General Motors checking impact of Kobe Steel data cheating www.reuters.com

DETROIT/TOKYO (Reuters) - General Motors is checking whether its cars contain falsely certified parts or components sourced from Japan’s Kobe Steel <5406.T, the latest major automaker to be dragged into the cheating scandal.

EBRD buys equity stake in Mongolian copper exploration operation www.ebrd.com

The EBRD has become a shareholder in Kincora Copper Limited, a copper exploration company active in Mongolia, with the acquisition of a 6.16 per cent stake for the equivalent of approximately €940,000 through a private placement. Kincora is listed on the TSX Venture Exchange. Its main shareholders are Origo Partners (24.5 per cent), the company’s management and a number of natural resource specialist institutional investors.

The company holds a number of licences in the Ömnögovi region in southern Mongolia, which contains important gold and copper resources including the underexplored Devonian copper belt. These resources include the Oyu Tolgoi deposit, operated by Rio Tinto, which is one of the world’s largest copper operations and the Tsagaan Suvarga deposit, currently under development by the Mongolia Alt Corporation. The EBRD is providing finance for both projects.

Despite growing interest, the Ömnögovi region remains widely untapped and offers substantial opportunities for Mongolia’s overall economy through the discovery and development of the next generation of mineral deposits. With a population of just over 3 million and a size of 1.5 million km2, Mongolia is one of the most sparsely populated countries on earth. Extreme climate conditions have a severe impact on the living conditions, but the country’s natural resources offer attractive opportunities for local and international investors.

By investing in Kincora, the Bank is promoting modern copper porphyry drill testing and a district scale reconnaissance exploration programme in the Devonian copper belt, alongside high environmental and social management standards and practices. The EBRD funds will be solely used by Kincora’s Mongolian subsidiaries to support an extensive drilling programme and potential further explorations at two key Devonian-age prospects.

Eric Rasmussen, Director, Natural Resources commented: “We are pleased to support the exploration plans of Kincora with an equity investment. It is strategically important for Mongolia to attract quality investors into metals and minerals exploration in order to realise the high potential for mining.”

Sam Spring, Kincora’s CEO, commented: "We are delighted to welcome the EBRD as a shareholder. The Bank has unique knowledge of, and relationships in Mongolia and has provided finance to assist the development of the two existing economic copper projects in the Devonian belt. In the last two months, Kincora has attracted two new significant investors who are well known in the industry and has undertaken extensive due diligence.”

Mongolia became an EBRD country of operations in 2006. The Bank is currently the largest multilateral investor in the country with about €1.42 billion (US$ 1.7 billion) invested in 92 projects in the private sector to date. The EBRD is one of the largest natural resources investors in the country and is playing a pioneering role in the development of renewable sources of energy such as wind farms.

More good news for lead price as market tightens further www.mining.com

Last week the price of lead spiked on the London Metal Exchange hitting the highest level since August 2011 at just over $2,600 a tonne.

Mongolian economy growth exceeds ADB forecast www.news.mn

The Asian Development Bank (ADB) has forecasted the economic growth of Mongolia would increase by 4% in 2017 and by 3% in 2018. This is more positive expectation compared to the forecast by last April.

Mongolia's Untapped Lending Market Has Earned This Japanese-Backed Fintech Startup A $30M Valuation www.forbes.com

In Mongolia, where the average monthly income is $390, informal loans between friends or family members are commonplace as credit and small bank loans are hard to get. On the other hand, small informal loans are almost expected to not be paid back.

“There is no leverage system for people to repay, so in the worst case they lose their friends,” says Anar Chinbaatar, 35, CEO of fintech startup AND Global.

He and two friends cofounded the company in 2015 after, one day out for a smoke, he finally got tired of friends asking to borrow money from him. His startup, which launched the mobile app LendMN, introduced mobile-based microlending to the North Asian country where borrowers are blacklisted from significant financial services such as mortgages if they default on a small loan from the bank.

But the lending industry is fractured, and AND -- meaning “friend” in Mongolian --- wants to work toward accessibility, transparency and accountability in microlending, the CEO says.

After raising $1 million in seed funding in April 2016, the company received another $4 million with a $30.8 million valuation in August from influential backers in Mongolia and Japan including former Japanese parliament member Takami Yuichi, investor Satoshi Matsumoto and his wife Yasuyo Matsumoto. It is also advised by Oko Davaasuren, an influential Mongolian investor from TechStars.

The company, which has issued over $1.9 million in loans as of this month, plans to use the new investment to fuel expansion into the Philippines and Japan and develop new technology such as a blockchain project while preparing for an initial coin offering in December.

“Our main target is serving underbanked people who cannot get financial services and who are paying loan sharks,” Chinbaatar says.

Fractured Lending Industry

Mongolia’s archaic banking industry lacks a credit scoring system, with banks and financial institutions instead sharing a spreadsheet-like database of customer info to evaluate borrowers, he says. Traditional bank loans of any size require lengthy paperwork, collateral and five days to process. Collecting collateral from the borrowers -- which could range from cars and houses in the capital Ulan Bator to flocks of sheep in the countryside -- is costly for banks, he added. People often resort to loan sharks, which charge a high interest rate of 10% per week -- but smaller loan sharks commonly even charge that rate per day, according to Bayar Volodya, 37, cofounder and chief operating officer.

AND wants to do away with loan sharks and raise customers’ financial education and responsibility. They seek to fill the cracks of Mongolia’s fragmented lending system through human interaction and artificial intelligence. The biggest problem to solve was accurately assessing borrowers’ creditworthiness.

“In the first year, we were advised by almost 100 bankers, risk managers and loan appraisers, and 99 of them says it was an impossible, stupid thing,” Chinbaatar says. Only one person, a broker for Mongolia’s biggest bank, saw a possibility and advised them on a concept for a credit scoring model.

LendMN lets users choose the lending amount and repay time period, processes the request in a few minutes -- compared to days with a traditional bank.
AND developed a machine learning-based system that assesses a range of data points from conventional information like banking, income and expense records to unconventional sources like social media, smartphone use and education and employment history.

The company sought to introduce cross-border peer-to-peer lending with funds from Japan, but found the plan infeasible as investors didn't want to take such a risk for a low return. Nonetheless, lending with its own funds, the company’s lending operation turned a profit within two months of commercial launch in April 2017, and now claims some 8,000 credit-approved active users.

LendMN’s initial customers surprised Chinbaatar. While at first he thought people would borrow small money for drinking, buying cigarettes or other entertainment, current data shows they are more financially responsible, using it for special needs to make ends meet.

Claiming a low 1.5% default rate, transaction sizes average around $70. Interest rates range from 3%-10%, compared to Mongolian bank and credit cards that charge 3.5% for prime borrowers. In contrast with banks, AND does not require collateral for its personal and business microloans -- stirring concern over disruption in the industry.

“When we launched, all the Mongolian banks had an emergency meeting over the weekend about how to tax or block us,” Chinbaatar says , but suggests it turned out to be a good thing for competitive innovation in the local industry. “Right after that, a lot of banks started working on new products, creating innovation departments to work on Facebook and chat bots.”

IMF upgrades global growth forecast www.nhk.or.jp

The International Monetary Fund has reported a brighter outlook for the global economy.

Trump's NAFTA agenda has 'poison pill proposals,' says U.S. Chamber of Commerce www.cnn.com

Round four of the renegotiation of NAFTA, the three-nation trade pact, begins Wednesday, and little, if any, progress on the thorny issues has been reported from any party. Some business groups are becoming extremely concerned about Trump's agenda.
"There are several poison pill proposals still on the table that could doom the entire deal," Ted Donahue, CEO of the U.S. Chamber of Commerce, said in a speech in Mexico City on Tuesday.

The Trump administration did not respond specifically to Donahue's remark, but had already criticized a similar comment from the Chamber last week regarding NAFTA talks.
"The President has been clear that NAFTA has been a disaster for many Americans, and achieving his objectives requires substantial change. These changes of course will be opposed by entrenched Washington lobbyists and trade associations," U.S. Trade Representative spokeswoman Emily Davis said.
Related: Trump's latest trade spat with Canada is over wine
Time to reach an agreement is running out: Mexican leaders have long warned that talks must end by early next year before their presidential election campaign gets underway in July. By the spring, they say, it'll be too difficult politically to ratify a new trade deal.
U.S. leaders acknowledge that talks should get done as soon as possible.
But some of the Trump administration's demands aren't going over smoothly.

One of the most controversial issues has to do with how cars are manufactured. In NAFTA, it's called "rules of origin." The rule determines the portion of a product that must be manufactured in North America in order to avoid import taxes.
For example, at least 62% of the parts in a car sold in North America must come from the region to avoid being hit with taxes at the border. It doesn't matter if the car parts are made in Mexico, Canada or the U.S., as long as they were produced in North America.
Companies are still free to decide where in North America different parts of a car are made. In fact, before a car reaches a dealership, its parts have frequently crossed the northern and southern borders multiple times.
But Trump's trade team wants to make a big change to that rule in an attempt to force manufacturing companies to create more jobs in the United States.
Instead of one rule for all of North America, the administration wants one rule for how much has to be produced in the United States, and another rule for how much needs to come from the entire region.
"You're pitting the countries against each other, not integrating them further," says Doreen Edelman, a trade lawyer at the firm Baker Donelson. "It is a deal breaker."

Mexico's top negotiator, Economy Secretary Ildefonso Guajardo, echoes a similar sentiment. In an interview with CNNMoney in April, he dismissed the idea of two separate standards for rules of origin.
"There is no one trade agreement in the world that has country-specific content. It doesn't exist," Guajardo said. "Content has to be measured regionally."
Meanwhile, significant issues, such as agriculture trade, government procurement contracts and protecting foreign investments in North America, need to be broached. A deeply divided trade spat over aviation has also emerged between the U.S. and Canada, with each side lobbying for their respective plane producers.
The U.S. is also advocating for a "sunset clause" that would make the agreement expire every five years unless each country decided to sign on for another five years. That's expected to meet resistance too.
"What kind of predictability is that for long-term investment?" adds Edelman, the trade lawyer. "There's no way for business to prepare."

SouthGobi Resources Secures Investment for Logistics Park on Mongolia-China Border www.asiapacific.ca

SouthGobi Resources Ltd., a Vancouver-headquartered coal mining company, has entered into an investment agreement with Beijing De Rong Tai Investment Co., Ltd. (BDRT) in connection with the Company's development of the Ceke Port Eco-friendly Bonded Logistics Park project (Ceke Logistics Park). Pursuant to the Investment Agreement, BDRT has agreed to invest RMB 231 million in instalments by July 30, 2018, in return for a 30% interest in Inner Mongolia SouthGobi Energy Ltd. (IMSGE), while the Company will hold the remaining 70% interest in IMSGE. Proceeds from BDRT's equity investment will be used by IMGSE for the construction of the Ceke Logistics Park, which will be located in the Ceke Port on the Mongolia-China border, the only inland port where the coal products of the Company are imported from Mongolia to China.

Iron ore dangerously close to $60 a tonne www.mining.com

Iron ore prices continued their downward trend Tuesday amid ongoing concerns that looming steel production cuts in China on environmental grounds will sap steel mill demand.

Kobe Steel shares plunge as data fabrication concerns deepen www.reuters.com

TOKYO (Reuters) - Kobe Steel Ltd shares tumbled a further 16 percent on Wednesday after it admitted it may have fabricated data on iron powder products and media reported the possible sale of its real estate business.