BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 454 – November 24, 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 negotiates higher coal prices

Erdenet to recover USD10 million debt from Kazakhstan

Tavan Tolgoi power plant investors meet in Singapore

SoftBank’s clean-energy goals find welcome in Mongolia’s desert

Moody's downgrades Development Bank of Mongolia's rating to Caa1 from B3

MAK to build power lines to its copper mine and towns in Umnugobi

Erdene reports 22.7 g/t at Bayan Khundii gold project

Investors get preview into Kincora’s IBEX licenses

TerraCom recommences mining operations in Mongolia

Mongolian Mortgage plans to issue debt offering

Mongolia’s first privately owned stock exchange opens

Holiday Inn hotel opens in UB

Contract signed for construction of Bulgarian greenhouse

Farmers market to open at Khan-Uul district

TIKA to finance honey farm in Selenge

Mongolian producer to nominate a Mongolian movie for Oscar

Wolf Petroleum appoints non-executive director

Kincora appoints exploration VP

Haranga exec resigns

5.11 Tactical sponsors MMA match and shooting competitions

Oyu Tolgoi finances new hospital

XacBank launches Peter Morrow Scholarship

Economy:

Mongol Bank: FX Auctions, t-bills

Mongolia rating cut as Moody’s expects elevated debt burden

Fitch downgrades Mongolia to B-; outlook ‘Stable’

No end in sight for economic problems

Coldest winter in 100 years? Not so fast

Extreme weather halts coal transport to China amid surge in exports

Italian fashion industry craves Mongolian cashmere

Authorities place temporary ban on export of live horses

Companies tasked to reserve 30 days of fuel

2016 harvest meets national demand for wheat and potatoes

5,100 tons meat exported in 2016, disease outbreaks affect sales

Government cuts cellular service payments for civil servants

Mongolia to receive grant from World Bank

Mayor appealed for citizens’ participation in snow removal

Politics:

Former Speaker Enkhbold to continue leading until December

Former PM Bayar denies offshore allegations

PM promises to rectify problems outlined in U.S. Embassy report

26 November declared public holiday

MPP divided on leadership for Erdenet Mine

Government has nothing to do with Dalai Lama’s visit, FM says

China says Dalai Lama's Mongolia visit could harm ties

N. Korea defends worker exchange program

Ambassador hands over humanitarian assistance to North Korean side

Mongolia selected as vice chair of UNESCO’s media development group

Authorities arrest sister of former PM Altankhuyag

Dalai Lama says will visit Trump in move bound to anger China

BCM Updates:

• Member-to-Member Special Offers & Benefits

Economic Indicators:

• Inflation

• Central Bank Policy Rate

• Currency Rates

*Click on titles above to link to articles.

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BUSINESS

ERDENES TT NEGOTIATES HIGHER COAL PRICES

The state-owned miner for the multi-billion ton Tavan Tolgoi coal fields has renegotiated

for better prices from the coal it sells to China—nearly twice as much as it previously was

selling by next year. Erdenes Tavan Tolgoi LLC has negotiated to raise the average selling

price for its coal by 85 percent to USD50 a ton in December to the distribution company

TTJVCo. In the first quarter of next year, coal is expected to sell for USD60 per ton from

the East Tsankhi block. Meanwhile, the companies SGS [Source is not clear, but this may

be SouthGobi Sands LLC -ed], Khishig Arvijak and Monnis LLC plan to extract a combined

1.1 million tons of coal from the West Tsankhi.

Erdenes TT hopes to repay in coal deliveries the USD350 million it borrowed from

Aluminum Corp. of China in 2011, as well as money owed to TTJVCo. Meanwhile, the East

and West Tsankhi blocks are projected to pay USD100 million tax revenue in first half of

2017.

Source: News.mn, Mongolia.GoGo.mn

ERDENET TO RECOVER USD10 MILLION DEBT FROM KAZAKHSTAN

Kazakhstan has agreed to repay USD10 million to Erdenet Mining Corporation for debt it

claims for copper deliveries that were never paid for. Erdenet supplied a private company

based in Kazakhstan that was processing copper ore into concentrate in the 1990's until

the company went bankrupt. Mongolia brought up the issue multiple times the matter of

USD10 million it was owed for copper during visits to Kazakhstan, but to no results until

now.

Source: News.mn

SOFTBANK’S CLEAN-ENERGY GOALS FIND WELCOME IN MONGOLIA’S DESERT

SoftBank Group Corp. plans to build more wind projects in Mongolia as the company’s

chairman, Masayoshi Son, pushes to connect countries across Asia with transmission lines

to supply cheap, clean energy. The Tokyo-based company’s first wind farm in Mongolia is a

50-megawatt project being developed with Newcom LLC in Mongolia’s Gobi desert. The

project is an outgrowth of a venture between Newcom and SoftBank’s clean-energy unit

called Clean Energy Asia LLC that was set up in 2012. SoftBank is now looking into two

more wind projects in Mongolia, with plans to possibly add 200 megawatts of solar and

wind at the site of its first project, according to Shinsuke Moriya, who manages SoftBank’s

electricity business planning group.

It’s the first time JICA is co-financing a project with the European Bank for Reconstruction

and Development, and China has emerged as a strong supporter of interconnections.

Source: Bloomberg

TAVAN TOLGOI POWER PLANT INVESTORS MEET IN SINGAPORE

Mongolian officials will meet with investors next month to discuss plans for moving forward

with a 450 megawatt thermal power station to be built at the Tavan Tolgoi mine. The

USD1 billion power plant is key project for powering mines in the Gobi desert, including

the Oyu Tolgoi copper mine. Representatives of Marubeni Corporation and MCS Group will

meet in Singapore on 2 December at the request of Oyu Tolgoi LLC, which asked that the

meeting be postponed from an earlier scheduled date.

Investors currently plan to provide 30 percent of the capital and raise the remainder from

international investors. Construction is estimated to span between three and four years.

Source: Undesnii Shuudan

MOODY'S DOWNGRADES DEVELOPMENT BANK OF MONGOLIA'S RATING TO CAA1 FROM B3

Moody's Investors Services downgraded Development Bank of Mongolia's rating to caa1 from

b3, and changed it outlook to stable. Sovereign-backed senior unsecured debt and tugrik

program rating are downgraded to caa1/(p)caa1 from b3/(p)b3. Downgrade of the bank’s

rating is driven by its strong linkages with the Mongolian government. The downgrade

reflects rising short-term liquidity pressure stemming from USD580 million payment due

march 2017. It’s driven by increased uncertainty over ability to meet its direct and

indirect debt service obligations over next 18 months.

Also driving the downgrade was the expectation that the budget deficit will remain wider

for longer. Combined with a weaker growth outlook in the next two years, this will raise

government's debt burden.

Source: Reuters

MAK TO BUILD POWER LINES TO ITS COPPER MINE AND TOWNS IN UMNUGOBI

The Mongolyn Alt Corporation (MAK) has been granted a USD32.2 million contract to build

overhead power lines between its Tsagaan Suvarga copper mine and Rio Tinto’s Oyu Tolgoi

copper-gold mine. The Cabinet Secretariat on 16 November gave its permission for the

National Development Agency to sign a concession agreement with MAK where the

government would be responsible for costs estimated at USD32.231 million.

Power lines will also be built to connect Mandakh and Khatanbulag Soums of Dornogobi

Aimag to the central power grid system.

Source: Montsame, Udriin Sonin

ERDENE REPORTS 22.7 G/T AT BAYAN KHUNDII GOLD PROJECT

Erdene Resource Development Corp. reported “impressive” intersections “with good

continuity and high grades” at the wholly owned Bayan Khundii gold project in southwest

Mongolia. The company reported 22.7 grams of gold per ton of ore in its third batch of drill

results from its third-and fourth-quarter drill campaign from a 56 meter seam with an

average 1.2 grams per ton at the Striker Zone. Also highlighted was 71 meters of 1.1 grams

per ton along the eastern end of the exploration spot.

Fourth quarter drilling will continue with with results anticipated through early quarter-

one 2017.

Source: Erdene Resource Development

INVESTORS GET PREVIEW INTO KINCORA’S IBEX LICENSES

Kincora Copper Ltd. has given investors a preview of its new assets from the so-called IBEX

transaction that consolidated new exploration licenses. Kincora ran a comprehensive

workshop and field visit in the fall with industry leading specialists and geologists with

expertise in the gold-rich souther Mongolian copper belt that identified priority targets

and a pipeline of regional prospects, the copper explorer said in a a 17 November

statement. “Location, team and targets are the key ingredients for a successful

exploration play,” said President and Chief Executive Officer Sam Spring.

“Since closing the IBEX transaction we have started outlining key positive developments on

these fronts that differentiate and positions Kincora well moving forward, with systematic

exploration advancing our targets up the value curve.”

Source: Kincora Copper Ltd.

TERRACOM RECOMMENCES MINING OPERATIONS IN MONGOLIA

TerraCom Ltd. has recommenced mining operations at its Baruun Noyon Uul coal mine in

the south Gobi in Mongolia, it said in a 18 November statement. The relaunch follows a

binding, five-and half-year offtake agreement of hard coking coal from the mine with

Kingho Group last week, one of the largest private coal companies in China, for an

estimated 7.5 million tons of hard coking coal sales. The offtake agreement was the final

piece on the implementation of TerraCom’s implementation of an alternative supply chain

for its BNU mine this year.

Source: TerraCom Ltd.

MONGOLIAN MORTGAGE PLANS TO ISSUE DEBT OFFERING

Mongolian Mortgage Corporation has requested from government permission to issue

MNT200 billion worth of bonds. If approved, it would be the ninth time the company has

issued debt to investors such as the Bank of Mongolia and commercial banks. So far, total

debt from Mongolian Mortgage totals MNT2.5 trillion.

The central bank currently holds 90 percent of Mongolian Mortgages debt, while

commercial banks own the remainder.

Source: Unuudur

MONGOLIA’S FIRST PRIVATELY OWNED STOCK EXCHANGE OPENS

A private stock exchange platform has launched to rival the state-owned Mongolia Stock

Exchange. “We plan to issue our first IPO in first quarter of 2017,” said Ch. Baasandavaa,

a senior trade system monitoring specialist, about the newly launched Mongol Securities

Exchange. Baasandavaa added that to be eligible for a a public offering on their new

bourse, companies should fit meet criteria such as recording profits in the last years. The

Mongolian Stock Exchange has around 130 companies, of which only 30 to 40 are active,

and most shares are owned by only a handful of people, Baasandavaa said.

The chief executive officer of the exchange, S. Davaasambum, said their exchange

planned use the same software used by the United State’s NASDAQ exchange, X-Stream.

“Now, we have eight brokerage companies as our member and another 10 companies are

talking with us about membership,” he said.

Source: Udriin Sonin, Unuudur

HOLIDAY INN HOTEL OPENS IN UB

Mongolia’s first Holiday Inn opened in Ulaanbaatar on 18 November. The franchise, which

boasts more than 5,000 hotels worldwide, is managed by Max Group in Ulaanbaatar and

sent staff to the United Kingdom and Russia for training. The hotel includes a children’s

play room, three conference rooms and a restaurant. The Holiday Inn has 169 rooms and is

located just west of Tengis Cinema, on Sambuu Street.

Source: Udriin Sonin

CONTRACT SIGNED FOR CONSTRUCTION OF BULGARIAN GREENHOUSE

Bulgaria will spend approximately about EUR868,771 to build a greenhouse for the

production of tomatoes, cucumbers and peppers at Ulaanbaatar. The exact value of the

5,000 square meter construction is estimated at 1.4 million Lev. The facilities will not

serve to grow exotic vegetables or fruits, but traditional Bulgarian products: 40 percent

tomatoes, 30 percent peppers and 30 percent cucumbers.

The project has been described as high-tech, with a greenhouse that will withstand

temperatures between -50 and +40 degrees Celsius, being thus tailored to the Mongolian

climate. According to earlier statements by the Bulgarian authorities, the greenhouse is a

pilot project that Bulgaria will try to run on the Mongolian market.

Source: frognews.bg, Fresh Plaza

FARMERS MARKET TO OPEN AT KHAN-UUL DISTRICT

Farmers will have a new market to sell their goods directly to customers at Ulaanbaatar’s

Khan-Uul District. Dairy, honey, sea buckthorn and more agricultural goods will be for sale

at the farmers market at prices below those found at traditional stores. Savings are made

by cutting out the middle-man procurers.

The market also comes equipped with a lab for testing the quality of goods. It’s located at

between Yarmag bridge and Viva City.

Source: Udriin Sonin

TIKA TO FINANCE HONEY FARM IN SELENGE

The Turkish Cooperation and Coordination Agency (TIKA) has agreed to invest USD30,000

into a honey operation at Selenge Aimag. The 200-square meter honey farm will be based

at Shaamar Soum, where almost 90 percent of small businesses for honey production are

located. The facility will allow bee keepers to care for their hives year-round.

Source: UB Post

MONGOLIAN PRODUCER TO NOMINATE A MONGOLIAN MOVIE FOR OSCAR

A Mongolian film will have a chance at an Oscar next year. Producer D. Angarag has joined

the Oscars’ Academy by joining the U.S. Producers Union and is now able to nominate an

Mongolian film for the category “Best Foreign Language Film.” "I am working on a business

plan to cycle MNT15-20 billion to the entertainment market of Mongolia for 2016-2018,”

said Angarag. “Financial companies and law firms of Mongolia and Hollywood are

cooperating on the plan."

Source: Unuudur

WOLF PETROLEUM APPOINTS NON-EXECUTIVE DIRECTOR

Wolf Petroleum Ltd. has appointed Siying Guo as a non-executive director to its board, it

announced on 17 November. Guo currently works in sales and project implementation with

CCC Financial Leasing Co., Ltd.

Source: Wolf Petroleum Ltd.

KINCORA APPOINTS EXPLORATION VP

Kincora Copper Ltd. has appointed a new vice president of its exploration. Peter Leaman

has been appointed as senior vice-president of exploration and John Holliday as Chairman

of the newly formed Technical Committee, Kincora announced on 14 November. The

Technical Committee will lead exploration efforts across the expanded portfolio, which

following the IBEX transaction has more than tripled in size to over 1,500km2, creating the

dominant landholding in the Oyu Tolgoi-Tsagaan Suvarga Devonian copper belt, with

multiple targets currently being advanced.

Source: Kincora Copper Ltd.

HARANGA EXEC RESIGNS

Haranga Resources Ltd.’s executive director, Marshall Cooper, has resigned from his

position. “The Board thanks Mr Cooper for his contribution to the Company,” reads a 17

November statement.

Source: Haranga Resources Ltd.

5.11 TACTICAL SPONSORS MMA MATCH AND SHOOTING COMPETITIONS

The local branch of U.S. outdoors and technical gear retailer 5.11 Tactical has sponsored a

mixed martial arts (MMA) match series. The competition will match Mongolian team, MGL-

1, with the Japanese team DEEP at the Mongolian Wrestling Stadium. Each team had seven

fighters, including one woman.

The event was organized together with 5.11 Tactical’s Mongolian dealer, Brother

Merchants LLC.

Source: NAMBC

OYU TOLGOI FINANCES NEW HOSPITAL

A new hospital financed by a development fund from Oyu Tolgoi LLC has opened at

Dalanzadgad Soum, Umnugobi. The two-story hospital built by Suvargan Gobi LLC comes

equipped with 10 beds, a garage and other amenities, and it will employ 18 staff. “On

behalf of the South Gobi aimag and the citizens of the Bayan-Ovoo Soum, we are thankful

to the Oyu Tolgoi team for close collaboration and cooperation and in funding this newly

built hospital building,” said Umnugobi Aimag Governor N. Naranbaatar.

The hospital was built using financing from the Gobi Oyu Development Support fund and

was managed in partnership with local community members. Construction began last June

and was complete in October. The fund was established as part of the Cooperation

Agreement between Oyu Tolgoi and its partner communities in April 2015.

Source: Oyu Tolgoi

XACBANK LAUNCHES PETER MORROW SCHOLARSHIP

XacBank LLC has dedicated a scholarship program in memory of Peter Morrow, former

Board Member of the Business Council of Mongolia and former independent Board Member

of XacBank. The scholarship will cover one year’s tuition to three students on their third or

fourth year to earning their Bachelor’s degree. The scholarship is directed to students

successfully studying banking, finance and economics, and those who are willing to pursue

career in commercial banks.

Source: XacBank LLC

ECONOMY

MONGOL BANK: FX AUCTIONS, T-BILLS

The Bank of Mongolia on 22 November sold USD27 million and CNY16 million in bids from

commercial banks at currency auction for closing rates of MNT2,444.91 and MNT354.51,

respectively. That day, it also rejected an equivalent of USD2 million in tugrik swap

agreements.

On 23 November, the central bank issued MNT152 billion worth of one week bills at a

weighted interest rate of 15 percent. Also that day, it canceled 52-week bills with a face

value of MNT40 billion due to a lack of bids.

Source: Bank of Mongolia

MONGOLIA RATING CUT AS MOODY’S EXPECTS ELEVATED DEBT BURDEN

Mongolia’s debt rating was downgraded by Moody’s Investors Service as there is

"heightened uncertainty" over the government’s ability to meet its debt service obligations

over the next two years and an expectation that the debt will increase. The nation’s long-

term issuer and senior unsecured rating was cut one step to Caa1 from B3 by Moody’s, the

same level as Barbados and Belarus, with a stable outlook, the debt rating company

announced on Friday.

The country faces USD800 million in external debt service obligations in 2017, equivalent

to 7.5 percent of GDP, Moody’s said. In addition to these existing debts, the budget deficit

this year is projected to be 19.5 percent of gross domestic product, up from five percent

in 2015, according to the statement. “It’s worth noting that credit rating changes rely on

lagging economic indicators, and new signs of revival in Mongolia’s economy are starting to

take shape," Bilguun Ankhbayar, chief executive officer of the Mongolian Investment

Banking Group, said.

Source: Bloomberg

FITCH DOWNGRADES MONGOLIA TO B-; OUTLOOK ‘STABLE’

Fitch Ratings downgraded Mongolia's Long-Term Foreign- and Local-Currency Issuer Default

Ratings (IDRs) to B- from B on 22 November. The outlooks are “Stable.” The issue ratings

on Mongolia's senior unsecured foreign-currency bonds have also been downgraded to 'B-'

from 'B'. The Country Ceiling has been downgraded to 'B-' from 'B' and the Short-Term

Foreign- and Local-Currency IDRs have been affirmed at 'B.’

The downgrade reflects the deterioration of Mongolia's fiscal indicators and increased

external liquidity risks. Large pre-election spending programs and weaker economic growth

contributed to a dramatic widening of the general government deficit to 19.7 percent of

GDP in 2016, the highest among Fitch-rated sovereigns based on our adjusted measure that

includes commercial spending by the Development Bank of Mongolia. Fitch expects greater

borrowing and the sharp depreciation of the tugrik over the past year to push gross general

government debt to 84.3 percent of GDP at end-2016, compared to the B category median

of 51.2 percent.

Source: Fitch’s Ratings

NO END IN SIGHT FOR ECONOMIC PROBLEMS

Economic data shows no slow down in Mongolia’s economic problems. Estimates for this

year’s balanced of payments have been revised to USD176.4 million, which is a 46 percent

decrease from 2016. The budget deficit was MNT2.3 trillion. Capital and financial accounts

showed a surplus of USD177.9 million, which is 43 percent less from the previous year.

Money supply grew by 16.2 percent to MNT11.5 trillion at the end of October compared

with the same period in 2015. Loans outstanding were up by 4.7 percent compared with

2015, while principals in arrears grew by 3 percent to MNT97.6 billion—or 12.4 percent

month-on-month. The total from non-performing loans was up 30.4 percent in October

compared with 2015.

Source: Bank of Mongolia, Montsame, 2

COLDEST WINTER IN 100 YEARS? NOT SO FAST

Last week, Mongolia received the chilling news that this year’s winter promised to be the

coldest in a century. But reporters may have goofed. German researcher Dominik Jung

prediction that this would be the coldest winter in 100 years appeared in a paper

published in October where Jung merely warned about record lows in Europe. Although

extremely cold temperatures last weekend seemingly confirmed what may have been

exaggerated reports, Jung on the social-media platform Twitter, bemused by his mention,

posting “good to know. “I never spoke to anybody in Mongolia,” Jung said in an interview.

P. Gomboo at the Mongolian Research Institute of Meteorology and Hydrology said it was

impossible to predict if this year would be the worst in 100 years, saying that the

journalists “mixed it up.” “We never called this the coldest,” Gomboo said. “But our

outlook is definitely cold, and with unusually heavy snowfall.”

Source: UB Post

EXTREME WEATHER HALTS COAL TRANSPORT TO CHINA AMID SURGE IN EXPORTS

Some coal deliveries to China have been delayed from western Mongolia due to extremely

cold winter conditions. Khuvd Aimag was covered by between averages of 25 to 35

centimeters of snow this month, raising some concern that this could be the second time

in two years Mongolia must manage the winter phenomenon where extremely difficult

winter conditions kill off millions of animals. Known as a “dzud,” authorities have issued

alerts to 18 counties in eight provinces.

Meanwhile, the heavy snowfall resulted in delays to the coal being transported through the

Barlag Mountain Pass to China. Mongolia’s deliveries to coal comprised 11 percent of

China’s total imports as of September. Exports were up 64 percent last months with 11.4

million tons of deliveries. Mongolia hit its peak for coal imports in 2011, representing 47

percent of all imports of coal to China, following severe weather that cut off supply from

Australia.

Source: News.mn, Mongolia.GoGo.mn, SXCoal.com

ITALIAN FASHION INDUSTRY CRAVES MONGOLIAN CASHMERE

Italy is the biggest export market of Mongolian combed cashmere, data shows. Italy

consumed 74 percent of the total volume of cashmere during the first nine months of

2016. Just behind Italy was the United Kingdom and then China as the second and third

largest buyers. The total from the sale of combed cashmere from this year of USD26

million was less than last year, however.

Exports to Japan have climbed 3.8 percent following the consummation for the Economic

Partnership Agreement Ulaanbaatar signed with Tokyo that eliminated tariffs for imports

of finished cashmere garments and more from Mongolia. Japan took home 1.1 percent of

total Mongolian combed cashmere exports in the first three quarters of 2016.

Source: News.mn

AUTHORITIES PLACE TEMPORARY BAN ON EXPORT OF LIVE HORSES

Mongolian authorities have suspended the export of live horses until the end of spring next

year to prevent deaths during this year’s extremely harsh winter conditions. Horses may

travel great distances across the country for export through the Bichigt land port to China.

The Agency for Specialized Inspection ordered the ban to prevent unnecessary deaths from

exhaustion the lack of grass for horses to eat because of snow cover and and other

challenges because of the extreme winter. Horses even risks freezing their own eyes

during these extremely cold temperatures.

Source: Mongolia.GoGo.mn, Udriin Sonin

COMPANIES TASKED TO RESERVE 30 DAYS OF FUEL

Fuel importers have received orders to stockpile 30-days of fuel reserves orders from the

Minister of Mining and Heavy Industry. Minister of Ts. Dashdorj ordered 16 companies to

collect a combined 81,900 tons of fuel. In August of 2015 and 2016, companies imported a

total of 982,000 tons of petrol and diesel fuels.

Source: Montsame

2016 HARVEST MEETS NATIONAL DEMAND FOR WHEAT AND POTATOES

Mongolia grew enough wheat and potatoes this year to meet national demand, according

to the minister of food, agriculture and light industry, in the face of what looks to be an

extremely cold and difficult winter. Preliminary results of this autumn’s harvest were

presented to the Cabinet by Minister P. Sergelen on Wednesday. This autumn, Mongolia

harvested a total of 475,000 tons of grains, including 460 thousand tons of wheat. It also

grew 153,000 tons of potatoes, 93,000 tons of vegetables, 20,000 tons of oil plants and

50,000 tons of soiling crops.

Source: Montsame

5,100 TONS MEAT EXPORTED IN 2016, DISEASE OUTBREAKS AFFECT SALES

Outbreaks of disease among livestock continues to limit Mongolia’s potential for meat

exports. The Ministry of Food and Agriculture reported 5,100 tons of meat exports for

2016, but three outbreaks of disease resulted in temporary bans of imports from Mongolian

by the Chinese government that are still in place. Food and Agriculture Minister P.

Sergelen visited Russia this year to propose meat exports there, and is currently working

on legislation that would bring veterinary hospitals up to international standards to deal

with animal health issues.

Agriculture currently comprises 13.7 percent of GDP, or MNT3.7 trillion. Last year,

agricultural products represented 7.1 percent of total exports, or USD332.2 million.

Source: UB Post

GOVERNMENT CUTS CELLULAR SERVICE PAYMENTS FOR CIVIL SERVANTS

Mongolia is expected to save MNT265 million a year with its decision that it will no longer

pay for government workers’ bills for their mobile phones. Government has discontinued

its benefits paying for the cellular services of 107 workers from the Parliament offices, 52

central government workers and 89 officials for local municipalities.

This year, the cut is expected to save MNT90 million.

Source: Mongolian Economy

MONGOLIA TO RECEIVE FREE GRANT FROM WORLD BANK

The World Bank will give a USD250,000 grant to finance projects in Ulaanbaatar that aim

to improve heating and energy capacities in Mongolia. The main aim of the grant is to

combat Mongolia’s growing air pollution problem, with Ulaanbaatar having some of the

worst in the world.

Source: News.mn

MAYOR APPEALED FOR CITIZENS’ PARTICIPATION IN SNOW REMOVAL

Ulaanbaatar’s mayor has asked residents of the capital to pitch in with the snow removal

to make up for its only failures to do so last weekend. The capital city’s streets are coated

with up to 20 centimeters of packed ice after heavy snow fall last weekend. Ulaanbaatar

Mayor S. Batbold said the city this week had sent out 149 workers with 41 trucks to clear

the streets, although most of the snow had already hardened into ice since the weekend.

Meanwhile, there have been reports of over 200 accidents from the slippery roads,

according to the National Trauma Orthopedic Research Center.

This year’s winter looks to be particularly cold and dangerous, with this year marking 13

cases of snowfall—or as many as the total instances from last year. “The weather

departments are giving out prognosis that this snowfall is likely to continue for a while,”

said Batbold.

Source: Montsame, Mongolia.GoGo.mn

POLITICS

FORMER SPEAKER ENKHBOLD TO CONTINUE LEADING UNTIL DECEMBER

Former Parliamentary Speaker Zandaakhuu Enkbhold will stay on as the leader of the

Democratic Party until a successor is chosen. The Democrats' National Consultative

Committee granted the duties to Enkhbold, who was voted out of office last June, at a

party meeting on 16 November. Enkhbold resigned after a stunning defeat by the

Mongolian People’s Party, taking more than 85 percent of the legislature.

Source: News.mn

FORMER PM BAYAR DENIES OFFSHORE ALLEGATIONS

Former Prime Minister S. Bayar has denied allegations that he held money in offshore

accounts while being vetted for a diplomatic post at the United Kingdom. Some members

of Parliament have balked at the appointment of Bayar, who headed government from

2007 to 2009, as the next ambassador to the United Kingdom because of allegations from

earlier this year that he secretly has offshore accounts. "I don’t have an offshore

accounts,” Bayar said. “I think that politicians should not own offshore accounts. I abide

by the law and am fully prepared to be investigated regarding the offshore allegations."

The name “S. Bayar” was included in an online database published by the International

Consortium of Investigative Journalists (ICIJ) from leaks known as the Panama Papers.

However, there was already one case of mistaken identity regarding a Mongolian official

linked to the leak.

Source: News.mn

PM PROMISES TO RECTIFY PROBLEMS OUTLINED IN US EMBASSY REPORT

Prime Minister Erdenebat is working to address issues outlined in the U.S. Embassy’s

summary of investment in the country. “Investment Climate Statement,” released last

June, is an annual summary of how Mongolia is dealing with investors and the degree to

which businesses can run freely. “The new government has acted quickly both to publicly

define problems and to address them,” said U.S. Ambassador Jennifer Galt said on 22

September.

She added, “Government leaders have met with investors and vowed to correct missteps

that contributed to Mongolia’s economic decline.”

Read the full report here.

Source: Mongolian Business Database

26 NOVEMBER DECLARED PUBLIC HOLIDAY

The Cabinet has called 26 November a public holiday for the founding of Mongolia’s

democracy. Friday will be a day off preceding Saturday, which is a holiday observing

Mongolia's independence.

Source: Udriin Sonin

MPP DIVIDED ON LEADERSHIP FOR ERDENET MINE

A month has passed with no appointment made for the next director of Erdenet Mining

Corp. amid party infighting. Former food and agriculture minister T. Badamjunai, a close

associate of party leader Miyeegombo Enkhbold, was rejected amid some conflicts of

interest. He is the father-in-law of a board member for Trade and Development Bank of

Mongolia LLC (TDB), which helped finance the purchase of a 49 percent shareholding in the

mine. The owner of the company that made the purchase, Mongolian Copper LLC, is also

on TDB’s legal staff.

Other rejected candidates are G. Ganzorig; the head of Altjin Group, G. Altan, and former

minister of mining and energy, D. Zorigt.

Source: Udriin Sonin

GOVERNMENT HAS NOTHING TO DO WITH DALAI LAMA’S VISIT, FM SAYS

The government has denied any connection to this week’s visit by the Dalai Lama to

Mongolia, which could throw a wrench in talks with China for a bail out from the current

economic crisis. The Dalai Lama is seen as a dangerous separatist by China, and it made a

strong statement last week advising Mongolia not to permit him into the country. “The

Government of Mongolia has nothing to do with the visit,” said Foreign Minister Ts. Munkh-

Orgil.

The Buddhist leader, who currently resigns in India, came to Mongolia at the invitation of

the Gandantegchinlen Monastery, he added.

Source: Montsame

CHINA SAYS DALAI LAMA'S MONGOLIA VISIT COULD HARM TIES

China urged Mongolia on Sunday to take steps to protect the two countries' relations after

the Dalai Lama visited the central Asian country at the weekend, despite Beijing

repeatedly voicing its opposition. Chinese foreign ministry spokesman Geng Shuang, in a

statement, said Mongolia should "adopt effective measures to eliminate the negative

effects of the Dalai Lama's visit, in order to prevent the disruption of the healthy

development of China-Mongolia relations." Mongolia had repeatedly ignored China's

cautions against allowing the visit, much to Beijing's dissatisfaction, the statement said.

Beijing frequently expresses its anger with countries that host the 81-year old Nobel Peace

Prize winner, who fled to India in 1959 following a failed uprising against the Chinese.

China regards the Dalai Lama as a separatist, though he says he merely seeks genuine

autonomy for his Himalayan homeland Tibet, which Communist Chinese troops "peacefully

liberated" in 1950.

Source: Reuters

N. KOREA DEFENDS WORKER EXCHANGE PROGRAM

North Korea has defended its right to send workers to Mongolia amid some concerns about

their treatment and welfare in Mongolia, in addition to some who claim that Mongolia and

other countries should no longer accept because of the country’s increasingly aggressive

behavior. Mongolia currently employs about 2,500 North Korean workers for jobs in

construction, textile production and more through a contract between its and Mongolia’s

governments.“Our workers are working in foreign countries only guided by their free will

and demands,” said North Korean Ambassador Hong Kyu in an 18 November statement.

The statement adds that these workers are in full compliance with Mongolian law and pay

into Mongolia’s social welfare programs. “Providing them (North Korean workers) with

favorable conditions to work and live is a priority provision of contract made between

corresponding companies in strict compliance with the pertinent legislation and

regulations of the given country.”

Source: Montsame

AMBASSADOR HANDS OVER HUMANITARIAN ASSISTANCE TO NORTH KOREAN SIDE

Ulaanbaatar has donated warm blankets and clothes to North Korea following disastrous

floods that rocked the country last summer. North Korea’s deputy foreign minister of

foreign affairs, Ri Kil Song, expressed gratitude to the donation from Mongolian

Ambassador to North Korea, S. Tsoggerel.

Source: Montsame

MONGOLIA SELECTED AS VICE CHAIR OF UNESCO’S MEDIA DEVELOPMENT GROUP

The U.N. Education Science and Communication Organization (UNESCO) has appointed

Mongolia as its vice chair of its global initiative for developing mass media in countries.

Kh. Naranjargal will represent Mongolia’s position as the vice chair position of the 39-

member International Programme on the Development of Communication until 2017.

Source: Montsame

AUTHORITIES ARREST SISTER OF FORMER PM ALTANKHUYAG

The younger sister of former prime minister Norov Altankhuyag has been arrested. The

Independent Agency Against Corruption has been running an investigation into Altankhuyag

and has called in relatives and advisers for questioning. The IAAC declined to answer

question about the arrest of Altankhuyag’s sister, N. Narantsetseg, on 17 November at the

Chinggis Khan International Airport while attempting to travel to Germany, According to

her attorney, O. Chuluunchimeg, the courts have refused her client’s release on the basis

that she had been arrested with no justification. “I think Mongolian judicial authorities has

became afraid of IAAC,” Chuluuchimeg said.

Courts have found a former senior advisor, L. Gansukh, guilty corruption around a coal

program. Altankhyag’s daughter A. Saranzaya is under investigation for crimes related to

the same program while her husband G. Denzen is suspected of defrauding state-owned

Erdenes Tavan Tolgoi LLC. Altankhuyag’s wife E. Selenge was stopped and given a travel

ban also before attempting a trip to Germany on 5 November.

Source: Udriin Sonin

DALAI LAMA SAYS WILL VISIT TRUMP IN MOVE BOUND TO ANGER CHINA

Exiled Tibetan spiritual leader the Dalai Lama said on Wednesday that he would visit U.S.

President-elect Donald Trump, a meeting that would infuriate Beijing which views the

Nobel Peace Prize-winning monk as a dangerous separatist. Speaking during a visit to

Mongolian capital Ulaanbaatar and asked about the U.S. election, the Dalai Lama said he

had always considered the United States a "leading nation of the free world". "I think there

are some problems to go to United States, so I will go to see the new president," he told

reporters, without elaborating.

The Dalai Lama, speaking in English, brushed off some of the U.S. election campaign

rhetoric. "Sometimes I feel during election the candidate has more freedom to express.

Once elected, having the responsibility, then they have to tell you their sort of vision,

their works according to reality."

Source: Reuters

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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]

Year 2015 *1.9% [source: NSOM]

September 30, 2016 *-0.1% [source: NSOM]

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

Note: -0.7% y-o-y - Ulaanbaatar City, September 30, 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 – 23 November 2016

Currency Rate

U.S. dollar USD 2,451.72

Euro EUR 2,604.83

Japanese yen JPY 22.08

British pound GBP 3,042.71

Hong Kong dollar HKD 316.12

Chinese Yuan CNY 355.66

Russian Ruble RUB 38.26

South Korean Won KRW 2.09