OYU TOLGOI CEO MAKES STATEMENT

Ulaanbaatar, Mongolia, /MONTSAME/ "Benefits of the Investment Agreement include more than 50 per cent of cash flow to Government of Mongolia," said the Oyu Tolgoi CEO Cameron McRae in his statement made September 19. He highlighted the benefits of the Investment Agreement that governs Oyu Tolgoi, pointing out that the Government of Mongolia will receive more than 50 per cent of all cash generated by the business over the lifetime of the project. Both sides are meeting all obligations under the agreeement, he added. In 2011 alone, the Government will receive more than US$300 million from the project, he went on. Before the first truckload of product leaves the mine gate in 2013, the project will have contributed US$700 million in tax revenues and prepayments to the Government. "Since the signing of the Investment Agreement in 2009, the Government of Mongolia and shareholders of Oyu Tolgoi LLC (OT) have worked together to ensure this historic mining project comes to fruition and the benefits are enjoyed by all Mongolians. In doing so, both sides are complying with all laws and obligations," McRae said. Resolution 57 was put in place to allow the Prime Minister to conclude the investment agreement under certain conditions. McRae said the Oyu Tolgoi Investment Agreement and the actions of the government clearly comply with these conditions. "Under this agreement, both the government and shareholders of OT have firm commitments, they have been living up to these in a partnership that is benefiting all Mongolians," McRae claimed. "The agreement and the actions of the government are in compliance with Resolution 57 of the State Great Hural of Mongolia." The Agreement has enabled the development of a resource that will provide decades of revenue to the government in taxes, royalties and dividends, he went on. In its initial years, the OT mine is projected to increase Mongolia's gross domestic product by around 35%. Having a firm agreement gave Ivanhoe and Rio Tinto the confidence needed to assume the risks and invest in a project that will cost US$6 billion in its first phase, he said. This investment is being made before the first truckload of product is mined and any revenue is generated. The Government of Mongolia will not need to contribute any cash to these costs, he added. In addition, the "Agreement has boosted foreign investor confidence and provided significant economic benefits to the country in terms of jobs, infrastructure development, advanced technology, and has enhanced the career prospects of ordinary Mongolians. "The benefits of the Agreement for Mongolia are clear:In addition to the revenue the Government will receive, this project will benefit individual Mongolians in several ways: Jobs: Oyu Tolgoi currently employs more than 10,000 Mongolians, from every province in the country. Also, as set out in the Investment Agreement, we have agreed that 9 out of 10 workers will be Mongolian during the operations phase. Skills Training: We are investing US$85 million in training and education, funding the largest vocational training program in Mongolia, and building three new professional training and vocational centers, as well as upgrading four other centers and colleges. Expanding the Local Economy: Mongolian businesses are also benefiting from the Agreement. During the development period over US$700 million in spending has gone to over 1,000 Mongolian suppliers. Five of the major construction projects underway in the South Gobi are 100 per cent managed by Mongolian contractors," he said. OT and its shareholders will continue to work in partnership with the government to honour its contractual obligations so this historic project will continue to transform the Mongolian economy and deliver benefits to the Mongolian people, said McRae.