Mongolia-China border checkpoints to be closed on November 8 and 26 www.montsame.mn

Ulaanbaatar/MONTSAME/ There are two public holidays this month in Mongolia: on November 8 and 26. The birth anniversary of Chinggis Khaan is marked on the first day of first month of winter according to the lunar calendar. This year, it falls on November 8. As for November 26, the country will mark Proclamation Day.

Mongolia’s first three-level interchange opens www.news.mn

Mongolia’s first three-level interchange, the new Yarmag Overpass opened to traffic in Ulaanbaatar on Friday. The 4,312-meter three-level interchange is the main route to from the city centre to Chinggis Khaan International Airport and the development zone of the Mongolian capital.

DP caucus asks President to veto 2019 Budget Bill www.zgm.mn

Following the ratification of the draft bill on 2019 State Budget last friday, the President may put a veto on the decision as he previously requested the Parliament to cut expenditure. Although some of his requests, such as allocation to child protection activities, were fulfilled, the Parliament approved MNT 47 billion allocation for Small and Medium-sized Enterprise (SME) Development Fund, which drew public attention as several parliament members (MPs) allegedly tapped high-sum loans at low interest rate. Another key request addressed by the President during the budget discussion last month was to cut budget expenditure by around 15 percent; however, the Parliament adopted the bill without any significant change at MNT 1.9 trillion in deficit. As for revenue, several MPs and experts criticized that the budget has an optimistic assumption. For instance, coal export, one of the key export items was forecasted at 42 million tons in 2019. Parliament members, including the Minister of Mining and Heavy Industry Sumiyabazar Dolgorsuren explained that the amount is attainable with the completion of infrastructure projects currently being implemented in the main coal export route. “The full repayment of the bonds will begin in 2021.

Copper, gold mines now likely cheaper to construct than to buy-research www.mining.com

LONDON, Nov 5 – The cost of building a copper or gold mine is likely to be cheaper than buying an existing one, dampening the prospect of big merger activity in the mining sector, S&P Global Market Intelligence said, citing in-house research.

Data shared with Reuters support comments from major miners, including BHP and Rio Tinto , which say their strategy is to build or to "smart buy", if they can possibly find a suitable mine for sale at the right price or acquire part of a promising prospect.

Keval Dhokia, copper analyst at S&P Global Market Intelligence, said the research provider had analysed the expense of building new mines based on reserves found through exploration.

Research suggests that exploration and building is still the riskier but potentially more cost-effective alternative
S&P Global Market Intelligence compared the decade 2007-2016 with 1997-2006 for copper and found the cost of acquired reserves increased by $742.15 per metric tonne, while the average unit cost of exploration-derived reserves rose $54.93 per tonne.

For gold, comparing the periods 2008-2017 and 1999-2008, the average unit cost in acquired reserves rose by $121.93 per troy ounce, much more than the $41.74 per troy ounce increase in the average unit cost of gold in reserves derived from exploration.

At the same time, the share of gold reserves growth attributable to acquisitions dropped to 30.4 percent in the decade ending 2017 from 51.3 percent in the previous decade.

Growth in copper reserves from big buys fell to 33.8 percent between 2007-2016 from 43.8 percent between 1997-2006.

Copper, one of the most effective electrical conductors, is in focus as miners see good demand prospects from both traditional consumers and from increased use in electric vehicles and global improvements in grid infrastructure.

Although on paper building projects is the better option and for majors offers the chance of tailoring them to maximise returns, finding reserves is harder as the more obvious ore bodies in politically stable countries have been depleted.

The declines in copper prices and exploration budgets that marked 2013 to 2016 had little impact on copper discoveries, which had already sunk to record low levels, S&P Global Market Intelligence said.

One of the few stand-out development projects is SolGold's copper-gold project in Ecuador.

Major BHP in September and October bought shares in SolGold, amounting to an 11.2 percent stake in two stages.

It paid a 32 percent premium to the 20-day volume-weighted average London Stock Exchange price for the second stake and 20 percent for the first in a total spend of around $95 million.

That compared with a previous offer SolGold rejected of $30 million for a 10 percent stake in the company in October 2016.

Dhokia, like other analysts, expects a copper shortfall to deepen over time and boost prices. This year the copper market has fallen nearly 15 percent as trade tensions between the U.S. and China have raised the prospect of reduced Chinese demand.

(REUTERS: By Barbara Lewis and Zandi Shabalala; Editing by Jan Harvey)

Exploration in Egypt, Ecuador, Russia, and Mongolia pushes boundaries www.ogj.com

Oil and gas companies are exploring in disparate parts of the world to add more reserves to fulfill growing world energy demand. Egypt intensified oil and gas exploration efforts in the Mediterranean and Red Sea while Ecuador recently opened more onshore blocks to international investors.

Tharwa Petroleum Co. of Egypt partnered with Eni SPA of Italy to spud their first exploratory well at Noor offshore gas field along the North Sinai coast in late September. Eni is exploring in about 25 countries to find more reserves, Eni Chief Executive Officer Claudio Descalzi said.

Descalzi believes Eni can add oil and natural gas reserves through disciplined exploration spending at lower cost than it can through acquiring producing properties. He estimates 400-500 million bbl has been added to Eni’s reserves in 6 years at about $2/bbl.

Meanwhile, various Latin American governments have revised oil and gas investment incentives. Colombia used tax credits to attract more exploration while Mexico and Argentina sought to attract investment in onshore conventional plays, Wood Mackenzie Ltd. analysts report.

In September, Ecuador launched its 2018 Intracampos Round for eight onshore blocks in the oil-prone northwestern Oriente basin. Ecuador Presidential Decree No. 449, dated July 12, changed the structure of investments from service contracts to a new petroleum sharing contract.

International companies actively explored in Ecuador during in the late 1980s and early 1990s, but they had scaled back, saying earlier effects failed to meet expectations.

In Russia, Gazprom OAO has steadily replenished its annual production volumes and built up its reserves through exploration. The gas giant is accelerating exploration around the Yamal Peninsula and Russia’s Far East.

Mongolia begin issuing oil and gas licenses in 1992 but interest by exploration companies has been low. A UK company is actively exploring in Mongolia.

EGYPT
Companies other than Tharwa and Eni also are exploring in Egypt. IPR Energy Group Inc. (IPR) of Irving, Tex., in August discovered a field in the Alamein lease of Egypt’s Western Desert. IPR is executing a large drilling program and workovers covering the Western Desert, Nile Delta, and Gulf of Suez offshore Egypt.

In the Western Desert, the Southeast Alamein-1X (SEAL-1X) exploration well encountered 97 ft of pay from Razzak sand, Basal Middle and Upper Bahariya sands, and Abu Roash G dolomite (Fig 1). Testing and evaluation of various zones are under way.

IPR drilled two new production wells in Alamein field (A-42, AL44), bringing another 580 bbl of oil on stream.

Exploration well AL45X discovered Dahab sand, extending IPR’s knowledge of channel sands. Initial tests exceeded 850 b/d of naturally flowing 30° API gravity crude.

The independent’s horizontal well NEAL-19H targets the Upper A-R G Dolomite of the Northeast Alamein (NEAL) field in the Western Desert.

In the North Ras Qattara (NRQ) concession in the Western Desert, IPR’s exploration well NRQ-12X discovered oil, which tested 1,458 b/d from the Lower Bahariya formation. Two appraisal wells, NRQ 255-18 and NRQ-9-7, brought an additional 820 b/d.

Exploration well Ibn Yunis-1X found gas in the South Disouq concession of the Nile Delta. It flowed 26.9 MMcfd on test.

IPR said appraisal well, SD-4X flowed 28.7 MMcfd on test from the Abu El Maadi (AEM) formation. The SD-3X discovery showed hydrocarbons in both AEM and Kafr El Sheikh (KES) formations. Gas flowed 16 MMcfd on test from AEM.

The independent plans a seismic survey covering 170 sq km in the concession’s southern territory.

IPR has focused on Egypt since 1993. It also has gas production in Pakistan and some mineral rights ownership in the Permian basin of Texas. The company acquired offshore Egyptian holdings through its 2003 acquisition of Devon Energy International’s Gulf of Suez assets.

Separately in Egypt, Eni announced an August gas discovery on the Faramid South prospect in the East Obayed concession, 30 km northwest of the Melehia concession. Both concessions are in Egypt’s Western Desert where Eni is working to develop gas reserves.

The Faramid South well, which reached its 17,000 ft target, flowed 25 MMscfd, confirming the East Obayed.

Through its joint-venture operating company with Egyptian General Petroleum Corp. (Agiba), Eni currently produces 55,000 boed from the Western Desert. Agiba owns 100% of East Obayed concession.

ECUADOR
The Ministry of Energy and Non-renewable Resources in Ecuador announced a licensing round for eight blocks onshore Ecuador (Fig. 2). Ecuador officials say they designed the round to attract international investors based on production sharing contracts (PSCs) and updated tax, fiscal, and legal terms.

Northwest Oriente basin reservoirs involve the Cretaceous Hollin and Napo formations, which comprise successions of sand-rich fluvial and deltaic deposits, WoodMac reports. The blocks are near existing pipelines and other infrastructure.

Ecuador officials talked with oil and gas executives in Houston on Sept. 25 during a road show on the licensing round. Carlos Perez, Ecuador’s Minister of Energy and Non-Renewable Natural Resources, told reporters he anticipates the round could attract $1 billion in investment.

A lingering issue for oil and gas investors is dispute resolution. Ecuador withdrew from the World Bank arbitration court in 2009. For the latest licensing round, Ecuador’s government agreed to arbitration by Colombian courts if any dispute resolution is needed.

Colombia has established petroleum laws and represents a Latin America perspective, said Noble Pendergrass, WoodMac principal petroleum economist for the Americas.

The PSCs have no cost provisions or royalty, but full production value is placed into a profit-sharing pool. The profit-sharing pool is split between the company and Ecuador’s government based on a percentage involving a production component and a biddable price component.

The production component is calculated using a tier-based system that increases with increased daily production. The biddable component increases as the oil price increases.

Pendergrass said a sovereignty adjustment can be applied to the profit share. Each year, the cumulative cash flows, including all taxes and costs, are calculated for the government and contractor. If the government share is less than 51%, the difference will be added into the government’s profit share the next year.

In addition, Ecuador cancelled its windfall tax. Two production taxes, called Ley 10 and Ley 40, will provide revenues for ecological redevelopment and provincial income. Two income taxes also apply. They are the labor participation tax and the corporate income tax, which together apply at a 36.25% rate to profits.

RUSSIA
Rosneft announced plans to spend almost $2.5 billion in oil exploration in Russia’s Far East and offshore its eastern Arctic during 2017-22.

Gazprom recently outlined its exploration efforts in Russia’s Far East as well as the Nadym-Pur-Taz region, the Yamal Peninsula, the Republic of Sakha (Yakutia), and the Irkutsk Region.

The company reported estimated gas reserves of 35.4 trillion cubic m as of Dec. 31, 2017. The company is reviewing its estimates following adoption of a new Russian Classification of Reserves and Forecast Resources of Oil and Flammable Gases.

Gazprom expects to complete its reserves estimate review by 2021. Meanwhile, it is working to add gas reserve through exploration.

Gazprom drilled two exploratory wells in Kovyktinskoye field in the Irkutsk Region in 2017 and plans to drill more wells in that area (Fig. 3). It acquired 3D seismic surveys covering 2,400 sq km. It also drilled an exploration well in Tas-Yuryakhskoye field last year.

Gazprom drills exploration wells in Irkutsk Region in ongoing efforts to increase its natural gas reserves (Fig. 3). Photo from Gazprom.

During 2018–21, Gazprom plans 20 exploratory wells and 3D seismic surveys covering 3,800 sq km. In Yakutia, efforts are under way to explore Chayandinskoye, Tas-Yuryakhskoye, Verkhnevilyuchanskoye, Sobolokh-Nedzhelinskoye and Srednetyungskoye fields.

Gazprom executives believe the Nadym-Pur-Taz production region has more resources. Petroleum engineers are studying deposits lying under and above the Cenomanian horizon.

Experts estimate resource potential of the above-Cenomanian deposits in Gazprom’s fields across the Yamal-Nenets Autonomous Area to be 4 trillion cu m. Gazprom continues to explore that area, both onshore and offshore the Yamal Peninsula shelf (Fig. 4).

The Nanhai VIII semisubmersible transited under tow earlier this year from the Port of Murmansk to drill a well at Gazprom’s Rusanovsky license area in the Kara Sea. (Fig. 4). Photo from Gazprom.

Gazprom is developing giant Kharasaveyskoye gas-and-condensate field on the Yamal Peninsula in arctic Russia. Kharasaveyskoye straddles the Kara Sea coast north of Bovanenskovskoye gas-and-condensate field, which will reach design capacity of 115 billion cu m/year of gas with the 2018 launch of a third 5.5-million tonne/year liquefaction train at the Yamal LNG plant.

Gazprom estimates Kharasaveyskoye holds explored and preliminary estimated (C1+C2) reserves of 2 trillion cu m of gas. Initial development will target Cenomanian-Aptian deposits, from which production is scheduled to start in 2023 at an estimated 32 billion cu m/year.

MONGOLIA
Petro Matad Ltd. plugged and abandoned the Snow Leopard-1 well in the Valley of the Lakes complex’s Taats basin of Block V in Mongolia. Snow Leopard 1 was the first exploration well drilled in the Valley of the Lakes complex, said Petro Matad, which holds 100% interest. It reached 2,930 m MD in granitic basement.

Snow Leopard 1 encountered no sands at the shallower of the two primary targets. No oil or gas shows were observed in the well’s deeper objectives. Snow Leopard-1 operations stopped in September.

“Data and samples gathered during the drilling of the well are now under evaluation to determine the implications of the well results for the surrounding prospectivity,” Petro Matad said in a news release.

“The presence of thick shales and oil and gas shows in the well highlight the potential prospectivity of the Taats basin in which a number of other prospects and leads have been mapped.”

The UK independent moved the rig from Snow Leopard-1 to Wild Horse 1 well where drilling was expected to start by Nov. 1.

The company expected Wild Horse drilling to take 30-45 days to reach a target depth of 2,200 m. The target is the Baatsagaan basin in Petro Matad’s Block IV.

By

Paula Dittrick Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.

Mongolia says it can fully secure domestic demand for wheat, potato www.xinhuanet.com

ULAN BATOR, Nov. 5 (Xinhua) -- Mongolia can now fully secure its domestic demand for wheat and potatoes, the country's Ministry of Food, Agriculture and Light Industry said Monday.

Oldest evidence of dairying on the East Asian Steppe www.sciencedaily.com

Although dairy pastoralism once made Mongolian steppe herders successful enough to conquer most of Asia and Europe, the origins of this way of life on the East Asian steppe are still unclear. Now an international team of researchers led by the Max Planck Institute for the Science of Human History has uncovered evidence that dairying arrived in Mongolia as early as 1300 BC through a process of cultural transmission rather than population replacement or migration.

Two thousand years before the armies of Ghengis Khan, populations in Mongolia were already living a pastoralist, dairying lifestyle -- similar to that which would enable future populations to conquer most of Asia and Europe. Although pastoralism has long been the primary means of subsistence on the East Asian steppe, the origins of this tradition have been unclear. Now, an international team of researchers has uncovered the earliest direct evidence to date of dairying in Mongolia -- around 1300 BC -- by tracking milk proteins preserved in tooth tartar. The livestock that were milked -- cattle, sheep and goats -- are not native to the region and were likely introduced by Western Steppe herders. However, ancient DNA evidence from Bronze Age Mongolians indicates minimal genetic contributions from Western Steppe herders, suggesting that the livestock and dairying technologies were transferred by cultural processes rather than a major population migration, in contrast to the pattern seen in Europe. The findings are published in PNAS.

Cultural and technological transfer without population replacement

Researchers analyzed human remains from six sites in northern Mongolia associated with the Deer Stone-Khirigsuur Complex (DSKC). "The DSKC is well-known for their monumental architecture, including upright stones with deer and other motifs, and large stone mounds, often associated with one or more human burials," explains co-first author Shevan Wilkin of the Max Planck Institute for the Science of Human History. "In some locations, these structures are highly conspicuous and visible from great distances." The DSKC is the earliest culture associated archaeologically with pastoralism in Mongolia, with sites containing bones of sheep, goat, cattle and horse as early as the 13th century BC. However, to date no direct observations of dairy consumption had been made in this area.

The researchers conducted genome-wide analyses on 22 Bronze Age individuals, whose remains were radiocarbon dated to the late Bronze Age, ca. 1300-900 BC. Whole genome sequencing was further performed on two of these individuals. The results of these analyses showed that these Bronze Age Mongolians were genetically distinct from Western steppe herders of the same time period, indicating that the appearance of dairying in Mongolia was not the result of population migration and replacement.

"These findings suggest that neighboring Western steppe herders directly or indirectly introduced dairy pastoralism to local indigenous populations primarily through a process of cultural exchange," explains Choongwon Jeong, co-first and co-senior author, of the Max Planck Institute for the Science of Human History. "We don't see evidence for the kind of large-scale population replacement by Western Steppe herders that has been observed in Bronze Age Europe or in the nearby Altai-Sayan region."

Analysis of dental calculus shows clear evidence of dairy consumption

The researchers also analyzed the dental calculus of nine individuals using proteomics. Milk proteins were found in the calculus of seven individuals, confirming that dairy products were consumed as early as 1300 BC. Both whey and curd proteins were recovered, and could be identified as coming from sheep, goats and cattle. Interestingly, none of the individuals was lactase persistent -- genetically capable of digesting the milk sugar lactose. Most Mongolians today are also not lactase persistent, despite consuming a large proportion of their diet as dairy products.

"The 3,000-year legacy of dairy pastoralism in Mongolia poses challenging questions to grand narratives of human adaptation and natural selection," explains Christina Warinner, senior author, of the Max Planck Institute for the Science of Human History. "As a non-lactase persistent dairying society with a rich prehistory, Mongolia can serve as a model for understanding how other adaptations, such as cultural practices or microbiome alterations, may be involved in enabling and maintaining dairy-based cuisines around the world."

Story Source:

Materials provided by Max Planck Institute for the Science of Human History. Note: Content may be edited for style and length.

First consultative meeting of Mongolia and Pakistan held in Islamabad www.montsame.mn

Ulaanbaatar /MONTSAME/. The first consultative meeting between the Ministries of Foreign Affairs of Mongolia and Pakistan was held in Islamabad on November 5. State Secretary of the Mongolian Ministry of Foreign Affairs D.Davaasuren and State Secretary (Asia Pacific) of the Pakistani Ministry of Foreign Affairs I.Ahmad chaired the meeting.
The two sides noted the great possibility of developing partnership in many sectors despite the geographic distance between Mongolia and Pakistan, and highlighted the importance of the consultative meeting between the Foreign Ministries in defining the future of partnership. The parties agreed to have partnership in sectors, such as politics, economy, trades, culture, education, tourism and agriculture.

Sophisticated ITS Solution for the Capital of Mongolia www.securityworldmarket.com

Ulaanbaatar is the capital and the largest city of Mongolia, with a population over 1.3 million, which is almost half of the country's total population. Over the past decade, the number of vehicles in Ulaanbaatar has risen by more than 300,000. As the political and cultural center of Mongolia, the increasing number of inhabitants and vehicles within the city has caused a series of social, environmental, and transportation problems. Dahua’s sophisticated ITS (Intelligent Transportation System) solution has integrated advanced software and hardware including sensors, information and data processing and physical electronics and communication technologies to assist the transportation department of Ulaanbaatar, in enhancing the safety and efficiency of its transportation system.

Challenges

In recent years, the government of Ulaanbaatar has prioritized the improvement of traffic management and has identified the need of a cost-effective solution towards speeding, traffic light violations and other road safety related issues, to create a more secure environment for citizens. Due to the high-latitude geography of the city, this project is particularly demanding on the monitoring equipment withstanding harsh environments.

Solution

Based on advanced intelligent algorithms, Dahua has provided the city with its cutting-edge ITS solution consisting of the ANPR (Automatic Number Plate Recognition) system for 28 main roads, the E-police system for 8 junctions, 2 mobile speed measurement systems as well as 15 high spot PTZ surveillance units. The project took only three months from the initial analysis of the client’s demands and solution design to, the final delivery, overcoming various tough issues along the way.

ANPR System

As there are no current systems for license plate recognition in Mongolia, the Dahua team worked in collaboration with a partner to customize a Mongolian license plate recognition algorithm. This was then integrated into the Dahua traffic cameras, achieving a reliable recognition rate, much to the satisfaction of the client. The Dahua traffic cameras installed at the significant main roads of the city, are able to function between a temperature of - 40 ℃ ~ + 80 ℃ and a 10%~90% humidity environment. The cameras will actively monitor and inspect each suspicious vehicle, and automatically capture their license plates in real time, sending out an automatic alert when blacklisted vehicles pass by.

E-police System

The monitoring equipment set up at the eight junctions, is able to help the Ulaanbaatar transportation authorities in making quick responses to traffic accidents that are caused by running red lights. When a violation occurs, the Dahua all-in-one capture camera takes a series of images of the vehicle’s license plate number, along with the status of the traffic signal and an aerial image of the scene as evidence. Afterwards, the DSS management and storage platform collects the data from each camera, and distributes it to operators for further processing.

Mobile Speed Measuring System

The mobile speed measuring system detects vehicles that surpass the speed limit in all weather conditions. The system features an all-in-one design, making it easy to use and install at different locations at a moment’s notice. This portability allows traffic police to move the system to different places whenever necessary. It consists of an 8MP CCD camera with amulti-target tracking radar, allowing for an accurate instant speed measurement of each passing vehicle and crystal-clear imaging. The IR flash lamp also ensures excellent imaging capabilities even during the dark of night.

To better serve the client, the Dahua team has provided the operators of the local transportation department, with relevant technical training and demonstrated to them, the installation and deployment of devices. Additionally, all three systems are unified on a single platform within the control center, further enabling the end user to a more efficient monitoring and management of road safety.

Benefits

Dahua’s ITS solution facilitates road safety and keeps the traffic flowing smoothly, raising the safety awareness of drivers, resulting in a more pleasant journey for drivers. Advanced technologies such as LPR and fuzzy search, actively reduces manpower demands on the police force, while increasing the efficiency of current enforcement. Furthermore, Dahua’s solution has assisted the government of Ulaanbaatar to finance a sustainable, growing, and well-maintained system of security and safety.

about Dahua Technology

Zhejiang Dahua Technology Co., Ltd. is a leading solution provider in the global video surveillance industry. In 2017, Dahua was ranked 3rd in “Security 50” by a&s international. Dahua is committed to providing the highest quality solutions and products with the latest technologies to enable our end users to perform their business successfully. The company has more than 6,000 R&D engineers and technical staff working on cutting-edge technologies in camera lens, image sensor, video encoding & transmission, embedded processor, graphic processing, video analytics, software reliability, network security and other technologies.

Why this Idaho chipmaker is suddenly at the center of the US-China trade war www.cnn.com

New York (CNN Business)Micron, a company in Idaho that makes memory chips, has been locked in bitter trade secrets dispute with a state-backed Chinese rival called Fujian Jinhua. Now it has the US government in its corner.

Last week, the Trump administration targeted Fujian Jinhua in a major escalation of its push against alleged economic espionage. On Thursday, the Justice Department charged Fujian Jinhua, along with a Taiwanese company and three Taiwanese individuals, with conspiracy to steal trade secrets from Micron. The charges move the government's attack on Chinese intellectual property theft beyond tariffs and tough talk.
The charges, along with a ban on American companies from doing business with Fujian Jinhua, gives Micron the "upper hand" in its tangle with the Chinese company, said Mehdi Hosseini, a semiconductor analyst at Susquehanna International Group. "They now have more ammunition to make sure the memory industry in China is marginalized," he said.
Micron's allegations
Micron (MU), which was founded in 1978, is the largest memory chip maker in the United States and directly competes with the biggest players in the global market, according to Hosseini.
In recent years, the company has had to contend with a growing threat from China, which has made building successful homegrown semiconductor companies a pillar of its plans to become a global tech powerhouse. Fujian Jinhua has been building a $5.7 billion plant in southeastern China to get in the game, and it's far from the only player.
Micron sued Fujian Jinhua and Taiwanese semiconductor company UMC in California federal court in December 2017. Micron claimed that as early as 2015, UMC and Jinhua devised a plan to get former employees of Micron's Taiwanese affiliate to steal Micron's trade secrets and deliver them to UMC, which would then pass them to Jinhua.
According to Micron's complaint, UMC would get $700 million in research and development equipment and fees in return, as well as co-ownership in the resulting technology.
Former employees of the Micron affiliate in 2015 and 2016 successfully pilfered tech secrets from the company by uploading confidential data to their laptops, removable drives and Google drives before they left the firm, Micron said.

The case is still working its way through the court system. And Micron has since had to battle a countersuit in Chinese court from Jinhua and UMC, which filed a patent infringement suit against Micron in January. The court in July temporarily barred Micron from selling 26 products in the country including memory chips, memory sticks and hard drives.
Micron said it only learned about the Trump administration's export ban after it was announced on Tuesday. "Micron strongly supports global fair trade and the protection of intellectual property," a spokesperson said in a statement.
On Thursday, after the Justice Department announced the charges against Fujian Jinhua and UMC, Micron's general counsel commended the agency's decision to "prosecute the criminal theft of our intellectual property."
UMC said in a statement Friday that it "takes seriously any allegation that it may have violated any laws," and "fully intends to respond to [the Justice Department] allegations accordingly."
It's no surprise that Micron said it appreciated the government's legal action.
"This lawsuit corners new entrants out of China," Hosseini said. As China pumps billions into technology such as semiconductors, it's a vital edge.
Trade war impact
Micron's claims of economic espionage are given heft by the US government's lawsuit. But filing charges against the Chinese firm also serves a political purpose for the Trump administration.
Negotiations with Beijing could be back on after President Donald Trump and Chinese President Xi Jinping spoke on the phone Thursday and said they were willing to meet at the upcoming G20 summit in Argentina. A Bloomberg report early Friday said that Trump has asked officials to draft a trade deal with China ahead of the meeting.
The buzz could be a ploy to boost markets ahead of next week's midterm elections, according to Michael Every, head of Asia financial markets research at investment bank Rabobank. But should talks resume, the United States could find itself in a stronger position.
Fujian Jinhua probably can't operate without access to US software and technology, according to analysts.
"These actions are meant both to increase leverage in the current negotiations and as a deterrent to others," said Scott Kennedy, an expert on the Chinese economy at the Center for Strategic and International Studies. "The US isn't going follow the standard playbook any longer because it has only emboldened China."
When the United States went after Chinese phone and telecom equipment company ZTE earlier in the year, it said it was the result of specific, sanctions-related violations. Implementing export controls with a sweeping national security rationale is different, according to Dan Wang, technology analyst at Gavekal Research.
"Unlike the ban on ZTE, the US action against Fujian Jinhua is no one-off penalty for a specific infringement, but part of a much broader policy drive," he said in a note this week, citing the US government's language.
The Commerce Department said Fujian Jinhua threatened the supply chain for essential military components.
CNN's Jethro Mullen, Daniel Shane, Sherisse Pham and Yong Xiong contributed to this report.