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Azerbaijan-focused miner Anglo Asian Mining (LON:AAZ), the country’s top gold producer, has swung back to profit and sharply reduced outstanding debt on the back of higher copper output and a better bullion prices.
The London-listed miner doubled its copper production from 969 tonnes to 1,941 tonnes last year, thanks mainly to the first full-year of production from a new flotation plant. Silver production also rose, increasing six-fold in 2016 to 165,131 ounces.
Anglo Asian plans to develop seven mines in western Azerbaijan with estimated gold reserves of 430 tonnes.
Both metals helped offset a more than 16% drop in gold sales as the company ran into lower grades at its Gedabek mine, its main operation in Azerbaijan.
Copper and silver increased output, together with improved precious metal prices, also helped the company’s profit, which surged to $79.2 million from $78.1 million a year earlier.
For 2017, Anglo Asian expects copper production to reach between 2,000 tonnes and 2,400 tonnes, while it has a gold output target of between 52,000 ounces and 58,000 ounces.
The company, which started mining at its flagship Gedabek operation seven years ago, still plans to develop seven mines in western Azerbaijan with estimated gold reserves of 430 tonnes.
Shares soared on the news and were trading 7.83% higher in London to 18.60 pence at 2:15 PM GMT. So far this year, however, the stock is down almost 24%.
MOSCOW, May 25 (Xinhua) -- Russia and China on Thursday agreed to deepen bilateral cooperation in various fields and enhance joint efforts in coping with concerned issues on the international agenda.
In the context of improving Russian economy, Russia and China should maintain the development of pragmatic cooperation by way of promoting mutual communication and consultation between government departments, Russian President Vladimir Putin said during his meeting with Chinese Foreign Minister Wang Yi in the Kremlin, who was on an official visit to Russia.
The two countries should also work closely with each other within multilateral frameworks, including the BRICS, the Shanghai Cooperation Organization (SCO) and the Group of 20 (G20), in resolving thorny issues and maintain global strategic stability, he added.
In addition, Putin warmly congratulated China for successfully hosting the Belt and Road Forum for International Cooperation earlier this month and expressed his welcome for Chinese President Xi Jinping's upcoming visit to Russia.
On his part, Wang pointed out that China and Russia agree with each other on development strategies and share broad prospects for bilateral cooperation.
He echoed Putin's appeal in saying that the two countries should further deepen cooperation in such fields as trade and investment and explore new sources of economic growth.
The two countries should also consolidate their strategic cooperation in international affairs and jointly promote the peaceful settlement of international and regional issues, Wang added.
* IMF and partners to help restructure Mongolia debt, economy
* Deal delayed from last month amid banking rule controversy
* Mongolia due to hold presidential elections in June (Adds detail, context and background)
BEIJING/ULAANBAATAR, May 25 The International Monetary Fund (IMF) said on Thursday it approved a total financial package worth around $5.5 billion to help support cash-strapped Mongolia's efforts to restructure its economy.
The IMF said in a statement that Mongolia was hit hard by the sharp decline of commodity prices and the slowdown in key export markets, and the government is therefore implementing a programme to pave the way to economic recovery.
The IMF has provided a three-year financial arrangement of about $434.3 million to support Mongolia's economic reform programme, with other financial partners such as the Asian Development Bank, the World Bank, Japan and South Korea also providing back-up.
The deal also included a three-year extension to a 15 billion yuan ($2.18 billion) swap agreement with the People's Bank of China.
The extended fund facility will help Mongolia tackle a heavy debt burden and a weak currency. The landlocked nation saw its economy grow at a double-digit annual rate over 2011-2013 as foreign investors rushed in to take advantage of its vast untapped mineral deposits, but clashes with investors, government overspending and declining revenues from commodity exports slowed growth to 1 percent last year.
The IMF support will enable Mongolia to swap $550 million in debt held by the Development Bank of Mongolia for new sovereign bonds worth $600 million due in 2024.
The formal confirmation of the package, first proposed in February, was delayed from last month amid concerns about a controversial clause in Mongolia's legislation that forced "strategically important" mines, such as the Oyu Tolgoi copper-gold mine run by Rio Tinto, to conduct transactions through local banks.
Coal India wins tax-cut boost as environmentalists fret
The government has subsequently annulled the banking requirement in order to push the IMF deal through.
Mongolia has agreed to cut spending, raise taxes and the retirement age, while pledging to maintain a flexible exchange rate and build a stronger regulatory environment for banking and finance.
Candidates running in next month's presidential elections may try to make political capital out of the painful austerity measures introduced by the ruling Mongolian People's Party (MPP), which is fielding Miyeegombo Enkhbhold, currently parliamentary speaker.
Businessman and former martial artist Khaltmaa Battulga is contesting the vote on behalf of the main opposition Democratic Party, while the Mongolian People's Revolutionary Party has nominated former independent Sainkhuu Ganbaatar.
Both challengers have gained popularity partly through their resource-nationalist rhetoric and their suspicion of foreign investors. ($1 = 6.8878 yuan) (Reporting by Sue-Lin Wong and Yawen Chen in BEIJING, Terrence Edwards in ULAANBAATAR; Editing by Michael Perry & Shri Navaratnam)
World Bank and Ulaanbaatar City Partner to Improve Municipal Capital Investment Planning and Public Transport Financing www.worldbank.org
Ulaanbaatar, Mongolia, May 24, 2017 - World Bank Country Manager for Mongolia James Anderson and Ulaanbaatar city Vice Mayor Bayarkhuu today signed a Memorandum of Understanding to jointly strengthen the capital investment planning process of Mongolia’s capital Ulaanbaatar and the financial sustainability of the city’s public transport sector.
“Capital investment planning is a critical part of municipal management. Ulaanbaatar hopes that improved capital investment planning will enable city officials to better identify, and plan investment projects based on long-term needs, budget availability, and development priorities,” – said Vice Mayor Bayarkhuu.
The municipality also hopes that the partnership with the World Bank will help the city reduce expenditures and, through increased public engagement, improve transparency. The city’s various agencies agreed during a recent workshop to incorporate best practices on capital investment planning into the budget planning process and to take further steps to make the project prioritization more transparent in 2018.
To improve financial strategy for the public transport sector, Ulaanbaatar city will carry out a comprehensive diagnostic assessment of the public transport sector and develop a medium term strategy for financial sustainability, based on analysis of alternative public transport plans. The assessment will improve the quality of public transport services, increase cost-efficiency, and reduce subsidies for public transport, currently increasing rapidly.
“A more transparent and harmonized process for capital investment planning can help cities improve coordination among implementing agencies so they get the most out of their projects. Similarly, the city needs to develop a strategy to provide public transport service in a financially sustainable way. Given the current fiscal constraints, both of these challenges are becoming increasingly important” - said James Anderson, World Bank Country Manager for Mongolia.
The partnership will be carried out under a technical assistance program funded by the World Bank’s Public Private Infrastructure Advisory Facility (PPIAF), and continues previous efforts by the World Bank to enhance public service delivery in the city. The World Bank’s Global Practice team for Transport & ICT has been working closely with the city government to lay the groundwork for improvement of the public transport sector, including through building the city’s capacity for planning and management.
Ulaanbaatar /MONTSAME/ The cabinet of ministers approved the 2017 Regional Cooperative Agreement for Research, Development and Training Related to Nuclear Science and Technology for Asia and the Pacific on May 24. The agreement’s main purpose is facilitating the possibilities for exchange of technologies, human resource capacity-building, determining need for nuclear technology, introducing some areas to nuclear technology, promoting sustainable development and conducting joint studies.
Countries in Asia-Pacific region established a treaty organization as a cooperation mechanism of introducing the pillar economic sectors, such as food and agriculture, healthcare, the environment, energy and industrial sector to nuclear technologies, and exchanging practices.
The 22 countries that are parties to the treaty jointly decide what projects to implement, and the financing is covered by the International Atomic Energy Agency, donor countries and international funds.
In the margin of observance of the Regional Cooperative Agreement, Mongolia is receiving a great support for expanding foreign cooperation and strengthening legal grounds of nuclear energy sector through learning from practices of other countries, introducing educational, scientific and research institutions and organizations that operate in healthcare, food and agriculture to the latest nuclear technologies and preparing professional cadres specialized in nuclear technologies.
One of Britain's most historic automakers will soon be Chinese-owned.
Control of Lotus will pass from Malaysia's Proton to China's Geely as part of a tie-up between the two Asian automakers.
Geely (GELYF), which already owns the Swedish brand Volvo, confirmed Wednesday that it is buying a 49.9% stake in Proton and a controlling 51% stake in its subsidiary Lotus. The financial terms were not disclosed.
Lotus is best known for its Formula One racing pedigree and its continued production of sports cars that appeal to driving enthusiasts.
The automaker, which has produced several iconic models including the Esprit and Elise, has long struggled to turn a profit. It was purchased by Proton in 1996, and its previous owners include General Motors (GM).
Its engineering division, which specializes in design and lightweight auto architecture, could prove especially useful to Geely as it seeks to expand its operations and expertise.
Related: Would you buy a Chinese car called Trumpchi?
Geely, one of China's largest automakers, has snapped up a series of struggling foreign firms in recent years. It bought Volvo from Ford in 2010, and it purchased London black cab maker Manganese Bronze out of administration in 2013.
It has since changed the name of the cab producer to the London Taxi Co., and opened a solar-powered factory near Coventry that will produce an all-electric version of the iconic taxi.
France's PSA Group, which makes Peugeot and Citroën cars, had also submitted a bid for Proton.
The International Monetary Fund has approved a financial package for Mongolia that will help the country reduce its crippling debt load, opening the door to financing packages from other lenders.
Approval for $425m in funds from the IMF, tied to about $3bn in financing from other international lenders, had been expected following the organisation’s annual meeting in Washington in April. However it was delayed by a Mongolian clause that directed sales proceeds from major foreign-invested products pass through a Mongolian bank account.
Expectations of IMF support have already allowed resource-rich but heavily indebted Mongolia to issue international bonds at somewhat lower interest rates, after years of loose domestic fiscal policy designed to ride out a four-year slump in the prices of copper and coal, its main exports.
“Mongolia was hit hard by the sharp decline of commodity prices and the slowdown in key export markets. Efforts to mitigate these shocks through expansionary policies were unsuccessful and resulted in unsustainable public debt, falling international reserves, and lower growth,” wrote Mitsuhiro Furusawa, deputy managing director and acting chair of the IMF.
He hailed Mongolia’s fiscal tightening measures, proposed efforts to strengthen the independence of the central bank and “commitment to a market-determined exchange rate.”
The tugrik, Mongolia’s currency, went into freefall last summer, triggered in part by the state’s sudden and unexpected purchase of Russia’s share in Erdenet, the country’s most historically important copper mine. It is now at about 2,400 to the U.S. dollar, after a long period in which the central bank spent reserves to keep it at the psychologically important level of less than 2,000 to the U.S. dollar.
The currency is now less than half its value in 2008, during the run-up in the commodity super-cycle. Meanwhile, Mongolia’s consistently high interest rates are exacerbating the population’s struggle to pay back personal and small business loans.
Policymakers of the US Federal Reserve are in favor of raising the key interest rate soon, further fueling expectation that a rate hike will take place next month.
On Wednesday, The Fed released minutes of its Federal Open Market Committee meeting held in early May.
The committee members agreed that the US economic slowdown is only temporary. They say policies of President Donald Trump's administration pose significant uncertainty on the economy, but it would be appropriate to raise the rate soon if economic data moves in line with their projections. The Fed raised the interest rate in March.
Minutes of the meeting also showed that most members think that the Fed should start reducing its securities holdings this year.
Ulaanbaatar /MONTSAME/ During its regular meeting on May 24, Wednesday, the Cabinet discussed Foreign Minister Ts.Munkh-Orgil’s upcoming official visit to the United States next month.
During the visit, the Foreign Minister will hold talks with Secretary of State Rex Tillerson, and meet with representatives of National Security Council, Millennium Challenge Corporation, Peace Corps and Congress.
He will also attend the 4th Mongolia-US Business Meeting and Investors’ Roundtable Meeting, and have an audience with Mongolians living in the US.
With the visit, Mongolia intends to strengthen its complex partnership with the US, broaden economic and investment cooperation, and secure major projects and measures.
2017 marks the 25th anniversary of diplomatic relations between Mongolia and the US.
Mongolia's economic reform program aims to stabilize the economy, restore confidence, and pave the way to economic recovery.
The total financing package amounts to about $5.5 billion, including support from the Asian Development Bank, the World Bank, Japan, Korea and China.
The program also lays the foundation for sustainable, inclusive growth in the future, and end the boom-bust cycles of the past.
The Executive Board of the International Monetary Fund (IMF) today approved a three-year extended arrangement under Extended Fund Facility (EFF) for Mongolia in a total amount of SDR 314.5054 million (about US$434.3 million, or 435 percent of quota) to support the country’s economic reform program. Other financing partners, including the Asian Development Bank, the World Bank, Japan, and Korea, have also committed to provide budgetary and project support, and the People’s Bank of China has agreed to extend its swap line with the Bank of Mongolia. In sum, the total financing package amounts to about $5.5 billion. The Board’s approval of the arrangement enables the immediate disbursement of an amount equivalent to SDR 27.9560 million (about $38.6 million).
The authorities’ program aims to stabilize the economy, restore confidence, and pave the way to economic recovery. A critical pillar of the program is fiscal consolidation, to reduce the pressure on domestic financial markets, stabilize the external position, and restore debt sustainability. The program includes important safeguards to protect the most vulnerable during this period of adjustment as well as institutional reforms to make sure the fiscal adjustment is durable. Another pillar of the program is a comprehensive effort to rehabilitate the banking system and strengthen the Bank of Mongolia. A broad set of structural reforms is designed to support private-sector led growth.
The Executive Board also concluded the 2017 Article IV consultation with Mongolia today. A separate press release will be issued shortly.
Following the Executive Board’s discussion, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:
“Mongolia was hit hard by the sharp decline of commodity prices and the slowdown in key export markets. Efforts to mitigate these shocks through expansionary policies were unsuccessful and resulted in unsustainable public debt, falling international reserves, and lower growth.
“Against this background, the Mongolian authorities are implementing a program to maintain macroeconomic stability, pave the way to economic recovery, and protect the most vulnerable during the adjustment process. Fiscal consolidation is a critical element of this program, including cuts of non-essential expenditures, a move to progressive taxation, pension and public financial management reforms, and steps to strengthen and better target the social safety net. A number of structural fiscal reforms, including an independent fiscal council, will help to bolster budget discipline. Sizable fiscal adjustment, coordinated concessional external financing from development partners, and continued engagement with private creditors will help restore debt sustainability and rebuild international reserves. The commitment to a market-determined exchange rate will strengthen the economy’s resilience to external shocks, supported by prudent monetary policy and the program’s favorable impact on confidence and private sector capital flows. A new central bank law is envisaged to strengthen the governance and independence of the Bank of Mongolia. In addition, implementation of a comprehensive strategy would rehabilitate the banking sector, improve the supervisory and regulatory framework, and strengthen the AML/CFT regime. The program also includes structural reforms to achieve sustainable and inclusive growth. These reforms aim to improve the business environment, promote economic diversification, and encourage foreign direct investment.
“Determined implementation will be critical to the success of the program. Together with Mongolia’s development partners, the IMF will assist the authorities in their effort with an arrangement under the Extended Fund Facility.”
Recent Economic Developments
With minerals accounting for up to 90 percent of total exports, the sharp drop in commodity prices from 2011 onward severely affected the balance of payments and fiscal position. Macroeconomic policy easing to buffer the economy from external shocks supported growth for a while, but at the cost of increasing public debt, weakening the balance of payments, and reducing banks’ asset quality. By end-2016, the large fiscal deficit and the depreciation of the currency together pushed general government debt up to nearly 90 percent of GDP.
The authorities recognized these economic difficulties and prepared an “Economic Recovery Program” that would largely reverse past policies. They also approached the Fund for assistance.
The authorities’ program supported by the extended arrangement aims to stabilize the economy, restore confidence, and pave the way to economic recovery. A critical pillar of the program is fiscal consolidation to reduce the pressure on domestic financial markets, stabilize the external position, and restore debt sustainability.
The program also lays the foundation for sustainable, inclusive growth in the future. To end the boom-bust cycles of the past, the reform program will: (i) discipline fiscal policy; (ii) improve the central bank’s independence, governance, and focus on core responsibilities; (iii) strengthen the financial sector; (iv) foster economic diversification and inclusive growth; and (v) protect the most vulnerable in society.
Fiscal Policy. The fiscal adjustment, combined with the projected growth recovery, a gradual normalization of domestic yields, and the authorities’ access to concessional financing under the program, is expected to restore debt sustainability.
Monetary and Exchange Rate Policies. A new Bank of Mongolia (BOM) law will be adopted to clarify the BoM’s mandate and strengthen its governance and autonomy. The monetary stance will need to remain tight for the time being, and the exchange rate flexible.
Financial Sector reforms. As a first step, the authorities will undertake a comprehensive diagnosis of the banking system to assess institutions’ financial soundness and resilience. This will be followed by recapitalization and restructuring as needed. The regulatory and supervisory framework will be strengthened.
Growth-enhancing structural reforms. Given the country’s large mineral resources, mining will always be a key sector for the economy, but agribusiness and tourism have strong potential as well. The program includes structural reforms to promote economic diversification and improve competitiveness.
Social protection. The program includes important safeguards to protect the vulnerable groups, and gives priority to health and education. For instance, the savings from better targeting the Child Money Program will be used entirely to increase spending on the food stamp program for the most vulnerable.
Program financing. Other international partners also plan to support the government’s program: the Asian Development Bank (ADB), World Bank, and bilateral partners including Japan and Korea are together expected to provide up to $3 billion in budget and project support; and the People’s Bank of China is expected to extend its RMB 15 billion swap line with the Bank of Mongolia for at least another three years....