BERAL, INC.  
Andrew G. Racz  
Director of Research  
300 East 54 Street, Suite 26C  
New York, New York 10022  
Telephone: (212) 319-6949  
Fax: (212) 753-1944  

 E-mail: mlikar@aol.com   

November 15, 2007

It is one of the financial world’s most famous and certainly longest negotiations. Rio Tinto and Ivanoe are negotiating for about four years. Granted, the issues are great. It is a mining project that can produce up to $4 billion copper and gold per annum, and the world’s commodity market is on the up-trend.

To date, the global investors are carefully watching what’s happening with the Oyu Tolgoi investment agreement.

Your government is on the eve of signing the agreement. You have stated personally that you are committed to approving the agreement for Oyu Tolgoi in the present form as had been negotiated.

It is my considered opinion that an early formalization is vital for the future of Mongolia and the prosperity of your country. Mongolia is a unique country, it is the sixth largest in the world, it has 2.5 million people, and less than $2 billion in GNP. The project you are negotiating with the Ivanoe Group would at least double the GNP of your country and in fact, according to classical economics, the GNP of Mongolia could hit $6 - 7 billion in less than a decade.

Meanwhile, you cannot overlook the fact that there are forces in the world that engulf your country. The BHP-Rio merger would create a company with $360 billion in revenues and represent 25 percent of the world’s uranium production. Mongolia is involved.

The surge of gold price to $1,000 per ounce reflects the monetary turmoil that affects every country, every bank. Mongolia is involved.

The eventual shortage of commodities does represent prosperity, but at the same time unleashes forces of political nature so far unknown to mankind.

The world should never forget that in 1938 Maxim Litvinoff, the Russian foreign minster, stated in Geneva, “Peace is indivisible.”

I say to you that in the year 2007 economic cooperation is universal and indivisible.

Mongolia is a small country. Mongolia’s future is an unusual economic prosperity.

Yet, it needs the firm commercial ties that you make your country a permanent member of the civilized world.

Mongolia is a small country, but its resources are world class. Close the future of Mongolia with a signature that is honored in the 21st century. Much in 1938 was a political game. There is no politics with a firm and speedy commercial signature in the 21st century.

I was born in Hungary and I can state with all conviction that the special relationship between Mongolian and Hungary survived a thousand years. There is a Mongolian faculty at the best University in Budapest and the museum for Genghis Khan.

The Mongolia-Ivanoe contract is going to make history. It would represent an unbreakable commercial and international contract which can transform Mongolia into the Switzerland of East Asia. In any case, an early contract signed in a turbulent world by a country not far from North Korea, not far from Iraq, not far from Viet Nam – would be considered Mongolia’s Finest Hour.

I happen to know, in a far away country the Hungarians would also be delighted.

Andrew Racz
A Hungarian-Mongolian