1 US TRADE WAR COULD COST GLOBAL ECONOMY $430 BILLION, IMF WARNS WWW.RT.COM PUBLISHED:2018/07/18      2 US PLANS G7 TALKS ON CHINA WWW.NHK.OR.JP PUBLISHED:2018/07/18      3 GOOGLE HIT WITH RECORD EU FINE OVER SHOPPING SERVICE WWW.BBC.COM PUBLISHED:2018/07/18      4 TURQUOISE HILL ANNOUNCES SECOND QUARTER 2018 PRODUCTION AND COMPLETION OF SHAFT 5 WWW.GOGO.MN PUBLISHED:2018/07/18      5 DEVELOPMENT OF BILL ON CIVIL SERVANT CODE OF CONDUCT FINALIZED WWW.GOGO.MN PUBLISHED:2018/07/18      6 CRUDE OIL EXPORTS GENERATED 94.3 BILLION WWW.GOGO.MN PUBLISHED:2018/07/18      7 MONGOLIAN PRESIDENT SUMMONS IRREGULAR PARLIAMENTARY SESSION WWW.NEWS.MN PUBLISHED:2018/07/18      8 JEFF BEZOS IS NOW WORTH MORE THAN BILL GATES AND LARRY PAGE COMBINED WWW.CNN.COM PUBLISHED:2018/07/17      9 APARTMENT COMPLEX FOR YOUNG FAMILIES UNDER CONSTRUCTION IN ERDENET WWW.MONTSAME.MN PUBLISHED:2018/07/17      10 NUM GRADUATES INVITED TO WORK FOR TOSHIBA CORPORATION WWW.MONTSAME.MN PUBLISHED:2018/07/17      ГЕРМАНЫ “ЧИНГИС ХААН” ХАМТЛАГ ИРЭХ ОНД МОНГОЛД ТОГЛОЛТОО ХИЙНЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/07/18     АНУ, ОХУ ХҮЙТЭРСЭН ХАРИЛЦААНДАА ЦЭГ ТАВИЛАА WWW.UBINFO.MN НИЙТЭЛСЭН:2018/07/18     ХУДАЛДААНЫ ДАЙН ХЯТАДЫН КОМПАНИУДАД НӨЛӨӨЛЖ ЭХЭЛЖЭЭ WWW.NEWS.MN НИЙТЭЛСЭН:2018/07/18     МОНГОЛД 92 ОРНЫ 9.6 МЯНГАН ГАДААДЫН ИРГЭН АЖИЛЛАЖ БАЙНА WWW.EAGLE.MN НИЙТЭЛСЭН:2018/07/18     ГАДААД ХУДАЛДААНЫ НИЙТ БАРАА ЭРГЭЛТ 6,3 ТЭРБУМ АМ.ДОЛЛАРТ ХҮРЧЭЭ WWW.DNN.MN НИЙТЭЛСЭН:2018/07/18     ЕВРОПЫН ХОЛБОО ЯПОН УЛСТАЙ ЧӨЛӨӨТ ХУДАЛДААНЫ ГЭРЭЭ БАЙГУУЛАВ WWW.MEDEE.MN НИЙТЭЛСЭН:2018/07/18     АЖ ҮЙЛДВЭРЖИЛТИЙН ЭРЧ СУЛАРЧЭЭ WWW.ZGM.MN НИЙТЭЛСЭН:2018/07/18     МӨНГӨНИЙ НИЙЛҮҮЛЭЛТ 3.8 ИХ НАЯД ТӨГРӨГӨӨР НЭМЭГДЖЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/07/18     ОЛОН УЛСЫН ИННОВАЦИЙН ИНДЕКСЭЭР МОНГОЛ УЛС 53-Т ЖАГСЧЭЭ WWW.MONTSAME.MN НИЙТЭЛСЭН:2018/07/17     ШАДАР САЙД НҮБ-ЫН ӨНДӨР ТҮВШНИЙ УУЛЗАЛТАД ОРОЛЦОЖ БАЙНА WWW.EAGLE.MN НИЙТЭЛСЭН:2018/07/17    

Events

Name organizer Where
"Open to Export" ICC WTO International business award ICC WTO London

NEWS

64x64

German economy slows in third quarter www.bbc.com

Germany's economic growth slowed in the third quarter of the year, dented by weaker exports, figures have shown.
Europe's largest economy grew by 0.2% between July and September, half the 0.4% rate seen in the previous three months.
This was slower than economists had expected and well below the 0.7% rate recorded in the first quarter.
"The development of foreign trade had a downward effect on growth," said Germany's Federal Statistics Office.
"Exports were slightly down while imports were slightly up compared with the second quarter of 2016.
"Positive impulses on the quarter came mainly from domestic demand," the statistics body added. "Both household and state spending managed to increase further."
Protectionism worry
Some analysts said that the uncertainty caused by Britain's vote to leave the European Union may have counteracted solid domestic activity.
"Brexit meets solid domestic economy. This is probably the best description of the German economic performance during the third quarter," ING Bank economist Carsten Brzeski told Reuters.
He added that there was a threat to the economy from Donald Trump's US election victory if he followed through with campaign pledges to limit foreign imports.
"If Germany's single most important trading partner, the US, really moves towards more protectionism, this would definitely leave its mark on German growth."

Signs of slowing economies also emerged in other European countries, with GDP growth coming in below forecast for Norway, the Czech Republic, Slovakia and Hungary.
Italy bucked the trend, however, reporting slightly faster-than-expected growth of 0.3% in the third quarter, after having stagnated in the second quarter.
'Political uncertainties'
The slowdown in Germany's growth rate means the country grew more slowly than the eurozone as a whole in the third quarter, with the 19-nation bloc expanding at a rate of 0.3%, according to latest estimates.
Howard Archer, chief European and UK economist at IHS Global Insight, said he expected eurozone GDP growth to pick up to 0.4% in the fourth quarter, given recent upbeat survey data.
He predicted the eurozone would grow by 1.6% in 2016 as a while, but thought growth could slow to 1.3% next year "as it is likely to be increasingly hampered by political uncertainties".
"The political environment could be increasingly problematic for eurozone growth over the coming months, especially given that the UK's Brexit vote in June and November's election of Donald Trump as US President fuels concern over potential political shocks in the eurozone," Mr Archer said.
"General elections are due 2017 in the Netherlands (in March), France (in April/May) and Germany (around September), and the Renzi government is looking vulnerable in Italy, particularly over constitutional reform.

...


64x64

Russian ruble, stocks higher after Economy Minister arrest www.rt.com

Markets and currency in Russia saw gains on Tuesday following the arrest of Economic Development Minister Aleksey Ulyukayev for bribery. He is the highest-ranking Kremlin official arrested since the collapse of the Soviet Union.
The ruble was gaining about one percent trading at 65.84 against the US dollar, and 70.57 against the euro.

GuneevRussia’s economy minister detained, investigated over alleged $2mn bribe linked to big oil deal
The dollar-traded RTS index was up 1.5 percent, and the ruble-denominated MICEX was trading flat to positive.

Ulyukayev was arrested on Tuesday after being accused of taking a $2 million bribe to green light oil major Rosneft's takeover of smaller rival Bashneft. Both oil companies are state-owned, and the privatization of Bashneft filled a budget hole, due to lower earnings from energy resources.

In July, Ulyukayev opposed the deal, saying state-owned company Rosneft should not participate in the takeover. Apparently, he changed his mind by October, when the $5.3 billion deal was sealed.

There were other reasons behind the ruble growth on Tuesday.

Oil prices recovered with Brent gaining 73 cents, trading at $45.16 per barrel on renewed hopes of an OPEC production cut. The price of the Russian oil benchmark the Urals blend is pegged to Brent quotes.

On top of that, Russian President Vladimir Putin spoke by telephone to US President-elect Donald Trump. According to the Kremlin, the two leaders agreed the current economic ties between the countries are at the worst level since the Cold War and needed to improve.

“During the conversation, Putin and Trump not only acknowledged current US-Russia relations as highly unsatisfactory, but also called for joint work to normalize ties toward constructive cooperation on a wide range of issues,” said a Kremlin statement.

Trump told Putin that he’s “very much looking forward to having a strong and enduring relationship with Russia and the people of Russia.

...


64x64

Gold price drops again – $1,200 in sight www.mining.com

Gold dropped to a near six-month low on Monday as the post-elections slump continues and financial markets try to make sense of what a Donald Trump presidency may mean for interest rates, economic growth and inflation.
 
Gold for delivery in December dropped to a session low of $1,212.00 an ounce, the lowest since the beginning of June in already heavy early morning trading on the Comex market in New York. Gold is now down more than $120 an ounce after an initial surge on Tuesday as results showed a likely Trump victory.
 
Gold bears are making big bets that Trump's plans for fiscal stimulus, including a $500 billion infrastructure spending program, will lead to strong US economic expansion and a number of prominent hedge fund managers and billionaires running family offices have moved aggressively out of gold and into stocks.
 
Gold bulls point to likely inflation arising from deficit spending by a Trump administration, burnishing gold status as a hedge against inflation and geopolitical uncertainty boosting gold's allure as safe haven asset.
 
In a note Simona Gambarini, commodities specialist at Capital Economics, says gold is likely to benefit from a Trump presidency for four reasons:
 
In an economy where the unemployment rate is below 5%, a big fiscal stimulus at this stage of the economic cycle is much more likely to boost inflation rather than real economic growth.
 
Should Trump go ahead with his protectionist policies on trade, there is a real risk of a trade war. Significant tariffs on imports would hurt US domestic real incomes and retaliation by other countries will negatively impact exports.
 
Trump’s foreign policy poses substantial geopolitical risks, especially in the Middle-East given his views on Isis, Syrian and Iran which could boost demand for safe havens.
 
Trump has often stated that he would be in favour of a gold-based monetary system, similar to the old gold standard. While not a likely scenario, it would boost demand for gold.
 
Gambarini says "the prospect of a big deficit-funded fiscal stimulus is likely to push inflation well above the Fed’s 2% target, meaning that even if the Fed raises rates more aggressively, real interest rates should remain low.
 
Capital Economics house view is a gold price of $1,450 by the end of next year.
...


64x64

Rio Tinto staff shaken to the core by bribery probe — CEO www.mining.com

Global employees at Rio Tinto (ASX, LON:RIO), the world’s second largest mining company, remain deeply distraught by a recently launched probe into the lawfulness of a payment made to an external consultant working on the firm’s Simandou iron ore project in Guinea.
 
The investigation, which caused the suspension of Rio’s energy and minerals chief Alan Davies, not only may take several years to resolve, but has left many across the company absolutely “shell-shocked,” Rio Tinto chief executive officer Jean-Sébastien Jacques said in an internal memo quoted by Bloomberg.
 
“Some of us may be feeling that we are better informed by the press than by ourselves,” he said in the internal communication. “Speculation is running in some quarters and some of what is being said strikes at the heart of the culture and values of our company, which for me are fundamentally strong and vitally important.”
 
Together with alerting US and UK authorities, Rio Tinto said last week that it was not until very recently that it became aware of emails from 2011 about the contentious payments, totalling $10.5 million, that Rio made for advisory services on its former project.
 
Rio’s legal and regulatory affairs executive, Debra Valentine, who was due to retire next May, has already stepped down in light of the probe, the company said last week.
 
Alan Davies was in charge of the iron ore project in 2011, when the payments were made and also the same year that Rio signed a major agreement with the Government of Guinea, which secured the firm's mining title.
 
The company announced in October it was fully exiting the project by selling its stake to partner Chinalco for up to $1.3 billion, with payments to begin with commercial production.
 
Davies, a 20-year veteran at Rio and member of the executive committee, was only promoted to the top role in the energy and minerals division in June this year, after a shake-up of the firm’s operations.
 
He is also a member of Rio Tinto’s ethics committee.
...


64x64

Apple considering expansion into wearable glasses: Bloomberg www.reuters.com

Apple Inc (AAPL.O) is considering expanding into wearable glass headsets and has talked about the project with potential suppliers, Bloomberg reported citing people familiar with the matter.
 
The wearable headset would show images, along with other information and may use augmented reality, according to the report.
 
Chief Executive Tim Cook, who has been struggling with a slowdown in iPhone sales in recent quarters, said earlier this year that the company would continue to invest a lot into augmented reality.
 
Apple, the world's largest technology company, has ordered a small number of near-eye displays for testing but has not obtained enough for production on a larger scale, the report added.
 
Apple declined to comment.
 
The move would make Apple the latest tech company to venture into wearable glasses.
 
Alphabet Inc's (GOOGL.O) discontinued its own wearable glass headset, Google Glass, and closed the social media account linked to the device earlier this year, ending its attempt to popularize the expensive devices with consumers.
 
The device received plenty of attention when it was launched in 2012, but quickly ran into problems with its awkward appearance and privacy concerns over video recording.
 
Snap, an $18 billion company which makes the popular messaging app Snapchat, also launched its own video-camera sunglasses last week.
...


64x64

Warren Buffett's Berkshire makes surprise U.S. airline bet www.reuters.com

Warren Buffett's Berkshire Hathaway Inc on Monday said it has bought shares in the four biggest U.S. airlines: American Airlines Group Inc, Delta Air Lines Inc, Southwest Airlines Co and United Continental Holdings Inc.
 
The investments mark an unexpected reversal for Berkshire, which has avoided the airline sector for nearly two decades after a troubled investment in the former US Air Group, a forerunner to American.
 
They also expand Berkshire's bet on the U.S. economy, and in particular transportation. Berkshire already owns the BNSF railroad and the NetJets luxury plane unit, and in January paid $32.1 billion for aircraft parts maker Precision Castparts.
 
According to a regulatory filing, Berkshire as of Sept. 30 owned 21.8 million American shares worth $797 million, 6.3 million Delta shares worth $249.3 million, and 4.5 million United shares worth $237.8 million.
 
Buffett told CNBC television that Berkshire later invested in Southwest, and was disclosing that stake to avoid misleading investors into believing he was avoiding the carrier.
 
It is unclear whether Buffett or one of his deputies, Todd Combs and Ted Weschler, invested in the airlines.
 
Shares often rise when investors perceive that Berkshire has given them its imprimatur.
 
Buffett usually handles larger Berkshire investments such as Kraft Heinz Co, Wells Fargo & Co, Coca-Cola Co and International Business Machines Corp.
 
His Omaha, Nebraska-based conglomerate also owns roughly 90 companies such as BNSF, Geico car insurance and Dairy Queen ice cream.
 
The airline investments are "really important for investor confidence" in that sector, said Adam Hackel, an airline analyst at Imperial Capital LLC in New York.
 
Berkshire did not respond to requests for comment.
 
In after-hours trading, American shares rose 3.8 percent, Delta 3.4 percent, Southwest 3.3 percent and United 2.2 percent.
 
U.S. airlines have benefited in recent years from lower fuel costs, labor peace, higher fees from checked bags and other once-free services, and reduced competition through mergers.
 
Such factors helped the four largest U.S. carriers post a record $21.7 billion combined profit in 2015, and command more than two-thirds of the domestic market.
 
WRIGHT BROTHERS, WRONG INVESTMENT
 
Berkshire had ventured into airlines in 1989 when Buffett bought $358 million of USAir preferred stock, but he quickly regretted that investment.
 
In 1997, he told Berkshire shareholders he had misjudged how USAir would "increasingly feel the effects of an unregulated, fiercely-competitive market whereas its cost structure was a holdover from the days when regulation protected profits."
 
Eleven years later, Buffett felt no better, calling airlines a capital-intensive business that earned little or no money.
 
"A durable competitive advantage has proven elusive ever since the days of the Wright Brothers," he wrote in his February 2008 shareholder letter. "Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down."
 
Buffett nonetheless admitted to having sold the USAir stock, in 1998, at a "hefty gain."
 
Orville Wright died in 1948, more than 44 years after he and his brother Wilbur flew their plane at Kitty Hawk, N.C.
 
American and Delta said they welcomed Berkshire as an investor, and American said it "reinforces our view that our industry has fundamentally changed in a profound and lasting way."
 
Southwest declined to comment. United had no immediate comment.
 
Berkshire on Monday also disclosed other portfolio changes.
 
It slashed its stake in Wal-Mart Stores Inc by roughly two-thirds to 13 million shares. Berkshire had begun paring its stake in the world's largest retailer earlier this year, after more than a decade of ownership.
 
Separately, Berkshire reduced its stake in pipeline operator Kinder Morgan Inc, and exited an investment in Canadian oil and gas producer Suncor Energy Inc.
...


64x64

AIIB president says US under Trump may join bank www.chinadaily.com.cn

The president of the young Asian Infrastructure Investment Bank (AIIB), Jin Liqun, is an exciting personality with sure words and mastery of the details of his office and firm.
 
The former top chief of the World Bank exudes firmness in his grasp of what the bank is and targets. It was a delight interviewing him at the AIIB headquarters in Beijing last weekend. The bank was created last year mainly at the behest of China on Christmas Day and commenced operation on January 17 this year. Apart from the founding member states, new members have joined including Canada that came in September after China hosted the G20 Summit. Egypt and South Africa are the only two African countries currently in the AIIB.
 
"The letter 'A' in AIIB can stand for Asia, Africa or America"
 
He hinted that irrespective of the phobia for the AIIB by the US at its inception, the possibility of the country joining the bank when the president-elect, Donald Trump, is in power cannot be ruled out.
 
He said: "I have heard a certain senior official of the President Barack Obama speak good of the AIIB and after Donald Trump won, I was told that many in his team have an opinion that Obama was not right not to join the AIIB, especially after Canada joined, which was a very loud endorsement of the bank. So we can't rule out the new government in US endorsing the AIIB or indicating interest to join as member."
 
Canada's membership became the 22nd non-Asian state member among the present 57 members. However, the test of the bank's popularity that started with a capital base of $100 billion, some 50 percent of that of the World Bank, is the line-up of close to 20 new countries intending to be part of the bank and most of them from outside Asia. At least, five of the new applicants are African countries. The Bank in October appointed Nigerian renowned economist, Dr Ngozi Okonjo-Iweala an adviser among nine others from all over the world.
 
The president restated the bank's willing to welcome new members as the old members with higher shareholding would drop more of their stakes to allow the new members have some shares, but after the next batch of members are admitted, Jin said there would hardly be any shares left for more countries to join. Very soon, the curtain would be drawn on the shortlist of the new members whose membership will take effect from January next year.
 
But the bank chief wants more African countries to join as he assured that the objectives of the AIIB includes assisting in the development of the smaller economies of the world no matter where located. To underscore the openness and overrule the phobia for it by US, Jin joked that "the letter 'A' in AIIB can stand for Asia, Africa or America. They all start with and that means the bank is for all of them."
 
"Our major consideration in extending facilities to governments or state members is whether such projects the fund would be used for will in any benefit of Asia and assist in bettering Asian economy and also that of the borrowing country. But we have a duty and obligation to ensure that we don't give impossible conditions to enable them utilize the funding and incentives of the bank. Every member state borrowing right is based not on the GDP but on shareholding and China has highest shareholding with 30 percent of the total volume. Right now, China is like a non-borrowing state member because if it does, it might crowd out other members that somehow need the fund more. But for the qualified borrower, the major plank for consent is on need and importance and not on shareholding capacity only. That implies that if a state needs to borrow and the AIIB is convinced that the need is compelling and there is prospect for profit in the targeted project the funding will be used for, the request would be granted as long as there is the collateral especially that of the economic potential of the project."
 
AIIB funding of project is predicated on factors like the sustainability, the environmental friendliness which implies how the project would not cause a serious imbalance in environmental protection. But in situations where the importance would impact and encourage development and fight poverty, the environmental impact factor might be played down provided it is not so weighty to create another big problem. The last factor is the social acceptability - implying that the people of the community the project is to be sited must be ok with it and it must target to improve on their livelihood.
 
"AIIB structure, projects and funding must be lean, clean and green. By these I mean that the membership must be manageable and not too bogus, and we believe that the more the better. The project funding must be clean and that means there must be no form of corruption in the process leading to the funding and in the execution. It has to be clean to the extent of encouraging a clean and non-polluted environment. As I said earlier, on this we also consider the benefits when the environmental impact is bearable. For instance, in the USA today, most of the states, or almost all the so-called 'Red States' still rely on coal power station for electricity and it is not foreseeable in the next 30 years that fossil fuel would be done away with because of the carbon emission. What is steadily done is ensuring its effect is minimized. So in a place we find that coal power plant for instance is needed as the only way the people would be assured of power supply enough to encourage economic growth, we will find a way of minimizing the emission effect and go ahead with the project to strike a balance."
 
US initial fear
 
Jin admitted that: "At the formation of the AIIB, the US, the base of the Bretton Wood Institutes that manage the world economy including the World Bank and the IMF, saw the new body as a threat to its dominance and importance in the world economic order. They raised issues on whether the bank's functions would be consistent with fundamental human and environmental rights of the borrowers or state members. We did our best to convince them that we were no threat or rivals or either naive as not to know the basic rules of operations. And moreover, we believe there is enough space in the global economic theatre for several bodies to operate, and many regional development banks operate side by side the World Bank and there is no reason the AIIB would be the violator. We rather need to work with and benefit each other to create a better world.
 
"For instance, Asia alone needs as much as $1tr infrastructure funding every year and the World Bank hasn't such pool of money to pick the bills therefore the need for an alternative. Moreover, if the AIIB exists just like the World Bank, there is no time the new body would embark on a project of building a power plant, airports, roads or seaport to boost the economy of any country that the World Bank will still vote funds for the same project. So if the AIIB handles one project and the World Bank takes another that is a lot better for the world towards defeating poverty and hardship."
 
On the management of the bank, the president stated that right now, the AIIB operates a lean workforce of about 90 workers and operates solely from the head office in Beijing as a strategy to save cost and may continue that way for a long time. He however hinted that with time as the need arises, the bank may operate little outlet offices just to handle needs as it would stick to the rule of cost effective management.
 
To make its operations adapt to global best practice standards, he said the AIIB adopts universal procurement approach to get the best manpower and equipment and also recruits experts from everywhere in the world based on their competence irrespective of whether the country of origin of such expert is a member of the AIIB or not. That way, it is sure to harness the best hands to run its operations.
...


64x64

6th Burns Supper Ulaanbaatar 2017 www.mongolianbusinessdatabase.com

Since 2012 Honorary Consul for Mongolia in Scotland in association with the Mongolian British Chamber of Commerce have hosted an annual Burns Supper in Mongolia’s capital, Ulaanbaatar. As well as celebrating the life of Robert Burns, Scotland’s National Bard, we reflect on the growing ties between Scotland and Mongolia. In past years we have seen performances from the band of the Mongolian Armed Forces, the Ulaaanbaatar Scottish dance group and renowned Scottish bagpiper Alisdair McCallum.

The 6th Ulaanbaatar Burns Supper will take place on 28th January 2017.
Tickets are now on sale for this event at http://www.mongolianconsul.com/ulan-bator-burns-supper-2016/

...


64x64

Beijing threatens retaliation against US companies if Trump starts trade war www.rt.com

American businesses in China will suffer if US president-elect Donald Trump fulfills his promise to levy huge tariffs on Chinese goods, a state-run newspaper warns.
 
"A batch of Boeing orders will be replaced by Airbus. US auto and iPhone sales in China will suffer a setback, and US soybean and maize imports will be halted. China can also limit the number of Chinese students studying in the US," said an opinion piece in the Beijing-run Global Times newspaper, quoted by CNBC.
 
During his election campaign, Trump said he would consider imposing a 45 percent tariff on Chinese goods. "They're devaluing their currency, and they're killing our companies. We are letting them get away with it, and we can’t let them get away with it," Trump said in January.
 
The Chinese newspaper added that in 2009 Barack Obama’s administration imposed a 35 percent tariff on Chinese tires. In a tit-for-tat response, Beijing hiked tariffs on US car parts and chicken.
 
The paper added that Trump was a "shrewd businessman" and unlikely to start a trade war with China, but said if he does so, it would have consequences.
 
"The new president will be condemned for his recklessness, ignorance and incompetence and bear all the consequences. We are very suspicious the trade war scenario is a trap set up by some American media to trip up the new president," the Global Times said.
 
On Sunday, Trump talked by phone to Chinese President Xi Jinping. According to Trump’s transition team, the leaders established a clear sense of mutual respect for one another, and "will have one of the strongest relationships for both countries moving forward."
...


64x64

Trump's infrastructure plans fuel surprise copper boom www.asia.nikkei.com

TOKYO -- U.S. President-elect Donald Trump's pledge of $1 trillion in infrastructure spending over a decade has helped copper rebound from a lengthy slump, though some are skeptical about the sustainability of the rally.

Monday marked the second day of Copper 2016, a major industry event at the Kobe International Conference Center in Japan. Global demand has been climbing 2% a year, and the industry's hard times will be over in three years, said Diego Hernandez, former president of Chilean state copper company Codelco and former head of resource giant Antofagasta.

The audience was reassured by these comments but clearly remained shocked by the metal's recent upswing. A Trump win had been expected to send prices lower, but his promises of increased infrastructure investment sparked a rally. Three-month copper futures jumped on the London Metal Exchange last Wednesday, after Trump's victory became clear, and climbed past $6,000 a ton at one point Friday. They hovered around $5,660 in off-hours trading Monday evening.

"Investors started buying Oct. 25, anticipating an increase in Chinese construction demand," said Tatsufumi Okoshi, senior economist at Nomura Securities. Improving economic indicators raised expectations of a pickup in building and renovating such facilities as ports, airports and schools. The electrical wires and machinery used in construction require a great deal of copper. "Hopes of infrastructure investment in the U.S. and China led to a copper rebound," Okoshi said.

Yet not everyone in the industry is bullish. "I'm glad, but at the same time, we have to watch out for an influx of speculative money," JX Nippon Mining & Metals President Shigeru Oi said. The company is a unit of JX Holdings.

Many market watchers see covering of shorts by U.S. and European hedge funds and Chinese speculators as contributing to the rally. "It's unclear whether prices will stabilize," Sumitomo Metal Mining Chairman Nobumasa Kemori said.

Some also argue that the rebound has not gone far enough to justify resuming mine development. The average mine will not be profitable unless prices recover to $6,600, Hernandez said.

Cost-cutting is crucial for mining companies to ensure that they are not at the mercy of market fluctuations. JX Nippon Mining and Codelco have developed a process that uses bacteria to boost copper yields from ore by 30-50%, which the Japanese company will implement at its mines. Mitsubishi Materials has developed a process that examines aerial photographs shot by drones to detect topographical changes that could affect mining.

Copper prices topped $10,000 in 2011 but plunged after that as inventories swelled in China. Now that the supply-demand balance has improved there, the focus has shifted to the U.S. economy, which could be the next big factor to shake up the market.

...