China's trade with Russia will soon reach $100 billion www.rt.com

The volume of trade between Russia and China increased by more than 20 percent last year and is still growing, according to Chinese Prime Minister Li Keqiang.
“We believe that Sino-Russian cooperation in the business sector has huge untapped potential. Trade turnover between our two big economies is currently about $80 billion,” said the head of the government during a press conference in Beijing. He expressed confidence that the trade volume could grow to $100 billion soon.

Mongolian c.bank rejects interest rate cap as austerity bites www.reuters.com

ULAANBAATAR, March 20 (Reuters) - Mongolia’s central bank has rejected lawmakers’ proposals to cap or cut interest rates, currently among the world’s highest, as rifts deepen over an economic rescue package agreed with the International Monetary Fund (IMF) last year.

Tree rings tell tale of drought in Mongolia over the last 2,000 years www.sciencenews.org

A new analysis is shedding light on drought in Mongolia, both past and future.

By studying the rings of semifossilized trees, researchers constructed a climate history for the semiarid Asian nation spanning the last 2,060 years — going 1,000 years further back than previous studies.

It was suspected that a harsh drought from about 2000 to 2010 that killed tens of thousands of livestock was unprecedented in the region’s history and primarily the result of human-caused climate change. But the tree ring data show that the dry spell, while rare in its severity, was not outside the realm of natural climate variability, researchers report online March 14 in Science Advances.

“This is a part of the world where we don’t know about the past climate,” says Park Williams, a bioclimatologist at Columbia University’s Lamont-Doherty Earth Observatory in Palisades, N.Y., who was not involved with the study. “Having this record is a great resource for trying to understand past droughts in the region.”

In recent years, many studies have sought to unsnarl the role of anthropogenic climate change from natural variability on extreme weather events (SN: 1/20/18, p. 6). Such work is necessary for more accurately predicting future climate trends and helping governments prepare for the most severe scenarios, says study coauthor Amy Hessl, a physical geographer at West Virginia University in Morgantown. This is especially true in countries like Mongolia that lack certain infrastructure, such as enough water reservoirs, to ease the impact of events like prolonged drought.

Hessl and her colleagues studied tree rings in hundreds of samples of Siberian pines, well-preserved by Mongolia’s naturally dry climate. A ring’s width indicates how much the tree grew in a year. In wet years, the rings are wider; in dry years, skinnier.

The recent dry spell was the severest in recorded history. But the rings showed that an even more severe drought took place around the year 800, long before anthropogenic climate change began.

Still, computer simulations suggest that about a third of the recent drought’s severity could have been caused by elevated temperatures linked to climate change, the researchers found. The finding is consistent with studies on how climate change has affected other recent droughts in South Africa and California.

Using computer simulations, Hessl and her colleagues conclude that droughts in coming decades may not be any worse than those seen in Mongolia’s past. The team predicts that as global temperatures rise over the next century, Mongolia will first become drier, then wetter. Increased heat initially will dry out the plains. But at a certain point, hot air holds more moisture, leading to increased precipitation.

Those climate patterns will likely guide how Mongolia develops, Hessl says, because they have in the past. In 2014, she and colleagues published a paper detailing how a 15-year period of unprecedented temperate and rainy conditions in 13th century Mongolia may have led to the rise of Genghis Khan

Oyu Tolgoi sets operational records in 2017 www.ubinfo.mn

According to its 2017 financial results and operational review, Oyu Tolgoi JSC set operational records for its total material mined and concentrator throughput during 2017. Oyu Tolgoi's copper production totalled 157,400 tonnes and gold production - 114000 ounces in 2017, meeting the company’s guidance. It was highlighted that Oyu Tolgoi achieved an All Injury Frequency Rate of 0.27 per 200 thousand hours worked for the whole year. The company's revenue resulted USD 939.8 million in 2017, reflecting lower sales volumes partially offset by higher copper prices compared with USD 1,203.3 million in 2016. For 2017, the company recorded income of USD 110.9 million and net income attributable to owners of Turquoise Hill Resources (TRQ) of USD 181.2 million or USD 0.09 per share. TRQ generated cash flow from operating activities before interest and tax of USD 325.8 million in 2017, with net cash generated from operating activities of USD 118.0 million. Oyu Tolgoi’s cost of sales was USD 2.32 per pound of copper sold, cash cost per unit of extracting and processing the metal products were USD 1.92 per pound of copper produced and all-in sustaining costs were USD 2.39 per pound of copper produced. Operating cash costs of USD 711.6 million in 2017 beat the Company’s guidance.

Mongolia to recover dinosaur fossils from South Korea, France www.xinhuanet.com

ULAN BATOR, March 19 (Xinhua) -- Mongolia is working to recover dinosaur fossils which were illegally trafficked into South Korea and France, the Department for Economic Crime of the Mongolian General Police Department said Monday.

Electric vehicles, higher prices to boost global copper output — report www.mining.com

Global copper production will spike over the next decade as rising prices and increasing demand from the electric vehicles sector encourage project development, a new reports shows.

Construction Minister discusses China-backed projects www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Construction and Urban Development Kh.Badelkhan met Chinese Ambassador Xing Haiming on March 19 to discuss the projects to be implemented in construction and urban development sector on Chinese loan and aid.

Can Mongolia be a new ‘paradise’ for crypto miners? www.chinaeconomicreview.com

“There is a huge potential for Mongolia to seize an opportunity to host big players in the cryptocurrency industry and become a crucial service provider,” said Tsolmon Bayaraa, CEO of Sourceland LLC.

The company initiated a project called GOBI—standing for Global Operation for the Bit Industry—to build enormous cryptocurrency mining facilities, crypto exchanges and data centers in southern Mongolia to host thousands of miners and entrepreneurs in blockchain technology from all around the world.

The company signed a contract with BW, one of Chinese largest crypto mining companies. Songxiu Hua, CEO of BW, confirmed that the company had made a deal worth $500 million and launched a pilot project in Mongolia to deliver 300,000 crypto mining machines in the first phase.

Mongolia is looking to take advantage of the uncertainty gripping the cryptocurrency industry in China. Until last year, China was by far the world’s largest market for both crypto mining and trading, but in September the Chinese government turned decisively against the industry, banning initial coin offerings (ICOs) and digital currency exchanges. Crypto miners are also being encouraged by local governments to leave China, according to recently leaked government document posted on Twitter by Chinese blockchain industry executive Elly Zhang.

Many of China’s crypto miners are therefore looking to move their operations elsewhere, and many are turning their heads toward Mongolia. Not only does China’s northern neighbor offer cheap energy costs, its sheer proximity to the Middle Kingdom minimizes a key cost for crypto firms in relocating: time spent offline. Furthermore, Chinese miners will want to take advantage of Mongolia’s cheap labor force, high-speed internet, and relatively unrestricted regulatory environment.

It’s all about energy

Nearly 60% of the world’s mining pools are currently based in China. These mining facilities, although found all over China, are mostly concentrated in the northern provinces, where miners often enjoy electricity subsidies due to the many local hydropower plants, and where the cold climate helps reduce costs associated with cooling servers—a significant drain on many mining businesses. However, crypto miners now consume such a huge amount of energy in these regions that the Chinese government has started to pay close attention.

Some entrepreneurs in Mongolia are already cashing in on the growing exodus from south of the border. Gobilink.com, a company that provides hosting services to miners in Mongolia, claims to have received dozens of offers in recent months. “Every week, we are approached by different Chinese miners wishing to move thousands of machines to our facilities,” said CEO Rene Villeneuve. “The biggest challenge is the amount of electricity needed, but we can handle most of what we’re seeing and we’re receiving great local support.”

Currently, the cost of electricity in Mongolia is 5 cents per kWh, which is almost three times cheaper than that in China. Despite this, the country’s current estimated energy capacity is only 1100 MW, as mentioned in the Mongolia’s Energy Sector Report, which will not be enough to feed the large-scale mega projects such as GOBI.

Project developer Tsolmon Bayaraa agreed that “it might be harder at the beginning to attract FDI into the energy sector, in particular to build power plants; but I believe in the long-run all parties would benefit from this win-win cooperation.”

Whilst it may be true that Mongolia at present barely meets its domestic energy demand, having to import electricity from both Russia and China, the country’s rich endowment of untapped natural resources still leaves considerable spare capacity in this area.
Erdenetsogt Energy, a company named after its huge coal deposit in Mongolia’s Dornogovi Province, has also secured permission from the government to build further coal-fired power plants. This will give the company the “possibility for us to provide cheaper electricity as low as 3 cents per kWh,” according to Managing Director Enkhtaivan Chimed.

Uchral Nyam-Osor, a member of the Parliament of Mongolia, says that hosting crypto miners and founding farms in the southern Gobi region would be the solution for a country like Mongolia to reduce its overexposure to mineral resources, on which hinges almost 23% of GDP. The country has been suffering through an economic crisis which brought it to the brink of default in 2016 after a brief stint as one of the world leaders in economic growth in 2012.

“Our focus has always been to find ways of diversifying the economy. If China bans crypto mining operations, Mongolia should embrace it,” he said.

“I assume that what those [crypto] miners want from the government is not regulation, but support for energy supply. Needless to say, that there is a demand for power plants. It would help increasing employment and income levels,” he added.

“One may say that the situation of Mongolia’s light regulation is a disadvantage. Not at all,” said Boldbaatar Bat-Amgalan, former head of Communications Regulatory Commission of Mongolia.

This could well be Mongolia’s stepping stone onto the world’s financial stage

Swiss seize bank accounts amid probe linked to Rio Tinto Mongolia mine www.reuters.com

ZURICH, March 19 (Reuters) - Switzerland’s highest court has upheld the seizure of $1.85 million in Swiss bank accounts, part of a corruption probe linked to a former Mongolian finance minister who helped clear the way for a disputed Rio Tinto mining project, a ruling showed.

The Swiss Office of the Attorney General (OAG) also confirmed it has an ongoing criminal investigation in which prosecutors contend one of the seized accounts was used to transfer $10 million to the ex-minister, Bayartsogt Sangajav.

Anti-graft authorities in Mongolia are investigating the country’s 2009 investment pact with Rio Tinto, signed by Bayartsogt, that kickstarted the British-Australian company’s Oyu Tolgoi copper-gold project in the Gobi desert.

Neither the OAG nor the heavily redacted Swiss Federal Tribunal ruling, released on Friday, identified Bayartsogt or Rio Tinto by name, but the court documents include details that clearly show both are elements of the OAG’s probe.

The court documents refer to Rio Tinto’s mine, now undergoing a $5.3 billion expansion, but do not accuse the company of wrongdoing on the project.

A spokesman for the Swiss OAG declined further comment on its investigation, saying it was confidential and adding those being scrutinised are presumed innocent until proven otherwise. Rio Tinto declined comment when contacted by Reuters.

“We confirm the Swiss attorney general’s office is conducting a criminal proceeding due to suspicion of bribery of foreign officials and money laundering,” the OAG said in an emailed response to Reuters.

Telephone calls and text messages from Reuters to Bayartsogt seeking comment were not answered or returned.

The Swiss attorney general’s office launched its probe in 2016, court documents show, when prosecutors seized the bank accounts they say were linked to a transfer of 8.2 million euros ($10.1 million) to accounts controlled by Bayartsogt in September 2008, the month he became Mongolia’s finance minister.

Since then, the unidentified owner of the seized accounts, with a balance of some $1.85 million, has sought unsuccessfully to have the funds unfrozen.

The account holder contended there was insufficient suspicion to make a case, that Switzerland lacks jurisdiction, that the statute of limitations had expired and that he had diplomatic immunity from criminal prosecution, court documents show.

In its rejection of those claims published on Friday, the Federal Tribunal’s three-judge panel wrote that evidence pointed to “concrete clues that large amounts of money of questionable origin” had flowed in transfers that were “typical of money laundering”.

“It is very suspicious that the minister of a foreign country, immediately after taking a ministerial post, would be the recipient of such a large sum,” the ruling said, adding the OAG’s criminal probe remains in its early stages.

A spokeswoman for Mongolia’s anti-corruption authority told Reuters that it is investigating a number of cases involving Bayartsogt. She did not elaborate.

A Swiss lawyer representing the holder of the seized accounts did not reply to an email seeking comment.

The Swiss Federal Tribunal’s ruling also referenced allegations that have been raised by some Mongolian politicians, accusing the government of handing too much control over big mining projects to foreign interests like Rio Tinto.

“There are indications that (Bayartsogt) as finance minister signed a contract that was disadvantageous to the Mongolian state,” the Swiss ruling said.

In 2013, Bayartsogt resigned as deputy speaker of the Mongolian parliament after details emerged of his Swiss bank account in reports by the International Consortium of Investigative Journalists, the group that has written extensively about leaks including the Panama Papers.

$1 = 0.8139 euros Reporting by John Miller in Zurich, Barbara Lewis in London and Munkhchimeg Davaasharav in Ulaanbaatar; Editing by Dale Hudson

IFC to help Mongolia increase its agricultural exports www.montsame.mn

Ulaanbaatar /MONTSAME/ The Ministry of Foreign Affairs and IFC, a member of the World Bank Group, signed a memorandum of understanding (MoU) on March 19 to implement the trade facilitation reform and enhance the competitiveness of Mongolia’s agricultural exports.