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Press release

Speech by Andrew Woodley, President and CEO, on second anniversary of commencement of shipments

Shaft 1, Oyu Tolgoi site


Udriin mend.

Ta buhen sain baitsgaana uu.

It is a great privilege to speak with you today, here at our site, the beating heart of our business, and especially to be here at the underground – the future of our business.

The 9th of July is, without a doubt, a special date in our history.

Two years ago on this day, OT shipped its first batch of concentrate for export and our birth as a real, operating business took place.

It took an extraordinary effort to arrive at this date back in 2013 – thousands of people came together to build this amazing project deep in the Gobi.

But building the mine was only the first step – what has been achieved since is even greater; and this is a story of what can be achieved by working together towards a common goal.

The past year has been one of transformation – taking Oyu Tolgoi from a nascent operation, to a rapidly maturing, world-class Mongolian business that is raising the bar not only at home, but around the world.

Just look at the highlights:

  • Safety remained – and remains – our absolute priority. We have made good progress, and continue to drive a strong safety performance – ranking with the best among our peers.
  • We crossed a landmark milestone: one million tonnes of concentrate shipped - a real credit to everyone, particularly the operations and logistics teams.
  • We achieved all this together with our partners – over 800 companies across Mongolia providing goods and services. This accounted for nearly 80 per cent of all we spent over 2014. Behind these Mongolian companies stand over 35,000 workers and their families.
  • We are rapidly becoming a highly skilled workforce, capable of running this project to the standards that our shareholders, partners and other stakeholders rightly expect.
  • After two years of full operations, we are in a position to contribute to this development beyond our own fence. I was proud to recently sign a MoU with Erdenet Mining Corporation focused on sharing global best practices in health, safety, environment and community engagement.
  • Our relationship with our partner communities – built on a foundation of mutual trust and respect – continues to build. I am confident that - together - we are well on the way towards achieving a relationship that provides truly sustainable development in the long term.
    • Since 2010 we have made social investments of nearly 35 million dollars, of which nearly 19 million was invested in community projects.
    • We partnered with the UN to set up a Youth Development Centre in Khanbogd.
    • We supported the “Mongol ger” project which aims to bring Mongolia’s ancient nomadic culture to urban school children.
    • We opened the Community Interaction Centre in Khanbogd to facilitate our day-to-day interactions.
    • We also opened the Galba Public Park in Khanbogd, the first of its kind in the region.
    • And most recently, we have signed a landmark Cooperation Agreement with our partner communities, committing US$5 million every year – and laying the foundations for a true long-term partnership.

There are many such milestones for us to remember and reflect on, but what is most striking is that all this has been achieved during turbulent times.

The world is going through major structural shifts and the commodities markets – which we serve – have been under significant pressure.

We have responded, and continue to respond to this as a business – we are ramping up productivity, and bringing down costs.

Here, we can point to some extremely impressive examples of changes – changes that you have all driven and delivered.

Take the truck tray extension programme. By spending just one million dollars in-house modifications, instead of over ten million dollars on new haul truck trays; we increased the average haul of a truck from 265 tonnes, to 290 tonnes. That’s the equivalent of carrying an additional ten Land Cruisers in weight on every run.

Our procurement team, by working with domestic companies, managed to reduce our fuel bill by more than 12 million dollars per year.

And the Concentrator team has even created a brand new composition of chemicals –
called OTZ – to improve metal recovery through floatation.

This is just one of many incredible improvements made in the concentrator.

This is innovation. Very impressive innovation – and shows our team, solving our challenges, to deliver our mission.

This is incredibly important. We face a very challenging environment with a weak market and low commodity prices, and an open pit where our grades will fall in the coming years. It is critical that we continue to adapt our business position to safely focus on cashflow, bring down costs and maximize productivity.

I say this to remind each one of us that, while there is much to be proud of, our work is not yet done; and, even as we focus on the day-to-day, we must keep our eye on to horizon.

We are today at the door of another major transformation. A little over a month ago, our shareholders signed the Underground Development Plan for Oyu Tolgoi, setting out a clear road map to develop with underground.

This next stage will mark Oyu Tolgoi’s emergence from adolescence, becoming a major
player on the world stage.

And, as we are here, at Shaft one, which has stood quiet for nearly two years, I want to take the opportunity to recognize the underground care and maintenance team which has, for 22 long months, undertaken hard and sometimes lonely work. Work which has been essential in ensuring that, in time, we would be able to re-start the underground – safely and successfully.

All of us are grateful to the team. As a sign of our thanks, I would like to invite Nergui and Dandar, on behalf of the whole team, to come up and receive a mark of our appreciation.


Thank you, Nergui and Dandar.

As you know, there is work to do before we restart construction here. But preparations are well underway, and I am tremendously excited about getting started.

Delivering this project will be significant work, and I would like to pause and reflect on where it will take us.

We rolled out ‘Our Vision, Our Future’ earlier this year. We did this so we can shape
where we want to be decades from now.

Our mission outlines our focus as a business: work together to deliver a safe and globally competitive copper business that contributes to the prosperity of Mongolia.

Each one of us should be proud of what we have already achieved in two years.

Looking further out, I see our future through the lens of our vision: from natural wealth to enduring value, knowledge and skill.

We have – all of us – been given the opportunity to be part of something greater, a project with the potential to be truly transformative. Not just in the sphere of our own business, but as a catalyst for broader development and prosperity.

From children playing in Galba Park today who in time will find new and high-skilled jobs, to businesses that have not even been set up yet, but will one day serve the world from the South Gobi.

While we look out onto this future – a future where OT will play a role in many lives, it is important to remain humble. We are a business that must primarily serve our customers and shareholders, including the Government of Mongolia.

I, for one, am very proud and excited to set out on this journey with you – the Oyu
Tolgoi family, and our many partners and stakeholders.

Today we are a few days past the Naadam celebration in Khanbogd, and just a day from national Naadam celebrations in Ulaanbaatar and around the country. This is a time of celebration, giving thanks and coming together to mark another summer.
It is time of joy and optimism, something – which I truly hope – each one of us shares. We have a long road ahead, but while it may be not always be easy, it is one full of
opportunity.

Looking around this room, I am reminded again that people are our greatest asset. Working together – with a total commitment to our own and each other’s safety – I am sure we will deliver on our potential and our promise.

On that note, I would like to thank each one of you for your hard work and commitment, and wish you and your loved ones a happy and safe Naadam.

Bayarlalaa, ta buhen saikhan naadaarai.

About Oyu Tolgoi LLC (www.ot.mn)

Oyu Tolgoi LLC, Mongolia's largest copper and gold mining company, is a strategic partnership between the Government of Mongolia, Turquoise Hill Resources and Rio Tinto. Located in the South Gobi, Oyu Tolgoi commenced shipment of product to customers in July 2013. Oyu Tolgoi is managed by Rio Tinto, which is investing global expertise and cutting-edge technology to help develop Mongolia’s mining industry and ensure Oyu Tolgoi is one of the world’s most advanced mines. For Oyu Tolgoi, nothing matters more than safety. The business operates under the principle that if a job cannot be done safely, it will not be done at all.

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