Ulf Quellmann, Chief Executive Officer of Turquoise Hill, said, “We are encouraged by the pivotal decision to proceed with the power project at Tavan Tolgoi. Resolving Oyu Tolgoi’s long-term power requirements is critically important to the mine’s long-term development and today’s signing of the PSFA is a positive milestone toward that goal. We will continue to work closely and collaboratively with our partners to finalize the details of the power project, which will allow this truly great world-class asset to achieve its full potential for the benefit of all stakeholders.”

The PSFA formalizes the role of each party and sets out an amended timetable for Oyu Tolgoi to source power domestically. Construction is expected to start in 2020 following further studies and commissioning of the power plant is scheduled for mid-2023. Oyu Tolgoi will now move forward to confirm the technical design of the project and finalize the commercial arrangements, including financing, underpinning the PSFA. The 300 megawatt plant will be majority owned by Oyu Tolgoi LLC and will be situated close to the Tavan Tolgoi coalfields. Turquoise Hill will update the market in due course.

Source: Turquoise Hill

The Oyu Tolgoi project is central to Rio Tinto’s push to diversify its portfolio away from iron ore, but it has faced a series of challenges as Mongolia’s fragile government wrangles over how to maximise benefits for the country.

First production at the $5.3 billion underground expansion located near the southern border with China is scheduled for early next decade, creating one of the world’s biggest copper suppliers.

The construction of a 300 megawatt plant, close to the Tavan Tolgoi coalfields, to supply electricity to the mine will start in 2020 under the new agreement.

The plant is expected to be operational by mid-2023, slightly later than the 2022 date mooted after the government cancelled an earlier power agreement in February.

The government of Mongolia owns 34 percent of Oyu Tolgoi with the remainder held by Turquoise Hill Resources, which in turn is 51 percent owned by Rio Tinto.

In a joint statement with Oyu Tolgoi, the Mongolian government said the agreement was “a significant step towards enhancing the efficiency of the Tavan Tolgoi coal mines,” and to supplying the wider region with domestic power.

The statement said the partners would also consider how to incorporate the use of renewable power.

Oyu Tolgoi would be the majority owner of the power plant, with funding possibly including third party debt, the statement said, without giving further details.

Analysts welcomed the deal but said the 2023 deadline looked optimistic.

“This was the last major hurdle for the underground production,” Badral Bontoi, chief executive of Mongolia-based market intelligence group Cover Mongolia, said.

A Mongolian government spokesman said the agreement was the first step to retain in the country the estimated $150 million Oyu Tolgoi currently pays China for electricity each year, with the figure set to rise when the underground extension comes online.

Rio Tinto in July entered agreements with three Chinese contractors on designing a power station to supply Oyu Tolgoi.

On Monday, a spokesman declined to comment on the status of those tenders.

Rio Tinto’s shares have fallen by around 5 percent this year and were down 0.9 percent on Monday. (Reporting by Barbara Lewis; Editing by Kirsten Donovan)

By Barbara Lewis and Munkhchimeg Davaasharav

The $940 million rail project, AutoHaul, is focused on driverless train movement to transport ore to the company's port operations and has been in development since 2012.

"Early results indicate significant potential to improve productivity, providing increased system flexibility and reducing bottlenecks," Ivan Vella, Rio Tinto's iron ore managing director Rail, Port & Core Services, said.

Rio Tinto operates about 200 locomotives on more than 1,700 km of track in Pilbara to transport ore from 16 mines to four port terminals.

In 2017, Rio Tinto's iron ore chief Chris Salisbury had said the company would look to develop an "intelligent" iron ore mine at a cost of $2.2 billion by fully incorporating technologies such as robotics and driverless trains and trucks on a single site.

(Reporting by Sangameswaran S; Editing by Shinjini Ganguli)

Furthermore, the U.S Federal Reserve approach on increasing interest rate in steps is reducing investors’ confidence and raising a risk of investment outflow in developing countries. Due to the decision of U.S Federal Reserve, the 22 foreign exchange rates of Bloomberg FX Fixings have depreciated by up to 50 percent against US Dollars. MNT rate followed the same fate, falling 9 percent against the USD since the beginning of this year.

Regardless, the International Monetary Fund, Asian Development Bank and other international organizations did not lower their 2019 Economic Outlook on Mongolia. Analysts expect the world economy to grow by 3-4 percent next year.

The trade dispute is creating risks to every countries and the Financial Stability Report of the IMF warned that the stock prices of U.S firms stand above the pre-global crisis period and real estates of developed countries, such as Australia and Canada are currently in “a bubble. Plus, the President of European Central Bank Mario Draghi told the media that a crisis situation has been seen in the global economy”.

Considering the current uncertainties in global economy and debt repayments in the upcoming years, the BoM is now holding a policy to create reserves. Accordingly, the foreign exchange reserve of Mongolia has reached a 6-year record last October.
However, the 2019 budget revenue and expenditure has been planned at a record-high amount. Experts are warning that monetary policy will be in a constraint and create more risks as budget investment will support imports, pressuring balance of payment and MNT rate as a result.

The Bank of Mongolia has improved the platform based on its internal possibilities and started using the developed version of the platform from December 21, 2018.

The developed version of the platform will reduce operational risks, increase information accessibility and contribute to development of internal currency exchange.

According to national statistics, registered unemployed people have been estimated at 25 thousand in 2018; most of them 25-34 years old. However; there are 35 thousand jobs available on the Mongolian labour market. Without doubt, E.Uujimsetgel is an ideal role model for the younger generation.

Currently, the minimum monthly wage is MNT 240 thousand, which came into force in January 2017.

Under the current law, if a foreign citizen undertakes espionage in Mongolia, they will be punished by 12-20 years imprisonment.

A census conducted between Dec. 7-17 showed the number of livestock animals in 2018 increased by 244,700, or 0.4 percent, from the previous year, Erdene-Ochir Myagmarkhand announced at a press conference.

According to the preliminary result of the nationwide census, sheep accounted for 46.0 percent of all livestock, goats accounted for 40.8 percent, cattle accounted for 6.6 percent, horses accounted for 5.9 percent and camels accounted for 0.7 percent.

Among the country's 21 provinces, the northernmost Khuvsgul has the largest number of livestock with 5.7 million, followed by Uvurkhangai and Arkhangai in the central provinces, with about 5.5 million respectively.

There are 230,800 herder households with livestock animals, up 0.8 percent from last year.

The promotion of animal husbandry is seen as the most reachable solution to diversify the landlocked country's mining-dependent economy. Currently, mineral products account for over 90 percent of its total exports.

Organisers estimated nearly 25,000 people turned out for the protest on Thursday.

Local media described the gathering as the second largest after a riot in 2008.

Protesters focused their anger on Mongolia's parliamentary speaker, Enkhbold Miyegombo, and the two main ruling parties, the Mongolian People's Party and the Democratic Party.

There has been rising anger over a long-running corruption case related to allegations that Enkhbold and other political figures had looked to raise 60 billion tugriks ($23m) by selling off government positions.

Enkhbold has denied the allegations.

A cross-party group of politicians who are boycotting the parliament's plenary sessions has signed a letter demanding Enkhbold's resignation.

The group, the Mongolian People's Union, opposes the two main parties, together known by the abbreviation MANAN.

"We will not allow the situation where the MANAN faction gets all the wealth and resources, while people ... remain with nothing," member of parliament Ayursaikhan Tumurbaatar told media.

"The air pollution, people's poverty, wealth inequality all started with Enkhbold since he was the mayor of Ulaanbaatar city," he said.

Mongolia, for years a satellite of the Soviet Union, transitioned to parliamentary democracy in 1990.

At the Thursday protest, people held up placards with messages such as "We Demand Enkhbold Resign."

Protester Dejid Avirmed, 61, told the Reuters news agency that people were fed up that in a mineral-rich, democratic country like Mongolia many still lived in poverty.

"Mongolians are very patient, but now we lose our patience," she told Reuters at the protest in the central square in front of parliament.

"Enkhbold should resign. A shame on him that he makes this many people protest in this mid-winter cold."

Thursday's regular session of parliament was delayed for a seventh time because of the boycott by the members demanding Enkhbold's resignation.

The last scheduled parliament session for 2018 is due on Friday.

"Parliament members should solve the problem not by appealing to protests, but by coming to the parliament session hall. This is the law," said Enkh-Amgalan Luvsantseren, deputy speaker of parliament.

Munkhchimeg Davaasharav