MONGOLIAUNIQUE POTENTIAL FOR EXPONENTIAL GROWTH

MONGOLIA

2011

KEY ECONOMIC INDICATORS

COUNTRY DATA

VAST UNTAPPED NATURAL RESOURCES

Total Area :East to West :

North to South :Capital city :Population :

LLiteracy rate :

GDP 2010 :Exports:Imports:

east densely populated :

1.56 mln sq. km 2,392 km (1,487 miles) 1,259 km (782 miles) Ulaanbaatar2.7 million

97.8%USD 6.1 billionUSD 2.9 billionUSD 3.2 billion

2 individuals per sq.km

20073,93110.2

1,49015

1,1701,949114,32,892

47

Nominal GDP, USD mlnGDP Growth Rate, %GDP per capital, USD

InflationUSD rate

Exports, USD mlnTrade Balance, USD mln

Total Bank Assets, USD mlnTotal Loans to GDP, %

20084,837

91,819

221,2682,539-710

2,88044

2009 4,197

-1.31,532

4.21,4431,902-228,73,06443.8

2010 6,088

6.11,532

4.21,4431,902-228,73,06443.8

GDP Current price (US$ Million), Real growth (%)

0

6,000

5,000

4,000

3,000

2,000

1,000

2006

8.6%

2007

10.2%

2008

9.0%

Source: National Statistical Office

Source: Central Geological Laboratory of Prepared by Mining Department, Golomt Bank

Mongolia

Elements discovered and studied in Mongolia

Elements not discovered in Mongolia

69 of the total 111 elements of the Periodic Table or 62% of the total elements are found in Mongolia.

Periodic table of the elements (Mendeleyev)

2009

-1.3%

2010 E

6.1%

EXPONENTIAL GROWTH POTENTIAL

Name of DepositTavan Tolgoi

Shivee ovooTugalgatai

Mushgia KhudagBaganuurErdenet

Nariin SukhaitTumurteiDornod

Mineral typecoking/thermal coal

Cu, Au

thermal coalthermal coalFe, rare earththermal coal

Cu, Mocoking coal

Fe, ZnU

Reserve6.4 bln tonnes39 mln tonnes,

1816 tonnes5.6 bln tonnes3 bln tonnes

23.6 mln tonnes512.8 mln tonnes4.87 mln tonnes

210.7 mln tonnes229.29 mln tonnes

76.11 thous. tonnes

Value (USD bln)

$1,484

462

33017741303724189

Oyu Tolgoi

TOTAL

356

Resource: Mineral Resources and Petroleum Authority of Mongolia, March 2008 Valuation: Golomt Bank, January 2010

Undeveloped world scale deposits

Oyu Tolgoi Investment Agreement (OTIA) was signed on 6th October 2009 entailing a joint venture partnership between Ivanhoe Mines, Rio Tinto and Government of Mongolia Oyu Tolgoi is projected to have annual production of USD 5 bln over a 40 year life spanTavan Tolgoi is projected to have annual production of USD 10 bln over a 50 year life spanSouth Gobi Sands listing in Hong Kong Stock Exchange at a > USD 450 million placement as of 29th January 2010

Coal Exports Forecast (mln tonnes)

50

40

30

20

10

02 2 3

6 7 916

2228

3340

45

Others Tavan Tolgoi

Copper Exports Forecast (thousand tonnes)

140012001000

800600400200

0

126 130 130 146 148 149 146382

518656

1147

Erdenet OthersOyu Tolgoi

150

Source: Golomt Bank Mining Department, 2009

ChinaCanadaRussia

UKItaly

Total Exports

2466.3141.682.767.431.5

2 789.5

84.8%4.7%2.8%2.3%1.1%

95.9%

Exports

Russian FederationChinaJapan

South KoreaUSA

Total Imports

1 046.7971.0196.5181.8158.9

2 554.9

31.5%30.3%6.1%5.7%4.9%

78.5%

Imports

TRADE PARTNERSUSD

millionShare of total

exportsUSD

millionShare of total

imports

Source: National Statistical Office, 2010

China absorbs 4/5 of exports and provides 1/2 of non-oil imports

Mongolia’s growth is strongly correlated with China’s growth

INVESTOR FRIENDLY ENVIRONMENT

Since our peaceful transition from a centrally planned economy to democracy, Mongolia has been creating an investor friendly environment to encourage foreign investment. The laws have been updated in 1993, 1998 and in 2003; with each revision of the laws conditions were improved reach win win situation.

Source: ICF/World Bank 2012 annual report on business conditions indeveloping countries

Starting BusinessProtecting Investors

Paying TaxesRegistering Property

Getting CreditEnforcing Contract

Doing Business, Overall

972957266733

Ease ofDoing Business

2012 rank out of183 countries

86

Source: National Statistical Office

MNT Billion Percentage2007

1 252.8

389.4729.7133.7

778.5407.7370.8474.3369.8104.5

Total By technological composition

By financial sources

Construction work Machinery, equipment

Others

Domestic State budget

Others Foreign

Foreign direct investment Others

20081 785.1

586.2854.7344.2

950.5519.3431.2834.6693.5141.1

20092 146.2

418.01 042.6685.6

843.2433.9409.3

1303.0819.3483.7

20103 370.7

350.81 801.71 218.2

1 038.5.

487.02 332.22 133.8198.4

551 5

2007100

31.158.210.7

62.132.529.637.929.58.3

2008100

32.847.919.3

53.229.124.246.838.87.9

2009100

19.548.631.9

39.320.219.160.738.222.5

2010100

10.453.536.1

30.816.414.469.263.35.9

Investment

Nominal GDP, USD bln

03 04 05 06 07 08 09 10 11 12 13 14 150

5

10

15

20

25

30

GDP per Capita, USD

010002000

30004000

5000

6000700080009000

10000

03 04 05 06 07 08 09 10 11 12 13 14 15

Source: Mineral Resources and Petroleum Authority of Mongolia, March 2008

Raise capital

Conduct fiscal reforms

Enhance competitiveness

Strengthen corporate governance

IMMEDIATE PRIORITIES OF THE GOVERNMENT OF MONGOLIA

Tel: 976-11-321927Fax: 976-11-321926

E-mail: info@ecrc.mnEconomic Policy and Competitiveness Research Center

Central Tower 1010a, Sukhbaatar Square, Ulan Bator, Mongolia WEB: WWW.ECRC.MN