National forum to be organized to reduce air pollution www.montsame.mn

Ulaanbaatar/MONTSAME/ At the initiative of the Mongolia’s President, a national forum on reducing air pollution will take place in Ulaanbaatar on October 23.

Step ahead in realisation Mongolian Northern Rail Corridor www.railfreight.com

The Australian company Aspire Mining and its Mongolia-registered Northern Railways (NR) subsidiary have signed an agreement with China Gezhouba Group International (CGGC) for carrying out the final stage of a feasibility study into the Erdenet – Ovoot line in northern Mongolia.

Goldman Sachs prefers gold to bitcoin www.rt.com

Gold is better than cryptocurrencies due to its durability and intrinsic value, explains American banking giant Goldman Sachs.

Political party financing in Mongolia: A road to grand corruption? www.politicsofhope.com

While true that Mongolia’s economy is heavily dependent on fluctuating coal and copper prices, it is also true that the country’s political parties increasingly influence economic outcomes.

According to The Asia Foundation’s annual survey on perceptions of corruption in Mongolia, in 2010, political parties ranked fifth on a list of the 16 most corrupt entities. By 2017, political parties had reached second place, just behind the Land Affairs Authority. The findings point to a worrying trend: as the amount of money needed to win an election increases, political parties are looking to “secret, private” donors, giving rise to questions of transparency and fairness in the electoral process. Economists argue that if this pattern continues, it will negatively affect Mongolia’s investment patterns and economic performance.

On September 21, Mr. Jargalsaikhan, a renowned TV host, economist, and good governance activist, popularly known as “Jargal Defacto,” explored The Asia Foundation’s latest corruption perception survey findings in the country’s first-ever public debate on corruption before a live television audience.

While true that Mongolia’s economy is heavily dependent on fluctuating coal and copper prices, it is also true that the country’s political parties increasingly influence economic outcomes.

According to The Asia Foundation’s annual survey on perceptions of corruption in Mongolia, in 2010, political parties ranked fifth on a list of the 16 most corrupt entities. By 2017, political parties had reached second place, just behind the Land Affairs Authority. The findings point to a worrying trend: as the amount of money needed to win an election increases, political parties are looking to “secret, private” donors, giving rise to questions of transparency and fairness in the electoral process. Economists argue that if this pattern continues, it will negatively affect Mongolia’s investment patterns and economic performance.

On September 21, Mr. Jargalsaikhan, a renowned TV host, economist, and good governance activist, popularly known as “Jargal Defacto,” explored The Asia Foundation’s latest corruption perception survey findings in the country’s first-ever public debate on corruption before a live television audience.

On the other side of this argument was Ms. Erdenedalai, who teaches at the University of Finance and Economics. She argued that financing political parties from the state budget is unfair, and that it is doubtful that doing so enhances oversight. She elaborated by saying that tighter oversight will make the true sources of financing even more hidden. Furthermore, she said that she believes the public lack the platform needed to demand transparency and hold political parties accountable for their actions. She noted that if only parties holding parliamentary seats are publicly financed, then smaller parties would be at a disadvantage and that democratic pluralism would suffer. Another risk, she argued, is that the larger political parties with seats in parliament would become disconnected from society because, at present, they need to listen to people and work with them to build trust when they later need to seek donations from them. Finally, she noted that political parties do receive small amounts of funding from the national budget but that this is not disclosed to the public. While the existing law on Political Parties requires that political parties report on their finances, but no parties publish these reports.

The debate stirred a great deal of interest on one of Mongolia’s most critical issues today, and raised a number of new questions, including how the country can follow international best practices in light of the economic slump. Mongolia’s current economic crisis and growing foreign debt will preclude it from providing full government financing to political parties at this juncture. But there may be ways to open up the system and provide some level of public financing while better regulating and limiting private donations. For example, the public budget could cover some of the costs associated with radio and television coverage of party candidates. Other measures could include allowing political parties to use billboards free of charge and offering reduced taxes to those who make donations. But most importantly, the public needs to truly know who they are voting for and how their campaign is being financed.

About 1000 teachers in Mongolia intend to go on hunder strike over low salaries www.akipress.com

AKIPRESS.COM - 1000 teachers intend to go on hunger strike claiming the Government has not responded to their demand for a better pay, Mongolian media report Wednesday. 

Representatives of teachers from 21 aimags and 5 teachers from every secondary schools and kindergartens of the capital city intend to join hunger strike, Gogo Mongolia reported.

UK banks exposed to money laundering in South Africa www.bbc.com

UK banks may have been used to launder money stolen from South Africa, a former cabinet minister has alleged in a letter to Chancellor Philip Hammond.

Lord Peter Hain said a South African whistle-blower had indicated the banks "maybe inadvertently have been conduits for the corrupt proceeds of money".
The Labour peer is due to raise the issue in the House of Lords later.
The Treasury said it had sent his letter to financial regulator the Financial Conduct Authority (FCA).
"We take allegations of financial misconduct very seriously, and have passed Lord Hain's letter on to the Financial Conduct Authority and relevant UK law enforcement agencies, including the National Crime Agency and Serious Fraud Office, to agree the right action," a spokesperson said.
'Corruption and cronyism'
A spokeswoman for the FCA said it was already in contact with the banks named by Lord Hain and would "consider carefully further responses received".
The money laundering accusation rests on alleged ties between the country's President Jacob Zuma and a wealthy business family, the Guptas.
Lord Hain, a leading anti-apartheid campaigner who grew up in South Africa, urged UK authorities "to track that stolen money down and make sure that British financial institutions help return it to South African taxpayers".
The former Northern Ireland secretary alleged the issue was "a result of the corruption and cronyism resided over by President Zuma and close allies the Guptas".
Brothers Ajay, Atul and Rajesh Gupta have interests in computer, mining, media, travel, energy and technology and employ about 10,000 people through their company Sahara Group.
The Guptas have been accused in the past of wielding influence in South African politics under President Jacob Zuma's administration.
Both President Zuma and the Guptas deny wrongdoing, and say they are victims of a "politically motivated witch-hunt".

Parliament appoints five ministers www.montsame.mn

Ulaanbaatar /MONTSAME/ During its irregular plenary meeting on October 18, the Parliament discussed and approved the appointment of five Ministers of the Prime Minister U.Khurelsukh's Cabinet. 

Chile's Cochilco boosts copper forecast to near $3 per pound in 2018 www.mining.com

Chile state copper commission Cochilco forecasted on Wednesday an average global copper price of $2.95 per pound in 2018, a sharp upward revision from its mid-year estimate of $2.68, due to greater demand in China, a key market.

October 18, 2017 trading report www.mse.mn

On October 18, 2017, 242,455 shares of 31 firms listed as Tier I, II, and III were traded. 11 firms’ shares increased in price, 13 decreased and 7 remained unchanged. Ikh Barilha JSC /IBA/ was the top performer, increasing 14.98 percent, whereas Hermes center JSC /HRM/ was the worst performer, decreasing 8.35 percent.

Cashed-up Kincora Copper now raring to dish up major discoveries in Mongolia www.proactiveinvestors.co.uk

Exploration activity in Mongolia is hotting up and with recent funding, Kincora Copper Limited (CVE:KCC) is now catching up. 

Oyu Tolgoi, the giant copper-gold porphyry mine run by Rio Tinto (LON:RIO), remains among the biggest. The mine has been in production for the last four years and will account for a third of the landlocked country’s GDP. Its underground development is the largest expansion project globally in the metals and mining sector for any commodity.

Focus on Southern Gobi copper belt

But the mining and exploration orbit in the Southern Gobi copper belt is getting busy. There is now Codelco, the major Chilean copper producer, Xanadu Mines (ASX:XAM), which has just raised A$15.4mln for exploration, Ikh Shankh, a private vehicle run out of New York and a recent Society of Economic Geologists (SEG) tour of the belt attracting the likes of Anglo American, Teck Resources and JOGMEC to name just a few. 

This copper belt was the global hotspot back in 2011/12, much as Ecuador is today. There is renewed interest in the area as illustrated by Xanadu’s share price rallying over 50% to a market capitalisation A$180mln Rio Tinto has resumed drilling in the Southern Gobi for the first time since 2012. 

Given the scale of Oyu Tolgoi, one has to wonder what else Rio might be looking for, but it adds further to the view that other Tier 1 discoveries are waiting to be found in this belt and just having one isn’t enough for Rio.

The largest landholder of them all, however, is Kincora Copper Limited (CVE:KCC), a company with a market capitalisation of only C$23mln, including its recent C$5.9mln fund raising. In the last week, Kincora has secured the support of one of the biggest investors in Mongolia, the European Bank for Reconstruction and Development (EBRD), and, also recently, the mining private equity specialist and heavy weight, Denver-based Resource Capital Funds (RCF). The EBRD and RCF have invested C$1.4mln each. 

The EBRD was the largest individual member of last year’s project financing of Oyu Tolgoi, the largest project financing in the history of the metals and mining sector, and sole project financier of the privately owned Tsagaan Suvarga copper mine, these being the two economic copper mines in the Southern Gobi with capex of over US$14bln and over US$1bn respectively. 

Following their investment in Kincora, EBRD have now invested in all the three Devonian age copper projects identified to date in this belt. The EBRD funds are to be solely used by Kincora to support an extensive drilling programme at its two most advanced Devonian-age prospects, East Tsagaan Suvarga (East TS) and Bayan Tal, the first Devonian targets in this belt since Oyu Tolgoi and both analogues to the two respective mines in the belt – big prizes. 

What’s more, the original progenitors of the Oyu Tolgoi project, Robert Friedland’s Ivanhoe, are also shareholders in Kincora, via a private vehicle called High Power Exploration (HPX) and last year vended to Kincora in the best parts available of the Devonian copper belt. On a contained metal basis, Oyu Tolgoi is still the biggest discovery of Mr Friedland’s and drove the original Ivanhoe Mines from a similar market capitalization to Kincora now to a peak of over US$30bn. 

HPX, EBRD and RCF are a bit of a club, now all holding about 6% each of Kincora. When added to the Kincora board representing a total of 37% of the register and other natural resource specialist institutions and high net worth individuals, this supports a unique and sophisticated register for such a small market capitalisation. 

Attention on Kincora

Serious investors who know mining and who know Mongolia are into Kincora in a big way, and with multiple targets and work streams now funded it is likely the retail market will soon start to follow this smart money and what is still effectively a new story to the public markets.

When we last caught up with chief executive Sam Spring in February, Kincora’s share price was up to C$0.65 a share and the aim was to be drilling these two high priority drill targets within 6 months having just done the deal with HPX to consolidate the dominant position in the Devonian belt and having attracted an industry leading technical team with multiple Tier 1 copper discoveries (who incidentally are majority remunerated in Kincora shares). 

However, capital market conditions remained challenging and as Kincora secured this “smart money”, which entailed extensive technical and legal due diligence, its share price drifted with the recent raising completed at C$0.33.The funds now raised supports the first modern Tier 1 drill testing and district scale reconnaissance exploration programme in this highly mineralised but vastly under-explored belt with two rigs having been operational for the last month. With the EBRD fund raising now complete, the “black out period” for on-going exploration activities is now lifted with a pipeline of news flow to come.

Now it’s up to Spring and his team to deliver the goods. While “small beer” relative to the Devonian targets and providing an analogue to the two mines in the belt, one work programme moving forward is looking to define a resource (geological or NI 43-101 inferred) around the company’s historic flagship asset, Bronze Fox, which has a large lower grade porphyry system and before a dispute with the government (now resolved) returned a hit of over 800 metres at over 0.4% copper equivalent including over 37 metres of over 1% copper equivalent. 

This asset has been forgotten about. However, being the same age, similar size (albeit lower grade) and having had about a third of the drilling of Xanadu Mines’ flagship Kharmagtai, a maiden resource of some kind is expected to highlight Kincora’s favourable valuation, Xanadu’s valuation is 10 times Kincora, particularly as Xanadu looks to dual list on the TSX Venture market. In the previous commodity cycle, Kincora attracted 14 NDAs, a period of exclusivity and separate offer for the Company based just on Bronze Fox.

The land package Spring now has at his disposal certainly offers plenty of further scale potential. Helped along by funds recently raised, Kincora is drilling East TS target and Bayan Tal targets, part of a wider 20,000 metre two-phase programme that will also work up other targets. 

Chile revisited?

Overall, Kincora holds 1400 square kilometres of ground, which gives it what Spring describes as the “dominant position” in the geological belt.

But it’s not just the size of the ground that’s impressive. It’s the geological setting and the context in the best parts of the Devonian copper belt, between and on strike, from the two existing mines in the Southern Gobi.

Spring describes Mongolia in mining and commercial terms as comparable to Chile in the 1970/80s: the potential was well known but just how good it would turn out to be wasn’t clear to anyone.

Such a scenario is also supported Codelco's recent interest in the Southern Gobi, when chief executive Nelson Pizarro said the company had “a lot of interest” in Mongolia and that his people were “learning to milk camels.”

If the parallels are clear enough to the Chileans given what’s happened there in the past half a century or so, then imagine the excitement in the Kincora camp, given that so much of the ground is under Kincora’s control.

A project like Oyu Tolgoi rarely occurs in isolation, explains Spring. Indeed, projects like that occur in clusters more often, as they do in Chile. 

It’s the nature of that opportunity that explains in part why a company such as Kincora has been able to secure significant backing from significant players and is now just starting what should be an interesting and fully funded 9-12 month exploration and expansion journey. . 

All concerned are betting that Kincora won’t be a pre-discovery company for much longer and they do seem to be systematically setting the foundations for success, both exploration wise but also corporately with the shareholders on its register.

With the price of copper still strong and the mining sector beginning to come back into favour more generally, the good times for Kincora might come pretty quick. It's a story worth keeping on your watch list.