Armando Torres, CEO, replies to questions sent by email:
Why do you consider the Memorandum of Understanding (MoU) on the Voluntary Code of Practice for Responsible Mining to be significant?
I believe this MoU lays out a strong foundation to promote best practices of responsible mining across the mining industry and streamline cooperation among major mining companies in Mongolia.
What is the next step for your company after signing the MoU?
We see it as an opportunity to share our best practices with our mining peers, broader stakeholders and the public and also to learn from others. Together with our partners of the MoU, we will support development of responsible mining in Mongolia by fostering a better understanding of what the industry needs to do in order to create mutual trust and shared responsibility for responsible mining in society.
How does Oyu Tolgoi approach responsible mining?
Oyu Tolgoi carries out its operations in line with relevant Mongolian laws, Rio Tinto’s standards and requirements of international lenders. We have successfully applied to our work the key elements of responsible mining under international standards and we have a lot to share with our peers in Mongolia. We are on a journey and we need to do more to consolidate our position as a leader in responsible mining.
Safety is the number one priority at Oyu Tolgoi. Everyone has the responsibility – and the right -- to report if anything in their work is putting their own or others’ health and safety at risk. As a company we have been sharing our safety culture with the broader community, and we recently co-hosted the “Safety First - 2019” conference with the Mongolian Occupational Safety and Health Professionals’ Association.
As part of our “Made in Mongolia” strategy which is to further support national and local procurement, Oyu Tolgoi collaborated with 764 suppliers in the first three quarters of this year, 524 of which are national businesses that account for 76 per cent of the total operations procurement spend. Between 2010 and the third quarter of 2019, Oyu Tolgoi spent over $3 billion on national procurement, of which $523 million was spent on procurement from Umnugovi. Recently, we signed an MNT2.7-billion contract to purchase over the next three years 5,000 “Made in Mongolia” leather safety boots from Khos-Az LLC.
What do you see as some of the leading best practices of responsible mining?
There are many I can think of. For instance, Oyu Tolgoi is currently leading in safety performance across Rio Tinto Group. The most important assets for us are our employees and their wellbeing. In addition, we collaborate closely with our local community and have established a Tripartite Council to jointly address and resolve complaints. We have demonstrated at an international level that this is an effective mechanism to work out a win-win partnership between mining companies and the local community.
Also, we are leading the mining sector with our efficient water usage. As of 2019 Q3, Oyu Tolgoi operations achieved recycling rate of 88 per cent. It used an average of 0.4 cubic metres of water per tonne of ore processed – significantly better than the global average of 1.2 cubic metres per tonne.
Oyu Tolgoi also collaborated with National Policy Agency on a road safety campaign. As a result of the two campaigns “No need to rush” and “Play by the rule, don’t be the mule”, there was significant decrease in both the number of road incidents and the fatality rate compared to the same period of the previous year.
Who are your partners in the work for responsible mining in Mongolia?
Besides industry peers and the private sector, Oyu Tolgoi cooperates with government and non-government organizations. For example, we partner with over 10 organizations on water monitoring such as the Ministry of Environment and Tourism, Galba-Uush Dolood water basin administration and MONGOL US, a state-owned enterprise. We also implement a participatory water monitoring project with Munkh Nogoon Galba NGO that consists of local herders.
Oyu Tolgoi also signed a Cooperation Agreement with our partner communities –Khanbogd, Manlai, Bayan-Ovoo and Dalanzadgad soums of Umnugovi province - in April 2015. Under the agreement, Oyu Tolgoi makes a contribution of $5 million every year to the development of Umnugovi province through Gobi Oyu Development Support Fund.
Here are the highlights of the local development work financed by Oyu Tolgoi LLC:
• 640-children school complex - 1 (Khanbogd soum)
• Sports hall - 3 (Dalanzadgad soum secondary school, Manlai soum, Bayan-Ovoo soum)
• Water sanitation plant - 2 (Gashuunsukhait border, Khanbogd soum)
• Water well - 77 (33 new wells, 44 reconstructed wells)
• Steam stove - 3 (Khanbogd, Manlai, Bayan-Ovoo)
• Hospital - 2 (Bayan-Ovoo, Mandal-Ovoo)
• Kindergarten - 5 (Dalanzadgad -3, Manlai-1, Khanbogd-1)
• Inter-soum animal health care centre - 1 (Khanbogd)
We launched Business Innovation and Growth (BIG) Centres in October 2018 jointly with GIZ and Gobi Oyu Development Support Fund in two locations: Dalanzadgad and Ulaanbaatar. The BIG centre is designed to facilitate suppliers’ growth and develop their capacity.