Iron ore price resumes fall www.mining.com

On Friday, the bounce in the iron ore price at the start of the week proved to be of the proverbial dead cat variety. Worries about Chinese demand going into winter also turned September into the worst trading month for the steelmaking raw material since the rout of May last year.

Chinese Cos. Look To Revive Mining Claim Against Mongolia www.law360.com

New York (September 29, 2017, 5:11 PM EDT) -- A trio of Chinese companies asked a New York federal court on Thursday to revive their claim against Mongolia over the revocation of an iron ore mining license, arguing that an international tribunal wrongly interpreted an underlying treaty when it dismissed the arbitration.

The three companies — two of which are state-owned or connected to state-owned entities — told the court that the New York-seated Permanent Court of Arbitration tribunal erred when it dismissed their claim for lack of jurisdiction in June. The tribunal had concluded that it could not decide the question of whether Mongolia had expropriated their investment in a joint venture that held a license to mine the vast Tumurtei iron ore deposit.

In fact, the tribunal found, the relevant treaty between China and Mongolia required that the latter country's national courts had to first declare whether there had actually been an expropriation before an arbitration could be initiated, or the Mongolian government had to admit an expropriation had occurred. But the Chinese companies argued that the question of whether Mongolia expropriated their investment has to be resolved in arbitration and that any other result would be illogical.

"Among the central purposes of [bilateral investment treaties] is to afford to investors the certainty of access to an impartial tribunal other than the national courts of one of the contracting states," according to the petition. "The award deprives petitioners of one of the essential benefits to which they were entitled. For that reason, together with the texts of the relevant treaties, the clear majority of other tribunals have reached the contrary conclusion under similar BITs."

The companies, China Heilongjiang International Economic & Technical Cooperative Corp., Beijing Shougang Mining Investment Co. Ltd. and Qinhuangdaoshi Qinlong International Industrial Co. Ltd., told the court that every other tribunal to address this question under other BITs involving China has rejected the narrow interpretation adopted by the tribunal that dismissed their claim.

They argued Thursday that the court in this instance has the power to determine whether the dispute can be resolved through arbitration because the relevant treaty does not specifically empower the arbitrators to decide on arbitrability. Indeed, the treaty did not mention the question of arbitrability, according to the suit.

Attorneys for the plaintiffs did not immediately respond to a request for comment on Friday. Representatives for Mongolia could not immediately be reached for comment.

The three plaintiff companies had held a 70 percent interest in a Mongolian joint venture called Tumturei Ltd., which held a license to exploit certain iron ore deposits in Mongolia. Production began in 2006, at which time exports to China commenced.

But a new government came to power in Mongolia that same year. As the price of iron ore began to climb, the new Mongolian government began trying to find a way to take back this now much more valuable concession, according to the complaint.

Ultimately, the license was revoked after the Mongolian government concluded that the license properly belonged to a state-owned enterprise called the Darkhan Metallurgical Plant, the Chinese companies claim.

The Chinese companies initiated arbitration in 2010, and the tribunal issued its award on June 30, concluding that it could only have jurisdiction if Mongolia admitted that it had expropriated the investment. Only then could the tribunal have jurisdiction over the claim, and only to decide how much the Chinese companies were owed for the expropriation, according to Thursday's complaint.

That tribunal was led by former International Court of Justice President Peter Tomka along with the claimant's appointee, Shearman & Sterling LLP partner Yas Banifatemi, and Mongolia's appointee, Foley Hoag partner Mark Clodfelter.

The plaintiffs are represented by Michael A. Granne, S. Christopher Provenzano and J.J Gass of Miller & Wrubel PC.

Counsel information for Mongolia wasn't available on Friday, but the country was represented in the arbitration by Gungaa Bayasgalan, state secretary of the country's Ministry of Justice, and by Michael D. Nolan, Elitza Popova-Talty and Kamel Aitelaj of Milbank Tweed Hadley & McCloy LLP.

The case is Beijing Shougang Mining Investment Company, Ltd. et al v. Mongolia, case number 1:17-cv-07436 in the U.S. District Court for the Southern District of New York.

--Editing by Kelly Duncan.

China hopes for progress in ties with Mongolia www.xinhuanet.com

BEIJING, Sept. 29 (Xinhua) -- China said Friday that it will advance bilateral ties and synergize development strategies with Mongolia.
The upbeat tone echoed Mongolian President Khaltmaa Battulga's congratulations to his counterpart Xi Jinping on the 68th anniversary of the People's Republic of China, which falls on Sunday.
"We have received congratulations from many world leaders, including President Battulga, and we thank them for that," Foreign Ministry spokesperson Lu Kang said at a regular news briefing.
"China and Mongolia are friendly neighbors, and China has always attached importance to bilateral relations," Lu said.
China will work with Mongolia to increase mutual trust while respecting each other's core interests and major concerns, synergizing development strategies, and pushing forward practical cooperation and people-to-people exchanges, Lu said.
President Battulga said he looks forward to the continuous development of bilateral relations, expressing appreciation for China's assistance in Mongolia's development, according to Lu.

September 28, 2017 trading report www.mse.mn

On September 28, 2017, 72,958 shares worth MNT 84,710,790 of 23 firms listed as Tier I, II, and III were traded. 6 firms’ shares increased, 14 decreased in price and 2 remained unchanged. Arig gal JSC was the top performer, increasing 13.03 percent, whereas Moninjbar JSC was the worst performer, decreasing 14.45 percent.

Europe's Biggest Fund Manager Expects Higher Interest Rates to Spread www.bloomberg.com

Regardless of central bankers’ assurances, higher interest rates are set to spread in Europe, according to its biggest fund manager.

Sergei Strigo, the London-based head of emerging-market debt at Amundi Asset Management, is betting that central-bank rates in east Europe’s biggest economies are more likely to follow the Czech National Bank than the European Central Bank on the path toward tighter policy.

Strigo, whose firm oversees 1.3 trillion euros ($1.5 trillion), has been paring positions in the region’s government debt since 2016 based on his view that central bankers will move to raise rates before the European Central Bank eventually does. He’s betting rate setters in Poland and Hungary will have to abandon pledges to keep borrowing costs at record-low levels until as late as 2019 as their economies heat up.

“Going into next year we see these central banks thinking about interest rate hikes as inflationary pressures build up and growth surprises on the upside,” said Strigo. His Global Emerging Local Currency fund has outperformed 92 percent of peers this year with gains of 15 percent.

With growth gathering pace and consumption on the rise, a growing chorus of investors are seeing a surge in wages feeding through to inflation in the region battered by a labor shortage. Strigo says he’s keeping bond duration lower than the benchmark and using interest-rate swaps to hedge against the possible increases.

The Czech National Bank, which delivered Europe’s first rate hike in August, is debating the timing for its next move to tighten as faster-than-expected economic growth and a shortage of workers drive up salaries and prices. Policy makers voted four to three to keep the benchmark rate at 0.25 percent on Wednesday.

Bernhard Matthes, a fund manager at Bank fuer Kirche und Caritas eG in Paderborn, Germany, said he anticipates another Czech rate increase before the end of the year. Poland may follow next year and Hungary later, he said.

“It’s really running hot in the Czech economy, so it’s perfectly appropriate to tighten monetary policy,” he said. Inflation doesn’t pose a similar threat to Poland or Hungary, he said.

Currency markets are painting a similar picture: in the past six months, the Czech koruna has topped all emerging-market peers against the dollar and it’s the only currency to have outperformed the euro. Hungary’s forint and the Polish zloty rank third and fourth.

While the euro zone is poised for the fastest economic expansion in a decade and unemployment is falling, inflation continues to fall short of the ECB’s goal of just under 2 percent. ECB President Mario Draghi is expected to start tapering his asset-purchase program in January and is unlikely to begin increasing rates before the fourth quarter of 2018, trading in the futures market shows.

Eastern Europe’s central banks will probably move earlier than their euro-zone counterpart, Matthes said.

Mongolian President and ADB Country Director discuss partnership www.akipress.com

The Asian Development Bank’s (ADB) Country Director in Mongolia, Yolanda Fernandez Lommen, last week paid a courtesy call to the President of Mongolia, Battulga Khaltmaa, to discuss ADB’s partnership with the country and planned operations, ADB said on Thursday. 

Ms. Fernandez Lommen extended her congratulations to the President on his appointment and presented him with a copy of the recently published ADB 50th anniversary history book, Banking on the Future of Asia and the Pacific: 50 Years of the Asian Development Bank.

Chinese carmaker to take $28 million stake in Australian lithium company www.mining.com

Great Wall will be involved in what seems to be the first direct investment in a lithium supplier by an automaker.

Funds flow in for Xanadu www.miningnews.net

It is claimed the company was only seeking about $10 million, but upped the number to $15 million on account of the strong interest out of North America.

Cryptocurrency platform to end transactions www.chinadaily.com.cn

BEIJING — China should tap the huge potential of public-private partnerships (PPPs) when investing in countries participating in the Belt and Road Initiative, officials said Thursday.

Alibaba launches new e-commerce platform in Russia www.rt.com

Chinese e-commerce giant Alibaba is introducing a new trade platform called Tmall to the Russian market; TASS reported citing its sources.