mining operational reportsharyngol.mn/.../uploads/2018/01/annual-report-2016-en.pdfannual general...

ANNUAL GENERAL MEETING DOCUMENT 2017

1

BOD’S CONCLUSION ON OPERATIONAL AND FINANCIAL

REPORT OF SHARYN GOL JSC IN 2015, BOARD OF

DIRECTORS OPERATION AND CORPORATE

GOVERNANCE REPORT (Chairman B.Batmunkh)

1. MINING ACTIVITY TARGET AND ITS PERFORMANCE OF 2016

In 2016, Mining performance went accordance with approved scope of BoD & MRA. Winter of

2016 to 2017, the highest production season we opened coal resource area at South high wall and

Grave Yard extension where we managed to do loading, selling and save the reserve coal for

transferring to the next year and prepared the area for next planning.

Main mining performance in 2016 were to transfer more over burden, mine energy supply coals

and able to prepare open area that made possibility of transferring in to 2017 with 150.0 thousand

tonnes of coal and successfully opened previous water pumping area to decrease the level of water

and fixed open pit platform, road area, and stockpile through its technological passport and that has

improved mine design and managing process.

This year, we had some external factors effected on our operation such as financial difficulties of

contracted costumers payment issues, factory shut downs and decreasing the purchase. Main

difficulties of overburden stoppage occurred by our excavator break down and vehicle shortage.

In 2016, we are able to managed attract 72,3 percent from South high wall area and 13,4 percent

coal extraction was from Grave yard extension and Remnant area and 0,9 percent coal extraction

was from North floor area. Mine technical issues such as slipping at Remnant area effected its

operation to stop and North high wall had rock increase in the seam and no space for stockpile.

MINING OPERATIONAL REPORT


2

Mining comparison of performance vs. target

№ Items Meas

2015 2016

Difference Performance Target Performance

1 Coal extraction thous.tn 758.5 883.0 761.9 100.4%

2 Coal sales thous.tn 758.4 855.2 753.7 99.4%

3

Total Overburden thous.m3 4570.0 6905.0 4340.3 94.9%

By truck thous.m3 3796.5 5885.0 4102.3 108.1%

Non transportation thous.m3 773.5 1020.0 238.0 30.8%

4 BCM thous.m3 5153.5 7584.2 4926.4 95.6%

5 Casting thous.m3 202.8 180.0 672.7 331.7%

6 Drilling thous.long.m 56.4 60.0 64.0 113.5%

7 Blasting materials thous.tn 455.5 450.0 557.1 122.3%

8 Blasted BCM thous.m3 1143.1 1100.0 1234.4 107.9%

9 Strip ratio m3/tn 6.03 7.8 5.7


3

South

High wall

soil

69%

North

block soil

15%

Remnant

soil

2%

South

High wall

coal

14%

2016 Blasting work percentage /by block/ 2016 Blasting material performance

2. COAL RESERVE AND ITS QUALITY

Coal reserve movement of the block in 2016

№ Items Reserve as of Jan 1st,

2016 /thous.tn/

Extracted amount

in 2016

Reserve as of Jan 1st,

2017 /thous.tn/

1 Grave yard extension 230.0 102.0 446.3

2 South high wall 1116.1 551.0 565.1

3 Remnant 481.4 101.8 379.6

Total

1391.0

2016

Target

/tn/

Performance

/tn/

Performance

/m3/

ANFO Emulsion ANFO Emulsion BCM

Total

260,0 190,0 291,4 267,7 1234,4

450,0 557,1


4

Supplied coal quality to Darkhan and Erdenet PPT

Use

r

Item

s

1 2 3 4 5 6 7 8 9 10 11 12

Av

e

Erd

enet

Mo

istu

re

14.8 14.9 14.8 13.4 12.6 12.8 12.5 13.6 15.4 15.4 11.3 13.8

Ash

22.6 20.6 23 27.7 26 27 26.2 23.8 24.8 25.1 27.5 24.9

Vo

lati

le

44.2 44.2 44.7 45.6 45.7 45.8 46.1 45.2 46 46.1 44.5 45.3

Ca

lori

c

Va

lue

4391.4 4391.7 4119.3 3900.6 4038.8 3891.5 4045 4148 3902.5 3945.6 3909.3 4062.2

Dar

kh

an

Mo

istu

re

14.6 14.6 14.1 13.3 12.1 12.8 14.9 12.4 13.4 14.7 14.7 14.9 13.9

Ash

23.4 21.5 24.9 28 26.5 29.2 28.2 27.1 24.2 25.5 27.7 26.7 26.1

Vo

lati

le

44.7 44.5 45.3 45.8 45.9 46.5 46.4 46.4 45.5 46.5 46.9 45.1 45.8

Ca

lori

c

Va

lue

4170.9 4339.1 4057.6 3883.3 3958.8 3774 3678.9 3992.3 4143 3969.5 3834.3 3903 3975.4

We mixed coals from 3 places in order to come up with requirement of the users and stabilize the

quality.


5

72.9 68.1

54.9 41.4

22.9

36.7

8.6

37.6 41.1 56.7

70.2 77.4

1 2 3 4 5 6 7 8 9 10 11 12

PPT-588.6 tonnes

PPT280,0

286,5

270,0

275,1

Эрдэнэт ДЦС Төлөвлөгөө

Эрдэнэт ДЦС Гүйцэтгэл

Дархан ДЦС Төлөвлөгөө

Дархан ДЦС Гүйцэтгэл

9.0 10.7

2.3 1.2 1.3 1.1 1.0 1.0

4.5

13.7 15.9

7.4

1 сар

2 сар

3 сар

4 сар

5 сар

6 сар

7 сар

8 сар

9 сар

10 сар

11 сар

12 сар

Other-69.1 tonnes

2.0 2.4 1.6

0.4

26.9

0.5 0.8 1.6 1.1

11.5

24.6 24.4

1

сар

2

сар

3

сар

4

сар

5

сар

6

сар

7

сар

8

сар

9

сар

10

сар

11

сар

12

сар

Erdenet factory, Achit ikht, Naco fuel

JSC, other -97.7 tonnes

VIP

3. COAL SALES

PPT

78%

VIP

13%

Contracted

retail user

3%

Non

contracted

person

0%

Retail sales

5% Discounted

sales

1%

Sales percentage

№ Costumer Ave price

MNT Total

1 PPT 36,524 588.6 2 VIP 55,762 97.7 3 Contracted: Retail 48,193 23.2 4 Non-contracted: Person 80,000 3.3 5 Retail sales 78,855 39.1 6 SG: Discounted 42,402 3.9 Total /tonne/ 755.4

1 2 3 4 5 6 7 8 9 10 11 12

Erdenet PPT

Target

Erdenet PPT

Perf

Darkhan PPT

Target

Darkhan PPT

Perf


6

4. UTILIZATION AND MAINTENANCE OF THE EQUIPMENT

Open pit operational used technical equipment’s type, number, used period in 2016 has shown in

the spreadsheet.

№ Items Type Numbers Used period

/by year/

1 Shovel EKG-4U, EKG-8E, EKG-5А 5 26-29 2 Dragline ESH-10/70 1 37 3 Komatsu HD465-7R 7 4 4 Vehicle Nord Benz 3 4 5 Dump Doosan DA-40 - - 6 Drill Sandvik DI-550 1 4 7 Locomotive TEM-2 1 10 8 Bulldozer Chantu SD-32, Komatsu 155А 3 5-10 9 Grader САТ-16G , GD-655 2 1-23 10 Hydro excavator Doosan DX-500,520,700 3 3-4 11 Shovel Doosan SD-200 , SD-300 2 2-3 12 Watering vehicle Howo 1 7 13 Conveyer Complex of Russian 1 37


7

55 406 592

6 864 000

48 542 592

-

10,000,000.0

20,000,000.0

30,000,000.0

40,000,000.0

50,000,000.0

60,000,000.0

HD-465 гарч ирж тосолгоо хийлгэх зардал

ЗИЛ-131 цайны цагаар тосолгоо хийхэд гарах зардал

ЗИЛ 131 цайны үеээр графикаар тосолгоо хийх

үеийн хэмнэлт

Improving the capacity, internal organization and tools in repair workshop the expense for

outsourced service had declined significantly.

Benefits of performing lubrication work in pit by designed machines

Cost of HD-465 coming out

from the pit and receiving

lubrication work

Cost of Zil-131 doing

scheduled lubrication during

lunch hour

Saving, when lubrication

done by Zil-131


8

431,1

MNT

115

MNT

-

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

гидро экс цахилгаан экс

Spare parts, oil and lubricant cost performance of Shovels and Hydro

excavators per 1m3 of BCM

Completed: Hydro excavator 2394137 m3

Shovel 3066500 m3

Hydro excavator Shovel

727.23

493.05

762.15

683.28

921.94

1,387.44

710.42

628.20

414.95 434.25 457.69

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

1,400.00

1,600.00

kom 37 kom 38 kom 39 kom 40 kom 41 kom 42 kom 43 kom 44 Nord 01 Nord 03 Nord 04

SPARE PARTS, OIL AND LUBRICANT COST PERFORMANCE OF

TRUCK PER 1m3 of BCM


9

5. WORKS DONE ON POWER SUPPLY IN 2016

• Received an approval to built 0.6 km long concrete pillars of high-voltage power line to

prepare the gold operation at Buyant area on August 2016.

• Installing BBTE-M-10/630 type of vacuum break on controller of 250 kilowatt high-voltage

electric engine of technical conveyer crusher has provided safe and reliable operation

• Electric shovel breakdown decreased after receiving 6 piece of section parts from "REM and

COIL“ LLC of Russia and completing maintenance.

2016 electricity use on each user

Items № Target

thous.killowat.hour

Performance

thous.killowat.hour Difference

ESH-10/70А №28 714.00 926.45 + 212.45

EKG-8E №38 693.00 535.46 - 157.54

EKG-4U №37 630.50 658.07 + 27.57

№39 693.00 534.42 - 158.58

EKG-5А №42 499.05 498.50 - 0.55

№20 55.0 52.8 - 2.2

Conveyer 620.8 607.69 - 13.11

Water draining 1536.4 2024.84 + 488.44

Wash plant 688 172.48 - 515.52

Total 6129.75 6010.71 - 119.04

Other 1456.25 1839.05 + 382.8

Total 7586.00 7849.76 + 263.76

Cause of electric engine

Breakdown of 2016

Didn’t receive planned inspection 7% Ability of shift separation 60% Mechanical breakdown 25% Depend upon person 2%

Operational expire 6%


10

Performance of electricity usage of past 3 years

2014

Target

thous.kilowatt.

hour

2014

Performance

thous.kilowatt.

hour

2015

Target

thous.kilowatt.

hour

2015

Performance

thous.kilowatt.

hour

2016

Target

thous.kilowatt.

hour

2016

Performance

thous.kilowatt.

hour

7374.3 7566.34 8021.81 7202.34 7586 7849.76

Unplanned usage occurred at Buyant gold area and usage of electricity had increased by 3.47% in

2016

6. HSE AND INTERNAL CONTROLS

Summary of health and safety expenses

№ Items Target Actual

1 Signs and workplace signs 7,06 1,54

2 Ensure fire safety, disaster stock 11,79 4,84

3 Training expenses for health and safety 32,67 5,11

4 Safety and protective clothing and apparels expenses 326,82 134,92

5 Planning on emergency response 52,53 15,86

7 Road safety tools 8,05 2,81

8 Health expenses 8,50 0.71

Total 447,42 165,16

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

7374.3 7566.34

0 00 0

8021.81

7202.34

0 0 0 0

7586.00

7849.76


11

6

1

7

02 2

6

20

45 5

0

31

5

16

Analysis in accident and incidents

Тохиолдлын төрлүүд

2015 2016

Near miss 6 4 Medical treatment

injury 1 5

Time lost 7 5 Acceptable daily

intake 0 0

Road traffic crush 2 3

Fire incident 2 1

Property damage 6 5

Alcohol 20 16

ОДТ ---------- Near miss

ЭТАГ -------- Medical treatment injury

ХАГ ---------- Time lost

ӨАШГ ------ Acceptable daily intake

АОТ --------- Road traffic crush

ГТ ------------ Fire incident

ӨЭТ --------- Property damage

Алкохол ---- Alcohol


12

7. SUMMARY OF INTERNAL MONITORING SECTIONS COMPLETED TASKS

In 2016, Internal monitoring department completed total of 72 tasks, half completed 11 tasks, and

because of financial difficulties could not completed 15 tasks out from total of 92 tasks with 84,6%

performance vs plan. In order to complete jobs, all necessary techniques, and equipment’s,

communication, fuel and stationery tools were provided and fully resolved requirements.

• There are many procedures and rules are currently in daily operational use, we have looked

into all procedure and updated total of 60 procedures and created total of 26 new

procedures.

• We have organized an investigation with guidelines six times in order to reduce

environmental impact where we have detected 28 violations and shortcomings and made

presentation to the management of the company on 3 issues which needed financial and

received positive decision.

• Investigation with guidelines have been made eight times where we have detected 55

violations and 8 formal notices have been sent.

• Investigations in connection with the occupational conditions, health and safety

requirement and occupational internal regulation have been organized 23 times and

detected 97 violations and 56 out of all detected violations were corrected on the spot and

28 notices were sent to the related officers and received reply for 97% of all notices sent.

• An agreement with “BCT” LLC has been made to place surveillance cameras on 25 spots

to control implementation of company asset safety and protection, occupational internal

regulation and improve discipline and responsibility and which all head of departments and

internal control department have the access to the cameras and gaining daily control over

all activities.

• Guidance were given for 4 times to increase responsibility of contracted safety officers and

to ensure normal condition and industrial safety and made sudden investigation for 26

times where 14 violations were detected and 6 notices were given and 22 co-investigations

were followed.


13

Inspection type First half of 2015

assessment

First half of 2016

assessment

Power plant, boiler oven, and water

heating oven above 100 kilowatt

capacity ХХ-2.3

Non required 82,5% or “High risk”

Small capacity oven performance XX-

5.30 55% or “High risk” 26,7% or “Low risk”

Open pit mine inspection XX-2.6 39% or “Medium risk” 22,7% or “Low risk”

Fuel station, warehouse impact on

environment ХХ-2.4 45% or “Medium risk” 15,6% or “Low risk”

Land owner, owner and user company

ХХ-2.12 Non required 8,8% or “Low risk”

Health and medical inspection ХХ-4.1.1 36% or “Medium risk” 12,8% or “Low risk”

Weight station and weight equipment

integrity ХХ-5.28.1 29,5% or “Medium risk” 17,8% or “Low risk”

Employees social behavior ХХ-4.2 Didn’t do inspection 9,9% or “Low risk”

8. TASKS MADE FOR ENVIRONMENTAL PROTECTION

Technical rehabilitation has been made on west side of mine with dumping total of 4,1 million m3

soil. Total 443.0 thous.m3 or 3.0 hector area filled with soil in 2016 by 10/70 electric shovel. Also

dumped soil to fill up the area on the floor by the bulldozer and also to the west side of non-

operational area.


14

Area of technical rehabilitation in 2016


15

312

74 85

0

200

400

0-15 жил 16-20 жил 21-с дээш жил

Empoyeed period

122 193 13026

0

100

200

300

Дээд Тусгай дунд Бүрэн дунд Бүрэн бус

дунд

Education level

195 213

621

0

100

200

300

20-35 нас 36-50 нас 51-60 нас 61-с дээш

Age

9. HR, TRAINING, SOCIAL RESPONSIBILITY PERFORMANCE

Completed tasks regarding social responsibility in 2016

Discounted coal price of local residents in Sharyngol soum

Donated donation to brand new kindergarten that started operation in Sharyngol soum

Supported with donation to Darkhan-Uul provinces library redone process

Provided coal worth of 450 thousand MNT to Darkhan-uul province low income elders.

Provided 36 million MNT to 10 people that been sick with work related disease.

Provided 13.9 million MNT worth of nonrefundable complaint to 24 person

Continued to support senior miners with gift and reception

Supported hockey team of Sharyngol soum with 2.37 million MNT.

Sponsored Senior Hockey Game that organized at Sharyngol Soum

Training summary of 2016

Last year’s plan to spending on HSE

training was 7.9 million MNT, and major

training plan was 14,3 million MNT and

total of 22,2 million MNT but actual

spending on training was 5 million MNT

and performance percentage equaled to

22,4%.

In 2016, company’s 982 employees

attended total of 14 international and

domestic training.

358

113

0

200

400

Эр Эм

Gender

Male Female 0-15 years 16-20 years 21 or above

Bachelor Associate GED Not

graduated 20-35 36-50 51-60 61 or above

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