SouthGobi Sands 

2020-01-27 13:48

Ch. Munkhbat, President and CEO, talks to B.Tugsbilegt


Why did you think it was important to join the Voluntary Responsible Mining Code? 
Studying the Mongolian National Mining Association initiative, we felt its implementation could lead to a significant reduction in irresponsible mining, developing responsible mining instead. We cannot continue with the kind of mining that only degrades the land by digging, or with how “ninjas” work. Eight of us working together can do a lot for responsible mining. The mining sector takes many risks as it is and cannot afford to have the public against it. It must consider the attitude of citizens in areas where there is mining.     

We are the only coal company in Mongolia which is registered in two stock exchanges. Stock exchanges require a company to operate in a transparent manner and its reports and financial statements to be open to the public quarterly. Any citizen of Mongolia can access them at the company’s webpage. Stock exchange listing also demands that a company’s management team act in a responsible and professional manner.  
Why did we feel it important to join the code? Let me start by saying that there is responsible mining and there is irresponsible mining. This does not mean that any company should be discriminated against or penalised for the way it operates. In general, there should be responsible behaviour in any economic sector, but some responsibility might be missing in a transitional economy.  

So what does responsible mining mean?  For us, it means to keep the over 500 people who work in our company in their job, thus providing them with regular income to help them take care of their family. Our social responsibility also extends to create for them better social, health, occupational and educational conditions.  

In addition to this, there is our responsibility in regard to the environment. We must be eco-friendly as much as possible. Mining-related laws and rules of our country are very strict. It is prohibited to run mining activities and even conduct blasting without first getting approved an Environment Management Plan and then sticking to it.   

As we are legally obliged to transport coal on paved roads, in 2015 our company built a road under a concession agreement. This has brought down the quantity of dust raised and also of the extent of diesel spillage that polluted the soil. We joined the code so that we can lead other miners with our example, and in a sense, be a model of responsible mining. 

Accepting its corporate social responsibility alerts a company to the fact that there is more to mining than extracting mineral resources and paying taxes. Mining companies working in the Nariinsukhait deposit submit their annual reports to their respective local soum. These are not just for the local leaders, but also for all citizens. I think this kind of transparency is a significant feature of responsible mining. I feel the people’s attitude to mining has changed since the time they read the first report, which showed how any mining operation in their area benefits local people in many ways, including providing some jobs directly and others indirectly. For example, Noyon, Sevrei and Bayandalai soums have 1,000 people, of whom 100 work for us.  Actually, 200 of our total 500 employees are from the local community.

Our company supplies coal free of charge to the soum which is most closely related to our operations to heat all households, schools and kindergartens.

What positive result do you expect from eight companies joining the code?
Externally, it would encourage more responsible mining and raise awareness among the government and the people. The media will play an important role in this. Internally, it would improve the corporate governance of companies -- both public and private. 

How would a company’s commitment to responsible mining be reflected in its internal working? 
We are already changing our governance practices to follow requirements of the Stock Exchange. To help instil the culture of responsible mining in our internal functioning, we have been conducting trainings on occupational safety, among other things. Last year, groups from Energy Resources and Erdenes Tavantolgoi made a study tour of our operation site and we shared experiences. 
Sharing is a good way of being more responsible, and we use the media to inform others of our experiences. We have also made it easy to visit our website and are uploading more news and information there. 

What steps do you plan to take to be a leader in the mining sector? 
We always try to improve our mining standards, procedures and technology and seek to involve neighbouring mines in this. Starting from this year, we are working in cooperation with MAK and Usukh Zoos to prepare a consolidated environmental plan for mines in the vicinity of Nariinsukhait. Since all the mines work in similar conditions of natural formation, a plan that covers all of them should be more useful in more effective protection of the environment. 

We try to be of help wherever we can. When the Tost and Tosonbumba Protected Area was established in Gurvantes soum, our company donated a vehicle and uniform for its employees. The soum has recently got a fire fighting unit, with our support and cooperation. Earlier, whenever there was an emergency, our company’s fire vehicle would respond to the call.   

Are there problems with the law or state policy in working for responsible mining? How can these be resolved? 
The government changes its mind frequently and so policies and decisions do not have a long life.  This makes problems for us and, together with the Coal Association, we have submitted certain proposals to the Ministry of Mining and Heavy Industry and also to the Ministry of Environment and Tourism. We hope their response will be favourable. 

Who are your partners as you work for responsible mining? Do you hope to receive good support for them? 
We cooperate with specialized associations such as the MNMA and the Coal Association. The media will have to play a big role in publicizing progress of the project so that citizens’ understanding is improved. I expect the first report of the Responsible Mining Code to be released in the beginning of 2020. This would include companies’ reports on what they did to promote the code. 
An important indicator of our success would be how local citizens accept a mining company and what reputation it has among them.

Besides meeting social responsibility and protecting the environment, responsible mining also means that a company reduces the risks to its employees. Last year, the Ministry of Labour and Social Welfare identified us as the best company to prioritise healthy and safe workplaces. Actually, seven companies had been shortlisted for the honour. On paper their status was the same, but when a special commission visited the mines, it realized that what we had on the ground was better than what the others could show. Such formal recognition is naturally a matter of great satisfaction and pride for us.   

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