BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 447 – October 7, 2016

BCM NewsWire provides short summaries of news collected from around the world. Each

article is kept to a maximum of 150 words for brevity, but click on the link next to

“Source” to read the full article.

NEWS HIGHLIGHTS:

Business:

Erdenes TT plans to pay off CHALCO debt in 2017

Erdene Resource expands exploration

Kincora to issue 5.89 mn post-roll back shares for Ibex

Entrée Gold mulls splitting into two separate public companies

UBTZ breaks tradition by appointing D. Jigjidnyamaa as next head

Vestas turnkey entry to Mongolia

Austrian firm contracted to renovate UB sewage system

Education TV to broadcast Mongolia’s Next Top Model

Wagner Asia’s Bruce Wagner remembers 20 years in Mongolia

Newmont Mining hires Former OT chief

Mongolia calls in IMF rescue team but WA still tops Rio's sovereign risk ladder

Economy:

Mongol Bank: FX auctions, currency swaps

Mongolia requests financial assistance from IMF

Asian Development Outlook 2016 Update

Early snow hits Mongolian harvest

Wheat production recovers from last year’s shortfall from drought

Parliament lays off 10% of staffers

Mongolia ranks 102nd in competitiveness

New Tianjin road cuts transportation time, cost to Mongolia, Russia

The first Mongolian satellite to launch next spring

UNICEF to earmark $26.8 mn for Mongolian children

IFRC Secretary General concludes visit to China and Mongolia

Climate Change and Savage Winters Fuel Urban Migration in Mongolia

Archaeologists discover largest dinosaur footprint Titanosaur in Mongolia

Coal prices and real costs at TT

Coal Logistics Hub Opens in Inner Mongolia

Japanese cars: Cheaper prices also means higher costs—EDITORIAL

Politics:

Finance Minister submits 2017 budget

Finance Minister proposes 90% cut in corporate tax for small businesses

Election Day declared public holiday

Chinese, Mongolian party leaders meet

Mongolia to sign extradition agreement with Kazakhstan

Russia to Hold Drills With India, Mongolia, Pakistan, Vietnam in 2017

Alaska, Mongolia team up for Disaster Management Leadership Seminar

Former PM Altankhuyag son-in-law arrested

Prosecutor ignores charges against Former ‘Little’ TT deputy

The 6,000-year-old tradition of hunting with eagles is dying out—VIDEO

Ten-point plan to fix Mongolia—EDITORIAL

Mongolia’s small country diplomacy and North Korea—EDITORIAL

BCM Updates:

• Dale Carnegie Tips

• Upcoming Events

• Working Groups News

• Job vacancies at member organizations

• Member-to-Member Special Offers & Benefits

• Websites Update - Presentations, Mongolia Reports, Interviews

Economic Indicators:

• Inflation

• Central Bank Policy Rate

• Currency Rates

*Click on titles above to link to articles.

SPONSORS

Khan Bank Wagner Asia Automotive

National News Corporation International SOS

BUSINESS

ERDENES TT PLANS TO PAY OFF CHALCO DEBT IN 2015

Erdenes Tavan Tolgoi LLC is targeting 2017 to repay its debt to Aluminum Corp of China,

(CHALCO), which has suppressed prices on its coal. The state-owned miner for the Tavan

Tolgoi coking coal mine still owes 96 million to be repaid in coal deliveries to Chalco

currently priced at USD70 a ton, said S. Amaglan, marketing director at Erdenes TT.

Mongolia borrowed USD350 million from the China-owned miner in a 2011 offtake

agreement that sets prices below market price.

Source: Udriin Sonin

ERDENE RESOURCE EXPANDS EXPLORATION

Erdene Resource Development Corp. plans to nearly double its exploration to 9,000 meters

of drilling, according to a 4 October results announcement from its 100 percent owned

Bayan Khundi gold project in southwest Mongolia. Erdene reported 116 meters of 2 grams

per ton of gold from its originally planned 5,000 meters of drilling at its 100-percent

owned Bayan Khundi gold project. The additionally announced drilling will include its Alan

Nar and Altan Arrow gold projects.

“Bayan Khundii continues to deliver exceptional, near-surface gold grades over wide

intervals and today's results increase our confidence in the continuity of these gold zones

and the broad extent of the lower-grade mineralization," said Peter Akerley, Erdene's

president and chief executive officer.

Source: Junior Miner Network

KINCORA TO ISSUE 5.89 MN POST-ROLL BACK SHARES FOR IBEX

Kincora Copper Ltd. said it will issue 5.89 million common shares and 2,947,500 warrants

with an exercise price of 54 cents and a term of 24 months. These securities will

ultimately be held by the shareholders of High Power Ventures Inc. (HPV) Following the

one-for-10 consolidation of Kincora Copper Ltd.'s outstanding share capital and the closing

of Kincora's USD1.053 million private placement, Kincora is updating the terms of its share

exchange agreement with HPV.

Source: Proactive Investors

ENTRÉE GOLD MULLS SPLITTING INTO TWO SEPARATE PUBLIC COMPANIES

Entrée Gold Inc. is evaluating options to potentially restructure its business, which may

include splitting synergistic assets into two separate publicly traded companies, it

announced on 3 October. Entrée's principal assets include a 20 percent carried joint

venture interest in two of the copper-gold deposits at Oyu Tolgoi project in Mongolia, 100

percent-ownership of the Ann Mason copper-molybdenum project in the Yerington District

of Nevada, and the exploration stage Lordsburg porphyry copper-gold project in New

Mexico. It also has approximately USD15 million in cash.

Many original shareholders invested in Entrée for exposure to the Oyu Tolgoi project, but

more recent shareholders have been looking at the Ann Mason project for its lower risk

profile, potential for further growth, good access to existing infrastructure, and is well

situated in one of the most favorable mining jurisdictions in the world. Work needed to

bring the Ann Mason project to the pre-feasibility level is already well advanced.

Source: Entrée Gold Inc.

UBTZ BREAKS TRADITION BY APPOINTING D. JIGJIDNYAMAA AS NEXT HEAD

Mongolia's joint-venture railway operator with Russia, Ulaanbaatar Railway JSC (UBTZ), has

appointed D. Jigjidnyamaa as the next director, breaking a tradition of trading between

Mongolian and Russian chief executives. UBTZ's board confirmed the appointment during a

meeting in Moscow on 28 September. Board members were in some disagreement before

Prime Minister Jargaltulga Erdenebat backed Jigjidnyamaa's nomination ahead of others to

replace L. Purevbaatar.

Additionally, the director of the Irkutsk railway station was appointed as the chief

engineer at UBTZ.

Source: News.mn

VESTAS TURNKEY ENTRY TO MONGOLIA

The Danish manufacturer Vestas has broken into a fresh market with a deal to build the 50

megawatt Tsetsii wind farm in Mongolia. It will deliver unidentified hardware to Clean

Energy Asia in the first quarter of next year with full operations expected before end-

2017. The contract is on an engineering, procurement and construction basis and includes

a five-year service package. Vestas opened an office in Mongolia earlier this year.

"Vestas looks forward to supplying world-leading wind power technology to Mongolia and to

supporting the country's efforts in reducing reliance on coal and in realising its vision to

contribute to the sustainable energy demand of Mongolia and the Asia Pacific region," said

Chris Beaufait, president of Vestas Asia Pacific and China.

Source: reNews

AUSTRIAN FIRM CONTRACTED TO RENOVATE UB SEWAGE SYSTEM

RTI Austria Co. has been contracted to renovate Ulaanbaatar’s aging sewage system with a

EUR7 million credit line from Austria. Plans are to repair the aging 44 kilometers of sewage

liens with the export credit agreement signed on September 27 in Vienna.

Source: Montsame

EDUCATION TV TO BROADCAST MONGOLIA’S NEXT TOP MODEL

Mongolia’s own version of Next Top Model is being filmed by Education TV this November.

Mongolia’s Next Top Model will be the first internationally franchised show to premier in

Mongolia, pitting 14 contestants—six men and eight women—against each other over 16

episodes. The show originally premiered as America’s Next Top Model with celebrity model

and host Tyra Banks and has spread to 170 countries around the world.

Mongolian male model E. Enkhbold will be the host. “The winner will take a cash prize, a

modelling contract with Hong Kong’s ‘SMI Movie’ and a fashion feature with Mongolian

sponsors,” said Enkhbold.

Source: News.mn

WAGNER ASIA’S BRUCE WAGNER REMEMBERS 20 YEARS IN MONGOLIA

A Wagner Asia executive has sent out words of hope to the new government under the

Mongolian People's Party and Prime Minister Jargaltulga Erdenebat in a letter

commemorating its two decades of operation in Mongolia. In a note published in the

magazine Mongolian Economy, Bruce Wagner recalled his first visit to Mongolia 20 years

ago with his father, and the “roller coaster ride” of world-beating growth in 2011 to the

near flat projections for this year. “Our business is intimately tied to the development of

the mining and mineral export sectors, to construction and infrastructure, to energy and

agriculture, so we sincerely hope that the new government can promote the development

of those sectors to a new level.”

“Today we remain as optimistic as we were when we first arrived in Mongolia 20 years ago

and we wish the present administration every success in getting Mongolia back on the

track to economic growth and prosperity.”

Source: Mongolian Economy

NEWMONT MINING HIRES FORMER OT CHIEF

Veteran mining executive Andrew Woodley has been named to oversee Newmont Mining

Corp.’s North American business starting 2 January. Woodley, who will succeed Tom Kerr,

previously ran the Oyu Tolgoi copper and gold mining operations in Mongolia for Rio Tinto

Group and before that was a mining executive in Mozambique, Australia and elsewhere.

“Andrew is an accomplished operations and business leader with more than 20 years'

experience driving improvements in safety, productivity and sustainability,” said Tom

Palmer, Newmont’s executive vice president and chief operating officer, in a 6 October

announcement.

Source: BizJournals

MONGOLIA CALLS IN IMF RESCUE TEAM BUT WA STILL TOPS RIO'S SOVEREIGN RISK

LADDER

Mongolia's request for financial rescue by the International Monetary Fund has done

nothing to alter the debt-burdened mining frontier's standing on the Rio Tinto Group

rankings of sovereign risk. Western Australia remains number one, well out in front of

cash-strapped Mongolia, an increasingly volatile South Africa and the even more politically

uncertain Madagascar and Guinea. This unlikely achievement results from the

commercially obtuse but politically acute plan by the

A net tax proposed by the Western Australia National Party would take the form of an

increase in lease rentals that are charged on production once mines have been producing

for 15 years. Currently the rent is 25 cents a ton.

Source: Australian Financial Review

ECONOMY

MONGOL BANK: FX AUCTIONS, CURRENCY SWAPS

The Bank of Mongolia on 6 October sold USD7.8 million to commercial banks at currency

auctions (out of bids totaling USD8 million and CNY2 million) for a closing rate of

MNT2,281.50. Also that day, it rejected an equivalent of USD9 million in tugrik swap

agreements.

On 5 October, the central bank issued MNT177 billion in one-week bills at a weighted

interest of 15 percent. Also that day, the central bank received MNT60 billion in bids for

28-week bonds with a face value of MNT40 billion at a discounted price with a weighted

average yield of 16.865 percent. It received MNT45 billion in bids for 39-week bills with a

face value of MNT30 billion that were sold at a discounted price and weighted average

yield of 16.943 percent. It received MNT7.5 billion in bids for 52-week bills with a face

value of MNT5 billion that was sold at a discounted price and weighted average yield of

16.99 percent.

Source: Bank of Mongolia

MONGOLIA REQUESTS FINANCIAL ASSISTANCE FROM IMF

Mongolia has sought financial assistance from the International Monetary Fund (IMF), as it

grapples with balance of payments woes and looks to stabilize its economy, the IMF said on

30 September. Discussions about financial assistance from the IMF will begin next week

when Mongolian officials visit Washington D.C. to attend the annual meetings of the IMF,

the organization said in a statement, without saying how much was sought. "The Mongolian

authorities have made a request for financial assistance from the IMF to support their

economic programme, which is intended to address balance of payments pressures and

stabilize the economy," spokesman Gerry Rice said in the emailed statement.

The IMF would also send a team to Ulaanbaatar in late October to continue discussions, it

added.

Source: Reuters

ASIAN DEVELOPMENT OUTLOOK 2016 UPDATE

Growth has held up in developing Asia despite a difficult external environment, according

to the Asian Development Bank’s update to its 2016 outlook, as it project 0.3 percent for

economic growth in Mongolia compared with 0.1 percent from earlier in the year. The

region is expected to grow steadily at 5.7 percent in 2016 and 2017. While global

commodity prices have begun to rebound, inflation remains largely subdued. Consumer

prices will likely rise by 2.6 percent in 2016 and 2.9 percent i n 2017. Transitioning to low-

carbon growth will help developing Asia reap outsized rewards in the global effort to

contain climate change.

East Asia’s outlook is boosted by strong growth in China. Strong fiscal and monetary

stimulus helped ease growth moderation in China to 6.6 percent in 2016 and 6.4 percent in

2017. The forecast for a sharp slowdown in Mongolia is revised up somewhat as mining

fared better than previously expected.

Asian Development Bank listed the following data and projections:

GDP Growth (%)

2015: 2.3

ADO 2016: 0.1

ADO Update: 0.3

2017 (ADO 2016): 0.5

2017 (ADO Update) 1.4

Inflation (%)

2015: 6.6

2016 (ADO 2016): 3.0

2016 (ADO Update): 3.2

2017 (ADO 2017): 7. 0

2017 (ADO Update) 5.4

Click here for the full report

Source: Asian Development Bank

EARLY SNOW HITS MONGOLIAN HARVEST

Early winter weather threatens to cut crop production by 40 percent this year, according

to a government report. Farmers have so far harvested 60 percent of its cereals (324,000

tons) of cereals, as well as as 82 percent of potatoes (126,000 tons) and and 72 percent of

other vegetables (72,000 tons). Harvesting has suffered from delays in the western region,

according to the report, although farmers in in Bulgan, Tuv and Selenge Aimag have fared

better. Losses are expected from Khentii Aimag this week from snow fall.

Source: News.mn

PARLIAMENT LAYS OFF 10% OF STAFFERS

Parliament has laid off 10 percent of its staff in the face of its economic challenges. After

layoffs, Parliament was left with a total 179 personnel left in seven divisions. The main

responsibility of staffers in Parliament’s Secretariat is to advise legislators.

Source: News.mn

MONGOLIA RANKS 102ND IN COMPETITIVENESS

Mongolia ranked 102nd in the world for competitiveness by the World Economic Forum,

rising two places from last year with a score of 3.8. Mongolia’s score in the Global

Competitiveness Index was the same as the last two years—despite the climb ranking—

although there was mention in the report of improved the development of the financial

market, technological readiness and higher education. “The decrease in inflation played a

large role in the improvement of the macro economy,” said D. Oyunbadam, the manager

of economic policy at the Open Society Forum, while presenting the report.

The report ranks 138 counties based on marks for infrastructure, education, healthcare,

market size, and the macro economy. Switzerland ranked first in the world with a score of

5.8 score. Singapore and the United States ranked second and third, respectively, each

with a score of 5.7. China ranked 28th and Russia was behind at 45. Yemen, Chad, and

Mauritania filled the last three places in the ranking.

Source: Montsame

NEW TIANJIN ROAD CUTS TRANSPORTATION TIME, COST TO MONGOLIA, RUSSIA

For traders and buyers in Russia or Mongolia who order fresh food from China will see soon

the transit time reduced by two-thirds to three days, as the China-Mongolia-Russia

international road freight route was launched in Tianjin last month, which aims to shorten

cargo transportation time between Tianjin, Mongolia and Russia. It usually took more than

10 days for goods to reach Mongolia and Russia from Tianjin by rail before, and the options

were limited as mostly storage-tolerance goods could be transported to maintain the

quality of the goods.

So far, Tianjin has been connected to two kinds of transport routes, namely rail transport

and road transport, which both directly go to Ulaanbaatar of Mongolia and Ulan-Ude of

Russia. "Not only the transport time but also the cost will drop significantly," said Guo Xin,

general manager of Nanning Xin Jin Hang Materials Co Ltd.

Source: China Daily, ecns.com

THE FIRST MONGOLIAN SATELLITE TO LAUNCH NEXT SPRING

National University of Mongolia plans to launch Mongolia’s first satellite next May. “Our

four young scholars are working right now on the model of that satellite,” said D.Ulam-

Orgikh, a vice professor at the physic department, about the satellite named “Mazaalai.”

One is at Hokkaido University while the others are at Kyushu University. “They are

specialized in electronics.”

Japan has donated some funds to the project, said Ulam-Orgikh, as part of a larger

initiative to help countries launch their own satellites for imagery and communications.

Mongolia and Japan will share information from their own satellites with Bangladesh,

Nigeria and Ghana while ground stations will be established at Taiwan and Thailand. Some

countries plan to launch a second satellite in 2019.

Source: Montsame, Udriin Sonin

UNICEF TO EARMARK $26.8 MN FOR MONGOLIAN CHILDREN

UNICEF will deliver USD26.8 million for projects that target children’s health, growth,

environmental education and child protection with a new 2017-2021 country program

approved on 14 September. Minister of Foreign Affairs Ts. Munkh-Orgil on 5 October

received UNICEF Resident Representative Roberto Benes to discuss the launch of the

program next year.

Munkh-Orgil recommended that UNICEF requested some attention brought to upgrading

pre-school education, improving access to kindergartens and drinking water supply for

school children.

Source: Montsame

IFRC SECRETARY GENERAL CONCLUDES VISIT TO CHINA AND MONGOLIA

The Secretary General of the International Federation of Red Cross and Red Crescent

Societies (IFRC), Elhadj As Sy, has reiterated the commitment of the IFRC to strengthen

cooperation with the Red Cross Society of China (RCSC) in the face of growing

humanitarian needs worldwide. In Mongolia, Sy praised MRCS for its response to recent

disasters, as well as for its efforts to expand its presence and programs in response to new

and emerging humanitarian needs across the country. He joined local Red Cross staff and

volunteers in launching the “One Billion Coalition for Resilience” in Mongolia, a global

initiative that aims to strengthen the resilience of one billion people by the end of 2025.

Source: IFRC

CLIMATE CHANGE AND SAVAGE WINTERS FUEL URBAN MIGRATION IN MONGOLIA

Nyamdulam and her family had been herders in Zavkhan Aimag for Nyamdulam’s whole

life. They had over 300 head of livestock including sheep, yak, camels, cows and horses

that were their whole livelihood, but the province was heavily affected by the harsh

dzuds. In 2007 her family was forced to move to the local township, and eventually in 2010

to Mongolia’s capital, Ulaanbaatar, to find new work when all their livestock died.

Nyamdulam’s story represents a growing trend. Mongolia’s unique geographical location,

and the reliance of rural populations on animal husbandry, make it one of the countries

most vulnerable to climate change. it was ranked eighth among over 100 countries in the

Global Climate Risk Index of 2014; over 70 percent of land area has already been affected

by desertification; average temperatures have already risen by 2.14 degrees; and glaciers

in the far north western provinces are fast retreating.

Source: Reliefweb

ARCHAEOLOGISTS DISCOVER LARGEST DINOSAUR FOOTPRINT TITANOSAUR IN MONGOLIA

A joint team of researchers from Japan and Mongolia has unearthed what could be termed

as the largest dinosaur footprint which measures almost the size of a man. The footprint is

believed to be of a species of dinosaur named Titanosaur which roamed in this part of

Earth nearly 90 million years ago. Researchers from Okayama University of Science and

Center of Paleontology under the Mongolian Academy of Sciences unearthed what could be

the world’s largest footprint of a gigantic dinosaur. The footprint is 42 inches long and 30

inches wide.

In the past also some footprints of dinosaurs were discovered in the Gobi desert in

Mongolia. However, this is the biggest footprint of a dinosaur and was from a geological

layer which hints that it could be 90 million years old also. The discovery is significant

because for the first time a fossil foot with clear imprints of its claws has been found.

Source: Indian Tribune

COAL PRICES AND REAL COSTS AT TT

The state-owned Tavan Tolgoi mine is missing out on a current rally in coal prices, and it

may be dragging down other miners in the Gobi desert with it. Coal prices have exceeded

USD200 a ton in China, while Erdenes Tavan Tolgoi LLC sells at a USD27. “It costs a lot to

transport a ton of coal over distances ranging between 600 and 700 kilometers across two

countries,” says B. Batbileg, a former chief executive for Erdenes TT. “It’s common to

face bureaucracy while traveling across China. It all becomes additional cost.”

Erdenes TT updates coal prices every quarter as per an agreement with Aluminum

Corporation of China Limited (CHALCO). Coal prices have been continuously falling since

that agreement was signed in 2011. Prices fell by a whopping 40 percent in 2013 from

2012, and continued to fall ever since.

Source: UB Post

WHEAT PRODUCTION RECOVERS FROM LAST YEAR’S SHORTFALL FROM DROUGHT

Wheat production in 2016 estimated to have recovered from last year’s sharply reduced

level. Harvesting is complete, and the 2016 wheat production is estimated by FAO at

450,000 tons—up almost 80 percent from 2015 and close to the 2014 record. Wheat and

rice are the two major imported cereals, mainly from the Russia and Kazakhstan. Cereal

imports in the 2015-16 marketing year (October and September) are estimated to almost

triple the previous year’s low level and reach 199,800 tons. This mainly reflects four times

as much wheat imports from last year level and well above the five-year average,

reflecting the sharply reduced harvest in 2015.

Beef and mutton prices in Ulaanbaatar have decreased seasonally since June 2016,

reflecting good supplies in the market. Overall, prices were below their levels in 2015.

Wheat flour and rice prices in Ulaanbaatar remained relatively stable in recent months,

owing to adequate availabilities mainly from increased imports.

Source: reliefweb

COAL LOGISTICS HUB OPENS IN INNER MONGOLIA

The city of Wulanchabu in central Inner Mongolia has opened a coal logistics center

designed to streamline shipments of locally mined coal to the eastern ports of Tianjin,

Caofeidian and Qinhuangdao. The announcement in the Inner Mongolia Daily newspaper

comes amid a dramatic decline in domestic coal output nationwide and a sharp increase in

coal imports. Government data showed China’s coal output declined 10.2 percent year-on-

year to 2.18 billion tons between January and August, state media said. But coal imports

rose 12.4 percent during the same period.

The logistics center is designed to streamline coal exports from a 1,200-square-kilometer

mining region by providing coal washing, processing and transportation facilities, according

to the report. The center is served by highway and railway links to eastern points including

ports and the Beijing region. The Wulanchabu center is expected to handle about 13

million tons of coal this year.

Source: Break Bulk

JAPANESE CARS: CHEAPER PRICES ALSO MEANS HIGHER COSTS—EDITORIAL

Traffic rules, roads, toll booths and more are designed for cars with vehicles on the left-

hand side in Mongolia, but 54 percent of all vehicles with the wheel on the wrong side. The

Japan-Mongolia Economic Partnership Agreement (EPA) waives import taxes for vehicles

newer than three-years-old and brand new cars, and reduced taxes on cars older than

three years. Japan bans vehicles more than 10-years-old from the road, and, as a result,

approximately USD1.3 billion Japanese imports to Mongolia are vehicles.

In 2015, 64.4 percent of all accidents involved cars with steering wheels on the right-hand

side—a big jump from the .05 percent in 2014. Mongolia paved 6,351 kilometers of road

from 2012 to 2015. Obstructions to view or drivers sometimes making sudden turns to

avoid pot holes result in accidents. A law eliminating cars with steering wheels on the

right-hand side by 2020 could save lives and improve time in traffic.

Source: UB Post

POLITICS

FINANCE MINISTER SUBMITS 2017 BUDGET

Finance Minister Battogtokh Choijilsuren has submitted the 2017 budget for a vote by

Parliament. Government revenue is not expected to increase much because of the

softened market for Mongolia’s major export commodities. The budget deficit is currently

capped at 18.5 percent of GDP for 2016, or MNT2.59 trillion. Afterward, Mongolia’s Fiscal

Stability Law requires that the deficit narrow to 9.9 percent next year, 7.5 percent in 2018

and 5.5 percent in 2019. The government is targeting zero deficit by 2020.

Source: Montsame

FINANCE MINISTER PROPOSES 90% CUT IN CORPORATE TAX FOR SMALL BUSINESSES

Corporate income tax for some small businesses will be cut by 90 percent if a new bill

submitted by the finance minister is passed. The bill would hold companies to 1 percent

corporate income taxation for companies that earn less than MNT1.5 billion and produce

food products, textiles, construction materials from 1 January 2017.

Source: Unuudur

ELECTION DAY DECLARED PUBLIC HOLIDAY

A public holiday has been declared for the day when local elections will be held on 19

October. Campaigning has already launched across the country, as more than 15,000

candidates from nine parties compete in the local election for office in Ulaanbaatar’s nine

district and the country’s 21 provinces.

Polling stations will open at 07.00 and will close at 22.00.

Source: News.mn

CHINESE, MONGOLIAN PARTY LEADERS MEET

An official from the Communist Party of China has pledged to increase mutual trust and

jointly push forward bilateral ties. Senior Communist Party of China (CPC) official Liu

Yunshan met in Mongolia on 1 October with the chairman of the Mongolian People's Party

(MPP) Miyegombo Enkhbold. Describing the two countries as "good neighbors, friends and

partners," Liu said China has proposed and will uphold its neighborhood diplomacy

featuring amity, sincerity, mutual benefit and inclusiveness.

Liu called for the implementation of the consensus reached by leaders of the two

countries, saying the two sides should boost mutually beneficial trade cooperation and

tightly dovetail China's Belt and Road Initiative with Mongolia's Steppe Road program. Also

during the visit, Liu attended ceremony for the opening of a kindergarten whose

construction was funded by China Foundation for Peace and Development, in Mongolia.

Source: News.mn, Xinhua, 2

MONGOLIA TO SIGN EXTRADITION AGREEMENT WITH KAZAKHSTAN

Mongolia plans to ink another extradition agreement with Kazakhstan during the Shanghai

Cooperation Organization summit to be held in June 2017 in Kazakhstan. Justice Minister

S. Byambatsogt broached the topic during a meeting with the Cabinet Secretariat and

Kazakh Ambassador Kalybek Koblandinon 5 October.

Source: News.mn

RUSSIA TO HOLD DRILLS WITH INDIA, MONGOLIA, PAKISTAN, VIETNAM IN 2017

Russia's Land Force will conduct joint exercises with Indian, Mongolian, Pakistani, and

Vietnamese troops in 2017, the Force's commander-in-chief, Col. Gen. Oleg Salyukov, said.

He reminded that Russia and Pakistan had been carrying out the first joint Druzhba-2016

("Friendship-2016") exercises since 23 September, adding that on 4 to 7 October, Russia

would also engage in joint drills of the collective rapid deployment forces of the Central

Asian countries "Rubezh-2016" ("Boundary-2016").

"Next year we will conduct joint exercises with troops of Pakistan, India, Mongolia,

Vietnam, Nicaragua and CSTO [Collective Security Treaty Organization's] member states,"

Salyukov told reporters.

Source: Sputnik News

ALASKA, MONGOLIA TEAM UP FOR DISASTER MANAGEMENT LEADERSHIP SEMINAR

A five member team from the Alaska Air National Guard’s 212th Rescue Squadron

participated in a Disaster Management Leadership Seminar in Ulaanbaatar, Mongolia from

19 to 23 September. The Mongolia National Emergency Management Agency hosted the

first of it’s kind exchange, partnering with service members. “This is the first that I am

aware of where we have actually gone in at an operational level and shared subject

matter expertise for the operator type,” explained Tech Sgt. Cody Inman, a

pararescuemen.

The Guardsmen attended the engagement in Mongolia as part of the National Guard State

Partnership program. The program was implemented to couple foreign democracies with

states to develop unique security partnerships that ensure U.S. strategic access and a

sustained presence in countries worldwide. U.S. personnel have deployed as advisors with

the Mongolians to Iraq since 2004 and Afghanistan since 2009.With almost 15 years of

U.S. operations combating international terrorism, pararescue has gained a lot of

invaluable experience in theaters across the globe.

Source: dvids

FORMER PM ALTANKHUYAG’S SON-IN-LAW ARRESTED

Anti-corruption authorities have arrested the son-in-law of former prime minister Norov

Altankhuyag for abuse of power in government. G. Denzen could face between one month

and 10 years in prison, according to a statement from the Independent Agency Against

Corruption. Denzen was under investigation for a claim that he accepted MNT17 billion in

return for a tender from Erdenes Tavan Tolgoi awarded to Gobi Power, which is registered

under his wife and Altankhuyag’s daughter.

Source: Udriin Sonin

PROSECUTOR IGNORES CHARGES AGAINST FORMER ‘LITTLE’ TT DEPUTY

A prosecutor in Umnugobi Aimag has ignored charges from anti-corruption authorities that

a former deputy director of Mongolia Stock Exchange-listed Tavan Tolgoi LLC accepted a

MNT500 million bribe. Kh. Tumenbayar, who was a public official working for the

provincially owned mining unit may have accepted the bribe from the company Erdenet

Tsetsiin Khairkhan, said authorities, among other alleged crimes. While a deputy at Tavan

Tolgoi—which is known to investors as Little TT to differentiate it from Erdenes TT—

Tumenbayar ran a private gas station on his property that allegedly owes MNT122 million

in back tax and owes MNT200 million from a MNT122 million fine for exploration without a

license, authorities say.

Source: Unuudur

THE 6,000-YEAR-OLD TRADITION OF HUNTING WITH EAGLES IS DYING OUT—VIDEO

The swiftness, speed and tact of hunting with eagles is pretty amazing to watch. But the

more than 6,000-year-old tradition in Mongolia is slowly disappearing. Eagle hunting is

used by the Kazakh ethnic group. It helps supply food in winter, is used as a coming of age

ritual for boys and a sport in an annual festival.

The Golden Eagle Festival has recently drawn in tourists to watch a series of competitions

unfold. Tourism in the area has caused tightened wildlife preservation, but that's only part

of the reason eagle hunting isn't as widely used. There's a lot less wildlife in Mongolia.

Now, some family members get jobs outside the villages where livestock farming is a main

way to bring in income. Only about 250 eagle hunters are left in the region. The

partnership between eagle and hunter is a tight bond, but hunters do let the eagles go

after 10 years.

Click on the Source to watch the video.

Source: Newsy

MONGOLIA’S SMALL COUNTRY DIPLOMACY AND NORTH KOREA—EDITORIAL

Landlocked Mongolia may become a problem solver in the Asia-Pacific. Whether its

Ulaanbaatar’s small country diplomacy or its non-nuclear weapons state (NNWS) status,

both regional and international actors recognize Mongolia’s accountability and

transparency in the global political arena. In the past six months, the world has seen

repeated evidence that the North Korean nuclear issue has turned into a prolonged crisis.

Mongolia-North Korea relations date back to the Korean War of 1950-1953 and continue to

this day. While the Mongolian government condemns North Korea’s dangerous moves,

Ulaanbaatar continues to believe in peace negotiations, seeking stable diplomatic and

economic solutions to overcome political, economic, and civil issues on the Korean

peninsula. In June 2014, Mongolia hosted the “Ulaanbaatar Dialogue on Northeast Asian

Security,” gathering 35 representatives,including those from Mongolia, Russia, Japan,

North Korea and more. Ulaanbaatar has put itself in a significant position to mediate

future negotiations to stabilize the Korean Peninsula.

Bolor Lkhaajav is a foreign policy analyst with a Master of Arts in Asia Pacific Studies.

Source: The Diplomat

TEN-POINT PLAN TO FIX MONGOLIA—EDITORIAL

Mongolia set a foot on the road to stabilizing its economy by formally beginning talks with

the International Monetary Fund last week. Here are a further 10 steps the new

government and the IMF should take to put one the world’s most promising economies

back on track.

1. Gold: Stop talking, start digging

2. Coal Train to China

3. Grow up: Further gains rely on technology.

4. Import Substitution

5. Taxing times

6. Stick to the plan: Mongolia is well below its commitments for greater public

transparency from the Open Government Partnership it’s signed on to.

7. The triple whammy: Mongolia could boost fiscal revenue, tackle corruption and lure

back foreign investors in one fell swoop through privatization.

8. Foreign Investment Promotion

9. Long bonds

10. License to bank: Mongolians protective against influence from overseas, but

appropriately granted licenses to foreign banks could help stimulate competition and

reduce fees.

Lee Cashell is the founder and chief executive officer of Asia Pacific Investment Partners

and Mongolia Properties.

Source: Frontera

UPCOMING EVENTS

BCM KNOWLEDGE SHARING SESSION, MONDAY 10 OCT

BCM’s next knowledge sharing session will be organized in partnership with BCM member

Wagner Asia Equipment LLC on the topic "6 Sigma awareness training". The session is

offered free of charge to BCM members only and will be conducted in Mongolian Language.

For registration, please contact via dolgorsuren@bcmongolia.org

For more information, click here.

BEST PRACTICES IN PROJECT MANAGEMENT CONFERENCE, 7-8 OCT.

PMI is hosting its third international workshop and conference with its theme “Best

Practices in Project Management” at the Blue Sky Tower & Hotel in Ulaanbaatar on 7 and 8

October. All engaged in the Project Management profession; Business Analysts; those

wanting to learn more about Project Management; and those interested in the latest tools

and techniques should attend for 12 workshops, networking opportunity and more.

Continental lunch and refreshments at breaks are included with registration fees of

between MNT50,000 and MNT175,000 per attendee. BCM members will receive a 20

percent discount. For more information, visit pmimongolia.mn. Phone calls can be made to

9901-7317, 9994-7237; or email registration@pmimongolia.mn.

2016 GERMAN-MONGOLIAN CORPORATE DAYS, 11-12 OCTOBER

GIZ’s Integrated Mineral Resource Initiative (IMRI) and the German-Mongolian Business

Association (DMUV) are jointly organizing the 2016 German-Mongolian Corporate Days

"Made in Germany" on October 11-12, 2016 in Ulaanbaatar.

With more than 400 visitors per day and more than 100 German exhibitors expected, the

German-Mongolian Corporate Days are the most important bi-lateral economic event in

Mongolia. The exhibition’s lecture program covers various disciplines and allows direct

contact with the general public and trade visitors, as well as the decision-makers in

business and government.

Participation in the conference is free of charge, while exhibition booths will be available

for a small fee. Click here for more information or email rebecca.schmuecking@dmuv-

mn.com.

PAST EVENTS

WORKSHOP ON CORPORATE RESPONSIBILITY WITH JANE MADDEN, 28 SEP 2016

The Business Council of Mongolia (BCM) in partnership with the Embassy of the United

States of America in Mongolia organized a workshop on Corporate Responsibility with a

distinguished guest speaker Jane Madden, US Managing Director of Corporate Responsibility

at Burson-Marsteller, a leading global public relations and communication firm. About 50

people came to the meeting to listen to Jane’s 25 years of experience in environmental,

social and governance strategy, performance and communications. She worked in more

than 20 countries, including Afghanistan, China, Russia, and Saudi Arabia, and has advised

Fortune 500 companies across a variety of industries. With work experience in the World

Bank, European Union, UNICEF and the corporate world, Jane’s presentation had

interesting angles on the Corporate Responsibility on how CSR can help companies in crisis

and issues management, in mitigating risks, creating business opportunity and easing

corporate license. Some of the important quotes from Jane include: “Corporate Social

Responsibility (CSR) needs to be integrated into the business strategy. It is not an stand-

alone and “nice-to-do” thing. CSR does not have to be expensive, it is good for the

business, and it is one way to keep top talent”. To see her full presentation, click here.

BCM WORKING GROUP NEWS

BCM’S BUSINESS ETHICS WORKING GROUP MEETING, 27 SEP 2016

BCM's Business Ethics Working Group meeting was held on 27 September with 10 members

attending with co-chair Chritine Hudetz. The key speaker of the meeting was Peter van

Veen of TI UK who made a virtual presentation on the topic "Third Party Bribery Risks". TI

UK in cooperation with TI USA have developed a guidance to support for companies with

managing third party bribery risks.

Moreover, the working group has conducted a needs assessment to find out about the most

sought after topics and achievements for the group, the key findings were presented by

co-chair Christine. Announcement was made regarding the secured funding from the Asia

Foundation for additional capacity development, knowledge sharing, and expert

presentations at the WG. An inaugural workshop for the funding period will be held in

early November to identify the topics and approaches of the group for the next year. For

more information please see web news here.

- Education & Innovation Working Group Meeting on “Opportunities for Fostering

Innovation in the Mongolian Market” 22 September 2016

- Energy & Environment Working Group’s consultation meeting with J.Batbayasgalan,

Deputy Governor of Capital City on “MUNICIPALITY’S ACTION PLAN FOR THE NEXT 4

YEARS”, 15 September 2015

- Risk and Legislative Working Groups' Joint Meeting on the "DRAFT AMENDMENT OF THE

LAW ON DISASTER PROTECTION" 16 June 2016

- Business Ethics Working Group Meeting on “CSR, GIFTS AND HOSPITALITY POLICY”, 7 June

2016

- Capital Markets Working Group Meeting on “OYU TOLGOI UNDERGROUND PROJECT

FINANCING”, 5 April 2016

- Tax Working Group Meeting on “VAT LAW”, 2 March 2016

JOB VACANCIES AT MEMBER ORGANIZATIONS

- The Business Council of Mongolia (BCM) is hiring Working Group Coordinator. Deadline

for application: Oct 13, 2016. For more information, please contact at

Bayarmaa@bcmongolia.org

- B Production is hiring Accountant. For more information, please contact at

azbayar@bproduction.mn

- Transwest Mongolia is hiring hiring Parts Analyst. Deadline for application: Oct 16, 2016.

For more information: please contact atcareers@transwest.mn

Please click here to view full list of Job Vacancies at member organizations.

MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS:

- Orchuulga 24 is providing 15% discount on written translation services to BCM Members

- MNC HD TV offers BCM members 20% discount from the fee to be showcased in their “The

Story of Business/Бизнесийн түүх” TV program.

- American University of Mongolia is offering BCM members a 20% discount on all of ELI

Summer Courses.

- Matoza LLC is offering 15% special discount to BCM members on Intensive Business English

Language Course in Poland with a Sightseeing Trip.

Please click here to view full list of Member-to-Member special offers & Benefits.

WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS

PRESENTATIONS:

- Presentations from “Invest Mongolia 2016” Conference

Please click here to view full list of Presentations.

MONGOLIA REPORTS:

- World Bank, “Mongolia Economic Brief”, Sep 2016

- WPP and Y&R Mongolia, BradnZ’s first ever “Spotlight on Mongolia”, Sep 2016

- ADB, “Asian Development Outlook 2016: Asia’s Potential Growth” (forecasts of the next 2

years for the 45 economies in Asia and the Pacific including Mongolia)

- Invest Mongolia, “Your Guide to Invest in Mongolia” 2016

- BTI, “Mongolia Country Report” 2016

- World Bank, “Doing Business: Economic Profile of Mongolia 2016"

Please click here to view full list of Reports.

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]

Year 2014 *11.0% [source: NSOM]

August 31, 2016 *-0.2% [source: NSOM]

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

Note: -0.6% y-o-y - Ulaanbaatar City, August 31, 2016

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]

July 30, 2014 12.00% {source: Mongol Bank}

January 14, 2015 13.00% {source: Mongol Bank}

January 14, 2016 12.00% [source: Mongol Bank]

May 6, 2016 10.50% [source: Mongol Bank]

August 18, 2016 15.00% [source: Mongol Bank]

CURRENCY RATES – 15 September 2016

Currency Rate

U.S. dollar USD 2,275.79

Euro EUR 2,548.20

Japanese yen JPY 21.95

British pound GBP 2,892.98

Hong Kong dollar HKD 293.40

Chinese Yuan CNY 341.12

Russian Ruble RUB 36.47

South Korean Won KRW 2.05