Mongolia to cooperate with IFC in green building evaluation www.montsame.mn

Ulaanbaatar /MONTSAME/ The Ministry of Construction and Urban Development, Ministry of Environment and Tourism, Energy Regulatory Commission signed a memorandum of cooperation with the International Financial Corporation (IFC) on green building evaluation system implementation in Mongolia on April 13.

Chinese giant recommits to Aspire coal rail plan www.thewest.com.au

Aspire Mining’s ambitious plan for a Mongolian railway line to unlock value in the globally significant Ovoot coking coal deposit in that country has taken another step forward, with the company entering a new memorandum of understanding with its giant Chinese engineering partner.

In an update to the ASX, Aspire said it had signed a new MOU with China Gezhouba Group International Engineering Co (CGGC) as part of an official program of 35 new infrastructure agreements between Mongolia and China.

The program was the centrepiece of the first official visit to China by Mongolia’s recently elected Prime Minister.

Under the new MOU, Aspire and CGGC agree they will continue to work together to finalise a feasibility study on a 550km-long railway running east from Ovoot to the railway hub town of Erdenet.

CGGC, who is 40% owned by the Chinese state, last month delivered a draft feasibility study that found it would be financially viable to construct the railway line. A target date of next month has been set to finalise the study.

Rather fortuitously, Aspire’s railway plan has been caught up in bigger ambitions by China and Mongolia to build a Northern Rail Corridor as part of China’s Belt and Road Initiative to develop trade throughout Eurasia.

This has helped Aspire pick up heavyweight partners such as CGGC on a railway line east from Ovoot and attract interest from Russia in building a line westwards to the Russian border.

Russian rail design group Mosgiprotrans last month signed a deal with Aspire to study the feasibility of running a rail line west from Ovoot to the town of Arts Suuri on the Mongolian-Russian border and then on to the Russian city of Kyzyl.

While the Russian government has yet to declare support for the project, Aspire noted in its latest update that the Russian Ministry for Rail had asked to review the Ovoot to Erdenet proposal.

The company added that the new MOU between Aspire and CGGC recognised that both parties were interested in attracting investment by the Russian and Mongolian governments.

The new MOU also confirmed CGGC’s interest in funding pre-development activities for the project, subject to a guarantee the Trans-Mongolian railway, which runs through Erdenet, will have capacity to take Aspire’s coking coal north to markets in Russia and south to the steel mills of China.

Aspire reiterated that Mongolia’s central rail authority Ulaanbataar JSC had confirmed its forward planning estimates included capacity demand from Northern Railways for production from Ovoot.

As part of the new MOU, Northern Railways has committed to enter into a lump sum turnkey EPC contract with CGGC by the end of November 2018. Aspire reported the EPC contract would be subject to funding for the project, which, if available, could allow construction to begin in the Mongolian spring of 2019.

With China and Mongolia already urging them on and Russia peering over the wall, Aspire has no shortage of potential heavyweight backers for a project that could transform the company into a world-class player in coking coal.

Integrated cashmere supply system required for stable cashmere production www.montsame.mn

Ulaanbaatar /MONTSAME/ Stakeholders of cashmere production propose to create inintegrated system of raw material supply and develop cashmere production at the strategic level. Multi-lateral stakeholders meeting entitled ‘Sustainable Supply Capacity of Cashmere and Cashmere Products: Proper Coordination of Stakeholders’ Collaboration' was co-organized on April 13, by the Ministry of Food, Agriculture and Light Industry, Sustainable Fiber Alliance (SFA) and the Embassy of the United Kingdom in Mongolia.

UN Special Rapporteur evaluates safety of drinking water www.montsame.mn

Ulaanbaatar /MONTSAME/ The United Nations Special Rapporteur on the human rights to safe drinking water and sanitation is working in Mongolia.

German minister to carmakers: Invest in electric cars or lose out www.reuters.com

BERLIN (Reuters) - The German automotive industry must invest heavily in electric car technology and develop battery production facilities in Europe to keep up with global competitors, Economy Minister Peter Altmaier said in a newspaper interview published on Monday.

Mongolia to cultivate over half a million hectares in 2018 www.news.mn

According to the Ministry of Food, Agriculture and Light Industry, a total area of 513.2 thousand hectares are to be cultivated nationally in 2018.

Russian oil producers to make money from China’s yuan-backed crude futures – analysts www.rt.com

Crude oil exports implemented via Eastern Siberia–Pacific Ocean (ESPO) oil pipeline may substantially benefit from yuan-denominated oil futures launched by China last month, according to industry experts.
If the new product manages to succeed, price pegging of the Russian ESPO export blend to the China contract will favorably influence the Russian oil blend price. The new futures contract may reportedly boost Russian producers’ annual revenues by extra $440 million.

Four meat factories to be built with Chinese loan of USD78 million www.montsame.mn

Ulaanbaatar /MONTSAME/ State Secretary of Ministry of Food, Agriculture, Light Industry signed a USD 78 million loan agreement with a Chinese company within the framework of soft loan to be granted from Government of China to Mongolia. The agreement was one of 11 documents of cooperation and mutual understanding between two countries established in scope of the official visit of Prime Minister U.Khurelsukh to China. Under the agreement, four meat factories and quarantine zones will be established in the Gobi, Khangai, Western and Eastern regions of Mongolia.

New MoU signed on Erdenet to Ovoot railway project www.news.mn

Aspire Mining Ltd has entered into a new memorandum of understanding (MoU) with China Gezhouba Group International Engineering Co Ltd (CGGC). The new MoU was signed during Mongolian Prime Minister U.Khurelsuk’s official visit to China.

Glencore is losing billionaire allies to Trump's sanctions www.mining.com

(Bloomberg) — The reach and power of U.S. sanctions are hemming in the world’s largest commodity trader.

In just four months, Glencore Plc chief Ivan Glasenberg has lost two of his closest business allies as President Donald Trump’s aggressive foreign policy hits home, forcing him to cut ties with billionaires Oleg Deripaska and Dan Gertler.

The U.S. actions demonstrate the rising risk from international sanctions for companies like Glencore, which has built a global business by cutting deals with powerful people, and leaves the trader without its key men in two major markets.

Glasenberg has quit the board of Deripaska’s United Co. Rusal, and Glencore abandoned plans to swap its stake in the Russian company with another of the oligarch’s businesses, En+ Group Plc. Deripaska is the second recent Glencore associate to face U.S. sanctions. Gertler, the Swiss trader’s former partner in the Democratic Republic of Congo, was singled out by America in December over allegations of corruption.

"The message to companies is you have to watch out who you are doing business with," said former U.S. Ambassador Daniel Fried, who coordinated the State Department’s sanctions policy under the administration of Barack Obama. “Business conducted with the world’s bad guys is going to have a higher risk premium."

Glencore, which trades in 100-odd commodities in more than 90 countries, has partly built its business by dealing with people and places that others avoided. While many of its commodity competitors also operate in high-risk jurisdictions, few have a footprint as large as Glencore. Alongside Congo and Russia it mines Kazakh gold and zinc, drills for oil in Chad, and trades petroleum products in Libya. The Swiss commodity giant declined to comment.

The trader had already distanced itself from Gertler before sanctions hit, buying out his stakes in its two Congo mines 10 months earlier in a near $1 billion deal. Yet, it still faces questions on how to manage royalties it’s contracted to pay the Israeli businessman. With respect to Deripaska, Glencore has an 8.75 percent stake in Rusal, which has already lost more than half its value, and a multi billion-dollar deal to buy its metal.

Trouble shooter
More importantly, U.S. action has now forced Glasenberg to review two relationships he spent a decade cultivating and that gave his firm privileged access to decision makers.

In Congo, where Gertler had aided most of Glencore’s engagement with the government, the company now needs to navigate a series of complicated roadblocks without its trusted trouble-shooter.

In Russia, Glencore has other links to the Kremlin and relationships in the local oil and agriculture industries that have yet to be targeted by the U.S. Last year, Glasenberg was even awarded Russia’s Order of Friendship medal by President Vladimir Putin. Deripaska, a Glencore partner since at least 2007, was one of the company’s most important allies.

High risk
Barclays Plc and Sanford C. Bernstein & Co. analysts are among those arguing the financial fallout from U.S. sanctions will be limited. Yet, there’s no doubt that Trump’s aggressive foreign policy adds uncertainty.

"Russia has always been a high risk, high gain business environment," said Fried from Washington. "They took advantage of the high gain, now they are learning about the high risk."

Glencore has a history of taking such risks in its stride. Founder Marc Rich was indicted in 1983 for trading oil with sanctioned Iran and spent years on the FBI’s most wanted listed.

Three decades later, Glasenberg won oil industry admiration with a bold deal to buy an $11 billion stake in Russia’s biggest oil company, Rosneft PJSC, in a transaction that the U.S. reviewed for potential sanctions violations but didn’t block.

What’s different today is that America has refined its financial arsenal and then put it in the hands of a president who favors gut instinct over chess-like maneuvering. The Obama-era 2016 Global Magnitsky Act, which significantly expanded the reach and flexibility of sanctions, allows the U.S. to punish individuals accused of corruption or human rights violations anywhere in the world, without the need to first establish a specific program to target the behavior.

While the prior administration focused on a longer-term policy agenda, Trump seeks to punish those he views as wrongdoers, according to Maximilian Hess, a senior political risk analyst at AKE International.

Gertler, along with 14 others including including a Myanmar general, a former Gambian president and an organized crime boss from Uzbekistan, was sanctioned in December under the Act.

Glencore’s success has been based in part on operating in places "where others are uncomfortable,” said Hess. With changes in the U.S., “their current model is facing serious challenges."

(Written by Tom Wilson and Thomas Biesheuvel)