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PARIS (Reuters) - France, Germany, Italy and Spain want digital multinationals like Amazon and Google to be taxed in Europe based on their revenues, rather than only profits as now, their finance ministers said in a joint letter.
France is leading a push to clamp down on the taxation of such companies, but has found support from other countries also frustrated at the low tax they receive under current international rules.
Currently such companies are often taxed on profits booked by subsidiaries in low-tax countries like Ireland even though the revenue originated from other EU countries.
“We should no longer accept that these companies do business in Europe while paying minimal amounts of tax to our treasuries,” the four ministers wrote in a letter seen by Reuters.
The letter, signed by French Finance Minister Bruno Le Maire, Wolfgang Schaeuble of Germany, Pier-Carlo Padoan of Italy and Luis de Guindos, was addressed to the EU’s Estonian presidency with the bloc’s executive Commission in copy.
They urged the Commission to come up with a solution creating an “equalization tax” on turnover that would bring taxation to the level of corporate tax in the country where the revenue was earned.
“The amounts raised would aim to reflect some of what these companies should be paying in terms of corporate tax,” the ministers said in the letter, first reported on by the Financial Times.
Le Maire, Schaeuble, Padoan and de Guindos of Spain said they wanted to present the issue to other EU counterparts at a Sept. 15-16 meeting in Tallinn.
The EU’s current Estonian presidency has scheduled a discussion at the meeting about the concept of “permanent establishment”, with the aim of making it possible to tax firms where they create value, not only where they have their tax residence.
France has stepped up pressure for EU tax rules after facing legal setbacks trying to obtain payments for taxes on activities in the country.
A French court ruled in July French court ruled that Google, now part of Alphabet Inc, was not liable to pay 1.1 billion euros ($1.3 billion) in back taxes because it had no “permanent establishment” in France and ran its operations there from Ireland.
TOKYO (Reuters) - Oil prices edged up on Monday after the Saudi oil minister discussed the possible extension of a pact to cut global oil supplies beyond March 2018 with his Venezuelan and Kazakh counterparts.
The news of the talks on Sunday helped offset the downward pressure on oil prices amid worries that energy demand would be hit hard by Hurricane Irma.
Hurricane Irma knocked out power to more than 3 million homes and businesses in Florida on Sunday, but it has weakened to a Category 2 with maximum sustained winds of 110 miles per hour (177 kph).
U.S. crude for October delivery CLc1 was up 29 cents, or 0.6 percent, at $47.77, having tumbled 3.3 percent on Friday.
London Brent crude for November delivery LCOc1 was up 23 cents, or 0.4 percent, at $54.01 a barrel by 0023 GMT, having settled down 1.3 percent.
OPEC and other producers, including Russia, have agreed to reduce crude output by about 1.8 million barrels per day until next March in a bid to reduce global oil inventories and support oil prices.
The Saudi energy ministry said Energy Minister Khalid al-Falih agreed with his Kazakh counterpart that the option to extend the rebalancing effort would be considered in due course.
Elsewhere, Iran will reach an oil production rate of 4.5 million barrels per day (bpd) within five years, Ali Kardor, managing director of the National Iranian Oil Company (NIOC), said Sunday according to the oil ministry news site SHANA.
Iran has been producing around 3.8 million bpd in recent months.
Saudi Arabia on Saturday also suspended any dialogue with Qatar, accusing it of “distorting facts”, just after a report of a phone call between the leaders of both countries suggested a breakthrough in the Gulf dispute.
Mining and metals investors were offloading the sector's big names on Friday after sharp declines in iron ore and base metals prices which according to some market observers have been running ahead of fundamentals.
While gold was trading at near 12-month highs on the back of safe haven buying, copper fell more than 3% to $3.03 a pound or $6,706 a tonne, bringing the bellwether metal's impressive two-month rally to a screeching halt. For the week, lead was hardest hit among base metals, dropping 4% to $2,311 a tonne, while zinc gave up more than 3% exchanging hands for $3,094 on Friday.
The iron ore price which has been also been defying expectations turned lower on Friday with benchmark Northern China import prices declining nearly 3% to $73.70 a tonne, a three week low. Coking coal was also softer on Friday, but at $209.40 a tonne premium Australian exports are up nearly 40% from its 2017 lows struck in June.
The bearishness spilled over to the sector heavyweights with investors rushing for the exits and booking gains on stocks that have enjoyed huge run-ups since the summer doldrums.
Shares in world number one miner BHP Billiton (NYSE:BHP) lost 3.2% in New York while Vale (NYSE:VALE.P), the world's top iron ore and nickel producer, fell 4.2%. While BHP is looking to shed assets, Rio de Janeiro-based Vale is said to be targeting acquisitions in an effort to diversify its portfolio.
The world's second largest miner based on revenue Rio Tinto (NYSE:RIO) declined 2.9% in New York. The Melbourne-HQed company is the world's number two iron ore producer and number seven copper producer, but unlike BHP and Vale which upped iron ore production by more than 5% during the second quarter experienced declining output of the steelmaking raw material.
Anglo American (LON:AAL) gave up 3.1% in New York, but year to date gains for the world's fourth largest diversified miner are still near 30%.
Top listed copper producer Freeport-McMoRan (NYSE:FCX) plunged 6.5% and with Vale was among the NYSE's top 10 most actively traded stocks on Friday. The Phoenix-based company announced last week that it's negotiating a deal with the Indonesian government to give up a majority stake in its iconic Grasberg mine in the remote Papua province of the Asian nation.
Glencore (LON:GLEN) was also marked down, with its over the counter units trading in the US losing 1%. Glencore is the world's third largest copper company in terms of output with production of 1.3m tonnes last year, but with little exposure to iron ore other than through its trading arm escaped some of the damage. Glencore is also benefitting from being a major producer and top trader of coal.
World number five copper producer Southern Copper (NYSE:SCCO) took a 3.6% hit while Canada's largest diversified miner, Teck Resources (NYSE:TECK) lost 5.5% in New York. Teck's valuation took a drubbing this week after it was revealed that a Chinese sovereign wealth company slashed its 17% stake in the Vancouver-based company first acquired in 2009....
The Bank of Mongolia traded 770.5 billion MNT worth 1-week maturity central bank bill (“CBB”), with weighted average yield of 12.0 percent per annum.
1 - week CBBs
1-week CBB plays an important role in managing the reserves of banks and is the core monetary policy instrument of the Bank of Mongolia. The interest rate on CBB will be the policy rate of the BOM and will serve as a guide interest rate on the interbank market. It was first introduced in July 2007, with fixed rate and unlimited bidding, and traded on a regular basis every Wednesday at the interbank market. This had attracted the banks’ interests providing the possibility for the banks to place their excess reserve in short term asset. Since the introduction of this instrument, there has been a substantial change in the way banks manage their reserves. For the favorable adjustment of CBB rate and loan principle along with the well balance of togrog and foreign exchange, 1 - week CBB auction has been held in the form of competitive interest rate since May 2010. In doing so, the upper and lower limits of the bank bids are to set +/- 2 per cent of the policy rate.
On September 7, 2017, the authorities of Mongolia began publishing critical macroeconomic data on the website of the National Statistics Office—the National Summary Data Page (NSDP). This marks the culmination of efforts conducted in recent period by the principal statistical agencies working together to publish the data recommended under the IMF’s enhanced General Data Dissemination System (e-GDDS), while utilizing the Statistical Data and Metadata Exchange. In support of these efforts, a mission of the IMF’s Statistics Department visited Ulaanbaatar during June 28-July 4, 2017 to assist with the implementation of the e-GDDS.
Publication of essential macroeconomic data through the new NSDP will provide national policy makers and domestic and international stakeholders, including investors and rating agencies, with easy access to information that the IMF’s Executive Board has identified as critical for monitoring economic conditions and policies. Making this information easily accessible in both human and machine-readable formats, and in accordance with an Advance Release Calendar, allows all users to have simultaneous access to timely data, bringing greater data transparency.
On Thursday, gold's status as a hedge against uncertainty were burnished again as investors worried about impact of storms in the US and escalating geopolitical tensions marked down the dollar.
Gold futures in New York for delivery in December, the most active contract, ended at $1,354.00 an ounce, up more than 1% compared to Wednesday's closing price and not far off its highs for the day. Gold is now up 17.6% or over $200 so far in 2017.
Gold's rally from it's summer lows was given fresh impetus from a sharp fall in the US dollar on Thursday. A decision to hold rates in Europe, disappointing US job numbers combined with mounting costs for damages from hurricane Harvey and the possible devastating effect of approaching storm saw the greenback trade at its lowest level against the country's major trading partners since January 2015.
The standoff with North Korea also attracted safe haven buying of gold with no sign that the world's major powers are any closer to finding a way to deal with the nuclear-armed rogue state:
“Investors don’t want to go into the weekend when North Korea is scheduled to show its military prowess during the Founders day celebration without their hedges in place,” Quincy Krosby, chief market strategist at Prudential Financial told MarketWatch.
Gold's leg up saw major gold mining stocks enjoying another positive day of trading.
World number two producer Newmont with output of 5m ounces expected this year, was one of the best performers of the day with the Denver-based company rising 3.2% in New York. With a $21.1 billion market cap Newmont is now worth more than top producer Barrick Gold. The Toronto-based company has shrunk its portfolio of mines and this year is predicting between 5.3–5.6m ounces of gold production, down from a peak of 7.7m ounces six years ago.
Goldcorp added 2.5% for a market cap of $12 billion, but the Vancouver-based miner's advance so far this year has been modest as just over 4%. The third largest gold miner in terms of output, AngloGold Ashanti trading in New York leaped 4.9% pushing the company back into positive territory for the year.
Fellow South Africa-based producer Sibanye fresh off a $2 billion acquisition of a North American platinum producer and a name change was the odd one out with a decline on the day, but Harmony Gold and Gold Fields advanced with the latter now sporting year-to-date gains of 55%. Africa-focused Randgold Resources added 3.8% lifting the company's market value on the Nasdaq to above $10 billion and year to date gains to above 40%.
Toronto's Kinross Gold climbed 4.5% pushing its market value above $6 billion. The Canadian miner with four mines in the US, a couple in Russia and operations in Brazil and West Africa is now up more than 47% in 2017. Other Canadian gold companies also performed well with Agnico Eagle up 1.6%, Yamana Gold adding 1.8% and Eldorado Gold gaining 1.6%
ULAANBAATAR (Reuters) - Mongolia’s parliament voted to oust Prime Minister Jargaltulga Erdenebat, its website said late on Thursday, after his ruling Mongolian People’s Party (MPP) was defeated in a July presidential election.
No prime minister of Mongolia, a thinly populated and mineral-rich country sandwiched between Russia and China, has completed a four-year term since 2004.
Of 73 members of parliament attending the vote, 42 were in favor of Erdenebat’s removal.
The outgoing prime minister noted that the country had seen 13 governments in the last 25 years.
“The resignation of a government in a democratic parliament is a normal occurrence, but it can be harmful if a good thing goes beyond its norms,” Erdenebat said in a statement on parliament’s website.
A former Soviet satellite, Mongolia transitioned to a parliamentary democracy in 1990.
“I believe that dismissing government is a mistake that hinders the development of the country, rather than a positive mechanism of accountability,” Erdenebat said.
The MPP gained power in mid-2016 in elections in which it won 65 of parliament’s 76 seats.
It is expected to hold a party congress to choose new leadership, said Dale Choi, an analyst and head of Altan Bumba Financial Group in Ulaanbaatar.
“I don’t think it means instability” for the government, he said.
“I think it means internal party politics. It’s clearing the party’s decks after a monumental, unexpected presidential loss.”
Last month, some 30 members of the parliament, or State Ikh Khural, signed a petition calling for Erdenebat’s resignation in the aftermath of the presidential vote, which was won by populist former martial arts star and businessman Khaltmaa Battulga of the opposition Democratic Party.
The defeat was seen as a rejection of the MPP government’s austerity policies and a reaction to allegations of corruption.
In Mongolia’s parliamentary democracy, the prime minister is the leader of the government, and the president has limited powers including the ability to veto legislation and to propose laws to parliament.
Higher coal prices this year have helped the resource-dependent economy gain momentum. But earlier this year, a slump in foreign investment and declining commodity prices forced Mongolia to agree to a $5.5 billion economic bailout led by the International Monetary Fund, to relieve fiscal strains and try to restore investor confidence.
Rosneft and Ministry of Transport of Mongolia to Continue Cooperation on New Ulaanbaatar Airport www.rosneft.com
Rosneft and the Ministry of Road and Transport Development of Mongolia signed basic terms of cooperation for development of optimal technical solutions, commissioning of hydrant system and jet fuel supply in the new Khöshig Valley Airport in Ulaanbaatar. The document was signed by Rosneft Chief Executive Officer Igor Sechin and Minister of Road and Transport Development of Mongolia Dangaa Ganbatduat in the course of the Russian-Mongolian high-level negotiations on the sidelines of the Eastern Economic Forum.
The purpose of signing the document is to provide assistance to the Mongolian party in commissioning jet fuel supply facilities of the new airport and to ensure uninterrupted supply of Rosneft jet fuel to the Mongolian market which is strategically important for the Company.
"Development of business in Mongolia is a part of our strategy, our Subsidiary Rosneft-Mongolia operates in the country dealing with wholesale fuel distribution offering the best financial conditions and committed to its contractual obligations. Over years of our work in the Republic we earned the reputation of a reliable and diligent supplier among our Mongolian colleagues. With our Mongolian colleagues we set up the joint venture Mergevan which supplies jet fuel for Chinggis Khaan International Airport in Ulaanbaatar. We have vast experience of work on this niche market and evident logistical advantages" - Igor Sechin said.
Mongolia is keen to further its coking coal trade cooperation with China, though efforts will be needed to overcome regulatory hurdles and improve logistics, senior executives from large mining companies and trade associations said Thursday at the 7th Coal Mongolia conference at Ulaanbaatar.
"Coal mining plays a big role in [government] revenue and job creation," a Mongolian politician said on behalf of the country's prime minister J. Erdenebat, who could not attend the summit at the last minute.
"Mongolia has [coal] export capacity and China has demand... we hope this will continue," said Mongolian Coal Association president T. Naran.
China is also keen to explore "huge potential in coal cooperation" with Mongolia, said the deputy secretary general of China's National Coal Association, Sun Shouren.
Much of the rhetoric stems from the interdependence between China and Mongolia in the coking coal market and appears to be driven by anxieties caused by a recent slowdown in that trade flow due to significant bottlenecks at border crossings.
Two sources said current truck queues on the Mongolian side of the border were 150-160 km (93-99 miles) long, which has caused a huge slowdown in Mongolian coal imports to China.
This comes at a time when China's domestic supply is particularly tight after more stringent safety measures were imposed in its Shanxi production hub after a spate of mining accidents in August.
Premium low-vol coking coal imported to China was assessed at $219/mt CFR China Wednesday, up 20% since August 1, based on S&P Global Platts data.
The distance from coking coal mines to the Mongolian-Chinese border at Ganqimaodu is generally around 240-250 km.
Multiple sources said the sudden slowdown at the border came after the recent election of Mongolian President Khaltmaa Battulga in July, who appears to be more keen on enhancing relations with Russia.
However sources also noted that it was not only Mongolia-China cross border trade that had slowed recently. There has been talk in trading and procurement circles in recent weeks that China is more broadly trying to reduce its dependence on coking coal imports, including via the seaborne route.
China has seen a significant spike in coking coal imports this year, with imports over January-July surging 32% year on year to 36 million mt. Landlocked Mongolia was China's second largest coking coal supplier in 2016, accounting for 41% of its import supply. Almost all of Mongolia's coking coal exports go to China. The country also produced some thermal coal, but the majority of its output is coking coal used by steelmakers.
Efforts to improve the competitiveness of Mongolian coking coal to drive greater trade should focus on regulatory actions, improving logistical infrastructure and lowering costs, said the CEO of Mongolian Mining Corporation, one of Mongolia's biggest coal miners, G. Battsengel.
Transportation and logistics bottlenecks needed to be fixed by completing required infrastructure, while better connections to railway networks would help Mongolian coal reach end-users in China, he added.
The current sales portfolio of MMC is spilt between direct end-user sales and, to a lesser extent, Chinese agents. A big proportion of MMC's sales are concentrated in Inner Mongolia, where end-users have little or no access to seaborne imports and "Mongolian coals dominate," Battsengel said.
In the longer term, Mongolian coals have to become more cost competitive, especially against lower-cost Australian supply, he said.
This is especially so when Chinese end-users do not need to pay 3% import duties for Australian coking coals due to a bilateral FTA, which Mongolia does not have with China, Battsengel added.
Efforts would need to be made to improve inter-governmental agreements on transportation and logistics, and on bilateral trade, Battsengel said....