23.05.2012 developing sustainable mining operations in mongolia, julien lawrence

Local knowledge International experience Focused on success

Julien Lawrence – Mining Services Manager - Leighton Asia

Developing a Sustainable Mining Operation in Mongolia


• Building a cohesive mining team in Mongolia

• Training and technologies for sustainable operations

• Strategy for rapid ramping up of coal production in Mongolia

CoalTrans Mongolia 2012 - Presentation Agenda

2


Building a cohesive mining team in Mongolia

Delivery Structure

Owner Miner OR Contractor?

Questions for Owner Miners

Can the Capex be secured for the mining fleet?

Is there more value in investing capex into business growth rather than operating

needs?

Do I have access to resources required to successfully deliver against key objectives?

Experienced technical, operational and support personnel

Training systems and trainers

OEM relationship and plant support team

Will the operations distract management from the core focus of the business – i.e.

selling the product and delivering maximum cash flow

3



- Selection of contract based delivery strategy

Example SoR / D-B-B EPC / D-B Alliance /

Partnering

BOOT / PPP

Is the Project… Traditional Collaborative Integrative Partnership

Large? O P P P

Complex? O O P P

Subject to a high risk of scope/design change? O O P P

Subject to high interface risk? O O P P

Does the owner…

Need the project delivered quickly? O P P O

Have strong project management resources? O P P O

Have an appetite to share project risks? O P P O

Have requirements that may evolve with design work? O P P O

Require strong "oversight" role? P P O O

Have a pipeline of other similar or identical projects? P P O P

Source: KPMG International, Project Delivery Strategy: Getting It Right, 2010

P The decision driver suggests that this procurement model is suitable

O The decision driver suggests that this procurement model may not be optimal

Delivery Strategies

De

cis

ion

Fa

cto

rs

4


XYZ MINING COMPANY Geology

Administration

Processing

Planning Commercial Safety

HR

Exploration

Environmental Quality/Systems

IT Management Corporate

Mining

Geotechnical Accounts

Maintenance

Engineering

XYZ MINING COMPANY Geology

Administration

Processing

Planning Commercial Safety HR

Exploration




Maintenance

Engineering

Mining Contractor

XYZ MINING COMPANY

Geology Administration

Processing

Planning Commercial Safety

HR

Exploration



Mining Alliance Contractor


Maintenance

Engineering


- Owner Miner or Contractor?

OWNER MINER TRADITIONAL CONTRACTING

INTEGRATED APPROACH

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Integrated Contract has significant advantages

Total integration into the mining team

Optimised capital expenditure profile

Most efficient utilisation of resources

Labour

Materials and Consumables

Equipment

Focused safety culture

Flexible plan – optimised cash flow

Access to a large pool of experience

Sharing of risks and aligning of business drivers

Leading continuous improvement strategies

Cost savings flow through to the project owner

Target is safest and lowest cost / tonne out the gate


6


Minimal expatriates – mentors not managers

Clear and culturally aligned core values

Focus on local content Operational personnel

Procurement

Services

Focus on training and knowledge transfer

Zero duplication of roles

A clear road map for staff development into senior

positions


- Important features for a Mongolian Operation

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Local knowledge International experience Focused on success 8

Competency Based

Training Programs

Senior Management

and Leadership

Development Strive for L.I.F.E Safety

Training Program

Administrative business

systems and values

Professional and

Technical Development

Entry Level to Advanced Operator Training

Trades / Skilled

technician program

Cultural awareness and social

responsibility

Integrated project-based

solutions

Training and technologies for sustainable operations

- Depth of training



Mining Training Library

Library of training course material for operational and mechanical training, accessible by project teams across

Leighton Asia countries over the intranet

Staff Training & Development Programs

Variety of training made available to staff/managers to support their professional and personal development.

Including management and leadership courses

Performance Development reviews

Needs analysis reviewed bi-annually for all staff and training plan implemented

Young Talent Management Program

- University Scholarships

- Internships

- Graduate Development Program

- Overseas experience – study, training and employment opportunities

Leighton Master Degree in project management

Development opportunity for engineers in conjunction with University of new South Wales, Australia

AFS Program

Opportunity for children of staff members to be awarded secondary school education grants to broaden their

worldwide knowledge.

9


Graduate Mining Engineer Development Program

Structured development framework for recruited graduates to develop into professional mining

engineers

No. of Graduates Location Commencement

Date

3 UHG, Mongolia March 2012

1 Khushuut, Mongolia April 2012

2 Seconded to Hong

Kong January 2012

Scholarship Programs

Leighton sponsored scholarship programs at Mongolia University of Science & Technology and

to develop a mining talent pipeline in a competitive market

No. of Scholars Location Mining Civil Mechanical

Final year

3rd year Mongolia University(s)

5

5

3

2

2

2


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Graduate Career Development Program

Phase 1

• Site Operations

Phase 2

• Technical Development

Phase 3

• Project Management

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Staff To Development

Zolboo

Hong Kong tunnel project

- 1 Year Training Work Visa

Tunneling/Heavy Civils

Drill and blast

International experience

Tamir

Hong Kong tunnel project

- 1 Year Training Work Visa

Tunneling

Drill and blast

International experience

Zoloo Australia mine sites

- mining delegation tour

Exposure to techniques and

technologies in use across

Victoria, New South Wales,

Queensland projects

Enkhbold Hong Kong head office

- Planning and estimation

Multiple commodities, risk

management exposure,

estimating systems

Baggy

Hong Kong head office

- Planning and estimation

Risk management and reporting

/ auditing

HR / Training / Safety Staff Hong Kong head office

- Systems, compliance training

Corporate systems and

international standards

management


International Experience and Professional Development

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Local knowledge International experience Focused on success 13


- Training Management Systems

• Tracking of training objectives

• Simulator Utilisation Focus

• Data input daily and reporting

monthly

• Tracking across all projects

• Reference library available online

• Covers core operating and

technical training areas

• Developing professional and

administration reference library

as next phase

• Customisable for each project


Strategy for rapid ramp-up of coal production in Mongolia

- Research and planning

In-Situ Delivered

to Buyer

Coal Quality Testing

Dry Washed / Wet Washed

Coal Washability Testing

Resource Definition Completed – Folding / Faulting / Oxidation / Seam thickness / Dip / Strike / etc

Does coal need to be transported through China or Russia?

In-Fill Drilling Completed

Only Russian Drilling Data

Adequate access through Mongolian/Chinese Border

Approvals, Licenses and Permits in place

Deposit robust enough to support adequate transport to border


Sell Raw Coal? Marketing / off take

ESIA Completed and approved

Community Interface - No promises you cannot keep

Adequate water




• Exploration License Acquisition

• Resource definition

• Desktop / scoping studies

• Pre-feasibility study

• Definitive feasibility study

• Feed / BES / DES

• Permitting and licenses

• Construction and Commissioning

• Production!!

Marketing, off take agreements

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Strategy for rapid ramp-up of coal production in Mongolia

- Strategy

Research, research, research

Early identification of critical path activities in the program

Local and regional social and political landscape

Infrastructure requirements – particularly if offsite

Water / natural resource needs

Regulatory requirements – understand well in advance

Management plans in place to ensure delivery of critical path expected outcomes

Realistic understanding of achievable timeframes

Early identification of all potential partners/support services

Clear public engagement – no promises that can’t be kept

Comprehensive training and succession planning

15


Thank You

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23.05.2012 developing sustainable mining operations in mongolia, julien lawrence

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