Source: www.open-government.mn, Montsame                           Date: 31 March, 2011

More details are now available about what Minister of Mineral Resources and Energy D. Zorigt briefed the Government on an agreement reached with Ivanhoe Mines and Rio Tinto about amending the Oyu Tolgoi investment agreement, so that there is a reduction in the financing cost for Mongolia. The Government has effectively borrowed money from Ivanhoe Mines to pay for its share in the project at an interest rate of 9.9% plus the U.S. inflation rate. Under the new agreement the interest rate is calculated at LIBOR+6.5%. The new rate is effective from January 31, 2011. Both the method of repayment and the rate of interest will be reviewed every seven years.

A clause allowing Mongolia to bring in funding into the project for its share of financing independent of Ivanhoe Mines at any time has now been included.  A “no dilution” clause has also been included, so that Mongolia’s share in the project cannot become lower than 34% without its explicit permission. A clause on preference shares has been removed in favor of bonds, while another has been incorporated, giving Mongolia a veto right, should Ivanhoe Mines and Rio Tinto decide to transfer any or all of their share to third parties, specifically state-controlled entities and persons directly or indirectly related to Oyu Tolgoi LLC.