectors all under one roof.

Speakers to the event include Altai Khangai, Chief Executive Officer of the Mongolian Stock

Exchange (MSE), Cameron McRae, President and Chief Executive Officer of Oyu Tolgoi LLC, and

James Passin, Co-founder and Manager of Firebird Mongolia Fund.

BCM is again a Supporting Organization for the event. BCM members will get a 15% discount. Jim

Dwyer, Executive Director of BCM, will chair both morning sessions. For more information, find a

brochure to the event by logging on to the website: mongoliainvestmentsummit.com.

___________________________________________

REGISTER NOW FOR MONGOLIAN MINING DIRECTORY-2013

Mongolian Mining Directory-2013 which provides information database for Mining companies,

investors, suppliers, service companies, government and non government organizations will be

published for the fourth year to commemorate the 90th anniversary of the Mongolian mining

industry. The MMD is distributed free of charge to international and domestic mining companies,

international conferences and exhibition, embassy offices in Mongolia and foreign countries to

investors.

BCM is a Supporting Organization of the MMD and welcomes Mongolian mining industry participants

who are interested in advertising their products and services in Mongolian Mining Directory-2013.

For more information please visit: www.mining.mn, www.mongolianminingdirectory.mn or call

+976-7011 5590.

___________________________________________

REGISTER FOR BCM‘S MINING SUPPLY CHAIN DATABASE AT NO COST

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

Oyu Tolgoi LLC, the BCM has maintained the Mining supply chain database since March 2009. It is

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

content and use of information technology opportunities.

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

Database. Please visit here for registration.

If you have any questions regarding the database, please contact Undral at undral@bcmongolia.org

or 317027.

___________________________________________

―MM TODAY‖ on MNB-TV, Friday‘s at 19:00

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 for 19:00 tonight. Tune in to watch this program that reports stories from today‘s BCM

NewsWire.

___________________________________________

BCM‘s WORKING GROUP MEETING

The BCM Environmental Working Group met on Thursday, August 16, with 12 members attending.

Co-chair Amanda Fine, Wildlife Conservation Society (WCS), moderated the session.

New member Tsolmon A, Areva/Cogegobi, was welcomed.

Meeting discussions were on the following topics:

- Discussion on the new package of environmental laws;

- Ideas for BCM environmental working group activities.

Next meeting: OT ESIA self assessment.

Further discussions on new environmental laws.

Please contact erka@bcmongolia.org.

BCM WEBSITES

MONGOLIAN WEBSITE ‗PRESENTATIONS‘ AND ‗NEWS‘ SECTIONS

The new ‗Presentations‘ section on BCM‘s Mongolian website can be reached via link to

bcm.mn/itgeluud. Several presentations already posted include World Bank‘s Mongolia Quarterly

Economic Update–June 2012; 11 speeches from the 2nd Coaltrans on May 23-24 in UB.

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

―Open-Government.mn‖ site are regularly posted.

___________________________________________

ENGLISH WEBSITE 'PRESENTATIONS', 'MONGOLIA REPORTS' AND ‗MONGOLIAN BUSINESS NEWS‘

On BCM‘s English website, ‗Resource, Presentations‘ section, for your review are the following

recent postings from BCM‘s August 27 monthly meeting:

-Dr. Nigel Finch, Director of Admissions and Associate Professor, University of Sydney Business

School, ―Enhancing Sustainable Economic Growth in Mongolia by Improving Transparency and

Accountability in the Mongolian Public Sector‖;

-Caroline Clarke, Managing Partner, PricewaterhouseCoopers Audit LLC, ―International Women‘s

Forum and the Business Sector in Mongolia‖;

-John Bachrach, Director, IEEC, member of IMC Montan, ―Mining Consulting – Adding Value in the

Sector‖;

-Peter Benson, Team Leader, VicRoads International, ADB-funded Technical Assistance 7844:

Mongolia Road Sector Capacity Development Project".

We are now posting some news stories and analyses relevant to Mongolia to BCM website's

‗Mongolian Business News‘ as they come, instead of waiting until each Friday to put them all

together in the weekly NewsWire. The NewsWire will, however, continue to be issued on Friday,

and will incorporate items that are already on the home page, so that it presents a consolidated

account of the week‘s events.

___________________________________________

MONGOLIAN WEBSITE ‗PRESENTATIONS‘ AND ‗NEWS‘ SECTIONS

The new ‗Presentations‘ section on BCM‘s Mongolian website can be reached via link to

bcm.mn/itgeluud. Several presentations already posted include World Bank‘s Mongolia Quarterly

Economic Update–June 2012; 11 speeches from the 2nd Coaltrans on May 23-24 in UB.

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

―Open-Government.mn‖ site are regularly posted.

___________________________________________

SOCIAL NETWORK WITH BCM

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

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

improving each day with BCM.

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

business environment in Mongolia today.

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

MONGOLIA/129826330435540 to read the latest announcements and comment on events carried in

the NewsWire with the community. Recently posted were the BCM football cup pictures.

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

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

Of course for news information, interviews, and announcements regarding our organization, visit

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

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]

July 31, 2012 *14.5% [source: NSOM]

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

Note: 14.9% y-o-y, Ulaanbaatar city, July 31, 2012

CENTRAL BANK POLICY 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]

CURRENCY RATES – September 6, 2012

Currency Name Currency Rate

U.S. dollar USD 1,384.84

Euro EUR 1,734.86

Japanese yen JPY 17.67

British pound GBP 2,196.08

Hong Kong dollar HKD 178.54

Chinese yuan CNY 218.13

South Korean won KRW 1.22

Russian ruble RUB 42.66

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.