Source: Business Wire                          Date: 27 July, 2011

The latest Mongolia Mining Report expects that mining sector output will grow to USD11.5 billion by 2015, marking a fourfold increase from 2010 levels of USD2.6 billion. Most of this rapid growth will occur in 2012 and 2013 as the Oyu Tolgoi mine comes on line. It sees a dramatic reversal of the trend of static growth in mining output, with rapid rates of growth across the mining complex over the coming years. From 2011 to 2015, the annual average growth rate is forecast to be 31.4% in gold output and 46.2% in copper production. In terms of coal, the report predicts an annual average growth rate of 17.0%, reaching 27.0 million tons per annum by 2015. There are substantial upside risks to this coal outlook as the Tavan Tolgoi mine, currently owned by the Mongolian government, is due to commence output by 2015.

Mongolia has made significant progress over the last decade to improve its business environment. Recently, however, there has been a slight deterioration in the country's business environment as the government suspended almost half of the country's mining licenses on environmental grounds, having previously cancelled two exploration licenses for the Canadian miner, Khan Resources.