B.

Byambasaikhan
CEO

2015.06.19

CORPORATE PRESENTATIO
2014

MONGOLIAN GROWTH AND PROJECTS

10-20% Annual growth to 2035

2010 Kazakhstan
GDP = $148 billion

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FDI, in $
Billions

Mining boom

Top mining projects drive economic growth

Source: World Bank, IMF

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Id
FD n
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$10bln+ Oyu Tolgoi (copper and gold)

$5bln+ Tavan Tolgoi (coking coal, coal)
$1bln+ Tsagaan Suvarga (copper and
molybdenium)

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OYU TOLGOI UDP IMPACT

The Oyu Tolgoi project is expected to generate US$46.9bln to the GoM, with
US$6.0bln from Phase I and an additional US$40.9bn from Phase II.
Oyu Tolgoi Project Cash Flow Development by
Project Phases
(US$mn
in 2014 real
The project
isterm)
expected to generate c.US$46.9bn direct cash
flows to GoM

Project Valuation (NPV) by Project Phases

(US$mn in 2014 real term)

No Project
--

Phase I

Phase I & II

US$2,130mn
US$2,130mn

US$7,608mn
US$7,608mn

ADDITIONAL BENEFITS TO MONGOLIA &

MULTIPLIER EFFECT

As the amount of spending from the OT Project increases, not only does
the direct benefits to Mongolia expands but so does the indirect benefits
as a result of the
injection of extra income which leads to further consumption growth
Direct Benefits
within the country.
The direct benefits to the Government of Mongolia from the Oyu Tolgoi project development include
receipt of dividends (post repayment of carry account), corporate income tax, VAT, withholding tax on
interest and dividends, royalties, customs duty, excise tax and property tax in relation to the project

Furthermore, the Mongolian economy would also directly benefit from the Oyu Tolgoi projects domestic
procurement (direct supply chain) and payment of wages to Mongolian employees

Indirect Benefits

The economic benefits of mining extend beyond this direct spending, since the purchase of these goods
and services will stimulate further purchasing
Increased spending and development of the wider indirect supply chain and supporting infrastructure
will result from direct Oyu Tolgoi project procurement

Increased wages will result in concomitant through-spend of Oyu Tolgoi project employees in Mongolia,
further boosting the economy in particular in the South Gobi region

Other Benefits

As has already been experienced, the Oyu Tolgoi project development provides a number of nonfinancial benefits to the region including:
increased employment in the South Gobi region as suppliers hired new workers in response to
spending by the Oyu Tolgoi project
education and training in mining or engineering for Mongolian nationals, with transfer of skills
increasing employability of workforce
improved infrastructure for local communities including health care, power, heating, roads and water
attracting further foreign and domestic investment that will further simulate economic growth
4

ERDENES MONGOL CURRENT PORTFOLIO

34%
A

51%

Oyu Tolgoi

One of the world

largest copper mine
with long mine life
Partnership between
GoM, Turquoise Hill
Resources and Rio
Tinto
Moving quickly into
Stage 2, underground
development
following resolution
on terms of the
underground project
Large exploration and
expansion potential
Access to China via
rail and highway

Erdenet
B
Mining
Corporation

JV between the
Mongolian and
Russian government
to operate the
wholly-owned
Erdenet copper
mine
Production
commenced in 1978
Connected to the
East-Siberian
railway network and
Chinese railway
network

100% state-owned
Established in February 2007
Represent the Government of Mongolia (GoM)
interest in strategic deposits
Hold mineral licenses of and develop deposits
explored with governing funds
Manage assets in deposits of strategic importance
upon the approval the Parliament and Cabinet

100%
C

75%
D

Erdenes
Tavan Tolgoi

Major undeveloped
world class premium
hard coking coal
deposit
Located next the
worlds largest steel
producing region
Rail infrastructure
under development
to connect to the
main Chinese
railway network
Large reserves of
1.8Bt coking coal
and 4.6Bt high
quality thermal coal
with exploration
potential

Copper Asset

90%
E

Baganuur

Largest producing
thermal coal mining
company in
Mongolia
Established in 1978
Provides c.40% of
the total coal
consumed in power
stations in Mongolia
and over 60% of
Mongolia's Central
Region thermal coal
requirements

Coal Asset

Shivee Ovoo

2nd largest
producing thermal
coal mining
company in
Mongolia
Established in 1990
Provides c.20% of
the total coal
consumed in power
stations in Mongolia
and over 30% of
Mongolia's Central
Region thermal coal
requirements

ERDENES MONGOLS CURRENT PORTFOLIO ARE ALL STRATEGIC DEPOS

POSITIVE EFFECTS ON INFRASTRUCTURE

DEVELOPMENT
Big opportunities in renewable energy sector

Mongolias yearly global solar radiation

estimates 1900 KW/m2 average, which is
almost twice as efficient than Germany (the
largest solar energy producer with installed
capacity of 37.8 GW)

Minimum of 7 MW of wind power can be

produced on 1 hectare effective land in
Mongolia (10% of Mongolian territory is
effective in wind power generation)

Top Energy and Infrastructure projects

Energy
$1.3bln CHP5 450MW
$1.2bln TTPP 450MW
$800mln Egiin Hydropower plant 315MW
$6bln Shivee Ovoo Mine Mouth 5000MW
Baganuur 750MW
Tevshiin Gobi 600MW

Infrastructure
Railroad ($5bln)
Roads
Power plant
transmission/distribution
Urban heat/power plant,
roads, water, other utility
lines
New Airport

Source: Mongolian solar atlas, ERC, Ministry of Energy

THANK YOU

Building #6, Jigjidjav Street, 1 Khoroo,

Chingeltei District, Ulaanbaatar, Mongolia

@bbyambasaikhan

@www.linkedin.com/in/byambasaikhan