|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
CAPE TOWN (miningweekly.com) – The images of large yellow mine trucks flashed across the big screen at this year’s Mining Indaba looked pretty ordinary. But that misperception was quickly cut short when Rio Tinto CE Energy and Minerals Bold Baatar told the full-house audience: "What you're watching are robots on wheels. They’re fully automated driverless trucks,” he said, adding their unassuming emergence beat the current obsession with driverless cars by a good decade, illustrating once again that mining has led human progress for millions of years.
“Since the time of our ancestors here in Africa, the Cradle of Humankind, three-and-a-half million years ago, human progress has been interlinked with mining,” Baatar emphasised.
What’s more, the oldest known mine, which is some 43 000 years of age, is located in neighbouring Swaziland, where ancestors of the San people mined red pigment for rock painting, and in East Africa, people produced steel more than 2 500 years ago, a development that only took place in Europe in the 1700s.
“So, mining has been essential to human progress since the dawn of time,” Mongolian-born Baatar told the Mining Indaba, which is being attended by Creamer Media’s Mining Weekly Online.
Mining is understood to be an economic bedrock in countries like Chile and Australia, underpinning gross domestic product and tax revenues, and Africa has its own success stories like Botswana, which was one of the poorest countries 50 years ago and now has a mining-linked sovereign wealth fund that benefits education, infrastructure and future generations.
“So, mining can be inclusive and bring on the sustainable development to the host communities in countries that change,” he said.
Common attributes of successful governments are good governance, good resource management and the rule of law.
“However, a key element that can make a difference for mining companies is the level of transparency, accountability, understanding and trust that are required for the partners to thrive,” he said.
“But the challenge is the mining sector is misunderstood where expectations are misaligned.”
He outlined how mining was made up of artisanal miners, who had a role to play, but who brought with them certain consequences; entrepreneurs, who pursued high-risk investment in the short-term; junior minor companies, which had the role of funding and discovering resources; and then the operator mining companies, which were small to large and brought on the operations.
If any of these participants did not behave responsibly, it cast a dark cloud over the whole sector.
For Rio Tinto, the key challenge was the misalignment of expectations, particularly around mineral wealth.
A common cause of misalignment was the calculation of the scale of mineral wealth by multiplying the resource size by the current mineral price.
Using copper as an example, a one-million-tonne resource multiplied by $7 000 becomes referred to as a $7-billion mineral resource.
The flaw of such analysis was that the investment and the costs are completely ignored in the equation.
Using $2-billion as the upfront investment, $1-billion paid in taxes, another $2-billion of operating expenses etcetera, left investors with $2-billion with which to cover debt interest and shareholder returns, which inflation would lower still further.
What should also be kept in mind was that the entire mine ecosystem of supply chain and mining services multiplied economic activity fourfold, with mining services generating more employment than mining itself.
It was important to maximise the local content of the supply chain, which was also a significant source of taxation revenue.
“It is not uncommon for the operators like us to see a very limited return on capital for a number of years,” Baatar calculated.
Returning to the driverless trucks, assuming each carried 250 t of material at the industry-average copper grade of 1%, that material would result in a mere 2.5 t of copper, with 99% of the material carried by the truck – some 247.5 t – having no mineral wealth in it whatsoever.
But the 250 t also has to be crushed and ground into a fine dust that was at times more refined than flour.
Then the copper was separated out of that through flotation, a bubble process not dissimilar from the brewing process.
There is more regrinding, dewatering and thickening and only after the smelting process, does the operating mining company end up with the 2.5 t of copper concentrate.
“So, we go from a massive large truck full to a little two-and-a-half tonnes of copper through a lot of hard work and energy usage,” he said, adding that his simplified example highlighted the central truth about mining: “It costs a lot of money to extract minerals, involves significant financial and execution risk and it is technically difficult work, particularly when done responsibly.”
EDITED BY: Creamer Media Reporter...
Pyongyang, February 6 (KCNA) -- Talks between DPRK Foreign Minister Ri Yong Ho and Mongolian Foreign Minister D. Tsogtbaatar were held at the Mansudae Assembly Hall on Monday.
At the talks both sides exchanged views on the issue of continuing to develop the long-standing friendly and cooperative relations between the two countries in several fields and the issues of mutual concern and reached a consensus.
The DPRK foreign minister stressed the need to continue to develop the traditional relations of friendship and cooperation between the two countries forged and developed by President Kim Il Sung and leader Kim Jong Il with the preceding leaders of Mongolia irrespective of the changing situation.
The Mongolian foreign minister, saying that this year serves as an important occasion in developing the bilateral relations as it marks the 70th anniversary of the establishment of diplomatic ties between the two countries, underlined the need to develop on good terms the Mongolia-DPRK relations of friendship with a long history and tradition. -0-
The biggest sell-off in cryptocurrency market history has wiped out around $550 billion since January 7, when the market capitalization reached a record $836 billion.
On Tuesday, the cryptocurrency market capitalization sank below $300 billion for first time since November, according to CoinMarketCap data. The top 10 digital assets by market value are facing double-digit losses for the fourth time in the last five days.
Bitcoin and other cryptocurrencies have been hammered by a series of crackdowns by banks and governments around the world. On Tuesday, the Bank for International Settlements warned that authorities must be prepared to act against the “invasive spread of cryptocurrencies.”
Since this year has been dominated by negative news for cryptocurrencies, most of them are down at least 70 percent from their record highs. Bitcoin’s market cap has plunged to $106 billion from its record of $326 billion.
Also this week, Britain’s Lloyds Banking Group, which comprises Lloyds Bank, Bank of Scotland, Halifax and MBNA, announced that it had banned cryptocurrency purchases on its credit cards. The move was followed by similar decisions from American giants Bank of America, JPMorgan Chase and Citigroup. Another British bank, Barclays, said its customers can use their cards to purchase cryptocurrency legitimately.
One large business hub that has no plans to ban cryptocurrency trading is Singapore. This was made clear in a statement by Deputy Prime Minister Tharman Shanmugaratnam on Tuesday.
Ulaanbaatar /MONTSAME/ The Cabinet on February 6 resolved to determine incentive for wheat supplied to domestic flour factories, Crop Farming Support Fund and government reserve.
In specific, I-III class wheat will receive incentive of MNT 60 thousand per ton and IV class MNT 50 thousand.
The Cabinet also agreed on tariff discount for wheat seeds of the Crop Farming Support Fund in order to support land farmers who suffered crop loss last year, and run spring sowing normally.
MNT 14.9 billion was projected last year’s budget for wheat bonus. The incentive requirements have been fulfilled by 597 citizens and entities in 13 aimags for supply of 128 thousand tons of wheat.
Ulaanbaatar /MONTSAME/ The Cabinet instructed the corresponding officials to study the possibility of establishing a government agency in charge of air pollution reduction in urban areas.
During its meeting on February 6, the Cabinet discussed air pollution reduction and ways of intensifying the National Program on Air Pollution Reduction.
The Cabinet decided to grant the authority of air pollution inspector to rangers and the staff of the Air Pollution Reduction Department of the Capital city, and the authority of non-staff inspector to corresponding officials in Khoroos of the capital city.
Corresponding Ministers and Governors of aimags and the capital city were ordered to look into possibilities of assisting citizens interested in migrating from UIaanbaatar to provinces to work in the agriculture sector, and introduce their proposals to the Cabinet meeting.
The Government is ready to render all forms of support for intensification of infrastructure development aiming to reduce air pollution such as establishment of a satellite city, sub-center, village and industrial and technological parks.
Corresponding Ministers and the Mayor of Ulaanbaatar were also assigned to study the matter of moving some government agencies, state-owned universities and higher educational institutes from downtown and present their proposals.
Furthermore, the Government aims to phase out the consumption of crude coal, promote use of refined fuel and broaden the centralized network.
The Government plans to take measures including converting public transport and taxi to gas fuel, exempting gas and electric-engine buses, trolleybuses and taxi vehicles from customs duty and value-added tax, and supporting domestic vehicle manufacturers. Furthermore, more actions like infrastructure development in ger areas, intensification of construction works and circulation of unsold apartments will be taken.
ULAANBAATAR, Feb 6 (Reuters) - Mongolia is on course to receive another tranche of a bailout package agreed last year after progress in its economic recovery was praised by the International Monetary Fund (IMF) on Tuesday.
The IMF said in a notice that it has completed its third assessment of Mongolia's $434 million three-year Extended Fund Facility, part of a quarterly review process agreed last year and designed to ensure Mongolia's reforms remain on track.
Mongolia agreed in 2017 to cut spending and undertake structural reforms as part of a $5.5 billion IMF-led bailout package aimed at relieving debt pressure and bolstering the tugrik currency, which went into freefall in 2016.
But the agreement faced "significant risks" and would therefore be subject to a quarterly review, the IMF said.
The IMF said on Tuesday that Mongolia had met key fiscal deficit targets while strong international commodity demand had aided the country's recovery.
Mongolia's economic growth was now projected at 5 percent in 2018 and 6.3 percent next year, compared with an estimated 3.3 percent in 2017, it added.
"The economy is doing better than expected led by commodity exports and a pick-up in domestic demand," IMF staff team leader Geoff Gottlieb was quoted as saying.
Government revenues also benefited from the pick-up in commodities demand, with coal exports more than doubling on the year in 2017 thanks to stronger sales to China.
"These developments have resulted in a largely stable exchange rate, a fall in interest rates, and have greatly improved the government's debt service schedule," Gottlieb said.
"Nevertheless, the growth outlook is subject to risks including a fall in external demand for commodities and higher fuel prices," he added. "In light of these risks and still limited buffers, fiscal and monetary policies should remain prudent."
Neil Saker, the IMF's representative in Mongolia, told Reuters the next disbursement of funds will be made after the assessment is approved by the IMF's executive board meeting in March.
In December, Mongolia made a scheduled repayment of $500 million to investors in its $1.5 billion 2012 debt offering, named the Chinggis bond after the 13th century Mongolian conqueror known in the West as Genghis Khan.
Mongolia's stronger-than-expected recovery also enabled the government this month to abandon a 10-25 percent progressive income tax, which led to protests. The levy will instead revert to a flat rate of 10 percent. (Reporting by Terrence Edwards; Editing by David Stanway and Eric Meijer)
The nation remained the world's largest consumer of gold bars and coins in 2017, investing in 306.4 metric tons, on the back of strong domestic demand and a rise in young consumers, the World Gold Council reported on Tuesday.
Wang Lixin, managing director of the WGC in China, said that annual demand in China last year was 8 percent higher than in 2016, comfortably above its five-year average of 284.8 tons.
"Looking at jewelry demand, China's 6 percent growth year-on-year in the sector in the fourth quarter heavily contributed to a 3 percent rise in annual jewelry demand－the first yearly increase since 2013," Wang said.
Consumption within China's gold jewelry market rose 3 percent year-on-year to 646.9 tons in 2017, data from the WGC show.
The country's overall gold consumption rose 9.41 percent to 1,089 tons last year, making the country the world's biggest gold market for the fifth year running, according to Beijing-based China Gold Association.
Wang said the trend for lower-weight, better designed, higher-margin premium gold jewelry products continued to gather momentum. Also in 2017, China harnessed more cutting-edge retail technologies, such as augmented reality and virtual reality.
"With the addition of AI-enabled tools, we believe the outlook for Chinese jewelry demand is positive," said Wang.
"The shift in taste has pushed the industry to upgrade, as many Chinese jewelry producers have already adopted machines with computer-controlled programs to design not only 18-karat, but also 24-karat gold products for better and more personal designs," said He Jingtong, a professor of business at Nankai University in Tianjin.
"Coupled with ongoing urbanization and rising domestic demand, powered by the Chinese government's measures to shift the economy to an internal consumption-driven model, the market potential in the Chinese mainland, particularly in lower-tier cities, continues to be attractive to jewelry retailers of all sizes," said Yang Lixin, director of the gemological training center for China's National Gem and Jewelry Technology Administrative Center.
The China Gold Association said the country's gold output dropped 6 percent to 426 tons in 2017, but it still retained its position as the world's biggest producer for the 11th consecutive year.
The country adopted new rules in 2016 to raise environmental requirements on solid waste from gold prospecting, leading to a wave of gold mine closures and output declines in the major producing provinces, including Shandong, Jiangxi and Hunan.
BEIJING, Feb. 6 (Xinhua) -- Top Chinese legislator Zhang Dejiang on Tuesday met with L. Enkh-Amgalan, deputy chairman of the State Great Hural (Parliament) of Mongolia in Beijing, with the two sides agreeing to strengthen parliamentary cooperation.
Zhang, chairman of the Standing Committee of the National People's Congress (NPC), expressed the hope that the NPC and the State Great Hural will make use of the mechanism of regular exchanges between the two legislatures to deepen their cooperation.
He said the two legislatures should share experience in state governance and legislation, improve the legal guarantee for pragmatic cooperation, and expand the social foundation of bilateral friendship.
He also called on the two sides to respect each other's core interests and major concerns, and cement the political foundation of China-Mongolia ties.
The Standing Justice Committee has backed a draft resolution about receiving asylum seekers from 2018-2020. According to the draft resolution presented by the government, Mongolia will annually receive up to 100 from 2018-2020. The following quotas have been imposed; up to 30 from Russia, up to 30 from China and up to 40 from other countries.
Regarding the question of where the asylum seekers will live, it is being proposed that up to 52 will be supported in Ulaanbaatar, up to four in the Darkhan-Uul, Orkhon and Selenge provinces and up to two asylum seekers in other provinces.
Ulaanbaatar /MONTSAME/ According to the review of implementation of the third phase of the IMF's Extended Fund Facility, Mongolia's economic growth was higher than expected, reported Geoff Gottlieb, head of IMF's working group.
He, also emphasized that increase in mining raw materials' prices has contributed to reaching economic growth in a short period of time.
Minister of Finance Ch.Khurelbaatar said "The IMF's working group is leaving back after working in Mongolia since January 25. As a result of the IMF's program, many positive changes has been recorded in the Mongolian economy. In 2017, our economic situation was difficult. Foreign exchange reserves accounted to USD 1 billion. Early 2017, we paid USD 580 millions for bond repayment and we faced a lot of difficult situations. However, with implementing the IMF's program economy has recovered and even grown by 5 percent over the past period. Foreign currency reserves exceeded USD 3 billion, and we drew foreign direct investments of USD 1.1 millions. Moreover, budget revenues exceeded MNT 600 billions," said the Minister.
Head of IMF's working group Geoff Gottlieb: As a result of the external and internal economic situation and policies implemented by the Government of Mongolia, the economy of Mongolia is expected to increase by 5 percent in 2018 and by 6.3 percent in 2019. The Mongolian government's policy adjustment program is being funded with USD 5.5 billion by donors including IMF. Moreover, governments bonds to be paid off in 2017-2018 were successfully re-funded. Official foreign currency reserves increased by USD 1.8 billion. Overall, a range of positive outcomes were reached such as drastic deacrese in government debt. Thanks to these changes, the exchange rate has stabilized, interest rate has fallen and the government debt service schedule has been greatly improved. However, there are several risks to economic growth. In particular, there is a tendency that external demand for raw materials might reduce and oil price increase. Taking into consideration insufficient funds allocated for risk protection, monetary and financial policies should remain adequate. In the near future, it is of importance to continue strengthening the banking system, building sophisticated taxation system and improving budget monitoring," said Gottlieb. IMF noted that as a result of the program Mongolia's foreign debt issue has been resolved in positive way, and foreign currency reserves increased by USD 1.5 billion.
Minister of Finance added that "Owing to the decrease in government’s debt and positive changes in economy, individual's income tax will be set at 10 percent as before. In 2018, 2019, a decision was made on increasing salaries in line with the inflation rate."