Source: Eurasia Capital             Date: 03 June, 2011

Mr. Peter Nicholls, General Manager of Rio Tinto's Commercial Department, has said that with a potential mine life of 50 years Oyu Tolgoi is expected to withstand the lower end of the commodity price cycle. The Oyu Tolgoi investment agreement has seven main areas of commitment: the terms of investment, taxation, procurement, infrastructure, employment and training, regional development and environment. Mr. Nicholls said that Rio Tinto and Ivanhoe Mines have invested USD2 billion over the last four years and USD4.5 billion is budgeted for the completion of first phase of the project between 2011 and 2013. A total of 12 major construction projects in the South Gobi, Choyr and Darkhan are 100% managed by Mongolian contractors for a total of over USD40 million. OT LLC has so far engaged 2,833 Mongolian suppliers and last year signed contracts with 103 local suppliers in Khanbogd and Dalanzadgad for a total USD1.5 million.

A study assessing the macroeconomic consequences of the project for Mongolia, commissioned by Rio Tinto and prepared by a team of independent economists led by Dr. Brian Fisher, Chairman and Managing Director of BAEconomics, shows, in Dr. Fisher’s words, how "a tide of growth will float everybody's boat". According to the study the Mongolian economy is expected to grow more than 10% a year for the next ten years, meaning that by the year 2020 the  size of the economy will more than double, as Oyu Tolgoi ramps up to full production. At the moment, Mr. Nicholls said, the economic impact is revealed by y-o-y rise in the production of wooden doors and windows by 258%, of sawn wood by 300%, and of cement by 200%. The net income of restaurants in Ulaanbaatar was up 800% in January this year. Economists predict that 4 additional jobs will be created in the country for every job at Oyu Tolgoi.

The Mongolian Directors of the Oyu Tolgoi LLC recently visited Rio Tinto's headquarters in London and also its Salt Lake City copper mine in Utah, which has been in operation for over 100 years, to get an idea of how Rio Tinto is implementing in Oyu Tolgoi its best international practice learnt from operating in over 40 countries, in areas from the pristine tundra in the far north of Canada to the Namib Desert, and to the remote Kimberley region of Western Australia.