Border jam puts Mongolia's coal lifeline under threat www.reuters.com

KHANBOGD, Mongolia (Reuters) - In Mongolia’s Gobi desert, thousands of heavy-duty trucks laden with coal inch along a cluttered highway towards the Chinese border in a journey that can take more than a week.

Truckers cook, eat and sleep in vehicles covered in coal dust, many subsisting on the same meat soup that fueled Genghis Khan’s Mongol Horde more than eight centuries ago.

Alongside the trucks a bustling microeconomy has sprung up of traders peddling cigarettes, water and diesel as drivers wait to clear Chinese customs in a queue that can stretch for 130 kilometers (80 miles).

A rebound in coal prices and a surge in exports to China this year has meant a bonanza for miners in Mongolia, and a vital lifeline for the country’s tiny economy, after a currency and debt crisis forced it to seek an economic rescue package from the International Monetary Fund (IMF).

But long delays at the Gashuun Sukhait-Gants Mod crossing, the main transit point between the two countries, are undercutting those gains as fleets of trucks carrying coal from Gobi desert mines to China pile up at the border.

The long delays have been blamed on a surge in traffic driven by the thriving cross-border coal trade. However, Mongolia’s inability to stop rampant smuggling across the border has also played a role as China has imposed more stringent checks on incoming deliveries in recent months.

Customs officials in China’s Inner Mongolia declined to comment when contacted by Reuters. The General Administration of Customs in Beijing also did not respond to requests for comment.

RECOVERY STALLED

The rise in coal prices this year has doubled border traffic, according to local police, putting law enforcement and customs staff under heavy pressure in both China and Mongolia.

With Gobi miners hoping to boost output further next year in a bid to take advantage of higher prices in China the bottlenecks are expected to get worse.

An environmental crackdown in China has resulted in the closure of hundreds of mines and the restriction of coal deliveries into smaller ports, driving up prices.

Curbs on coal imports from North Korea as a result of international sanctions against Pyongyang’s nuclear weapons program have also allowed Mongolia to fill the breach.

Mongolia’s coal exports to China rose more than four-fold in the first half of the year, but growth has petered out since the delays at the border crossings first arose in July.

Bataa Davaasuren, director of Mongolia’s Customs House at Gashuun Sukhait, said customs on both sides of the border were short-staffed, adding that the situation had been exacerbated by events like the Chinese Communist Party Congress in October.

Mongolia’s Foreign Affairs Ministry said the problem was initially caused by the Naadam summer festival, when many Mongolians take long holidays.

Mongolian customs officers are also taking more time to screen cargoes after their Chinese counterparts complained that raw meat and even guns had been secreted in coal heading to China, Davaasuren said.

There was even one incident when a driver tried to sneak a live wolf across the border, he said.

“Nobody wants the long queue, of course,” said Davaasuren, who said the problem would quickly disappear if Mongolian customs could raise its handling capacity to 3,000 trucks a day from 700 currently. “It’s bad for the drivers and the country, so we’re all working to resolve the issue.”

When trucks aren’t stuck in grinding traffic, just getting to the border is also a harrowing ordeal, as vehicles speed towards China and back down the one-lane road. With no street lamps to guide the way and drink-driving a constant problem, danger levels increase at night, drivers say.

“It’s very risky,” said one driver, who identified himself as Bat-Erdene. “We see flipped-over cars on the side of the road every day.”

On a recent trip down the road, a team of Reuters journalists saw numerous overturned trucks and vehicles smashed up from head-on collisions littering the side of the road.

“We see unbelievable things,” said Dunshig Baasanjav, a driver standing outside his truck amid the motionless traffic. “Others who see it would think it’s the worst they’ve ever seen, but we see it all the time. We’re numb to it.”

Miners say the long-term solution to the border bottleneck problem is a new rail link connecting mines with the Gashuun Sukhait crossing.

Mongolia built more than 200 kilometers of foundations for railway tracks for the link but the project was put on hold after financing ran dry.

Local authorities believe the project may have to start again from scratch because the foundation blocks have been left at the mercy of Mongolia’s harsh environment for so long.

Whatever the fate of the railroad, those plying the roads from the Gobi to China in stop-and-go traffic have little choice but to keep driving given the lack of opportunities in a country strapped by austerity measures linked to the IMF bailout.

“This job is very risky and life threatening, but we have no other choice,” said Choijiljav Ganbold, a trucker who emerged from his truck as the sun set on the motionless traffic.

“We have nothing else to do.”

November 13, 2017 trading report www.mse.mn

On November 13, 2017, 181,897 shares of 32 firms listed as Tier I, II, and III were traded. 19 firms’ shares increased in price, 8 decreased and 5 remained unchanged. Nogoon khugjil undesnii negdel JSC /JLT/ was the top performer, increasing 15.00 percent, whereas Aduunchuluun JSC /ADL/ was the worst performer, decreasing 8.17 percent.

Mongolia participates in IMF regional conference www.montsame.mn

Ulaanbaatar /MONTSAME/ Mongolian delegation led by N.Bayartsaikhan, Governor of the Bank of Mongolia attended an international conference in commemoration of the 20th anniversary of the IMF Office for Asia and the Pacific held in Tokyo on November 8.

Minister N. Tserenbat reflects on Mongolia's tourism potential www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Environment and Tourism N.Tserenbat briefed Irina Kravchenko, the European Bank for Reconstruction and Development (EBRD) Head of Mongolia, on his priorities and policy directions on November 10.

The meeting was also attended by Svetlana Radchenko, EBRD Senior Banker in charge of infrastructure affairs. Appreciating the EBRD’s investment into entities working in the area of renewable energy, Minister N.Tserenbat inquired into possibilities of directing EBRD investment into development of tourism infrastructure.

“Tourism sector development is based on the opportunities of private sectors in Mongolia. Investment is lesser in tourism sector than major industries like mining,” said the Minister, citing a promise he made upon his appointment which is to attract a million tourists to Mongolia in a short amount of time and increase tourism revenue to USD 1 billion. “If we look at Mongolia’s geographic and other advantages, it is not a dream number,” he said.

The Minister proceeded to introduce his action plan, which will focus on several areas – universalizing service quality in all parts of Mongolia, ensuring transport safety and improving the services offered by hotels and camps and assisting companies working in air transport.

The Minister touched upon the Cabinet’s action plan which comprises major projects and developments targeting tourism sector, expressing his readiness to put all necessary efforts in order to put these plans into action. “Most importantly, tourism sector can’t continue with the current self-financing mode, which is why long-term cooperation with international organizations is ideal,” said the Minister, expressing his hope to strengthen cooperation with the EBRD.

In return, the EBRD Head of Mongolia expressed the bank’s readiness to cooperate with public organizations as it has experience in working with private entities. “There are dozens of opportunities for cooperation,” she said, emphasizing the high environmental standards the Bank sets in all projects.

She also informed that the Bank will be co-implementing an infrastructure project in cooperation with the Mongolian Government. The project team includes a representative from the Ministry of Environment and Tourism. The EBRD is also working with the Government on infrastructure development in the capital city, which will serve as a contributing factor for attracting more tourists.

“Environment and tourism are inseparable,” remarked Irina Kravchenko, pointing out how air pollution is affecting winter tourism in Mongolia. She suggested that more detailed discussion on projects and investment areas is needed between the sides.

As such, the meeting paved the way for a closer and broader cooperation between the Ministry of Environment and Tourism and the EBRD. Over the years, the EBRD has made an investment worth USD 1.5 billion into Mongolia.

Environment Minister N.Tserenbat has also met country directors of the Asian Development Bank (ADB) and World Bank Group (WBG).

Gold demand from China picks up again www.resources.mn

China seems to have recovered its appetite for gold, with demand for bars and jewellery markedly increasing in the first nine months of the year, data from the China Gold Association shows.

Weekly trading report www.mse.mn

During the week spanning November 06 to November 10, 2017, MNT2,061,273,576.21 worth of securities were traded through 5 trading sessions on the MSE. The daily average MNT volume was 412.6 million.

These 35 cities in China are as wealthy as some countries www.rt.com

Decades of skyrocketing economic growth have resulted in some Chinese cities having economies as big as many countries.

Former star funds crash out of Europe’s top list www.ft.com

Almost half of the 20 largest actively managed funds in Europe in 2012 have disappeared from the same ranking in 2017, as portfolio manager departures, the hunt for yield and upheaval in Asian markets transformed the continent’s investment industry.

Nine new funds have entered the top-20 chart over the past five years, pushing out old favourites including Pimco’s Total Return and Diversified Income funds, according to figures compiled for FTfm by Morningstar, the data provider.

Pimco’s Total Return fund, which ranked as the third-largest fund in Europe five years ago, no longer appears in the top 20. Investors fled the fund on the back of the departure of Bill Gross, the famed bond investor.

Invesco Perpetual’s High Income and Income funds also fell out of the top 20 after Neil Woodford, who ran the products, quit Invesco in 2013 to set up his own asset management company.

Ali Masarwah, a director at Morningstar Europe, said: “You get celebrities among fund managers. If the celebrity exists, money will usually flow out of the funds.”

Several funds rose up the charts as investors went on the hunt for income because of the low interest rate environment, according to the data. This included Pimco’s Income fund, which did not appear in the 2012 ranking but surpassed €50bn in assets in September and is now Europe’s largest mutual fund.

JPMorgan’s Global Income fund, DWS Top Dividende and Nordea’s Stable Return were also entrants to the ranking, each appearing in the top 10.

Massimo Greco, head of European funds at JPMorgan Asset Management, said: “European investors are seeking income as a result of demographics and macroeconomic factors that keep interest rates low.”

Chris Chancellor, a partner at Mackay Williams, the asset management consultancy, added: “Since the end of the crisis, we’ve seen a whole new type of fund rise up the rankings: those offering some kind of solution, whether that is income or a stable return.

“More building-block options, such as the core equity funds, have fallen out of favour for the time being and this [has led to] some funds falling out of the rankings.”

According to the data, the dominant position of Franklin Templeton, the US fund house, has been challenged in Europe over the past five years. In 2012, the emerging markets specialist was home to Europe’s largest actively managed fund, the Templeton Global Bond vehicle run by Michael Hasenstab. But this has dropped to 15th position over the past five years.

Its Templeton Asian Growth fund also fell out of the top 20 since 2012. The company has suffered because of a sell-off in emerging markets during 2013 and 2014, and concerns about performance.

“Franklin has had a pretty rough few years. Performance was quite poor relative to the peers,” said Mr Masarwah, adding that investors continue to pull money from the asset manager.

Aberdeen Global Emerging Markets Equity, Axa’s US short duration high yield, AllianceBernstein’s American Income and M&G’s Recovery funds also fell out of the top 20 over the past five years.

While many of the largest funds in Europe are run by huge asset managers, the data revealed some smaller investment houses are doing well. Two funds from Carmignac, the French boutique, and an equity fund run by Terry Smith, who set up a UK-based asset management company in 2010, appear in the top 20.

Bitcoin Plunges 29% From Record High www.bloomberg.com

Bitcoin plummeted, extending its drop to 29 percent from a record high, on speculation some traders were buying its offshoot amid a struggle over the digital currency’s future.

Washington State company trying to revive shuttered coal mine www.mining.com

A Washington State company is trying to resist the wave of U.S. coal mine and coal plant closures by re-opening the John Henry Mine in King County.