The Asia Miner

JAN-FEB 2018

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

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2 | ASIA Miner | Volume 15 • Issue 1 | 2018 From The Editor Welcome to the first edition of The ASIA Miner for 2018. Whether the industry likes it or not, issues relating to re- source nationalism, impacts of the mining industry on the en- vironment, and the shift towards renewables are on the rise. In this issue, our Regional Focus looks at Mongolia – the new mining frontier. With its rich mineral deposits, a proximity to large markets in Asia, and a fairly stable political situation, in- vesting and selling equipment to the mining sector in Mongolia was seen as safe and profitable. Yet, Mongolia's solid outlook is beginning to show cracks. One of the mega projects underpinning Mongolia's mining promise – The Oyu Tolgoi copper-gold project – declared force majeure due to a Chi- nese border blockade and protest. According to industry sources based in Ulaanbaatar, Chinese drivers have been pro- testing against the Mongolian authorities' increased enforcement of rules requiring driv- ers to pay Mongolian taxes and social insurance in order to receive permits to deliver coal. As a result, Oyu Tolgoi convoys were unable to cross through the Chinese-Mon- golian border to deliver concentrates to customers. This is not the only issue plaguing Oyu Tolgoi. The mine has also faced criticism from several environmental groups due to its high water needs in an area that is renowned for its aridity. It's not the first, nor only mining project facing a full-frontal attack from environmental groups and citizens. In Papua New Guinea, citizens have launched landmark legal proceedings against the country's government over a deep seabed mining project. The project, operated by Nautilus Minerals Inc., aims to extract gold and copper deposits from 1.6km below the surface of the Bismarck Sea using a seabed mining technique never used before in commercial operations. Globally, this is a historic case, as communities try to understand the legality and po- tential impacts of the world's first commercial deep seabed mine. And then there is China. Growth in coal demand is centred on Asia but is offset by sharp declines in Europe and the US. Coal-fired generation in China is set to peak within the next 10 years but rolling mine safety inspections had impacted the Chinese thermal coal production. Following an announcement by the Chinese Environment Minister at a press con- ference in October 2017, it appears that China's pollution crackdown is expected to also continue. This decision is likely to intensify production cuts in China and is seen as necessary not only to curb air pollution, but also to offset new capacity additions and idled capacity restarts. To add insult to injury, annual figures from Bloomberg New Energy Finance (BNEF) reveal an expected $10.2 trillion to be invested in new power generation capacity world- wide to 2040. Of this, 72% is anticipated to go towards renewables. With global power demand growing by 58% between now and 2040, or 2% per year, this is a good chunk of investor money moving away from mining. Ripples are already being felt in Australia, with one of the major four banks announcing in Q4 of 2017 that it will stop lending to new coal mining projects. The move is borne of the bank's recognition that it wants play a role in the transition to a low-carbon economy. Then we have the Philippines' "experiment". After President Rodrigo Duterte's gov- ernment shut down over half of the country's mines citing preservation of the ecosys- tem, the Chamber of Mines of the Philippines (COMP) announced that it will adopt the Towards Sustainable Mining® (TSM®) initiative, which requires mining companies to annually assess their facilities' performance. This might have to be the future that mining needs to adopt if it wants to remain viable and to rid itself of the "dirty industry" moniker. No matter how tentative it might be to implement cleaner practices and approaches, the world is now watching. By Sylwia Przybyla /Editor The ASIA Miner® Suite 1, G02/685 Burke Road, Camberwell, Melbourne, Victoria, 3124 Australia Phone: + 61 3 9006 1742 Mobile: + 61 417 517 863 Publisher—Lanita Idrus, Lidrus@asiaminer . com Editor— Sylwia Przybyla, Corporate Office 8751 East Hampden Ave, Suite B-1 Denver, Colorado 80231, U . S . A . Phone: +1 303-283-0640 Fax: +1 303-283-0641 President—Peter Johnson, pjohnson@semcopublishing . com —Michael Florman, —Dan Fitts, Subscriptions: $120/year—Tanna Holzer, —Lorraine Mestas, Lmestas@semcopublishing . com INTERNATIONAL SALES U.S. & Canada, Sales —Victor Matteucci, vmatteucci@mining-media . com Tel +1 440 257 7565 Scandinavia, U.K. & European, Sales—Colm Barry, colm . barry@telia . com Tel +46 (0) 736 334670 Germany, Austria, Switzerland, Sales— Gerd Strasmann, gerd@strasmann-media . de Tel +49 2191 93 1497 Japan Sales—Masao Ishiguro, ma . ishiguro@w9 . dion . ne . jp Tel +81 (3) 3719 0775 Indonesia Sales—Dimas Abdillah, dabdillah@asiaminer . com Tel +6221 2940 6337 The ASIA Miner® is published quarterly and every endeavour is made to ensure the contents are correct at time of publication . The Publisher and Editors do not endorse the opinions expressed in the magazine. Editorial advice is non-specific and readers are advised to seek professional advice for specific issues. Images and written material submitted for publication are sent at the owners risk and while every care is taken, The ASIA Miner® does not accept liability for loss or damage . The ASIA Miner® reserves the right to modify editorial and advertisement content . The contents may not be reproduced in whole or in part without the written permission of the publisher . Copyright 2018 The ASIA Miner ISSN: 1832-7966 PHOTOCOPIES: Authorisation to photocopy articles for internal corporate, personal, or instructional use may be obtained from the Copyright Clearance Center (CCC) at +1 . 978 . 750 . 8400 . To obtain further information, visit www . copyright . com Skirting issues at hand, but is it time to stop and face them?

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