Ph.D.Assoc.Prof. M.Naranbat, Head of the Mongolian Drilling Association, tells G.Iderkhangai about a very
specialised discipline.
What has your association done to develop the drilling sector? The association was established in 1996 and had the name National Center of Drilling Technology. Its aim was to facilitate networking and to carry out basic research in drilling science. There were only four Ph.Ds then in Mongolia -- J.Tseveenjav, L.Tuvkhuu, L.Dugerjav and me. A little study on drilling had been done in Russia but nothing in Mongolia. There was not even any preliminary documentation or a drilling journal. The few journal entries on the Tavan Tolgoi deposit were not well documented. Our purpose was to systematize drilling records, arrange them in an ordered fashion and bring together all professionals in the field. The first goal has been fulfilled.
Mostly foreign companies are now working on the major drilling projects of Mongolia. At present, USD20 million-USD30 million of drilling work is being executed by US and Australian multinational companies such as Major Drilling, Atlas Copco and Redpath. This means money is going out of the country. The drilling contractor of Ivanhoe Mines is Major Drilling and USD9 million of the USD10 million spent on drilling has gone out. It is time for Mongolians to develop their capacity for drilling and grab orders.
What has prevented Mongolians from developing the sector? The gest problem is the cost of a drill, which is, on average, USD400,000-USD600,000. Accessories would need anther USD300,000-USD400,000. The start up investment required is around USD1 million. This is huge money in Mongolia. Our association also aims to train Mongolian companies to help them become more competitive. We have done some preliminary work, such as organizing a scientific conference for 13 years on the challenges of drilling sector and our research material has been published in Russian “Geologia I razvedka” and “The Miner”.
2010 was a successful year for us as we had two new Ph.D. scholars. In addition, two Mongolian drilling companies, Ord Geo and Tanan Impex, with 10-15 drills started operation as a result of our endeavors. A professional competition among drilling masters had been introduced during the extensive geological studies in Erdenet, Tsagaan Suvarga and Baganuur. This became a regular feature until 1986 and we managed to restore the practice 4 years ago. Last year it was successfully organized in Tsaidam valley of Tuv aimag. Incidentally, modern drilling was introduced in Mongolia in 1922, at Nalaikh. Oil drilling started in the beginning of the 1940s in Zuunbayan and Dornogobi basins and mineral exploration drilling started in the next decade.
How many drilling companies are there in Mongolia?
There are over 400 drills and over 100 drilling companies. Our association has 50 members, of which 13 are foreign invested, 37 local, 28 geological drilling, 16 water drilling, 2 oil drilling, 4 engineering and others.
Is outdated Russian drilling technology being replaced by advanced Western technology?
Some old Russian drills are still being used by private companies. Russian machines UKS -22 M, UGB-50 M are still functioning well for water exploration. Their parts are produced in Mongolia. Russian drills take 20 days to drill 200-m deep holes, while Western machines do this in a week, and the really modern ones can drill 300 m in a couple of days. That is indeed fast and powerful technology. I did my Ph.D in 1994 and when I was in Russia last year to meet my professors, they admitted that Russian technology was very much behind American and Australian.
There can be no question about the competence of Mongolian drillers. We have over 30 master drillers working abroad, some of them engineering graduates from the Technical University. They start working abroad as assistant drillers and are gradually promoted to masters and engineers and general managers.
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How many drills do our major national companies have and what is the quality of their work?
Both Ord Geo and Tanan Impex are technically very good, and both have a sizable number of drills, 10-15 each. Drilling companies secure bank loans using their licenses as collateral and have to drill control wells for determining gold and coal reserves in a time efficient way to be able to pay the interest regularly. Some banks have claimed a number of drills from defaulters. Atlas Copco, Tanan Impex and Ord Geo have Korean, Australian and American machines which are powerful and work fast. Recently, I visited a company with a Chinese drill. It worked perfectly.
Drilling is a responsible job. It helps people to see and touch the minerals, something that raises confidence. Drilling requires much calculation and establishes the reserves in detail. It turns probable reserves into actual ones. That knowledge helps the investor decide on the next course of action, to proceed or not. It is thus important to drill quickly. Western machines mostly use powerful beating and combined methods. Russian drills also have combined methods, but they work only at a relatively shallow depth.
We hear about “fake” machines in Mongolia? Do they harm the environment? Are they safe?
There is no such thing as a fake or bad machine. Some machines can drill to 100 m and not lower, that’s it. The contracting company specifies the technical calculation and data it requires and the drilling company offers drills with the right capacity. Most companies import their drills from Korea or China. Swedish ones operated by Atlas Copco are very good. American machines installed on Benz engines is powerful, but are too expensive for Mongolians. Mongolian Star Melchers LLC displayed advanced drilling machines during Discover Mongolia. Several machines used by Major Drilling cost USD1 million each. They helped Ivanhoe Mines find the copper body quickly.
How do environment and weather conditions affect drilling?
Some conditions do. When it is very cold, the well walls may fall down and the leaching liquid may vaporize. It is challenging to drill in the Gobi region as its soil expands in volume. As water or some liquid is used for drilling, it gets mixed with the soil and expands in volume. It was difficult to drill on coal, but modern drills are changing all that. However, only capable, educated and experienced master drillers can handle them.
It requires many years to become a good driller. It is hard for Mongolians to afford to study in Singapore or India, so, it is a chance for them to participate in the professional competition and acquire experience. As the competition is organized near Ulaanbaatar, participants bring their machines. This year, we are thinking of organizing it in the Ulaanbaatar water supply unit. Water supply is a critical issue. Around 80%-90% of all drills are now located in Ulaanbaatar, so all may participate in the competition.
There are some courses that offer master’s degrees and upgrade degrees. There are six degrees in drilling technology and the higher the degree, the more accurate and safe utilization of drills. Technical University professors J.Tseveenjav, L.Tuvkhuu and others share their technical expertise.
Are there areas in Mongolia, where no drilling has been done, as opposed to the south Gobi and central parts which have seen extensive drilling?
Mineral reserves in the western part of Mongolia have not been studied well. It has to be drilled extensively and documented well. The results must be kept secret. China has drilled all its territory but keeps the data secret. It does not touch its own resources, but imports from Mongolia, Russia and other countries, even from Africa. Mongolia needs productive exploration and this is why drilling should be covered under the state black box policy.
The legal environment in Mongolia posts challenges to foreign and local investors in exploration work. For example, exploration in Bayankhongor aimag would have cost MNT400 million for drilling. If the license is now among the 254 that are to be revoked, all that money is lost. Nobody can tell which license will be revoked under the long-titled law. This shows that the state does not care about drilling work and costs. It will take a lot of time and argument to get compensation and probably only half the money spent will be returned and that, too, in instalments. It’s a lot of bother for the state, too. Failure to produce proper laws and to implement laws properly is getting the state to international courts often.
Exploration means drilling. This is divided into five categories. A deposit cannot be studied fully until it is fully deployed. Once mining proceeds, fresh drilling is needed to determine the state of further reserves. Drilling is done not only for geology, but also for road, construction, hydro geology and soil research. Oil drilling is very different, it requires 4,000-6,000 m drilling. For example, in Zuunbayan you can’t say that there is no oil after drilling 2,000 m only. Oil drilling technology is also very fine. Now we also have undersea drilling.
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What kind of drilling is most popular in Mongolia?
This varies according the specific demands. Most of the demand is in coal. Our geological coal resource is around 150 billion tons, out of which the proven reserve is over 20 billion tons. Coal will be the dominant mineral for long. At the moment, over 400 coal deposits have been discovered, and further drilling will find more. We also have to drill for iron ore, rare earth elements, uranium etc.
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How do you help someone with a drill?
There are many cases of people buying drilling machines from Australian and American companies, where they worked. Individual ownership is not easy and it is better to work for people to come together as a group. The association advises them. Drilling is profitable, though somewhat risky for exploration companies.
How will use of satellite and laser technology to locate minerals affect drilling?
Geophysical methods are mostly tentative studies, and only drilling can determine more accurate reserves. It is more reliable and produces tangible samples. These are then analyzed for further studies in a laboratory to determine if there is any other element or mineral to be found and its quantity. Probable reserves cannot indicate the value of a deposit.
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Tell us about the special rig designed by Tanan Impex to maximize the efficiency of sampling, which shows how innovative Mongolian engineers can be.
This technology is called double chimney/pipe. It exists in Russia and the US. It means when one pipe is turning, the other is not, which helps take the sample. Once the sample is gathered, the pipe is closed. These double pipes are most important when drilling for coal. This technology is used for soft soil. Drilling also has to be done at a specified point and as deep as possible. It required 1,500 m drilling in Tavan Tolgoi to determines the current reserves.
What is the future of drilling in Mongolia?
The Ministry of Mineral Resources and Energy has hydrogeology, geophysics and mining policy departments but none for drilling. The former geology and mining ministry had a department of drilling technology and it was then that major deposits like Asgat, Tavan Tolgoi, Shivee Ovoo and Banagnuur were discovered. The 300 drilling machines in the socialist times have now become 600, and it is time to examine whether the most apt technology is being used or not.
Drilling is a very fine science and is very specialised work. A driller who has spent his life working on gold cannot move to coal. It is imperative to have a drilling technology center in Mongolia. People do not see the theory behind drilling work. Remember how over 60 Chilean miners were rescued from 700 m underground only by using a powerful drill. During the British Petroleum oil spill in the Mexican gulf also, only use of a drill stopped the leaked oil from reaching the sea floor. Now it is time to develop drilling from the scientific point of view.