D. BailikhuuSPC of Mongolia

� Total State Property- 4,1 trillion ₮

� SOE’s–72

� Government institution – 934

� State share of SOE’s to sell through the Stock exchange

� To issue additional share and IPO

� To conclude a Concession Agreement

� Mainly, To attract private investment by PPP

� Conditions:◦ The evaluation of coal resources by the JORC standard◦ Mining License should be assessed in terms of property◦ Power plant and Coal liquids projects are needed to be

studied by the professionals, then it can be implemented

• Methods:◦ To issue additional shares up to 51 percent of shares

owned by the state

� Conditions:◦ New investment for technological innovation ◦ To increase the heating capacity ◦ To reduce the cost

� Methods:� Concession agreement�

� Conditions:◦ To extend service framework ◦ Equipment and Technological Innovation◦ To reduce cost ,

� Methods:◦Open bid tender

�Mongolian airline /MIAT/-Management contract

� “Mongolian stock exchange”/MSE/– Management contract

� State offers own share to the Korean telecom on contractual basis

� Should refuse, State goes whit use the privatization through open bid

� 15 strategic deposits

� To bundle shares owned by State by type of minerals

� To establish new Joint Stock company

� To trade certain percentage of state shares at domestic and international stock markets

.Tavan Tolgoi 6.4 bn t coal

Nariin Sukhait 125.5 mn t coal

Baganuur 600.0 mn t coal

Shivee Ovoo 646.2 mn t coal

Mardai 0.001 t at 0.119% O3U8

Dornod 0.029 mn t at 0.175% O3U8

Gurvan Bulag 0.016 mn t at 0.152% O3U8

Tomortei 229.3 mn t at 51.15% Fe

Oyu Tolgoi 2.7 bn t of ore; 25.4 mn t of copper; 1,028 t of gold

TsagaanSuvarga

10.6 mn t of oxides at 0.42% Cu/ 0.011% Mo; 240.1 mn t sulphidesat 0.53% Cu/0.018% Mo

Erdenet 1.2 bn t at 0.51% Cu/0.012% Mo

Burenkhaan 192.2 mn t at 21.1% P2O5

Boroo 0.025 mn t at 1.6g/t Au

TomorteinOvoo

7.7 mn t at 11.5% Zn

Asgat

Metallurgical coal

Metallurgical coal

Lignite coal

Lignite coal

Uranium

Uranium

Uranium

Iron

Copper, gold

Copper, molybdenum

Copper,molybdenum

Phosphor

Gold, ore

Zinc

Silver 6.4 mn t at 351.08g/t Ag

Reserves and qualityDeposit MineralsStage of development, start date, output p.a. Ownership structure

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

100% Erdenes

100% private (SouthgobiSands, MAK-Qinhua JV)

75% SPC, 25% locally listed

90% SPC, 10% locally listed (ope-rational part; rest by Erdenes)

100% private company

21% SPC, 21% Russian Gov., 58% Khan Resources

100% private Chinese comp.

100% Darkhan Metallurgical factory (100% owned by SPC)

34% Erdenes, 66% Ivanhoe Mines

51% SPC, 49% Russian Gov.

100% MAK (private company)

100% mult. private companies

100% Tsairtminerals (private JV)

100% Mongolrostsvetmet (50% SPC, 50% Russian Gov.)

100% Boroo Gold

Partial production, ramp-up in 2011, 15-30 mn t

Feasibility study

Production, 2.8 mn t

Production, 2.0 mn t

Feasibility study

Feasibility study

Feasibility study

Feasibility study

Development, 2013

Feasibility study

Production, 27.1 mn t of ore

Feasibility study

Close to depletion

Production, 0.07 mn t of zinc

Feasibility study

Estimated capex

USD 2.2 bn (1.6 bn for first 3 years)

N/A

–

USD 4 bn for power plant

USD 200 mn for all three

USD 100 mn

USD 12 bn (5 for first 5 years)

USD 200 mn

(USD 150 mn for downstream plant)

N/A

–

–

USD 47 mn

SOURCE: Worley Parsons; Ministry of Mineral Resource and Energy; State Property Committee

Tavan tolgoi Coal Mine

SPC

Erdenes MGL

Erdenes TT

citizens

Mongolian Mongolian Mongolian Mongolian private private private private companiescompaniescompaniescompanies

Investor Operator company

Marketing company

Mining contractPSH contract

Coal assets company

SPC

Baga nuur600 mn t

Shvee ovoo530 mn t

Nariin Suhait

130 mn tttt

Power plant

300MW

Coal mine 20mn t

Coal liquifation factory

Power plant

4800MW

Coal mine

20mil t

Electricity transmision

line 600KB

Other coal

deposits

Erdenet OT45m tn

Tsagaan suvragaAsgat

Copper and Silver

company

SPC

Copper smelting factory

SPC

Temurtei240 m tn

Temur tolgoi25m tn

Darhan metallurgical plant

zinc

Iron Assetscompany

CAU45t tn Mardai

SPC

MonAtom

3 Bulag10t tn

Coge gobi10t tn

3 saihan10t tn

Cameco

Rail way1000 km

Auto road270 km

Power Plant600Mw

Water Pipe Line 70km

220kvLine 500 km

� Corporate Governance for SOE◦ Member BoD◦ Subcommittee of BoD

� Balanced Score Card � Audit◦ E&Y◦ KPMG◦ PWH

� Disclose� IAS� IPO� Independent regulator for infrastructure � Price deregulation for infrastructure