Down Under On The Tundra: It's Our Man In Ulan Bator 

Eric Ellis Ulan Bator

04/23/1996 

IAIN Gerrard went hunting wolves on the frozen Mongolian steppe the other day, just another day in the career of a Perth accountant.

"When I was at university I didn't expect I would end up doing anything like this," the rugged-up 33-year-old partner of Arthur Andersen's Perth office says.

Since 1994, Gerrard has been stewarding one of Arthur Andersen's quirkier client relationships, a multi-million-dollar contract to "Westernise" Mongolia's biggest company, the mining giant Erdenet.

Erdenet isn't so much a company as it is Mongolia's economy.

Last year, its copper, molybdenum and gold exports accounted for 65 per cent of Mongolia's foreign currency earnings of $US320 million.

The company town is centred on one of the world's biggest open-cut copper mines, in northern Mongolia, near the Siberian border with Russia. It is Mongolia's third-largest city, with 80,000 inhabitants.

When Erdenet burps, Mongolian politicians say excuse me. When Gerrard arrives with his laptop, Erdenet's managers give his team of expatriate adventurers virtually free rein to drag the company into the modern world.

Curiously, the Erdenet contract had its beginning in Western Australia's severe post-WA Inc recession.

Gerrard's mining-based practice looked offshore for fees after the easy pickings of the 1980s dried up.

That brought them to the attention of the World Bank and Asian Development Bank, which were forcing the former communist Mongolia to take the bitter free-market medicine necessary when its patrons in the Soviet Union collapsed overnight.

A condition of development aid is the introduction of international standard business systems, with the ultimate aim of preparing the old state-planned kombinats for eventual privatisation.

The Erdenet job was put out to international tender, and Andersen's Perth office won the job in 1994 ahead of tough competition from London, Canada, the US and South Africa, all centres with expertise in mining.

Gerrard has been making trips from Perth to Ulan Bator via Beijing ever since. The World Bank no longer shepherds the relationship with Erdenet, which is now just the same as those Gerrard has with mining houses back in Perth.

That means Gerrard has to brave temperatures that reach as low as minus 40 during January (it was a relatively balmy minus 12 when he arrived this week), battling a Mongolian infrastructure that he describes as "grim at best".

It also means he gets roped into numerous vodka sessions at Erdenet's dacha, which doubles as a hunting lodge for senior executives when not at the office.

Erdenet is perhaps Mongolia's best hope for renovating its abandoned economy and taking its place in Asia's economic ascendancy.

"This is actually a very well managed company, Gerrard says. "The management is as enlightened as any comparable operation in the West, and their mining techniques are very efficient."

The company began in 1978 as a Mongolian-Soviet government joint venture, and today the Russians still have 49 per cent.

There's another 60 years of copper in the mine, and the market is being expanded to include Japan, China and South Korea.

And while the company is preparing for privatisation on the new Mongolian Stock Exchange, its chief executive is campaigning for the national presidency, doing the rounds in the company's Russian helicopter.

Gerrard's work at Erdenet has given him a taste for exotic locations, and his team in Perth are spread as far apart as Zambia, Indonesia and Palestine, all on aid-related deals.

In Gaza, Gerrard's team is putting in an entire bureaucracy for Yasser Arafat's new Palestine Authority, which initially had no physical government budgetary infrastructure.

While some with memories of the WA Inc disaster may smile, the new Palestine Government is being modelled in part on systems used by the West Australian State Government. The project has the backing of Premier Richard Court.

Meanwhile, Arthur Andersen is preparing Zambia's biggest company, Zambian Consolidated Copper Mines, for privatisation.

It all means that as well as trying to make sense of ancient business systems, Iain Gerrard spends a lot of time battling bloody-minded bureaucracies in drafty visa offices ... and occasionally hunting Siberian wolves.