China warns investors over risks in overseas virtual currency trading www.chinadaily.com.cn

BEIJING - A leading Chinese Internet finance guild has warned domestic investors about risks in trading overseas "initial coin offerings" (ICOs) and virtual currency transactions.

Moody's publishes FAQ on Mongolia's growth potential, liquidity and fiscal metrics www.moodys.com

Singapore, January 29, 2018 -- Moody's Investors Service ("Moody's") says that the Government of Mongolia's (B3 stable) medium-term growth potential is backed by its abundant mineral resources, demand for which is expected to remain solid. A recent debt refinancing has coincided with an improvement in external metrics to alleviate liquidity and external pressures, albeit from high levels. Sustained adherence to IMF rules designed to improve accountability and tighten the budgetary process would distinguish the current improvements in credit metrics from previous boom-bust cycles. However, at the current juncture and in the next few years, Mongolia's credit metrics will remain vulnerable to commodity price cycles.

Moody's conclusions are contained in its just-released report, "Government of Mongolia: FAQ on medium-term prospects for growth, liquidity and fiscal strength".

Moody's report answers the three questions below:

1. What are Mongolia's medium-term growth prospects?

2. Does the recent refinancing eliminate external liquidity risks?

3. What is the outlook for Mongolia's fiscal metrics in light of implemented and planned reforms?

Moody's says that Mongolia's GDP growth will be strong over the medium term, rising towards 7.0% by 2021, backed by demand for its natural resources. Consumption of coal and copper, both key exports for Mongolia, is likely to remain robust, given structural changes in the market, such as those associated with urbanization and the electrification of transport in China. However, risks to growth stem from a very high reliance on China as a destination for its exports and source of investment, as well as lack of predictability on the regulatory environment which can weigh on investment.

Moody's also notes that last October's debt refinancing alleviates liquidity pressures. Combined with a narrower current account deficit and higher investment inflows from both FDI and multilateral support, the refinancing has also reduced pressures on the country's foreign exchange reserves.

However, both liquidity risks and external vulnerability remain key constraints to the credit profile. Moody's estimates that external debt obligations due over the next year are still around 1.5 times larger than foreign exchange reserves, underscoring the prominence of external risks.

In light of implemented and planned reforms, Moody's now forecasts Mongolia's deficits to narrow faster than expected at the start of 2017, reflecting stronger headline GDP and revenue growth supported by the mining sector. This is leading to a gradual moderation in the country's debt burden. Still, government debt at around 81% of GDP in 2018 is high for an economy of the size and income levels of Mongolia's.

Thus, a sustained observance to structural reforms developped under the IMF program is crucial for credit quality because these reforms are designed to prevent a return to boom-bust cycles, that Mongolia has tended to be vulnerable to in the past.

Subscribers can read the full report at:

http://www.moodys.com/researchdocumentcontentpage.aspx…

NOTE TO JOURNALISTS ONLY: For more information, please call one of our global press information hotlines: New York +1-212-553-0376, London +44-20-7772-5456, Tokyo +813-5408-4110, Hong Kong +852-3758-1350, Sydney +61-2-9270-8141, Mexico City 001-888-779-5833, São Paulo 0800-891-2518, or Buenos Aires 0800-666-3506. You can also email us at mediarelations@moodys.com or visit our web site at www.moodys.com.

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page on www.moodys.com for the most updated credit rating action information and rating history.

Anushka Shah
Asst Vice President - Analyst
Sovereign Risk Group
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Marie Diron
MD - Sovereign Risk
Sovereign Risk Group
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077
Releasing Office:
Moody's Investors Service Singapore Pte. Ltd.
50 Raffles Place #23-06
Singapore Land Tower
Singapore 48623
Singapore
JOURNALISTS: 852 3758 1350
Client Service: 852 3551 3077

Iran reportedly considers meat import from Mongolia www.akipress.com

An Iranian official unveiled plans for importing red meat from some neighboring countries, as well as from Mongolia, according to Deputy Agriculture Minister of Iran Ali Akbar Mehrfard.

China’s coal imports from Mongolia surge www.news.mn

According to customs data released on Thursday, China’s coal imports from Russia and Mongolia soared in 2017 as the two countries filled a supply gap caused by trade sanctions on North Korea.

Robert Friedland tells Frank Holmes why copper is ready to run www.mining.com

Last week the U.S. Global Investors office was visited by a living legend in the junior mining industry, billionaire founder and executive chairman of Ivanhoe Mines, Robert Friedland. In case you don’t know, back in the mid-1970s, Robert was caretaker of an apple orchard south of Portland that one of his buddies from Reed College would often visit. That buddy’s name was Steve Jobs, who later went on to found a little company he named—what else?—Apple.

Before Robert and Steve Jobs began palling around, Jobs was known as shy and withdrawn. It was Robert who taught him his skills in what’s been described by many as “reality distortion.” Having seen numerous speeches by Robert over the years, I can attest to his masterful ability to utterly command a room of hundreds with his electric charisma. Some of that charisma must have rubbed off on Jobs, helping the future iPhone innovator evolve into the shrewd, larger-than-life business leader he’s celebrated as today.

Robert’s “reality distortion” was on full display during his visit. I was pleased and honored, as were my U.S. Global team members, to have the opportunity to hear his unique insights on a wide range of issues, from the debilitating smog in Delhi, India; to China’s efforts to become the world’s leading electric vehicle (EV) economy; to Ivanhoe’s development of the Kamoa-Kakula Copper Project in the Democratic Republic of Congo, independently ranked as the largest high-grade copper discovery in the world.

Robert made a very compelling case for Kamoa-Kakula, which he calls “the most disruptive Tier One copper project in the world today.” In its first year of production, its average copper grade is estimated to average an ultra-high 7.3 percent. Because the site is flat and uninhabited, and wages are paid in local currency, the cash cost for the life of the mine is projected to be a low, low $0.64 per pound of copper. As of my writing this, copper is priced at $3.20 a pound, so the margin is significant. After an initial $1.2 billion in capital costs to develop the project, the company expects a payback period of only 3.1 years.

I reminded Robert that we’re bullish on both copper and the industries it supports, including the imminent EV revolution and massive electricity demand in emerging markets, especially China and India. EVs, as I’ve pointed out before, require three to four times as much copper as traditional gas-powered vehicles. By 2027, as much as 1.74 million metric tons of copper will be needed to meet EV demand alone, up from only 185,000 tons today, according to the International Copper Association.

The red metal was one of the best performing commodities last year, surging more than 30 percent, and with investment demand near all-time highs, I predict another year of phenomenal returns. That would represent a third straight year of positive gains, something copper hasn’t accomplished this decade.

As you can see below, open interest in copper futures on the Chicago Mercantile Exchange (CME) is still historically high, even after cooling somewhat from its all-time high set in late July, when contracts hit an average 319,000 contracts. Open positions last month averaged more than 285,000, up 7.3 percent from the previous month and 26.9 percent from December 2016.

Robert expressed confidence that copper—along with aluminum, cobalt, nickel, platinum and scandium—will be among the biggest beneficiaries of the global transition to EVs and clean energy.

“You’re going to need a telescope to see copper prices in 2021,” he told us theatrically.

A rally is already in the works. From its recent low two years ago this month, the Bloomberg Industrial Metals Subindex, which tracks aluminum, copper, nickel and zinc, has surged more than 65 percent. Support looks strong, and copper prices could be headed even higher on global supply disruptions, as labor negotiations continue in Chile, the world’s top producer of the red metal.

“There are between 20 and 25 collective negotiations expected. If some of them lead to significant strikes, that would have a positive impact on [copper] prices,” explained Sergio Hernandez, vice president of Cochilco, Chile’s state copper commission.

Other fundamental trends are driving commodities, as I’ve noted earlier. The global purchasing manager’s index (PMI), a gauge of the manufacturing industry, is near a seven-year high. Construction confidence in the eurozone turned positive. And construction spending here in the U.S. hit $1.257 trillion in November, a new high.

China and India Cleaning Up Its Act
About half of all the copper produced globally every year is consumed by China. Last year, the Asian giant set a new record in importing the red metal. Imports climbed to a never-before-seen 17.35 million metric tons in 2017, up 2.3 percent from the previous year.

The metal is needed not just for the construction of new buildings but also to manufacture millions of new electric vehicles in the world’s largest auto market. Sometime this year, China is expected to announce when it plans to outlaw gas-powered vehicles, joining a growing number of other countries, including the U.K. (which is shooting for a 2040 ban), France (2040), Germany (2030), India (“next 13 years”) and more.

According to Bloomberg New Energy Finance, about 1,293 gigawatts per hour (GWh) are forecast for the lithium-ion battery market. That’s up spectacularly from only 19 GWh in 2015. About two thirds of the demand will come from China and the U.S.

To accommodate all these new EVs, China has pledged to build a charging station for every vehicle on the road by 2020. That equates to around 4.8 million charging outlets and stations, requiring a total investment of $19 billion. China had 190,000 charging stations at the end of September, so to call this goal ambitious is an understatement. The U.S., by comparison, has a little over 64,000 outlets and stations around the country, according to the Department of Energy.

Even William Ford Jr., Ford Motor’s executive chairman, acknowledged that the Chinese are more aggressive than most in their mission to fully embrace the electric vehicle. “When I think of where EVs are going,” Ford said in Shanghai last month, “it’s clearly the case that China will lead the world in EV development.”

Not only was China the largest importer of copper, crude oil, natural gas and other natural resources, it also outspent every other country in new clean energy capacity. The country invested as much as $132.6 billion in 2017, about 16 percent more than the U.S. and Europe combined. The government’s efforts already seem to be having a positive effect, as sales of face masks and air purifiers in Beijing have fallen dramatically compared to last winter.

Sales of face masks in beijing are down this year thanks in part to the governments huge investment in clean energy

Another market that’s in urgent need of clean energy is India. In Delhi, the country’s capital territory, the air quality has become so noxious and filled with heavy metals that the World Health Organization has likened it to smoking at least 50 cigarettes a day. The city’s chief minister, Arvind Kejriwal, went so far as to call it a “gas chamber.”

Shell Shelling Out for Electricity Provider

It’s not just governments seeking to diversify their energy mix. Royal Dutch Shell, the largest oil company in Europe, is steadily acquiring smaller providers of electrical power and natural gas. In December it announced a deal to buy retail energy provider First Utility. It’s just the latest in a series of purchases by large oil and gas companies looking ahead to the day when charging stations, rather than gas stations, might be the norm.

In an interview this month, Shell CEO Ben van Beurden sees the current energy transition as an opportunity.

“We have to embrace the future, and the future will include battery electric cars,” van Beurden said. “Importantly, I believe Shell can achieve this without destroying value in the company. It is about identifying real business opportunities to thrive through the energy transition.”

As my friend Robert Friedland sees it, those business opportunities lie in copper, aluminum, cobalt and other key industrial metals.

“We’re in the battery business,” he told us, adding that very little of lithium-ion batteries is actually lithium.

Rio Tinto lifts force majeure at Kennecott copper mine www.mining.com

World’s second largest mining company Rio Tinto (ASX, LON:RIO) has lifted force majeure on shipments of refined copper from its Kennecott unit in the U.S., 79 days after adopting the measure.

Parliament ratifies EUR 5 million loan agreement www.montsame.mn

Ulaanbaatar /MONTSAME/ Parliament ratified a Mongolia-Germany loan agreement on January 26, which will fund the completion of the New Turbine for Darkhan Thermal Power Plant project, being implemented within the Energy Efficiency -I Program.

Swiss Development Agency to implement projects worth CHF 51.5 million in Mongolia www.montsame.mn

Ulaanbaatar /MONTSAME/ On 25 January 2018, the Swiss Agency for Development and Cooperation (SDC) presented its new Cooperation Strategy which will guide Switzerland’s engagement in Mongolia for the next four years.

Mongolia wins gold at Breckenridge Int'l Snow Sculpture Championships www.xinhuanet.com

ULAN BATOR, Jan. 27 (Xinhua) -- Team Mongolia won gold in the 28th International Snow Sculpture Championships on Saturday with a piece entitled, "The Secret."

Coincheck: World's biggest ever digital currency 'theft' www.bbc.com

One of Japan's largest digital currency exchanges says it has lost some $534m (£380m) worth of virtual assets in a hacking attack on its network.

Coincheck froze deposits and withdrawals for all crypto-currencies except Bitcoin as it assessed its losses in NEM, a lesser-known currency.

It may be unable to reimburse the funds lost on Friday, a representative told Japanese media.

If the theft is confirmed, it will be the largest involving digital currency.

Another Tokyo exchange, MtGox, collapsed in 2014 after admitting that $400m had been stolen from its network.

The stolen Coincheck assets were said to be kept in a "hot wallet" - a part of the exchange connected to the internet. That contrasts with a cold wallet, where funds are stored securely offline.

Coincheck says it has the digital address of where the assets were sent.

Hackers broke in at 02:57 on Friday (17:57 GMT Thursday), the company said in a statement, but the breach was not discovered until 11:25, nearly eight and a half hours later.

Company chief operating officer Yusuke Otsuka said 523m NEMs had been sent from Coincheck's NEM address during the breach.

"It's worth 58bn yen based on the calculation at the rate when detected," he told reporters at the Tokyo Stock Exchange.

Coincheck was still examining how many customers had been affected and trying to establish whether the break-in had been launched from Japan or another country.

"We know where the funds were sent," Mr Otsuka added. "We are tracing them and if we're able to continue tracking, it may be possible to recover them."

Coincheck reported the incident to the police and to Japan's Financial Services Agency.

How damaging is the loss?
NEM, the 10th-largest crypto-currency by market value, fell 11% over a 24-hour period to 87 cents, as of 18:30, Bloomberg news agency reports.

Among the other crypto-currencies, Bitcoin dropped 3.4% and Ripple retreated 9.9% on Friday, according to prices seen by the agency.

More was lost on Friday than in 2014, when MtGox lost what it thought was 850,000 bitcoins. However, MtGox later found 200.000 bitcoins in an old digital wallet.

"In a worst-case scenario, we may not be able to return clients' assets," an unnamed Coincheck representative was quoted as saying on Saturday by Japan's Kyodo news agency.

After the collapse of MtGox shook the digital currency world, a licensing system was introduced in Japan to increase oversight of local currency exchanges such as Coincheck.

"What's the lasting impact? It's hard to tell," Marc Ostwald, global strategist at ADM Investor Services International in London, told Bloomberg.

"Japan is one of the most pro-crypto trading countries, among the G-20. In Japan they don't really want a wholesale clampdown. So it will be interesting how Japanese regulators respond to this, if they indeed do."

50 Cent discovers his Bitcoin millions
What is Coincheck?
Founded in 2012, the company is based in Tokyo, where it employed 71 people as of August last year.

Its headquarters are located in the city's Shibuya district, an area popular with start-ups that was also home to MtGox, Bloomberg reports.

Last year, Coincheck began running adverts on national television featuring popular local comedian Tetsuro Degawa, the agency adds.

Kunihiko Sato, a 30-year-old customer from Tokyo, told Kyodo he had deposited about 500,000 yen ($4,600), into his account with the exchange.

"I never thought this kind of thing would happen with Japan's developed legislation," he said.

How do crypto-currencies work?
Whereas money is printed by governments or traditional banks, digital currencies are generated through a complex process known as "mining". Transactions are then monitored by a network of computers across the world using a technology called blockchain.

There are thousands of them, largely existing online, unlike the notes or coins in your pocket.

It may be more useful to think of them as assets, rather than digital cash. The vast majority of Bitcoin holders, for instance, appear to be investors. But the anonymity that crypto-currencies afford has also attracted criminals.

The value of a crypto-currency is determined by how much people are willing to buy and sell them for.