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China and Russia start dropping the dollar in bilateral trade

Section: Daily Dispatches

Currency Settlement Benefits China-Russian Traders

From Xinhua News Agency
via China Daily, Beijing
Thursday, November 25, 2010

BEIJING -- China and Russia will expand local currency settlements for bilateral trade, Chinese Premier Wen Jiabao and his Russian counterpart Vladimir Putin announced Tuesday, one day after the yuan started trading against Russian rouble on the Chinese interbank market.

The announcement was made at the 15th regular meeting between the Chinese premier and Russian prime minister, marking the first step of the local currency settlement between the two countries -- the yuan's trading on the Russian forex market will follow in December.

As China's energy needs would continue to grow quickly and with Russia's increasing appetite for manufactured goods, skipping the US dollar would benefit the burgeoning trade between the two countries, said Zhang Junsheng, director of Information Center with China National Institute of WTO affiliated to the University of International Business and Economics.

... Dispatch continues below ...


Prophecy Receives Permit To Mine at Ulaan Ovoo in Mongolia

VANCOUVER, British Columbia -- Prophecy Resource Corp. (TSX-V:PCY, OTCQX: PRPCF, Frankfurt: 1P2) announces that on November 9, 2010, it received the final permit to commence mining operations at its Ulaan Ovoo coal project in Mongolia. Prophecy is one of few international mining companies to achieve such a milestone. The mine is production-ready, with a mine opening ceremony scheduled for November 20.

Prophecy CEO John Lee said: "I thank the government of Mongolia for the expeditious way this permit was issued. The opening of Ulaan Ovoo is a testament to the industrious and skilled workforce in Mongolia. Prophecy directly and indirectly (through Leighton Asia) employs more than 65 competent Mongolian nationals and four expatriots. The company also reaffirms its commitment to deliver coal to the local Edernet and Darkhan power plants in Mongolia."

The Ulaan Ovoo open pit mine is 10 kilometers from the Russian border and within 120km of the Nauski TransSiberian railway station, enabling transportation of coal to Russia and its eastern seaports. Thermal coal prices are trading at two-year highs at Russian seaports due to strong demand from Asian economies.

For the complete press release, please visit:

Zhang said direct trade between the countries began long before at China's border goods distributing centers. Local traders had largely accepted the Chinese yuan for bilateral trades because of their confidence in its stability and China's strong economy.

It was the first time China has ever officially cooperated with a big power on local currency settlement.

Yao Zhizhong, research fellow at the Chinese Academy of Social Sciences' World Economy and Politics Institute, said the move would immediately benefit local enterprises in the two countries. "Without exchange rate loss, they will see large reductions in trade costs, which will help China and Russia trade get back on track" to the pre-crisis level, he said.

But there are concerns about China's ambitions to make the yuan into a global currency and the dollar's position. "The dollar's position in the international monetary system is too secure to rock," Zhang said.

According to Yao, the recent moves by China and Russia sent signals. One was that countries have begun to seek new channels to avoid domestic assets' being devalued by outside risks, as the dollar-dominated international monetary settlement model exposed a number of problems during the 2008 financial crisis.

Meanwhile, it also signaled that emerging markets and countries were working closer and expected more mutual benefits while gradually steering away from cooperating with developed economies.

"However, the impact on the dollar is very small. How big a ripple can be made by a pebble in a large pool?" Yao said, adding that though China was the world's second largest economy, its economy was too fragile and its ambition for its currency too great.

China started to allow the yuan to trade against the Russian rouble at 4.671 from Monday and will soon see the yuan trade against the rouble in Russia in December.

The rouble is the seventh currency traded on China's Foreign Exchange Trade System after the introduction of the US and Hong Kong dollars, the euro, yen, British pound, and Malaysian ringgit.

Bilateral trade between the two countries is estimated to reach above $50 billion by the end of 2010.

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Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit,
Extending the Mineralization of the Southwest Vein on the Property

Company Press Release, October 27, 2010

VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include:

-- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres.

-- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres.

-- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre.

Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest."

For the company's full press release, please visit: