|Frontier's "Invest Mongolia Tokyo 2018"||Frontier Securities||Tokyo Japan|
|"Open to Export" ICC WTO International business award||ICC WTO||London|
The European Union and Japan have formally agreed an outline free-trade deal.
The agreement paves the way for trading in goods without tariff barriers between two of the world's biggest economic areas.
However, few specific details are known and a full, workable agreement may take some time.
Two of the most important sectors are Japanese cars and, for Europe, EU farming goods into Japan.
The outline plan was signed in Brussels after a meeting between the Japanese Prime Minister, Shinzo Abe, and the European Commission president, Jean-Claude Juncker, on the eve of a meeting of the G20 group of leading economies in Hamburg.
It comes hard on the heels of the collapse of a long-awaited trade agreement between Japan, the US and other Pacific ring countries, the Trans-Pacific Partnership (TPP), which was scrapped in January by US President Donald Trump.
The president of the European Council, Donald Tusk, said the agreement showed the EU's commitment to world trade: "We did it. We concluded EU-Japan political and trade talks. EU is more and more engaged globally."
Mr Tusk also said the deal countered the argument put forward by some of those in favour of Brexit that the EU was unable to promote free trade: "Although some are saying that the time of isolationism and disintegration is coming again, we are demonstrating that this is not the case."
He added that the deal was not just about common trade interests, but reflected "the shared values that underpin our societies, by which I mean liberal democracy, human rights and the rule of law".
Japan is the world's third-largest economy, with a population of about 127 million.
As it stands, the country is Europe's seventh biggest export market.
One of the most important trade categories for the EU is dairy goods.
Japan's appetite for milk and milk-based products has been growing steadily in recent years.
The EU's dairy farmers are struggling with falling demand in its home nations and an ultra-competitive buying climate, which farmers say means they are paid less than the cost of production.
Even once the agreement is fully signed, the deal is likely to have in place long transition clauses of up to 15 years to allow sectors in both countries time to adjust to the new outside competition.
The voice-controlled Tmall Genie can be used to play music, run third-party apps and buy goods from the Chinese retail giant's online stores. Like many such devices, it lacks a display.
At launch, it will understand only Mandarin and be sold in the company's domestic market.
It will compete in China against devices already launched by Baidu and JD.com.
Tencent - China's biggest technology company by market capitalisation - has announced it has a similar product in development.
In the West, Amazon's Echo range of smart speakers compete against Google Home. Apple and Microsoft have similar products scheduled for release soon. And Samsung is readying a speaker of its own, powered by its new Bixby virtual assistant, according to a report by the Wall Street Journal on Tuesday.
Alibaba's new product derives its name from the company's e-commerce platform - Tmall - and during a demonstration in Beijing was used to order a delivery of Coca-Cola and buy credit for a phone.
Tmall allows local and international retailers to run their own virtual storefronts on its platform and says it is China's third most visited shopping site.
"It clearly is an advantage if - like Amazon - you can pull consumers into your retail ecosystem with a smart speaker," said Eden Zoller from the technology consultancy Ovum.
"But one thing we need to remember is it's early days for this category, and there remain questions of consumer trust in using the digital assistants to buy goods, on a smartphone or smart home speaker device.
"By that, I mean both the security of the transaction and privacy concerns about how personal data is leveraged and shared."
Alibaba has addressed these concerns in part by using voiceprint-technology to try to restrict purchases to recognised users.
In addition, it has built in support for Alipay, the company's popular online payment system, which is similar to PayPal.
However, to begin with, the company is marketing the device as a "limited beta" release that will help provide feedback before it is ready to mass produce the item.
It will charge 499 yuan ($73; £57) for the product, making it one of the cheapest on the market.
Japan's SoftBank Group Corp (9984.T) is targetting raising between $3 billion and $5 billion through an offering of U.S. dollar bonds, according to a person familiar with the plans.
The group has named Morgan Stanley, Bank of America Merrill Lynch and Deutsche Bank as joint global coordinators for a bond offering, it said in an announcement on Thursday, without disclosing the amount it plans to raise.
A SoftBank spokesman said an issuance of hybrid bonds is under preparation, but declined to comment on details.
The bond offering comes after the telecoms-to-investment conglomerate announced raising the world's largest private equity fund – the nearly $100 billion Vision Fund backed also by Saudi Arabia's main sovereign wealth fund - in May.
It bought British semiconductor designer ARM Holdings last year for $32 billion and has been involved in a number of deals across the globe this year including acquisitions of two robotics business from Google's parent company Alphabet Inc.
Shortly after it announced the ARM deal, SoftBank said it was considering selling around $9.8 billion worth of hybrid bonds in the financial year that ended in March to bolster its capital base and secure funds for future growth.
Hybrid bonds are often treated as quasi-equity by credit-rating firms, allowing companies to raise capital without hurting their ratings.
SoftBank did not specify the purpose of the proceeds in the announcement on Thursday. It will meet fixed-income investors in Hong Kong, Singapore and London from tomorrow. The group is rated Ba1 by Moody's and BB+ by S&P.
Ulaanbaatar /MONTSAME/ The Government of Mongolia won in the arbitration dispute with three Chinese investors to Tumurtein Khuder Company. The investors appealed to the permanent court of Arbitration at the Hague in February 2010, concerning the Government agency’s decision on cancellation of Tumurtei khuder company’s license of Tumurtei iron ore mine. On June 30, the arbitral tribunal made decision to dismiss the claimants’ requests in full.
Tumurtei mine located in Khuder soum of Selenge aimag has a reserve of 250 million tons of iron ore. The mine license was cancelled in 2006 as license holder ‘Tumurtein Khuder’ company had breached relevant laws and regulations by not repaying costs for the exploration of the deposit conducted with the state budget finance, having failed to develop plans on environmental protection and rehabilitation and take measures, making explosion on a field of ‘Khustain Yeroo” company or unauthorized field and by having exported iron ore instead of concentrating it as stated in its Environmental Impact Assessment.
The Chinese investors, including China Heilongjiang International Economic and Techinical Cooperative Corporation claimed investment of USD60 million, plus potential profits since the license revocation as well as all costs incurred arbitration dispute.
Mining accounts for over 80% of Mongolian exports
The mining sector accounts for approximately 25% of Mongolia’s GDP and more than 80% of all exports. The resource-rich economy has had its double–digit growth glory days back when commodities demand from China was robust. However, since the commodity price slide in mid-2014, the economy has been struggling to cross the 5% growth rate mark. Mongolia has been attempting to immune itself from such commodity shocks by diversifying into other export oriented industries such as meat, dairy, and cashmere. Regardless, nothing diminishes the importance of metals and mining in generating revenue for the economy, and particularly funds coming from major mining giants operating in the country including such as Rio Tinto or Xanadu Mines.
2 reforms to attract more foreign investment
Although commodity prices are recovering, this will still not put the metals and mining industry in Mongolia back to where it was during the boom period. To plug the gap, local authorities are undertaking new reform measures to attract foreign investment into the area.
In May, the country decided to open up a wider mining exploration area, now covering over a fifth of its territory.
The country has also revoked a banking law that required foreign companies to channel all their sales revenues from investment projects through local banks.
Rio Tinto and others stand to benefit
Consequently, companies such as Rio Tinto and Turquoise Hill have launched new exploration projects in the Asian nation for metals and mineral resources, beyond the pre-existing Oyu Tolgoi mine. OT is a copper-gold mine in the South Gobi region of Mongolia. Turquoise Hill currently holds a 66% stake in OT, with the other 34% being with the Government of Mongolia. Rio Tinto indirectly owns a 50.8% interest in Turquoise Hill Resources.
In October, a new gold zone was discovered at the Bayan Khundii gold project in Mongolia by Canada’s Erdene Resource Development. The project, now Erdene’s flagship venture, has grown to prominence in the past 18 months.
Australia’s Xanadu Mines is another established explorer and metal miner in Mongolia. Its flagship Kharmagtai copper-gold exploration project has been delivering beyond initial expectations thus far.
The Coal Mongolia 2017 international conference and exhibition to be held from September 7-9 this year in the capital, Ulaanbaatar, is expected to help the economy attract international investment into the coal sector of Mongolia. Currently, Mongolian coal export capacity has reached about 50 million tonnes but actual export is around half of the full capacity.
Milbank Secures Significant Victory for Mongolia over Chinese SOEs in Treaty-Based Arbitration www.milbank.com
NEW YORK, July 5, 2017 – Mongolia, represented by Milbank, Tweed, Hadley & McCloy LLP, has prevailed in an arbitration brought by Chinese State-Operated Entities’ (SOEs) pursuant to the investment-protection treaty between the two countries following Mongolia’s revocation of a license for the Chinese entities to mine the vast Tumurtei iron ore deposit. The Tribunal’s award of June 30 dismissing all claims has potentially significant implications for Chinese foreign investment worldwide because the identical treaty language appears in the majority of China’s 110 bilateral investment protection treaties with other countries.
The Tribunal’s award parted ways with determinations by two tribunals in prior arbitrations brought by Chinese investors, one confirmed by the Singapore Supreme Court, that found the critical treaty language to be a broad submission to the jurisdiction of international tribunals. In contrast, the Tumurtei Award relied upon evidence of historic Chinese state practices not considered in the prior cases and held that only national courts in the host country of foreign investment, not arbitral tribunals constituted pursuant to the China-Mongolia treaty, were empowered to determine whether the host State had committed an unlawful expropriation.
The final award handed down on June 30, which was unanimous, puts an end to seven years of arbitration. The arbitration was presided over by the former President and current Judge of the International Court of Justice Peter Tomka. A week-long hearing was held at the Peace Palace in The Hague in late 2015. The other members of the arbitration tribunal were Yas Banifatemi, a member of the Shearman & Sterling team that secured the $50 billion arbitration award for Yukos against Russia (by nomination of the Chinese Claimants) and Mark Clodfelter, the former US State Department’s Assistant Legal Adviser for International Claims and Investment Disputes (by nomination of Mongolia).
At a time when Chinese outbound foreign investment has become enormous and is growing, the decision of the arbitral Tribunal has potentially significant implications for Chinese foreign investments around the world. Out of 110 bilateral investment treaties entered into by China and still in force, 70 are treaties of the “1st generation” – that is, early treaties concluded in the 1980’s and 1990’s almost all of which contain the same sort of language restricting access to arbitration to disputes involving the amount of compensation for expropriation. These early treaties reflect China’s distrust of arbitration as a mechanism to resolve disputes with foreign investors at a time when China was predominantly a capital importer hosting foreign investments. It is only around the time that China adopted its so-called “going out” strategy in 2001, shifting its focus to becoming a significant exporter of capital, that a new wave of BITs were signed. In these ‘2nd’ and subsequent generations of Chinese BITs, the arbitration clause was extended to “any disputes concerning an investment” so as better to protect China's outbound investments.
The Tribunal's ruling on the Chinese Treaty departed from prior awards interpreting identical language in other Chinese treaties and similar language in communist-era treaties of Russia, Bulgaria and the Czech Republic. In support of its position, claimants had relied on arbitral awards in Tza Yap Shum v. Peru, EMV v. Czech Republic, Renta v. Russia and Sanum v. Laos. In Sanum, the Singapore Court of Appeal held, in September 2016, following extensive treaty-based arbitration proceedings, that a “narrow interpretation” of the dispute resolution clause of the China-Laos BIT (containing the same language) could “render illusory the availability of access to arbitration” and leave the clause without meaningful effect. In Tza Yap, the arbitral tribunal also agreed that the Chinese claimant’s “interpretation, the broader one, is the most appropriate.”
The Tumurtei arbitration was the first in which a respondent-State had put forward the argument that international arbitration would be available for the determination of quantum following an expropriation formally “proclaimed” by the State. In the arbitration, Mongolia submitted substantial of China's historic use of such proclaimed expropriations, whether through ordinances or decrees, when its 1st Generation treaties were entered. Thus, Mongolia argued that the critical treaty language had meaningful effect even if construed so as to exclude international review of its revocation of the Tumurtei license.
By unanimous decision, the Tribunal accepted Mongolia’s position and found that the China-Mongolia BIT “restrict[s] the jurisdiction of an ad hoc arbitral tribunal to encompass only disputes which involve the amount of compensation for expropriation.” The Tribunal disagreed with Claimants’ view that the arbitration provision of the BIT would be deprived of any effect in practice, because “[a]rbitration before an ad hoc arbitral tribunal would be available in cases where an expropriation has been formally proclaimed and what is disputed is the amount to be paid by the State to the investor for its expropriated investment. In other words, arbitration will be available where the dispute is indeed limited to the amount of compensation for a proclaimed expropriation.”...
Gold prices picked up Wednesday on North Korea's successful test-launch of an intercontinental ballistic missile, and gloomy US economic data.
Bullion rose as high as $1,228.40 an ounce after US secretary of state Rex Tillerson said last night North Korea’s test represented "a new escalation of the threat" to the country and its allies.
The metal was trading slightly down last at $1,223.60 per ounce, while investors were awaiting the release of minutes from the US Federal Reserve’s June meeting, due Wednesday afternoon shortly after gold futures settle.
The market was also looking ahead to employment data on Friday that could influence the pace of rate rises.
In the nearer term, analysts at Commerzbank said technical support for gold was around its May low of $1,214.
Ulaanbaatar /MONTSAME/ Under the theme “25 years of CICA: For Asian Security and Development”, the second non-governmental forum of Conference on Interaction and Conference-Building Measures in Asia (CICA) took place in Beijing, China on June 28-29. The forum was attended by over 300 delegates including CICA member states, observer states (organizations) and concerned countries in the region and discussed issues such as security situations in Asia, on how to achieve common, comprehensive, cooperative and sustainable security in Asia and jointly build the Belt and Road.
Within the framework of the forum, eight roundtable panels focusing on the Asian security situation was held, such as the implementation of the United Nations 2030 Agenda for Sustainable Development, anti-terrorism cooperation, cyberspace security, addressing climate change, financial security, the role of the CICA Non-governmental Forum, and the role of the media. Also, Director of International Relations’ Department of Mongolian Academy of Sciences PhD. J.Bayasakh held a discussion on “Northeast Asian Security and Mongolia’s Contribution in the Region” during the roundtable panel on anti-terrorism cooperation.
“Northeast Asia’s security is still delicate. The issues are both bilateral (Japan-Russia, Japan-China, China-Vietnam) and multilateral (China-ASEAN). And this is only Mongolia in the region which faces no challenges in terms of security. Owing to its geographical location and foreign relationship potentials, Mongolia is pursuing soft power policy in the region, and in taking advantage of its neutrality position it calls other regional countries for holding security dialogues” said PhD. J.Bayasakh during his presentation.
Russian energy major Gazprom has signed an agreement with Hungary to deliver gas via the Turkish Stream pipeline, the MTI news agency reported, citing Hungary’s Foreign Minister Peter Szijjarto.
He said the Turkish Stream branch to Hungary would be completed by the end of 2019. Budapest sees Turkish Stream gas supplies as the best option because other routes, across Romania and Croatia, are at an early stage, the foreign minister added.
"This will improve Hungary's energy security a great deal, so it is in our strategic interest for this cooperation to start," said Szijjarto.
The Turkish Stream gas pipeline will consist of two branches. The first with a maximum capacity of 15.75 billion cubic meters, is expected to be finished in 2018 and to deliver Russian natural gas directly to Turkey. The second branch is supposed to deliver gas to European customers.
Russia accounts for over 75 percent of oil and 60 percent of gas consumption in Hungary which is supplied via Ukraine.
The Prime Minister of Hungary Viktor Orban said earlier his country would prefer to diversify the delivery method, including via the Nord Stream or Turkish Stream pipelines.
In February during a state visit to Hungary Russian President Vladimir Putin guaranteed the country would receive the contracted amount of oil and gas, and confirmed deliveries using northern and southern routes were also possible. He said that Nord Stream-2 could deliver gas to Hungary through Slovakia and Austria.
"We are studying all these possibilities, but can say for sure: Russian gas will reliably come to the Hungarian market, it is a hundred percent probability," Putin told Orban.
Gazprom CEO Aleksey Miller announced the start of the Turkish Stream pipeline construction in May. He said that “by late 2019 our Turkish and European consumers will have a new, reliable source of Russian gas imports.”
The Turkish Stream project was signed by Putin and his Turkish counterpart Recep Tayyip Erdogan in October 2016. Its total cost was estimated at €11.4 billion ($12.9 billion).
Petro Matad, the AIM quoted Mongolian oil explorer announces that further to the press release on 31 May 2017, a comprehensive drilling contract has now been signed with SINOPEC INTERNATIONAL PETROLEUM SERVICE MONGOLIA CO. LTD ("Sinopec") and that the initial drilling targets have been selected.
2017 exploration drilling programme
The first exploration well will be located on the Irves (Snow Leopard) prospect in the Taats Basin of Block V and will spud in September 2017. The well will be drilled to a total depth of 3150 m and have an expected duration of 50 days. The Irves prospect comprises a series of tilted fault blocks, with multiple stacked reservoir targets, and has an estimated potential of 160 million barrels of oil-in-place (mean-case) and an upside of 350 million barrels of oil-in-place.
Irves-1 is an important 'basin and play opening' well. It will be the first deep exploration well drilled in Central Mongolia to test the hydrocarbon potential of the highly prolific Early Cretaceous 'syn-rift' play already proven in neighbouring Chinese and eastern Mongolian basins. Success at Irves-1 would open the Taats Basin for further exploration and potentially access over 1.8 billion barrels oil-in-place (mid-case estimate).
Once the Irves-1 well has been completed, the rig will mobilise to the second well location, which is the Takhi (Wild Horse) prospect within the Baatsagaan Basin of Block IV. Takhi-1 will be a shallower exploration well, with a total depth of 1850m and an expected duration of approximately 20 days. The Takhi prospect comprises a large faulted anticline with several stacked reservoir objectives. The well is designed to target 280 million barrels of oil-in-place (mean-case), and has an upside case exceeding 650 million barrels of oil-in-place. Success at Takhi-1 would likewise, open the Baatsagaan Basin for further exploration and potentially access over 1.2 billion barrels oil-in-place (mid-case estimate).
For both the Irves and Takhi prospects there is significant stratigraphic upside potential, which is not included in the prospect volumes stated above. More details on the drilling targets will be provided nearer the commencement of drilling operations.
The Taats and Baatsagaan basins are just 2 basins out of a total of 12 basins that the Company has identified within Blocks IV and V. Petro Matad has so far mapped over 65 structural prospects and leads across these basins and based on these alone the 12 basins have the potential to contain over 20 billion barrels of oil in place. These basins may also offer significant upside potential from stratigraphic traps and unconventional oil plays. All volumes are the Company's internal estimates.
Further announcements will be made on progress leading up to the spud of the first well.
Ridvan Karpuz, the CEO of Petro Matad, said:
"I am very pleased to have executed the rig contract which is a significant milestone as we head toward exploratory drilling later in 2017. With the signature of the agreement with Sinopec, the Company is now poised to deliver on its commitment to undertake a high impact exploration drilling programme in 2017."...