Mongolia coal railway to link with Russia
June 25, ULAN BATOR, Mongolia (AP) -- Mongolian lawmakers have approved plans for a rail line linking with Russia to help tap large coal deposits in the south, the latest move in the long-delayed project that could make the poor but mineral-rich nation less dependent on exporting to China.
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Lawmakers on Thursday voted nearly unanimously in favor of building the line and making it broad gauge, referring to the distance between the rails, so it could link up with Russia's rail network. There were concerns that if the rail were standard gauge like China's rail system, too much of the commodity would end up flowing to coal-hungry China at bargain prices. China currently takes about two thirds of Mongolia's exports.
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Mining giant BHP Billiton earlier held rights to the project but judged the deposit too expensive to develop.
(Mogi: I believe it was actually Energy Resources who held the right to the entire TT deposit. BHP was the previous owner of OT before selling to Ivanhoe)
Coal miner Peabody eyes Australia, Mongolia expansion
NEW YORK, June 24 (Reuters) - Coal miner Peabody Energy (BTU.N), rebuffed in a recent acquisition bid in Australia, still wants to expand Down Under to meet Asian demand and is also pursuing opportunities in Mongolia, Chief Executive Officer Gregory Boyce said on Thursday.
"We're still optimistic," he told Reuters on the sidelines of a coal industry conference, when asked if the company was looking at further expansion in Australia.
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Peabody, which mines in most U.S. regions, expanded into Australia, the world's largest coal exporter, by acquiring Excel Coal Ltd for about $1.3 billion in 2006.
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Demand for coal rose 46 percent in the last decade -- faster than any other energy source, he noted. And he expects 90 percent of global coal demand growth to come from Asia.
"China, Mongolia and India are our focus," Boyce said.
Peabody has a joint venture in Mongolia. Last month the company and China's Winsway Coking Coal Holdings Ltd struck a deal to buy Polo Resources Ltd's (POL.TO) stake in the joint venture.
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"Met (metallurgical) coal is at the surface, and mining risks are low," he said. "We see Mongolia as a place we want to be."
The Peabody chief also said the company was exploring the possibility of opening a port on the West Coast of the United States or Canada for its Asian exports.
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S3 Investment Company CEO Attends Mongolia Investment Conference in Ulaanbaatar
DANVILLE, Calif., Jun 23, 2010 (GlobeNewswire via COMTEX) -- S3 Investment Company, Inc. (Pink Sheets:SIVC) today announced that the company's Chairman and CEO Jim Bickel has attended a conference titled "Mongolia: Capital Raising" held on June 15-16, 2010 at the Chinggis Khaan Hotel in Ulaanbaatar, Mongolia. This annual conference focused on capital raising by Mongolian private sector and the Mongolian government by way of privatization and/or sovereign bond issues. According to conference organizers, investment opportunities in Mongolia have become exponentially abundant as the country is aggressively emerging from severe economic crisis last year and its mining sector is poised to boom
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S3's wholly owned Redwood Capital subsidiary, which assists private Chinese companies in accessing the North American capital markets by achieving reverse merger and financing transactions, has recently signed a new client that operates in Mongolia's mining sector. Redwood Capital is exploring additional opportunities the country, which is considered an exciting potential new market for investment.
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"I was pleased to have the opportunity to attend this investment conference in Ulaanbaatar," said S3 Investment Company Chairman and CEO Jim Bickel. "Having visited Mongolia on my previous trip to Asia as Redwood Capital was preparing to sign Monseka Mining Corporation as a client, I was already aware of the significant opportunities in Mongolia, but this event has only strengthened my belief that Redwood Capital may find additional business in the country."
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Monseka Mining Corporation was founded to become a world class multi-mineral provider focused on the production of tungsten, tin, molybdenum and bismuth. The company has a successful track record analyzing mines for major mining companies in Mongolia, Australia, Indonesia, Papua New Guinea, and Vietnam, plans to expand while maintaining a unique earnings growth model by continually acquiring producing properties, which they can improve efficiency, and acquiring late-stage proven reserves that can be quickly brought to production. The company's business model focuses on low cost acquisition of current production and late stage resources. Monseka Mining has 4 current projects: one in production, one in development and two in feasibility study stage.
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20 Thousand MNT every month for every Citizen in 2011
June 25 (summarized from open-parliament.mn) Government will include provisions for 20 thousand MNT every month to every citizen from the Human Development Fund in 2011 budget draft, instead of in lots as it was done this year. Inflation this year was partly blamed on the 70,000 MNT distributed in spring.
Limits to be placed on guarantee for bank deposits
June 25 (news.mn) The Government has prepared some amendments to the law presently guaranteeing the security of bank deposits. This follows reports that some banks have been abusing the provisions of the guarantee to secure deposits on inflated promises, and also to relax their internal risk control mechanism. All this could end up disturbing stability in the banking system.
The government now proposes to limit both the types and amount of deposits covered by the guarantee. In addition, it wants all banks to put 1 percent of the guaranteed funds in a special Government fund, which can be used at an emergency.
Government to discuss Chinese loan only after development bank Is set up
June 25 (news.mn) There was criticism of both the Government and the Central Bank at a recent meeting of the Standing Committee on the Budget when it discussed the status of foreign loans. When Finance Minister S.Bayartsogt said serious talks on a USD30-billion loan from the Chinese Government would begin only after Mongolia had set up a development bank, N.Batbayar wondered how a bank that is yet to be established can hold up negotiations on an urgent loan. He cautioned the Government against keeping Parliament in the dark, recalling that the decision to set up the State Bank was taken administratively, and no permission from Parliament was sought on such an important issue. Some MPs also wanted to know why the Central Bank places its foreign exchange reserves overseas in accounts that pay 2% interest while it is saying it wants to borrow from abroad and pay 4% interest.
Mongolia to increase crude oil output with foreign investment
June 25 (news.mn) Ambassador to Australia J. Tserendorj has said Mongolia is looking for foreign investors to help it boost domestic crude oil production tenfold in the next three years,. The increase in crude production to 10 million barrels a year from 1 million in 2009 would coincide with construction of Mongolia"s first oil refinery, enabling the country to reduce its dependence on Russia for all petroleum products.
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(The ambassador’s statement was previously reported on CPS NewsWire)
Mongol Bank’s foreign currency policy criticized
June 25 (news.mn) Noted economaist N. Dishevel says the failure of the Mongol Bank to contribute anything to the state budget in 2009 shows the flaws in its policy in relation to foreign currency reserves. “That tax payers’ money was wasted in loss-making currency deals shows that the bank’s officials are not qualified,” he said.
Other economists see little merit in the Central Bank’s claim that the present foreign currency reserves are at “a historic high” of USD1.3 billion. They say this should actually be much higher, given the country‘s natural resource and the high commodity prices in recent months. Gold extraction was estimated to reach 15 tons but the Central Bank received less than 3 tons, indicating failure of last year’s measures to support gold extractors. Parliament cannot take Central Bank officials to task because their appointment is decided by MPs.
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International organization assessing needs of migrant herders
June 24 (news.mn) The International Organization for Migration (IOM) is now in Ulaanbaatar making preparations to conduct a wide ranging Emergency Displacement Assessment following the migration of thousands of nomadic Mongolians to urban centers, mainly the capital, after they lost most of their animals because of climatic inclemency. IOM has planned the assessment in partnership with UNICEF.
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Foot and Mouth Disease Outbreak in Mongolia
June 25 (UB Post) Dornod province of Mongolia alone has destroyed 1,308 animals infected with highly contagious foot and mouth disease, the Government spokesperson stated this week.
In three eastern provinces of Dornod, Sukhbaatar and Khentii, burying of infected herds and disinfection measures are being taken by local authorities in an attempt to contain the high risk of disease not spread into major urban settlements especially Ulaanbaatar.
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Administration of Ulaanbaatar city earlier banned trading of live animals and meat products with those three provinces. Also, western provinces have banned to get breeding animals from those three provinces in next two years.
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Uncertainty weighs on shares
June 25 (AAP) Close. Australian shares fell to a two-week low today, and notched up their first weekly fall in three as concerns over the global economy resurfaced and investors turned edgy over the mining tax.
The benchmark S&P/ASX200 index fell 66.7 points, or 1.5 per cent, to 4413, bringing this week's losses to 3.2 per cent. The broader All Ordinaries index lost 64.7 points, or 1.4 per cent, to 4439.4.
Financials fell 1.6 per cent, materials stocks slid 1.7 per cent and energy stocks were 1.6 per cent lower.
Traders were hesitant to take on positions today given the uncertainties, both domestically and international, currently hanging over the market, CMC Markets analyst David Taylor said. "In the immediate term we look towards the G20 summit."
need2know:
- Asian shares slip on earnings doubts
- The dollar slips below 87 US cents
- Oil follows shares down, to $US76
- Gold stabilises at $US1244
- Dow futures are 21 points higher at 10,120
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‘‘Everyone is questioning the weak US housing market, the bleak jobs market and there are almost perpetual concerns about debt in Europe,’’ he said. ‘‘These issues have dominated the market for six months and we haven’t really put them behind us.’’
‘‘The market got quite distracted yesterday with all the goings on in Canberra.’’
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Among the big miners, Rio Tinto was down $2.13, or 3 per cent, at $69.60, and BHP Billiton was 85 cents lower, by 2.1 per cent, at $38.80.
Fortescue Metals Group lost 18 cents, or 4 per cent, to $4.36 and Macarthur Coal fell 25 cents, or 2 per cent, to $12.09.
Mining firms had received a fillip yesterday from hopes that new Prime Minister Julia Gillard would offer a more conciliatory approach on the 40 per cent super profits tax, but there was little new information today on negotiations.
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Choppy times
‘‘These sort of choppy moves are going to be par for the course over the next few months,’’ Mr Peacock said. ‘‘There is nervousness about the upcoming US reporting season.
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Gold stocks were higher, with Newcrest Mining adding 35 cents to $36.00 while Lihir Gold rose seven cents, or 1.6 per cent, to $4.44.
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No panic
Traders said despite a shaky global recovery and investors ready to jump ship to safer assets such as gold and bonds the index should draw good support round the 4400 level barring further bad news.
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Dollar drops as risk sell-off gathers pace
June 25 (Reuters) The Australian dollar stayed under pressure on Friday, giving up gains after China set a higher mid-point for the yuan, as investors wary about anything risky sold high-yielding currencies.
At the local close of trade, the dollar was down at $US0.8633, down from yesterday's $US0.8728. It has shed over 2.5 per cent from this week's peak of $US0.8859 struck on Monday when investors cheered China's move to allow more movement in the yuan by piling on to growth-linked currencies.
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Traders were also looking to go square ahead of the G-20 summit in Toronto at the weekend.
A draft document of the the summit communique, obtained by Reuters, said world leaders at the meeting would warn against complacency on a global recovery, while admitting sickly public finances would hurt long term growth.
Mining tax to be negotiated ASAP: Gillard
June 25 (AAP) Prime Minister Julia Gillard has made it a priority on her first full day in the top job to resolve the damaging fight with the mining sector as she tries to regain voter support.
Ms Gillard this morning met with Deputy Prime Minister Wayne Swan and Resources Minister Martin Ferguson first thing to begin working on a new strategy to resolve the impasse with miners over the proposed resource super profits tax (RSPT).
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Ms Gillard maintained the Rudd government’s line that she wanted to make sure Australians got a fair share of Australia’s mineral wealth but was adamant the negotiations would be genuine and conducted in good faith.
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Mining shares were trading lower this morning, with Rio Tinto down 93 cents, or 1.3 per cent, to $70.80, and BHP Billiton 37 cents lower, or 0.9 per cent, at $39.28 - in line with the falls in the broader market.
IMF official challenges miners' profits tax claims
June 25 (Sydney Morning Herald) A SENIOR official from the International Monetary Fund has challenged resource industry claims that the competitiveness of Australian mining will be harmed by the proposed ''super profits'' tax.
In an advertising blitz, miners argue Australia will become the most highly taxed mining nation, with a total rate of 58 per cent once company tax is included.
But the deputy head of the fund's tax policy division, Philip Daniel, said it was misleading to look only at the headline tax rate created by the 40 per cent levy.
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''The new tax is designed to be responsive to changed circumstances and its impact is known and certain for companies in advance, whereas royalties are not responsive and are more vulnerable to unexpected change,'' he said.
For instance, the government of Western Australia this week raised iron ore royalties levied on BHP Billiton and Rio Tinto to 5.625 per cent, from 3.75 per cen
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Link to Article
China
China’s Stocks Retreat, Trimming Weekly Gain, on Profit Concern
June 25 (Bloomberg) -- China’s stocks fell for a third day, led by brokerages and industrial companies, on concern slowing economic growth will erode corporate earnings.
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The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, retreated 13.93, or 0.5 percent, to 2,552.82 at the close. The CSI 300 Index fell 0.8 percent to 2,736.29. The Shanghai gauge gained 1.6 percent this week after the central bank said it will increase the flexibility of the nation’s exchange rate.
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China’s stock markets are “immature” compared with regional rivals, posing a challenge to Shanghai’s ambition of becoming a global financial center within a decade, according to Goldman Sachs Group Inc.
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Slowing Growth
China’s economic growth, the engine of the global economic recovery, will slow to 9.6 percent in the third quarter and 9 percent in the following three months, from 10.5 percent in the second quarter, according to as many as 21 economists surveyed by Bloomberg. The economy expanded 11.9 percent in the first quarter, the fastest pace in almost three years.
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Yuan Completes Biggest Weekly Advance in 18 Months Before G-20
June 25 (Bloomberg) -- The yuan had its biggest weekly gain since December 2008 after China set the currency’s daily reference rate at a record high, allowing appreciation before the Group of 20 meeting tomorrow.
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The yuan rose 0.5 percent this week, and 0.1 percent from yesterday, to 6.79 per dollar as of 5:51 p.m. in Hong Kong. The central bank fixed the reference rate at 6.7896 per dollar, 0.3 percent stronger than yesterday and 0.15 percent higher than the close in the spot market. The yuan is allowed to trade 0.5 percent on either side of the daily fixing.
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China’s benchmark money-market rate rose to near the highest level this year as bets that the yuan’s appreciation will be modest spurred speculation funds will flow abroad. The 12-month non-deliverable forward contract was pricing in a 1.7 percent currency gain in 12 months.
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China’s benchmark money-market rate rose to near the highest level this year as bets that the yuan’s appreciation will be modest spurred speculation funds will flow abroad. The 12-month non-deliverable forward contract was pricing in a 1.7 percent currency gain in 12 months.
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“The market expects limited yuan appreciation and more funds will flow out of the country than are coming in,” said Pang Aihua, a Beijing-based fixed-income analyst at China Citic Bank.
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Date set for historic deal with Taiwan
June 25 (China Daily) Taipei - The Chinese mainland and Taiwan will sign a landmark trade deal next Tuesday, cutting import tariffs on hundreds of items and providing a major boost of about $100 billion annually in two-way trade, negotiators said on Thursday.
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The free-trade deal, or the Economic Cooperation Framework Agreement (ECFA), will cut tariffs on more than 800 products and open up service industries.
The deal provides Taiwan companies tariff advantages on some 530 categories of goods for mainland export, and mainland companies will receive advantages on some 260 categories in the Taiwan market.
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The mainland has agreed to open its market for some industries in Taiwan in commodity trade and open some of its service sectors, he said.
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Global
Asian Stocks Decline as U.S. Forecasts Fuel Concern
June 25 (Bloomberg) -- Asian stocks fell, dragging the MSCI Asia Pacific Index to its biggest slump in almost three weeks, after disappointing earnings forecasts at U.S. companies fueled concerns about growth in the world’s largest economy.
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The MSCI Asia Pacific Index lost 1.6 percent to 115.29 at 7:20 p.m. in Tokyo, the most since June 7. The index has risen 5.9 percent from a 10-month low on May 25 amid reports of improved U.S. manufacturing and consumer sentiment and as China ended the yuan’s peg to the dollar. The gauge has fallen 0.8 percent this week as reports of declining new and existing home sales in the U.S. rattled investor confidence.
Japan’s Nikkei 225 Stock Average slumped 1.9 percent, even after the statistics bureau said consumer prices fell at a slower pace in May. South Korea’s Kospi index declined 0.6 percent. Australia’s S&P/ASX 200 Index slipped 1.5 percent.
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Futures on the Standard & Poor’s 500 Index fell 0.2 percent. The gauge dropped 1.7 percent yesterday, led by consumer shares and as banks dropped on concern over financial regulation.
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"Mogi" Munkhdul Badral
CPS International
Email: mogi@cpsmongolia.mn
Mobile: +976-99996779
CPS International is a marketing arm of CPS Securities in Mongolia. CPS Securities is a Perth, Western Australia based ASX Licensed Financial Services Company. To trade ASX stocks, feel free to contact me at mogi@cpsmongolia.mn or +976-9999-6779.
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