1 May 2014

Erdenes Tavan Tolgoi JSC

Infrastructure Projects to increase ETT competitiveness

● Company overview

● The development of infrastructure projects:

- Water supply

- Coal Handling and Preparation Plant (CHPP)

- Road & Railway Cross-Border Railway

Tavan tolgoi mine-Chinese border railway

- Power Plant

Agenda

Company overview

– Erdenes Tavan Tolgoi JSC (ETT) was established in 2010.

– The ETT owns 6 mining licenses, out of which, the Tsankhi is world-class coking coal deposits.

– Pre-stripping and box cut development started in 2010, 2013 exported in 2011, 2013 respectively.

– Over 500 employees in the company.

Tavan Tolgoi is one of the largest developing

coking coal deposits in the world

Company overview

4

According to Norwest’s preliminary estimation of TT In-Situ coal resource by JORC code, there are 7.5

billion tons of thermal and coking coal within 300 m depth range limit.

West Tsankhi coal field

East Tsankhi coal field 1.2 Bt* Coking coal 65 %

1.08 Bt* Coking coal 78 %

Eastern (Onch Kharaat) Borteeg

South-Western (Oortsog)

Tavan Tolgoi JSC

Measured

Indicated

Inferred

282.5 Mt

Calculation within *200m depth

1,21 Bt* Coking coal 63%

765 Mt* Coking coal 72 %

Calculation by JORC code

60.3 Mt Coking coal 70%

74,5 Mt Coking coal 61%

78.8 Mt Coking coal 82%

298 Mt Coking coal 53% Bor tolgoi

Ukhaa khudag

Formation of Tavan Tolgoi deposit

How the infrastructure projects will bring greater operational capacity?

Feasibility study completed and approved by

the Mineral Resource Professional

Committee’s meeting in June 2013.

Front end engineering study of the plant is

completed.

Selection of EPC contractor will be completed

in 2014.

Commissioning first 5 Mt capacity module in

2015.

CHPP ramping up to processing 20mt of ROM

coal per year in 2017.

Coal Handling and Preparation Plant (CHPP)

GoM approved water use permit minimum

150 liters/sec from Balgasyn Ulaan Nuur

ground water in 2011 (~70km from mine

site).

Feasibility study completed and ready to

announce bidding for potential contractors.

Exploration to be commenced for

additional water supplies.

Completion of water supply pipeline and

structure targeted in 2015.

Water Supply

Dalanzadgad

Sainshand

Zuunbayan

Tavan Tolgoi

Oyu tolgoi

Gashuun sukhait

Zamiin-Uud

Khangi

Balgasiin Ulaan Nuur

240 km paved road from Tavan Tolgoi coalfield to Gashuun Sukhait,

Chinese Border.

Road and Railway

SOE MTZ plans to Construct 257 km railway from Tavan Tolgoi

area to Chinese Border by 2016.

GoM has allocated 200 mln USD.

Tavantolgoi-Gashuunsukhait Railway

Cross-Border Railway Projects

Mongolian and Chinese enterprises established the Consortium for

building a cross-border railway.

The Consortium (ETT, ER, TT and Shenhua group) is responsible for

project financing and construction.

This project will boost the transportation capacity of border ports and

reduce transportation costs.

450MW thermal power plant (GoM has allocated 50 mln USD).

Feasibility Study of PP was approved by the Ministry of Energy in

September 2013

Expected to be commenced the power plant in early 2016.

Tavan Tolgoi Power Plant

ETT Supply Chain and the project

Operating cost- 50%

Transportation to Tsagaan Khad

25-30%

Cross Border Transportation

14%

Mine Stockpile Stockpile Stockpile

China

B C

Stockpile charge

3%

A Mongolia

Stockpile charge

3%

240 km paved road

Operating cost- 50%

Haul truck to Tsagaan Khad

25-30%

Cross Border Transportation

3%

Stockpile charge

3%

Stockpile charge

3%

240 km paved road

Operating cost- 50%

Stockpile charge

3%

Stockpile charge

3%

257 km railway

Mongolia

Mongolia China

China

1

2

3 Transportation cost will reduce

c. 40-50%

Cross Border transportation

will reduce c.25%

1-Current supply chain 2-Cross Border Railway project is expected to be completed by the end of 2014 3 -Mine to Chinese Border railway is expected to commenced in 2015

A-Mine Mouth Sale B-Tsagaan Khad Sale C-Gants Mod Sale

Tsankhi Stockpile

Tavan Tolgoi Mine Stockpile

Thank you for attention!