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Aspire Mining’s proposed railway line that is critical for getting its giant Ovoot coking coal deposit in Mongolia to market is firming up with both the Chinese and Russian Government’s recognising the strategic value of Mongolia as a transportation hub in the region.
The company said a long-awaited intergovernmental agreement on transporting goods by rail was signed in the Mongolian capital of Ulaanbattar on the 8th June by Mongolia’s Minister for Roads and the Russian Transport Minister.
The agreement allows for Mongolian-sourced freight to enjoy a tariff discount on Russian rail transportation for its exports to, and via Russia for 25 years.
In particular, Mongolian coal exports will now receive a whopping 66.4% discount on the Russian rail system to the north of Mongolia.
The agreement is a shot in the arm for Aspire, whose high-quality coal assets are perfectly placed to take advantage of the new discounted rail transportation opportunity into Russia.
A recent feasibility study based on the construction of a rail corridor from Aspire’s Ovoot coal deposit to the rail hub town of Erdenet, 548km to the east, confirmed attractive economics that would be largely underwritten by Aspire’s project.
Whilst the initial study was based on transporting coal south into China, the recent agreement on transport between Mongolia and Russia potentially opens other options for Aspire, whereby coal could be transported via Russia into sea borne markets.
The proposed hefty tariff reductions on coal transported via rail through Russia will place the Russian option on a more even economic playing field with the proposal to transport into China to the south.
Russia is already constructing a new rail line to the town of Kyzyl, which could potentially be connected into Erdenet via Aspire’s Ovoot coal deposit..
Additionally, plans are in place to upgrade the railway from Russia, through Mongolia and into China with an initial commitment of USD$260m over the next two years on the table.
The upgrading of the north south rail line that is connected to Erdenet, is an essential part of Aspire’s grand plan to transport coal into China as it seeks to make the case for an Erdenet to Ovoot rail line to be built.
Aspire Executive Chairman David Paull said: “This Rail Cooperation Agreement has two important positive impacts for Aspire. The first is that it lowers rail transit costs through Russia to Far East Ports and potentially west to the Black Sea Ports to a point where it is competitive with transport costs to Northern Chinese customers, opening up a larger and more diverse customer base.”
“The second impact is the agreement from the Mongolian Government side to cooperate to assist Russian exports south from the Russian city of Kyzyl to connect with the Erdenet – Ovoot Railway once the Northern Corridor is completed.”
Aspire is sitting on a 255 million tonne ore reserve of premium, metallurgical coal at Ovoot, which produces a high-grade “coke”, an essential fuel and reactant in the blast furnace process for primary steelmaking.
Recent test work completed on coal from the company’s Nuurstei project, 160km east of Ovoot and closer to Erdenet, has also returned outstanding results indicative of premium hard coking coals.
Nuurstei holds a JORC-compliant coal resource of 12.9 million tonnes and Aspire are planning more work at the deposit during the latter half of 2018.
Mr Paull added: “These coke results demonstrate that coal from Nuurstei will be potentially sought after by Japanese and Korean steel producers as well as from Chinese steel mills where higher quality inputs into the steel industry are being sought.”
On the face of it, the new spirit of cooperation between Mongolia and Russia and indirectly China, comes at a significant time for Aspire and almost by default, is enhancing the potential viability of its coking coal project.
The market is watching too, with Aspire’s share price jumping by nearly 400% since early April, giving Aspire a current market cap of just over $58m...
Mongolia’s president, a former martial-arts champion, wrestles with some major problems www.washingtonpost.com
ARVAIKHEER, Mongolia — On the vast Mongolian steppe, birthplace of Genghis Khan, a strong man has arisen. Literally. Mongolia’s President Khaltmaa Battulga is a former world martial arts champion who still trains regularly, a friend of Russia’s Vladimir Putin and a business tycoon with a tough-guy image.
He is also a nationalist and something of a populist. Battulga swept into office last year by casting himself as a Trump-like outsider, a champion of the poor taking on a corrupt and self-serving political elite.
Like the U.S. president, this is a man who says he always wins, whose campaign motto was “Mongolia will win.” But he is now wrestling with the challenge of his life.
Mongolians overthrew an authoritarian communist regime in 1990 in a peaceful democratic revolution. Nearly three decades of democracy have fostered progress but also glaring inequality, leaving nearly 30 percent of the population in poverty. Corruption is rampant, the dark side of the country’s huge reserves of copper, coal and gold.
“I asked before the election and I am still asking,” the gruff-voiced Battulga told a town hall meeting in Arvaikheer in central Mongolia last month. “Why are the people of a country so rich in resources still so poor?”
Battulga, 55, rose from poverty to the country’s highest post, leapfrogging from a sambo wrestling world championship to a successful business career, but his power as president is limited — parliament and the prime minister’s job are in the hands of a rival political party. Battulga has an important role in setting foreign policy, but his ambitions are much grander.
For the past three months, he has been touring Mongolia, holding town hall meetings in every one of the nation’s 21 provinces, asking for popular support in his battle to improve the way his country is governed.
“Do you get the feeling the president we chose is on his own?” he asked hundreds of people packed into a theater here. “It is time to start talking about president plus who? President plus the people, working together.”
Luvsandendev Sumati, director of the independent Sant Maral polling organization, underscores the parallels between the most recent Mongolian and U.S. presidential elections.
After the dirtiest presidential contest in Mongolia’s history, he said, many people stayed away or cast blank ballots in protest. In the end, though, Battulga’s anti-establishment status outweighed questions about his business record and past corruption allegations.
“The poor decided he is their president, and once people decide that, they forgive you everything,” Sumati said. “Anti-establishment politicians are taking over the globe. Why should Mongolia be any different?”
This is the most sparsely populated country in the world, the size of Texas, California and Montana combined but home to just 3 million people, living in the giant shadows of Russia to the north and China to the south. Culturally, it remains closer to its northern neighbor, but economically it is dependent on its booming southern neighbor, with more than 80 percent of its exports flowing there.
Distrust of China runs high here, however, and Battulga exploited that to portray himself as a pro-Moscow, anti-Beijing candidate during the campaign. As president, though, he takes a more pragmatic approach, saying that Mongolia should be friends with both countries while “rebalancing” to reduce China’s trade dominance.
A former president of Mongolia’s judo association, he shares a love of wrestling, and a friendship, with Putin.
“Because we both practiced judo, it is easier for us to communicate,” he said in an interview, noting that Putin is also “president of a country that has been our neighbor for thousands of years.”
But Battulga wants American support, too. In 1990, then-Secretary of States James A. Baker III pledged that the United States would be the “third neighbor” to the newly democratic Mongolia, a pledge repeated when President George W. Bush visited in 2005. More recently, another secretary of state, John F. Kerry, praised Mongolia as an “oasis of democracy” between Russia and China.
Yet U.S. defense and security ties with Mongolia are much stronger than economic ties, which account for less than 2 percent of Mongolian trade.
“The praises of the United States that Mongolia is ‘an oasis of democracy’ or ‘model of democracy’ have not brought any substantial contribution to the economy,” Battulga wrote in a letter to President Trump in December. “Discouraged by this fact, ordinary citizens of Mongolia are losing confidence in democracy and doubting the choice of democratic path.”
Battulga asked for improved access for Mongolian textile exports to the United States. Trump replied that he would be delighted to explore ways to boost trade in a “fair and equitable manner,” according to the Mongolian presidential office.
Battulga began his business life in modest fashion. After graduating from art school, he sold paintings to tourists in the capital, Ulaanbaatar, before sewing and selling jeans and then trading electronics across borders. He used the prize money and international connections gleaned from his sambo tournaments to get his start.
A taxi service, television station and nightclub followed, as well as a lottery business. During the privatization of state-owned assets, he acquired controlling interests in a hotel and a meat-processing factory. But he was also forced to flee the country for six months after he was falsely accused of illegally importing alcohol, according to his friend and biographer Dorjkhand Turmunkh. Another investigation into alleged corruption followed a more recent stint as roads and transport minister, but no charges were brought.
Battulga underlined his nationalist credentials more than a decade ago by erecting a giant statue of Genghis Khan on horseback in an amusement park outside the capital. He burnished his populist credentials by pledging to use proceeds from mining to pay off personal debts held by ordinary Mongolians.
Today, Battulga is Mongolia’s most popular politician, Sant Maral polls show. Yet questions remain for many people: Is the president, with his vast business empire, part of the solution or part of the problem?
As president, he is supposed to renounce party affiliation and unite the nation, but is his nationwide tour a genuine attempt to raise and address problems — or an attempt to grab personal power and campaign for his party ahead of parliamentary elections in 2020? Is he a genuine man of the people or a wannabe strongman?
At the town hall meeting, complaints were manifold. They included requests to repatriate offshore funds held by the political elite and exposed in the Panama Papers, as well as pleas for better conditions for health workers. Some railed against Chinese workers in Mongolia, others about overcrowding in schools.
The president listened patiently for more than an hour before blaming voters for giving the rival Mongolian People’s Party a dominant position in 2016 parliamentary elections.
“One party got 65 out of 76 seats,” he said. “They have all the seats, but unfortunately these past two years they didn’t do anything.”
But at least one listener pushed back, accusing him of being no better than his rivals.
“You are blaming voters, saying this is our fault for electing thieves,” he said. “Look at our lives, look at the condition our kids live in. The Chinese are the owners of Mongolia now. The country is on the brink of disaster. I elected you. I voted for you. But Mongolia will only ‘win’ when we get rid of both these two parties.”
CORRECTION: A headline previously on this article misidentified Khaltmaa Battulga as a former world judo champion. He is a former world champion at the martial art sambo and former president of Mongolia’s judo federation....
India and China have discussed creating an ‘oil buyers’ club’ to be able to negotiate better prices with oil exporting countries.
They will be looking to import more US crude oil in order to reduce OPEC’s sway, both over the global oil market and over prices, India’s Petroleum Ministry said on Wednesday.
“With oil producers' cartel OPEC playing havoc with prices, India discussed with China the possibility of forming an 'oil buyers club' that can negotiate better terms with sellers as well as getting more US crude oil to cut dominance of the oil block,” a tweet from the Petroleum Ministry’s Twitter account reads.
India has been saying for months that oil prices have risen too much to be sustainable for many oil-importing countries.
Last month, as Brent Crude prices briefly broke above $80 a barrel—the highest since late 2014—gasoline and diesel prices in India surged to a five-year-high, also due to a weakening rupee against the US dollar.
India is concerned that the rallying oil prices are hurting its economy, and its Petroleum Minister Dharmendra Pradhan reiterated the need for “stable and moderate” prices in a phone conversation with Saudi Arabia’s Energy Minister Khalid al-Falih in the middle of May.
Thursday, Pradhan met with ambassadors of OPEC countries to India and “discussed India’s growing position in the world energy demand & the need for responsible pricing which balances the interests of both the producer & consumer countries,” the Indian minister tweeted today, adding that he had also suggested creating transparent and flexible markets for both oil and gas.
“Further also raised the issue of discriminatory pricing in global oil & gas trade through measures such as Asian Premium. Urged the OPEC Ambassadors to reconsider these discriminatory measures in the overall interest of all the countries & work together for a sustainable future,” Pradhan added.
The Indian oil minister plans to visit Vienna next week to take part in the 7th OPEC International Seminar to further discuss the oil market and pricing issues with OPEC’s Secretary General Mohammad Barkindo and with ministers from OPEC countries, the Indian government said in a statement today.
Advisory day for private enterprises which are supplying products to the European Union countries or plan to make export was held on June 14 at the Mongolian National Chamber of Commerce and Industry (MNCCI).
The event was organized for the first time under the EU Trade Related Assistance to Mongolia (TRAM) project with the support of EU. Last year, Mongolia’s export to the EU totaled EUR 67 million, 40 percent of which was non-value added semi-finished products.
Cooperation between Mongolia and EU started in 2005 and Mongolia is eligible to export 7200 items tax free to the EU market. However, only few products such as knitwear, carpet and semi-finished leather are being exported. Therefore, the participants of the event stressed the need to increase the types of products for the EU market export, which accounts for 16 percent of world imports.
GM Daily had the opportunity to sit down with Arnaud Soirat, Rio Tinto’s Chief Executive of Copper and Diamond, about the company’s future. The first part of the interview, which covered the stanceon the current turmoil around the Oyu Tolgoi (OT) project, was published on June 14th issue of ZGM Daily. Scan the QR code to read the first part of the interview.
How do plan to contribute to solving social problems of the workers on-site? It has been widely debated that a town near the site will be solution to many problems such as divorce?
-Yesterday, I went to visit Khanbogd town and I am very impressed by the work that has been done. I am sure that you have read in the newspaper where politicians are saying nothing has been done. Maybe you should ask them a simple question. “Have you gone and seen them by yourselves? What has been done?” Because, when you go, it is impossible to say that Rio Tinto has done nothing. It is not true at all. Actually, we have already done a lot. We have helped building the key infrastructure for a town. We have built the water treatment plants and we have visited the veterinary clinic, which is going to help the herders have healthier stock in general. We have built schools too. So, we have built lots of infrastructure, which are the enabler for the town to grow. The town has already grown quite a lot. Compared to ten years ago, the population has been tripled. But we are not a real estate business. Our job and purpose are not to build a town. We can be a catalyst, but the government and private investors have got their own roles to play.
-You have said the investment agreement and the UDP are the foundation of your investment. Some populists are stating, they might want to renegotiate the agreement. What does that mean to the company? Also, the election is coming up in two years, which significantly increases the risk of that actually happening.
-We are prepared and waiting to invest in the country. Because waiting is the right thing to do for the country, for Mongolian people and for shareholders. But we cannot invest if we do not have stability. Therefore, those agreements cannot be renegotiated. They have been negotiated in good faith. We need those agreements to be honored, first to continue investing.
I am convinced that within the existing agreements, there are many more things we can do together. For example, power. We are committed to building a power station in Mongolia, using the coal from Tavan Tolgoi that will supply electricity to OT. That is the commitment that we made in the investment agreement. Yet, we cannot do it on our own. We need permits. We need the Government’s support. Currently, we are having difficulties to get the support of the Government. This is a great example of how, within the existing agreement, we can create more value for the country. We do not need to renegotiate agreements to do so.
-What does it take to create more value within the existing agreement?
-We are currently buying power from Inner Mongolia, which is equivalent between USD 120-140 million per year. So, if we were to build a power station, then this money will stay in the country. If you look at the very strong priorities that we are giving to employ more Mongolian people and to give more of our procurement contracts to Mongolian companies, 85 percent of our contracts are with Mongolian companies. We are, right now, contributing to the diversification of Mongolian economy. Also, we are encouraging “Made in Mongolia”. More of this is creating huge amount of value for the country. So, my point is that these agreements are foundations, on which very reputable international banks and international organizations have lent USD 6 billion. If those agreements are renegotiated, the whole foundation of the lending will collapse. There is an incredible strength in the culture. People are very smart, adaptable and creative. When we give opportunities, entrepreneurs are seizing those opportunities to create new businesses. So, diversification is already happening. I think the parliamentary working group has got the key opportunity to actually explain better to Mongolians why those agreements are good agreements and what we can do together to create environment for us to continue investing.
-Does the many things include a copper cathode factory in the foreseeable future?
We had a commitment to study about a potential copper smelter in the country, which we did. We gave our study to the Government, around August last year. As for the commitment we made in the agreement, the analysis shows that it will be very difficult for the investor to invest in a smelter and get some money back out of it. Mongolia has a geographical situation such that it would be very difficult to have a profitable smelter. So, we gave the conclusion to the Government that we are not interested in investing in a smelter. However, if the Government were interested for strategic critical reasons, for example, to create jobs, that is up to them to invest if they wish so. We have given the commitment that would be selling copper concentrates to local smelter at the international market price to enable that smelter to import....
On June 13, Cabinet approved the submission to Parliament of a bill on establishing a loan agreement with the European Bank for Reconstruction and Development (EBRD).
The Ulaanbaatar Solid Waste Modernization Project includes plans to build a construction and demolition waste facility at Moringiin Davaa. Furthermore, a consolidated tariff system for solid waste and construction and demolition waste management will be introduced.
It is expected that improved waste management could reduce greenhouse gas emissions in Ulaanbaatar and more than 100,000 tons of construction waste could be recycled with the new plant in operation. EBRD has agreed to provide financing of 4.5 million EUR in grant aid and a 9.7 million EUR loan for the implementation of the project. The loan must be repaid within 15 years.
Orkhon /MONTSAME/ On June 13, Deputy Governor of Orkhon aimag S.Batjargal, Head of the Governor’s Office D.Soyolchkhuu met Ambassador of Hungary to Mongolia Mihaly Galosfai.
Deputy Governor S.Batjargal expressed thanks to the Ambassador for meeting to exchange views on cooperation in social and economic spheres, restoring established relations between Orkhon aimag and Szekesfehervar city of Hungary and put proposals to collaborate in processing leather and hide, establishing a joint factory as well as exporting meat and meat products to Hungary.
"Agriculture sector has well developed in Hungary, so it is possible to cooperate in meat processing, supplying equipment and facilities, introducing and using new technologies. Also some 100 people are possible to be involved in student exchange programs, and bachelor, master and doctoral level trainings in Hungary," said the Ambassador.
Orkhon aimag and Szekesfehervar city of Hungary established a memorandum of cooperation of ‘Partner Cities’ to cooperate in economy, health and tourism sectors in 2008.
A recent meeting between Vladimir Putin, President of the People’s Republic of China Xi Jinping and President of Mongolia Khaltmaagiin Battulga took place in Qingdao.
During the meeting, Russian President Vladimir Putin said Moscow supports Mongolia’s plan to build oil and gas pipelines from Russia to China via Mongolia. According to the Kremlin press release, Putin said: “Our states are building cooperation in developing a modern transport infrastructure. As I said at the bilateral meeting before, last year, the volume of container traffic on the China−Mongolia−Russia route to Europe increased 2.7 times, and by almost four times in the first quarter of this year.
“We plan to upgrade the Ulaanbaatar Russian−Mongolian railway and adjacent sections. We are developing an upgrade project for this railway through 2030. The first stage spanning 2018–2020 will receive $260 million in investment.
“In 2016, we signed a trilateral intergovernmental agreement on cooperation in motor transportation. Russia ratified the agreement last year. We hope that our friends will do their part soon.
“We are starting to work together to remove excessive administrative barriers to provide an uninterrupted flow of transit trade. To this end we have to ensure full implementation of the 2016 agreement on mutual recognition of the results of customs control inspections.
“As Mr Chairman just said, the introduction of the electronic information exchange system envisaged by the agreement has already substantially expedited the process of customs clearance at the border.
“We have good opportunities for interaction in energy. Our Mongolian partners have proposed oil and gas pipelines from Russia to China across their territory. Generally, we are supportive, this is a good idea. But of course, as always, thorough feasibility studies need to be carried out.
“Close interregional links play a special role in the cooperation between our states. For several years now border cooperation forums have been held involving Russia’s Trans-Baikal Territory, the Inner Mongolia autonomous region in China and the border areas of Mongolia.
“We believe it is important to step up the efforts to promote three-way cooperation in tourism. In this context I would like to mention the proposal to form a cross-border “Tea Road” that would link these regions in Russia, China and Mongolia.”
Ulaanbaatar (AsiaNews/Agencies) – The Global Agenda for Sustainable Livestock (GASL) is currently underway in Mongolia (11-15 June) with the participation of 120 experts from 34 countries.
The topics covered are: food and food security, means of subsistence and growth, animal health and welfare, climate and the use of natural resources.
In Mongolia, 40 per cent of the population is lives off the land. The livestock industry has been the main source of income for its people for centuries.
Herding has contributed significantly to economic growth in the country over the past 25 years.
During this period, the GDP tripled, thanks also to the mining sector, and livestock contributes 15 per cent of GDP. Livestock numbers have reached 66 million in a country of three million people.
However, in recent years, pasture quality and productivity have dropped, both for environmental factors (climate) and the aging livestock. For this reason, the Mongolian Livestock programme was launched.
The plan aims to protect breeder and livestock, with an eye towards protecting biodiversity, wildlife and landscape. Another important goal is better communication between herders and markets.
Under a plan called Industrialisation 21:100, about a hundred processing plants are in the works in 21 provinces to treat meat, milk and wool and provide better access to markets.
In a letter, Munkhnasan Tsevegmed, Minister of Food, Agriculture and Light Industry writes that the government is “working to improve access to markets, both domestic and international.”
He acknowledges that Mongolia is also not alone. In fact, the UN’s Food and Agriculture Organisation is lending a hand to set up “disease-free zones for beef and lamb”.
To this effect, a Mongolian delegation travelled to Botswana and Namibia “to learn from their experiences of opening up meat exports to the European Union.”
Japan's Foreign Ministry says one of its senior officials has briefly talked in Mongolia with the head of a North Korean government-affiliated body.
The ministry says Asian and Oceanian Affairs Bureau Deputy Director-General Fumio Shimizu conversed with the chief of the North's Disarmament and Peace Institute. They met on the sidelines of an international conference on security issues in Northeast Asia.
The ministry says Shimizu conveyed to the North Korean side Japan's basic stance that Pyongyang must return all Japanese nationals abducted by its agents.
Shimizu is also believed to have told the North Korean side that Japanese Prime Minister Shinzo Abe is willing to resolve the abduction issue through direct talks with North Korea.
A similar brief conversation between officials of the 2 countries took place at last year's session of the security conference. At that time, the Japanese side demanded that the North abandon its nuclear and missile programs and allow the abductees to return home.