Road in route Tosontsengel and Uliastai to be built with Chinese soft loan www.montsame.mn

Ulaanbaatar /MONTSAME/ At its yesterday’s meeting, the cabinet approved a draft of revised Government resolution on projects to be implemented with a soft loan of USD500 million, granted from the Government of the People’s Republic of China to the Government of Mongolia.

'Khovd Thermal Power Station' company to be established www.montsame.mn

Ulaanbaatar /MONTSAME/ The cabinet held its meeting yesterday, on May 02 and made a decision to establish ‘Khovd thermal power station’ company in charge of production, transfer and distribution of electricity and heating.

Mongolia and China to develop ecological, energy and research cooperation www.montsame.mn

Ulaanbaatar /MONTSAME/ On May 2, D.Regdel, Academician and President of the Mongolian Academy of Sciences (MAS) and Bai Chinli, professor and President of the Chinese Academy of Sciences (CAS) signed a memorandum of cooperation at the Tuushin Hotel in Ulaanbaatar.

In the frames of the memorandum, the two sides will collaborate in studies of biotechnology, coal chemistry and technology, environment and desertification, materials science, nuclear physics, paleobiology and pollution in residential areas.

ШУА-ийн Ерөнхийлөгч, академич Д.Рэгдэл хэлэхдээ, “Энэ санамж бичгийг БНХАУ-ын шинжлэх ухаан, технологийн амжилт дэлхийг гайхуулж буй үе болон Монгол Улс эдийн засгийн хүндрэлтэй нөхцөлд байгуулж буйгаараа онцлогтой. БНХАУ-ын шинжлэх ухаан, техникийн боломжийг ашиглаад Монголын судлаачид Хятадын тэргүүлэх эрдэмтэдтэй хамтран Монголын газар нутгийг судлах, экологи, түлш эрчим хүчний асуудлыг шийдвэрлэхэд хариулт өгөх юм

Өмнөх санамж бичиг байгуулснаас хойших 18 жилийн хугацаанд нэлээн амжилт олсон. 2019 онд хоёр улсын хооронд дипломат харилцаа тогтоосны 70 жилийн ой гэхэд эхний үр дүн гарах болов уу. Өнгөрсөн хугацаанд хоёр орны эрдэмтдийн хувьд туршлага бий болсон. Үүндээ үндэслээд илүү хурдтай ажиллана.

D.Regdel said that “This memorandum is being established during the current period of scientific and technological achievement of China is to well known in the world and Mongolia is facing economic challenges in recent years. Mongolian researchers have opportunities to use scientific and technological success of China, cooperate with Chinese leading scientists in order to seek for ways to solve challenges of energy and ecology and to study Mongolian territories. We have achieved more success since the establishment of the first memorandum of cooperation between Mongolia and China in the last 18 years”.

He believes that first result of the memorandum will be seen within in 2019, the 70th anniversary of diplomatic relations between the two countries. In the last decade, the two countries’ scientists have had many experiences based on which they can more actively work in the future.

Moreover, he continued that “The President of CAS told us that Chinese side is ready to finance large projects of cooperation in Mongolia. Today, we met with the Speaker and the Prime Minister of Mongolia and they expressed their opinions to provide all types of supports such as financing and organization. According to an action plan of the Mongolian People’s Party, the political party in power has a plan to increase expenditure of scientific and technological actions of Mongolia by five times until 2020”. All of those work and actions to be joined for becoming effective measures that believes D.Regdel.

The Mongolian Academy of Sciences (MAS) and the Chinese Academy of Sciences have been cooperating in the scope of the scientific cooperation agreement in 1991, protocols and memorandums of cooperation in 1991 and in 1999. 
B.Oyundelger

Mongolia to revise new law after IMF postpones bailout www.asia.nikkei.com

ULAANBAATAR -- Following last Friday's postponement of a much-needed bailout from the International Monetary Fund, the Mongolian government on Tuesday moved to assure the fund that it was ready to make adjustments to a controversial new regulation.

The IMF board decided to delay voting on the loan due to concerns over new rules in Mongolia's 2017 budget requiring foreign companies operating in the landlocked central Asian country to bank with local institutions.

According to the Mongolian ministry of finance, Rio Tinto, the biggest investor in the country and 56% owner of the Oyu Tolgoi copper and gold mine which is 34% owned by the government, filed a complaint to the IMF. It objected to the recent budget which, as well as introducing tax increases and other changes ostensibly to meet the IMF's bailout conditions, also required foreign investors to use Mongolian commercial bank accounts for sales transactions.

Khayankhyarvaa Damdin, head of the ruling Mongolian People Party's parliamentary caucus, said: "Without the grant from the IMF Mongolia can't move forward ... [The MPP] has decided that we will change the new regulation again. Because the economy is in a dire state, Mongolia first needs to be part of the grant, after that we will discuss whether foreign investment should go through a Mongolian bank."

Mongolia was expecting to receive $440 million from the IMF after its board members met last Friday. Following approval of the loan, Mongolia will also be able to get an additional $5 billion from IMF partners including Japan, South Korea, the Asian Development Bank and the World Bank over the next 10 years in order to tackle the country's budget deficit and debt crisis.

At a press conference on Tuesday, the IMF's local representative Neil Saker said: "The IMF will approve Mongolia's loan in the next two to three weeks. The IMF is unable to comment on the Mongolian government's agreement with a certain company." He said the IMF was proceeding with caution because of the effect of the recent regulation on the country's foreign investment environment. "Mongolia must provide a friendly environment for foreign investment which is good for economic growth," he said.

IMF representative Neil Saker told reporters Tuesday that his institution expects to approve its planned loan for Mongolia within three weeks. (Photo by Odbayar Urkhensuren)
Rio Tinto currently uses Mongolian bank accounts only to pay local employees' salaries and local taxes. The miner spent $6.4 billion on open-pit mining at Oyu Tolgoi between 2009 to 2013, contributing to the country's 17% economic growth over that period. But a commodities slump has hit the mining-reliant country.

Rio Tinto told the IMF and Mongolia's finance ministry that it would only use banks with at least AA rating from international agencies such as Moody's and Fitch. No Mongolian bank falls into this category. It highest-rated bank is Japanese-owned Khan Bank, with a rating of Caa1 from Moody's and B- from Fitch.

Rio Tinto representatives at its local office declined to answer questions from the Nikkei Asian Review.

The lawmakers who proposed the amendment believe the new regulation will allow Ulaanbaatar more insight into how much the Oyu Tolgoi mine project earns and spends and can tax it accordingly. According to Damdin, parliament will not remove the new regulation entirely, but some parts will be changed.

Davaasuren Tserenpil, a member of parliament who proposed the FDI change, said that the new regulation did not currently encompass sales related to the Oyu Tolgoi mine. But he stressed the importance of raising the country's foreign currency reserves. "I want foreign investment to come through Mongolian banks, in essence increase the foreign currency reserve, which will stabilize the value of the domestic currency."

In its latest budget, Ulaanbaatar dropped some of its social welfare offering by raising the retirement age and cutting allowances to children and pensioners. It also increased the duty on alcohol, tobacco, automobiles and petrol despite heavy opposition from businesses and other groups.

Temasek and Jack Ma fund lead $75m round for Chinese genomic company www.asia.nikkei.com

SINGAPORE -- Singaporean state investor Temasek Holdings and private equity firm Yunfeng Capital, backed by Chinese e-commerce group Alibaba's founder Jack Ma, have led a $75 million funding round for WuXi NextCODE, a Chinese genomics data company.

Democratic Party registers 6 nominees www.montsame.mn

Ulaanbaatar /MONTSAME/ May 2, the first day of nomination of candidates for the upcoming Presidential Election saw Democratic Party’s nominee registration, and 6 politicians registered themselves to run for the party’s candidacy.

Saudis now fully own America’s biggest oil refinery www.rt.com

Saudi Aramco has become a 100-percent owner of Port Arthur, an oil refinery in Texas. Port Arthur has a capacity of 600,000 barrels per day, making it the biggest in North America.
The kingdom’s national oil company previously owned 50 percent in the refinery before acquiring the full stake from Royal Dutch Shell on Monday. Complicated relations between the companies forced them to separate their assets. On Monday, Shell announced the divorce was complete.

Google & Facebook control one-fifth of global ad revenue www.rt.com

Silicon Valley internet giants Google and Facebook have raked in over $100 billion in global advertising spending, a recent report says.
The two companies have grown their share of global ad revenue from about a tenth in 2012 to a fifth in 2016, according to an annual ranking presented by data and analysis agency Zenith.

Washington takes note of BC premier’s targeting US coal exports www.mining.com

Christy Clark’s vow to ban or tax thermal coal exports moving through B.C. ports may be nothing more than election brinkmanship, but it seems to be having its intended effect in the U.S.

According to Joe Aldina, a New York based energy analyst specializing in coal for S&P Global Platts, Clark’s recent targeting of thermal coal exports moving through B.C. ports has generated a bit of a buzz in the corridors of Washington.

“I know from my contacts that I was just talking to, already they’re lobbying and having conversations behind the scenes in Washington,” Aldina told Business in Vancouver. “It’s certainly got people’s attention.”

Last week, in response to new countervailing duties of 20% or more slapped on Canadian softwood lumber, Clark wrote the prime minister asking for a federal ban on thermal coal exports passing through B.C. ports, and then added that, if exports aren’t banned, a B.C. Liberal government would apply a levy “so onerous that there’s no percentage in shipping thermal coal through British Columbia.”

Thermal coal exports may be the only real trump card B.C. has to play. Or maybe that should read “Trump card” because U.S. President Donald Trump made the revival of America’s faltering thermal coal industry a major election plank.

“I think it’s pretty smart posturing,” Aldina said. “It grabs headlines and is visible, so I don’t think Trump would want headlines – negative headlines – given that he’s made coal a rallying cry of his administration.”

British Columbia is a major metallurgical coal producer. Historically, it has been the province's second largest single export commodity, next to softwood lumber. Metallurgical coal is used to produce steel. Thermal coal, on the other hand, is burned to produce power.

A handful of American thermal coal producers have managed to find markets outside of the U.S. for their coal, thanks to British Columbia.

There are no ports on the U.S. west coast that can handle large volumes of coal. New proposed coal terminals on the U.S. west coast have been rejected, due to thermal coal's "dirty" image – i.e. high in carbon, and therefore a high emitter of carbon dioxide.

Because of its large metallurgical coal industry, B.C. ports have the capacity to ship large volumes of coal and have increasingly been used by American coal producers, who ship their product to B.C. via the BNSF Railway.

About one third of the volume moved through Westshore Terminals in Delta is American thermal coal, generating $100 million in revenue annually, 100 jobs and $12 million.

In response to Clark’s posturing on coal exports, Westshore has written Prime Minister Justin Trudeau asking him not to make thermal coal exports a bargaining chip.

“We are deeply disappointed to see the Premier of British Columbia’s call to close our borders to our long-term U.S. customers,” the company says in a letter to Trudeau.

“We recognize that Canada is in a dispute with our most important trading partner, but we hope that our leaders will consider the best interest of all Canadians and not punish Canadian companies and workers by putting one industry ahead of another.”

Fraser Surrey Docks, meanwhile, has been trying to move forward a plan to build a new $15 million coal export terminal that would be used exclusively by American thermal coal producers. It has been stalled by a court challenge, but could be killed with a new levy.

“They’re not even off the ground in terms of booking business with customers,” Aldina said. “It would probably mean a decision of not moving forward with an investment.

“It’s already on the margins because there’s already capacity available at Westshore, so it’s already in a tenuous position. This would really be the death knell for the project.”

Iron ore climbs on Chinese restocking www.mining.com

The end of the Labour Day holiday in China saw fresh demand for iron ore and steel, with both commodities rising in tandem today.