MONGOLIA is OPEN

for BUSINESS

Invest Mongolia Agency

WHY INVEST IN MONGOLIA

1. Large mineral resource base that can

be leveraged for value added

processing

2. Situated between two giant

economies, China and

Russia, Mongolia promises abundant

opportunity for growth

3. Attractive FDI environment and trade

through an open policy committed to

reducing bureaucracy and corruption

4. Vibrant and flourishing democratic

Government with stability since 1990

5. A large number of Industrial &

Infrastructure mega projects open for

investors to participate

CountryBest Practice,

Mineral Capacity Index

MONGOLIA #1

Chile #8

Columbia #21

Vietnam #40

P.R China #45

All countries 96

Reason 1. LARGE MINERAL RESOURCE BASE

3

& Scrap

Minerals – Main Composition of Total Exports

(1H2013)

Coal

Copper

Iron ores

Crude oil

Zinc

Gold

Other

16%

7%

4%

10%

27%

17%20%

Mongolia’s World Class Mineral Reserves

Main Mineral ResourcesApproved

Reserves(2013)

Copper (million tons) 84.1

Coal (billion tons) 26.8

Gold (thousand tons) 2.4

Zinc (thousand tons) 37 340.4

Iron ore (mln tons) 1 088.9

Uranium (thousand tons) 47.9

Rare Earth (thousand tons) 3,768

Conventional crude oil (mln barrel) 2,438

Total coal exports are estimated to exceed 30 million tons atthe end of 2015 once railway infrastructure is in place andis expected to further increase to 50 million tons by 2017

Operations at the Oyu Tolgoi deposit have commenced in2013 and exports of its products began in July of 2013.These exports are expected to play a crucial role in totalexports of Mongolia.

Leading country in Mineral Resources

Source: Fraser Institute Report,2013

Ulaanbaatar

Strategic Deposits including Oyu Tolgoi and Tavan Tolgoi, world’s largest untapped deposits

AsgatSilver6.4 mm tons

BurenkhaanPhosphorite300 mm tons

ErdenetCopper/molybdenum1.2 bln tons

BorooGold0.025 mm tons

TumurtoiIron ore229.3 mm tons

GurvanbulagUranium0.016 mm tons

MardaiUranium0.001 mm tons

DornotUranium0.029 mm tons

Tumurtein OvooZinc7.7 mm tons

Tsagaan Suvarga

Copper/Molybdenum10.6 mm tons

BaganuurCoal600.0 mm tons

Shivee OvooCoal646.2 mm tons

Nariin SukhaitCoal125.5 mm tons

Tavan TolgoiCoal7.4 bln tons

Oyu TolgoiCopper 37mm tonsGold 1,431 tons

Rashaant

Gantsmod

jargalant

Hushuut

Olonubulag

Tsahiurt

Hotgor

Hugshin gol

Tamasagulag

Choibalsan

Ondorhaan

Ulaangom

Mongolia’s world class mineral reserves

Estimated reserves by 2012

Reason 1. LARGE MINERAL RESOURCE BASE

CHINAUS$ 8,358 1351

RUSSIAUS$ 2,014 143

KoreaUS$ 1,129 50

MONGOLIAUS$ 10 3

JAPANUS$ 5,959 128

Reason 2. STRATEGIC LOCATION

GDP 2012 in USD billions

Population 2012 in millions

Situated between two massive economies, China to the south and Russia to the

north, Mongolia promises abundant opportunity for growth.

5

STARTING A BUSINESS

PROTECTING INVESTORS

REGISTERING PROPERTY

ENFORCING CONTRACTS

GETTING CREDIT

According to the 2014 Doing Business report by the WORLD BANK,

MONGOLIA is ranked 76th progressing by four places compared to the previous year.

Reason 3. ATTRACTIVE FDI ENVIRONMENT

MONGOLIA CONTINUES TO GROW IN DOUBLE DIGITS

Ministry of Economic Development forecasts Mongolia to continue in double digit growth in the coming years.

3.9 3.9

5.3

6.9

8.8

10.6

12.8

15.9

18.9

8.9

17.5

12.0

19.0

-2

0

2

4

6

8

10

12

14

16

18

20

0

5

10

15

20

6.4

12.2

14.8 14.1

20162015201420132012

%

US$ bln

2011201020092008

GDP at current prices, US$ blnGDP growth, yoy%

-1.3

Reason 3. ATTRACTIVE FDI ENVIRONMENT

Foreign Direct Investment into Mongolia

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

USD mm

Non-Mining FDITotal FDI

2011: Oyu

Tolgoi

Progression

2010: Oyu Tolgoi

construction budget of

$758 million

2008: Oyu Tolgoi

completion of first

construction phase

2005: Oyu Tolgoi project

receives approval

2001: Oyu Tolgoi

discovers mineral deposit

2012: Unfavorable

coal market

8

Source: Invest Mongolia Agency, 2012

Reason 3. FDI continues to grow despite coal price

Reason 3. THE REVISED INVESTMENT LAW

Effective Nov 1, 2013

Key features

Eliminates approval system to foreign investors and replaces it

with registration procedure.

Promises the same guarantees and protections to both Domestic

and Foreign Investors.

Creates an independent agency to serve investors in many ways

Reveals possible tax and non-tax state supports and incentives to

investors

Increases efficiency of investment facilitating a mechanism to

follow up real projects in the economy

First Legal Act including regional and sectors classification in order to diversify the economy as a whole.

9

Reason 3. THE REVISED INVESTMENT LAW

Tax Incentives Provided by the new Investment Law

10Source: Government of Mongolia, 2013

10%

5%

VAT

Corporate income

5

years

22

years

Tax-free

economic

zones

Tax rate

5%

10%10%

5%

VAT

Corporate income

Customs duty

Royalty

The new investment law is aimed at reviving foreign investment by

easing restrictions on investors in key sectors such as mining and by

providing greater certainty on the taxes.

New Services to Investors

1. Provide integrated information

2. Guide Investors to business and public procedures

3. Organize Field Tours

1. Legal Consultancy

2. Project Management Consultancy

3. Aftercare assistance

1. Investment Research

2. Investment & Investors Database

3. Targeted Promotion & AD Campaign

Reason 3. INVEST MONGOLIA AGENCY

• WTO member since 1997

• Member of Multilateral Investment Guarantee Agency (MIGA)

• Avoidance of Double Taxation Agreement signed with 26 countries

• Mutual Protection and Promotion of Investment Agreement signed

with 44 countries

• Bilateral Transparency Agreement signed with United Stated

• Joined to Asia-Pacific Trade Agreement (APTA)

• Negotiation for the Japan-Mongolia Economic Partnership

Agreement (EPA) is at the last stage

Reason 3. ATTRACTIVE FDI ENVIRONMENT

Icela

nd

Russia

Tu

nis

ia

Mala

ysia

Mexic

o

New

Ze

ala

nd

Japan

India

Jord

an

Indonesia

Sa

ud

i A

rabia

Chin

a

Arg

entin

a

Gre

ece

Belg

ium

Lithuania

Irela

nd

Fra

nce

Slo

vak R

epublic

Hungary

Costa

Ric

a

Italy

South

Afr

ica

Czech R

epublic

0.450

0.400

0.350

0.300

0.250

0.200

0.150

0.100

Bra

zil

United S

tate

s

Mo

ng

olia

Au

str

ia

Peru

Ukra

ine

Isra

el

Austr

alia

Kore

a

Kazakhsta

n

Mo

ng

oli

a

Canada

0.050

0.000

Luxem

bourg

Port

ugal

Slo

venia

Rom

ania

Neth

erla

nds

Fin

land

Spain

Esto

nia

Germ

any

Colo

mbia

Sw

eden

United K

ingdom

Egypt

Latv

ia

Moro

cco

Chile

Pola

nd

Denm

ark

Tu

rkey

Norw

ay

Kyrg

yz R

epublic

Sw

itzerla

nd

After adoption of the Strategic Entities Foreign Investment Law, 2012

Potential after the new Investment Law

Non-OECD

Average

OECD

Average

FDI Regulatory Restrictiveness Index (Closed =

1, Open = 0)

The drop in FDI in 2013 is largely attributable to the completion of Phase 1 of the OT

project as well as some changes to the strategic investment law of 2012 and other

temporary factors.

13

Reason 3. ATTRACTIVE FDI ENVIRONMENT

Reason 4. DEMOCRATIC GOVERNMENT

14

Tested with 7 consecutive successful democratic elections

Free and Fair election system

Less Domestic protests and Civil movement

Stability-next elections are in 2016 and 2017

Member of 69 international institutions and entered 250

international agreements and pacts

Peaceful and ultimately successful translation since 1990

to become a mature democracy over the last 20 years

Reason 5. MEGA PROJECTS

15

Railways

$16.0 bln

Highways

$0.46 bln

Subways

$1.50 bln

Copper Smelter

$2.0 bln

Oil Production

$0.8 bln

Iron Ore Cluster

$1.0 bln

Coal to Gas

$10.0 bln

Coal to Liquids

$2.5 bln

Coal Washing

$0.8 bln

The Development Bank of Mongolia provides loans to finance large scale development

projects and programs1 of Mongolia approved by the Parliament and the list of projects

and programs to be financed shall be approved by spring session of the Parliament.

New Development Medium Term Target Program

Railroad Transportation

Sainshand Industrial Complex

Auto Roads and Energy Facilities

Reason 5. MEGA PROJECTS

Industrial mega projects to utilize abundant coal resources in order to create value add and

domestic sources of strategic products.

• To increase energy efficiency and cut

reliance on oil and gas imports

• To provide cleaner fuel sources vital

for solving pollution in urban centers.

• The Project aims to create domestic

source of petroleum products thus

enhancing energy independence and

security of supplies through the

introduction of commercially

proven, cutting edge technology in

Mongolia.

• CHPP complex to be constructed as 2

x 10Mtpa modules, and

commencement of construction in

2014.

• First module in June 2015, and

second 5 mtpa in November 2014.

• CHPP ramping up to processing 20Mt

of ROM by 2017.

Coal–to–Gas Plant1

Coal–to–Liquid Plant2 Coal Washing and Handling

Plant

3

16

• In 2010, the Government approved the list of 121 concession projects.

• The Cabinet made amendments to the list of Concession projects (reduced to 56 projects).

• Major infrastructure projects such as Power plants, Railroads and Highways, infrastructure of SainshandIndustrial Complex; social sector projects

• The PPP project pipeline list is updated with more bankable and Government priority projects

• The new list consists of 51 projects submitted by line ministries and 5 projects submitted by private sector.

Reason 5. CONCESSION PROJECTS

Sectors

Infrastructure 10

Road and transportation 16

Railway 1

Pipeline transport 1

Airport 2

Energy 13

Environment 3

Education 3

Health 2

Culture and sport 4

We WELCOME YOU to MONGOLIA –

a land of enormous OPPORTUNITY

of political, economic, and legal STABILITY

enabling mutual growth and PROSPERITY.

WHY INVEST IN MONGOLIA