Foreign Minister holds talks with his Chinese counterpart www.montsame.mn

Ulaanbaatar /MONTSAME/ Minister of Foreign Affairs D.Tsogtbaatar, who is on an official visit to the People’s Republic of China, held official negotiations with the State Council and Foreign Minister of China Wang Yi on April 2.

How countries are getting tougher with mining companies www.mining.com

A mix of political populism, higher commodity prices and the expectation electrification will spur demand for some raw materials has led resource-holding governments to change the rules for miners operating in their countries.

In most cases, governments are seeking to increase their share of profits, rather than all-out resource nationalism, although Mongolia has been trying to nationalise a stake in a copper mine.

The toughness is not universal.

Some governments see the hardened stance of other countries as a chance to lure investment. Ethiopia is rolling out pro-business reforms after Prime Minister Abiy Ahmed swept into office last year.

What's different this time?
Typically, resource holders have increased the demands they make of international companies when commodity prices rise.

Commodity prices have been increasing since the start of this year, but are relatively low and were still recovering from the crash of 2015-16 when the latest wave of resource nationalism began.

In Africa, Tanzania, regarded as an extreme example, turned on the miners after President John Magufuli swept to power in late 2015, pledging to secure a bigger share of the country's natural resource wealth.

"China's growing investment in mining projects has helped spur resource nationalism by giving many resource-rich countries an alternative to Western investment"
Industry insiders and lawyers say political populism and social media are impelling calls for a greater share, beginning with the local communities around mines.

They also say investment by China, and to a lesser extent Russia, increases the leverage of resource-holding governments.

"China's growing investment in mining projects has helped spur resource nationalism by giving many resource-rich countries an alternative to Western investment," Henry Hall, associate director at Critical Resource advisory firm, said.

Which countries dominate?
In Africa, Democratic Republic of Congo, Tanzania and Zambia have been seeking more of the profits from copper, cobalt and gold.

Democratic Republic of Congo in June last year signed off regulations to implement its new mining code that raised royalties and taxes.

Major mining companies, such as Glencore and Barrick, have opposed the code and are seeking negotiations and ways to increase pressure.

Zambia raised royalties from January and introduced a 10% tax when the price of copper exceeds $7,500 per tonne.

Zambia also plans to replace value-added tax with a non-refundable sales tax to help reduce public debt, but has delayed the move until July, pending further consultation.

What is the impact on investment?
Mining executives say a first response is to withdraw exploration funding.

The biggest listed miners say they are focusing their exploration in countries with low political risk.

Democratic Republic of Congo's reserves, however, are temptingly rich and include copper and cobalt, needed for an expected upturn in demand for battery vehicles, which gives the government bargaining power.

Figures from S&P Global Market Intelligence show falls in exploration spending in Tanzania, Zambia and Mongolia last year, while investment in Democratic Republic of Congo rose as Ivanhoe Mines and its Chinese partner Zijin Mining have invested in developing a copper mine.

Globally, exploration spending climbed, but is far below the peaks of 2012 at the height of the commodity boom.

Spending was highest last year in countries considered mining-friendly, such as the United States and Ecuador, which is welcoming Western explorers into its copper prospects as it seeks to diversify from oil.

What can companies do to protect themselves?
Companies have threatened to leave when the terms of engagement change to their detriment, but resource-holding governments know firms are reluctant to do that when they have invested in building a mine.

Lawyers and mining executives say companies have become more careful about where they invest in the first instance.

As sustainability has shot to the forefront following the Vale dam disaster in Brazil in January, the need to get all sections of society on side has increased.

"One of the most important aspects to have a good understanding of is the community landscape – without the social licence, mines will either not start up, or will be disrupted by community activism," — Hogan Lovells
"One of the most important aspects to have a good understanding of is the community landscape – without the social licence, mines will either not start up, or will be disrupted by community activism," Warren Beech, a partner at law firm Hogan Lovells, said.

While the overall mood is cautious, China and Russia have a higher risk appetite, potentially providing negotiating power for resource-holding governments.

"The risk appetite varies, with China and Russia seemingly having a greater appetite for risk, probably to support their strategic intent to control the life cycle … and to develop geopolitical influence," he said.

As a last resort, international miners can threaten arbitration, which lawyers say is cheaper than political-risk insurance.

Dispute settlement lawyer Samuel Pape of Latham and Watkins said miners can seek legal protection by for instance investing through a company incorporated in a country that has a bilateral investment treaty with the resource-holding nation.

"Many disputes can be resolved through negotiations without the need to commence proceedings under an investment treaty, though the potential for such an arbitration can provide important leverage," he said.

(By Barbara Lewis; editing by Dale Hudson)

President proposes agricultural projects to increase income of households www.montsame.mn

Ulaanbaatar/MONTSAME/. On April 4, President of Mongolia Khaltmaagiin Battulga received representatives of the World Bank, including Martin Raiser, Country Director for China and Mongolia and Director for Korea, and Andrei Mikhnev, Country Manager for Mongolia.

Mr. Raiser spoke about the World Bank’s mission to end extreme poverty in its member countries and its efforts and certain accomplishments in Mongolia in reducing poverty and expressed his views on some challenges that Mongolia still faces today.

President Battulga brought to attention the rate of poverty in Mongolia which is as high as 30 percent /29.6 percent of population or 907.5 thousand/ and exchanged views with Mr. Raiser on the necessity of economic diversification for the reduction of poverty.

For instance, President Battulga put forward agricultural projects and programs on processing raw materials such as hide and manufacturing final products, saying that the successful implementation of these projects would result in solid increase of income for 170 thousand households that are making a living in this sector.

At the end of the meeting, Mr. Raiser expressed his appreciation for the specific and practical proposals made by President Battulga and thanked the latter for the audience, while stressing the importance of the meeting in the integration of strategy proposals with Mongolia.
 
Source: president.mn

President meets representatives of the Asian Development Bank www.montsame.mn

Ulaanbaatar/MONTSAME/. On April 4, President of Mongolia Khaltmaagiin Battulga received representatives of the Asian Development Bank (ADB), including Amy Leung, Director General of its East Asia Department, and Yolanda Fernandez Lommen, Country Director for Mongolia.

At the beginning of the meeting, President Battulga spoke about the ADB’s leading position among international financial institutions that are operating in Mongolia in terms of its activity, number of funded projects and programs and amount of funds, while expressing his gratitude to the bank for its invaluable contribution to the development of Mongolia.

During the meeting, President Battulga discussed infrastructure projects, especially on railway, energy, construction and urban development and exchanged views with the ADB representatives.

For her part, Ms. Leung expressed appreciation for Mongolia’s initiative and active engagement towards strengthening the Northeast Asia Power System Interconnection, emphasizing that it was a visionary policy for Mongolia’s development.

Furthermore, Ms. Leung expressed the ADB’s support to the Northeast Asia Power System Interconnection strategy and expressed gratitude for the opportunity to discuss many projects and programs in detail.

Source: president.mn

Three Mongolian included in Forbes 30 Under 30 Asia list www.news.mn

Forbes Asia has been scouting the Asia-Pacific region in search for 300 outstanding individuals to highlight in the annual Forbes 30 Under 30 Asia list.

Carlos Ghosn arrested again, vows he 'will not be broken' www.cnn.com

Minister D.Tsogtbaatar meets with Commerce Minister of China www.montsame.mn

Beijing /MONTSAME/ Within the framework of his official visit to the People’s Republic of China (PRC), Minister of Foreign Affairs D.Tsogtbaatar met with Commerce Minister of China Zhong Shan, exchanging views on broad range of issues regarding development of bilateral trade and economic cooperation.

Salary and pension to be increased in 2020 www.montsame.mn

Here’s how democracy is eroding in Mongolia www.washingtonpost.com

Mongolia's growth to ease slightly, but will remain solid: ADB www.xinhuanet.com

ULAN BATOR, April 3 (Xinhua) -- Mongolia's economic growth is expected to ease slightly in 2019 and 2020, but will continue to maintain solid growth momentum thanks to strong domestic demand, stable services, manufacturing and recovery of the agriculture sector, the Asian Development Bank (ADB) forecast on Wednesday.