The mining sector of Mongolia has been booming during last decade. Rich in coal, GOLD and copper, this country of fewer than 3 million people in Central Asia is riding a mineral boom that is expected to more than double its GDP within a decade. There are several strategically important mines has been discovered around ten years ago. Although there were several local companies operating in the mining sector, the new big mines were out of their capacity to operate. In order to use the mines economically efficient, the government of Mongolia needed to fund projects, which requires more funding than GDP of Mongolia. One way to rise funding was through initial public offering (IPO). Another way was to cooperate internationally well-known mining giants, which has plenty of experience and know how to operate with big mining sites. In mining sector well known Rio Tinto, Chalco, Peabody energy, Centerra Gold and others offered cooperation with the Mongolian Government. Most of the largest corporations operate in multiple national mining fields. The reason for not relying on local companies is their lack of experience in terms of health and safety (workplace safety) of their workers. Mining is a high-risk industry, which constantly needs huge funding. Also instability of finance, which is going fund millions of dollars. The government of Mongolia signed agreement with the international companies. There was big amount of money behind every agreement. The government requested payment in advance, and the money went to the society as social welfare. What the government did not projected is the unpredictable price fluctuation in the world market. Every country has its own labor standards. It varies from one country to another. The project “Oyu Tolgoi” signed between the government of Mongolia and Rio Tinto has problems with following the specific standards of labor force. For example, there is inequality exist in wages. Salaries for Western, Chinese, and Mongolian specialist differ enormously. The average monthly salary for specialized engineers from Western is around 6000 USD, and it is not the same for Mongolian engineers who are dealing with the same task. That inequality on salary has very bad influence for the mentality of Mongolian engineers, and even worse it derives the under valuation of Mongolian labor force. Mongolia is considered one of the less populated countries with population of 3 million. Therefore labor force shortage is a big issue in construction and mining sector. Since the cheapest labor in the world exists in the neighbor country China, it is optimal to import labor from China. However, it arose huge discrimination problem between Mongolian and Chinese workers. It is historical thing that Mongolians hate Chinese. The discrimination problem goes hand in hand with conflict and hatred. It applies the same to local citizens. As the inflow of Chinese workers increase, the discrimination from local citizens increases as well. The head company behind the project should consider it as its human resource management problem. It has been stated in the agreement with the government, that 70 percent of the total employee must be Mongolians. However, there were some ridiculous cases have been recorded. For example, Chinese are using local Mongolians’ documents to get employed by Oyu Tolgoi projects. This kind of acts that are done by Chinese are arising the tension between Chinese and Mongolians in terms of discrimination.
Posted on: Fri, 19 Dec 2014 17:40:32 +0000
Trending Topics
Recently Viewed Topics
© 2015