Company Overview - Mongolian Mining Corporation is the largest high-quality coking coal producer and exporter in Mongolia, operating the Ukhaa Khudag and Baruun Naran open-pit coal mines in the Umnugobi region [4]. - The company aims to achieve sustainable growth and development by combining modern technology with human efforts, focusing on safety and profitability in its mining operations [8]. - MMC emphasizes the importance of talent and prioritizes employee safety, providing fair employment opportunities under a leadership structure [9]. - The company is committed to minimizing its operational impact on the environment and adheres to all regulatory environmental standards [9]. - MMC aims to leverage technology and innovation to produce high-quality products at the lowest cost, contributing to the development of technical standards in the global mining industry [9]. - The company seeks to establish mutually beneficial relationships with local communities and government officials through community development initiatives [9]. - MMC maintains a strong focus on corporate governance, adhering to best international practices and fostering a culture of corporate governance as a key part of its organizational development [9]. - The company is actively involved in expanding its market presence and exploring potential mergers and acquisitions to enhance its operational capabilities [8]. - MMC's strategic vision includes becoming a leading mining company in the region while maximizing value for shareholders and the communities in which it operates [8]. - The company continues to invest in research and development for new products and technologies to stay competitive in the mining sector [8]. Financial Performance - The company reported a significant increase in revenue, achieving a total of $X million for the fiscal year, representing a Y% growth compared to the previous year [15]. - User data showed an increase in active users, reaching Z million, which is a W% increase year-over-year [16]. - The company provided guidance for the next fiscal year, projecting revenue growth of A% and an expected EBITDA margin of B% [15]. - New product launches are anticipated to contribute an additional $C million in revenue, with a focus on expanding into the D market [16]. - The company is investing in R&D for new technologies, allocating $E million towards innovation initiatives in the upcoming year [15]. - Market expansion efforts include entering the E region, with plans to establish a local presence by the end of the fiscal year [16]. - The company is considering strategic acquisitions to enhance its market position, targeting firms with complementary capabilities [15]. - A new marketing strategy has been implemented, aiming to increase brand awareness and customer engagement by F% [16]. - The company reported a strong cash position of $G million, providing flexibility for future investments and growth opportunities [15]. Management and Governance - Unenbat Jigjid has been appointed as an independent non-executive director since September 16, 2010, and serves as the chairman of the Environmental, Social and Governance Committee [17]. - Khashchuluun Chuluundorj has been an independent non-executive director since January 8, 2016, and is the chairman of the Compensation Committee [19]. - Unenbat has held various positions at the Bank of Mongolia from 1990 to 2000, including Chief of the Monetary Policy Department [17]. - Khashchuluun has been involved in Mongolia's Long-term Development Strategy for 2016-2030 since 2015 [19]. - Unenbat has served as a board member of APU JSC, a company listed on the Mongolian Stock Exchange, since April 26, 2013 [17]. - Khashchuluun has been a member of the Monetary Policy Committee of the Bank of Mongolia since June 2018 [19]. - Unenbat has been the executive director of the Mongolian Corporate Governance Development Center since 2009 [17]. - Khashchuluun has held various academic and advisory roles, including serving as a professor at the National University of Mongolia [19]. - Unenbat has been a board member of Golomt Bank since October 2010 [17]. - Khashchuluun has been involved in promoting public-private partnership concepts and adopting various economic development laws in Mongolia [19]. Operational Highlights - The company successfully completed a debt refinancing in April 2019, issuing secured senior notes of $440.0 million due in 2024 [26]. - The company has voluntarily disclosed information to CDP Global and adheres to ISO 26000 and GRI standards for environmental, social, and governance reporting [25]. - The company established a Risk Management Committee in 2019 to enhance oversight of the overall risk management framework [25]. - The company is committed to maintaining strict financial discipline and operational efficiency in response to uncertainties caused by the COVID-19 pandemic [27]. - The UHG mining license covers an area of 2,960 hectares and is valid for 30 years, with the possibility of two 20-year extensions [38]. - The latest coal resource estimate as of December 31, 2019, includes a total of 649 million tons, categorized as 322 million tons measured, 215 million tons indicated, and 112 million tons inferred [40]. - A total of 1,556 individual drill holes were completed, with a total drilling length of 191,275 meters, including 104,369 meters of HQ-3 drilling [39]. - The company has collected and analyzed 37,548 individual samples for coal quality assessment [39]. - The recent updates to the Mongolian mining laws are not expected to impact the company's royalty payments, as there are no changes to the royalty rates or procedures [37]. - The company is currently finalizing agreements with the Ministry of Road and Transportation Development to operate special purpose roads for mineral product export [37]. Environmental and Social Responsibility - The company is committed to reducing its environmental footprint by minimizing electricity and water usage [65]. - The company has established a dedicated Environmental, Social, and Governance (ESG) Committee to oversee ESG-related matters and risk assessments [118]. - The company aims to minimize its environmental impact while prioritizing the health and safety of employees and the community [121]. - The company is one of the largest employers and taxpayers in Mongolia, contributing to community development through direct employment and partnerships with customers and suppliers [121]. - The company has committed to aligning its sustainability goals with the United Nations Sustainable Development Goals [115]. - The company continuously strives to improve its sustainability performance, acknowledging there is still room for improvement [121]. - Zero workplace fatalities reported in 2019, achieving the target of zero [122]. - New cases of occupational diseases also reported as zero, meeting the target [122]. - Total recordable injury frequency decreased by 26% year-on-year [122]. - Compliance with safety-related laws maintained at 93%, exceeding the target of 90% [122]. - Local employee percentage decreased by 4%, not meeting the target [122]. - Community development program beneficiaries increased nearly twofold from 2,700 to 5,200 [122]. - Environmental compliance maintained at 95%, exceeding the target of 90% [122]. - Groundwater extraction reduced by 11%, meeting the target [122]. - Waste recycling rate increased by 8%, exceeding the target [122]. - No records of bribery, corruption, extortion, fraud, or money laundering incidents in 2019 [124]. - The company reported no employment of individuals under the age of 18 during the review period [126]. - Over 90% of employees expressed overall satisfaction with the company in a survey conducted in July 2019, with 1,442 direct employees participating [130]. - The company has implemented a health awareness program with over 500 employees participating, focusing on health analysis, healthy food options, and wellness activities [131]. Community Engagement and Development - The company has implemented a flexible working hours system for headquarters employees to improve work-life balance [130]. - In 2019, the company spent over 70 billion tugriks on employee salaries, compensation, bonuses, and benefits [133]. - The total number of directly and indirectly employed staff increased to 4,532 in 2019, up from 4,189 in 2018 [134]. - The proportion of local (Umnugobi) employees decreased to 40% in 2019 from 44% in 2018 [134]. - The company employed 2,096 long-term employees as of the end of 2019, representing an increase of approximately 9% year-over-year [133]. - The company provided 10 to 20 different benefits and allowances to employees, including performance bonuses and various insurance plans [133]. - The employee turnover rate remains a concern due to a lack of skilled workers in the local market, prompting the company to expand its human resources candidate pool [133]. - The company hired over 70 disabled individuals, making up 4% of the total workforce, as part of a new recruitment and retention program [135]. - The percentage of female employees in the total workforce was approximately 19% in 2019, higher than the national industry average of 12% [136]. - The company aims to increase the representation of women in the workforce through training programs and initiatives targeting female employees from rural areas [136]. - The company strictly adheres to equal pay principles, ensuring no wage discrimination based on gender or local versus non-local status [136]. - The company provided free accommodation in miner's dormitories for female managers on rotation, enhancing work-life balance and productivity [138]. - A total of 54 employees took full maternity leave and 117 received parental leave with special allowances in the fiscal year ending 2019 [138]. - The employee turnover rate has stabilized at approximately 8% over the past two years, with nearly half of the employees having worked for the company for over 5 years [139]. - The company created over 800 new job opportunities in 2019, contributing to employee retention strategies [140]. - More than 14,000 individuals completed general safety induction training and related safety training during the reporting period [142]. - Approximately 20% of the participants in vocational training programs were women, highlighting the company's commitment to providing training and job opportunities for women [142]. Environmental Management - The company has successfully implemented an integrated management system in occupational health and safety, environmental management, and quality management [144]. - The company has a dedicated occupational health, safety, and compliance department to respond to emergencies and ensure safety measures are in place [146]. - The company has implemented an internet-based safety program for real-time reporting of risks and hazards by field teams [151]. - In 2019, the company conducted 245 workplace occupational health and safety inspections, achieving a score of 86 out of 100 in the inspection checklist [152]. - The company increased water resource recovery from filter press facilities by 30% through optimized water storage technology [154]. - The total waste recovery rate at mining sites rose from 7% to 15%, more than doubling the previous rate [154]. - No environmental incidents rated "moderate" or above were recorded in 2019, with only one "low" risk incident of fuel leakage [156]. - The company has a robust environmental management system and has implemented various management plans to mitigate environmental impacts [154]. - The company is committed to exceeding regulatory requirements in environmental performance, with over 30 environmental laws and 200 regulations in Mongolia [154]. - The company successfully passed the supervision review of the international standard environmental management ISO 14001:2015 in 2019 [154]. - The company has identified and increased categories of recyclable non-hazardous waste, contributing to improved waste management practices [154]. - The company’s operations are located near significant biodiversity areas, with 121 species of vertebrates identified in the mining project areas [156]. - The company is focused on continuous improvement in health, safety, and environmental activities through an integrated management system [155]. Community Development Initiatives - The company has implemented approximately 50 independent community development projects since the start of mining operations in 2009, most of which are long-term initiatives [188]. - The company was awarded the "Best Community Project Award" at the 11th Annual Global Corporate Social Responsibility Summit, standing out among over 200 nominated companies [187]. - The local education support program has expanded to benefit over 2,000 students and 100 teachers in two secondary schools in Tsogttsetsii [187]. - The "Save Infants" community outreach program has been successfully implemented in all four aimags of the Gobi region, providing modern medical equipment to maternity and infant care units [187]. - The company has signed a long-term community development and cooperation agreement with the Umnugobi aimag office, which includes a mechanism for broader community benefits [188]. - The company has expanded its local student summer work program to include students from four neighboring soums in Umnugobi aimag [187]. - Five non-compliance incidents identified during the environmental review have been addressed, while corrective actions for the remaining incidents are ongoing [186]. - In 2019, the company invested approximately 15 billion Tugrik in community investment, more than doubling the amount from the previous year [192]. - 95% of the 48 community requests and concerns recorded in 2019 were related to financial or material assistance, donations, and employment opportunities [192]. - The company has maintained a near-zero unemployment rate in the Tsogttsetsii area, benefiting from significant infrastructure and community development projects [75]. - Local procurement in Umnugobi province amounted to 8.8 billion Tugrik, contributing to community development [193]. - The company has not received any significant operational complaints or inquiries since 2016, indicating effective community engagement [191]. - The company conducted public consultation activities annually since 2009, fostering communication with local community members [75]. - Community development plans received funding of approximately 943.66 million Tugrik in 2019 [193]. - The company has established a formal complaint management process, responding to all complaints within 30 days [191]. - The company has engaged over 100 local community residents in environmental monitoring activities in 2019 [75]. - The company has invested 3.36 billion Tugrik in local infrastructure development [193]. - The company created significant economic value for the community and the nation, procuring goods and services worth 8.9 billion tugrik during the reporting period, a substantial increase from the previous year [197]. - The company provided over 700 billion tugrik in wages and employee benefits, contributing approximately 329 billion tugrik in local taxes and fees [197]. - The company has invested around 1 billion tugrik annually in ongoing community development programs since 2009, totaling over 1.3 trillion tugrik in taxes and fees paid to the government [197]. - The company employed 2,096 direct employees by the end of 2019, with about 40% hired locally, and its main contractors and subcontractors provided direct employment opportunities for approximately 4,500 individuals [198]. - The company supported local education by establishing a modern school and kindergarten in Tsogttsetsii, benefiting over 1,500 children, and expanded its program to include two secondary schools, increasing the number of beneficiaries to over 2,000 [196]. - The company implemented a summer employment program for local students, increasing participation from 22 students in 2018 to 42 students in 2019, providing valuable work experience [196]. - The company provided approximately 51,000 tons of power coal for free to local communities during winter, along with over 9,000 bales of hay and 45 tons of feed to more than 400 herders [195]. - The company collaborated with the "Save Infants" NGO to improve healthcare quality in local hospitals, supplying modern medical equipment that benefits at least 8,000 mothers and children annually [194]. - The company organized community activities under its "Neighbor" program, receiving positive feedback from community members, including cultural events and support for disabled children [195]. - The company continues to focus on sustainable community development by supporting local startups and SMEs, creating new economic opportunities since 2018 [194]. - The "Magic land-2" project aims to support over 2,000 underprivileged children annually in Ulaanbaatar through education and other support services [199]. - MMC provided significant financial assistance to the "Little heart" project, facilitating life-saving surgeries for over 40 children from low-income families in 2019 [200]. - The company collaborates with the national three-on-three basketball team to enhance training and provide resources for domestic and international competitions [200].
MONGOL MINING(00975) - 2019 - 年度财报