Chile Mining 2021 Chile Mining 2021
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CHILE MINING 2021 CHILE MINING 2021 Political Overview - Production - Exploration - ESG Equipment & Technology - Engineering & Consulting - Services Dear Reader, Welcome to our Chile Mining 2021 publication, where we dive deep into the chal- lenges, opportunities and competitiveness of the Chilean mining industry, as well as ongoing trends and debates on automation, digitalization, the copper cycle, the future of lithium and potential for gold. Our Chile Mining report of 2020 highlighted the battle the country fought with the social unrest and how the industry was impacted. Chile was hopeful at the beginning of 2020 to start the year on a clean slate. However, the world witnessed the Covid-19 pandemic unravel, plunging global economies into recessions and triggering trillion- dollar stimulus plans. Fortunately, the Chilean mining industry has shown remarkable resilience and perse- verance, as it withstood the external pressures well compared to other leading copper producers. This was facilitated by the industry’s early trial at remote work in Octo- ber 2019 and the boom in commodity prices that pushed base and precious metals to record-highs that gave hope to the global mining sector. The pandemic has also significantly accelerated technology adoption across the entire supply chain as companies adopted remote working techniques. However, there were challenges as supply chains were disrupted due to lockdowns and social distancing measures. The pandemic aside, the industry in Chile is fighting some of the same battles we see every year with water scarcity, rising energy costs and decreasing total factor produc- tivity. This year we are witnessing significant investments in R&D by equipment and service providers to address these challenges. In parallel to these events, the country is undergoing a pivotal process that will dictate its future: rewriting the national constitution. Some investors and analysts remain wary of how this might impact mining investment, although regulators should be aware of the industry’s significance and its crucial role in the country’s economic growth and development. This report is the product of over 70 interviews with major mining companies, junior mining companies, service providers, equipment and technology suppliers and govern- ment officials, as we try to paint an accurate picture of the present state of the industry and attempt to foresee its future direction. Thanks for reading! Alfonso Tejerina General Manager and Director GBR CONTENTS / CHILE MINING 2021 Introduction PERU to Chile BOLIVIA CHILE MINING 2021 Industry Explorations Arica The impact of the pandemic, Global Business Reports upcoming constitutional reform This research has been conducted by and an economic overview Lucrezia Falcidia and Germaine Aboud Iquique Edited by Mungo Smith Introduction to Chile Engineering and Construction Graphic design by Gonzalo Da Cunha A Global Business Reports Publication 8. Chile faces hurdles to maintain 54. Engineering and Consultants For updated industry news from our Tocopilla 6-21 on-the-ground teams around the world, leadership position – An overview of 55. Interview with SRK Consulting please visit our website at gbreports.com, mining in Chile 56. Interview with Wood subscribe to our newsletter by signing up to our VIP list through our website, 9. Interview with Bi-Minister of Energy 59. Interview with JRI Ingeniería or follow us on Twitter @GBReports and Antofagasta LinkedIn (gbreports) and Mining 60. Interviews with Arcadis and CDM Smith 11. Interview with Chilean Copper 61. Interview with Ausenco Commission (COCHILCO) 64. Interviews with Aggreko and with Taltal 12. Interview with the Association of Techint Engineering and Construction Chañaral Industrial Mining Suppliers (APRIMIN) 65. Expert Opinion: 14. Political and economic overview The red metal for a greener world Caldera 17. Interviews with Plusmining and 66. Construction and Contractors Copiapó with Invest Chile 67. Interview with Echeverría Izquierdo 18. Interviews with EY Chile and 68. Interview with Promet with Montt Group 69. Interview with Sigdo Koppers Ingeniería La Serena 19. Expert Opinion: y Construcción (SKIC) Chile’s constitutional process and 70. Interview with Edyce Ovalle royalty reform discussion – Business as 71. Technology-driven solutions Production, usual or transformative landscape? 72. Interview with Strabag Züblin 21. Insights from the Ground: 73. Interview with Tecno Fast Development and Pacic San Felipe Concerning the constitutional reform 74. Interview with Nexxo Ocean Valparaiso Santiago and its impact on mining 75. Interview with Thiess Exploration San Antonio Copper and gold production Rancagua updates, rise in mid-tier mining and the future of lithium in Chile Talca ARGENTINA Production, Development and Equipment and Technology Exploration Chillán 78. The journey to Smart Mining 22-51 Concepción 24. Copper 79. Interview with HighService Corp. 26. Interview with Antofagasta Plc 80. Interview with Finning 27. Interview with Anglo American Chile Temuco 81. Interviews with Sandvik and with Epiroc 28. Majors’ production and brownfield 82. Autonomous Technology expansion updates 83. Interview with Komatsu Cummins Valdivia 31. Interview with Freeport-McMoRan 84. Interview with Liebherr Chile Osorno 32. The rise of mid-tier mining 85. Interview with SKC Maquinarias Puerto Montt 33. Interviews with Capstone Mining, Los 86. Underground Equipment Andes Copper and Altiplano Metals International Boundary Ancud 87. Comminution and Material Handling State Boundary Castro 34. Codelco – Going underground 88. Interview with Weir Minerals 35. Copper Exploration National Capital 89. Interview with Metso 36. Interview with Pampa Metals State Capital 90. Interview with Tecnipak 38. Interview with Torq Resources 91. Interviews with Hofmann Engineering 0 100 200 300 Kilometers 39. Insights from the Ground: and with Bosch Rexroth Engineering, 0 100 200 300 Miles A new commodity supercycle? 92. The Use of Data Analytics 93. Interview with Enaex Construction and N 95. Interview with SGS Chile 96. Interview with ABB Chile and Siemens Equipment Beyond Copper: 97. Interview with Geocom Gold and Lithium Potential 98. Interview with Mathiesen The journey to green mining, desalination plants, water 42. Gold 99. Concluding Thoughts reuse, smart mining and the 45. Interview with Gold Fields 101. Company Directory use of data analytics 46. Interview with Barrick 103. Credits 47. Interview with Yamana Gold 52-98 48. Lithium 50. Interview with SQM Punta Arenas 51. Interviews with Wealth Minerals and with Lithium Chile INTRODUCTION TO CHILE “The challenges in the Chilean mining industry are entering a new stage as the industry matures. Today the industry is focused on sustaining operations in a complicated environment, characterised by political and economic uncertainty.” - Juan Carlos Guajardo, Founder and Executive Director, Plusmining GBR • Industry Explorations • CHILE MINING 2021 Image courtesy of Freeport-McMoRan EDITORIAL Global Business Reports Industry Explorations INTERVIEW Chile faces hurdles to Juan Carlos maintain leadership Jobet Chile continues to be the fourth country in the world position in terms of exploration investment, with over US$450 BI-Minister of Energy and Mining million in 2020 alone. OVERVIEW OF MINING IN CHILE GOVERNMENT OF CHILE The world witnessed unprecedented events in 2020, and GDP and Inflation Chile, the world's copper powerhouse, was no exception. Source: IMF Traditionally considered a model for political and financial Real GDP Growth (annual percentage change - April 2021): 6.2 stability in Latin America, the last two years have challenged What is the vision of the Piñera administration for the The Pascua Lama case has put the spotlight on glacier Inflation rate avg. consumer prices (annual percentage change - April 2021): 3.1 this reputation. Nevertheless, the country's solid macroeco- mining industry? protection. How can the industry coexist with glaciers? Annual % change nomic framework has allowed it to withstand the pressures, 40 Mining is our biggest industry: It represents over 10% of our Glaciers are a key freshwater reserve that regulate water flows cushioning the effects of the volatile internal disturbances GDP, more than 50% of our exports, 25% of total investment in the different basins. Their importance is only going to in- of 2019 and the pandemic of 2020. received, and a big chunk of fiscal revenues for the country. crease with climate change, so they need to be protected. 30 In October 2019, the country experienced social unrest re- 2020 presented many challenges, the pandemic being the This said, the mining industry can perfectly develop while flecting widespread frustration with persistent inequality. largest one, and the mining sector showed great resilience protecting glaciers. The overlap of mining activities with gla- Yet mining investment in the same year recorded its high- 20 and capacity to take care of the health and safety of workers, cier areas is extremely low. There is a legislative bill advanc- est level since 2015, standing at US$10.1 billion, while total with contagion rates much lower than the average popula- ing in Congress, and we believe we are reaching a good point tion. That was complemented with business continuity, as we of equilibrium between glacier protection and mining indus- production in 2019 amounted to 5.79 million tonnes (mt) of 10 copper and 112,600 mt of lithium, according to the Chil- closed 2020 with a copper output in line with 2019 figures.