Chinese delegation informs Mongolians on Tibet's development www.xinhuanet.com

ULAN BATOR, Sept. 17 (Xinhua) -- A visiting Tibetan cultural exchange delegation dispatched by China's State Council Information Office has reported on the latest economic and social development of China's Tibet Autonomous Region and China's policies to protect traditional Tibetan culture.

China reports new African swine fever outbreak in Inner Mongolia www.reuters.com

BEIJING (Reuters) - A new outbreak of African swine fever occurred on a farm in northern China’s Inner Mongolia, the agriculture ministry said on Monday, the second in the region, as the highly contagious disease continues to spread rapidly across the world’s top producer of pigs.

More Mongolians visiting South Korea for medical services www.news.mn

With more than 9,000 Mongolians having visited Seoul as “medical tourists” last year, the South Korean capital city is offering a promotional tour for a group of Mongolians to show what the city has to offer in the way of tourism and health care.

China Railway to build infrastructure for Russia’s Far East www.rt.com

Chinese state-run corporation China Railway says Russia’s Far Eastern Federal District is currently one of the priority markets for expanding the company’s core operations as part of the Belt and Road Initiative.
The region requires a developing net of railroads and motorways, as well as new bridges and other transport infrastructure, according to the company’s CEO Zhang Zongyan, who says that China is ready to participate in the projects to give a boost to its global shipping routes strategy.

Most profitable mining companies in 2017 www.mining.com

It is hardly a surprise that existing and future shareholders in the mining industry are predominantly concerned about returns on their investments. Regardless of whether investors are seeking a capital appreciation of their stock portfolio or plan to grow their money through dividend payments, or a combination of both, they typically make money when a company does.

Mining companies that provide a competitive and sustainable rate of return to their shareholders are highly sought-after targets for investors.

Mining Intelligence profit margin miners ranked
A company’s financial indicators, such as revenue and expenses, cannot always tell a reliable and comprehensive story about its financial performance. For instance, growing revenue, at a first glance, is usually considered to be a positive sign of a company’s financial health, but expenditures that outpace improving revenues can smudge the overall performance picture and will surely disappoint shareholders.

When it comes to the evaluation of a company’s financial health, net profit margin is one of the most important and powerful—yet simple—indicators to be taken into an arsenal of any group of investors in the mining and metals industry.

Net profit margin is equal to net income (or profit) divided by total revenue and represents how much profit each dollar of revenue generates.

Intuitively, net profit margin can be interpreted as an indicator of whether a company’s profitability is secure or not. Indeed, let’s consider a case where a company reported a USD$100 billion dollar in revenue but just a 3% net profit margin. While on paper this looks like the company is doing well, the low net profit margin means that this company is in a very vulnerable position; even an insignificant downward move in commodity prices, slightly lower ore grades, unfavourable exchange rates, or minor operational disruptions could push the previous year’s net profits into a net loss the following year. A high net profit margin provides a company with a solid buffer against even major negative events.

The following is the list of active mining companies compiled from data at Mining Intelligence that ranks by miners' net profit margins yielded in 2017 and measured in percentages. Companies that generate a majority of their revenues outside of mining/mineral processing operations have been excluded from this ranking. The research focus was on net income earned from ongoing operating activities and not from one-time sources of “accounting” income such as debt restructuring and impairment reversals. The threshold net income level for companies considered for this analysis was set at USD$400 million.

Top 10 mining companies ranked by net profit margins in 2017 (%)
Rank Company Sector Net Profit, 2017, USD million 2017 Net Profit Margin % 2016 Net Profit Margin %
1 Polyus Precious Metals 1,241 46 58
2 Uralkali Potash 875 32 63
3 Fresnillo Precious Metals 561 27 22
4 KAZ Minerals Base Metals 447 27 23
5 Fortescue Iron Ore 2,004 25 14
6 Lundin Base Metals 502 24 8
7 Norilsk Nickel Diversified 2,129 23 31
8 Rio Tinto Diversified 8,762 22 14
9 Teck Resources Diversified 1,859 21 11
10 Goldcorp Precious Metals 658 19 5
Data from Mining Intelligence

As can be seen, the top companies generating the highest net profit margins are from across the mining spectrum; from major gold producers such as Polyus and Goldcorp to potash behemoth Uralkali, and big diversified companies such as Rio Tinto and Teck Resources.

Common themes that contributed towards high net profit margins for these companies were expansions of mining operations, improved commodity market conditions, higher ore grades and higher metal recoveries, as well as successful implementation of portfolio optimization and cost reduction strategies.

Major contributors to decreased margins were losses on unfavourable currency exchange rates; production disruptions due to environmental, geopolitical and technical risks and challenges; lower ore grades; and negative price dynamics for a number of commodities.

What all the high net profit margin companies have in common is a decent margin of safety. This will help them weather even a significant storm on the mining markets and deliver competitive and secure shareholder returns in situations where other companies will struggle to survive.

Ministry of Energy plans to take control of power plants following Saturday blackout www.zgm.mn

Minister of Energy Davaasuren Tserenpil held a press conference on the citywide blackout affected Ulaanbaatar last Saturday. Due to the accident, two generators were damaged and the case is currently under investigation. Thermal Power Plant IV was also damaged by an accident last Spring. The Minister informed that an official letter has been sent to the Government Agency for Policy Coordination on State Property (PCSP) to demand accountability from the Administering Engineer responsible for the incident; however, PCSP did not give any response and a major accident occurred last Saturday. Therefore, Mr. Davaasuren noted the significance of taking power stations under the Ministry’s control to entail accountability and provide independent energy. He added, “Due to potential voltage fluctuations, I demanded to limit solar and wind energy, as well as Baganuur power station to generate 150MW power. Solar and wind powers are highly inefficient as the electrical voltage will fall due to natural circumstances. If Baganuur plant installs 350MW power generator, a malfunction similar to last Saturday will also affect the entire power system. Therefore, we must intensify the implementation of a hydropower plant.

Irresponsibility at workplace results in citywide blackout www.zgm.mn

The entire city of Ulaanbaatar experienced a major blackout last Saturday morning. Some areas were affected by power outage for over 13 hours followed by a significant aftermath, including a malfunction in the wastewater plant pump, resulting in wastewater overflowing onto electrical system. Minister of Energy Davaasuren Tserenpil explained, “Thermal Power Plant (TPP) IV went into a full shutdown at 9:54 AM, causing malfunctions at other plants. There were no accidents or damage. The investigating is currently being conducted to locate the source of the outage. I was informed in advance that it was due to negligence in the work and irresponsibility of technical administrators.”

Salesforce billionaire Marc Benioff to buy Time magazine www.bbc.com

Time magazine is changing hands once again, nearly eight months after it was sold to US media group Meredith Corporation.

Investors should focus on battery materials, not EVs – Blackstone Resources CEO www.mining.com

Investors keen to tap into the electrification of the world’s transport networks should look upstream to the battery metals market instead of buying shares in automakers, according to Ulrich Ernst, the chief executive officer of Blackstone Resources.

The electric vehicle (EV) revolution will first emerge as a mixture of differing technologies, from hybrids to all-electric cars powered by an ever-evolving battery-metal-mix of cathodes, Ernst said.

“Battery-metals don’t mind what path the EV revolution takes. They don’t mind which automaker wins and which one loses. Even the type of technology used is of little relevance,” he said.

“Aggregate demand for battery-metals will rise at an exponential rate. And the days of the traditional combustion engine are limited,” he added.

Citing data from the Boston Consulting Group, Ernst said that the proportion of vehicles produced that run on gasoline and diesel will fall to just 52% by 2030from 95% globally in 2017.

“What’s astonishing is that we are now in 2018, and 2030 is only 12 years away,” he added.“What’s astonishing is that we are now in 2018, and 2030 is only 12 years away.”

The mix of battery metals used in battery cathodes may well change drastically in the years ahead, along with the battery cathodes themselves, according to Ernst.

“Technological progress will drive this shift to make owning a decent electric car like the Tesla more affordable. The exact mix of battery metals and the technology used will change to make all-electric cars more efficient, more powerful, drive longer and speed-up charging times while on the road,” he said.

“The beauty of investing in battery metals is that you don’t have to wait for this point in time to arrive. If you diversify your portfolio of batterymetal interests, then the final mix doesn’t matter whether it’s North American cobalt, rare earths from Norway, manganese from Colombia or molybdenum from Mongolia,” he noted.

“So forget about investing in EVs. Battery materials matter more,” he added.“Battery materials matter more,”

Price moves
Ernst is unfazed by the recent fall back in the cobalt and lithium prices, he said.

“The easing of supply-side tensions in the Democratic Republic of Congo has seen cobalt prices fall 15% and lithium prices fall 20% in the last six months. I think it’s good to see some of this risk premium come out of the battery metal market because it’s the long-term demand-side forces, such as the electric car, which will drive this market forward,” he said.

“Batteries might be falling in price due to efficiency gains made in battery technology. However, battery metals are also rising as a percentage-ofcost of these batteries. And, as the number of EVs dramatically increases, demand-side forces are likely to overwhelm any short-term supply-side relief,” he added.

Metal Bulletin's assessments of low and high-grade cobalt prices, a key raw material used in the production of EV batteries, peaked at 10-year highs in April but slid lower for several months after May. Meanwhile cheap selling from China met weak summer demand elsewhere.

Yet spot prices for high-grade cobalt rose for the first time in 19 weeks on Friday August 31, with sellers successfully hiking their offers in response to an uptick in consumer demand, alongside a more positive backdrop from China.

The high-grade cobalt price rose to $32.90-34 per lb, in-warehouse, on Friday August 31 from $32.55-33.55 per lb in mid-week.

The low-grade cobalt price was unchanged at $33-33.60 per lb inwarehouse on August 31.

Lithium prices meanwhile soared to an average of $21,760 per tonne in 2017 from around $9,500 per tonne in the second half of 2015, based on Metal Bulletin's assessment of spot prices ex-works China. Yet prices have since eased amid an anticipated supply surplus while projects ramp-up and new producers enter the market.

Metal Bulletin's battery-grade lithium carbonate index was calculated at 85,298 yuan ($12,492) per tonne, ex-works China on Thursday August 30, down from 159,250 yuan per tonne at the start of the year.

Switzerland-based Blackstone Resources is an independent mining and exploration company with strategic stakes in battery materials projects in Canada, Peru, Columbia, Norway and Mongolia.

Russia, Mongolia have great potentials for expanding bilateral cooperation - official www.ecns.cn

Russia and Mongolia have great potential for expanding bilateral cooperation in many areas, M.V.Vasiliev, trade representative of Russia to Mongolia, told Xinhua in an exclusive interview on Sunday.