Rio Tinto’s top investors face off over emissions cut plan www.mining.com

Rio Tinto’s (ASX, LON, NYSE: RIO) top investors are set to face off at the company’s upcoming annual meeting, with only some of them in favour of pushing the miner to extend the range of its targets to reduce greenhouse gas emissions.

The world’s second-largest mining company recently committed to spend $1 billion over the next five years to reduce its carbon footprint and have “net zero” emissions by 2050.

Rio Tinto also said at the time that its total Scope 1 and Scope 2 emissions (indirect emissions from the generation of purchased energy consumed by a company, such as electricity) would be 15% lower by 2030 than 2018 levels.

The announcement triggered heated criticism from some investors and environment advocates, with a group led by a Friends of the Earth’s subsidiary tabling a shareholder motion to improve what it calls “weak” climate goals.

With three days to Rio Tinto’s annual meeting, proxy investor Institutional Shareholder Services (ISS) is recommending shareholders support the resolution that asks the miner to also tackle Scope 3 emissions — those generated by customers through the use of its products.

Shareholders “have a long-term interest in assessing whether Rio Tinto is adequately assessing and acting on its climate risk and opportunities,” including through “targets to work with its customers to achieve reductions in its scope 3 emissions,” ISS said in an April 30 note to clients.

Glass Lewis, instead, wants shareholders to reject the plan at the meeting on Thursday, Bloomberg reports.

“Not feasible”
While Rio Tinto should continue to reduce its own emissions, it’s probably not “feasible for the company to set goals based on how its customers determine to utilize its products,” the adviser said in a note to clients last month.

Market Force, a subsidiary of activist investor Friends of the Earth, has said that Rio’s current plans are a “simply a reflection of business-as-usual,” energy cost savings and efficiency measures.

“Rio Tinto is essentially telling its shareholders it is aware of a massive financial liability sitting on its books, but isn’t planning to manage that risk down,” executive director Julien Vincent said in March.

He noted that Rio’s absolute emissions would have to decline 30% in the next decade to hit the “well below” 2°C global pre-industrial levels outlined in the 2015 Paris Agreement on climate change.

UBS analyst Glyn Lawcock said the group could almost instantly achieve the 2030 target if it sold or closed its coal-fired alumina refineries and aluminum smelters in Australia.

“We couldn’t help but notice that the closure of Pacific Aluminium alone would reduce emissions by (about) 25%,”’ he said in a note.

“Maybe this is the elegant solution to Rio’s desire to reduce carbon dioxide as well as lifting margins within the aluminium business unit,” Lawcock said.

For Julian Kettle, Wood Mackenzie’s vice chairman of metals and mining, Rio’s plans to decarbonize its globe-spanning operations are a “small but significant” step in the right direction.

“Setting Rio Tinto’s $1bn in context, this represents just 16% of the dividend it distributed in 2019, or just under 5% of its reported EBITDA of $21.2bn for the same year,” Kettle said.

The miner’s bulk of earnings come from iron ore, its main commodity and a key ingredient for steelmaking. The highly polluting industry process involves adding coking coal to make carbon steel and is responsible for up to 9% of global greenhouse emissions.

Oyu Tolgoi troubles
Rio’s management will also have to face criticism over its giant Oyu Tolgoi copper project in Mongolia at the annual meeting.

US hedge fund Pentwater Capital is demanding a shakeup at the mine to stop what it calls “a massive devaluation” of the asset. The investor has a 9% interest in Turquoise Hill, the Rio-controlled company that operates Oyu Tolgoi.

Rio Tinto is not the only company criticized for its current plans to cut emissions. A report released Monday by a UK-based investor initiative showed that eight of the world’s top ten largest mining companies are not doing enough to help meet international climate goals,

Russian flag-carrier Aeroflot warns air travel may not resume until mid-summer www.rt.com

As the coronavirus pandemic has halted almost all travel around the globe, Russian’s biggest airline said that in the best-case scenario, international flights could be resumed in July.
“It is difficult to indicate the exact timing of flights so far but when looking at the best-case forecasts… international traffic may start recovering in the middle of summer,” Aeroflot spokesperson Yulia Spivakova told Rossiya 24 TV.

ADB, Mongolia sign loans to modernize vegetable production, irrigation www.montsame.mn

Ulaanbaatar /MONTSAME/. The Asian Development Bank (ADB) and the Government of Mongolia today signed $40 million in loans and a $2 million Japan Fund for Poverty Reduction (JFPR) grant to support the modernization of government-owned irrigation networks and vegetable production in Mongolia.

Mongolia planning charter flights to Turkey and India to bring Mongolians home www.montsame.mn

Ulaanbaatar /MONTSAME/ So far, 10,072 Mongolian citizens have submitted their request to return to their home country.

Precious metal purchase rises threefold www.zgm.mn

The Bank of Mongolia (BoM) purchased 1.4 tons of precious metals in April 2020, up to 6.7 tons since the beginning of the year, the central bank’s Reserve Management and Financial Markets Department reported on Monday. Of these, 5.0 tons were gold and 1.7 tons were silver. This is a threefold increase compared to the same period last year. The average price of gold stood at MNT 149,986.18 per gram. The Parliament and the BoM are counting on the gold sector to increase foreign exchange reserves during the COVID­-19 crisis. For example, within the framework of the Resolution on measures to ensure financial and economic stability, prevent risks and make the digital transition in public services during the COVID­-19 pandemic approved by the Parliament, the Gold­2 program will be intensified, as well as the finance measures to support the gold sector.As the balance of payments deteriorated, official foreign exchange reserves declined by about USD 300 million to USD four billion in March. 2020 State monetary policy guidelines include a steady increase in FX reserves. According to the Bank of Mongolia, the current level of FX reserves is 27.5 percent lower than the National Security Concept and 1.3­2 times lower than the International Monetary Fund (IMF)’s adequacy ratio. Additionally, the USD 1.8 billion Currency Swap Agreement between Mongolia and the People’s Bank of China is set to expire this year. However, negotiations to extend the deal have begun. Mongolia also plans to refinance bonds to be repaid in the coming years.

Mongolia reports one new COVID-19 case, totaling 41 www.montsame.mn

Ulaanbaatar/MONTSAME/. Today, the National Center for Communicable Diseases has reported one new COVID-19 case, detected in a Mongolian national, who arrived on a charter flight from Frankfurt on May 3, as a result of the repeated testing. It brings the total number of lab-confirmed positive cases to 41.

Falcons and hawks, don’t crash into our skyscraper! www.news.mn

As high-rise cities grow upwards and outwards, increasing numbers of birds are killed each year by crashing into glass buildings; and, of course, many others break beaks, wings and legs or suffer other physical harm. But we can help eradicate the danger by good design.

Mongolia and South Korea sign partnership to develop boxing www.insidethegames.biz

Anti-corruption body raids office of Tavan Bogd Group’s President www.news.mn

Officers from the Independent Authority against Corruption of Mongolia have raided Tavan Bogd Group President Ts.Baatarsaikhan’s office.

Mongolia’s gold purchase surges amid coronavirus lockdown www.news.mn

The Central Bank of Mongolia or Mongol Bank purchased 1.4 tonnes of precious metals from individuals and enterprises in April. The Bank’s purchase has reached 6.7 tonnes of precious metals; 5.0 tonnes being of gold since 1 January. This represents an increase of 66 percent or 4.4 tonnes from previous year.