China And Russia Eye Mongolian Gas Route www.rfa.org

Warming relations have renewed prospects for delivering Russian energy supplies through Mongolia to China as rising demand competes with historical mistrust.

Hopes for transit through Mongolia appeared to brighten last month following a meeting of the three countries' presidents at Russia's Eastern Economic Forum in Vladivostok.

Mongolian President Khaltmaagin Battulga took the occasion to repeat his appeal for new oil and gas pipeline routes through his country, eliciting a positive response.

"This is all in the works," said Russian President Vladimir Putin on Sept. 12, Interfax reported.

Chinese President Xi Jinping's reaction to the pipeline plan was not reported, but in a speech at the forum, Xi called for regional cross-border links.

"We need to make connectivity a priority. We need transnational infrastructure," Xi said, according to Platts Commodity News.

"Based on the principles of mutual trust, ... China is willing to work with Mongolia to seize opportunities, remove interferences and solidly carry out exchanges," Xi said earlier in June.

In a further sign of improving relations, contingents from both China and Mongolia joined in Russia's massive Vostok-18 military exercises in Siberia last month.

In June, the three countries agreed to establish a "China- Russia-Mongolia economic corridor." Last month, Battulga also hailed China's cooperation on a high-voltage transmission project as the start of a Northeast Asian electricity grid.

According to a recent report by Mongolia's English-language UB Post, a cooperation agreement has been signed for a trans-Mongolian gas pipeline project by China Railway 25th Bureau Group Co., Ltd. and a Chinese investment company "that could not be identified in English."

No further details on the agreement have been available.

Support for Mongolian energy transit has been building since the first trilateral meeting in 2014 with then-President Tsakhiagiin Elbegdorj at the Shanghai Cooperation Organization (SCO) summit in Dushanbe, Tajikistan.

That meeting followed two weeks after Xi's icebreaking visit to Ulan Bator, marking the first trip by a Chinese president to neighboring Mongolia in 11 years.

Four years of bridge building have so far produced a series of optimistic statements on the pipeline possibilities but, so far, few results.

"We generally support the idea," Putin said in June during the last trilateral meeting. "But of course, as always in such cases, you need to thoroughly work out the feasibility," he said at the last SCO summit in China's port city of Qingdao.

Complicating factors

Behind each of the positive statements are a series of complicating factors and considerations that have slowed developments down.

From Russia's standpoint, building a gas pipeline across the Mongolian steppe is likely to be faster and easier than completing its planned 2,800-kilometer (1,740-mile) western route through a narrow corridor to Xinjiang over the remote Ukok Plateau of the Altai Mountains.

Among other problems, the Altai nature reserve area has been designated as a world heritage site by UNESCO, the United Nations Educational, Scientific and Cultural Organization.

The proposed mountain route through the Kanas Pass is said to be at an elevation of 2,650 meters (8,690 feet).

Despite the drawbacks, Russia's monopoly Gazprom has pushed the Altai project for over a decade as its preferred option to supply China, even as it rushes to complete its 4,000-kilometer (2,485-mile) Power of Siberia eastern route.

The giant pipeline is scheduled to open in December 2019.

The Power of Siberia line is designed to deliver 38 billion cubic meters (1.3 trillion cubic feet) of gas per year while the Altai project would supply 30 billion cubic meters annually.

A Mongolia route could break the Altai impasse, avoiding both the mountains and restive Xinjiang, which already has a surplus of resources and pipelines.

"I don't think the Chinese are particularly interested in Altai, in spite of the change in rhetoric," said Edward Chow, senior fellow for energy and national security at the Center for Strategic and International Studies in Washington.

Chow said the project would "get gas to the wrong place" in China, far from its biggest consuming markets in the east.

"From an energy supply and logistics point of view, it strikes me that Mongolia makes more sense," he said.

But Russia's reports on a Mongolian option stress that all of its gas routes "are direct pipelines from Russia to China without transit states."

The argument makes Putin's comment that something is "in the works" all the more remarkable, suggesting that Russia's policy on the Altai route could be subject to change.

When asked about the Altai plan at the Vladivostok meeting, Russian Energy Minister Alexander Novak told Reuters that President Xi had set the task of "concluding the agreement of a contract on gas supplies ... in the nearest future."

"All the technical conditions have been agreed," Novak said, repeating a statement that Russian officials have been making for years.

Officials said they had been tasked with signing a contract for gas supplies from the western route by the end of this year, but the completion of the Altai pipeline was originally set for 2015.

From China's standpoint, the openings to Mongolia have been aimed at steadily building trust with investment in projects such as renovating Ulan Bator's shantytown districts.

The unusual aid for a social welfare project in a neighboring country may be needed to overcome historic resentment in Mongolia, which gained independence from China in 1911. Past reports suggest that China's commercial mining investments in Mongolia have stirred public anger.

"From the steppe to the streets of the capital, Ulan Bator, Mongolians evince a distrust of Chinese," the Associated Press reported in 2012. "Almost everyone says China is stealing Mongolia's coal."

Leaning towards Russia

Although China is Mongolia's top trading partner, the country has leaned heavily toward Russia since Soviet times.

In the past, mistrust between Mongolia and China has worked both ways with regard to energy transit.

Before Russia opened a direct branch to China for oil exports from its East Siberia-Pacific Ocean (ESPO) pipeline in 2011, it tried to supply China through two Trans-Siberian Railway routes.

Most of the oil traffic was routed through the more distant Zabaikalsk border crossing with China to the east, avoiding Mongolia, while smaller volumes were shipped across Mongolia through the Naushki crossing in southern Siberia.

After a series of complaints over high tariff costs on both routes, the Mongolia traffic was halted entirely in 2007 amid reports that China considered it less secure. The border between the two countries is 4,700 kilometers (2,920 miles) long.

A decade later, Russian energy supplies and routes to China have increased dramatically along with Chinese demand, particularly for gas.

China's gas consumption rose 15 percent last year, according to the National Bureau of Statistics (NBS), and increased by 17.5 percent in the first half of 2018 as the government pursued its push for cleaner-burning fuels.

The question is whether conditions have changed enough for China to rely on Mongolian transit.

In an interview, Chow said the statements at the latest meeting of the three presidents should not necessarily be taken as signs of progress on either the Altai or Mongolian supply routes.

"My instinct is that every time Xi and Putin meet, they have to announce something, and gas seems to be one of the favorite topics," he said. "They can't meet and not have something to announce."

Moscow has continued to press its case for the Altai project because it would rely on its well-developed resource base in Western Siberia, which also serves Europe, spurring competition for Russian gas.

But Chow said that China wants nothing to do with the Russian strategy.

"It does nothing for the Chinese," he said.

(An analysis by Michael Lelyveld)

Mongolia to establish sovereign wealth fund www.news.mn

Mongolia will establish a sovereign wealth fund next year as part of its strategy to manage growing revenues from its resources.

President Kh.Battulga addresses at the opening of Autumn Session of the Parliament www.montsame.mn

Ulaanbaatar/MONTSAME/ President Khaltmaagiin Battulga addressed at the opening of the Autumn Session of the Parliament on October 1.

In his speech, the President asserted that Mongolia is suffering from a systematic crisis that is the reason and root of all present problems and that the political and governance system, formed in 1992, has fundamentally lost its ability to resolve and regulate the social challenges that Mongolia is currently facing.

He stressed, “The problem lies within the system itself, rather than due to a single individual or political party. Regardless of how good the person or the political party is, they become victims of the irresponsible, poorly coordinated, and unaccountable system, and an adverse condition is set where problems keep piling up and stress levels in the society keep rising. I have decided to share with you, the Members of the Parliament, constituents, and the people of Mongolia, proposal and solutions to overcome this systemic crisis, which are the result of my careful consideration and talks with various politicians and political science researchers after being elected as the President.”

He stated, “Unless the system is changed, nothing will change. To use an analogy, when the foundation and pillars of the house that we built together have developed faults and face a risk of collapsing, we have been making superficial changes instead of tearing it down and constructing new foundations and firm pillars. But the crisis has come to a point where it cannot be dodged and evaded. The house is already on the verge of collapsing. …The key is to build a stable system that can organize, arrange, and facilitate a government that is capable of resolving the problems that have been accumulated and fulfills its duty to lead and manage the society well so that the people would be employed, healthy, educated, satisfied with their lives, and happy.”

“The Government of Mongolia is facing a full-front accountability crisis. It has been defined that “accountability is the ability of decision-makers to respond and to solve issues.” Responsibility is the ability of the government to respond and find solutions when the people point at the “things that are not working.” But it is ever clearer that the institutions that must be accountable and look after the social system, including the Parliament and the Cabinet, are in an accountability crisis themselves. The poor state of the economy and widespread poverty and income inequality are indelible signs of bad governance. All social classes, political groups, and researchers have reached a common understanding that the governance system has to undergo a drastic change that is suited for the developmental needs and social requirements of Mongolia. This can be accomplished only through the Constitution.”

“The democratic new constitution served as an important mechanism in facilitating the transition from one social system to another. But now, we need to amend the Constitution in accordance with the developmental needs and social requirements. Now is the time to thank the current Constitution and those who drafted it and move on to the discussion of the next version of the Constitution.”

For the interest of the country’s future and building a prosperous and power Mongolia, the President urged the parliament members to make a systematic reform through collective judgment and rational discussion with the political parties, academics and researchers and their constituents.

“First of all, with active discussion and involvement of all people, let us adopt a new Constitution, which reflects our present and future goals and needs of society. This is the most important issue that we have to resolve,” the President appealed and said, “Our new Constitution shall:

-Dissolve monopoly power of a few group of people that are controlling politics, economy, and wealth distribution of Mongolia, and reform into a fair system of optimal allocation of power of governance that is democratic, transparent, balanced, mutually accountable, and meets the demands and expectations of the public.

-Establish a system where the exploitation and distribution of natural and social resources are transparent and fair, overseen by the public, and tied with accountability.

-Prioritize the national interest of Mongolia above all, completely cease entering international treaties and agreements that contradict our national interest, and include provisions for accountability.

-Reform judicial and law enforcement organizations which should serve the citizens and not those in power, comply with the law, have a clear responsibility, and enjoy proper judicial power.

-Revise the Law on Political Parties, define the boundaries between the involvement of the government and political parties in economic and social life, and separate political parties’ policies and politicization from government

-Include an accountability mechanism that specifies the means to truly implement and not just declare the government’s duty to ensure the conditions for the Mongolian people to be the true rulers of the society, to live in healthy and safe environment, to acquire education, and to be employed.

A reform will be more vibrant and practical if it is based on mutual understanding and support of the government and people."

The President also called upon the politicians and the people to join all together in this act, a responsible and inevitable act to build a rational, well-arranged, transparent, and beneficial to the people political system. “The winners of the reform will be the people, and the losers will be the oligarchs who enriched themselves with public funds.”

Putting an end to the power-seeking and pedestrian arguments, and instantly starting the bold systemic reform shall fully comply with the core interest of Mongolia and the people of Mongolia. As the official responsible for ensuring the national unity under the Constitution, I, as the President, express my commitment to providing full support to the political reform to establish a fair government. The reason is, in the long-run, unity of the people of Mongolia will be ensured by fair government, fully-enforced law, and the prosperous life of our people. Mongolians can make a difference together. We only need to unite and cooperate.”

Concluding his speech, the President said, “Dear Members, prepare for the drastic reform, amend the Constitution in line with the interests of people, and let them discuss and support you. Failure to do it will be considered as evasion from a historic responsibility. If the narrow interests of political parties and groups interfere with the systemic reform, it will be a sin, a crime equivalent to betrayal of the national interest. The time is forcing a drastic reform on us. Recognize this as a historic responsibility in front of our people.”

source: president.mn

China won’t renew coal, steel output restrictions amid trade war www.mining.com

China won’t renew harsh restrictions on coal and steel production capacity originally targeted at cut air pollution, as the country’s trade war with the US has begun to affect growth.

Ivanhoe Mines soars on third major copper discovery in Congo www.mining.com

Shares in Canadian miner Ivanhoe Mines (TSX:IVN) jumped Monday after it announced a significant new discovery of high-grade copper on its 100%-owned Western Foreland asset, west of the Kamoa-Kakula mining licence in the Democratic Republic of Congo (DRC).

Petro Matad completes site construction for new Mongolia well www.stockmarketwire.com

Mongolian-focused explorer Petro Matad said site construction for its Wild Horse 1 well was completed on Monday.

Mitsui and partners to invest $1.5bn in Australian iron ore mines www.asia.nikkei.com

TOKYO -- Japanese trading house Mitsui & Co. on Monday announced plans to develop new iron ore mines in Western Australia along with joint-venture partners Nippon Steel & Sumitomo Metal and Rio Tinto, with production slated to start in 2021.

Elon Musk agrees to pay $20 million and quit as Tesla chairman in deal with SEC www.cnn.com

Elon Musk agreed Saturday to step down as chairman of Tesla and pay a $20 million fine in a deal to settle charges brought this week by the Securities and Exchange Commission.
Under the settlement, which requires court approval, Musk will be allowed to stay as CEO but must leave his role as chairman of the board within 45 days. He cannot seek reelection for three years, according to court filings.

He accepted the deal with the SEC "without admitting or denying the allegations of the complaint," according to a court document.

Separately, Tesla agreed Saturday to pay $20 million to settle claims it failed to adequately police Musk's tweet.

"The $40 million in penalties will be distributed to harmed investors under a court-approved process," the SEC said in a press release.

The company also agreed to appoint two new independent directors to its board and establish a board committee to oversee Musk's communications.

Tesla declined to comment. A spokesperson confirmed Musk will be permitted to remain a member of the board.

The announcement from the SEC comes two days after the agency filed a lawsuit against Musk, claiming he misled investors. The suit centers on tweets Musk sent on August 7 in which he said he had secured funding to take Tesla private at $420 a share, causing the company's stock to soar. He had not secured the funding, the SEC said.

The lawsuit sought to ban Musk from serving as an officer or director of any publicly traded company.

Musk called the SEC's suit "unjustified."

"I have always taken action in the best interests of truth, transparency and investors," he said. "Integrity is the most important value in my life and the facts will show I never compromised this in any way."

CNBC, citing unnamed sources, reported that the agency filed the suit on Thursday after Musk refused an earlier settlement offer. Under that deal, Musk would have had to pay a "nominal fine" and leave his role as chairman for two years. He chose not to accept the terms because "because he felt that by settling he would not be truthful to himself," according to the outlet.

A representative for Musk did not immediately reply to CNN's request for comment Saturday.

Jay Dubow, a partner at Pepper Hamilton and a veteran of the SEC's enforcement division, said it was "unusual" that the SEC agreed to let Musk stay on as chief executive but exit the chairman role.

It's surprising considering "the conduct at issue, if [the SEC] really thought it was egregious," Dubow said. "The CEO is certainly more involved than the chairman in day-to-day operations."

He suggested the SEC may have determined that removing Musk as CEO would cause more harm to Tesla's share price, and thus harm investors.

Barclays analyst Brian Johnson estimated in a recent note that Tesla's stock has a $130 "Musk premium," which could disappear if he leaves.

Still unclear is whether or not the Department of Justice will file criminal charges against Musk.

Tesla confirmed earlier this month that the DOJ was investigating whether Musk's comments about taking his company private constituted criminal activity.

Dubow, the former SEC official, said he suspects nothing will come of it.

"My guess is that it's still possible the DOJ will pursue something, but...it's more likely than not that the DOJ chooses not to pursue this," he said.

The settlement has likely assuaged the SEC, mitigating the DOJ's incentive to act.

Diplomatic notes exchanged on mutual visa exemption with Chile www.montsame.mn

Ulaanbaatar /MONTSAME/ Taking part in the 73rd Regular Session of the United Nations General Assembly in New York, Foreign Minister D.Tsogtbaatar met with Chilean Foreign Minister Roberto Ampuero.

Here are the best performing coking coal stocks over the past six months www.stockhead.com.au

Prices for both coking and thermal coal have both more than doubled since the market bottomed out in 2016.

While demand for thermal coal — which is used for electricity generation – is expected to decrease over the medium term, the outlook is stronger for coking (or metallurgical) coal — which is needed to make steel.

That’s because there is no substitute for metallurgical coal (sometimes shortened to “met”coal) in the production of steel.

About 800kg of metallurgical coal is needed to produce one tonne of steel – or about 200 tonnes for every wind turbine — according to the Office of the Chief Economist.

And with the pickup in global growth supporting steel production – and hence demand for metallurgical coal – prices remain high, increasing from $151 / tonne at the start of August to $178/ tonne on September 24.

China’s environmental and safety reforms have also seen it close local mines, resulting in increased demand for imported coal.

In the medium term, India is expected to become the world largest importer of metallurgical coal by 2020 on the back of a rapidly expanding steel sector.

Mongolia-focused Aspire Mining (ASX:AKM) has been the best performer over the past six months — rising 242 per cent to 2.4c.

Aspire is developing a huge metallurgical coal project known as Ovoot in north-western Mongolia — but first it needs a railway link between the project and Mongolia’s existing rail system.

The 250 million tonne Ovoot project would potentially produce up to 10 million tonnes a year of premium coking coal over a 21-year mine life.

Aspire shares jumped in June on news the Russian and Mongolian governments were planning to upgrade the Russian – Mongolian Ulaanbaatar Railway and lower tariffs to boost trade flow between the countries.

In the meantime, Aspire has kicked off studies into a smaller road-based operation, which will give the miner early cash flow while waiting for rail access.

In July, the share price of Jameson Resources (ASX:JAL) shot up when the company announced it was accelerating permitting and final feasibility studies at its flagship Crown Mountain project in the Canada’s western British Columbia province.

Over the past six months Jameson has enjoyed a 75 per cent share price increase to 17.5c.

The low cost, high quality Crown Mountain project will produce 1.7 million tonnes a year over 16-year mine life – and will take just over 2 years to payback the start-up costs of $US281m.

The share price of fellow Canada-based explorer Pacific American Coal (ASX:PAK), has increased more than 42 per cent in the last six months – and 100 per cent over the last 12 months – to 5.4c.

Pacific American is currently boosting resources its high quality 257 million tonne Elko coking coal project, located in an established coal mining region in British Columbia.

After the exploration program is completed this quarter, the company will look to release an updated Resource Statement in early 2019.

In 2015, when junior Stanmore Coal (AX:SMR) paid a nominal $1 for Vale’s closed Isaac Plains mine in Queensland its share price languished at 8c.

In the last year, the Stanmore share price has jumped 127 per cent – 22 per cent in the last six months – to recent highs of 87c.

In the last financial year the miner reported record revenues of $208.1 million — up 51 per cent from 2017 – and a gross profit of $52.3 million.

At the end of the 2018 financial year, it was debt free, paying dividends, and “well on-track for a 50 per cent increase in production over the next year”, the company said.