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.

Ministry of Finance estimates budget deficit at MNT 1.9 trillion in 2019 www.zgm.mn

Minister of Finance Khurelbaatar Chimed submitted the bill on 2019 State Budget to the Parliament for approval last Friday. The bill estimated budget balance to be MNT 1.9 trillion in deficit with MNT 9.7 trillion revenue and MNT 11.6 trillion expense. The deficit equals 5.2 percent of total GDP. The 2018 budget balance was estimated at MNT 2.4 trillion in deficit. The minister noted that next year’s budget revenue did not include two income sources from Stabilization fund and Future Heritage Fund. If added, the budget balance may total MNT 11.1 trillion in surplus for the first time. “In preparing the budget, we evaluated Mongolia’s economic growth to be 8 percent in 2019. The package bills on taxes were prepared this year and submitted to the Parliament. These taxes will take effect starting from January 1, 2019. We expect the new taxes will have significant impact in increasing economic activity, supporting the operations of small and medium enterprises and attracting foreign investors,” remarked Mr. Khurelbaatar. He added, “For instance, the corporate income tax will be 1 percent for entities with an annual revenue of less than MNT 1.5 billion. Private entities were previously required to submit four tax reports every year. They are now required to submit 1-4 reports depending on their income with the revision. Secondly, an extensive inspection involving over 10 government agencies was co-conducted in tavan tolgoi and border checkpoints. There were some cases were certain amount of coal that were being transported through Gashuunsukhait border checkpoint was lost due to lack of monitoring, as well as quality issues.

Ministry of Finance expects external debt to equal 55 percent of GDP in 2019
Therefore, the Government decided to allocate budget to create comprehensive system to improve monitoring, install x-ray equipment and cameras, which will be government by a single agency. Also starting from 2019, oil products that are being imported through four border checkpoints will be examined by cutting-edge technology. The budget included the necessary financing to install the equipment.” Within the frames of the package bills on taxes, customs databases are expected to be merged and will be commissioned in 2019. The Ministry of Finance expects the unified database will allow taxes to be fully collected and stop tax evasions. According to the budget bill, foreign loans and aids will account for MNT 1.3 trillion of the revenue and remaining will be built up from domestic sources. The ministry estimates the external debt to equal 55 percent of GDP, which is 26.2 percent lower than 2017. “We are increasing the number of projects to be implemented with foreign loans and aids. Prime Minister Khurelsukh Ukhnaa signed an agreement worth USD 350 million to increase the drinking water supply in Ulaanbaatar. Considering the cost of establishing a wastewater facility in Ulaanbaatar, the total expense on water will total USD 650 million. The amount of investment from the state budget totals MNT 1.36 trillion, which doubles the amount of this year,” informed Mr. Khurelsukh. Additionally, MNT 720 billion was allocated a for increasing salary, pension and welfare, while MNT 200 billion has been allocated for air pollution reduction in 2019 Budget.