Chile Mining

2018 EXPOMIN OFFICIAL INVESTMENT GUIDE EXPOMIN OFFICIAL INVESTMENT CHILE MINING

GLOBAL BUSINESS REPORTS CHILE MINING 2018 - EXPOMIN OFFICIAL INVESTMENT GUIDE Dear Reader,

The mining industry has only recently emerged from a difficult period. The consistent price decline of copper between 2013 and 2016 presented a whole set of challenges to red metal producers. Chile, as the world's copper powerhouse, was no exception. Nelson Pizarro, CEO of state-owned copper titan CODELCO, referred to this period of low mineral value and sustainability issues as a 'perfect storm’ exacerbated by a lack of government funding. Miners worldwide embarked on aggressive cost reduction missions to boost productivity, eliminate bottlenecks, and think outside of the box to incorporate new technologies. In a joint effort with their providers, surviving mining companies managed to reduce production costs substantially across the board. It was a tough journey, but it paid off, as the industry has created much more efficient and resilient solutions to capitalize on the commodity cycle’s most recent upswing. While the cautious argue that we have not yet seen the light at the end of the tunnel, there are clear signs of recovery. The upward trend in the copper price, starting from the last quarter of 2016, continued throughout 2017. On the other hand, Chile's investment portfolio for the upcoming decade increased by 32%, according to COCHILCO, from the US$49.2 billion portfolio in 2016 to an estimated US$65 billion for the period from 2017 to 2027. The mistakes of the last super-cycle remain fresh in everyone's minds, so both mining companies and providers must continue their strong partnership to develop cutting-edge technology and be at the forefront of innovation, efficiency, and safety. With all of this in mind, Santiago is hosting the 15th edition of EXPOMIN. The event is the key meeting point for both national and international investors, mining executives, and technical experts with an interest in Chile's mining industry and its world-class pool of providers. EXPOMIN 2018 will look to strengthen the integration of the Latin American and global mining markets. As part of this effort, FISA, the organizers of EXPOMIN, and Global Business Reports, a market-intelligence company with extensive experience in the production of industry reports worldwide, have partnered for the production of Chile Mining 2018: EXPOMIN's Official Investment Guide. The publication offers a 360-degree overview of the state of Chile's mining industry, including its main producers and operating mines, exploration companies and their exciting upcoming projects, and the different providers across the whole value chain, from engineering to mining equipment and services. Hoping that you have a great conference full of business and networking opportunities, we thank you for your participation in EXPOMIN, and we hope you enjoy reading Chile Mining 2018. Best regards,

Carlos Parada Alice Pascoletti Executive Director General Manager EXPOMIN Global Business Reports (GBR) PERU

Production & Overcoming BOLIVIA Arica

Development Challenges EXPOMIN Official Investment Guide Chile Mining 2018 Iquique EXPOMIN An overview of Chile's main Global Business Reports Providers play a key role in mining producers, latest This research has been conducted by optimizing operating costs and Imara Salas, Meredith Veit, M&A deals and upcoming Ana Miclea and Kevin Norchi Tocopilla assuring sustainability PARAGUAY operations Edited by Mungo Smith and Alfonso Tejerina Graphic design by Gonzalo Da Cunha

A Global Business Reports Publication Antofagasta For updated industry news from our 14-31 46-55 on-the-ground teams around the world, please visit our website at gbreports.com, subscribe to our newsletter by signing up Taltal to our VIP list through our website, or follow us on Twitter: @GBReports Chañaral

Caldera The Exploration Copiapó Innovation Market La Serena From advanced projects to The world's largest mining Ovalle greenfield ventures, Chile equipment and technology continues to expand its companies have a base in ARGENTINA investment pipeline Chile San Felipe Valparaiso Santiago San Antonio 32-45 56-69 Rancagua

Talca Pacific Ocean Chillán Concepción

Introduction to Chile's Mining Industry Overcoming Challenges: the Role of Providers Temuco 8. Mining in Chile 10. Interview with Chile's Ministry of Mining 48. Investment Challenges Valdivia 11. Interview with Sonami 49. Interview with Aprimin 12. Interview with Cochilco 50. Interview with Golder Associates Osorno 13. Interview with Fisa - Expomin 51. Interview with SRK Puerto Montt 53. Interview with OHL Ancud 54. Interview with Prochile Castro Production and Development 55. Post-Downturn Transformations Chile 16. Chile's Copper Mines Atlantic 19. Interview with Codelco Innovation International Boundary Ocean 20. Interview with BHP Minerals Americas National Capital

22. Interview with Lumina Copper 58. Innovation and the Future of Mining City 23. Major Asset Sales 60. Interview Normet 24. Interview with Mantos Copper 60. Interview Komatsu Cummins Chile 25. Interview with Minera Tres Valles 61. Interview Liebherr 26. Interview with EY 62. Interview Fast Pack N 27. Chile's Varied Richness 62. Interview Antirion 28. Interview with Yamana Gold 66. Interview ABB 30. Chile's Next Top Mine 67. Interview Mainstream Renewable Power 68. Interview Exsa 68. Interview Dyno Nobel Exploration 69. Game-Changing Innovations

34. A New Wave of Exploration in Chile 36. Interview with Altiplano Minerals Conclusion 0 100 200 300 Kilometers 38. Interview with Gold Fields 38. Interview with LiCo Energy Metals 72. The Strength of the Leader 0 100 200 300 Miles Punta Arenas 40. Interview with Bolsa de Santiago 73. Final Thoughts 43. Interview with Superex 44. Interview with Foraco 74. Business Directory 45. The Onset of a Positive Market Sentiment 78. Credits

Industry Explorations CHILE MINING 2018 Global Business Reports GBR • Industry Explorations • CHILE MINING 2018

INTRODUCTION TO CHILEAN MINING

"The mining business is cyclical. We never know when there will be a period of low prices or how long it will last, so we are not banking on new copper super-cycles. We have to focus on being an efficient industry, capable of offsetting the decline in ore grades, the increased operational complexities and the growing environmental and social demands."

Carlos Ávila, VP Planning and Technical, BHP Minerals Americas Image courtesy of Chile Ministry Mining EDITORIAL Global Business Reports Global Business Reports

CHILE'S GDP GROWTH Source: IMF

Mining in Chile % 7

6 Reawakening the sleeping giant

2 1.4%

-1

-2 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 It is no secret that the global downturn in an imminent influx of foreign investment is CHILE AT A GLANCE commodity prices left mining jurisdictions warranted. “In my opinion, the price of cop- Source: IMF across the world reeling since 2013. Chile, per already reached a floor,” said Maritza CHILE: MINING PRODUCTION AND RESERVES (2016) whose mining sector comprised 20% of its Araneda, KPMG Chile’s mining manager Capital: Santiago Sources: Consejo Minero, USGS, Sernageomin, Cochilco total GDP as recently as a decade ago, is no and resident copper expert. “A sustained GDP: $263.2 billion 8 GDP Growth (2017): 1.4% exception. As a country whose economy has increase is likely to be seen in 2018, with Inflation rate: 2.3% historically depended on mining and whose further upside in 2019.” Current account balance (% of GDP): -2.3% national budget is pegged to the price of Fortunately for Chilean copper producers, copper, Chile serves as a microcosmic rep- global demand for copper has remained resentation of the mining industry at large. relatively steady. Anticipated infrastructure PRODUCTION: 5.5 M mt % WORLD PRODUCTION: 28% DEMOGRAPHIC DATA (2017) COPPER From 2015 to 2016, the world’s top copper investments from the United States and WORLD RANKING: 1 producer fell from 11th to 39th in the Fraser China, as well as the looming transition Source: IMF % WORLD RESERVES: 29% Institute’s Survey of Mining Companies, from fossil fuels to electric batteries in the the result of which, in this case, correlates automotive industry, bode well for copper’s directly with investment dollars. According inherent application value. The Financial to Sergio Hernández Núñez, executive vice Times reports that Chinese consumption of president of the Chilean Copper Commis- refined copper is expected to grow at 2% PRODUCTION: 1.39 M oz sion (COCHILCO): “Since 2013, the port- per year over next five years, and according % WORLD PRODUCTION: 1.40% GOLD Population WORLD RANKING: 14 folio of mining investment projects in Chile to the Observatory of Economic Complex- % WORLD RESERVES: 7% has declined significantly, from approxi- ity, US$13 billion worth of Chilean copper 18.4 mately US$110 billion to US$65 billion.” exports were destined for China in 2015. million The purpose of this editorial, however, is “China consumes approximately 45% of not to examine the flotsam of a shipwrecked the world’s copper,” Araneda continued. mining economy. Rather, it is quite an ex- “At the end of the day, whatever happens PRODUCTION: 48.22 M oz citing time for the Chilean mining industry. in China will heavily influence the price.” SILVER % WORLD PRODUCTION: 6% WORLD RANKING: 4 Not only does Chile still produce 30% of In general, while total mining investment % WORLD RESERVES: 14% the world’s copper — Chile produced 5.55 in Chile has taken a hit since 2013, produc- GDP per GDP per million mt in 2016— but it is also essential tion totals have remained relatively stable. capita capita (PPP) to recognize that US$65 billion of invest- While this is likely due to companies try- ment is no paltry sum. Chile’s total copper ing to maintain a certain revenue quota, the $14,314 $24,587

exports in 2016 accounted for $26 billion overarching message is that Chile’s stron- PRODUCTION: 55,650 mt in revenue, matching 2009’s copper export gest mines were able to withstand the social % WORLD PRODUCTION: 23% MOLYBDENUM revenue, which was the low point before the darwinian test of an extended down cycle. WORLD RANKING: 2 % WORLD RESERVES: 11% most recent mining boom. If history repeats Chile’s mining health should serve as a pos- Unemployment itself, then the optimism stemming from a itive sign of vitality for the global mining sustainable rise in the price of copper and industry at large. ▬ 7%

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports INTERVIEW Global Business Reports Global Business Reports INTERVIEW

What have your major accomplishments 2027. The copper mining industry is, in fact, been since taking over as minister? increasing water efficiency. One of our accomplishments was making the mining industry an integral development How do you ensure a balance between Could you please give an introduction to a bit of spending on this area, but we have platform with more productivity, innova- productivity and environmental respon- Sonami? yet to see its full use. At first, companies tion, community involvement and environ- sibility? Founded in 1883, Sonami is Chile’s cham- were hesitant to implement automation be- mental commitment. To do this, we have The government created the Presidential ber of mines and our membership includes cause introducing new technology could promoted multi-party dialogue and invited Advisory Commission, whose mission small, medium and large mining compa- take time away from production efforts. mining companies, suppliers, guild associa- was to evaluate the current Environmental nies. The small mining companies belong However, as companies began to focus on tions, nonprofit institutions, local communi- Impact Assessment (SEIA) and generate to different regional associations and pro- operating margins, they are finding that ties, research centers and academy repre- adjusted modification proposals to the new duce about 1% of Chilean copper. The they have no choice but to invest in this sentatives to participate. As an example of sociocultural and economic scenario. The large mining companies, with the excep- technology. A key benefit of automation is the success of this model, the new Policy for goal is to have more expedited processes, tion of Antofagasta Minerals, are interna- the increase in safety associated with hav- Lithium and Governance of Salares gives us but with high quality standards and in a tional and produce the full range of coming fewer employees on-site. the ability to increase our lithium offer and context of legal certainty for the companies, modities that Chile has to offer. We belong diversify the national lithium industry. the communities and the different public to the Confederation of Production and Do you expect the current legislation At the same time, we have created public- services that are part of the evaluation. This Diego Commerce, which is the top business as- around land claims will change to at- Aurora private entities, including the Mining Value commission’s work ended with 25 propos- sociation in Chile. tract more attention to greenfield activ- Alliance and the National Mining Program als, some of which became draft laws, regu- ity? Williams High Law, which look for opportunities to latory modifications, and other management Hernández What are mining companies’ major con- We may see some changes to attract more create value with the introduction of new measures. Additionally, the creation of the cerns at the moment? greenfield investment, but land claim leg- technologies. We also promoted the Mining National Sustainability Agency ensures that In a short amount of time, mining compa- islation will fundamentally remain the Safety Regulation update to make regula- environmental standards are improved and nies had to transition from producing as same. Guaranteed land claims is one of the tions suitable to new operations in the in- fulfilled. much as possible while commodity prices biggest factors that attracted international dustry, maximizing safety for the workers. were high to defending operating margins investment to the Chilean mining industry Regarding public mining, we have capital- What steps are being taken to abate po- President while commodity prices were low. There in the first place. Ideally, we would like to ized Codelco, which secures the sustain- tential investors’ concerns about strikes SONAMI have been some positive effects, including have more medium-sized exploration com- 10 Minister of Mining* ability of the corporation and strengthens its and labor unions? lower operational costs. The devaluation of panies enter Chile, but any changes must 11 GOVERNMENT OF CHILE productivity. By March 2018, we will dou- Unionization is a fundamental right. It is our currency has led to lower cash costs in be done cautiously so as not to drive away ble our support to small mining with over recognized in every democratic country as terms of American dollars. existing investment. Chile’s current project US$100 million in resources within the next a basic condition to establish fair and bal- Companies have also begun to make more portfolio is competitive, and we anticipate *Until March 2018 four years of government and create more anced relationships between employees and decisions with the future in mind, includ- more development in Chile during the next focalized mechanisms for its sustainable de- employers. Those who invest or wish to ing focusing on innovation and other long- wave of mining investments. The govern- velopment. invest in Chile know that we are a nation term initiatives. In Q1 2017 we already ment recently dropped foreign investment that has very clear rules and great political, saw an increase in tax payments from mi- agreements that guarantee stability and How can you reduce the relatively high economic, and social stability. This is guar- ning companies, indicating that the worst is certainty for international companies, and costs of energy and water accessibility in anteed by unrestricted respect to our laws behind us. We are also seeing an increase in we believe these agreements should be Chile? and the international agreements we have. pre-feasibility studies and brownfield -ex brought back to attract more foreign in- Considering new projects and expansions, it ploration. Everyone wants to be prepared vestment. “ is projected that the industry will increase What does the future hold for Chilean “ for when the price of copper reaches a cer- energy consumption to about 34% of total mining in terms of exploration and mine tain level. Our expectation is that, as grades What are the main advantages to invest- The industry's energy consumption consumption over the next decade. As a expansion? Guaranteed land claims is one of fall and some mines run out of ore, the de- ing in Chilean mining? will represent 34% of total result, the government has promoted new Chile still has diverse geological potential. the biggest factors that attracted mand for copper will continue to grow by Chile is a mining country. We produce 30% consumption over the next decade. tenders that caused a decrease in the energy The country’s exploration budget repre- international investment to Chile. around 2% annually for the next ten years. of the world’s copper, our mines are quite The government has promoted prices. Rates will become more competitive sented 6.4% of the global exploration bud- Ideally, we would like mature, and the mining industry is very new tenders that will push rates on an international level at between US$50 get in 2016 at US$443 million. Most of the to have more medium-sized What are the major innovation trends well established. That said, there is still to become more competitive on and US$100 per MW. investment is related to copper at 66%, fol- exploration companies, but any that you have observed in the industry? more room for production in Chile. Son- an international level, at between Regarding water efficiency, we have - pro lowed by gold at 31%. We also have plenty changes [to the claims system] Large mining companies tend to be con- ami has prepared some strategies to attract US$50 and US$100 per MW. moted projects to expand the volume of pre- of silver, molybdenum, nitrates, lithium, must be made cautiously. servative with technological investments more foreign investment, which we plan to served water, increase the reuse of treated iron, and rhenium reserves. In the future, we because production is so capital intensive. share with the new president. We need to waste water, and have more sea water de- must increase that geological potential by Using unproven technology creates ad- find a way to make our regulations more salination systems. According to Cochilco, expanding our mineral reserves, but also by ditional risks for these operations. Over similar to those of the world’s most com- total continental water consumption pro- exploring other elements that we know exist the past few years, however, we have seen petitive mining jurisdictions, but without jected in 2027 will be 10.8 cubic meters in our territory such as rare earths, titanium companies increasing the scale of their jeopardizing what the regulations were ” per second, which represents a decrease of and cobalt. There are opportunities through ” equipment and incorporating communica- originally meant to protect. For example, about 17% compared to consumption in Enami, which is looking for strategic part- tions technology into their operations. We an environmental permit that normally 2016. Meanwhile, sea water use is expected ners to develop greenfield and brownfield expect companies to increase their invest- takes four years to obtain should only take to increase to 9.3 cubic meters per second in projects. ▬ ments in automation. There has been quite two years. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Image courtesy of Chile Ministry of Mining Global Business Reports Global Business Reports INTERVIEW

Sergio Carlos Hernández Parada

Executive Vice President Executive Director CHILEAN COPPER EXPOMIN COMMISSION (COCHILCO) Commercial Manager FISA

What have been the biggest develop- have plenty of activities that always support 12 ments in Chilean mining since 2013? mining companies, not only during difficult What is the objective of EXPOMIN? Mining Development” that is related to the With certain commodities, Chile is still 13 Since 2013, the portfolio of investment times. Cochilco is a very reliable institution EXPOMIN was created in the 1990s due topics the mining industry is dealing with, the leader in the world, and it will remain projects in Chile has declined significant- that always thinks about the development of to a change in Chilean law that opened up like the use of sea water, mineral process- like that for a long time. Beyond that, the ly, from approximately US$110 billion to the sector. external capital, after having done the ex- ing, sustainability, human resources, or Chilean mining industry has to solve many US$65 billion. The most important cause is act opposite in previous years by national- new laws, for example. These conferences infrastructure problems related to how the sharp decline in the price of copper. In How important is the use of data to Co- izing the mining industry, which is when have one representative from the mining mineral deposits are built, and there are fact, the demand for copper has been rela- chilco’s operations? Codelco was created. This change in the industry who is recognized as a leader in technical challenges that affect productiv- tively steady. Before the downturn in the We receive statistical information on pro- law had to be done because the national in- the field. This year, that representative is ity. On the other hand, we see other issues price of copper, the mining boom in Chile duction, costs, and supply and demand. vestors were not capable of developing the Iván Arriagada, CEO of Antofagasta Min- related to permitting, processing, and eval- led to the development of and investment in This information is handled with absolute mining industry according to its expected erals. We also incorporate students to in- uation. All of these conditions have caused many projects. Eventually, costs increased confidentiality and is delivered in generic growth. EXPOMIN was an initiative by crease the interest in the industry and make other jurisdictions in Latin America to because these companies were hiring work- terms, and it has evolved as a management the American government to promote in- it attractive as a profession. become more attractive to foreign inves- ers and consultants, and buying equipment tool for companies, universities and pro- teraction with American dealers. Eventu- tors. I believe the Chilean mining industry and machinery. We are now seeing the op- fessional institutes. Our evaluations and ally, it became the predominant mining In your opinion, how can the mining is doing its job to solve these problems, posite, and operational costs are lower. I be- investments of Codelco and Enami give us conference in Chile. industry in Chile become more collab- however. lieve the price of copper will hover around in-depth knowledge about the industry and orative? US$3 per pound in the long-term. supply needs. These figures give us confi- What were the highlights of EXPOMIN To face critical cycles, the Chilean mining Do you have an overarching message for dence in the fact that Cochilco knows the 2016, and what is the ideal outcome for industry must be more collaborative. EX- the delegates of EXPOMIN? How has the government helped boost or mining sector from both a technical and 2018? POMIN aims to be a platform for compa- EXPOMIN is a high-profile event with a incentivize the mining sector during this economic perspective. Every year, EXPOMIN represents what nies across all industries in Chile to share lot of exposure for those who participate, time of low commodity prices? the industry is about and what is being their views and experiences. EXPOMIN as potential investors will be coming from The government of Chile provides informa- What are the main advantages of invest- done. We maintain a period of two years 2018 will be specifically focused on initia- all over the world. It should be seen as a tion to the mining sector, including reliable ing in Chile? because many things happen in two years, tives that incorporate innovation to solve chance to share information and knowl- statistics that we have access to thanks to Chile is the biggest copper producer in the particularly regarding technology. We cre- problems in mining, and the development edge, as well as a window to show how our International Copper Study Group. world. The country has developed unique ated a committee that analyzes the inter- of Chilean technology companies. advanced Chile is compared to other coun- They give us access to data pertaining to technology, we have great professionals, ests of the industry and creates a theme tries in South America. EXPOMIN should the evolution of the market, such as supply and our institutions have 200 years of tra- based on their findings. The core of each How can Chile increase its competitive- be considered as a key meeting for both and demand. Besides that, we represent the dition and stability. Furthermore, Chile conference does not change, but we alter ness in the global mining industry? the national and international mining in- country in the world copper market, we own has a great deal of respect for international the complementary activities related to Nowadays, the Chilean mining industry dustries. ▬ the presidency of APEC’s mining group, contracts, and investors can have legal cer- the conference each time. For example, is going through a good period. The price and we also supervise copper exports. We tainty here. ▬ we have a congress called "Innovation for of copper is projected to be very positive.

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations GBR • Industry Explorations • CHILE MINING 2018

PRODUCTION & DEVELOPMENT

“The Bachelet administration started a commission of specialists to get an opinion on what should be done regarding lithium projects. The commission had some short-term recommendations, the main one being that the government should promote public-private developments in order to develop projects in Chile’s salars.”

- Patrick Cussen, Director, Bearing Lithium Image courtesy of Minera Tres Valles Image courtesy of Minera Tres EDITORIAL Global Business Reports Global Business Reports FACTSHEET

PRODUCTION MAP & DIRECTOR Chile’s Copper Mines C

Taraapacá Region Products Company Survival and growth Cerro Colorado C BHP Billiton Collahuasi C M Anglo American/Glencore Quebrada Blanca C Teck Resources Tarapacá Antofagasta Region Products Company Antucoya C Antofagasta Minerals El Abra C Freeport McMoRan/CODELCO Radomiro Tomic C CODELCO Chuquicamata C M CODELCO Ministro Hales C CODELCO Antofagasta Michilla C Antofagasta Minerals For many copper producers in Chile, pro- The state-owned National Copper Corpo- Despite the current price of copper, Codel- Spence C BHP Billiton duction continued at a fairly consistent ration (Codelco)’s top-producing mine, El co appears to have its sights set on the fu- Sierra Gorda C G M KGHM rate over the past several years despite a Teniente, has increased production every ture, investing in projects that aim to extend Centinela C G Antofagasta Minerals relative lack of return for their product. year since 2011. Codelco’s total copper pro- the company’s current mine lives. In fact, Gabriela Mistral C CODELCO BHP Billiton’s Escondida mine, the top- duction in 2016 amounted to over 1.7 mil- in 2016, Codelco allocated over US$2.7 bil- Salar de Atacama L SQM producing copper mine in the world, still lion mt, representing 31% of Chile’s total lion toward development projects as part of produced over 1 million mt of copper in production. BHP Billiton produced Chile’s an US$18 billion investment plan that will Lomas Bayas C Glencore 2016, representing a modest 6.8% decrease second-largest amount of copper in 2016 at last through 2020. The company’s largest Atacama Zaldívar C Antofagasta Minerals/Barrick Gold in production from 2012. Anglo American 1.2 million mt. Mine production is volatile development project is at the Chuquica- Escondida C BHP Billiton and Glencore’s Collahuasi mine, Chile’s regardless of the state of the industry, but mata mine, where it is developing an un- Franke C KGHM second-most productive copper mine in Chile’s sustained level of production indi- derground mine structure that is projected Atacama Region Products Company 16 2016, produced 506,000 mt, representing cates an absence of any long-term econom- to add 40 years to Chuquicamata’s current Salvador C M CODELCO 17 an 11.2% increase from the previous year. ic health concerns. mine life. The underground mine is expect- NuevaUnion (development) C G M Teck Resources/Goldcorp ed to be in production in 2019. As Nelson La Coipa G S Kinross Pizarro, CEO of Codelco, explained: “We Coquimbo Maricunga G Kinross realized that we needed to carry out a plan to replenish the production capacity that Ojos del Salado C G Lundin Mining had been lost due to the decrease in the re- Candelaria C G Lundin Mining serves, so we formed a portfolio of struc- Caserones C M Lumina Copper tural projects, such as the Chuquicamata Valparaíso Coquimbo Region Products Company new underground expansion, a new haulage Carmen de Andacollo C Teck Resources level at El Teniente, a potential expansion Altos de Punitaqui C Glencore Región for Andina, and others.” Los Pelambres C M Antofagasta Minerals El Teniente, already the world’s largest un- Metropolitana Santiago Valparaíso Region Products Company derground copper mine, is also a recipient El Soldado C Anglo American of Codelco’s investment funding, as the Andina C M CODELCO company is adding a seventh level to it that is projected to add 50 years to its mine life. O'Higgins Santiago Metropolitan Region Products Company Also in the El Teniente division, Codel- Los Bronces C M Anglo American co implemented the Dacita and Diablo O’Higgins Region Products Company Regimiento projects, which are expected to El Teniente C M CODELCO generate a respective 490,000 mt of refined copper over twelve years and 126,000 mt of COMMODITY C = Copper refined copper over eight years. M = Molybdenum Antofagasta Minerals (AMSA), the larg- Copper L = Lithium est privately owned, Chile-based producer, Copper-Gold S = Silver brought their Antucoya mine into produc- Copper - Molybdenum G = Gold tion. After having briefly been owned by Copper - Gold - Molybdenum Sociedad Química y Minera (SQM) and Gold then reacquired by AMSA, Antucoya began Gold - Silver producing in 2015 and is still ramping up its copper production totals. Meanwhile, Lithium 18

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations EDITORIAL Global Business Reports Global Business Reports INTERVIEW

Could you please give us an overview of amount of copper due to the high price. In Codelco’s position in the Chilean mining my opinion, this triggered an excess de- industry? mand of engineering and construction ser- Codelco is Chile’s largest producer of vices for new mines and the cost for critical copper with more than 1.8 mt annually supplies for the mining activities increased (including own and third party copper). dramatically during that period. Addition- We also produce gold and silver. Being a ally, the new generations of mining work- state-owned company, we have statutes and ers do not have the feeling of belonging specific legal frameworks that allow us to to any company, and go to work wherever compete in this market. Over the years, ore they are paid best while nobody is willing grades have been decreasing, while we have to work at the mine site. The industry has transitioned from mining on the secondary to shift from a business model focused on enrichment zone to primary sulfide (chalco- productivity and obtaining operational li- pyrite). censes to one focused on simultaneously Nelson satisfying workers expectations, controlling What are the main challenges for today's environmental effects, complying with law mining industry? restrictions and, of course, creating value Pizarro Sustainable mining has a number of stra- for investors. In summary, we need a new tegic pillars, including safety, the environ- business model based on sustainability. Our ment and local community relations. Mini- challenge is to be able to monetize lower- mizing environmental impact is a constant grade ore deposits. challenge. The environmental assessment process in Chile can take two to three years. Does automation present a threat or an CEO The consequence of requiring hundreds of opportunity to mining workers? CODELCO permits is that mining companies have been Productivity is advancing as a result of au- 18 forced to develop advanced engineering tomation, and it is now possible to achieve 19 work in order to evaluate the impact and its 16-18 hours of effective work per day ver- mitigation solutions. In Chile, communi- sus 13 or 14, which equates to a lot of mon- ties have the right to be informed, but the ey. Robots do not get sick or tired. We have regulations are not yet clear enough. Envi- configured a way to scan equipment and op- Image courtesy of Minera Tres Valles ronmental control also limits the ability to timize metallurgical recovery, and our goal 16 Even more concerning for the country, Codelco laid off over 4,300 use fossil fuels, which leads to the use of is for plants to operate more than 95% on AMSA’s Los Pelambres mine is consistently a top-five copper pro- employees in 2015, which created a ripple effect throughout the in- electricity and, therefore, a greater use of automatic pilot in the future. ducer in the country, and the company’s Centinela mine frequently dustry. “Mining in Chile has lost about 56,000 jobs, and two-thirds copper. falls within the top ten. of that corresponds to mining providers,” stated Pascual Veiga We have been suffering from drought for What does the future hold for Codelco? Apart from Antucoya, Codelco’s Ministro Hales mine, KGHM’s López, president of Aprimin, an organization that represents and “ more than five years, and water scarcity is a In 2014, the government committed to We realized that we needed Sierra Gorda mine, and Lumina Copper’s Caserones mine, also promotes the development of mining suppliers. “We are not cur- big issue. Due to the resulting restrictions in capitalize Codelco with up to US$4 billion, came into production during the height of the downturn, each of rently seeing the salaries, bonuses, and employment numbers we to replenish the production the use of water, mining companies are now including US$1 billion through retained which have been able to sustain steady growth in spite of market have seen in the past.” capacity that had been lost due looking to use sea water for their opera- earnings and an additional US$3 billion by conditions. “We are operating at 90% of our full concentrator plant Despite their decrease in manpower, Codelco’s production from to the decrease in the reserves, tions. Obtaining sea water is not a problem, way of direct capitalization within a period production capacity, and we are working to close the remaining 2015 to 2016 only decreased by a proportionately negligible 3.4%, so we formed a portfolio of but pumping it up to high-altitude mines is of four years. We realized that we needed 10% gap as quickly as possible by identifying and mitigating bot- which is emblematic of the rest of the industry in Chile. This is a structural projects, such as the very costly. Additionally, labor laws have to carry out a plan to replenish the produc- tlenecks,” said Maciej Sciazko, CEO of Lumina Copper. “Hope- direct result of increased operational efficiencies and investments Chuquicamata new underground also changed, imposing more regulations to tion capacity that had been lost due to the fully, this project will serve as an example of how to bring an asset in automation. “If you compare Chilean mining production in 2013 expansion, a new haulage level at El the mining activity, with new work sched- decrease in the reserves, so we formed a into production during difficult times.” and 2016, however, you will only notice a small variation,” con- Teniente, a potential expansion for ules. For instance, previously, mining settle- portfolio of structural projects, such as the The decline in commodity prices, however, did not come without tinued Veiga. “Chile is obtaining good numbers but with 56,000 Andina and others. ments could be built as close as possible to Chuquicamata new underground expansion, some detrimental effects. Codelco’s US$18 billon plan is a toned fewer workers, so that tells you that we are starting to overcome the the operation, but now they must be built a new haulage level at El Teniente, a poten- down version of its original US$25 billion plan. Despite a US$600 challenge of maximizing productivity.” below 3,000 meters above sea level. The tial expansion for Andina and others. This million investment from the government earlier in 2016, Codelco Nevertheless, as the market recovers, many miners may once again Chilean mining industry, nowadays, is very aggressive portfolio of projects accounts for has suspended its US$5.4 billion Radomiro Tomic sulphide proj- find work. Kinross, for example, is still carrying out aggressive challenging. US$25 billion of capital investment over ect until 2024, and the deadline to expand El Teniente was pushed exploration plans despite a temporary hold on gold production. five years. Unfortunately, the copper price from 2020 to 2023. “We expect to accelerate the remaining projects ” How has Codelco maintained its produc- dropped dramatically, so we had to priori- “At the La Coipa mine, we continue to look for ways to restart the when the copper price is slightly above US$3 per lb,” said Nelson mine,” explained José Tomás Letelier, vice president of external tivity despite the challenges of the mining tize the most critical projects, particularly Pizarro. “We have decided not to increase the debt of the company affairs at Kinross Chile. “We believe that the assets that we have downturn? Chuquicamata underground and the new and instead have been analyzing the profitability of each project in Chile have good potential and we would like to develop them During the mining boom, mining com- level of El Teniente. ▬ and approving only the most profitable.” further.” ▬ panies produced the maximum possible

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports FACTSHEET

29 Cu THE COPPER MARKET Copper Could you please provide an overview of What is the nature of BHP’s relationship 63.546 the most recent developments at Escon- with the local communities? EVOLUTION OF COPPER PRODUCTION IN CHILE dida and Spence? As a company, we have made a voluntary Source: Cochilco 2011-2017 was a very intense period as commitment to devote 1% of our pre-tax Million mt SOME COPPER regards investment. Projects totalled over profits – calculated over the average of the 5.8 APPLICATIONS US$10 billion, particularly at Escondida, previous three years – to social investment. 5.7 where they included the new OGP1 con- In this way, we foster and support commu- centrator and the second desalination plant, nity development plans that give priority 5.6 with a capacity of 2,500 liters per second. to improving people’s quality of life. We 5.5 Cables The operation of the three concentrators are, for example, the private company that will help us offset the decline in ore grades contributes most to culture and access to it. 5.4 and maintain annual production stable at We work through long-term alliances with 5.3 around 1.2 mt for a decade. top-quality partners such as Chile’s Teatro 5.27 5.2 We have also started the Spence Growth a Mil Foundation and its Museum of Pre- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Option (SGO) project, a US$2.4 billion Columbian Art. We are also part of CREO Carlos investment including a concentrator to Antofagasta, a public-private alliance to process the hypogene mineral. This project address the challenges of the city’s growth. WORLD COPPER PRODUCTION (2016) WORLD COPPER RESERVES (2016) will extend Spence’s life by over 50 years, Capability development is another area in Sources: USGS / Cochilco / GBR Sources: USGS / GBR

and we expect it to produce its first concen- which we work and where a key initiative is Million mt Million mt Ávila 1 1 trate in the 2021-2022 Australian financial the Industrial and Mining Training Centre Chile 5.50 Chile 210 Electric engines year. The 1,000-l/s seawater desalination (CEIM), which has now been in operation 2 2 plant to supply Spence, which will be built for over 15 years. Our contribution also Peru 2.35 Australia 89 and equipment on the Mejillones Bay, will also be in op- includes the creation of high-quality jobs, 3 3 eration by then. procurement of local goods and services, China 1.74 Peru 81 supplier development and support for re- VP Planning and Technical 4 4 BHP MINERALS AMERICAS What are BHP’s short-term plans for gional and national economies. USA 1.41 Mexico 46 20 Cerro Colorado? 21 5 5 At present, Cerro Colorado is working on What steps is the company taking to Australia 0.97 USA 35 its operational continuity, which will ex- maintain relations with its workforce? 6 6 tend the mine’s useful life through to 2023 We are strengthening the communication D.R. Congo 0.91 Russia 30 and, a few months ago, we implemented with our workers. We hold daily meetings 7 7 a plant recovery plan in order to optimise so they can make known their views on dif- Zambia 0.74 China 28 and ensure the installations’ integrity. In ferent matters, particularly safety improve- Coins 8 8 this way, we are ensuring the future of this ments. We insist on these relationship rou- Canada 0.72 D.R. Congo 20 mine, which started production in 1994 tines to listen to their concerns and resolve 9 9 with an expected life until 2016 and is now them, while also fostering informed opin- Russia 0.71 Zambia 20 on a sound footing to continue producing ions and explaining matters like remunera- 10 10 $ “ and contributing to the Tarapacá Region, tions and benefits in greater detail. Regard- Mexico 0.62 Canada 11 We have already started with an option to do so beyond 2023. less of the price of copper, we must stay in the Spence Growth Option the first quartile of costs and each of our Others 3.80 Others 150 (SGO) project, a US$2.4 What are BHP’s plans for integrating workers contributes to this task. Since the billion investment including a autonomous mining into their opera- last strike, we have achieved two important WORLD 19.47 WORLD 720 concentrator to process the tions? agreements: the exceptional working day TOTAL TOTAL hypogene mineral. This project will We are going to be carrying out a study with Union N° 1 and, in negotiations ahead extend Spence’s life by over 50 about integrated operations and mine auto- of their due date, a new three-year collec- COPPER PRICE EVOLUTION 2017 - Of cial average price, LME, Cash Buyer years, and we expect it to produce mation for the operations of BHP Minerals tive contract with Union N° 2. Sources: LME / GBR its first concentrate in the 2021- Americas, with plans for implementation Antibacterial gel 2022 Australian financial year. towards mid-2019. BHP has implemented Do you have a final message for our $/tm $/lb $/tm $/lb automation projects in other parts of the readership? January 5.737 2,60 July 5.978 2,71 world and the results have been very con- At BHP, we have a very positive view of February 5.941 2,69 August 6.477 2,94 vincing. For example, in one of our Austra- the outlook for the copper market and have lian iron ore mines, Jimblebar, our autono- worked very responsibly, from a long-term March 5.821 2,64 September 6.582 2,99 mous truck fleet resulted in productivity standpoint, to ensure we are in a position ” April 5.697 2,58 October 6.796 3,08 gains that have helped to reduce transport to supply the world. Electric vehicles and

costs by 20%. In parallel, we are giving pri- solar energy will be the great drivers of de- May 5.591 2,54 November 6.825 3,10 ority to improving the planning and imple- mand, so we are convinced that copper is mentation of maintenance. the mineral of the future. ▬ June 5.699 2,58 December 6.801 3,08

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports EDITORIAL

Image courtesy of Minera Tres Valles

Could you please give us an overview of an efficient system that recycles more than Major Asset Sales Lumina Copper? 80% of the groundwater we use. This sys- Lumina Copper is owned by JXTG Hold- tem was presented to Chilean authorities ings Inc., Mitsui Mining & Smelting, and who assessed it thoroughly and approved it Mitsui Co., with 51.5%, 25.87%, and for our operations. 22.63% ownership respectively. Caserones is a high-altitude operation with an aver- How would you characterize the quali- A look at Chile's M&A activity age grade of 0.34% Cu, so maximizing fied labor market in Chile? production and maintaining cost is key for In terms of labor, during the most recent the company to remain in operation. Due mining boom, there were a lot of projects to this, in mid-2016, the company entered a being developed and it was very difficult to transformation period where we focused on find high-skilled labor in Chile. The situa- increasing production output and cost opti- tion eased in 2016 and 2017, but it will be- mization. For 2017, we set very aggressive come more restrictive in the coming years Maciej goals and we achieved substantial progress as copper price remains above $3/lb. We in concentrator throughput – almost a one have strong relationships with the three dif- third increase compared to 2016. We also ferent labor unions to which our employees Sciazko implemented a plant reliability process belong and our transparency with them is which significantly reduced the number of key to this. We will leverage on these rela- errors at our plant. Our cathodes produc- tionships this year and I am confident of a tion reached expected targets in the same positive outcome for all parties involved. year. In spite of recent improvements, we are still in a situation where we need to How do you ensure the company has a In 2015, Anglo American sold its Mantos and the Papomono underground mine. Evi- CEO further maximize our operational and cost win-win relationship with the local com- Copper operations to London-based hedge dently, Sprott was attracted to the projects LUMINA COPPER efficiencies. munities? fund Audley Capital for US$300 million due to their potential capacity. “Right now, 22 Caserones is a great example of how co- with an additional US$200 million in con- Don Gabriel produces 15,000 to 20,000 mt 23 What are the main factors that were con- hesive mining and agricultural communi- tingency payments. The operation includes of ore per month with a strip ratio between sidered in the cost optimization process? ties can be. Since the very beginning of the the Mantos Blancos and Mantoverde mines, 3.5 and 4. After the mine is fully ramped Caserones was built during a time when mining process, we have prioritized estab- which produce a collective annual total of up, it will produce 78,000 mt per month,” commodity prices, and thus operational lishing close relationships with local com- 100,000 mt of copper. Having invested an said Luis Vega Muñoz, general manager of costs, were very high. When we began to munities, including indigenous population. additional US$150 million in a concen- Minera Tres Valles. “We plan to eventually transition from construction to production, We employ from the local community and trator de-bottlenecking project at Mantos go public so that we can raise more capital the Chilean market was normalizing, so will further integrate as we set up social Blancos and US$782 million in a sulphide to pursue additional drill targets.” we renegotiated each of the contracts we programs within the community. One of development project at Mantoverde, Aud- In 2016, AMSA sold its Michilla mine to had from 2012 and 2013. The contractors our aims is to make our workforce more ley is implementing a long-term strategy Haldeman Mining for US$52 million. In understood the situation and were quite co- robust. uncharacteristic of a typical hedge fund 2015, the mine’s most recent year of pro- “ operative in the renegotiation process. Re- model. According to John MacKenzie, duction, Michilla produced 29,400 mt of Chile has always been a stable What is Lumina Copper’s long term vi- country for doing business [...] cently, we have shifted focus towards ad- executive chairman of Mantos Copper: copper. The mine has historically produced dressing the need to improve productivity. sion in Chile? “There are two phases that we are imple- between 35,000 and 50,000 mt/yr of cop- The country’s environmental Short term gains will be our initial priority Presently, we are completing the process menting to get from high-cost, short-life to per. regulations are strict, but we have before we focus on increasing our long run of transitioning from a ramp up stage to a low-cost, long-life mines. The first phase is BHP Billiton has also been negotiating to found that this is actually quite productivity performance. stable operation. For the long term, we are the capital-intensive process, in which we sell its Cerro Colorado mine since April helpful to us in the long run. looking to create a mine that is sustainable have been able to decrease our overall costs 2017. Having produced 74,000 mt of cop- How feasible have you found it to do throughout its whole life. Caserones has by developing a lean set of processes and per in 2016, the sale is expected to com- business in Chile? been a difficult asset to bring into produc- systems. Secondly, we stay in touch with mand approximately US$800 million. Teck Chile has always been a stable country tion, but fortunately, thanks to everyone in- the most modern technologies that have al- Resources, HudBay Minerals, and Lundin for doing business, and this has remained volved in the project, we recovered signifi- ready been tested and proven to work suc- Mining, which operates the Candelaria ” true in our experience. In general, Chile’s cantly in 2017. Hopefully, this project will cessfully. Overall, we will produce around mine in northern Chile, have all been spec- stability has proven beneficial to our- op serve as an example of how to bring a com- 140,000 mt/y of copper.” ulated as potential buyers. erations and we have been able to proceed plex asset into production during difficult Additionally, in August 2017, Canada- Glencore also ventured to sell its Lomas without any major obstacles. The country’s times. Usually companies relax when the based Sprott Resource Holdings acquired Bayas mine in 2015, but they have since environmental regulations are strict, but price of copper picks up, but Caserones, as 70% of small producer Minera Tres Valles taken the mine off the market. The mine we have found that this is quite helpful in a low-grade producer, has no room or time from the Vecchiola Group, a transaction produced over 80,000 mt of copper, but the long run. For example, Caserones is lo- to enjoy today’s market situation. We need that may provide hope to any major look- the speculated US$500 million price tag cated in an area where water is very scarce. to stay focused on continuously improving ing to sell an asset. Minera Tres Valles was evidently too high for any prospective We overcame this restriction by setting up our operation. ▬ includes the Don Gabriel open pit mine suitors. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports INTERVIEW

How did Mantos Copper initially ap- ing and flotation capacity, maintains the pear on Audley Capital’s radar? production from Mantos Blancos at 50,000 After nearly 25 years with Anglo Ameri- mt of copper in concentrate per year. It is can, I left the company in 2013 to set up a a very capital-efficient project and extends new mining company with the belief that the life of Mantos Blancos to at least 2032. the ideal time to do this was when the in- Mantoverde was built by Anglo American dustry was heading into a downturn. I part- in 1994 and has a very successful history. nered with Audley Capital to seek suitable It is currently a pure oxide operation that acquisition opportunities and identify co- yields around 50,000 mt of copper cathode investors. With Orion Mine Finance, our per year. When we acquired the mine, it Could you please give us a brief history now, we are only operating at one-third principal co-investor, we were success- had a projected mine life through 2019. of Minera Tres Valles’ presence in Chile? of our total plant capacity, so third-party ful in acquiring the Anglo Norte business Through an active drill program, we have Tres Valles is a relatively new project that miners are a very important source of cash of Anglo American, which includes the already extended the life of the oxides to was discovered by Vale in 2005. The Bra- flow. These miners are also part of the lo- Mantos Blancos and Mantoverde copper 2026. Beneath the oxide, there is a large, zilian company developed the project and cal communities, so this is a good way for mines, for US$300 million plus an addi- high-grade sulfide deposit that has a well constructed the plant, investing a total of us to maintain a strong relationship with tional US$200 million in contingent pay- drilled resource base with over 4 million US$242 million. The mine entered into them. John ments. Upon acquisition, the business was mt of contained copper. The US$782 mil- Luis production in 2011 and has important cop- re-named Mantos Copper. lion Mantoverde sulfide development proj- per resources. At the end of 2013, the Vec- What are the most recent updates on the ect demonstrates very attractive capital ef- chiola Group acquired the asset. Vecchiola Papomono and Don Gabriel mines? MacKenzie What is Orion’s exit strategy for Man- ficiency at less than US$10,000 per annual Vega is a contracting company with a long his- Don Gabriel is our open pit mine, and Pa- tos Copper? tonne of copper produced. It is relatively tory and a very clear expertise in open pit pomono is underground; we plan to ramp Our investors, somewhat counter-intui- high-grade, and much of the necessary in- mining and plant operations. up production at Don Gabriel first. Right tively, have a far more long-term approach frastructure is already in place, including Following the Vecchiola acquisition, we now, Don Gabriel produces 15,000 to to developing Mantos Copper than one our own desalination plant. This project is were able to cut costs by half over 18 20,000 mt of ore per month with a strip Executive Chairman may normally expect from a private equity currently scheduled to commence produc- months. For underground expertise, we re- ratio between 3.5 and 4.0. After the mine MANTOS COPPER fund. The Orion fund life of seven years tion in 2021, at which point Mantoverde’s General Manager built the technical team with relevant Vale is fully ramped up, it will produce 78,000 provides good flexibility in terms of tim- overall production will increase to around MINERA TRES VALLES experts by inviting them to stay on the mt per month. 24 ing. Our strategy is to develop these two 140,000 mt of copper per year. project. Thanks to the strength of our team, Regarding Papomono, we are transitioning 25 mines into long-life, low-cost operations, we were able to survive the downturn. We from a more selective extraction method to at which point, Orion would seek to real- How would you summarize the new in- now expect to continue reducing our cash a massive exploitation method, so our unit ize its investment, most probably through vestors’ approach to operating Mantos costs by taking advantage of economies of costs are decreasing significantly. With a public market listing. Mantos Copper, Copper? scale. the current known resources, we expect in this case, would continue to grow and There are two key phases involved in a mine life of nine to ten years, and once develop the business as a listed, mid-tier converting these assets from being two What is changing with the arrival of we secure the necessary funds to ramp up, copper producer. Until the point of a list- high-cost, short-life mines to being two Sprott? it will take 12 to 15 months to reach full ing, our private company status affords us low-cost, long-life mines. The first phase In August 2017, Sprott Resources acquired capacity. We will also still be focusing on significant flexibility to focus exclusively was reducing our unit costs by implement- 70% of Minera Tres Valles from Vecchiola, the exploration of these properties, as the “ upon the implementation of our strategy, ing a lean operating model focused on ef- “ but we are still retaining our management current reserves are only located in 10% of The Mantoverde sulfide namely optimizing our operational effi- ficiency and accountability, coupled with In August 2017, Sprott Resources and technical teams to keep the project our 44,000 total hectares. We plan to even- development project demonstrates ciency and developing our key projects. fit-for-purpose processes and systems. We acquired 70% of Minera Tres moving forward. This new financial and tually go public so that we can raise more very attractive capital efficiency at are very proud of the fact that we currently Valles [...] This new financial and technical partnership puts us in a strong capital to pursue additional drill targets. less than US$10,000 per annual Could you elaborate on the de-bottle- have one of the lowest accident rates in position to ramp up our production, and it technical partnership puts us tonne of copper produced. It is necking project at Mantos Blancos and the mining industry, and we are continu- will play a significant role when we even- What percentage of Minera Tres Valles’ in a strong position to ramp up relatively high-grade, and much the sulfide development project at Man- ally striving to achieve the target of zero tually go public. The project’s production energy usage is renewable? our production, and it will play a of the necessary infrastructure is toverde? harm. Our strategy is to stay in touch with capacity is up to 18,500 mt of copper cath- We have a contract with the KDM Group, significant role when we eventually already in place, including our own When we acquired Mantos Blancos, it what is happening in technological devel- odes per year with a plant capacity of 5,500 which generates nearly 100% of our energy go public. desalination plant. had a projected mine life through 2021, opment and to implement technologies mt per day. Our next step is to publish our through a biomass project in Tiltil, Chile. at which point the oxide ore that currently that have already been tested and proven reserves under 43-101 standards. We are also looking into implementing accounts for 40% of the mine’s copper to work successfully. The second phase of solar energy in the future, but this is still production would be depleted. The mine our strategy is more capital-intensive, spe- What cost optimization tactics did you in the conceptual stage. Renewable energy would still have very significant sulfide -re cifically the development of the organic employ in order to reduce costs so dras- helps reduce both our impact on the local ” sources with attractive copper grades, but growth and life extension projects at each ” tically? communities and our cost margins. In ad- we now intend to expand the existing cop- of our two operations. We also keep an Because of our relationship with Vecchio- dition to being respectful to the local com- per concentrator in order to process 40% eye open for value-accretive acquisition la, we were able to determine how our sup- munities in terms of our environmental more sulfide ore per year. The US$150 opportunities where we can leverage our plier contracts from the Vale days could be footprint, it is important to mention that we million concentrator de-bottlenecking existing skill set or asset base. ▬ optimized and renegotiated. Additionally, have a foundation that promotes Minera project, which utilizes our current crushing we focused partly on the supply of third- Tres Valles-funded projects, that benefit capacity and simply adds additional grind- party ore from our processing plant. Right the local towns. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports EDITORIAL

Image courtesy of Liebherr How does EY help optimize its clients’ If you were to design the new tax reform, expenditures? what are the key points you would high- After many of the mining companies im- light? Chile's Varied Richness plemented the obvious measures to opti- After the reform, there will be two systems. mize expenditures, not all of them contin- One is the attributed system, in which com- ued to the next phase of understanding how panies pay 35% taxes whether they distrib- to get the most productivity out of their as- ute profits to final shareholders or keep the sets nor did they focus on working capital. fund within the company. I would take that For example, some of our clients focused away, as it creates a disincentive for com- Anticipating growth from the country's mainly on accounts payable and receiv- panies to invest and spend within Chile. able, but they did not understand that they The second system is the semi-integrated secondary commodities needed to also focus on their inventory to system, in which companies get credit for optimize their working capital. We shared corporate taxes paid against final taxes to insights on how reviewing your inventory shareholders only when profits are actually as a powerful tool to improve your work- distributed to final shareholders. Compa- ing capital. nies used to get a 100% credit, but now, Javiera unless a foreign shareholder has a tax trea- How have you seen the capital raising ty with Chile, they can only credit 65%. I environment change over the past few think that is very unfair to local sharehold- Contreras years? ers (individuals) or foreign shareholders Companies are always looking for new in jurisdictions without a tax treaty. Chile ideas to fund their projects, and they are should go back to the previous system that getting more creative since banks are more allows a deferral of final taxes and also al- reluctant to take risks in the mining indus- lows everyone to have that 100% credit, Mining & Metals Manager try. They are looking for different types not only because it is fair, but also because EY of financing, including royalties, metal it was a system that made companies want streaming, and minority partnerships. At to invest within Chile. 26 EY, we have seen an increase in companies 27 inquiring about how metal streaming could What are the key strengths of EY’s Mi- work in Chile. However, the regulatory ning & Metals group? Aside from copper, Chile is also the world’s 14th largest gold producer, 4th largest silver environment in Chile is not ready for that, EY’s advisory team, which is a very strong producer, and 2nd largest molybdenum producer. Chile’s gold and silver reserves com- and it is not clear what the tax implications pillar for our whole group, includes people prise 7% and 14%, respectively, of the world’s total reserves. Chile also accounted for would be. from all service lines and is quite futur- 23% of the world’s molybdenum production in 2016. Notable gold producers in Chile istic, meaning they are forward thinkers include Los Pelambres and Yamana Gold’s El Peñón and Minera Florida mines, each of As the market has begun to recover, who have a lot of experience, particularly whom appear to be committed to Chile in the long-term. “We seek to achieve a long life have you noticed an increase in consoli- abroad. They are bringing ideas and solu- for both of our assets in Chile,” said Gerardo Fernández-Tobar, senior vice president of dation? tions into Chile that are new to us, includ- southern operations at Yamana Gold. “In general, Chile’s geology, infrastructure, suppli- “ The M&A deals we have seen have been ing the use of data analytics for predictive ers, and regulatory environment make the country a top priority for Yamana’s continued very difficult to close because there is typi- maintenance and remote mine operations. presence in Latin America.” Chile is not as attractive to foreign cally a mismatch in expectations. Some They also have systems to help large com- Chile is also one of the world’s largest lithium sources, and the Salar de Atacama alone investors as it was before the tax companies are willing to sell an asset for panies think about how they supply every- is responsible for 37% of the world’s total lithium carbonate production. Though Chile’s reforms of the last ten years. It a lower price, but not as low as the buyers thing, as well as analyze what they buy and lithium market is considerably less mature than its copper and gold markets, the stag- has been getting increasingly would like. It shows optimism within the from which country. gering volumes have not gone unnoticed. Codelco has already expressed an interest in expensive to do business in industry that companies are not liquidating lithium by establishing a lithium-focused subsidiary, Salar de Maricunga S.A., in April Chile, particularly for the mining assets, but rather choosing to sit on them What advice do you have for our inves- 2017, and BYD, a Chinese electric vehicle company, has shown interest in investing in industry. and wait as the market improves, and per- tor readership? Chile’s lithium supply. haps operate them themselves later on. Investors need to understand regulations to SQM’s Salar de Atacama mine, the world’s largest lithium brine mine, produced 44,000 really understand how to invest better. For mt of lithium carbonate in 2016, up from 33,000 mt in 2015, indicating the global Do you think Chile’s lack of tax exemp- example, they should model out how they demand for lithium is not slowing down to wait for the rest of the mining economy. tions deters foreign investment? structure their investment, how are things The only other company that has permission from the government to produce lithium Chile is not as attractive to foreign inves- going to work if they engage in a joint ven- is Rockwell Lithium, which was acquired by Albemarle in 2016. In August 2017, Al- ” tors as it was before the tax reforms of the ture, or how they are going to take their bemarle’s lithium carbonate plant received permission from the government to nearly last ten years. It has been getting increas- profits out of the country, not just intwo double production from 45,300 mt/y to 88,000 mt/y. ingly expensive to do business in Chile, years, but in twenty years. ▬ The reason why there are only two lithium producers in Chile is largely due to the gov- particularly for the mining industry. How- ernment’s classification of lithium as a strategic metal, which creates a barrier for lithium ever, compared to other countries, mining exploration companies who wish to eventually bring their projects into production. The companies pay similar taxes, and Chile is a main limitation is that lithium properties in Chile are not able to become concessions, and relatively stable country. the general consensus is that the rules around lithium production are largely unclear. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports

Could you please give an overview of Ya- production since the mid-1980s, and we mana’s presence in Chile? continue to see great opportunities to ex- Yamana Gold has two producing mines pand the resources and reserves and extend in Chile, El Peñón and Minera Florida, as mine life. well as a number of development projects, including the Atlas Titan joint venture ex- How is Yamana leveraging technology in ploration project, the Agua de la Falda joint the production process? venture project, and La Pepa. In 2017, we We are in a great position to leverage re- expect El Peñón and Minera Florida to pro- cent developments in technology. We have duce a combined 245,000 ounces of gold created a true continuous improvement and 4.48 million ounces of silver, with the culture, where innovation and change can majority of that coming from El Peñón. In be better managed and implemented effec- addition, Chile is a significant portion of tively. Also, the developments in advanced Gerardo our exploration efforts with over 30% of analytics, communications, and other dis- our overall budget dedicated to Chilean ex- ruptive technologies mean that more pow- ploration in 2017. At El Peñón alone, our erful tools are accessible and less costly Fernández- 2017 exploration program was 86,000 me- than in the past. ters at approximately US$14 million. At the moment, we have three main tech- Overall, exploration and production in nology initiatives. The first is shorter-term Tobar Chile are very important to our portfolio. interval control for underground mines, El Peñón, in particular, is a very important including knowing exactly what each ma- asset for us in terms of cash generation, and chine is doing, what workers are doing, Senior VP Southern Operations we continue to improve the operations and and where they are against the plan so short YAMANA GOLD financial performance. Since Yamana- ac term decisions can be made. 28 quired El Peñón in 2007, its production has The second initiative is increasing the level been around 2.6 million ounces of gold and of automation. Automatic control for pro- 81 million ounces of silver, and for most of cessing is very common, but we are seek- that time, it has been the top producer in the ing to control more variables than before company. Despite this, in 2017 we defined in order to get marginal gains in recovery, a new production platform for El Peñón, power, and reagents consumptions. reducing it from over 220,000 ounces of The third initiative, which is currently gold to 140,000 ounces, while maintain- still in its testing phase, is to improve our ing most of its cash generation capacity. predictive maintenance. Together with the This was done to better fit the operation equipment vendor, we collect and analyze “ to the mineral resources and reserves, as data from the equipment in real-time and We defined a new production well as the most recent results of explora- use it to extend the life of major compo- platform for El Peñón, reducing tion which point to narrower, higher-grade nents so that we can be more cost-efficient it from 220,000 to 140,000 veins. To achieve this transformation, we and minimize unplanned maintenance oz Au. This was done to better deployed an aggressive operations excel- downtime. fit the operation to the mineral lence program using a combination of lean resources and reserves, as well tools and techniques and technology en- What is Yamana’s long-term vision for as the most recent results of hancements. Chile? exploration which point to While Minera Florida is a more modest Chile has been very good for Yamana. We narrower, higher-grade veins. contributor to our portfolio, we are also seek to achieve a long life for both of our focused on operations optimizations and assets in Chile, which provide an excellent developing the excellent exploration po- foundation as we advance exploration at tential on the property. In 2016, we con- our development opportunities in the coun- solidated the land concessions surrounding try. Chile is stable in terms of geopolitical ” the mine and discovered the Las Pataguas risk and is a world-class mining jurisdic- vein system. These systems are closer to tion. There are some challenges, but in the processing plant than the current mine general, Chile’s skilled workers, geology, workings, and their setting could allow the infrastructure, suppliers, and regulatory en- mine to improve the infrastructure, which vironment make the country a top priority would in turn improve efficiency and - re for Yamana’s continued presence in Latin duce costs. Minera Florida has been in America. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports EDITORIAL Global Business Reports

Image courtesy of Chile Ministry of Mining Chile’s Next Top Mine

The country sees new project developments as prices improve

In addition to sustained production, Chile’s mt/y of copper and 6,000 mt/y of molyb- development projects bode well for the denum, putting the mine’s production total future of the country’s mining industry. nearly on par with Chuquicamata. In 2015, Teck and Goldcorp announced In 2015, BHP Billiton began a develop- a 50/50 joint venture to consolidate their ment project focusing on expanding the life Relincho and El Morro projects into a single of its Spence mine by 50 years. The fea- development project, NuevaUnión, which sibility study process began at the end of could become one of the largest mines in 2015, but the company only approved the the world. The US$3.5 billion copper-gold- US$2.46 billion required investment in Au- molybdenum project could save the compa- gust 2017. Spence has produced an average nies a combined total of US$4.9 billion, as 173,000 mt/y of copper over the past three the Relincho project and El Morro project years. were expected to cost US$4.5 billion and In addition to its efforts at NuevaUnión, US$3.9 billion, respectively. According to Goldcorp has also entered into a 50/50 Jeff Hanman, vice president of corporate partnership with Barrick Gold to develop affairs at Teck: “This innovative partner- the Cerro Casale project. Previously a ship between Teck and Goldcorp combines 75/25 joint venture that featured Barrick two stand-alone projects, resulting in one as the majority partner and Kinross as the project with a longer mine life at a lower minority partner, Cerro Casale is known to cost and improved capital efficiency.” be one of the world’s largest undeveloped Teck is also investing in its Quebrada gold deposits. Like Goldcorp, this is not Blanca mine, implementing a development Barrick’s only joint venture in Chile, as project that aims to extend the life of the the company also owns part of the Zaldívar mine by 30 years. Also, while the mine has mine in a 50/50 partnership with AMSA. produced fewer than 50,000 mt/y of copper Large companies entering joint ventures in each of the past three years, Quebrada as a means to hedge their bets may be a Blanca Phase 2 is expected to extend the continuing trend as the market remains in mine’s production capacity by 240,000 a state of recovery. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports GBR • Industry Explorations • CHILE MINING 2018

AN IMPROVING EXPLORATION MARKET

“The world’s view of Chile is more positive that Chile’s view of itself right now. Chile is more resilient than what locals give it credit for, and I believe the future will be very positive.”

- Ignacio Salazar, CEO, Orosur Mining Image courtesy of Hot Chili EDITORIAL Global Business Reports Global Business Reports EDITORIAL

Image courtesy of Maricunga A New Wave of Exploration in Chile

Hot Chili has already completed a pre-feasibility study on its Pro- Prospect Generators ductora copper-gold project, and the company has spent a total of Will optimism translate to development? US$100 million on the project’s development. In May 2017, Hot Two copper-gold exploration companies in particular, Mirasol Chili, along with joint venture partner Compañía Minera del Pací- Resources and Revelo Resources, decided to take advantage of fico, a subsidiary of CAP Mining, began a drilling program with recent economic conditions by staking significant land claims the aim of expanding the potential mine life before beginning a in Chile at relatively inexpensive costs, following the prospect definitive feasibility study. “Productora is currently at a resource generator model. Mirasol currently has an active joint venture in In addition to sustained levels of production and increased invest- base of 1.5 million mt of contained copper and 1 million oz of Chile with Yamana Gold, known as the Gorbea joint venture, as ment in development projects, Chile’s mining sector also contin- contained gold,” said Christian Easterday, managing director of well as a number of non-joint venture projects in northern Chile ues to show signs of vitality through exploration following a slug- Hot Chili. “The project will be a large-scale, open pit, sulfide and that are potential epithermal precious metal properties. Between gish period from 2013 through 2016. According to EY, Chile’s oxide operation producing approximately 70,000 mt/y of copper the company’s Gorbea joint venture and Ocean Gold joint venture exploration budget in 2016 totaled US$443.4 million, represent- and possibly up to 30,000 oz/y of gold.” in Argentina, Mirasol planned to have approximately 6,000 me- ing a 30% decrease from the previous year. The fact remains, Atacama Pacific Gold is also nearing a feasibility study onits ters drilled by the end of 2017. According to Stephen Nano, CEO however, that Chile has the highest concentration of world-class Cerro Maricunga gold project, and they expect the study to be of Mirasol Resources: “In Chile, we are actively seeking joint 34 copper porphyry deposits, as well as more than half of the world’s completed by mid-2018. The company remains open to both joint venture partners for a number of our projects that include the Rubi 35 lithium carbonate reserves. As the value of Chile’s exploration venturing to take the project into production and building the 39 portfolio varies almost directly with the price of copper, the next mine themselves. “While Cerro Maricunga is the largest oxide years are positioned to be pivotal for Chilean exploration. gold discovery in the last 10 to 15 years, it will still be a relatively simple, straightforward project to bring into production,” said Carl Hansen, CEO of Atacama Pacific Gold. “Assuming the Copper and Gold Projects feasibility study and permitting processes go according to plan, this project could be in production by late-2020.” If there is any indication that the majors have regained their inter- Kingsgate Consolidated’s Nueva Esperanza gold and silver proj- est in investing in new projects, it begins with Goldcorp’s acqui- ect is currently one of the most advanced projects in Chile. As sition of Exeter Resource Corporation, which was completed in the definitive feasibility nears completion, the company plans to August 2017. Chilean Metals is also one of the early beneficia- begin mine construction in the first half of 2018 and then be in ries of the majors’ attention, having sold its Copaquire project to production by 2020. According to Leonardo Hermosillo, Kings- Teck in exchange for a 3% NSR royalty. The company still has gate’s vice president of project development: “I am very sure that five properties, the priority being the Zulema copper-gold project, when the feasibility study is complete and the deal is approved, which they believe to be analogous to Lundin Mining’s Cande- the value of the company is going to increase. At that point, we laria mine. “We initiated a drill program starting in January 2017 will have the option to go into production ourselves, find a joint and just completed it in April,” said Patrick Cruickshank, CEO venture, or sell the project, but right now we plan to take it into of Chilean Metals. “We proved that it is an IOCG-style system, production.” and we will be implementing phase two of our drilling program.” Also nearing production are Altiplano Minerals’s Farellón and TriMetals Mining is expected to begin a 20,000m drilling pro- Maria Luisa projects, which the company earned into via joint gram by mid-2018 on their Escalones copper project, for which venture with Comet Exploration. While the joint venture was they have already published a 43-101 resource. The company only announced in 2017, both projects are close to production was waiting for a more favorable market to begin drilling, but because the artisanal miners who previously owned them had the 2018 campaign is expected to bring the project to the pre-fea- already completed a significant amount of permitting and drill- sibility stage. “At the moment, Escalones, which is located near ing. According to Altiplano’s CEO, John Williamson: “From the El Teniente, has 6.5 billion lbs of copper equivalent at a grade of start, both mines will be smaller producers in the 50,000 to 60,000 0.38%,” said Felipe Malbran, TriMetals’ vice president of explo- tonne-per-year range with initial five-year mine lives, but we will ration. “Our aim is to take the project through the development be adding reserves and increasing the mine lives as we go along. process, likely with an equity partner or as a joint venture, if it Long-term, we expect the mines to last at least ten years, given makes the most sense at the time.” the right commodity price.”

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports

International Convention, Trade Show & Investors Exchange Could you give us an overview of Alti- pace and perhaps look for a strong joint plano’s latest updates? venture partner. Because we are prioritiz- Prospectors & Developers Association of Canada (PDAC) In September 2017, we completed around ing the Chile projects, we need to be more 350 meters of exploration development, flexible in Idaho. At most, we will spend a drilling about 30 holes along the length of couple hundred thousand dollars on an air- March 4–7 the tunnel. In December, we began to re- borne survey and additional soil sampling. Metro Toronto Convention Centre | Toronto, Canada move copper, gold, and iron material from the vein, totaling approximately 2,000 mt How has the decrease in energy prices to date. Our first bulk sample results came that was spurred by an increase in re- back at a grade of 2.36% copper. Our goal newable energy usage affected your cost now is to remove 5,000 mt of material at a structure? grade of greater than 2%. In February 2018, Given the stage we are in with both prop- we are beginning a second surface drilling erties, we are not particularly affected by John campaign with Maria Luisa. We hope to changes in energy costs. We generate all acquire more information before moving of our energy onsite. There are no govern- into the underground phase of Maria Lu- ment policy decisions that are hindering Williamson isa because it is a more complex, multiple- our efforts in Chile. Eventually, joining the phase project. In December 2017, we made Chilean power grid will cost us roughly an offer to our joint venture partner, Comet $40,000, and at that time we can reduce Exploration, to buy out the remaining 50% our usage of diesel fuel. It will be a worth- of Farellon and Maria Luisa. When junior while investment when the time comes, but mining companies acquire projects, the we first need to prove our grades and de- President and CEO market wants to know that you own 100% termine at which point the investment can WHY YOU SHOULD ATTEND ALTIPLANO MINERALS of the project, and it expects that you have be made. 36 the money to be the operator. The entire acquisition was predominantly covered by What is your main criteria for future in- ATTEND ENGAGING outstanding warrants, but we expect Farel- vestment in Chile? lon to be in production by mid-May 2018 Our main corporate strategy for acquiring PRESENTATIONS and Maria Luisa by the end of 2018. new projects in general is to look for proj- Aboriginal Program | Capital Markets ects that would require a finite amount of Program | Corporate Presentation 3,800 What is your strategy to reduce costs capital to get back up and running, to drive Investors and maximize margins? them toward cash flow in the short-term to Forum for Investors | CSR Event Our main strategy to reduce costs is to pay back our investment, and then focus on Series | Exploration Insights | Letter maximize productivity, and the key to ac- expanding them. In the future, when Alti- Writer Presentations for Investors | “ complishing this has been to determine plano has established a base on two to five 24,000+ Presentation & Reception Rooms | ACCESS CAPITAL how to mine over the pre-existing local cash flow positive assets, we would like to Attendees from The key to maximizing Short Courses* | Student Program | Meet with private, mining techniques. Specifically, we have become more involved in greenfield explo- productivity is using larger 130 Technical Program* retail and institutional larger machinery, as well as more sophisti- ration projects that have large deposit po- Countries investors and senior machinery with more cated engineering designs and drilling and tential. We have already begun looking at * Receive a certificate of attendance to assist with professional development requirements. executives. sophisticated engineering blasting techniques, which will help us not about six additional projects in Chile, and designs and drilling and blasting only increase productivity, but also operate we are willing to consider partnering with techniques. more safely. The workforce at the mines other stakeholders to advance projects. BUILD YOUR NETWORK are already very skilled, but we have also added technical support. What do you expect the new government Connect with thought leaders and industry regime to do to attract mining invest- colleagues from around the world. Be sure SHOWCASE YOUR BUSINESS How does the Orogrande exploration ment into the country? to purchase tickets for networking events Interact with exhibitors promoting leading project in Idaho fit into your portfolio? When the new government takes over in 1,000+ Orogrande was our first project, and we March 2018, my expectation is that they including the Awards Gala & After Party products, services, mining jurisdictions, Exhibitors ” still believe it has good potential. However, will maintain the status quo for some time. and the Mineral Outlook Luncheon. investment and development opportunities. given the rate at which we are moving in Eventually, I would like to see more ef- Chile and the cost structure in Idaho, we fort being made to open up land claims for thought it best to keep our focus in Chile small to mid-sized exploration companies for the time being. That said, the Chile like Altiplano. Right now, much of the un- projects allows us more freedom to take explored land is held by large corporations REGISTER at our time exploring Orogrande at our own who are not investing. ▬ pdac.ca/convention Industry Explorations CHILE MINING 2018 Global Business Reports

PDAC.18_ Global Business Reports.ad.final.indd 1 2017-11-17 10:52 AM INTERVIEW Global Business Reports Global Business Reports EDITORIAL

Image courtesy of Maricunga Could you give us an introduction to the of active projects are variables that impact Salares Norte project? on approval times. Max Gold Fields started working on Salares Norte in 2009, and the first gold discovery Do you think there is a lot of gold explo- Combes was made in 2011. Since then, we have been ration potential in Chile? progressively increasing our efforts, and we While Chile is a copper country, I do believe have thus far drilled about 100,000 meters. there is a lot of potential for gold mining. We have an average of 4.6 grams per tonne Particularly in the region where we are, there Chile Country Manager of gold, but there are areas where we have is more gold than copper. That area was ba- GOLD FIELDS higher grades. Everything is indicating that sically unexplored before we started there, it will be an open-pit operation, but we need and it appears our presence has sparked an to finish the study before we make a definite interest among our peers. decision. We are completing the pre-feasibility study and continuing to drill to expand What is your long-term plan for Chile? our resource base. Salares Norte appears to be just the beginning of a bigger exploration district. The How is the permitting process in Chile area around the property is completely un- compared to elsewhere in the world? explored, and there is geological potential to Permitting is difficult everywhere right now, expand there. Our strategy, at the moment, is and it is an evolving process. Chile changed to prioritize Salares Norte, and then we will its requirements in 2015, so its evaluation look into expanding in the area. Should we system is somewhat new. We believe that the decide to proceed with the project, our over- approval time we saw with the first project all plan is to go into production in 2021. We is not reflective of what is happening now have good support from the local commu- or will happen in the future. The amount of nities and the authorities, and we have high investment in the industry and the number expectations for Salares Norte. ▬ 38 39

What attracted LiCo to Chile and, more to implement direct extraction technology specifically, the Purickuta lithium proj- instead of the traditional evaporation pond Tim Fernback & ect? model. Our hope is to see if the property can TF: LiCo’s business is specifically focused support about 4,000 mt of lithium carbonate Malcolm Bell on energy metals. We were always looking per year using this technology. With a direct to add additional assets in South America processing technology, we would not have TF: President and CEO and we realized the best opportunity was in to wait 18 months for the lithium to precipi- MB: VP Exploration Chile. The political change happening here tate and evaporate. Not only is the speed of 35 LICO ENERGY METALS may be favorable to lithium exploration, and the process beneficial, it is also not invasive we thought the time was right to find a high- environmentally, as we would not be evapo- and Odin copper projects. Both of these projects are very prospec- International Majors quality asset, start exploring, and hopefully rating water into the air, but rather after the tive and are receiving strong interest from copper producers.” get to the point where we can mine lithium process takes the lithium out of the water, Similarly, Revelo Resources has recently signed agreement let- Another indication that Chile’s exploration potential is alive and for the benefit of our shareholders and the recirculating the water, and putting it back ters with two precious metals producers. In June 2017, the com- well is the presence of companies that are producers in other local community. We are looking at several into the salar. pany signed a letter agreement with Hochschild for the option and countries. Gold Fields, which has mines in Peru, Ghana, South different direct extraction technologies, in- eventual sale of 100% of their Loro property, and in July 2017, Africa, and Australia, is in the process of completing the pre-fea- cluding Tenova Bateman. With this techno- How would you characterize LiCo’s re- they signed a letter agreement to sell two projects, San Guillermo sibility study for their Salares Norte gold project. “Gold Fields logy we will be turning a historically low- lationship with the local community? and Reprado, to Austral Gold. Revelo’s complete portfolio in- started working on Salares Norte in 2009, and the first gold dis- tech business into a high-tech business. MB: LiCo has strived to create a good rela- cludes 26 projects totaling 300,000 hectares and 40 drill targets. covery was made in 2011. Since then, we have been progressively tionship with the local community. Many of “Our Montezuma copper-gold project is probably our flagship increasing our efforts, and we have thus far drilled about 100,000 What phase is the project in right now? the locals work for SQM, so they are open project, but we are also particularly excited about Loro, as it has meters,” said Max Combes, Gold Fields' country manager in MB: We have completed a geophysical sur- to the idea of mining, but their main con- all the characteristics of an epithermal precious metal vein pros- Chile. “As of now, and should we proceed, our strategy is to take vey. The interpretation was that we have cern is the water, and they like the fact that pect similar to Yamana Gold's El Peñón mine,” said Tim Beale, the project into production ourselves.” TF lithium brine from about 20 meters below LiCo is not building an evaporation pond. CEO of Revelo Resources. “Regarding other copper projects, we Orosur Mining, the operator of the only producing mine in Uru- surface to the depth of the survey, which is We also believe that, with our technology, are very excited about Morros Blancos, which is very close to guay, also acquired an early-stage gold asset, Anillo, through an between 150 and 200 meters. Now, our task we can produce some agricultural water for our San Guillermo project. Morros Blancos has two very large earn-in agreement with Codelco. According to the terms of the is to drill to a depth of 300 meters. What is the local community, which is a big benefit hydrothermal alteration zones with very strong characteristics of deal, the company has until 2022 to complete a pre-feasibility unique about our plan is that we are looking for them. ▬ the upper parts of porphyry copper systems.” study, and they are being funded by Asset Chile, which is cover-

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations EDITORIAL Global Business Reports Global Business Reports EDITORIAL

ing most of the financing up to US$3.5 million. “Asset Chile has LiCo’s vice president of exploration. “Our hope is to see if the five years, and the joint venture plans to complete a definitive until December to decide whether to move into phase two. They property can support about 4,000 mt/y of lithium carbonate using feasibility study in 2018. “In the most recent resource update, must get to the end of the second phase to consolidate an earn- this technology.” the resource increased nearly four-fold from 600,000 mt to 2.2 “ ing, which gives them a significant incentive to go onto the next Wealth Minerals is also a new arrival to Salar de Atacama, hav- million mt, while maintaining exceptionally high grades,” said phase,” said Ignacio Salazar, CEO or Orosur. “Our long-term goal ing acquired a land position there of 46,000 hectares in 2016. In Jeremy Poirier, CEO of Bearing Lithium. “It is the highest-grade We are permitting for a water production well at is to eventually bring the asset into production, but if it makes less than two years, Wealth Minerals has acquired five projects, undeveloped lithium brine project in the world.” Challacollo, a process that will take until mid-2018. At more sense for somebody else to do so, then we are open to it.” including Salar de Atacama, Laguna Verde, Trinity, Five Salars, that point we will determine whether to sell the property and most recently, Seven Salars, which includes Salar de la Isla or take it into production ourselves. Mandalay considers and puts the company in a 50/50 partnership with Talison, which Other Metals Challacollo a core asset because of its significant indicated Lithium Projects is operated by Albemarle. “This asset gives us bargaining power resource, its feasibility-stage status once the water in any future consolidation discussions, particularly because it in- In addition to copper, gold, and lithium projects, there is a repre- While it is understandable that Chile has been historically known cludes Salar de la Isla, which is very close to production because sentation of companies exploring deposits of Chile’s less preva- sourcing is resolved, and its exploration potential. as a “copper country,” it would be a mistake to not also consider of the amount of work that has been done on it already,” said Tim lent resources. Minera Aguila del Sur’s Quince iron project, for Chile a “lithium country.” Chile is the world’s largest lithium pro- McCutcheon, president of Wealth Minerals. “Salar de la Isla is on example, was discovered in 1997 by explorers searching for cop- ducer, and the Salar de Atacama region alone contains 27% of par with Salar de Maricunga in terms of size and grade.” per. The project now has a resource of 680 million mt of iron, the world’s total lithium reserves. SQM, however, is no longer Salar de Maricunga, in fact, is home to the largest pre-production as well as a significant vanadium reserve, and the company is - Mark Sander, the only company in on the secret. Lithium exploration company lithium project in Chile. Bearing Lithium, formerly known as expected to complete the pre-feasibility study within the next two President and CEO, LiCo Energy Metals has recently completed a geophysical survey Bearing Resources, signed an agreement to acquire Li3 Energy years. “This is the largest iron source on the west coast of the Mandalay Resources on the Purickuta project and plans to drill to a depth of 300m. and its 17.7% stake in the Maricunga Lithium project in Janu- Americas. Our location on the Pacific Ocean makes it easier to “What is unique about our plan at Salar de Atacama is that we ary 2017. The project, which is 50% owned by Lithium Power get to China to help them with supply, instead of them relying on are looking to implement direct extraction technology instead International and 32.3% owned by Minera Salar Blanco, has al- some of the larger players in Brazil,” said David Cadwell, COO of the traditional evaporation pond model,” said Malcolm Bell, ready had US$30 million spent on its exploration over the past of Stillwater Resources, Quince’s geological consultancy. “At this point, the company is looking for a partner to shoulder some of the heavier expenses.” In July 2016, Australia-based exploration company Golden Rim 40 ” 41 Resources acquired their Paguate zinc project, of which there are very few in Chile, and recently completed an updated resources ect was put on temporary suspension. “None of the other veins estimate. According to Craig Mackay, Golden Rim’s managing were affected, but we need to ensure that none of the veins are director: “The results indicated 2.4 million mt at 8% zinc equiva- susceptible to flooding before reopening any of them,” said Mark lent. Our long-term strategy is to take the project into production Sander, CEO of Mandalay Resources. “While the mine is shut ourselves.” down, we are still doing some surface drilling to confirm the mine What steps are you taking to become more internationally recognized? pillar thickness in certain areas." Cerro Bayo was effectively put Internationalization for us means both bringing international investors to trade in Chile on care and maintenance in September 2017. and having more international assets and standards within Chile for local players to Private Equity Minería Activa, a local Chilean private equity firm, has taken a trade. In 2010, Bolsa de Santiago joined the Exchanges and Depositories of Colombia, more domestic approach, focusing only on Chilean mining proj- Mexico, and Peru to create the Latin American Integrated Market (MILA). We also have Private equity is a less common path to funding in the mining ects. The company’s first fund in 2008 was well known for its agreements with the Brazilian Exchange B3, and the Canadian TSXV. Chile is gradually industry than standard private placements, joint venturing, or an successful exit of the Dominga mine, which is now owned by getting on other countries’ radars, which is exactly what we want. IPO. Given that risk mitigation is a priority in this type of busi- Andes Iron. Minería Activa is currently on their third fund, which ness model, however, it should be no surprise that some private includes the Pampa Camarones copper project. The company pur- Could you elaborate on your partnership with the Toronto Stock Exchange? equity investments do exist in politically stable jurisdictions, chased 90% the project in October 2016 for US$18 million, and Lucy In 2013, Bolsa de Santiago signed an agreement with the Toronto Stock Exchange Ven- such as Chile. International private equity firm Denham Capital, a lately received the results of their most recent drilling campaign. ture (TSXV) to have a specific listing segment for mining companies. We discovered nearly US$9 billion fund, has invested in Santiago Metals, whose “With mid-sized projects like Pampa Camarones you can increase that most Chilean mining projects were listed in Canada, so the agreement stands for a flagship project, Delirio, is a copper porphyry system that is cur- reserves without significant expenditures,” said Minería Activa Pamboukdjian dual listing initiative that grants any TSXV-listed company the right to dually list on the rently going through the permitting process. “Santiago Metals has director Ignacio Del Río. “Through selective mining, we are able Chilean Exchange and have simultaneous access to investors in Canada, Chile and the a pipeline of potential projects, but they all need to be run through to mine with twice the grade while maintaining total cathode pro- other integrated MILA markets. There are no additional costs or listing requirements. We Denham’s strict criteria,” said Waldo Cuadra, president of San- duction.” launched the initiative in 2015. tiago Metals. “We are also in the midst of a possible acquisition, which could be very exciting for us. We have received enough Chief Commercial Officer For mining companies, what are the main advantages of being listed on the San- funding to make room for three total projects.” Looking Forward BOLSA DE SANTIAGO tiago Exchange? Mandalay Resources has also followed the private equity model Bolsa de Santiago is starting to develop a culture of investing in mining in Chile. We since it was set up by Plinian Capital in 2009. Mandalay’s Cerro As the copper price continues to surge and lithium remains in are making a conscious effort to work with new investors in the market. We are starting Bayo mine in southern Chile was in care and maintenance when high demand, Chile’s exploration portfolio should receive the in- to see new buy-side demand in the mining industry. Our dual listing program with the it was acquired in 2010, and Mandalay spent US$23 million on flux in investment capital required to move many of these projects TSXV and our MILA integration program should provide many opportunities for mining its acquisition and reopening. The mine life was quickly extended forward. The quality of Chile's deposits has already been proven companies to increase their visibility in front of investors. In the long-term, we want to from three years to ten, and Cerro Bayo was in production from by the more mature mines, so now is a good time to invest in what make Chile the top mining investment country. ▬ 2010 until mid-2017, when one of the veins flooded and the proj- could be the next major mine in Chile. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations FACTSHEET Global Business Reports Global Business Reports INTERVIEW

THE LITHIUM MARKET Jorge Sources: Benchmark Mineral Intelligence, ABC Australia, Galaxy Resources, USGS Maldonado

General Manager SUPEREX

Four companies What is Superex’s role within the Perfochile Group? system can also be moved around quite easily, which is helpful at account for In 2008, my business partner and I founded Superex and became sites that have limited road access. part of the Perfochile Group. Perfochile is a company that has existed for more than 33 years and that has some of the more What are Superex’s goals over the next two or three years? powerful drills in Latin America. We currently have facilities in We are expecting lithium exploration to increase, and the sonic of lithium of global production La Serena, Antofagasta, and Iquique. Perfochile is an expert in drilling system is the best choice to get a good sample because reverse circulation drilling and, by bringing in Superex’s sonic it does not use air, additives or water. We call it dry drilling and production worldwide based in South America drilling capabilities, Perfochile was able to round out their drill- it gets a perfect, uncontaminated sample. We have been thinking ing portfolio. about expanding our business to Peru or Argentina, but for now, Chile is the country we want to be in. Mining is a long-term busi- LITHIUM DEMAND GROWTH DRIVES PRICE UP What are Superex’s main projects at the moment? ness and you cannot be narrow-minded because the small picture Source: Benchmark Mineral Intelligence Many projects that have been on hold throughout the downturn is not what you need to focus on. You must be open to learning 42 are now starting to open back up. There is noticeably more activ- and following new technological trends in order to adapt. ▬ 43 ity from both majors and juniors. During the downturn, we were Lithium carbonate Lithium hydroxide Expected demand growth lucky enough to still be working with the few juniors who had ex- average prices (battery grade) average prices (battery grade) for battery market ploration projects. We are a 15-drill company, and we were using 2016 two or three drills at a time during the downturn, but now we have 2015-2016 2015-2016 mt as many as five drills being used. We are experts in greenfield USmt USmt lithium carbonate euivalent LCE exploration, but the majority of our business today is brownfield work, including for Glencore at the Lomas Bayas mine. Chile is 2017-2020 2017-2020 2020 still a great mining country. Investors still see a lot of potential and I hope the conditions will change in the near future. USmt USmt mt lithium carbonate euivalent LCE What are Superex’s main competitive advantages? Our people give Superex its biggest competitive advantage. We are very aware that the mining business is cyclical, so we prepare LITHIUM PRODUCTION AND RESERVES PER COUNTRY (2016) financially to ensure that we never have to fire our employees. We Plans to phase out sales of LITHIUM APPLICATIONS % of total Source: USGS prefer to hire people with no experience and train them. Despite internal combustion cars: PRODUCTION (mt) RESERVES (mt) the added cost, it is worth it because they learn everything our way. By keeping the employees we have trained, we are essentially creating another teacher who can help onboard additional Noray: 225 Australia 14,300 1,600,000 employees. Despite being a small company, our clients see the value of our service. India: 23 Chile 12,000 7,500,000 Can you elaborate on Superex’s water recycling system? France: 24 Lithium-Ion atteries Superex is one of the only companies in Chile that has its own lass and Ceramics Argentina 5,700 2,000,000 water recycling system. We have three or four of these, and our Luricant reases clients find this useful when presenting their plans to the Chilean Other countries with o cial targets for government as they are able to give favorable water consumption electric vehicle sales: Other: pharmaceuticals, catalysts, China 2,000 3,200,000 estimates. Water is a very important part of drilling, especially Austria, Denmark, Ireland, Japan, air conditioning, welding electrodes, diamond drilling, and when a water source is 200 kilometers from the Netherlands, Portugal, Korea, Spain luminescent paints, rubber and T 35,000 14,300,000 a drill site, you can only make three or four trips in a day. With our aluminium production water recycling system, we could last two days between trips. Our

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports THOUGHTS

Juan Luis The Onset of a Positive Market Sentiment Uberuaga “For Hot Chili and any of the surviving companies listed on the ASX or TSX, there is quite a bit of optimism for future capital raising efforts. The copper price increase is being driven on the demand General Manager side by the very encouraging growth numbers in China and in the electric vehicle industry, as well as FORACO CHILE on the supply side by the union strikes in Chile and Indonesia.”

- Christian Easterday, Managing Director, Hot Chili

Could you give us a brief overview of Foraco’s presence in As the price of copper recovers, what is your outlook on the Chile? mining industry in Chile? “Our portfolio in Chile has essentially been built in the last three years. Because we had funds in Foraco is a French company and the third largest drilling compa- The changes we made during the low copper cycle allowed us the bank, we were able to continue exploring throughout the downturn. Within the last two years, ny in the world with activity in five continents. Foraco has strong to reorganize ourselves in a way that best positions us for a mar- we have started to turn our attention to copper projects, and the timing was right because most technological tools and we provide a broad range of drilling ser- ket recovery. Our strategy over the next five years is to manage of the majors were hurting, commodity prices were low, and high-quality projects were becoming vices. Foraco entered Chile in 2000, but 2003 brought a drop in our costs better, and with a better staff structure. The recovery available.” the market, so we decided to temporarily suspend operations. of the mining industry is occurring worldwide, not just in Chile. In 2010, Foraco bought Adviser Drilling and opened its offices Therefore, it is important to apply these lessons globally. Foraco in Chile for the second time. We currently have 150 employees expects an intense level of activity over the next six to twelve - Stephen Nano, CEO, in the country. At the moment, we are only managing one large months, so we are prepared for what is coming. ▬ Mirasol Resources project, but we are expecting new projects over the next year. In Chile, our strategy is to continue to work on small but well struc- 44 tured projects that generate consistent, organic growth. 45 “In 2014, we decided it was a good time to capitalize on the new projects becoming available that What steps has Foraco taken toward innovation? were previously held by distressed companies and establish a significant land position in Chile. Foraco has a technical department dedicated to innovation. Most Staking meaningful claims in Chile can be quite difficult because most of the prospective areas have of our research and development occurs in France, Australia and already been staked by large mining companies who tend not to relinquish those claims.” Canada, and we are mainly focused on the reduction of water consumption, remote operations, routing, and drilling in deep wells. - Tim Beale, CEO, Water, in particular, is becoming a scarcer resource every day, which is why it is crucial for us to have water recycling and treat- Revelo Resources ment systems. Today, all companies are looking to innovate, so it is likely to find similar developments elsewhere. That is why we put emphasis on providing a better service as a brand differentia- tor. “There is an appetite in the market for copper. Investors are allocating money toward copper projects, but oddly enough, they are not looking where the copper is. They are looking in Australia How is Foraco perceived in the market? and Canada, but not in Chile. Chile produces over 30% of the world’s copper. Australia and Canada Foraco likes challenges and we deliver projects in difficult areas each produce 5% or less.” where traditional companies would not work: difficult countries, high mountain areas, low temperature conditions, and meteoro- - Francisco Acuña, Business Manager, logical risks. We are also a public company, and thanks to this Kura Minerals access to the markets, Foraco is always able to increase its working capital to take on new challenges. Since we entered the stock market, we have grown very quickly and acquired new companies in several countries. There are many people who trust us and who want to invest in us. “We are optimistic about exploration in Chile. In my opinion, exploration is always plausible and many projects that are seemingly at a dead end just need to be rethought. Most of the obvious How does Foraco ensure safe practices on a mine site? mineralization in Chile has already been discovered, but there is plenty of potential if explorers get The Chilean market is very demanding in terms of safety and se- creative. Projects are not found, they are created.” curity, but we guide ourselves by safety regulations at a global level. Our company policy is such that we train our personnel, we - Felipe Malbran, VP of Exploration, apply high security standards, and we work every day to build a TriMetals Mining safer work environment.

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations GBR • Industry Explorations • CHILE MINING 2018

OVERCOMING CHALLENGES: THE ROLE OF PROVIDERS

“In the near future, most mining companies will have to recycle most of their water. They will also likely have more difficulty obtaining water permits and moving fresh water into the mountains. There is clearly plenty of water available in the sea, but engineering companies are still working on solutions to desalinate seawater and transport it to high altitudes.”

- Felipe Azócar, General Manager, Tetra Tech Metálica Image courtesy of Chile Ministry Mining EDITORIAL Global Business Reports Global Business Reports EDITORIAL

jors. The government is likely unwilling to trade major investment money for junior investment money. According to Diego Pascual Investment Hernández, president of Sonami: “Guaranteed land claims is one of the biggest factors that attracted international investment to the Chilean mining industry in the first place. Ideally, we would like Veiga Challenges to have more medium-sized exploration companies enter Chile, but any changes that are made must be done cautiously so as not to drive away existing investment.” Water Scarcity Looking for new opportunities President in a mature market For mines entering the production or development phases, water APRIMIN scarcity continues to be the most pressing issue in Chile. While Chile evidently has plenty of access to water on its coast, trans- porting water to high-altitude mines has proven very costly in terms of the amount of energy it requires. Underground water is also becoming increasingly scarce and energy-consuming to ex- How did the low copper cycle affect the Chilean mining industry? tract, driving both producers and service providers to devise new A lot has changed since 2012 because of the low price of copper. water recycling tactics. “Kinross has taken measures to be more Mining in Chile has lost about 56,000 jobs, and two-thirds of that efficient with water usage and is using less water to produce the corresponds to mining providers. As a result, companies have had same amount of ore,” said Jose Tomás Letelier, vice president to maintain productivity at lower costs. If you compare Chilean mi- of government affairs at Kinross. “We recycle a high percentage ning production in 2013 and 2016, however, you will only notice a of the water we use, we have improved our piping and we have small variation. Chile is obtaining good numbers but with 56,000 lowered evaporation rates, which is a common issue at such high fewer workers, so that tells you that we are starting to overcome the Given Chile’s extensive mining history represented the lion’s share of 80.9%. government corruption. If this is the case, altitudes.” challenge of maximizing productivity. While production volume has and relative political stability, it should Chile has high-quality infrastructure, sig- one would expect Chile to have garnered As a result of the declining underground water supply, mining dropped 2%, productivity is still increasing. We are still working hard come as a surprise that, in 2016, junior mi- nificant port accessibility by virtue of its greater interest from exploration compa- companies have been investing in desalination plants. Escondida, to be competitive, but we are not currently seeing the salaries, bo- ning companies were responsible for only geographical composition, legislative nies around the world. for example, recently constructed the largest desalination plant nuses, and employment numbers we have seen in the past. 48 7.8% of the country’s exploration, while transparency and, according to Transpar- in Latin America, as well as one of the largest in the world. “The 49 major companies already residing in Chile ency International, very little discernible plant’s capacity is 2,200 liters per second, and it has a 175-kilo- How realistic is it that automation in mining becomes widely im- meter pipeline,” said Mark Venning, business development direc- plemented? Land Claims and Mining Licenses tor of Black & Veatch, the engineering firm tasked with building Automation in mining is very realistic and can be implemented in the plant. “The contract will enable us to build a 1,400-liter ex- almost every possible mining process. Providers support automa- The predominant explanation for an ap- pansion. This will supply the water for Escondida and reduce or tion, and the main reason is the new labor reform in Chile. Instead parent lack of exploration activity in Chile eliminate its consumption of groundwater.” of motivating more job opportunities, it motivated the automation of is that land claims and mining licenses In recent years, some companies have resorted to using sea water processes. Remote operations is also a very relevant option because it do not expire provided that the holders without desalination treatment for their operations, but they even- allows employees to operate the equipment in a secure and comfort- of the concessions pay annual taxes. For tually learned that this solution can be incredibly corrosive and, able way. Codelco's Gabriela Mistral mine is already operating almost the major mining companies that hold the consequently, expensive. “If you just use salt water, you reduce completely autonomously. majority of Chile’s explorable land, this is your recovery rate, and your plant lasts a fraction of the time,” a negligible expense. “There is very little explained Venning. “When comparing the cost of using fresh wa- How do current environmental regulations affect suppliers and turnover of ground compared to other ju- ter to the amount of increased capital that ends up being spent on services? risdictions where licenses have limits,” a plant using salt water, it is easy to see which solution is more Environmental regulations are affecting the industry more than we had said Craig Mackay, managing director of viable.” initially expected, as the approval process is very bureaucratic. Un- Golden Rim Resources. “There are certain Employment and Regulations fortunately, in Chile, the environmental approval does not guarantee groups in Chile that hold very prospective that you can go on with a project, and it is not always clear which licenses but are under no pressure to con- Even if the land claims are secured and the water situation is entity grants the final approval. Chile has always been respectful of duct meaningful exploration work. This resolved, it is still important for investors to understand how environmental laws, but the processes take too long: up to five years keeps a lot of ground from the active ex- smoothly their operation will be able to continue. While govern- in some cases. ploration companies.” ment expropriation of private mining assets will likely never be According to Cochilco, the top ten hold- an issue in Chile, as it is in Bolivia, Venezuela, and Thailand, for What are you most excited about for the mining industry in Chile? ers in 2015 accounted for 40% of Chile’s example, mining companies in Chile have had their fair share of Mining is very cyclical, but I am optimistic about the improvement of total exploration concessions. While it has hiccups. this cycle. Investment in the Chilean mining industry has been very been reported that the government is con- In early-2017, Minera Escondida faced a 43-day, 2,500-employee strong, thanks to business transparency. Chile has a significant number sidering changing the mining code to in- strike, which was Chile’s longest since 1973. As a result, Escon- of world-class professionals, from exploration to exportation. Over the centivize concession holders to explore or dida’s Q1 output dropped 63% compared to Q1 2016 output. course of the past 15 years APRIMIN has developed a strong platform release land, such an outcome is unlikely Antofagasta Minerals also faced strike threats at their Centinela of suppliers in Chile which covers the entire value chain of the mi- because any type of legislative change and Zaldívar mines in July 2017. Because of Chile’s strong labor ning industry, meaning investors can be confident that they will have a may deter investment from foreign ma- union presence, strikes do not simply end once the employees smooth transition into the country. ▬ 52

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports INTERVIEW

María Esteban Eugenia Hormazabal What have been Golder’s major developments in Chile over Parot the past few years? Golder has been consolidating a strong consulting and design team in Chile, providing integrated services to the mining industry in the General Manager areas of mine waste, water management, environmental impact as- Could you please give us an overview of SRK’s operations in General Manager GOLDER sessment, permitting and sustainability, mine engineering and stabil- Chile? SRK ASSOCIATES ity, and construction services. Our main goal has been to develop SRK’s work in the Chilean mining industry pertains mostly to CONSULTING solid, well-rounded professionals through seamless collaboration of copper, gold, iron and some non-metallic commodities, including our experts working together on challenging projects. lithium and phosphates, among others. Our major clients include What role does Golder play in finding water efficiency solu- Codelco, Anglo American, AMSA, BHP Billiton, CAP, Barrick tions? and Gold Fields, and we cover most of the disciplines in a mining Golder provides comprehensive water balance models that help project from exploration, planning and operation to mine closure. clients to understand water consumption, recovery, and losses, as SRK currently has more than 115 employees in Santiago, and we well as implement programs to minimize the overall consumption are planning to grow. We also support the SRK teams in Argentina, of freshwater. For example, we apply different technologies and Peru, Brazil and Russia from our Santiago office. SRK has been conduct innovative investigations to maximize water recovery from in Chile for 23 years, and we are the oldest SRK office in Latin tailings and optimize our designs to minimize water losses. America.

What are Golder’s main advantages? What steps does SRK take to create environmentally sustain- 50 Golder has several competitive advantages when it comes to provid- able practices for its clients? 51 ing services to the mining industry, including technical excellence, SRK has strong expertise in supporting environmental permitting which allows us to deliver tailored, state-of-the-art solutions to our processes, as well as mine closure and geochemistry. One of SRK’s clients. Our strong global footprint allows us to serve our mining main value additions is the incorporation of environmentally clients worldwide and we have a deep understanding of the mining friendly solutions in project designs. We are always innovating in industry from early development stages to design, construction, op- productivity and improving our environmental standards and field eration, and closure. Finally, our model as an employee-owned com- equipment. Water recycling is also an important trend right now, pany in which our senior owners lead the business is an advantage. and our hydrogeology department is doing water supply studies to optimize water use inside plants and proposing strong water man- What are the key factors in establishing a successful relation- agement plans to avoid potential impacts to the environment. ship between a mining company and a local community? Successful relationships are based on mutual benefit, respect, and How do you expect demand from your clients to evolve over CAN’T AFFORD TO GET IT WRONG? trust. Early consultation with communities to find out what matters the next few years? JUST ASK GOLDER. to them is key in developing successful relationships, as mining During the last two years, SRK was involved in several mine clo- companies must be able to execute projects that respect and enhance sure projects and we are currently starting to receive more due dili- elements that are important to local communities. gence requests for early-stage operating projects and pre-existing mines. I believe we will face an increase in activity in the coming Complex geology, remote sites and regulatory approvals are just What are Golder's goals in the mining industry over the next years. After the price of copper fell, the industry learned an impor- some of the challenges faced in mining projects. Integrating your several years? tant lesson. Also, mining projects in Chile are facing big challenges engineering and environmental studies can result in a more robust By 2020, Golder aims to be the leading provider of integrated en- related to environmental and social issues. As a result, the mining design and can streamline the planning process, avoiding gineering and environmental services from the earliest stages of industry will focus on more sustainable projects. unnecessary delays and costly rework. mine development throughout the entire life of the mine, as well as a global leader in providing niche services such as mine waste man- What is SRK’s competitive advantage? Let Golder’s global team of over 1700 mining consultants help you agement, water management, geological resource engineering, mine Our core competitive advantage is high-level consultancy, reflected advance your project along the right path. closure, and environmental and social management. in the excellent technical skills of SRK professionals. We have a solid group of employees and consultants that have been working What is your outlook on the future of mining in Chile? together for a long time and can provide quick and practical solu- Chile: +56 (2) 2616 2000 We expect Chile to continue being a relevant player in the global mi- tions to challenging and world-class projects. We care about choos- [email protected] ning industry. The country has the opportunity to become the global ing our people, training them and preparing them for a long-term www.golder.com leader in innovation to solve key challenges related to productivity, development process. SRK is a one-stop shop for its clients and a water, ecosystems, and community relationships. ▬ strategic ally with a worldwide network of experts. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations EDITORIAL Global Business Reports Global Business Reports INTERVIEW

Roberto

Durán & Could you please give an overview of RD: Chile is one of the main mining mar- OHL’s presence in Chile? kets in the world and, as a result, it is very RD: OHL has been in Chile for over 35 competitive and demanding. Companies Javier Vaca years, and we have a wide history in this that want to participate must meet the country. We have an important presence in highest quality standards. Another point the mining industry and, whether the mar- to consider is the environmental and social RD: President ket is up or down, we always make sure responsibility requirements, which also JV: Regional Director to have strong, experienced mining profes- present very high standards. The environ- OHL CONSTRUCTION sionals. mental issue has only recently become a JV: We currently have nine projects in priority in the past decade, and environ- Chile. Our only project directly related to mental awareness has noticeably increased mining is a dam that we are constructing in the mining industry. As a result, com- in northern Chile. This is one of the largest panies have reconsidered their entire pro- copper projects in the country, and there duction chains. For example, OHL has have been several stages. We are currently focused on water recycling and carbon in the eighth phase. The project began in emission reduction. November 2016, and we expect to finish it in two and a half years. As underground mining in Chile picks up, what additional services do you plan Which of OHL’s several divisions per- to offer? tain to mining? RD: We can provide support in under- Image courtesy of Chile Ministry of Mining JV: We are reorganizing the company’s ground mine engineering, the construction 52 divisions and merging the industrial and of vertical shafts, and mine access, and 53

JV construction divisions. We have synergies we can do this with our own machinery. 49 when it comes to mining projects because Our experience in tunneling in the civil go back to work. “Labor unions are more government is working with the private we are able to mix our capabilities with segment allows us to contribute to the in- powerful now than they used to be, and re- sector to overhaul the existing environmen- civil and industrial projects. The industrial crease in underground mining efforts. cent strikes have had severe consequenc- tal permitting process. “Chile needs to find “ division manufactures equipment, includes,” said John Byrne, managing director at a way to make regulations more similar to ing conveyor belts, crushing plants, and What are OHL’s main competitive ad- Boyden Executive Search. “In the case of those of the world’s most competitive mi- There is very little turnover of ground others, and they are working on operations vantages? Minera Escondida, both sides will need to ning jurisdictions, but without jeopardizing compared to other jurisdictions where and maintenance with several projects RD: In Chile, we have two main advan- meet again to negotiate.” what the regulations were originally meant licenses have limits. Certain groups in Chile. We are in the process of put- tages. First, we have extensive market The verdict is still out regarding whether to protect,” said Diego Hernández. “An hold very prospective licenses but ting these divisions together, determining knowledge, worldwide experience, and or not Chile’s regulatory environment is environmental permit that normally takes are under no pressure to conduct what the synergies are, and approaching the capacity to mobilize resources around. a substantive deterrent to investment. The four years to obtain should only take two meaningful exploration work. This Codelco and private mining companies to We also have our own crushing equip- general consensus is that the permitting years.” keeps a lot of ground from the active offer our services. It is a very positive de- ment, conveyor belts, and earthmoving process that was introduced by the govern- exploration companies. velopment for us as we are transforming equipment, so when entering a project, we ment in 2014 is quite time-consuming. Ac- our service offering and making it more design, build, and manufacture our own cording to Pascual Veiga López, president powerful. equipment, which is tailored specifically of APRIMIN: “Environmental regulations Looking Forward to each customer. are affecting more than we had initially ex- “ How do construction companies com- pected. Unfortunately, in Chile getting en- While efficiencies are being created to RD: We can provide support in pete for mining projects? What are OHL’s goals over the next - Craig Mackay, vironmental approval does not guarantee combat water scarcity issues, and a robust, underground mine engineering, the JV: Construction companies have always couple of years? Managing Director, that you can go on with a project and it is albeit bureaucratic, regulatory process is construction of vertical shafts, and gone through the tender process in the JV: The amount of mining activity in both Golden Rim Resources not always clear which entity gets final ap- necessary for a mining economy of Chile’s mine access, and we can do this with public mining sector, but we have also Chile and Peru will increase, so our goal is proval of a project. Chile has always been scale, land claim and mining license leg- moved to the private sector in recent years. to increase our market share in the indus- our own machinery. Our experience respectful of environmental laws, but the islation appears likely unchangeable in the In Chile, companies must comply with try. Also, through the merger of our indus- in tunneling in the civil segment processes take too long.” short-term. Because land availability is certain technical capabilities, financial re- trial and construction divisions, we want The Chilean government, however, appears scarce compared to Chile’s actual explora- allows us to contribute to the increase quirements and safety standards. For each our clients to understand our capabilities in to understand how important a smooth per- tion potential, junior companies wishing to in underground mining efforts. project, you have to pre-qualify with both both markets. Mining is a very important mitting process is to stimulating the mining enter Chile would be practically better off the private and public sectors and then, if sector in Chile, and we believe OHL can industry. According to EY, after consider- acquiring projects from or joint venturing you qualify, you can participate in the ten- contribute to clients directly as a partner, able pressure from the private sector, the with existing players in the country. ▬ ” der. and not just as a contractor. ▬ Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports ” CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports THOUGHTS

Post-Downturn Transformations

“Industry 4.0, or connected automation, is a growing trend. In the next years, it will be much more common in Chile. Right now, most equipment has run on the same technology for the past 60 years. New mobile and stationary equipment will come with a combination of hydraulics, sensors and controllers, which will allow for better production results with a direct impact on cost-per- tonne.”

- Marcelo Celis, General Manager, Bosch Rexroth Can you please give us an overview of allowed. ProChile’s role in mining? How are Chilean companies generally ProChile is a government agency that has perceived abroad? “There is a lot of optimism as a result of the recent uptick in the copper price. However, there Alejandro existed for more than 40 years, and we ProChile has been developing the industry are other factors that play into our optimism for the future. We believe we will soon be seeing have been working with mining suppliers for a long time, and we have found that companies replacing their fleets of equipment, as even well-maintained equipment have limits and since the 1990s. Our goal is to promote Chile is a very reputable country abroad. will eventually cost more to repair than to replace.” Buvinic suppliers and service companies abroad. People know that when they are doing We also train the companies that plan to business with a Chilean company they are operate abroad. International legalities can not vulnerable to fraud or scams, which - Juan Luis Simunovic, General Manager, Fluitek be very complex. Sometimes you need a is very important to our reputation. Chile permit, and sometimes you have to sign has been developing a very high standard Director a joint venture with a local company. We of innovation and carrying out studies that “Although historically it has been a challenge for renewable technologies to compete against PROCHILE also have to examine the tax system, par- can be applied across many different tech- depreciated coal and gas power plants, companies have recently begun to recognize the true value ticularly when there is a double taxation nical industries. This is particularly true of renewable energy sources, which goes beyond just price. Mining companies are beginning 54 agreement. for the mining sector since there has been to recognize that they will have better relationships with local communities if they reduce their 55 so much investment into it. If a company emissions. The transition from conventional to renewable energy is unstoppable." What measures did ProChile take dur- has a contract with Codelco or any of the ing the downturn to help suppliers sur- other major mining companies present in - José Ignacio Escobar, General Manager, Acciona Energy vive? Chile, the standard is already very high. As With 6,000 mining suppliers in Chile, the a result of this, many service companies downturn was a difficult problem to deal are highly certified. with. In the 1990s, Chile accounted for “The nature of desalination plants in Chile has really changed. Ten years ago, mining companies more than 17% of the global production of Which countries are most of your mem- would insist on owning the water production assets and operating them. After the downturn, copper. By 2014 that percentage had gone ber companies investing in? they have realized that it is best for someone to sell them the water, much like how a power plant up to 36%. The increase was due not just Over 80% of our membership goes to operates.” to the extraction of the mineral, but also to other Latin American countries. 45% go the development of the suppliers market. to Peru, which has recently become very - Richard Dixon, Chile Country Manager, Stantec Chile has a large mining sector with sig- popular; 20% go to Brazil, and about 15% “ nificant projects and, as a result, our sup- are split between Argentina and Mexico. pliers’ businesses vary directly with the Other popular markets include the United “Mining is a volatile market, but volatility is the new stability. In order to help companies configure Chile is a very reputable country price of copper. When the price of copper States, Canada, Australia, China, Spain, themselves to adapt to this, it is necessary to create ecosystems among suppliers and develop more abroad. People know that when they decreases, mining suppliers suffer, partic- Germany, Hong Kong, Mozambique and collaborative relationships.” are doing business with a Chilean ularly the small ones. Two years ago, we South Africa. company they are not vulnerable to did a special report on exporting suppliers - Philip Hopwood, Global Mining Leader, Deloitte fraud or scams. to miners. When commodity prices de- What is your outlook on the industry creased, the suppliers had to look at other over the next few years? countries. This is where ProChile is most Chile is a resilient country. We are a coun- valuable. Every jurisdiction has different try of problem-solvers and it is important “We recognize that water supply is increasingly important to mining operations. We developed challenges. For example, in South Africa for us to remain positive and optimistic. new technology for filtering tailings, and now we are testing those new equipment changes in some there is not just a language barrier, but also The next step is to advance our capac- plants in Chile. We will soon be able to release the results of these new filters, which will be an certain cultural differences. One company ity, knowledge and experience around the incredible benefit to the industry.” was training in South Africa and they kept world. That is ProChile’s goal in support- ” ▬ running into issues with human resources. ing its suppliers and service companies. - Roberto Montiglio, Director of Sales South America, FLSmidth Minerals Occasionally we will take a Chilean company abroad, and other times that is not

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations GBR • Industry Explorations • CHILE MINING 2018

INNOVATION

“The mining industry has tended to gloss over the technical depth of all of the information that has become available. I believe there will come a point in the near-future where legislation will mandate maximizing value of an asset while minimizing the environmental impact. This will give way for more innovators to drive these initiatives forward.”

- Matthew Dorman, Latin America Regional Director, Whittle Consulting Image courtesy of Liebherr EDITORIAL Global Business Reports Global Business Reports

Innovation and the Future of Mining

Chile as a hotbed for technological development

Perhaps clouded by some of the challenges nucleus for technological innovation and is the case in mining jurisdictions around labor shortage throughout Chile. The the country faces both internally and as a engineering expertise. the world, Chilean mining engineers have mine can now be operated by lower-level global player, Chile remains an exciting As mining companies focus on cutting a particularly high reputation and are workers, but without any apparent loss mining jurisdiction. If a silver lining could costs while maintaining their levels considered on par with those in Canada of productivity. “An example of this is be drawn from the downturn in the price of production, engineers have been and Australia. “The Chilean engineer is SMART construction,” said Darko Louit 58 of copper, it would be that Chile has es- tasked with developing efficiencies and well recognized around the world in the Nevistic, executive vice president of sentially been forced to become a global fabricating creative solutions. While this mining industry,” explained Juan Pablo Komatsu Cummins Chile. “This system González Toledo, president of the Institute is a combination of intelligent machines of Mining Engineers. “In general, the and operation planning methods that perception of Chilean engineers is very can significantly increase productivity strong in mining and in other industries.” in a construction operation. All of the more complex tasks of the operations are managed by the machine automatically.” The Rise of Autonomous Mining While mining companies generally appear to be quite receptive to the idea of auto- Chile’s mining expertise and the indus- mated operations, labor unions are much try’s call for creating efficiencies have co- more skeptical. Even if it is reasonable alesced into a perfect storm of innovation. to conclude that autonomous mining will There is a general consensus around the replace human workers with machines, mining industry that autonomous mining this does not necessarily imply fewer jobs is the most exciting of these innovations available in mining. On the contrary, many due to its positive financial, environmental believe the new technology will, in fact, and security implications. “One of the pos- elicit new employment opportunities. As itive things about automation is that it is Pedro Damjanic, senior vice president of steady, which reduces variability and saves mining at Finning Chile, stated: “Some millions of dollars,” said Felipe Cabrera, people are scared that autonomous mining general manager of Emerson Automa- will result in a loss of jobs, but what they tion Solutions. “Automation also greatly forget is that it creates opportunities to reduces the risk of people working in the open many other mines that are otherwise mines being injured.” too expensive to pursue.” Codelco’s Gabriela Mistral mine is thus Accenture estimates that, from 2016 to far Chile’s most advanced mine in terms 2025, autonomous operations will save of automation, implementing autonomous the mining industry an aggregate US$56 haulage systems (AHS) supplied by million, 395 million mt of carbon dioxide Komatsu. Beginning in 2007, the mine’s emissions, 10,000 injuries and 250 lives. automation was a response to a qualified There are a number of ways in which mi- 63

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports INTERVIEW Global Business Reports Global Business Reports INTERVIEW

Normet we have have offices in Mexico, Co- products. Chile’s factory increased its capac- After that, we develop a training program, lombia, Brazil, and Peru, and sales agents in ity by 50% in 2016, and now we can produce which takes three to six months. Then, we Guatemala and Argentina. Through acquisi- 10 machines per month locally. Overall pro- use the simulator to develop skills. A key as- Marcelo tions, we added new business lines, including duction tripled in 2017. pect is to review the concrete mix design and Dale construction chemicals and dynamic bolts for make adjustments if needed. Finally, we as- Anabalon ground support. This gives us an end-to-end What is next in Normet’s innovation pipe- sess the performance of the training program. Clayton approach, and we are now the only supplier line? There are also efficiency opportunities in oth- who can offer the equipment, support, and Normet's R&D team has many ongoing in- er processes, such as explosive loading. It is VP Latin America construction chemicals required for the spray novation projects, including our first battery- still a challenge to control the precise number NORMET concrete process. powered machine. Over the last six years, of explosives used for each blast, but we have Managing Director we have also introduced simulators for spray the right equipment for the charging process, LIEBHERR How is the business going in Chile? concrete and scaling, to train operators cor- which puts exactly the correct amount of ex- Despite the mining downturn, our business rectly. Regarding automation, the explosive plosives into each drilling hole. has been growing continuously. Our big- loading process is not yet mechanized in gest projects are at Codelco's El Teniente and Chile. We are working with Chilean explo- What are Normet’s goals over the next What role does Chile play in your global strategy? Chuquicamata underground development, sives companies to further develop this tech- several years? Liebherr is a global company with over 130 individual companies. Liebherr Chile is very im- and we currently have 110 employees in the nology. Normet’s main goal is to offer continuous portant, as it is a large mining country and has a good exposure to copper, lithium, and iron ore. country. Normet’s most popular sprayers are improvement to our partners’ processes for We have put an emphasis on Australia, Indonesia, and South Africa for coal and iron ore, but the Alpha 20 and Alpha 30, and our most How does Normet mitigate the amount of increased safety, productivity and profitabil- we would also like to focus our business on Chile and Peru to get more commodity diversity. popular concrete transporters are the Tornado wasted concrete? ity. In the Chilean mining market, we want Liebherr has been in Chile since 2001. We have 44 trucks operating and 20 excavators. The and Variomec. In the Chuquicamata under- The average amount of rebound in spray con- to be more involved with Codelco's future trucks operating are T282B and C models, which are 363-tonne ultra-class trucks. We also have ground project, we introduced our scaling crete application is around 30%, but it should projects. We know that we need to develop 996B 600-mt excavators and some smaller R9350 and R984C excavators. We currently have How has Normet’s business evolved since machine, Scamec 2000S, and now Codelco be 10%. Through our training programs, we a wider use of the scaling machines. We also trucks at Radomiro Tomic, Chuquicamata and Collahuasi. We have excavators at Centinela, the acquisition of Semmco? pretty much incorporates a dedicated scaling have been able to achieve an 8% to 10% re- have a long way to go with the explosive ma- and contractors EPSA, ICV, and Excon operate some of our machines. Semmco started in Chile in 1993 as a spray machine for all new contracts. bound. Rebound depends on three main fac- chines in the mines. Normet’s main advan- concrete contractor equipment manufacturer. tors: operator quality, concrete quality, and tage is that we are ready to support our cus- What steps is Liebherr taking toward innovation? In 2008, when Normet took over Semmco, What is your manufacturing capacity? compressed air availability. tomers throughout entire selected process, as We have market-leading technologies. With our trucks and excavators, we have our Litronic we had a 90% share in the concrete sprayers Normet has two factories, one in Finland Mitigating waste is a process. First, we assess opposed to just supplying machines or other management systems and use our own internal components and control systems. Through 60 market between Mexico and Chile. Now as and one in Chile, and they produce different the quality of the operators the customer has. products. ▬ our sister companies, we build many of our own mechanical and electronic components that 61 are specifically built for our equipment, as opposed to equipment produced by a third-party supplier. We feel that this really gives our equipment an advantage when it comes to fuel How receptive has the Chilean mining in- economy and performance, as we can control all the stages of machine development. company with a fleet of over 600 machines, What steps has Komatsu taken toward dustry been to automation? We also have a Global Mining Service Excellence Program. This is where we measure all Darko Louit as well as remanufacturing and component automation? At first, it took some visionary customers, Liebherr Mining companies to our defined standards and look for our global best practices. repair shops. Overall, we have over 5,000 Komatsu has been working for many years like Codelco in Chile or Rio Tinto in Austra- We believe this sets us apart from our competition, as it is not a dealership competing against people across Chile, and the mining indus- on automation, leading the development lia, to endorse the technology and push for dealership; it is the Liebherr company finding the global best practice in everything we do. Nevistic try is our main market. Today, we have 20 of autonomous haulage systems (AHS) for its successful application. Many other play- mining contracts and we are present in most mining operations. We were pioneers in de- ers in the industry are evaluating this techno- How important is training to Liebherr? of the major mining sites. We have a very Personal development is key for any organization. For our technicians, we have a five-level Executive VP ploying autonomous trucks and, today, we logy, but it has not been a priority for them strong focus on training, considering that KOMATSU CUMMINS CHILE have fleets running in Chile, Australia and so far. When you have several fleets running training program that starts with our basic online courses that we developed for excavators and 70% of our workforce are technicians. A sig- Canada. Here in Chile, we have operated with good results for a long period of time, trucks. We also have classroom-based training, where many of the intermediate courses are nificant milestone for us has been our recent an AHS at Codelco's Gabriela Mistral mine the industry generally accepts that this is a held. Levels four and five are our technical specialists, and this training is completed in Chile $33 million investment in a new repair facil- since 2007. reliable technology; we are at that point right or at our factories. There are three full-time trainers based in Chile, two for the mine services ity in Santiago. Likewise, Komatsu has made great advance- now. This results in a safer operation as it re- and one dedicated to the workshop. They train with the help of our T282C electrical simula- ments in the application of operator assis- duces the amount of people exposed to risks, tor. Our factories also invest heavily in their training centers with full simulators, and we have How does the acquisition of Joy Global fit tance methods for construction machinery. but it also makes operating in remote, harsh factory-based technical experts available to train on our trucks, excavators, and components. into Komatsu’s overall strategy? An example of this is SMART Construc- locations easier. And this is becoming more We also believe that we need to develop our administrative, supervision, and management As a result of the Joy Global acquisition (now tion, which allows for complex machinery relevant to the industry as new deposits are staff and have regular training sessions on our internal systems. Our supervisors and managers Komatsu Mining Corporation), we have an to be operated by people without intensive in increasingly remote locations, where re- regularly attend internal and external seminars and workshops for planning and product support even wider range of equipment, including training or accumulated experience. This ad- ducing the operating footprint is critical. management, and we spend considerable time on management coaching. Finally, we also offer drills, rope shovels, large mining loaders, dresses the shortage of qualified labor, while training for our clients, including operator and mechanical training. and a full line of underground equipment and improving productivity and quality. Finally, What types of hybrid machines does What is Komatsu’s presence in Chile? conveyor systems. Komatsu’s offer consid- we are also working on ways to remove peo- Komatsu offer? Do you have any final remarks on what Liebherr Chile is looking forward to? In 1999, Komatsu and Cummins joined to- ered several products for mining, including ple from harm’s way, via remote operation. In Chile in particular, we have hybrid exca- Liebherr realizes that South America is a large and extremely important market for our future. gether to form KCC and, since then, the hydraulic shovels, trucks, and a variety of We believe that a combination of automated vators operating in the forestry sector with We like being in South America, and we see its great potential. Mining is cyclical, and prices company has experienced significant growth earthmoving equipment. Joy Global, on the and remotely operated equipment will pro- good results in terms of fuel burn and emis- go up and down. We have to journey through the bad times as best as we can while preparing both in market share and volume. We are other hand, provided machines that Komatsu vide the industry with a safer and more pro- sions reductions. We also have an LHD load- for the future and eventual market recovery. We believe that all of the improvements we have the distributor for both Komatsu and Cum- did not have. The possibility for synergy be- ductive environment in the future. er with hybrid technology for hard rock un- made over the last four years will put us in a good position to capitalize and look forward to mins in Chile, while we also have a rental tween the two companies is significant. derground operations. ▬ an exciting future. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports EDITORIAL

piece functioning. Fast Pack is one of the alliance with Chinese suppliers. The mi- Alberto few companies that has all of our services ning industry recently went through a tough integrated, which helps our customers save time due to the downturn, and our clients are Belmar significant costs while also assuring our focused on minimizing costs. Our Chinese products are held to a high standard. 52% of presence has become relevant because the our business is in the mining industry. materials are high-quality, and the prices are very competitive. What sets Fast Pack apart, in your opinion? What are Fast Pack’s main goals in Fast Pack’s main competitive advantage Chile over the next few years? is its longevity in the mining industry (20 We continue to optimize our own opera- General Manager years). We also deliver products very quick- tions, improving productivity and incorpo- ly to reduce operational downtime. The fact rating automation. We believe that every FAST PACK 59 that we are an integrated company means day presents an opportunity to improve. we can react quickly. We also have a flexible For example, we recently introduced an ning inherently involves a considerable need maintenance,” said Esteban Rodrí- 2012, Consejo Minero predicted Chile to product portfolio that adjusts to our custom- upgrade in our current Smartsheet resource level of risk and limiting human involve- guez, executive director of natural resour- have the second-worst energy costs in the What is Fast Pack's positioning in the ers’ needs, depending on the processes that that increases traceability and project con- ment in the more dangerous aspects of the ces at Accenture. “It is also now possible world, after the Democratic Republic of market? are used. In 2017, we created a new section trol, an online manufacturing cost system, mining process mitigates this concern. “In to simulate a business' production or pre- the Congo, from 2014 to 2020. Since then, We are leaders in the manufacturing, sup- in our factory dedicated to the HDPE coat- new valves lines, and an internal calendar Chile, the explosive loading process is not dict how certain factors could increase or however, the Chilean government has plying, and distribution of integrated solu- ing process. service. We will soon be incorporating ma- yet mechanized,” said Marcelo Anabalon, reduce production.” taken steps toward reducing the prices of tions to conduct fluids. We customize our chines to do shot blasting, which will be vice-president Latin America of Normet. electricity supply tenders and promoting solutions for each costumer, and we have What efforts is Fast Pack making to in- automated so that we can keep the same “We are working with Chilean explosives renewable energy operations, resulting in specialized in spools in special alloys, in- ternationalize? good quality but with increased efficiency. companies to further develop this techno- New Energy Sources a 34% decrease in the average marginal cluding piping, valves, coatings, and other Because we prioritize quality over expan- We expect the mining industry to pick up its logy.” energy cost from 2013 to 2015. services. We focus on participating through- sion, we are focused on bringing our Peru pace, and we are investing in new products Autonomous mining addresses the fact Mining operations and developments The increased presence of renewable ener- out our customers’ value chains and achiev- office up to full strength first. We also have for that reason. ▬ that thousands of workers can be living in northern Chile have long regarded gy in the mining industry would be a sig- ing operational continuity to keep every representation in China to have a strategic on a mine site at one time, which is costly high energy costs as one of the major nificant step toward a further reduction in 62 in terms of both accommodations and detriments of operating in the country. In both cost and carbon emissions. “The key 63 employee morale. Remote operations is an increasing popular technological focal point, as it would allow employees Ramón at least 300 contractors who serve these mi- What explains your success in the mi- to telecommute to a mine from a control ning clients. Almost 90% of our company is ning industry? center at the company’s headquarters. dedicated to the mining industry. We chose We are a profitable and debt-free company ABB, for example, has already developed Opazo to work in mining because it is the most from the first day we entered the market. this technology and uses it to monitor advanced industry in risk management in We were not affected by the fall in com- their operations at their clients’ mine sites, Chile and much of the world. We consider modity prices because our software is very as opposed to sending their employees mining to be part of the DNA of Chile, and affordable, and also because risk manage- back and forth. According to Jorge miners are constantly looking to improve in ment is not something that companies can Abraham Canales, ABB’s industry lead risk prevention. stop attending to from one day to the next. for mining: “The opportunity to work on Also, being profitable gives one some free- mines remotely is going to be the next big How does your software specifically dom to innovate. demand trend, and that is something ABB mitigate risk? is pushing for.” CEO The software is a management tool that Do you think the use of data technology ANTIRION The use of data has also become more serves managers, supervisors, workers, and is going to be more prevalent in the fu- prevalent in the mining industry. Each health and safety professionals. A supervi- ture? rock in a mine and each machine part have sor, for example, must be in charge of hun- We believe cloud technologies are here to various data points associated with them, What is Antirion's business? dreds of safety points, so it is important to stay. When we entered the cloud in 2010, resulting in a nearly incalculable quantity Antirion provides risk management servic- see how the controls are administered and virtually no one in Chile used it. Today, of data at any given mine site. Some equip- es through a web-based software platform. have regular verifications. The software more people understand the cloud and cus- ment companies have begun to leverage It deals mainly with the strategic and opera- helps supervisors stay focused on critical tomers are requesting more services. We data analytics to develop predictive capa- tional risk management of safety, occupa- hazards, which are monitored by accurate have had to hire more people to expand our bilities that optimize production processes tional health, and environment. This trans- performance indicators. In most cases, it capacity and to keep up with the pace of or limit operational downtime, which lates into healthy workers returning to their would be impossible to manage such con- development demanded by the mining in- could potentially cost a mining company homes and a more protected environment. trols without the help of software like ours. dustry, which is certainly moving forward thousands of dollars for every hour a ma- Our company started as a consulting service In essence, Antirion is an information man- technologically, including in the mobile ap- chine is down. “Data analytics, in particu- and then transformed into a software com- ager that helps people make better preven- plication space. ▬ lar, can help predict when a company may pany. We have 12 large mining clients and tive decisions. run out of supplies or when a machine will

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations Global Business Reports Global Business Reports EDITORIAL

Image courtesy of Liebherr

issue with mining companies was that they Looking Forward wanted to know if renewables could provide power 24 hours per day, seven days per week, and we have proven that renew- As the state of the mining industry has ables can do so,” said Bart Doyle, general repeatedly flashed its hazard lights over manager of Mainstream Renewable Pow- the past several years, mining companies er. Mainstream Renewable Power operates across the world have no choice but to Cuel, a 33 MW wind project in Chile, and consider the future. In the coming years, its joint venture, Aela Energía, began cons- Chile will be an interesting investment truction on two additional Chile-based destination for mining companies, service wind projects that are due to begin opera- providers, and perhaps even technology tions in the second half of 2018. companies that previously had little to do Acciona Energy also hopes to one day with mining. Whether it is a response to provide renewable energy to the mining companies cutting costs or environmental sector. Currently, the company operates Minera Valle Central operation has been the prefeasibility engineering for the as a stable residue for Codelco’s North challenges, Chile and its talented pool of the El Romero solar project, 30% of in production since 1992 and produced Complex Concentrates and Leaching District,” said Iván Valenzuela, general engineers are prepared to lead the charge which is dedicated to supplying Google 57 million pounds of copper in 2016. In Project (PLCC), which was completed a manager of Ecometales. “The US$324 toward more efficient mining practices Chile. According to José Ignacio Escobar, addition to receiving new tailings from year later. The project eliminates arsenic million project will have a capacity of as commodity markets are poised to re- 65 general manager of Acciona Energy: “We Codelco in exchange for a US$0.50/ from copper concentrates and dispose it 200,000 mt/y of concentrates.” bound. ▬ are fairly confident that the renewable lb royalty, Amerigo is also expanding energy sector will be able to compete with its operations to a historical El Teniente the more conventional offerings. Some tailings deposit called Cauquenes, which mining companies are now mandated to was in use from 1937 to 1977. reduce their carbon emissions, so they Once the expansion is completed, the have become more open to the renewable company’s operation will have a produc- approach.” tion capacity of 90 million pounds per year As the industry continues to search for at a cost between US$1.40 to US$1.60 per efficiencies and ways to reduce costs, it is pound. As Rob Henderson, Amerigo’s logical to conclude that mining operators president and CEO, stated: “Minera Valle would be receptive to alternative energy Central uses hydraulic extraction with sources. Minera Tres Valles, for example, high-pressure water to extract the tailings. is working with the KDM Group, which The tailings at Cauquenes are very fine and generates nearly 100% of its energy have a granularity somewhere between through biomass. According to Luis Vega, powder and sand. The high-pressure water general manager of Minera Tres Valles: converts the solid tailings into a slurry of “We are also looking into implementing about 50% water and 50% solids, which solar energy in the future, but this is still are then pumped to our processing plant.” in the conceptual stage. Renewable energy Codelco has also taken its own innovative helps reduce both our impact on the local approach to copper recovery by stabilizing communities and our cost margins.” the arsenic in flue dust. Ecometales, a subsidiary of Codelco, has operations at the Chuquicamata and Ventanas smelters Alternative Production Methods that are geared toward processing waste. This methodology is both economical and One smaller-scale producer, Vancouver- environmentally beneficial, as it removes based Amerigo Resources, has innovated arsenic from waste piles without emitting a way to produce copper solely from any toxic chemicals into the atmosphere. the tailings of El Teniente. Amerigo’s “In November 2013, we began developing

CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports INTERVIEW

How has the renewable energy land- with the transmission cost. It used to be scape evolved over the past several paid by the generator, but now it is paid by years? the customer. Starting in 2019, that is near- From 2008 to 2012, there was a very small ly a US$9 swing in our favor. In addition to market for renewable power, and the larger this, having different projects from Arica consumers did not really consider re- to Puerto Montt enables us to cover some newable energy as a serious option. That of the trading risk, and having a 1,000-MW changed in 2014 with the first public dis- turbine order means we can obtain better tribution tender where renewables won a deals on turbine prices at scale, as well. large portion. Since then, there has been a boom in renewable energy. Today, 13% From a foreign investment perspective, of energy in Chile is provided by renew- how do these prices compare to other ables, including 7% solar and 6% wind. countries? Jorge Bart It is phenomenal to go from nearly 2% to The prices here compare quite favorably 13% in just two years. The next big jump to other countries. Chile had been an ex- is to have 25% of Chile’s power provided tremely expensive place to buy power for Abraham Could you please give us a brief intro- wait list. The program provides standard Doyle by new renewables (excluding hydro) and many years because of lack of competition. duction to ABB? and specialty training to prepare people to I think that will likely happen within the In the next couple of years, we may see ABB Chile first moved into the mining be competitive. next two to three years. Chile jump ahead of other countries. The sector in 1996, and now mining represents sector has yet to understand the impact of about 60% of the company's business. We What is ABB’s competitive advantage? What are Mainstream’s biggest projects storage, and in Chile it is probably four or Industry Lead for Mining hope to have about 70% of the business in ABB has very advanced technology, but General Manager right now? five years away. Distributed generation is ABB the mining sector by the end of 2018. our biggest advantage is our people. Our MAINSTREAM RENEWABLE The Cuel project, a 33 MW wind project, something that should be big in Chile due team truly believes in the company, and POWER CHILE began operating in January 2014. Through to the excellent solar resource, but has not 66 Could you talk about your robotics pro- that opens many possibilities. ABB is very Aela Energía, a joint venture by Main- had a significant impact yet. 67 gram as it relates to the mining sector? open to receiving suggestions and insight stream (40%) and Actis (a U.K. fund, In general, ABB has an advanced robotics from the employees, which helps them feel 60%), we won 300 MW of wind power in Could you elaborate on Mainstream’s program, and we have been promoting ro- as being part of the big picture. Another ad- the October 2015 tender for Mainstream social responsibility program? botics in the mining sector for nearly ten vantage is the onsite customer training we projects Aurora (170 MW) and Sarco (130 Historically, Chilean infrastructure proj- years. There are some challenges in trying provide. When our customers know how MW), now under construction. Finally, in ects have not been good at community to implement robotics in mining, includ- to use the equipment correctly, they can the CNE distribution tender held in July engagement, including the mining sector. ing union issues and people fearing losing get the most out of the product. Our cus- 2016 Mainstream won 3,300 GWh of This has left a negative legacy between big jobs to robots. ABB knows that mining is tomers are often very far away and need to PPAs to be supplied by close to 1,000 MW businesses and local communities. Since an industry that needs to be led by humans, solve issues on their own sometimes. Be- of wind projects. Mainstream owns 100% Mainstream has been in Chile, we have but we also believe that robotics has the po- cause of the onsite training program, they of these PPAs and projects. invested in in-house community liaisons, tential to be a significant part of the safety know what to do. The program also limits who work with both indigenous and non- “ aspect of mining. It will also allow people the need for us to send our engineers to fix “ How receptive will Chile’s mining indus- indigenous communities. Communities to work on mines remotely, and this is go- equipment on-site. try be to moving toward renewables? have a lot more power than they used to, Robotics bring challenges, ing to be the next big demand trend; ABB In the past, when renewables were at the and they are exercising that power. They including union issues and people In the past, most mines were using is pushing for it. In general, mining com- What is your outlook on the mining in- same price as fossil fuels, most mines were want to be involved before projects are fearing losing jobs. ABB knows renewables simply to be a green panies are aware that robotic technologies dustry in Chile? story. Mining companies wanted to using renewables simply to be a green sto- designed so they can influence how they that mining is an industry that are developed. In terms of jobs, the renew are going to be a part of the future of the Today's copper price today is good. The know if renewables could provide ry. Mining companies wanted to know if - needs to be led by humans, but industry. problem is not with the price, but with the renewables could provide power 24 hours ables sector is much larger now, and there power 24 hours per day, seven robotics has the potential to be production cost. ABB creates efficiencies per day, seven days per week, and we have are many more people working within the days per week, and we have proven a significant part of the safety What insights do you have about the for companies, and we believe that techno- proven that renewables can do so. sector. aspect of mining. It will also allow availability of qualified laborers and en- logy is the key to cutting down on produc- that renewables can do so. people to work on mines remotely. gineers? tion costs and reducing risk. Chile needs What is the threshold, in terms of price What is Mainstream’s long-term vision Chile has many high-quality engineers. to be more open to new technology, and if per Mwh, for a wind or solar farm now, in Chile? Mine laborers receive a lot of training on- even just one company takes a step toward and what do you think it will be in the I do not think new conventional plants are site; however, onsite training is different the idea of new technology, many more will future? going to be built in Chile for at least the from learning at a university. I think edu- follow. Technology is going to be a sig- The average PPA price in the last bid was next five years. If these storage and distri- ” cation is very important, which is why we nificant part of the mining industry here in ” US$50 per Mwh. Mainstream won with an bution generations come into play at scale, have a training center called ABB Universi- Chile, and ABB is looking forward to sup- average price of $US42/Mwh. One reason then we may not see any new conventional ty. The program started out in a small room porting mining companies as they incorpo- we were able to bid less since the tender in plants built ever again in Chile. All future 15 years ago, but today it has a two-year rate new technology into their business. ▬ 2015 is because there has been a change demand will be met by renewables. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations INTERVIEW Global Business Reports Global Business Reports THOUGHTS

George Game-Changing Innovations

Cariz How does Dyno Nobel leverage innova- is a duopoly, and it is very difficult for new tion? companies to enter the business. Participat- Dyno Nobel is constantly trying to improve ing in a bid, for example, requires signifi- “Tenova is executing the design and supply of the main material handling system for and innovate. One of our divisions is Dyno cant investment. When the price of copper Chuquicamata Underground, which is a US$200 million project. This main conveyance Consult, which specializes in software and was high, companies were used to operating system will be the largest in the world by far. We are using state-of-the-art technology terrain analysis. We have access to techni- without considering cost, so after the bid- that has never been implemented. Each conveyor we use is 20 MW, and the belt we are cians who travel to Chile to help us decide ding process, typically only Orica and Enaex using could pull seven Boeing 747 aircrafts.” where exactly to use certain explosives. Our were left to win the contracts. It would be a General Manager engineers are constantly training to use our good idea to split the bids into raw materials - Cristian Cavagnaro, General Manager, Tenova TAKRAF DYNO NOBEL products and software and determining how on one side and services on the other. Doing to best use the data we have. this will give more opportunities to compa- Dyno Nobel invented dynamite, the wick, nies that have world-class technology to en- “Rockwell Automation has a Distributed Control System solution called PlantPAx, the powder and the detonator, so we have ter the market, generating more competition. What is Dyno Nobel's presence in Chile? always been at the forefront of technology. which is part of our connected mine concept, where all of the information in a mine is Dyno Nobel is the second largest explosives The company has about 200 years’ worth of What does Dyno Nobel do to assuage en- available everywhere in real-time through a flexible, scalable, and easily maintainable company in the world. In 2009, Dyno Nobel development, and we are leading the United vironmental concerns? platform.” became the first manufacturer of electronic States’ explosives market. That is why we One of Dyno Nobel’s top priorities is to en- detonators in Latin America, and we did this consider ourselves able to compete in the sure that our products are environmentally - José Antonio Beas, Latin America Mining Industry Manager, Rockwell Automation in Chile. Before that, they where imported Chilean mining market. friendly. One of the biggest problems in the from France, Canada and South Africa. oil sector, for example, is that when the wells Nowadays, Dyno Nobel has a plant in La What are the major pain points in the are loaded, some do not detonate, and the “Volvo has experience in direct mining operations in Europe involving fully electric and Serena, where we manufacture non-electric blasting sector? product stays in the land. To combat this, we automated vehicles used to transport materials. We already have trucks being sold in and electronic detonators, and our goal is to In Chile there are two providers, Orica and have made our products biodegradable. ▬ Chile that involve the first stages of automation. These trucks can manage themselves, 68 introduce more products to the market. Enaex, capturing about 85% of the market. It learn routes, and increase efficiency by consistently running the same route.” 69

- José Olimpio, Managing Director, Volvo Group

lations to reduce their operational costs. We petitive edge, and it will make an important Ricardo are starting the construction of our first pro- difference in the Chilean market. “We have innovated a booster that is made entirely of non-explosive ingredients that duction base in northern Chile, and we ex- cannot explode until mixed and detonated, which will have a significant impact on safety Estay pect the plant to become operational in Q1 What role does data play in your opera- 2018. Exsa has also invested US$50 million tions? in mining operations. The sources of TNT are now very limited around the world, and in a plant in Peru for automated manufactur- Data analytics is essential. In our case, the this innovation is the answer to a future world without TNT.” ing of initiation systems. trick is to have the devices and systems in place to capture and process the data of ev- - Alois Kwenda, General Manager, AEL Mining Services What are the advantages of Quantex? ery blast in real-time so that we can compare The Chilean industry has become extremely the real results with our models or the previ- competitive. After the decline of copper ously made diagnosis of the mining opera- "Some people are scared that autonomous mining will result in a loss of jobs, but what prices, customers became more eager of tion. Based on that, we can not only recom- they forget is that it creates opportunities to open many other mines that are otherwise General Manager finding technological alternatives to reduce mend improvements to our customers, but EXSA CHILE too expensive to pursue. We are working very closely with clients and with Caterpillar to costs. Quantex is a patented technology that we can also customize any blasting solution develop this technology and introduce it to the Chilean market." offers more energy, less consumption of to increase efficiency and reduce costs. explosives, and increased versatility when - Pedro Damjanic, Senior VP Mining, Finning Chile What is Exsa's plan for the Chilean mar- working with different types of rock. There- What are Exsa Chile´s goals looking for- ket? fore, it performs better than any traditional ward? Exsa is in a phase of regional expansion, blasting solution. It is based on fertilizer We have an ambitious but realistic goal to starting with Chile and very soon other grade ammonium nitrate, which is more fa- become an important player in the Chilean "Austin Engineering customizes each design client-by-client. We look at things like the countries within Latin America. Our market vorable than porous ammonium nitrate in market. We are working to capture a rele- density of the material, the angle of repose of the material, the angles of the ramps the entry plan consists of three pillars, the first terms of prices. Quantex is also more en- vant market share within the next five years, trucks must climb, and many other aspects that define what the most suitable solution being the introduction of our differentiat- vironmentally friendly, since it eliminates and we are very satisfied with the consistent would be.” ing technology, Quantex. The second pil- any toxic red fumes normally produced by and systematic support we have received lar is generating productive platforms to be blasts with traditional explosive mixes and from our Peruvian headquarters. We have - Tim Mitchell, VP Business Development South America, Austin Engineering competitive from a logistics standpoint. The at the same time has a lower carbon foot- a long-term business view, and we are in third is direct and personalized customer re- print. This technology gives us a clear com- Chile to stay. ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations GBR • Industry Explorations • CHILE MINING 2018

CONCLUSION

“We were told repeatedly that 2014 was a bad time to enter the mining sector in Chile because of the copper price, but we actually came to realize it was a good opportunity, as many mining companies were looking for alternatives at this time.”

- Daisuke Otaki, General Manager, Zamine Image courtesy of Minera Tres Valles Image courtesy of Minera Tres EDITORIAL Global Business Reports Global Business Reports THOUGHTS

The Strength of Final Thoughts

the Leader “Chile feels like a whole new country, and it seems the next generation agrees. Chile has the capacity to realize great achievements in the future, but we need projects and goals in order to have a clearer vision. We are facing a new cycle of development, and clean electricity and The world's copper powerhouse is not energy efficiency will be very important.” set to lose its dominant position soon - Andrés Castro, General Manager, Alumini Engineering

“The Strategic Investment Fund was launched in 2015 with the aim to stimulate productivity and growth and fill in specific gaps in the economy. Our mining roadmap’s main goal is to have at least 250 providers who export a combined total of $4 billion. We also aim to reduce the cost of production, while increasing copper production from 5 million to 7 million mt annually.”

- Thierry de Saint Pierre, Executive Director, Strategic Investment Fund, Chilean Ministry of Economy

72 73 “Underground mining is very relevant in Chile, but it is a young area. We are starting to work As commodity prices continue to recover, so will Chile’s mining industry. The combina- on innovation and development services to increase productivity for underground mining, tion of expected infrastructure projects in the United States, China and India, and the such as hydraulic transport, new automatic control systems, and robotization.” world’s transition from fossil fuels to electric vehicles and lithium ion batteries indicates that Chile’s natural resources will play a more critical role than ever. Both the public and - Iván Rayo, General Manager, private sectors are confident Chile will remain an important player in the global mining industry, particularly in the event of a commodity deficit. JRI Ingeniería Mining is a cyclical business. Commodity prices over the past decade have become increasingly volatile and, as great as the mining boom was for most companies involved, the past few years were equally painful. Going forward, it is imperative for companies to examine the mistakes that were made at the onset of the downturn in order to avoid “We foresee about 60% of the mining process eventually being completed by artificial them when the next one inevitably comes. In the opinion of Nelson Pizarro, CEO of intelligence. Since most of the technology is already available, not much money needs to be Codelco: “During the mining boom, mining companies produced the maximum possible invested. The only thing that needs to change is how the mining industry thinks. Right now amount of copper due to the high price. This triggered an excess demand of engineering is the best opportunity for the mining industry to take advantage of new technology.” and construction services for new mines, and the cost for critical supplies for the mining activities increased dramatically during that period.” - Esteban Rodríguez, Executive Director of Natural Resources, Sustainability will be an important weapon in the fight against volatility, and cost-con- Accenture scious productivity is a key element of a sustainable business model. Perhaps another boom would not be ideal for the health of the mining industry. According to Gonzalo Fanjul, director of corporate finance at Asset Chile: “When the copper price was up to US$4 per pound, the average cost to produce was nearly US$3 per pound. Mining companies are hoping for the price to recover slowly. They want a long-term, sustainable “Chile has a stable, transparent economy with low levels of corruption. We also have good copper price. A stable and healthy industry is much better than the alternative.” infrastructure, including ports and roads in remote areas, and a significant number of high- As we look toward the future, the most comforting sense of optimism comes from the level mining professionals. Knowing that we need to improve some things, we are confident companies who have been in Chile through its highs and lows. Chile is indeed a proven that Chile is a very attractive country because of its experience and clear rules.” mining jurisdiction, but the country’s long-term players believe it could be much more. According to María Eugenia Parot, general manager of Golder Associates: “Chile has - Juan Francisco Bustos, Head of Mining Investment Office, the opportunity to become global leaders in developing a mining industry that is innova- Chilean Ministry of Mining tive in the way it solves key challenges related to productivity, water, and community relationships.” ▬

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations CORPORATE DIRECTORY Global Business Reports Global Business Reports CORPORATE DIRECTORY

COMPANY / INSTITUTION Website COMPANY / INSTITUTION WEBSITE

ABB new.abb.com/south-america Conveyor Belt Technology www.cbtech.cl

Accenture www.accenture.com/cl-es Copec www.copec.cl

Acciona www.acciona.cl Dartel www.dartel.cl

AcQuire www.acquire.com.au Deloitte www2.deloitte.com/cl/es

AEL www.aelminingservices.com Diamantina Christensen www.diamantinachristensen.com

Albemarle www.albemarle-lithium.com Divalco www.divalco.cl

Altiplano Minerals altiplanominerals.com Downing Teal www.downingteal.cl

Alumini Engineering cl.linkedin.com/company/aluminiingenieria DynoNobel www.dynonobel.com

Amerigo Resources www.amerigoresources.com EcoMetales www.ecometales.cl

Aminpro www.aminpro.com Emerson Electric www.emerson.com

Ancor Tecmin www.ancortecmin.com Eral www.eralchile.com

Andes Analytical Assay www.3aaa.cl Esmax www.esmax.cl

Anglo American chile.angloamerican.com Evalueserve www.evalueserve.com

Antirion www.antirion.cl Exsa www.exsasoluciones.cl

Antofagasta Minerals www.aminerals.cl EY www.eychile.cl

APRIMIN www.aprimin.cl Fast Pack www.fastpack.cl

Arcadis www.arcadis.com/es-cl/chile FISA www.fisa.cl

Asset Chile www.assetchile.com FLSmidth www.flsmidth.com 74 75 Atacama Pacific Gold atacamapacific.com Fluitek www.fluitek.cl

ATCO-Sabinco www.atcosabinco.com Foraco www.foraco.com

Audley Capital www.audleycapital.com Forjados www.forjados.cl

Ausenco www.ausenco.com Fourthane www.fourthane.cl

Austin Engineering www.austineng.com.au Freeport McMoRan www.fcx.com

Barrick Gold www.barricklatam.com/chile Gecamin www.gecamin.com

Bearing Lithium www.bearingresources.ca GeoAssay Group www.geoassay.cl

Bertling www.bertling.com Geoblast www.geoblast.cl

BHP Billiton www.bhp.com Geovia www.geovia.cl

Black & Veatch www.bv.com Glencore www.glencore.com

Bolsa de Santiago www.bolsadesantiago.com Gold Fields www.goldfields.com

Bosch Rexroth www.boschrexroth.com/en/cl Golden Rim Resources www.goldenrim.com.au

Boyden www.boyden.cl Golder Associates www.golder.com

Chilean Metals www.chileanmetals.com Groundprobe www.groundprobe.com

Coasin Group www.coasin.cl Haldeman Mining www.haldeman.cl

CODELCO www.codelco.com HE Parts International www.h-eparts.com

COCHILCO www.cochilco.cl HiLTi www.hilti.cl

Consejo Minero dev.consejominero.cl Hot Chili www.hotchili.net.au

COMPANY / INSTITUTION Website COMPANY / INSTITUTION WEBSITE

HudBay Minerals www.hudbayminerals.com ProChile www.prochile.gob.cl

Institute of Mining Engineers of Chile www.iimch.cl ReliX www.relixwater.com

ITT www.ittchile.cl Revelo Resources www.reveloresources.com

JRI Ingenieria www.jri.cl RK Geología www.rkgeologia.com

Karcher www.kaercher.com/cl Rock Blast www.rockblast.cl

KGHM www.kghm.com Rockwell Automation www.rockwellautomation.com

Kingsgate Consolidated www.kingsgate.com.au Russell Mineral Equipment www.rmeglobal.com

Kinross Mining www.kinrosschile.cl Santiago Metals www.santiagometals.cl

Komatsu www.komatsucummins.cl SGS www.sgs.cl

KPMG home.kpmg.com SignumBOX www.signumbox.com

Kura Minerals www.kuraminerals.com SNC-Lavalin www.snclavalin.com

LiCo Energy Metals www.licoenergymetals.com Sonami www.sonami.cl

Liebherr www.liebherr.com Sorena www.sorena.cl

Lithium Power International www.lithiumpowerinternational.com Sprott Resource Holdings www.sprott.com

Lumina Copper www.caserones.cl SRK Consulting www.latam.srk.com

Lundin Mining www.lundinmining.com Stillwater Resources www.stillwater-resources.com

Mainstream Renewable Power wwwmainstreamrp.com Strategic Investment Fund www.fie.cl

Mandalay Resources www.mandalayresources.com Superex www.superex.cl 76 77 Master Drilling www.masterdrilling.com Swanson Industries www.swansonindustries.com

ME Elecmetal www.me-elecmetal.com TDM www.tdmchile.cl

MetaProject www.metaproject.cl Techint Group www.techint-ingenieria.com

Microglobal www.microglobal.cl Teck Resources www.teckchile.com

Minera Tres Valles www.mineratresvalles.com Tecno Fast www.technofast.cl

Mineria Activa www.mineriactiva.com Tenova www.tenova.com

Mining Parts www.miningparts.cl Tetra Tech www.tetratech.com

The Ministry of Mining www.minmineria.gob.cl Total www.total-chile.cl

Mintech www.mintech.cl Trimetals Mining www.trimetalsmining.com

Mirasol Resources www.mirasolresources.com TTM www.web-ttm.com

Multotec www.multotec.com Tumi Raise Boring www.tumiraiseboring.com

MWH Global latinoamerica.mwhglobal.com Vecchoila Group www.vecchiola.cl

Normet www.normet.com Volvo www.volvocars.com/cl

OHL www.ohlconcesiones.cl Wealth Minerals www.wealthminerals.com

Orosur Mining www.orosur.ca Whittle Consulting www.whittleconsulting.com.au

Pesco www.pesco.cl Yamana Gold www.yamana.com

PH Ingenieria www.phingenieria.cl Yokogawa www.yokogawa.cl

Pilotes Terratest www.terratest.cl Zamine www.zamineservice.com

Poyry www.poyry.com

Industry Explorations CHILE MINING 2018 Global Business Reports Global Business Reports CHILE MINING 2018 Industry Explorations CREDITS Global Business Reports

EDITORIAL AND MANAGEMENT TEAM

Project Directors: Imara Salas, Meredith Veit, Ana Miclea Project Journalist: Kevin Norchi Editors: Mungo Smith ([email protected]), Alfonso Tejerina ([email protected]) Operations Director: Miguel Pérez-Solero ([email protected]) Graphic Design: Gonzalo Da Cunha ([email protected]) Graphic Design (ads): Özgür & Deniz ([email protected]) General Manager: Alice Pascoletti ([email protected])

Your opinion is important to us, please be in touch to share your comments on this report!

For updated industry news from our on-the-ground teams around the world, please visit our website at gbreports.com, subscribe to our newsletter through our website, or follow us on Linkedin and Twitter (@GBReports) 78

THANK YOU

We would like to thank all the executives and authorities that took the time to meet with us. Also, special thanks to:

FISA www.fisa.cl

GECAMIN www.gecamin.com

PROCHILE www.prochile.gob.cl

APRIMIN www.aprimin.cl

SONAMI www.sonami.cl

Industry Explorations CHILE MINING 2018 Global Business Reports