20 April 2018

Hong Kong

A DECADE OF EXCELLENCE AND LEADERSHIP IN ASSET

MANAGEMENT AND INVESTMENT.

Presented by:

Odbayar ODONCHIMED

Vice President of Business

Development

Road is the primary

means of

transporting

product from the

Umnugobi region to

the Mongolia

Chinese border

Purchased from

Mongolian Mining

Corporation for a

net consideration of

MNT 157.8bn

Erdenes

Oyu Tolgoi

100% state-owned

Established in February 2007

Represents the Government of Mongolia’s

interests in strategic deposits

Manages assets in deposits of strategic

importance upon the approval of the Parliament

and Cabinet

One of the world’s

largest copper mines

with long mine life

Partnership between

GoM, Rio Tinto and

Turquoise Hill

Access to China via

paved highway and

rail

Major world class

premium hard coking

coal deposit

Located next to the

world’s largest steel

producing region

Large reserves of

1.8Bt coking coal and

4.6Bt high quality

thermal coal with

exploration potential

Largest producing

thermal coal

mining company in

Mongolia

Established in

1978

Provides c.40% of

the total coal

consumed in

power stations in

Mongolia and

2nd largest thermal

coal mining

company in

Mongolia

Established in 1990

Provides c.20% of

the total coal

consumed in power

stations in Mongolia

Developing a

9,000MW power

plant with State

Grid of China for

export

Copper Coal Infrastructure

Mongolia’s largest

uranium deposit

Located next to the

world’s biggest

nuclear power

producers

Access to China

via railroad

Uranium

Gashuun

Sukhait RoadMon Atom

100%

Oyu Tolgoi

Eco-friendly and

economical coal and

renewable energy

based power plant

Erdenes Shivee

Energy

Becoming the leading

asset management

company

EMGL’s financing arm

of its projects

Erdenes Asset

Management

Energy Fund

Erdenes Tavan

TolgoiBaganuur Shivee Ovoo

Clean and cost

effective energy -

regional mine

sites and urban

power generation.

Erdenes

Methane

Methane

Current Assets

100% 51%

34%

90% 100% 100% 100%

34%

Badrakh

Energy

100% 100%

Striving to become

an internationally

recognized

holding

company

through mining &

infrastructure

projects, and value

added products

VISION

Sustainable growth, fair distribution and prosperity

MISSION

Creating value and return by managing natural resources

through good governance.

PRINCIPLES

• Compliance with law

• Good governance

• Transparency

• Economic diversificaiton

• Human development

Preliminary estimates of Erdenes Mongol’s profits in 2017 reached $8.3 million.

Tavan Tolgoi - Gashuun Sukhait coal transport charges have been increased in connection with an increase in coal price.

The Asian Development Banks project to strengthen Erdenes Mongol LLC’s management and investment capacities through its loan funding was initiated.

Erdenes Mongol’s subsidiary Erdenes Tavan Tolgoi repaid $350 million to Chalco Trading Hong Kong.

An internationally reputable audit firm has audited the financial statements for the last 3 years and has made consolidated financial statements for the company.

34% of “Badrakh Energy" LLC has been transferred to State authority and started the project to enrich uranium at Zoovch Ovoo and Dulaan Uul.

Projects and programs have been initiated in cooperation with private companies in the production of value-added products.

Company Vision, Mission & Principles Erdenes Mongol Mandate

Financial Performance - 2017 Key Milestones - 2017

$ 614.6

$ 444.0

$ 128.1 $ 111.6

$ 632.9

$ 400.1

$ 183.5

$ 133.6

-

200.0

400.0

600.0

Total Revenue Total Expenses Total Profit Total Taxes

2017 Projection 2017 Preliminary estimate

Million $Usd

(2) Use deposits &

infrastructure

(3)

Possess, use and

own licenses and

assets

(4) Attract

financing and

investment

(5) Value added

product sale

(6) Advisory

services

(1) Execute state

representation

Strategic Goal I Expanding mineral deposit operations

• Establish a subsidiary company in gold mining operations;

• Establish a subsidiary company in oil, gas, and rare earth elements;

Strategic Goal II Expanding production capacity and

increasing exports of products

• Improve and renew machines and machinery of "Baganuur" and

"Shivee Ovoo" JSC;

• Start production of “Badrakh Energy" in 2018-2019;

• Cooperate with Oyu Tolgoi LLC's underground mine development and

co-operate in infrastructure and logistics projects within the

framework of increasing product exports.

Strategic Goal III Developing the value-added processing

industry

• Set up a metallurgical coke and steel plant complex with a production

capacity of 500,000 tons coking and 300,000 tons of steel per year in

2020-2021 in the frame of public-private partnerships;

• Improve coal production by up to 5 million tons at Tavan Tolgoi and

constructing a coal processing plant in 2018-2021.

Strategic Goal IV Supporting and implementing energy

projects

• Supporting the development of a large-scale power plant of 5280 MW

by Chinese State Grid company based on the Shivee-Ovoo coal

deposit and providing a constant stream of coal energy;

• Support power plant projects based on the Tavan Tolgoi deposit

supplying coal from Tavan Tolgoi.

Erdenes Mongol - Strategic Plan /2018 – 2022/

Strategic Goal V Infrastructure and logistics development

• Build new 416 km road with Tavantolgoi-Choir road;

• Build infrastructure of Tavantolgoi-Gashuun Sukhait railway;

• Build infrastructure for Tavantolgoi-Sainshand road and railway infrastructure.

Strategic Goal VI Implementing asset management and

investing in capital

• Creation of an investment fund through Erdenes Mongol LLC’s asset

management strategy;

• To sell 20-49% of "Erdenes Tavan Tolgoi" JSC, 24% of "Baganuur" JSC and

39% of "Shivee Ovoo" JSC respectively in domestical and international stock

markets;

• Establish a "Mineral Exchange“.

Strategic Goal VII Increasing competitiveness through an

effective marketing policy

• Conduct price policy on coking coal markets;

• Optimize retail channels of thermal coal.

Strategic Goal VIII Implementing good corporate governance and

promoting sustainable development

• Introduce the ISO 9001 Quality Management System;

• Introduce the ISO 14001 Environmental Management System;

• Implement OHSAS 18001 Occupational Health and Safety Management

System;

4

сая тн

China’s coking coal import (mTn)

20.0 19.1 15.4 14.8 12.723.6 21.7

44.7

53.5

75.4

62.4

48.0

59.3 58.5

45%

36%

20%24%

27%

40%37%

0%

10%

20%

30%

40%

50%

-

20

40

60

80

100

2011 2012 2013 2014 2015 2016 3Q2017

Бусад

Монгол

Нийт

МУ-ын эзлэх хувь

Market

share

Other

countries

Mongolia

Total

mTn 11/01/17

China’s coal imports from Mongolia increased by + 20%

over the previous years.

As of Nov 1, 2017, ETT holds about + 14%

of the China’s market share of coking coal import.

Erdenes Tavan Tolgoi JSC

2017

By purchasing coal

loading equipment, costs

would decrease by ~50%

2019

By installing conveyor

systems, costs would

decrease by ~30%

2020

By increasing production,

and installing power supply

system, profits will increase

by ~40%

2020

By producing value added

coal products, prices will

increase by ~30%

Dual listing on both domestic and foreign

stock exchange markets

By building a thermal

power station, (450mWt)

costs would decrease by ~30%

2018

IPO

2019

Mid term strategy plan

34.1million tons

Total coal production

$215 million dollars

Total taxes and fees

$1.09 billion dollars

Total sales

7.4 billion tons

Total coal reserves

Russia

Mongolia

China

Ulaanbaatar

Tavan Tolgoi

coal deposit

65.20% 14.75% 0.05% 20%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Төр Иргэд ААН ЗарлахState

ownedPublic Businesses Shares to be issued

Shareholders’ structure

5

Oyu Tolgoi

Mid term strategy plan

$1.5 billion dollars

Total taxes and fees between

2010-2017

6.4 billion tons

Total reserves

Russia

Mongolia

China

Ulaanbaatar

Oyu Tolgoi

2015-2022

Underground mine

development through

$6.0 bn project financing

Gold, copper refining plant to

produce value added products

Oyu Tolgoi thermal power station (450MW) as main power supply

2018-2022

-600.0%

-500.0%

-400.0%

-300.0%

-200.0%

-100.0%

0.0%

(1,000.00)

(500.00)

-

500.00

1,000.00

1,500.00

2,000.00

2013 2014 2015 2016 9/30/2017

Sales Net profit Net Profit Margin

Financial Performance

6

51% 25% 24%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

State owned Public Shares to be issued

Baganuur’s coal production will increase by + 91% to 7.6mnt

over the next 5 years. Power plant projects will increase demand.

Baganuur JSC

Mid term strategy plan

4.0million tons

Total coal production

$9.8 million dollars

Total taxes and fees

$51.3million dollars

Total sales

812million tons

Total coal reserves

Russia

Mongolia

China

Ulaanbaatar

Baganuur

coal deposit

Shareholders’ structure

Thermal coal (mTn)

3,876.7

3,617.1

3,731.2 3,719.4

4,019.4

3,824.5 3,683.3

3,747.0 3,741.7

4,039.2

2013 2014 2015 2016 2017

Production Sales

2018

Mining machinery and

equipment renewal

2019

2020

Construction of a thermal power plant, (700MW)

2022

Value added production of

coal products

Further renewal of

mining machinery and

equipment

Dual listing on both domestic and foreign

stock exchange markets

2019

2019

Increase of coal production output

7

IPO

IPO

Shivee-Ovoo’s coal production will increase from 2 million tons per year

to 4 million tons per year, an increase of + 100% by 2022.

Shivee-Ovoo JSC

2018

Mining machinery and

equipment renewal

2022

Value added production of

coal products

Feasibility study of a coal briquette factory

Dual listing on both domestic and foreign

stock exchange markets

2019

2019

Mid term strategy plan

2.0million tons

Total coal production

$3.2 million dollars

Total taxes and fees

$20million dollars

Total sales

617million tons

Total coal reserves

Russia

Mongolia

China

Ulaanbaatar

Shivee Ovoo

coal deposit

Shareholders’ structure

51% 10% 39%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

State owned Public Shares to be issued

1,964.4

1,939.1

1,736.8

1,883.9

2,037.0

1,917.0

2,013.7

1,817.8

1,848.2

2,020.3

2013 2014 2015 2016 2017

Production Sales

Thermal coal (mTn)

Further renewal of

mining machinery and

equipment

2019

8

Investments Opportunities Technologic Support Opportunities

Construction of a coking coal and

metallurgical complex to meet growing

demand for steel

Mining, Infrastructure and Energy

projects

Thermal coal mine expansion and

advanced technology introduction in

mining operations to increase mining

productivity and output

Exploration of coalbed methane at the

Tavan Tolgoi Deposit

“Dulaan Uul“ and “Zoovch Ovoo“

Uranium Deposits Project agreement

between Monatom LLC and Areva

Mongolia LLC

Shivee-Ovoo strategic deposit based

energy complex to export energy.

Partnership Opportunities with Erdenes Mongol

9

Road and rail projects in the Umnugobi

region connecting mines with export

hubs.