First anniversary of Investment Agreement

Oyu Tolgoi project summarises its achievements

Ulaanbaatar, Mongolia – Mr.Galsan Batsukh, Chairman of Oyu Tolgoi LLC, and Mr. Keith Marshall, President and CEO, summarised the achievements of Oyu Tolgoi one year since the Investment Agreement was signed on October 6, 2009.

Mr.Galsan Batsukh said, “The Board of Oyu Tolgoi LLC has been focusing on completing the project within the scheduled time frame and satisfying the interests of key stakeholders and shareholders as well. We have worked hard to fulfil our responsibilities as laid out in the Investment Agreement. Overall and we have done much more than we promised.”

Mr. Keith Marshall continued, “It seems like just yesterday but it’s already a year since we signed the Investment Agreement with the Government of Mongolia. Full-scale construction of the Oyu Tolgoi mine is now underway, production is scheduled to begin in 2013, and our team is dedicating its full effort to the project. Oyu Tolgoi is investing 4 billion MNT every day in Mongolia. This will increase significantly next year.”

Major developments and achievements of the Oyu Tolgoi project are:

• Investment Agreement became effective after the 10 outstanding conditions were satisfied.
• Full-scale construction was launched. This will include:

1. Foundations for USD 1.2 billion, 100,000-tonne-per-day copper concentrator;
2. Head-frame of Shaft # 2;
3. Tunnelling of Shaft # 1;
4. Two Batch plants;
5. A 20-megawatt diesel power station and 35-kilovolt distribution system;
6. Construction of a regional airport and concrete runway to accommodate Boeing-737 sized aircraft; and
7. Construction of a 105-kilometre highway link to the Mongolia-China border
8. Implementation of the Training Plan and Strategy has begun upon submission to the Government of Mongolia. Oyu Tolgoi will fund the project with 78 billion MNT. The plan includes:
9. 40.5 billion MNT towards a five year training programme.
10. 13.5 billion MNT to establish two mining focused professional training and vocational centres: in the South Gobi capital, Dalanzadgad and Mongolia’s capital Ulaanbaatar.
11. 13.5 billion MNT towards a student scholarship plan for 200 students to study at Mongolian universities, institutes and vocational training colleges and for 30 students to study overseas in mining related fields.
12. 10.8 billion MNT for the equipment and curriculum upgrade of four selected educational centres in Erdenet, Ulaanbaatar, Darkhan and Choir.
13. A Memorandum of Understanding was signed between the Ministry of Education, Culture and Science, the Ministry of Social Welfare and Labour and Oyu Tolgoi LLC to cooperate in the training of professional workers. Oyu Tolgoi will fund this initiative with 36 billion MNT. 3,300 people will be trained at various professional training and vocational centres, and will be employed at Oyu Tolgoi as well as on mining, road, railway and construction projects.
14. As of today Oyu Tolgoi employs more than 5,200 workers: of which more than 3,200 or 61 per cent are Mongolians and 500 are from South Gobi province.
15. Projects are continued to support local community and ensure sustainable development.From January 01, 2010 until August 15, 2010, Oyu Tolgoi signed 98 contracts with Mongolian companies at a value of 280 billion MNT. In addition, Mongolian companies filled 849 purchase orders totalling 67.5 billion MNT and accounting for 86 per cent of the total purchase orders for the period. Also, a Business Development Centre is scheduled to open in 4th quarter of 2010 to support local suppliers in the neighbouring city of Dalanzadgad, South Gobi province.