Russia, China to assess prospects of laying gas pipeline via Mongolia www.tass.com

MOSCOW, February 10. /TASS/. Russia and China continue negotiations on the ‘western route’ of gas supplies to China (Power of Siberia 2) contemplating deliveries of 30 bln cubic meters of gas per year and the parties are assessing prospects of laying the pipeline across Mongolia, Russian Energy Minister Alexander Novak said in his article in the Energy Policy magazine.

Export decreases by more than 20 percent in January www.zgm.mn

In January, exports totaled USD 459 million, decreasing by 24.4 percent compared to the same period of the previous year. According to the Customs General Authority (CGA), imports surpassed exports for the first time since September 2014 with a loss of USD 14.3 million. The sharp decline in crude oil sales was one of the key drivers. Copper and ore concentrate sales declined by nearly 30 percent. Excluding raw coal, most of Mongolia’s exports have declined. However, export revenue was up 20 percent year­-on-­year. Despite the restriction on movement in line with the new types of coronaviruses, mineral exports from major ports are continuing to operate normally, the CGA said.

Oyu Tolgoi in-country spend passes US$10 billion www.montsame.mn

Ulaanbaatar /MONTSAME/. Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company, today announced that the company has reached US$10 billion in total in-country spend since 2010, marking the largest foreign investment made in the country.

Mongolia setting up its research station in Antarctica www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Environment and Tourism N.Tserenbat met with Director of the Antarctic Research Center of the Mongolian University of Science and Technology, Antarctic researcher L.Dugerjav at his request.

King Tug suffers first defeat of professional career www.news.mn

Mongolia’s King Tug (N.Tugstsogt) suffered the first loss of his professional career when WBC featherweight champion Gary Russell Jr. defended his title on Sunday at PPL Center Center in Allentown, Pennsylvania.

Foreign Ministry releases measures to be enforced in response to novel coronavirus www.montsame.mn

Ulaanbaatar /MONTSAME/. On February 7, the Ministry of Foreign Affairs of Mongolia issued a press release on measures to be enforced in response to the novel coronavirus 2019-nCoV outbreak.

Mine delays in China are buttressing beleaguered coal bulls www.bloomberg.com

Disruptions to coal mining in China because of the coronavirus are giving the coal market a rare cause for bullishness.

For the past five months, Asian seaborne prices have been hovering near a three-year low on rising supply and soggy demand. But now, as the deadly epidemic hinders Chinese mines from restarting after the Lunar New Year holiday, the world’s biggest consumer is looking to import more and that’s giving prices a boost, according to traders and miners.

The global commodity market has been thrown into disarray by the virus as Beijing keeps swathes of the country under lockdown, disrupting raw material supply chains and subduing demand. The fallout has hammered global prices of everything from oil to copper, but coal joins a handful of commodities such as fertilizer that are getting a boost.

The rise in Asian seaborne prices is mainly driven by delays in Chinese mines returning after the holiday, said New Hope Corp. Managing Director Shane Stephan. Lower shipping rates also help to make “Australian coal more competitive on a landed cost basis into China.”

The most-active Newcastle coal futures have climbed about 9% this week to $72.20 a tonne Thursday. Chinese prices on the Zhengzhou Commodity Exchange rose 3.6%, capping the biggest weekly gain in almost a year.

The price arbitrage for seaborne and Chinese coal has widened, implying a window is open for China to boost imports, according to Marex Spectron analyst Hui Heng Tan.

Output cuts
Mine suspensions will probably cut China’s coal production by 145 million tonnes, said Dennis Ip, an analyst at Daiwa Capital Markets Hong Kong Ltd. While that’s about 4% of the country’s total output last year, it’s equivalent to almost half of its imports and could have a significant impact on the seaborne market.

Still, the strength and sustainability of higher imports are in doubt. The extended shutdowns have disrupted land, sea and air transport. So not only will exporters find it a challenge to get vessels into China, they may have difficulties unloading cargoes and moving them to end-users.

A Chinese buyer of liquefied natural gas and a copper importer have already declared force majeure, a contractual term meaning they’re unable to take delivery of cargoes, as the impact of the virus on logistics and manpower constrains their ability to receive shipments.

Ample stockpiles
Lofty coal stockpiles at some power plants may also curb additional purchases, according to traders. Inventories at six major utilities are sufficient for 44 days of use as of Friday compared with 33 days before the holiday, data from China Coal Transport & Distribution Association show.

At the same time, China is seeking to expedite the resumption in domestic production. The National Energy Administration said in a notice that authorities should improve transportation networks and connectivity to production hubs, while the raising of domestic coal prices beyond certain levels is prohibited.

For now, there is higher demand for small shipments from Indonesia, which takes a shorter time of about two weeks to deliver into China, according to one of the traders. The Indonesian Coal Mining Association said there’s an opportunity to boost exports, though China’s demand will depend on port conditions.

Exxon man to lead Rio Tinto's Mongolia mission www.afr.com

Rio Tinto has hired a British oil executive with extensive experience in the developing world as part of efforts to smooth its fractious relationship with the Mongolian government.

Mongolia Braces for Coronavirus Impact www.thediplomat.com

In response to growing fears amid the spread of a novel strain of coronavirus, Mongolia shut down its borders to China and closed all schools and public gatherings until March 2. There are currently no confirmed cases of coronavirus in Mongolia, but the government has taken stringent measures to prevent the spread of disease.

The Mongolian News Agency reported that a charter flight through Mongolia’s national air carrier, MIAT, transported 31 Mongolian nationals from Wuhan, the epicenter of the outbreak, to Ulaanbaatar (UB) on Saturday, February 1. Passengers and crew will be held in quarantine for two weeks, although reports indicate all evacuated Mongolian nationals tested negative for coronavirus.

According to a Mongolian government news source, as of February 4 a resident of Darkhan-Uul Province who returned from Taiwan via South Korea on January 30 has been held in isolation after showing signs of a fever. Two more suspected cases are being investigated after arriving on a flight to Ulaanbaatar through Seoul. On February 5, the State Emergency Commission held a meeting to clear out a hospital in UB for use as a quarantine center for future coronavirus victims, and temporary quarantine facilities at Chinese border checkpoints are being built for incoming Mongolian nationals.

Since the border closure, more than 6,000 Mongolians have crossed into Mongolia from China as of February 4. As of February 6, Mongolian citizens are only able to enter Mongolia through Buyant-Uku (Ulaanbaatar Airport) and Zam-Uud on the eastern Mongolia-China border. Prior to the border quarantine, immigration officers at the Gashuunsaikhait border checkpoint in Umnugobi worked alongside the State Emergency Commission Province to supervise the entrance of 2,615 Mongolian nationals, 36 Chinese citizens, and 1,432 vehicles in accordance with the quarantine between January 28 and February 5.

A statement released by the Embassy of Mongolia in the U.K. confirms that Mongolian nationals will be prohibited from traveling to China until March 2, except on official business; however, restrictions will not be applied to truck drivers in order to maintain the flow of goods and products between the two countries.

Mongolian journalist Anand Tumurtogoo said that while Mongolian citizens “can still travel to China if [they] have official business, mostly people who bring in small goods from China are … hurt the most.” Over 90 percent of Mongolian products are shipped to or through China. Depending on how long the situation lasts, shutting down the border with China could cause a severe shortage in goods, particularly if the informal economy is shuttered.

A new task force run under the minister of health has been created to stop the spread of coronavirus in Mongolia. The taskforce will collect and transfer information on new coronavirus infections to the National Security Council and the State Emergency Services Office. International organizations are also rushing to preemptively address health concerns.

The head of People in Need Mongolia, Tim Jenkins, reported that “When the coronavirus hit, we … shifted our aim a bit. The problem in Mongolia is that people believe masks are the main barrier to prevent the virus, so we’re going to have a hygiene project whereby we give soap, toothpaste, masks, water, etc. to vulnerable households.” Many international organizations in Mongolia, including People in Need, Breathe Mongolia, and the Red Cross lead campaigns to provide Mongolians with masks to prevent against air pollution, but are concerned that people are prioritizing masks over other basic hygiene practices in response to the coronavirus outbreak.

“Even when you go to facilities with ‘international standards’ the soap dispenser is empty. You’ll see people just rinse their hands with water,” Jenkins said. “There’s very little awareness on the importance of regular handwashing during influenza season.”

In Ulaanbaatar, many parents have been sending their children out to the countryside because they don’t have school, likely in an effort to save on childcare costs as much as to protect their children from potential exposure to coronavirus. In order to reduce the educational gap, primary schools have been broadcasting lessons through televisions throughout the country, while most universities remained closed.

Tsagana Norov, a teacher at Khovd State University in western Mongolia, reported that the university began teaching online curricula in order to lessen the educational impact caused by the extended break, but admitted that “not all the students are involved… even the ones in the city are not responding as they don’t have internet access available.”

Siera Hanks, an American expat living in UB, mentioned that more people are wearing masks, and as in many countries, masks are completely sold out. In terms of public reaction, Hanks said, “It’s … spooky. The movies are shut down and all public events. Everyone is wearing masks… a weird climate for sure. Stuff is mostly pretty empty. [The government] sent around the police with respirators to inspect restaurants.”

Most businesses are functioning as usual, but nightclubs have been closing earlier.

Journalist Anand’s biggest concerns are misinformation and mass hysteria. “I have friends who have shut themselves out, and have stockpiled on food and other goods. I did that too. There was a fake photo circulating around [social media] that all the store shelves went empty. And in response people actually cleaned out some stores.” Posts on Mongolian Facebook and Twitter pages have propagated wild rumors about the nature of the coronavirus in Mongolia, including the idea that Mongolians are immune to the effects of the disease.

There has also been an increase in anti-Chinese sentiments and posts, as in many other countries. Indeed, there has been a notable uptick in xenophobia in Mongolia. Most recently, a football team from Taiwan was forbidden entry to Mongolia, as part of the ban on foreign visitors from “Chinese areas,” including China, Macau, Hong Kong, and Taiwan. In addition, Anand reported that on Tuesday, January 28, a “neonazi group went to the train station to not let in Chinese nationals to the country.”

The Mongolian Lunar New Year, Tsagaan Tsar, is to be held February 24-26, but is likely to be a quieter affair than usual due to concerns over coronavirus. For now, an air of uncertainty hangs over the country. While Mongolia seems relatively insulated from coronavirus thus far, the economic and social impacts could have much larger ramifications over the next year.

Monica Weller is a Policy Research Fellow of the Reischauer Center at the Johns Hopkins School of Advanced International Studies (SAIS). Weller previously participated in the Fulbright U.S. Student Program in Mongolia.

Xanadu Mines remains focused on flagship Mongolian copper-gold project after positive December quarter www.proactiveinvestors.com.au

Xanadu Mines Ltd (ASX:XAM) (TSE:XAM) (FRA:02X) remains focused on its flagship Kharmagtai Copper-Gold Project in Mongolia with optimisation and metallurgical work completed in the December 2019 quarter leading to potential value uplifts.

Activities during the December 2019 quarter focused on a review of sulphide flotation metallurgical results and the generation of a large-scale copper-gold exploration target beyond the 2018 mineral resource aiming to highlight the growing potential at Kharmagtai.

A geophysical drilling program has been designed to convert the exploration target into inferred mineral resources.

The first phase would consist of a tenement-wide seismic survey conducted in parallel with a similar spaced deep magnetotellurics (MT) program.

Xanadu had A$1.2 million in cash at the end of 2019 prior to the receipt of A$2.58 million placement funds on January 20, 2020.

“Large-scale copper-gold potential”
Chief executive officer Andrew Stewart said: “We have always had a strong belief in the large-scale copper-gold potential of the Kharmagtai district.

“This upgraded global exploration target outlines the areas we are aiming to convert to resources in the near to mid-term.

“Additionally, our geologists have highlighted a series of compelling geochemical and geophysical vectors which suggest mineralisation within this exploration target is just the tip of a much larger porphyry system at depth.

“We know these systems exist in Mongolia as the giant Oyu Tolgoi is currently being developed some 120 kilometres to the south, which we believe is a similar type of system to Kharmagtai.”

Met results “better than expected”
He added the company was pleased with new metallurgical results, which were better than expected at this stage in the project’s life.

The new results, which were received in December 2019 improved copper recoveries by around 4.5% to an average recovery of 89.5% for the two main metallurgical composites.

“We are comfortable that additional improvements can be made further down the track.

“These early-stage flotation test results are very encouraging and indicate that a standard crushing, grinding and flotation process will be enough to deliver good extraction of the economic minerals from the deposit.

“In combination with the low content of deleterious elements, we foresee no significant hurdles to producing a high-quality concentrate through standard processing pathways that will be in high demand from all the major global copper smelters, at a time the time of production.”

Capital raising
In January 2020 the company completed a non-brokered placement raising A$2.58 million.

The placement was conducted at A3.3 cents per share and resulted in 78.32 million new shares being issued.

Shareholder approval was not required for the placement, which was undertaken under Xanadu’s ASX Listing Rule 7.1 15% capacity.

New shares were issued to Precious Capital Gold Mining & Metals Fund (PCG), managed by SSI Asset Management AG, a Zurich-based fund.

Following completion of the raising, PCG holds approximately 9.9% of Xanadu.