Beavers relocated in Terelj River www.montsame.mn

Ulaanbaatar /MONTSAME/ The Environmental Authority of Ulaanbaatar in cooperation with the Gorkhi-Terelj National Park Administration relocated two pairs or four beavers in Terelj River which flows into Tuul River.

China's economy grows at slowest pace since 1990s www.bbc.com

China's economy grew at its slowest pace since the early 1990s in the second quarter, official figures showed.

In the three months to June, the economy grew 6.2% from a year earlier. The result was in line with forecasts.

China has moved to stimulate its economy this year by boosting spending and delivering tax cuts.

The country is also fighting a trade war with the US which has hurt businesses and weighed on growth.

The data released on Monday showed China's economic growth rate slowed from 6.4% in the first three months of the year.

US President Donald Trump tweeted that US trade tariffs were having "a major effect" on the Chinese economy.

"China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal...."

China's national statistics bureau said the figures pointed to a "complex environment" both at home and abroad.

It said the economy had "performed within the reasonable range" in the first half of 2019, but that it faced "new downward pressure".

The figures do show some impact from the trade conflict with the US. Growth has probably slowed a little more than it would have done had China been facing a more tranquil international commercial environment. The longer-term picture, though, is one of an economy continuing a reasonably orderly and intended slowdown in growth.

The average growth rate over the three decades to 2010 was 10%. The Chinese leadership - and every economist I have ever heard expressing a view on this - did not regard that as sustainable for the long term. The aim was to see the economy less dependent on investment and exports and an increased role for spending by consumers.

There has been some progress, though the rates of saving and investment remain very high. There are dangers, however, notably the high level of company debt. The authorities encouraged strong credit growth in the aftermath of the global financial crisis. That has helped prevent a more rapid and potentially disruptive slowdown, but at the price of creating additional financial risks.

While China-watchers advise caution with Beijing's official gross domestic product numbers, the data is seen as a useful indicator of the country's growth trajectory.

Other data showed some signs of improvement in the world's second-largest economy.

Industrial production rose 6.3% in June from a year earlier, while retail sales rose 9.8% year-on-year - both above forecasts in Reuters polls.

Global impact
Slowing growth in China has raised concerns about the potential knock-on effect on the global economy.

Earlier this year Beijing announced plans to boost spending and cut billions of dollars in taxes in an effort to support the economy.

It has also moved to provide a liquidity boost by reducing the amount of cash banks must hold in reserve.

Edward Moya, senior market analyst at Oanda, said the latest economic data "shows the slowdown remains intact and markets should expect further stimulus" from China's central bank later this year.

The US-led trade war is another factor weighing on growth.

"The trade war is having a huge impact on the Chinese economy, and with no end sight as trade negotiations struggle for meaningful progress, we are probably not near the bottom for China's economy," he said.

US-China trade war in 300 words
While both sides agreed to resume trade talks at a recent G20 summit in Japan, they have already placed tariffs on billions of dollars worth of one another's goods, hurting businesses and casting a shadow over the world economy.

Asian air traffic controllers convening in Ulaanbaatar www.montsame.mn

Ulaanbaatar /MONTSAME/ The Third Asian Air Traffic Controller Forum is being held in Ulaanbaatar between July 14 and 17 with involvement of 100 air traffic controllers and other representatives from Mongolia, Russia, China, Thailand, Japan and Hong Kong.

Mongolian dinosaur fossils on display in Tokyo www.montsame.mn

Ulaanbaatar /MONTSAME/ 14 exhibits of dinosaur fossils found in Mongolia including the Deinocheirus skeleton are on display at the Dinosaur Expo 2019 which opened in the National Museum of Nature and Science, Tokyo, Japan, on July 13.

Rio Tinto warns of delay and cost blowout at Mongolia copper mine www.ft.com

Rio Tinto has warned of further delays and a cost blowout of up to $1.9bn at its giant underground copper project in Mongolia’s Gobi desert.

The Anglo-Australian miner said difficult ground conditions meant that it would have to completely rethink the design and development schedule at Oyu Tolgoi.

As a result, first sustainable production is now expected between May 2022 and June 2023 — a delay of 16 to 30 months compared with original guidance — while the cost of the $5.3bn project will increase by $1.2bn-$1.9bn.

“We have made significant progress on a number of key elements in the construction of the underground project during 2019,” said Stephen McIntosh, head of Rio’s growth and innovation group.

“However, the ground conditions are more challenging than expected and we are having to review our mine plan and consider a number of options.”

Rio said a final estimate cost and schedule would be announced in the second half of next year, “reflecting the preferred mine design approach”. “Significantly more work is required to complete the final assessment,” it said.

The miner also said it was reviewing the carrying value of the project and could announce an impairment charge when it announces half-year results next month.

While it is not unusual for large, complex mining projects to experience delays, the overrun at OT, as the mine is known, will still be painful for Rio, which prides itself on being one of the best operators in the industry.

It could also raise tensions in Mongolia, where the mine dominates political debate and is the country’s biggest source of foreign direct investment.

While Rio operates OT, it does not have a direct shareholding. It is 66 per cent owned by Toronto-listed Turquoise Hill Resources, in which Rio Tinto has a 50.8 per cent controlling stake, and 34 per cent by the Mongolian government.

Although Rio has been producing copper, gold and silver from an open pit at OT since 2013 that was always with a view to exploiting its vast underground riches.

The expansion of OT is Rio’s most important growth project and the one most closely associated with chief executive Jean-Sébastien Jacques, who pulled together the financing package for the project when he ran the company’s copper business.

Commodities
Supply squeeze in iron ore catches miners on the hop
The project is aimed at lifting output to 550,000 tonnes of copper per year. When finished it will make OT the world’s third-largest source of copper, an industrial metal tipped to be in ever-greater demand as the world shifts to cleaner forms of energy.

Problems with the underground project first emerged in October when Turquoise Hill Resources announced a nine-month delay to sustainable production, citing issues completing a 1,300 metre production and ventilation shaft and changing ground conditions.

In February, Rio warned investors of “significant changes to the design” of the development schedule of the project that would push back first sustainable production.

Rio is using a mining technique called block-caving to extract the copper ore and send it to the surface. Although technically challenging, it is considered one of the most cost-effective methods of mining ore from deep below the ground.

For this method to work, weak and fractured rock needs to collapse under pressure from blasting and gravity. Mr Jacques has previously said the problem at OT is that the rock collapses too easily.

Rio Tinto says Mongolia blow out may top $2.7b www.afr.com

Rio Tinto's flagship iron ore division has confirmed an 8 per cent slump in exports, while the miner conceded its Mongolian copper project could suffer cost blowouts of up to $US1.9 billion ($2.69 billion).

Rio had expected an underground expansion of Mongolia's Oyu Tolgoi mine to cost $US5.3 billion when it was approved in 2015, but has known for the best part of a year that the project would be delayed.

Rio won't know the exact scale of cost and schedule blowouts until late 2020, but current estimates suggest the project will cost between $US6.5 billion and $US7.2 billion.

Those cost estimates do not include the cost of building a power station for the mine, which could cost Rio and its Oyu Tolgoi partners a further $US1 billion.

The cost blowouts are much bigger than analysts had expected, and have been partly caused by weaker than expected rock forcing changes to the mine plan.

Some close to the project believe shortcomings in project management have also contributed to the cost and schedule blow outs.

RBC had earlier this year modelled a $US500 million blow out at Oyu Tolgoi, while Deutsche had estimated a blow out of $US800 million.

Goldman Sachs analyst Paul Young had assumed a $US1.1 billion increase for a total cost of $US6.4 billion, but even that is below the bottom end of Rio's updated cost estimate range.

Sustainable first production of the mine could be up to 30 months late, although Rio said it had built eight months contingency into that estimate.

Originally scheduled for the early weeks of 2021, Rio said first production could now come between May 2022 and June 2023.

Rio flagged it may record an impairment against Oyu Tolgoi when it reports its half year financial results next month.

''Rio Tinto is reviewing the carrying value of its investment in the project and will announce if any changes are required in the half year results on August 1, 2019,'' the company said.

The cost and schedule blow outs will not be popular with the Mongolian government, which is a 34 per cent shareholder in the Oyu Tolgoi mine, and has previously expressed concern about the rising costs.

Mongolia is keen for the mine's copper, gold and silver to start bolstering its budgets as soon as possible, and the latest delays mean the nation's young democracy will have to wait longer than desired for the revenues to flow.

Even Rio's ability to give shareholders a ''definitive estimate" of the updated cost and schedule for the mine has been delayed.

Rio told shareholders last year it would publish such a definitive estimate by mid 2019.

By February that timeline for the definitive estimate had been pushed back to late 2019.

On Tuesday Rio said it would be the second half of 2020 before it would be able to provide a definitive estimate of costs and schedule, suggesting a major rethink of the mine design is underway.

''All options under consideration present a pathway to sustainable first production, and have different cost and schedule implications,'' said Rio in a statement on Tuesday.

''Significantly more work is required to complete the final assessment."

While Oyu Tolgoi is Rio's most important growth project, its Australian iron ore division remains its biggest money-spinner, generating more than 66 per cent of its underlying earnings in 2018.

Iron ore could deliver an even higher proportion of Rio's earnings in 2019, given prices for the steelmaking ingredient have been trading near five year highs in the past month.

The type of iron ore Rio typically sells from Western Australia, ore with 62 per cent iron, was fetching $US119.25 per tonne on Monday.

That price includes the cost of freight, which is currently about $US9.55 per tonne.

Rio said it had received an average price of $US85.30 (excluding the cost of freight) for its iron ore over the past six months.

Iron ore price strength has been largely driven by supply curtailments in Brazil, but Rio's exports have also been soft, with the company confirming on Tuesday it had shipped 85.4 million tonnes in the three months to June 30.

That was about 8 per cent less than in the first half of 2018.

Analysts at UBS had expected Rio to report iron ore shipments from Australia of 85.2 million tonnes in the three month period, including tonnes owned by joint venture partners like Gina Rinehart's Hancock Prospecting.

Rio's mines produced 79.7 million tonnes of iron ore in the three months to June 30; below the 81.2 million tonnes expected by UBS.

The weak performance at the mines appears to relate to the operational problems in the Pilbara that Rio disclosed to the ASX on June 19.

Rio began the year promising to ship between 338 million and 350 million tonnes of iron ore from Western Australia.

By April bad weather and a fire at a port had forced Rio to cut its iron ore export guidance to a range between 333 million and 343 million.

Guidance was cut a second time in June to between 320 million and 330 million tonnes, after mine sequencing issues emerged in the Brockman hub.

If Rio delivers at the bottom end of its latest guidance range, it will be the company's weakest year of iron ore exports since 2015.

Rio said major rail maintenance would occur on its iron ore railways in coming months, but that work was already factored into its export guidance.

The weaker exports have driven up Rio's unit costs from a range between $US13 and $US14 per tonne of iron ore, to between $US14 and $US15 per tonne.

UBS expects Rio to ship 324 million tonnes of iron ore from Australia in 2019.

Rio has also downgraded expectations for its Canadian iron ore business, which was expected to produce between 11.3 million and 12.3 million tonnes in 2019.

The Canadian division will now produce 10.7 million to 11.3 million tonnes in the year.

Meanwhile, Rio confirmed it had completed the sale of its stake in Namibia's Rossing uranium mine.

The Iranian government's ownership of a stake in Rossing had complicated life for Rio, which was forced to make regular, detailed assurances to US authorities about the nature of its involvement with Iran.

Rio Tinto Hits Cost Blowout at Mongolia Copper Expansion www.reuters.com

(Reuters) - Rio Tinto on Tuesday flagged a cost blowout of up to $1.9 billion and a delay of up to 30 months at its Oyu Tolgoi underground copper mine in Mongolia, the miner's key growth project.

Russia Approves ‘Shortest’ Europe-China Highway – Reports www.themoscowtimes.com

The Russian government has approved construction plans for a toll highway that will dramatically cut cargo shipping times between Europe and China, the Vedomosti business daily reported.

Chinese central bank unveils plan on digital currency www.chinadaily.com.cn

The central bank is accelerating its efforts to introduce a government-backed digital currency, aiming at securing a cutting-edge position in the global cryptocurrency race, a senior official said on Monday.

The People's Bank of China, the central bank, is organizing market-oriented institutions to jointly research and develop a central bank digital currency and the program has been approved by the State Council, the country's Cabinet, Wang Xin, director of the PBOC Research Bureau, said at a seminar at Peking University.

The central bank has been watching the emergence of a new global digital currency called Libra, introduced by Facebook, the world's biggest social network company, on June 18.

"We will keep a close eye on the new global digital currency," said Wang, making the latest comment on Libra from the country's monetary authority.

Unlike other cryptocurrencies, such as Bitcoin, Libra is described in a Facebook white paper as a currency "fully backed by a reserve of real assets". A basket of bank deposits and short-term government securities will be held in a Libra reserve to guarantee its value.

Twenty-seven companies and entities have joined the Libra founder group, including the world's traditional payment giants Visa and Mastercard.

Facebook has indicated it intends to establish a worldwide independent governance body, based in Geneva, aiming to ultimately include 100 members by the scheduled launch time in 2020.

"From the government's perspective, we pay more attention to its influence on financial services, monetary policy and financial stability," Wang said.

He said that if Libra can be successfully launched, it may challenge the existing United States dollar-centered international monetary system, a possibility that must be closely monitored.

Huang Yiping, director of the Digital Finance Research Center of Peking University and a former member of the PBOC monetary committee, said the birth of Libra serves as an "alert" for China's digital currency innovators and regulators.

Any role for Libra beyond the payment function could bring changes to the rules of the global monetary system, and regulators should pay close attention to that possibility, Huang said.

The world's economies have yet to decide how to cope with the challenge by the Libra system, though accelerating the launch of their own digital currencies could be a counterbalance, according to Wang of the PBOC.

Wang also said that the central bank digital currency could be a new monetary policy tool, or an investment asset that carries an interest rate to satisfy investors' demand for value. Wang's discussion of the matter indicates it might also be used as a reference for bank interest rates on deposits.

"A digital currency issued by the central bank can improve the efficiency of monetary policy, and help to optimize the payment system," he said.

Some experts suggested launching a Chinese version of Libra, using Facebook as a reference, to compete in the global cryptocurrency race, and they said the Chinese digital currency also could be used domestically. But "everything is just under discussion", the PBOC's Wang told China Daily.

Li Zhenhua, executive director of the Ant Financial Research Institute, part of the Alibaba Group, said the market is worried about whether Libra will develop into a type of credit money. If that were to happen, it would challenge central banks' monetary sovereignty. Li said. Credit money is a future monetary claim, like an IOU.

"We will improve international coordination and cooperation in digital finance, and to enhance global communication on Libra and CBDC. China will push forward the establishment of unified standards and regulatory rules," said Wang.

The PBOC was one of the earliest central banks to start digital currency innovation. The program began in 2014, led by former governor Zhou Xiaochuan.

China's monetary authority identifies the nature of digital currency as "a substitute for cash", rather than a speculative instrument, according to the central bank.

Research work is led by the PBOC's Currency Gold and Silver Bureau. The department, primarily in charge of traditional currency management, is shifting to digital currency innovation because the use of cash is declining in China amid booming digital payment systems.

Peking University launched a new program on Monday called Open Research Initiative of Digital Finance to provide a research platform for innovation in digital financial products.

First aircrafts landed on new airport www.montsame.mn

Ulaanbaatar /MONTSAME/. Aircrafts of national airlines including MIAT Mongolian Airlines, Hunnu Air and Eznis Airways were landed on the New Ulaanbaatar International Airport at Khushig Valley on July 5 during the ceremony to launch a new airport management project.