Alibaba eyes revamp in food sector www.chinadaily.com.cn

After taking the lion's share of China's e-commerce sector, Alibaba Group Holding Ltd is looking to revamp the food sector by addressing the imbalance between supply and demand.

Hema Fresh, its iconic fresh food chain that employs technologies to dispatch goods and manage inventory, plans to open stores across all first and second-tier cities in China and aims to reach at least 300 million consumers.

The goal was announced at last week's vendor conference in Shanghai, where Hema forged partnerships with over 500 merchants including agriculture produce bases, and pledged not to charge any fees as prerequisites for brands to access Hema.

Chief Executive Officer Hou Yi said the company was making more efforts in product development with merchants and targeting sales of tailor-made goods to account for half of Hema's overall sales in three years.

New Zealand-based diary giant Fonterra Co-op Group Ltd was among the early adopters of such a model. For instance, the pair are shortening the shelf life of milk sold in stores down to less than 24 hours from the usual seven to 10 days. The milk is produced and collected each day at Fonterra's dairy hub in Hebei province, one of the two the company operates in China.

Such a tie-up is part of Hema's "Daily Fresh" program, which sees a host of fresh produce and meat removed from store shelves at the end of the day and replaced with fresh products the following morning.

The model is likely to be extended to a wider variety of goods, with Hema signing direct procurement contracts with agricultural produce bases in Yunnan, Hubei and Shandong provinces.

"Under the project, consumers can buy the most comprehensive and fresh local produce at the lowest possible prices," said Wang Minzheng, head of the department of agriculture of Yunnan province.

"Eliminating middlemen can effectively trim costs and boost retail efficiency," said Gu Guojian, head of Shanghai Chain-Store & Franchise Institute. "The model is especially meaningful as China moves to increase imports and enhance circulation efficiency."

"They can totally leverage big data instead of third-party market research firms to get more precise customer insights and estimates of market size, therefore deciding what and how much (of the goods) to keep stock of," said Shi Jialong, head of China internet equity research at Nomura Securities Co Ltd.

The move aims to meet the evolving preferences of Chinese consumers who shun preservatives in their quest for a healthier lifestyle. According to Hou, Hema's typical consumers are middle-to-upper income earners who are willing to experience new things and shop on a daily basis rather than weekly.

Unlike conventional supermarkets that introduce a wide range of products for shoppers to compare, Hema has adopted the buyer model, where professional procurers are responsible for sourcing and hand-picking the right goods to sell.

"This model is 'win-win' as it revolutionizes the producer end by using customer data to predict their preferences and can tailor manufacturing to meet their needs," said Lao Guoling, a professor at Shanghai University of Finance and Economics.

New Manufacturing is one of the five "New"s that Alibaba founder Jack Ma proposed two years ago to reshape commercial technologies.

Ele.me, Alibaba's newly acquired food delivery arm, has integrated its membership system with Alibaba's e-commerce sites to tap into at least 500 million active users who could order food as they shop via their mobile devices.

Koubei, its offline local services platform, has also branched out by offering breakfast pre-ordering services via smart phones in a number of café and bakery chains in Shanghai.

Itools JSC presents its 2018 semi-annual report www.mse.mn

'I Tools’ JSC, a Tier 2 listed company, presented its semi-annual financial and operational report to the public on August 13th, 2018 at MSE. 

In the first half of 2018, sales of ‘I Tools’ JSC increased by 39.4 percent reaching MNT439.3 million and its net profit tripled reaching MNT62.4 million. 

During the reporting period, the company involved in the project introducing KHUR system, a information system of state organizations, to private organizations and offered blockchain technology services to some Japanese companies. 

According to the company officials, it will complete its modular data center construction using its proceeds raised from public, provide an integrated services of blockchain data center as well as offer services met standards of ISO 9001 and ISO 27001 to public and private entities.

Aspire mining: Mongolia extends railway study deadline www.miningbusiness.net

ULAANBAATAR, Aug 13 The Mongolian govt has given Australian-based Aspire Mining another 18 months to meet the environmental, land use and funding conditions for the Erdenet to Ovoot railway project, the key logistical aspect of its planned coking coal mine in the country’s north.
Its rail concession deadline has been extended to Feb 2020, but Aspire aims to complete its studies in the June 2019 qtr.
Aspire has accepted Mongolia’s request to lift design capacity on the 574km railway to 30Mtpa, catering for higher expectations of transit freight demand. It says the increase in construction costs will be marginal, within its 10% contingency range.

The city ranked as the most liveable in the world www.bbc.com

Austrian capital, Vienna, has beaten Australia's Melbourne to be named the world's most liveable city.

Gov’t expresses condolence and dismisses top officials of Road Ministry www.montsame.mn

Ulaanbaatar/MONTSAME/ Last Thursday, a crime was occurred at the Ministry of Road and Transportation Development. According to the preliminary examination, 38-year old G, head of Department for Monitoring, Valuation and Internal auditing of the Ministry, was murdered by 48-year old M, head of the State Administration and Management department. The investigation is underway.

Copper vulnerable to supply shock as giant mine faces strike www.bloomberg.com

Copper bears could get caught wrong-footed as a strike looms at the world’s biggest mine.

In the U.S., hedge funds’ bearish bets outnumber bullish wagers by the most since 2016, latest government data show. The top brokers on the Shanghai Futures Exchange boosted their net-short position by more than half. Sentiment has turned increasingly negative even as BHP Billiton Ltd. and workers at its Escondida mine in Chile approach the end of a government-led mediation, after wage talks failed. A strike could start as early as Tuesday.

Copper has slumped almost 17 percent this year on Comex as an escalating trade war between the U.S. and China threatens global growth, fueling demand concerns for the metal that goes into building power grids, homes, cars and electronic gadgets. Societe Generale SA analyst Robin Bhar said the market is “fixated” on concerns about the global economy, ignoring the bullish factors that could send prices higher, including potential strikes in Chile.

“The market maybe isn’t priced correctly,” Andrew Cosgrove, a Bloomberg Intelligence senior analyst, said by telephone, citing the risk of supply disruption. “Last year, the market was net-long going into what was the beginning of a strike.”

Copper, often seen as a barometer of economic growth, posted the eighth weekly loss in the past nine. Futures for September delivery slipped 0.8 percent to settle at $2.7425 a pound Friday on the Comex in New York.

Money managers’ net-short position, or the difference between bets on price declines and wagers on price gains, reached 29,986 futures and options as of Aug. 7, according to Commodity Futures Trading Commission data released Friday. Bearish wagers are near the highest on records going back to 2006, data showed.

Things could turn quickly, should mediation fail and work stops at Escondida, squeezing bearish money managers and brokers in China and the U.S.

Labor tensions in Chile aren’t restricted to the BHP-owned behemoth. Pan Pacific Copper Co.’s Caserones mine is following a similar path, with workers voting to strike if mediation fails. The giant Chuquicamata open pit has been hit by protests as workers fret about a transition to underground operations that require a smaller workforce.

There’s less cushion to protect users of the metal against supply shocks, with stockpiles tracked by the London Metal Exchange down more than a third since the end of March, while those in warehouses monitored by Comex are at the lowest in 10 months. Inventories tallied by the Shanghai Futures Exchange are at the lowest since January.

Investors who have focused on the U.S.- China trade war have one other thing to consider: Beijing’s decision to slap a 25 percent tariff on American scrap would make refined copper more attractive than the recycled material, boosting the Asian nation’s imports of new metal, according to SMM Information & Technology Co. The U.S. supplied about 535,000 metric tons of copper scrap to China last year, about 15 percent of the nation’s overseas purchases.

That could further bolster demand at a time when the Chilean mining industry is seeing a record number of collective bargaining negotiations, that have the potential to disrupt operations. Last year, when BHP and the union failed to reach an agreement, a 44-day strike at the world’s largest copper mine and a slower ramp-up at Escondida’s third mill cut output by 300,000 tons, Goldman Sachs Group Inc. analysts estimate.

Mediation at Escondida ends Monday, and without an extension or an agreement, the strike could start Tuesday. The two parties’ positions seem far apart after more than two months of discussions, with 84 percent of workers rejecting the company’s last offer. The union is already geared up for a work stoppage, having stashed away about $864,000 to cover costs during a possible monthlong strike. Talks were continuing over the weekend, the union said.

“Positive fundamentals take a backseat,” Societe Generale’s Bhar said in a note Thursday. “Macro woes, which could be indicating sluggish demand and a potential economic slowdown are overshadowing short-term bullish factors, ” including the potential strikes in Chile and declining inventories, he said.

(By Susanne Barton and Laura Millan Lombrana).

Train with 328 passengers on board crashed in Dornogobi aimag www.montsame.mn

Ulaanbaatar/MONTSAME/ A train with 328 passengers on board derailed near Airag station, Airag soum of Dornogobi aimag at about 4.50am on Sunday, August 12. Sudden pouring rain measured at 82 mm is considered to have caused the crash by destroying the embankment of the rail track. Eighty-eight injured people were taken to hospital; two of them are under serious health condition. Emergency services have been taking urgent measures.

9 injured as train derails in SE Mongolia www.xinhuanet.com

ULAN BATOR, Aug. 12 (Xinhua) -- At least four coaches of a train with 328 passengers aboard derailed in southeastern Mongolia Sunday morning, injuring nine passengers including three children, authorities said.

Municipal government decides to spend MNT 1 billion for road repairs www.montsame.mn

Ulaanbaatar/MONTSAME/ A regular meeting of the Council of Governor of the Capital City was held on August 9, discussing some matters regarding constructional works and repair works of roads and streets destroyed by last month’s heavy rains in Ulaanbaatar city.

A.Enkhjin: BoM aims to increase its gold purchase by 10 percent www.montsame.mn

Head of the Reserve Management and Financial Markets Department of the Bank of Mongolia A.Enkhjin was interviewed on the purchase of gold and issues in this regard.

- How much gold the BoM is planning to purchase in 2018?

The amount of gold accumulated to the BoM reached 7.1 tons in the first half of the year, an increase of 400 kg or 6 percent compared with the same period of the previous year. Last year, a total of 20.01 tons of gold were purchased from the individuals and entities under the ‘Mongolian Gold’ campaign and the central bank plans to increase gold purchase by 10-20 percent this year. In order to achieve this goal, the bank launched the ‘National Gold to the Fund of Treasures’ five-month campaign to provide public with information about the bank's purchase of gold and its importance, conducting a wide range of trainings and promotional activities in this regard.

- How about the studies and researches on whether the Bank accumulates all extracted gold with its gold purchase?

The BoM receives monthly reports from the Precious Metals Assay Inspection Department of the Mongolian Agency for Standard and Metrology. The difference between the received assay data and gold purchased by the BOM is low. Therefore, it can be considered that the majority of gold mining companies and individuals sell the mined gold to the Central Bank. Before 2017, the annual average amount of gold sold to the BoM was 15-16 tons. However, the amount reached 20 tons last year, showing that the illegal gold trade was reduced as a result of the bank’s actions.
- In particular, how do you cooperate with law enforcement agencies to reduce illicit gold trade within this campaign? What do you think about the legal environment regarding the illicit gold trade? 
Under the ‘Mongolian Gold’ campaign last year we organized a workshop in Zamyn-Uud soum of Dornogobi aimag on enhancing cooperation of public organizations and preventing illegal exports of gold and precious metals. As a continuation of this work, a number of promotion works on improving public education in this regard are being implemented under the ‘National Gold to the Fund of Treasures’ campaign. For instance, the billboards calling to sell the gold to the Treasury Fund are posted along the main roads from Ulaanbaatar to the rural areas, information on the gold purchase of the BoM are regularly broadcasted through the media and numerous works including the upcoming trainings and events in August are planned. The results of the previous campaign showed that in order to reduce illicit gold trade it is important to provide the public with appropriate information. It is important that the citizens recognize the consequences of illegal gold trade, specifically that the illegally exported gold is confiscated.

- Is there any legal reform planned for the accumulation of national gold in the Fund of Treasures within the campaign?

The BoM is developing draft amendments to the Law on Treasury Fund. The amendment regulates the approval of assay of precious metal, precious stones and their articles for sale to the Treasury Fund by the legal entity with assay license or by the BoM, the state administrative body responsible for assay. Thus, it will allow legal entities with license that meets international standards and requirements to assay precious metals, not centralizing assay activities on one organization. As a result, it will save time of gold miners and make the services of public organizations and NGOs more accessible. The 2014 amendments to the Minerals Law reduced the royalty for gold sold to the BoM and authorized banks to 2.5 percent, which played an important role in increasing the volume of gold sold to the Treasury Fund. The BoM has submitted proposals to relevant ministries to extend the term of the provision which terminates on January 1, 2019. In addition, the BoM is planning to undertake measures to support the gold producers' operations and to reduce the cost of financing.

- How is the BoM involved in the Government’s ‘Gold-2’ program?

‘Gold-2’ program is aimed at ensuring short and mid-term development of gold sector, stabilizing legal environment, intensifying prospection, using major gold deposits and deposits of other metals that contain gold, ecological gold mining, increasing production and efficiency by introducing advanced technology, increasing international competitiveness and improving economic benefits. The Cabinet Secretariat, Ministry of Mining and Heavy Industry, Ministry of Finance, Ministry of Environment and Tourism, BoM, local administrations, National Police Agency, professional government and non-government organizations, gold miners and individuals are cooperating within the program. Gold funding has not been solved in the years before the program. In 2017, MNT 31.9 billion loan was given to 10 gold mining companies to start the project. Thematic geological research works on gold started in central and eastern regions of Mongolia.

- Once our country is rich in gold resources, it is imperative that refineries are required in the future. How do you plan to solve this issue?

According to the BoM survey, in case of establishment of gold refinery in Mongolia, the refined gold will cost 3-4 times higher than we pay now. Moreover, it will be difficult to store and sell the refined gold at the international markets since the newly established plant can appear in the Good Delivery List only after 5 years of operation. Therefore, these issues should be considered before making decision on refinery establishment. The BoM has conducted studies on the gold refinery. However, more detailed researches, technical and economic calculations of the refinery need to be done.