The US coal producers plowing ahead with new mines in a rout www.mining.com

As coal prices tumble and bankruptcies rise, a few U.S. miners are still pushing ahead with plans to expand.

Arch Coal Inc. and Consol Energy Inc. remain on track to open new mines to dig steelmaking, or metallurgical, coal from the West Virginia hills. That’s even as the market is already glutted, with prices down about 30% in 12 months.

They’re betting they can produce coal cheaply enough to profit even as their rivals retrench. Bloomberg Intelligence expects the global supply of the metallurgical variety to exceed demand this year by 2.7%, as economic headwinds blunt steel demand. At least four U.S. companies have shut mines since August. Five have filed for bankruptcy this year.

“There is a lot of pain in the marketplace,” Consol Chief Executive Officer Jimmy Brock said during a conference call last week. “We expect to hold our ground.”

Arch ahead of schedule
Arch, the second largest U.S. miner, has already started digging small amounts of coal from its Leer South project, which won’t reach full production of 3 million tons annually until the third quarter of 2021. The company announced the project in February, when metallurgical coal prices were around $190 per ton. Now they’re at about $137. The site is near an existing Arch mine and will plumb the same reserves, reducing some of the risk for the company.

In July, Arch sped up the project’s schedule by a quarter. Last month, the company said it would “drive forward with the accelerated build-out.” Arch did not respond to a request for comment.

Consol marches on
Consol, the eighth-largest U.S. miner, expects to begin extracting some coal next quarter from its Itmann mine in West Virginia before ramping up to full capacity in 2021. Excavation is already underway, and the company is working to hire miners. Consol announced the project in May, just as metallurgical coal prices peaked at about $200 million a ton. At the time, Brock said the returns on the project would “significantly” exceed capital costs even if met coal is $150 per ton.

Warrior on the fence
Warrior Met Coal Inc. is laying groundwork for a new metallurgical mine, too, but doesn’t plant to make a final decision on it until next early next year. The company expects the Blue Creek project will be “fully permitted and shovel ready” at that time.

While Warrior Met has said repeatedly that it hasn’t made a final call, “many investors interpreted the company’s language on its earnings call to mean the project is more likely to happen than not,” Seaport Global analyst Mark Levin wrote in a research note.

Contura’s pending results
Contura Energy Inc. has also unveiled plans to start production at a new metallurgical mine in West Virginia next year. But coal from the Lynn Branch project will essentially offset the lost output from another mine in the region that Contura is closing. The company hasn’t disclosed much in recent months about the project, which was announced in May. Contura is scheduled to report third-quarter earnings Thursday.

Bankruptcies and closing mines
Much of the rest of the U.S. coal industry is struggling. Peabody Energy Corp., the top U.S. coal company, announced last month that it was closing an Illinois mine. Murray Energy Corp., the biggest closely held American coal producer, filed for bankruptcy last month, becoming at least the fifth to do so this year.

“We probably won’t need all that new U.S. met coal within the time frame of when they’re expected to come online,” Bloomberg Intelligence Andrew Cosgrove said in an interview.

(By Will Wade)

Job availability expectation decreases among consumers www.zgm.mn

Current Situation Index (CSI) was the main driver of this growth. In particular, the CSI has increased by 7.3 percentage points to 60.7. However, the Expectation Index has decreased slightly by 1.8 percentage points and reached 98.7.

Mongolia to change Immigration Law www.news.mn

A public discussion on the draft amendment to the Immigration Law of Mongolia took place at the National Legal Institute on 11 November. The draft amendment is focused on simplifying visa issuance, establishing a visa centre for consolidated information for foreign travellers, extending the visa terms to meet international standards and improving overall visa policy.

Kincora Announces Agreement For New Priority Drilling Porphyry Project www.kincoracopper.com

Mongolia's emerging IT sector leads economy in new direction www.asia.nikkei.com

ULAANBAATAR -- Startups in artificial intelligence, fintech and other sectors are set to transform Mongolia's economy, as they begin turning the capital of Ulaanbaatar into a small but thriving high tech hub.

Mongolia's key industries have traditionally centered around mining, farming and tourism, but severe winters limit activity during the cold season. To keep the economy humming through the frigid months, the country is ramping up efforts to fuel its nascent information technology industry.

With fourth-generation mobile networks well established -- especially 4G LTE -- the IT sector has been taking off and is set to play a more prominent role in the economy.

Helping lead the charge are Mongols returning home to set up companies after studying and working abroad. Finding locals to train and fill tech positions in these new companies can be a challenge, but is made easier by the strong personal relationships that Mongols forge, sometimes stretching back to early childhood.

The reach of this friend-based network could be seen in late July as experts in AI from Facebook, Microsoft and other tech giants gathered in Ulaanbaatar for a deep-learning seminar organized by Dentsu Data Artist Mongol, an AI subsidiary of Tokyo-based advertising agency Dentsu.

One of the speakers at the seminar was Sainbayar Sukhbaatar, who works for Facebook AI Research. He was asked to join the confab by a childhood buddy, Dentus Data's Agchbayar Amarsanaaof, who extended the invitation "because Sainbayar is a friend from elementary school and we both studied at the University of Tokyo."

"I have not a small number of [Mongolian] friends at GAFA," Agchbayar said, referring to Google, Apple, Facebook and Amazon by acronym.

About 1.5 million people -- half of Mongolia's population -- live in the capital, which is also home to 90% of the country's universities. Students study at the same school from elementary through high school, where they form bonds that often last a lifetime.

After graduating from the University of Tokyo, Agchbayar joined Data Artist, an AI startup founded by a fellow student. After the Dentsu Group acquired the startup in 2018, Dentsu Data Artist Mongol was established in Ulaanbaatar to develop AI systems.

Due to the lack of qualified personnel in Mongolia, Dentsu Data plans to hold training seminars and choose hires from among the participants, hoping to increase its workforce to 100 from the current 70 by the end of the year.

Though not as advanced as many of its Asian neighbors, communication infrastructure is firmly in place and related markets are starting emerge, one of which could be in data centers thanks to Mongolia's relatively cheap electricity.

Smartphone penetration attests to the country's solid mobile network. At the end of 2018, there were 4.2 million devices in use, or 1.4 smartphones per person, according to the Communications Regulatory Commission of Mongolia.

This makes fertile ground for new types of financial services. Few Mongolians own credit cards, instead relying on pawnshops for short-term loans to cover daily expenses. Local fintech startup And Global senses opportunity with the situation, introducing in 2017 LendMN, a smartphone app that offers unsecured microloans starting from 50,000 tugrik ($19). Loan applications can be approved in just three minutes.

To ensure repayment, the company uses a proprietary AI-based system to assess an applicant's credit rating. It seems to be working, as 98% of borrowers repay on time. The company has since expanded LendMN overseas to the Philippines and Mexico.

Chief Investment Officer Khos-Erdene Baatarkhuu said the company's tech prowess is on par with peers in advanced economies "at just a fraction of their labor cost." Management includes people educated overseas who returned home to dive into the growing tech scene.

The country's proficiency in math is another plus. This year, Mongolia ranked 26th in the International Mathematical Olympiad, just behind France and Canada, and up from 50th place in 2010.

The government is fully behind the blossoming IT industry. In 2018, it launched the Hub Innovation Center, the nation's first facility that directly supports startups. It is also not hindering the industry with undue regulation, which essentially allows companies to use the country as a test bed before expanding overseas.

Bat-Erdene Baldangombo, head of the innovation center, said Mongolia's current industrial foundation is unsustainable, noting that the mainstay industries of coal and copper mining are vulnerable to market fluctuations. Coal mining, in particular, faces headwinds from tighter global environmental regulations. His answer is for the government to promote diversification into high technology.

The center rents space to entrepreneurs like Ochirbat Boldbaatarr, founder of a ride-sharing startup that he founded after stints at a German university and U.S. company. The breakneck speed of Mongolia's development prompted him to return home. "I thought I wouldn't be able to catch up because the pace of Mongolia's development is so fast," he said.

As the economy upscales, the government wants to do its part to educate tent dwellers and nomads outside the capital. According to Bat-Erdene, plans are underway to set up support facilities in the countryside to help rural areas with the transition.

Still, some entrepreneurs are worried about the country's habit of mixing politics with business. One noted that bribery is a way of life in the country. "When there is competitive bidding, you are never sure of fairness in the screening process," the person said.

And despite the Hub Innovation Center, another complained that government support for startups "hasn't even reached the starting line."

Mongolia-initiated resolution on cooperatives approved www.montsame.mn

On November 7, the Third Committee (Social, Humanitarian and Cultural) of the 74th session of the United Nations General Assembly approved draft resolution titled ‘Cooperatives in social development’, initiated by Mongolia, without a vote.

New ADB Country Director for Mongolia Assumes Office www.adb.org

ULAANBAATAR, MONGOLIA (11 November 2019) — The Asian Development Bank (ADB) has appointed Mr. Pavit Ramachandran as its new Country Director for Mongolia. As the head of the country office, he will work as the primary operational link for activities between ADB and the government, the private sector, civil society stakeholders, and development partners.

Invest in Mongolia forum takes place in Shanghai www.montsame.mn

Shanghai /MONTSAME/ With the aims to promote Mongolia’s business, trade and investment opportunities to foreign countries, ‘Invest in Mongolia’ Forum took place in Shanghai, China. The forum is organized on the occasion of the 70th anniversary of establishment of diplomatic ties between Mongolia and China and the China International Import Expo, which is running in Shanghai, China.

Alibaba sees strong sales as Singles' Day closes in on record www.bbc.com

Chinese e-commerce giant Alibaba's Singles' Day shopping frenzy is set to break records in its 11th year.

British Steel agrees £70m rescue with Chinese firm www.bbc.com

British Steel is set to announce a rescue deal with China's Jingye Group, which could safeguard up to 4,000 jobs in the UK.

Jingye Group has agreed in principle to buy British Steel for £70m.

It is understood that the government will help in the form of loan guarantees and other financial support.

British Steel has been kept running by the government since May when the company went into liquidation.

As well as employing 4,000 people at its Scunthorpe and Teesside sites, British Steel supports an additional 20,000 jobs in the supply chain.

It is believed that while Jingye Group has promised to increase production, it has also warned costs may need to be cut.

The Chinese group is reportedly aiming to increase production at Scunthorpe from 2.5 million tonnes per year to more than three million.

Since May, the company has been run at a loss by the Official Receiver - effectively a privately hired government agency.

British Steel's previous owners, Greybull Capital, walked away saying Brexit concerns had decimated forward order books.

Turkish deal
British Steel had been in rescue talks with Ataer, which is a subsidiary of Turkey's state military retirement scheme Oyak.

Ataer had signed a preliminary agreement to buy the company in August.

However, hopes that the deal could be completed faded last month when the Official Receiver to British Steel said the parties had failed to agree terms.

The UK industry has been struggling for a number of years amid claims that China has been flooding the market with cheap steel.

It prompted US President Donald Trump to impose a 25% trade tariff on steel imports from China and the EU among others.

Jingye has 23,500 employees and as well as its main steel and iron making businesses, it is also involved in hotels, tourism and property.

The majority of British Steel's workers are employed at its Scunthorpe plant.

Jingye's chairman Li Ganpo recently visited British Steel's sites and met with Scunthorpe MP Nic Dakin and Andrew Percy, representative for the Brigg and Goole constituency.

Mr Percy told the Grimsby Telegraph he had been given assurances over the company's future.

"They have assured us that if they do progress with this acquisition, they have every intention of investing to expand production to serve the UK and European market," he said.

Media captionBritish Steel is Scunthorpe's biggest employer
Who is Jingye Group?
China's Jingye Group specializes in iron and steel but also engages in tourism, hotels and real estate.

It has 23,500 employees and total registered assets of 39bn yuan ($5.6bn; £4.4bn). According to its website, Jingye Group ranked 217th among the top 500 enterprises in China in 2019.

The firm sells its products nationwide and exports them to more than 80 countries and regions.

Jingye's products have been used in major projects such as Beijing Daxing International Airport and the underground system in Shijiazhuang.