1 FOREIGN RELATIONS OF MONGOLIA’S ROAD TRANSPORT SECTOR BROADENING WWW.MONTSAME.MN PUBLISHED:2019/02/21      2 MONGOLIA EXPRESSES READINESS TO CONTRIBUTE TO STRENGTHENING ASIA-EUROPE COOPERATION WWW.MONTSAME.MN PUBLISHED:2019/02/21      3 OYU TOLGOI FUNDED 35.1 KM ROAD OPENS IN KHANBOGD WWW.GOGO.MN PUBLISHED:2019/02/21      4 POLYMER BITUMEN TO BE DOMESTICALLY PRODUCED WWW.MONTSAME.MN PUBLISHED:2019/02/21      5 KHURELBAATAR CHIMED: 319 ENTITIES DREW LOANS FROM TWO FUNDS WWW.ZGM.MN PUBLISHED:2019/02/21      6 CONSTRUCTION OF TAVANTOLGOI-GASHUUNSUKHAIT ROAD TO BE INTENSIFIED WWW.MONTSAME.MN PUBLISHED:2019/02/20      7 OVER 30 MEASURES PLANNED FOR REDUCTION OF ENVIRONMENTAL POLLUTION WWW.MONTSAME.MN PUBLISHED:2019/02/20      8 MONGOLIA SAYS IT EARNS OVER 169 MLN USD FROM COAL EXPORTS TO CHINA IN JAN WWW.HELLENICSHIPPINGNEWS.COM  PUBLISHED:2019/02/20      9 RUSSIA’S GAZPROM TO START CHINA GAS PIPELINE BY DECEMBER 1 WWW.RT.COM PUBLISHED:2019/02/20      10 MONGOLIA'S FOREIGN TRADE UP 41.6 PCT IN JAN. WWW.XINHUANET.COM PUBLISHED:2019/02/20      УГСАРМАЛ ОРОН СУУЦНЫ ДУЛААЛГАД ЗОРИУЛЖ 12.7 ТЭРБУМ ТӨГРӨГИЙГ УЛСЫН ТӨСВӨӨС ГАРГАХААР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/21     2018ОНД ЦАГААН БУДАА , ЭЛСЭН ЧИХЭР , ТАХИАНЫ МАХНЫ ИМПОРТ 24-32 ХУВИАР ӨСЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ДЦС IV: 2018 ОНД НИЙТ АШИГ 4.7 ДАХИН ӨСӨЖ , 4.48 ТЭРБУМ ТӨГРӨГ БОЛСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     ТУСГАЙ САНГУУДААС ГАРГАСАН ЗЭЭЛИЙН 100 ОРЧИМ ТЭРБУМ ТӨГРӨГ ХУГАЦАА ХЭТЭРСЭН ӨР БОЛЖЭЭ WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/21     МОНГОЛ УЛСЫН БОРЛУУЛАЛТЫН МЕНЕЖЕРҮҮДИЙН ИНДЕКС СҮҮЛИЙН 12 САРД АНХ УДАА УНАЛТЫН БҮСЭД ШИЛЖИВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     2018 ОНД ХАМГИЙН ЧИНЭЭЛЭГ БҮЛГИЙН ХЭРЭГЛЭЭ ЯДУУ БҮЛГИЙНХНЭЭС 5.1 ДАХИН ИХ БАЙВ WWW.BLOOMBERGTV.MN НИЙТЭЛСЭН:2019/02/21     ХОВД ГОЛД ОСОЛДСОН 6 НАСТАЙ ХҮҮХДИЙН ЭРЛИЙГ ЗОГСООЛОО WWW.MONTSAME.MN НИЙТЭЛСЭН:2019/02/21     ДБНХ-НООС П.ОРХОНЫ БАРИЛДАХ ЭРХИЙГ 4 ЖИЛЭЭР ХАСАВ WWW.MONTSAME.MN  НИЙТЭЛСЭН:2019/02/21     УУХҮЯ: II САРЫН БАЙДЛААР НИЙТ НУТАГ ДЭВСГЭРИЙН 5.6 ХУВЬД АШИГТ МАЛТМАЛЫН ЛИЦЕНЗ ОЛГОСОН WWW.BLOOMBERGTV.MN  НИЙТЭЛСЭН:2019/02/20     300 ОРТОЙ ТӨРӨХ ЭМНЭЛГИЙН БАРИЛГЫН АЖИЛ 80%-Д ХҮРЧ ГУРАВДУГААР САРЫН 1-НЭЭС ДУЛААНД ХОЛБОГДОХООР БОЛЖЭЭ WWW.IKON.MN НИЙТЭЛСЭН:2019/02/20    

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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President of Mongolia : Elbegdorj Meets With Putin www.4-traders.com

On June 9, on the sidelines of the Shanghai Cooperation Organization (SCO) Summit of the Council of Heads of State in Astana, the Republic of Kazakhstan, the President of Mongolia Tsakhiagiin Elbegdorj met with the President of the Russian Federation Vladimir Putin.
 
At the meeting, the parties exchanged views on expanding the bilateral relations between Mongolia and the Russian Federation. President Elbegdorj highlighted that the Russia's investment in Mongolia is increasing and this is important for the development of mutual ties. He also noted: 'All relations established with Russia in all spheres are good relations for Mongolia. All investments from Russia are also good. Mongolia and Russia have always enjoyed good friendly relations and we must not have any issues pertaining to our bilateral relationship'.
 
The President of the Russian Federation Vladimir Putin mentioned that he is glad to see the President of Mongolia Tsakhiagiin Elbegdorj and discuss issues related to the mutual relations and cooperation, during the the Shanghai Cooperation Organization Summit of the Council of Heads of State. He stressed that there is quite a lot in terms of quantity and areas of cooperation between the two countries.
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Bayan Khundii, Mongolia: 108m grading 2.8g/t gold from 97.7m depth (BKD-110) www.mining-journal.com

Continued drilling at Erdene Resource Development Corp’s (CN:ERD) 100%-owned Bayan Khundii project in Mongolia has discovered a new mineralisation zone north of Midfield. 

The above-mentioned drill hole, 60m north of the Midfield zone, also included 20m at 7.2g/t gold, and contained visible gold at 144m.

Erdene said this visible gold represented the “most strongly mineralised comb-textured vein observed to date” at the project.

Results are still pending for two step-out holes north of Midfield where visible gold was also observed in the core.

The latest assays also identified a previously untested area for exploration, with BKD-118 returning 10m of 12.8g/t gold, 90m east of the Striker zone.

The two rig, 20,000m programme is continuing and Erdene said more detailed drilling would then be done before establishing a resource estimate.

Investor confidence in the company is growing with Erdene’s share price up more than 245% in 12 months.

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Mongolia moots asset management company to tackle bad loans www.ft.com

The Mongolian government is considering the establishment of an asset management company before the end of the year to offload onerous non-performing loans from domestic banks’ balance sheets. 

Mongolia secured an International Monetary Fund financial package last month to slash a bulging debt load. That package included a requirement for an audit of the domestic banking sector as part of its fiscal discipline guidelines. 

The IMF’s three-year, $434m loan unlocked financial support from the Asian Development Bank, the World Bank, Japan and South Korea, while the People’s Bank of China extended existing swap lines with the Bank of Mongolia, the central bank. The total financial package amounts to $5.5bn, helping Mongolia service external debt repayments of about $2bn through to 2022. 

The 16 banks serving Mongolia’s $10bn economy are small, pay extraordinarily high deposit rates and are burdened with bad debt built up during the mining industry’s previous boom-and-bust cycle. The asset management company would help banks offload NPLs and release capital that is now held against bad loans, which many banks prefer to roll over rather than recognise.

“Many loans are restructured and we have no idea how big [the issue is],” said Neil Saker, the IMF’s representative in Mongolia. “We only have anecdotal evidence because banks don't really report restructured loans.”

NPLs expanded rapidly after drops in commodity prices and in Chinese demand and the resulting squeeze on the Mongolian economy. Overborrowing and overspending at the height of the commodities cycle meant mining-dependent Mongolia built up debt of 90 per cent of GDP and a chunky fiscal deficit of 17 per cent of GDP.

The parliament, known as the Great Hural, is expected to debate the proposal in its autumn session. “The design of the asset management company has been drawn up already,” said Ayumi Konishi, director-general for East Asia at the Asian Development Bank. 

Estimating the size of Mongolian NPLs is not easy, because of both borrowers’ and lenders’ preference for extending loans rather than categorising them as non-performing. According to Bank of Mongolia, the banking sector’s NPL ratio sits at 8.6 per cent. But some market participants believe the true ratio might be as high as 20 per cent.

What is more, much NPL collateral is in the form of mining certificates calculated on the basis of commodity prices before the recent, multiyear slump. “I am sceptical that 100 per cent of the collateral will ever be recovered,” said Graeme Knowd, managing director, banking, at Moody’s.

More transparent books could help some banks attract interest in the NPLs from foreign investors, with banking sources floating Middle Eastern sovereign wealth funds as potential buyers. Generating capital from Mongolian banks' declining profits “is just not sufficient”, Mr Knowd said.

Meanwhile, newly proposed rules aim to make Bank of Mongolia more independent of parliament while limiting the power of the governor. Those laws could be passed as early as next year, according to the IMF.

In March, Ulan Bator avoided defaulting on a $580m Development Bank of Mongolia bond thanks to an IMF agreement. The country now expects a recovery in the commodities cycle and will receive $1bn in foreign direct investment annually for the next five years for the gold and copper Oyu Tolgoi mine.

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New met-coal mine opens in Pennsylvania www.mining.com

President Donald Trump didn't waste the opportunity to press his pro-coal agenda by mentioning the opening of a new coal mine in Pennsylvania.

Corsa Coal Corp. (TSXV:CSO) decided almost a year ago to open the Acosta mine, about 60 miles from Pittsburgh, to take advantage of higher metallurgical coal prices. The official opening took place last Thursday, attended by business leaders and about 200 miners whose "mining headgear lay atop red, white, and blue table cloths labeled 'Make Coal Great Again,' according to a description by Associated Press. The mine would create up to 100 new jobs.

Trump made the revitalization of the U.S. coal industry – which had been targeted by the Obama Administration including tighter restrictions on coal-fired power plants – a central plank of his election campaign. He has made good on deregulating the coal industry through legislation signed in February to end the regulation protecting waterways from coal mining waste. The Surface Mining's Stream Protection Rule enacted by Obama was resisted by coal miners.

President Trump referred to the mine's opening during a speech announcing his intention to withdraw from the Paris climate accord.

"One by one, we're eliminating the regulations that threaten your jobs, and that's one of the big reasons you're opening today: Less regulation," Trump said. "We have withdrawn the United States from the horrendous Paris climate accord, something that would have put our country back decades and decades, we would have never allowed ourselves to be great again."

AP quoted Corsa Coal's chief executive, George Dethlefsen, as saying that Trump has made the mining industry more optimistic.

"The war on coal is over," he said. "Easing the regulatory burden, lowering taxes, stimulating infrastructure spending, balancing out the interest of economic growth versus environmental policy — it's very good for coal." Pennsylvania kicked in a $3 million grant for the project.

The company, currently valued at $165 million, will produce metallurgical coal for steelmaking. It plans to open another mine next year and a third one in 2019. Corsa Coal currently has nearly 400 employees in two divisions: NAPP, which has three deep mines and two active surface mines in Maryland and Pennsylvania; and CAPP, which has two deep mines and two open-pit active surface mines in Tennessee and Kentucky. Projected sales for 2017 are between 1.325 and 1.475 million tons, according to a corporate presentation.

The company says it benefits from its proximity to the largest met-coal market in the U.S., as well as access to East Coast ports, being 170 miles from Baltimore.

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Glencore snatches Rio Tinto-owned mines from Yancoal with $2.55B offer www.mining.com

Miner and commodities trader Glencore (LON:GLEN) has performed a coup d'etat on a deal that was practically sealed between Yancoal Australia (ASX:YAL) and Rio Tinto (ASX, LON:RIO) for Rio's coal assets in Australia's Hunter Valley.

The company said Friday that it has offered $2.55 billion for the mines that are near coal operations already owned by Glencore – outbidding Yancoal which had offered to buy Rio's interest in Coal & Allied Industries Limited (C&A) for $2.45 billion in January.

Details of the transaction, which is pending until Rio accepts the offer, include a US$2.05 billion cash payment upon deal completion, plus $500 million in deferred cash payments, payable as $100 million installments over five years. The deal will expire on June 26 if a binding sales agreement is not reached.

The offer must come as a snub to Yancoal. In April Australia's Foreign Investment Review Board approved its deal with Rio Tinto – the largest acquisition by a Chinese government-controlled firm of Australian assets – which left Rio with just two producing coal mines in the country. The terms of that deal, however, allowed Rio to negotiate with other firms for a better offer.

In a statement, Glencore explained the rationale for the mega-buy, saying that the C&A assets are long-life, low cost mines that in 2016 produced 25.9 million tonnes of quality thermal coal and semi-soft coking coal. It also noted that C&A has substantial landholdings and owns a 36.5% interest in Port Waratah Coal Services, a coal export terminal located at the Port of Newcastle, the world’s largest coal export facility.

"The addition of the C&A assets to our existing portfolio in the Hunter Valley would unlock large scale mining and operating synergies. Glencore’s combined portfolio of mines in the Hunter Valley would have production capacity of 81 million tonnes per annum of high energy coal that feeds increasing Asian demand for high efficiency, low emission coal."

Glencore has also offered to buy minority stakes in the Hunter Valley operations from Mitsubishi for $920 million cash. In an effort to limit its debt, the company would sell $1.5 billion worth of assets, possibly including up to half of its stake in the C&A mines.

In May Glencore (LON:GLEN) announced it had begun a sale process for its Tahmoor coking coal mine ahead of plans to halt operations next year, potentially throwing hundreds of Australian miners out of work.

The firm had announced last year its intention to stop mining at Tahmoor in 2018, but improved coal prices made it reconsider such plans and instead opted to sell the asset.

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Mongolia to earn USD 1.4 billion from copper export in 2017 www.mongolia.gogo.mn

Chili and China are playing key roles in global copper industry. Chili leads the world for copper reserve and production and supplied 23 percent of global copper demand in 2016. Meanwhile, China tops the world for copper import. 
International experts are projected that the copper price will be decreased while prices for per tons of copper will reach USD 5,500 in 2017 due to the rapid growth of copper reserve and China`s economic slowdown. Moreover, the amount of copper supply is expected to be more 160 thousand tons than supply in 2017. 
Mongolia ranks 12th in the world for copper reserve, 17th for copper production and 5th for copper ore exports. 
In 2016, Mongolia`s copper industry exported a total of 1.6 million tons of copper ore which accounted 36 percent of the total export of the country and earned revenue of USD 1.7 billion. Of which 62 percent of copper export was supplied by Oyu Tolgoi while Erdenet mining corporation supplied 30 percent of copper export respectively. 
Due to falling copper prices, Mongolia`s export of copper concentrate is projected to reach 1.3 million and export revenue to amount USD 1.4 billion in 2017.

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MAK inaugurates cement factory in Dornogobi www.montsame.mn

Ulaanbaatar /MONTSAME/ On June 9, Friday, Prime Minister J.Erdenebat attended an inauguration ceremony of Mongolyn Alt Corporation’s ‘MAK – Euro cement’ factory, and remarked on its potential to minimize cement import.

Located in Dalanjargalan soum of Dornogobi aimag, the ‘MAK – Euro cement’ factory will manufacture a world standard product to replace imported cement. The cement factory will manufacture not only multi-purpose cement but also acid and water resistant cement. Mongolia’s annual cement demand is estimated to be more than 2 million tons.

The Prime Minister said, “The Cabinet will always stand by companies and individuals that are making a concrete contribution to prosperity of Mongolia”.

The newly inaugurated factory is estimated to create about 900 jobs, garner annual MNT 35 billion for tax and replace import worth USD 70-75 million.

In the frameworks of the factory construction, 1.9 km railroad was built from Olon-Ovoot rail port, and 65 km long power transmission line was set up from Choir city of Gobisumber aimag alongside a substation.

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Toshiba to pay $3.68bn for 2 nuclear plants after US subsidiary files for bankruptcy www.rt.com

 
Embattled Japanese conglomerate Toshiba has agreed to pick up the $3.7 billion tab for its faltering nuclear engineering division, Westinghouse, which has been forced to file for Chapter 11 bankruptcy protection.
Toshiba signed on for the construction of two nuclear reactors at the Vogtle nuclear plant in Georgia in 2008 but the project has been plagued by cost overruns and delays for years.
“We are pleased with today’s positive developments with Toshiba and Westinghouse that allow momentum to continue at the site while we transition project management from Westinghouse to Southern Nuclear and Georgia Power,” said Georgia Power CEO Paul Bowers, the utility which is working with Westinghouse on the Vogtle nuclear plant expansion project, as cited by the AP.
The Japanese company will cap its liability for the construction of two of Westinghouse’s AP1000 reactors at the Vogtle nuclear plant in Georgia but the future of the development remains uncertain.
Government intervention may be required, however, as suggested by Tom Fanning, CEO of the Southern Company which is in talks to take over management of the project from Westinghouse.
“This is a national security issue,” he said on a recent a call to analysts, as cited by the Financial Times. “If the United States wants nuclear in its portfolio for the future, we’ve got to figure out a way to be successful here.”
In a statement Saturday, Toshiba confirmed the payments will be made from October 2017 through to January 2021. The company reported $8.6 billion loss for fiscal year ended March 2017.
Toshiba has factored the payment into its earnings reports. Auditors though, have refused to endorse the reports and are viewing the figures as projections and not true financial reports.
Toshiba is struggling to stay afloat financially and has been forced into selling its lucrative and highly prized computer chip and semiconductor business.
Toshiba President, Satoshi Tsunakawa, has acknowledged the flaws in the company's strategy regarding Westinghouse, reports the AP, but nuclear power will remain part of Toshiba's near-term business strategy which includes the decommissioning of the Fukushima Dai-ichi nuclear plant.
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President attends opening ceremony of Astana Expo www.montsame.mn

 
Ulaanbaatar /MONTSAME/ On the sidelines of the 17th Shanghai Cooperation Organization Summit, President of Mongolia Ts.Elbegdorj attended the opening ceremony of Astana Expo 2017 on June 10, Friday in Kazakhstan.
 
Following the invitation of Nursultan Nazarbayev, President of Kazakhstan in 2014, Mongolia began participating in the international expo which will run until September 10.
 
The 2017 Astana Expo is being held under the theme ‘Future Energy’, gathering exhibitors from over 100 countries around the world and more than 20 international organizations.
 
In conjunction with the expo, business forums, national days and cultural performances under over 20 themes will be organized, attracting around 5 million visitors to the Kazakh capital.
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John Grogan Chairman of Mongolian-British Chamber of Commerce elected as an MP of British Parliament. www.mongolianbusinessdatabase.com

Britain's Prime Minister Theresa May seeks to form a new government despite her Conservative Party's loss of its majority in Thursday's general election.

PM May's Conservatives won 318 seats, a sharp drop from the pre-election total of 330. The party needed to secure 326 for a majority. 
 The opposition Labour Party won 262. 
The Scottish National Party secured 35 seats and the Liberal Democrats took 12.

The Keighley seat was gained for Labour by John Grogan (Chairman of Mongolian-British Chamber of Commerce) who had a majority of just 249 over the Conservative, Kristan Hopkins.

The MBCC is a not-for-profit membership organisation established in 2009 to foster strong business links between Mongolia and the UK. Chaired by Mr John Grogan, it aims to provide a professional and social environment for business people who wish to be introduced to, and become part of, the British-Mongolian business culture and community.

John was awarded the Order of the Polar Star, Mongolia's highest national honor for foreign nationals according to his great effort for the mission.

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