1 LEGAL DISPUTE OVER EMC OWNERSHIP COMES TO AN END WWW.ZGM.MN PUBLISHED:2018/09/20      2 ERDENES TAVAN TOLGOI REVENUE SURGES DUE TO HIGHER COAL PRICES WWW.NEWS.MN PUBLISHED:2018/09/20      3 RUSSIA AND MONGOLIAN BORDER CROSSING NO. 487 WWW.NEWS.MN PUBLISHED:2018/09/20      4 WORLD ECONOMICS REPORTS THAT MONGOLIA’S EMPLOYMENT RATE HITS A FIVE-YEAR HIGH WWW.GOGO.MN PUBLISHED:2018/09/20      5 USD HITS RECORD HIGH IN MONGOLIA DUE TO HIGHER IMPORTS WWW.CHINA.ORG.CN PUBLISHED:2018/09/20      6 READOUT OF VICE PRESIDENT MIKE PENCE’S MEETING WITH PRIME MINISTER UKHNAA KHURELSUKH OF MONGOLIA WWW.WHITEHOUSE.GOV PUBLISHED:2018/09/20      7 MONGOLIA LAUNCHES EU-FUNDED PROJECTS TO PROMOTE GREEN DEVELOPMENT, ENVIRONMENTAL PROTECTION WWW.XINHUANET.COM PUBLISHED:2018/09/20      8 COAL EXPORTS FROM TOP SHIPPER HOBBLED WITH MINERS FACING CONSTRAINTS WWW.MINING.COM PUBLISHED:2018/09/20      9 FRONTIER'S "INVEST MONGOLIA TOKYO 2018" WWW.MONGOLIANBUSINESSDATABASE.COM PUBLISHED:2018/09/19      10 U.S.-CHINA TRADE TUSSLE IS CREATING WINNERS IN SOUTHEAST ASIA WWW.BLOOMBERG.COM PUBLISHED:2018/09/19      УУРХАЙЧДЫН АЖЛЫН БАЙР НЭМЭГДЭЖ, ЦАЛИН ӨСЧ БАЙНА WWW.GOGO.MN НИЙТЭЛСЭН:2018/09/20     “ЭРДЭНЭТ”-ИЙН 49 ХУВИЙН ӨМЧЛӨЛ ТОЙРСОН ХУУЛЬ ЗҮЙН МАРГААН ЭЦЭС БОЛЛОО WWW.ZGM.MN НИЙТЭЛСЭН:2018/09/20     СЗХ-НД МӨНГӨ УГААХТАЙ ТЭМЦЭХ НЭГЖИЙГ БАЙГУУЛАХААР БОЛЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/09/20     БНХАУ: ОЛОН ТАЛТ, ЧӨЛӨӨТ ХУДАЛДААГ ДЭМЖИЖ БАЙНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/20     АТҮТ: БҮРТГЭЛТЭЙ АВТОМАШИНЫ 60 ОРЧИМ ХУВЬ НЬ ҮЗЛЭГ ОНОШИЛГООНДОО ХАМРАГДСАН WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/20     ЭДИЙН ЗАСАГ УРТ ХУГАЦААНЫ ТЭНЦВЭРИЙГ ХАНГАХАД ТӨВЛӨРНӨ WWW.ZGM.MN НИЙТЭЛСЭН:2018/09/20     ЯПОН УЛСТАЙ АЯЛАЛ ЖУУЛЧЛАЛЫН САЛБАРТ ХАМТАРНА WWW.DNN.MN НИЙТЭЛСЭН:2018/09/20     МОНГОЛ, АМЕРИКИЙН ХАРИЛЦАА ШАТ АХИЖ, ӨРГӨТГӨСӨН ИЖ БҮРЭН ТҮНШЛЭЛИЙН ТҮВШИНД ХҮРСНИЙГ НОТЛОВ WWW.NEWS.MN НИЙТЭЛСЭН:2018/09/20     ШЕНГЕНИЙ БОГИНО ХУГАЦААНЫ ВИЗИЙН МЭДҮҮЛГИЙГ УЛААНБААТАР ХОТОД АВНА WWW.MEDEE.MN НИЙТЭЛСЭН:2018/09/19     2018 ЭХНИЙ 7 САРД МОНГОЛЧУУД ГАДААД РУУ ЭМЧИЛГЭЭНД ЯВАХДАА 19.5 САЯ АМ.ДОЛЛАР ЗАРЦУУЛЖЭЭ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2018/09/19    

Events

Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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SEC charges Rio Tinto, former top executives with fraud www.mining.com

NEW YORK (Reuters) – The U.S. Securities and Exchange Commission on Tuesday charged mining company Rio Tinto Plc (RIO.AX) and two of its former top executives with fraud, saying they inflated the value of coal assets in Mozambique acquired for $3.7 billion and sold a few years later for $50 million.

The U.K.’s Financial Conduct Authority also said Tuesday it had reached a settlement with Rio Tinto under which the company would pay a fine of £27 million ($35.6 million) to settle claims that it breached accounting rules in connection with the Mozambique assets.

In a lawsuit filed in U.S. federal court in Manhattan, the SEC said Rio Tinto, former Chief Executive Officer Thomas Albanese, and former Chief Financial Officer Guy Elliott failed to follow accounting standards and company policies to accurately value and record the assets.

The securities regulator said Rio Tinto concealed the problems with the deal, in part because Rio Tinto had already disclosed huge losses in connection with its 2007 acquisition of Alcan
The lawsuit centers on Rio Tinto’s 2011 acquisition of Mozambique coal explorer Riversdale Mining for $3.7 billion. The SEC said that soon after the deal was completed, Rio Tinto learned that the acquisition would yield less coal, and of a lower quantity, than expected.

The securities regulator said Rio Tinto concealed the problems with the deal, in part because Rio Tinto had already disclosed huge losses in connection with its 2007 acquisition of Alcan. Making public a second failure “would call into question Albanese’s and Elliott’s ability to pursue the core of Rio Tinto’s business model,” the SEC said in its complaint.

By making misleading public statements, Rio Tinto and the executives were able to raise $5.5 billion from U.S. investors, the SEC said. They continued to solicit the investments even after executives of the Mozambique subsidiary told Albanese and Elliott that the unit was likely worth negative $680 million, according to the SEC.

The SEC said the fraud continued until January 2013, when another executive discovered accounting irregularities. Albanese subsequently resigned, and the Mozambique subsidiary was sold for just $50 million, the SEC said.

Rio Tinto said it would defend itself vigorously against the allegations. Lawyers for Albanese and Elliott could not immediately be reached for comment.

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Putin green lights launch of the CryptoRuble www.rt.com

Russian President Vladimir Putin has ordered the issue of a national cryptocurrency, according to Communications Minister Nikolay Nikiforov, after a closed-door meeting.

The minister said once the digital currency or CryptoRuble is issued other cryptocurrency mining will be banned and it will be entirely regulated by the government.

“I am so confident to declare that we will run CryptoRuble just for one simple reason: if we don’t, our neighbors in the Eurasian Economic Community will do it in a couple of months,” said Nikiforov.

All the financial operations involving the CryptoRuble will be taxed according to the minister. The tax will also be applied to any appreciation in value.

“When buying and selling a CryptoRuble, the rate will be 13 percent from the earned difference. If the owner cannot explain the reason for the appearance of his CryptoRubles, when converting them into Russian rubles, the tax for him will be 13 percent of the total,” he said.

The national digital currency will be moved to international markets, according to the Russia's Deputy Minister of Economic Development Oleg Fomichev, stressing that there is no point in the currency circulating only inside the country.

“This mustn’t be a private currency, but the one, which is issued by the state, controlled by the state and enable to provide circulation of digital money in light of the digital economy,” he said.

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Housing price index declines www.mongolia.gogo.mn

ULAANBAATAR (GoGo Mongolia) - The housing price index of 6 central districts of Ulaanbaatar observed a decline by 1.2% if compared to third quarter of 2016 and by 0.3% from the preceding quarter of 2017, respectively. 

Most depreciation is recorded in Bayangol and Songinokhairkhan districts at 1.6% and 1.5%, respectively from a year ago. Subsequent decline goes to Khan-Uul Chingeltei and Bayangol districts at 0.3%, Bayangol and Sukhbaatar districts at 0.2%.
The lowest drop is observed in Songinokhairkhan district at 0.5%. 
Below figure shows the housing price index, by percent, in the third quarter of 2017, by central 6 districts of Ulaanbaatar, compared with the same period of previous year. 
In reference period, housing price index for apartments built before 1970's dropped in all 6 central districts from 0.4% to 2.2%.
For apartments built during 1970's to 2001 this figure is by 0.6%-1.8% and for apartments built after 2001 by 0.4%-1.0% compared with same period of 2016, respectively.
If compared to preceding quarter, housing price index for apartments built before 1970's stays without a change in Sukhbaatar district, however decreasing in remaining districts from 0.3% to 0.6%.
Housing price index for apartments built 1970's-2001 unchanged in Bayanzurkh district, however, decreased in other 5 districts from 0.1% to 0.5% and for apartments built after 2001 decreased in central 6 districts by 0.1%-0.3% compared with previous quarter.

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Discussing future of robotics www3.nhk.or.jp

Technology specialists from Japan and the US have gathered in Silicon Valley to discuss the future of robotics.

About 400 people on Monday participated in the event sponsored by Japan's New Energy and Industrial Technology Development Organization.

University of California Professor Henrik Christensen was optimistic about the future possibilities for the robotics industry. He said research should lead to new practical applications, such as nursing care for the elderly and rescue work during natural disasters.

The event showcased some of the latest robots. One machine will pick things up in response to orders sent from a tablet.

A Japanese participant said he hopes to work with Silicon Valley to foster further growth in Japan's robotics industry.

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IMF team to arrive in Mongolia later this month www.montsame.mn

Ulaanbaatar /MONTSAME/ A team of the International Monetary Fund (IMF) will be arriving in Mongolia later this month for a Second Review of the Extended Fund Facility program.

The above issue was touched upon during a meeting between N.Bayartsaikhan, Governor of the Bank of Mongolia and Christine Lagarde, IMG Managing Director, on the sidelines of Annual Meetings of the Boards of Governors of the World Bank Group (WBG) and the International Monetary Fund (IMF) held in Washington, DC, the USA on October 9-15.

During his meeting with the IMF Managing Director, the Mongol Bank Governor reiterated Mongolia’s commitment to implementation of the Extended Fund Facility program and handed over a formal letter from Prime Minister U.Khurelsukh.

Managing Director Christine Lagarde appreciated a progress of the Mongolian economic growth and successful implementation of actions within programs thanks to consistent efforts of the Government of Mongolia. She informed that an IMF team will visit Mongolia end of this month to review the program's realization.

Mongolian delegation led by the Governor and B.Nyamaa, State Secretary of the Ministry of Finance participated in the Annual Meetings and met several officials including the IMG Managing Director, Victoria Kwakwa, WB Vice President for the East Asia and Pacific, representatives of the State Department and the Millennium Challenge Corporation of the US and others.

The sides exchanged views on Mongolia’s current economic and social situation, the progress of IMF’s Extended Fund Facility program, future policy measures and cooperation.

During the Annual Meetings, the Mongolian delegates also met with authorities of the Moody’s Corporation and Fitch Ratings Inc.

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Kincora advances Red Well prospect, adjacent to Rio Tinto drilling www.kincoracopper.com

Vancouver, BC— October 17th, 2017. Kincora Copper Ltd. (the “Company”, “Kincora”) (TSXV:KCC) is pleased to announced that ground magnetic and gravity surveys have commenced at the wholly owned Red Well license. The Red Well license is located approximately 40km north of the Oyu Tolgoi concentrate plant and immediately to the north of Rio Tinto drilling activities on a Turquoise Hill Resources license (XV- 19315), the latter being the first regional drilling by any major group since 2012.

Limited previous exploration across the immediate Red Well region has identified outcropping volcanic rocks with localized malachite staining. The volcanics continue into both the eastern and western sections of the license. At the eastern margin of the license a historic rock chip sample returned 2% copper, 0.25g/t gold, 1.5g/t silver, 0.25% arsenic and zinc, 0.08% lead, 0.002% molybdenum and bismuth, with further copper and other anomalies identified to the immediate west. Historic airborne magnetic data suggests that the cover sequence to the north of the outcrop in the central third of the license is shallow, with a historic regional Induced Polarization (“IP”) target across the central portion of the license.
Sam Spring, President & CEO, commented: “The immediate and general regional setting of Red Well is considered to be highly prospective. Capital constrained field activities since securing the license last year have provided encouraging geological indications with positive fertility results, sodic-calcic alteration, with smears of malachite within volcanics located in the central portion of the license. Recent drilling activities by Rio Tinto based on geophysical targets on the license immediately adjacent to the south along the general NNE arc transverse trend from Oyu Tolgoi also provides encouragement.
Ongoing ground magnetic and gravity surveys are expected to advance our interpretation of Red Well and refine target generation for follow up exploration.
The recent direct private placement with EBRD has further strengthened our balance sheet supporting an acceleration of exploration activities. First phase drilling and initial follow up geophysics has already be completed at Devonian target #1, East Tsagaan Suvarga, and drilling is ongoing at our second target, Bayan Tal.
These activities support the first modern systematic Tier 1 copper porphyry drill testing and district scale reconnaissance exploration program in the Devonian copper belt with current geophysics are advancing Red Well as target 3, with plans currently refining targets 4 and 5 within the dominant ground position we hold across the Oyu Tolgoi-Tsagaan Suvarga Devonian belt.”

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Vanguard boss warns on stock market highs www.bbc.com

The boss of Vanguard, one of the world's biggest investment funds, has expressed concerns about the record highs in stock markets.

Bill McNabb, chairman of the US company, told the BBC the markets could be on course for a "decent-sized correction at some point".
US stocks closed at fresh highs on Monday, days after the UK's FTSE 100 index hit a new record.
Mr McNabb said Vanguard was also watching Brexit "very carefully".
Vanguard, which manages $4.5 trillion (£3.5tn) of funds worldwide, employs about 400 people in London.
The firm's main focus is on providing tracker funds for do-it-yourself investors which follow the rise and fall of indices such as the FTSE 100.
'New highs'
In an interview with BBC Radio 4's Today Programme, Mr McNabb said stock markets were not "in bubble territory", but he felt valuations were "very high".
Wall Street has hit new records several times over the last month on expectations of strong company profits and hopes that President Trump will win backing for his tax cut plan.
Mr McNabb said financial markets "keep reaching new highs", partly because they had ignored some of the political turbulence around the Trump administration.
"The Trump presidency has in a sense defied conventional wisdom," Mr McNabb said.
He suggested it was because the markets were viewing "a lot of what gets said as really just words".
But Mr McNabb predicted that over the next 10 years stock markets will fall back again and the return from shares could drop from 9% to 6%.
"We expect there could be a decent-sized correction at some point," said Mr McNabb, who is stepping down as chief executive at the end of the year but staying on as chairman of Vanguard.
The UK's FTSE 100 closed at a record high on Thursday at 7,556.24, but has since eased back slightly.
Brexit impact
Mr McNabb said the firm was also monitoring the economic impact from Brexit on Europe and the UK.
Vanguard is concerned about rules for non-UK workers and the regulation of some of its financial products after the UK leaves the European Union.
But he added that those issues were "overcome-able".
"We remain very optimistic about the UK's prospects as a place to do business in the long-run," he added.
In May, Vanguard launched a new service to attract personal investors in the UK, offering tracker funds directly to consumers.
Mr McNabb's comments come as a City lobby group warned financial firms would pull the trigger on "irreversible" job relocations next year unless the government agreed a transitional Brexit deal.
The City UK said financial firms were "beyond the planning stage now" and would go ahead with contingency plans next year if there was no progress in the Brexit talks.

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Turquoise Hill announces third quarter 2017 production; operational records achieved during quarter www.turquoisehill.com

Turquoise Hill Resources today announced third quarter 2017 production for Oyu Tolgoi.

Jeff Tygesen, Chief Executive Officer of Turquoise Hill, said, “During the third quarter, Oyu Tolgoi set three operational records for total material mined, ore treated and average daily concentrator throughput. We are extremely proud of what the nearly all-Mongolian operations team achieved for the quarter. Copper production for the quarter was in-line with second quarter while gold production increased almost 30%.”
In Q3’17, material mined increased 9.0% over Q2’17 and ore treated increased 10.1% over Q2’17. During Q2’17, the concentrator underwent a scheduled maintenance shutdown. Average daily concentrator throughput for Q3’17 of 115,400 tonnes increased 8.9% over Q2’17. Copper production in Q3’17 was essentially flat compared to Q2’17 while Q3’17 gold production increased 29.2% over Q2’17 due to higher head grades from the medium-grade stockpile and Phase 4A. Higher gold grades during Q3’17 resulted in a 26.1% increase in gold sales compared to Q2’17.
Oyu Tolgoi is expected to produce 130,000 to 160,000 tonnes of copper and 100,000 to 140,000 ounces of gold in concentrates for 2017. Open-pit operations are expected to mine in Phases 4 and 6 during the year. In addition, stockpiled ore will continue to be processed during 2017.

 
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Aspire Mining to complete bankable feasibility study for railway www.proactiveinvestors.com.au

Aspire Mining (ASX:AKM) has entered into a binding memorandum of understanding (MOU) to advance the Erdenet to Ovoot Railway Project located in Mongolia.

The Erdenet to Ovoot Railway is required for the development of Aspire’s 100% owned Ovoot Coking Coal Project, which is the second largest coking coal project by reserves in Mongolia.

The MOU was signed with China Gezhouba Group International Company Limited (CGGC) and commits CGGC to completing the second stage of the bankable feasibility study.

David Paull, managing director, commented: “Aspire is very pleased to be able to add a very large and experienced sponsor for the Erdenet to Ovoot Railway Project.

“Being able to attract a large and significant engineering and construction company such as Gezhouba provides clear affirmation of the importance and role of the Ovoot to Erdenet Railway in fulfilling Mongolia’s potential to become a transit corridor for China-Europe Trade.”

MOU details

This MOU follows on from a June 2017 non-binding agreement between the parties to cooperate on developing the Erdenet to Ovoot Railway.

Under the current MOU, CGGC has agreed to complete the second and final stage of the Rail bankable feasibility study by 31 March 2018.

The MOU also sets out a pathway for the development of the Erdenet to Ovoot Railway Project as well as the potential extension of that project from Ovoot through to the Mongolian-Russian border.

Door is open for equity investment

The MOU also provides the framework by which CGGC can provide additional equity investment in Northern Railways, Aspire’s subsidiary.

The investment would be to fund the company through to meeting the outstanding conditions precedent for the Erdenet to Ovoot Rail Concession and for EPC funding.

Such an additional equity investment is proposed to be made on or before 15 February 2018.

Rail unlocks coking coal project

The Erdenet to Ovoot Railway is required for the development of Aspire’s 100% owned Ovoot Coking Coal Project.

Erdenet to Ovoot is 547 kilometres of rail that forms part of the Northern Rail Economic Corridor connecting China and Russia through Mongolia as part of China’s One Belt One Road Policy.

The more advanced this railway becomes the more value is realisable from Aspire’s 100% owned Ovoot Coking Coal Project.

While this longer-term project continues to progress, Aspire remains leveraged to nearer term coal production through its Nuurstei Coking Coal Project.

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Asia credit close: All eyes on Mongolia, as Asian bonds edge higher www.reuters.com

SINGAPORE, Oct 16 (IFR) - Mongolia drew attention after mandating banks for a proposed new dollar issue and tendering for its old dollar and renminbi 2018 bonds.

Its 2024 bonds dropped a quarter of a point, widening 3bp to 6.33%, following the news. They have tightened 120bp since March. Mongolia’s January 2018 dollar bonds were unchanged at a cash price of 100.3 to yield 2.6%.

Bank of Zhengzhou’s AT1s were bid at a cash price of 100.3, having been issued at par.

Corporate perpetual bonds from Overseas Chinese Town and Haier Group were bid at cash prices of 101.2 and 100.0, respectively, but Yuzhou Properties’ perps had dropped below par and were seen at 99.6.

Reliance Communications’ 2020 bonds dropped a third of a point to a cash price of 44.4, implying a yield of 39.3%.

“The market is moderately higher but nothing noteworthy,” said a credit trader, who noted that there were few trading cues expected to come from China’s National Congress, starting on Wednesday.

The Asia ex-Japan iTraxx investment-grade CDS index was marginally tighter at 77bp/78bp. CK Hutchison’s 10-year notes tightened 1bp to Treasuries plus 97bp, while ICBC Asia’s 2022s tightened by the same amount to Treasuries plus 89bp.

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