Rio Tint Q2 Iron Ore Shipments Down 3%; Says Mongolia Copper Mine To Cost More www.markets.businessinsider.com

(RTTNews) - Anglo-Australian mining giant Rio Tinto Plc (RTNTF, RIO, RIO.L, RTPPF) reported that Pilbara iron ore shipments in the second quarter were 3% lower than last year, due to recovery works following Tropical Cyclone Veronica. It reaffirmed its full-year shipment guidance.

Projects on animal identification and traceability to be implemented www.montsame.mn

Ulaanbaatar /MONTSAME/. The Ministry of Food, Agriculture and Light Industry and the UN Food and Agriculture Organization (FAO) will be jointly implementing projects on animal identification, registration system and improving the system on recording and traceability.

Auto Recycling Center to be built in Nalaikh www.montsame.mn

Ulaanbaatar /MONTSAME/ South Korea invested Mongol Auto Recycle Park LLC is to establish an auto recycling center at the Nalaikh Industrial and Technology Park of Building Materials. The center's construction will be commenced in September 2019 and expected to be completed within first quarter of 2020.

China’s new Silk Road trade expands to over $600 billion in first half of 2019 www.rt.com

China’s trade with countries participating in its ambitious Belt and Road Initiative (BRI) has been expanding and reached 4.24 trillion yuan ($617.5 billion) in the first half of this year.
Customs data showed trade with BRI countries for the period was up 9.7 percent year-on-year. It has outpaced the growth rate of China’s total trade, which remained stable at 3.9 percent.

How Trump could kick off a currency war www.cnn.com

New York (CNN Business)It's no secret that President Donald Trump wants to weaken the US dollar to juice the American economy.

Trump has repeatedly suggested the greenback is too strong against rival currencies -- and some analysts say he's probably right. The US dollar may in fact be overvalued, depressing overseas trade and manufacturing activity in the Rust Belt important to Trump's re-election chances.
There's growing speculation that Trump officials will take concrete steps aimed at knocking down the dollar, making a sharp and potentially-dangerous break from recent US policy. However, it's not clear how effective such a strategy would be -- and there's a risk it could badly backfire by sparking retaliation from other countries, driving up import prices and weakening the purchasing power of American households.
"It could trigger a currency war," Bank of America warned in a recent note to clients.

Across India, as millions lift out of poverty, the challenge is provide more energy with fewer emissions.
The administration has several ways it could weaken the dollar. One would be to explicitly abandon the strong-dollar policy that has been in place for more than two decades. Or Trump could order the Treasury Department to sell dollars in a bid to lower their value. That type of intervention hasn't happened since 1995.
"We think direct FX intervention by the US is a low but rising risk," Goldman Sachs strategist Michael Cahill wrote in a note to clients.
Trump's sudden trade moves have "created a perception that 'anything is possible,'" Cahill said.
The president has already hinted at a bold step on currencies.
On July 3, Trump complained in a tweet that China and Europe are playing a "big currency manipulation game."
"We should MATCH, or continue being the dummies who sit back and politely watch," Trump tweeted.
Any attempt by the Treasury to intervene unilaterally would be bound to fail, unless it could rely on the Fed's support."

Last month, Trump complained that the European Central Bank's easy money policies caused the euro to tumble, "making it unfairly easier for them to compete against the USA."
Of course, the Federal Reserve's own head-spinning shift from hawkish to dovish has cooled off the US dollar. The greenback is up less than 1% this year against a basket of currencies.
The king of the currencies
There is evidence that Trump is right about the dollar. The Economist's Big Mac Index, released last week, showed that nearly all currencies are undervalued against the dollar.
"Trump probably does have a little bit of a point," said Stephen Gallo, European head of FX strategy at BMO Capital Markets.
The US dollar, as measured against a basket of currencies, took off in mid-2016 and has remained relatively high. Those gains reflect economic weakness elsewhere around the world. The dollar has also been boosted by Trump's own policies, including stimulating the US economy with tax cuts and deregulation and efforts to cut the US trade deficit.
"The America First narrative that Trump is pushing is ultimately dollar positive," Gallo said.
Here's another sign the US dollar is too strong: Burgers
Here's another sign the US dollar is too strong: Burgers
The other factor is that the US dollar is the world's reserve currency. That status creates persistent demand for the greenback, making it difficult to properly value the currency.
"The dollar is at the top of the food chain," said Gallo.
Trump himself has acknowledged this, tweeting on Thursday that the dollar is "by far the most dominant currency anywhere in the World, and it will always stay that way."
Is America's strong dollar policy at risk?
Still, Trump officials have tried talking down the dollar in the past -- moves that Goldman Sachs says have had a "decent amount of success."
The easiest way to weaken the dollar, according to Bank of America, is for the Trump administration to announce it is abandoning the strong dollar policy introduced in 1995 under President Bill Clinton.
Such a move "could be very effective," causing the "overvalued" greenback to tumble by 5% to 10% and bringing it back into equilibrium, Bank of America strategists wrote.
Treasury Secretary Steven Mnuchin would not have to declare that the US wants a weak dollar. He could merely say the US wants a fair value for the dollar. Bank of America notes that no other major economy has a strong dollar policy and the US Treasury Department has done "nothing in practice to implement it."
Still, other nations could seek to retaliate against the shift in US dollar policy by weakening their own currencies.
The Fed must go along
A more aggressive option would be an outright intervention in the foreign-exchange market, something that analysts say would break modern norms.
Goldman Sachs said that direct intervention would cause a "sizable market reaction," including a weaker dollar, stronger yen and falling foreign stock markets.
However, the firm warned that there are several complications to such a strategy.

One problem is that Trump would need the Federal Reserve to go along with his plan to weaken the dollar.
Although the Treasury Department has authority over US currency policy, it only has control over a relatively small amount of assets that it could sell in a bid to drive down the dollar. The department's Exchange Stabilization Fund is only sitting on about $22 billion in US dollars, according to Goldman Sachs.
"After accounting for leverage, there are plenty of hedge funds that have more clout than that," Paul Ashworth, chief US economist at Capital Economics, wrote in a note to clients. "Any attempt by the Treasury to intervene unilaterally would be bound to fail, unless it could rely on the Fed's support."
Race to the bottom
Even if the Fed did agree to intervene in the currency market, such a move could take considerable firepower.
Nearly $5 trillion is traded each day in the foreign exchange market, roughly five times the level in 1995 when the US last launched an intervention, according to Ashworth.
"The gorilla keeps getting heavier and heavier," he wrote.
There may be unintended consequences as well. Ashworth said that while depressing the dollar could boost the competitiveness of US exporters in the medium-term, it would also lift import prices and an "almost immediate loss of purchasing power" for American households and businesses.
"We would view any action to deliberately weaken the dollar as negative for near-term GDP growth," he wrote.
Goldman Sachs warned that outright currency intervention could be "counterproductive" if other countries follow suit.
It's easy to see how this could spark a race to the bottom. A currency war, on top of a trade war, is a scary thought. But anything's possible.

Beavers relocated in Terelj River www.montsame.mn

Ulaanbaatar /MONTSAME/ The Environmental Authority of Ulaanbaatar in cooperation with the Gorkhi-Terelj National Park Administration relocated two pairs or four beavers in Terelj River which flows into Tuul River.

China's economy grows at slowest pace since 1990s www.bbc.com

China's economy grew at its slowest pace since the early 1990s in the second quarter, official figures showed.

In the three months to June, the economy grew 6.2% from a year earlier. The result was in line with forecasts.

China has moved to stimulate its economy this year by boosting spending and delivering tax cuts.

The country is also fighting a trade war with the US which has hurt businesses and weighed on growth.

The data released on Monday showed China's economic growth rate slowed from 6.4% in the first three months of the year.

US President Donald Trump tweeted that US trade tariffs were having "a major effect" on the Chinese economy.

"China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal...."

China's national statistics bureau said the figures pointed to a "complex environment" both at home and abroad.

It said the economy had "performed within the reasonable range" in the first half of 2019, but that it faced "new downward pressure".

The figures do show some impact from the trade conflict with the US. Growth has probably slowed a little more than it would have done had China been facing a more tranquil international commercial environment. The longer-term picture, though, is one of an economy continuing a reasonably orderly and intended slowdown in growth.

The average growth rate over the three decades to 2010 was 10%. The Chinese leadership - and every economist I have ever heard expressing a view on this - did not regard that as sustainable for the long term. The aim was to see the economy less dependent on investment and exports and an increased role for spending by consumers.

There has been some progress, though the rates of saving and investment remain very high. There are dangers, however, notably the high level of company debt. The authorities encouraged strong credit growth in the aftermath of the global financial crisis. That has helped prevent a more rapid and potentially disruptive slowdown, but at the price of creating additional financial risks.

While China-watchers advise caution with Beijing's official gross domestic product numbers, the data is seen as a useful indicator of the country's growth trajectory.

Other data showed some signs of improvement in the world's second-largest economy.

Industrial production rose 6.3% in June from a year earlier, while retail sales rose 9.8% year-on-year - both above forecasts in Reuters polls.

Global impact
Slowing growth in China has raised concerns about the potential knock-on effect on the global economy.

Earlier this year Beijing announced plans to boost spending and cut billions of dollars in taxes in an effort to support the economy.

It has also moved to provide a liquidity boost by reducing the amount of cash banks must hold in reserve.

Edward Moya, senior market analyst at Oanda, said the latest economic data "shows the slowdown remains intact and markets should expect further stimulus" from China's central bank later this year.

The US-led trade war is another factor weighing on growth.

"The trade war is having a huge impact on the Chinese economy, and with no end sight as trade negotiations struggle for meaningful progress, we are probably not near the bottom for China's economy," he said.

US-China trade war in 300 words
While both sides agreed to resume trade talks at a recent G20 summit in Japan, they have already placed tariffs on billions of dollars worth of one another's goods, hurting businesses and casting a shadow over the world economy.

Asian air traffic controllers convening in Ulaanbaatar www.montsame.mn

Ulaanbaatar /MONTSAME/ The Third Asian Air Traffic Controller Forum is being held in Ulaanbaatar between July 14 and 17 with involvement of 100 air traffic controllers and other representatives from Mongolia, Russia, China, Thailand, Japan and Hong Kong.

Mongolian dinosaur fossils on display in Tokyo www.montsame.mn

Ulaanbaatar /MONTSAME/ 14 exhibits of dinosaur fossils found in Mongolia including the Deinocheirus skeleton are on display at the Dinosaur Expo 2019 which opened in the National Museum of Nature and Science, Tokyo, Japan, on July 13.

Rio Tinto warns of delay and cost blowout at Mongolia copper mine www.ft.com

Rio Tinto has warned of further delays and a cost blowout of up to $1.9bn at its giant underground copper project in Mongolia’s Gobi desert.

The Anglo-Australian miner said difficult ground conditions meant that it would have to completely rethink the design and development schedule at Oyu Tolgoi.

As a result, first sustainable production is now expected between May 2022 and June 2023 — a delay of 16 to 30 months compared with original guidance — while the cost of the $5.3bn project will increase by $1.2bn-$1.9bn.

“We have made significant progress on a number of key elements in the construction of the underground project during 2019,” said Stephen McIntosh, head of Rio’s growth and innovation group.

“However, the ground conditions are more challenging than expected and we are having to review our mine plan and consider a number of options.”

Rio said a final estimate cost and schedule would be announced in the second half of next year, “reflecting the preferred mine design approach”. “Significantly more work is required to complete the final assessment,” it said.

The miner also said it was reviewing the carrying value of the project and could announce an impairment charge when it announces half-year results next month.

While it is not unusual for large, complex mining projects to experience delays, the overrun at OT, as the mine is known, will still be painful for Rio, which prides itself on being one of the best operators in the industry.

It could also raise tensions in Mongolia, where the mine dominates political debate and is the country’s biggest source of foreign direct investment.

While Rio operates OT, it does not have a direct shareholding. It is 66 per cent owned by Toronto-listed Turquoise Hill Resources, in which Rio Tinto has a 50.8 per cent controlling stake, and 34 per cent by the Mongolian government.

Although Rio has been producing copper, gold and silver from an open pit at OT since 2013 that was always with a view to exploiting its vast underground riches.

The expansion of OT is Rio’s most important growth project and the one most closely associated with chief executive Jean-Sébastien Jacques, who pulled together the financing package for the project when he ran the company’s copper business.

Commodities
Supply squeeze in iron ore catches miners on the hop
The project is aimed at lifting output to 550,000 tonnes of copper per year. When finished it will make OT the world’s third-largest source of copper, an industrial metal tipped to be in ever-greater demand as the world shifts to cleaner forms of energy.

Problems with the underground project first emerged in October when Turquoise Hill Resources announced a nine-month delay to sustainable production, citing issues completing a 1,300 metre production and ventilation shaft and changing ground conditions.

In February, Rio warned investors of “significant changes to the design” of the development schedule of the project that would push back first sustainable production.

Rio is using a mining technique called block-caving to extract the copper ore and send it to the surface. Although technically challenging, it is considered one of the most cost-effective methods of mining ore from deep below the ground.

For this method to work, weak and fractured rock needs to collapse under pressure from blasting and gravity. Mr Jacques has previously said the problem at OT is that the rock collapses too easily.