Rio Tinto, down 1.8% in New York, could face higher costs on its $5.3 billion underground expansion of the giant copper-gold mine in the South Gobi desert near the border with China.

Mongolia gave Rio four years to build a local power plant which could come with a bill as high as $1 billion to serve the mine in the land-locked country to replace Chinese suppliers.

Rio said in a press release Friday "the cost and means of financing this will be finalized between shareholders":

Rio Tinto will continue to review its capex forecasts for the project but has already earmarked $250 million a year for the development of a power station in Mongolia in its 2019 and 2020 capex forecasts.

The underground expansion would lift Oyu Tolgoi production from 125–150kt this year to 560kt at full tilt from 2025, making it the biggest new copper mine to come on stream in several years.

Last month Rio Tinto set up a 80-person office in Mongolia, independent from Oyu Tolgoi to strengthen ties with Ulaanbaatar and serve as a base for exploration in the vast mineral-rich nation of fewer than three million inhabitants.

Earlier January the government served the mine with a new bill for $155 million in back taxes which the company is disputing. Turquoise Hill also had to declare force majeure on deliveries after protests by Chinese coal haulers disrupted deliveries near the border.

Rio has come under pressure from shareholders about its alleged lack of transparency about pledges to the Mongolian government and escalating costs for the expansion, as well as its treatment of minority shareholders of 51%-owned Turquoise Hill.

Rio holds an effective one third of Oyu Tolgoi via its shareholding of Turquoise Hill and the Mongolian government 34%.

Copper was trading near its highs for 2018 on Friday jumping to $3.24 a pound or $7,140 a tonne. Copper averaged $2.80/lb ($6,192/t) over the course of last year.

Concerning the price increase, Radnaasuren Lkhamaasuren, Deputy Head of Mineral Resources and Petroleum Authority of Mongolia (MRPAM), explained, “Oil dealers recovered around 60 percent of their loss through the excise tax exemption. However, border price had to increase due to oil price surge in the global market. Thus, oil dealers have increased fuel price by MNT 20- 30 per liter in order to prevent price fluctuation.” Fuel Policy Department of the Ministry of Mining and Heavy Industry informed that the ministry is holding a policy to maintain retail price of fuel. There will not be any fuel shortage issue in the future.

Another good news is the reducing USD /MNT rate. This will have significant impact in maintaining fuel price.” MRPAM is expected to collect MNT 291.8 billion to the State Budget. The officials informed that a total of MNT 223.4 billion will be collected from oil export revenue. For instance, January report shows that MNT 21.9 billion has been accumulated to the budget, of which MNT 19.2 billion were from oil export revenue, displaying 7.5 percent of annual plans. As of February 5, Mongolia’s fuel reserve could cover 39 days of average consumption, informed the related officials.

Additionally, Organization of the Petroleum Exporting Countries’ (OPEC ) decision to reduce production output and the political instability in the second half of 2017 had significant impact on global oil price. As for Mongolia, border price at Mongolia-Russian borders have been increased since July 2017, reaching USD 140 per ton. International Monetary Fund’s Extended Fund Facility program also forced Mongolia to increase excise tax on gasoline in July and November of last year. Furthermore, Rosneft increased their border price of fuel this month.

Specifically, total production of mining, extractive industry reached MNT 9.4 trillion increasing by MNT 2.3 trillion or 32.8 percent, of which MNT 1.1 trillion or 78.7 percent growth was made up in coal mining and MNT 1 billion or 20.7 percent growth in metal ore mining.

Mining, extractive sector accounts for 72.6 percent of production of industrial sector.

B.Batchimeg

As of January, a number of working age people reached 1.4 million, of whom 801.6 thousand are living in urban areas and 565.6 are in rural areas.

In the fourth quarter of the last year, the employment rate increased by 1.3 points compared to that for the previous quarter, whereas unemployment decreased by 6.7 thousand.

Economically inactive population is made up of 264.9 thousand pensioners, 240.9 thousand students and 60.4 thousand people with disabilities.

But the artist behind the Docklands piece said a newly-released video showing the making of the mural portrays the artwork's message better than the mural itself.

As well as being the world's coldest capital city, with temperatures as low as minus 40 degrees Celsius, Ulaanbaatar in Mongolia is among the most polluted cities in the world.

Melbourne-based artist Khosnaran Kurelbaatar, aka Heesco, moved to Australia from Mongolia in 1999 and still has friends and family in Ulaanbaatar.

"I go visit, if not every year, then every second year," he said, adding that he has watched the city's air pollution problem "growing spontaneously".

"I have so many family members there, and seeing what they go through started really affecting me.

"It's pretty much a humanitarian disaster."

Heesco said using art to draw attention to the issue was "better than doing nothing".

"As a mural artist I do have a small amount of viewers, of followers, that I can reach," he said.

Working with organisation Breathe Mongolia, Heesco arranged for a photographer to shoot images showing the pollution on the streets of Ulaanbaatar.

He used two of those photos, both showing children wearing facemasks, as the basis for his mural.

Local videographers then filmed Heesco as he painted the work.

"I wanted to start off painting a really clear blue sky — Mongolia was once known as the land of blue sky," Heesco said.

He then painted the buildings and people before spraying lightly over the artwork with grey paint to portray the city's smog.

"In the video process you will be able to see from the beginning to the end, which I think works better."

Heesco said he hoped the mural and video would help inform the public about Mongolia's smog problem and draw the attention "of whoever is willing to contribute" to solving it.

"Mongolia needs sustainable solutions to this problem," he said.

He said places like Melbourne have the research facilities and funding required to come up with those solutions, but those researchers had to first be aware there was a problem to solve.

"People won't know unless we do something and talk about it," he said.

"Hopefully this will bring some attention to it."

It was confirmed by the court that MCC did not loan from the Government to purchase EMC's 49 percent stake. In other words, the claim about MCC buying EMC’s ownership through a loan from Bank of Mongolia (BoM) and Development Bank of Mongolia (DBM) has been proven false. Although the MCC had announced several times that the company did not loan from BoM and DBM, the public agencies have been refusing to provide evidence; however, the Administrative Court required the Government to collect some of the necessary information.

The related documents included a proof that the company did not receive any loan from DBM or BoM. This turn of event raised more attention than the court’s decision for some as its the first time DBM and BoM have released any document relating to the Government’s accusation. Right after the Cabinet was formed, the Minister of Justice and Home Affairs Nyamdorj Tsend proudly declared to settle EMC’s issue in the first 100 days and fulfilled his promise; however, his illegal actions driven by his own interests have failed the Cabinet. During the court ruling, it was also proven that the Government’s Agency for Policy Coordination on State Property (PCS P) has re-appointed EMC’s board of directors, announced distribution of dividend and made its transaction, as well as increasing the number of directors and making structural changes before the court ruled its decision.

While EMC is rushing to ratify 2018 purchase plan, premium of the board, contract review of and the CEO and tender lists, the court has ruled to suspend the rules and regulations of EMC and Mongolrostsvetmet LLC, which was approved by the PCS P, as well as the resolution on reappointing the board. Whether if the Government will accept or reject the suspension will display the true face of justice system in Mongolia. The administration law states that a suspension act must be settled within a week; but the PCSP has made several requests and complaints to delay the case. The plaintiff’s attorney presumed that the Government is trying to buy time in order to ratify the board premium and 2018 tender lists.

Tugsbilig.B

In 2016, the company has distributed 85 percent of its net profit (MNT 45.9 billion, MNT 872 per share) as a dividend.

Additionally, the company's market value reached MNT 569 billion, the bid for shares hit MNT 1.4 million and distributed MNT 130 thousand per share in 2011, setting a record in Mongolian Stock Exchange.

The higher revenues are the result of the $15-$20 increase in oil prices, compared to the price of oil before the deal between OPEC and a dozen non-OPEC nations led by Russia was signed, the minister said.

Russia is cutting 300,000 bpd as part of the pact with OPEC, and although there have been voices and speculation that some Russian companies are unhappy with the agreement that hampers their production expansion plans, Moscow has been keeping its end of the deal so far.

Russia’s crude oil production in January was basically flat compared to December 2017, after rising production at foreign firm-led projects compensated for small declines at the two major Russian oil producers, Rosneft and Lukoil.

The oil price rally earlier this year has caused many to wonder whether Russia and/or some OPEC members could ditch the deal because they wouldn’t want oil prices too high—a scenario that could incentivize US shale production too much.

US production is beating previous growth expectations, while minister Novak said in an interview with Russian news agency Interfax that the goal of the OPEC-Russia deal in bringing the oil market back to balance had been two-thirds achieved.

Asked how the cartel and allies will exit the deal, Novak said that it should be gradual and will likely take several months—between two and five months—to avoid a sharp increase in production that could again result in oversupply.

The quality of bank’s loan portfolio, its operational policy, regulations, credit risk management system, collateral and third-level assets were evaluated during the asset quality review. The review concludes that banks’ credit risk management, conditions and requirements related to collateral value need to be improved.

Officials note that the asset quality review was based on the financial balance of 2016 when the country was undergoing financial and economic difficulties, and adjusted as of the third quarter of 2017, taking into consideration the financial and economic situation of the year of 2017.

The asset quality review of commercial banks was made by the "Pricewaterhouse Coopers" company registered in the Czech Republic.

B.Misheel