The first Mining Journal Awards were presented on December 24, 2010 at Monet restaurant in Central Tower. It was a glittering social event but its main importance lay in the fact that it was the first time a non-official entity -- more specifically, a magazine -- was honoring the bests in the mining sector. The third such event awaits us and we at the Mining Journal feel gratified that our pioneering move has become an annual fixture that so many look forward to.
The main reason for the success of our Awards is that people know the awardees are not chosen by a State organization for reasons often extraneous to their actual achievement. Our assessments are made by unbiased experts in the sector, not big officials with axes to grind. Such fair recognition contributes to the development of responsible mining. We also give the people an opportunity to vote during the selection process, strengthening the base of independence and reliability.
We broke with tradition in two other ways. Attendance at the event was free and the results were announced only when the awards were presented.
The Mining Journal instituted the Awards in an effort to change the unfortunate social perception of mining as nothing but money making and people’s habit of badmouthing the sector whenever there is something that does not please them. We wish to encourage the sector to be more productive and to adopt world standards as it grows.
The first year, awards were given in the following categories: Best Mining Activity, The Explorer of the Year, Best Green Miner, and Best User of Advanced Technology. The choice for the award for The Best Support Provider was made on the basis of popular voting. We received 300 votes from professional organisations and 1000 online votes from the public. Nomination invitations were sent out to 148 companies, of which 26 submitted their annual reports to be assessed.
The same number of invitations was sent out last year and 30 companies competed in five categories. Seeing that both the quality and the number of submissions had risen we added a new category in consultation with the judges’ panel. Both the participation and the evaluation indicated how the mining industry was developing and expanding. In that way, the Mining Journal Awards reflect the history of Mongolian mining.
This year’s Awards will be given in six categories: The Best Deposit of the Year, The Best Responsible Mining Activity of the Year, The Green Miner of the Year, The Best Use of Technology, Explorer of the Year, and Supplier of the Year. In addition, The Person of the Year and The Best Supporter Organization of the Year will be selected by members of the public and professional organisations. We are sure the number of companies in the fray will increase in every category, confirming that as the sector develops, so does the competition grow.
XAC Bank, one of the leading banks of Mongolia, has agreed to sponsor the award in The Green Miner of the Year category to show its special appreciation of a company that cares for the environment. Competition in this category is always fierce, and the videos submitted show how hardsome companies work throughout the year for rehabilitation.
We give below some comments, from both judges past and present and the public, on the Mining Journal Awards.
MP Kh.Narankhuu:The Awards play a significant role in supporting mining activities, in establishing connections, in informing and training, and in developing business cooperation.
Former Minister of Finance S.Bayartsogt:In the short space of three years, the Awards instituted by a professional magazine have become a tradition. It is an event where the mining sector, the main player in the economy of Mongolia, comes together to celebrate its successes of the year. As for the audience, they get an idea of the expansion of the sector and the sophisticated technology in use there.
B.Nergui, Director of Policy at the Ministry of Mining: I congratulate the Mongolian Mining Journal on making the annual event a success and on ensuring that the choice of winners is truly fair.
Countries where mining has developed have this kind of awards and the Mining Journal Awards are already being numbered among the more well-known international events. A number of representatives from foreign companies take part in the event every year, and diplomats are on hand to cheer companies from their country. Gregory Goldhawk, Ambassador of Canada to Mongolia, said, “Mongolia has become a new market in the world following its mining sector development. The Mining Journal Awards play an important role in introducing the country to the world.”
Let us now take a look at some of the important milestones we passed on our way to be acknowledged as setting new standards.
Unbiased and fair selection is the basis of the people’s trust in the Mining Journal Awards. We are proud that those we have invited to serve as judges are respected by the sector for their knowledge and integrity. There has never been any question about their choice. We are grateful for their painstaking work in sifting through heaps of material submitted by contestants and proud that they have always taken their decisions without fear or favour.
The 2010 Judges’ Panel included Kh.Narankhuu, MP; N.Enkhbayar, Economic Policy Advisor to the Prime Minister; N.Algaa, Executive Director of the National Mining Association; Ts.Davaatseren, Director of Mining and Research at the Mineral Authority; B.Purevtogtokh, Head of the Mining Academy at the University of Science and Technology; D.Dondov, head of the Markscheider Association; D.Enkhbat, Director of the Environmental and Natural Resources Authority at the Ministry of Environment; N.Batbayar, Director of the Environment, Tourism, Geology and Mining Inspection Authority; and J.Unenbat, Executive Director of the Corporate Governance Development Centre.
The decision does not have to be unanimous and usually the consensus is reached only after fierce debates. That is how it should be among independent evaluators who do not work according to instructions or an agenda.
The panel was enlarged in 2011, with the induction of G.Sharkhuu, head of the Mongolian Mineral Processors Association; D.Galsandorj, President of the Exporters’ Association; and D.Tserenjav, Executive Director of Transparency Foundation. The new names added breadth to the assessment, making the final judgment even more equitable.
With the inclusion of a new category this year -- The Explorer of the Year – the need was felt to have specialists in that area on the panel. We invited two experts who know the ins and outs of exploration work. They are D.Bat-Erdene, President of the Industrial Geologists’ Association, and D.Tseveenjav, Executive Director of the Drilling Association of Mongolia.
The Best Miner
The Best Miner of the Year category has been there from the very beginning. However, the title was changed to The Deposit of the Year, following a suggestion by the judges’ panel. The award goes to the best mineral or oil deposit, and all stages of mining activity are taken into account.
The first year’s winner was Mongolyn Alt Company, or MAK in the Cyrillic initials. The judges did not choose it because of its size, but because its annual activity report was found worthier than its competitors’.Our judges know from their experience that feasibility studies, especially those made before 2006, cannot be absolutely trusted. One has to read between the lines and to be wary of claims. MAK convinced the judges that it actually worked according to plan, and wastage was within the limits set out in the feasibility study. Its massive construction work was certainly another factor.
The company’s achievements were well documented. It had extracted 2 million tons of coal in 2009, but this went up to 5 million tons the next year, setting a record for coal extraction, sales and export in the Mongolian mining sector’s history of 88 years. 2010 was the peak year of success for “black gold” extractors, with Mongolia becoming one of the biggest coal exporting countries in the world by exporting 15 million tons by November, 2010. That was also the year in which, for the first time, Mongolia exported more energy than it imported. This is the result of the work of all who vied for the title of the best extractor. The respective amount of tax they paid was also a factor. In 2010, MAK paid over MNT80 billion to the State budget in 2010.
The change of the award title reflected the fact that mining is not only about extracting the mineral, but is a complex activity closely linked with other industries, creating added value, ensuring safety, using advanced technology, and affecting the environment. The judges thought of all this when they suggested the new name.
Four companies, some State owned and some private, were in the fray in 2011. They were Tavan Tolgoi JSC, Erdenet Factory, Energy Resources LLC and Erdenes Tavan Tolgoi LLC. Erdenes Tavan Tolgoi had high hopes because it had opened its Zuun Tsankhi coalfield and had started exporting coal. However, no one was surprised when the award went to Erdenet Factory, Mongolia’s deposit of the century. It had maintained impeccable standards throughout the 30 years of its history.
There is no doubt that the competition for the Best Deposit will only become stronger every year. Mongolyn Alt will start operating Tsagaan Suvarga and commission a processing plant. Erdenet Tavan Tolgoi will build huge mines at both Tsankhis. Energy Resources will also be a strong candidate, doubling, as it does, its extraction amount every year. It promises to be an exciting race this year.
Honouring Responsible Activity
At first, this category was called The Best Mining Activity of the Year, but the judges’ panel wanted to make the emphasis clearer and, accordingly, it is now renamed The Best Responsible Mining Activity.
The award is for only those who have made a successful transition from mining as an industrial activity to mining as having a clear social responsibility. Some might feel that the best deposit will by definition be the one doing the best responsible mining activity, but we think it is more nuanced. In one, the focus is on corporate success, while in the other, this success is judged by how well a company fulfills its responsibility to the community.
Just how do the judges determine the contestants’performance? One of them, D.Dondov, explained it thus: “By ‘Best’ we mean the most positive effect the company has on society. ‘Social responsibility’ is first and foremost what a company has done for society.”
In 2010, seven companies -- including Oyu Tolgoi, Erdenet Factory, Energy Resources, SouthGobi Sands, Mo En Co, Boroo Gold and Redhill Mongolia – vied for the honours in this category.The first criterion was, “How has the company transitioned to the processing stage?” Other sub-criteria were: work hours without any accident; labour safety management system; social responsibility schemes;total money spent on infrastructure construction; financial transparency; whether the company’s accounts have been subject to an international audit; and whether the company had joined the Extractive Industries Transparency Initiative (EITI).
Boroo Gold and Mo En Co did not make the shortlist because they had failed to submit adequate information. Redhill Mongolia and Oyu Tolgoi were also eliminated at the first round as they were just about to begin mining and there was not enough to judge them by. That left the judges with Erdenet, SGS and Energy Resources. SGS was eliminated because it failed to provide processing activity indicators, and Energy Resources, with initiatives such as construction of a road and a power plant, and arranging water supply, won the “Best Mining Activity” award in 2010.
The company was in the news for not only its overt acts of social responsibility. The autumn of 2010 saw its IPO at the Hong Kong Stock Exchange under the name Mongolian Mining Corporation to raise funds for its infrastructure projects, the first time a Mongolian company took such a plunge. A special feature of this infrastructure development was that innovative technology was used and Mongolian engineers were in charge of the work.
The change in name to The Best Responsible Mining Activity was not the only notable thing about this category in 2011. The previous year, most of the competing companies had been foreign funded but this time it was just the opposite -- all were national companies. They felt confident enough of their record while the foreign companies moved over to categories such as the best user of technology. This was a clear indication of the kind of change that took place in the Mongolian mining sector in that one year.
Companies like Mongolyn Alt, Sharyn Gol, Gobigeo, and Glogex put in their claim but the judges felt that Energy Resources was ahead of them in making the transition from mining to processing. They also noted its investment in infrastructure development, the commissioning of its processing plant, and its comprehensive support for the region’s health, education and culture. Mongolyn Alt had also built a processing plant and done a lot of work in the region, but its use of technology could not compete with that of Energy Resources and the company was in the second place. Sharyn Gol came next. It is worth noting that even as Energy Resources won in the category “The Best Responsible Mining Activity”, it also took the highest online popular votes.
Maybe the competition for Energy Resources will be stiffer this year, mainly, one expects, from Mongolyn Alt, Oyu Tolgoi and Erdenes Tavan Tolgoi.
Erdenes Tavan Tolgoi opened its Zuun Tsankhi last year and exported coal, and has recently started operating Baruun Tsankhi as well. The profits of Erdenes TT went to the Human Development Fund and were then distributed among the people of Mongolia.
Oyu Tolgoi has opened its processing plant this year and has provided jobs to thousands of Mongolians, contributing to the welfare of society and to the country’s economic growth.
As for Mongolyn Alt, it is running big mining projects, many of them new, with a slant to social responsibility. Its Tsagaan Suvarga copper mine is scheduled to start operatingnext year.
As you can see, nobody gets a cakewalk this year.
The Best Technology Use
It is never easy for the judges to choose the best in this category from among the national and foreign companies that claim to have adopted the most appropriate and advanced technology. The first year’s award went to Erdenet Factory. The judges found that Erdenet had constantly upgraded its technology and that in 2010, by upgrading the technology at its Float processing plant, it had increased its extraction capacity from 4 million tons to 6 million tons, raised copper extraction rate to 88 per cent and molybdenum extraction to 59 per cent. This resulted in a saving of $3 million.
Both Monrostsvetment’s innovations at its Bor-Undur spar mine processing factory and Shivee Ovoo’s coal conveyor system were undeniably big steps in the sector and both companies were favourites forwinning the award in 2010. However, Shivee Ovoo LLC stayed away from any contest but Tavantalst, the company which was installing the conveyor system, did. Judge D.Dondov expressed the certainty that “next year, this technology will be a winner”.Many companies from the fields of supplies and drilling sent entries but the judges found that most did not meet the qualifying criteria. Finally 6 were considered.
The number went up to 13 in 2011, the year of a “technology boom” in Mongolian mining, when the sector proudly welcomed its first power plant, processing plant, and coal drying and transferring technologies. The category was the most competitive last year. The field included Mera LLC with its use of explosive material; Erdmin with its copper cathode manufacturing technology; Energy Resources with its first wet coal processing plant; Micromine with its geology and mining software; Blast LLC with its emulsion explosives technology; Tavantalst with its coal drying and conveyor system; Gobigeo with its drilling procedures; Ikh Mongol Mining with its absorption technology; Oyu Tolgoi LLC with its processing plant and mining technologies; MT Drilling with diamond and spudding drilling technology; Sandvik Mongolia with its drilling equipment; Mongolian Star Melchers and Erdeniin Erel companies with its exploration tools.
The original submission criteria were modified in 2011 following requests from companies that mainly use drilling, explosives and software technologies to facilitate their inclusion. Purists might feel that there can be no comparison between a big plant and drilling machinery, or between geological exploration software with explosives manufacture, but the judges took the wider view that they all contributed to adoption of advanced technology in Mongolia.
The competition was fierce, with the final focus on Erdmin, Tavantalst and Energy Resources.Erdmin had a “dream” technology for final products,Shivee Ovoo built a coal drying plant without any financial support from the State, while Energy Resources had built a power plant and a processing plant.
Let the number of Green Mines grow
The Best Green Mine category honours both innovation and commitment and contribution to society, the economy and the environment. National and international standards are followed in the evaluation. The Mongolian Mining Journal hopes this public recognition will encourage more green mines to come up, so that the environment remains clean. The standards remain high and the judges do not allow false hopes to be raised with the award. As one of them, D.Enkhbat, says, “No company meets all the requirements of the criteria relating to rehabilitation, and we have to choose the ones that come closest.”
The first year’s winner was Baganuur Company, followed by Erdenet Factory and Monpolymet in that order. The judges assessed the environmental policy of the contesting company, its use of advanced technology with less harmful effect on the environment, extent and quality of the rehabilitation work done, compliance with ISO 1400 and ISO 1900 standards, and provision of funds for mine closure.This last was emphasized by one of the judges, N.Batbayar, whosaid, “We shouldn’t talk about rehabilitation only when evaluating green mines. Mine closure is a most relevant issue.” In 2010, Boroo Gold, SGS and Monpolymet were commended for their work in this respect.
According to the judges, the Baganuur deposit faced stiff competition from the Erdenet Factory. They found that the ultimate winner had done its rehabilitation work following all the standards set, but Erdenet’s rehabilitation technology had been better. The judges also felt Baganuur had been regular and consistent in its rehabilitation, much more than others.
We need to mention here that even though some companies do good work in a year, they are eliminated during the evaluation process because their reports lack adequate information. The companies must make sure that their entries include information on all criteria, and not a lot about some with none on others. For example, Boroo Gold LLC, otherwise a leading contender for the award in 2010, was eliminated when the judges found its supporting documents did not include environmental indicators.
The large number of entries in this category in 2011 belied the common perception that the mining sector does nothing but harm the environment. The new entries included Mondulaan, Mongol Gazar, Gatsuurt, Peabody Winsway Resources, and Urmun Uul. This time, the judges not merely read the material submitted by the companies, in some cases they made on-site inspections, too. N.Algaa and G.Sharkhuu visited the mine site of Peabody Winsway Resources, and complimented the company on its quality of rehabilitation even though the area covered was small. A visit to the Energy Resources mine site showed them how the company had planted grass and plants in areas close to the mine.
Two of the most enthusiastic judges for this category are D.Enkhbat, Director of the Environment and Natural Resources Authority at the Ministry of Environment, and N.Batbayar, Director of the Environment, Tourism, Geology and Mining Section at the Inspection Agency. Their word, spoken always after meticulous work, carries much weight with their fellow panellists.
At their last meeting in 2011, N.Batbayar said, “It is unfortunate to see from the material the companies have sent that nobody understands what mine closure is and where the mine closure fund comes from. For a green mine, it is very important to explain clearly what their environment policy is, but we find it hard to understand and compare their submissions. Peabody Winsway Energy is the only example we have of mine closure, monitoring of the closure and compliance with MNS 2008 standard.”
D.Enkhbat said, “Choosing the best greenmine is difficult. After going through the voluminous reports on pieces of small work, we find that there are only one or two companies that meet all the requirements. Peabody Winsway’s rehabilitation area was flooded last year because of a mistake in planning. Energy Resources completely solved the water supply issue. Therefore I shall choose Energy Resources as the winner.”
Explorers in the race
Every mining activity starts from exploration. This discovers the underground minerals, estimates the resource amount and prepares the deposit for operation. In recent years, at least 10 deposits have started operating every year. This is what persuaded us to add The Explorer of the Year category to the Awards in 2011, following requests from mining companies, especially those in exploration.
The judges’ panel agreed that explorer companies should be treated on par with mining and exporter companies. Mongolian exploration companies match their international counterparts in quality of work and management. They also finish the work quicker, and raise a good amount of funds locally.
Last year, the number of contestants was 6 -- QGX, Erdene Mongol, Hunnu Coal, Xanadu Mines Mongol, MT Drilling, and Erdenyn Erel.
The judges took time to agree on the evaluation parameters. Some wanted to recognise the advantage foreign companies gain because of the amount of money they have, and instead wanted the emphasis to be on how many Mongolian professionals they hire, on their treatment of environmental and social responsibility issues. Some others wondered if this was not being too nationalistic and wanted to keep the ultimate test as selecting the best company that explored underground minerals.
They were not happy that some companies sent their submission only in English, preferring any company that operates in Mongolia to prepare their material both in Mongolian and English.
Some more experts in the field have been included in the judges’ panel this year, such as D.Tseveenjav, Executive Director of the Mongolian Drilling Association, and D.Bat-Erdene, President of Mongolian Industrial Geologists Association.
Last year’s winner was Hunnu Coal, a company that has been eyed by both Mongolian and international investors since its establishment. The company had an IPO on the Australian Stock Exchange in 2010 and with the funds raises for exploration,accomplished a lot of work and explored a great amount of coal in a short period of time.
The choice this year promises to be tough for the judges, with companies such as Aspire Mining, Xanadu Mines, QGX and Haranga Resources already in reckoning.
The Best Supplier of the year
We have made this a separate category this year considering the fact that the mining sector cannot move forward without suppliers providing companies with advanced technology, equipment and professional training. In the previous years, when suppliers competed in the Best Technology category, some of them were eliminated early because their submissions did not fit the criteria. Things are expected to be different now.
The basic criteria are the usefulness of the technology and the number and quality of the equipment supplied, whether there was any training for using the equipment, whether there was any damage to the supplies, performance of what was supplied, and the amount of tax paid to the State. However, the main factors will be the contribution they made to the mining industry and the number of national professionals they prepared.
Major suppliers including Hera Equipment, Wagner Asia Equipment, Liebherr, Komatsu, Mongol Motors and Aode have confirmed entries. It will be a close race.
The Best of the Best
In deference to the Mongolian fondness for the term “The Best of the Best” the Awards included a Grand Prix last year when the judges were asked to choose the best company when all the categories are taken together. This means the Grand Prix goes to the company that scores well in all areas -- mining, use of technology, processing, infrastructure, social responsibility and environment protection.
In 2011, the shortlist comprised Oyu Tolgoi, Mongol Gazar, Erdenet Factory and Energy Resources. These were the ones that had competed in the most number of categories. Energy Resources was the final choice.
The Grand Prix could well be the most exciting contest every year.
Best Provider of Support
This is one category where the winner is not selected by the judges, but by professional organisations and popular vote. In 2010, the Mongolian National Mining Association received the most votes out of 67 non-government organisations. Obviously people placed a high value on its strong support for the private sector, for attracting foreign investment, and for developing responsible mining since its establishment in 1994.
The next highest number of votes was polled by the NGO, Responsible Mining Initiative for Sustainable Development. The Mongolian Mining Journal came next. We were not in the running but such popular recognition was a shot in the arm for all our staff.
The then Minister of Finance,S.Bayartsogt, was the choice for the Best Individual Provider of Support. Next year, it was the turn of D.Zorigt, then Minister of Mineral Resources and Energy. He received 720 votes or 53 per cent of the total cast. The first president of Mongolia, P.Ochirbat, and J.Odjargal, chairman of the Board of Directors of MCS Group, followed him.
Among the best supporting organisations, the winner was Trade and Development Bank of Mongolia, which had received 31 per cent of the total votes to. In 2010, the TDB had spent nearly MNT500 million to help organise international investment forums and conferences.
It is still early days but the track has been laid. We wait for the race to begin.