Google to invest $550 million in Chinese e-commerce giant JD.com www.reuters.com

SINGAPORE (Reuters) - Google will invest $550 million in Chinese e-commerce powerhouse JD.com (JD.O), part of the U.S. internet giant’s efforts to expand its presence in fast-growing Asian markets and battle rivals including Amazon.com (AMZN.O).

#1218166: This Chinese hacking group pwned a bunch of Mongolian government sites www.brica.de

A Chinese hacking group broke into a national data center in Mongolia late last year in an expansive cyber-espionage campaign that allowed the attackers to quietly plant malware into government websites, according to a new research report by Kaspersky Lab and supplemental analysis provided to CyberScoop.

According to Kaspersky’s latest research, a known Chinese hacking group used watering hole-style attacks and spear phishing emails to breach specific employees of the Mongolian data center. After gaining individual access, they leveraged those accounts to gain additional control over the facility’s infrastructure.

The episode began around October 2017. It was discovered by Kaspersky in March 2018. The Chinese speaking group that’s responsible is widely linked to Beijing. It’s tracked by the cybersecurity community under different names, including APT27, EmissaryPanda, IronPanda and LuckyMouse. They’ve been known to also target U.S. defense contractors.

The Kaspersky report does not list Mongolia as the victim, but instead refers to it more ambiguously as a “Central Asia” country. A source familiar with the report revealed that country as Mongolia. The person spoke to CyberScoop on condition of anonymity to offer insight that the company chose not to publish.

In the past, APT27 has been tied to both government spying and financial crime, including bitcoin mining efforts. There are other cases where Chinese government-backed hacking groups appeared to be double-dipping; making money on the side while also conducting traditional intelligence missions.

It’s rare to see hackers breach an entire national data center though, especially to this degree.

“The most unusual and interesting point here is the target. A national data center is a valuable source of data that can also be abused to compromise official websites,” Kaspersky senior security researcher Denis Legezo wrote.

The purpose of hacking this data center was to compromise a “wide range of [Mongolian] government resources at one fell swoop.” Some websites hosted by the data center were then injected with malicious JavaScript code, which would cause people who visited the domains to also be potentially infected.

In some cases, compromised machines also received a remote access trojan (RAT) known as “HyperBro,” which provided customized controls to further manipulate or steal secrets from systems.

“There were traces of HyperBro in the infected data center from mid-November 2017. Shortly after that different users in the country started being redirected to the malicious domain update.iaacstudio[.]com as a result of the waterholing of government websites,” a Kaspersky blog post reads. “These events suggest that the data center infected with HyperBro and the waterholing campaign are connected.”

Researchers found that the attack server behind these Mongolian government breaches was mysteriously located in Ukraine. More specifically, the command and control (C2) could be tied back to a hacked Mikrotik router running old firmware. The hackers likely leveraged this Ukrainian machine in order to obfuscate their activities. It’s not yet clear how the hackers owned the Mikrotik router.

Multiple critical vulnerabilities in Mikrotik systems have been reported in recent months.

Historically, Mongolia and China maintain a complicated relationship.

China is one of Mongolia’s biggest trade partners and regional allies; almost 90 percent of Mongolia’s exports go to China, according to one study. But Beijing is also known for its persecution of ethnic and religious minorities, including buddhists, muslims, shamanists and others. Buddhism is the most prevalent religion in Mongolia.

In late 2017, around same the time that APT27 breached the aforementioned government data center, Chinese President Xi Jinping had just won re-election. Months earlier, Mongolia also had an election where their current President Khaltmaa Battulga dominated by riding a populist wave driven by anti-China rhetoric. At the time, some foreign policy experts predicted that Mongolia would shift their economic dependence towards Russia.

More info: https://www.cyberscoop.com/apt27-mongolia-kaspersky/

Russian rail option opens up for Aspire coal www.thewest.com.au

Aspire Mining’s proposed railway line that is critical for getting its giant Ovoot coking coal deposit in Mongolia to market is firming up with both the Chinese and Russian Government’s recognising the strategic value of Mongolia as a transportation hub in the region.

The company said a long-awaited intergovernmental agreement on transporting goods by rail was signed in the Mongolian capital of Ulaanbattar on the 8th June by Mongolia’s Minister for Roads and the Russian Transport Minister.

The agreement allows for Mongolian-sourced freight to enjoy a tariff discount on Russian rail transportation for its exports to, and via Russia for 25 years.

In particular, Mongolian coal exports will now receive a whopping 66.4% discount on the Russian rail system to the north of Mongolia.

The agreement is a shot in the arm for Aspire, whose high-quality coal assets are perfectly placed to take advantage of the new discounted rail transportation opportunity into Russia.

A recent feasibility study based on the construction of a rail corridor from Aspire’s Ovoot coal deposit to the rail hub town of Erdenet, 548km to the east, confirmed attractive economics that would be largely underwritten by Aspire’s project.

Whilst the initial study was based on transporting coal south into China, the recent agreement on transport between Mongolia and Russia potentially opens other options for Aspire, whereby coal could be transported via Russia into sea borne markets.

The proposed hefty tariff reductions on coal transported via rail through Russia will place the Russian option on a more even economic playing field with the proposal to transport into China to the south.

Russia is already constructing a new rail line to the town of Kyzyl, which could potentially be connected into Erdenet via Aspire’s Ovoot coal deposit..

Additionally, plans are in place to upgrade the railway from Russia, through Mongolia and into China with an initial commitment of USD$260m over the next two years on the table.

The upgrading of the north south rail line that is connected to Erdenet, is an essential part of Aspire’s grand plan to transport coal into China as it seeks to make the case for an Erdenet to Ovoot rail line to be built.

Aspire Executive Chairman David Paull said: “This Rail Cooperation Agreement has two important positive impacts for Aspire. The first is that it lowers rail transit costs through Russia to Far East Ports and potentially west to the Black Sea Ports to a point where it is competitive with transport costs to Northern Chinese customers, opening up a larger and more diverse customer base.”
“The second impact is the agreement from the Mongolian Government side to cooperate to assist Russian exports south from the Russian city of Kyzyl to connect with the Erdenet – Ovoot Railway once the Northern Corridor is completed.”
Aspire is sitting on a 255 million tonne ore reserve of premium, metallurgical coal at Ovoot, which produces a high-grade “coke”, an essential fuel and reactant in the blast furnace process for primary steelmaking.

Recent test work completed on coal from the company’s Nuurstei project, 160km east of Ovoot and closer to Erdenet, has also returned outstanding results indicative of premium hard coking coals.

Nuurstei holds a JORC-compliant coal resource of 12.9 million tonnes and Aspire are planning more work at the deposit during the latter half of 2018.

Mr Paull added: “These coke results demonstrate that coal from Nuurstei will be potentially sought after by Japanese and Korean steel producers as well as from Chinese steel mills where higher quality inputs into the steel industry are being sought.”
On the face of it, the new spirit of cooperation between Mongolia and Russia and indirectly China, comes at a significant time for Aspire and almost by default, is enhancing the potential viability of its coking coal project.

The market is watching too, with Aspire’s share price jumping by nearly 400% since early April, giving Aspire a current market cap of just over $58m

Mongolia’s president, a former martial-arts champion, wrestles with some major problems www.washingtonpost.com

ARVAIKHEER, Mongolia — On the vast Mongolian steppe, birthplace of Genghis Khan, a strong man has arisen. Literally. Mongolia’s President Khaltmaa Battulga is a former world martial arts champion who still trains regularly, a friend of Russia’s Vladimir Putin and a business tycoon with a tough-guy image.

He is also a nationalist and something of a populist. Battulga swept into office last year by casting himself as a Trump-like outsider, a champion of the poor taking on a corrupt and self-serving political elite.

Like the U.S. president, this is a man who says he always wins, whose campaign motto was “Mongolia will win.” But he is now wrestling with the challenge of his life.

Mongolians overthrew an authoritarian communist regime in 1990 in a peaceful democratic revolution. Nearly three decades of democracy have fostered progress but also glaring inequality, leaving nearly 30 percent of the population in poverty. Corruption is rampant, the dark side of the country’s huge reserves of copper, coal and gold. 
“I asked before the election and I am still asking,” the gruff-voiced Battulga told a town hall meeting in Arvaikheer in central Mongolia last month. “Why are the people of a country so rich in resources still so poor?”

Battulga, 55, rose from poverty to the country’s highest post, leapfrogging from a sambo wrestling world championship to a successful business career, but his power as president is limited — parliament and the prime minister’s job are in the hands of a rival political party. Battulga has an important role in setting foreign policy, but his ambitions are much grander.

For the past three months, he has been touring Mongolia, holding town hall meetings in every one of the nation’s 21 provinces, asking for popular support in his battle to improve the way his country is governed.

“Do you get the feeling the president we chose is on his own?” he asked hundreds of people packed into a theater here. “It is time to start talking about president plus who? President plus the people, working together.”

Luvsandendev Sumati, director of the independent Sant Maral polling organization, underscores the parallels between the most recent Mongolian and U.S. presidential elections.

After the dirtiest presidential contest in Mongolia’s history, he said, many people stayed away or cast blank ballots in protest. In the end, though, Battulga’s anti-establishment status outweighed questions about his business record and past corruption allegations.

“The poor decided he is their president, and once people decide that, they forgive you everything,” Sumati said. “Anti-establishment politicians are taking over the globe. Why should Mongolia be any different?”

This is the most sparsely populated country in the world, the size of Texas, California and Montana combined but home to just 3 million people, living in the giant shadows of Russia to the north and China to the south. Culturally, it remains closer to its northern neighbor, but economically it is dependent on its booming southern neighbor, with more than 80 percent of its exports flowing there.

Distrust of China runs high here, however, and Battulga exploited that to portray himself as a pro-Moscow, anti-Beijing candidate during the campaign. As president, though, he takes a more pragmatic approach, saying that Mongolia should be friends with both countries while “rebalancing” to reduce China’s trade dominance.

A former president of Mongolia’s judo association, he shares a love of wrestling, and a friendship, with Putin.

“Because we both practiced judo, it is easier for us to communicate,” he said in an interview, noting that Putin is also “president of a country that has been our neighbor for thousands of years.”

But Battulga wants American support, too. In 1990, then-Secretary of States James A. Baker III pledged that the United States would be the “third neighbor” to the newly democratic Mongolia, a pledge repeated when President George W. Bush visited in 2005. More recently, another secretary of state, John F. Kerry, praised Mongolia as an “oasis of democracy” between Russia and China.

Yet U.S. defense and security ties with Mongolia are much stronger than economic ties, which account for less than 2 percent of Mongolian trade.

“The praises of the United States that Mongolia is ‘an oasis of democracy’ or ‘model of democracy’ have not brought any substantial contribution to the economy,” Battulga wrote in a letter to President Trump in December. “Discouraged by this fact, ordinary citizens of Mongolia are losing confidence in democracy and doubting the choice of democratic path.”

Battulga asked for improved access for Mongolian textile exports to the United States. Trump replied that he would be delighted to explore ways to boost trade in a “fair and equitable manner,” according to the Mongolian presidential office.

Battulga began his business life in modest fashion. After graduating from art school, he sold paintings to tourists in the capital, Ulaanbaatar, before sewing and selling jeans and then trading electronics across borders. He used the prize money and international connections gleaned from his sambo tournaments to get his start.

A taxi service, television station and nightclub followed, as well as a lottery business. During the privatization of state-owned assets, he acquired controlling interests in a hotel and a meat-processing factory. But he was also forced to flee the country for six months after he was falsely accused of illegally importing alcohol, according to his friend and biographer Dorjkhand Turmunkh. Another investigation into alleged corruption followed a more recent stint as roads and transport minister, but no charges were brought.

Battulga underlined his nationalist credentials more than a decade ago by erecting a giant statue of Genghis Khan on horseback in an amusement park outside the capital. He burnished his populist credentials by pledging to use proceeds from mining to pay off personal debts held by ordinary Mongolians.
Today, Battulga is Mongolia’s most popular politician, Sant Maral polls show. Yet questions remain for many people: Is the president, with his vast business empire, part of the solution or part of the problem?

As president, he is supposed to renounce party affiliation and unite the nation, but is his nationwide tour a genuine attempt to raise and address problems — or an attempt to grab personal power and campaign for his party ahead of parliamentary elections in 2020? Is he a genuine man of the people or a wannabe strongman?

At the town hall meeting, complaints were manifold. They included requests to repatriate offshore funds held by the political elite and exposed in the Panama Papers, as well as pleas for better conditions for health workers. Some railed against Chinese workers in Mongolia, others about overcrowding in schools.

The president listened patiently for more than an hour before blaming voters for giving the rival Mongolian People’s Party a dominant position in 2016 parliamentary elections.

“One party got 65 out of 76 seats,” he said. “They have all the seats, but unfortunately these past two years they didn’t do anything.”

But at least one listener pushed back, accusing him of being no better than his rivals.

“You are blaming voters, saying this is our fault for electing thieves,” he said. “Look at our lives, look at the condition our kids live in. The Chinese are the owners of Mongolia now. The country is on the brink of disaster. I elected you. I voted for you. But Mongolia will only ‘win’ when we get rid of both these two parties.”

CORRECTION: A headline previously on this article misidentified Khaltmaa Battulga as a former world judo champion. He is a former world champion at the martial art sambo and former president of Mongolia’s judo federation.

India, China look to form ‘Oil Buyers Club’ www.rt.com

India and China have discussed creating an ‘oil buyers’ club’ to be able to negotiate better prices with oil exporting countries.
They will be looking to import more US crude oil in order to reduce OPEC’s sway, both over the global oil market and over prices, India’s Petroleum Ministry said on Wednesday.

Tax-free supply to EU countries available www.montsame.mn

Advisory day for private enterprises which are supplying products to the European Union countries or plan to make export was held on June 14 at the Mongolian National Chamber of Commerce and Industry (MNCCI).
The event was organized for the first time under the EU Trade Related Assistance to Mongolia (TRAM) project with the support of EU. Last year, Mongolia’s export to the EU totaled EUR 67 million, 40 percent of which was non-value added semi-finished products.
Cooperation between Mongolia and EU started in 2005 and Mongolia is eligible to export 7200 items tax free to the EU market. However, only few products such as knitwear, carpet and semi-finished leather are being exported. Therefore, the participants of the event stressed the need to increase the types of products for the EU market export, which accounts for 16 percent of world imports.

Arnaud Soirat: OT agreements are not renegotiable (Part 2) www.zgm.mn

GM Daily had the opportunity to sit down with Arnaud Soirat, Rio Tinto’s Chief Executive of Copper and Diamond, about the company’s future. The first part of the interview, which covered the stanceon the current turmoil around the Oyu Tolgoi (OT) project, was published on June 14th issue of ZGM Daily. Scan the QR code to read the first part of the interview.

How do plan to contribute to solving social problems of the workers on-site? It has been widely debated that a town near the site will be solution to many problems such as divorce?

-Yesterday, I went to visit Khanbogd town and I am very impressed by the work that has been done. I am sure that you have read in the newspaper where politicians are saying nothing has been done. Maybe you should ask them a simple question. “Have you gone and seen them by yourselves? What has been done?” Because, when you go, it is impossible to say that Rio Tinto has done nothing. It is not true at all. Actually, we have already done a lot. We have helped building the key infrastructure for a town. We have built the water treatment plants and we have visited the veterinary clinic, which is going to help the herders have healthier stock in general. We have built schools too. So, we have built lots of infrastructure, which are the enabler for the town to grow. The town has already grown quite a lot. Compared to ten years ago, the population has been tripled. But we are not a real estate business. Our job and purpose are not to build a town. We can be a catalyst, but the government and private investors have got their own roles to play.

-You have said the investment agreement and the UDP are the foundation of your investment. Some populists are stating, they might want to renegotiate the agreement. What does that mean to the company? Also, the election is coming up in two years, which significantly increases the risk of that actually happening.

-We are prepared and waiting to invest in the country. Because waiting is the right thing to do for the country, for Mongolian people and for shareholders. But we cannot invest if we do not have stability. Therefore, those agreements cannot be renegotiated. They have been negotiated in good faith. We need those agreements to be honored, first to continue investing.

I am convinced that within the existing agreements, there are many more things we can do together. For example, power. We are committed to building a power station in Mongolia, using the coal from Tavan Tolgoi that will supply electricity to OT. That is the commitment that we made in the investment agreement. Yet, we cannot do it on our own. We need permits. We need the Government’s support. Currently, we are having difficulties to get the support of the Government. This is a great example of how, within the existing agreement, we can create more value for the country. We do not need to renegotiate agreements to do so.

-What does it take to create more value within the existing agreement?

-We are currently buying power from Inner Mongolia, which is equivalent between USD 120-140 million per year. So, if we were to build a power station, then this money will stay in the country. If you look at the very strong priorities that we are giving to employ more Mongolian people and to give more of our procurement contracts to Mongolian companies, 85 percent of our contracts are with Mongolian companies. We are, right now, contributing to the diversification of Mongolian economy. Also, we are encouraging “Made in Mongolia”. More of this is creating huge amount of value for the country. So, my point is that these agreements are foundations, on which very reputable international banks and international organizations have lent USD 6 billion. If those agreements are renegotiated, the whole foundation of the lending will collapse. There is an incredible strength in the culture. People are very smart, adaptable and creative. When we give opportunities, entrepreneurs are seizing those opportunities to create new businesses. So, diversification is already happening. I think the parliamentary working group has got the key opportunity to actually explain better to Mongolians why those agreements are good agreements and what we can do together to create environment for us to continue investing.

-Does the many things include a copper cathode factory in the foreseeable future?

We had a commitment to study about a potential copper smelter in the country, which we did. We gave our study to the Government, around August last year. As for the commitment we made in the agreement, the analysis shows that it will be very difficult for the investor to invest in a smelter and get some money back out of it. Mongolia has a geographical situation such that it would be very difficult to have a profitable smelter. So, we gave the conclusion to the Government that we are not interested in investing in a smelter. However, if the Government were interested for strategic critical reasons, for example, to create jobs, that is up to them to invest if they wish so. We have given the commitment that would be selling copper concentrates to local smelter at the international market price to enable that smelter to import.

Cabinet supports a loan agreement for a solid-waste recycling plant www.mongolia.gogo.mn

On June 13, Cabinet approved the submission to Parliament of a bill on establishing a loan agreement with the European Bank for Reconstruction and Development (EBRD).

Orkhon aimag proposes to export meat and meat products to Hungary www.monstame.mn

Orkhon /MONTSAME/ On June 13, Deputy Governor of Orkhon aimag S.Batjargal, Head of the Governor’s Office D.Soyolchkhuu met Ambassador of Hungary to Mongolia Mihaly Galosfai.

Proposed oil, gas pipelines from Russia to China via Mongolia www.internationalfinance.com

A recent meeting between Vladimir Putin, President of the People’s Republic of China Xi Jinping and President of Mongolia Khaltmaagiin Battulga took place in Qingdao.