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MONGOLIA MINING ISSUES SEPTEMBER 2012

MONGOLIA MINING ISSUES SEPTEMBER 2012. OYU TOLGOI COPPERGOLD & SILVER DEPOSIT. Location – Gobi Desert, South Gobi province, 100 km from border with China Owned - 66% Rio TintoIvanhoe Mines; 34% Mongolia Investment requirement - total $13.2 bln

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MONGOLIA MINING ISSUES SEPTEMBER 2012

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  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 MINEENERGY RESOURCE • Name of the project: UkhaaHudag/Tavan Tolgoi • Coal reserves: TT contains estimated 6.5 billion tons of which UH - 4% • Location – Gobi Desert: 160 km from OyuTolgoi; 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 • TsagaanSuvraga – MAK cooper deposit – EBRD funded at $300 mln • TavanTolgoi – Erdenes MGL – big interest • TavanTolgoi – Ajnai Corporation • TsagaanTolgoi – IvanhoeMines/Rio Tinto subsidiary • OvootTolgoi - 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?

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