MONGOLIA Mining Webinar 2020

21 May 2020 WEBINAR SPEAKERS

Presenters:

• Dave Vosen, Australian Ambassador to Mongolia

• Ron Green, Trade Commissioner – Korea & Mongolia

• Batbaatar Galsandorj, Manager - Strategic Sourcing, Oyu Tolgoi LLC

• Derrick Hansen, General Manager – Procurement, Oyu Tolgoi LLC

• Amarjargal Sharkhuu, Senior Officer - Planning & Strategy, Erdenes Tavan Tolgoi JSC

2 COUNTRY PROFILE: Mongolia

HE Mr Dave Vosen Australian Ambassador to Mongolia Peaceful shift to democracy in 1990s

Parliament has 76 seats and serves four year term Elections scheduled for 24 June Head of the State is elected directly elected (next election 2021) Prime Minister is appointed by the POLITICAL Parliament Expect a very interesting election, move to coalitions and large PROFILE number of independents ECONOMIC PROFILE: MONGOLIA Import source (2019)

• China 33.2% Population: 3.2 million (2019) • Russia 28.2% GDP: US$ 13.7 billion (5.1% Pre-COVID growth) GDP per capita: US$4,150 Sector strengths: Mining and agriculture Literacy: 98 % Main Export destination (2019)

Most sparsely populated country – rural/urban • China 90.5% divide

Source: Mongolian National Statistics Office 2020 Mongolia General Customs Office 2020 ECONOMIC DEVELOPMENT

- Upper middle income country (based on GNI, but small pop…)

- Deep recession early 1990s, but turned around in 1995 and improved significantly till 2008

- Mining-led growth reached to 17.3 percent in 2011, driven by a surge in mining investment

- Economic situation stabilized with IMF PACKAGE (US$5b+OT Phase II agreement) launched

2017 to be concluded in 2020, supported by the global commodity price

- Mining represents ~30% of GDP (ag important, cashmere, tourism/services aspirations)

- Banking sector been a significant focus of reform: IMF and others, quantity over quality a

challenge (high retail penetration, high NPL and IR) WATCHING CLOSELY - INVESTORS CONCERNS

• Political Instability –Next Parliamentary election on 24 June 2020, gov’t formed when? –Messaging about the value of FDI – why – nationalisation

• Governance, corruption –Rule of Law, use of justice system for political purposes is possible –Adherence to contract

• Financial stability (macro and micro) –FATF Grey Listing, EU Black Listing COUNTRY COVID-19 UPDATE

• Total confirmed cases: 140 as at 18 May (all imported)

• Declared a state of high alert on 13 February, extended until 31 May (and beyond)

• Impacts on Mining: –Q1/20 Mineral exports decreased by 41.52% (mainly copper, coal) –Some coal mines stop & slowdown at the border crossing –OT Underground construction is ongoing but with some impacts in the progress due to travel restrictions and procurement supply limitations PROSPECTS

• Difficult to identify massive success and growth projects recently

• TT IPO a signal – but still potential (cautious)

• Need next government to overturn moratorium on exploration › Crippling and lag

• High capacity human capital › Strong Australian flavour

• Access to markets enviable Mongolian Mining Overview

Ron Green Trade Commissioner to Korea and Mongolia Agenda

1. Mining Industry Facts 2. Market Opportunities and Challenges 3. Austrade services and expertise

Otgonbuyan Okityaber Dump Truck Operator, Oyu Tolgoi (OT) Mining Industry Facts

1. Mongolia’s mining sector accounts for the country’s 21% GDP, 70% FDI, 85% exports earnings, 71% industrial output.

2. 29 major mines operating in Mongolia out of over 6800 major mines operating around the world.

3. 4000 "junior explorers" involved in 10,000 active exploration projects and on average 73 new significant discoveries per year.

4. Coal generates 35% of Mongolia's export revenues with China accounting for 90% of demand for coal and copper.

5. The Mongolian mining sector around 45,000 people compared to 160,000 in Australia Mining Industry Facts

Mining licenses by minerals type 2018 Top miners contributed to 85% 35.00% of state budget from extractive 30.00% sector in 2018 25.00%

20.00% 1. Erdenet Mining Corporation: 350 kt (copper concentrates) 15.00% 2. OT LLC : 350kt (copper concentrates)+ gold

10.00% 3. Erdenes Tavan Tolgoi (ETT) (coal): 16Mt (coking coal) 4. Petrochina Dachin Tamsag (oil&gas): 6.5 mln barrel 5.00% 5. MAK (coal): 5Mt 0.00% 6. Tavan Tolgoi (coal): 2Mt 7. Energy Resource(coal): 10Mt 8. Tsairt Mineral (zinc): 420Kt Iron ore Gold Coal Fluorspar Sand/gravel Tungsten Others/copper/zinc Mining Industry SWOT

Strengths • Strong long term mining projects Opportunities pipeline including Oyu Tolgoi and Tavan • Mongolia benefits from China's coal policies Tolgoi to boost economy • Mongolia’s conciliatory approach to investors going • Close proximity to key markets in Asia forward Weaknesses • Mining tax revenue will be used to improve the • Lack of skilled workers infrastructure and lower cost • Mine safety • Potential diversification to seaborne markets • Capital costs is high, the country is • Railway, road network in South Gobi vulnerable to decreased investment flow • Russia-Mongolia-China gas pipeline, Power of Siberia 2 due to high market risks • Inadequate infrastructure, lack of Threats transport connectivity • Public perception over economic and environmental impact of mining • Nationalism and political populism makes Mongolia less attractive to offshore mining investors • Short term political cycles conflict with long-term deposit developments Issues Affecting Mongolia Mining

1. Land Access Australia: Exploration licenses granted are 26% Australian land area (ie 1.9 million km2) Mongolia: Exploration licenses applied for are 17% of the Mongolian land area (ie 266,067 But granted only for 59,452 km2 = 3.8% of total land area 2. Infrastructure

3. Lack of skilled workers

4. Effective taxation rates and Investment Rules

5. Business Risk (Fraser Institute Annual Mining Survey 2017 & 2018)

OPPORTUNITIES: METS

Information technology, IT equipment Core engineering design (engineering services, process and mechanical design, mine planning, and related services, automation mineral analytical and processing services)

Environmental management, consultancy (copper refinery, coal projects General equipment and components including IPCC technology) supplies and servicing (logistics and warehousing)

Consulting services(Water Management) Consumables

Mine Rehabilitation services Safety Management System and Training AUSTRADE SERVICES AND EXPERTISE

Introduction to Mines: site Market research: visits, tailored meeting identify market barriers and programs, identifying regulations and assess opportunities market potential

Provide information about Mongolian commercial Exhibitions practices and requirements and conferences

Identify business partners, new customers and Targeted opportunities through our trade missions business networks AUSTRADE ULAANBAATAR R&E TEAM CONTACT US

Email: [email protected] Ron Green Trade Commissioner Address: Shangri-La Centre Level-20 Olympic Street 19A SB District Ulaanbaatar 14241 Mongolia

Tel: + 976 7013 3006 Fax: +976 7013 3014 Odonchimeg Lundaa Business Development To contact the Austrade in Australia, Manager please call 13 28 78 (Australia only) OT PROCUREMENT STRATEGIC DIRECTION

Oyu Tolgoi LLC retains all intellectual property interests associated with the presentation. Oyu Tolgoi LLC makes no claim, promise, or guarantee of any kind about the accuracy, completeness, or adequacy of the content of the presentation and expressly disclaims liability for errors and omissions in such content.

OYU TOLGOI IS A WORLD-CLASS COPPER AND GOLD MINE The largest investment in Mongolia

Oyu Tolgoi

600 km 220 km Ulaanbaatar Dalanzadgad 45 km 80 km Khanbogd Gashuun sukhait

23 Copyright © 2020 Oyu Tolgoi LLC, All rights reserved FUTURE • At its peak production, OT will be one of the largest copper mines in the world • At least 75 years of mine life • Top skills and technology operated by Mongolians and national businesses • Developing capable and globally competitive national businesses • Will be the beacon for future investments

2012 2013 2016

26 Copyright © 2020 Oyu Tolgoi LLC, All rights reserved SUPPLIER DEVELOPMENT APPROACH OT has developed a fit-for-purpose Supplier Development Policy to address OT and Mongolia’s unique operating context

- Oyu Tolgoi maintains a dedicated national procurement policy focused on promoting and developing a safe, sustainable, and local supply chain. - Oyu Tolgoi actively encourages capacity building efforts of new and existing suppliers and will partner with companies to foster in-country manufacturing and service provision for products and services that are currently imported. - The policy sets overarching principles for current operations and the Oyu Tolgoi Underground Project. - Oyu Tolgoi prioritizes the development of service contractor employment and value-added procurement opportunities in Umnugovi (South Gobi) aimag, with a continuous focus on cost and productivity improvements across the supply chain.

Our core values of respect, integrity, teamwork and accountability serve as a foundation of doing business

• Health & Safety Performance • Governance and Legal Compliance • Labor and Human Rights • Environmental Performance • Emergency Preparedness and Business Resilience • Host Communities • Information and Reporting • Management Commitment

Our business integrity principles are set out in our Code of Conduct – The Way We Work and OT Business Integrity Standards and covers:

Between 2010 and 2019, Oyu Tolgoi spent US$10.3 billion in-country in the form of salaries, payments to Mongolian suppliers, taxes and other payments to the Government of Mongolia.

Oyu Tolgoi operation’s procurement team engaged with 838 suppliers in 2019, of which 564 are national businesses that account for 76 per cent of total operations procurement spend. Between 2010 and 2019, Oyu Tolgoi spent US$3.1 billion on national procurement.

87 local suppliers provided goods and services to Oyu Tolgoi in 2019. Between 2010 and 2019, Oyu Tolgoi spent US$554 million on procurement from Umnugovi province.

* Umnugovi Supplier: A supplier registered in Umnugovi province and more than 75% of its employees are from Umnugovi province. 32 Copyright © 2020 Oyu Tolgoi LLC, All rights reserved PROCUREMENT PROCESS Transparent and value driven with focus on integrity

• Approval in accordance • HSE • Authority matrix with financial authority • Technical • Senior Management matrix • Commercial committee meeting

• Developed by • Develop / submit result Manage contractors package owner/ End • of evaluation performance user

1 2 3 4 5 6 7

EOI/ RTA/ DFA/ ContractContract SOW DFA Evaluation Management Bid RFA Award administration

- Package owner /End User • Watch postings via ot.mn - Procurement • Register to “Oyu” - Approval database to be notified - SOW – Scope of Work - DFA – Delegated Financial Approval - EOI – Expression of Interest - Bid – Bidding documents – RFP/ Q, ITT - RTA/ RFA – Recommendation to/ for Award33 Copyright © 2020 Oyu Tolgoi LLC, All rights reserved STRATEGIC DIRECTION 34 34 Copyright © 2020 Oyu Tolgoi LLC, All rights reserved In Country Spend In Country Value add Total spend spent to Total spend retained by suppliers in suppliers in country country through value add $ $

In country spend In country spend

In country value

Time Time • Existing measures are (i) In country, (ii) National • It will compliment our existing measures so and (iii) Umnugovi spend targets previous improvements are still recognised and driven for further improvements

Mechanical Gloves/ Disposable Coverall Winter Gloves Bama socks (US$ 0.2 million) ((US$ 0.2 million) (US$ 0.1 million)

• Request for Quote* and Expression of Interests are processed through “Oyu”

• Total 2000 suppliers are registered in the system to date

• Free to register

• Every supplier has to be registered and pre-qualified * - Small value requests

• Useful documents

• Procurement numbers • Operation • Underground

• Expression of Interests

• Register as a Supplier

• Register for events/ activities

• Key suppliers’ list

• Contact details

Partners

Trainings

Business HSE Integrity

Financial Human Literacy Recourses

Quality Supply Chain Management

Organized various capacity building trainings/sessions Business Lean Management Manufacturing for total 900 individuals and organizations

Partners

Supply Chain Finance • Service Fee Waived • No collateral • Lower rate • Longer period Total 166 suppliers accessed to ACF with $216 million • Higher amount financing

EOI Descriptions EOI Descriptions

Operational Liability Insurance Supply of Steel Coating Maintenance Service Supply of MRO consumables IT Support Service Tax advising service contract Supply of Steel Supply of Industrial Gas associated services Relay Inspection service Supply of LV and TBR Tires Oil Analyzing service contract International Freight Forwarding service Pressurized pipeline service support Onshore Property Insurance Light Vehicle Repair and Maintenance Services

Safety Integrity Alignment Value Timeliness

• Policies • No interference • Technical • Competitive • On time • Procedures from Board or requirements prices • Short lead- • Processes other parties on • Quality assurance • Productivity times bids / supplier • Culture • Quality control • Vendor • Closer evaluation managed stock capability/ • Monitoring • Think local • Anti-bribery and • On schedule capacity • Risk corruption within budget management Management of • Record keeping • conflicts of interest and no personal benefits

1 Register “Oyu” Supplier Qualification Management System https://oyu-supplierdatabase.ot.mn

2 Watch out for upcoming RFQs and EOI’s On “Oyu” system and OT.mn https://www.ot.mn/procurement/ eoi-expression-of-interest-new/

• Phone: 331880 Extension: 6000

May Financial Center, Chingeltei District, 1 Khoroo, Jigjidjav Street, Ulaanbaatar, 2020 Mongolia

Phone: 750555555 Fax: 70119595 Web: http://www.erdenestt.mn E-mail: [email protected] AGENDA

ABOUT TAVANTOLGOI DEPOSIT

ABOUT COMPANY

DEVELOPMENT PROJECTS

48 DISCLAIMER

This presentation contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the coal exploration and mining business.

Whilst Erdenes-Tavantolgoi JSC believes the expectations reflected herein to be reasonable in light of the information available to them at this time, the actual outcome may be materially different owing to factors beyond the Company’s control or within the Company’s control where, for example, the Company decides on a change of plan or strategy.

The Company undertakes no obligation to revise any such forward-looking statements to reflect any changes in the Company’s expectations or any change in circumstances, events or the Company’s plans and strategy. Accordingly no reliance may be placed on the figures contained in such forward looking statements.

49 ABOUT TAVANTOLGOI DEPOST

Russia

Mongolia Japan Mongolia PRC

Umnugobi Province

. Erdenes-TT JSC (ETT) is holder of all mineral licenses of PROXIMITY TO KEY MARKETS Tavantolgoi deposit, except . Ukhaakhudag ( UHG, MMC) • Southern Gobi Region . JORC-compliant resources1 of 7.4 billion tonnes of coal 250 km, Mongolia-China border resources • Tavantolgoi deposit consists of: • 540 km, Ulaanbaatar . East and West Tsankhi , current active mining operations 1. East Tsankhi . Expected to be updated JORC-compliant report in 2020 2. West Tsankhi 3. Oortsog 1 : Norwest report, 2011 4. Borteeg 5. Onchkharaat 6. Bortolgoi 7. Ukhaakhudag (MMC) LICENSES TAVANTOLGOI DEPOSIT

UHG

Tsankhi

Bortolgoi

Oortsog

Onch-kharaat Borteeg

Infill Detailed Preliminary Reconnaissance Exploration and development history

“Erdenes Mongol” East Tsankhi’s IPO Preparation established for production Tavantolgoi JORC- started for East TT Tavantolgoi commenced compliant resources $350 million of development 7.382 billion tons debt paid off

 Local household use “Erdenes Tavantolgoi” Long-term 1072 shares to each Paid off $300 million of 60 million tons  Joint exploration by JSC established contract with citizen debt to borrower of coal produced Mongolia & Soviet Union $350 million of /1950-1980/ advance payment  Feasibility study by BHP and research by Norwest. /1990/ RESOURCES WORLD CLASS COKING COAL

VAST RESERVE BASE WITH WORLD-CLASS QUALITY COAL

COAL RESERVES COAL RESOURCES (INCLUSIVE OF COAL RESERVES)

Marketable Proved Probable Total (mtn Measured Indicated Inferred Total Coalfield (mtn ROM) (mtn ROM) (mtn ROM) Product) Coalfield (mtn ROM) (mtn ROM) (mtn ROM) (mtn ROM) East Tsankhi 410 726 126 1,262 East Tsankhi 359 589 948 619 West Tsankhi 576 706 452 1,734 West Tsankhi 482 406 888 610 Others (1) - 1,554 2,833 4,387

Total ETT 841 995 1,836 1,229 Total ETT 986 2,986 3,411 7,382

COAL RESERVES SPLIT BY COAL TYPE COAL RESOURCES SPLIT BY COAL TYPE

(mtn) (mtn) 8,000 3,411 7,382 2,000 1,836 1,229 528 883 1,500 97 6,000 1,975 1,000 708 393 2,528 353 2,987 500 599 4,000 - 384 699 5,407 Reserves (ROM) Reserves (Marketable) 2,000 985 2,288 393 - 592 Measured Indicated Inferred Total

Hard coking coal Semi-soft coking coal

Source: Norwest Technical Report, 2011 1. Includes Southwest, Borteeg, Eastern and Bortolgoi coalfields

53 AGENDA

ABOUT THE COMPANY

54 Company

ETT is100 % state owned company and the largest corporation in terms of numbers of shareholders in Mongolia since 2010.

Shareholding structure of the company

Shareholders %

GoM 85.20

Citizens (2.5 million) 14.75

Legal entities 0.05

55 OPERATIONS

RESPONSIBLE MINER WITH STRONG COMMITMENT FOR ENVIROMENT AND SAFETY

NEW AND OPEN-CUT OPERATIONS DEMONSTRATED TRACK RECORD OF ESG

Phased Production Approach / Expansion Opportunities A Training and B Annual development environmental program; local sustainability and community management plan Environmental Social engagement Highly Skilled Local Workforce programs

Annual protocol Anti- Governance “Transparency” and detailed Fully committed and low cost contract miners corruption instrument of guidelines against reporting corruption D C Numerous High-Return Capital Projects to Enhance Value

STANDARD OF EXCELLENCE Delivering Exceptional Results A B (tremendous growth from 2015 - 2017)

Cooperation agreement with local Environmental Management Plan province D C

Detailed Guidelines against Weekly Expense Reporting Corruption

56 Strong support by the Government of Mongolia

MONGOLIA’S GROWTH STORY

(US$) 8000

6000

4000

2000

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

■ GDP per capita (2000-2018)

Jun 29, 2018 Aug 8, 2018 Apr 10, 2019 Jul 24, 2019

Parliamentary Resolution #73 Government Resolution #245 Government Resolution #135 Government Resolution #304 “Measures to intensify the development “Measures to be taken in regard with the “Measures to intensify the Tavantolgoi- “Measures to intensify the Tavantolgoi- of the Tavantolgoi deposit” Erdenes-Tavan tolgoi JSC” Zuunbayan railroad project” Gashuunsukhait railroad project”  Raise capital through international and domestic IPOs by selling up to 30  Organize procurements related to the percent of the Company shares, and IPO  Finance MNT750 billion, the first part of to finance parts of the infrastructure  Appoint the Ministry of Mining and investment required to Tavantolgoi-  Erdenes-Tavantolgoi JSC to hold 66% projects such as railroad, paved road Heavy Industry and the Government Zuunbayan railroad construction, with shares of “Tavantolgoi Railroad” SPV. and other key projects. Agency for Policy and Coordination operational profit of “Erdenes  Erdenes-Tavantolgoi JSC to raise  Take immediate actions to intensify on State Property to exercise Tavantolgoi” of 2018; capital to finance parts of the railroad the implementation of the paved shareholder rights in respect of the  Resolve the remaining financing with project through off-take agreement. road, railroad, power and water shares held by the State. the Bank of Mongolia. supply projects related to Tavantolgoi deposit.

Source: Central Bank of Mongolia, National Statistic Office of Mongolia Location and key markets

. Tavantolgoi is the most important mineral asset with increasing importance for the international markets

PROXIMITY TO KEY MARKETS...... AND COAL HAS SEEN STRONG GROWTH IN MONGOLIA

(mtn)

Tavantolgoi 100 Mongolian share in Chinese 42% 42% Russia 40% coking coal import 38% 37%

80 32%

27% 27% 60 54.6 24% 49.5 22% 45.7 41.9 Mongolia 36.7 17% 40 35.133.8 33.4 24.427.3 24 25.8 12% 19.5 22.1 20 14.5 7%

~700км 0 -3% Access to 2014 2015 2016 2017 2018 Korea, Production Sales Export Japan and Others … SPEARHEADED BY ETT

People’s Major HCC exporters 2018 Exports Republic of China Erdenes Tavantolgoi JSC 11.7 Mongolian Mining Corporation 4.7 India ~7,000км МАК 5.0

ETT’s current market Usukh Zoos 2.8 ETT’s target market 1 South Gobi Sands 2.8 ETT’s target market 2 Tavantolgoi 1.9 Chinese steel makers Australia PRODUCTION OPERATIONS AND SALES

Performance of East & West Tsankhi mines, Mt

59 AGENDA

VALUE-ADDING PROJECTS

60 Development projects

2010-2018 2019-2023 2024 AND BEYOND

PRODUCTS

Raw coal Prepared & raw coal Water New Urban Methane gas Mine Conveyor supply development plant Coking & semi-coking coal Gas and gas products

TRANSPORTATION

Auto roads

Integrated Coal chemical Railroad CHPP Coke, power terminal plant Power lines Gas pipelines

CONSTRUCTION

Supporting TT-ZB TT-GS Power plant Paved roads Gas pipes railroad Railroad Production

Transportation LOCAL AND GLOBAL MARKET

Launch Development Expansion TT Infrastructure

Choir RAILROAD Project location and route 5. Tavantolgoi- 6. Tavantolgoi- Gashuunsukhait Zuunbayan Purpose Expand capacity, Support domestic reduce cost industry and railroad network

Sainshand Capacity 30 mln tons 30 mln tons 250 km 415 km Zuunbayan CAPEX ~$1,07 billion ~$1,1 billion Investment ETT $792 million ETT $300 million (66%) (Bond) Dalanzadga d Zamiin- PAVED ROAD Uud Oyutolgo 7. Tavantolgoi- 8. Tavantolgoi- Gashuunsukhait ОТ-Khangi i Khan Purpose Increase capacity, improve truck drivers’ working condition, new gateway gi Gashuunsukhai Existing auto and railroads Capacity 30 mln tons 20 mln tons t Planned auto road 250 km 435 km Tsagaandel- Planned railroad CAPEX ~$280 mln - Uul

MINING PREPARATION ENERGY COAL UTILIZATION 1. Mining 2. Conveyer 3. CHPP 4. Water supply 9. Power plant 10. Coke and technique system power plant Purpose Reduce operating expense and Purpose Wash and blend raw coals for export Purpose Power source, produce value added maintenance cost, enhance readiness product Capacity 15 mln tons 35 mln m3 Capacity 30 mln tons 63.5 l/s Capacity 450 MWt 2 mln tons - 6-8 km 4-6 module ~70 km - - CAPEX ~$282 mln ~$100 mln CAPEX ~$600 mln ~$28 mln CAPEX ~$1 billion ~$500 mln MID-TERM PROJECTS TRANSPORTATION

Railways

Altanbulag . 3 B USD CAPEX . National Railway Policy, 2010

Darkhan-Uul . 70 mtpa capacity . 66% ownership TT-GS link . Resolutions of GoM Ulaanbaatar . Reduction of transport cost

Choir Tavantolgoi to Gashuunsukhait port . Environmental protection

Sainshand Capacity: ~30 mtpa Length : ~267 km Zuunbayan CAPEX ~$800 mm . Safe traffic Tavantolgoi to Zuunbayan Tavantolgoi

Zamiin-Uud Capacity: ~20 mtpa Oyutolgoi Length : ~414,6 km CAPEX ~$1,200 mm Khangi Gashuunshukhait Zuunbayan to Khangi port Capacity: ~20 mtpa Existing railway Length : ~280 km Under construction CAPEX ~$1,000 mm Planned

63 Projects TRANSPORTATION

Paved roads

Altanbulag Tavantolgoi to Gashuunsukhait port Capacity: ~20 mtpa Lenght : ~250 km Darkhan-Uul CAPEX ~$270 mm US$ 600 MILLION Tavantolgoi to Oyutolgoi to Khangi port CAPEX Ulaanbaatar Capacity: ~15 mtpa Lenght : ~350 km CAPEX ~$330 mm ~40 MPTA Choir EXPECTED CAPACITY Sainshand

Zuunbayan

Tavantolgoi

Zamiin-Uud Oyutolgoi

Khangi Gashuunshukhait Tsagaandel-Uul

Existing paved road Planned parallel paved road

64 Timeline of key projects

2020 2021 2022 2023 Profitability projection of Erdenes-Tavantolgoi JSC

Equipment 2500 Production $2100 Conveyer 2000

1500 Phase I-10 million tons $950 Coal handling and Phase II-10 million tons 1000 $810 $800 preparation $564 Phase III-10 million tons 500 $305 $181 $101 TT – Zuunbayan project 0 Revenue tax Profit Divident Railroad ТТ- Gashuunsukhait project Present Future

ТТ- Gashuunsukhait parallel Paved road ТТ-ОТ-Khangi 2,000-3,000 “Tavantolgoi city” Light industry permanent job with population of development positions 50-100 thousands Power plant /local citizens, ETT Coke and workers, contractual power Coke and power workers, truck drivers/ OPERATION, TRANSPORTATION AND SALES SALES SCHEME

COMPETITIVE ADVANTAGE THROUGH COST LEADERSHIP

With implementation of the parallel road, and a railway between Tavantolgoi and Gashuunsukhait port, we expect to have very low transportation cost with capacity of up to 70 mtpa.

Current transport and sales scheme Tsankhi mines Mining operation Sales

ETT Mine border 250km paved road Custo border m house Stockpile Ganqimaodu Chinese Mongolia port stockpile

Planned sales path starting from Tsankhi mines Mining operation Transport Ganqimaod Sales ~2021 (Ex-Stock Gantsmod) u port border

ETT Mine border 267 km railway Custo m house Stockpile Ganqimaodu Chinese Mongolia port stockpile

66 THANK YOU FOR YOUR ATTENTION!

Finance Center, Jigjidjav-8, 1st Amarjargal.sh@erde 976-75055555 ext www.erdenestt.mn khoroo, Chingeltei nestt.mn 912 district, Ulaanbaatar- 976-70118464 15160 AUSTRADE ULAANBAATAR

Email: [email protected]

Address: Odonchimeg Lundaa Shangri-La Centre Level-20 Business Development Olympic Street 19A SB District Ulaanbaatar 14241 Mongolia Manager

Tel: + 976 7013 3001 Fax: +976 7013 3014

Australia Unlimited 68