Julien Lawrence, Mining Sector Manager, Leighton Asia

1. Local knowledge  International experience  Focused on success
Julien Lawrence – Mining Services Manager - Leighton Asia
Developing a Sustainable Mining Operation in Mongolia

2. Local knowledge  International experience  Focused on success
• 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
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3. Local knowledge  International experience  Focused on success
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
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4. Local knowledge  International experience  Focused on success
Building a cohesive mining team in Mongolia
- 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
DecisionFactors
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5. Local knowledge  International experience  Focused on success
XYZ MINING COMPANY
Geology
Administration
Processing
Planning Commercial
Safety
HR
Exploration
Environmental Quality/Systems
IT ManagementCorporate
Mining
Geotechnical Accounts
Maintenance
Engineering
XYZ MINING COMPANY
Geology
Administration
Processing
Planning CommercialSafety HR
Exploration
Environmental Quality/Systems
IT ManagementCorporate
Geotechnical Accounts
Maintenance
Engineering
Mining Contractor
XYZ MINING COMPANY
Geology
Administration
Processing
Planning Commercial
Safety HR
Exploration
Environmental Quality/Systems
IT ManagementCorporate
Mining Alliance Contractor
Geotechnical Accounts
Maintenance
Engineering
Building a cohesive mining team in Mongolia
- Owner Miner or Contractor?
OWNER MINER
TRADITIONAL CONTRACTING
INTEGRATED APPROACH
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6. Local knowledge  International experience  Focused on success
 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
Building a cohesive mining team in Mongolia
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7. Local knowledge  International experience  Focused on success
 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
Building a cohesive mining team in Mongolia
- Important features for a Mongolian Operation
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8. 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

9. Local knowledge  International experience  Focused on success
Training and technologies for sustainable operations
 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.
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10. Local knowledge  International experience  Focused on success
 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
Training and technologies for sustainable operations
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11. Local knowledge  International experience  Focused on success
Training and technologies for sustainable operations
Graduate Career Development Program
Phase 1
• Site
Operations
Phase 2
• Technical
Development
Phase 3
• Project
Management
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12. Local knowledge  International experience  Focused on success
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
Training and technologies for sustainable operations
International Experience and Professional Development
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13. Local knowledge  International experience  Focused on success 13
Training and technologies for sustainable operations
- 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

14. Local knowledge  International experience  Focused on success
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
Approvals, Licenses and Permits in place
Sell Raw Coal? Marketing / off take
ESIA Completed and approved
Community Interface - No promises you cannot keep
Adequate water
Community Interface - No promises you cannot keep
Community Interface - No promises you cannot keep
Approvals, Licenses and Permits in place
• 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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15. Local knowledge  International experience  Focused on success
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
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16. Local knowledge  International experience  Focused on success
Thank You
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