Friday, November 21, 2008 

NEWS HIGHLIGHTS:

Business: MPs’ group favors 51% share in Tavan Tolgoi, 34% in Oyu Tolgoi; Ivanhoe “well-positioned” to pursue “focus” on Oyu Tolgoi; Erdene “opportunistic in this period of uncertainty”; Drop in Cameco’s adjusted earnings; Work on computerized mining registry system to begin; Bayar consults with Chilean Minister on mining copper; Goldman Sachs team calls on President; Khan Bank wins secure ratings from Moody’s; Proposal to put Development Fund money in banks; Western Prospector moves into court against Tinpo; Some Aero Mongolia staff threaten to go on strike; Spa opens in Terelj Hotel and Resort. 

Economy: GDP expected to rise 28.2% over 2007; Central Bank cuts interest rate; Inflation the main target of Monetary Policy 2009; New measures showing results, claims Central Bank chief; Tax boss hopeful of meeting this year’s goals; Budget deficit increases; Mongolians abroad send home USD1 million every two days; Money supply, foreign currency deposits fall; Dollar price rise was manipulated, says Bank official.  

Politics:  Government tightens belt; MPs criticize wasteful expenditures; New vice ministers unlikely before next month; MCC to fund only after UB Railway submits audit report; US supplied radiation scanners at Mongolian border posts; 20% of petrol reserve to be sold; Erdenet anniversary in Moscow; Projects identified for using Chinese loan; Fall in authorized spirits plants; Training planned for provincial staff at all levels; Inspecting teams find child labor is common.  
 

BCM’S D1G1TAL M0NG0L1A – Technology Symposium 

We would like to remind BCM Members and Friends to have your colleagues register for BCM’s first D1G1TAL M0NG0L1A-Technology Symposium on Tuesday, November 25 from 2 PM to 5:45 PM in the Chinggis Khan Hotel.

To assure seats and free flash disks with all presentations at the Symposium, please register now by calling or Emailing the BCM office – 11-332345 or  This email address is being protected from spam bots, you need Javascript enabled to view it .

This bi-lingual technology symposium is designed for “non-IT” individuals.  The Symposium is offered free to BCM members and for MNT 5,000 to non-members.  A reception for all attendees will immediately follow the conclusion of the Symposium, also in the Chinggis Khan Hotel. See here for more information .  
 

MPs’ GROUP FAVORS 51% SHARE IN TAVAN TOLGOI, 34% IN OYU TOLGOI

The Government of Mongolia is likely to try to pin down a deal that will give it 34 percent ownership of the country's giant Oyu Tolgoi copper deposit as falling commodity prices push it to back away from seeking majority control. A parliamentary working group studying revisions to the country's minerals law has proposed that agreements for Oyu Tolgoi -- which is being developed by Ivanhoe Mines and Rio Tinto -- as well as for the big Tavan Tolgoi coal project be negotiated before the law is finalized.

"We had expected that first there would be a minerals law and then an investment agreement. But the new proposal is to proceed on an investment agreement before the new law," said Sodontogos, an advisor to the Mongolian National Mining Association. Parliament may consider that suggestion as early as December1, she said.

The proposal would include a recommendation for the state to hold 34 percent in Oyu Tolgoi and 51 percent in Tavan Tolgoi, Mongolian media have said and sources close to the working group have confirmed. The group was scheduled to release its recommendations on November 15, but has not done so, due to splits within the group over the proper role of the state and the best way for Mongolia to realize wealth from its mineral deposits.

The Government is unlikely to invest any money on developing either project. Its proportionate share of such expenses will be adjusted against taxes, royalty and other fees, dividends and advances. An emphasis in both projects will be on processing the raw extraction. Development of infrastructure, water and energy supply, and urban planning will be a formal part of the agreements. Facilities for training workers will also have to be installed.

Source: Reuters.com, en.News.mn 

INFLATION THE MAIN TARGET OF MONETARY POLICY 2009

Parliament last week approved the draft resolution on general guidelines for the state monetary policy for 2009 after just one reading. The unusual haste had become necessary as without this policy in place the discussion on the government budget and the guidelines for socio-economic development could not be started. The monetary policy enjoins the Central Bank to keep inflation rates, measured in relation to the consumer price index, at an average 9.5 percent between 2009 and 2011. The expectation is that it will stand at 12 percent at the end of 2009, 10 percent in 2010, and 6.5 percent in 2011. In 2009, monetary and fiscal policies will be coordinated more effectively to help control inflation and raise the living standards of the population.

During the debate several MPs blamed the Central Bank for letting inflation reach 34 percent (yoy) this year. Others faulted the previous Parliament for increasing Government expenditures in the mistaken certainty that mineral prices would forever be high.

Source: Montsame 

GOVERNMENT TIGHTENS BELT

Faced with the need to cut MNT157 billion from the draft budgetary expenses to cope with the anticipated fall in revenue resulting from the drop in global commodity prices, the Government decided at a special meeting on Tuesday to:

             - restrict official travel, both within and outside the country, to save Tg1 billion 82 million;

       - reduce petroluem consumption to the tune of Tg650.6 million;

        - impose a uniform bonus payment system in state organizations, thus saving Tg648.2 million;

             - stop dispensing grants worth Tg465.4 million to political parties represented in  local assemblies;

       - cut down on cell phone allowances to staff, thereby saving Tg285.7 million;

       - reduce expenses on stationery by Tg242.2 million; and

       - save Tg35.1 million by cancelling newspaper subscriptions of ministries and agencies.

                                                                                                                Source: en.News.mn