BUSINESS COUNCIL of MONGOLIA NewsWire

www.bcmongolia.org info@bcmongolia.org

Issue 436 – July 22, 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:

• Oyu Tolgoi still expects to reach 2016 goals despite slight declines • KEXIM to provide $44.6 mn to Mongolia • SoftBank forms renewables alliance in Mongolia with KEPCO • Sharp, partners to build 10-MW PV park in Mongolia • Shina Asia, SEPCO to build energy plant to power western provinces • Mongolian Mining continues debt restructuring talks • Did the Erdenet deal out-of-left-field cost the Democrats the election? • State Bank rolls out debt card for tourists • Emart opens first store in Mongolia • IMAX movie theater to open in Mongolia • Mongolian media streaming services launches • Fashion designer Tuvshinzaya targets Chinese market • Taiwan, Mongolia universities to strengthen cooperation • Wiinsway proposes name change to e-commodities holdings • S. Korean president attends business forum • BCM hosts business delegation to Singapore • Udriin Sonin named Mongolia’s most popular newspaper

Economy:

• Mongol Bank: FX Auctions, 1-Week Bills • H1 2016 Coal trade via Gashuunsukhat expands 23% • China expands economic corridor with Mongolia, Russia • KEA partners with Mongolia for energy efficiency, renewable energy • IDA to provide $20 mn loan to Mongolia • Russia stalls China's $1 bn hydropower loan • Czech Republic presents 1:50,000 scale geological maps • Supporting Export Development for SMEs • MPP to introduce investor, miner-friendly policies • Belt & Road Initiative expected to boost Mongolia's development • Youths’ role at ASEM • ‘Marmot’ plague vaccination underway • Red Cross sends aid to flood-stricken Ulgii • Drinking water restored at Ulgii • Northern Michigan University group researches biodiversity in Mongolia • Przewalski's mares fly from Prague Zoo to Mongolia • Mongolian child contortionists stretch for international success • Gold’s Run Could Hit Roadblocks

• What’s in a category?—EDITORIAL • Mongolia's nesting program helps save the prized saker falcon—VIDEO

Politics:

• Mongolia Picks Former Finance Minister to Lead New Government • New PM appoints 13ministers for new government structure • Bayartsaikhan Nadmid appointed as central bank governor • Parliament appoints standing committee members • Parliament confirms anti-corruption agency head appointment • UB leaders appointed • China writes off Mongolia’s $18 mn debt • S. Korea, Mongolia Agree to Pursue EPA • Japan, Mongolia agree to boost economic ties • Kazakhstan, Mongolia mull expansion of mutually beneficial co-op • Mongolian Peacekeepers awarded NATO medal • Former minister under investigation for corruption returns after 6 months

abroad • Battulga, Ganbat appeal to court against MPP win at 2016 election • Bayanzurkh land official arrested for graft • Former president urges N. Korea to give up nukes for economic

development • Asia Foundation releases 2016 SPEAK survey • U.S. asks other nations to curb use of North Korean workers • Mongolia’s election – a protest vote for the good—EDITORIAL

BCM Updates:

• Announcements • Advocacy Notes • Working Groups News • Member-to-Member Special Offers & Benefits • Websites Update - Presentations, Mongolia Reports, Interviews

Economic Indicators:

• Inflation • Central Bank Policy Rate • Currency Rates

*Click on titles above to link to articles.

SPONSORS

Khan Bank Wagner Asia Automotive

Mongolian Business Database International SOS

BUSINESS OYU TOLGOI STILL EXPECTS TO REACH 2016 GOALS DESPITE SLIGHT DECLINES Copper and gold production is on the decline at the Oyu Tolgoi copper mine but is still expected to meet annual targets, according to a 19 July statement from the mining unit. The mining unit, Oyu Tolgoi LLC, will be processing lower-grade ore from the open-pit mine while it waits on an underground mine that was delayed for two years but began construction in June. Copper and gold production fell 10.3 percent and 52 percent, respectively, in the second quarter from the first of this year, reflecting lower grades while concentrator throughput was broadly consistent between the two quarters. Average throughput was approximately 105,000 tons per day for the quarter. Concentrate sold in for the second quarter increased 6.7 percent over the first. Oyu Tolgoi is expected to produce 175,000 to 195,000 tonnes of copper in concentrates and 255,000 to 285,000 ounces of gold in concentrates for 2016.

Source: Montsame KEXIM TO PROVIDE $44.6 MN TO MONGOLIA State-run policy lender Export-Import Bank of Korea announced on 18 July that it will provide USD44.6 million to Mongolia to help upgrade its transport system. KEXIM said it will use USD25 million of its economic development cooperation fund to replace aging buses with new ones in Mongolia and use another USD19.6 million to build classrooms equipped with information and communications technology, and develop digital textbooks. The export credit agency said its projects in Mongolia could help South Korean firms expand their presence in the East Asian country.

Source: Korean Herald SOFTBANK FORMS RENEWABLES ALLIANCE IN MONGOLIA WITH KEPCO Japan’s SoftBank Group Corp. has signed a pact with Korea Electric Power Corp., or KEPCO, and Mongolian investment company Newcom LLC to co-develop and co-invest in renewable energy projects with the target of generation 10 gigawatts of power production in Mongolia. This new memorandum of understandingfrom 19 July calls for the three companies to work together primarily on wind and solar photovoltaic (PV) projects in Ulaanbaatar city, SoftBank announced in a statement on Tuesday.

Source: SeeNews SHARP, PARTNERS TO BUILD 10-MW PV PARK IN MONGOLIA Japanese company Sharp Corp. will work with Mongolia-based Solar Power International LLC and Shigemitsu Shoji Co. Ltd. for the construction of a 10 megawatt solar project in Darkhan, Mongolia. Construction works will begin later this month, Sharp said in a 19 July statement, while the park is to launch commercial operations in December. The plant is expected to generate 14,182 megawatts an hour in a year, which is enough to offset around 14,746 tons of carbon dioxide (CO2) emissions. Sharp will be the supplier of solar modules, mounting structures and other components, such as the inverters. The Japanese giant will also be in charge of the design and engineering services. The Japanese trading company Shigemitsu Shoji will support the joint

management and operation of the plant for the next 25 years. Source: SeeNews

SHINA ASIA, SEPCO TO BUILD ENERGY PLANT TO POWER WESTERN PROVINCES Construction of the 100 megawatt energy plant which is expected to power the western half of the country, is scheduled to launch in August. Construction is expected to span 30 months at Telmen Soum, Zavkhan Aimag by Shina Asia Group and Chinese construction firm SEPCO Corp and will run on coal mined from the Mogoi river.

Source: Udriin Sonin MONGOLIAN MINING CONTINUES DEBT RESTRUCTURING TALKS Mongolian Mining Corp. is continuing to progress negotiations with its creditors in relation to the potential debt restructuring, the Mongolia-focused miner said in a 8 July statement. The company has filed an application for the appointment of provisional liquidators over the company on a "soft touch" basis to assist in this process and to facilitate recognition of the debt restructuring in different jurisdictions (as appropriate), as well as a petition for the winding up of the company which is a necessary pre-cursor to facilitate the application, with the Grand Court of the Cayman Islands.

Source: etnet, Mongolian Mining Corp. DID THE ERDENET DEAL OUT-OF-LEFT-FIELD COST THE DEMOCRATS THE ELECTION? Controversy has swirled around the sale of Russia’s shares in the Erdenet copper mine, and it may have been the downfall of the Democratic Party government. Announced one day before the 29 June elections, the proposed sale of the 49 percent Russia-owned shares of Erdenet Mining Corp. and Mongolrostsvetment for USD500 million will be debated by parliament when it reconvenes. Columnist D. Jargalsaikhan (“Jargal de Facto”) asserts that last-minute popular anger with the transaction may have cost the ruling Democratic Party more than 20 seats. Cover Mongolia publisher Mogi Badral Bontoi wrote a similar thesis for the Nikkei Asian Review, where the called the Erdenet sale announcement the “ tipping point” for the Democrats before the elections. The buyer is the newly-formed Mongolian Copper Corporation, headed by 28-year-old Tsooj Purevtuvshin. He briefly worked previously as a legal adviser to the Trade and Development Bank of Mongolia LLC (TDB), which also provided partial financing for the sale.

Source: NAMBC STATE BANK ROLLS OUT DEBT CARD FOR TOURISTS The Mongolian government-owned State Bank LLC is rolling out its new “Travel Card,” allowing tourists to make transactions in the local tugrug currency. The card, which is only valid in Mongolia, will allow for payment as well as receive information on discounts provided at service centers.

Source: Mongolia.GoGo.mn EMART OPENS FIRST STORE IN MONGOLIA The South Korean discount retailer Emart will open its first store in Ulaanbaatar on 28 July as it continues to expand its presence in the global market. Emart, which is part part of the Shinsegae Group. It will be Mongolia’s largest discount store "Two to three stores will also be opened in Ulaanbaatar in the future to help local small and medium size firms expand exports to Mongolia," said Lee Gab-su, Emart’s chief executive Officer. The first Emart store in Mongolia will be operated by local retailer Sky Trading, a subsidiary of one of Mongolia's largest business groups Altai Holdings. Sky Trading covers 90 percent of the capital expenditure, while Emart covers 10 percent. Emart will receive loyalties in return for providing its brand, products and consulting services to the Mongolian retailer.

Source: Retail Analysis

IMAX MOVIE THEATER TO OPEN IN MONGOLIA Urgoo cinema’s opens its first IMAX Theater on 22 July at the Shangri-la Mall with the premier of Star Trek Beyond. Urgoo Cinemas is Mongolia’s first to partner with Canada’s IMAX Corp. for the extra-large, high-definition screens.

Source: News.mn MONGOLIAN MEDIA STREAMING SERVICES LAUNCHES A Mongolia-based website dubbed “Mongolia’s online cinema” has launched its streaming service, providing Mongolian-made television shows, short films and documentaries in high definition. MIYE.mn launched on 5 July to provide Mongolia-made media content here and abroad.

Source: Montsame FASHION DESIGNER TUVSHINZAYA TARGETS CHINESE MARKET Distinguished Mongolian fashion designer A. Tuvshinzaya has made her summer collection for sale in the Chinese market for the first time this month. Tuvshinzaya, who won the “Best Young Designer” award at the Goyol Festival, released her collection in China on 1 July. Her clothes are noted for their distinct traditional Mongolian styles and feature wide variety of traditional patterns.

Source: UB Post TAIWAN, MONGOLIA UNIVERSITIES TO STRENGTHEN COOPERATION Taipei National University of the Arts (TNUA) and Mongolian State University of Arts and Culture (MSUAC) signed a memorandum of understanding on 15 July in Ulaanbaatar to foster bilateral cooperation in cultural and arts education. TNUA and MSUAC will jointly organize forums on education, carry out programs on experimental education, engage in faculty and student exchanges, and host joint exhibitions of the arts, according to a statement issued by Taipei Trade and Economic Representative Office in Ulaanbaatar.

Source: Focus Taiwan WIINSWAY PROPOSES NAME CHANGE TO E-COMMODITIES HOLDINGS Winsway Enterprise Holdings Ltd. has proposed a change of its name to E-Commodities Holdings Ltd. to reflect its new business model of providing an integrated supply chain services model. Following the completion of the rights issue and the effectiveness of the restructuring, the group has came out of the financial difficulties, and has started to upgrade its business from traditional bulk commodities trading, such as the trading of seaborne coal, Mongolian coal, and petrochemical products.

Source: AA Stocks S. KOREAN PRESIDENT ATTENDS BUSINESS FORUM The arrival of South Korean President Park Geun-hye brought extra prestige to the Mongolia-South Korean business forum held in Ulaanbaatar on 18 July. About 190 representatives from South Korean businesses attended the forum last week. “Our two countries have broad capacity to counter-complement each other’s economy and widen the cooperation, she emphasized,” said Park, who arrived in Ulaanbaatar for the Asia-Europe Meeting held here last week.. South Korean business has been active in catering, hospitality, health care and technology, with new interest growing in renewable energy production. South Korea is Mongolia's fourth-largest partner for trade and the seventh larger for foreign investment.

Source: Montsame BCM HOSTS BUSINESS DELEGATION TO SINGAPORE The Business Council of Mongolia (BCM) sent a delegation of 13 businesspeople to Singapore to engage high-level business leaders their to tap into interests in investment

and partnerships with Mongolia. Erdenes Mongol LLC hosted a networking lunch with the Singapore Business Federation on 15 July. From 12 to 16 July, 11 Singaporean businesspeople were in Mongolia for the Asia-Europe Business forum held in conjunction with the Asia Europe Meeting summit held that same week.

Source: BCM UDRIIN SONIN NAMED MONGOLIA’S MOST POPULAR NEWSPAPER Udriin Sonin was named the most popular newspaper among 40 in Mongolia, with a 55 percent market share. Behind Udriin Sonin was Unuudur, with 242 percent market share in the city, followed by Zuunii Medee’s 19 percent and Zasgyn Gazryn Medee’s 5 percent. Udriin Sonin had a 40 percent market share in the provinces, according to the survey.

Source: Udriin Sonin ECONOMY MONGOL BANK: FX AUCTIONS, 1-WEEK BILLS The Bank of Mongolia on 21 July sold USD4 million and CN47.5 million at currency auctions for closing rates of MNT2,045 and MNT306.66, respectively. That day, it accepted commercial banks’ tugrik swap agreement offers for an equivalent of USD41.5 million. On 20 July, it issued MNT333 billion in one-week bills at a weighted interest of 10.5 percent.

Source Bank of Mongolia CHINA EXPANDS ECONOMIC CORRIDOR WITH MONGOLIA, RUSSIA Mongolian designer Ganchimeg never imagined her clothing store in Inner Mongolia's Erenhot City could be so popular that sometimes she is too busy to stop for a drink of water. "I came to China two years ago and have seen trade fairs and expos between the two countries rise. I met buyers at these events, and the orders just keep coming," Ganchimeg said. The former tour guide opened a business in China after Chinese tourists showed interest in Mongolian culture. They arrive in Mongolia on the the Erenhot-Ulan Bator-Ulan-Ude route, one of the main routes on the China-Mongolia-Russia economic corridor. The trilateral channel aims to boost transportation connectivity and economic cooperation in border regions. The economic corridor has also accelerated other cross-border transportation infrastructure projects, said Tumen-Tsetseg, a regional assessment researcher and professor with Inner Mongolia University.

Source: Xinhua KEA PARTNERS WITH MONGOLIA FOR ENERGY EFFICIENCY, RENEWABLE ENERGY The Korea Energy Agency (KEA) has signed a memorandum of understanding for cooperation in energy efficiency and a new renewable energy sector with the Mongolian Energy Development Center. The two institutions have agreed to set up policies and systems for the Mongolian energy sector, and the information related to energy and climate change. In addition, they plan to develop promising projects of reducing greenhouse gases. According to the KEA, Mongolia is working out plans to push ahead with an energy efficiency enhancement project across all the sectors of the country.

Source: Business Korea IDA TO PROVIDE $20 MN LOAN TO MONGOLIA The International Development Association (IDA) has committed to a USD20 million loan to Mongolia for a project aiming to boost Mongolia’s range of export products. The World Bank’s executive council has approved this loan, which will facilitate credit easing in all non-mining sectors, particularly fpr small-and medium-sized enterprises (SME’s).

Source: News.mn H1 2016 COAL TRADE VIA GASHUUNSUKHAT EXPANDS 23%

The delivery of coal to China through the Gashuunsukhait land port was up 23 percent for the first half of the year compared with the same period a year ago, according to Chinese data. China reported a total 4.3 million tons of coal exports received through the port. Meanwhile, stockpiles of coal there has fallen over the past two months. Industry analysts have explained the uptick as a consequences of China’s cut of exploration for new coal supplies. Chinese Customs reported that Mongolia had supplied 46 percent of China’s coking coal consumption as of May 2016. Revenue for coal was still down by USD20 million from last year, however, because of price declines.

Source: UB Post RUSSIA STALLS CHINA'S $1 BN HYDROPOWER LOAN Russia’s concern about water rights is holding up a USD1 billion loan package Mongolia is seeking from China to build a hydroelectric dam that would help the landlocked central Asian nation ensure independent supplies of energy. The proposed Egiin Gol dam would would harnessing the power of the Eg River, which flows into Russia’s Lake Baikal—the biggest freshwater body on Earth. China is withholding funds until a compromise can be found with Russia, according to Mongolian government documents. While Putin has ask for time to study the plans and the United Nations Educational, Scientific and Cultural Organization (UNESCO) has reported that the dam would impact endangered species of fish and birds, project manager Odkhuu Durzee said Russia’s environmental concerns are unfounded and the push back from Russia and UNESCO is politically motivated.

Source: Japan Times CZECH REPUBLIC PRESENTS 1:50,000 SCALE GEOLOGICAL MAPS A new geological map in the west has brought the the total mapped area of Mongolian territory to 40 percent. The Czech ambassador to Mongolia, Ivana Grollova, has presented the Mineral Resources Authority with a 1:50,000 scale geological maps. In 2013, the MRA and Czech Geological Survey established an agreement to geological maps of Munkhkhairkhan, Zereg and Mankhan Soums of Khuvd Aimag, as well as conduct general research funded by grant aid from the Czech government. According to the MRA, Mongolia now has geological maps for around 40 percent of its territory.

Source: UB Post SUPPORTING EXPORT DEVELOPMENT FOR SMES Mongolia’s efforts to expand and diversify its exports got a boost with a USD20 million credit from the International Development Agency (IDA), approved by World Bank’s board of executive directors. The credit finances the Export Development Project, which will support Mongolian small- and medium size enterprises (SMEs) in non-mining sectors to strengthen their export capabilities and expand access to export markets. The Project will provide training, matching grants and access to export credit insurance products for the SMEs. The Project aims to support economic diversification to agricultural-related products and have an important impact on employment and productivity in the country. In 2015, 87 percent of Mongolia’s total exports were in mining commodities, while cashmere products represented 5 percent of total exports. Export diversification is expected to boost productivity, overall entrepreneurship, and encourage new entrants to the market.

Source: World Bank MPP TO INTRODUCE INVESTOR, MINER-FRIENDLY POLICIES Mongolia's mining sector is set for a comeback from a few troubled years, after the country's investor-friendly opposition party regained control of parliament. The Mongolian People's Party (MPP) won an impressive 85 percent majority in parliamentary elections last

Wednesday, sweeping back to power following a four-year hiatus and ending the ruling Democratic Party's (DP) reign. “MPP's victory will reduce political friction within the parliament given that MPP appears to be an older party with stronger structure and discipline, as compared to DP, which is operated by several factions,” Citi economist Adrienne Lui commented in a note this week.

Source: CNBC, Global Risk Insights BELT & ROAD INITIATIVE EXPECTED TO BOOST MONGOLIA'S DEVELOPMENT More and more Mongolians think the China-proposed Belt and Road Initiative provides a good chance to boost the landlocked country's economy. In a recent interview with China Radio International, Mongolian Ambassador to China Tsedenjav Sukhbaatar said China is Mongolia's largest foreign investor and trading partner. “Mongolia will contribute to the implementation of the Belt and Road Initiative” and “will also greatly benefit from the increased trade turnover and good shipment,” he said. Mongolia boasts 73 million heads of livestock farmed by about 200,000 herder households in the vast countryside. Currently, the country's agricultural products lack market access and the government wants to sell them to big consumer markets including China, according to Mongolian media. However, the country's poor infrastructure and ineffective veterinarian and vaccination services have proved to be a big hindrance.

Source: Xinhua YOUTHS’ ROLE AT ASEM Some 130 youth representatives from 51 Asia-Europe Meeting (ASEM) countries, including Malaysia, attended the five-day 7th Model ASEM in Ulaanbaatar. The participants, who are students and young professionals from various fields such as diplomacy, law, engineering and journalism, engaged in political debate and negotiation on Asia-Europe future collaborations such as the creation of a unified employment bloc and labor exchanges. They also developed a chair’s statement of the 7th Model ASEM. From Mongolia, over 120 young ASEM volunteers were trained to assist the international journalists present for the conference. The volunteers were given instructions on points to remember while working with international journalists.

Source: The Star, ASEM11.mn ‘MARMOT’ PLAGUE VACCINATION UNDERWAY Health authorities have issued a warning that adults and children over six years old to be vaccinated for marmot plague where outbreaks have occurred. The government will provide vaccinations until 28 July. According to the World Health Organization, about 2,000 people contract the plague each year in Asia, South Africa and South America, which is found in rodents carrying fleas, with between 5 and 15 percent mortality rate. In Mongolia, 137 counties in 17 provinces have seen outbreaks of the disease.

Source: Montsame RED CROSS SENDS AID TO FLOOD-STRICKEN ULGII Red Cross of Mongolia has donated 100 blankets, 100 mats and 100 water bottles to the State Emergency Commission for the families left homeless after a flood hit the provincial center of Bayan-Ulgii Aimag last week. The trucks carrying the donated goods left Ulaanbaatar for Ulgii Soum on 19 July following the floods. The Secretary General for the Mongolian Red Cross, N. Bolormaa, said the Mongolian office would be requesting further assistance from the International Federation of Red Cross and Red Crescent Societies with the expected results from detailed disaster survey it has conducted. Other donations for the disaster include five ger homes from World Vision and MNT15 million in adult and children’s apparel from Es Sain LLC’s S’Outlet.

Source: Montsame

DRINKING WATER RESTORED AT ULGII Residents of Ulgii Soum, Bayan Ulgii have regained access to clean drinking water after severe storms contaminated sources and cut off supply. The storm swept away more than 160 families’ homes, leaving some 700 people homeless, said the commission’s secretary, M. Enkh-Amar at a 19 July meeting. Authorities have removed 7.7 tons of contaminants from the drinking supply since flooding hit the city on 10 July.

Source: Mongolia.GoGo.mn NORTHERN MICHIGAN UNIVERSITY GROUP RESEARCHES BIODIVERSITY IN MONGOLIA Northern Michigan University is sending professor and four students to Mongolia this month to study the biodiversity of mammals and parasites in remote regions. Professor Kurt Galbreath will lead the team to collect specimens and extract DNA for genetic clues as to how climate change and other factors influence population patterns. “There has not been much research done in Mongolia,” adding that the research can be compared with new samples years later to determine how the biodiversity changed.

Source: Up Matters PRZEWALSKI'S MARES FLY FROM PRAGUE ZOO TO MONGOLIA Four Przewalski's horse mares from the Prague Zoo left for Mongolia, where they would be transported to the Gobi B National Park and released into the wild later, aboard a military special plane in the afternoon. After two intermediate landings in Kazan and Novosibirsk, Russia, the plane will finally land in Bulgan, Mongolia on Sunday morning. This time, the Prague Zoo in cooperation with the military prepared a double transport. Apart from the four mares from Prague, the CASA military plane will also transport horses internally in Mongolia. After their arrival in Mongolia, the mares in their transport boxes will be loaded to lorries and driven to the strictly protected Gobi B where they will be released to special fences for acclimatisation. Next Wednesday, the CASA military plane will fly from Bulgan to Ulaanbaatar to take another four horses from the Khustain Nuruu National Park and fly them to Takhin Tal reserve in Gobi B.

Source: Prague Monitor MONGOLIAN CHILD CONTORTIONISTS STRETCH FOR INTERNATIONAL SUCCESS Nine-year-old Mongolian schoolgirl Suvd-Erdene spends four hours a day perfecting the art of doing a head-stand on a pole clenched with her teeth and push-ups without her feet touching the ground. She and about a dozen team mates are training in a basement in the capital, Ulaanbaatar, to be contortionists, a revered art that Mongolians say was developed in the palace of 13th century warlord and national hero Genghis Khan. Usually performed by females, the discipline involves twisting and stretching the body to the extreme. The girls are given time off school to train down a drab Ulaanbaatar back street under the guidance of 22-year-old Urangoo, a third generation contortionist. Mongolian contortionists are in high demand and performers may be vaulted into an international career if they are lucky enough to be spotted by scouts from theatrical producers like Cirque du Soleil.

Source: Reuters.com WHAT’S IN A CATEGORY?—EDITORIAL One year ago, Mongolia was designated an Upper Middle Income Country (UMIC) when the country’s GNI per capita crossed the threshold between lower and upper middle income countries. While Mongolia’s progress is unmistakable, we also know that 22 percent of the population lives below the national poverty line of roughly $2.70 per day—what does it mean to be an “upper middle income country” in the face of such a statistic? Last week, Mongolia was re-designated a Lower Middle Income Country (LMIC). How is this possible and what does it mean?

The designations are not judgments on anyone’s part. They are completely based on official statistics regarding levels of income. The World Bank does not use the classification per se for aid allocations, although the same economic statistic that is used for the classifications, GNI, does figure into aid allocation decisions and the thresholds do have implications, even if not hard and fast and some organizations do.

Source: World Bank GOLD’S RUN COULD HIT ROADBLOCKS After three bearish years, gold’s 25 percent year-to-date price increase has pushed its long-term fans to predict a sustained bull run. Whether they are right could depend on whether central-bank action boosts inflation, which has historically been positive for gold. Gold’s gains have boosted the beaten-down mining sector and brought rare cheer to beleaguered developing world commodity producers that Mongolia could join in on. The precious metal has shined as a gloomy global economic outlook—from China’s slowdown to the U.K.’s exit from the European Union—has boosted the fortunes of haven assets. But unless consumer prices start to climb, those gold bets could sour. Some analysts point to another potential problem for gold: Its price has risen so rapidly that the extra expense may put off the Chinese and Indian retail buyers who are responsible for more than 50 percent of physical demand for the metal.

Source: Wall Street Journal MONGOLIA'S NESTING PROGRAM HELPS SAVE THE PRIZED SAKER FALCON—VIDEO Mongolia is home to the Saker falcon, which is a bird prized in the Middle East known for its speed and stealth to catch prey in the desert. But it's an endangered bird. Watch a special report on the national bird here.

Source: Al Jazeera POLITICS MONGOLIA PICKS FORMER FINANCE MINISTER TO LEAD NEW GOVERNMENT Mongolia’s new parliament has named a former finance minister who helped oversee the an expansion of the massive Oyu Tolgoi mine to steady the economy as the country’s next premier. A week after the Mongolian People’s Party unseated the Democratic Party in a landslide election win, lawmakers voted in Erdenebat Jargaltulga, 41, as prime minister. "The economy is in a difficult situation," Erdenbat said in his acceptance speech. “We fully intend to establish a professional, merit-based government at all levels. The focus will be on urgent stabilization of the economy, plus fiscal discipline. We will cooperate with international financial institutions.” Erdenebat served as finance minister under former Prime Minister Saikhanbileg Chimed in 2014-15, when the major parties unified to approve the second phase of the Oyu Tolgoi project. He has been a member a parliament since 2012 and previously served as provincial governor in Selenge Aimag, north of Ulaanbaatar.

Source: Bloomberg, Montsame NEW PM APPOINTS 13MINISTERS FOR NEW GOVERNMENT STRUCTURE Prime Minister Jargaltulga Erdenebat has proposed a new government structure with a 16-member cabinet, including the prime minister, deputy prime minister and Cabinet minister,. The new prime minister on 20 July submitted to Parliament plans would see the establishment of 13 ministries. In total, Mongolian government would comprise the same number of government agencies as the previous government, with 10 regulators and 17 policymaking agencies. The Mongolian People’s Party-government will also divided again some agencies consolidated under the Democrats. The taxation and customs bodies will be separated as well as the National Statistics Office and General Authority for State Registration and Intellectual Property. The appointments approved by the standing committee in Parliament on 22 July are:

Deputy Prime Minister: U. Khurelsukh Head of the Cabinet Secretariat: J. Munkhbat Minister of Environment and Tourism: D. Oyunkhorol Minister Foreign Affairs: Ts. Munkh-Orgil Minister of Finance: B. Choijilsuren Minister of Justice and Internal Affairs: S. Byambatsogt Minister of Labour and Social Protection: N. Nomtoibayar Minister of Defense: B. Bat-Erdene Minister of Construction and Urban Development: G. Unurbolor Minister of Education, Culture, Science and Sport: J. Batsuuri Minister of Roads and Transportation: D. Ganbat Minister of Mining and Heavy Industry: Ts. Dashdorj Minister of Food, Agriculture and Light Industry: Ts. Anandbazar Minister of Energy: D. Tsengel Minister of Health: J. Tsolmon

Source: Montsame, News.mn BAYARTSAIKHAN NADMID APPOINTED AS CENTRAL BANK GOVERNOR Parliament has confirmed Bayartsaikhan Nadmid as the Bank of Mongolia’s next governor, succeeding Zoljargal Naidansuren. Nadmid was a parliamentarian from 1992 to 2008. He has a Ph.D. in economic from the State Institute of Economic in Irkutsk, Russia. He was a lecturer for an institute under the Mongolian People’s Revolutionary Party from

Source: Bank of Mongolia PARLIAMENT APPOINTS STANDING COMMITTEE MEMBERS Parliament on 7 July announced the eight standing committees for the legislature. Legislation will divided among committees for security and foreign policy; state structure; state budget; the legal system; the economy; environment; food and agricultural; social policy; education; culture and science; and petitions. MP S. Byambatsogt reported that all nine Democrats in Parliament were posted in three standing committees each. “In 2012 the Mongolian People’s Party MP’s did not have any standing committee membership. ”

Source: Undesnii Shuudan PARLIAMENT CONFIRMS ANTI-CORRUPTION AGENCY HEAD APPOINTMENT Parliament has confirmed Kh. Enkhjargal as the next head of the Independent Agency Against Corruption. Born in 1964 in Ulaanbaatar, Enkhjargal has served as head of the Information Technology Division at the General Police Department. Prior to that post, he worked in the police departments of Bayanzurkh District, Nalaikh District, Erdenet and Tuv Aimag, in addition to the Traffic Police Department.

Source: Montsame, News.mn UB LEADERS APPOINTED Ulaanbaatar’s new mayor has promised to continue with the development of Ulaanbaatar’s so-called ger district slums, but with a focus on developing infrastructure rather than relocating families. “I will support ger district development plan. However, I will emphasize need of service centers and infrastructure development in the ger area rather than housing project,” he said. The Mongolian People’s Party, which took a majority in the runaway election for the municipality in June, has appointed S. Batbold as Ulaanbaatar’s next mayor. The recently appointed Parliament speaker, Miyegombo Enkhbold, met with Batbold and Citizens Council Speaker D. Amarbayasgalan to congratulate them on their wins and wished them success. The Mongolian People’s Party holds 34 seats at the City Council compared with the Democrats 11. Ts. Sandui will serve as the party head for Ulaanbaatar.

Source: News.mn, Montsame, Udriin Sonin

CHINA WRITES OFF MONGOLIA’S $18 MN DEBT China has forgiven USD18 million in debt from credits issued as far back as 1958 with an agreement signed by Chinese Prime Minister Li Keqiang while in Ulaanbaatar for the Asia-Europe Meeting last week. The debt forgiveness was one of seven agreements signed by Finance Minister B. Bolor on 14 July, including a CNY350 million grant for the re-planning of Ulaanbaatar’s ger districts.

Source: Mongolia.GoGo.mn, Udriin Sonin S. KOREA, MONGOLIA AGREE TO PURSUE EPA South Korea has agreed with Mongolia to pursue a bilateral economic partnership agreement (EPA), a move to expand bilateral economic cooperation and exchanges with the world's 10th largest producer of natural resources. The possible Korea-Mongolia EPA is Mongolia’s second FTA following the Japan-Mongolia EPA which came into effect in June. The East Asian country initially took a passive attitude toward EPA with South Korea due to negative public sentiment of Japan-Mongolia EPA but it has decided to seek the bilateral EPA in the summit meeting. Once the negotiation begin, the EPA is expected to come into effect in four years. The problem is the issue in the negotiation with interests between the two countries. South Korea and Mongolia are also highly likely to have difficulties in reaching an agreement in tariffs for goods in the agricultural, dairy and industrial sectors to conclude the EPA.

Source: Business Korea JAPAN, MONGOLIA AGREE TO BOOST ECONOMIC TIES The top leaders of Japan and Mongolia agreed Thursday to boost economic ties by taking full advantage of a new bilateral trade deal. Prime Minister Shinzo Abe and Mongolian President Tsakhia Elbegdorj held talks on the eve of a biennial summit of Asian and European leaders. “As we are precious partners in this region that share basic values, the importance of our relations remains unchanged,” Abe said after the meeting while in Ulaanbaatar for the Asia-Europe Meeting. As the volume of trade between Japan and Mongolia is still relatively small, the immediate impact of a free trade agreement between the two countries that took effect last month is expected to be limited. Still, the Japanese government sees Mongolia, landlocked between China and Russia, as becoming more strategically important, not only economically but also in geopolitical terms.

Source: Japan Times KAZAKHSTAN, MONGOLIA MULL EXPANSION OF MUTUALLY BENEFICIAL CO-OP Kazakhstan’s Prime Minister Karim Massimov met with Mongolian leadership at the 11th ASEM (Asia-Europe Meeting) Summit of Heads of State and Government in Ulaanbaatar, Mongolia, to discuss the expansion of bilateral cooperation, the Kazakh prime minister’s website reported on 15 July. During Massimov’s met with President Tsakhia Elbegdorj and Prime Minister Jargaltulga Erdene bat in separate meeting to discuss expanding trade. During the meeting with Erdenebat, Massimov pointed to the significant potential for increasing trade turnover between the two countries, as well as expressed willingness to further expand cooperation and enhance trade and economic relations. He also said the energy and mining industries, agriculture, transportation infrastructure, housing, mining and processing of gold and uranium are the most promising areas for establishment of mutually beneficial partnerships between Kazakhstan and Mongolia. The prime minister also promised USD200,000 in aid for Bayan-Ulgii Aimag, which is where Mongolia’s much of Kazakh minority population lives.

Source: Trend.az, Mongolia.GoGo.mn MONGOLIAN PEACEKEEPERS AWARDED NATO MEDAL Mongolia’s “Blue Helmet” soldiers sere honored with medals from NATO for their

professionalism in their duty alongside U.S. armed forces in Afghanistan. Operation “Resolute Support” launched on 1 January 2015 with about 13,000 personnel from both NATO and partner countries posted throughout the country during the foreign occupation.

Source: News.mn FORMER MINISTER UNDER INVESTIGATION FOR CORRUPTION RETURNS AFTER 6 MONTHS ABROAD Former minister of roads A. Gansukh has returned to Mongolia after being added to Interpol’s wanted list and six months away from the country. Gansukh and Khaltmaa Battulga are both being investigated for USD40 million that went missing from an account held by Samsung C&T, which was contracted for the construction of a railway line between the Tavan Tolgoi coal deposits in the Gobi desert and the Gashuun Sukhait land port to China. Gansukh denies the allegations that he was on the run from the law while abroad. “I am working in Russia and U.S.A,” he said in a post on Facebook, adding that he had also visited Japan and South Korea since January this year. “In every visit, I informed to relevant legal authorities and the Independent Agency Against Corruption, and I have no reason to escape Mongolia.”

Source: Undesnii Shuudan BATTULGA, GANBAT APPEAL TO COURT AGAINST MPP WIN AT 2016 ELECTION Former MPs Khaltmaa Battulga and D. Ganbat, who were voted out of office in the June election, have filed complaints with a court about the election results, claiming voters relocated to sway outcomes in specific constituencies. Many people moved out of Ulaanbaatar to vote in the countryside, according to the National Registration and Statistics Office. The Democratic candidates from Bayankhongor—N. Tuvshinbayar, Ganbat and Battulga—all lost by slim margins. Ganbat and Battulga have filed appeals with the administrative court asking to check on the mass migration. They’ve also sent a letter to the General Election Committee about the irregularity.

Source:Undesnii Shuudan BAYANZURKH LAND OFFICIAL ARRESTED FOR GRAFT The director of land registration at Ulaanbaatar’s Bayanzurkh District has been arrested after bing caught accepting a MNT240 million bribe from a Chinese construction company. The company, which has run 10 years in Mongolia, was allegedly paying off the official for the construction of a 42-unit housing complex. Also under arrest are three Mongolian women who allegedly acted as mediators for the deal.

Source: Udriin Sonin FORMER PRESIDENT URGES N. KOREA TO GIVE UP NUKES FOR ECONOMIC DEVELOPMENT Former Mongolian President Punsalmaa Ochirbat has said North Korea's simultaneous pursuit of nuclear weapons and economic development is an "impossible" task, adding that Pyongyang should first give up its nuclear program to seek economic growth. Ochirbat, who served as Mongolia's first directly elected president from 1990 to 1997, said economic cooperation with North Korea will be impossible, unless the reclusive state gives up its nuclear program. “North Korea needs to focus on enhancing its relationships and economic cooperation with neighboring countries to boost its economy,” Ochirbat said. Ochirbat has been an important figure in building the relationship between South Korea and Mongolia. During his presidency, South Korea and Mongolia established diplomatic ties in 1991. In the same year, he also became the first Mongolian leader to visit South Korea. Ochirbat is also known for leading denuclearization in his country. In 1992, he declared Mongolia as a "nuclear-weapon-free zone," at the United Nations General Assembly.

Source: Yonhap News

ASIA FOUNDATION RELEASES 2016 SPEAK SURVEY Political Parties topped the list for the first time in recent ten years of a survey measuring perceived sources of corruption by The Asia Foundation and Sant Maral Foundation. In March 2016, the Asia Foundation and Sant Maral Foundation, conducted tge seventeenth Survey on Perceptions and Knowledge of Corruption (SPEAK) in Mongolia, a nationwide survey of citizens in rural counties, provinces and the capital city, Ulaanbaatar. In the survey, political parties were followed by government and parliament rounding up the top five sources of corruption. Read the full report here.

Source: Asia Foundation U.S. ASKS OTHER NATIONS TO CURB USE OF NORTH KOREAN WORKERS The administration of President Barack Obama is asking other nations to cut the employment of North Korean workers as a way to reduce Pyongyang’s access to foreign currency, a U.S. official said on Thursday. The official, speaking on condition of anonymity, spoke a day after the United States sanctioned North Korean leader Kim Jong Un for the first time, citing "notorious abuses of human rights" in a move that infuriated the nuclear-armed country. A U.N. report last year estimated over 50,000 North Koreans were working abroad, earning the state USD1.2 billion to USD2.3 billion annually, although some experts question these figures. Aside from China and Russia, many are believed to be working in African countries and on construction sites in the Middle East, including in Qatar which is preparing to host the 2022 World Cup. Workers are also in Mongolia.

Source: Reuters MONGOLIA’S ELECTION – A PROTEST VOTE FOR THE GOOD—EDITORIAL Amidst the chaos sown by Brexit, one country’s protest vote is being greeted with relief by investors. In a landslide election, three million Mongolians opted to end an era of policies that contributed to a fall off in foreign direct investment and economic growth. After clinching an 85 per cent majority in the election, the Mongolian People’s Party (MPP) hopes to reinvigorate the economy through a more permissive operating environment and friendlier attitudes toward investors. The combination of the commodities downturn and perceived hostility toward foreign investors has resulted in economic growth shrinking from 17.5 percent in 2011 to 2.4 percent last year. The dearth of opportunity has triggered unemployment, inflation and a currency devaluation. While the Democratic Party was genuinely thought of as well meaning, it lacked the experience of running a country. The MPP, which has governed outright or through coalitions from 2000 to 2012, has no such problem. Lee Cashell is the founder and chief executive officer of Asia Pacific Investment Partners and Mongolia Properties

Source: Financial Times

BCM UPDATES: UPCOMING EVENTS JOIN BCM’S TRADE DELEGATION TO MINEXPO INTERNATIONAL 2016 The Business Council of Mongolia (BCM) is now registering members to join a Mongolian business delegation for MINExpo International 2016 at the Las Vegas Convention Center on 26 to 28 September. The expo is the world's largest show of its kind and most comprehensive exposition dedicated to mining equipment, products and services. More than 1,800 exhibitors in twelve exhibit halls will display the latest technology, equipment, components, parts and services for exploration, extraction, safety, environmental remediation and more!

Attendees will learn about improving productivity, controlling costs, keeping operations competitive, improving safety and managing risk with all the new equipment, services, products and technology. There will also be plenty of opportunities to network and meet industry leaders & experts for finding potential partners and suppliers. BCM has partnered with the U.S. Embassy’s Commercial Section in Ulaanbaatar for the event. The registration deadline is 29 July. Contact BCM at 70114442 or email tugi@bcmongolia.org for registration or more information. JOIN BCM’S DELEGATION TO GLOBAL GREEN GROWTH WEEK 2016 BCM in collaboration with the Global Green Growth Institute (GGGI), is now registering a Mongolian business delegation to participate in Global Green Growth Week 2016 (GGGW2016), which will be organized at the Jeju International Convention Center, Republic of Korea on 5-9 September 2016. GGGW2016 will engage high-level officials from government, multi-lateral development banks and international development agencies, private-sector leaders, and representatives from academia and non-governmental organizations. Participants will assess green growth policy, research, partnerships, financing, and technology through GGGW2016 policy dialogues, expert panels and presentations, discussions, capacity building workshops, country-focused briefings, and technology exhibits. Why you should attend: · See and experience the latest trends in Green Growth Technology from around the world, especially in the Energy, Urban Infrastructure, Water and Land Use sectors. · Engage with experts on the show floor and in education sessions to help you solve the challenges you face daily and the ones you see on the horizon. · Network and meet government and industry leaders & experts. · Find potential partners & suppliers. For more information about the event, please click here or contact BCM at 70114442, 99109887, bayarmaa@bcmongolia.org. Registration deadline is August 13, 2016.

BCM ADVOCACY NOTES "BCM Workshop & Advocacy Efforts on the New Corporate Income Tax (CIT) Draft Law" As a follow-up action on BCM's position paper on the draft Corporate Income Tax law, on 24 May meeting was held with MP Amarjargal Rinchinnyam, who led the Working Group established at the Parliament to oversee the drafting of the draft legislation. With other private sector representatives present at the meeting, BCM has shared the concerns identified in the position paper. Read more… BCM WORKING GROUP NEWS BCM’s Energy and Environment Working Group Meeting, 16 June 2016

BCM’s Energy and Environment Working Group meeting was held on 16 June 2016 with 3 speakers in roundtable experience sharing format. Oyunbat Tumurkhuyag, Founder of Best Energy Savings LLC introduced vacuum heater, vacuum steam boiler, smart socket and smart ger which were produced by Mongolian engineers. MP Oyun discussed about the need to leapfrog from brown to green economy, and suggested BCM to send an official letter to the Ministry of Environment, Green Development and Tourism to get a full list of laws, policies and regulations that support green development and provide incentive to private sector to go green. BCM will send this official letter and share the received list to all members and post on BCM website. The final speaker Solongo Khurelbaatar, (Former) Assistant Advisor for Asia-Oceania, Ramsar Convention Secretariat shared her work experiences at RAMSAR convention. To see the full meeting summary and upload presentations, please click here.

- Risk and Legislative Working Groups' Joint Meeting on the "DRAFT AMENDMENT OF THE LAW ON DISASTER PROTECTION" 16 June 2016 - Business Ethics Working Group Meeting on “CSR, GIFTS AND HOSPITALITY POLICY”, 7 June 2016 - Education Working Group Meeting on “BCM SSUMMIT PROCEEDINGS”, 5 May 2016 - Capital Markets Working Group Meeting on “OYU TOLGOI UNDERGROUND PROJECT FINANCING”, 5 April 2016 - Tax Working Group Meeting on “VAT LAW”, 2 March 2016

JOB VACANCIES AT MEMBER ORGANIZATIONS -The British Embassy is recruiting a Press & Public Affairs Assistant who will provide general support to the Political & PPA section of the British Embassy. The chosen candidate will play a key role in helping to upgrade the Embassy’s Facebook and Twitter channels, including launching and delivery of Mongolian content. Only short-listed candidates will be contacted, and the position is on a fixed-term basis for six months. Click here to apply. - Mercy Corps is hiring Director of Programs. Deadline for Application: August 10, 2016. For more information: Please refer to website here Please click here to view full list of Job Vacancies at member organizations.

MEMBER-TO-MEMBER SPECIAL OFFERS & BENEFITS: - Orchuulga 24 is providing 15% discount on written translation services to BCM Members - MNC HD TV offers BCM members 20% discount from the fee to be showcased in their “The Story of Business/Бизнесийн түүх” TV program. - American University of Mongolia is offering BCM members a 20% discount on all of ELI Summer Courses. - Matoza LLC is offering 15% special discount to BCM members on Intensive Business English Language Course in Poland with a Sightseeing Trip. Please click here to view full list of Member-to-Member special offers & Benefits.

WEBSITE UPDATES: PRESENTATIONS, MONGOLIA REPORTS PRESENTATIONS: BCM Monthly Meeting, 30 May: - B. Byambasaikhan, Chairman, BCM - “BCM Summit Proceedings” - Ch. Mergen, Executive Director, BCM - "BCM Report" - Anthony Woolley, Senior Associate, Hogan Lovells - “CIT Draft Law Update” - D. Bat-Oktyabri, Director APAC, Techstars - “Start-up community in Mongolia” - Michael Morrow, Executive Director, MACU & Ya. Enkhee, Owner & Partner at Gandan Live House, Mexikhan & Guantanamera Restaurant - “It’s all about wine & cheese” event - New Members Introduction Please click here to view full list of Presentations. MONGOLIA REPORTS: - ADB, “Asian Development Outlook 2016: Asia’s Potential Growth” (forecasts of the next 2 years for the 45 economies in Asia and the Pacific including Mongolia) - Invest Mongolia, “Your Guide to Invest in Mongolia” 2016 - BTI, “Mongolia Country Report” 2016 - World Bank, “Doing Business: Economic Profile of Mongolia 2016"

Please click here to view full list of Reports.

ECONOMIC INDICATORS INFLATION Year 2006 6.0% [source: National Statistical Office of Mongolia (NSOM)] Year 2007 *15.1% [source: NSOM] Year 2008 *22.1% [source: NSOM] Year 2009 *4.2% [source: NSOM] Year 2010 *13.0% [source: NSOM] Year 2011 *10.2% [source: NSOM] Year 2012 *14.0% [source: NSOM] Year 2013 *12.5% [source: NSOM] Year 2014 *11.0% [source: NSOM] May 31, 2016 *1.8% [source: NSOM] *Year-over-year (y-o-y), nationwide Note: 1.8% y-o-y; 3.2% Core - Ulaanbaatar City, May 31, 2016 CENTRAL BANK POLICY LOAN RATE December 31, 2008 9.75% [source: IMF] March 11, 2009 14.00% [source: IMF] May 12, 2009 12.75% [source: IMF] June 12, 2009 11.50% [source: IMF] September 30, 2009 10.00% [source: IMF] May 12, 2010 11.00% [source: IMF] April 28, 2011 11.50% [source: IMF] August 25, 2011 11.75% [source: IMF] October 25, 2011 12.25% [source: IMF] March 19, 2012 12.75% [source: Mongol Bank] April 18, 2012 13.25% [source: Mongol Bank] January 25, 2013 12.50% [source: Mongol Bank] April 8, 2013 11.50% [source: Mongol Bank] June 25, 2013 10.50% [source: Mongol Bank] July 30, 2014 12.00% {source: Mongol Bank} January 14, 2015 13.00% {source: Mongol Bank} January 14, 2016 12.00% [source: Mongol Bank] May 6, 2016 10.50% {source: Mongol Bank} CURRENCY RATES – JULY 21, 2016 Currency Rate US dollar USD 2,043.40 Euro EUR 2,254.79 Japanese yen JPY 19.06 British pound GBP 2,709.04 Hong Kong dollar HKD 263.46 Chinese Yuan CNY 306.27 Russian Ruble RUB 32.12 SouthKorean won KRW 1.80