Rio Tinto avoids footing $1bn bill for new power plant in Mongolia www.ft.com

Rio Tinto has been spared from footing the bill for a $1bn coal-fired power station in Mongolia, where the miner is developing a huge underground copper deposit in the Gobi Desert.

The Anglo-Australian group said on Monday that a government-built plant at the Tavan Tolgoi coalfield would provide the long-awaited domestic power source for its $6.8bn Oyu Tolgoi project.

The deal comes days after the ruling Mongolian People’s party scored a landslide general election victory and will give the government greater influence over the project, the country's biggest source of foreign direct investment.

Analysts at Canaccord Genuity said the deal handed Mongolia a “valuable bargaining chip” should there be further disputes over the investment agreement that underpins development of the underground mine and that Ulaanbaatar wants to improve.

“While the elimination of a funding requirement on the order of $1bn is positive, in a world awash with historically cheap capital we view this as a limited benefit relative to the negative strategic and operational implications,” said analysts at Canaccord.

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“In addition, we are unclear as to what the impact on the mine’s operating costs will be as the government seeks to recoup a meaningful return on its investment.

Mongolia owns 34 per cent of OT, with the remainder owned by Turquoise Hill Resources, a Canadian-listed company. In turn, Rio owns 50.8 per cent of Turquoise and manages the mining operations.

The existing surface mine at OT is powered by coal-fired electricity that is imported from neighbouring China via overhead cables, but Mongolia has demanded that Rio find a domestic power source.

In February, Rio said a 300 megawatt coal-fired power station costing almost $1bn was the most likely domestic solution, a proposal that was subsequently knocked back by the government.

Under the new agreement, the parties will work towards finalising the commercial terms of a power purchase agreement by March 2021.

Subject to negotiations, Rio will continue to buy power from China for the surface mine at OT until the plant is commissioned and can supply reliable and continuous power from 2025.

The underground expansion of OT is one of Rio’s most important growth projects. When finished it will make the mine one of the world’s largest sources of copper, producing more than 500,000 tonnes a year of the metal used in everything from cars to air conditioning units.

However, the project has suffered setbacks. In July 2019 Rio said the expansion was running 16 to 30 months behind schedule and would cost $1.2bn to $1.9bn more than forecast, although it has since said the delay and cost overrun will be near the middle of that range.

“This was always a Catch-22 for Rio,” said Henry Steel, of Odey Asset Management. “Either Rio build the power plant and have to source the coal from Tavan Tolgoi, allowing the Mongolians to squeeze them on the coal price. Or the Mongolians build the power plant and squeeze Rio on the power price. Both are as bad as each other.”

Mongolia’s Dance with Democracy: Some Steps Back and Some Forward www.theglobepost.com

Last Wednesday, Mongolia held its 8th parliamentary elections since the democratization of the country in 1990. However, these were the first ones to take place amidst a pandemic.

Notwithstanding fears among important sectors of the population and some institutions, including the president who had called for postponing the contest, almost three-quarters of the population turned out to vote with great normality.

Here are four things you need to know.

Unsurprising Landslide Victory
The post-communist Mongolian People’s Party (MPP), which had already gained a constitutional majority at the last 2016 parliamentary elections, won again by a landslide.

The party acquired 62 of the 76 seats in parliament, while the main opposition party, the liberal-conservative Democratic Party (DP), won just 11. The other three seats went to an independent candidate and two social-democratic parties. Thirteen 13 of the 76 seats went to female candidates, the highest number since the first democratic elections 30 years ago.

On the one hand, MPP’s victory was favored by the good management of the pandemic. Despite Mongolia’s proximity to China, MPP has managed to keep the number of infections low with just 219 cases, all of them coming from abroad. No one died from the virus in the country. This, in comparison with other more economically developed countries such as the US, UK, or Italy, has been considered an enormous success.

On the other hand, it was an institutionally engineered landslide too. Using its constitutional majority, MPP managed to change the electoral system and introduce a block voting system characterized by multiple non-transferable votes. This not only marginalized smaller parties as expected (11 parties and two coalitions were left without representation), but it also increased the level of electoral disproportionality, especially pushed by the high number of wasted votes: 8.5 percent, a record in democratic Mongolia.

Thus, while MPP won almost 82 percent of the seats with barely 45 percent of the votes, DP won 14.5 with almost a quarter of the votes. Perhaps the best example of such disproportionality in the distribution of seats is that the New Coalition, which came in fourth place with 5.4 percent of the votes, was left out of parliament.

Thirdly, we should not forget that the new electoral changes also discriminated against more than 150,000 Mongolian emigrants, usually more inclined to vote for the opposition, as they could not be registered in any specific constituency. In a country with just 2 million voters, emigrant voters can make a huge difference.

Finally, Prime Minister Ukhnaagiin Khürelsükh’s battle against air pollution in the capital, one of the most contaminated cities in the world, certainly paid off. By reducing the capital’s air pollution by almost half, MPP managed to solve one of the main environmental concerns in Mongolia’s electorate.

Mongolia’s Trajectory Toward a Dominant Party System
MPP’s victory of last Wednesday constitutes not only the party’s second landslide victory in the last four years but also its sixth win since 1992.

The opposition, with the Democratic Party at its head, was only able to defeat MPP in 1996, in coalition with the Mongolian Social Democratic Party, and then again in 2012.

In a world where the stakes of political competition are higher, electoral results have consequently become more uncertain and governments more difficult to predict. Mongolia constitutes one of the few current examples of what political scientists call a dominant party system.

This, like in India or South Africa before, or in Hungary now, might become problematic given dominant parties’ tendencies to blend party and state, and to appoint party officials to senior positions regardless of whether they have the required qualities. This was already visible during the last legislature and might become even more during the next four years.

COVID-19: No Impediment for Democracy
As in South Korea, this election was unique in terms of its organization. Because of the COVID-19 pandemic, social distancing had to be practiced during campaigning events. Voters had to wear gloves and/or use sanitizing facilities. The number of international observers was low, especially compared with previous electoral contests, and actual observations were limited.

This pushed some candidates to vote buying. The most imaginative example was a candidate in the Dundgovi province in Southern Mongolia, who wanted to distribute motorcycles among those who voted for him. Fortunately, the police intervened and stopped the attempt.

Worried COVID-19 might affect the affluence of voters, various civil society groups campaigned to increase participation. One example was that of the NGO Zorig Foundation, which, to mobilize the youth vote, encouraged voters to wear traditional clothes when voting to make the act of voting more sociable and look cooler. Paradoxically, this might also have mobilized older voters, nostalgic of traditional clothing and “voting” during Communist times, when people would vote covered in a deel, a traditional piece of clothing worn by nomadic tribes since the Mongols.

The result could not have been better. Almost 74 percent of voters participated in the elections. This is the highest turnout in a decade and breaks the declining trend that began with the new century.

Some Steps Back, Some Steps Forward
One of the elections’ most worrying events was the arrests of five opposition candidates (three of them DP members) without proper legal guarantees. A sixth candidate, this time an MP from the governing party, was also illegally detained accused of a conflict of interest. This, together with the concerns on MPP’s dominance over the political process, raises concerns about the quality of democracy in Mongolia.

On the other hand, however, Mongolian democracy seems firmly consolidated.

First of all, the Central Electoral Commission’s management of the contest was almost exemplary, especially given the COVID-19 pandemic.

Secondly, these elections saw an important generational change in Mongolian politics after 32 energetic, well-educated, and young candidates managed to obtain representation.

Finally, DP’s leader immediately accepted the crushing defeat and announced his resignation. It is definitively a good sign that intra-party democracy also works in the country. This is extremely important, especially given Mongolia’s exceptional position as the only fully democratic state in the region.

Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the editorial position of The Globe Post.

Bat-Orgil Altankhuyag is a Researcher at the DeFacto (Independent Research) Institute, Mongolia. Fernando Casal Bértoa (@CasalBertoa) is Associate Professor at the University of Nottingham, United Kingdom

Mongolia extends heightened state of readiness until July 15 www.xinhuanet.com

June 30 (Xinhua) -- Mongolia has extended its heightened state of readiness until July 15 amid the COVID-19 pandemic, the government's press office said Tuesday.

Suspected case of bubonic plague reported in western Mongolia www.global.chinadaily.com.cn

A suspected case of bubonic plague has been reported in western Mongolia, local media reported on Tuesday, citing the country's National Center for Zoonotic Diseases (NCZD).

Mongolian Parliament appoints G.Zandanshatar as Speaker www.montsame.mn

The inaugural session of Mongolia’s new parliament formed by the 2020 parliamentary election was held today, June 30.

Mongolia keeps key policy rate at 9 percent www.news.mn

At a meeting held on 26 of June 2020, the Monetary Policy Committee decided to:

Fauci warns of 100,000 US cases per day www.bbc.com

Top disease researcher Dr Anthony Fauci has told the US Senate that he "would not be surprised" if new virus cases in the country reach 100,000 per day.

"Clearly we are not in control right now," he testified, warning that not enough Americans are wearing masks or social distancing.

During the hearing, he said about half of all new cases come from four states.

Earlier, the New York governor said nearly half of all Americans must self-quarantine if they visit the state.

On Tuesday, cases rose by more than 40,000 in one day for the fourth time in the past five days.

The surge - which is occurring particularly strongly in southern and western states - has forced at least 16 states to pause or reverse their reopening plans, according to CNN. Florida, Arizona, Texas and California are the four states referenced by Dr Fauci as being most heavily hit currently.

For some the new measures come over a month after they first began to reopen their economies.

Also on Tuesday, New York Governor Andrew Cuomo expanded the number of Americans who are required to self-quarantine for 14 days if they visit the state. There are now 16 states on the list.

The newly added states are California, Georgia, Iowa, Idaho, Louisiana, Mississippi, Nevada and Tennessee.

They join Alabama, Arkansas, Arizona, Florida, North Carolina, South Carolina, Texas and Utah.

All together, the order affects 48% all US residents, according to a USA Today analysis.

What did Dr Fauci say?
Testifying to a Senate committee on the effort to reopen schools and businesses, the director of the National Institute of Allergy and Infectious Diseases criticised states for "skipping over" benchmarks required for reopening, and said cases will rise as a result.

"I can't make an accurate prediction, but it is going to be very disturbing, I will guarantee you that," he told Senator Elizabeth Warren.

"Because when you have an outbreak in one part of the country even though in other parts of the country they're doing well, they are vulnerable."

"We can't just focus on those areas that are having the surge. It puts the entire country at risk," he added.

Dr Fauci also called on the US government to produce face masks to be distributed for free to all Americans, and condemned the "all or none phenomenon" of some people who have completely disregarded social distancing measures.

Robert Redfield, the director of the Centers for Disease Control and Prevention (CDC) - who was also testifying on Tuesday - told lawmakers that 12 states have seen hospital admission numbers rising, and Arizona has recorded an increasing death rate.

"It is critical that we all take the personal responsibility to slow the transmission of Covid-19 and embrace the universal use of face coverings," Dr Redfield said.

"The disease impacts us all and it's going to take all of working together to stop it."

Before the hearing began, Republican Senator Lamar Alexander, who leads the committee, appealed to President Donald Trump to wear a face mask - an act he has yet to do in a public event.

"Sadly this simple life-saving practice has become part of the political debate," said the ally of Mr Trump.

"If you are for Trump you don't wear a mask, if you are against Trump you do," he continued, going on to "suggest that the president occasionally wear a mask".

"The president has plenty of admirers that would follow his lead," he said.

'We have way too much virus'
On Monday, Dr Anne Schuchat, principal deputy director of the CDC, warned that the US is not responding like other countries who have shown success in containing the coronavirus, and has allowed the virus to spread much more widely and rapidly.

"We're not in the situation of New Zealand or Singapore or Korea where a new case is rapidly identified and all the contacts are traced and people are isolated who are sick and people who are exposed are quarantined and they can keep things under control," Dr Schuchat said in an interview with the Journal of the American Medical Association.

"We have way too much virus across the country for that right now, so it's very discouraging."

New Zealand declared the country infection-free on 8 June, and since then has had to contain several cases that came from international travellers. South Korea has aggressively employed contact tracers, and since 1 April has recorded fewer than 100 cases per day. Singapore's outbreak peaked in mid-April when 1,400 new cases were reported in one day.

The US has recorded 2,682,897 confirmed cases of coronavirus as of Tuesday, according to Johns Hopkins University, and has a total of 129,544 deaths.

"This is really the beginning," Dr Schuchat added.

"I think there was a lot of wishful thinking around the country that, 'hey it's summer'. Everything's going to be fine. We're over this and we are not even beginning to be over this. There are a lot of worrisome factors about the last week or so."

'Herd immunity unlikely'
Dr Fauci warned on Monday that the US is "unlikely" to develop herd immunity to the coronavirus even once a vaccine is available, which he earlier predicted could be available by early 2021.

He said this was due to the combination of a vaccine that is potentially only partially effective, and the large number of Americans who might refuse to get it.

"There is a general anti-science, anti-authority, anti-vaccine feeling among some people in this country - an alarmingly large percentage of people, relatively speaking," he said, calling for more education to promote confidence in vaccines.

Dr Fauci added that he would gladly "settle" for a vaccine that is only 70% to 75% effective at first.

According to the CDC website, herd immunity is reached when "a sufficient proportion of a population is immune to an infectious disease (through vaccination and/or prior illness) to make its spread from person to person unlikely".

China confusion leaves scrap metal stranded overseas www.reuters.com

China is dragging its feet in releasing new codes governing high-grade copper and aluminum scrap imports, leaving scrap metal firms abroad confused and without a clear way into their key market.

Top metals consumer China has carried out an environmental campaign against foreign garbage in recent years, progressively restricting scrap inflows and planning a ban on all solid waste imports by the end of 2020.

The State Administration for Market Regulation (SAMR) published new standards for “recycled” copper and aluminum in January after the metals industry successfully lobbied for high-grade scrap to be reclassified as a resource instead of waste – meaning it will not be affected by the ban.

But only days before the new system is due to take effect on July 1, China has not released the customs codes for the materials, leaving foreign and Chinese firms abroad unable to send cargoes and denying China’s manufacturing sector a key source of supply.

“The current situation – without the necessary coordination of all regulators and procedures yet fully established – is a confused fiasco,” said Michael Lion, former Asia chairman of Sims Metal Management.

The reclassification gives some solace to scrap traders after a long-running decline in Chinese imports. Arrivals of copper scrap into China plunged 38.4% and those of aluminum scrap fell 10.9% last year after the country further tightened restrictions on scrap metal from July 2019.

Fabricators use copper scrap to make copper products like wire rods and copper smelters use it to make refined copper.

Aluminum scrap, often in the form of used beverage cans, can be melted down into brick-shaped aluminum ingots, which are then processed into aluminum products used in everything from aeroplanes to cars.

Nowhere to go
Manson Zeng, who runs the CRA Recycling International trading platform in China, estimates there is currently 50-100% more scrap metal than usual sitting in yards in countries such as Malaysia, Thailand, Japan, the Philippines and Indonesia, ready for easy shipment to China from July 1.

The companies which prepared in advance for the new Chinese system – by bringing scrap to nearby countries and ensuring it meets the new standards – will either have to remain patient or find another market to sell to.

Budding suppliers and buyers of the new-standard material must first wait for the codes to come out, said Wang Jiwei, secretary general of the China Nonferrous Metals Industry Association’s recycling branch (CMRA). Without the codes, the material cannot be transported or clear customs.

“Otherwise you will not be able to sign a contract,” he said.

It remained unclear who would be releasing the codes.

When contacted by Reuters, China’s General Administration of Customs referred questions to the Ministry of Ecology and Environment, which said customs and the SAMR were taking the lead on the new system.

The SAMR did not respond to a faxed request for comment.

Insufficient quotas
While qualified companies in China can still import scrap material through quotas periodically issued by the environment ministry, Lion said these would be insufficient to meet lofty Chinese demand particularly for copper scrap.

Firms are having to come up with alternatives. Two aluminum scrap suppliers with stock in Malaysia said they could melt their scrap into secondary ingots which can still get into China, with one saying he could sell domestically instead.

CRA’s Zeng expects the new system to be postponed until the end of the year.

(Reporting by Tom Daly; Additional reporting by Mai Nguyen in Singapore and Shanghai Newsroom; Editing by Ana Nicolaci da Costa)

Looted Mongolian dinosaur fossils return home with charter flight from USA www.news.mn

A MIAT Mongolian Airlines plane has conducted the first-ever flight from the capital, Ulaanbaatar to the United States, triggering plans for a regular service when the world returns to normal. The flight to Seattle International Airport was a special government-charter with three important tasks: firstly, to provide medical equipment to help the Navajo Nation fight coronavirus, which from the beginning has been successfully managed in Mongolia, with zero domestic cases; secondly, to rescue some 255 nationals who have been stranded in the US since the pandemic struck and ran wild, and, thirdly, to brings home some much older residents – the remains of dinosaurs who roamed the Gobi over 65 million years ago.

Mongolia is famous for its dinosaur remains – not just among palaeontologists, but also with international smugglers; some of the most valuable remains have, as we shall see, ended up belonging to the rich and famous in Beverly Hills.

The fossils, of creatures such as the carnivorous Tarbosaurus Bataar, a relative of the Tyrannosaurus Rex, originally lived in what is now the vast Gobi desert, but in the Cretaceous was a verdant land with rivers and lakes, with different weather patterns – at the time, India had not smashed into the Eurasian Plate pushing up the Himalayas. The area is rich in dinosaur remains and is known by palaeontologists around the world. It was there in the 1920s and 1930s that American explorer Roy Chapman Andrews, known as a prototype Indiana Jones, found the first fossilised dinosaur eggs, and with it proof that dinosaurs were reptiles.

The fossils packed in to the hold of the Mongolian Airlines plane, including two fossilised skulls of Tarbosaurus Bataar, represented the latest success in a decade-long effort to locate and repatriate artefacts.

The non-profit Institute for the Study of Mongolian Dinosaurs has been working together with both the government of Mongolia and officials through the the US Department of Homeland Security’s Immigration and Customs Enforcement (ICE) responsible for the investigation of stolen items.

In 2007, Hollywood actor Nicolas Cage acquired the complete skull of a Tarbosaurus Bataar at a public sale in Beverly Hills gallery – this is one of the two on the plane. It is reported that he paid USD 276,000, outbidding Leonardo DiCaprio for the fearsome object. Little did he suspect that the skull had found its way to the City of Angles by a very murky route.

In June 2014, Mr Cage was contacted by US Homeland Security who informed him that the skull may be the property of Mongolia, which had criminalised the export of dinosaur fossils in 1924. The US authorities have made it clear that the actor did nothing wrong. In 2015, he voluntarily handed over the fossil to US officials for eventual return to Mongolia.

The I.M.Chait Gallery, where Nicholas Cage obtained the skull appears to have unwittingly obtained various treasures from convicted Florida-based palaeontologist Eric Prokopi, who has been described as a “one-man black market in prehistoric fossils.”

Prokopi is connected with an even more elaborate auction, namely that of a whole Tarbosaurus Bataar skeleton in New York city for USD 1 million in 2012. Mongolia’s then Minister of Culture, Sports and Tourism, Ts.Oyungerel with the support of President Ts.Elbegdorj filed an injunction and the Prokopi auction was rendered void. After intense negotiations, the complete skeleton of Tarbosaurus Bataar was returned to Mongolia along with other items illegally acquired by Eric Prokopi. It was an important national event and the day of the dinosaur’s return, 18 May 2013 was declared Mongolian Dinosaur Day. Initially, the complete remains, thought to be a juvenile measuring 2.4 metres in hight and 7.3 metres in length, were displayed in a special pavilion on Ulaanbaatar’s Sukhbaatar Square, before being moved to the new dinosaur museum on Victory Square along with other priceless fossils – including dinosaur eggs – which had been housed in the old National History Museum.

It is hoped that the latest repatriated remains, including Mr Cage’s former skull will soon be on public display in Ulaanbaatar.

Members of new parliament receive identification cards www.montsame.mn

June 29, 75 candidates who received the most votes in each of 29 constituencies in the 2020 parliamentary election of Mongolia received their identification card of a Member of the State Great Khural from the General Election Commission. A member-elect from Selenge aimag, J.Erdenebat, who was the Prime Minister of Mongolia in 2016-2017, was unable to receive his card in person as he is currently being investigated under custody.