22.06.2010 leighton's experience in mining in mongolian, hamish tyrwhitt

Local knowledge International experience Focused on success

Leighton’s experience in mining in MongolianMongolia Mining Investment 2010 Conference


Leighton Asia Today

� Leighton Asia is part of the Leighton Group – one of the world’s major project development and contracting organisations, we are also the world largest contracts miner

� Employing over 7,800 employees� Work in hand exceeds A$7 million� Leighton Asia operates in Hong Kong,

Macau, China, Mongolia, Indonesia, Taiwan, the Philippines, Guam, Vietnam, Thailand, Laos, Cambodia and Kazakhstan

� Focused on resources, civil & infrastructure, property and mining

� Leighton Asia is part of the Leighton Group – one of the world’s major project development and contracting organisations, we are also the world largest contracts miner

� Employing over 7,800 employees� Work in hand exceeds A$7 million� Leighton Asia operates in Hong Kong,

Macau, China, Mongolia, Indonesia, Taiwan, the Philippines, Guam, Vietnam, Thailand, Laos, Cambodia and Kazakhstan

� Focused on resources, civil & infrastructure, property and mining


Why Mongolia?

� Enormous mineral wealth� Developing mining legislation� Low security risk� High growth potential� Logistically challenging due

to remote mining location and extreme environmental conditions

� A mining industry at its infancy requiring modern equipment, technical support and training of the Mongolian workforce

� Hardworking, well educated, industrious workforce

� Enormous mineral wealth� Developing mining legislation� Low security risk� High growth potential� Logistically challenging due

to remote mining location and extreme environmental conditions

� A mining industry at its infancy requiring modern equipment, technical support and training of the Mongolian workforce

� Hardworking, well educated, industrious workforce


Leighton Asia Mongolia Business


Contract Mining in Mongolia

Owner Operator Traditional Contract Miner

Full Services Contracting

Contractor Activity

� Infrastructure setup � Pre-strip� Mining� Rehabilitation

� Infrastructure set-up� Mine planning� Pre-strip� Mining� Processing & loadout� Rehabilitation

Delivery System

� Design & construct� Lump sum

� Schedule of rates� Lump sum

� Alliancing/relationship� Schedule of rates

Investment by Contractor

� Nil � Plant & equipment � Plant & equipment� Working capital� Investment stake in mine

Skills Required by Contractor

� Construction � Earthmoving/mining � Construction� Mine planning� Earthmoving/mining� Operations &

maintenance


Challenges for Mongolian businesses

� Lack of developed capital market

� Infrastructure constraints� Lack of skilled labour� Evolving & changing mining

legislation� Foreign exchange

regulations� Isolation & climate� Inflation potential� Political risk� Land locked country –

Russia and China

� Lack of developed capital market

� Infrastructure constraints� Lack of skilled labour� Evolving & changing mining

legislation� Foreign exchange

regulations� Isolation & climate� Inflation potential� Political risk� Land locked country –

Russia and China

+40oC to – 40oC


Ukhaakhudag Coal Mine

Location Southern Gobi Desert

Client Energy Resources LLC

Entity Leighton LLC

Scope Works includes pit de-watering, drill & blast, overburden removal, load & haul of coal, and loading of ROM coal into client’s transport. Also includes the provision of mine planning and engineering services.

Resource 430 million tonne coking & thermal coal deposit, part of the TavanTolgoi coal resource. Open pit extraction.


UHG mine issues

UHG mine issues

At the UHG Coal Project our people have successfully overcome many obstacles

� One of the harshest environments in the world� Team members from different countries of origin and cultures� No previous experience of working together� Creating a new mine in a very remote location� Introducing new mining methods and equipment that were not previously

tested in Mongolia� Setting production at high levels not previously achieved in Mongolia� Achieving accelerated ramp up objectives – producing coal at 400K

tonnes/month

UHG mine issues

At the UHG Coal Project our people have successfully overcome many obstacles

� One of the harshest environments in the world� Team members from different countries of origin and cultures� No previous experience of working together� Creating a new mine in a very remote location� Introducing new mining methods and equipment that were not previously

tested in Mongolia� Setting production at high levels not previously achieved in Mongolia� Achieving accelerated ramp up objectives – producing coal at 400K

tonnes/month


UHG mine today

� Leighton Asia is delivering a world class mine to international best practice and standards - focused on safety, environment, community, training and productivity excellence with a predominantly Mongolian workforce.

� Contract with Energy Resources based on relationship principles providing a foundation for a long term relationship with one unified team

� Over 310 employees on site� 996 excavator and 793 trucks� 9250 excavator and 785 trucks� Planned coal production 2010 – 3.8 million tonne

� Leighton Asia is delivering a world class mine to international best practice and standards - focused on safety, environment, community, training and productivity excellence with a predominantly Mongolian workforce.

� Contract with Energy Resources based on relationship principles providing a foundation for a long term relationship with one unified team

� Over 310 employees on site� 996 excavator and 793 trucks� 9250 excavator and 785 trucks� Planned coal production 2010 – 3.8 million tonne


UHG mine tomorrow

� Planned mining capacity end 2010 – 5 mtpa� Planned mining capacity June 2011 - 10 mtpa

– Co-ordinating with the infrastructure developments– Power plant– Coal wash plant– Rail line to Chinese border– Water pipeline– Equipment ramp up and delivery– Training of the workforce

� Planned mining capacity end 2010 – 5 mtpa� Planned mining capacity June 2011 - 10 mtpa

– Co-ordinating with the infrastructure developments– Power plant– Coal wash plant– Rail line to Chinese border– Water pipeline– Equipment ramp up and delivery– Training of the workforce


Community involvement


Mine safety & environment

� International standard practices established� Risk based approach to safety & environment� Strive for LIFE programme implemented� Buy-in from client & workforce� Full time expatriate safety manger on site� No class 1 injuries to date� Successfully mined through two winters� Staff & Workforce united and aligned with common vales

and culture

� International standard practices established� Risk based approach to safety & environment� Strive for LIFE programme implemented� Buy-in from client & workforce� Full time expatriate safety manger on site� No class 1 injuries to date� Successfully mined through two winters� Staff & Workforce united and aligned with common vales

and culture


Training at UHG

� Established a training school at the mine site and in Ulaanbaatar

� Trainers on site full time� Simulator commissioned onsite –

March 2010� Utilizing Leighton’s proven training

systems� Working closely with industry

partners– CAT– Liebherr

� Mongolians are keen to learn and have achieved world class productivity rapidly

� World standard plant utilisationachieved

� Established a training school at the mine site and in Ulaanbaatar

� Trainers on site full time� Simulator commissioned onsite –

March 2010� Utilizing Leighton’s proven training

systems� Working closely with industry

partners– CAT– Liebherr

� Mongolians are keen to learn and have achieved world class productivity rapidly

� World standard plant utilisationachieved


� The ER and Leighton partnership has developed a world class coal mine in a very short time period

� The opportunities to further expand in Mongolia are significant and well within our capabilities

� Leighton keen to work with Government and mine operators to plan & develop Tavan Tolgoi resource

� Improving infrastructure is crucial for the development of the resource sector in Mongolia

� The ER and Leighton partnership has developed a world class coal mine in a very short time period

� The opportunities to further expand in Mongolia are significant and well within our capabilities

� Leighton keen to work with Government and mine operators to plan & develop Tavan Tolgoi resource

� Improving infrastructure is crucial for the development of the resource sector in Mongolia