Tuesday, November 13, 2018

RESTRUCTURING OF MINES AND MINERAL DEPARTMENT

Project Introduction

Punjab Mineral Company is helping Mines and Mineral department of Punjab on the transformation and restructuring of its processes, procedures and organization state.

A Consortium of Foreign Consultants were hired through competitive bidding to help in this process.

The vision is to have a modern, innovative, dynamic and private sector driven mineral sector that is environmentally responsible, socially sustainable and safe; that contributes significantly to the Punjab’s and Pakistan’s overall economic growth.

And the mission is to ensure responsible mineral development that contributes the optimal level of mineral revenue while respecting the principles of sustainable development

Background

The mining industry is a major force in the world economy, occupying a primary position at the start of the resource supply chain. However, its role in contributing to the national economies of different countries varies greatly.
Punjab, being the second largest (area-wise) province of the country, has a vast mineral potential like coal, salt, iron ore, limestone, gypsum, silica sand and fire clay. Mines and Minerals Department is striving to follow a road map on mineral exploration projects planned by the Government of Punjab.
Considering the immense mineral potential of the province, Government of the Punjab aspires to develop and exploit its metallic and industrial mineral resources and to enhance its contribution to the national GDP. In order to achieve its aspirations, the government plans to restructure the Mines & Minerals department (along with its attached / associated organizations) to give a modern, market and investor friendly outlook in an authority and company mode .
EY Ford Rhodes (EY) and Cornelius Lane and Mufti Consortium (CLM) Consortium have been selected by Punjab Mineral Company for the institutional restructuring of the Mines & Minerals Department. EY will act as the lead consortium member for the assignment and will be responsible for the overall management of the assignment. CLM will be responsible for leading the legal and regulatory reform aspects of the project. In this manner the consortium will capitalize on its strengths and ensure that the objectives envisaged from this assignment are adequately addressed.

Project objectives

The objective of the assignment is to develop a holistic plan for the restructuring of MMD from current departmental mode into authority and company mode and include the following:

  • Smooth transition from the current Departmental mode to the Company & Authority mode in the Mines & Minerals Sector with a view to give it a modern, market & investment friendly and research & development oriented outlook
  • Re-adjustment/re-orientation of technical and non-technical human resource (current & newly recruited) with the special focus on capacity building and maximizing output
  • Reinforcing vertical & horizontal linkages within the sector/allied sectors with a view to attract foreign investment in minerals extraction & development and improve/modernize mining practices
  • Propose a mechanism to strengthen regulatory framework for curbing monopolistic tendencies, lease management and ensuring healthy/safe mining environment including miners’ welfare

Project Progress

After inception of the assignment, to prepare an initial plan, EY – CLMteam held meetings with the key officials in each of the key departments/ agencies under Mines & Minerals Department for obtaining a high level understanding of their respective roles and functions, contributions made by and challengesfaced by the Punjab mining sector

The international experts were also present on ground between01August to 03 August 2016 to kick off the project and to discuss the on ground situation with the relevant stakeholders

A broad work plan and delivery approach was discussed and finalized in the meetings and presented to Secretary Mines & Minerals Department as well the Provincial Steering Committee for Institutional Restructuring of Mines & Minerals Department, setup by the Chief Minister for overseeing the Restructuring project.

In this respect, following two reports have already been shared with the management of PMC:

  • Inception Report; and
  • Gap Analysis Report
  • Draft Recommendation Report
  • Draft Punjab Mineral Policy

Inception Report

The inception report was submitted at the start of this project which outlined the following:

  • Overview of assignment scope, methodology and team structure
  • Snapshot of the initial meetings held with the stakeholders
  • Detailed work plan
  • Deliverables and work products of the project
  • Project roles and protocols

Gap Analysis Report

The second report submitted was Gap Analysis/ Current State Assessment to highlight gaps in the current institutional, policy, legal and regulatory framework in Mines & Mineral sector in comparison with best practices. The contents of the gap analysis report were as follows:

  • Approach for the current state assessment
  • Current overview of the Mines & Minerals Department
  • Gap Analysis/ Assessment across value mining value chain
    • Strategy & Policy
    • Legal & Regulatory Framework
    • Governance & Institutional Framework
    • Resource Mapping, Exploration & Assessment
    • Investment Promotion
    • Mining Concession & Regulation
    • Mining Operations
    • Health & Safety
    • Labor Welfare
    • Environment
    • Royalty & Taxes
    • Human Resource

Recommendation Report

The recommendations report primarily covers the following key elements:

  • Study on selected international institutional structures
  • Assessment of the current institutional structure to identify gaps and comparison with other global structures
  • High level recommended institutional structure and proposed organizational structure
  • High level future state of Human Resource Management
  • High level recommended changes in legal and regulatory framework

Punjab Mineral Policy, 2017

The Punjab Mineral Policy 2017 has been developed to realize the Vision and Mission of Government of the Punjab to make the sector attractive for both local and foreign investors and to contribute significantly to the provincial and national economy.

Consultant Team

Methodology and Scope of Work

For this assignment consultants will be combining two EY approaches used globally for similar restructuring projects. The overall assignment will be managed through Global Service Delivery Approach(SDA); Identify, Diagnose, Design, Deliver, and Sustain, as briefly shown in below diagram:

Keeping in mind the outputs expected of this project we will combine our SDA with Current State Future State Assessment Methodology(CFAM). Overall snapshot of methodology for the proposed project is as follows:

Key Deliverables

Key deliverables for the assignment includes the following:

  • Inception report
  • Detail specifics on the scope of work
  • Protocols on liaison, communication and reporting
  • Detailed work plan highlighting key milestones and deliverable dates
  • Restructuring plan report
  • Current State Assessment
  • Gap analysis report
  • Future State Options
  • Recommendations report
  • Human resource management and capacity building plan report
  • Implementation plan report
  • Draft restructuring plan report
  • Final restructuring plan report
  • Comprehensive policy, legal & regulatory instruments
  • Draft legal instruments
  • Operational rules, procedures, guidelines & templates
  • Key SOPs, aligned with the international betterpractices
  • Workshops and presentations to key stakeholders
  • Workshops guiding the top management on the Department on their expected roles in the transition phase
  • TOR or Scope of Works for programme of support

Expected Outcomes

Expected outcome of the project is to have a restructured Mines & Minerals department in a company / authority mode, having a modern and investor friendly outlook. More specifically, the following outcomes are expected from the restructured department:

  • Restructured set-up lines with international betterpractices and keeping up with the local requirements
  • Attract investment in the sector and facilitate stakeholders – cross sector linkages
  • Strengthening process for mapping and assessing mineral resource potential
  • Focus on research & development – discoveries, new technology and emerging industries
  • Developing skills, capacity and capability across the sector
  • Discovery and development of mineral resources through geoscience information
  • Strong legal and regulatory framework
  • Robust HR system aiding in developing the sector
  • Protection of environmental values, communities and workers’ welfare

Presentation