Mongolia Plans to Offer 30% Tavan Tolgoi Company
July 8 (Bloomberg) -- Mongolia plans to sell 30 percent of a company controlling the Tavan Tolgoi coking coal deposit in share sales to help fund $1.5 billion of initial development cost, the mining minister said.
The share offerings may take place overseas or in Mongolia and a government-owned company will retain a 40 percent stake, Minister for Minerals and Energy Dashdorj Zorigt said in a telephone interview, after a parliamentary vote yesterday. The rest will be offered to local businesses and the public, he said, without giving details.
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"Finally there is clarity in terms of the government policy and the way to move forward," said Alisher Ali Djumanov, chief executive officer of Eurasia Capital Management, based in Beijing. "We would be a buyer considering the strong long-term potential of this company and the coal sector in Mongolia."
About 20 percent of the share capital of the company will be offered to Mongolian businesses and 10 percent to the public, Zorigt said. No timetable has been set for the share sales overseas or a preference made for where they should be held, he said.
Overseas Companies
The government is still negotiating with overseas mining companies over whether they will help develop Tavan Tolgoi on a contract basis, said Zorigt. The government will report back to parliament on the issue later this year, he said.
Among the companies that have publicly said they are interested in developing Tavan Tolgoi is China Shenhua Energy Co., the biggest Chinese coal producer.
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BHP Billition Ltd., Mitsui & Co., Xstrata Plc, OAO Russian Railways and Sojitz Corp. are also among the companies with which the government has been negotiating this year on Tavan Tolgoi rights, Zorigt said in a Dec. 3 interview.
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Mongolia approves plan for coking coal IPO
July 8 (AP:ULAN BATOR, Mongolia) Mongolian lawmakers have overwhelmingly approved a plan authorizing the government to raise $1.5 billion to develop the huge Tavan Tolgoi coking coal deposit through an overseas share sale.
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Sojitz to Expand Coal Trade 18% With Access to Mongolian Mine
July 8 (Bloomberg) -- Sojitz Corp. will boost coal trading by about 18 percent after the Japanese trading company won an agreement from Prophecy Resource Corp. to market the fuel to China from a Mongolian mine.
Coal trading will rise to about 20 million metric tons a year in the year starting April 1, 2012, from 17 million tons, Yoshikazu Ichikawa, a spokesman for the Tokyo-based company, said today in a phone interview. Sojitz agreed to jointly market power station coal from its Canadian partner's 208 million-ton Ulaan Ovoo coal deposit, according to a June 7 statement.
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The Japanese trader will start selling 250,000 tons of Mongolian coal in the year to March 2011, and 3 million tons two years later, Ichikawa said.
Itochu, Japan's fourth-largest trading company by market value, invested inWinsway Coking Coal Holdings Ltd. in April to secure coal from Mongolia, the company said May 17.
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Chinalco may take stake in Mongolian copper mine
* Chinalco may buy stake in Oyu Tolgoi copper-gold mine
* Rio may convert stake in Ivanhoe into direct mine holding
* Talks may results in three-way agreement
LONDON, July 7 (Reuters) - Global miner Rio Tinto's (RIO.AX) (RIO.L) biggest shareholder, China's Chinalco, is considering buying a stake in the massive Oyu Tolgoi copper-gold project in Mongolia, according to a regulatory filing. Oyu Tolgoi is billed as one of the world's biggest undeveloped mine deposits and is expected to cost $4.6 billion to build.
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POTENTIAL CONVERSION
Rio has been holding talks with Ivanhoe about "the potential conversion of its ... equity stake in the company into a direct ownership interest in the Oyu Tolgoi copper and gold mineral development project," the filing said.
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The end result of the talks with Chinalco could be a two-way or three-way agreement between Ivanhoe, Rio and Chinalco, Rio added.
Any such deal would require the approval of the Mongolian government, Rio said in the filing.
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Rio has also discussed the mine project with the European Bank for Reconstruction and Development and the International Finance Corp, the finance arm of the World Bank, it added.
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The mine is expected to produce 544,000 tonnes of copper and 650,000 ounces of gold annually over its first 10 years, and operate for at least 27 years.
Chinalco Weighs Stake in Ivanhoe Project
July 8 (WSJ) LONDON –
Ivanhoe project drawing investor interest
July 8 (The Gazette, Montreal) A Chinese aluminum company, a European development bank and a division of the World Bank have emerged as early contenders to invest in Oyu Tolgoi, the Mongolian mega-project controlled by Ivanhoe Mines Ltd. that is drawing huge interest from third parties.
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EBRD: First local currency financing for micro and small businesses in Mongolia
July 7, The FINANCIAL -- The EBRD is boosting the availability of local currency financing in Mongolia with a synthetic loan in Mongolian Togrog worth $8 million to XacBank for on-lending to local micro, small and medium-sized enterprises (MSMEs).
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… The EBRD holds approximately ten per cent equity stake in XacBank.
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"The synthetic local currency loan, the first one provided by the EBRD in Mongolia, will help XacBank increase the term of its local currency funding, and expand its portfolio of loans in Togrog. This will enable XacBank's clients to repay their loans in the same currency as they earn from their operations," EBRD reports.
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Since the beginning of the EBRD's operations in Mongolia in 2006, the Bank has committed over €294 million in various sectors of the Mongolian economy, with total projects cost of €936 million.
WAYS OF ACCESSING TO SEA TO BE INCREASED
July 8, Ulaanbaatar, Mongolia, /MONTSAME/ The cabinet meeting held Wednesday discussed and backed some measures to increase Mongolia's access to the sea. A related resolution of government will be issued.
The Deputy Premier M. Enkhbold was ordered to start implementation of projects and programs within 2010 pursuant to a memorandum established in 2009 between government of Mongolia and the authority of China's Tianjin city, and to introduce to regular Mongolia-China inter-governmental meeting contracts and agreements established with China to own land in Tianjin's Binhai district for 50 years for having the Mongolian entities run business activities.
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SIZE OF EXCISE TAX ON FUEL INCREASED
July 8, Ulaanbaatar, Mongolia, /MONTSAME/ The Wednesday's cabinet meeting fixed size of the excise tax in a scope of a power given from parliament.
The government has increased size of excise tax imposed on A-80 auto fuel imported through border checkpoints of Sukhbaatar, Zamiin-Uud, Ereentsav and Altanbulag from MNT 120.000 to MNT 220.000; on AI-92 auto fuel--from MNT 170.000 to 220.000; and on diesel fuel--from MNT 115.000 to 215.000.
The excise tax on the same kinds of fuel imported through other border checkpoints will be not changed. As expected, such a step will not trigger a price rise.
Dr. Brzezinski Meets PM Batbold
July 8 (summarized from Government Press Office) Dr. Brzezinski, former national security advisor during President Carter, has met the PM Batbold today. He is here on the PM's invitation and will give a lecture in Foreign Ministry titled "US Foreign Policy on Eurasia".
Polo Resources Limited ("Polo" or "the Company") - Cancellation of Shares
TORONTO, July 7 /CNW/ - Further to the announcement of 30 June 2010 in respect of the completion of the sale of its interest in the Mongolian joint venture, Polo Resources Limited (AIM and TSX: POL) announces the following changes to its share capital.
As noted in the announcement of 30 June 2010, the warrants to subscribe for 265,455,111 ordinary shares in the Company granted to Peabody Energy have been surrendered for no consideration.
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VIDEO: Frontier Securities COO Yuji Iwasaki Interviews Adam Bornstein from CDIB Capital in Mongolia
VIDEO: London Stock Exchange (LON:LSE): Naomitsu Abe Speaks with Yuji Iwasaki in Mongolia
Australia
Jobs data icing on market's cake
July 8 (AAP) Close, The Australian sharemarket rallied today, posting its biggest gain in five weeks, boosted by strong overseas markets and encouraging local jobs numbers.
At the close, the benchmark S&P/ASX200 index was up 102.1 points, or 2.4 per cent, at 4356.7, while the broader All Ordinaries index gained 96.2 points, or 2.2 per cent, to 4374.
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need2know:
- Asian stocks jump on US optimism
- The dollar soars to 87.3 US cents
- Gold extends its rise to $US1205
- Oil surges past $US75
- Dow futures are 22 points lower at 9958
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Australia added almost 46,000 jobs in June, the most since January, underscoring the strength of local demand. The jobless rate fell to 5.1 per cent for the month - the lowest rate since January 2009. The news also sent the Australian dollar soaring about 0.8 US cents.
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Resources and energy stocks made solid gains, with BHP Billiton advancing 73 cents, or 1.95 per cent, to $38.16 and Rio Tinto adding $1.21, or 1.84 per cent, to $67.05.
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By 1628 AEST, the spot price of gold in Sydney was trading at $US1,206.50 per fine ounce, up $US17.25 from Wednesday's closing price of $US1,189.25.
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On the Sydney Futures Exchange, the September futures contract was 97 points higher at 4,344 points on turnover of 35,048 contracts.
IMF sees strong growth in Australia, but risks grow
July 8 (AAP) The International Monetary Fund expects the Australian economy to grow at a solid clip this year and next, but has warned that downside risks to world growth have intensified.
In its World Economic Outlook Update released in Hong Kong today, the IMF upgraded its world growth forecast for 2010 because of ''stronger activity during the first half of the year''.
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It predicts growth of 3.0 per cent in 2010, accelerating to 3.5 per cent in 2011, as it did in April. It has revised up its growth forecast for world growth to 4.6 per cent in 2010 from 4.2 per cent previously, while leaving its 2011 forecast at 4.3 per cent.
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In the IMF's accompanying update of its Global Financial Stability Report it says the progress toward financial stability experienced a setback in late April and early May.
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China
China to Extend Resources Tax to Cover Entire Nation
July 8 (Bloomberg) -- China plans to extend a tax on oil, gas and coal output to the entire nation, stepping up efforts to raise funds for development of poorer inland provinces in a move that will reduce earnings for resource producers.
The government will set a benchmark rate of 5 percent that will vary across commodities, Du Ying, vice chairman of the National Development and Reform Commission, said in Beijing today. It's "unclear" when it will be applied nationwide, he said. The tax, introduced in Xinjiang province last month, will be extended through western areas, the government said on July 6.
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"This is a long overdue policy change," Qu Hongbin, a Hong Kong-based economist at HSBC Holdings Plc., said by telephone. "There is much need in infrastructure development, and this should help relatively undeveloped areas like the western or even central regions."
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"If it goes nationwide this year and the companies get a full year of impact from the tax, it may take down PetroChina's earnings per share by 12 percent and Sinopec 7 percent," Brynjar Eirik Bustnes, an analyst at JPMorgan Securities Ltd., said by telephone from Hong Kong.
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Global
IMF Raises 2010 Growth Estimate, Sees Recovery Risk
July 8 (Bloomberg) -- The International Monetary Fund raised its forecast for global growth this year, reflecting a stronger-than-expected first half, while warning that financial- market turmoil has increased the risks to the recovery.
The world economy will expand 4.6 percent in 2010, the biggest gain since 2007, compared with an April projection of 4.2 percent, the Washington-based fund said in revisions yesterday to its World Economic Outlook. Growth next year is projected to be 4.3 percent, unchanged from the April forecast.
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'Cloud' Over Outlook
"Recent turbulence in financial markets -- reflecting a drop in confidence about fiscal sustainability, policy responses, and future growth prospects -- has cast a cloud over the outlook," the IMF report said.
Fiscal woes in advanced economies may curtail the flow of capital to emerging markets, Olivier Blanchard, the IMF's chief economist, said at a press briefing today in Hong Kong. Blanchard said the reversal will prove "temporary" in the aftermath of the European crisis, with a resumption of flows over time.
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Japan Outlook
Japan's gross domestic product will increase 2.4 percent in 2010, more than the 1.9 percent forecast in April, before slowing to 1.8 percent growth next year, the fund said.
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China Slowdown
In China, strong gains in consumption and investment have led to a 0.5 percentage point boost to the 2010 growth forecast compared with the April estimate, Jorg Decressin, head of the fund's world economic studies division, told reporters in Hong Kong today. In the second half, China's expansion will moderate, with the slowdown carrying over into 2011, he said.
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Stocks, Oil Rise on Economy; Yen Weakens, Bond Risk Declines
July 8 (Bloomberg) -- Stocks rose for a third day and oil gained after the International Monetary Fund increased its estimate for global economic growth. The yen weakened and confidence in European government debt improved.
The MSCI World Index advanced 0.6 percent at 12:02 p.m. in London. Standard & Poor's 500 Index futures fell less than 0.1 percent after the U.S. gauge surged 3.1 percent yesterday.
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"I doubt we'll have another global recession," said Masayuki Kubota, a fund manager at Tokyo-based Daiwa SB Investments Ltd., which oversees $51 billion. "People are very sensitive to economic data from the U.S. If something good comes out, market sentiment easily rebounds. I'm buying sectors which were sold on excessive pessimism."
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Asia, Emerging Markets
Asian stocks advanced, pushing the MSCI Asia Pacific Index 1.8 percent higher.
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The MSCI Emerging Markets Index jumped 1 percent, heading for the highest closing level in almost two weeks.
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Asian Stocks Rise as IMF Outlook, U.S. Retail Data Ease Concern
July 8 (Bloomberg) -- Asian stocks rose, led by commodity producers and banks, as the International Monetary Fund raised its global economic growth forecast and a U.S. trade group said the country's retail sales grew the fastest in four years.
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S&P 500 Rallies
Japan's Nikkei 225 Stock Average gained 2.8 percent, while the Kospi index added 1.4 percent in Seoul. Hong Kong's Hang Seng Index climbed 0.9 percent. New Zealand's NZX 50 Index rose 0.8 percent.
Futures on the Standard & Poor's 500 Index declined 0.3 percent. The gauge surged 3.1 percent yesterday, the most since May, after the International Council of Shopping Centers trade group said U.S. retail sales probably expanded at an average monthly rate of 4 percent in the first five months of the retail fiscal year that began Jan. 31, the biggest gain since 2006.
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BHP Billiton, Australia's biggest oil producer, climbed 2 percent to A$38.16 after oil climbed for a second day in New York.
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Rio Tinto Group, the world's third-biggest mining company, gained 1.8 percent to A$67.05 after copper futures for September climbed 1.5 percent to $3.015 a pound in New York yesterday. Mitsubishi Corp., Japan's No.1 commodity trading company, added 2.6 percent to 1,951 yen.
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Misc.
Japanese-style high school in Mongolian capital celebrates 10th anniversary
July 7 (Mainichi) ULAN BATOR -- A Japanese-style high school here has celebrated its 10th anniversary.
The Shine Mongol High School was established in the Mongolian capital of Ulan Bator by a former international student to Japan. The private high school employs a comprehensive Japanese education system, from school lunches to uniforms and club activities.
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Mongolia promotes use of traditional script
ULAN BATOR, July 6 (Xinhua) -- Mongolian President Elbegdorj Tsakhia on Tuesday issued a decree to promote the use of the traditional Mongolian script.
"Official letters by president, speaker of the parliament, prime minister and cabinet members of government to officials of other countries in similar positions shall be written in traditional Mongolian script and will be translated to the language of that country or any of the official languages of the United Nations and be attached," said the decree.
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"Mogi" Munkhdul Badral
CPS International
Email: mogi@cpsinternational.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@cpsinternational.mn or +976-9999-6779.
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