Some economists predict 5 percent of inflation for the beginning of this year but official statistics for January and February are not yet revealed. Major holidays like the Mongolian New year also affected the price of consumer goods during February.

The bad fact of the distribution of 70 thousand MNT of the HDF is that it will bring the price of consumer goods up, therefore the few little cash on people’s hand is worthless in the long run. Additionally, increased cash flow in the economy did not increase domestic production as import already rose by 90.0 million USD or 43.7 percent this year alone. This is one of the worst news as it continues to increase the trade deficit of Mongolia.

Unstable legal environment negatively affect the foreign investment in the geology sector. 90% of total geology work is funded by the foreign investment. Due to the prohibition of geology and exploration work in the reserve areas forest and water, the latest change in the legal environment of mining sector, issued licenses are about to be cancelled and many foreign companies are pulling their investment, leaving many geologists unemployed. The participants think that it is wrong decision and also it is another example of irresponsibility that the compensation resource is still not clear to companies which lost their licenses.

Also geological researches and explorations are not sufficient enough as they were in the socialist time. Only 20% of 1:50.000 mapping was completed in Mongolia. This mapping should cover whole territory of Mongolia. The Government announces 6-7 tender bids each year to complete this task.
4 billion MNT is allocated in the budget to be spent for geology and general prospecting works and Mr. Todbileg.M, a senior officer of Ministry of Mineral Resources and Energy has more.

Q: Can you briefly update the current situation of geology sector?

Todbileg: Geological studies and researches are being made in three levels. First, academic level, this work is conducted by the universities and its professors and students. Second, geological mapping and general prospecting works funded by the state budget. Third, geological works, funded by private investment, conducted by private companies. Last year, geological work of over 100 billion MNT was made.

Q: It was said that 1:50.000 mapping work is completed only 20% of total territory of Mongolia. Can you give us more detailed answer?

Todbileg: 1:200.000 mapping covered Mongolia 100%. 1:50.000 mapping work is made on only 27% of territory of Mongolia. It will continue in the future. The state pursues policy to increase its investment.
Over 1200 companies will lose their licenses.

Over 1200 companies will lose their licenses due to the prohibition of exploration works in the reserve areas of forest and water. Now, the Ministry of Environment and Tourism is working on finalizing the list. Ministry of Justice and Internal Affairs refused to comment on the necessity of amending the Mineral Law of Mongolia. Over 80 laws are under discussion to be amended and 2 – 3 of them are related to the mining sector.

During this forum, Mongolian Ministerial level officials will speak about Government policies of Mongolia and attractive investment opportunities to the biggest investors from Hong Kong and globe and Hong Kong Exchanges and Clearing will introduce about rules and regulations of IPO in Hong Kong stock market, common issues faced for international companies in listing procedures, sectors suitable for listing in Hong Kong to Mongolian delegates. After each session, there will be roundtable discussion, allowing each delegate to raise questions to speakers. Following the official session, one-to-one meeting cocktail reception will take place and delegates from both sides will have a chance to discuss freely.

Taking part in this event will enable you to number of rare opportunities such as meeting with the largest investors of Hong Kong face to face, introducing your investment seeking projects to potential investors, and familiarizing in person with the operation of the leading stock market in Asia.

Registration for Mongolian delegates is in process and interested companies are advised to contact with Ms. Tsolmon, before March 26^th, 2010. Please be informed that limited seats are available for Mongolian companies.

For more details, please refer following address.

Foreign Investment and Foreign Trade Agency of Mongolia

Government Building – 11, suite 802

Tel: 320706, 326040

Fax: 324076

e-mail: tsolmon@investmongolia.com

Top – 20 index has increased by 9.7% or 825.92 points reached 9333.81 and TOP – 20 index reached 820.3 billion MNT.

The biggest gainers were Sor (31.7%), Ulaanbaatar Hotel (30.7%), Makh Impex (29.6%) and on contrary, the biggest declines were Mongolia Telecom (9.1%), Monimjbar (4.0%).

489.8 thousand Khukh Gan shares, 42.7 thousand Gobi shares, 37.6 thousand APU shares were sold.

One percent of casino income will be collected into the “Good Will” Foundation, a social welfare fund. The casino is only open to foreign nationals and the Government of Mongolia will own certain part of the casino.

In the year 2010, APU’s target is to increase production and profit. They are to finish all factory expansions and to produce products with 70-100 percent output. Also, USD 35 million will be invested into machinery and technology this year alone.

As for 11th of March, 26 JSCs dated their financial meeting and 43 JSCs sent their financial report to the MSE. Financial meetings of all JSCs must be held before the 1st of May according to the Law of Companies and rule No2.2 of the Financial Regulatory Committee.

PM S.Batbold, on his first foreign trip since becoming PM in late 2009, said it was extremely important for Mongolia to build ties with the European Union.

PM Bajnai said the Hungarian border-crossing point of Zahony on its eastern boundary with Ukraine could serve as an entry point for Mongolian goods entering the European Union. To build trade links between the two countries, a Mongolian Trade and Information Center was set up in Budapest in 2005.

The next step is to manufacture products and goods out of these oil commodities in order to reduce oil and petrol importing. D.Odkhuu also made plans to build railway roads across the country to link the West and the East. This railway project will ensure faster economic growth and will open ways to export coals to South Korea and Japan. B.Ganbat, Advisor of Construction and Urban Development Minister said that this project will secure Mongolia to reach its Macro Economic targets. The cost of the Railway project is calculated to be around USD 14 billion.

For example, international independent auditing, a German branch of PricewaterhouseCoopers, has been working on the Oyu Tolgoi project and it will be completed within March. General Authority of Taxation is in charge of expense of the investors, tax redemption issues and a working group with 5 members is conducting inspection at Oyu Tolgoi LLC.

About representation of the Government in the Board of Directors, The State Property Committee and working group are preparing their joint proposal.