D. Bailiikhuu, Senior Officer, State Property Committee, Mongolia

1. D. Bailikhuu
SPC of Mongolia

2. Total State Property- 4,1 trillion ₮
SOE’s–72
Government institution – 934

3. State share of SOE’s to sell through the Stock
exchange
To issue additional share and IPO
To conclude a Concession Agreement
Mainly, To attract private investment by PPP

4. Conditions:
◦ The evaluation of coal resources by the JORC standard
◦ Mining License should be assessed in terms of property
◦ Power plant and Coal liquids projects are needed to be
studied by the professionals, then it can be implemented
• Methods:
◦ To issue additional shares up to 51 percent of shares
owned by the state

5. Conditions:
◦ New investment for technological innovation
◦ To increase the heating capacity
◦ To reduce the cost
Methods:
Concession agreement

6. Conditions:
◦ To extend service framework
◦ Equipment and Technological Innovation
◦ To reduce cost ,
Methods:
◦ Open bid tender

7. Mongolian airline /MIAT/-
Management contract
“Mongolian stock exchange”
/MSE/– Management contract

8. State offers own share to the Korean
telecom on contractual basis
Should refuse, State goes whit use the
privatization through open bid

9. 15 strategic deposits
To bundle shares owned by State by type of
minerals
To establish new Joint Stock company
To trade certain percentage of state shares at
domestic and international stock markets

10. .
Tavan Tolgoi 6.4 bn t coal
Nariin Sukhait 125.5 mn t coal
Baganuur 600.0 mn t coal
Shivee Ovoo 646.2 mn t coal
Mardai 0.001 t at 0.119% O3U8
Dornod 0.029 mn t at 0.175% O3U8
Gurvan Bulag 0.016 mn t at 0.152% O3U8
Tomortei 229.3 mn t at 51.15% Fe
Oyu Tolgoi 2.7 bn t of ore; 25.4 mn t of
copper; 1,028 t of gold
Tsagaan
Suvarga
10.6 mn t of oxides at 0.42% Cu/
0.011% Mo; 240.1 mn t sulphides
at 0.53% Cu/0.018% Mo
Erdenet 1.2 bn t at 0.51% Cu/0.012%
Mo
Burenkhaan 192.2 mn t at 21.1% P2O5
Boroo 0.025 mn t at 1.6g/t Au
Tomortein
Ovoo
7.7 mn t at 11.5% Zn
Asgat
Metallurgical
coal
Metallurgical
coal
Lignite coal
Lignite coal
Uranium
Uranium
Uranium
Iron
Copper, gold
Copper,
molybdenum
Copper,
molybdenum
Phosphor
Gold, ore
Zinc
Silver 6.4 mn t at 351.08g/t Ag
Reserves and qualityDeposit Minerals
Stage of development,
start date, output p.a. Ownership structure
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
100% Erdenes
100% private (Southgobi
Sands, MAK-Qinhua JV)
75% SPC, 25% locally listed
90% SPC, 10% locally listed (ope-
rational part; rest by Erdenes)
100% private company
21% SPC, 21% Russian
Gov., 58% Khan Resources
100% private Chinese comp.
100% Darkhan Metallurgical
factory (100% owned by SPC)
34% Erdenes, 66% Ivanhoe
Mines
51% SPC, 49% Russian Gov.
100% MAK (private company)
100% mult. private companies
100% Tsairtminerals (private
JV)
100% Mongolrostsvetmet (50%
SPC, 50% Russian Gov.)
100% Boroo Gold
Partial production, ramp-
up in 2011, 15-30 mn t
Feasibility study
Production, 2.8 mn t
Production, 2.0 mn t
Feasibility study
Feasibility study
Feasibility study
Feasibility study
Development, 2013
Feasibility study
Production, 27.1 mn t of
ore
Feasibility study
Close to depletion
Production, 0.07 mn t of
zinc
Feasibility study
Estimated capex
USD 2.2 bn (1.6 bn
for first 3 years)
N/A
–
USD 4 bn for
power plant
USD 200 mn for
all three
USD 100 mn
USD 12 bn (5
for first 5 years)
USD 200 mn
(USD 150 mn for
downstream plant)
N/A
–
–
USD 47 mn
SOURCE: Worley Parsons; Ministry of Mineral Resource and Energy; State Property Committee

11. Tavan tolgoi Coal Mine
SPC
Erdenes
MGL
Erdenes
TT
citizens
MongolianMongolianMongolianMongolian
privateprivateprivateprivate
companiescompaniescompaniescompanies
Investor Operator
company
Marketing
company
Mining contractPSH contract

12. Coal assets
company
SPC
Baga nuur
600 mn t
Shvee ovoo
530 mn t
Nariin
Suhait
130 mn tttt
Power
plant
300MW
Coal
mine
20mn t
Coal
liquifation
factory
Power
plant
4800MW
Coal
mine
20mil t
Electricity
transmision
line
600KB
Other
coal
deposits

13. Erdenet OT
45m tn
Tsagaan
suvragaAsgat
Copper and
Silver
company
SPC
Copper
smelting
factory

14. SPC
Temurtei
240 m tn
Temur tolgoi
25m tn
Darhan
metallurgical
plant
zinc
Iron Assets
company

15. CAU
45t tn
Mardai
SPC
Mon
Atom
3 Bulag
10t tn
Coge gobi
10t tn
3 saihan
10t tn
Cameco

16. Rail way
1000 km
Auto road
270 km
Power
Plant
600Mw
Water
Pipe
Line
70km
220kv
Line
500 km

17. Corporate Governance for SOE
◦ Member BoD
◦ Subcommittee of BoD
Balanced Score Card
Audit
◦ E&Y
◦ KPMG
◦ PWH
Disclose
IAS
IPO
Independent regulator for infrastructure
Price deregulation for infrastructure