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Metallurgical coal miners could be exposed to more pricing volatility if a move afoot to do away with quarterly pricing comes to anything.
Coking coal, the kind used in steelmaking, is currently set at quarterly benchmarks between Australian mining companies and Japanese steelmakers.
But current negotiations between the two parties are pointing to a shift from benchmark pricing to a system that uses the monthly average of a daily spot price, Reuters quoted three sources close to the negotiations. The sources say it's Japanese steel mills that want a change.
"They want index-linked or fluctuating pricing," said a source at a mining company willing to be quoted. "They are tired of quarterly discussions and want more third-party assessments."
If that is true, coking coal pricing could be moving to a system more akin to the way iron ore, the other main ingredient in steelmaking, is priced. For the past eight years iron ore has been set on a daily basis, but prior to 2010, the bulk-shipped mineral was hammered out between buyers and sellers in one-year fixed contracts.
The more flexible pricing system would benefit coal miners when supplies are tight, which raises prices. Conversely, the same companies would be hit with lower prices when supply is plentiful and demand is weak. Of course, the latter situation would be a boon to steel mills.
According to Reuters BHP is siding with the Japanese steelmakers while "Other miners led by Glencore and Peabody are resisting the moves since they sell coal with a lower heat content that could be priced at a discount to a spot market price."
Australian premium coking coal was being sold as high as $304 a tonne earlier this year after Cyclone Debbie hit Queensland, the heart of Australian met-coal mining.
On Thursday a cargo of hard coking coal was being traded for around $156 a tonne according to MetalBulletin.
The steelmaking raw material is now trading more than $150 a tonne below its mid-April peak when the price of Australia free-on-board premium hard coking coal jumped to its highest since the second quarter of 2011.
That price spike was also the result of flooding in Queensland that saw quarterly contract prices negotiated at an all-time high of $330.
BAYIN was three when he moved from the eastern grasslands of Inner Mongolia to Chifeng, a city of some 1m people. Like hundreds of thousands of ethnic Mongolian pastoralists forced to settle by the government, his family has gone from rural yurt to urban block of flats within a generation. Bayin, who is 32, moves seamlessly between staccato Mongolian and tonal Mandarin. In many ways he exemplifies the successful assimilation of China’s 6m ethnic Mongolians, most of them in Inner Mongolia in China’s north.
Yet Bayin lives largely within a Mongolian world. He designs Mongolian robes for a living and wore them to get married in 2012; of his 300 or so wedding guests only a handful were Han, the ethnic group that makes up more than 90% of China’s population. His daughter attends a Mongolian-language kindergarten. He likes to watch videos of Mongolian life in the 1950s.
The Chinese government has long struggled to bring the country’s borderlands under control. It took a decade for the Communist Party to subdue Yunnan in the southwest and Tibet after it came to power in 1949. In Tibet and in the far western province of Xinjiang ethnic tensions still sometimes flare into violence; both have separatist movements that have been brutally suppressed. Ethnic relations have not always been easy in Inner Mongolia either: Mongolians frequently clashed with the authorities until the early 1990s.
In recent decades, however, the province has been largely quiescent. It does not have a separatist movement—a surprise given that Mongolia, an independent, democratic country populated by 3m people of the same ethnicity, lies just to the north. Local gripes are more often expressed in economic terms than in ethnic ones. It helps that many ethnic Mongolians are visually indistinguishable from Han Chinese, says Enze Han of the School of Oriental and African Studies in London. They are far more likely to marry a Han than minorities in western China. Many more youths leave the province to find work elsewhere too. Small wonder that the Communist Party is trying to replicate at high speed in Tibet and Xinjiang policies that have helped it subdue Inner Mongolia over many decades.
Damned if you Xanadu
Inner Mongolia’s integration is partly historical. Kublai Khan, grandson of Genghis Khan, founded a dynasty in 1271 that bound it to China. Geographical proximity to Beijing meant exchanges were frequent. Tribal divisions and the dispersal of the population hampered resistance to Chinese authority. Inner Mongolia constitutes 12% of China’s territory, but hosts less than 2% of its population.
Government policies suppressed Mongol identity. Han migration started in the 19th century. The native population was already in the minority by 1949; now only 20% of people in the province are Mongolian. The region suffered especially severe violence in the Cultural Revolution—up to 100,000 people died, by some reckonings. Buddhism, which was strongly rooted in Inner Mongolia, was crushed, and most temples destroyed. At the sprawling monastery of Da Zhao in the provincial capital of Hohhot, tourists now outnumber devotees (nevertheless, in case of problems, a SWAT team waits around the corner).
Teaching local children in Mandarin, a policy which the party is now pursuing with gusto in Tibet and Xinjiang, started early in Inner Mongolia too. All young Mongolians speak Mandarin—far fewer understand Mongolian. So comfortable is the party with the dominance of Mandarin that it has allowed Mongolian-language education to grow: the share of primary and middle-school pupils taught in Mongolian actually increased from 10% in 2005 to 13% in 2015.
Money has helped ethnic Mongolians come to terms with the Chinese Communist Party: GDP per person is $10,000 a year in Inner Mongolia, compared with $4,000 in Mongolia the country. Such riches are the result of a deliberate government strategy to exploit minerals, particularly coal, and build infrastructure (another measure repeated recently in western China).
The question is whether the model of assimilation and appeasement is sustainable. Economic pressures are growing. Many Mongolians feel excluded from the province’s overall prosperity. City folk, who are disproportionately Han, earn twice as much as herders. Even in rural areas, the energy-intensive and heavily polluting industries that fuelled the region’s boom largely benefit Han companies; few miners are Mongolian.
Mining companies show scant regard for grass or goats and consume lots of water. The water table has dropped by 100 metres in some places, according to Greenpeace, an NGO. New mines were curtailed in 2011, when a Han driver deliberately ran over and killed a Mongolian herder, sparking protests. The provincial government also soothed pastoralists with subsidies.
But Tsetseg, a 36-year-old herder near West Ujimqin, close to the scene of the killing, says most subsidies now exist in name only. Desertification and climate change mean there is less grass for her goats to graze on, so she increasingly has to buy corn as well. With rising feed costs and falling meat prices, her family has little hope of ever repaying the 100,000 yuan ($15,000) they owe. Tsetseg’s economic woes sometimes assume ethnic overtones. The area was awash with Han police after the protests in 2011, she says. She “would not agree” to her son marrying a Han: “There aren’t many Mongols now. When they marry a Han we lose them: we have to keep our bloodline.”
Bodi, who is 65, lives in a community of settled herders in Bailingmiao, an hour’s drive from Hohhot. His flat is comfortable, he says, but he hates the noise of cars, the fried (Chinese) food and eating meat raised by someone else. His neighbours, who are in their thirties, say they miss the grasslands, but their 12-year-old daughter is happy “anywhere where there is Wi-Fi”.
The government is emboldened by the area’s tranquillity. This year it is marking Inner Mongolia’s 70th anniversary as an “autonomous region” with months of “traditional” sports, music and other events. Beyond government-sponsored festivities, however, there are signs of a quiet resurgence of Mongolian identity. A 20-something in West Ujimqin whose upbringing was so Chinese that he goes by his Chinese name recently started a line of clothing adorned with local Mongolian monuments and Mongolian script that he himself cannot read. Social media have helped Mongolians from different parts of the province get in touch; Mongolian-language apps, some aimed at adults wishing to learn, are helping revive the language.
Ties with the country of Mongolia have grown too. Restaurants in Hohhot advertise chefs and singers from Mongolia. Like many Chinese-Mongolians, Bayin talks of his visit to Mongolia with awe: “Everyone there is Mongolian—even the leaders.”...
Mayor of Ulaanbaatar S.Batbold declared that every Wednesday of the last week of May will be Listen to Children Day, to give voice to children’s concerns and respect their opinions.
During the second meeting of the Council for Children of Ulaanbaatar, the Mayor ordered representatives from every district to organize Listen to Children Day events every year.
“Listening to children and respecting their voices will directly benefit our work. We will be able to get more realistic results if children evaluate the investments, policies, and projects we carry out for them,” stated Mayor S.Batbold.
Nearly half the population of Mongolia lives in the capital, and more than 450,000 of the city’s residents (30 percent) are children, according to U.Gan-Ulzii, the head of the Children and Families Development Center. He emphasized the importance of paying more attention to children.
During Monday’s meeting, members of the council reported on projects and made recommendations related to children’s leisure. The results of The Voices of Adolescents survey conducted by Save the Children Mongolia NGO were shared to give the meeting’s attendees a better grasp of the challenges faced by teenagers in Mongolia.
The survey was conducted in Ulaanbaatar among 1,236 sixth, eighth, and tenth grade students between the ages of 11 and 16.
Children’s Rights Governance Program Coordinator of Save the Children Mongolia E.Tsolmon said, “Children must be allowed to exercise their right to freely express their thoughts in every environment. Listening to children’s opinions and reflecting them in our activities is the responsibility of adults. Raising children’s awareness about exercising their rights, identifying violations of their rights, reporting such instances, and voicing ideas for potential solutions is a normal practice in democratic societies.”
General Electric CEO Jeff Immelt is not happy with President Trump. And he's not alone.
Dozens of top executives urged Trump not to pull the U.S. out of the Paris climate agreement. Now, many are voicing their displeasure.
"Disappointed with today's decision on the Paris Agreement. Climate change is real. Industry must now lead and not depend on government," Immelt said on Twitter shortly after Trump's announcement.
Elon Musk, the CEO of Tesla (TSLA) and SpaceX, announced that he's quitting the president's business advisory councils because of the decision.
"Am departing presidential councils. Climate change is real. Leaving Paris is not good for America or the world," he said on
Am departing presidential councils. Climate change is real. Leaving Paris is not good for America or the world.
Marc Benioff, the chief executive at Salesforce (CRM, Tech30), also voiced his disappointment.
"Deeply disappointed by President's decision to withdraw from Paris Agreement. We will double our efforts to fight climate change," he said.
Deeply disappointed by President's decision to withdraw from ParisAgreement. We will double our efforts to fight climate change.
Microsoft (MSFT, Tech30) president Brad Smith echoed those sentiments.
"We're disappointed with the decision to exit the Paris Agreement. Microsoft remains committed to doing our part to achieve its goals," he said.
Google (GOOG) CEO Sundar Pichai also weighed in.
"Disappointed with today's decision. Google will keep working hard for a cleaner, more prosperous future for all," he said.
Meanwhile, over on Facebook (FB, Tech30), CEO Mark Zuckerberg shared his own chagrin.
"Withdrawing from the Paris climate agreement is bad for the environment, bad for the economy, and it puts our children's future at risk," Zuckerberg said.
In recent months, hundreds of companies have lobbied the Trump administration to remain in the agreement. Apple (AAPL, Tech30), Starbucks (SBUX), Gap (GPS), Nike (NKE), Adidas (ADDDF), L'Oreal (LRLCF) and Monsanto (MON) all voiced their support for the Paris deal.
Even oil companies like ExxonMobil (XOM) and Chevron (CVX) gave their backing. Exxon CEO Darren Woods wrote Trump a personal letter earlier this month asking him to remain in the pact, saying it ensures the U.S. is "well positioned to compete."
The Russian government has no plans to sell the state’s share in major oil companies like Rosneft, according to the President’s press secretary Dmitry Peskov.
The statement was issued in response to a proposal from former Russian Finance Minister Aleksey Kudrin during the St. Petersburg International Economic Forum (SPIEF).
During the Forum, Kudrin said the Russian government should privatize all state-owned oil firms by 2025.
"The oil sector should be fully privatized in the next 7-8 years, no state companies are needed now as state ownership brings more harm than benefit to those companies," he told the TASS news agency, adding that oil companies can deal with problems without government participation.
“It turns out that the private sector reacts more quickly to all these new changes. Reducing the public sector and increasing the private sector is within our power,” said Kudrin.
Russia's dependence on oil and gas exports resulted in a two-year recession, which finished at the end of 2016. Kudrin has repeatedly urged President Vladimir Putin to consider oil privatization to help revive economic growth.
“This is a well-known expert point of view of Aleksey Kudrin. His arguments are reasonable enough. There are also other points of view. As far as I know, the government has no such plans yet," Peskov said.
Kudrin is now working for the Kremlin in an unofficial capacity developing an economic plan for Russia in competition with other independent economists.
Chinese Premier Li Keqiang says his country will fulfill its commitments in the Paris Agreement on climate change.
Li was speaking at a joint news conference with German Chancellor Angela Merkel in Berlin on Thursday.
He touched on reports that US President Donald Trump will soon make a decision on whether to pull his country out of the landmark climate deal.
Li expressed resolve that China will continue tackling global warming in cooperation with the international community, despite any decision by the US.
Li also suggested that China is ready to offer financial assistance to island nations vulnerable to climate change.
Merkel welcomed Li's comments, saying she is glad China will continue to pursue the Paris deal.
Chinese Foreign Ministry spokesperson Hua Chunying told reporters that Beijing will continue with its measures against climate change even if other countries change their position.
She added that Beijing will sincerely implement the Paris deal.
As the world's largest and second-largest emitters of greenhouse gasses, China and the US had played a leading role on the issue until Trump took office.
Funding facility with up to US$ 16 million will help company increase retail and production
In a boost to the local economy the EBRD is extending new financing to Gobi JSC, a leading cashmere garments maker in Mongolia. The funding facility, with a volume of up to US$ 16 million, will support the crucial sector and contribute to a more resilient and sustainable economy.
Cashmere is a key export commodity for Mongolia, second only to products from the mining industry. Developing a sustainable cashmere industry and value chains is one of the EBRD’s strategic priorities in Mongolia, where the Bank supports diversification from the mining sector.
Gobi JSC is the largest vertically integrated cashmere and camel wool processor and garments manufacturer in Mongolia. The EBRD financing will support the opening of a new flagship store in the Ulaanbaatar Galleria, a new shopping mall in the country’s capital. It will also finance a capacity increase and the modernisation of sewing equipment. Gobi JSC will increase purchases of raw cashmere from herders in remote areas to expand production of garments.
The company, a long-standing client of the Bank, will obtain a total of US$ 16 million in EBRD financing: a US$ 12 million six-year loan and a US$ 4 million working capital facility for up to three years. The working capital facility will provide Gobi JSC with more flexibility, allowing the company to access funds as necessary for seasonal purchases of raw material.
Irina Kravchenko, EBRD Head of Mongolia, said: “We are proud to support Gobi JSC’s expansion. The company shows that Mongolia can produce not only raw cashmere for foreign garments manufacturers, but that it can itself make desirable, quality clothes. We are also working with other stakeholders in the cashmere industry to improve sustainability and quality standards.”
Baatarsaikhan Tsagaach, CEO of Gobi JSC, added: “Firstly, we would like to express our appreciation to the EBRD team for contributing to the development of the manufacturing sector in Mongolia, specifically the cashmere industry. We are pleased that Gobi JSC has been successfully cooperating with the EBRD since 2009. In this period we have become the largest cashmere producer in Mongolia and the face of Mongolian cashmere on the international arena. We believe that the long-standing relationship with the EBRD is one of the important factors that contributed to our success.”
Mongolia produces about 50 per cent of the global supply of raw cashmere, which is a reliable source of income for nomadic herders, bolstering a traditional lifestyle threatened by rapid urbanisation. The EBRD is planning a technical cooperation (TC) project, with additional contribution from Gobi JSC, aimed at developing a sustainable cashmere supply. With this TC the suppliers and cashmere goat herders in remote areas will get educated and trained on how to increase the quality and sustainability of the fibre....
On May 24, 2017, the Executive Board of the International Monetary Fund (IMF) concluded the 2017 Article IV Consultation with Mongolia.
Mongolia’s longer-term prospects are promising given its large natural resources. In recent years, however, the economy has faced substantial challenges, as external shocks and expansionary fiscal and monetary policies have compounded structural weaknesses. The new government that took office in 2016 has expressed a strong commitment to strengthen macro policies and implement structural reforms in order to stabilize the economy and lay the basis for sustainable, inclusive growth in the future.
Mongolia remains heavily exposed to external shocks, given its export profile, and a key challenge will be to avoid the boom-bust cycles of the past. The discussions thus focused on improving the fiscal framework and strengthening policy discipline, complemented by structural reforms to boost diversification and competitiveness and by efforts to strengthen and better target the social safety net.
Executive Board Assessment
Executive Directors noted that Mongolia had been hit hard by the fall in commodity prices and a slowdown in key export markets. Efforts to offset the impact of these external shocks through expansionary policies had proved unsustainable, leading to large fiscal deficits, high and rising debt and a fall in international reserves. Directors commended the new government for a strong commitment to restore stability and lay the foundations for sustained, rapid, and inclusive growth through sound macroeconomic policies and structural reforms, as reflected in its Economic Recovery Plan. Coordinated financial assistance from development partners, sizeable fiscal adjustment and continued engagement with private creditors will help restore debt sustainability as envisaged under the program to be supported by the IMF’s Extended Fund Facility Arrangement.
Directors stressed that fiscal consolidation and discipline are central to regaining durable debt sustainability. They supported plans to reduce non-essential expenditures, and increase tax revenues and pension contributions. Directors supported the commitment to implement the rules-based fiscal framework, including an end to quasi-fiscal operations of the Bank of Mongolia and the Development Bank of Mongolia, and the establishment of an independent fiscal council. They welcomed plans to strengthen public financial management and tax administration, and tighten the framework for public-private partnerships. Directors underlined the need to enhance the social safety net, strengthen the pension system, and improve program targeting to protect the most vulnerable sections of society.
Directors underscored that monetary policy should remain appropriately tight to contain inflationary pressures, even as there will be room to lower the policy rate from the current high level if inflation remains low and confidence is restored. The exchange rate should remain flexible and market-determined with intervention limited to addressing disorderly market conditions.
Directors stressed the need to strengthen the banking system through special audits and recapitalization of banks as well as upgrades to the regulatory and supervisory framework. Directors welcomed steps, including the new Bank of Mongolia law, to strengthen the independence and governance of the central bank. The renewed focus on implementing an effective anti-money laundering framework would help attract foreign investment.
Directors emphasized the need to promote inclusive growth through a focus on sustainable mining, economic diversification, and further regional integration. In addition, structural reforms should aim to improve the business climate, address supply-side bottlenecks, and deepen access to finance....
‘Innovation in maternal and newborn health services in Mongolia: from pilot to institutionalization’, the exit phase of the Telemedicine project is successfully launched.
Final stage of project on mother and child health launched. ‘Innovation in maternal and newborn health services in Mongolia: from pilot to institutionalization’, the exit phase of the Telemedicine project is successfully launched. With the project implementation, the sub-province centers were connected to the National Health Center for Mothers and Children via online network, enabling the patients in rural areas to receive medical advice and required information without coming to the city. The project also contributed to the reduction of maternal mortality, which decreased by 75 percent compared to that of 1990. Mongolia, thus, became one of the nine countries that have fulfilled their duties on reducing maternal mortality rates under the Millennium Development Goals, said Minister A.Tsogtsetseg during the signing ceremony of the project implementation agreement. The final stage will comprise works including conducting maternal and reproductive education training, capacity building for medical workers and making online network and mobile technology an inseparable part of our healthcare system. The project has been under realization since 2007 with the support of UN Population Fund and the Government of Luxembourg.