1. MONGOLIA MINING ISSUES SEPTEMBER 2012

2. OYU TOLGOI COPPER\GOLD & SILVER DEPOSIT Location – Gobi Desert, South Gobi province, 100 km from border with China Owned - 66% Rio Tinto\Ivanhoe Mines; 34% Mongolia Investment requirement - total $13.2 bln Current project $4.0 bln – $900 mln cut by roads and diversion at OT pit and international airport – no EIA, no local approval Project disclosed by IFC on August 24, 2012 Disclosure date by EBRD is September 5,2012 Closure of ESIA consultations – ??? Board date – NOVEMBER 8, 2012

3. OYU TOLGOI ESIA ESIA -evaluating impact of construction phase OT project construction 94% complete ESIA –not evaluation but a report based on pre 2009 EIAs No stakeholder consultation & approval process Recent updates not all incorporated ESIA report not accessible to affected communities

4. TAVAN TOLGOI : UKHAA HUDAG MINE ENERGY RESOURCE Name of the project: Ukhaa Hudag/Tavan Tolgoi Coal reserves: TT contains estimated 6.5 billion tons of which UH - 4% Location – Gobi Desert: 160 km from Oyu Tolgoi; 245km from China border Coal washing plant: 5 mtpa capacity plant funded by EBRD Power plant – 18 MWT Private airport Private blacktop road to border Private railroad toborder under construction

5. OTHER MINES Tsagaan Suvraga – MAK cooper deposit – EBRD funded at $300 mln Tavan Tolgoi – Erdenes MGL – big interest Tavan Tolgoi – Ajnai Corporation Tsagaan Tolgoi – IvanhoeMines/Rio Tinto subsidiary Ovoot Tolgoi - IvanhoeMines/Rio Tinto subsidiary

6. COMMON ISSUES Funded or actively considered for funding by WB/IFC and EBRD Lack of water resources for life of project – 870 l/s Lack of international standards EIA/SIA Lack of FPIC by local communities on extraction operations or infrastructure projects No recognition of indigenous peoples rights of nomadic herders Common areas of impact on the environment and communities Lack of HIA on local communities

7. ISSUES WITH THE IFC ESIA ESIA –evaluation of the construction phase impact assessment 2009 reports dressed to meet IFC standards ESIA – no evaluation of impact from the extraction process; Consultation process – no consultation for approval of local communities; no stakeholder discussions; Disclosure date – closure dates

8. IMPACTS CAUSING SOCIAL TENSION Severe water scarcity & its degrading quality Loss of pasture as livelihood means for nomadic pastoralists Depletion of herder wells Loss of agriculture land - 40% workforce Loss of nomadic lifestyle & cultural traditions Contamination of living environment for human and wildlife populations Desertification: soil and pasture degradation

9. QUESTIONS & CONCERNS Do WB/IFC and EBRD policies allow loans for extraction operations without an ESIA for its mining impact? $4.0 bln loan to projects that do not have proven and available water resources? Why nomadic herders of Mongolia are not recognized as indigenous people by EBRD and IFC? Cumulative and aggregate impact on water, climate change, bank portfolio?