1 VALE EVACUATES 200 PEOPLE FROM TOWN NEAR ITS MAR AZUL MINE WWW.MINING.COM PUBLISHED:2019/02/17      2 TOOTH PLAQUE SHOWS DRINKING MILK GOES BACK 3,000 YEARS IN MONGOLIA WWW.SCIENCENEWS.ORG  PUBLISHED:2019/02/17      3 INCREASING NUMBER OF CHINA-EUROPE FREIGHT TRAINS SUPPORTS MONGOLIA'S ECONOMY: OFFICIAL WWW.XINHUANET.COM PUBLISHED:2019/02/17      4 TAX REVENUE INCREASES BY 33.7 PERCENT WWW.MONTSAME.MN PUBLISHED:2019/02/17      5 COPPER MINER'S $10B BET COMES TO LIFE IN PANAMA JUNGLE WWW.MINING.COM PUBLISHED:2019/02/15      6 TRADE UNIONS REQUEST PM TO FOCUS ON INTEREST RATE CUT WWW.ZGM.MN PUBLISHED:2019/02/15      7 MONGOLIA’S HOURLY WAGE TO REACH USD 1 WWW.NEWS.MN PUBLISHED:2019/02/15      8 US NARCOTICS BY POST TO MONGOLIA! THREE ARRESTED WWW.NEWS.MN PUBLISHED:2019/02/15      9 WRITER D.URIANKHAI NOMINATED FOR THE NOBEL PRIZE WWW.MONTSAME.MN PUBLISHED:2019/02/15      10 MONGOLIA-CHINA-RUSSIA ECONOMIC CORRIDOR BENEFITS ALL SIDES: OFFICIAL WWW.XINHUANET.COM PUBLISHED:2019/02/15      “ОЮУ ТОЛГОЙ” КОМПАНИ 570 ТОННЫ ДААЦТАЙ CAT БРЭНДИЙН ГИДРАВЛИК ЭСКВАТОРООР ХҮЧЭЭ СЭЛБЭЛЭЭ WWW.GOGO.MN  НИЙТЭЛСЭН:2019/02/15     ӨРХИЙН САРЫН ДУНДАЖ ОРЛОГО 78,000 ТӨГРӨГӨӨР ӨССӨН Ч ЗАРЛАГА ДАВСАН ХЭВЭЭР БАЙНА WWW.IKON.MN НИЙТЭЛСЭН:2019/02/15     АВСТРАЛИЙН ЭЛЧИН САЙД ДЭВИД МЭТЬЮ ВОСЭН ИТГЭМЖЛЭХ ЖУУХ БИЧГЭЭ ӨРГӨН БАРИВ WWW.MONTSAME.MN НИЙТЭЛСЭН:2019/02/15     2018 ОНД МОНГОЛ УЛСЫН ЭДИЙН ЗАСАГ 6.9 ХУВИАР ӨСЛӨӨ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/15     МХБ: II/15-НЫ БАЙДЛААР 8 КОМПАНИ ХЭХ-ЫН ТОВОО ГАРГААД БАЙНА WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/15     2017 ОНД 1.9 ТЭРБУМ ТӨГРӨГИЙН АЛДАГДАЛТАЙ АЖИЛЛАСАН “УЛААНБААТАР БҮК” 2018 ОНД 566 САЯ ТӨГРӨГИЙН АШИГТАЙ АЖИЛЛАВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/15     ОРХОН ТҮҮХИЙ НҮҮРСНЭЭС ТАТГАЛЗСАН АНХНЫ АЙМАГ БОЛНО WWW.UNUUDUR.MN НИЙТЭЛСЭН:2019/02/15     АТГ-ААС НЭР БҮХИЙ 6 ШҮҮГЧИЙГ ШАЛГАЖ ЭХЭЛЖЭЭ WWW.EAGLE.MN НИЙТЭЛСЭН:2019/02/15     МОНГОЛ УЛС ДЭЛХИЙН 77 ОРОНД БАРАА ЭКСПОРТОЛСНООС ХЯТАДАД 93%-ИЙГ НЬ НИЙЛҮҮЛЖЭЭ WWW.IKON.MN  НИЙТЭЛСЭН:2019/02/14     АВТО МАШИНЫ ИМПОРТ 2018 ОНД 30% ӨСӨЖ, 86,296-Д ХҮРЧЭЭ WWW.IKON.MN  НИЙТЭЛСЭН:2019/02/14    

Events

Name organizer Where
“Doing business with Mongolia”, “UK Investors show” бизнес хөтөлбөр March 27-April 02. 2019 ЛОНДОН ХОТ, ИХ БРИТАНИ Mongolian Business Database London UK
SYMPOSIUM ON GLOBAL MARKETS Nationalism and Protectionism: The United States in the International Arena June 17-18, 2019 The Center for American and International Law Plano, Texas, USA The Center for American and International Law (CAILAW) Plano Texas June 17-18 2019
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

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Mongolian economy growth exceeds ADB forecast www.news.mn

The Asian Development Bank (ADB) has forecasted the economic growth of Mongolia would increase by 4% in 2017 and by 3% in 2018. This is more positive expectation compared to the forecast by last April.

The World Bank (WB) assumed that the Mongolian Gross Domestic Product (GDP) would grow up by 2.8% in 2017 and by 3.1% in 2018. In 2019, it is possible to exceed over 7%, the WB said. Meanwhile, representatives of the International Monetary Fund (IMF) reported the GDP of Mongolia is expected to increase by 2% in this year after monitoring the first stage of a program being implemented in Mongolia.

Deputy Governor of the Bank of Mongolia (BoM) B.Lkhagvasuren explained its decision to keep the policy rate at 12%, saying the reason was a debt pressure expected from the next year as well as a political state. The inflation rate is expected to increase by end of this year, but it will be stable from beginning of 2018. The country’s foreign exchange reserves is expected to reach USD 3.8 billion by 2019, the BoM added.

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Mongolia's Untapped Lending Market Has Earned This Japanese-Backed Fintech Startup A $30M Valuation www.forbes.com

In Mongolia, where the average monthly income is $390, informal loans between friends or family members are commonplace as credit and small bank loans are hard to get. On the other hand, small informal loans are almost expected to not be paid back.

“There is no leverage system for people to repay, so in the worst case they lose their friends,” says Anar Chinbaatar, 35, CEO of fintech startup AND Global.

He and two friends cofounded the company in 2015 after, one day out for a smoke, he finally got tired of friends asking to borrow money from him. His startup, which launched the mobile app LendMN, introduced mobile-based microlending to the North Asian country where borrowers are blacklisted from significant financial services such as mortgages if they default on a small loan from the bank.

But the lending industry is fractured, and AND -- meaning “friend” in Mongolian --- wants to work toward accessibility, transparency and accountability in microlending, the CEO says.

After raising $1 million in seed funding in April 2016, the company received another $4 million with a $30.8 million valuation in August from influential backers in Mongolia and Japan including former Japanese parliament member Takami Yuichi, investor Satoshi Matsumoto and his wife Yasuyo Matsumoto. It is also advised by Oko Davaasuren, an influential Mongolian investor from TechStars.

The company, which has issued over $1.9 million in loans as of this month, plans to use the new investment to fuel expansion into the Philippines and Japan and develop new technology such as a blockchain project while preparing for an initial coin offering in December.

“Our main target is serving underbanked people who cannot get financial services and who are paying loan sharks,” Chinbaatar says.

Fractured Lending Industry

Mongolia’s archaic banking industry lacks a credit scoring system, with banks and financial institutions instead sharing a spreadsheet-like database of customer info to evaluate borrowers, he says. Traditional bank loans of any size require lengthy paperwork, collateral and five days to process. Collecting collateral from the borrowers -- which could range from cars and houses in the capital Ulan Bator to flocks of sheep in the countryside -- is costly for banks, he added. People often resort to loan sharks, which charge a high interest rate of 10% per week -- but smaller loan sharks commonly even charge that rate per day, according to Bayar Volodya, 37, cofounder and chief operating officer.

AND wants to do away with loan sharks and raise customers’ financial education and responsibility. They seek to fill the cracks of Mongolia’s fragmented lending system through human interaction and artificial intelligence. The biggest problem to solve was accurately assessing borrowers’ creditworthiness.

“In the first year, we were advised by almost 100 bankers, risk managers and loan appraisers, and 99 of them says it was an impossible, stupid thing,” Chinbaatar says. Only one person, a broker for Mongolia’s biggest bank, saw a possibility and advised them on a concept for a credit scoring model.

LendMN lets users choose the lending amount and repay time period, processes the request in a few minutes -- compared to days with a traditional bank.
AND developed a machine learning-based system that assesses a range of data points from conventional information like banking, income and expense records to unconventional sources like social media, smartphone use and education and employment history.

The company sought to introduce cross-border peer-to-peer lending with funds from Japan, but found the plan infeasible as investors didn't want to take such a risk for a low return. Nonetheless, lending with its own funds, the company’s lending operation turned a profit within two months of commercial launch in April 2017, and now claims some 8,000 credit-approved active users.

LendMN’s initial customers surprised Chinbaatar. While at first he thought people would borrow small money for drinking, buying cigarettes or other entertainment, current data shows they are more financially responsible, using it for special needs to make ends meet.

Claiming a low 1.5% default rate, transaction sizes average around $70. Interest rates range from 3%-10%, compared to Mongolian bank and credit cards that charge 3.5% for prime borrowers. In contrast with banks, AND does not require collateral for its personal and business microloans -- stirring concern over disruption in the industry.

“When we launched, all the Mongolian banks had an emergency meeting over the weekend about how to tax or block us,” Chinbaatar says , but suggests it turned out to be a good thing for competitive innovation in the local industry. “Right after that, a lot of banks started working on new products, creating innovation departments to work on Facebook and chat bots.”

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IMF upgrades global growth forecast www.nhk.or.jp

The International Monetary Fund has reported a brighter outlook for the global economy.

The organization released on Tuesday its latest World Economic Outlook.

Its analysts have upgraded their global-growth forecast. But they are warning of possible instability in emerging economies.

The IMF raised the outlook for next year to 3.7 percent growth due to an improving labor situation. That figure is up one-tenth of a percentage point from the previous prediction given in July.

The IMF also revised upward its growth forecasts for the major economies, including Japan, the US, China and Germany.

The US Federal Reserve is set to begin shrinking its balance sheet.

And the European Central Bank is to decide whether to start tightening its monetary policy.

The IMF says if those policy moves take place rapidly, then money could flow out of emerging nations and flood into the US and Europe. That could trigger instability in financial markets of the emerging economies.

The IMF report is to be presented to a meeting of G20 finance ministers and central bank chiefs later this week. The G20 delegates are expected to discuss in Washington the issues raised by the IMF.

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Trump's NAFTA agenda has 'poison pill proposals,' says U.S. Chamber of Commerce www.cnn.com

Round four of the renegotiation of NAFTA, the three-nation trade pact, begins Wednesday, and little, if any, progress on the thorny issues has been reported from any party. Some business groups are becoming extremely concerned about Trump's agenda.
"There are several poison pill proposals still on the table that could doom the entire deal," Ted Donahue, CEO of the U.S. Chamber of Commerce, said in a speech in Mexico City on Tuesday.

The Trump administration did not respond specifically to Donahue's remark, but had already criticized a similar comment from the Chamber last week regarding NAFTA talks.
"The President has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change. These changes of course will be opposed by entrenched Washington lobbyists and trade associations," U.S. Trade Representative spokeswoman Emily Davis said.
Related: Trump's latest trade spat with Canada is over wine
Time to reach an agreement is running out: Mexican leaders have long warned that talks must end by early next year before their presidential election campaign gets underway in July. By the spring, they say, it'll be too difficult politically to ratify a new trade deal.
U.S. leaders acknowledge that talks should get done as soon as possible.
But some of the Trump administration's demands aren't going over smoothly.

One of the most controversial issues has to do with how cars are manufactured. In NAFTA, it's called "rules of origin." The rule determines the portion of a product that must be manufactured in North America in order to avoid import taxes.
For example, at least 62% of the parts in a car sold in North America must come from the region to avoid being hit with taxes at the border. It doesn't matter if the car parts are made in Mexico, Canada or the U.S., as long as they were produced in North America.
Companies are still free to decide where in North America different parts of a car are made. In fact, before a car reaches a dealership, its parts have frequently crossed the northern and southern borders multiple times.
But Trump's trade team wants to make a big change to that rule in an attempt to force manufacturing companies to create more jobs in the United States.
Instead of one rule for all of North America, the administration wants one rule for how much has to be produced in the United States, and another rule for how much needs to come from the entire region.
"You're pitting the countries against each other, not integrating them further," says Doreen Edelman, a trade lawyer at the firm Baker Donelson. "It is a deal breaker."

Mexico's top negotiator, Economy Secretary Ildefonso Guajardo, echoes a similar sentiment. In an interview with CNNMoney in April, he dismissed the idea of two separate standards for rules of origin.
"There is no one trade agreement in the world that has country-specific content. It doesn't exist," Guajardo said. "Content has to be measured regionally."
Meanwhile, significant issues, such as agriculture trade, government procurement contracts and protecting foreign investments in North America, need to be broached. A deeply divided trade spat over aviation has also emerged between the U.S. and Canada, with each side lobbying for their respective plane producers.
The U.S. is also advocating for a "sunset clause" that would make the agreement expire every five years unless each country decided to sign on for another five years. That's expected to meet resistance too.
"What kind of predictability is that for long-term investment?" adds Edelman, the trade lawyer. "There's no way for business to prepare."

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SouthGobi Resources Secures Investment for Logistics Park on Mongolia-China Border www.asiapacific.ca

SouthGobi Resources Ltd., a Vancouver-headquartered coal mining company, has entered into an investment agreement with Beijing De Rong Tai Investment Co., Ltd. (BDRT) in connection with the Company's development of the Ceke Port Eco-friendly Bonded Logistics Park project (Ceke Logistics Park). Pursuant to the Investment Agreement, BDRT has agreed to invest RMB 231 million in instalments by July 30, 2018, in return for a 30% interest in Inner Mongolia SouthGobi Energy Ltd. (IMSGE), while the Company will hold the remaining 70% interest in IMSGE. Proceeds from BDRT's equity investment will be used by IMGSE for the construction of the Ceke Logistics Park, which will be located in the Ceke Port on the Mongolia-China border, the only inland port where the coal products of the Company are imported from Mongolia to China.

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Iron ore dangerously close to $60 a tonne www.mining.com

Iron ore prices continued their downward trend Tuesday amid ongoing concerns that looming steel production cuts in China on environmental grounds will sap steel mill demand.

Ore with 62% content in the port of Qingdao dropped 2.6% to $61.01 a tonne, according to Metal Bulletin.

The most-traded iron ore on the Dalian Commodity Exchange dropped 2% to 440 yuan per tonne, adding to Monday’s 2.1% decline. Earlier in the session, the contract fell as far as 434.50 yuan, its weakest since July 6.

Benchmark Australian iron ore fines dropped 4.1% Tuesday to a three-month low of $59.1 a tonne, based on data provided by The Steel Index, taking losses since the start of September to more than 20%.

Iron ore dangerously close to $60 a tonne
It means that the January 2017 iron ore contract is now sitting at the lowest level since mid-July. Further falls are predicted to around $50 a tonne by 2019 as China also plans to revoke about a third of its iron ore mining licences, mostly belonging to small polluting operations.

At the same time, supply from Australia — the world’s No. 1 iron ore producer — has risen, further pressuring prices.

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Kobe Steel shares plunge as data fabrication concerns deepen www.reuters.com

TOKYO (Reuters) - Kobe Steel Ltd shares tumbled a further 16 percent on Wednesday after it admitted it may have fabricated data on iron powder products and media reported the possible sale of its real estate business.

The latest disclosure comes after Japan’s No.3 steelmaker said on the weekend it had falsified data to show that its aluminum and copper products had met customer specifications, and suggests the problems could be widespread.

Japanese manufacturers were thrown into turmoil by the revelation, with implications for materials used in cars, aircraft and possibly a space rocket and defense equipment.

Shares in Kobe Steel were down 15.73 percent at 900 yen as of 0114 GMT on Wednesday, underperforming the broader market which was steady. They fell 22 percent the previous day.

A Kobe Steel spokesman confirmed a report on Wednesday in the Yomiuri newspaper saying the firm may have fabricated data on iron powder products used in components such as automotive gears. He said the company was investigating the issue.

The Nikkei business daily meanwhile reported that Kobe Steel intended to put its real estate business on the block in an effort to shore up already shaky finances now threatened by the data falsification scandal.

The Kobe Steel spokesman said he could not comment on that report.

Kobe’s data fabrication problems are the latest in a series of industrial missteps undermining Japan’s reputation for high-quality production.

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Russian central bank wants to block bitcoin exchange websites www.rt.com

The Central Bank of Russia has suggested banning access to bitcoin and other cryptocurrency exchange websites in the country. The officials say digital money is a financial pyramid which is prohibited in Russia.

The BRICS countries (Brazil, Russia, India, China and South Africa) have agreed a cryptocurrency is a tool without a legal definition, which has an ambiguous economic nature and does not allow regulators to protect investors, according to First Deputy Governor of the Bank of Russia Sergey Shvetsov.

“We have seen how bitcoin has transformed from a payment unit into an asset, which is bought in order to obtain a high yield in a short period of time. This is a definition of a pyramid,” he said.

Even those who have significant investments in bitcoin admit that there is not much money in the system, it has low liquidity, and it is almost impossible to get out of the system.

Shvetsov said that in Russia there is a procedure for blocking access to sites which encourage investment in financial pyramids. He admitted there are a lot of them, and the process is not easy.

"There is a permanent job of blocking malicious sites that involve Russian citizens in financial pyramid schemes. Everything that contradicts or violates Russian law, or creates unfair competition, will be limited," he stressed.

Russian authorities said earlier this year they would like to regulate the use of cryptocurrencies by Russians by limiting access by the general public.

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Hogan Lovells exits Mongolia with Ulaanbaatar office closure www.thelawyer.com

Hogan Lovells is closing its Ulaanbaatar office seven years after it first entered the Mongolian market via a local association in 2010.

The firm’s decision to exit Mongolia comes following a strategic review of the market. Hogan Lovells’ office managing partner in Ulaanbaatar Chris Melville will establish a new independent firm in the Mongolian capital with the existing team of 15 lawyers and staff. Hogan Lovells will form a co-operation relationship with the new firm in a bid to continue servicing its clients in the country.

“Following a review of the market and our investment priorities, we have taken the decision to close our Ulaanbaatar office,” said Hogan Lovells global CEO Steve Immelt.

Hogan Lovells gained an Ulaanbaatar presence when it entered a formal association with Mongolian outfit GTs Advocates in August 2010. It was also the first global firm to set up a permanent presence in Mongolia, and has operated there since 2011 advising on inbound corporate investment work and foreign investment in the infrastructure and natural resources sectors.

“Global and local markets and the strategic priorities of the firm have changed since then. I strongly believe that we have a good practice, an excellent team, and that there are opportunities that we can take advantage of operating from a different platform, including working with Hogan Lovells in the future. We are excited about the next chapter,” said Melville.

Melville was relocated from London to the Ulaanbaatar office in 2012, working with the then office managing partner Michael Aldrich.

A very small number of other international firms continue to have a presence in the country, including DLA Piper, which entered the Mongolian market via a local tie-up with C&G Partners in 2011, and Dentons – thanks to its merger with Chinese firm Dacheng, which set up an office in the city in 2013.

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EBRD and EU support sustainable wool products in Mongolia www.ebrd.com

Mongolia’s grasslands are an ideal playground for several million cashmere goats, sheep and yaks. Their world-renown wool means big business: it provides an income for around 400,000 herders, so it should not come as a surprise that locals refer to it as “white gold”.

But, for a long time, Mongolians have not seen the benefits of possessing this precious resource. Foreign traders bought the raw material and processed it abroad, so the economic upside took a detour out of the country.

This is why the EBRD teamed up with the European Union and the United Nations’ Food and Agriculture Organization (FAO) to add value across the whole production cycle – from the local farmer to exporters in Ulaanbaatar.

Sustainable farming

The story of a beautiful cashmere scarf starts in the picturesque hillside of the north-western Khövsgöl Province. The sight could not be more different from the glitzy lights of Ulaanbaatar: it is a land of animals covered in fur, not man, whom they outnumber by a healthy 25:1.

Batulzii is a local farmer who lives with his wife and young children in a traditional yurt. Cashmere goats are shorn in May, followed by sheep, he explains. They naturally start to shed their wool in June and if he does not cut it, it simply falls to the ground.

It is the first part of the chain where we strive to add value to the wool production. FAO offers training to farmers, from grassland management and providing the right feed to the animals to the relevant sustainable industry standards.

“After cutting the wool, I sell it to the Leader Cashmere factory,” Batulzii explained. “This is how I earn a living.”

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