June 12 2009

1. BUSINESS COUNCIL of MONGOLIA
NewsWire
www.bcmongolia.org
info@bcmongolia.org
Issue 73, June 12, 2009
NEWS HIGHLIGHTS:
Business: Boroo Gold negotiations may set pace for mining labor contracts; BHP Billiton closing
office in Mongolia; UB Railway assets to be listed to assess investment needs; Railway
repair work starts; Petro Matad plans 3 wells in 2009 at Block XX; Xanadu Mines to
raise AUD12 million in fresh capital for work in Mongolia; Mongolia’s strategy to rein
in Shinhua if it wins Tavan Tolgoi bid; BHP-Rio deal faces legal hurdles in Western
Australia; Steel producers want competition probe of Rio-BHP JV deal; Chinese steel
makers say BHP-Rio JV monopolistic; Japan steel body joins chorus against Rio-BHP
venture; Specter of investment protectionism stalks China; China’s pockets aren’t
deep enough during crisis; Deal collapse blow to China.
Economy: IMF happy with Mongolia’s performance; Moody’s sees improvement in Mongolia, but
retains negative outlook; Part of USD430-million IMF soft loan to plug deficit;
Elbegdorj’s priority is to reassure foreign investors; Putin’s global strategy best seen
in Mongolia; Washington meeting pledges to develop U.S.-Mongolian trade relations;
Asset manager probes investment opportunities in Mongolia; Builders assail
bureaucracy, corruption; Commercial banks giving apartment loans, with conditions;
Government needs MNT20 billion for herders; Tax waiver on cashmere export may be
counterproductive; Government sanctions funds for Mon-Atom; Over 20% fall in both
retail and wholesale trade; Downturn seems to lose momentum; Survey reveals
popular perceptions of economy; Bees from Russian region start arriving; Audit
director complains of curbs; Proposal to fine plastic bag importers rejected;
Ulaanbaatar woman studies credit unions in Canada.
Politics: Minister asks US to redirect funds nixed by Russia; Mongolia offers to “arrange and
host” U.S.-N. Korea meeting; Medvedev wants meeting with Elbegdorj; Elbegdorj to
take oath on June 18 at 12:06 p.m.; Attention shifts to Chingeltei by-election; Global
corruption survey finds growing distrust of business; Abandoned garbage dump
provided living for some; Development plan for Ulaanbaatar submitted; MPs debate
eavesdropping behind closed doors; President pardons children and women; New
Ulaanbaatar-Beijing train for tourists; 12 nationals of six countries deported in May;
Poland to shut down Embassy; Visa section in German Embassy shifts for some time.
BUSINESS
BOROO GOLD NEGOTIATIONS MAY SET PACE FOR MINING LABOR CONTRACTS
Being among the first foreign companies to mine in Mongolia has been both exhilarating and
frustrating for Centerra Gold, which now finds its Boroo gold mine in a temporary shutdown as the
mining companies and Mongolia's national trade union debate a labor contract, which could set a
precedent for other foreign miners. In an interview last week Centerra Vice President, Investor
Relations, John Pearson said Boroo's labor problems began after Ivanhoe laid off workers and Boroo
let go of the contract workers who had finished building the mine's heap leach pad in June 2008.
Discussions began between the local Boroo Trade Union and Boroo management in the fall of last
year. However, things heated up politically after a national trade union organization joined the
talks with the aim of increasing the pay of all Mongolian miners. Eventually, Mr. Pearson said,
redundancy pay and mine closure bonuses were also raised by the national union, issues which
parent Centerra Gold says are unreasonable. Although Centerra's collective bargaining agreement
expires on January 31, 2010, unionized employees initiated a work stoppage on May 26, an action
Centerra asserts is illegal.
Mining and milling have been temporarily suspended as the labor negotiations plod along. In

2. Mongolia, contract negotiations take longer because -- since the Mongolians stand by their
commitments once they are made -- they are scrupulously careful as to the wording of such
agreements. Mr. Pearson said Boroo started production in 2004 and is estimated to have 800,000
ounces of gold reserves remaining. While Boroo is located in a remote area of Mongolia, the mine
site enjoys good access to a highway and a railway.
Read more…
The Gatsuurt exploration property, located 35 kilometers from the Boroo mine, contains a number
of satellite deposits with ore that can be processed in the Boroo operation, which plans to add a
bio-oxidation circuit. Because of the satellite deposits, Mr. Pearson estimates that Boroo and
Gatsuurt offer another decade of mine life, yielding 200,000 ounces of gold.
Since international mining investment is considered one of the key stepping stones to economic
growth for the country, the Boroo negotiations may attract more attention from the Mongolian
Government and international agencies than a typical gold mine of its size almost anywhere else.
Source: Mineweb.com
BHP BILLITON CLOSING OFFICE IN MONGOLIA
According to the public relations department of BHP Billiton Mongolia, the company will be closing
down its office in Mongolia from July 1. All Mongolia-related affairs will be handled at the
company’s Perth office. Mr. D.Ganbold, President of the Mongolian National Mining Association, has
said the decision in no way indicates that the mining giant is withdrawing from Mongolia, but is just
an administrative decision necessitated by economic considerations.
Source: Zuunii medee
UB RAILWAY ASSETS TO BE LISTED TO ASSESS INVESTMENT NEEDS
Russian Minister of Transport I. Levitin led a high-level team to Mongolia last week to study
prospects of investing in new large joint projects, and to review the progress and needs of the joint
ventures already in operation. He assured the Mongolian Minister of Road, Transport, Construction
and Urban Development, Mr. Kh.Battulga, that the Russian side will make all efforts to develop
Ulaanbaatar Railway into a modern and efficient enterprise. The two Ministers are joint Chairmen
of the Mongolian-Russian intergovernmental commission.
Arrangements for transferring Russian Government shares in Ulaanbaatar Railway to the Russian
Railways Company and for amending the 1949 intergovernmental agreement to make this possible
are almost complete. A comprehensive inventory of the assets of UB Railway now has to be made so
that a proper assessment can be made of the company’s future financial needs.
Mr. Levitin said a proposal to raise the authorized share capital of UB Railway was under
consideration to meet the costs of laying new tracks to take the railway to the big mine sites.
Source: Montsame
RAILWAY REPAIR WORK STARTS
A ceremony marked the recent start of repair work on 108 km of railroad going west from Emeelt in
Ulaanbaatar. Russian equipment and technology will be used and the total cost of the work will be
RUB1.1 billion. The money will come from UB Railway owned by the Mongolian Government and the
Russian Railway, a state-owned company.
Source: www.news.mn
PETRO MATAD PLANS 3 WELLS in 2009 AT BLOCK XX
Mongolia-focused oil explorer Petro Matad Ltd remains confident about the overall prospectivity for
oil exploration of Block XX, and currently plans to drill up to three wells in the 2009 drill season.
There are a number of options available to Petro Matad and the board is in the process of
evaluating the optimal means by which the wells may be funded.
Block XX is an inexpensive location for exploration drilling due to the shallow target depth of the
wells, the nature of the regional topography and the ready availability of drilling equipment
because of the proximity of large oil producing regions of China. The final drilling location of the

3. wells has yet to be determined, but in all likelihood all will be on the Davsan Tolgoi prospect.
The statements accompanied full-year results for the period ending December 31 2008. The group
widened its pretax loss to USD6.3 million from USD4.4 million, mainly as a result of increased
exploration and evaluation expenditure in the period. “We are confident that the company will
evolve in a positive manner in the next financial year,” it said, adding that “overall economic
conditions remain challenging, the effects of which will continue to have a significant bearing on
the company's future”.
Source: www.petromatad.com
XANADU MINES TO RAISE AUD12 MILLION IN FRESH CAPITAL FOR WORK IN MONGOLIA
Xanadu Mines Ltd. has launched an AUD12 million capital raising via the issue of 10 million new
shares at AUD1.20 per share to further advance its Mongolian projects. The offer is open to existing
shareholders and new investors. More information can be obtained by contacting
bt@xanadumines.com via email.
The company plans to apply the capital to:
- CTL scoping study with Nexant Inc.;
- Drilling a highly prospective sediment hosted gold system in SE Gobi with defined targets;
- Drilling of two promising IP anomalies on Xanadu’s 100% Hust Uul gold project in NE
Mongolia;
- Acquisition of additional coal licenses to treble Xanadu’s resource base;
- Further drilling of Xanadu’s porphyry copper licenses in the SE Gobi;
- Evaluation of a number of new copper and gold joint venture opportunities.
Source: www.xanadumines.com
MONGOLIA’S STRATEGY TO REIN IN SHINHUA IF IT WINS TAVAN TOLGOI DEAL
Dealmakers and analysts say the Rio-Chinalco debacle has rekindled fears in Beijing that few
companies or governments in the democratic world trust that China -- a resource-hungry nation
under an authoritarian regime -- is pursuing multi-billion dollar resource deals for purely
commercial reasons. With its proposed Rio deal, Chinalco was on its way to being one of the biggest
suppliers of raw materials that drive industrial activity worldwide. But China's insistence on a Rio
Tinto board seat smacked of a desire to influence prices, despite claims that this was not the
intention. "Unfortunately, the Chinese seemed to think they needed to have a board seat," said one
banker. "It's something the Chinese, in almost all of the circumstances in which we've worked with
them, have insisted on: influence. "They don't just want to make an investment, they want to
interfere, and that's the biggest problem here."
It's not just Australia that is concerned about China's influence across the region. Mongolia is selling
up to 49 percent of its prized USD2 billion Tavan Tolgoi site, one of the world's largest untapped
coking coal deposits, and Chinese coal giant China Shenhua Energy Co is widely considered the
leading bidder. But if Shenhua seals the deal, the Mongolian government will likely demand it teams
up with a Western firm, such as Peabody Energy, to get around geopolitical concerns about total
Chinese ownership of the strategically important asset, say dealmakers with direct knowledge of
the situation.
Source: Reuters.com
BHP-RIO DEAL FACES LEGAL HURDLES IN WESTERN AUSTRALIA
Western Australia, a state that provides 18 percent of the world’s iron ore, said the agreement
between BHP Billiton Ltd. and Rio Tinto Group will require legislative changes that may take about
a year. BHP will pay Rio Tinto USD5.8 billion to create a joint venture covering the two companies’
Western Australian iron ore assets. The arrangement has been structured in part to avoid paying
about USD806 million in stamp duties, Western Australia Premier Colin Barnett has said. “I’m not
pleased,” Mr. Barnett said. “I have a concern about the iron ore resource of the Pilbara being in the
hands of one company. There is a third person at the table here -- the state of Western Australia.”
Mr. Barnett, whose state produces more than half the nation’s exports to China, said he was

4. disappointed Rio Tinto scrapped a deal with China’s biggest aluminum producer. “Australia has to
accept the reality, whether we like it or not, China is certainly for Western Australia our major
trading partner now,” Mr. Barnett said. “We need to do a bit of work as a nation and as a state to
reassure the Chinese that we value them as a customer and we also welcome them as direct
investors in our resource industry.”
The deal could see jobs losses in the state, which Mr. Barnett said supplies 60 percent of Japan’s
iron ore and 36 percent of the steel-making material to China. BHP and Rio Tinto have both laid off
“thousands” of workers in Western Australia in the past six months, he said. “There are over 20
State Agreement Acts affecting their operations,” Mr. Barnett said. “If they want to in any way
merge, achieve synergies, share infrastructure, pool their assets in production, they will require
significant changes to the iron ore agreements.”
Source: Bloomberg.com
STEEL PRODUCERS WANT COMPETITION PROBE OF RIO-BHP JV DEAL
Competition authorities should interrogate the potential anticompetitive consequences for the iron-
ore market should the newly-unveiled Rio Tinto-BHP Billiton joint venture (JV) be allowed to
proceed, the World Steel Association (Worldsteel) has said. The Brussels-based association, which
represents 180 companies producing about 85% of the world’s steel, argued that, should the
proposed JV in the Pilbara region of Western Australia proceed, almost 70% of world seaborne iron
ore exports would be controlled by two entities: the JV and Vale, of Brazil. It estimated that Vale
controlled about 36% of seaborne iron ore trade, Rio Tinto some 19% and that BHP Billiton’s share
was around 14%.
Rio Tinto said that the JV would result in savings of more than USD10-billion, but both miners
stressed that they would continue to sell iron ore independently through their own marketing
groups. Worldsteel DG Ian Christmas said that the announcement did nothing to allay the
competition issues it had raised when an earlier merger was proposed. “We are again calling on
competition authorities to seriously examine the obvious implications for future pricing regimes and
the competitive environment for iron-ore. At present, we cannot see how this JV could be in the
public interest and thus it should not be allowed to proceed,” Mr. Christmas added.
Source: www.miningweekly.com
CHINESE STEEL MAKERS SAY BHP-RIO JV MONOPOLISTIC
China's leading steel industry group strongly opposes a joint venture deal consolidating iron ore
assets of BHP Billiton and Rio Tinto in Australia, China's influential Caijing Magazine reports. "After
BHP Billiton and Rio Tinto establish the joint venture, large iron mines in Australia will belong to
one company and this will lead to a monopoly operation," China Iron and Steel Association (CISA)
General Secretary Shan Shanghua Shan was quoted as saying in the report. "China needs to import
almost half of the iron ore it consumes, and the volumes from BHP Billiton and Rio Tinto account
for more than half of this."
Source: Reuters.com
JAPAN STEEL BODY JOINS CHORUS AGAINST RIO-BHP VENTURE
Japan's steel industry joined an anti-competitive tirade launched by steelmakers around the world
against a Rio Tinto and BHP Billiton plan to link up their iron ore operations, while China called for
"a fully open international market". The Japan Iron and Steel Federation said it would fight the
venture. "While it takes the form of a joint production venture, it is in effect an anti-competitive
move similar to that of the failed takeover bid by BHP of Rio Tinto," said the Japanese steel body,
which includes world No.2 steelmaker Nippon Steel Corp. "We understand the judgment of Japan's
competition authorities will also be vitally important in this matter."
The two mining heavyweights, which with Brazil's Vale account for nearly 70 percent of the world's
traded iron ore, face tough anti-trust scrutiny, but analysts say the planned venture's shrewd
structure could mean they sidestep some concerns. "What was very smart of Rio and BHP is that
they've done it as a joint venture to use their infrastructure. BHP goes from 150 to 170 million tons

5. and Rio actually reduces from about 200 million to 170 million tons. Is this really anti-competition? I
don't think so, and doubt the European Commission will think so," said a mining analyst in Perth.
Source: Reuters.com
SPECTER OF INVESTMENT PROTECTIONISM STALKS CHINA
Please, please buy our bonds -- and bits of our bankrupt car companies, if you like -- but keep your
hands off our big natural resource companies. That is what China must be making of the stance of
rich countries to its overseas investment plans. Deep-pocketed China, it seems, is welcome only as
a buyer of last resort: witness the eagerness of bankrupt General Motors to announce that it was in
talks to sell its gas-guzzling Hummer marque to Tengzhong, a little-known Chinese industrial
machinery company. Rio was desperate when it turned to Chinalco in February, but capital markets
and commodity prices subsequently perked up, which gave the miner an alternative.
"This development will strengthen views among Chinese corporates -- particularly in the energy and
natural resources sector -- that it may take more than their cash to open the doors to deals for
them overseas," said Mr. Antony Dapiran, partner in a Shanghai-based law firm. Mr. Ken Davies,
with the investment division of the Organization for Economic Co-operation and Development in
Paris, said investment protectionism has been on the rise globally, but China's particular worries
were not unfounded.
Chinese firms venturing abroad are predominantly owned by the Communist state, raising fears that
their investments may not be driven by normal commercial considerations. "State-owned
enterprises are still controlled by the powerful State-owned Assets Supervision and Administration
Commission and have to fulfill various policy aims," Mr. Davies noted.
Read more…
Businessmen and analysts said China could do more to win Western hearts and minds by opening up
its own politically sensitive sectors more widely to foreign direct investment (FDI). China has
attracted about USD1.25 billion a week in FDI since it joined the World Trade Organization in 2001,
but Western executives complain that some sectors where they have a proven advantage are in
effect off limits.
For all the friction, China's Go Forth policy is here to stay. With a stockpile of USD1.95 trillion in
foreign currency reserves, China can in theory try to buy whatever it fancies. But the lesson of the
Rio fiasco is that some targets may just be too big to digest politically, thus calling for more subtle
ways of tapping energy resources abroad. There will be alternative arrangements that are still going
to achieve the ultimate strategic aim of securing energy and natural resources for China's
development but without encountering the kind of regulatory and other political stumbling blocks
that some more flashy deals might encounter.
Chinalco's setback could cause Beijing to pause and review its foreign acquisitions strategy, possibly
leading to a more active coordinating role for the government. Already, Chinese leaders appear
increasingly aware of the political minefields that could derail deals, with Vice Premier Wang
Qishan reportedly criticizing state company managers for lacking the expertise and sophistication to
succeed in acquisitions
Source: Reuters.com
CHINA’S POCKETS AREN’T DEEP ENOUGH DURING CRISIS
There are many things to say about Rio Tinto rejecting China in favor of raising USD21 billion from a
share sale and an iron-ore venture with BHP Billiton Ltd. Here are three worth considering: China’s
global ambitions are being stymied; the credit crisis is far from over; and China will keep coming.
First, China’s goal of securing resources to fuel its rapid growth is experiencing some setbacks. The
collapse of the deal with Rio Tinto is a humiliating wallop for cash-rich China. Its assertions that Rio
Tinto was a purely commercial exercise never gained traction. That was especially so after Xiao
Yaqing, a former Chinalco chairman and an architect of the deal, joined the Chinese government’s
Cabinet after it was announced.
China is ground zero for one of modern history’s greatest resource grabs. Massive investments in
Latin America, Africa and Asia have delighted many politicians anxious to revive economic growth.
In more developed economies, though, China is hitting its share of resistance or misfortune.

6. Read more…
Second, the role of falling commodity prices, frozen credit markets and tepid demand for asset
sales can’t be underplayed where Rio Tinto and Chinalco are concerned. Global trends are
undermining the valuation of both companies. All this talk of “green shoots” in markets and
economies won’t amount to much if financial systems don’t return to normal. Once they do, the
world needs to contend with central banks removing the vast waves of liquidity they pumped into
markets over the last two years. That adjustment will be as rough on acquisitive companies around
the globe as on a government sitting on top of about USD2 trillion of currency reserves. China’s
deep pockets don’t trump chaos in markets.
Third, China isn’t likely to go away quietly in the long run. A unique feature of China’s economic
model is a greater emphasis on acquiring overseas brands than creating indigenous names. Also,
maintaining China’s growth will require ever-increasing amounts of commodities. The Rio Tinto
news was a get-out-of-jail-free card for Australian Government leaders; they will be leaping for
joy. It’s safe to say China’s leaders aren’t jumping for joy. If anything, they will learn from this
latest setback, and fast. You haven’t heard the last of China’s overseas ambitions.
Source: Bloomberg.com
DEAL COLLAPSE BLOW TO CHINA
The collapse of the Chinese Government’s largest investment ever in a Western company, the
proposed USD19.5 billion stake in the Australian-British mining giant Rio Tinto Group, has dealt a
blow both to China’s global corporate ambitions and to its efforts to gain clout in the natural
resources market.
In Australia and elsewhere, the Rio-Chinalco deal was viewed as a corporate landmark, a crucial
test of whether the West’s shareholder-driven capitalism could mesh with a Chinese model that is
ultimately under state control. By collapsing, the deal will rank alongside the failed attempt by a
Chinese company to take over Unocal, the American oil company, in 2005 and will provide new
evidence that China’s attempts to extend its global corporate reach are often limited by
nationalistic backlashes abroad.
Read more…
Institutional shareholders complained bitterly that Rio should raise money through a new stock issue
instead of selling a dominant stake to the Chinese Government, which they argue has a vested
interest in keeping the price of ores as low as possible. Chinalco insisted that it was independent of
its owners in the Chinese Government, and Australian regulators ruled that the Chinese would not
be able to affect the price of iron ore, one of Rio’s main products, even with the proposed stake in
the company.
But those declarations failed to sway some critics, who argued that Chinalco’s proposed investment
followed the government’s declared strategy of diversifying its global investments in resources as a
way of hedging against price increases. The Chinese are such voracious consumers of some metals,
like iron ore, that they already have some sway over its price.
Australia’s political opposition savaged the proposed deal, calling it evidence that Prime Minister
Kevin Rudd, a Mandarin-speaking former envoy to Beijing, was too cozy with the Chinese
Government. A nationally broadcast television commercial showed scenes of the Chinese army’s
1989 assault on pro-democracy demonstrators in Tiananmen Square and charged that Mr. Rudd
“bears gifts to the Chinese military regime by allowing control of strategic mineral resources in
Australia”.
As the debate over the Rio investment grew louder, Chinese officials complained about what they
called protectionism and nationalism. Chinese companies have been on the prowl around the world
over the past few years, striking supply contracts and buying corporate stakes that secure long-term
access to oil, iron ore, rare earth metals and other natural resources.
The Chinese have also made major investments in recent years in real estate, agriculture and
international finance. Just last week, China’s sovereign wealth fund agreed to spend more than
USD1 billion to increase its already significant stake in Morgan Stanley, the Wall Street investment
bank.

7. Source: The New York Times (NYT.Com)
ECONOMY
IMF HAPPY WITH MONGOLIA’S PERFORMANCE
Mongolia is on track to meet its end-of-year fiscal target but the authorities will need to maintain
expenditure controls, the International Monetary Fund has said. "Fiscal policy is on track to achieve
the 6 percent of GDP fiscal deficit by end-year," the IMF said. "This will still require continued
expenditure restraint while safeguarding the fiscal resources needed to protect the poor during this
period of economic adjustment." In a statement, the IMF said Mongolia had so far successfully
implemented its USD229.2 million IMF program since April, and a staff mission would recommend
disbursement of the next tranche of USD40 million under the loan.
"While challenges and risks remain, especially as regards the fiscal outlook and the banking system,
the Mongolian authorities' continued commitment to strong policies should help safeguard the
recent hard-earned economic stability," said Mr. Steven Barnett, IMF mission chief to Mongolia. He
said inflation had fallen, the currency had moved flexibly and Central Bank currency reserves have
grown since the loan program was approved. "Conditions are now in place for a gradual easing of
monetary conditions," Mr. Barnett added.
Source: Reuters.com
MOODY’S SEES IMPROVEMENT IN MONGOLIA, BUT RETAINS NEGATIVE OUTLOOK
Moody's Investors Service is no longer reviewing Mongolia's sovereign B1 rating for a possible
downgrade but has retained a negative outlook, the agency said in a statement on Wednesday. In
February, Moody's had put Mongolia's ratings on review for a possible downgrade, citing a rapid
deterioration in the country's external payments position and strains on the government's finances.
On Wednesday, the ratings agency said that Mongolia's balance of payments position had improved
and confidence had been restored in its currency allowing for the government to gain access to
financing from the IMF, multilateral development banks and the government of Japan. But it added
concerns remained about the durability of the new policy stance and the ability of the authorities
to implement far-reaching reforms.
Source: www.xe.com/news
PART OF USD430-MILLION IMF SOFT LOAN TO PLUG DEFICIT
Finance Minister S.Bayartsogt has told Parliament that the IMF has given Mongolia a soft loan for
USD430 million, of which USD201 million will be in cash to plug the budget deficit. Part of the
money has arrived and the remaining USD110 million will be received by June 30. Replying to a
question on what measures are being taken to overcome the economic crisis, the Minister said a
program had been developed with IMF help and suggestions that meet the goals set by Parliament,
with some different measures included. This stabilization program will be implemented over 18
months.
Asked if bank interest rates would be reduced, Mr. Bayartsogt said the Government did not have the
power to take that decision.
Source: Ardiin Erkh
ELBEGDORJ’S PRIORITY IS TO REASSURE FOREIGN INVESTORS
Mr. Ts.Sukhbaatar, Foreign Relations Secretary of the Democratic Party, has said that President-
elect Ts.Elbegdorj plans to meet with foreign investors immediately after assuming office. He has
noted the concern expressed in foreign media about his likely position on foreign investors, some of
whom have also expressed their personal worries. The new President is also likely to grant
interviews to foreign TV channels to reassure foreign investors that everything will be done under
the law. He will tell them that Mongolia guarantees them help and safety once an agreement is
signed.

8. Asked if the real reasons behind MPs’ refusal to approve the draft investment agreement for Oyu
Tolgoi were corruption and disagreement between groups, and not their concern for national
interests, Mr. Sukhbaatar said he also felt that way, but foreign investors prefer to blame the
opposition for the delay. He said Mr. Elbegdorj will put an end to the present practice of groups
with their own political and economic interests pulling strings through the working group.
Asked if Russian interest in mining will grow less now, Mr. Sukhbaatar said Russian interest in
Mongolia was a fact of life and was welcome. However, Russia has to understand that putting too
much trust in one individual may not be very productive. “Our other neighbor China has good and
equal ties with all political forces in Mongolia,” he said.
Source: en.News.mn
PUTIN’S GLOBAL STRATEGY BEST SEEN IN MONGOLIA
These days Russian Prime Minister Vladimir Putin seems content to let President Medvedev do the
talking about high-tech development. Meanwhile, he focuses on the "core business" of Russia Inc.:
multi-billion dollar projects in commodities and energy control. The true Russian agenda is most
transparent in faraway Mongolia. Strategically squeezed between China and Russia, it has been
dominated by both nations in the past. Today, the pro-American, democratic republic finds itself
deluged by visits from senior Russian officials, including Mr. Putin himself.
Mr. Putin jetted into Mongolia on May 13. He spent six hours pressing officials for a number of deals
in uranium, copper, gold and coal. All these commodities are expected to be in high demand in the
neighboring Asian markets. The government-owned Rosatom hopes to grab Mongolia's massive
uranium reserves. The key is the railroads, controlled by Moscow since the times of Soviet
hegemony there.
Read more…
Russian Railroads (RZhD), a state-owned mega-company, dominates Mongolian rail through a joint
venture. It is offering Mongolia a railway modernization project. Part of the project includes
building a new line that would ensure access to natural resources in the Gobi desert and the
uranium-rich northeast, boosting Russia's grip on nuclear fuel supplies.
The railroad deal would also give Russia development licenses for two of Mongolia's largest mineral
fields: the Tavan Tolgoi coal deposit and the Oyu Tolgoi gold and copper field. The latter is
problematic, however. The Mongolian government has already signed a contract promising Oyu
Tolgoi to Canadian company Ivanhoe and Rio Tinto, the London-based natural resources giant.`
And there's another fly in the ointment. The Mongolian railways are eligible to receive USD300
million for capital improvements from the U.S. government's Millenium Challenge Corp. (MCC). The
Russians have ordered the Mongolians to reject MCC funds - lest it comes with strings that might tie
up their own plans. The Obama administration faces a difficult choice: to allow the Mongols to
redirect the MCC funds to other projects, or cede strategic initiative to Russia.
Russian government-connected companies are preparing other major projects in Mongolia as well. A
slew of Russian firms - Alexei Mordashov's Severstal, Oleg Deripaska's Basic Element, Victor
Vexelberg's Renova, Alisher Usmanov's Metalloinvest, and state-owned Russian Technologies - a
weapons exporter - have their eyes on Oyu Tolgoi and other deposits.
Source: The Washington Times (www.washingtontimes.com)
WASHINGTON MEETING PLEDGES TO DEVELOP U.S.-MONGOLIAN TRADE RELATIONS
At their meeting in Washington D.C. on June 8, both U.S. Commerce Secretary Gary Locke and
Mongolia's Minister of Foreign Relations and Trade Sukhbaatar Batbold pledged to continue
developing U.S.-Mongolian trade and economic relations. "The Commerce Department looks forward
to working with Mongolia's Ministry to further strengthen our commercial ties," Secretary Locke
said. Mr. Batbold expressed Mongolia’s interest in establishing a free trade agreement with the USA.

9. The meeting decided to establish a transparency agreement, considered essential to motivate
investors. It also agreed to organize forums, workshops and seminars, like the USA-Mongolia
business forum, whose meeting Mr. Batbold later attended. Mr. Locke urged the Mongolian
Government to help American companies in the country, at the same time emphasizing that they
should strictly adhere to environment standards.
Source: Montsame
ASSET MANAGER PROBES INVESTMENT OPPORTUNITIES IN MONGOLIA
Executive Chairman of Templeton Asset Management Mark Mobius said during a recent fact-finding
trip to Ulaanbaatar that Mongolia’s banking, cashmere and mining sectors offer potential
investment opportunities, but the Government needs to improve the overall regulatory
environment. Mr. Mobius felt the delay in reaching a deal on Oyu Tolgoi added to the uncertainty
among investors in other sectors as well.
“They have to have a basic foreign investment structure in place so that agreements can be made
and be honored without having to go back to the authorities. It’s not rocket science,” Mr. Mobius,
who manages roughly USD20 billion in emerging market assets, said in an interview. Double-digit
interest rates and an inevitable consolidation mean Mongolia’s banks could make good private
equity investments.
Export-oriented minerals projects present another opportunity, because they would not be subject
to domestic price controls, Mr. Mobius said. Most feasible would be those close to the Chinese
border for which infrastructure is already in place or could be completed relatively quickly. He
declined to give details on what types of mineral investments he was looking at.
Read more…
A third potential area is cashmere, particularly companies that work with big foreign companies
downstream from the production chain for export. With such a small population, the domestic
consumer market does not hold much potential. “It has to be oriented towards export, at this stage
of the game anyway,” he said.
Templeton, which is part of Franklin Resources Inc, would currently be limited to private equity
investments or buying the shares of Mongolian companies listed overseas, because current rules on
setting up custodian banks would make it impossible to invest in domestically listed firms, Mr.
Mobius added.
Source: guardian.co.uk
BUILDERS ASSAIL BUREAUCRACY, CORRUPTION
A meeting last week to discuss how building regulations can be simplified turned into an exchange
of charges between construction companies and government organizations hurling accusations at
each other. At present, any construction can begin only after the builder has obtained permission
from 144 different government departments. The companies say appointments take time to be
granted and most of the 144 signatures are given only after money changes hands. The whole
process can take up to a whole year. During this period the prices of construction materials rise so
that the original estimates have to be revised. Customers accuse the builder of greed and
dishonesty, not knowing how the system works.
While the companies claimed they had all paid large sums of money to get their work done, the
government officials did not admit they had taken any of it. Instead, they attributed the delay to
the companies usually submitting false documents and using substandard material. Both called for
extensive checks.
A representative of the builders said quite a few of the 144 permissions are from departments that
have no relevance to building or buying a house. He also said the inspectors should halt work during
construction if they have any complaint and not refuse a certificate after the whole work was over.
Source: en.News.mn
COMMERCIAL BANKS GIVING APARTMENT LOANS, WITH CONDITIONS
MNT 500 billion is reportedly blocked in the construction sector where work on 170 complexes with
11,436 apartments has been halted for lack of adequate financing. The situation can improve only

10. when commercial banks begin lending on a large scale, but this is unlikely to happen any time soon.
Golomt Bank is giving loans up to MNT120 million to people who buy apartments from four
companies of its choice and pay 40 percent of the total price in advance. The loans carry 2 percent
interest and have to be repaid in 10 years. Trade and Development Bank has strict criteria and is
lending up to MNT80 million.
Read more…
Xac Bank entertains applications only from those who have worked for any organization for at least
two years and lends up to USD25,000 to those who have already paid 50% of the apartment prices.
The interest rate is 1.63-1.29 percent for USD loans depending on its size and a flat 2.3 percent for
MNT loans.
Mongol Shuudan Bank has an agreement with three building companies. People who buy from them
after paying 50 percent of the price in advance are eligible for loans with 1.9 percent interest
repayable in 8 years. Khan Bank is giving loans repayable in 10 years with 1.8 percent interest to
those who make a 30 percent advance payment to any of 10 designated companies which have
agreements with the bank.
Source: Ardiin Erkh
GOVERNMENT NEEDS MNT20 BILLION FOR HERDERS
The Head of the Standing Committee on Nature, Food and Agriculture, Batj.Batbayar, and MPs
Su.Batbold and D.Baldan-Ochir have explained the Government’s policy on herders. The policy has
three main directions. It seeks to ensure a comfortable standard of life for herders and improve
their working conditions and access to social security and health services. It also wants to develop
the entire livestock industry and improve commodity trading conditions. Third, it wishes herders to
be part of a civil society. MNT18-20 billion will be needed from the state budget to implement the
policy. The committee feels it is possible to raise the amount from domestic and foreign
investments.
The policy will be implemented in two stages. During the first, from 2009 to 2015, it is planned to
raise the income of herders by no less than 50 percent, enroll no less than 50 percent of herders in
social insurance schemes, and have no less than 70 percent under health insurance cover. During
the second stage, between 2015 and 2020, their income will be raised by no less than 80 percent
and there will be full enrollment in insurance programs.
Most herders with up to 100 heads of livestock have a yearly income of MNT1.4-1.5 million, those
with 100-500 MNT4 million, and those with more than 1,000 MNT13 million. There are 171,000
herder families in Mongolia. About 36 percent of them have fewer than 100 heads of livestock.
Source: Undeshnii Shuudan
TAX WAIVER ON CASHMERE EXPORT MAY BE COUNTERPRODUCTIVE
Parliament is likely to approve the proposal initiated by the President to waive the MNT4,000 per
kilogram tax on cashmere exports. The relevant Standing Committees have already approved the
draft. Many, however, fear that instead of helping herders, the measure will end up allowing
traders, particularly the Chinese among them, to make more money.
MP D.Gankhuyag feels even if the law is approved, it is now too late to make any difference to
herders this year. This is because the cashmere is gathered between mid-March and June 10 and
most of it has already been sold to traders. Also, export of raw livestock commodities has been
severely restricted since 2005. A total of 24 Chinese companies wash cashmere in Mongolia because
of this. “What we are doing is wrong because waiving the tax on washed cashmere will in no way
benefit the primary producer. Instead we should support the setting up of domestic factories and
make better finished cashmere products. I am sure the law will result in a fall in cashmere prices,
instead of raising it,” Mr. Gankhuyag said.
Read more…
Mongolia produces 6,000 tons of cashmere a year but only 7-8 percent of it is used by local
manufacturers. If they can utilize 50 percent of the cashmere from herders, things worth USD400-
500 million can be produced.

11. MP Ts.Sedvaanchig thinks the law should apply for a specified period of time. “I assume the goal is
to help the herders during these hard times and particularly to help them pay back bank loans. I
suggest the law should be valid until the crisis is fully over. It concerns the livelihood of 360,000
citizens in the countryside and 10,000 workers in cashmere factories,” he said.
The Director of Goyo Company, S.Enkh-Amgalan, has said he hopes the Government will not make a
law that will be against the interests of domestic manufacturers.
Source: www.news.mn
GOVERNMENT SANCTIONS FUNDS FOR MON-ATOM
The Government last week decided to provide MNT100 million to Mon-Atom LLC to meet its
expenses, almost four months after the State-owned company was established on February 11. Mon-
Atom does not have its own office, and has not paid any salary to its staff. This has been quite
inconvenient as many foreign companies, including RosAtom from Russia and Mitsui and Marubeni
from Japan, have expressed interest to cooperate with the company in uranium exploration,
production and refining, and have visited Mongolia to hold talks with Mon-Atom.
Source: Onoodor
OVER 20% FALL IN BOTH RETAIL AND WHOLESALE TRADE
Total trading from January to May has been recorded as worth MNT359.1 billion, MNT106.1 billion
or 22.8 percent less than in the same period last year. There was little difference in the percentage
of the fall in the retail and the wholesale sectors, according to figures released by the National
Statistical Organization.
Wholesale traders earning more than MNT2 billion in a year are numerically only one percent of all
trading companies, but they account for 70 percent of the total volume of trade. Their business
was down by MNT89.5 billion or 23.1 percent, while retail sales fell by MNT16.3 billion or 21.2
percent.
Source: Ardiin Erkh
DOWNTURN SEEMS TO LOSE MOMENTUM
Several indicators seem to show that the economic downturn in Mongolia has begun to lose
momentum, but it is far too early to celebrate. Also some of them are contradictory, thus blurring
the picture. There is more unemployment and the financial sector continues to cause concern. Real
GDP fell 4.2 percent yoy in the first quarter of 2009, mainly because of a contraction in industry
and construction, but services and agriculture were positive. Since then industrial production has
stabilized, but manufacturing is yet to pick up. Unemployment rose 3.0 percent in April, while real
wages in the informal sector fell by about 60 percent.
The fiscal deficit has started to stabilize. Actual revenue in the year to April was only 1.3 percent
lower than estimated, while expenditure declined by 3.6 percent yoy. There was a slight increase
in current expenditure, mainly because of increased expenditure on wages and salaries, while less
was needed for subsidies and transfers. Domestic investment was cut sharply.
Read more…
The trade deficit is gradually narrowing. Imports have fallen mainly as a result of the domestic
slowdown, lower global energy and food prices, and the exchange rate depreciation. The multiple
exchange rates that prevailed after November 2008 have converged, following corrective actions
taken by the Central Bank. MNT deposits in banks have been rising fast while those in foreign
currencies have fallen in consecutive months.
However, the increase in the number and amount of non-performing loans causes concern. The
general deterioration of loan quality means that on the whole there continue to be significant risks
in going forward.
Consumer price rise has slowed and the inflation rate has decelerated significantly, but this is
largely because the domestic economy has slowed down drastically.
Source: www.worldbank.org.mn

12. SURVEY REVEALS POPULAR PERCEPTIONS OF ECONOMY
The consumer belief index emerging out of a survey of 1,100 households by the Open Society Forum
and the School of Economic Studies of National University of Mongolia has revealed popular
perceptions of current economic conditions and future possibilities. The midway mark is 50;
anything above that on the index is considered good and below that, bad. In these terms, the
Ulaanbaatar city consumer belief index stands at 36.7 points. The current situation index is 12.9
which shows that an overwhelming number of households are unhappy with present economic
conditions. The redeeming feature is the expectancy index at 52.6 showing that consumers hope
the economy will improve before long. Asked about real estate prices, 48.9% of respondents said
they will fall, while 21.4% said they will go up within a year. The survey also found 57.2% of the
people in Ulaanbaatar city qualified as poor and 11.5% as extremely poor.
Source: Onoodor
BEES FROM RUSSIAN REGION START ARRIVING
Mongolia has begun importing honey-producing bees from Bashkiria in Russia. Altogether some 500
colonies each with a queen bee will come from there and Mongolian apiarists are to be trained by
experts from the Bashkiria State Agrarian University.
The Shaamar Tokhoi Company is responsible for the imports worth RUB ten million. Tests have
found that this breed of bees can successfully adapt to Mongolian conditions.
Source: Montsame
AUDIT DIRECTOR COMPLAINS OF CURBS
The Standing Committee on the Budget discussed on Tuesday a report from the Director of the
National Audit Authority complaining of constraints put in the way of his office functioning freely.
He says that the budget cuts imposed by Parliament deny him opportunities to audit accounts in
Mongolian embassies abroad. He also asks for more staff given the work load and the time
constraints.
Source: Onoodor
PROPOSAL TO FINE PLASTIC BAG IMPORTERS REJECTED
Parliament has rejected a proposal to impose a fine of MNT1 million on individuals importing plastic
bags. For companies this was proposed to be MNT10 million. MPs cutting across party lines felt this
was not the time to put common people under more hardship.
Source: www.news.mn
ULAANBAATAR WOMAN STUDIES CREDIT UNIONS IN CANADA
Ms. Buyanbat Khashbaatar, a 35-year-old mother of one, is in Canada for a month to work at the
Peterborough Credit Union through a women’s mentoring program, learning how to improve a credit
union she founded in 2005, which now has 40 members and five employees. Over seven years, 111
managers from credit unions in 16 countries have used a Canadian Co-operative Association
women’s program called Giving Credit Where Credit is Due to change governance, human resources
and loan policies as well as to reduce delinquency.
Ms. Khashbaatar studied economics at Belarus State University and then wanted to open a credit
union because there are few banks in Mongolia and it can be difficult for people to get loans. She
co-founded the Lkhabuyan Savings and Credit Cooperative in Ulaanbaatar to make it easier for
people to get loans, mostly to start their own business or buy luxury items such as TVs. The average
age of her clients is 26 and most borrow more than they save.
Source: www.thepeterboroughexaminer.com

13. POLITICS
MINISTER ASKS USA TO REDIRECT FUNDS NIXED BY RUSSIA
Foreign Relations and Trade Minister Sukhbaatar Batbold has met with top US officials on
redirecting USD188 million in aid after Russia vetoed US help to improve its rail network. There has
been no official comment from either side on any decision that might have been made. Mr. Batbold
said he was asking US Secretary of State Hillary Clinton "to kindly accept this situation and to
accept the circumstances and to redirect this fund for another project". Russian Prime Minister
Vladimir Putin last month pledged Moscow's own aid to improve Mongolia's railways.
Under the Millennium Challenge Corporation aid program, which rewards countries that liberalize
their political and economic systems, Mongolia was set to receive USD188 million in US funding to
modernize its aging rail infrastructure. Russia, however, objected to Mongolia taking the funding.
The Ulaanbaatar Railway Company is a joint venture between the Russian and Mongolian
governments, and if the Russian side does not agree to something, the Mongolian side cannot force
them to accept it, Mr. Batbold told a gathering at the Hudson Institute, a Washington think-tank.
He explained that Mongolia had no choice but to drop the US grant "since it was really a
government-to-government joint venture and if one party is not agreeing to accept the support
from the third party it becomes a real issue," he said. "We need to agree with Russia on this, as it's
a 50-50 joint venture. Therefore, we have to ask the U.S. government… to kindly accept this
situation and to understand the circumstances and to redirect the funding to other projects."
MCC officials, similarly asked by Mr. Batbold to transfer the rejected money to other projects, said
the Board of Governors would take a decision when they meet in September.
Read more…
His talk at the Hudson Institute was devoted to explaining Mongolia's relations with Russia and
China and its 'Third Neighbor' relations with the USA and Japan. Mr. Batbold highlighted how
Mongolia's ties with Russia have strengthened since the collapse of the Soviet Union. Trade between
the two countries, which reached USD800 million in 1990, fell to USD200 million in 1994, but has
since rebounded and last year topped USD1 billion. The trade is imbalanced, however, because
Mongolia depends heavily on Russia for energy, Mr. Batbold said. "So we pay a lot of attention to
our trade and investment relations with Russia."
The Minister spent relatively little time discussing Mongolia's relations with Washington. But he did
describe the USA as his country's "main partner" in the defense sector, and highlighted the annual
joint military exercises between the two countries. Mongolia's troops have served in Iraq and
Mongolia is also "ready to contribute to operations" in Afghanistan, where a handful of Mongolian
military trainers have already been serving, he said. He added that Ulaanbaatar believes that the
Shanghai Cooperation Organization, of which Mongolia is an observer, holds more promise as an
engine of economic development and cooperation than as a military bloc.
In comments prior to their meeting at the State Department, Secretary Clinton said the USA is
“committed to supporting the government and people of Mongolia as they seek assistance to
develop, as they continue their democratization, and as they reach out to the rest of the world”.
On his part, Mr. Batbold said Mongolia was determined to deepen and expand its relations with the
USA on the basis of “comprehensive partnership, based on our shared values and common strategic
interests”. The people of Mongolia, he said, have “always been grateful to the USA for continued
support of our democratic reforms”.
Source: AFP, www.Eurasianet.org, secretrayclinton.wordpress.com, Montsame
MONGOLIA OFFERS TO “ARRANGE AND HOST” U.S.-N. KOREA MEETING
Mongolia has offered to mediate between the USA and North Korea because of its good ties with
both countries, and Secretary of State Hillary Rodham Clinton has expressed interest. Mongolian
Foreign Minister Sukhbaatar Batbold said his country could arrange and host a meeting between
U.S. and North Korean officials to discuss any issues they want. "Mongolia has kept very close ties
with North Korea" since Mongolia was a communist state during the Cold War, the minister said. "We
have organized meetings between North Korea and Japan and would be happy to continue in that
direction."
He said he discussed the idea with Mrs. Clinton during their meeting on Tuesday and "she was quite
interested" in it. "We'd like to keep this channel warm and to make contributions to this process,"

14. he said. "We would be in a position to provide the contact and avenue for meetings." State
Department officials declined to comment.
Read more…
Mongolia strives to maintain good relations with its two powerful neighbors, but it also wants to be
friendly with Washington and benefit from U.S. foreign aid. Mr. Batbold said the Obama
administration could soon approve tens of millions of dollars of aid to his country to help it deal
with the effects of the global recession. He also wants the U.S. to contribute to a program for
Mongolian students to study in the U.S. to complement the Fulbright scholarships.
When it comes to sensitive issues with China and Russia, such as democracy and human rights,
Mongolia walks a very fine line, the Minister said. "They understand that Mongolia is a free country"
and can invite the Dalai Lama over Beijing's objections, although those visits are private and formal
meetings with government officials do not take place, Mr. Batbold said. At the same time, Mongolia
does not address China's political practices, many of which have been criticized by the West, and
instead "focuses on trade and economic relations," he said.
There are also issues that are apparent taboos with North Korea, such as refugees who flee to
Mongolia via China. Those numbers have reached several hundred over the last several years, but
the matter "has not been discussed" with Pyongyang, Mr. Batbold said. He added that no refugees
have been deported back to the North, because "as a democratic country, we respect their rights."
Many have been allowed to go to South Korea, if they wish so, through the U.N. High Commissioner
for Refugees, he said.
Source: www.washingtontimes.com
MEDVEDEV WANTS MEETING WITH ELBEGDORJ
In a congratulatory message to Mr. Ts. Elbegdorj Russian President Dmitry Medvedev has expressed
the hope that “Mongolia’s policy of consolidating its strategic partnership and good-neighborly
relations with Russia will be further promoted under your leadership”. Saying that he was “ready to
establish working business contacts with you”, Mr. Medvedev invited Mr. Elbegdorj to attend the
meeting of the Shanghai Cooperation Organization heads of state and of observer nations to be held
at Yekaterinburg on June 15 and 16. “I believe we shall have an opportunity to arrange our first
personal meeting there,” he said.
Mr. Elbegdorj is expected to assume office on June 18.
Source: ITAR-TASS
ELBEGDORJ TO TAKE OATH ON JUNE 18 AT 12.06 P.M.
President-elect Ts.Elbegdorj will be sworn in at 12:06 p.m. on June 18. The time has no astrological
significance but has been chosen as the Democratic Party was established on December 6, or 12.06,
in 2000. Its telephone number is also 1206.
In a break from tradition, the new President will make his first speech to the general people, from
before the statue of Chinggis Khaan in Sukhbaatar Square. So far a new President first addressed
Parliament members. Two other desires of Mr. Elbegdorj about the ceremony are unlikely to be
fulfilled as the MPRP does not favor any departure from convention. The President-elect wanted to
take the oath at Sukhbaatar Square and not in the Parliament Hall. He also wanted to wear a
business suit on the occasion, and not the national dress.
Source: Ardiin Erkh
ATTENTION SHIFTS TO CHINGELTEI BY-ELECTION
When Mr. Ts.Elbegdorj vacates the Chingeltei district seat that elected him to Parliament in 2008,
it will be the third time that a by-election would be held as a new President takes office. When
MPRP candidate N.Bagabandi took over as President in 2001, his seat in Zavkhan was won by the
present President, Mr. N.Enkhbayar. Even as a first-time MP he took a leading role in forcing the
Motherland-Democracy coalition government led by Mr. M.Enkhsaikhan out of office. His party MPRP
was at that time in the opposition.
In 2004 Mr. Enkhbayar, now an MP from Bayangol and Speaker of Parliament, was himself

15. nominated as MPRP’s presidential candidate. He won and the DP chose Mr. Elbegdorj to contest the
by-election at Bayangol. After much political negotiation City Mayor M.Enkhbold of the MPRP
instead came to Parliament from there.
Now another President will relinquish his parliamentary seat and all eyes are on who will be
nominated by the two major parties. The MPRP is almost certain to put up President Enkhbayar as
its candidate, opening up the possibility that he will replace as MP the man who replaced him as
President. A front runner for the DP nomination is Mrs. R.Burmaa, head of Voters’ Education
Center. She has been a General Election Committee member and was a candidate at last year’s
parliamentary election. She lost, but some of her several complaints of how the rules were broken
have been vindicated by courts.
Source: en.News.mn
GLOBAL CORRUPTION SURVEY FINDS GROWING DISTRUST OF BUSINESS
The private sector uses bribes to influence public policy, laws and regulations, believe over half of
those polled for the 2009 Global Corruption Barometer. The Barometer, a global public opinion
survey released earlier this month by Transparency International (TI), also found that half of the
respondents expressed a willingness to pay a premium to buy from corruption-free companies.
The Barometer, with more than 73,000 respondents drawn from 69 countries and territories around
the world, including Mongolia, also found the poor to be disproportionately burdened by bribe
demands. And it found that government efforts to combat corruption are generally perceived as
ineffective, in addition to high levels of perceived corruption in political parties, parliaments and
the civil service.
Echoing the findings of past editions of the Barometer, 68 percent of respondents saw political
parties as corrupt, and 29 percent saw them as the single most corrupt institution in their country.
The civil service and parliament trailed political parties, perceived by 63 and 60 percent of
respondents respectively as being corrupt. The media, while not perceived as clean, scored best
with just over 40 percent of respondents labeling the sector as corrupt and with only 6 percent
seeing it as the single most corrupt domestic institution.
Source: www.transparency.org
ABANDONED GARBAGE DUMP PROVIDED LIVING FOR SOME
The burial costs of the Ulaanchuluut garbage dump are expected to be MNT350 million. All the
scrap iron in the dump has been taken away and the rest of the garbage will be covered with 40-60
centimeters of soil. After some time when the toxicity in the waste is absorbed in the earth a park
will be built at the site. The 19-acre area was demarcated as a dump in 1975 and ended up
collecting over two million tons of trash. Ulaanbaatar produces 1,000 tons of trash a day.
Not everybody is happy that the dump will disappear. For years it has offered scraps of food for
many poor people. Some have been making a regular living by picking cans, and glass and plastic
bottles from the dump. One woman says she can make MNT20,000 or more on certain days. She said
there are people who even bought a car with money earned from digging the trash. As Ulaanchuluut
gets ready to go under the ground, more than 250 people are shifting ground to Naran, which will
be the new dump of the city.
Source: www.news.mn
DEVELOPMENT PLAN FOR ULANBAATAR SUBMITTED
The Japan International Cooperation Agency (JICA) has submitted to the Government a
development plan for Ulaanbaatar prepared after consultation with specialists of the city
administration. Work on the plan began in March 2007. The study identifies population density in
certain areas of the city as a major problem and recommends some measures to more evenly
distribute the concentration.
For example, in an effort to decentralize the ger areas it proposes construction of 103,000 new
apartments and extension and renovation of 97,000 existing housing units before 2030. It also
recommends a light-rail-based public transport system to make commuting easier. Altogether 17
specific projects in 14 areas have been suggested.

16. Source: Montsame
MPs DEBATE EAVESDROPPING BEHIND CLOSED DOORS
Parliament is discussing the draft law to allow police and intelligence organizations to intercept cell
phone conversations to prevent crime. The discussions are being held behind closed doors because
of the sensitive nature of the issue. Mr. E.Munkh-Ochir feels police can be granted the access only
under certain conditions and only if serious crimes such as human trafficking or trade in drugs are
involved.
The Director of the General Police Authority, Mr. D.Sandag-Ochir, assured MPs the provision, if
adopted, would not be misused as decisions to eavesdrop would be taken only at the highest level.
Mr. U.Enkhtur, head of the Mongolian Investigation Department, said criminals are adopting more
and more sophisticated methods, and “we cannot just sit here not using modern technological
aids”.
Source: en.News.mn
PRESIDENT PARDONS CHILDREN AND WOMEN
President N.Enkhbayar has issued a pardon to the nine children and four women who are in jail in
connection with the July 1 events of last year. He said, “I hope those children and their parents will
ensure that the children’s future is made bright.”
Source: Odriin sonin
NEW ULAANBAATAR-BEIJING TRAIN FOR TOURISTS
An agreement has been signed between China Railway Travel Service, Erlianhot China Youth Travel
Service and Mongolia Travel Service to run a new monthly train service for tourists between
Ulaanbaatar and Beijing. The first train is scheduled to leave on July 21 with 400 passengers on
board. The initial period of the agreement is for one year.
Source: Mongolia-web.com
12 NATIONALS OF SIX COUNTRIES DEPORTED IN MAY
Even as cases of illegal entry and overstay without proper documents become fewer than last
year’s, the Office of Immigration, Naturalization and Foreign Citizens took steps in May against 101
nationals of 15 different countries for violating residency, transit, labor and visa regulations. Most
of the cases were of staying on after expiry of visa, unauthorized employment and failure to
register as a resident.
The Agency makes its own inquiries and also receives information from the public about possible
violation of law by organizations and individuals. Of the 101 people caught in May, 12 from six
countries have been deported and will not be allowed entry into Mongolia in future.
Source: Mongolia-web.com
POLAND TO SHUT DOWN EMBASSY
Poland is to shut down its Embassy in Ulaanbaatar. All consular work will be handled by its Embassy
in Beijing after June 16.
Source: Undesnii Shuudan
VISA SECTION IN GERMAN EMBASSY SHIFTS FOR SOME TIME
Extensive work on the German Embassy building in Ulaanbaatar will start on June 19. The Consular
section, where all visa matters are handled, will be moving to the French Embassy for the duration
of the work. Embassy officials have said work on visas may be delayed because of the move.
Source: Zunii Medee

17. SPONSORS
ECONOMIC INDICATORS
MSE WEEKLY REVIEW
For the week ended June 05, 2009, trading activity on the Mongolian Stock Exchange (MSE) totaled
468,800 shares with 17 companies traded. Total market value of transactions was MNT 311.4
million. Total market capitalization of the 358 stock companies listed on the MSE was MNT 453.4
billion, and decreased by MNT 1.1 billion or 0.24% from the previous week.
The Top-20 Index decreased by 0.93 points or 0.02% compared to the previous week, closing at
4,719.57 points. The MSE Composite Index decreased by 4.01 points or 0.16 % compared to the
previous week, closing at 2,430.12 points.
Most active stocks traded were: Tuul songino usnii nuuts (360,100 shares), Khuh gan (69,400
shares), APU (24,200 shares), and UID (7,000 shares).
Major share price percentage gainers were: Zoos goyol (14.3%), Genco tur buro (5.9%), APU (4.0%),
UID (2.9%), and Mogoin gol (2.9%). Major share price percentage losers were: Tavan tolgoi (10.4%),
Spirt Bal Buram (3.5%), and NIC (2.1%).
INFLATION
Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)]
Year 2007 *15.1% [source: NSOM]
Year 2008 *22.1% [source: NSOM]

18. May 31, 2009 *8.0% [source: NSOM]
* year over year (yoy)
CURRENCY RATES – June 11, 2009
Currency name Currency Rate
US dollars USD 1427.24
Euro EUR 2016.19
Japanese yen JPY 14.62
British pound GBP 2343.24
Hong Kong dollar HKD 184.13
Chinese yuan CNY 208.88
Russian ruble RUB 46.22
South Korean won KRW 1.14
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.