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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Traders drain pricey U.S. oil storage as OPEC deal bites www.reuters.com

 
Traders are turning the spigots to drain the priciest storage tanks holding U.S. crude stockpiles as strengthening markets make it unprofitable to store for future sale and cuts in global production open export opportunities.
 
That could signal the beginning of the end for a two-year trade play that came about during an international price war and global oil glut. It is also what the world's largest oil exporters wanted to see when they agreed last year to work together in a historic supply cut to end the glut.
 
From Houston through Louisiana to floating storage in the Gulf of Mexico, traders are starting to ship crude out of inventories as the rising price of oil for near-term delivery erodes the profits to be had by holding onto oil for later sale.
 
To be sure, shipments from storage have so far made only a small dent in record U.S. crude inventories. But if prompt oil prices continue to strengthen, more storage will empty out.
 
"Right now, traders aren't incentivized (to store)," said Sandy Fielden, director of oil and products research at Morningstar.
 
"It won't all stampede out of the gate, but inventory levels will come down. What will happen is that some of it will go to refineries, but a fair amount will be exported too."
 
To make money by holding crude, the spread between oil prices for future months needs to be wide enough to cover the cost of leasing tank space and borrowing the money to buy the fuel to fill it. For the last two years, U.S. traders have rushed to that opportunity as those price spreads widened.
 
Since November, when the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers agreed to cut output, the spread, or discount of prompt barrels to later supplies known as a contango, between the front and second month U.S. benchmark CLc1-CLc2 crude price has narrowed to as little as 26 cents from 95 cents a barrel. That is no longer enough to cover the more expensive storage options, traders said.
 
In the Houston area, traders that took out storage at the height of capacity issues in 2015 at around $1.20 a barrel are finding it no longer economical.
 
In the Louisiana Offshore Oil Port (LOOP), the only deep-water U.S. oil port and a major conduit for the country’s crude oil imports, drawdowns have been reflected in the costs of storing oil, traders said.
 
The futures contract for oil storage there LOSc1 has fallen to around 40 cents per barrel, down about half in a month and still double the difference between front- and second-month crude prices.
 
One of the most expensive storage options is to hold oil on tankers at sea. During the massive build up in inventory through 2015 and 2016, even some of that was profitable.
 
Floating storage is now falling. In the U.S. Gulf, crude in offshore tankers fell to 26 million barrels last week from 35 million barrels a month ago, according to data provider ClipperData.
 
Not all of that crude was considered to be held in floating storage. Some of it may have simply been waiting to discharge.
 
The largest, and typically cheapest, U.S. storage facility is in Cushing, Oklahoma, which is also the delivery point for West Texas Intermediate (WTI) futures contract CLc1, one of the world's two most important benchmarks for oil prices.Even at Cushing, market participants are emptying storage. Stocks have fallen on average by more than 600,000 barrels per week since the end of 2016, and analysts expect another two to three million barrels to empty out in March.
 
The going rate for putting oil in tanks in Cushing is around 35-50 cents per barrel per month, though some secured cheaper space still considered profitable before the oil price rout began in mid-2014.
 
Even as traders sell from the pricier storage tanks, total inventories in the United States have reached a record level. [EIA/S]
 
That build up is likely due to high imports that were booked before the OPEC production cut, traders and analysts said. It takes around six week for crude from the Middle East to make its way to the United States, and further shipments should fall in coming weeks.
 
"There is unlikely to be much more of a tail to the increased flow from the Middle East into the U.S.," Paul Horsnell, global head of commodities research at Standard Chartered, said in a note.
 
Stocks have also built because refineries are piling up inventories during their seasonal maintenance periods. As they return ahead of summer demand season, inventory builds should reverse.
 
Record exports of U.S. crude in February and March, particularly to Asia, are also expected to boost prices and encourage shipments from storage.
 
Exports from the United States hit a record high of 1.22 million barrels per day (bpd) last week and domestic production rose to above 9 million bpd, the highest since April, the U.S. Energy Administration Agency said.
 
"With those two together, the U.S. is becoming an export juggernaut," said John Kilduff, partner at New York energy hedge fund Again Capital.
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Erdene Closes Oversubscribed $13.8 Million Bought Deal Financing www.erdene.com

Halifax, Nova Scotia – February 23, 2017 – Erdene Resource Development Corp. (TSX:ERD)
("Erdene" or "Company") is pleased to announce the closing of its previously announced bought deal
financing for gross proceeds to the Company of C$13.8 million (the “Offering”). The Offering was led
by Paradigm Capital Inc., with a syndicate including Canaccord Genuity Corp. (collectively, the
“Underwriters”).
The Company issued an aggregate of 17,922,077 common shares (“Shares”) at a price of C$0.77 per
Share, including the full exercise of the Underwriters’ 15% over-allotment option. The Offering was
oversubscribed with participation from multiple institutional investors from Canada and abroad.
In consideration for their services, the Underwriters received a cash commission of $828,000
representing 6% of the gross proceeds of the Offering and 1,075,324 compensation warrants (the
“Compensation Warrants”) representing 6% of the Shares issued pursuant to the Offering. Each
Compensation Warrant is exercisable for a period of 24 months from closing and entitles the holder to
purchase one Share for $1.20 per share.
All Shares issued in connection with the Offering are subject to a four-month hold period expiring June
24, 2017. The Company intends to use the net proceeds of the Offering to advance its 100%-owned,
high-grade Bayan Khundii and Altan Nar Gold Projects, and to further explore and develop the
Company's other gold properties in southwest Mongolia, as well as for working capital and general
corporate purposes. An approximate 20,000 metre drill program at Bayan Khundii is expected to
commence in April 2017.
“We are extremely pleased with the strong interest shown in the financing which was significantly
oversubscribed. It is our pleasure to welcome these high caliber shareholders into Erdene”, said Peter
Akerley, Erdene’s President and CEO. “We now have the financial capacity to significantly advance our
promising gold projects in southwest Mongolia.”
The securities described herein have not been, and will not be, registered under the United States
Securities Act of 1933, as amended (the “U.S Securities Act”), or any state securities laws, and
accordingly, may not be offered or sold within the United States except in compliance with the
registration requirements of the U.S. Securities Act and applicable state securities requirements or
pursuant to exemptions therefrom. This news release does not constitute an offer to sell or a solicitation
to buy any securities in any jurisdiction.

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Game company seeks to block Facebook from using virtual reality code www.reuters.com

 
Video game publisher ZeniMax Media Inc., which earlier this month won a $500 million verdict against Facebook Inc.’s (FB.O) Oculus virtual reality unit for unauthorized copying of computer code, has asked a federal judge to block Oculus from using the code in its products.
 
ZeniMax made its request for an injunction in papers filed on Thursday in federal court in Dallas. It was the same court where jurors on Feb. 1 issued the verdict against Oculus and its founders Palmer Luckey and Brendan Iribe.
 
Tera Randall, a spokeswoman for Oculus, said the company was continuing with its plan to ask the judge to set aside the verdict, which she called "legally flawed and factually unwarranted."
 
Lawyers for ZeniMax declined to comment.
 
If granted, the injunction could limit the number of games available for sale for Oculus' Rift VR headset. Such a move would be a blow to a product still in its infancy and on which Facebook has made a big bet for the future.
 
Oculus has already made the disputed code available to companies that develop games, and it is embedded in many of the games available for use on the Rift, as well as Samsung Electronics Co's (005930.KS) Gear VR, a smartphone-compatible device developed through a partnership with Oculus.
 
Mark Romeo, an Irvine, California-based intellectual property lawyer not involved in the case, said the potential disruption from an injunction, if granted, would put an "incredible amount of pressure on Facebook to enter into some sort of settlement."
 
The litigation stemmed from Oculus co-founder Palmer Luckey's 2012 correspondence with video game designer John Carmack, well-known for creating the Doom series. Carmack, who at the time was employed by a ZeniMax subsidiary, subsequently agreed to help develop software for the Rift. In 2013 he left ZeniMax and joined Oculus as its chief technology officer.
 
ZeniMax sued Oculus in 2014, less than two months after Facebook paid $3 billion for the start-up, claiming Carmack developed crucial Rift technology while he was a ZeniMax employee. ZeniMax also argued that Luckey breached a non-disclosure agreement.
 
The case culminated in a three-week trial in which ZeniMax sought $6 billion in damages. Jurors rejected a claim by ZeniMax that its trade secrets were stolen, but it found that Oculus used the copyrighted code without permission and violated the non-disclosure agreement.
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10 clinics to be built with Turkish aid www.mongolia.gogo.mn

 
Sh.Ankhmaa, City Governor’s Office’s deputy in charge of social affairs received the delegations led by Ismail Hakki Turunc, the Chief Advisor of the Governor of Istanbul, Turkey. The sides discussed the project on the establishment of 10 hospitals using the non-refundable aid of Turkey. Within the project framework, 9 family clinics and a dialysis clinic will be established
Sh.Ankhmaa expressed her gratitude towards the delegates for providing aid in Ulaanbaatar and said “Many projects are being implemented through foreign investment in Mongolia. But this project is one of the relatively few non-refundable aid”.
A total of 152 family clinics are operating in 152 district committees throughout the city. And because of the scarce apparatus and obsolete facilities, the clinics are in dire need for reconstruction. Therefore, the renovation of nine clinics will be a relieving aid for Mongolia. The project is planning to commence with the construction season in April and Hakki Turunc mentioned that the construction work will be handled by Mongolian companies. Also, the project indicates that 10 medical apparatus will be installed in the Dialysis Clinic.
City Governor’s Office has prepared the construction sites of the clinics. Specifically, 5000 m2 area of Dialysis Clinic in Khan-Uul district and 1000 m2 for each Family Clinics are planned by the Governor’s ordinance. As for the Family Clinics, 600 m2 areas will be used for the facility and 400 m2 will be composed of green areas.
By the estimation of the Turkish side, each Family Clinics are expected to have 6 doctors that will provide medical service for 1800-2000 people which means they are capable of providing medical service to 12 thousand people. After visiting the selected construction areas, the delegates of Istanbul have met the authorities of Ulaanbaatar. Also, Sh.Ankhmaa noted that the Governor’s office will provide support in every way possible to hasten the project.
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Leave-work-early campaign kicks off www3.nhk.or.jp

 
Many employees across Japan will be leaving work at around 3 pm on the last Friday of each month, starting this week.
 
This is part of a new campaign called "Premium Friday," led by government and business officials. The aim is to boost the country's sluggish consumption.
 
Industry groups and companies, as well as local shopping areas, are expecting the campaign to bring them more customers.
 
Officials at a joint public and private sector council say about 4,000 firms and organizations have applied for permission to use the campaign's logo.
 
But quite a few employers are not completely on board.
 
Some may give the campaign a miss to avoid disruptions in their customer-support services. Others say they are already encouraging their workers to use their vacation days.
...


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Mongolia and China to extend swap arrangement www.montsame.mn

Ulaanbaatar /MONTSAME/ The Bank of Mongolia and the People’s Bank of China have agreed to extend the local currency swap line during the meeting between Deputy Governor Lkhagvasuren Byadran and Deputy Governor Yi Gang on February 22, 2017 in Beijing, the People’s Republic of China.

Currently, the two central banks have RMB 15 billion swap line, maturing in 2017. It is expected that the maturity will be extended to 2020 by the agreement.

The central banks first entered into the swap arrangement in 2011 with RMB 5 billion. The swap line was expanded two times in 2012 and 2014 to RMB 15 billion.

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Mongolian coal miners bet on ’One Belt, One Road’ to feed demand www.news.mn

Coal miners operating in Mongolia are betting on China's massive 'One Belt, One Road' programme to improve access to existing markets in China and Russia and enter new ones as far afield as Eastern Europe.

Although Chinese demand for coking coal, or metallurgical coal – a key steelmaking ingredient – has recovered, infrastructure constraints in Mongolia, particularly a lack of rail capacity continues to cause 'bottlenecks' and delays in getting product to markets, said David Paull, managing director of ASX-listed Aspire Mining Ltd.

In the longer term, China's efforts to re-invent the Silk Road trading route for the modern era, connecting Asia to the Middle East and Europe will shift the balance.

"One Belt, One Road and investment in Mongolian rail will provide capacity, allowing greater penetration of the Chinese and Russian markets 'and eventually Eastern Europe," Paull told CNBC in a telephone interview on Feb. 21st.

Despite the longer-term appeal of new growth markets, Mongolian-focused miners like Aspire remain cautious.

"The coking coal market certainly has stabilized," Paull said. "The capital markets were completely closed to us" during the depths of the commodity price collapse in 2014.

"We reduced ourselves to a skeleton crew to keep ourselves in the game. We're still very much in that mode but more confident in sources of funding if you can point to the fact you can move to the development stage quickly."

In the near term, China's ban on North Korean coal imports is boosting demand for Mongolian coking coal, said Thomas Hugger, founder and CEO of Asia Frontier Capital. "Naturally, Mongolia should be the main beneficiary of this." (CBSN)

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Germany overtakes UK as fastest-growing G7 economy www.theguardian.com

 
 
Germany overtook the UK as the fastest growing among the G7 states during 2016. Europe’s largest economy expanded at the fastest rate in five years, showing growth of 1.9% last year.
 
The expansion pushed Britain into second place among the G7 industrialised nations, after the Office for National Statistics revised down annual UK growth to 1.8%, from an initial estimate of 2%.
 
In the final quarter of 2016 Germany’s economy grew by 0.4%, improving on 0.1% growth in the third quarter. It was fuelled by domestic demand as government and consumer spending rose.
 
Germany proved the International Monetary Fund wrong, after the Washington-based fund predicted the UK would outpace its G7 peers.
 
Alan Clarke, economist at Scotiabank, said the economies of both countries had turned out a decent performance last year, and pointed out that UK growth of 0.7% had outpaced Germany in the fourth quarter.
 
He said: “UK economic growth in 2016 was fractionally below that of Germany – no longer the fastest growing in the G7. In the big scheme of things 0.1 percentage points between friends isn’t something that anyone is going to notice. And if anyone wanted to pick a fight, you are only as good as your last game and the UK scored 0.7% growth in the fourth quarter. Both economies are doing pretty well and survey indicators for [each] suggest more good news early 2017.”
 
Germany’s statistics office, Destatis, described the country’s economy as “solid and steady”. The figures suggested German consumers had so far shrugged off the uncertainty created by Britain’s decision to leave the European union.
 
In the final quarter, government spending in Germany rose 0.8%, and household spending increased by 0.3%. Trade was a drag on GDP however, as the 3.1% growth in imports outpaced exports growth of 1.8%.
 
Jennifer McKeown, chief European economist at Capital Economics, said: “German GDP was growing at a healthy pace at the end of last year, driven mainly by consumer spending. While business surveys suggest that growth will accelerate further in the near term, March’s dip in consumer confidence may be an early sign of a slowdown in spending to come. In all, the German economy remains in good health. But we doubt that it will go from strength to strength.”
 
A strong economic backdrop has helped Germany post a record budget surplus of €23.7bn in 2017, fuelled by higher tax revenues, rising employment and low debt costs. It was the highest budget surplus since reunification in 1990 and the third successive year the government has had a budget surplus.
 
Olga Tschekassin, an economist at Barclays, said government and state spending would continue to be the main drivers of growth in the coming quarters. “However, external factors such as Brexit and US trade policy, and a series of upcoming elections in the euro area, will likely increase uncertainty and could harm investment.”
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Daimler to invest in Mercedes-Benz plant in Russia, creating over 1,000 jobs www.rt.com

 
German vehicle producer Daimler will invest 15 billion rubles (about $250 million) in an assembly plant in Russia’s Moscow region, according to a statement from the Ministry of Industry and Trade (Minpromtorg).
 
The plant will produce premium class passenger cars and be completed by 2019. Daimler will localize welding, painting, and assembly of vehicles, as well as logistics in Russia.
 
"According to the contract, Daimler guarantees to invest at least 15 billion rubles in the project. The investment contract has been signed for nine years. The launch is scheduled for 2019; the plant's production capacity will be over 20,000 cars a year. The project will create more than a thousand jobs," Minpromtorg said in a statement.
 
Russia will contribute to the project by giving government support and will offer a favorable tax environment, the ministry added.
 
The plant will be built by the newly-created Mercedes-Benz Manufacturing RUS (MBMR) division.
 
“Russia is a strategically important and rapidly developing market for Mercedes-Benz," said Mercedes-Benz Cars board member Markus Schäfer. He added that the localization of production will make the company more competitive in the global market.
 
Minpromtorg deputy head Aleksandr Morozov said the German car producer is investing in Russia despite the short-term deterioration of relations between Moscow and the European Union.
 
The agreement to build the plant was signed last year during the St. Petersburg Economic Forum (SPIEF). Daimler will start building it next year.
 
Daimler has long had plans to build a car assembly plant in Russia. The company was considering locations in St.Petersburg or Nizhny Novgorod but decided on Solnechnogorsk, 40 kilometers from Moscow.
 
The German carmaker will produce the S, E, ML, GL and A class vehicles in Russia.
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Government to submit bill on budget amendments www.montsame.mn

Ulaanbaatar /MONTSAME/ Today February 23, an irregular cabinet meeting was held to discuss adjustments to the state budget of 2017. The Cabinet approved to submit the bill to the Parliament.

Though it is clear that the Parliament has to call irregular session to discuss the budget amendments, the date of the session has not been announced yet. Sources said, the irregular session of the Parliament would be called most probably soon after the Lunar New Year-Tsagaan Sar.

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