The meeting on November 1 at the Kempinski Hotel Khan Palace was attended by 115 members. Mr. Laurenz Melchers was in the chair and announced that the next meeting, the last in 2010, will be on December 13. Executive Director Jim Dwyer welcomed the 4 new members since the last meeting.

They are the Noble Group, a market leader in managing the global supply chain of agricultural, industrial and energy products, with more than 150 offices and plants in 38 countries across five continents, employing over 11,000 employees from 68 nations; Integrated Financial Services, one of the premier financial and economic services providers in Mongolia, offering expert advice and support to both local and international clients; Friends of Mongolia, organized and operated exclusively for charitable, educational, and developmental purposes, not-for-profit, conducting activities in both Mongolia and the United States; and the Redpath Group, providing full and comprehensive expertise and experienced services to the global mining industry since 1962. Redpath Mongolia was incorporated in 2004 with headquarters in Ulaanbaatar and completed the deepest mine shaft ever sunk in Mongolia in January, 2008, at a depth of 1,385 meters at the Oyu Tolgoi copper gold deposit. BCM thus ends its year with 167 members, 36 more than when the year began.

Mr. D. Damba, President, Mongolian National Mining Association, mentioned how sustained advocacy is slowly achieving results in changing the legal environment for the better. “For the first time ever”, a Government working group invited an MNMA team to listen to its reservations about the sliding royalty rate. If the Government does not change its decision to levy increased customs duty on mineral exports, the MNMA “does not rule out” asking the courts to resolve the issue. As 2010 draws to a close, some improvement can be seen in the business environment in keeping with the Government’s declared intention to reform it this year, but much more was expected and needs to be done. For example, there should be a single-window service for issue of mining licenses. There should also be just two kinds of licenses in the sector – exploration and extraction – and not the many more needed at present for smaller components of work.

Mr. L. Sumati, BCM Vice Chairman, spoke in his capacity of Director, Sant Maral Foundation, about the way opinion polls through the years reveal how people’s perceptions change or do not change with time. It was interesting that while the number of households that said they had given a bribe to get something done showed a considerable drop between September 2006 and September 2009, the percentage of people who felt corruption affected personal, business, and political life in the country remained quite stable in the same period for all three sectors. 

Ms. Jigjidmaa Dugeree, Local Coordinator of the IFC-funded Mongolian Business Inspection Reform Project, gave a presentation on the Investment Climate Program of IFC in Mongolia. How serious the Government is about the program is seen by the fact that the Deputy Prime Minister himself is involved. So far the program has focused on reforming the business inspection regimen, run by the Government Agency for Specialized Inspection (GASI). A baseline survey was done and some amendments to the inspection law were passed in July, but a lot more ground has to be covered before GASI abandons the trivial for the significant, eliminates overlapping, and reduces its own powers of discretion, used mostly selectively and arbitrarily. Information has to be made easy to access, clear and understandable. She feels the political will for the necessary reforms is there, but there is resistance from the low- and middle-level staff to letting go of their traditional mindset and power to impose fines without much cause or on flimsy pretexts. At present the costs of compliance total USD15.5 million in a year.

Dr. Battsengel Gotov, Executive Director & Chief Executive Officer, Energy Resources, presented an overview of Mongolian Mining Corporation, its holding company that raised USD650 million in a recent IPO on the Hong Kong Exchange. As part of the development program, MMC is building a road to China and is expecting a rail line to follow as part of the government’s plans for an east-west arterial railway. It is also building its own coal-washing plant and power generating unit.

The networking reception that follows the meeting was brief as there was little time left before the Membership Renewal Dinner attended by 110 members in Kempinski Hotel’s Oasis Restaurant. This, said Mr. Melchers in his address, was actually the first of what he hoped would become annual dinners for all members.