Brad Clarke, Managing Director, SANDVIK MONGOLIA
How has Sandvik navigated Mongolia’s mining cycles since being incorporated in 2006?
The OT continues to symbolize the country’s investment environment to the international community, so when the OT shut down operations in 2012, massive ripple effects spread across the industry, including for Sandvik, since our business was deeply anchored in the OT. The 2013 legislative changes posed significant challenges for investors, and the exploration sector was affected the most. For that reason, the Mongolian industry struggled to fully capture the upcycle of 2016. Then, as commodity prices gathered momentum in 2019, the pandemic came, hitting the country severely. Naturally, investment from the OT and other players became more conservative. Today, the atmosphere is changing as people begin to overcome that nervousness about investing in Mongolia and realize that, instead of fighting over the same-size cake with larger companies that tend to take the bigger slice, we need to expand the cake for everyone to be happy. The way to grow that cake is through exploration. Could you speak of the reception you see for Sandvik’s technologies not just at the OT, but more broadly?
The industry, not only the OT, is starting to recognize how digitalization, data management, automation and semi-automation can really support their business objectives and that the upfront capital cost of a piece of equipment is only a minimal aspect of the purchasing criteria over the life of the equipment. How do logistics in Mongolia compare to other parts of the world where Sandvik operates?
We are probably sitting at about 15 to 20% higher logistics costs compared to other locations where we deliver. Freight transport will continue to be a restriction for a while; as we speak, there is a 30-day delay at Tianjin port. From a Sandvik perspective, we have done really well in consistently supplying our customers. We invested in a South Gobi warehouse for higher inventories of loose parts, fast-moving parts and other components, and we have also reverted to air freight where necessary.
*Darren Carter, General Manager, EPIROC MONGOLIA
Could you give us a brief overview of Epiroc in Mongolia?
Since Epiroc Mongolia established more than 17 years ago, growth has been consistent. We are seeing more activity across exploration, surface drilling, as well as underground drilling at the OT. What role does Epiroc play in Mongolia in terms of introducing technology, especially at the OT?
One can run a mine with basic technology, but Oyu Tolgoi created a world-class, modern operation, and that really suits what we do at Epiroc. Epiroc is now moving to the second stage of automation or what we refer to as ‘deep automation’. Our mission is to go beyond machine automation, to process automation, and eventually system integration. Providing a “Sixth Sense” which is almost intangible because technology moves so quickly is where Epiroc sees its future role. How has the political environment impacted mining?
Mining is clearly a huge asset for Mongolia and has the capacity to deliver substantial economic growth in coming years, but the current legal framework has created some uncertainties. However, the government is now looking to create new laws to guarantee long-term stability. I am sure this will encourage sustainable growth to everyone’s benefit. Why is Epiroc opening a new company in South Gobi?
Epiroc is investing in a major workshop facility in Khanbogd during 2024, it will be a South Gobi registered company called Modern Mining Engineers Gobi (MMEG) in a bid to align with the government’s vision to boost development in the region. Do you have a final message for our international readers?
Epiroc is heavily invested in Mongolia, we are here for the long term, and we believe Mongolia has a bright future. If the legal framework is right, there will be exceptional opportunities for exploration and mining development in the country. Mongolia has a highly educated, young, and energetic workforce. It is a peaceful and welcoming country and deserves positive attention. *Until November 2023. New Epiroc Mongolia GM is Andrew Forster