Ministry of Mineral Resources and Energy, Fuel Policy Department Director A.Erdenepurev Ulaanbaatar city 2012

 COAL FOR ELECTRIC POWER GENERATION PURPOSE  REST:  EXPORT  LOCAL/RURAL CONSUMPTION  OTHERS

PS 2PS 3PS 4 Darkhan PS Erdenet PS Dornod PS Dalanzad gad PS Total Coal

“Coal pricing guideline” approved by the Infrastructure Minister in 2002 Old Statement of the Energy Law The Statement of “to approve pricing guideline of fuel which is used for power generation and to check the fuel pricing calculation” In the Government central organization prerogative “New amendment in the Energy Law which was approved on “The Statement “to approve pricing guideline of fuel which is used for power generation and to check the fuel pricing calculation” In the Regulatory Committee authorizations

date Mines Baganuur Shivee ovoo Sharin Gol Aduunchuluun Ulaan Ovoo22680

MINES COSTPRICE LOSS MNTPercentage Baganuur % Shivee Ovoo % Sharin Gol % Aduunchuluun % Average 3000 MNT * 5 mln tons = 15 bln tugrig loss

Mines Average Baganuur Growth percentage 12% 10%11%14%12% Shivee Ovoo Growth percentage 22%10% 17%14% Sharin Gol Growth percentage 6%5%6% 7%6%

Name of Coal Mines COAL MINESREGULATORY AUTHORITY Baganuur17%12% Shivee Ovoo17%10% Sharin Gol12%5%

 Poor financial situation due to accumulated loss.  Delayed payment of Loan and interests  Cost increase such as currency exchange, diesel fuel etc.  Mining conditions are getting more complex from year to year.  Obsolete machinery and equipments. ....

 Renew the Coal Pricing Guideline, do detailed calculations,  Indexation based on cost components,  Coal Pricing based on free market principles