President meets Gucci CEO Marco Bizzarri www.montsame.mn

Mongolia, ADB sign grant to develop participatory food waste recycling www.montsame.mn

Ulaanbaatar /MONTSAME/. The Asian Development Bank (ADB) and the Government of Mongolia have signed a $3 million grant agreement to improve food waste recycling in local communities in the capital city, helping to keep Ulaanbaatar cleaner, reports ADB Resident Mission in Mongolia.

Credit rating agency to be established www.montsame.mn

Ulaanbaatar /MONTSAME/. The Financial Regulatory Commission (FRC) is working in partnership with the Japan International Cooperation Agency (JICA) on diversifying financial instruments to develop the capital market of Mongolia.

Tourism revenue increases by 10.2 percent www.montsame.mn

Ulaanbaatar /MONTSAME/. Mongolia received a total of 529.360 tourists in 2018 and it increased by 9 percent or 47.902 in 2019, according to Ulaanbaatar City Tourism Department.

Mining sector equals one-quarter of GDP www.zgm.mn

According to the preliminary results of 2019, the mining sector accounts for 25 percent of Mongolia’s GDP, 72 percent of industrial production and 90 percent of exports. The statistics were presented during the monthly press conference of the Ministry of Mining and Heavy Industry, Transparent and Responsible Mining. The report reveals that the mineral industry constitutes 24.5 percent of the total budget revenue in 2019. During the period, the budget revenue totaled around MNT 11.9 trillion, with an increase of MNT 1.9 trillion or 18.6 percent from a prior year. Of these, revenue from the mineral sector reached MNT 2.9 trillion, which is increased by MNT 590.7 billion or 25.4 percent compared to the same period of last year. In 2019, 50.83 million tons of coal, 1.26 million tons of copper concentrate, 16.25 tons of gold, 5,300 tons of molybdenum concentrate, 156,150 tons of fluorite ore, 47,490 tons of fluorspar concentrate, 8.57 million tons of iron ore, 3.39 million tons of iron ore concentrate and 83,090 tons of zinc concentrate were produced in the mining and extractive industry of Mongolia. The report also found that the total production of the mining and extractive sectors amounted to MNT 12.47 trillion, increasing by MNT 1.24 trillion or 11.1 percent since 2018. Coal exploration grew markedly, reaching MNT 1.15 trillion last year. The mining industry makes up 71.8 percent of the total output of industrial production.

Five copper price trends to watch in 2020 www.mining.com

As we look to 2020, copper is faced with a finely balanced market. For now, positive investor sentiment around copper’s fundamentals is supporting higher prices, Metals and mining research and consultancy group Wood Mackenzie said in a research note Wednesday.

Stronger demand growth is underpinned by new semis capacity, while mine supply growth will be reliant on additions from both projects and existing mines.

Meanwhile, the recent approval of new copper scrap re-categorisation standards in China could yet determine the mix of copper raw material imports into the country and influence global scrap dynamics, said Wood Mackenzie.

These fundamental factors, in addition to the strong geopolitical headwinds across the global landscape, will no doubt lead to another year of volatile prices. In the absence of a major economic downturn, copper’s supportive fundamentals should keep price risk skewed to the upside, said the firm.

Eleni Joannides, Wood Mackenzie Principal Analyst, sees five key themes to watch in the global copper market in 2020.

Copper prices – fundamentals vs sentiment
Policies and politics that will drive copper demand
The global scrap dynamics will shift – response to changes in Chinese scrap policies on imports
Lower TC/RCs could push some smelters below breakeven
Mine supply looks set to return to growth
“During 2019, copper prices were largely determined by US-China trade-related news rather than copper’s own fundamentals. It was not until the US-China Phase 1 trade deal was agreed in December that there was a shift in sentiment,” Joannides said.

“As we look to 2020, the risk is that wider factors will once again influence price. The geopolitical issues that have surfaced since the start of the year could derail the rally that emerged in December 2019. On the other hand, further progress in resolving trade disputes will likely encourage a faster than anticipated recovery in demand and underpin prices,” Joannides added.

“This year, we are forecasting that positive mine supply growth of 1.3% — after disruptions — will be offset by a recovery in demand. The resulting draw down in total cathode stocks by year-end should be positive for prices.”

Wood Mackenzie said differing incentive approaches to renewable technologies will lead to varied impacts on copper demand in 2020.

“Contributions to copper demand from electromobility and renewable energy will be a long-term story. However, in 2020, electric vehicles (EVs), wind and solar projects will see a range of incentives accelerate, stop and reverse. In some cases, this will be a drag on the development of projects. In other cases, however, a possible front-loading of projects ahead of further subsidy removal could emerge.

“The Chinese government recently announced that it has no plans to further reduce the subsidy on EVs in 2020. We believe the decision to keep the subsidy will help to support EV sales, production and related copper demand in 2020.

“This change in approach to EVs in China is in line with developments in other regions. In Europe, the likes of Germany and Norway continue to ramp up EV-related incentives, supporting copper consumption in the region. In consultation with German automakers, the so-called “Environmental Bonus” incentive has been raised to a maximum of €6,000 for battery EVs priced up to €40,000. In the US, some States have extended subsidy offerings, while others are introducing similar incentive programs.

“In the renewable markets, the Chinese government plans to end the subsidy on newly approved onshore and offshore wind projects in 2021 and 2022, respectively. In the US, tax incentives for new solar power installations have started to wind down this year and the subsidy on wind power generation will also begin to decrease next year. As a result, we believe that demand for copper will be brought forward in both China and the US in 2020, as developers rush to install new capacity ahead of these changes,” said Joannides.

A shift in global scrap dynamics could occur in response to changes in Chinese scrap policies, Wood Mackenzie warns.

“The Chinese government recently approved new standards, beginning in July 2020, that will re-categorise some copper scrap as “renewable copper material,” Joannides said.

“The new threshold for copper content of imported copper scrap has been set at 97% and 56% for brass scrap. This threshold is noticeably above the average copper content for copper and brass scrap imported in 2019. Nevertheless, the copper industry in China has shown optimism towards scrap imports this year.

“Given that most of the examination will be done by visual inspection at ports, it is widely believed that implementation of the new standards will leave some room for scrap slightly below the threshold to be imported. However, the risk is that if Chinese Customs implement the new standards strictly, according to the guidelines, scrap processors will need to make additional efforts to meet the requirements. This means that China will be not be able to source as much scrap from the external market this year.

“In addition to the changes in scrap-related policies in China, rising costs to upgrade scrap ahead of export to China will likely incentivise more secondary consumption capability to be built in scrap generating and/or processing countries. We have already seen early examples of this around the world. It remains to be seen if this will be the start of a trend, which would not only have implications for scrap volumes available for China but also the requirement for concentrate, blister/anode and copper cathode,” said Joannides.

Partly driven by new project delivery, mine supply is expected to return to growth. Wood Mackenzie’s base case is for mine supply to reach 21Mt in 2020 – after applying a 5% disruption allowance. Notably, approximately 40% of the additional production capability will be a result of a net increase in output at operating mines.

“Projects that started in 2019 will support higher production as they ramp-up to full capability in the year ahead. Similarly, the increase of brownfield expansions and extensions will contribute a significant amount of supply growth. New projects that are scheduled to start during 2020 will also play their part,” added Joannides.

“Glencore’s Mutanda mine in the DR Congo will be the largest planned decline in production in 2020. This accounts for 100 kt less mined copper supply year-on year.”

As with previous years, Wood Mackenzie expects a considerable amount of copper supply to be lost from unexpected disruptions. In addition to unforeseen operational and weather-related issues, social and political factors are central to supply risk.

“Approximately 40% of total disruptions recorded for 2019 were located at mines in the African Copperbelt. The environment in both cases appears more stable now, however. The initial upheaval brought about by tax and mining code changes in Zambia and DR Congo, respectively, has subsided as the mining industry comes to terms with changes to the operating environment.

“The more immediate issue facing Zambia now is power supply, with water levels in the country’s hydro-electric dams critically low,” said Joannides.

Lower treatment charges (TC) and refining charges (RC) could push some copper smelters below breakeven, according to Wood Mackenzie.

“A tight concentrate market in 2019 forced TC/RCs to their lowest level in six years. The 2020 benchmark was set at $62/t & 6.2c/lb – a 23% decrease on the 2019 benchmark and the fifth year of falling treatment charges.

“Our latest concentrate balance implies a deficit for 2020, with the addition of primary smelter capability outpacing growth in mine supply.

Joannides said with a lower annual TC/RC benchmark and very weak acid prices, some smelters in China are precariously close to breakeven. Therefore, smelter economics will have a bearing on the amount of available capacity in 2020.

“Outside China, aside from a continuing strike at Asarco’s Hayden smelter in the US, smelter stoppages are limited to planned maintenance so far. Smelting capacity in Chile is reaching full capability following t

Mongolia's capital launches cleanup campaign ahead of Lunar New Year www.xinhuanet.com

Mongolia's capital Ulan Bator has launched a campaign to clean up the environment ahead of the traditional "White Moon" festival or the Lunar New Year, the press office of the municipal government said Wednesday.

China finds oil in Asia’s deepest onshore well, nearly 9,000 meters underground www.rt.com

China National Petroleum Corporation (CNPC) has found crude oil and natural gas in the deepest well drilled in Asia’s onshore, striking hydrocarbons in a pre-salt layer for the first time in China.
The discovery was made in the Tarim oilfield in China’s northwestern region of Xinjiang in a well deep 8,882 meters (29,140 feet), which was first drilled in July last year.

Defense, Foreign and Finance ministers retain their positions in new Russian government www.rt.com

President Vladimir Putin has approved a new Russian government after the surprise resignation of the previous cabinet last week. While there was a significant reshuffle, the defense, foreign and finance ministers kept their posts.
"The new government is a well-balanced one, although it went through a major reshuffle," Putin said during a meeting with the new cabinet.

Both Sergey Lavrov and Sergey Shoigu are political heavyweights and among the most trusted political figures in Russia, trailing only behind President Putin himself when it comes to popularity with the public. Anton Siluanov has been Russia's finance minister since 2011.

A career diplomat with decades of experience in international relations, Lavrov served as Russia’s envoy to the UN for ten years before taking the helm at the Foreign Ministry in 2004.

He led Russian diplomacy through turbulent periods on the international stage and has been instrumental in building Moscow's reputation as an influential global power in recent years.

Shoigu, meanwhile, is credited with strengthening and modernizing Russia's Armed Forces through a set of ambitious reforms to increase combat readiness and spearheading a massive rearmament program to equip forces with cutting-edge weapons.

Siluanov has worked in the Russian Finance Ministry since the early 1990s heading several ministerial departments, including on macroeconomic policy and banks, as well as on budgetary policy. He held the post of deputy finance minister for several years before becoming finance minister in 2011.

They are joining new Prime Minister Mikhail Mishustin along with nine other members of the previous cabinet and nine freshmen ministers.

The new prime minister and new government members are all technocrats and professionals with rich management experience, said head of the CIS strategic development center Aleksandr Gusev, adding that the ones who have stayed on are also effective government officials. He believes the new government has all of the necessary background to work effectively to improve the quality of life in Russia, something the previous government didn't succeed in doing.

The abrupt resignation of the government last week after Putin's state of the union speech was an earthquake for Russian politics. Former Prime Minister Dmitry Medvedev announced last week that the entire government would resign in a surprise statement shortly after Putin's address.

What was an annual routine event turned into one of the most significant moments in Russia’s modern political history as Putin unexpectedly proposed major amendments to the nation’s constitution.

The proposed reform envisages broader powers for the State Duma – Russia's lower house of parliament – including giving it the ability to choose the PM and form the government.

Putin also proposed that Russia should abide by international law only to the extent that it does not restrict Russians' rights and freedoms and does not contradict Russia's own constitution.

Mongolia exports 6.5 mln barrels of crude oil in 2019 www.xinhuanet.com

Mongolia exported a total of 6.5 million barrels of crude oil in 2019, the country's Ministry of Mining and Heavy Industry said Tuesday.