Shenhua profit rises to 5-year high as China curbs boost coal www.mining.com

China Shenhua Energy Co., the country’s biggest coal miner, said profit jumped to the highest level since 2012 as robust demand and government efforts to rein in overcapacity helped bolster prices.

Net income climbed to 47.8 billion yuan ($7.6 billion) from 24.9 billion yuan a year ago, the Beijing-based miner said in a statement Friday to the Hong Kong Stock Exchange. Revenue rose 35.8 per cent to 248.7 billion yuan. The company, which also runs power stations and railroads, had flagged the profit jump in January.

Coal prices were supercharged last year as China pressed on with efforts to cut overcapacity by shuttering some mines and restricting imports, aiding major producers including Shenhua, Yanzhou Coal Mining Co. and China Coal Energy Co. Demand was also underpinned by robust economic growth. Still, there’s concern the good times will end as prices have eased in recent months and analysts are warning of further declines as mines ramp up output.

Spot coal at the Chinese port of Qinhuangdao averaged 36 per cent higher last year and hit 751 yuan in January, the most since 2012, according to China Coal Resource. Prices, which have since eased to 636 yuan as of March 19, may decline about 5 per cent this year, Shanxi-based Fenwei Energy estimates.

Coal Targets

Shenhua targets output this year of 290 million tons after posting a 1.9 per cent rise to 295.4 million for 2017. Coal sales will also slide to 430 million tons, from almost 444 million tons. As the country brings on new “advanced” capacity mines this year, the nation’s overall coal output will likely increase while imports will remain steady, the company said.

Shenhua proposed a final dividend of 0.91 yuan per share for 2017, a far cry from the large special dividend the previous year that sent its shares jumping.

Separately, Yanzhou said Friday that net income jumped more than fourfold to 7.36 billion yuan. Revenue gained almost 48 percent to 151.2 billion yuan, the Shandong-based miner said in a statement.

The company’s coal sales last year rose 29 per cent to 96.8 million tons after new mines in Inner Mongolia started operation and the acquisition of Coal & Allied Industries Ltd. in Australia was completed in September, it said. Net income was also helped by its subsidiary, Yancoal Australia Ltd., swinging to a record profit from a loss the previous year, the company said.

Yanzhou also reported impairments of more than 2.2 billion yuan, including bad debts and depreciation of inventory. A company statement showed the bulk of the writedowns came from almost 1.5 billion yuan in assets held by Inner Mongolia Xintai Coal Mining Co., without providing further details.

China Coal, the country’s largest listed miner after Shenhua, reported net income doubled to 3.49 billion yuan last year. While the producer said China may face coal shortages from time to time, it warned the nation’s consumption will slow.

— With assistance by Jing Yang.

Amended draft laws handed over to the Bank of Mongolia www.montsame.mn

Ulaanbaatar /MONTSAME/ The amendments to Law on Central bank, Banking law and Bank Deposit Insurance approved at the 2017-0218 Parliament autumn session were handed over to the Central bank of Mongolia on March 22.

PM sends a message to investment forum participants www.montsame.mn

Ulaanbaatar/MONTSAME/ On March 22, Prime Minister sent a message to participants of the investment forum ‘Mongolian Minerals and Mining 2018’, being held on March 22-23 in Ulaanbaatar. The message was read by L.Altangerel, advisor to the Prime Minister.

Trump signs tariffs memorandum against China despite strong warnings www.xinhuanet.com

WASHINGTON, March 22 (Xinhua) -- Despite strong warnings from business groups and trade experts, U.S. President Donald Trump on Thursday signed a memorandum that could impose tariffs on up to 60 billion U.S. dollars of imports from China, the latest unilateral move that poses a threat to global trade.

Trump has directed U.S. Trade Representative Robert Lighthizer to publish a list of proposed Chinese goods that could be subject to tariffs in 15 days, while the U.S. Treasury Department will have 60 days to propose restrictions on Chinese investment in the United States, according to the presidential memorandum.

The tariffs "could be about 60 billion" dollars, Trump said Thursday at the White House before signing the memorandum. But a senior White House official told reporters earlier in the day that the number would be close to 50 billion dollars.

The memorandum is based on a so-called Section 301 investigation into alleged Chinese intellectual property and technology transfer practices, launched by the Trump administration in August 2017.

China will "take all necessary measures" to defend its rights and interests, an official with the Ministry of Commerce said Thursday, responding to media reports that Washington will soon release results of the investigation.

"China has made clear its position several times that it stands firmly against such unilateral and trade protectionist practices from the U.S. side," the official said.

Section 301, once heavily used in the 1980s and the early 1990s, allows the U.S. president to unilaterally impose tariffs or other trade restrictions on foreign countries. But the United States has rarely used the outdated trade tool since the World Trade Organization (WTO) came into being in 1995.

"It became no longer necessary really for the United States that they have to use that law, because now we have an effective dispute settlement system under the WTO," said Chad Bown, a trade expert and senior fellow at the Washington D.C.-based Peterson Institute for International Economics (PIIE).

The memorandum follows Trump's recent tariff plan on steel and aluminum imports and January's tariffs levied on imported solar panels and washing machines. These unilateral moves have prompted strong opposition and warnings from business groups around the world.

In a letter to Trump on Sunday, 45 U.S. trade associations, representing retail, technology, agriculture and other consumer-product industries, urged the administration not to move forward its tariff plan on Chinese imports, as it would hurt U.S. consumers and companies.

A group of 25 major U.S. retail companies, including Walmart, Costco and Best Buy, also warned on Monday that any additional broad-based tariff would worsen U.S. inequity and "punish American working families" with higher prices on household basics like clothing, shoes and electronics.

If the Trump administration imposes a 25-percent tariff on information and communications technology imports from China, it would cost the U.S. economy 332 billion dollars over the next 10 years, according to a report recently released by the Information Technology and Innovation Foundation, a U.S. technology policy think tank.

"Simply put, tariffs are damaging taxes on American consumers," said Thomas J. Donohue, President and CEO of U.S. Chamber of Commerce, warning the Trump administration's tariff plan could lead to "a destructive trade war" with serious consequences for U.S. economic growth and job creation.

"Tariffs of $30 billion a year would wipe out over a third of the savings American families received from the doubling of the standard deduction in tax reform. If the tariffs reach $60 billion, which has been rumored, the impact would be even more devastating," Donohue said.

Mongolia holds mineral exploration forum to boost mining industry www.xinhuanet.com

Minister D.Sumiyabazar meets EBRD and Deutsche Bank representatives www.montsame.mn

Ulaanbaatar /MONTSAME/ On March 22, Minister of Mining and Heavy Industry D.Sumiyabazar met with Deutsche Bank delegates headed by Heinz-Guenter Bockenheimer, Deutsche Bank Relationship Manager for Asia and Pacific.

Mongolian sales managers’ index increases www.gogo.mn

According to World Economics, the Mongolian sales managers' index increased in March, reaching 51.8 points, after previously being in decline.

Rio sells one of latest coal assets in Australia for $200 million www.mining.com

Mining giant Rio Tinto (ASX, LON:RIO) has agreed to sell its 75% stake in a Queensland project to Australia's Whitehaven Coal (ASX:WHC) in a deal worth $200 million.

7 percent mortgage program in discussion www.ubinfo.mn

The Cabinet is considering to facilitate 8 percent mortgage program. Earlier this year, the Ministry of Finance and Bank of Mongolia (BoM) co-established a working group to prepare a draft subsidiary mortgage program with 7 percent interest rate and 25 percent downpayment, which is 5 percent lower than the current subsidized mortgage requirement. Officials perceive that the current 8 percent mortgage program has reached its target market; thus, the Cabinet has prepared a draft program for the first-time accomodation purchasers in the outskirts of Ulaanbaatar with more favorable terms. Sources claim that the program will be financed from the USD 500 million borrowing from the Republic of Korea that settled was during the Prime Minister’s visit to South Korea in January. The soft loan has a maturity date of 30 years and grace period of 10 years with an annual interest rate of 0.2 percent. Presently, around 30 thousand accommodations are ready for sale; however, the housing sales are only about 30 percent. This year, the Government and BoM set a plan to finance around MNT 300 billion to the mortgage program, which will provide around five thousand accommodations. According to Marketinfo, the mortgage program will be effective in decreasing pollution and other associated social problems. This, along with several air pollution protests last winter, will likely galvanize the Cabinet to approve the application of the program in the second quarter of 2018.

China ready for trade war with ‘repeat abuser’ of international norms US www.rt.com

China is readying itself for a trade war with the US as Washington reportedly plans to announce new measures against Beijing within days. Officials have been seeking support from other nations and world trade bodies.
US media reports have claimed the White House was preparing punitive measures, including tariffs on Chinese technology and telecoms commodity imports valued at $60 billion dollars, to be a announced on Friday.