Ivanhoe Mines : Management’s Discussion and Analysis for the period ended September 30, 2021

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2021

DATED: NOVEMBER 12, 2021

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INTRODUCTION

This management's discussion and analysis (MD&A) should be read in conjunction with the unaudited condensed consolidated interim financial statements of Ivanhoe Mines Ltd. ("Ivanhoe", "Ivanhoe Mines" or the "Company"), for the three and nine months ended September 30, 2021, which have been prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting (IAS 34) and the audited consolidated financial statements of Ivanhoe for the years ended December 31, 2020 and 2019, which have been prepared in accordance with International Financial Reporting Standards (IFRS). All dollar figures stated herein are in U.S. dollars, unless otherwise specified. References to "C$" mean Canadian dollars and references to "R" mean South African Rands.

The effective date of this MD&A is November 12, 2021. Additional information relating to the Company is available on SEDAR at www.sedar.com. Certain statements contained in the MD&A are forward-looking statements that involve risks and uncertainties. See "Forward-LookingStatements" and "Risk Factors".

This MD&A includes earnings before interest, tax, depreciation and amortization (EBITDA), and "Cash costs (C1) per pound" which are non-GAAP financial performance measures. For a detailed description of each of the non-GAAP financial performance measures used in this MD&A, and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the Non- GAAP Financial Performance Measures section of this MD&A starting on page 39. The non-GAAP financial performance measures set out in this MD&A are intended to provide additional information to investors and do not have any standardized meaning under IFRS, and therefore may not be comparable to other issuers, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

THIRD QUARTER HIGHLIGHTS

• The Kamoa-Kakula Project began producing copper in May 2021 and achieved commercial production on July 1, 2021. Production for the third quarter was 41,545 tonnes of copper in concentrate, with year-to-date production of over 76,265 tonnes as of November 12, 2021.
• The initial 2021 production guidance range for copper in concentrate of 80,000 to 95,000 tonnes was raised to 92,500 to 100,000 tonnes, reflecting the successful completion of ramp-up of the Kakula Phase 1 concentrator.
• During its first quarter of commercial production, the Kamoa-Kakula joint venture sold 41,490 tonnes of payable copper and recognized revenue of $342.6 million, with an operating profit of $209.7 million and an EBITDA of $233.2 million.
• Kamoa-Kakula'scost of sales per pound (lb) of payable copper sold was $1.08/lb, while cash costs (C1) per pound of payable copper totaled $1.37/lb. Costs for the quarter reflect the measured ramp-up of production at Kamoa-Kakula to steady-state, and are expected to trend downward as the Phase 2 concentrator plant is commissioned and the mine's fixed operating costs are spread over increased copper production.
• Kamoa-Kakula'sPhase 2 construction is progressing well toward a Q2 2022 start-up, which will see a doubling of the mine's nameplate milling throughput to 7.6 million tonnes per annum (Mtpa). Phases 1 and 2 combined are forecast to produce approximately 400,000 tonnes of copper per year.
• Ivanhoe Mines recorded a profit of $85.4 million for Q3 2021, compared to a loss of $5.3 million for the same period in 2020. The Company's share of profit from the Kamoa-Kakula joint venture and the finance income therefrom were the principal contributors to the profit recorded in the current quarter.

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• The Company has a strong balance sheet with cash and cash equivalents of $579.7 million on hand as at September 30, 2021, and expects that the majority of Kamoa-Kakula's expansion capital expenditures on Phase 2 and Phase 3 will be funded from copper sales and facilities in place at Kamoa. Based on current market conditions, it is anticipated that shareholder loan repayments from Kamoa-Kakula will commence in 2022.
• During Q3, Ivanhoe continued its 2021 copper exploration program on its Western Foreland licences that cover approximately 2,550 square kilometres (km2) in close proximity to Kamoa- Kakula. Work in Q3 primarily was focused on completing the project's infrastructure program (all-weather road building and bridge construction) needed to allow Ivanhoe's drilling crews to access the highly-prospective exploration licences located to the south and west of the Kamoa and Kakula orebodies. Geophysical surveys (airborne, electromagnetic (EM), and gravity) were advanced during the quarter and are either complete or are nearing completion. Drilling during the quarter was focused on extending the copper discoveries at Makoko and Kiala.
• Platreef's updated feasibility study for the phased development plan is progressing well toward completion in early 2022. All design and engineering work has been completed with the cost estimates well advanced. The Shaft 1 changeover is progressing well in preparation for permanent rock hoisting in early 2022. Construction activities on the Shaft 2 headframe also are advancing.
• Financing arrangements for Platreef's first phase of development are nearing completion, which include a $300-million gold, palladium and platinum streaming facility, and a senior project debt facility of up to $120 million.
• The review of Kipushi's development and financing plan with joint-venture partner and state- owned mining company, Gécamines, is progressing well as Ivanhoe looks to resume development activities. Discussions with potential financing sources are in progress.
• At the end of Q3 2021, Kamoa-Kakula had reached 3.00 million work hours free of a lost-time injury, Kipushi had reached 3.66 million work hours free of a lost-time injury, and Platreef had reached 310,000 work hours free of a lost-time injury. In addition, the construction team at Kamoa-Kakula achieved 4.00 million hours worked without a lost-time injury in October 2021, a milestone that underscores the strict safety culture of the Kamoa Copper construction team.
• On November 12, 2021, Ivanhoe promoted David van Heerden to the role of Chief Financial Officer. David has been with Ivanhoe since 2011 in progressively senior finance roles, most recently Vice President, Finance, Treasury and Tax.

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REVIEW OF OPERATIONS

Ivanhoe Mines is a mining, exploration and development company. At present, the Company's financial performance is primarily affected by ongoing mining operations at its Kamoa-Kakula Project, and ongoing exploration and development activities being conducted at its three material properties and the highly prospective Western Foreland Exploration Project. These consist of:

• The Kamoa-KakulaProject. A joint venture between Ivanhoe Mines and Zijin Mining Group

Co., Ltd., ("Zijin" or "Zijin Mining") within the Central African Copperbelt in the Democratic

Republic of Congo's (DRC) southern Lualaba province. Ivanhoe Mines and Zijin Mining each hold an indirect 39.6% interest in the Kamoa-Kakula Project, Crystal River Global Limited (Crystal River) holds an indirect 0.8% interest and the DRC government holds a direct 20% interest. The Kamoa-Kakula Project began producing copper in May 2021 and, through phased expansions, is positioned to become one of the world's largest copper producers. (See "Kamoa- Kakula Project")

• The Platreef Project. Construction of the planned Platreef Mine on the Company's discovery of palladium, rhodium, platinum, nickel, copper and gold, on the Northern Limb of South Africa's
  Bushveld Igneous Complex is in progress. Ivanhoe Mines holds a 64% interest in Platreef, the South African beneficiaries of a broad-based, black economic empowerment structure have a combined 26% stake in the Platreef Project and the remaining 10% is owned by a Japanese consortium of ITOCHU Corporation, Japan Oil, Gas and Metals National Corporation; and Japan Gas Corporation. (See "Platreef Project")
• The Kipushi Project. The existing Kipushi Mine is located on the Central African Copperbelt in the DRC's southern Haut-Katanga province, one of Africa's major mining hubs. The mine, which operated between 1924 and 1993, is approximately 30 kilometres southwest of the provincial capital, Lubumbashi, and less than one kilometre from the DRC-Zambia border. Ivanhoe Mines holds a 68% interest in Kipushi; the state-owned mining company, La Générale des Carrières et des Mines (Gécamines), holds the remaining 32% interest. (See "Kipushi Project")
• The Western Foreland Exploration Project. A group of exploration licences totalling approximately 2,550 km2 and located in close proximity to the Kamoa-Kakula Project, the majority of which are 90%-100%-owned. Ivanhoe's DRC exploration group is targeting Kamoa- Kakula-style copper mineralization through a regional exploration and drilling program. (See

"DRC Western Foreland Exploration Project")

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KAMOA-KAKULA PROJECT

The Kamoa-Kakula Project, a joint venture between Ivanhoe Mines and Zijin Mining, has been independently ranked as the world's fourth-largest copper deposit by international mining consultant Wood Mackenzie. The project is approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of Lubumbashi. The Kamoa-Kakula Project began producing copper in May 2021 and achieved commercial production on July 1, 2021.

Ivanhoe sold a 49.5% share interest in Kamoa Holding Limited (Kamoa Holding) to Zijin Mining and a 1% share interest in Kamoa Holding to privately-owned Crystal River in December 2015. Kamoa Holding holds an 80% interest in the project. Since the conclusion of the Zijin transaction, each shareholder has been required to fund expenditures at the Kamoa-Kakula Project in an amount equivalent to its proportionate shareholding interest in Kamoa Holding. Ivanhoe and Zijin Mining each hold an indirect 39.6% interest in the Kamoa-Kakula Project, Crystal River holds an indirect 0.8% interest and the DRC government holds a direct 20% interest.

Kamoa-Kakula Q3 2021 summary of operating and financial data

Ore tonnes milled (000's tonnes)	861
Copper ore grade processed (%)	5.89%
Copper recovery (%)	83.40%
Copper in concentrate produced (tonnes) in Q3 2021	41,545
Payable Copper sold (tonnes)	41,490
Sales revenue ($'000)	342,584
Cost of sales per pound ($ per lb)	1.08
Cash cost (C1) ($ per lb)	1.37
EBITDA ($'000)	233,212

9,858 tonnes of copper in concentrate were produced in Q2 2021, bringing the year-to-date total tonnes produced as of September 30, 2021 to 51,403.

C1 cash costs are prepared on a basis consistent with the industry standard definitions by Wood Mackenzie cost guidelines, but are not measures recognized under IFRS. In calculating the C1 cash cost, the costs are measured on the same basis as the Company's share of profit from the Kamoa Holding joint venture that is contained in the financial statements. C1 cash costs are used by management to evaluate operating performance and include all direct mining, processing, and general and administrative costs. Smelter charges and freight deductions on sales to final port of destination, which are recognized as a component of sales revenues, are added to C1 cash cost to arrive at an approximate cost of delivered finished metal. C1 cash costs exclude royalties and production taxes and non-routine charges as they are not direct production costs.

C1 cash cost per pound of payable copper produced can be further broken down as follows:

Mining Processing

Logistics charges (delivered to China) Treatment, refining and smelter charges General and administrative expenditure

($ per lb)	0.36
($ per lb)	0.16
($ per lb)	0.35
($ per lb)	0.21
($ per lb)	0.29

C1 cash cost per pound of payable copper produced

($ per lb)

1.37

All figures in the above tables are on a 100%-project basis. Metal reported in concentrate is prior to refining losses or deductions associated with smelter terms. This MD&A includes EBITDA and "Cash costs (C1) per pound" which are non-GAAP financial performance measures. For a detailed description of each of the non-GAAP financial performance measures used in this MD&A, and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the Non- GAAP Financial Performance Measures section of this MD&A starting on page 39.

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