The Asia Miner

JAN-MAR 2019

The ASIA Miner - Reporting Important Issues to Mining Companies in the Asia Pacific Region

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the asia miner • volume 16 • issue 1 21 REGIONAL FOCUS: Central Asia & Mongolia In late January, US President Donald Trump's administraঞon announced li[ing of sancঞons on Russian tycoon Oleg Deripaska's empire, including aluminium giant Rusal and its parent company En+. The decision to li[ the sancঞons, imposed by the US Treasury in response to what it called Russia's 'malign acঞviঞes', defied a Democraঞc-led push in the US Congress to maintain them. Earlier this month, Democrats were joined by 11 of Trump's fellow Republicans in the US Senate in an effort to keep the sancঞons on Rusal, En+ Group and power firm JSC EuroSibEnergo, arguing that Deripaska – an ally of Russian President Vladimir Puঞn – retained too much control over the companies. Lawmakers from both parঞes felt that it was inappropriate to ease the sancঞons while Special Counsel Robert Mueller invesঞgates whether Trump's 2016 presidenঞal campaign colluded with Moscow. News of President Trump's decision sent the Russian stock index to an all-ঞme high, whilst Hong-Kong listed shares in Rusal, the world's largest aluminium producer outside China, hit their highest since April, rising 9 per cent. Aluminium prices on the London Metal Exchange (LME) dropped as much as 1.4 per cent a[er the open. The sancঞons had sent London aluminium to a seven-year high when they were announced in April last year amid fears of a supply squeeze. On Monday, the LME said it had li[ed its suspension on storing Rusal-produced metal in LME-approved warehouses with immediate effect. Post the announcement, Rusal announced that its Chairman, Jean-Pierre Thomas, had resigned as part of the deal to push the li[ing of the sancঞons through. En+ Group followed suit, announcing that it will shed several of its board members, with the appointment of new directors to saঞsfy US Treasury demands that boards of both companies be made up of independent directors. Addiঞonally, En+ announced that Swiss company Glencore would swap shares in Rusal for a direct ownership interest in En+. Rusal given a reprieve from US Treasury At the end of December 2018, Rio Tinto announced the signing of the Power Source Framework Agreement (PSFA) between Oyu Tolgoi and the Government of Mongolia. Rio Tinto Copper & Diamonds chief execuঞve Arnaud Soirat said that the Power Agreement is a posiঞve step forward for Oyu Tolgoi and outlines a path to secure reliable, long-term power for the operaঞon. "We will now work together with all of Oyu Tolgoi's partners to finalise the details and develop the power project which will help ensure the operaঞon reaches its full potenঞal to the benefit of all shareholders," said Mr Soirat. The agreement sets out an amended ঞmetable for Oyu Tolgoi to meet its obligaঞon to source power domesঞcally. The 300-megawa plant will be majority owned by Oyu Tolgoi LLC and will be situated close to the Tavan Tolgoi coalfields. Construcঞon is scheduled to start in 2020 following extensive studies, with the commissioning of the plant by mid-2023. All Oyu Tolgoi shareholders will now work on the further technical specificaঞons and commercial arrangements underpinning the framework agreement. Oyu Tolgoi power solution progresses Rio Tinto's Oyu Tolgoi operaons. Image ©Rio Tinto

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