Anglo American will divest from its South African and Colombian thermal coal operations by mid-2023, the miner said on Friday.

The global miner said a de-merger and listing on the Johannesburg Stock Exchange was the most likely route for its South African thermal coal assets, which include three wholly-owned and operated mines – Goedehoop, Greenside and Khwezela.

“With the bulk of (growth) options in copper, PGMs, and now also crop nutrients, we are increasingly positioned to supply those metals and minerals that enable a cleaner, greener, more sustainable world,” Chief Executive Mark Cutifani said on Friday in an annual update to investors.

Cutifani said the company planned to exit its Cerrejon thermal coal mine in Colombia within 1 1/2 to 2 years, while the South African thermal coal exit will happen within 2 1/2 years.

Anglo American said production across all minerals will increase by 14% in 2021 and unit costs are expected to fall by 3%.

Capital expenditure would be between $5.7 billion and $6.2 billion next year, reflecting deferred 2020 spending and new investments.

“We expect to deliver sector leading volume growth of 20-25% over the next three to five years that includes first copper production from Quellaveco in 2022. We are on track to deliver our targeted $3-4 billion run-rate of incremental annual improvement by the end of 2022,” said Cutifani.

The miner said it expects to produce 890,000 to 1 million tonnes of copper in 2023. It cut its 2022 copper production forecast, though, to 680,000-790,000 tonnes, from 700,000-810,000.

Diamonds

The De Beers owner also trimmed its diamond production forecasts for the next two years, from 31-million carats in 2019 to 33-35-million carats in 2021 and 30-33-million carats in 2022. The world’s top diamond producer by value, saw rough diamond production decrease by 5% to 8.7-million carats in the quarter ended Sept. 30.

“Current diamond prices will increase pressure on producers and output will shrink unless they rally,” Cutifani said.

Jefferies analyst Christopher LaFemina told Reuters the cuts to copper and diamond forecasts were “unhelpful” considering organic growth is a unique aspect of the investment case for Anglo American.

I have a clear memory of my first experience of Mongolia. It wasn’t actually in Mongolia itself; I was in the waiting room of the Mongolian embassy in Hanoi, Vietnam.

I’d been traveling through Southeast Asia for months, and the constant rush of mopeds and people and sound was making me yearn for silence, for wide-open spaces, for cold air.

I didn’t find any of that in the waiting room. But I did find a massive photograph, stretching across a whole wall, of a white-crowned Mongolian mountain range rising from the green steppe towards dark and stormy clouds.

image from remoteland.com

I stared at the photo for a long time, swept up in its drama, before the woman behind the desk sharply told me that they’d be unable to process my visa application. (I eventually made it to Mongolia, which you can read about in my book about traveling from Australia to Switzerland without flying).

This memory resonated in my mind during the opening sequence of Robert Lieberman’s new film, Echoes of the Empire. Horses trundle across a wooden bridge, past a lake on the grasslands, and suddenly the camera rises higher to take the mighty vastness of Mongolia and paint it across the screen.

It was a powerful beginning to what turned out to be an insightful and inspirational film.

Lieberman starts by chronicling the life of Genghis Khan, from his beginnings as an outcast to his brutal conquests to his empire’s pioneering of religious freedom, women’s education, international law, diplomatic immunity, and more.

The film then draws ‘echoes’ to the modern-day. As one example, Mongolian women remain more educated than Mongolian men, who are traditionally expected to look after livestock while the women go and study.

Anecdotally, this was the practice of a Tsaatan family I once stayed with; in winter, the boys helped their fathers move the reindeer herds north while the girls stayed behind to go to school in a nearby village.

Then the film moves past Genghis and into modern nomadic life. It covers Bhankars, huge shaggy dogs that play a vital role in maintaining steppe ecosystems; the cultural importance of ‘long song’ singing and the landscape sounds of Mongolian music; the genesis of communism, its tragic effects on Mongolia’s cultural history, and its demise in 1990; Russia’s influence on Mongolian society; and more.

The film doesn’t shy away from Mongolia’s problems. It shows rising inequality in UB and the difficulties of life in the ger districts, including the notorious pollution problem and its effect on children's lungs.

But it has a hopeful note. It looks at how people are reinventing the ger to make a version that’s more suitable for city life. It speaks to the uniqueness of Mongolian democracy. It talks about art and music.

Finally, it returns to the wild places with panoramic shots that never fail to impress.

“It’s one of the only countries left in the world where you can leave the city and within half an hour, you’re in the countryside,” D. Gereltuv, the director of Mongolia Quest, says.

“You can hike anywhere you want, camp anywhere you want, live anywhere you want.”

I’m not Mongolian, but I think that freedom, that sense of being in a wild place, is the gravity that keeps me grounded to the country.

It pushed me to write about my own experience riding a motorcycle across Mongolia, living in its landscapes, its rhythms.

But maybe there’s something more.

At one point, Allen MacNeil, a biologist at Cornell, comes on screen. He talks about how an unusual marker on the human Y chromosome, which is passed unaltered from father to son, can be found right across Eurasia.

“Almost by accident, it was discovered that there’s a pattern to a particular marker,” he says. “If you overlay the map of that marker onto a map of the conquests of Genghis Khan, the maps are identical. What we’re really saying is, genes from the Mongolian ancestors have spread through all these places.

“But the folk way of saying that is: people have Mongol blood.”

Lieberman’s film is about the echoes of Mongolia’s old ways in the country’s modern life. But for me, it also creates a deeper, more primal echo - one that almost feels genetic.

Maybe it will for you too.

To view a trailer of our new film opening soon go to: “Echoes Of The Empire: Beyond Genghis Khan” https://www.echoesoftheempire.com/

by Ewen Levick

Mongolia worked with development partners and donor nations to craft a plan that pro-actively pursued policies on anti-money laundering and combating the financing of terrorism

Every year an estimated $2.6 trillion is lost to corruption worldwide. This fraudulent conduct undermines the rule of law, impedes economic development, and diverts scarce resources from schools, hospitals, and other essential services.

Developing countries in Asia are on the front line in the fight against this societal scourge. One strategy that these countries use to battle corruption is to join international agreements and adopt standards that help stanch the money that flows into and out of activities such as tax evasion, trafficking, and other crimes.

An important facet of this work relates to policies on anti-money laundering and combating the financing of terrorism, or AML/CFT. Countries ignoring these two initiatives face serious internal and external consequences, such as higher costs of doing business and of banking transactions, as well as de-risking, where entities exit certain relationships as they are unable to manage potential AML/CFT risks involved.

Despite the challenges, developing countries can make significant progress in curbing money laundering and terror financing. Mongolia provides an example of what works. In October 2019, the country was placed on the “grey list” by the Financial Action Task Force, a global money laundering and terrorist financing watchdog group. Being on this list means that there are strategic deficiencies in the country’s regimes to counter money laundering, terrorist financing, and proliferation financing that need to be addressed.

Within 12 months, Mongolia was off the list. This was extraordinarily quick for a developing country to undertake the reforms and actions needed to get off the grey list, particularly amid a pandemic.

Combating money laundering and terror financing is extremely complicated, requiring international expertise across a wide range of government and private sector activities. Working with development partners who have expertise in this area is key to an informed response. Mongolia leaned into their network of experts to develop an effective strategy.

Mongolia worked with development partners and donor nations to develop a plan that was in line with its action plan under the International Co-operation Review Group, an initiative of the Financial Action Task Force that works with countries at high risk of being compromised by money laundering and terror financing. These are some of the world’s top experts in the area.

They also brought together private sector professionals from various sectors, such as real estate agents, accountants, dealers in precious stones and metals, lawyers and notaries, to cooperate with training and adhere to new reporting requirements.

Mongolia’s leaders brought to the task a focus on cooperation, political will, and a willingness to adapt and learn new procedures. This leadership allowed Mongolia’s government agencies to concentrate on the changes needed for maximum results at the fastest possible time by efficiently utilizing resources.

With clear, pre-determined goals to conserve time and resources, and the Ministry of Finance taking ownership of and responsibility for the response they were able to get multiple agencies moving quickly in the same direction.

Some developing countries make the mistake of waiting until they are pressured by the international community to address money laundering. Mongolia did not take this path. When there were indications that it would be put on the grey list, the country’s leaders immediately undertook actions to begin studying and addressing the issue.

By the time Mongolia was placed on the grey list, the country’s central bank and financial regulatory commission were already addressing its anti-money laundering and terror financing deficiencies. Because of this proactive work, instead of the expected 20 or so issues to be pointed out by the International Co-operation Review Group, Mongolia only had to address six key items.

Mongolia’s experience provides important lessons for other countries facing similar issues with money laundering and terror financing. For one, participation in international agreements and covenants are important but lasting change can only happen when reforms benefit a country’s citizenry.

Anti-money laundering efforts should not be seen as arbitrary new bureaucratic procedures being imposed from outside the country. These changes decrease corruption, increase transparency in extractive industries such as mining, strengthen the rule of law, improve the operation of government, and improve the lives of the public in myriad other ways.

It is important to communicate these benefits to the public because people are more likely to support reforms when they understand them. And when it comes to the expertise needed, development partners have sent a clear message to developing countries: You can rely on us. We have your back.

By Declan Magee, Carlo Antonio Garcia

WUHAN, Dec. 12 (Xinhua) -- A total of 30,000 testing kits donated by central China's Hubei Province, once hard hit by COVID-19, left for Mongolia on Saturday as gifts in appreciation of their previous donation of sheep in support of China's COVID-19 fight.

The testing kits for detecting the novel coronavirus are expected to arrive at the port of Erenhot, Inner Mongolia, on Dec. 14, making use of strict safety measures and cold-chain transportation.

At a ceremony in Hubei's capital city of Wuhan earlier this month, the province also promised to donate three units of PCR testing equipment and 22,000 locally produced brick-tea products to Mongolia.

Mongolian President Khaltmaa Battulga visited China in February, during a critical stage of China's COVID-19 battle, and promised to send 30,000 sheep as a token of support.

The first batch of 11,267 sheep arrived in Wuhan in late November after being slaughtered. The Hubei government decided to deliver the mutton to medical workers in Hubei who contributed to the COVID-19 fight, as well as to the relatives of those who died in the line of duty, and medical teams across the country that were sent to Hubei to offer a helping hand.

Many would be desperate to bid goodbye to 2020 as the year of the novel coronavirus epidemic, the resulting global economic downturn, and the global problems created by the growing trade protectionist and unilateralist policies.

Yet for China and Mongolia, 2020 has been a year of friendly exchanges, deepening cooperation and heartening stories. One such story is Mongolia donating 30,000 sheep to China in 14 batches－an example of friendship and mutual help during the pandemic.

During his visit to Beijing in February when China was battling the worst stage of the pandemic, Mongolian President Khaltmaa Battulga reaffirmed support for China as a comprehensive strategic partner and said his country would gift 30,000 sheep to help the Chinese people fight the epidemic.

With the pandemic still raging in many parts of the world, it is time to focus on what China and Mongolia can do to overcome the multiple challenges posed by the pandemic and the global downturn.

As for deepening Sino-Mongolian relations, China dispatched testing kits and other medical equipment to Mongolia to help the authorities there to cut the virus's transmissions chains, and maintain a high level of alert.

The mutual lessons China and Mongolia have learned over the past months have helped them to better plan their moves to prevent more outbreaks. Mongolia has been trying to contain the epidemic essentially by quarantining people infected with the virus. The country has imposed a nationwide lockdown till Dec 1 to halt the virus's spread and to identify all the people who had contact with locally transmitted COVID-19 patients. And if there is a drastic increase in the number of infections, the Mongolian authorities can ask the people to start joint control and prevention programs against the pandemic.

After all, China succeeded in containing the virus partly because it mobilized local residents and volunteers to ensure the anti-pandemic measures were properly implemented and followed at the community level.

And since the pandemic has also caused a global economic recession, China and Mongolia need to find new ways to boost bilateral trade. In fact, the two countries have devised ways to expand bilateral trade, for example, by opening "green freight channels" but closing the passenger channels. The "green freight channels" have made major contributions to bilateral trade－for one, they have made Mongolia China's largest coal supplier. The coal trade has benefited Mongolia－as the mineral industry is one of the pillars of Mongolia's economy－and helped China to meet its demand for coal.

During State Councilor and Foreign Minister Wang Yi's visit to Mongolia on Sept 15-16, China and Mongolia agreed to deepen cooperation in different fields, and expedite the alignment of the China-proposed Belt and Road Initiative and Mongolia's Development Road development initiative. The construction of sewage treatment plants and hydropower stations, and the project to transform shantytowns into safe, hygienic living spaces will continue in Mongolia. Also, China will increase the import of coal and agricultural products, including meat and dairy products, from Mongolia, which will further deepen cooperation between the two sides, especially between cross-border economic zones.

Besides, based on broad agreements, China and Mongolia should boost cooperation on key projects while upholding multilateralism and enhancing mutual trust, because despite economic globalization facing severe challenges, it is the only way different economies in the world and the global economy as a whole can recover from the impact of the pandemic and flourish in the future.

China and Mongolia have helped each other during the worst global public health crisis in a century. But the two countries should also further strengthen mutual security and development because the pandemic is yet to be contained at the global level.

Which brings us back to Mongolia's gift of 30,000 sheep. For the Mongolian people, the 30,000 sheep reflect their friendship with the Chinese people because they consider sheep as the best gifts for friends and family.

During his visit to China in February, Battulga quoted a Mongolian proverb, "a needle in need is of greater use than a camel in prosperity", which means adversity reveals the true quality of friendship. In response, President Xi Jinping quoted an ancient Chinese proverb,"If you have received a drop of beneficence from other people, you should return to them a fountain of beneficence" credited to Confucius.

True to the words of the two countries' presidents and in the spirit of Sino-Mongolian friendship, the two sides have been consolidating their good neighborly relations, and will continue to do so in the future.

Rio Tinto’s legal destruction of ancient Australian rockshelters showed the mining sector was exposed to material investment risks without more reforms, institutional investors said on Thursday, backing the findings of a review into the incident.

The interim parliamentary review into how global miner Rio legally destroyed the sites in May recommended it pay restitution to the traditional owners, and that the industry improve how it obtains consent from Aboriginal groups to impact heritage sites on their ancestral lands.

“The report has … highlighted the material risks for investors,” said Australian Council of Superannuation Investors Chief Executive Louise Davidson.

“Long-term investors support structural and cultural changes to the way companies approach their relationships with First Nations stakeholders,” Davidson said in a statement, supporting legal reform that would ensure consent was gained in line with global standards.

ACSI represents 37 asset owners and institutional investors which collectively own on average 10% of every ASX200 company.

The focus by investors has been on ensuring continuing, free, prior and informed consent which is defined as a human right under United Nations principles for dealing with First Nations people.

The concept has made uneasy some in the mining industry who see it as potentially undermining certainty for their multi-year, billion dollar investments.

“Action must be undertaken by the Western Australian Government and the mining industry to rebalance the relationship between the mining industry and Traditional Owners,” the report found.

While new legislation in Western Australia is being established, expected some time next year, the mining industry must take extra care to ensure proper consent is obtained, the inquiry said. Iron ore miner Fortescue Metals said during the inquiry it had continued with the development of a rail line around “Spear Hill” in 2017 despite opposition by Eastern Guruma traditional owners because the group had not earlier raised concerns despite a “detailed consultation process.”

The rail line was ultimately re-routed after the Western Australian government intervened.

“Mining companies failing to negotiate fairly and in good faith with traditional owners represents a clear systemic risk to investors,” said chief executive Debby Blakey of HESTA, an investor and health industry superannuation fund.

(By Melanie Burton; Editing by Grant McCool and Lincoln Feast)

Chinese gross domestic product (GDP) will get a substantial boost next year due to a rebound in consumption and services, accelerating income growth and fiscal stimulus, international economic research firm Capital Economics says.

The Chinese economy is projected to grow by 10 percent in 2021, higher than the current market consensus of 7.9 percent, according to the company’s analysts.

“Looking ahead, while the analyst consensus has turned more upbeat in recent months, we think there is still room for further upside surprises,” the latest research note by the London-based consultancy reads.

According to Capital Economics, domestic drivers of growth will stay strong in the near term with the latest boost in exports to start unwinding amid vaccine rollouts in developed markets.

An increase in savings rates registered earlier this year will reportedly cause a boost in spending as confidence improves. The fourth quarter of 2020 will see China’s economic output grow higher compared to Capital Economics’ forecast a year ago, with its economic output to stay above the trend for the next year.

The projected economic rise will reportedly trigger some state policy tightening in 2021 with focus to be shifted back to controlling the swift growth in national debt. The country’s central bank will start to hike the rates on its lending facilities next year, according to the research.

“This policy reversal is unlikely to derail the recovery and we expect China’s economy to remain a global outperformer next year,” Capital Economics said.

At the same time, China’s economy reportedly faces some downside risks from the property sector and credit markets. The economic growth will slow down by the end of 2021 with the appreciation of the national currency to level off.

Hong Kong (CNN Business)Chinese state-owned companies are starting to default on their debts. It's a problem that could ripple through the country's financial system, threatening to slam the brakes on the nation's economy and hobble the global recovery from the pandemic.

State firms defaulted on a record 40 billion yuan ($6.1 billion) worth of bonds between January and October, according to Fitch Ratings. That's about as much as the last two years combined.

The problem has only gotten worse in recent weeks. A slew of major companies — including BMW's (BMWYY) Chinese partner Brilliance Auto Group, top smartphone chip maker Tsinghua Unigroup, and Yongcheng Coal and Electricity — declared bankruptcy or defaulted on their loans last month, sending shock waves through the nation's debt market. Bond prices have plummeted and interest rates have spiked, and the turmoil has even spilled over into the stock market, where shares of state-owned firms have been sinking.

It's alarming on a couple of fronts. First of all, the close relationships between these companies and local Chinese governments typically make them safe bets in times of trouble. If investors are worried that the state is no longer willing to support them, they suddenly become much riskier propositions.

Second, the success of the state sector is critical to China's financial system. While such firms contribute less than a third of GDP, they account for more than half of the bank loans offered in China and some 90% of the country's corporate bonds, according to data from the People's Bank of China and Chinese brokerage firm Huachuang Securities.

"The credibility of government guarantees has been the most important bulwark against [financial] crisis so far. Now we are seeing signs that this credibility is eroding," according to Logan Wright, director of China markets research at Rhodium Group.

Historically, Beijing has been reluctant to let these companies fail. The Chinese Communist Party enjoys tight control over wide swaths of the economy, including business, and it believes that the ties between these firms and the government are important for maintaining that.

Now, they appear to be willing to allow at least some to collapse. But too many defaults on loans and corporate bonds would leave the financial system incredibly vulnerable, making that approach fraught with risk.

"Although authorities want market discipline for riskier firms, they cannot know how much credit risk might create broader contagion," Wright wrote in a recent research note. "No one can know this line clearly, given that there is no precedent for this risk in China's financial system."

If Beijing's ability to manage the debt is called into question, Wright warned that the fallout could strain the financial market, reducing available credit and liquidity. Already there have been some consequences: Bond financing dropped sharply in November, according to statistics released Wednesday by the People's Bank of China.

These problems could ultimately drag on what has been a fragile recovery for the world's second largest economy. While the International Monetary Fund expects China's economy to grow 1.9% this year, better than its big global peers, that would be the weakest annual rate of expansion in more than four decades.

The efforts to reign in risky borrowing "will weigh on the pace of non-bank credit," wrote Julian Evans-Pritchard, senior China economist for Capital Economics, in a Wednesday research note.

"While it won't derail China's economic recovery overnight, it will gradually weaken the recent tailwinds from policy stimulus," he said, referring to moves by the Chinese government this year to cut interest rates and free billions of dollars worth of spending to prop up growth.

'Inevitable' defaults

While the record amount of bond defaults this year likely has a lot to do with the coronavirus pandemic, China's state-owned businesses have been accumulating debt for years.

"We viewed these defaults as inevitable," wrote analysts at Nomura in a recent research report. They noted that the Chinese government has been propping up the sector with trillions of dollars in stimulus since the 2008 global financial crisis.

But those investments didn't generate as good returns as expected.

The shortcomings of state-owned businesses have been widely acknowledged. Such firms are often less competitive than their private peers and generate lower returns on investment, said Ning Gaoning, the chairman of the state-owned chemical conglomerate Sinochem Group, at a major political gathering in Beijing in May.

At the same time, China has been historically biased toward its prized state firms and offered them far more access to financing than their private counterparts. That trend has accelerated in recent years as President Xi Jinping has called for a stronger and more dominant state sector.

All of those factors now appear to be coming together this year to create a perfect storm. To help companies recover from fallout related to Covid-19, China dramatically loosened restrictions on financing — a decision authorities acknowledged earlier this year would result in an uptick in bad loans.

Unsurprisingly, state-owned companies accounted for the lion's share of credit bond issuance through the first nine months of the year. Such firms raised some 8.5 trillion yuan ($1.3 trillion), compared to the private sector's 857 billion yuan ($131.2 billion), according to Pengyuan International, a Chinese rating agency.

Defaults, meanwhile, have risen dramatically. The Nomura analysts estimated that by mid-November, companies had defaulted on some 178 billion yuan ($27 billion) worth of bonds in the mainland Chinese market. About 43% of that came from state-owned firms, more than 30% above the recent yearly average.

"Most likely we will see many more such defaults in coming years," the Nomura analysts wrote.

Striking a balance

Beijing has been taking some steps to help calm the market. Last month, the People's Bank of China injected one trillion yuan ($153 billion) worth of loans into markets to ease the stress on liquidity and soothe the nerves of investors.

Vice Premier Liu He, who chairs China's financial stability committee, has been trying to boost confidence, too. During a recent meeting with financial and economic officials, he urged local governments in China to prevent worst-case scenarios by strengthening the warning systems they use to detect systemic risks and keeping sufficient liquidity.

Even so, Liu and others have made it clear that not everyone should be saved. In that same meeting, he warned state-owned firms that Beijing has "zero tolerance" for "strategic defaults" — remarks that have been interpreted to mean that the government thinks some companies are deliberately evading debt obligations that they should have been able to meet.

Analysts have also noted that rescuing some state-owned firms from collapse is probably a dead end, given how financially cumbersome the sector can be. Along with their other inefficiencies, such companies also employ just 10% of the workforce.

Still, allowing for too many defaults could jeopardize the financial stability and near-term recovery. Analysts at Goldman Sachs recently pointed out that widespread failures in the sector could spill over into the banking system, causing banks to cut back on lending more broadly, or increase interest rates — the latter of which is already starting to happen.

"Although the central government has been trying to reduce implicit guarantees in the market," they are aiming to do so in an "orderly way," those analysts wrote in a recent research note.

"Given China's post-Covid economic recovery is still ongoing, the bottom line is the government will try to contain" those risks, they added.

Mongolia is quickly becoming a hub of international trade and investment. According to the 2020 World Investment Report published by the United Nations Conference on Trade and Development, foreign direct investment flows to Mongolia totaled US$2.4 billion in 2019, an increase from US$2.2 billion in 2018, owing largely to a continuation of large mining projects, including the country’s world-class Oyu Tolgoi copper-gold mine.

Recently, a number of diplomatic and legislative initiatives were made to protect and promote partnerships between Mongolia and its neighbors Russia and China, as well as overseas investors.

The China-Mongolia-Russia Economic Corridor

The start of 2019 marked seven decades of diplomatic relations between Mongolia and China. China’s Mongolian component of its Belt and Road Initiative (BRI) — the China-Mongolia-Russia Economic Corridor (CMREC) — is designed to facilitate trade between Mongolia and its neighbors while at the same time opening Mongolia to overland routes to the European Union as well as sea ports in Asia.

The CMREC is one of six major corridors envisioned by China’s BRI. The project aims to promote infrastructure connectivity and regional economic integration while developing trade and investment. The corridor intends to position Mongolia as the critical link in newly-developed trade networks between the East and West and, once completed, is expected to reduce freight times, create new export routes and cut down bureaucratic barriers. The Mongolian government itself has invested in national infrastructure through railway expansion and the construction of more than 6,000 km of roads.

The CMREC will begin in the Chinese port of Tianjin, trending northwest toward the cities of Zhangjiakou and Erenhot before crossing the China-Mongolia border. Mongolian stops along the corridor include Choyr, Ulan-Bator and Darkhan. The corridor then crosses the Mongolia-Russia border toward the Russian towns of Kyakhta and Ulan-Ude. For northeast China’s provincial powerhouses, the CMREC represents the shortest path to Europe, positioning Mongolia as a key logistics hub.

Mining success

Roughly 80 percent of Mongolia’s current export volume is directed toward China. While the CMREC will open Mongolia to additional international investment partners, the country has already begun the process of expanding its horizons. In particular, the Mongolian government only has 34 percent equity stake in the high-profile South Gobi Oyu Tolgoi mine, often referred to as the backbone of the Mongolian mining industry, as a symbol of Mongolia opening its doors to international majority-holding partnerships like Canada-based companies Ivanhoe Mines (TSX:IVN,OTCQX:IVPAF) and Turquoise Hill Resources (TSX:TRQ,NYSE:TRQ).

Oyu Tolgoi is one of the largest known copper-gold deposits in the world. The mine has seen immense success since open pit mining began in 2011. In 2013, the mine’s copper concentrator, the largest industrial complex ever built in Mongolia, began processing mined ore into copper concentrate. Production is expected to continue for decades to come.

As Mongolian legislation continues to pave the way for large-scale resource development, Mongolia remains one of the world’s most significant prospective sources of lithium. With confirmed reserves of at least 200,000 tonnes of lithium, the country has positioned itself as the ideal candidate for lithium exploration and development. As rising demand for electric vehicles (EVs) and lithium-ion batteries may begin to challenge the world’s existing lithium sources, most of which originate from South America’s Lithium Triangle, new sources of lithium could prove extremely valuable.

One of the companies hoping to capitalize on one of the world’s most unique mining opportunities is ION Energy (TSXV:ION), an early-stage exploration company that currently holds one of the largest and highest-grade lithium licenses in a country that neighbors the world’s leading lithium consumer. ION has secured a sizable 81,758 ha license in Mongolia’s southern Gobi region, only 24 km from the Mongolia-China border. Early exploration work on the property has identified both lithium brine, as well as spodumene targets with grades as high as 811 parts per million with notably low potassium and magnesium content.

Mongolia’s arid climate and 250 days of sunshine per year help maintain high evaporation rates when processing lithium brine, a low-cost and environmentally friendly method of lithium production. Brine deposits account for 66 percent of the world’s lithium reserves, occurring in saline desert basins known as salars. In comparison to hard rock lithium extraction, brine extraction is up to 50 percent cheaper when it comes to exploration capital and operating expenses. Its impact on the environment is also much cleaner, owing to the fact that lithium brine is already a solution, eliminating the need for ore processing or extensive logistics.

In 2019, China accounted for 39 percent of global lithium consumption. Its eastern neighbors, South Korea and Japan, were the second and third largest consumers of lithium, at a 20 and 18 percent share of global lithium consumption, respectively. In the same year, the global EV lithium-ion battery market reached a total of US$17.4 billion and is expected to grow to US$95.3 billion by 2030.

Lithium, Mongolia and the US

Over the last decade, Mongolia has focused efforts on strengthening its third neighbor foreign policies.

In 2019, during Mongolian President Khaltmaagiin Battulga’s state visit to Washington, the US became Mongolia’s fifth strategic partner. Mongolia’s third neighbor foreign policy towards the US has sought fruitful economic cooperation, and the Mongolia-US strategic partnership aims to diversify Mongolia’s mining-dependent economy, increase its workforce and reinvigorate free trade.

In addition to the diplomatic strategic partnership, the recent Biden win and the worldwide “greening” of economic stimulus announcements further solidify Mongolia’s potential as an emerging leader on the lithium front.

Changing regulations

In September 2016, Canada and Mongolia signed an international Agreement for the Promotion and Protection of Investments, also known as the Canada-Mongolia Investment Agreement, a framework that offers greater certainty for Canadian investors. The agreement is one of many bilateral agreements between nations meant to promote and protect foreign investments — it has been estimated that more than 2,900 similar international investment agreements (ILAs) exist worldwide. Canada has entered into 32 ILAs while Mongolia takes part in 43.

The Canada-Mongolia Investment Agreement was designed to protect Canadian investors when investing in Mongolian territory. According to the United Nation’s Investment Policy Review on Mongolia, Canada held an 8 percent share in Mongolia’s total foreign investment inflows between 1990 and 2012. With the Canada-Mongolia ILA ratification in February 2017, Canadian investors are now more protected than ever and can effectively rely on international law to secure their investments in Mongolia.

Takeaway

Mongolia’s geological potential, arid climate and close proximity to major Asian markets solidifies its position as one of the last frontiers for mineral exploration and mining. Diplomatic and legislative initiatives, including the ongoing Mongolia-US strategic partnership, CMREC and the Canada-Mongolia Investment Agreement, are expected to promote infrastructure connectivity, economic growth and international trade.

This INNSpired article is sponsored by ION Energy (TSXV:ION). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by ION Energy in order to help investors learn more about the company. ION Energy is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.

This INNSpired article was written according to INN editorial standards to educate investors.

INN does not provide investment advice and the information in this article should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with ION Energy and seek advice from a qualified investment advisor

Mongolia has put into operation its second fuel processing plant here, the government's press office said Wednesday.

The plant, built in Nalaikh district of the capital city Ulan Bator, has an annual capacity of processing 600,000 tons of fuel.

"Reducing air pollution in Ulan Bator was one of our government's challenges. Thanks to the government's decision in 2019 to replace low-grade coal with processed fuel in Ulan Bator, air pollution in the city, which is home to over 1.5 million people, has been reduced by 50 percent," Prime Minister Ukhnaa Khurelsukh said at the opening ceremony of the plant on Tuesday.

The first fuel processing plant, commissioned in early 2019, has the same processing capacity as the new one.

The Mongolian government reduced the price of processed fuel by 50 percent from Dec. 3 to April 1 in order to support the livelihoods of residents of ger areas of Ulan Bator during the COVID-19 pandemic.

The original price of processed fuel is 150,000 Mongolian tugriks (about 52.8 U.S. dollars) per ton.

Around 220,000 households live in Ulan Bator's ger (yurt, or round-shaped dwelling) districts, with no running water, central heating or sewerage systems, according to government data. Enditem