Name organizer Where
Frontier's "Invest Mongolia Tokyo 2018" Frontier Securities Tokyo Japan
"Open to Export" ICC WTO International business award ICC WTO London



Sophisticated ITS Solution for the Capital of Mongolia www.securityworldmarket.com

Ulaanbaatar is the capital and the largest city of Mongolia, with a population over 1.3 million, which is almost half of the country's total population. Over the past decade, the number of vehicles in Ulaanbaatar has risen by more than 300,000. As the political and cultural center of Mongolia, the increasing number of inhabitants and vehicles within the city has caused a series of social, environmental, and transportation problems. Dahua’s sophisticated ITS (Intelligent Transportation System) solution has integrated advanced software and hardware including sensors, information and data processing and physical electronics and communication technologies to assist the transportation department of Ulaanbaatar, in enhancing the safety and efficiency of its transportation system.


In recent years, the government of Ulaanbaatar has prioritized the improvement of traffic management and has identified the need of a cost-effective solution towards speeding, traffic light violations and other road safety related issues, to create a more secure environment for citizens. Due to the high-latitude geography of the city, this project is particularly demanding on the monitoring equipment withstanding harsh environments.


Based on advanced intelligent algorithms, Dahua has provided the city with its cutting-edge ITS solution consisting of the ANPR (Automatic Number Plate Recognition) system for 28 main roads, the E-police system for 8 junctions, 2 mobile speed measurement systems as well as 15 high spot PTZ surveillance units. The project took only three months from the initial analysis of the client’s demands and solution design to, the final delivery, overcoming various tough issues along the way.

ANPR System

As there are no current systems for license plate recognition in Mongolia, the Dahua team worked in collaboration with a partner to customize a Mongolian license plate recognition algorithm. This was then integrated into the Dahua traffic cameras, achieving a reliable recognition rate, much to the satisfaction of the client. The Dahua traffic cameras installed at the significant main roads of the city, are able to function between a temperature of - 40 ℃ ~ + 80 ℃ and a 10%~90% humidity environment. The cameras will actively monitor and inspect each suspicious vehicle, and automatically capture their license plates in real time, sending out an automatic alert when blacklisted vehicles pass by.

E-police System

The monitoring equipment set up at the eight junctions, is able to help the Ulaanbaatar transportation authorities in making quick responses to traffic accidents that are caused by running red lights. When a violation occurs, the Dahua all-in-one capture camera takes a series of images of the vehicle’s license plate number, along with the status of the traffic signal and an aerial image of the scene as evidence. Afterwards, the DSS management and storage platform collects the data from each camera, and distributes it to operators for further processing.

Mobile Speed Measuring System

The mobile speed measuring system detects vehicles that surpass the speed limit in all weather conditions. The system features an all-in-one design, making it easy to use and install at different locations at a moment’s notice. This portability allows traffic police to move the system to different places whenever necessary. It consists of an 8MP CCD camera with amulti-target tracking radar, allowing for an accurate instant speed measurement of each passing vehicle and crystal-clear imaging. The IR flash lamp also ensures excellent imaging capabilities even during the dark of night.

To better serve the client, the Dahua team has provided the operators of the local transportation department, with relevant technical training and demonstrated to them, the installation and deployment of devices. Additionally, all three systems are unified on a single platform within the control center, further enabling the end user to a more efficient monitoring and management of road safety.


Dahua’s ITS solution facilitates road safety and keeps the traffic flowing smoothly, raising the safety awareness of drivers, resulting in a more pleasant journey for drivers. Advanced technologies such as LPR and fuzzy search, actively reduces manpower demands on the police force, while increasing the efficiency of current enforcement. Furthermore, Dahua’s solution has assisted the government of Ulaanbaatar to finance a sustainable, growing, and well-maintained system of security and safety.

about Dahua Technology

Zhejiang Dahua Technology Co., Ltd. is a leading solution provider in the global video surveillance industry. In 2017, Dahua was ranked 3rd in “Security 50” by a&s international. Dahua is committed to providing the highest quality solutions and products with the latest technologies to enable our end users to perform their business successfully. The company has more than 6,000 R&D engineers and technical staff working on cutting-edge technologies in camera lens, image sensor, video encoding & transmission, embedded processor, graphic processing, video analytics, software reliability, network security and other technologies.



Why this Idaho chipmaker is suddenly at the center of the US-China trade war www.cnn.com

New York (CNN Business)Micron, a company in Idaho that makes memory chips, has been locked in bitter trade secrets dispute with a state-backed Chinese rival called Fujian Jinhua. Now it has the US government in its corner.

Last week, the Trump administration targeted Fujian Jinhua in a major escalation of its push against alleged economic espionage. On Thursday, the Justice Department charged Fujian Jinhua, along with a Taiwanese company and three Taiwanese individuals, with conspiracy to steal trade secrets from Micron. The charges move the government's attack on Chinese intellectual property theft beyond tariffs and tough talk.
The charges, along with a ban on American companies from doing business with Fujian Jinhua, gives Micron the "upper hand" in its tangle with the Chinese company, said Mehdi Hosseini, a semiconductor analyst at Susquehanna International Group. "They now have more ammunition to make sure the memory industry in China is marginalized," he said.
Micron's allegations
Micron (MU), which was founded in 1978, is the largest memory chip maker in the United States and directly competes with the biggest players in the global market, according to Hosseini.
In recent years, the company has had to contend with a growing threat from China, which has made building successful homegrown semiconductor companies a pillar of its plans to become a global tech powerhouse. Fujian Jinhua has been building a $5.7 billion plant in southeastern China to get in the game, and it's far from the only player.
Micron sued Fujian Jinhua and Taiwanese semiconductor company UMC in California federal court in December 2017. Micron claimed that as early as 2015, UMC and Jinhua devised a plan to get former employees of Micron's Taiwanese affiliate to steal Micron's trade secrets and deliver them to UMC, which would then pass them to Jinhua.
According to Micron's complaint, UMC would get $700 million in research and development equipment and fees in return, as well as co-ownership in the resulting technology.
Former employees of the Micron affiliate in 2015 and 2016 successfully pilfered tech secrets from the company by uploading confidential data to their laptops, removable drives and Google drives before they left the firm, Micron said.

The case is still working its way through the court system. And Micron has since had to battle a countersuit in Chinese court from Jinhua and UMC, which filed a patent infringement suit against Micron in January. The court in July temporarily barred Micron from selling 26 products in the country including memory chips, memory sticks and hard drives.
Micron said it only learned about the Trump administration's export ban after it was announced on Tuesday. "Micron strongly supports global fair trade and the protection of intellectual property," a spokesperson said in a statement.
On Thursday, after the Justice Department announced the charges against Fujian Jinhua and UMC, Micron's general counsel commended the agency's decision to "prosecute the criminal theft of our intellectual property."
UMC said in a statement Friday that it "takes seriously any allegation that it may have violated any laws," and "fully intends to respond to [the Justice Department] allegations accordingly."
It's no surprise that Micron said it appreciated the government's legal action.
"This lawsuit corners new entrants out of China," Hosseini said. As China pumps billions into technology such as semiconductors, it's a vital edge.
Trade war impact
Micron's claims of economic espionage are given heft by the US government's lawsuit. But filing charges against the Chinese firm also serves a political purpose for the Trump administration.
Negotiations with Beijing could be back on after President Donald Trump and Chinese President Xi Jinping spoke on the phone Thursday and said they were willing to meet at the upcoming G20 summit in Argentina. A Bloomberg report early Friday said that Trump has asked officials to draft a trade deal with China ahead of the meeting.
The buzz could be a ploy to boost markets ahead of next week's midterm elections, according to Michael Every, head of Asia financial markets research at investment bank Rabobank. But should talks resume, the United States could find itself in a stronger position.
Fujian Jinhua probably can't operate without access to US software and technology, according to analysts.
"These actions are meant both to increase leverage in the current negotiations and as a deterrent to others," said Scott Kennedy, an expert on the Chinese economy at the Center for Strategic and International Studies. "The US isn't going follow the standard playbook any longer because it has only emboldened China."
When the United States went after Chinese phone and telecom equipment company ZTE earlier in the year, it said it was the result of specific, sanctions-related violations. Implementing export controls with a sweeping national security rationale is different, according to Dan Wang, technology analyst at Gavekal Research.
"Unlike the ban on ZTE, the US action against Fujian Jinhua is no one-off penalty for a specific infringement, but part of a much broader policy drive," he said in a note this week, citing the US government's language.
The Commerce Department said Fujian Jinhua threatened the supply chain for essential military components.
CNN's Jethro Mullen, Daniel Shane, Sherisse Pham and Yong Xiong contributed to this report.



War against West www.zgm.mn

Opinion: by Tsenddoo

Rumors about foreign investors dismantling Mongolia’s economy are nothing new. There is even a history of one of our mighty neighbors conducting such an operation before they established total political and economic control over our country. In the beginning of the 20th century, Mongolia proclaimed their newly regained independence and announced that Chinggis Khaan’s steppes woke up from their slumber. The world became interested in Mongolians, who were quietly sleeping under the Manchu or Qin rule for several centuries. In general, that was an interesting period when the world was set in motion and the kindling of two great wars that will change the political map of our planet several times started smoking. Christian priests headed by Frans August Larson, who later received a title of Duke from Bogd Khaan, came to Mongolia. Danish farmers, such as Henning Haslund-Christensen, and others moved to Khuvsgul aimag to start a modern livestock breeding and trade firms. Many other countries began operation in Mongolia; for instance, a foreign-invested company called “Mongolor” mined gold and the famous Roy Andrews’ expedition astonished the world with dinosaur eggs found in the Gobi dessert. Along with state flags of the Great White Tsar of Russia and the Chinese Republic, flags of many countries such as the USA, Sweden and Denmark could be seen around the capital of our country.

Since half of Mongolians were herding livestock and the other half were monks, no one was providing the nation with necessary goods. Nobody forbid Mongolian to engage in such works, but Mongolians themselves were not much interested in businesses. Trade and commerce were regarded as an inferior job, and Mongolians disdainfully regarded that “traders are one step away from becoming a thief” and “a spirited thief is better than a soulless merchant”. The “spirited thieves”, who stole livestock, were respected as noble outlaws and the real men. That is why only foreign traders provided Mongolia with three import goods they needed, namely, tea, tobacco and textiles. The traders also bought wool, fur and hides, which were plentiful, from Mongolia so a mutually beneficial business was flourishing. Out of 103,019 puu (1 puu16.3kg) of camel wool, 783,00 puu of cashmere, 979,512 puu of sheep wool transported from Mongolia to Tianjin in 1912 and 122,123 puu of camel wool, 43,231 puu of cashmere, 1,036,629 puu of sheep wool imported in 1913, the majority of camel wool was shipped to England and all of sheep wool went to the USA. Russia bought both wool and cashmere, as well as livestock. For instance, a total of 98,000 cattle were exported to Russian Empire in 1913, 67,700 in 1914 and 80,000 in 1915. “Non- Russian” phrases, such as Machinery Manual and “miles per hour”, shows that a part of Mongolian language remained as witnesses to the fact that technology was first introduced to these steppes from a different place.

Century-old doctrine of condemning foreign investors for potential exploitation is reviving
As such, Mongolia forged relations with the rest of the world, becoming a part of the changing world. In present terms, it was, to a certain degree, a globalization and with each passing days, Mongolia was shaping into a typical independent state with diplomacy of that time. However, the Soviets, who set up their total control upon the Mongolian government by mid-twenties, started a war against foreign capitals in Mongolia. That was the beginning of the first war against foreign investment. Let us see from the history how Soviets wrote about it in their “made up” story for Mongolians. In the history of revolution, it is mentioned that ”…in addition to the oppression over Mongolians, Western Europe and American capitalists conspired with greedy China to rob the country”. Is it not a familiar slogan? It reminds me of slogans against present Oyu Tolgoi, Tavan Tolgoi and Boroo Gold. Both state and civil movements against foreign investors have spread out.

At first, they forbid investors from hanging up their national flags, then froze their bank accounts and lastly, expelled the owners from the country. The last foreign investor left the country in 1928. Just like the phrase “there is no other God than Allah”, only the Soviet economy dominated Mongolia after that. A day later, private properties of Mongolians themselves were confiscated and nationalized under the excuse of “confiscating assets of feudal lords”. If Larson’s property had been confiscated, it might have led to a dispute between Russia and Sweden or Russia and America, which would have delay the exertion of robbing resources off of Mongolia. If the herds of Danish farmers had been given to collective farms, it might have led to a quarrel between Russia and Scandinavian countries and would ultimately make it difficult to take livestock from Mongolia. However, such problems were avoided by conducting a campaign on “chasing away foreign investors” by the hands of Mongolians. That was the beginning of a Red terror against the Mongolian economy and the Mongolian people. As a result, Mongolia lost all of their private properties, a strict limitation was imposed on small amount of properties one could own and one in every five adult males was killed.


A decade before the end of the 20th century, the socialist system collapsed on its own. Mongolia had an opportunity to regain their economic and political independence. In my personal view, main achievements of democracy in our country were that, first, the Government of Mongolia no longer had to ask another country to make a decision and, secondly, Mongolia’s economy was free from the control of a single country. In almost three decades into democracy, many foreign investors came to our country, which is making an effort to become a part of the globalized world and striving to reach the standards of modern independent state. Besides, numerous mineral deposits with rich resources were discovered throughout the country. Mongolians’ tradition of inviting skilled people to do the job that we are unable trails back to the ancient times. Households without a man to slaughter a sheep, used to ask their neighbors to do the job and cooked them a breast-bone or gave them the sheep’s leg as a reward afterwards. Aside from collecting dung and ruthlessly cutting wood, Mongolia had limited experience in energy production sphere; thus, the mining industry was established on the back of the Soviet investment in the 20th century.

• Soviets avoided potential disputes with Western countries through a campaign on "chasing away foreign investors" by the hands of Mongolians.

• Aside from collecting dung and ruthlessly cutting wood, Mongolia had limited experience in energy production sphere; thus, the mining industry was established on the back of the Soviet investment in the 20th century.

• The fact that the “hatred towards foreign capitals” excluded our two powerful neighbors seems suspicious.

However, in modern mining, it is inevitable that we cooperate with modern companies and give them the “breast-bone or leg”. Unfortunately, in recent years, the century-old doctrine of condemning foreign investors for potential exploitations is reviving and spreading further. There were rumors about books that detailed the methods of exploiting Mongolia’s economy. Some even cited from the book. Well, there are lots of different books. If these people read the Koran, they would probably say “it is written in the book that there are no other Gods than Allah” and destroy the Gandan temple and break the Megzedjanraiseg statue. An open window lets in fresh air, as well as flies. Since no one would want to suffocate in order to keep off flies, one would open the window and be ready with a fly-swatter. Since anybody can walk in through the open door of Mongolia, one needs to be vigilant and that is what the state is working for. Is the fact that the main objective of the war against foreign investors in Mongolia is directed at Western countries, specifically American and Canadian investors, a sign of history repeating itself? It feels like the fact that the “hatred towards foreign capitals” excluded our two powerful neighbors seems to be proving this point.

I am not saying it is wrong, I am just saying that this exclusion seems suspicious. Chinese companies account for the majority of foreign investments with Government approval set by a certain law on foreign investment. But how many companies with Chinese investment can you name? While there are a lot of general rhetorics about Chinese invasion and a danger of assimilation, do you know of any civil movement against 100 percent Chinese-invested companies or joint ventures? Do you at least know the names of Chinese companies that are using strategic deposits of iron ore, zinc or oil in our country? Have you ever heard about one person, let alone a movement, who protested against a Russian company called the Altan Dornod Mongolia, which dug out all the gold from the Zaamar mountain and then demanded USD 500 million from the state? Have you considered the reason why people are protecting Mongolia’s economy from Western investors and not holding a grudge against Chinese or Russian investors? Do you know the history of foreign investors in Mongolia getting expelled from the country as “exploiters”, so that only one foreign country could possess our country? Like it or not, but such questions are raised every time I think about topics such as “economic hit man” or “foreign exploitation” that are replacing the search for the assassin of Zorig Sanjaasuren.



Harvesting completes with abundant yields www.montsame.mn

Ulaanbaatar /MONTSAME/ Harvesting has completed nationwide, cropping 409.6 thousand tons of wheat, 160.9 thousand tons of potato, 93.6 thousand tons of vegetables, 117.8 thousand tons of fodder plants and 19.3 thousand tons of oil plants.

Compared with the previous year, increases were shown in wheat by 172.6 thousand tons, potato by 44.5 thousand tons, vegetables by 14.5 thousand tons, fodder plants by 57.3 thousand tons and oil plants by 7.2 thousand tons respectively.

This year’s yield has made it able to entirely provide domestic needs of wheat and potato.

Last spring, Government resolved to establish farming areas which cover territories of 113 baghs /the smallest administrative unit/ of 60 soums of seven aimags and is now adhering to a policy of seed improvement and technical modernization and to enlarging irrigated fields.



Chinese police chief kills himself after two former colleagues come under corruption cloud www.scmp.com

A top public security official in China’s resource-rich region of Inner Mongolia killed himself on Thursday, just days after two of his former colleagues were taken away for investigation by anti-corruption officials.

In a one-sentence report the same day, state-run Xinhua news agency said Li Zhibin, 51, deputy head of Inner Mongolia’s Public Security Department and chief of public security in the regional capital of Hohhot, took his own life.

The report did not say what prompted the death but on Friday Inner Mongolia’s official news website reported that Li left a suicide note saying he had been suffering from depression.

A senior Chinese law enforcement veteran familiar with the situation told the South China Morning Post that Li’s death was related to the corruption investigations.

“Inner Mongolia has been a main target of the nation’s anti-corruption effort and recently we have seen many officials taken away for investigation, especially in the law enforcement agencies,” the source said.

China executes former Inner Mongolia police chief for murder and bribery
On Monday, Inner Mongolia’s Communist Party disciplinary watchdog announced that Du Baojun, deputy director of public security in Hohhot, had been detained for investigation.

Du worked with Li for two years at the Baotou public security bureau and again in Hohhot after Li was transferred to the regional capital.

The same watchdog announced on Tuesday that Meng Jianwei, deputy director of public security in Inner Mongolia, had also been detained for investigated. Meng was Li’s superior in Baotou from 2003 to 2009.

Inner Mongolia’s law enforcement system has been plagued by corruption and scandal. As chief of police in Chifeng, Li was part of the task force investigating the case of Zhao Liping, Inner Mongolia’s former top cop, who murdered a woman he had an affair with. Zhao was later sentenced to death.



Resource update shows Xanadu has its foot on a monster in Mongolia www.stockhead.com.au

Xanadu Mines has confirmed its Kharmagtai project in Mongolia’s South Gobi Desert as one of the largest undeveloped copper and gold assets in the world with the release of a new resource estimate.

And there’s more to come, with the company describing the resource update announced last Wednesday as an “interim” step ahead of delivering a larger global resource update for the project.

Following the interim update, indicated and inferred resources at Kharmagtai now stand at 598 million tonnes containing 1.9 million tonnes of copper and 4.3 million ounces of gold (2.6 million tonnes of copper equivalent metal or ).

Within the broader resource is a shallow, higher grade core of 54 million tonnes grading 0.86% copper equivalent, 61% of which is in the higher-confidence “indicated” category.

The new resource represents a 400% increase in contained copper and a 249% increased in contained gold compared to the maiden Kharmagtai resource published by the company in March 2015 and will serve as the basis for a scoping study on a shallow, high grade starter pit development, the results of which are expected this quarter.

“We are extremely delighted with the new results, particularly the substantial increase in the open pit, shallow resource base at Kharmagtai,” Xanadu managing director Andrew Stewart said.

“With a 400% increase in contained copper, we are confident that the upcoming scoping study will show a financially robust starter project that will pave the way for Kharmagtai to develop into another high-quality Mongolian mining operation.”

The global resource update will include the Zaraa discovery made earlier this year, which has been labelled by Xanadu as a potential game changer.

Zaraa, where mineralisation has been intersected to a depth of 1,200 metres and remains open, is expected to have a significant positive impact on the overall scale and grade of the Kharmagtai resource.

“To go from discovery to a maiden mineral resource estimate at Zaraa in a short space of time will not only validate the exploration methodology used by Xanadu but highlight the speed at which projects can be advanced in Mongolia,” Stewart said.

There are multiple other shallow drill targets within the Kharmagtai leases that will be assessed systematically by Xanadu with a view to discovering additional porphyry deposits to add to the project’s growing resource base.

Based on contained copper equivalent metal, Kharmagtai is currently just over one-third the size of Solgold’s Cascabel project in Ecuador, which has attracted corporate interest from BHP and Newcrest Mining.

The mineralisation at Kharmagtai starts at surface and appears amenable to open pit mining, whereas Cascabel will need to be mined from underground.

Xanadu shares closed at 12c on Friday, capitalising the company at $77.8 million.


Xanadu Mines is a Stockhead advertiser.

This advice has been prepared without taking into account your objectives, financial situation or needs. You should, therefore, consider the appropriateness of the advice, in light of your own objectives, financial situation or needs, before acting on the advice. If this advice relates to the acquisition, or possible acquisition, of a particular financial product, the recipient should obtain a disclosure document, a Product Disclosure Statement or an offer document (PDS) relating to the product and consider the PDS before making any decision about whether to acquire the product.



Millions in funding announced for renewable energy project in Mongolia www.cnbc.com

The Asian Development Bank (ADB) and Mongolian government have signed loan and grant agreements relating to renewable energy and the improvement of tax administration and public investment management. The total cost for both the projects amounts to $85.6 million.

In an announcement Friday, the ADB said that the renewable energy loan would help Mongolia develop a 41-megawatt distributed renewable energy system that uses solar photovoltaic and wind power. It will also use advanced battery storage technology and energy management systems. Photovoltaic refers to a way of directly converting light from the sun into electricity.

The ADB said the project would supply clean electricity to around 260,000 people living in “remote and less-developed towns in western Mongolia.” It added that, at the moment, these communities were reliant on expensive and “high-polluting carbon-intensive electricity.”

The ADB’s funding of $40 million is being backed by grant co-financing, with $14.6 million coming from the Strategic Climate Fund under the Scaling Up Renewable Energy Program in Low-Income Countries.

A further $6 million will come from the Japan Fund for the Joint Crediting Mechanism, which is a single-donor trust fund set up in 2014. It is supported by the Japanese government and managed by the ADB. The Mongolian government is making a contribution of $5.6 million.

“These projects will support the government’s efforts to raise the share of renewable energy, decrease carbon dioxide emissions, and improve public financial resource mobilization and management,” Yolanda Fernandez Lommen, the ADB’s country director for Mongolia, said in a statement Friday.

Headquartered in the Philippines, the ADB was set up in 1966. Its operations in 2017 amounted to $32.2 billion, with $11.9 billion in co-financing.

In November 2017, the ADB approved a $44.76 million grant to finance the construction of a 20-megawatt on-grid solar photovoltaic plant in Afghanistan.

At the time, the ADB said the new facility would boost renewable energy generation and supply in the country, producing at least 43,000 megawatt hours of solar power.



Draft resolution of Mongolia’s international security and nuclear-weapon-free status approved www.montsame.mn

Ulaanbaatar /MONTSAME/ On November 1, the First Committee (Disarmament and International Security) of the United Nations General Assembly approved a draft resolution of Mongolia’s international security and nuclear-weapon-free status.

In 1992, Mongolia declared its territory a nuclear-weapon-free zone, received support from the General Assembly. Since 1998, the resolution has been approved biannually.

The General Assembly called on other UN Member States to continue to cooperate with Mongolia in taking the measures necessary to consolidate and strengthen Mongolia’s independence, sovereignty and territorial integrity, the inviolability of its borders, its independent foreign policy, its economic security and its ecological balance, as well as its nuclear-weapon-free status.

Mongolia’s nuclear-weapon-free status has a great significance for actions of the international organization in disarmament and non-proliferation of nuclear weapons.

In 2017, the 25th Anniversary of Mongolia’s nuclear-weapon-free status was marked and Secretary-General António Guterres sent a congratulatory message in which he noted that Mongolia’s nuclear-weapon-free status is 'unique'. He also highlighted that the UN highly appreciates the achievement of the Mongolian Government and its people towards nuclear-weapon disarmament and the non-proliferation of weapons.



Turquoise Hill announces financial results and review of operations for the third quarter of 2018 www.turquoisehill.com

Turquoise Hill Resources today announced its financial results for the quarter ended September 30, 2018. All figures are
in U.S. dollars unless otherwise stated.
“During the third quarter, we delivered strong operational results in the open-pit mine, continued to progress underground
construction while achieving industry-leading safety performance,” said Ulf Quellmann, Chief Executive Officer. “The high
quality of our mining assets, as well as the strength of our management team, were instrumental in our ability to
successfully deliver such results. We are focused on demonstrating the value of Turquoise Hill to our shareholders and
the broader market.
“In our open-pit mine, we generated increases of nearly 150% in gold production and nearly 7% in copper production
resulting in lower unit production costs compared with the third quarter of 2017. The higher volumes, which offset the
impact of lower copper and gold prices, allowed us to maintain stable revenue in the third quarter of 2018 compared with
a year earlier.
“Underground, we continued to move forward with the construction of critical infrastructure to transform Oyu Tolgoi into a
true Tier One asset with the potential to operate for approximately 100 years. Underground development will deliver one
of the largest copper mines globally, with cash costs at the bottom of the cost curve.”
 Oyu Tolgoi achieved a strong All Injury Frequency Rate of 0.19 per 200,000 hours worked for the nine months ended
September 30, 2018.
 Copper production of 39,400 tonnes during Q3’18 increased 6.8% versus Q3’17 as higher grades and recoveries were
partially offset by lower throughput.
 Gold production of 77,000 ounces during Q3’18 increased 148.4% over Q3’17 due to higher grades and recoveries.
 Mill throughput in Q3’18 decreased 9.1% over Q3’17 due to increased processing of harder Phase 4 ore as well as a
planned maintenance shutdown during the quarter.
 Revenue of $246.5 million in Q3’18 maintained at Q3’17 levels by virtue of higher gold sales volumes offsetting lower
copper and gold prices.
 For Q3’18, Oyu Tolgoi’s cost of sales was generally lower than in Q3’17 at $2.28 per pound of copper sold (down 6.2%
from $2.43: Q3’17), C1 cash costs of $1.65 per pound of copper produced (down 9.8% from $1.83: Q3’17) and all-in
sustaining costs of $2.29 per pound of copper produced (down 17.0% from $2.76: Q3’17)1

Total operating cash costs2 of $196.4 million in Q3’18 increased 21.3% over Q3’17 mainly due to increased open-pit
and concentrator costs resulting from higher maintenance costs, higher input costs as well as lower capitalization of
production phase stripping costs.
 Turquoise Hill has updated its guidance for 2018 operating cash costs2
from approximately $700 million to approximately
$800 million due to higher freight and royalty costs associated with increased sales revenue, a reduction to deferred
stripping costs capitalized as well as higher input prices, maintenance and power study costs.
 Turquoise Hill has also updated its guidance for 2018 open-pit capital expenditure from approximately $150 million to
approximately $120 million due to lower capitalized deferred stripping and deferral of projects from 2018 into 2019.
 During Q3’18, underground lateral development progressed 3.0 equivalent kilometres for a cumulative total of 15.7
equivalent kilometres since project restart.
 Pre-sinking activities for Shafts 3 and 4 progressed during Q3’18, including a box cut, and sinking for both shafts is
expected to commence mid-2019.
 Underground expansion capital for the nine months ended September 30, 2018 was $866.5 million, resulting in total
project spend since January 1, 2016 of $1.9 billion.

Income in Q3’18 was $15.2 million compared with $47.7 million in Q3’17. The decrease is primarily due to $86.0 million
of additional deferred tax assets recognized in Q3’17 compared to Q3’18, partially offset by a reduction to finance costs in
Q3’18 compared to Q3’17, due to increased amounts capitalized to property, plant and equipment. Cash generated from
operating activities in Q3’18 was $76.2 million compared to $109.1 million in Q3’17. This decrease was due primarily to
the impact of higher vendor payments in Q3’18 compared to Q3’17 as a result of higher operating cash costs incurred in
Q2’18 compared to Q2’17. Capital expenditure on property, plant and equipment was $328.8 million on a cash basis in
Q3’18 compared with $234.0 million in Q3’17, attributed principally to underground ($304.8 million) with the remainder
related to open-pit capital activities.
Turquoise Hill’s cash and cash equivalents at September 30, 2018 were approximately $1.5 billion.
The Oyu Tolgoi mine is approximately 550 kilometres south of Ulaanbaatar, Mongolia’s capital city, and 80 kilometres
north of the Mongolia-China border. Mineralization on the property consists of porphyry-style copper, gold, silver and
molybdenum contained in a linear structural trend (the Oyu Tolgoi Trend) of deposits throughout this trend. They include,
from south to north, the Heruga Deposit, the Oyut deposit and the Hugo Dummett deposits (Hugo South, Hugo North and
Hugo North Extension).
The Oyu Tolgoi mine was initially developed as an open-pit operation. The copper concentrator plant, with related facilities
and necessary infrastructure, was originally designed to process approximately 100,000 tonnes of ore per day from the
Oyut open pit. However, since 2014, the concentrator has improved operating practices and gained experience, which has
helped achieve a consistent throughput of over 105,000 tonnes per day. Concentrator throughput for 2018 with harder ore
is now expected to be 38 million to 39 million tonnes compared to previous expectations of approximately 40 million tonnes.
In August 2013, development of the underground mine was suspended pending resolution of matters with the Government
of Mongolia. Following signing of the Oyu Tolgoi Underground Mine Development and Financing Plan (Underground Plan)
in May 2015 and the signing of a $4.4 billion project finance facility in December 2015, Oyu Tolgoi received formal notice
to proceed approval by the boards of Turquoise Hill, Rio Tinto and Oyu Tolgoi LLC in May 2016, which was the final
requirement for the re-start of underground development. Underground construction recommenced in May 2016.



Fingers in the till? Mongolian Minister resigns www.news.mn

B.Batzorig, Food, Agriculture and Light Industry Minister of Mongolia announced his resignation on Wednesday because of financial irregularities. The resignation was demanded by the ruling Mongolian People’s Party Group in parliament.

Recently, reports have been made public about how some members of parliament and their relatives obtained loans with low interest rates from a special fund for developing small and medium-sized enterprises. The fund is directly linked to Batzorig’s ministry. Batzorig’s wife is, allegedly, among those who obtained loans from the fund.