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					COAL-TO-GASOLINE PROJECT




                           1
                                  ICM LLC
• Established and organized in 2007 under laws of Mongolia.

• 100% private company.

• Founders of our company:
    – Many years’ of experience in project management and implementation
      and doing business in mining and minerals sectors.
    – Good relations with technological, engineering companies and financial
      institutions

• We are aiming to initiate projects which are strategic and essential
  industrial plants for Mongolia’s development.

• These projects are basis of other industries.



                                                                               2
                      ICM Projects

1.   Coal-to-Gasoline (CTG) Project

2.   Power Plant (PPT) Project

3.   Trans-Mongolian Highway Project

4.   Cement Plant Project

5.   Coke Plant Project

6.   Integrated Iron and Steel Plant Project

                                               3
             Coal-to-Gasoline (CTG) Project

• ICM and Uhde, ThyssenKrupp signed a contract for Feasibility
  Study of CTG Complex.

• Capacity of the CTG Complex is:
   – 18,000 barrels per day of Gasoline
   – 270 ton per day of Liquid Petrolium Gas
   – Plus slag for Cement and Construction Materials

• Consumption: 675 ton per hour of lignite (before drying)

• Location: Tugrug Nuur lignite deposit, Bayan soum, Touv aimag
  (~170 km south-east of UB)

• Reserve: 210 million tons
  (acquiring more licenses and additional exploration and drilling in 2008
  would increase the reserve more than 300 million tons)
                                                                             4
                       Why Coal?
• Dependency of Mongolian petrolium market
• Not enough oil reserve in the territory for construction of oil
  refinery
• Dramatic increase in oil and natural gas prices

• Growth of Chinese economy and market

• Plenty of available coal reserves

• Proven technologies: Coal Gasification, Methanol Synthesis,
  Methanol-to-Gasoline

• More attention to Coal Liquefaction around the world

• More interest of investors in this sector


                                                                    5
What can be produced from Coal?




                                  6
          Coal-to-Gasoline Technology
• In-Direct Coal Liquefaction

• History:
  1925:
       Patent of Fischer-Tropsch Synthesis was granted.
  1944 он:
       25 plants in Germany producing 6.5 million tons of synthetic fuel
  1950 он:
       Sasol, South Africa was established. Now producing 175,000 bpd
       synthetic fuel.
  1970 он:
       Бензин үйлдвэрлэх катализийг гаргаж авсан байна.
  1980 он:
       Methanol synthesis pilot plant was built.
  1985 он:
       First commercial Natural gas-to- Gasoline plant was build in New
       Zealand and it has operated successfully for 10 years. Then it was
       converted to methanol plant.

                                                                            7
                   Coal-to-Liquid Processes
Three step processes will be used:
1. Coal to Synthetic gas
2. Synthetic gas to Methanol
3. Methanol to Gasoline
   (Production of diesel also takes similar steps)




                                                     8
Block Flow Diagram of CTG Processes




                                  9
Gasification Systems




                       10
Fischer-Tropsch & MTG Products




                             11
           Coal-to-Gasoline (CTG) Project
• Technologies to be used:
   – Coal Gasification: PRENFLO (Uhde)
   – Methanol to Gasoline: MTG (Exxon Mobil)


• Feasibility Study prepared by Uhde
  (Final report in May, 2008)


• Financial Advisor: Commerzbank, NY, USA and Trade &
  Development Bank of Mongolia

• Technical Advisor: Discussing with Fluor Corporation, USA and
  KOPEC, Korea Electric Power Company

• EPC: Will be chosen with assistance of Financial and Technical
  Advisors                                                         12
CTG Complex Block Diagram




                            13
                       Power Plant Project

• Scope of the Feasibility Study:
    –   Coal Fired Power Plant
    –   Open Cast Coal Mine
    –   Coal Drying Facility
    –   Water Treatment Facility
    –   Other Facilities

• Contractor: RWE Power International
    – Experience in EPC and O&M of Power Plants and Open Cast Mines
    – Operation in 8 countries in Europe including German and UK

• Financial Advisor: Commerzbank

• Owners Engineering: KOPEC, KEPCO submitted a proposal in
  April, 2008.

                                                                      14
                     Time Table of FS for PPT




Initial Proposal of Nov. 2008
                                                15
                    Project Financing
• As an owner, ICM has been financing the CTG and PPT Projects.
• Prospects of required investment:
   –   CTG Complex:   USD1.0 billion
   –   Power Plant:   USD 800 million
   –   Mine:          USD 200 million
   –   Others         USD 300 million
       Total          USD 2.3 billion




  USD 5 million         USD 25 million         USD 2.3 billion


                       Basic & Detailed       Purchase and
Feasibility Study
                         Eng. Design          Construction

                                                                 16
                  Advantages of the Project
1.    Technologies:
      ICM is collaborating with well-known technology and engineering
      companies in the world such as following:

     a)   Uhde (ThyssenKrupp) is one of the a few companies which
          have technology and experience in Engineering and
          Construction of commercial scale gasifiers.

     b)   Exxon Мobil ownes MTG technology and is one of the
          biggest oil and petroleum producing company in the world.

     c)   RWE Power International is a German company, which
          produces and supplies 81 per cent of total German electricity
          consumption.

     d)   KOPEC (KEPCO), Posco E&C, Daewoo Engineering are
          Korean best engineering companies.
                                                                      17
• One of the leading engineering company in the sector
    – Engineering design, EPC and O&M of coal, oil, residue gasification
      plants, oil refineries, coke plants etc.

• Annual revenue
    – EUR 1,0-1.3 billion, last year work order of EUR 800 million.

• References of over 2,000 plants around the world

• Experience in gasification:
    – Over 100 gasifiers over last 65 years
    – Implemented 8 gasification technologies in the practice.

• Branches and offices in 27 countries

• A subsidiary of ThyssenKrupp
                                                                           18
• Investment
   – 46 refineries in 46 countries
   – Has a capacity of 6.2 million barrels per day
• Operations and Management
   – 33 refineries
• Joint Ventures
   – 16 refineries
• Marketting
   –   45,000 gas stations in 118 countires
   –   700 airports in 80 countries
   –   150 ports in 60 countries
   –   1 million bulk purchasers and plants
• By-products
   – The biggest supplier in the world

                                                     19
                             Power International
•   Operation
    –   Construction, Operation & Management, Maintenance and Technical
        Support of power plants, Investment
    –   Coal and other open cast mines.

•   Europe:
    –   Power plants, coal mines, distribution and sale of electricity in 8
        countries of Central Europe including Germany and UK
    –   Produces 81 per cent of electricity and supplies 65 per cent of lignite
        consumptions of Germnay.

•   World:
    –   Feasibility Study, EPC and Technical Support for power plants in 65
        countires.

•   Annual revenue:
    –   Electricity – 255 Теrrа.W.h
    –   Natural Gas – 220 kilo.W.h

•   A subsidiary of RWE Group, RE GmbH
                                                                                  20
                        KOPEC (KEPCO)
• Operation
   –   FS, EPC of power plant, energy distribution systems
   –   Nuclear Power Plants
   –   Coal Fired Power Plants
   –   Project Management
   –   Technical Support

• Number of projects
   – Nuclear: 20 reactors (12 in operation, 1 under construction, 7 under
     development)
   – Coal fired: 43 power plants (37 in operation, 1 under construction, 5
     under development)

• A Subsidiary of Korea Electric Power Company




                                                                             21
                  Advantages of the Project
2. Financial:
   Commerzbank, NY is providing Financial Advisory Service for
   the Project.

   Scope of the service:
    –   Review and evaluation of Feasibility Study proposals/reports
    –   Supply and offtake agreements;
    –   Business risk analysis;
    –   Financial modeling for the Project;
    –   a timeline and plan of action for development stages of the
        Projects;
    –   debt and equity financing structures for the Project;
    –   Selection of a legal counsel and other advisors (as requirde) for the
        Project; and
    –   Identifying potential equity requirements and equity sources as well
        as equity advisors for the Project.


                                                                           22
                        COMMERZBANK

• 2nd biggest bank of Germnay
   – Established in 1870
• Year 2007:
   – Net income of EUR 1.92 billion
   – Operation revenue of EUR 2,513 billion
• Market Capitalization
   – EUR 17.3 billion
• Listed on 11 stock exchanges
   – Divident per share – EUR 1.0
• Cooperation with 5,000 banks
• Subsidiaries:
   – 159 company with ownership of more than 50 per cent
   – 610 company with ownership of less than 50 per cent


                                                           23
                   Advantages of the Project
3.   Resources:

     - Cheap coal supple: Cost of coal mining is less than USD10.0

     - Available infrastructure:
                 - Railway
                 - Road
                 - High Voltage Transmission Line of State-Grid.

     - Mining and Exploration Licenses, Land permission were
     obtained.




                                                                     24
                  Advantages of the Project
4.   Government Support

     Decisions and actions taken by Government:
     1. “Lists of Leading Sectors of Mongolia”,Sections C19 and D35,
        Government Decree #311 of 2006,

     2. “Approval of Guideline” /Stabilization of Costs/, Clauses 6.1
        and 4.1, Government Decree #307 of 2007

     3. “Organization of working group on development of strategy on
        Government support and participation to CTL project and oil
        refinery”, Order #12 of Minister of Industry and Trade, 2008.

     4. Discussion in the Cabinet Meeting, Wednesday, 14st of May
     and resolved that the Government supports our CTG project.

                                                                        25
             Result of the Project

• Mongolia becomes producer and exporter of gasoline

• Becomes independent from only one Russian supplier

• Annual Sale: ~ USD 1.2 billion

   – 25 per cent increase in GDP of Mongolia

   – Pay about USD 300 million to State Budget




                                                   26
                      Social Impact
Creation of new jobs:

   – Direct:
      • 4000-6000 jobs during construction period of 4-5 years
      • 3500 jobs for operation of the complex

   – Indirect:
       • 2000-3000 jobs during construction period
       • 5000 jobs when complex is in operation

   – Total:
      • 7000-9000 jobs during construction
      • 8000-9000 jobs when complex is in operation

                                                                 27
                        Social Impact

• Technical college for 3500 students

   – To provide basic engineering and technical knowledge

   – Technical skills

   – For preparation of work force to the complex.

   – Collaboration with universities and colleges of developed
     countries such as Australia, Germany and Canada.




                                                                 28
               Environmental Impact

• Decrease air pollution from coal buring.

   – Low cost LPG gas can be used in households for heating and
     cooking to replace coal.

   – Sulfur and Nitrogen free gasoline and LPG will be used for the
     most of the automobiles in the urban areas.




                                                                      29
Thank You

  Q&A

        Contact Information:

        Bayangol Hotel Office
        Sukhbaatar district, Ulaanbaatar
        Tel: 7011-0612
        Fax: 7011-0612
        Email: icm_mon@magicnet.mn
        Website: www.icm.mn


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