PRESENTATION

1. THE BUSINESS OF BEING
A THIRD NEIGHBOUR
David Landers
General Manager
East Asian Growth Markets
Presentation to Mongolian Mining Summit
Perth, Australia
31st of October 2013

2. Australia Unlimited
Topics
• Austrade‟s value
• Bi-lateral relationship
• Environmental settings
• Opportunities for Australian business

3. Austrade’s value

4. Australia Unlimited
Who we are
• 80 offices in 48 countries, with 44 of those offices in 15
markets in Asia.
• An „inverted pyramid‟ – more than 60 per cent of our 1,000
people are offshore, and 60 per cent of those are in Asia.
• More than 400 of our staff have one or more Asian languages.
• Of the people we send overseas, and our executive officers,
two-thirds have experience working in the private sector
• Work at the „market & firm-specific‟ level, not the lead on trade
policy & negotiation

5. Australia Unlimited
Where we are

6. Australia Unlimited
What we do
Our role is to advance Australia’s international trade, investment and education
interests. Specifically, we:
• Assist Australian companies to grow business in international markets, including
through administration of the Export Market Development Grants scheme, the
TradeStart program and the Australian Century Business Engagement program.
• Provide coordinated government assistance to attract productive foreign direct
investment (FDI) into Australia.
• Promote the Australian education sector in international markets and assist
Australian education providers with market information and services.
• Provide advice to the Australian Government on its trade and investment policy
agenda.
• Deliver Australian consular, passport and other government services in 16 designated
overseas locations.
• Manage the building Brand Australia program to enhance awareness of
contemporary Australian skills and capability, and to enrich Australia‟s global
reputation.

7. Australia Unlimited
Our great strength -- sustained on-the-ground
presence in offshore markets
• We identify opportunities in market
• We can interpret the business climate and local commercial practice,
and provide language support as well
• We can brief you in-depth on the market and the companies involved
• We can refer you to potential customers in market
• We can develop a visit/contact program for you
• We can set up, and direct you to your appointments
• We can provide ongoing in market assistance to assist in
establishing your business presence.

8. Bi-lateral relationship

9. Australia Unlimited

10. Australia Unlimited
Mongolia’s ‘Third Neighbour’ policy
• Defined by current Mongolian president as neighbors
with a “values” rather than land connection
– Rule of law
– Human rights
– Market economy
• Strategic balance to potential overreliance on Russia and
China for trade and investment
• Third neighbours include Australia, Canada, Japan,
Korea, Britain, EU and the US.

11. Australia Unlimited
Australia – Mongolia relations
• Diplomatic relations established 1972
• Mongolian Embassy opened in Canberra 2008
• Australian Consulate-General opened March 2012

12. Australia Unlimited
Australian engagement
• Australian engagement focused on development assistance and
commercial activities in Mongolia's resources sector
• Since 1995, Australia has provided more than $81 million in aid to
Mongolia with significant expansion in the last two years
• One current minister and three serving members of parliament have
studied in Australia.
• Since 2008, 51 Mongolian MPs have visited Australia
• Mongolia looks towards Australia when setting new standards.
• More than 120 young Australian volunteers have contributed to
Mongolia‟s development, including Austrade‟s Trade Commissioner
to Dubai, Anna Lin.

13. Australia Unlimited
‘Mozzies’ in Mongolia

14. Australia Unlimited
The Australian Mission in Mongolia
• Austrade services commenced via Seoul in 2009
• A permanent Austrade office established in Ulaanbaatar
in May 2011
• Office upgraded to Consulate-General in March 2012
• Two permanent AusAID Staff commenced April 2013
• Consulate supervised Australian election ballots in
September where 122 Australian citizens voted.

15. Australia Unlimited
The Australian Mission team

16. Environmental settings

17. Australia Unlimited
Mongolia’s strengths
• Commitment to
peaceful democracy
• Aspirational population
• Strong bilateral
political and economic
relationships
• Abundant, high quality
mineral deposits of
gold, copper, uranium
and coal

18. Australia Unlimited
Key dimensions of the Mongolian economy
• The mining sector is integral to the Mongolian economy
– 20 per cent of GDP
– 67 per cent of industrial output
– 91 per cent of export earnings
• Mongolia is very closely correlated with China: 92% of
exports are destined for China
• China and Russia are the major counterparties for
Mongolia‟s imports
– imports from Russia (mostly oil) are 24.5% of Mongolia‟s imports
– imports from China (consumer goods) are 30.8% of Mongolia‟s
imports.

19. Australia Unlimited
Potential for continued high growth exists
Source: The Economist& World Bank Mongolia Economic Update April 2013 f = forecast
-5
0
5
10
15
20
2009 2010 2011 2012 2013f 2014f 2015f
World Bank: GDP growth % 2009-2015

20. Australia Unlimited
FDI finding a new level post the OT spike
Source: World Bank and EIU f = forecast
FDI and service imports
0
1
2
3
4
5
2009 2010 2011 2012 2013f 2014f
$USbillion
FDI Net services imports

21. Australia Unlimited
What an investment spike looks like: the Oyu
Tolgoi Concentrator Complex

22. Australia Unlimited
Competitive with peers at similar stage of development

23. Economy Overview (out of 185 economies)
Source: The World Bank Group, Doing Business 2014 data for Mongolia

24. Some room for improvement …

25. Australia Unlimited
Example -- establishing a business in Mongolia
• Key laws: Company Law, Civil Code and a new Law on
Foreign Investment (effective 1st November)
• Registering a business takes 4-12 weeks
• Foreign companies can establish a representative office,
but parent company typically liable

26. Australia Unlimited
Skills shortages, infrastructure and bureaucracy
the biggest challenges

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Improvements in human capital
• US$126 million has already
been spent on training &
education in the past 3
years and demand is
expected to remain strong.
• Within the next few years,
up to a thousand Mongolian
students will have received
an Australian certified
vocational qualification in-
market, in fields such as
OH&S, basic trades and
mining operations.

28. Australia Unlimited
Mongolia slated to spend US$40B improving
infrastructure over next 5-8 years
• Road
• Rail
• Power

29. Opportunities for Australian business

30. Australia Unlimited
0
5
10
15
20
25
30
35
40
45
50
2008 2009 2010 2011 2012
US$Million
Australia’s merchandise exports to Mongolia
A small but growing export market for Australia

31. Australia Unlimited
The challenge makes the opportunity
• METS
• Contract mining
• Mine-to-market rail
design
• Construction and
operations
• Urban planning
• Health and medical
infrastructure and
professional services
• Vocational education
• Professional services

32. Australia Unlimited
Australian companies are well placed

33. Australia Unlimited
Success Factors
• Are you Mongolia ready?
• Check your assumptions: climate, transport and
infrastructure difficulties require careful planning
• Conduct due diligence on potential partners
• Invest in relationships and staff training
• Enjoy the journey of Mongolia‟s transformation!

34. Australia Unlimited
A very good place to start the journey…
Australian Consulate-General
Australian Trade Commission (Austrade)
4th Floor, Naiman Zovkhis Building,
21 Seoul Street,
Ulaanbaatar -14251
Mongolia
Telephone: +976 7013 3001
Fax: +976 7013 3014
Email: mongolia@austrade.gov.au
Website: www.austrade.gov.au/mongolia
Key contacts:
Tony Burchill
Consul-General and Trade Commissioner
Tony.Burchill@austrade.gov.au
Ijilmurun Yalalt
Office Manager and Consular Officer,
Ijil.Yalalt@austrade.gov.au
Solongo Dashdendev
Business Development Manager
Solongo.Dashdendev@austrade.gov.au
Bart Gurbazar
Business Development Manager
Bart.Gurbazar@austrade.gov.au