Altain Khuder - Equity

repaying

The EBRD is considering an equity and debt financing to Altain Khuder LLC (‘the Company’ or ‘AK’) for the development of its Tayan Nuur iron ore mine in Mongolia. The project is part of a broad approach in support of the sustainable development of the Mongolian mining sector. Key transition impact objectives of the transaction include: Setting standards for corporate governance and business conduct: The project will improve standards in various areas of corporate and industry life. In particular, it will: (a) include a Corporate Governance Action Plan for both AK and its parent company, which will comprise specific measures for improvement of transparency and disclosure; (b) introduce the requirement for AK to comply with the disclosure process under the Extractive Industries Transparency Initiative in Mongolia. This is expected to have a significant demonstration effect since the Company is expected to become one of the largest private sector iron ore producers; (c) improve corporate, environmental and social management practices through the introduction of appropriate covenants in the financing documents including the preparation of a mine closure plan, compliance with the Environmental and Social Action Plan (ESAP), and the introduction of a Waste Management Plan; (d) introduce the first internationally audited IFRS financials in the iron ore sector in Mongolia; (e) introduce the first internationally audited iron ore reserves, in accordance with global JORC reserves standards; and (f) introduce an advanced mine management software at AK, such as ‘MicroMine’. Support to Private Sector Development. The project is expected to have a significant demonstration effect vis-a-vis other similar-sized producers. Through the proposed financing, the Bank will continue to support AK in establishing itself as a successful domestically-grown company, able to compete on international markets. Mongolia has sizeable deposits of iron, and produced/exported around 3.5 million metric tons of iron ore in 2010. Altain Khuder LLC, a Mongolian private mining company. Equity financing of up to US$ 25 million. US$ 100 million. Categorised B. Due diligence has identified environmental and social risks associated with the operation of the Project site that can be mitigated through appropriate commitment to good E&S practices. The client appointed an international consultant to undertake due diligence which has resulted in the development and adoption by the client of an agreed ESAP to meet the EBRD’s performance requirements (PRs). The Environmental and Social Action Plan will address mine and road rehabilitation, further assessment of macro-biodiversity, implementation of dust control, sustainable use of water and disclosure of relevant information and consultation with local communities. The findings of the consultant’s report reflect the conditions observed on site and the potential issues identified by ESD. With the full implementation of the ESAP the Project site is expected to achieve compliance with the EBRD PRs in a reasonable timeframe. None. Altain Khuder LLC Tengeriin Tsag Center Section D, Olympic Street 12, Sukhbaatar District Ulaanbaatar, Mongolia