Hunnu Coal Announces General Meeting
June 30 (Mogi) Hunnu announced today that it will hold its General Meeting of Shareholders on July 30, 2010.
EBRD mulls Mongolian PE fund commitment
June 30 (AltAssets.com) The European Bank for Reconstruction and Development, a development finance institution whose remit is to enhance poorer economies in Europe, is considering committing up to $10m to a new Mongolian private equity fund.
The Mongolia Opportunities Fund I will target $50m in total and the EBRD does not intend to commit any more than 20 per cent of its total capital, it said.
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The novel vehicle will invest in companies primarily operating in sectors covering agribusiness, infrastructure and mining services and supply chains, and will consider growth investments in the range of $2.5m to $7.5m per company.
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Origo Partners, an Asia-focused fund manager listed on London’s AIM exchange, recently set up an office in the country to tap the gold, iron ore, molybdenum, uranium, oil, copper and coal reserves there.
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LSE welcomes Mongolian companies
July (news.mn) Mongolia Day took place in London Stock Exchange on June 28. Our reporter Budvaa Byambasuren sends this report.
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The event began at 8.45 am. MP O. Chuluunbat, director of Mongolian Stock Exchange R. Sodkhuu, director of Government Property Bureau D.Sugar, director of Norton Sec Company B. Ulziibayar and Mongolbank representative in London D. Enkhjargal were among those present. A welcome speech was given by John Edwards, senior manager of the Stock Exchange and D. Enkhjargal responded. LSE executive director Havir Rolet then spoke and expressed his readiness to help Mongolian companies develop. Many investors and legal consulting companies were present.
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B. Erdenebileg said, “I am happy that Europe is no longer afraid of Mongolians and has opened its doors for us.” He gave detailed information about Mongolian natural resources. Exploration licenses cover 23.3 percent of the total area of the country, while mining licenses cover another 0.24 percent. The number of total licenses is 1,081. Last year, USD500 million was invested in the sector. There was scope for many more large foreign investments.
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Polo Resources Limited ("Polo" or "the Company") - Polo completes sale of interest in Mongolian Joint Venture for US$35 million and Cancellation of Warrants
TORONTO, June 30 /CNW/ - Further to the announcement of 24 May 2010, Polo Resources Limited (AIM and TSX: POL) announces the signing of a Sale and Purchase Agreement and the completion of the sale of Polo's 50% interest in Peabody-Polo Resources B.V. (the "JV"), being the joint venture company holding coal and uranium assets in Mongolia, to Winsway Coking Coal Holdings Ltd (the "Disposal").
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Polo has received cash consideration for the Disposal of US$15 million and a further US$20 million is payable within 12 months in cash or, in certain circumstances, by the issue of shares in Winsway. In addition, Polo will retain a 1% royalty (net 0.5% as a result of the arrangements described further below) for coal sold from licences currently held in the JV.
… As required by AIM Rule 15, the Company is preparing an investing policy and a circular to shareholders convening a General Meeting at which shareholders will be asked to approve the Company's proposed investing policy. …
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Co-chairman Neil Herbert said: “We are pleased to have completed the divestment. Polo is focused on maximising shareholder value through its interests in Extract, GCM and Caledon Resources.”
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Mongolia, Saudi Arabia to boost mining cooperation
ULAN BATOR, June 29 (Xinhua) -- Mongolia and Saudi Arabia on Tuesday pledged to step up their cooperation in the mining and minerals sectors.
There is full potential for successful and mutually beneficial cooperation between the two countries, Prime Minister Batbold Sukhbaatar said during a meeting with a Saudi Arabian delegation led by Ali bin Ibrahim Al-Naimi, Saudi Arabia's Minister of Petroleum and Mineral Resources.
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The Saudi oil minister said that his visit to Mongolia aims to explore opportunities for mutual cooperation and investment in the mining sector.
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The Saudi minister also expressed willingness to help train Mongolian oil specialists and create opportunities for Saudi businessmen to invest in the Asian country.
87.3 percent happy to receive HDF money in a non-cash form
July 1 (news.mn) The Head of the Government Office, Minister Ch.Khurelbaatar, has told the Government that 2 million 358 thousand 432 options have been received about receiving the allowance from Human Development Fund in ways other than cash. Many gave more than one option and these have been counted separately.
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Mo En Co chief sees Mongolia as “the right place to be”
June 30 (news.mn) James J. Schaeffer Jr., Executive Director of Mongolia Energy Corporation, which holds mining concessions of coal, ferrous and non-ferrous metals in Mongolia, has told The Mongolian Mining Journal that “Mongolia is the right place to be”. He is sure development of its energy and mineral resources by various companies will bring robust economic opportunities to Mongolia.
The company’s own Khushuut coal project in the west of the country is not very big by international standards, but it will create significant employment opportunities, and also encourage a lot of other industries to grow around the mine, meaning there will be more jobs and income for the local people.
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Oyu Tolgoi Partners End in the Red
June 30 (The Street) NEW YORK (The Street) -- Shares of Rio Tinto (RTP) stock ended Wednesday's trading session in the red a day after the company said that it has chosen to exercise all its Series A warrants in Ivanhoe Mines (IVN), demonstrating its continued dedication to the Oyu Tolgoi copper and gold project in Mongolia.
Rio Tinto American Depository Receipts settled down 4% to $43.60 Wednesday afternoon. Meanwhile, shares of Ivanhoe stock closed at $13.04, down 2.3%. Rio Tinto and Ivanhoe are development partners for the Oyu Tolgoi project.
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Meanwhile, Kitco analyst Jon Nadler's longer-term forecast for the metals sees gold price averages of $900 an ounce over a one-year period, down to $850 an ounce over a three-year period, and copper prices rising from $7,500 a ton over a one-year period to about $8,500 a ton over over a three-year period.
Nadler said that gold investment demand could abate with prices returning to a more balanced relationship between the yellow metal's prices and its fundamentals as the financial crisis ebbs and the European sovereign debt situation resolves itself. …
Meanwhile an uptrend in copper prices will of course be dependent on the eonomic recovery, which "while not yet out of the 'fragile' state at the moment, will gain traction and demand for base metals," Nadler explained. That said, "a housing recovery means good news for copper."
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FACTBOX-Key political risks to watch in Mongolia
BEIJING July 1 (Reuters) - Landlocked Mongolia sits on vast quantities of untapped mineral wealth and analysts say it could be one of the fastest growing economies of the next decade, as well as a key investment target for global mining giants.
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But foreign companies and investors are watching to see whether the country's fledgling democratic government can build the infrastructure required, maintain stability, improve the rule of law and -- most crucially -- negotiate its way through the geopolitical pressures exerted by its two large neighbours, Russia in the north and China in the south.
Following is a summary of key Mongolia risks to watch:
POLITICAL INSTABILITY
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What to watch:
-- How will Mongolia use the proceeds from its mining projects? It has set up education and fiscal stabilisation funds, but it has also promised direct dividends for Mongolian citizens.
-- How will it deal with rapid economic change as foreign investment transforms large parts of the country's mainly rural economy? Investment in the Oyu Tolgoi copper deposit alone stands at roughly the equivalent of the country's entire GDP of 2009.
REGULATORY RISK
In April, Mongolia's president ordered a halt to the issuance and transfer of mineral exploitation licences until the government enacts a stricter law on mining investment. The directive has rekindled some of the uncertainty that for years surrounded mining investment in the country.
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What to watch:
-- Hints on the likely shape of the new law.
-- How will the government handle populist pressures to maintain greater control over the country's strategic assets?
DEPENDENCE ON CHINA, RUSSIA
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What to watch:
-- The growing dominance of China in Mongolia's economy has prompted many of Mongolia's elite to lean further towards Russia, but China is unlikely to step aside, and will also have much to say on where and how Mongolia builds its roads and railways.
-- China rejected the bid for Khan Resources by state nuclear firm CNNC after Ulan Bator revoked the company's licenses. Is Russia now in the driving seat in the battle to secure more Mongolian uranium? What will be China's next move?
BALANCING "THIRD NEIGHBOURS"
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What to watch:
-- Will Mongolia's efforts to bring in overseas investment be derailed by the pressures being exerted by Russia and China?
-- Will the Tavan Tolgoi model of maintaining state control of state assets be used in other key "strategic resource" projects, or will Mongolia be forced to sell properties outright in order to kickstart economic growth?
Australia
Mining tax breakthrough
July 1 (The Age) The Gillard government and Australia’s big three miners have made significant progress in talks about a resources tax compromise and are believed to have reached an agreement that would end one of the biggest government-private sector brawls in history.
It's understood that BHP Billiton, Rio Tinto and Xstrata have agreed with the government now on the key elements of a new resources tax structure, including the creation of a new trigger point for the imposition of the tax, set at the 10-year Commonwealth bond yield plus 7 per cent.
Shares of all major miners pared their losses on the news, with BHP, Rio and Fortescue Metal Group among those stocks to pick up, helping the overall market to trim its retreat for the day.
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The proposed new trigger point for the ''super profits'' tax to kick in is currently equal to a rate of about 12 per cent, around about the average cost of capital in the mining industry. The original tax cut in above the bond yield only, currently just over about 5 per cent.
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The new agreement is also likely to not only see lower value resources including sand, gravel and limestone excluded from the regime, but exclude nickel mining and processing from the regime. That is another big win for the miners, who argued that the complicated, integrated nickel mining and processing process did not lend itself to the resources tax design.
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Much more work will be needed to thrash out the fine details of the compromise, and smaller miners will need to be included in those talks. …
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Shares slump as gloom reigns
July 1 (AAP) Close, The Australian sharemarket has finished in the red for an eighth consecutive session, as investors become more worried about the global economic recovery.
At the close, the benchmark S&P/ASX200 index was down 64 points, or 1.5 per cent, at 4237.5, while the broader All Ordinaries index was down 62.1 points, or 1.4 per cent, at 4262.7.
Among the major sectors, materials stocks fell 1.2 per cent, while financials and energy shares both shed 1.6 per cent.
neeed2know:
- Asian shares fall after China data
- The dollar pares losses, trades at 83.6 US cents
- Oil slips below $US75, following shares
- Gold slips to $US1240
- Dow futures are 31 points down at 9685
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Miners fight back
The major miners clawed back some ground after the report on the mining tax compromise, but were still down for the day. Rio Tinto lost $1.56, or 2.3 per cent, to $65.10 and BHP Billiton dropped 54 cents, or 1.4 per cent, to $37.11, while Fortescue Metals shed 12 cents to $4.00.
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Gold stocks made gains, with Newcrest Mining rising 27 cents at $35.37 and Lihir Gold up 2 cents at $4.33.
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China
PMI of manufacturing sector falls to 52.1%
July 1 (Xinhua) BEIJING - The Purchasing Managers' Index (PMI) for China's manufacturing sector stood at 52.1 percent in June, down 1.8 percentage points from last month, the China Federation of Logistics and Purchasing said Thursday.
The PMI includes a package of indices to measure manufacturing sector performance. A reading above 50 percent indicates economic expansion, while that below 50 percent indicates contraction.
It was the 16th straight month that the index was above 50 percent.
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"The reading of the June index indicates China's economic growth is at a key stage turning to stabilization. The foundation for a new round of sustainable growth is forming, which needs to be consolidated," said Zhang Liqun, a researcher with the State Council's Development Research Center.
China's gross domestic product (GDP) surged 11.9 percent year on year in the first quarter, accelerating from 10.7 percent in the last quarter of 2009.
Major economic data, including China's GDP growth for the second quarter and June inflation and industrial production, are due to be released on July 15, according to the NBS preliminary schedule.
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China's stocks drop for seventh day
July 1 (Agencies) China's benchmark stock index dropped for a seventh day, the longest losing streak in 18 months, as a bigger-than-expected slowdown in the country's manufacturing last month added to evidence the economy is cooling.
Jiangxi Copper Co and in Shenhua Energy Co paced losses by commodity producers as metal and oil prices declined.
Aluminum Corp of China Ltd, the nation's biggest maker of the lightweight metal and also called Chalco, slid 2.8 percent after cutting the price of alumina.
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The Shanghai Composite Index retreated 24.58, or 1 percent, to close at 2,373.79, the lowest since April 8, 2009. The seven- day decline is the longest since an eight-day slump that ended Dec 31, 2008. The CSI 300 Index slid 1.4 percent to 2,526.07.
"The market is still in the middle of a correction as economic growth is expected to slow," said Zhang Ling, a fund manager at Shanghai River Fund Management Co.
Global
Global Manufacturing Shows Weakening From China to Europe
July 1 (Bloomberg) -- Manufacturing growth from China to the euro-region slowed in June, suggesting the global export-led recovery is losing strength.
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Asian and European stocks fell on concern that a Chinese economic slowdown combined with deepening budget cuts from Spain to the U.K. may undermine the global recovery. While the Organization for Economic Cooperation and Development on May 26 raised its global growth forecast for this year, it said that a “boom-bust scenario cannot be ruled out” in some countries.
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The MSCI Asia Pacific Index dropped as much as 1.7 percent today. …
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Asian Stocks Fall on China Manufacturing, Moody’s Spain Review
July 1 (Bloomberg) -- Asian stocks fell, dragging down the MSCI Asia Pacific Index towards its lowest level in three weeks, after Chinese manufacturing growth slowed and Moody’s Investors Service said it may cut Spain’s top credit rating.
Mining companies BHP Billiton Ltd. and Rio Tinto Group, which get at least a fifth of their revenue from China, retreated in Sydney after the Purchasing Managers’ Index, a gauge of Chinese manufacturing, fell more than economists estimated. Nissan Motor Co., which gets 13 percent of its revenue in Europe, lost 3.2 percent in Tokyo after Moody’s said it may lower Spain’s Aaa classification.
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Manufacturing Slowdown
China’s manufacturing expanded at a slower pace for a second month in June, adding to signs that growth in the world’s third-largest economy is moderating. The Purchasing Managers’ Index fell to 52.1 from 53.9 in May, the Federation of Logistics and Purchasing said today. That was less than the median 53.2 estimate in a Bloomberg News survey of 12 economists. A reading above 50 indicates expansion.
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Misc.
Mongolia, S Korea reach agreement on interests of Mongolian migrants
ULAN BATOR, July 1 (Xinhua) -- Mongolia and South Korea reached consensus here on Thursday on taking care of the interests of Mongolians who work or live in South Korea, Mongolian official news agency reported.
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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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