North Korea to give China right to mine rare earths in return for investment in solar plants – report www.rt.com

China could gain access to a rare earth mine in North Korea in exchange for investment in solar energy, a Chinese industry association website said. The deal could ease North Korea’s chronic power shortages.
According to the Association of China Rare Earth Industry, building a solar power plant capable of producing 2.5 million kilowatts of electricity each day in inland areas like North Pyongan would cost around $2.5 billion. China’s reward for investing would be mining rights to a rare earth mine on the province’s borders.

Petro Matad announces results of testing at Heron-1 in the north of Block XX, eastern Mongolia www.energy-pedia.com

Petro Matad, the AIM quoted Mongolian oil explorer, has announced the results of well testing operations at its Heron-1 oil discovery in the north of Block XX, eastern Mongolia, adjacent to the producing Block XIX, operated by PetroChina.

Highlights

Positive results of well testing operations at Heron-1 oil discovery in the north of Block XX
DST2 flowed oil at a peak rate of 821 bopd
Produced 46 API oil, without need for artificial lift or stimulation, exceptional for the Tamsag Basin
DST1 did not flow naturally but proved at least a 70 metre oil column in the well
Company will incorporate all data from the 2019 drilling campaign into rapid reinterpretation of Block XX in order to apply for an Exploitation Licence from the Government of Mongolia
Intervals for two separate cased hole drill stem tests ('DST'") were chosen based on the petrophysical analysis of log data acquired over the 77 metres of potential oil reservoir in the Lower Tsagaantsav Formation in the Heron-1 well. The first test was performed over a three metre zone at 2,872 metres, near the base of the sands seen in the well. This zone proved to be tight with very limited inflow recorded. Oil was present in the test string when the tools were recovered to surface indicating that the zone is indeed oil-bearing and so proving an oil column height of at least 70 metres in the well. The pressure data from DST1 is now being analysed and will be used by specialist reservoir stimulation experts that the Company has retained to determine if improvements in permeability could be achieved to allow this zone to flow.

DST2 was performed over a 12 metre interval from 2,834 metres in the upper portion of the Lower Tsagaantsav Formation. The zone flowed oil and some associated gas to surface without the need for any artificial lift. This is exceptional for the Tamsag Basin where only a few of the hundreds of wells drilled have had the capability to produce oil to surface on natural flow. The peak production recorded during the test was 821 barrels of oil per day ("bopd"). For the main flow period, the well was choked back on an 0.3-inchchoke to optimise the collection of pressure data. Through this period, the well flowed at an average rate of 200 bopd with a well head flowing pressure of 250 psi. The oil recovered is very light, with an API gravity of 46 degrees making it one of the lightest oils recorded in the basin. This may be a function of Heron-1 being one of the deeper discovery wells so far drilled and tested in the area. No formation water was produced during the test. The well has now been shut in for pressure build up and once the test is complete and all samples and pressure data have been gathered the test equipment and the service rig will be demobilised and the Heron-1 well will be suspended.

Given the capacity of the well to flow naturally to surface at what is clearly a commercial flow rate, the well will not be subject to any reservoir stimulation operations at this time. The test data will now be analysed to determine the sustainable deliverability of the well on natural flow and what rate the reservoir could be expected to sustain if the well is pumped. The data will also be used to investigate what impact reservoir stimulation could be expected to have on the well's production characteristics in the future including analysis of the additional oil-bearing intervals in the well that have not yet been tested.

The Company had assigned a pre-drill resource estimated for the Heron structure of 165 million barrels of in place oil, with 25 million barrels (P50) recoverable resource, based on a recovery factor of 15%. The Heron-1 flowrate is very encouraging and could indicate that the assumed recovery factor is too conservative, however more wells will be required to prove up the total volumes in the structure.

The Company will now focus its activities on incorporating all the data it has gathered in its 2019 drilling campaign, and in particular the Heron-1 results, into a rapid reinterpretation of Block XX and will then engage with the Mongolian government to secure an Exploitation Licence in order to be able to put Heron-1 on to production in 2020, to pursue the development of the discovery and to investigate further the resource potential of the now proven continuation of the Tamsag Basin petroleum system into Block XX.

'The test results at Heron-1 are even better than we expected given that the well is deep in the basin centre. The data gathered will now be analysed and used to secure tenure of a development area in Block XX with a view to transitioning Petro Matad from explorer to producer with revenue generation.

I am delighted that the Petro Matad team has been able to achieve this result having put in so much effort. We look forward to progressing to the next phase of the Company's development.'

Coal power plants face $7.3 billion losses in Europe in 2019 www.mining.com

Coal power generators in Europe face 6.6 billion euros ($7.3 billion) of losses this year as plunging renewable energy costs and cheap natural gas cut use of the dirtiest plants to a record low.

Almost 80% of lignite and hard coal-fired generators will be unprofitable this year, a hit the industry is unlikely to survive without government help, according to a report from Carbon Tracker. The research group pushing for lower greenhouse gas emissions calls for a continent-wide phaseout of the most polluting fossil fuel by 2030.

Utilities in Germany, Spain and the Czech Republic are the most exposed to falling profits in a year where falling coal prices and rising carbon emission permits make it less attractive to burn the fuel for power. Coal’s days are already numbered in Germany, which plans to shut its plants by 2038, and Spain has set a 2030 deadline.

While European year-ahead coal prices have dropped to about $66 a ton from more than $100 a year ago, EU carbon permits have surged fivefold since 2017. That has driven up the cost of burning coal. At the same time, benchmark gas contracts in the Netherlands are trading 27% below their 10-year seasonal average, encouraging utilities to use that fuel instead.

The report by Carbon Tracker, an environmental group that advises institutional investors, points to how energy economics is prompting nations to wean themselves off coal to curb emissions and slow climate change. For most of this decade it was more profitable to burn coal in Germany, but that relationship was turned on its head this year because of a glut of gas.

“EU coal generators are hemorrhaging cash because they cannot compete with cheap renewables and gas and this will only get worse,” said Matt Gray, Carbon Tracker’s head of power and utilities. “Getting off coal is cheap and can be a win-win for consumers and shareholders, providing governments and investors work with local communities.”

RWE AG, which owns six coal plants in Germany, could incur losses of close to 1 billion euros in 2019, Carbon Tracker said. In countries such as Poland where wholesale prices are higher and government subsidies are generous, coal plants can remain profitable for the foreseeable future, the analysts said.

RWE rejected that analysis. “The figures stated and assumptions made do not stand up to a fact check,” an official at RWE said in an emailed statement. “They are false and cannot be used as a basis for any serious treatment of this topic.”

In the first six months of 2019 RWE reported earnings of 99 million euros for its European power generation — including hard coal, gas, biomass and hydropower — while for its lignite and nuclear sector it posted 172 million euros of earnings, the spokesman said. The utility doesn’t publish consolidated numbers for coal-fired generation.

Hard coal generation has collapsed by 39% in 2019 while lignite has seen a 20% decline year-on-year, according to Carbon Tracker which it calls “eye wateringly low” utilization rates.

Bloomberg Philanthropies, which along with Bloomberg LP is owned by Michael Bloomberg, helps fund Carbon Tracker.

(By Jeremy Hodges)

Stove that uses waste cooking oil for fuel introduced www.montsame.mn

Ulaanbaatar /MONTSAME/. Flint bio stove that uses waste cooking oil as fuel was introduced yesterday on October 23. Used in developing countries in order to reduce air pollution and electricity costs, this type of stove is unique for not requiring coal or any other types of fuel. At the initiation of Chairman of the Citizens’ Representative Khural of Sukhbaatar district E.Ganbat, the ‘Flint bio stove’ project is jointly being implemented by KOICA, KTL and Flint LLC in the framework of the National Programme for Reduction of Air and Environmental Pollution. Used for cooking as well as heating, the stove was made specifically for the conditions of Mongolia.

Oyu Tolgoi announces Q3’19 Performance results www.montsame.mn

Ulaanbaatar /MONTSAME/. In the third quarter of 2019, Oyu Tolgoi achieved an All Injury Frequency Rate (AIFR) of 0.18 per 200,000 hours worked. Safety remains Oyu Tolgoi’s top priority for as we maintain strong safety performance and culture across our workforce. To reinforce our safety culture across our wider community we are campaigning for safer roads with our partner National Police Agency, committing over MNT 280 million for communication and provincial road monitoring system. Earlier this month, we co-hosted “Safety First - 2019” conference with the Mongolian Occupational Safety and Health Professionals’ Association.

Policy on sustainable investment to keep economic growth stable www.montsame.mn

Ulaanbaatar /MONTSAME/. The importance of a clear, consistent policy on investment was highlighted at the international conference held under the theme, ‘Investment Climate: Stability’, on October 22. The conference was co-organized by the Bank of Mongolia, International Finance Corporation, and the National Development Agency.

While foreign investment in Mongolia was USD 1.5 billion in 2016, it reached USD 2.7 billion, with an increase of 80 percent in 2018. Furthermore, entities with foreign investment made up 23 percent of the total tax revenue in 2018. However, as there is a potential risk of economic difficulties due to the fluctuating rate of export commodities, officials highlighted the possibility to overcome the difficulties with direct foreign investment and increase in exports.

Head of the Cabinet Secretariat L.Oyun-Erdene said, “Foreign-invested entities making 23 percent of our country’s total tax revenue shows the impact of foreign investment in the economy. Specific goals and objectives on regaining investors' confidence and attracting investment have been reflected in the Government’s plan for 2016-2020. In order to implement these goals, we are currently working on creating a favorable environment for new investors, protecting their rights, and introducing the best international practices.”

Governor of the Bank of Mongolia N.Bayartsaikhan said, “The macroeconomy of Mongolia has stabilized since 2017. As of the first half of 2019, GDP grew by 7.3 percent. Despite this, the fluctuating rate of raw commodities and foreign debt risks continue to be problematic. Thus, to attract investment and find additional sources for programs on increasing the competitiveness of export products, and diversifying the economy, creation of a favorable investment environment is currently the most important issue.”

Head of the National Development Agency of Mongolia B.Bayarsaikhan said, “In partnership with the International Financial Corporation of the World Bank, the National Development Agency has developed a report on the investment reform of Mongolia. The policy paper on attracting investment is currently being developed based on the report. It is highly important to define the vision for the sectors that will serve as a pillar of development, foreign investment, and human resource and personnel 20-30 years into the future. In this framework, the National Development Agency has begun to work on defining the vision for up to 2051.”

IFC’s Resident Representative in Mongolia Rufat Alimardanov said, “Alongside foreign investment and localization of know-how, it will be crucial to have a policy on investing in increasing domestic business opportunities. Our research showed that Mongolia is able to benefit the most from investments in sectors, such as mining, tourism, services, and agriculture. We eager to give support in creating opportunities in the sectors, and realizing possible opportunities.”

Central bank and Financial regulatory commission blamed for fail in duties www.montsame.mn

Ulaanbaatar /MONTSAME/. Last week, Financial Action Task Force (FATF), intergovernmental organization on combating money laundering and tourist financing worldwide, identified Mongolia as a jurisdiction with Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies for which they have developed an action plan with the FATF, or included Mongolia in so-called ‘Grey List’.

Italy installs bumper car track in Ulaanbaatar www.news.mn

C and S, an Italy-based manufacturer of bumper cars for adults and juniors, have installed an indoor bumper car track in Mongolia.

Mongolia-EEC working group meets for the third time www.montsame.mn

Ulaanbaatar /MONTSAME/. On October 21, a third meeting of the joint working group of the Government of Mongolia and the Eurasian Economic Commission (EEC - supranational governing body of the Eurasian Economic Union) was held in Moscow, Russia.

The Russian pipeline that could derail China's LNG boom www.rt.com

China’s booming natural gas and liquefied natural gas (LNG) demand is set to cool off, with both demand growth and LNG import growth slowing down from the dizzy growth rates of the past few years.
A major natural gas pipeline designed to ship gas from Russia’s eastern natural gas fields to China could further eat some of the growth in Chinese LNG imports in a few years, when the pipeline starts operations at full capacity, according to an S&P Global Platts analysis.

Earlier this month, Russia’s gas giant Gazprom said that the Power of Siberia pipeline to China is being filled up with gas as scheduled, with operations slated to begin in December.

While the initial volumes of Russian gas shipments to China will be low and unlikely to have a major impact on this coming winter’s LNG market in China, at full capacity in 2023, the pipeline from Russia is set to provide as much as 9.5 percent of China’s expected gas supply, possibly denting LNG import growth, S&P Global Platts has estimated.

“We have many city gas supply projects in the northeast, so the startup of the China-Russia gas pipeline is expected to ease our supply pressure in the winter peak season,” a source at a Chinese city gas supplier told S&P Global Platts, noting that the supplier could mull over reducing imports of LNG when the Russian pipeline gas starts flowing.

Russia will start shipping gas into China at a time when Chinese natural gas and LNG demand growth is slowing down amid weakening economic growth. Still, analysts don’t see China’s gas and LNG demand starting to fall in the coming years and decades.

Demand for natural gas in China will continue to grow in the coming years as Beijing favors increased use of cleaner-burning natural gas to clamp down on stifling pollution levels. Even at its slower pace, LNG import growth could help China outstrip Japan to become the world’s top LNG importer as soon as in 2022. While analysts see no end to LNG import growth in the foreseeable future, experts and the Chinese government itself admit that growth it set to slow over the coming years, with a first such slowdown as early as this year.

The slowing economic growth in China is taking a toll on gas demand growth. The Chinese government has recently admitted that this year’s gas demand growth would slow down from last year’s growth pace—to 10 percent from 17.5-percent growth in 2018. State-run Sinopec Gas Company chimed in with a similar forecast last week, saying that demand for natural gas is forecast to rise by 10 percent this year, at a slower growth rate than in previous years, due to slowing economic growth.

Slowing growth pace, trade disputes undermining investor confidence and industrial output, and China’s pragmatic policy position to manage the pace of coal-to-gas switching inevitably led to a slower rate of Chinese gas demand growth, Gavin Thompson, Vice Chairman, Energy – Asia Pacific at Wood Mackenzie, said earlier this month.

Chinese gas demand is set to grow by 9 percent annually this year—“hardly a poor performance, but not matching the 17 percent increase seen in 2018,” Thompson said, but noted that he disagrees with commentators who have started talking about cracks emerging in China’s LNG demand. China will continue with the coal-to-gas switching to reduce air pollution, but it will also look to avoid LNG price spikes seen in the winters of 2017 and 2018, said Thompson, who remains optimistic about China’s natural gas and LNG demand growth in the long term.

Commenting on the impact of more pipeline gas to China, Miaoru Huang, Senior Consulting Manager – China, APAC Gas and LNG at WoodMac, said last month:

“Despite higher flows of pipeline imports, LNG will be crucial to meeting China’s gasification ambitions. LNG is more flexible than piped imports to counter demand and production uncertainty.