Qi Song: Metso will suit Mongolia very well

Qi Song, General Manager of Mining and Minerals Processing Business Sales, Metso Mining and Construction China

Metso is a well-known global supplier of technology and services to customers in the process industries, including mining, construction, pulp and paper, power, and oil and gas. Our 30,000 professionals based in over 50 countries deliver sustainability and profitability to customers worldwide.  Metso, with its headquarter located in Helsinki, Finland, is an Old Friend for Mongolian companies.
As Mongolia has a current need of highly developed technologies in the mining sector, we interviewed with the representatives of Mesto Mining and Construction China Market Area on about the advantages and benefits of their technologies and services.

Metso is well known by global mining industries. What are the ranges of Metso’s operation?

Qi Song, General Manager of Mining and Minerals Processing Business Sales, Metso Mining and Construction China:

Metso is a global company headquartered in Helsinki, Finland. It is registered at the international SE in Helsinki and released its IPO there. There are more than 30,000 professionals in over 50 countries working with Metso. Our net sales reached EUR 6.6 billion in 2011. Metso Corporation has three segments which are ‘Mining and Construction (MAC)’, ‘Automation and Pulp, Paper and Power’. Our China based office is in charge of the operation of mainland China, North Korea and Mongolia. Metso MAC China Market Area is taking part in Future Mongolia 2012 Trade Fair. In China, we employ more than 400 professionals and we have one plant in Tianjin where HP500 or smaller designs are produced.

You may know that Metso produces various mining products including crusher and crushing solutions, minerals processing solutions, pumps, filters, thickeners and iron ore transportation equipment. Nearly 55 per cent of the total equipment is crushing solutions and the rest is processing equipment, construction equipment and maintenance services. We have been interested in and serving Mongolia’s construction and mining industry for many years.

To my assumption, Mongolian companies have already started looking into your technologies. It could also be that Metso has taken initiative to negotiate about introducing its technologies to the major mining projects of Mongolia to the State and private organizations. Would you please clarify on this?

Metso started working with Oyu Tolgoi LLC in 2007 and has been supplying equipment to this company ever since. We supplied three MP1000 crushers, six VTM 1250 crushers and flotation technology to this project four years ago. Also four lokotrack mobile plants were supplied in 2010 when Oyu Tolgoi was constructing the road. Now we continue to provide the maintenance services for the equipment we supplied.

What other projects in Mongolia do you think Metso will be able to start working on in the near future?

Currently, Oyu Tolgoi is the gest project Metso involved and we are supplying equipment and services. We are holding negotiations with other local and foreign companies on potential projects even though most of them are still in the primary stages. Our engineers and professionals always work closely  with the customers through all efforts and expertise.

There are many other companies that supply mining equipment that are similar to Metso’s. Some of them have even entered Mongolian market already. What is the main factor that makes Metso different from other companies?

Metso’s goal is not only providing quality products and solutions, but also servicing for environment-friendly and energy-saving operation. The professionals at the technology center of Metso consider the quality of the products, together with factors like how the products can be eco-friendly, how to extract less carbon and how to save energy etc.

We has been providing VertiMill for grinding application at mining field,  which will save 30-40 per cent of energy compared to conventional grinding mills. Plus, this VertiMill will be ger than the ones that are supplied in the market today. Metso’s products are easy to load and unload, and they require less maintenance. It is because we have improved the quality of the materials used in the equipment.  As we know, Mongolia’s mining sites are mostly located far from the central areas, it is hard to get services. However, Metso’s service could reach to the sites to keep the operation in normal and reliable through our experience, management and supports from other companies’ cooperation.

Metso technology works better for processing copper, iron ore and other ores. Also our equipment used for power plants are highly developed. One of them is coal mill. This equipment grinds the coal and then blows it to the steam boiler. We ever supplied more than hundred coal mills to 300 MW, 600 MW even ger power plants in China, and ever installed a hundred screens in Antaibao Coal Washing Plant, China. Metso’s grinding mills also were used for desulfurization system for coal firing power plant, which helps to get better for environment protection.

Ziqiang Li, General Manager of the Construction Business Sales, Metso Mining and Construction China:

This is my first time in Ulaanbaatar. I think Mongolia has a future in its infrastructure and I am sure that a great amount of construction work will take place in the future. Therefore Metso’s crushing and screen equipment is necessary products for Mongolian infrastructure. Metso has been supplying vast number of crusher and screen equipments to China for the last 30 years such as dam, highways and railway construction project in China and so on, Especially for the Three Gorges dam project is have gest quarry in the construction project, all the major crushers are from Metso.  In Monglia Metso already supplied a mobile crushing plant for OT project for road construction two years ago.

Metso’s IPCC means In Pit Crushing and Conveyor system, consisted of the primary Lokotrack mobile crushing plant and LL mobile conveyor system. It is a perfect match with a proven track record of effective cost reduction. Working together as a mobile plant and the LL Series mobile conveyor carry the material crushed by the primary unit via a field conveyor to secondary crushing. The LL conveyors can follow the primary unit as it moves along the quarry face and can easily be moved to a safe distance from the face for blasting. Given the easy maneuverability of the LL mobile conveyor, breaks in production caused by blasting are minimized. Substantial savings can be achieved by introducing the IPCC system in place of dump truck haulage. This also means lower levels of dust and exhaust gas emissions as well as improved safety in the workplace.

Metso really hopes that this technology will be implemented successfully in Mongolia.

Thomas Bai, General Manager of Services Sales, Metso Mining and Construction:

Mongolian customers require reliability in equipment, maintenance services and spare parts supports more than the customers in other countries. Because of the harsh weather that reaches -40 Celsius in winters, it is rightful to demand reliable equipment that would not break easily and spare parts for replacement. We have shown a number of services to Oyu Tolgoi project and have been able to supply the necessary spare parts without losing time.  Metso’s service professionals travel to customers sites on a routine basis, conducting machine inspection, holding training seminars, doing on site training for customers’ technicians, so that customers’ own maintenance team can conduct maintenance by themselves. Since we supplied one track-mounted mobile aggregate plant to Oyu Tolgoi, two service engineers have worked on site one a rotation basis for a year, from October 2010 to October 2011. They were able to do the necessary maintenance and also they trained local engineers. At our base, we always reserve certain amount of parts for Oyu Tolgoi’s use.

Our company has three warehouses in China, e.g. in Tianjin in North China, in Shanghai in East China, and in Kunming in Southwest China. The equipment we supplied to Oyu Tolgoi is massive in size and their spare parts are , too. Therefore we load the spare parts from the closest seaport to Mongolia, which is Tianjin. In the future, we are planning to establish a warehouse in Ulaanbaatar or on site at Oyu Tolgoi to keep the spare parts. Even if some equipment that some of Mongolian companies use is not that of Metso, some of the spare parts are identical to ours. We are willing to supply the spare parts in this kind of situation, as well.

As you said, Metso puts a great attention on the quality of the maintenance service. But there always is a potential damage for any equipment, especially in the harsh weather of Mongolia. How are you planning to face this issue?

I would like to mention one service offering that Metso is implementing worldwide. Metso Performance Solutions is a comprehensive service that offers to cover all maintenance services of the equipment throughout its whole life cycle. We provide this service to our customer companies in countries like Brazil and Russia where the weather is harsh. We do all the works including new installations and commissioning, maintenance, spare parts replacements and upgrades. Companies that sign performance contracts with Metso won’t have to prepare their own maintenance crew. They don’t have to prepare the spare parts inventory of their own. Customer payments could be in several different way for performance based service contracts, such as costs per ton deal which means Metso gets paid based on the production volume, or gain-sharing deals which means Metso gets certain percentage share of extra revenue that Metso has successfully helped the customer to gain..

For some equipment companies, the customers have to buy the equipment and take care of the maintenance service on their own. Metso is not like that, and Metso has some more to offer. If a long-term performance per ton contract is signed with Metso, the customers don’t need to have personnel to buy spare parts and cover maintenance service, and all maintenance and operation jobs will be done by Metso personnel. Many countries and companies are choosing such service. Currently, many mine sites in Africa, Brazil, and Sweden are getting this type of service. Companies like BHP, Rio Tinto and Vale get their equipment with similar contracts.

Mongolia has a vast open land and most mines are located far from central areas. Performance Solutions are very suitable for this kind of condition. . Metso has signed a contract valued at approximately EUR 200 million with Russian Copper Company ZAO (RMK) for its copper operation in Chelyabinskya region in southwestern Russia, covering mineral processing equipment and over 6-years on site services, for which service a team of more than 130 Metso on-site personnel will stay on site. With the life cycle services, Metso will draw from its vast global experience with similar operations and the technical expertise of their product lines to deliver a high level of service to Mikheevsky GOK. The planning will be performed during the next 2 years after which Metso will maintain and assist in the operation of their comminution circuit for 6 ½ continuous years on cost-per-ton basis. From the moment the equipment begins to operate, Metso will supply a fully tooled and trained team of over 130 people to Mikheevsky GOK. As such, while Metso takes care of the headache for the customer, the customer focuses on their core business. .

We also have a division called PTI (Process Technology and Innovation). This division offers consulting services for mining companies targeting energy efficiency and higher production rates. A company that wants to get this service doesn’t have to get all its equipment from Metso. Our specialized engineers from the processing plants will go on site and make assessments. Then by providing necessary technical resources, the productivity of the mine can be increased dramatically. There are cases in which the productivity was increased by 50 to 60 per cent. In that case, the extra benefits can be shared between Metso and the customer based on a mutually agreed percentage, for example, upon agreement. So the mine would not have to pay in cash upfront. The difference between this service and Performance Solutions is that Performance Solutions is offered only if the equipment is supplied by Metso. As for PTI, Metso is in charge of all the equipment upgrades. Some new equipment is supplied by Metso or other companies and then the extra benefit is shared. For example, Metso doesn’t have drilling equipment. Therefore, during PTI, if the mine needs drilling equipment, we buy it from relevant peer companies who make drilling machines for upgrade.
 
What are you aiming to expand your market in the future?

Qi Song: We have a five-year plan until 2015. Taking part in Future Mongolia was the first step of our plan. As for Mongolia, we will establish our office in the first place and then we will advertise our mining and construction equipment. Mongolia and China are both developing, but their economy and market condition is different. That is why the office in China was in charge of the market in Mongolia. Last year, Metso’s board made a new decision to increase the number of spare parts produced in China. Investments toward China are increasing. As a result, Metso team in China will gain more experience. And this experienced team will serve the customers around China.

We got familiar with Mongolian market through Oyu Tolgoi since five years ago. Now we need to open our branch in Mongolia and send the specialized teams of maintenance and sales. We are aiming to deliver quality and reliable service to the mining and construction industry of Mongolia in the near future.

How do you see the future of Mongolian mining industry based on the technological development of Metso?

We must note here that though Metso is a Finnish company, its technology unites worldwide technologies. Our plants are also located throughout the world. As we mentioned before, we have branches in over 50 countries. Our board of members and the gest share holders are based in Finland.

Because of the weather conditions and geologic location, Mongolia requires energy saving and environment friendly equipment. Equipment that are cheap and prone to damage are not suitable for this country. Trying to save money and choosing such equipment will cause even greater cost and harm to the operations. What is needed for your country is equipment that is affordable yet reliable, sustainable and highly developed. Metso’s equipment can meet all these requirements. And we are known worldwide. We would highly recommend Metso’s equipment for an isolated country that has harsh weather conditions like Mongolia. As an employee of Metso, I am fully confident in our market.  We assure that our products will be most suitable for Mongolia’s weather and environmental conditions.

You have cheaper and similar products in the neighboring countries. But our company can be confident in the quality of the products and services. In a country where the infrastructure is highly developed and that pleasant weather conditions, our products might not outstand other products. But our quality is obvious in cold and harsh weather and in a country elevated from the sea level. We work closely with our partners. There is nothing that can hinder our work. If there is a mountain, we will make a road through it, if there is a river, we will build a bridge to reach our customers and improve their operation. Our success is the customers’ success. This is the simple principle that we abide by.