Elixir Energy to develop SSLNG facility in Mongolia www.nsenergybusiness.com

Australian oil and gas company, Elixir Energy has signed a non-binding Memorandum of Understanding (MOU) with Mongolia’s fuel retailer, MT Group to develop a small scale LNG (SSLNG) facility in Mongolia.

Gold and iron ore are doing equally well. Their miners are not www.reuters.com

(The opinions expressed here are those of the author, Clyde Russell, a columnist for Reuters.)

Gold and iron ore are the standout commodities so far this year, but the performance of their respective miners are far more divergent – and weighted in favour of the precious metal.

Spot gold closed at $1,729.67 an ounce on June 12, up 14% since the end of last year. Meanwhile benchmark 62% iron ore for delivery to China MT-IO-QIN62=ARG, as assessed by commodity price reporting agency Argus, was at $104.45 a tonne, a gain of 14.6%.

If the year-to-date performances are very similar, the underlying drivers of iron ore and gold are quite different.

The steel-making ingredient is benefiting from China’s economic stimulus push as it recovers from the novel coronavirus, coupled with number two exporter Brazil’s struggles with the same disease.

While there is also a coronavirus element to gold’s rise, what investors are buying into is the belief that the weak global economy and expected extended recovery period mean low interest rates and heightened volatility of other asset classes.

Given that iron ore has rallied to a 10-month high and has both bullish stories for both demand and supply, it’s perhaps surprising that the top miners are generally not sharing the good news.

Shares in Rio Tinto, which derives the bulk of its profits from its iron ore mines in the state of Western Australia, are down 3.7% so far this year in Australian dollars and 4.8% in U.S. dollar terms.

Stock in BHP Group, Australia’s second-biggest iron ore producer behind Rio, is down 9.6% in U.S. dollars, with some its underperformance versus Rio likely being explained by the company’s greater exposure to crude oil and natural gas.

But both Rio and BHP will be huge cash generators with iron ore at its current price, given their cost to produce a tonne of iron ore is around $14-$15.

Australia’s third-ranked iron ore miner, Fortescue Metals Group, is easily outperforming Rio and BHP, its shares gaining 33% year-to-date in U.S. dollar terms. That’s a reflection of the fact that it is a pure iron ore play and also tends to pay out a higher proportion of earnings as dividends to shareholders.

Brazil’s Vale is the laggard, its stock sliding 20% in U.S. dollar terms so far this year. Unlike its Australian competitors, Vale is struggling with mine closures and a potentially worsening situation as Brazil’s cases of coronavirus continue to rise.

Gold miners outperform
While the high iron ore price isn’t reflected in the share price of the miners, Fortescue excepted, gold miners have been performing quite well for the main part.

Canada’s Barrick Gold has seen its stock price jump 29.8% in U.S. dollars so far this year, while Newmont has gained 27.6%.

Outside North America, AngloGold Ashanti is up 35.1% while fellow South African producer Gold Fields has gained 13.4%, both in U.S. dollar terms.

But top Australian producer Newcrest is down 4.1% in U.S. dollar terms year-to-date: the company had concerns, now resolved, over water supply at its Cadia mine in New South Wales state.

Overall there does appear to be a clear trend, with gold producers generally outperforming while iron ore miners haven’t gained as much as the commodity they produce, Fortescue being the outlier.

While there are many elements that go into assessing the value of a company – such as dividend policy, debt levels and regulatory risks – it does appear that iron ore’s story isn’t as compelling as the narrative for gold.

There may also be regional and investor bias at play, with the major gold companies more exposed to retail investors in the United States, while the iron ore miners are more heavily held by institutional investors.

Disclosure: At the time of publication, Clyde Russell was an investor in Rio Tinto and BHP Group as an investor in a fund.

(Editing by Kenneth Maxwell)

Deputy Prime Minister visits Oyu Tolgoi www.montsame.mn

On June 14, Deputy Prime Minister U.Enkhtuvshin got acquainted with the Oyu Tolgoi project along with representatives of the Ministry of Road and Transport Development and the Ministry of Mining and Heavy Industry.

Prime Minister U. Khurelsukh checks railway construction progress www.montsame.mn

Dornogobi/MONTSAME/. On June 13, Prime Minister U.Khurelsukh checked the progress in the construction works of 414.6 km railway connecting Tavantolgoi mine in Tsogttsetsii soum of Umnugobi aimag with the Zuunbayan Station in Dornogobi aimag.

Mongolian court slaps huge bail fee on former PM and Finance Minister www.news.mn

The trial of former PM S.Bayar and other six people started at the Ulaanbaatar’s Chingeltei Criminal Court today (15 June) at 09.00 a.m. However, the trial was postponed to 18 June after lawyers and one of the defendants – former finance minister S.Bayartsogt – simply did not show up in the court because he was away election campaigning in Selenge province.

European Business Associations in Mongolia Cooperate Closely www.mongolianbusinessdatabase.com

The European Mongolian Chamber of Commerce and Industry (EuroChamber) has signed a Cooperation Agreement with the German Mongolian Business Association (DMUV), French Mongolian Chamber of Commerce and Industry (FMCCI) and the British Business Group (BBG) .
One of the founding principles of EuroChamber Mongolia it to bring the European and Mongolian business community closer together and to have a strong common voice that represents the interest of its members. Today with the signing of the cooperation agreement the German, French and British business associations become represented in the EuroChamber Board, allowing for common decision making, leadership and alignment, while the bilateral business associations' member companies are becoming members of EuroChamber.
With this step, EuroChamber Mongolia now provides a united platform to more than 125 British, French, German and other European as well as Mongolian member companies from very diverse sector backgrounds.
All European business associations and EuroChamber intend to promote the highest values of cooperation and partnership, while exercising unified power toward improvement of business and investment climate in Mongolia, for the benefit of our members and the wider public. Mongolia has a tremendous potential for development, and we jointly intend to support the socio-economic development with helping removing bottlenecks and obstacles for investment and ease of doing business for Mongolian and international companies, investors and banks.
The main focus areas and goals of EuroChamber in cooperation with DMUV, FMCCI and BBG are:
1/ Policy dialogue and advocacy on behalf of its members, with focus on trade facilitation and barriers (export/import), business and investment climate, human resource development, etc.
2/ Additional Networking opportunities for establishing and developing business contacts 3/ Support to Mongolian companies to access European markets; among
others through cooperation with the EU-funded Trade Related Assistance to Mongolia (TRAM) program, with whom EuroChamber enjoys close cooperation.
Based on main interests and needs of our members, the team of EuroChamber, DMUV, BBG and FMCCI will develop white papers as a basis for policy dialogue with the Government of Mongolia.
We would like to express our gratitude to those who made this milestone European Business Cooperation happen, especially to the leadership teams of the three bilateral business associations and EuroChamber. Special thanks go also to HE Ambassador Traian Hristea and the team of the EU Delegation to Mongolia as well as all national diplomatic representatives for their continued support.

Mongolia reports no new COVID-19 cases, three more recoveries www.xinhuanet.com

June 14, 2020 (Xinhua via COMTEX) -- Mongolia reported no new cases of COVID-19 in the last 24 hours, with its total confirmed cases remaining at 197, the National Center for Communicable Diseases (NCCD) said Sunday.

Japan to give JPY 1.2 billion to Mongolia as non-refundable aid www.montsame.mn

Ulaanbaatar /MONTSAME/. Amid COVID-19 global pandemic, the Government of Japan has decided to provide JPY 1 billion as part of the non-refundable assistance to promote economic and social development, and another JPY 249 million as nonrefundable aid to carry out human resources development program to the Government of Mongolia.

Mongolia’s population totals 3,296,866, latest census shows www.montsame.mn

The cabinet irregular meeting convened June 12, heard the results of the 2020 nationwide population and housing census.

Mongolia Livestock Commercialization Project kicks off www.montsame.mn

On June 12, Government of Mongolia, with support from the World Bank, kicked off the Livestock Commercialization project to improve the health and productivity of livestock and increase value of products by commercializing targeted value chains.

The Food and Agriculture Organization of the United Nations will provide technical support towards building human, technical and institutional capacity in support of strengthening animal health systems in the country.

In presence of Mr. Andrei Mikhnev, World Bank’s Country Manager for Mongolia, Mr. Vinod Ahuja, FAO Representative in Mongolia and Ch. Ulaan, the Minister of Food, Agriculture and Light Industry signed a sub-agreement today that aims to strengthen animal health and food safety systems in Mongolia.

As part of this agreement, FAO will work closely with the project implementation unit to strengthen Mongolian national veterinary services in line with international standards and improve the quality and safety of animal products along the value chain through improved management of animal health.

Mr. Ulaan.Ch, Minister of Food, Agriculture and Light Industry expressed his appreciation by highlighting that “This will be a significant project that will contribute to the long-term vision of improving and diversifying economy, with increased export of livestock product opportunities. Longstanding technical support from FAO in the sector has proven to be successful and we are happy to be partnering with FAO and WB in this new endeavour.

“Mongolian agriculture and livestock sectors have huge potential as a driver for economic diversification and as a key source of broad-based employment. As the economic shocks caused by COVID-19 are likely to increase poverty and threaten the food security, the project’s importance is even more relevant now,” – said Andrei Mikhnev, World Bank Country Manager for Mongolia.

“This is truly an ambitious project and we are pleased to be partnering with the Government of Mongolia and the World Bank. I thank the Government and the World Bank for their trust. As a global knowledge organization and a technical leader in the field of animal health, we are committed to bring the best expertise and practices to Mongolia”, said Mr. Vinod Ahuja, FAO Representative in Mongolia

Livestock is a true lifeline for the people of Mongolia contributing to some 80 percent of the total agricultural production, almost 13 percent of the GDP and representing an invaluable cultural heritage. Yet, the livestock sector also faces the sustainability challenge due to climate change, livestock overstocking and depleting natural resources that threaten this lifeline.

FAO’s support will focus on strengthening capacity of the institutions involved in the delivery of animal health services, including related policy and legislation, upgrading veterinary and food safety laboratories to enable animal health related diagnostic services and accreditation and promote digital innovations in support animal health and traceability together with an integrated animal health information system. All these activities will also strengthen the resilience of Mongolia’s livestock system against adverse climate change events and ultimately help preserve Mongolia’s livestock as lifeline for future generations.

FAO Representative Office in Mongolia