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

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

3. PS 2PS 3PS 4 Darkhan PS Erdenet PS Dornod PS Dalanzad gad PS Total Coal191.51067.52899.7351.9222.4270.639.45043.0

4. “Coal pricing guideline” approved by the Infrastructure Minister in 2002 Old Statement of the Energy Law The Statement of 6.1.7 “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 2011-12-09 “The Statement 9.1.14 “to approve pricing guideline of fuel which is used for power generation and to check the fuel pricing calculation” In the Regulatory Committee authorizations

5. date Mines 2005 5-1 2007 10-1 2008 7-15 2010 1-15 2010 9-20 2010 11-1 2011 5-1 2011 11-1 Baganuur11500125001620018200 20500 Shivee ovoo750085001140013960 15560 Sharin Gol13600166002140022680 26275 Aduunchuluun510061008584 9600 Ulaan Ovoo22680

6. MINES COSTPRICE LOSS MNTPercentage Baganuur2397520500347517% Shivee Ovoo1813015560257017% Sharin Gol2950026275322512% Aduunchuluun125009600290030% Average 3000 MNT * 5 mln tons = 15 bln tugrig loss

7. Mines200920102011201220132014Average Baganuur162001820020384224222488928400 Growth percentage 12% 10%11%14%12% Shivee Ovoo114001396015356168921858121750 Growth percentage 22%10% 17%14% Sharin Gol214002268023927252432663228400 Growth percentage 6%5%6% 7%6%

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

9.  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. ....

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