ON MEASURES TO INCREASE MONGOLIA’S BENEFIT FROM THE OYU TOLGOI DEPOSIT (RESOLUTION OF THE PARLIAMENT OF MONGOLIA)

FULL TEXT OF THE RESOLUTION OF THE STATE GREAT KHURAL (PARLIAMENT) OF MONGOLIA

December 30, 2021

Resolution No. 103

Government Palace, Ulaanbaatar

ON MEASURES TO INCREASE MONGOLIA’S BENEFIT FROM THE OYU TOLGOI DEPOSIT

Pursuant to Article 5.1 of the Law on the State Great Khural, the State Great Khural hereby RESOLVES:

1. In order to implement Resolution No. 92 of November 21, 2019, titled “Ensuring Mongolia’s Interests in the Utilization of the Oyu Tolgoi Deposit”, and in consideration of proposals submitted by the foreign investor within the framework of negotiations between the Government of Mongolia and the Oyu Tolgoi Project’s foreign investor, the Government of Mongolia (Prime Minister L. Oyun-Erdene) is hereby authorized to take the following measures in accordance with Mongolian legislation:

1/ To write off in full the accumulated debt of USD 2.3 billion owed by Erdenes Oyu Tolgoi LLC (representing Mongolia’s 34% ownership in the Oyu Tolgoi Project) to Turquoise Hill Resources Ltd. as of December 31, 2021;

2/ To annul, in compliance with the law, the “Oyu Tolgoi Underground Mine Development and Financing Plan” signed on May 18, 2015, as well as its “Additional Financing Plan,” between the Government of Mongolia, Erdenes Oyu Tolgoi LLC, Turquoise Hill Resources Ltd., THR Oyu Tolgoi Ltd., Oyu Tolgoi Netherlands B.V., Rio Tinto International Holdings Ltd., and Oyu Tolgoi LLC;

3/ To conduct an independent audit of the underground mine development financing of the Oyu Tolgoi Project;

4/ To require the foreign investor to fully bear any additional costs incurred until the start of extraction from the Oyu Tolgoi underground mine, projected for the first half of 2023, without creating additional debt obligations for Erdenes Oyu Tolgoi LLC and without raising further debt financing from shareholders or third parties for Oyu Tolgoi LLC;

5/ To improve the corporate governance of Oyu Tolgoi LLC; to conclude a power supply agreement from Mongolia’s central energy grid; and to cooperate in improving water usage, environmental protection, social responsibility, and governance;

6/ To ensure compliance with tax audit findings, and to secure the foreign investor’s agreement to a clear and consistent interpretation and application of tax laws going forward.

2. Upon full implementation of the measures set forth in Clause 1 of this resolution, Resolution No. 92 of November 21, 2019, “Ensuring Mongolia’s Interests in the Utilization of the Oyu Tolgoi Deposit”, shall be considered fulfilled.

   
   

3. The Standing Committee on Economy (J. Ganbaatar) and the Standing Committee on Security and Foreign Policy (B. Battömör) of the State Great Khural shall be tasked with monitoring the implementation of this resolution.

CHAIRMAN OF THE STATE GREAT KHURAL

G. ZANDANSHATAR

Source: https://legalinfo.mn/mn/detail?lawId=16389951932261

Translated from Mongolian