Mongolia's economy and foreign investment are heavily dependent on the Oyu Tolgoi copper and gold mine project. The project accounted for over 50% of foreign investment and significantly impacted GDP growth and budget revenues between 2009-2012. However, Mongolia now faces challenges in attracting further investment for exploration and mining. Mongolian mining companies' stock prices on global exchanges have declined 60-70%, and investors that operated at a loss are no longer interested in investing. Additionally, Mongolia faces high risks that unstable policies could increase interest rates on its $1.5 billion bond issued and planned $3.5 billion in future bonds.

1. Mongolian Mining
Investment Environment
Ulaanbaatar, 2013

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Талбай(гa)саяар
Хайгуулын лиценз (гa) Ашиглалтын лиценз (гa)
“Long Named Law”
Prohibition
of issuing
exploration
license
FIL ( Law on
Regulating Foreign
Investment Into
Strategic Sectors)
44% of
the
territory
13.6%
of the
territor
y
5% of
the
territory
2006 –
Minerals Law
Oyu Tolgoi
Investment
Agreement
Mineral Resource Licensed Fields in Mongolia
(2015 Outlook)
5,913 licenses in 2005, 70 mil hectare (40%)
636 licenses in 2013, 21 mil hectare (13%). 1,200 exploitation licenses on 0.8 mil hectare of land, 0.5% of
the territory. If no exploration license is issued next 2 years, it will be 7% by 2014 and 5% by 2015. 2

3. Licensed Field Map
(as of 2012 )
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4. Mongolia’s Foreign Investment Directly Depending on
Oyu Tolgoi Project
( MNT as Trillion) 2009 2010 2011 2012 2013
GDP 6,591 8,415 11,088 14,185 17,649
Changes (nominal) 1,824 2,673 3,097 3,464
Budget Income 1,994 3,123 4,228 5,530 7,088
Changes (nominal) 1,129 1,105 1,302 1,558
Foreign Investment 798 2,152 6,191 5,177 ?
Changes (nominal) 1,354 4,039 (1,014) ?
Oyu Tolgoi Investment 0 1,092 3,809 3,286 830
Өөрчлөлт (номинал) 1,092 2,717 (523) (2,456)
Оюу толгойн эзлэх хувь 51% 62% 63%
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US$mln/Month
Mongolia’s Foreign Investment Directly Depending on
Oyu Tolgoi Project
OTIA^^ signed
^-Mineral law; ^^- Oyu Tolgoi Investment Agreement; ^^^- Strategy Entities Foreign investment law
Amended ML^
OT Project Development Expenditure
SEFIL
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6. Share Financing Is More Suitable for High-Risk
Exploration Phase
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100%
Acquisition
Exploration
Exploration Resource&
Reserve
Estimattion
Mine Planning Mine
Operation
Ore
Processising
Investment Risk
Prospectors
Senior explores
Majors
Claim Holder
Junior explorer
Share Financing Loan financing
Share/Convertible
bond

7. Mongolian Mining Companies Shares Fall is 60-70% on global
stock exchanges. Attracting investment, in this case, is very
difficult.
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8. Investors operated at a loss are not interested anymore
in investing in shares
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9. MICC Index, who reached its peak $26 billion, fell by
67% reaching $8 billion
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10. Mongolia issued $ 1.5 billion bond and plans to issue $ 3.5 billion
in the future. However, there’s a high risk that unstable policy
would increase the level of the bond interest
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11. Mongolia issued $ 1.5 billion and plans to issue $ 3.5
billion in the future.
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