GLOBAL BUSINESS REPORTS & EXPOMIN

GLOBAL BUSINESS REPORTS CHILE MINING 2020 EXPOMIN OFFICIAL INVESTMENT GUIDE CHILE MINING 2020 EXPOMIN OFFICIAL INVESTMENT EXPOMIN OFFICIAL GUIDE Metso Performance Center Helping you take control of your site

Mining continues to be more remote and complex than ever. Dear Reader, However that is no excuse for a lack of responsiveness. When things go wrong, ramifications can add up quickly. This compounds the need for timely and accurate service - or more so, to get ahead of problems before they start. Chile, long considered a stalwart of stability in the Latin American region, experi- enced an unusually tumultuous 2019. An eruption of civil unrest and mass protests over the country’s high rate of inequality and the rising cost of living raised questions That is the benefit at the heart of our new, state-of-the-art, regarding the stability of the country and its most important industry. Metso Performance Center. Coupled with intuitive services, Despite the headlines, Chile’s miners continued to invest in large brownfield expan- you’ll see more and stay ahead, in better control of now and sions and, to a lesser extent, greenfield projects, in hopes of tapping the country’s ready for what comes next. vast geological potential for decades to come. According to Consejo Minero, the country anticipates investments amounting to approximately US$72 billion, coming from projects to be developed in the 2019-2029 time period. With a team of equipment, process, and technology experts, At the beginning of 2020, things looked promising, as the copper price had began Metso can provide real-time support to: its recovery on the back of improved trade relations between the US and China. The • Analyze your equipment and operations general sentiment was that the global economy was on the mend. These dynamics have since shifted drastically as coronavirus spread around the world. Few, if any, • Anticipate potential issues countries have been untouched and as a result of government enforced lockdowns, movement and commerce have come to an abrupt stop. Consequently, demand for • Accelerate to achieve & sustain performance improvements most metals has fallen substantially. This is a profoundly complicated problem for Chile at a time when the country is de- pending on its trusted mining industry to bolster its economy and lead it out of social The center opens March 2020 in Santiago, Chile. crisis. Across the value chain both local and global companies are eager to deploy Learn more at metso.com/performance the latest technology and cutting edge engineering approaches to capitalize on the wealth of opportunities in everything from lithium, copper and gold. However, it is unclear how the pandemic will affect the overall health of the Chilean mining industry going forward. Certainly, conferences have been temporarily put on hold, which is why Global Busi- ness Reports is releasing its digital format Chile Mining 2020: Official Investment Guide to EXPOMIN, produced in partnership with FISA, the organizers of EXPOMIN. As we navigate these uncertain times, it is crucial for both national and international investors, mining executives, and technical experts involved in Chile's mining industry to support each other and remain well informed. This publication offers widespread coverage of the current state of Chile's mining industry, including its leading producers and operating mines, exploration companies and their projects, as well as examining the different providers across the value chain, from engineering to mining equipment and services. We sincerely hope that you have a great conference, full of business and networking opportunities. Thank you for your participation in EXPOMIN, and we hope you enjoy reading Chile Mining 2020.

Alice Pascoletti Managing Director Global Business Reports PERU

Introduction BOLIVIA to Chile CONTENTS / Chile Mining 2020 Arica

Analysis of the political and Iquique macroeconomic factors influencing Chile’s miners Tocopilla 8-17 Introduction to Chilean Mining PARAGUAY 61. Interview with Black and Veatch 62. Interview with Ingenalse Antofagasta 8. Chilean Miners Display Resilience 64. Interview with Amphos 21 Despite Socio-Political Uncertainty 65. Interview with CDM Smith 10. Interview with Minister of Mining 67. Interviews with Worley and Arcadis 11. Interview with Consejo Minero 68. Energy and Technology Taltal 13. Interview with Cochilco 69. Underground Mining Chañaral 14. Factsheet: Macro-Economic Overview 70. Interview with The Institute of Mining 15. Interview with EY Engineers of Chile (IIMCh) Chile Caldera 16. Interview with GL Events Chile 71. Interview with DSI Underground Copiapó 17. Interview with APRIMIN 72. Interview with JRI Exploration, 73. Interview with Wood Group 74. Construction and Logistics

75. Interview with Echeverría Izquierdo 0 100 200 300 Kilometers Production and Production and Development Montajes Industriales La Serena 0 100 200 300 Miles Development Ovalle 20. Copper: Increasing Necessity for New N An overview of the most Projects Today to Meet Tomorrow’s Equipment and Technology Demand San Felipe influential projects in Chile 21. Factsheet: Copper Valparaiso Santiago 25. Interview with Codelco 78. Equipment: Technology that Offsets San Antonio 20-55 26. Factsheet: Codelco 79. Autonomous Mining and Teleoperation 29. Interview with Anglo American Chile 80. Interview with Komatsu Cummins Rancagua 32. Gold 81. Interview with Hard-Line ARGENTINA 34. Interview with Gold Fields 82. Interview with Liebherr Talca 35. Interview with Yamana Gold 84. Interview with Epiroc 36. Interview with Barrick 85. Interview with Emerson Chillán 39. Interview with Albemarle 86. Interview with Finning Concepción 88. Interview with American Air Paci c 89. Interview with Michelin Ocean 91. Data and Analytics Temuco Exploration 92. Interview with Highservice Corp. 93. Interview with Technosteel Valdivia 94. Interview with Normet Engineering and 42. Juniors Progress Through Down Market 95. Comminution and Material Handling Osorno 43. Interview with InvestChile 96. Interview with FLSmidth Construction 44. Factsheet: Investment Portfolio 98. Interview with Takraf Tenova Puerto Montt 45. Interview with Los Andes Copper 99. Interview with Metso Ancud Discover Chile’s efforts to drive 46. Interviews with Abraplata Resource Corp. 100. Interview with McLanahan Castro and Hot Chili sustainability and cut costs 101. Interviews with Motion Metrics and 48. Lithium: Dealing with Difficult Conditions Hexagon Mining 49. Interview with Wealth Minerals Atlantic 50. Gold: Ocean 58-75 Enjoying Favorable Market Conditions 51. Interview with Rio2 Drilling and Blasting 52. Prospect Generating: Rare Dollars for Exploration 53. Interview with Revelo Resources 104. Drilling: Building Resilient Businesses 54. Interview with Minería Activa Through Tough Times 55. Expert Opinion Article: 105. Interview with Griffith Drilling Is Chile Only for Major Miners? 106. Interviews with Superex and PerfoChile 108. Blasting: Precision and Sustainability Drive the Market 110. Interview with Dyno Noble Engineering and Construction 111. Interview with Plasma 4th Equipment, 112. Interview with ENAEX 113. Interviews with Orica and MAXAM CHILE MINING 2020 Technology and 58. Establishing Value Through EXPOMIN Official Investment Guide Sound Design Global Business Reports and EXPOMIN 114. Concluding Thoughts Punta Arenas 59. Water and Environment 116. Company Directory Services This research has been conducted by 60. Interview with Stantec 118. Credits Lucrezia Falcidia, Jason Spizer and Mariolga Guyon Insights from Chile’s world leading Edited by Mungo Smith players across the value chain Graphic design by Gonzalo Da Cunha

A Global Business Reports Publication For updated industry news from our 78-113 on-the-ground teams around the world, please visit our website at gbreports.com, subscribe to our newsletter by signing up to our VIP list through our website, or follow us on Twitter: @GBReports GBR • EXPOMIN OFFICIAL INVESTMENT GUIDE • CHILE MINING 2020

INTRODUCTION TO CHILEAN MINING

» Chile has been a mining country since before the arrival of the Conquistadors and will be a mining country for much longer. We want to maintain Chile’s status as the largest producer of copper in the world. «

- Baldo Prokuriça, Minister of Mining, Government of Chile

Image courtesy of Vinícius Henrique on Unsplash EDITORIAL Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

GDP (PPP) possesses the world’s largest lithium re- Mining Minister Baldo Prokuriça is simi- making and earth-moving to advanced Chilean Miners Display Source: World Bank 2018 serves, according a U.S. Geologic Study larly optimistic that the mining indus- electronic components, a slowdown in (USGS) report. try will continue functioning as normal: manufacturing was bound to put down- Resilience Despite Socio- US$474 billion It is unclear what, if any, backlash there “Chile has a long history with a stable ward pressure on the commodity price. will be on heavy industries such as min- mining investment climate and the cur- Adding to the pain was the fact that Chil- Political Uncertainty ing in the long-term. The protests caused rent situation will not erase that. There ean copper production fell 2.5% in the POPULATION disruption to the typically efficient op- are doubts regarding the referendum first half of 2019 on the back of declin- Source: Censo 2017 Instituto Nacional de Estadísticas (INE) erational environment throughout the and the new constitution, but it must be ing copper grades according to a study 18.4 million country, but strikes within the mines were remembered that Chile has very clear by the International Copper Study Group limited to a few union groups and inter- laws protecting investors and respecting (ICSG). 2020 has seen a precipitous drop ruptions were overall minimal. private property, freedom of expression in the copper price, due to coronavirus SOCIAL TURMOIL FORCES RECONSIDERATION OF GDP PER CAPITA (PPP) According to Joaquín Villarino, president and human rights.” and will undoubtedly put producers and Source: World Bank PINOCHET ERA DEVELOPMENT MODEL of Consejo Minero: “October and No- It is not just those who took to the streets service providers under extreme pressure 1970 vember 2019 very hard months for Chile. armed with clanking pots and pans who until the disease is subdued and global We believe that the social unrest is tran- were disappointed in the pace of eco- economic activity begins to recover. US$2,300 sitory. However, it will mean profound nomic growth in 2019; mining companies Given these dynamics in the market and 2018 changes in certain public policies in the also had high expectations going into the protests that crippled the nations retail country in order to improve the quality of year. However, predictions of demand economy in October and November Prior to October 2019, the pervasive view dictatorship, which have enabled con- US$25,222 life of those Chileans who are suffering. outpacing supply for copper and lithium 2019, it is a testament to the dynamism held amongst Chileans and outside ana- sistent, long-term economic success. We are optimistic that regulation of the never materialized. The demand shortfall of the Chilean economy and sound man- lysts was that Chile was immune to po- Famed economist Milton Friedman re- mining industry will not change dramati- for these commodities can be blamed on agement practices in its mining industry litical destabilization and social unrest. ferred to this growth from deregulation POVERTY RATE cally.” a variety of global economic factors, but that the economy still managed meagre Although populism was spreading across and open markets as “The miracle of Source: Ministerio de Desarrollo Social In Chile, mining is taxed at a rate of 40%, the most salient are the China-U.S. trade growth. Although growth was well below Latin America and several other parts of Chile.” 1989 one of the highest percentages globally. war and economic stagnation in Europe. expectations, it is still far better than that the world, Chile was viewed as a consis- The poverty rate has fallen from over 40% Villarino continued: “There is not much These have taken a toll on global manu- of its regional peers; Argentina, which is tently strong economic performer with in 1990 to under 9% today, according to 47.0% room to raise taxes, but it is something facturing activity and, given copper’s in recession, and Brazil, whose economy relatively moderate politics. At the sus- World Bank figures. The middle classes we are anticipating.” critical end usage in everything from car- has stagnated. tainable mining conference in Santiago now form a majority, income inequality 2017 in September 2019, the most profound is below the Latin American average and challenges facing the Chilean mining Chile received the region’s highest score 8.6% industry were outlined: weakness in the on the United Nations Human Develop- price of copper and lithium, water scar- ment Index, which is predicated on a MINING city, declining ore grades, social license, blend of life expectancy, education and Source: Banco Central de Chile high energy and labor costs to name a national income per capita. few. One concern absent from that list In the context of the region, this perfor- 10% of GDP was internal stability. mance is strong. However, compared For the past three decades, Chile has to its rich country peers in the OECD, been viewed by investors as a bastion of Chile ranks highest in economic inequal- PRINCIPAL MARKETS calm in an otherwise politically precari- ity. UN reporting found that the richest Source: Dirección General de Relaciones ous region. Chile achieved its status as a 1% of the population earns 33% of the Económicas Internacionales Chile leading mining jurisdiction not only be- nation’s wealth. This fact is one of the cause of its high quality and easy to ex- principal reasons why there is such wide- China 30% ploit resource base, but also because its spread anger. Poor and middle class USA 17% policies toward mining were regarded as people, who rely on public transport, best in class from an ease of doing busi- feel that the burden of state funding is EU 14% ness perspective. being unfairly placed on them at a time In light of the October 2019 protests when middle class wages are stagnating that shocked the country, questions have and low skilled jobs are being replaced TRADE Source: Dirección General de Relaciones been raised regarding Chile’s ability to with technology. Rising expectations that Económicas Internacionales Chile maintain its status as Latin America’s have gone unfulfilled are surely a part of most stable and successful country. The this story. 26 FTAs civil unrest was seemingly triggered by Much of Chile’s economic success has (64 markets) increased metro ticket prices, but at its come on the back of a robust mining sec- core the disorder is fuelled by a gather- tor that has been, and will continue to ing sense of economic inequality. Since be, the lifeblood of the economy. Chile INFLATION (CPI) 1990, the country’s restored democracy is the world’s top producer of copper and Source: IPC June 2019 Instituto Nacional de Estadísticas (INE) has maintained the broad outline of free- exports of the metal account for approxi- market policies installed by Pinochet’s mately 10% of the nation’s GDP. It also 2.3%

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What are the most important initiatives How is the government incentivizing and policies the Mining Ministry has pro- efficient use of water and technologies moted during your term? such as desalination? The most important initiative was to help Chile is experiencing its worst water crisis Could you provide us with some context about Consejo Minero? reactivate mining investments in the coun- and its worst drought in the last 60 years. Consejo Minero is an organization that is 22 years old and brings together the major try and reshape the industry to become From that point of view, there has been a mining companies in the country, which combined produce 97% of copper, 71% sil- more environmentally friendly and pro- lot of effort on the part of the mining indus- ver; 55% gold and 97% molybdenum in Chile. ductive. In addition, we have focused on try to reduce continental water usage. To- We have four fundamental targets. The first is to communicate what the mining in- providing strong support for small and me- day, 8% of Chile's copper mining projects dustry does in terms of investment, profitability and taxes. Second, we try to foster dium-sized mining companies. During our use desalinated water and we expect that a competitive and sustainable industry. Thirdly, we have the mission to participate term, the State-backed mining companies number to grow substantially in the future. in the discussion of public policies that affect the mining industry. Finally, we are fo- began working in lithium and we are work- There is a great effort to recycle water. That cused on promoting the improvement of the skills of workers in the country. We are ing to improve the situation of the national is why there are projects from companies in contact with educational organizations to ensure that the training and education of mining company. We want to generate a like Anglo American, that recycle up to 80% workers is keeping pace with technological changes in the industry. new national mining policy that will help of water and forecast to have 100% recy- Chile sustain its competitiveness through cled water in the future. What are the medium and long term prospects for the mining industry in Chile? Baldo 2050 and I believe that we have achieved Joaquín Mining production in Chile grew considerably until ten years ago and then stabilized progress in this area. In the wake of social unrest, how can at around 6 million mt/y of copper, which is 27% of the world's copper, making it the the government reassure investors that largest producer in the world. This year we will probably see a small decrease, but Prokuriça What progress is being made in Chile to Chile will remain a leading mining juris- Villarino production will be around 5.9 million mt/y. The industry has the capacity to produce reduce carbon emissions and make the diction in the future? that amount of copper for at least 30 more years. country a leader in sustainable mining? Chile has a long history with a stable min- From the perspective of investment, we have a pipeline of approximately US$72 bi- Chile has made it a priority to focus on ing investment climate and the current llion in new projects to be developed over the next 10 years. 58% of that portfolio electro mobility. The country has invested situation will not erase that. The record of is highly likely to happen; the rest will depend on factors, such as the copper price, US$2,2 billion in Codelco and US$80 mil- stability in Chile supports the idea that we which has been kept low by the trade war between China and USA. We will have a lion in ENAMI to reduce emissions from will be able to resolve our differences and sustained increase in demand for copper in the world that, with the market projec- smelters. US$200 million have also been that the social turmoil will be solved. I think tions, it will be hard to satisfy, so there should be an upward pressure on the copper Minister of Mining Executive President invested in private smelters. We invested there are doubts regarding the referendum price, which would make it possible to execute all the projects. GOVERNMENT OF CHILE US$3 billion in December 2018 in order and the new Constitution, but it must be CONSEJO MINERO October and November have been very hard months for Chile. We believe that the to significantly reduce the emissions of remembered that Chile has very clear laws social unrest is transitory, but it will mean profound changes to certain public policies. Chilean smelters. There are a lot of mining protecting investors and respecting private This will help improve the quality of life for many Chileans who are suffering from not companies that are using renewable en- property, freedom of expression and hu- having access to basic services. We expect that violence is going to be controlled and ergy. In 2021, ENAMI will operate on 100% man rights. we are optimistic in our belief that regulation of the mining industry will not change renewable energy. BHP has just made a dramatically. In Chile, mining pays around 40-43% of taxes; it is second only to Aus- public tender of 6 gigawatts to use 100% What potential does Chile have to grow tralia in taxes paid. renewable energy in 2022. Codelco uses its presence in other minerals such as » renewable energy and electric vehicles in cobalt and to remain competitive as a There is a trend in Chile where open pit mines are transitioning to underground their mines and the trucks in which they lithium producer? » operations. What are the implications of this transition? transport their workers. Chile is a leading We are promoting investments from com- It is a paradigm change for Chile, which has been characterized by having large open Chile can maintain and increase jurisdiction in terms of renewable energy panies in cobalt mines so that this element, pits, with the exception of El Teniente. Chuquicamata, after being the largest copper Mining production in Chile grew copper production despite adoption. which is key to lithium-ion batteries can be pit in the world for many years, is going underground. The expansion of Los Bronces considerably until ten years ago ore grade decline, and the aim marketed and included in foreign invest- is also planned to go underground. This generates challenges and opportunities. of our government is to help What production level do you expect ments in our country. The ultimate goal is and then stabilized at around The underground deposits imply stopping the exploitation of many mining resources facilitate an environment that Chile to reach for copper? Do you ex- for Chile to become a supplier of lithium ion 6 million mt/y of copper, which buried, but they have less impact on the surface, so places where there are glaciers or batteries to the global auto sector. We want vegetation remain intact and, in addition, it generates less dust. On the other hand, it encourages further investment pect the country to be able to maintain is 27% of the world's copper, and grow copper production in the fu- to jump into the value-added chain. We are making it the largest producer is a great opportunity to introduce technological changes in the field and have more in the mining industry. the world’s second-largest lithium produc- machinery that is remotely operated, which improves safety and efficiency. ture? in the world. This year we will We currently extract 5.5 million mt/y of cop- er; we have salt flats, and we would like to probably see a small decrease, per and hope that by 2020 we can reach get as close as we can to the manufactur- What are the reasons why Chile has a high cost of production? 6 million mt/y. We believe we can achieve ing of batteries and the manufacturing of but production will be around 5.9 We have a higher energy cost because we had stress in our energy grid for many « this with the upcoming projects that are cu- elements to store energy, which we believe million mt/y. The industry has the years, which led companies to sign long-term contracts at prices of more than US$100 rrently in development and with Codelco´s could create more revenue, more jobs and capacity to produce that amount of per MWh. That is more expensive than in Canada, Australia, US or Peru. This problem pipeline of investments. Chile can maintain more opportunities for Chilean families. copper for at least 30 more years. is being solved because tenders have changed, and renewable energy is now being and increase copper production despite Codelco and ENAMI have both signed introduced, which is causing prices to decrease. Another reason for the high cost of ore grade decline, and the aim of our gov- agreements to develop projects and production in Chile is that our workforce is expensive. Salaries for Chilean miners are ernment is to help facilitate an environment Codelco has committed to invest US$10 similar to the US, Canada and Australia. However, productivity is lower. Lastly, Con- that encourages further investment in the million for exploration in the Salar de Mari- sejo Minero is working to promote a more reasonable legal framework in which the mining industry. cunga. ■ « approval of projects does not take so long. ■ CHILE MINING 2020 10 EXPOMIN Official Investment Guide Global Business Reports 11 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

INCOME INEQUALITY IN CHILE YEARLY PER CAPITA INCOME IN LATIN Source: World Bank AMERICAN COUNTRIES (2018) Jorge Source: World Bank

Gini Index 60 Chile $25,222 Cantallopts 58

56 Uruguay $23,530

54 Argentina $20,567 Vice President 52 COCHILCO Venezuela $18,102 50

48 Brazil $16,068 What is the mandate and mission of Cochilco? of discussion is the use of public infrastructure for desalination. 46 Cochilco is a government institution that was established in We have been working on proposals to create incentives for the Suriname $15,497 1976. Our main focus is advising the Chilean government on the use of public infrastructure for water projects. 44 implementation and evaluation of public policies, strategies and actions that contribute to the sustainable development of 42 Colombia $14,999 Is there anything that is being done to try and streamline the national mining sector. Cochilco also aims to safeguard the the permitting process in Chile? interests of the state and its mining company Codelco, super- Cochilco investigated how long it takes a company to obtain 40 Peru $14,393 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 vising and evaluating their management and investments. approval and licences. We proposed solutions to the Minister of Mining to speed up the process. Some of the proposed so- Chile’s history of churning out success- volves US$4.2 billion in investment over Paraguay $13,570 What areas of mining today are most in need of policy re- lutions have been implemented, but the permitting process is fully run local businesses devoted to the next five years to extend the life of form? still a challenge. Currently, it can take up to two to three years to the mining industry is undoubtedly a the copper mine in the Tarapacá re- Ecuador $11,713 Improving the level of engagement between the mining indus- obtain permits for exploration. In addition, environmental and positive driver of wealth creation. In de- gion. Antofagasta Minerals, meanwhile, try and the community is critical. We believe that previous re- social permits are also required. The entire process can take up scribing the advantage Chilean compa- will invest US$3.7 billion to expand its lationships between mining companies and communities have to a decade, which is way too long and also gets quite expen- nies have over large global enterprises, Centinela copper mine, with construc- Guyana $8,568 been more transactional rather than developmental. The mi- sive. This scares investors and thus it is necessary for Chile to Ivan Rayo, general manager of Chilean tion starting in 2021. The third biggest ning industry should be more involved in the development of streamline the permitting process to attract more investment. engineering consulting firm JRI, said: project is Nueva Unión, a joint venture Guatemala $8,447 local communities, so we are studying how to improve these Because the permitting process is timely and expensive, the “Being a Chilean company means that between Teck and U.S.-based Newmont relations. Chilean mining market is dominated by major mining compa- our clients benefit from increased flex- GoldCorp, that needs US$3 billion over Mining is perceived as a dirty industry, but we need to educate nies and there are too few junior companies operating in Chile. Bolivia $7,859 ibility. For example, many operations five years for construction of a copper- communities that mining can be sustainable, environmentally are struggling to stay profitable with a gold mine. friendly and contributes significantly to the economic develop- How does Cochilco see the ability of Chile to offset some of depreciated copper price. Local busi- These new investments are needed to Honduras $5,129 ment of Chile. Good public policies are necessary to build a the more mature ore bodies? nesses excel in responding quickly to offset a potential decline in production new system that encourages companies to build relationships The best way to fight the decreasing grade of ore bodies is by adjust costs and implement solutions.” from some of Chile’s largest and most with local communities. We also believe that the government increasing exploration. This is one of the reasons why we want Another locally run business, PerfoChile, reliable sources of copper. After 104 48% of the world’s lithium reserves, ac- should have a more active role in early stages of mining pro- to create incentives for exploration in Chile. Another way for has 35 years experience as a drilling ser- years of production, Codelco’s Chuqui- cording to Invest Chile. Furthermore, jects to promote and incentivize sustainability and efficiency mining companies to offset declining ore bodies is to improve vices provider. General manager Os- camata, the largest open pit mine in the the quality of these reserves is often de- through the implementation of technologies. their processes and to become more efficient in implement- valdo Carmona outlined his approach to world, closed its surface operation and scribed as best in class. In light of the ing technology. Declining ore grades are a huge challenge, weathering turbulent times: “We have commenced its underground phase, civil unrest, political sensitivities have What is Cochilco’s view on automation and digitization? because it leads to greater demand for water and power. It is a focused on building our cash reserves and there is uncertainty surrounding the become a more important part of the One of the issues with automation is that you are taking the great advantage that electricity prices in Chile are decreasing over time in order to invest through mine’s ability to maintain current pro- discussion regarding mining in Chile, worker out of the mine, which can be a great thing in terms of and this is impacting the decisions of mining companies oper- good and bad economic and political duction levels, particularly in the near- but given the role that the mining in- safety and cost efficiency. The problem is that automation is ating in the country. climates.” term. Codelco is expected to invest dustry can play in delivering a better often viewed as a threat to today’s workforce. It is the respon- Although mining is not experiencing US$5.58 billion according to Consejo future for Chileans, it is important that sibility of the industry to educate people that automation is not Do you foresee that the civil unrest in Chile will have any its best year, companies continue to Minero in order to achieve a production it prevails in the face of any populist replacing human capital, but rather creating different and safer backlash on the mining industry and business climate in invest. Almost US$66 billion has been level of 140,000 mt/d of ore, with an ap- backlash. Jorge Maldonado, general jobs. general? earmarked for Chilean mining projects proximate mine life of 45 years. manager of Superex, a leading company I believe that we are going to see some big changes in the near for the period of 2018 to 2027, and 43 At the end of the day, it is important to in sonic and diamond drilling, summed Can you highlight some of the policy proposals Cochilco future. How politicians develop and implement new policies will mining projects will be built or will be- keep in context the sheer size of oppor- this sentiment up: “Sometimes Chile for- has made over the last three years? be one of the major changes. We have to be careful as we do gin production by the end of 2023, ac- tunity the Chilean market represents. gets how vitally important a strong min- We are working on developing our long-term vision, which in- not want to deter investment, but at the same time we want the cording to the Ministry of the Economy. Chile holds 22% of the world’s copper ing sector is to the health of its broader volves improved engagement between mining companies and money to be spent in the right places. Now is the right time to The biggest project is Teck Resources’ reserves, 11% of molybdenum reserves, economy. We must not miss our oppor- the communities. We are also proposing a new mining code implement policies, which will empower and uplift communi- Quebrada Blanca phase II, which in- 5% of silver reserves, 7% of gold and tunity to lead in mining.” ■ which will incentivise new exploration in Chile. Another topic ties. ■

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CHILE WEALTH GROWS WITH MARKET-FRIENDLY POLICIES (GDP) Can you provide a brief overview of of doing business in the country with the Source: The World Bank the services EY provides to the mining Constitution, tax structures, royalties, and property rights, investments will USD Billion sector in Chile? 300 EY has four major lines of service. We slow. Investors are not yet pulling out of provide consulting, audit, transaction their commitments in Chile, but they are and tax advisory services. Consulting certainly acting with extreme caution at or advisory services focuses on strategy the moment. and innovation for the mining sector and how to apply it. We help organiza- When you look at Chile as a jurisdic- tions with operational projects to reduce tion from a tax and regulatory per- costs and become more effective and 200 spective in mining, what are the ad- efficient. Also, we assist in supporting vantages? businesses by implementing new tech- Chile is a great place to do business. nologies such as robotic processes auto- We have trade agreements with 150+ mation and data analytics. We recently countries and we are very global in our 1990 Pinochet voted out in a 1988 bought a Chilean company called Met- thinking. We see big potential for more referendum and steps down in 1990, capitalist policies Eduardo ric Arts, that was built to work with cli- renewable energy investment, desali- stay in place ent data to improve their business using nation, water, and infrastructure invest- 100 1973 artificial intelligence and mathematical ments. China is looking to invest a lot in Allende is ousted by military Valente models. The last area of our business Chile. In the past three years Chile has coup. Augusto Pinochet, military head, comes to power and enstates free-market provides management services. For seen a huge increase in Chinese busi- 1970 economic policies some clients we run their supply, finan- nesses purchasing Chilean infrastructure Socialist leader Salvador Allende is elected president cial and accounting and HR processes. companies. Additionally, we provide IT, supply chain management, and customer relationship EY listed license to operate as the 0 consulting. biggest risk facing the global mining 1960 1970 1980 1990 2000 2010 industry. If you could tailor this list Chile Advisory Managing Partner How has social unrest impacted the specifically for Chile, what would be EY investment climate for investors? the biggest risks? CHILE PERFORMANCE OVERVIEW 2019 Before October 18th, miners were stay- Every year it is becoming harder to com- Source: Global Competitiveness Index 4.0 ing on track with their plans to invest. In municate to the world the importance High-income group averageLatin America and the Caribbean average fact, we saw an acceleration of invest- of mining to our economy, society, the ment in the mining sector and we were way that we consume things, and its im- Overall Enabling Human Markets Innovation Score Environment Capital Ecosystem having a good year in terms of new in- portance in creating jobs. We still have a vestments and projects. We had a lot of lot of room to improve how we connect Best: Singapore Finland Singapore Korea (33) (4) Switzerland Hong Kong Singapore Hong Kong China USA Germany companies investing in digital transfor- with society, the environment and how Score 100 mation programs, automation and ro- we transform mining into a greener and botics technology. At the same time, we more sustainable process by reducing 90 saw a lot of interest from companies to water consumption, carbon footprint, keep investing in brownfield operations. and waste. At the same time, the license 80 » We didn’t see a lot of greenfield projects to operate means companies need to but a lot of projects were focused on im- consider how to best connect with the 70 Chile is a good place to proving existing operations. After Octo- government and the broader ecosys- 60 invest, but if you change ber 18th, everything changed. Although tem of suppliers, and universities. This the fundamentals of doing the mining sector has not been affected broad concept is a big risk, because we 50 business in the country with to the same extent the retail or banking are seeing a big shift in how people view sector has, mining is affected by the so- the mining industry. The same goes for 40 the Constitution, tax structures, cial environment. Chile. royalties, and property rights, 30 Right now, if you have a change in the The second biggest risk is about attract- investments will slow. Investors way that the mining properties are regu- ing the right people and how the compa- 20 are not yet pulling out of their lated in Chile, it will have a big impact nies can transform themselves to make commitments in Chile, but on investment and the way we calculate workers jobs more attractive. Mine sites 10 they are certainly acting with projects. Investors are waiting to see are not attractive places to live because what will happen with the Constitution. they are far from big cities and good in- 0 extreme caution at the moment. Rank We are seeing a two year timeline where frastructure. The ability to bring in and 33rd 32nd 42nd 56th 1st 37th 47th 10th 53rd 21st 46th 47th 53rd /141 we expect to see the market slow down retain talent in the world of digital trans- Overall Institutions Infrastructure ICT Macro- Health Skills Product Labour Financial Market Business Innovation adoption economic market market system size dynamism capability quite a bit. Chile is a good place to in- formation is one of the most important stability « vest, but if you change the fundamentals risks companies face. ■ CHILE MINING 2020 14 EXPOMIN Official Investment Guide Global Business Reports 15 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

Francisco What kind of activities does APRIMIN There has been a positive change. The carry out to promote the develop- mining community has been criticized Sotomayor ment of the mining industry in Chile? in recent years for resisting innovation, APRIMIN's mission is to be a strategic but the reality is that there has been a partner within the mining sector in or- lot of innovation and the attitude of mi- der to make Chile an attractive country ning companies has evolved. This posi- for sustainable mining investments. Our tive change has resulted in more interest goal is to help Chile become a devel- and willingness to create the necessary Managing Director oped country through the mining sector agencies to be able to do pilot testing. and its suppliers. There is an ongoing initiative to achieve GL EVENTS CHILE Most of the suppliers in Chile are very more innovation in the mining industry involved in mining operations and seek in Northern Chile. Companies such as to have permanent support that ensures CODELCO, BHP, Anglo American and the continuity and sustainability of the Collahuasi are working with the Funda- What is GL Events experience in the What are the main challenges for the How is Chile positioned as an R&D hub Pascual business in the long term. APRIMIN pro- cion Chile (Chile Foundation) and the organization of trade and industry Chilean mining industry, and how do for the mining industry? vides support in this regard. Expande organization. events such as EXPOMIN? you plan to address these within EX- EXPOMIN is the largest mining fair in There are startups dedicated to the cre- GL events is a French business group POMIN? Latin America, and that gives us the op- Veiga Has Sebastián Piñera's government ation of innovation for the mining indus- founded in 1978, that is currently pres- Within the framework of EXPOMIN, we portunity to present to the community carried out actions to create a more try in Chile. There are large companies ent in 26 countries and had revenues have the XVI International Congress, un- the technological advances that are set- favorable environment for the Chilean that are doing many innovation improve- of US$ 1.2 billion in 2018. We have 40 der the slogan “Mining facilitating the ting industry trends. These are the ones mining industry? ment initiatives that use Chile as a labo- years of experience in the events indus- future.” 13 seminars will be held with that generate changes and transforma- Yes. There has been a very special em- ratory due to the many different types try, and we employ 10,000 staff. Some 120 speakers who will make presenta- tions that increase the mining potential phasis on trying to facilitate the ap- of operations, variation in the mine loca- of the events produced by the group in- tions on issues such as projects, regional of the different countries, improving ef- proval of projects through the Oficina tions and diversity of rock type. Experi- clude the Rio Olympics in 2016, the Pan mining, innovation and productivity, di- ficiency and productivity. de Gestión de Proyectos Sustentables ments and differentiated products have Chairman American Games in Toronto in 2015, the gital transformation, logistics, markets, At the XVI International Congress, we (Sustainable Project Management Of- been made in Chile. Medium-sized sup- 2014 World Cup in Brazil, G8 and G20 inclusion and diversity, and environ- will promote important areas of discus- APRIMIN fice) and attempts have been made to pliers are promoting and making signifi- summits, and COP summits. ment. sion and analysis on the key trends in our facilitate permit approval processes cant innovation and improvement in the GL Manages more than 300 own fairs industry. The seminars will be focused through government policies. The main process, transportation and information and sets up over 4,000 events per year Has the recent social unrest affected on how mining has developed in the mission of this is to reduce permitting systems sectors. These local companies in industries such as the food, mining, the country's attractiveness for for- region, so we will examine issues, such time without leaving the quality stan- use technology from other parts of the culture, fashion, gastronomy, environ- eign investment in mining? as innovation and productivity, the de- dards and environmental regulations be- world but apply it in Chile and create ment, and more. In Chile, we have op- According to a COCHILCO report on velopment of mining activities, and the hind. Some attempts have been made their own system and methodology. erated since 2014 through the FISA and the 2019-2028 period, the expected promotion of women in mining. In addi- to avoid repetitive processes. Tarpulin subsidiaries. FISA is the main investment in mining for the next 10 tion, we will have technological events, What is your vision for the Chilean mi- organizer of fairs in this country, with years amounts to US$ 72.5 billion. This where companies will present their ex- » What is the biggest challenge that ning industry in the next three years? events such as Expomin, Expo Vivienda, includes 23 private, large and medium- periences in areas such as water man- service providers currently face in the The mining industry will continue to be Expo Hospital, Expo Naval, Edifica, Se- sized copper mining projects, for US$ agement, hydrometallurgy, solutions mining industry? Chile's main source of income and ex- guridad Expo, Expo Andes, and others. 28.3 billion, and eight Codelco projects, and innovations in electromobility and There is no solution to climate The relationship between mining actors port due to its size, geological potential Meanwhile, Tarpulin is the leading play- amounting to US$ 23.1 billion. Other energy, environment, lithium and cobalt change mitigation without the and communities has greatly improved, and experienced work force. There is no er in temporary infrastructure solutions minerals such as gold, silver, iron, lithi- processing in Chile and elsewhere, and mining industry. Challenges but there are still situations where peo- solution to climate change mitigation and also industrial solutions. um and industrial minerals account for the potential development of these in- ple view mining as a problem because without the mining industry. Challenges such as the lack of water, the another 13 projects worth US$ 6.9 bi- dustries. of a failure of contextual understanding. such as the lack of water, the cost of What are your expectations for EXPO- llion of investment. Therefore, mining cost of energy and the cost of Sometimes people do not see the ben- energy and the cost of labor in Chile will MIN 2020? is a very relevant sector and can be a Would you like to add a final message labor in Chile will continue to efit that the projects bring to the com- continue to be increasingly high and less The goal for 2020 is to host more than driver for economic recovery, as high- for the readers? be increasingly high and less munity. Regarding the water shortage competitive compared to other mining 1,300 exhibiting companies and more lighted in the latest executive commit- EXPOMIN 2020 is a great opportunity competitive compared to other issue, the Antofagasta region has the countries, so improving productivity will than 70,000 professional visitors from tee of EXPOMIN that was headed by to showcase new technologies and ex- largest desalination plant in Chile for be a must. The lack of support and posi- mining countries, so improving Chile and overseas. We expect the par- minister of mining, Baldo Prokuriça, and change ideas and experiences on rel- the benefit of the population and mining tive perception of citizens is an obstacle ticipation of over 5,000 foreign visitors, which included high industry represen- evant topics such as the environment, productivity will be a must. The companies. Now, desalinated water has that must be solved. It is true that there from over 35 countries, with more than tatives. It was reiterated that EXPOMIN innovation, productivity, digitalization lack of support and positive been used for most projects due to the have been environmental problems 20 international pavilions. Our estima- is a key event in this context, because it and automation. This exhibition allows perception of citizens is an country's water limitations. caused by the mining industry, but this tion is that there will be 2,500 business showcases the strength of this industry us to project what is coming in the fu- obstacle that must be solved. has changed over the last decades and meetings during the framework of the and the interest it generates at a global ture in order to innovate and thus move How has the mining industry’s atti- more environmental awareness is be- fair, resulting in approximately US$ 1.7 level. towards the mining industry that the tude towards innovation evolved in ing developed. Chile has the capacity to billion in business deals. world needs. ■ « Chile over the last two years? continue operating for many decades. ■ CHILE MINING 2020 16 EXPOMIN Official Investment Guide Global Business Reports 17 CHILE MINING 2020 GBR • EXPOMIN OFFICIAL INVESTMENT GUIDE • CHILE MINING 2020

PRODUCTION AND DEVELOPMENT

» The last couple of years have been slow globally, but we are starting to see an increase in mining investment. Compa- nies that had put projects on hold have decided to move ahead with the invest- ments. The current project pipeline for mining projects in Chile for the period 2018 to 2027 is close to US$66 billion, which is encouraging. Considering the current social and political juncture that Chile is facing, we are confident that the country is and will continue to be a good destination for foreign investment, especially in the mining sector. «

- Christoff Janse, Investment Promotion Officer, Invest Chile

Image courtesy of Black & Veatch EDITORIAL Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

ELECTRIC VEHICLES WILL CAUSE HIGHER DEMAND FOR COPPER GLOBAL COPPER CONSUMPTION BY MARKET SECTOR Copper Source: Wood Mackenzie, Copper Outlook December 2018 Source: Anglo American

Electric vehicles Combustion engines Growth in total consuption from 2017 to 2040 is estimated to be 1.8% per year and will Copper demand million metric tons 2017 reach 43.8 million metric tons, underpinned 7 by electrification in transportation, buildings and manufacturing. In addition, INCREASING NECESSITY FOR governments continue to establish targets CONSTRUCTION for renewable energy, which results in NEW PROJECTS TODAY TO MEET 6 30% 25% higher copper demand. TOMORROW’S DEMAND - power cables - building wire 29.1 5 - transformers MILLION METRIC TONS - non-electrical Total Consumption 11%

4 24% 10% CONSUMER AND GENERAL 3 - home air conditioners - regrigerators 2 - washing machines - televisions ELECTRICAL NETWORK 2040 - mobiles - computers 1 - power grid - power generation

22% 0 28% 2015 2020 2025 2030 2035 2040 2045

43.8 MILLION METRIC TONS Take a flight to the north of Chile and, as the plane descends, ...AND DEMAND WILL KEEP STRONG DUE TO THE Total Consumption TRANSPORT you may notice one of the many deep holes that dot the land- DECARBONIZATION COMMITMENDS AND NEW TRENDS 18% scape. Of the top 20 highest producing copper mines globally, Source: CRU - auto/trains/ships seven are located in Chile: Escondida, Collahuasi, El Teniente, INDUSTRIAL MACHINERY - infrastructure Los Bronces, Los Pelambres, Chuquicamata, Radomiro Tomic million metric tons 23% - electric vehicles are all stars in the global mining constellation. Maintaining 7 - industrial motors 9% - EV charging facilities high production from these large mines, along with additional new production, is essential as the world transitions to a new 6 energy economy. Simply put, the green economy is far more metal intensive than the fossil fuel economy. So long as de- mand continues to rise for electric vehicles and solar and wind 5 energy, demand for copper will rise synchronously. COPPER PRODUCTION IN CHILE CHILE’S GLOBAL PRODUCTION RANKING Wind and solar energy requires three to 15 times as much Source: Consejo Minero Source: Consejo Minero copper per unit of output as fossil fuel generation, according 4 to the Financial Times. A report from Deutsche Bank expects the global electric vehicle market to grow 22% annually to ST TH global rank global rank 2030, led by China’s 25% market growth. Estimates are that 3 1 6 copper demand for electric vehicles, which was 0.9% of the 31.5% share of global share of global state owned Cu production Ag production global total in 2017, will rise to 8.2% of total copper demand 27% 5% 2 in 2030. Given these dynamics, it is increasingly important that Chile continues to invest and innovate in order to offset production declines. 1 ND TH Although Chile is considered a mature mining jurisdiction, 68.5% 2 global rank 14 global rank Timothy Beale, CEO of Revelo Resources, a prospect genera- private companies share of global share of global tor with a portfolio of copper and gold-silver projects focused 0 Mo 20% production Au 1% production in Chile, described the quality of the country’s mining assets: 2015 2020 2025 2030 2035 22>> CHILE MINING 2020 20 EXPOMIN Official Investment Guide Global Business Reports 21 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide

“World class means long life of mine and scalability of pro- overall progress. It will also be a critical part of funding a new additional government spending in December 2019 and the duction, and Chile has several truly world class mines. These wave of social spending into the future. state owned miner will be expected to help fund a larger huge mining districts in Chile will all be mining for decades welfare system in the country. The company can also antici- into the future.” pate a much more tightfisted response from the state in its A prolonged period of high production is imperative, because Codelco allocation of funds to meet Codelco’s financing needs. copper mining plays an instrumental role in the development Same mission, New urgency On the spending side, Codelco is now looking to shrink its of the country. Consejo Minero data shows copper accounts project budget through 2028 by US$8 billion or 20%. Ac- for more than 90% of the country’s mining exports, has been Before the protests and riots began in October 2019, Codelco cording to the companies Q3 2019 reporting, there are no the economic sector with the highest contribution to fiscal was already facing the difficult task of having to invest bil- plans to suspend any planned projects. At the same time, revenue and has contributed 12.1% of GDP over the last de- lions just to maintain production levels and keep costs from the company is looking to generate an additional US$1 bi- cade. There are efforts to diversify the Chilean economy and rising. Now, as the government faces a long list of spending llion in gross earnings from 2021 onward. According to CEO grow exports in other areas, but it is clear that copper will demands to appease protesters, the challenge is more for- Octavio Araneda, Codelco is making a “great effort” to help continue to play an outsized role in its contribution to Chile’s midable. Piñera’s administration announced US$5.5 billion of generate the cash Chile needs to address social demands. To achieve the capex savings Codelco will simplify project design and reinforce operations maintenance and supply. LARGEST COPPER MINES “Codelco’s future depends on finishing structural projects BY ESTIMATED PRODUCTION on time and at lower costs. Without them, our production Source: International Copper Study Group; Wood Mackenzie will fall significantly,” Araneda said. Fortunately for Codelco, the company owns a portfolio of

Thousand mt some of the most prodigious copper producing assets in the 0 200 400 600 800 1,000 1,200 world. Chuquicamata has been in operation for over 100 years and is now entering into a new phase underground. Codel- Escondida, Chile co reported that, although the ramp up period of the un- Kamoa-Kakula, DR Congo derground mine is projected to take seven years to reach Grasberg, Indonesia 140,000 mt/d, work to maximize process efficiency aims to shorten this period to five years (2024). Oyu Tolgoi, Mongolia El Teniente produced 465,000 mt of copper in 2018 and Morenci, US has now completed 54% of development on its New Mine Level work. The plan is to boost production at the mine to Buenavista del Cobre, Mexico more than 500,000 mt/y by 2025. This ramp up in output Collahuasi, Chile would place the mine as a top five producer globally and the company intends to invest US$3.4 billion to carry out Cerro Verde II (sulphide), Peru the expansion. Polar Division (Norilsk-Talnakh mills), Russia At Radomiro Tomic, a mine producing 310,000 mt/y of cop- Antamina, Peru per, Codelco filed an updated environmental impact assess- ment (EIA) for an US$882mn, mine life extension plan in An- Las Bambas, Peru tofagasta region. El Teniente, Chile Overall, 2019 was a difficult transitional year for the com- pany as it struggled to boost production and earnings. The Los Bronces, Chile world’s largest copper producer had 1.12 million mt of cop- Los Pelambres, Chile per output from January to September 2019, which repre- sented a fall of 6.7% in relation to the same period of the Kansanshi, Zambia previous year. Company reports also showed a drop of 57% Quellaveco, Peru in pre-tax earnings year on year. Driving these results were February rains, a 14-day strike at Chuquicamata, lower head Chuquicamata, Chile grades and lower levels of treatment. Kamoto, DR Congo Although this past years’ performance was below compa- Radomiro Tomic, Chile ny expectations, there is no denying the historical impact Codelco has had on the pace of development in Chile. For Bingham Canyon, US almost half a century, it has provided a reliable stream of rev- Sentinel, Zambia enue to the country. Moving toward the future: “The hope is to transform ourselves in order to continue contributing to Toromocho, Peru the progress of Chile for at least 50 years more,” Araneda 0 200 400 600 800 1,000 1,200 said.

CHILE MINING 2020 22 EXPOMIN Official Investment Guide Global Business Reports 23 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

Octavio Araneda

Majors that Escondida will continue to be a very WORLD COPPER PRODUCTION Jurisdictional preference good cash returner for the next decade Source: Cochilco remains strong despite the down year. CEO Collahuasi, majority owned by Anglo In 2018 Chile reached record levels of American and Glencore, is a copper CODELCO copper production, with 5.831 million mine located in northern Chile. The mt. The industry was able to achieve mine produced 560,000 mt of copper this because of consistent investments in 2018 and, for the first nine months of made in years prior. In order for the 2019, production was flat. Meanwhile, at What is the current status of your its construction and will be inaugurated 20% of all sales abroad during the pe- country to continue its status as a lead- Anglo American’s Los Bronces produc- different operations, and can you in 2020. Andean Future Development, riod. In surpluses for the State, we have ing producer in the future, investments tion was down 3% over the same period, highlight your most important invest- meanwhile, continues with its feasibility generated more than US$ 116 billion, must resume. In 2018, US$4.5 billion of due to unprecedented drought condi- ments? study, which currently is 40% complete, equivalent to 9% of fiscal revenues. In investment and 68.5% of production tions. 2019 was the driest year with the Codelco is currently developing a stra- while advancing the main engineering addition, our capital investments of came from private mining companies, longest drought ever recorded in cen- tegic transformation plan that seeks to and mining contracts. US$ 65 billion represent 8% of the total according to Cochilco. tral Chile and water scarcity remains a position it as a more sustainable, prof- In El Teniente, the New Mine Level is investment made in Chile in the same Some of the biggest global players risk for 2020 production. itable and competitive company. This now 54% complete. In the North Andes, period, and more than all the foreign operating in Chile are Anglo American Perhaps the most successful producer process involves achieving savings of the excavation of the main maintenance investment materialized in mining in our (Collahuasi 44% , Los Bronces 50.1%), through the first three quarters of 2019 US$ 8 billion in its investment portfolio cavern began. At the Diamante and An- country. We also contribute at the local BHP (Escondida 57.5%, Spence), Teck in Chile was Antofagasta Minerals. Cop- between 2019 and 2028 through bet- desita projects, the early works prog- level, with the generation of economic (Quebrada Blanca, Carmen de Andacol- per production for the first nine months ter designs, project prioritization and ress is going according to schedule. activity in the areas where our opera- lo) Antofagasta Minerals (Los Pelambres of the year was 584,200 mt, 15.6% construction optimization, following ef- It is important to highlight that the tions are located. This is highly valued 60%, Centinela 70% ), Rio Tinto (Escon- higher than in the same period last year Chile 28% ficiency goals and continuous improve- Codelco transformation process seeks by the communities, because it brings dida 30%), Glencore (Collahuasi 44%), on continued higher throughput and ment. This amounts to a 20% reduction to position it in 2021 in the second cost employment and improvements in in- Lundin (Candelaria) and Freeport Mc- grades. This higher production at all Peru 12% in the investment budget, including quartile, ensure the financing and de- frastructure. MoRan (El Abra 51%). operations resulted in mid year EBITDA structural projects, without diminishing velopment of structural projects, and China 7% According to Joaquín Villarino, presi- increasing by 44% to US$1.3 billion. the value contribution of the portfolio. maintain the company's contribution to What goals does Codelco wish to dent of Consejo Minero: “Mining pro- Building off the company’s success, the The first of these, Chuquicamata Un- the country for at least 50 more years. USA 6% achieve over the next 2-3 years in duction in Chile grew considerably until board of directors approved a US$1.3 derground, was inaugurated in August Chile? ten years ago and then stabilized at just billion expansion of the Los Pelambres DR Congo 6% 2019. Tests have been carried out and How has 2019 been from a produc- Today we are focused on achieving below 6 million mt/y of copper, which copper mine in November of 2018. With we have already initiated the operation tion perspective? challenging objectives, which are part equates to about 27% of the world's the expansion the company will be able Zambia 5% of the mineral transport system. It is a Between January and September 2019, of a strategic business plan and cultural copper, making it the largest producer to increase production from the mine complex technology that includes a 14 we reached 1.120 million mt of produc- transformation. To be more produc- in the world. In 2019, we will probably by around 60,000 t/y of copper over the Australia 5% km belt, which will allow the transport tion, that is, 80,000 less than in the third tive, profitable and sustainable we have see a small decrease, but industry has first 15 years of operation. The project and feeding of ore to the concentrator quarter of 2018. There are several ex- three main goals. We must look for the the capacity to produce that amount of will involve the construction of a de- Rest of the World 31% plant up to 140,000 mt/d of material. planations for this issue, but the most best projects and execute them on time copper for at least 30 more years.” salination plant and water pipeline. An- At Radomiro Tomic we are updating relevant are the February rains, the and with simpler designs, pursue excel- The three largest mines owned by pri- tofagasta was initially targeting startup our Environmental Impact Assesment 14-day strike in June, the lower head lence in all our operations and focus vate companies in Chile are Escondida, in H2 2021, although in April 2020 the in order to extend the useful life of the grades and lower levels of treatment. on further development of our mineral Collahuasi and Los Bronces. company announced a four-month sus- potential. In relation, Escondida and oxide deposit for 10 years, until 2030. In Next year our projections are to reach resources At Escondida, the highest producing pension of the project due to the coro- Collahuasi both have strip ratios of over parallel, we are continuing with the fea- better production levels. This strategic plan aims to expand rev- copper mine in the world, 2019 results navirus. 2.5:1. Therefore, QB2’s cost of produc- sibility study of the RT Sulfuros Phase II enues by US$1 billion per year, starting came up short of projections. Copper The other big project in Chile’s cop- tion will likely be lower. project. How are the mines bringing economic in 2021. This will be in addition to to our production at Escondida in FY 2019 de- per investment pipeline is Teck’s QB2. Construction is expected to be com- In Atacama, in our Salvador Division, and social value to local communities projected savings of 20% in the total creased by 6% to 1.135 million mt, as a The company is reliant on the project pleted in the fourth quarter of 2021, the Rajo Inca project is being advanced and the country? investment portfolio we have planned consequence of a 12% decline in copper to transform its copper business and as with ramp-up to full production during through its early stage work, while its Our historical contribution to the de- for the coming years. Our intention is grades. Revenue from Escondida also a result, has committed US$4.7 billion 2022. The project is estimated to pro- environmental permits are being ap- velopment of Chile is unquestionable. to maintain the same projects, but to fell by US$1.5 billion to US$6.9 billion toward its development. One of the duce 316,000 mt/y of copper during its proved. Expectations are that opera- For almost half a century (1971-2018), execute them with maximum efficiency. overall for the year. According to BHP’s strongest characteristics of the project first five years of operation, making it tions will begin in 2021. we have been one of the main engines These resources will help us finance our end of fiscal year 2019 (Australian) con- is that it possesses a strip ratio of less one of the world’s largest undeveloped In Andina Division, the Andean Transfer of development in the country. Our projects and fulfill our promise to ex- ference call on June 30th, it is believed than 1:1 and has significant expansion copper resources. project reached 80% in the progress of exports of US$ 303 billion represent tend Codelco's life. ■

CHILE MINING 2020 24 EXPOMIN Official Investment Guide Global Business Reports 25 CHILE MINING 2020 COMPANY PROFILE Global Business Reports EXPOMIN Official Investment Guide COMPANY PROFILE

CODELCO El Teniente Chuquicamata

FALLING GRADE ST CODELCO NEEDS TO PROCESS MORE MINERAL TO MAINTAIN OUTPUT LEVELS production production 1 Source: Codelco (December 2019) (December 2019) worlwide Codelco ore grades (R1) Mineral processed by Codelco (L1) copper producer Millions of mt % 459,744 385,309 310 0.78 METRIC TONS OF METRIC TONS OF 0.76 300 FINE COPPER FINE COPPER

1.8 0.74 290 million metric tons internal staff internal staff copper production 0.72 (December 2019) (December 2019) 280 includes El Abra and Anglo American Sur attributable production to Codelco’s share 0.70 4,058 4,899 270 0.68 PEOPLE PEOPLE

ND 260 2 0.66 worlwide 250 0.64

molybdenum producer 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 extraction method extraction method

OPEN PIT AND OPEN PIT AND UNDERGROUND MINING UNDERGROUND MINING CODELCO’S INVESTMENT PROGRAM IS KEY TO THE COMPANY’S FUTURE 139 Source: Codelco US$ cents per pound ktmf in operation in operation C1 cash cost 2,000 Annual Copper Production 1,800 SINCE 1904 SINCE 1915

1,600

1,400 location location 100% Projects owned by the 1,200 under study MACHALÍ, CALAMA, Replubic of Chile REGIÓN LIBERTADOR REGIÓN DE 1,000 74% (A+/A1/A) 2029 GENERAL BERNARDO O’HIGGINS ANTOFAGASTA 800 Current Operations Projects 600 without Projects under construction ST products products 1 400 contributor to the 200 COPPER ANODES ELECTRO-REFINED AND Chilean treasury AND CONCENTRATES ELECTRO-WON CATHODES 0 2000 2005 2010 2015 2020 2025 2030 2035 2040 AND COPPER CONCENTRATE

CHILE MINING 2020 26 EXPOMIN Official Investment Guide Global Business Reports 27 CHILE MINING 2020 COMPANY PROFILE Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

BHP How is Anglo American positioning it- No impact on glaciers; no impact on the self as the mining industry transforms biodiversity of protected areas; no addi- Source: Cochilco, USGS itself? tional fresh water use in processes; using In the decades ahead, mining must trans- already authorised capacity of tailings and In 2019, BHP in Chile produced Equivalent to form more significantly than it has in the waste rock deposits; using existing pro- Total production in chile last century. This involves addressing the cessing plants and no additional traffic on industry’s critical challenges, including the access road. 1,452,900 safety, productivity and the use of energy water and land. In addition, society ex- What initiatives does Anglo American METRIC TONS pects that the mining industry should con- have in place to enhance the sustainabil- of fine copper 20.5% tribute more effectively to socio-economic ity of its operations and to contribute to 5.79 development, while reducing its environ- from its Chilean operations* million the well being of communities in Chile? mental footprint. Globally, we have acquired several com- *(948,100 mt Cu attributable) of Chile’s mt Cu copper production In this context, we define as our purpose mitments to accomplish our purpose: 30% to re-imagine mining to improve people’s reduction in energy use, 50% reduction in 1,187,800 lives. We do this through FutureSmart water abstraction and 30% reduction in Mining™, our innovation-led approach GHG emissions by 2030. In Chile, Anglo METRIC TONS Aaron to sustainable mining. It is our blueprint American has applied its FutureSmart Mi- at Escondida (57.5% owned) for the future of our business. A future in ning™ approach boosting actions to have (683,000 mt Cu attributable) Total production worldwide Puna which broad innovative thinking, enabling more sustainable operations. technologies, and collaborative partner- We are implementing a new Strategy of 265,100 ships will shape an industry that is safer, Water Management, which seeks to be METRIC TONS 5.9% more sustainable and efficient, and better able to face the challenge posed by cli- Pampa Norte (100% owned) harmonised with the needs of our host co- mate change and drought through an mmunities and society as a whole. action plan that considers: Water use op- (683,000 mt Cu attributable) of world 20 timization by the use of new technologies copper production million of which mt Cu What is the overall importance of Chile in the mining process; collaborative work CEO in the context of Anglo Americans in the areas of influence to support water 193,400 71,700 ANGLO AMERICAN CHILE broader project portfolio? availability for communities; access alter- MT MT at Cerro Anglo American has had a presence in native sources of industrial water, not good at Spence Colorado Chile since 1980; it has interests in two for human consumption nor agriculture; of the world’s largest copper mines, Los and develop scientific studies to have up to ECONOMIC CONTRIBUITION IN CHILE Bronces and Collahuasi, and employs more date data which will help us make a better than 10,700 people. In addition, we oper- use of the resource. Related to this strate- Source: BHP Economic Contribution Report 2019 Period: 1 July 2018 to 30 June 2019 ate El Soldado mine and Chagres smelter. gy, we can mention that Los Bronces recir- Our copper assets in Chile are of excep- culate between 70% and 80% of the water tionally high quality and there is potential the operation uses in the mining process. for growth at both sites. Los Bronces has In the same way, we continue implement- US$3.71 US$928 been mined for more than 150 years, and ing and developing new technologies to potential exists to extend the current life of reduce our emissions such as the introduc- BILLION MILLION » the mine beyond 2040. tion of electric buses to transport our work- ers, TIER 4 engines and the Start Stop sys- Suppliers Taxes What are Anglo’s future plans for the tem for the trucks we have at Los Bronces. Our copper assets in Chile are Payments to suppliers in Chile Taxes and other payments continued development of Los Bronces? In addition, we recently signed a contract US$5.23 of exceptionally high quality and for goods and services to the government We have recently submitted for environ- to have 100% of supply from renewable there is potential for growth at mental evaluation Los Bronces Integrated energy sources that will reduce our CO2 Taxes: Refers to expenditures for tax provisions. BILLION both sites. Los Bronces has been (LBI) project, which was designed to pre- emissions 70% from 2021; a similar agree- mined for more than 150 years, vent significant environmental impacts. ment was reached by Collahuasi which will Total economic and potential exists to extend The project is the result of six years of take effect in April this year. scientific territorial studies, analysis of in- Furthermore, the company has installed contribution the current life of the mine US$573 US$928 ternational experience and three years of the first photovoltaic plant built on a tail- Excludes payment to shareholders. beyond 2040. active dialogue with local communities ing’s facility in the world at Las Tórtolas. MILLION MILLION and various stakeholders. These activities These floating solar panels will help to re- identified the conditions to be met by the duce evaporation from the tailings facility, Employees Social investment project’s design allowing a harmonious co- therefore making more water available for « existence with its surroundings. the water recirculation system. At the same Payments to employees, Direct investment and As a result, the LBI project was designed time, it will generate clean energy for the wages, incentives and others administrative expenses under the following sustainability criteria: operation. ■

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COPPER PRODUCTION PER OPERATION

Mining Unit Main Controller 2019 production (Thousand mt) of the remaining 45% of the portfolio market slow down quite a bit. Chile is a the crisis is that social issues will now be Escondida BHP Billiton 1187.8 in the country is dependent on factors good place to invest, but if you change incorporated into the law and we can Collahuasi Anglo American / Glencore 565.4 such as copper price and other dynam- the fundamentals of doing business in move forward as a country.” El Teniente Codelco 459.7 ics affecting the potential return on in- the country and tax structures, royal- For the foreseeable future, investment Los Bronces Anglo American 389.2 vestment. ties, and property rights change, invest- decisions will have to be made more Chuquicamata Codelco 385.3 For example, companies are fearful that ments will slow.” cautiously than they may have been in Los Pelambres Antofagasta Minerals 375.9 the new constitution could bring about When discussing the investment cli- the past. However, companies should Radomiro Tomic Codelco 266.4 a more burdensome environment for mate, perspectives vary greatly. There not be dissuaded by headline risks, as Centinela (Sulfides) Antofagasta Minerals 195.5 mining operations. Eduardo Valente, are many who view the impact of the so- the operational environment shares Spence BHP Billiton 193.4 managing partner of EY’s Chile advisory cial crisis as an opportunity for Chile to more in common with Canada than it Andina Codelco 170.3 posits that although Chile’s mining sec- move into a new era of greater clarity for does Congo. Mining is an irreplaceable Ministro Hales Codelco 151.8 tor has not been affected to the same investment. According to Carlos Leigh, part of Chile’s economy and geological- Caserones Lumina Copper Chile 145.5 extent the retail or banking sector have, CEO of Latin America at DSI Under- ly speaking there is still a lot of copper Zaldívar Antofagasta Minerals / Barrick 116.1 mining is still affected by the second ground: “It is important to remember to be exploited at a competitive cost. Sierra Gorda KGHM 114 order effects, resulting from changes that mining investments are very long Given the potential for copper to be a Candelaria Lundin Mining 111.4 in the social environment. “If you have term, so companies will continue mov- high yielding asset in the coming years, Gaby Codelco 104.1 a change in the way that the mining ing forward with the development of it is clear that Chile remains a favorable Mantos Copper Audley Capital Advisors 86.3 properties are regulated in Chile, it will their assets. Social demands are being destination for miners. El Abra Freeport McMoRan 81.9 have a big impact on investment and made and it is giving Chile the oppor- Centinela (Oxides) Antofagasta Minerals 81.1 the way we value projects. Investors are tunity to solve its problems. Chile was Lomas Bayas Glencore 78.9 waiting to see what will happen with the never considered, in its recent history, Antucoya Antofagasta Minerals 71.9 constitution. We are seeing a two year a populist country and I still believe it » Cerro Colorado BHP Billiton 71.7 timeline where we expect to see the will not become one. The silver lining of Andacollo Teck 54 Salvador Codelco 50.6 COPPER PRODUCTION AND PRICE EVOLUTION Quebrada Blanca Teck 21.1 Source: Consejo Minero If you have a change in the way Michilla Haldeman Mining 12.5 KTMF US$/lb that the mining properties are Other 245.6 Production: Chile Production: Rest of the World Copper Price 22,000 450 TOTAL 5787.4 regulated in Chile, it will have a big impact on investment Mid Tier Mining In 2019, Mantos Copper secured remain a cloud on what could become 20,000 and the way we value projects. US$250 million to fund the expansion of a vibrant investment landscape, but so 400 Investors are waiting to see what Although over 90% of Chile’s output the sulphides concentrator at its Mantos long as there are no major unforeseen 18,000 comes from large mines, the country Blancos operation, which will extend the developments, progress will continue to will happen with the constitution. has several promising mid size mines in life of the open-pit mine until 2035 and be made. 350 We are seeing a two year development. Mantos Copper has its reduce costs. According to Mark Venning, South 16,000 timeline where we expect to MantoVerde and Mantos Blancos pro- For Pucobre, its El Espino mine has an America’s regional mining leader at see the market slow down quite jects, Pucobre is developing El Espino estimated investment of US $ 624 mil- Stantec: “The trade war has created 300 and Capstone Mining is looking to be- lion and its annual production is pro- nervousness in the mining sector, be- 14,000 a bit. Chile is a good place to gin construction on its Santo Domingo jected to be 42,000 mt of fine copper cause investments are big. A large cop- invest, but if you change the 250 project. and 20,000 oz of gold. Pucobre plans per mine costs US$5-10 billion, and if 12,000 fundamentals of doing business According to Tomás Buttazzoni general to enter into operation at El Espino in you don’t understand the direction the manager of Technosteel: “There are 2022 and it will double the company’s world is going, copper price uncertainty in the country and tax structures, 10,000 two trends driving the mining market in production capacity. can stifle investment decisions. The 200 royalties, and property rights Chile today. One is big mining sites that copper price fell to levels where most change, investments will slow. are expanding and the other is new mid Chilean mines are still profitable, but 8,000 size projects. Mid-size companies have Investment Climate Summary not generating considerable cash flow, 150 been much more efficient in the use of as had been anticipated. Towards the funds because they have exponentially Heading into 2020, the investment cli- middle of the year (2019), a lot of pro- 6,000 less cash available for investment.” mate remained positive and resilient jects started drying up.” He continued 100 - Eduardo Valente, Capstone mining’s Santo Domingo is throughout the country. In 2019, mining saying that if prices were to recover to 4,000 managing partner, now shovel-ready with all building per- companies weathered a commercial war levels above US$3 per pound: “projects EY Chile mits having been obtained and cons- between the US and China and one of will be reactivated and fast-tracked in a 50 truction is ready to begin in early 2020. the biggest political crises in modern second, especially in Chile.” 2,000 The project has a mine life of 17.9 years Chilean history. Nevertheless, projects On a probability of materialization ba- and a projected IRR of 21.8% after tax. sis, Cochilco sees upwards of 55% of are moving forward and progressing, 0 0 The projected cost of development is for the most part, on time. Substantial planned investment from 2018-2027 2003 2006 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 US$1.7 billion. geopolitical and domestic political risks as highly likely to occur. Development 2005 2008 « CHILE MINING 2020 30 EXPOMIN Official Investment Guide Global Business Reports 31 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

currencies, gold is an in-demand investment class and pro- For Gold Fields, 2019 was an important year of progress as Gold jections are that it will remain that way. According to Enrique the environmental impact study for its Salares Norte project Garay, senior vice president of Rio2 Limited: “As long as there in the northern region was approved in December. Chile’s is international political and economic uncertainty, the price environmental regulator has now given the green light to of precious metals will remain strong. We are confident that the country's second biggest planned gold project. Salares the prices for precious metals will continue to be elevated in Norte, was discovered in 2011 and is expected to begin oper- 2020 and beyond.” ations in 2022. The project has completed its feasibility study One of the reasons for bullishness is gold-backed ETFs have and hosts a gold mineral resource of 3.9 million oz of gold While Chile is less famous as a gold producer than Peru and seen positive flows in 15 of 16 months from July 2018 - No- and 44 million oz of silver, while the reserves are 3.5 million oz Mexico, the country was discovered in the quest for gold, its vember 2019 and they saw a 51% jump in their holdings in of gold and 39 million oz of silver. Approximately 90% of the exploration was financed by the precious metal, and in 1810, 2019 based off World Gold Council statistics. This is all wel- value and volume is in gold and 10% of the value and volume on the eve of its independence, it was producing as much come news for those seeking to reinvigorate the Chilean gold in silver. The initial life of mine is expected to be 11.5 years gold as Peru and Mexico combined. In 2019, gold production industry. and the payback period is 2.5 years, given a US$ 1,200 gold and investment are a fraction of that devoted to copper. How- price. According to Max Combes, Gold Fields Chile country ever, it still plays an important role in bringing jobs, technol- manager: “At today’s gold price, the mine would be very prof- ogy and economic development to the country. Production and Investment Pipeline itable.” Chile produces 1% of the worlds gold and had the 14th high- Located at an altitude of 4,500 meters, the estimated invest- est production globally in 2017. In 2018, the country fell out of In analyzing gold mining in Chile, it should be recognized that ment in Salares Norte is around US$850 million in capital in- the top 20 as production has declined from its peak of 49 mt a sizeable amount of the production comes from hybrid cop- vestment and a further US$450 million in sustaining capital Hedging the impact of in 2012 to 36 mt in 2018. As of September 2019, gold produc- per/gold operations and as a result of operational byprod- over the life of mine. “We will create a peak of 2,700 jobs dur- tion in the country had reached 29 mt for the first nine months ucts. KGHM’s Sierra Gorda, Lundin’s Candelaria, Antofagasta ing construction of the mine and an average of 900 workers COVID-19 with Gold of the year. Investment in projects totaled US$139 million for Minerals Centinela are all primarily copper mines that also during the operational phase,” mentioned Combes. 2018. produce gold. Another company making progress on its gold projects is Despite declining production, Chile still has an important Currently, Yamana Gold is one of the biggest producers in Kinross. The La Coipa Restart project feasibility study is now lineup of gold projects set to come online by 2023. They are Chile as it has two producing mines in El Peñón and Minera scheduled to be completed in early 2020, with study results Gold Fields’ Salares Norte, Kinross Gold’s La Coipa Restart, Florida. The company’s focus at El Peñón is on continuing to expected to be released in February. The timing of the com- In times of deep uncertainty, it is increasingly logical to have Yamana Gold’s El Peñón expansion, Rio2’s Fenix and Kings- replace annual mineral depletion while exploring for signifi- pletion of the feasibility study is not expected to have an im- insurance that limits downside risk. For centuries gold has gate Consolidated’s Nueva Esperanza. cant new veins. It completed more than 100,000 meters of pact on the overall project timeline. proven to be a consistent store of value during turbulent pe- The reason these projects are being advanced is largely due exploration drilling in 2019 and the results yielded high-grade Meanwhile, the Lobo-Marte project pre-feasibility study is riods and, in light of global economic activity screeching to to a bullish outlook on long term gold prices, thus making intervals of mineralization, indicating “excellent potential for progressing and is on schedule to be completed in mid-2020. a halt in the spring of 2020, it is currently amongst the most funding more readily available for project development. In mineral reserve and mineral resource growth with potential to Both studies are evaluating the potential for a return to long- preferred asset classes. This is seemingly justified given the contrast to copper and lithium, precious metals focused com- further extend mine life.” term production in Chile based on the concept of commenc- pervasive negative impact Coronavirus has had on econo- panies have not experienced the same level of difficulty in At Minera Florida the company is focused on replacing deple- ing Lobo-Marte production following the end of La Coipa’s mies around the world. financing their operations. With gold prices reaching a five tion in the core mine and investing in surface exploration and mine life. The response by most governments to mitigate the effect of year high above US$1,500 per oz and prices hovering around data modeling to generate new targets. Minera Florida will the pandemic on citizens has been to dramatically increase that mark for the majority of the year, projects are achieving require more years of exploration successes and considerable government spending to historically unprecedented levels. good margins. Given gold’s status as a reliable store of value efforts at development of newly discovered and prospective Pascua Lama’s return? As of April 2020, the US government committed upwards of and the trend amongst global central banks to devalue their areas in order to deliver positive free cash flow and returns. US$2 trillion to soften the economic blow of the virus and it One of the high profile gold projects in Chile that never got is believed that spending will increase substantially until the the chance to go into production was Barrick’s Pascua Lama. situation improves. Meanwhile, Chile has spent an amount The project has been shuttered since 2013, when a Chilean equal to 4.7% of its gross domestic product for emergency court ordered the company to halt construction over environ- measures aimed at saving jobs and protecting small business- mental concerns. Barrick shelved the project, citing cost over- es. These extraordinary actions taken by policymakers and runs and falling metal prices. central banks throughout the world to accommodate the sys- The original plan for the mine, which required a capital outlay temic shock Coronavirus has brought will inevitably debase of more than US$8 billion, contemplated an open-pit opera- certain currencies that overreach. As a result, the price of tion that would have had an effect on three small glaciers on gold has risen above US$1600/oz, with the potential to revisit the Chilean side of the Andes. It also involved major construc- all time highs reached in 2011. tion in the area and huge waste dumps. With the copper price hovering just above 2016 lows, miners As of end of year 2019, the company remains focused on re- and service providers throughout the value chain in Chile are solving the legal and environmental issues around the project in for a painful period ahead. Of course, there is hope that and, in addition to the ongoing remediation work, it had em- economic activity and copper prices will bounce back quickly. barked on a technical review of the project parameters and However, it is inevitable that, given the rapid price increase potential. CEO Mark Bristow said: “We believe that despite in gold, its production will be prioritized and existing proj- the legacy challenges relating to the Pascua-Lama project ects will be expedited. Thus far, the “currency of last resort” there are exciting opportunities here, especially in the El In- has proven to be a valuable hedge and will continue to be dio Belt, and we will be pursuing this in line with our strategy throughout this challenging time. ■ of creating value for all our stakeholders.”

CHILE MINING 2020 32 EXPOMIN Official Investment Guide Global Business Reports 33 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

What have been the biggest advances on Gold Field’s Salares Norte project Andrés over the past few years? Since 2017, Gold Fields has completed a pre-feasibility study (PFS) at our Salares Guzmán Norte project. We had two phases of the study – an interim feasibility study and a definitive feasibility study (DFS). The DFS, approved by the board in February 2019, was based on developing Salares Norte as an open pit mine with combined Bosque counter-current decantation (CCD), Merrill-Crowe and CIP processing at an average 2 million mt/y plant throughput. We have commenced with a detailed engineer- ing phase and are progressing well with 52% already completed. We are in a very VP-Country Administrator Chile unique position and, according to our plans, we will move into production with YAMANA GOLD more than 80% of the engineering completed. Gold Fields has also completed all the baseline studies for the environmental im- pact assessment (EIA), and we presented our EIA to the authorities in July 2018. We have been through the entire approval process and have made all relevant amend- What is the current status of Yamana’s already has a significant inventory of pre- and project approvals in Chile is that dif- Max ments to our EIA. We are now expecting the consolidated evaluation report to be different operations in Chile? cious metals with potential upside. It also ferent governmental agencies often act completed and approved by mid December 2019. Our permitting timeline was very While we are monitoring developments has the geological potential for base together and have overlapping require- fast compared to industry norms in Chile as it only took us 18 months. This quick closely in the country, the political pro- metal deposits, which is being investi- ments. To help address this problem, the Combes timeline was possible because of the strength of the project characteristics. tests have not impacted our operations. gated. Yamana is currently assessing the Chilean government created the Office Gold Field’s vision is to be the most sustainable gold producer in the world. This Our focus at El Peñón is on continuing to best path forward for Agua de la Falda of Sustainable Management to serve as a has been embedded in the design of our project. We have managed to build a replace annual mineral depletion while along with strategic options for develop- point of contact between companies and very good relationship with all the stakeholders in the area, and we invested a lot exploring for significant new veins. We ment and financing. different government agencies. of effort and money into creating a sustainable design that ensures water use is completed more than 100,000 metres kept to a minimum. We have introduced filter tailings that allow us to recover most of exploration drilling in 2019 and these Chile and Canada are the largest What initiatives does Yamana have in of the water and we will produce a dry tailing that will be moved with trucks to be efforts, along with ongoing geophysical sources of revenue for Yamana. How place to ensure efficient use of water compacted. analysis of the property, generated en- do the two jurisdictions compare? and energy at its operation in Chile? Country Manager couraging results. There are many similarities in the two Our focus is on increasing our reuse and GOLD FIELDS What is the business case for the Salares Norte mine? Drill results yielded high-grade intervals jurisdictions. Both countries have distin- recycle rates and minimizing overall raw Salares Norte is a very rich deposit with high grade gold and a lot of silver. Includ- of mineralization, indicating excellent po- guished mining pedigrees and a long water consumption. To that end, we use ing silver as gold equivalents, the mineral resource is 4.5 million oz and the mineral tential for mineral reserves and mineral history of support for the industry. Both the dry-stack method of tailings storage reserve 4.1 million oz. Approximately 90% of the value and volume is in gold and resource growth with potential to further have defined rules for developing mining at El Peñón, which allows 80% of the wa- 10%. Our strategy at this high-grade, open pit, gold-silver project is to stockpile the extend mine life. In addition, we discov- projects as well as deep mining infra- ter contained in the tailings to be recov- ore. We will then be able to select the right grade of gold and silver to process in ered a second vein at the Laguna satellite structure, skilled workforces, and clear ered. The El Peñón processing plant in- the plant. We currently have an 11.5 year life of mine with a production average of deposit with high-grade intervals of min- processes and expectations around per- cludes a secondary containment system 350,000 equivalent oz/y gold. We expect that for the first seven years of operation, eralization, while ongoing exploration mitting, health, safety, and the environ- with a capacity of 3,000 cubic metres that we will be in the order of 400,000 to 450,000 equivalent oz/y gold. This makes the and infill drilling of secondary veins in the ment. There is also a degree of predict- recycles 100% of the water to the plant. project very attractive and the investment recovery very low at approximately 2.5 core mine area have produced strong re- ability and reliability with respect to the Water on the mine property is collected years. In our financial model for the PFS we have used a price US$1,200 and with sults from several sectors, including Sor- tax and royalty regimes in both countries. in surface pools and reused in process- » today’s gold price, Salares Norte would be very profitable. presa, Dorada, and Aleste. In terms of challenges, the level of scru- ing, reducing consumption coming from At Minera Florida, we are focused on re- tiny from communities, governments, local wells. El Peñón has four sewage Salares Norte is one asset in an entire land package that Gold Fields controls. placing depletion in the core mine and NGOs, and activists has increased in both treatment plants, including a treatment Salares Norte is a very low-cost What is Gold Field’s vision for the overall project, beyond Salares Norte? we are investing in surface exploration countries in recent years, as have expec- plant in the mine camp that treats 200 operation and we still have We have different properties in the area of Salares Norte and we have concentrated and data modelling to generate new tar- tations around environmental steward- cubic meters of water per day, which is potential to add additional our search efforts in this area. Gold Fields was able to consolidate some properties gets. The property consolidation com- ship. In Chile, expectations for benefits then used in the mine’s tailings treatment resources in addition to our around our current project, and three years ago, we started with a systematic ap- pleted in 2017 facilitated the develop- sharing as well as local hiring and pro- process. In addition, per capita water proach to do exploration on these properties. Our aim is to define targets, which ment of targets that are producing good curement have increased and this some- consumption in the El Peñón mine camp main project. We expect to we will then drill out. Because of our extensive work on Salares Norte, we have the results at better than life-of-mine grade times manifests in protests that can delay is carefully controlled through the use start operations in 2022 and we ability to read the surface better and understand the potential of what we have. in the PV Sur-Fantasma corridor and the production. Yamana has largely avoided of water metres. With respect to energy are in the process of designing Patagua-Don Leopoldo corridor. these tensions by engaging respectfully, consumption, El Peñón implemented a a mine of the future. How do you plan to incorporate innovative technologies? transparently and continuously with its new grinding system to improve energy Salares Norte is a very low-cost operation and we still have potential to add ad- What potential does Agua De La Falda community partners and by investing control and optimization, reducing the ditional resources in addition to our main project. We expect to start operations in bring to Yamana’s portfolio? heavily in local development, quality of energy consumption in the grinding 2022 and we are in the process of designing a mine of the future. We are trying to Yamana owns 57.74% of Agua de la Falda; life, education, and culture. The com- process by 15% in 2018. The mine also implement advanced technologies into our design such as connectivity solutions. CODELCO owns the remaining percent- pany also maintains strict environmental generated a 14% reduction in energy us- « Salares Norte is very isolated and we are 150 km away from power infrastructure. age. Agua de la Falda presents an excel- policies and procedures that often go age related to ventilation last year after We will power the mine through diesel, but we have also incorporated solar energy lent opportunity for value creation in the beyond local laws and regulations. One installing a ventilation-on-demand sys- solutions in our strategy. ■ long term for the company. The property of the bottlenecks to obtaining permits tem. ■

CHILE MINING 2020 34 EXPOMIN Official Investment Guide Global Business Reports 35 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

Describe the importance of Chile for of geologists and experts who are reviv- to expand and depend on consistent supplies of lithium. In Barrick? What options is Barrick con- ing the value of this asset. Lithium the past decade, Chile’s share of global lithium production sidering to expand elsewhere in the has dropped from 40% to 20%. According to Marcelo Awad, country? What are Barrick’s views on the poten- executive director at Wealth Minerals: “To make a change, the Over the past 10 years alone, Barrick has tial of the El Indio belt? entire constitution will need to be brought back into congress spent some US$8 billion in Chile on ex- Barrick is a very different company today. for review and we have not seen a government willing to do ploration, development, royalties and Following the merger with Randgold and In looking to diversify the mining economy and the products this. The government is currently finding ways to comply with taxes, wages, and payments to local sup- the arrival of Mark Bristow as president it exports, the Chilean government has made it known that the constitution, but they are also trying to bring more pro- pliers. and CEO, it is a 'geocentric' organiza- lithium will play a key role in the future of the country. Since duction licenses to companies to develop lithium projects. I We own the largest package of highly tion; meaning our behaviors and actions reassuming power in 2018, Chile’s President Sebastian Piñera believe that we need more clarity from the government with prospective lands in the El Indio gold are consistent with our values and we has vowed to ensure a combination of both state and private regards to the current lithium laws.” belt, creating opportunities for explora- recognize the critical importance of un- investment to double the country’s output to 230,000 mt/y of tion and development in gold, silver and derstanding the characteristics of an ore lithium carbonate equivalent by 2023. This would represent a copper projects. As of today, we have body and its responsible development large increase in relation to the 96,083 mt mined in the coun- The New Great Game created the most ambitious exploration throughout its life cycle. In this strategy, try in 2018, as reported by Reuters. plan in this region in the company's his- Chile, where much of the El Indio belt sits, The lithium industry, in general, is in a nascent stage in its Despite, some of the regulatory complications, Chile is still a Marcelo tory, trusting more than ever in Chile as has abundant mineral wealth and remains development. However, Cochilco forecasts approximately country lithium producers are hungry to access and deal flow an excellent destination for mining invest- a safe, reliable and transparent invest- US$1.8 billion of new investment in lithium projects by 2022 is reflective of that. In December 2018, China based Tianqi ment. ment destination and therefore Barrick and the mining ministry is keen to increase that amount. bought a 23.8% share in SQM from Canadian fertilizer com- Álvarez In our track record we have operated El will continue to trust and invest. Lithium in Chile is mined by pumping water up through un- pany Nutrien for US$4.1 billion, the largest deal in history for Indio gold mine since 1994 and were the Our understanding of gold deposits has derground salt beds to create pools of minerals. Thanks to a lithium asset. In the wake of this deal, Uranium One, a sub- first company to carry out a successful evolved, as have the geological models the dry air of the Atacama, these pools quickly evaporate to sidiary of Russian state run nuclear group Rosatom, signed a program to close a gold mine according and technologies used to explore them. leave a yellowish, oily lithium liquid that then gets processed memorandum of understanding with Canada’s Wealth Miner- to international standards that, to this day, Areas that were hidden by barren rocks or and put into lithium-ion batteries, which store energy that als that gives it the right to buy up to a 51% stake in the com- remains a model for others to follow with rocks that were deposited in the mineral- powers mobile phones, electric cars and electricity grids pany’s 46,200 hectare lithium project in the Atacama desert. thoughtful and responsible closure plans. ization were rarely looked at. We are thus when attached to wind turbines and photovoltaic cells. The deal gives Rosatom access to major deposits of lithium Currently, over 80% of closure works are embarking on a ‘third wave’ or the next The reason Chile is such an attractive jurisdiction for lithium that are dissolved in brine beneath the Atacama Desert. Executive Director Chile and Argentina completed with US$80 million dollars in- generation of modern exploration, and production is largely because of the Atacama Salar, which BARRICK vested in this process. Since then we’ve we are very excited and reinvigorated in produces the most lithium of any salar in the world. Henk Van also partnered with local and internation- our compelling belief that there are more Alphen, CEO of Wealth Minerals, a company with a conces- al companies to explore, build and oper- discoveries to be made. sion of 46,200 hectares in the Atacama salar, described why ate mines together. The best example is it is so compelling: “The Atacama Salar is the world’s highest the Zaldivar copper mine (a joint venture Why is Barrick bullish on the funda- grade and largest producing lithium brine deposit and cu- with Antofagasta Minerals) which contrib- mentals of copper? How do your views rrently produces approximately one third of global lithium utes significantly to Chile's economy and on copper compare with those of the output from two production facilities operated by SQM and which, from June 2020, will become the gold market? Albemarle. The Atacama possesses a very high grade of both first mine to operate on 100% renewable If you are exploring along the Andean lithium and potassium, and has a high rate of evaporation energy. trend then more often gold deposits and extremely low annual rainfall. These characteristics make » Our company also holds a successful ex- come with either copper and/or silver. Atacama’s finished lithium carbonate easier and cheaper to ploration history in Chilean mining. Our Our view is the growth prospects and op- produce than its peer group globally. A key factor in lithium latest discovery Alturas has a resource portunities to discover Tier 1 gold depo- production costs is evaporation time and the Atacama Salar’s We own the largest package base that already puts it as one of Chile’s sits into the future are skewed to Central evaporation rate is the highest in the lithium industry.” of highly prospective lands in largest pure gold deposits. It was the and South America and therefore looking Despite prime production conditions and upward of 50% of the El Indio gold belt, creating result from a systematic re-evaluation ahead, it is possible, if not guaranteed, the world´s reserves, according to United States Geological opportunities for exploration and of Barrick´s landholding in the El Indio that the gold mining companies of the Survey data, Chile has not permitted a new lithium mine since belt and a remarkable discovery, as it is future will also be copper producers. development in gold, silver and the boom began in 2014 and only two private companies, extensively covered by barren unmin- That is the context of our view on copper. SQM and Albemarle, are in production. copper projects. As of today, we eralized rock, but our exploration team Regarding our view on its fundamentals, Chile´s policy toward lithium has been deeply criticized as have created the most ambitious understands these deposits better than if you believe in EV and more ESG and unclear for newcomers because it requires private miners exploration plan in this region in anyone else, which represents a competi- a world that is more responsible towards to partner with the State or obtain a special permit known the company's history, trusting tive advantage for Barrick. Pascua-Lama the environment and pollution then cop- as a CEOL to mine lithium on their own. The problem is that more than ever in Chile as an is also undoubtedly an exciting and vir- per can be considered one of the more the government has yet to provide guidelines for obtaining a tuous project for Barrick and for Chile. strategic metals of the future. Just as gold excellent destination for mining CEOL. Nor has it announced a uniform royalty or tax scheme With its complexities, under the guidance looks to be the only remaining value/ that would help investors gauge the risks. investment. and values of the new Barrick, it can be financial reference in a world that is ob- Regulations are another problem. Chile classifies lithium as transformed into a great opportunity for sessed with financial manipulation, quan- “strategic” because it can be used in nuclear fusion. The nu- communities and the country’s economy titative easing and consequential value clear energy commission limits the quantity of metal that can « and is now the priority for the new team destruction. ■ be mined. That is a worry for battery makers that might want CHILE MINING 2020 36 EXPOMIN Official Investment Guide Global Business Reports 37 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

COUNTRIES WITH MAJOR LITHIUM PRODUCTION AND RESERVES tough sell. In a previous tender in 2018, What is the history of Albemarle’s in- tion has stated that they want to maintain Source: USGS 2019 all three winners, including electronics volvement in Chile’s lithium industry? Chile’s market share. At the end of 2020, giant Samsung SDI and South Korean 39 years ago, alongside Corfo, Albemarle Albemarle will complete construction and PRODUCTION Thousand mt Million mt RESERVES steel mill Posco, subsequently dropped became the first company to develop the begin commissioning of Plant 3, which 50 40 30 20 10 0 0 123456 7 8 out. lithium industry in Chile. Over the years, has a nameplate capacity of 40,000 mt/y, we have seen a lot of change in the indus- allowing us to double production. The Australia try. Previously, lithium had very finite us- growth we project in lithium demand can- Falling prices spark investment ages. In the last 10 years, with the rise of not be met without leveraging the larg- delays electric vehicles, use has expanded great- est proven resources in the world, and we ly. In order for OEM’s to commit serious have access to the top three. capital for investments in electric cars, Chile A more than 50% drop in lithium prices from US$18,000 per mt in May 2018 to Albemarle needed to prove that there How do you see the medium term dy- US$7,250 per mt in December 2019 un- would be enough lithium supply. This namics of the lithium market? nerved the industry, fueling cuts to cap- meant we needed to obtain government We expect to see serious growth in the ital spending and halting expansions. approval in order to pump more brine. medium term. It is projected that demand China Additionally, shares in major lithium We took six years to study the impact of will rise to approximately one million mt/y producers have dropped as a result, ex- Ellen additional lithium extraction on the salar by 2025. Given that demand, financ- acerbating investor anxiety. and Albemarle proved that the impact of ing should begin to become available Big producers like SQM and Albemarle increasing pumping was sustainable. As a for the junior producers. In the medium Argentina are responding by cutting costs and de- Lenny- result, the government allowed Albemar- term, supply and demand will be better laying projects. Albemarle’s corporate le to increase its pumping from 142 liters balanced, which will likely result in prices statement affirmed it had begun a cost per second to 442 liters per second. That trending upwards. control program targeting over US$100 Pessagno sent a strong signal to the market in 2016. Zimbabwe million in savings over the next two How does Albemarle’s La Negra plant years. The world’s largest lithium pro- In what ways is Albemarle contributing add value to its operation in Chile? ducer also delayed plans to add about to the development of Chile? La Negra is a critical component of what 125,000 mt/y of processing capacity. Chile has clear competitive advantages we do. In the salar, we concentrate the Country Manager SQM, the world’s second-largest lithium in lithium production. When we received lithium using the sun. We then truck the Portugal producer, has also done its part, push- ALBEMARLE approval to increase our pumping rates, brine to La Negra and there we pass it ing back a key expansion at its Atacama the government successfully capitalized through a complex chemical process and salt flat operations from the end of 2020 on these advantages and ensured that produce a molecule that can be used in to late 2021. The company has project- the country captures the majority of these cell phones, glass or electric vehicle bat- Brazil ed sales of 45,000-50,000 mt this year, benefits. As a result, in the addendum teries. Each cathode has a different re- well below its anticipated production of to our original agreement, Albemarle quirement so we take 6-9 months to qual- 60,000 mt. agreed to pay the highest royalties in ify the product with the customer. Lithium All in all, there are a host of reasons to the world to extract lithium. We now pay is not a commodity. Namibia remain bullish on the outlook for lithium- up to 40% of the final sales price to the ion batteries. Despite the market facing Chilean government. From July 2018 to How does Albemarle prove the sus- a triple negative of oversupply, excess July 2019, Albemarle paid US$100 million tainability of its operations? stock and underwhelming demand in » in royalties, in addition to taxes. We also We have implemented the highest stan- 2019, there is a strong argument that committed to provide the largest financ- dard in measuring the hydrogeological USA further along, as momentum builds, ing ever devoted to research and devel- levels of the salar, constituting the most demand could outweigh supply. By Chile was the leading producer of opment from a single company in Chile. advanced tools that exist in the industry 2030, the supply of lithium-ion batter- lithium and now is number two, Albemarle pledged US$300 million be- for this purpose. 50 40 30 20 10 0 0 123456 7 8 tween now and 2043, and we are proud On the occasion of our RCA (Environmen- ies will need to increase more than 10- behind Australia. In Australia you fold, Bloomberg forecasts, with electric to take part in the effort to help grow the tal Qualification Resolution) approved extract lithium from hard rock Moving up the value Chain get as close as we can to the manufac- vehicles accounting for more than 70% knowledge economy in Chile. in 2016, the company presented an ad- turing of batteries and the manufactur- of that demand. “We expect to see se- and then process it. It is a much vanced hydrogeological model of the Chilean producers currently export ing of elements to store energy, which rious growth in the medium term. It is simpler and faster process. In What are your thoughts on Chile’s po- Salar de Atacama, with which the com- mostly unrefined lithium, not the higher- we believe could create more revenue, projected that demand will rise to ap- contrast, the salars are complex tential to expand production in the fu- pany established a new standard for the value battery parts the country hopes more jobs and more opportunities for proximately 1 million my by 2025. Given and each salar has different brines. ture? sustainable exploitation of the salar. In will someday generate added earnings Chilean families.” that demand, financing should begin to Chile was the leading producer of lithium March of this year, we updated the model The current administration has for its export oriented economy. An auction slated for 2020 offers a guar- become available for the junior produc- and now is number two, behind Australia. with real operational and measurement According to Mining Minister Prokuriça: anteed supply of discounted Chilean ers. In the medium term, supply and de- stated that they want to maintain In Australia you extract lithium from hard data of the last few years, so it is the most “With regard to lithium, we want to jump lithium in exchange for a commitment mand will be better balanced, which will Chile’s market share. rock and then process it. It is a much sim- updated tool that exists and serves as a into the value added chain. We are the to build battery parts plants in Chile. likely result in prices trending upwards,” pler and faster process. In contrast, the basis for authorities, communities and world’s second largest lithium producer; Oversupply and plummeting lithium said Ellen Lenny-Pessagno, country salars are complex and each salar has other companies with operations in the we have salt flats and we would like to prices, however, have made the deal a manager at Albemarle. ■ « different brines. The current administra- area. ■ CHILE MINING 2020 38 EXPOMIN Official Investment Guide Global Business Reports 39 CHILE MINING 2020 GBR • EXPOMIN OFFICIAL INVESTMENT GUIDE • CHILE MINING 2020

EXPLORATION

» Chile can be viewed as a good place for juniors to operate, because it has stable rule of law, a stable economy, centrist politics, good enough infrastructure, and community relations aren’t as bad as in other countries. There are also many challenges for juniors, and this starts with the fact that in the mining rights system in Chile, it is very easy for majors to block juniors from acquiring title. Here there is no “use it or lose it” policy for mining rights, no “minimum exploration commitments”, so majors can keep mining rights forever, as long as you pay a small tax to maintain the mining right. It is an important issue for juniors, because the majors acquire a lot of these rights and end up blocking juniors. «

- José Ignacio Silva, Country Manager, Hot Chili Exploration

Image courtesy of Gold Fields EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

Copper: Christoff Juniors Progress Through Down Market Janse

Investment Promotion officer INVESTCHILE

Can you give an overview of Invest- streamline procedures such as permit- edgement of the importance of foreign Chile and the role it plays in promot- ting in order to boost large investment companies in the economy and their BROWNFIELD ing investments in Chile? projects. contribution to best practices, opera- In the mining sector we focus on mining Chile is a world-class mining jurisdiction tional efficiency and development. EXPANSIONS REMAIN and exploration projects and companies and was ranked 6th out of 91 jurisdic- IN FAVOR in the supplier value chain. Diversifica- tions in terms of attractiveness for in- There are concerns about high labor tion of the country´s key economic sec- vestment in mining projects in the latest costs and requirements around labor tors is a long-term strategic goal, and Fraser Institute Survey. Many of the big being a drag on profitability. In what besides primary extraction projects, we players in the mining sector have op- way is the government trying to im- promote projects that move up the mi- erations here and from a supplier´s per- prove the situation? ning sector value chain. spective this means relative easy market There was a significant increase in op- In what ways does InvestChile inform entry by continuing business relation- erating costs during the super cycle pe- and support investors? ships already established elsewhere riod due to high demand for labor and We act as a bridge between foreign with their clients. services. After this period, these costs companies and the public sector. We did not decrease significantly but just also act as a link between other agen- Can you elaborate on the permitting leveled off. Some companies still strug- cies and services which can help the process in Chile? gle to fill positions for skilled workers, Taking a walk around the core shack at typically replacing reserves through become increasingly difficult for juniors company during the evaluation of a The permitting process might take lon- which puts pressure on the cost of labor. the SEG conference in October of 2019, brownfield expansions. to raise financing on the stock markets. project or the implementation phase. ger in Chile than in some other jurisdic- The government has initiatives in place it was obvious that Chile will continue to The positive trajectory established in There has also been a slowdown in ex- InvestChile works closely with CORFO tions but remains transparent. There is to increase training and educational possess some of the most compelling 2017 gave juniors hope that the market ploration activity from the majors, mak- (The Industrial Development Corpora- a stated commitment to streamline the programs focusing on technical skills geological opportunities regardless of had finally turned for the better. But in ing it hard to do joint ventures.” tion) that provides subsidies for special permitting process and many initiatives in an effort to grow the available talent its status as a mature jurisdiction with 2018, the exploration budget in Chile That said, there are still many companies focus programs. have already been launched in this re- pool. With 200,000 university students declining ore grades. Representatives dropped to US$576.2 million, down willing to endure soft market conditions gard. graduating annually and with Chile hold- of some of the top junior mining com- by around US$27 million year-on-year in the short term in order to reap the What makes Chile an attractive in- ing the top position in Latin America in panies operating in Chile presented on from 2017, based off Chochilco report- benefits of remaining in Chile when the vestment destination? How has mining investment been in the 2018 Global Talent Competitiveness the economic and geological promise of ing. This positioned Chile in sixth place market turns up again. 110 companies Chile ranks highly, in the region and 2019, and what do you project 2020 Index, there is reason to believe that the their projects. However, there was one internationally, accounting for 6% of the are conducting exploration in the coun- internationally, in terms of the ease to look like? issue of high labour costs is being ad- topic of discussion that was ubiquitous. global exploration budget. try and 46% remain active. Some 54% of of setting up a business and has been The last couple of years have been slow dressed. Obtaining financing to advance projects In analyzing the drop in the countries these exploration projects are focused consistently ranked as the most com- globally, but we are starting to see an was an existential challenge. This is not exploration budget, the number seems on copper, 25% on gold, 4% on lithium petitive country in Latin America since increase in mining investment. Compa- How does InvestChile encourage an unfamiliar discussion. There was a small. However, the lack of funding op- and 3% each on silver, cobalt and iron, a the creation of the World Economic Fo- nies that had put projects on hold have smaller players to enter the Chilean multi year contraction in exploration ex- portunities have been more acutely felt Cochilco study disclosed. rum ranking for this metric. There is still decided to move ahead with the invest- mining market? penditure from 2012-2016, after hitting by juniors, who decreased their budget According to José Ignacio Silva, country some red tape and bureaucracy compa- ments. The current project pipeline for InvestChile has started to focus on a record high of US$1.04 billion in 2012. by 52% in 2018, with their share of the manager of Hot Chili, an Australian junior nies have to go through but the govern- mining projects in Chile for the period smaller exploration projects that do not During that period, returns mining com- total budget dropping to 5% in Chile. operating in Chile: “As financial markets ment is committed to cutting red tape 2018 to 2027 is close to US$66 billion, necessarily have the visibility or direct panies had promised failed to come to Meanwhile, the contribution of majors have not been funding many exploration with a new pro-investment set of laws which is encouraging. contact with potential investors. In col- fruition, leaving project financiers out of held steady due to their brownfield pro- projects in the last few years, the few and accelerating projects with a new Considering the current social and po- laboration with the Ministry of Mining pocket and unwilling to fund more de- jects. ones that remain will be very important office that supports Investchile in the litical juncture that Chile is facing, we we annually publish a catalog of smaller velopments. This sentiment is continuing Dave O’Connor, chief geologist at Aeth- in the next cycle.” He went on to address landing stage. are confident that the country is and and medium sized exploration and ex- to affect project investment today, and on Minerals, commented: “There is a lack why greenfield projects are less favor- The Sustainable Projects Management will continue to be a good destination ploitation operations in Chile that could is why most of the capital currently in- of investment in junior companies result- able at the moment: “In general, drilling (GPS) office was established by the Min- for foreign investment, especially in the be of interest to bigger mining compa- vested is ‘stay-in-business’ expenditure, ing in a lack of activities from them. It has is very expensive and chances of success istry of Economy and aims to track and mining sector. There is wide acknowl- nies or investors. ■ 47>> CHILE MINING 2020 42 EXPOMIN Official Investment Guide Global Business Reports 43 CHILE MINING 2020 FACTSHEET Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

INVESTMENT PORTFOLIO BY REGION, COPPER MINING AND OTHER MINING What is the history of Los Andes Cop- infrastructure to achieve a production of Source: Cochilco per and the evolution of your Vizcahi- approximately 500,000 mt/y of copper Antony concentrate. Copper Other minerals tas project? AA: Los Andes Copper and our Vizcachi- Billion US Dollars Amberg & tas project have a long history dating How important is it for Los Andes Cop- 0510 15 20 25 30 back to the 1970’s. I joined the company per to establish good relations with in 2012 and, since then, we have complet- nearby communities? ed two drilling campaigns; in 2015 and You cannot develop a project today Arica y Fernando FP: Parinacota 2017. The results of these drilling cam- without social acceptance. Vizcachitas paigns were then used to prepare a NI has some advantages, in that we are not Porcile 43-101 compliant Preliminary Economic located in an area with much human ac- Assessment, which we published in June tivity. The main social issues of concern 2019. The PEA demonstrated that the Viz- in the community are water and tailings cachitas project is a very attractive and disposal, and we believe our project will AA: President and CEO viable copper project. We were able to have a positive economic impact on the Tarapacá $5.23 FP: Executive Chairman show an NPV of US$1.8 billion and inter- community, without causing relevant dis- LOS ANDES COPPER nal rate of return of 20.77% at US$3.00/lb ruption to the environment. copper after tax. We demonstrated a sig- nificantly larger resource base and have How does the 2014 PEA differ from measured and indicated resources ore the PEA published in 2019? of 1.284 billion mt. The PEA also demon- AA: The resource base has increased sig- Antofagasta $28.02 strated that there are no fatal flaws and nificantly and we have defined measured the project can be mined without any sig- resources for 46% of the projected mill nificant complications. feed for the first 10 years of operations. We are now pressing ahead with a Prelim- The conditions of the Chilean power mar- inary Feasibility Study for the project and ket have improved drastically from those to enable that, there has be a restructur- present in 2014. The 2015 and 2017 met- Atacama $16.24 ing of the management team to reflect allurgical test work has demonstrated the fact that we are now a development that we can use a coarser grind for the company, with Fernando Porcile joining rougher flotation circuit, while maintain- the board as executive chairman. ing recovery. This means that for the same capital and operating costs we can AA What is Los Andes Copper’s vision for significantly increase the ore throughput. Coquimbo $5.06 the Vizcachitas project and what is the company’s strategy moving forward? What are the biggest challenges Los FP: The Vizcachitas project not only has Andes Copper sees moving forward a large resource, but also has some quali- with the PFS? ties that make it more competitive than FP: The challenge will be to have all the many new greenfield projects and even information required for an EIA prepared some of the brownfield expansions in in our targeted timeframe. Our plan is to Valparaiso $5.19 Chile. The ore grades are satisfactory, complete our PFS by the end of 2020 and we have molybdenum content which im- have everything ready for an EIA. The EIA proves our copper, and it is a clean ore approval process can last 12-15 months. with minimal impurities. The project is Once the approval has been granted, located at an elevation of approximately multiple sectoral permits need to be pro- 2000 meters above sea level, which is cessed. Los Andes Copper estimates that Santiago very attractive in a country such as Chile, this approval, including the sectoral per- FP and the deposit occurs in the same geo- mits, may be finalized by the end of 2022. logical belt as several other giant porphy- ry deposits. What has been the driving force be- Vizcachitas is located approximately 150 hind Los Andes Copper’s increase in km northeast of Santiago, in the Rio Rocin shareholder value in 2019? O’higgins $5.99 Valley, an area with good infrastructure AA: I believe that the PEA has demon- and paved roads. The port of Ventanas strated the attractiveness of the project. is located at approximately 140 km from We are also now going into the develop- the project site. The infrastructural ad- ment phase and have brought on a very vantages are very relevant for us, as we experienced management team to take 0510 15 20 25 30 will need reduced capital investment in the project forward. ■

CHILE MINING 2020 44 EXPOMIN Official Investment Guide Global Business Reports 45 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

Image courtesy of Revelo Resources Can you give a brief overview of Aethon Minerals in Chile? <<42 David Aethon Minerals commenced trading on the TSX Venture exchange in May 2018 are very low. That is why it is better for ju- and was based on a series of exploration projects in the Maricunga and Antofa- nior companies to look for a project with gasta regions of northern Chile. These are early projects which have had money some drilling and some results than rath- O´Connor spent on them to focus on targets for more detailed exploration, and recently we er than opting for a greenfield project.” entered into a joint venture with Rio Tinto on one of the projects in Antofagasta Some of the juniors that are skillfully nav- region. igating the current challenging environ- ment in Chile are Aethon Minerals, Coro When Aethon partners with a major, what are the terms of the agreement? Mining, Hot Chili, Los Andes Copper, Country Manager and Chief Exploration Companies such as Rio Tinto are looking for mega projects as they have deep pock- Rio2 limited, Wealth Minerals, Lithium ABRAPLATA RESOURCE CORP. ets and long-term vision. They are thus happier to look at concepts where a mega Chile and Revelo Resources. project might develop. Aethon Minerals cannot afford to go down this route as it Los Andes Copper is leading the de- is too expensive for us and thus, we need to enter joint venture agreements. The velopment of the industry with its Viz- earn-in agreement we announced with Rio Tinto on Arcas allows Rio to earn into a cachitas project, located in the Rio Rocin 75% stake in the project by spending up to US$25m in exploration activities over Valley of central Chile. It is one of the the next several years. largest advanced copper projects in the Americas not held by a major. The proj- What is the major challenge for Aethon Minerals for the next 12 months? ect is currently well positioned to con- Aethon Minerals is going to be focused in Argentina on the advanced Diablillos tinue its development as it is now in the project. We aim to start drilling this project next month. We aim to improve the permitting process for its pre-feasibility economics of the evaluation by expanding the resource and looking at an under- study. According to executive chairman ground mining scenario which would have a much lower capital cost, but retain the Fernando Porcile: “The Vizcachitas proj- amount of gold and silver production over the life of the mine, as well as improving ect not only has a large resource, but metallurgical recoveries. also has some qualities that make it more competitive than many new greenfield What are Aethon Minerals’ objectives in Argentina and Chile moving forward? projects and even some of the brown- In Chile, as our projects are more appropriate to majors, Aethon Minerals would like field expansions in Chile.” to venture out all our properties to majors to get them financed. In Argentina, we His colleague Antony Amberg, CEO of As of 2020 Aethon Minerals is now aim to expand our resource and complete a new economic assessment to improve Los Andes Copper, explained why their AbraPlata Resource Corp. the overall economics. ■ project has garnered so much attention from the mining community: “The PEA demonstrated that Vizcachitas is a very What has been driving Hot Chili’s strong stock performance year to date? attractive and viable copper project. We José The Cortadera project has been and will continue to be a game changer for Hot were able to show a net present value Chili. We are now finishing the year having announced on December 4th one of the (NPV) of US$1.8 billion and an IRR of best intercepts globally (972 m at 0,5% copper and 0.2 g/mt gold from surface). 20.77% at US$3.00/lb copper after tax. Ignacio Once we began reporting positive results from our project, the financial markets We demonstrated a significantly larger quickly took notice of our larger than expected resources and this explains the ex- resource base and have measured and ceptional performance of our stock year to date. indicated resources of 1.284 billion mt.” Silva The PEA also demonstrated that there How is the location of your Cortadera and Productora projects strategically are no fatal flaws and the project can be beneficial? mined without any significant complica- Country Manager In terms of infrastructure, I don’t know of any other project in Chile with a better tions. HOT CHILI location. Cortadera and Productora are located 14 km from each other, at low alti- Another notable copper exploration geous, particularly when compared ly competitive, with 972 m of drilling and tude, 50 km from the coast and 20 k from a power sub-station. Additionally, there is project is Coro Mining’s Marimaca. The to projects in the high Andes and this grading at 0.5% copper and 0.2 g/mt no need for camps, because our projects are located close to a mining town called project is geologically unique in that it prime location could enable its future gold from surface. José Ignacio Silva de- Vallenar. We have very good relationship with the people living in the town and they is an oxide deposit and is hosted by in- development at a relatively modest scribed this years developments: “Once support our work. trusive rocks, while the numerous manto capital investment. “Marimaca lies in the we began reporting positive results from deposits in the same region are hosted heart of Chile’s main copper producing our project, the financial markets quickly What are the benefits and drawbacks for juniors operating in Chile? by volcanic rocks. With a lack of new region, surrounded by the skills and in- took notice of our larger than expected Chile can be viewed as a good place for juniors to operate, because it has stable copper exploration discoveries in Chile, frastructure needed to build and oper- resources and this explains the excep- rule of law, a stable economy, centrist politics, good enough infrastructure, and it represents a new type of deposit, ate a mine. Crucially, it does not need to tional performance of our stock year to community relations aren’t as bad as in other countries. There are also many chal- which challenges accepted exploration incur the significant infrastructure costs date.” Cortadera, first thought of as a lenges for juniors, and this starts with the fact that in the mining rights system in wisdom and may open up new frontiers associated with a remote development satellite project for Productora, is now Chile, it is very easy for majors to block juniors from acquiring title. Here there is no for discoveries elsewhere in the country. project,” said CEO Luis Albano Tondo. the companies flagship asset. Hot Chili’s “use it or lose it” policy for mining rights, no “minimum exploration commitments”, Marimaca’s location on the coastal belt At Hot Chili, its Cortadera project saw combined resources base is approximat- so majors can keep mining rights forever as long as you pay a small tax to maintain at low elevation close to Antofagasta notable progress in 2019. The company’s ed at 236 million mt at 0.5% Cu equiva- the mining right. ■ and Mejillones is considered advanta- latest drill results announced are global- lent.

CHILE MINING 2020 46 EXPOMIN Official Investment Guide Global Business Reports 47 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

What compelled you to join Wealth Min- ter in a desert environment isn’t a popular Lithium: erals and enter the lithium industry? thing to do. Marcelo MA: I realized that lithium had a signifi- Dealing With cant amount of potential in Chile. In the From a policy perspective, lithium was Awad & past, lithium was left as waste. Only in the declared a strategic mineral. Do you see Difficult Market last 10 years has lithium become an im- the status changing, and what policy ini- portant mineral for the global economy. tiatives do lithium producers need from Conditions Henk Van It is now clear, however, that lithium will the Chilean government to fully realize play a big role in the energy and transpor- their potential? tation technologies of the future. For this The Chilean government has been Source: Cochilco and Ministerio de Minería MA: The two most influential juniors operat- Alphen reason, I decided that I wanted to con- very eager to find a way out of the fact ing in the Chilean lithium mining market Project Company Amount tribute to making Chile a leader in lithium that lithium and uranium are strategic are Calgary based Lithium Chile and production. metals according to the constitution. To Vancouver based Wealth Minerals. Most Planta La Negra - Fase 3 Albermarle US$ 300 millions make a change, the entire constitution Canadian lithium explorers battled mas- MA: CEO Can you elaborate on the projects will need to be brought back into con- sive share price declines and difficulties HVA: Executive Director Wealth Minerals is involved in in Chile? gress for review, and we have not seen a Ampliación Salar del Carmen SQM Salar US$ 180 millions raising financing in 2019. As a result of WEALTH MINERALS MA: Wealth Minerals holds a number of government willing to do this. The gov- falling prices, companies reacted quickly mining concessions of which the most ernment is currently finding ways to com- to the deteriorating market conditions Producción de Sales Maricunga SIMCO SpA US$ 350 millions important is the Atacama Salar. The Ata- ply with the constitution, but they are also and curtailed drilling operations to pre- cama Salar concessions cover an area of trying to bring more production licenses vent excessive cash burn. Globally, the approximately 46,200 hectares. We also to companies to develop lithium projects. Ampliación Salar del Carmen SQM Salar US$ 450 millions Mining Intelligence Data Application have concessions in the Trinity Salar, I believe that we need more clarity form Ampliación Carbonato de Litio A 180 revealed that in Q2 2019, drilling activi- which comprise several land positions the government with regards to the cur- ties focused on exploration and resource located in close proximity to each other. rent lithium laws. evaluation of lithium and cobalt deposits Maricunga Minera Salar Blanco US$ 527 millions Our other concession is in the very north- dropped to the lowest level in two years. ern part of Chile in the Iquique area. In to- Is Wealth Minerals in a position where Also, the number of completed drillholes tal, Wealth Minerals holds approximately the company has social license to oper- dwindled by more than 50% from the LITHIUM PRODUCTION (LITHIUM CARBONATE EQUIVALENT) 70,000 hectares across its five Salars. ate? peak reached during Q3 2018. MA: The day we bought the mining con- Australia China Brazil Namibia In spite of market conditions, Lithium cession at the Atacama Salar, Wealth Min- Chile Canada Finland Portugal What makes Wealth Minerals assets at- Chile remained committed to advancing Argentina Bolivia Mexico USA tractive to investors? erals decided to immediately meet with its lithium property portfolio consisting Zimbabwe The Atacama Salar is the world’s the communities and report our plans to LCE (million mt) MA HVA: of 166,150 hectares covering sections 2.0 highest grade and largest producing them. We have kept the community very of 14 salars and 2 laguna complexes in lithium brine deposit, and currently pro- well informed from the start and we have Chile. Lithium Chile is the largest land- duces approximately one third of global continuous dialog with them. We will al- holder of lithium exploration projects lithium output from two production fa- ways listen to the concerns of the com- in Chile outside of the government and cilities operated by SQM and Albemarle. munity, as we believe that it is necessary SQM. In December 2019, the company The Atacama possesses a very high grade to involve all stakeholders in the process announced that drilling has commenced 1.5 of both lithium and potassium, and has a of developing the Atacama. at its Turi lithium brine project in Chile. high rate of evaporation and extremely Turi is one of six high-priority projects low annual rainfall. These characteristics What are Wealth Mineral’s objectives identified for early drill testing. make Atacama’s finished lithium carbon- moving forward? For Wealth Minerals, the announcement ate easier and cheaper to produce than HVA: In the next two years it is very im- of a memorandum of understanding with its peer group globally. portant to get a big strategic partner to Uranium One could lead to a Definitive 1.0 move the project forward and provide us Agreement for a partnership that would What is your outlook on lithium prices? with the financial backing we need. That accelerate the development of the com- HVA: I believe lithium prices will rise be- is our hope for the next two years. Pro- panies Atacama lithium project. This in- cause currently there is not enough pro- duction will take substantially longer, but cludes the use of Uranium One’s lithium duction coming online. None of the salars as long as we are working toward that extraction technology, which potentially in the lithium triangle in South America goal, we will be successful. has big implications for more efficient 0.5 are moving forward quickly and the only use of water. A Pertinencia (or work pro- country in the world that has seen an in- Why is Wealth Minerals an appealing in- gram review affidavit) was received from crease in production is Australia. Chile vestment opportunity? the Chilean Environmental Agency for hasn’t increased production much and it HVA: As a shareholder we are trading at a the company’s Atacama project in Au- is much more complicated than people 2 or 3 year low, so its a good time to start gust 2019. This key document allows for predicted. The process in Chile is to looking at companies again, because low impact exploration programs at the 0 pump the brine and evaporate the water, there will be a lithium shortage at some property. 2019 2020 2021 2022 2023 2024 2025 and that creates lithium. Evaporating wa- point over the next 2-4 years. ■

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Gold: COMEX NET LONG POSITIONING Enrique Tonnes Other Net Long (Ihs) Money Manager Net Long (Ihs) Enjoying 1,000 Favourable Garay

Market 750 SVP Geology Conditions RIO2 LIMITED

500

What is the history of Rio2 and why has the company cho- been positive. The process does take time as it is very prescrip- sen Chile for its flagship project? tive but we have a commitment to comply with all the regula- Rio2 is a follow-up business to the previously successful Rio tions and get through the process as quickly as possible. The 250 Alto Mining, which began business in 2008. Alex Black and his advantage is that we have a good sense for how long it is going management team took Rio Alto Mining from a CAD$12 million to take, and the clarity of the process significantly helps with company in 2009 to a CAD$1.2 billion company in 2015, which planning for the future. was then acquired by Tahoe Resources. 0 Three years later, the same team that had successfully devel- What are Rio2’s objectives moving forward? 2016 2017 2018 2019 oped two projects in five years with Rio Alto, formed the man- Rio2’s main objectives for 2020 will be to look for other per- agement team of Rio2. Today we are a public company listed mitted sources of water for our Fenix project and ways to op- GOLD PRODUCTION AND PRICE EVOLUTION on the Toronto Stock Exchange Venture, the OTCQX Market, timize and lower our capex and opex for the project. We are Source: Consejo Minero and the Lima Stock Exchange. We believe that we have the ex- also planning to continue our M&A activities focused in the perience to move advanced projects into production or man- Americas. ■ TM US$/oz Production: Chile Production: Rest of the World Gold Price age existing mining operations and, to date, we have evaluat- 3,500 1,800 In contrast to copper and lithium, pre- ed over 60 mining and development projects in the Americas. cious metals focused companies have The Cerro Maricunga project in Chile captured our attention not experienced the same level of dif- because it was well drilled with a sizeable initial resource. After 1,600 acquisition, the project was renamed the Fenix Gold project. ficulty in financing their operations. Be- 3,000 cause of this, the market for new explo- We then wanted to confirm the resource disclosed and drill a ration has been reinvigorated. further 7,000 meters. The mineral resource estimate was up- 1,400 Rio2 is a junior led by CEO Alex Black. dated in 2019, based on data collected from 91 diamond drill holes and 291 reverse circulation holes drilled on the project Black previously turned Rio Alto Mi- 2,500 ning into a new gold producer in Peru, since 2010. 1,200 which was eventually acquired by Tahoe Resources for US$1.12 billion. Rio2’s Fe- What strategy and business model is being implemented at the Fenix Gold project? nix project, located in Copiapó Province, 2,000 Antofagasta region, is one of the largest 1,000 Rio2’s business model is to move the large resource at Fenix gold oxide resources in the world ac- Gold into development and production as an open pit, gold cording to the company. In 2019, it com- heap leach mining operation. The strategy is to take the proj- 800 ect into production in the shortest possible timeframe based pleted an updated pre-feasibility study 1,500 to reveal an after-tax net present value of on a staged development strategy. The advantages of devel- US$121 million discounted at 5% and an oping a project in Chile compared to Peru are that mining regu- IRR of 27.4%. The study also proved that 600 lations are clearly defined and the social aspects of doing busi- ness in Chile are far less complex than in Peru. We are in the the project is capable of profitability at 1,000 prices as low as US$1200/oz. According process of conducting an EIA on the Fenix Gold project, which to Enrique Garay, senior vice president 400 will be completed in early 2020 and planned to be filed with of geology: “Rio2’s business model is to the authorities for approval in Q1, 2020. In the meantime, we will be applying for various permits related to the project while move the large resource at Fenix Gold 500 the EIA is being assessed. We expect to receive our construc- into development and production as an 200 open pit, gold heap leach mining opera- tion permit in Q4, 2021 and commence construction shortly tion. The strategy is to take the project thereafter, with a target date of Q4, 2022 for the start of gold. into production in the shortest possible 0 0 timeframe based on a staged develop- Can you elaborate on the permitting process in Chile? 2003 2006 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 ment strategy.” 2005 2008 Rio2’s experience with the permitting process in Chile has

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Image courtesy of Revelo Resources What is the history of Revelo Resources? Why did it choose to focus its operations Prospect in Chile? In the late 2000’s, Iron Creek Capital identified Chile as a jurisdiction with great potential Generating: and the company decided to establish a presence there. In 2014, when the last mining boom finished and the industry was in a depression, Iron Creek decided to capitalize on Rare Dollars opportunities in the market and we started making acquisitions. We performed several stock based transactions to expand our portfolio and this included a merger with an- for Exploration other Chile based junior named Polar Star Mining. After Iron Creek Capital acquired Polar Star Mining, we changed the company name to Revelo Resources.

What is the business model of Revelo Resources? Revelo Resources has been known in the industry as a prospect generator. The idea is that we generate prospects and then look for industry partners to make joint venture agreements. Our partners then go on to explore our properties and invest more in them. We are now looking to modify our strategy by continuing to look for option and joint venture agreements with mid-tier or large companies; but also by raising private finance Tim to fund exploration, perhaps by spinning out certain projects which we will operate. For partnerships, we are focusing on companies that do not have a presence in Chile but Beale would like to have a presence in the country. In what stage of development are most of Revelo’s projects? What is your biggest challenge in moving these projects forward? Revelo Resources has historic data on our assets and we have done surface work such as geological mapping and revision of the historical data. Some of the projects require Revelo Resources is a prospect genera- more surface work, but most are at the drill stage. The challenge for us and many other tor and the company’s CEO Tim Beale juniors today has been financial. It is a struggle in the capital markets to get money for outlined its strategy: “The idea is that greenfield exploration and mining companies have not been doing many deals with ju- CEO we generate prospects and then look niors lately. for industry partners to make joint ven- backing. Greenstone and Tembo Capital REVELO RESOURCES ture agreements. We are now looking Private own 70% of Coro Mining and Resource Describe the interest Revelo is receiving from investors? to modify our strategy by continuing to Capital Funds has been instrumental Investor interest is very much dependent on what commodities the world is looking for. look for option and joint venture agree- Equity in helping Los Andes Copper advance With the recent increase in precious metals prices, there has been an improvement in the ments with mid-tier or large companies, its Vizcachitas project. The company fi- sentiment for precious metals exploration. We have four precious metals projects in our but also by raising private finance to nanced drilling for Vizcachitas in 2016 portfolio, of which three are currently attracting interest. We are looking at a possible fund exploration – perhaps by spinning and in 2018 provided funds to complete spinout of these precious metal projects. We also have several copper focused projects out certain projects which we will oper- Junior exploration companies primarily the preliminary economic assessment that we are promoting. ate.” fund their operations through liquidity and initiate the prefeasibility study. The company signed a letter of agree- generated by stock market listing. Anal- Criteria for private equity firms differ Is Revelo Resources looking to acquire more assets in the Chilean market? ment with UK based BMR Group in 2019 ysis of the geographies in which these significantly, but often companies are As a junior company, Revelo Resources has a competitive portfolio of 130,000 hectares to acquire an 80% interest in the Mont- companies are listed gives a strong in- flexible and adapt to opportunities in of wholly owned properties in Chile. We have 16 projects – four gold/silver assets and 12 ezuma copper project for US$6.5 million dication into where the capital for explo- the market. According to Ignacio Del » copper assets. This is a significant portfolio to offer to investors and to companies which in cash and US$1.5 million in exploration ration activities in Chile are raised. The Rio, CEO of Minería Activa: “Back in the are not present in Chile. Revelo would be open to acquire more assets, but capital is cu- expenditures. Montezuma is located in Toronto Stock Exchange (TSX), the TSX boom of 2010, it was difficult to acquire rrently a challenge. We need to advance the portfolio we have before we start making When compared to its neighbors northern Chile between the Chuquica- Venture Exchange (TVX) and the Austra- an operating company. We saw valua- more acquisitions. mata and Centinela copper districts and lian Stock Exchange (ASX) are the princi- tions at US$4 copper projections, so it in the Andean cordillera, Chile BMR will have an option over the pro- pal markets, according to Cochilco. Giv- made more sense to invest in explora- is a less complicated place to How does Revelo Resources view Chile as a mining jurisdiction? perty, while Revelo Resources will have a en, funding for junior explorers dropped tion or pre economic assessment stages. mine. There are a host of political, Chile is a very stable jurisdiction. The legal system works, and levels of corruption are 25% year on year on the Canadian stock retained interest through to the comple- We did this with Dominga and it proved social, legal, environmental and low. The geological potential of the country is huge, and despite claims that Chile is a tion of a PEA. markets, and these exchanges finance to be successful. When we went through security issues that are much more mature market, we still believe there are significant opportunities. When compared to As for the company’s future plans, it in- over 50% of juniors operating in Chile, the crisis and copper fell back to US$2 in its neighbors in the Andean cordillera, Chile is a less complicated place to mine. There manageable in Chile. tends to continue spending money on it is understandable why impacts are be- 2016, that is when we acquired Pampa are a host of political, social, legal, environmental and security issues that are much more exploration and advancing projects: ing felt so markedly in Chile. Camarones, a copper operation that was manageable in Chile. Some of the big mines have been mined for over 100 years and yes, “The exploration process is the biggest Private equity provides an alternative to filing for the Chilean bankruptcy process. grades are much lower than they used to be, but Chuquicamata, for example, has gone step up in value creation in the whole financing via the stock market and in- In this case we went for a distressed op- underground and will likely be mined for another 50-100 years. World class means long chain of exploration, feasibility and de- sulates companies from the volatility of portunity with a turnaround idea. We are « life of mine and scalability of production, and Chile has several truly world-class mines. velopment in mining. If we make a dis- public financial markets. Two of Chile’s opportunistic and flexible regardless of These huge mining districts in Chile will all be mining for decades into the future. Juris- covery, significant shareholder value will top juniors, Coro Mining and Los Andes what stage a company is in or what min- dictional risk is increasing all over the world today, and there are fewer and fewer places be created,” Beale said. Copper, have significant private equity eral they are producing.” ■ where you want to invest a lot of money. Chile still remains a leader in that regard. ■

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pressed markets and access to capital. Mineria Activa has focused its invest- The permitting process has evolved A decade of However, although Chile adds additional ments in Chile. What about Chile is so through time. It has become more chal- constraints for junior miners, there have appealing for a private equity fund? lenging and in some ways this is a good financing for been encouraging stories of success. An Minería Activa belives that being local thing, because society expects high exploration and example of a success story for a junior in provides an important advantage in the standards for projects. It is a matter of this decade was Exeter Resource, a Ca- value we add to our portfolio compa- the process and coordination of entities mining projects: nadian company that was developing the nies. We know the history of our invest- that makes permitting tricky. There is gold-copper project Caspiche. In 2017, the mentments and we have the network in much improvement to be made in terms Is Chile only for By Francisco Acuña company was acquired for US$180 million place to overcome challenges. of providing more clarity on what the Mining Consultant and Entrepreneur by Goldcorp (now Newmont). Other ex- rules are to get the permit and then how major miners? Senior Consultant, CRU amples of successful financing and project Currently, what are your key invest- to maintain it once it has been granted. development are the Australia based, Hot ments in Chile? Many projects have received permits Chile’s mining output is extraordinary. It is sector during the last decade, with mixed Chili and Canadian Los Andes Copper. Our first fund was raised in 2008 with a and ended up in a court of law anyway a world class producer of copper, molyb- strategies and, in many cases with yet to Both have been able to attract capital from focus on early stage junior companies. and that is an issue. denum and lithium, while also producing a be seen results. Examples are Haldeman different sources to advance their Produc- For that fund we acquired an Australian significant amount gold, silver and iron ore. Mining, part of the Solari Group, and Alxar tora/Cortadera and Vizcachitas projects Ignacio junior company that had a project called Is there a particular stage of a project During 2010-2018, annual mining exports Mineria of Empresas Copec, part of the An- respectively. While the projects have been Dominga. We took the project to pre- that Minería Activa finds most attrac- amounted, on average, to 58% of the coun- gelini Group. Haldeman changed strategy able to move forward, the final capitaliza- economic assessment and had a good tive for its investments? try’s total export value. With this in mind, drastically in 2015, with the acquisition of tion is yet to be seen and challenges and Del Río exit. Overall, it was a good initial fund. For early stages, it needs to be an inter- one would expect booming exploration, the copper cathode mine operation Mich- risk remain present. Last month, we sold our investment in esting opportunity with some derisking project development and a financial sector illa from Antofagasta Minerals for US$52 Foreign private equity funds have also a company called BioLantanidos. We already occurring there. Today, we are readily fueling the dreams of local entre- million. Before this, Haldeman’s initial focus found opportunities for investment in invested 100% of the fund into the com- finding opportunities at the later stage preneurs and investors looking for the next was project generation and development Chile, particularly in the medium-size mi- pany. It required a large investment, be- of the curve. Closer to operation or big discovery or project breakthrough. The of small-medium gold production near Pu- ning space. AMCI Capital has maintained a cause the company was starting a new within operation. At this stage, margins reality is very different. In perspective, only nitaqui. Alxar, on the other hand, initiated significant stake in Grupo Minero Las Ceni- industry in Chile and also Latin America are not that high and it is a really difficult three mining companies are formally listed its strategy as a medium sized miner with zas since 2010, and Audley Capital and and was important to us. We held that funding environment for construction, on the Santiago Stock Exchange (SQM, the El Bronce mine. Alxar decided to jump Orion Resources backed Mantos Copper CEO investment for 8 years and just sold it to so coming in at that stage you can find CAP and Pucobre) and the investor base into the “tier-1 club”, however not as an in their bid to acquire Mantos Blancos and MINERÍA ACTIVA Hochschild Mining. The last fund was a good value. mining companies rely on has shown acute operator but acting as a financial/strategic Mantoverde from Anglo American in 2015. mining fund with two important compa- weakness. How dynamic is the financial partner in the Mina Justa project in Peru Other private funds have been keener to nies; one is Pampa Camarones, which What is your assessment of deal flow sector for mining in Chile? What happened alongside Minsur. take risks, such as Dehnam Capital, with its is a copper cathode producer in op- in the Chilean market today? with local and foreign investors this last If capital for exploration is scarce locally, fully funded vehicle, Santiago Metals, that eration, and the other is a polymetallic In the early stage, there are a lot of pro- decade? then Chile should be an important target initially started as an exploration vehicle project that we are taking to feasibility. jects that are frozen so there is plenty of In 2012, CORFO and the Ministry of Mines for mining markets with better financial (but later switched to a small/medium size availability. It is relatively cheap to hold achieved a great milestone; establishing ecosystems such as Canada and Austra- cash flow generator). How do you see potential for grow- projects, so many companies are wait- the first ever risk capital funding program lia. Junior miners headquartered in these While the results of most of the Fenix- ing the rare earths industry in Chile? ing out the current environment. There for greenfield mineral exploration, bet- countries have been active in Chile for backed exploration and development ven- » There is only one rare earths project in is deal flow if you want to go and get it. ter known as the “Fenix Fund.” Through much of the past decade. Yet, junior mi- tures remain unclear, it seems that mining Chile and that is BioLantanidas. Produc- The tricky thing is you need to be sen- a tender process, six fund managers were ning activity is still insignificant in Chile. remains to be a bull that cannot be tamed tion of rare earths has been monopo- sitive to the market. We like operations awarded a US$90 million line of credit to When compared to other mining coun- Before construction stage, by local investors. The relatively small junior lized by China. Here, we have found a that are already proven and working. be spent on mineral exploration in Chile. tries like Canada, Australia and Peru, ju- sector is a reflection of a tough competitive permitting is the most relevant deposit that is unique because it brings The funds contributed a combined US$60 niors make up a far smaller portion of the environment to develop new projects and, risk in Chile. At feasibility stage, supply to the kind of rare earths you do What are the biggest challenges that million from different investors. What was market. Complex access to prospective therefore, both local and foreign investors securing water supply has not find outside of China. The answer you face with your projects? the result of these ventures? Did they ground as a result of a mining claim system are impacted. However, success stories become a key challenge in Chile. goes beyond Chile, it is a global chal- The challenges in operations are relat- create new projects and opportunities? that allows for property stagnation and have demonstrated that Chile’s mineral At exploration, geololgical risk is lenge to produce rare earths for our ed to people, plant issues, and mining Mineria Activa successfully advanced the accumulation, and lack of quality publicly endowment still offers opportunities. Posi- most advanced technologies, such as costs. The biggest issue in the construc- Biolantanidos project to a prefeasibility available geological data from past explo- tive lessons can be found from mining fo- relevant, but metallurgical issues electric vehicles and motors. When you tion stage is visibility and permitting. In stage; Zeus Capital and IM Trust carried a ration work are generally pointed out as cused private equity funds that have grown should also be faced early on. start a new kind of project in a region the operation stage with drilling, you prospect generator strategy aiming to sell two factors that have led to this situation. in presence in Chile over the last decade. it brings a whole ecosystem with its have flexibility to stop or continue with or partner with third parties to advance Additionally, I would like to add to this list The role of the government should be to growth. That has happened with lithium the risk of exploration, which is a major projects. After several years, however, the lack of realistic business expectations promote competitiveness, understanding and SQM and we hope we are starting a step. What all stages have in common the Fenix Fund initiative did not prove to from private mining property owners and a that there is still untapped potential for ex- « story similar to that. in terms of challenges is that mining is have generated traction and attractive- lack of incentives (or creativity) form larger ploration and small-medium scale opera- technical. Risk management and pour- ness among local investors, with an overall mining companies to seek partnership for tions beyond major tier-1 developments. What has been your experience push- ing capital into a company is important. negative - or yet uncertain- capitalization their non-core portfolio of mining proper- Indirect incentives to attract capital, rather ing projects forward in Chile and Staging activity to decrease risk is how to the funds over their investments. ties. than subsidy-type instruments, should be what areas do you think can be im- you require the least amount of capi- Large and diversified Chilean conglom- The latter half of the previous decade was further analyzed and positive lessons from proved from a policy perspective? tal. ■ erates have also entered into the mining tough for junior miners globally, with de- other jurisdictions imitated. ■

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ENGINEERING AND CONSTRUCTION

» Water management in the Chilean mining sector is perhaps the most important factor for success. Even more important than the grade of copper in the reserve. It has become a make or break issue, where if you don’t secure the water for your project, the mine may have to close down or may never be built in the first place. «

- Mark Venning, South America Regional Mining Leader, Stantec

Image courtesy of Echeverría Izquierdo EDITORIAL Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

Image courtesy of Echeverría Izquierdo was to be the responsibility of Techint Chile, owner of pro- Water & cess and equipment supplier Tenova. This plant would reduce water consumption costs by 35% and become the country's Environment second largest desalination plant behind Escondida’s, ac- cording to a report by Reuters. The BOOT (Build-Own-Oper- ate-Transfer) tender was awarded in November, but retracted The Atacama desert is the driest climate in the world. It is in December. Codelco identified adjustments to be made to also one of the most mineral rich, which means securing wa- the project, prompting a decision: “To redefine the tender, ter supply is absolutely essential to advance a project or to which will take place within the next 24 months,” it said in the expand an existing one. In the high, arid deserts of South statement. America, particularly in Chile, water is possibly the most im- There are three plants, besides Codelco’s, scheduled to be- portant factor. gin operations in the next decade. Anglo American-Glen- Historically, Chile's water code has permitted the state to core’s US$3.2 billion Collahuasi mine life extension, includes grant long term and perpetual water use rights, which can a desalination facility. Antofagasta Minerals’ Los Pelambres be exploited with minimal regulation and without any "use Complementary Infrastructure project (INCO) will have a 400 or lose" obligations. Mining rights in Chile to date have l/s plant and Teck has announced plans to build a 1,000 l/s therefore contained water rights, permitting holders to use plant for its QBII project. any water they come across within the mining area for any According to Jose Maria Guzman, Chile country manager at purpose for the duration of the mining project. Due to the CDM Smith: “Water scarcity and drought has been a com- increased scarcity of fresh groundwater following a series of mon trend in Chile in the past 10 years, but the sector is now droughts in recent years, there has been intensifying socio- even more pressured to come up with more resourceful ways political pressure from indigenous communities fighting for to use water. Most mining operations rely on ground water prioritization of their domestic and farming water needs. The sources, as many mining sites are located in remote areas at care of freshwater resources and the promotion of efficient high altitudes. Because of the draught, the government be- water use have therefore become a public policy priority in gan to reduce some of the water permits extended to mining ería, Pares & Alvarez, Ingenalse as well sure. More studies are going on and Chile and, accordingly, a key risk concern for mine operators operations and mining entities had to start looking at innova- Establishing as international firms such as Arcadis, miners are reluctant to select a single in the country. tive ways to find water. 63>> Black & Veatch, Stantec, Wood Group solution very quickly. In today’s mar- At the same time, mining companies demand for water is ex- Value and Worley. These companies all pos- ket, clients are looking to ensure they pected to soar as ore grades decline, forcing them to process sess significant knowledge and experi- are getting the best value for what they more material to maintain production levels. Through ence that makes for an extremely com- can achieve. With this in mind, we are The modern sustainability agenda, beyond regulatory com- petitive landscape as companies bid for also seeing clients taking time to ensure pliance, is becoming critical to the sector, with both risks and Sound contracts. that projects are fully optimized,” Hum- opportunities stemming from environmental and social pres- Chile is such a large producer of me- phreys said. sures. tals that there is ample room for many Although the slow down in 2019 hurt Design industry participants, but in 2019, the demand for construction, other areas market seemed crowded due to the such as advancement on feasibility Desalination and Pipelines slowed pace of project development. studies continued. Jim Spenceley, se- CHILE MINERS LEAN In the vjew of Ivan Rayo, general man- nior vice president of mining at Black In response to increased risk regarding the securing of water ager of JRI Ingeniería, a company that & Veatch added: “Currently, many min- ON EPC’S TO SOLVE supplies, miners are building large desalination plants,and has been working with Codelco on the ers are taking advantage of the indus- seawater use is expected to more than double through 2029, INDUSTRY’S BIGGEST renovation of its El Salvador mine: “Be- try’s slow progression to update their according to the latest forecast from Cochilco. Despite that cause of the low copper price demand prefeasibility/feasibility studies and fact, use of ground water at the country’s giant mines is still CHALLENGES for engineering services has shrunk. make progress on permitting, so their set to increase 12% through until 2029, Cochilco said. There are fewer opportunities to ex- definition phase timelines have not Although mining companies and their shareholders are more pand the business and many engineer- necessarily been impacted. What has cautious when it comes to capital spending today, investment ing companies have been forced to been impacted is the full funds deci- in desalination is proving to be the exception to this rule, as Mining is a very capital intensive busi- take austerity measures to increase effi- sion timing for these project.” He con- it is fundamental to survival in the mining industry in Chile. ness. Therefore, it is crucial that the ciency. It has also meant fiercer compe- tinued: “As trade pressure reduces the BHP and Rio Tinto's Escondida joint venture has spent US$3.4 design and construction of everything tition. Many companies are looking for copper price will rebound, the peso will billion over the past decade as they hired Black & Veatch to from crushing plants, to tailings dams opportunities outside of Chile where strengthen, and we expect projects to build a second desalination plant on Chile's west coast, as Avenida Isidora Goyenechea 2800 to desalination facilities are carried out they can lend their expertise.” progress with full funding approvals. well as a 175 kilometer pipeline that carries the desalinated Oficina 902 , Las Condes, Santiago efficiently and to the highest safety and Iain Humphreys, Santiago office leader We don’t expect to see a repeat of the water more than 3000 meters uphill to the site of the famous +56 2 32245270 [email protected] environmental standards. Chile has a at Black & Veatch, also observed chang- previous mining super-cycle as our min- mine. diverse mix of EPC and consulting firms es over the past year. “Clients want ing clients have very disciplined and Additionally, in 2019, Japanese holding Marubeni won a that bring expertise to help develop mi- more for less, but as the grade of cop- rigorous capital investment processes. contract for a US$1 billion desalination plant supplying state ning projects. The market includes local per reduces, the returns are becoming We anticipate a more measured pace of miner Codelco's Chuquicamata, Radomiro Tomic and Minis- companies like Amphos 21, JRI Ingeni- even more modest, compounding pres- project development.” tro Hales mines. Engineering, procurement and construction

CHILE MINING 2020 58 EXPOMIN Official Investment Guide Global Business Reports 59 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

Why is Chile an important market for Black & Veatch? What advantages and capa- Describe the dynamics of the Chilean companies on large projects to assess bilities do you bring to the market? copper market in 2019 and the effect how to best reuse water. Clients can Jim JS: Chile is the largest copper producer in the world, many of the major global mining it has had on EPCM contracts in the limit the amount of desalinated water companies are represented here, and they are all committed to energy and water sustain- country? they need to pump up to the mine if Spenceley ability. Additionally, most of the mining operations are located in the Antofagasta and When I joined Stantec in January 2019, they can re-use already processed wa- Atacama regions, some of the driest spots on the planet. This means that effective use of I was incredibly bullish about the year. ter effectively. water is extremely important to be responsible and sustainable. Using seawater for mining At Stantec, we expected to double our & Iain – whether it is desalinated to produce freshwater or for seawater flotation – is definitely the workforce in Chile within 12 months and How do you view Chile as a mining ju- direction in which the Chilean copper producers are moving. Our market strategy is to be we expected the copper price to rise risdiction in light of civil unrest that the service provider of choice for water and energy security solutions. Understanding that to $3.50 per pound. At that level, the has shaken the country? Humphreys holistic, integrated water management is critical for the future of mining in Chile, Black & mines are producing huge quantities of Chile is incredibly stable and has a very Veatch provides the full spectrum of water management solutions, from desalination and cash and projects are easily approved. large and sophisticated mining indus- seawater conveyance to water reuse and treatment. From an energy standpoint, Chile has Unfortunately by June, I was pessimistic try, with hundreds of billions of dollars a fantastic solar resource, and the government is committed to significant expansion of about the market, mainly due to the US- invested, employing hundreds of thou- JS: Senior Vice President-Mining renewable energy for the grid. Mining companies are dedicated to expanding their use of China trade war. The fundamentals of sands of people, both directly and in- IH: Santiago Office Leader renewable energy supply for mine power. As a full service provider of energy and water Mark copper are fantastic, because we have directly. The industry pays incredibly BLACK & VEATCH solutions to the mining industry, there are many opportunities for Black & Veatch in Chile. come to a point where there are not good salaries. My hope is that the cur- enough projects to cater to an increase rent social unrest will result in a better How is Black & Veatch working with companies to develop creative solutions to Venning in demand. I expected demand to ex- and more socially aware Chile and that water and energy challenges in Chile? ceed supply by mid 2019, however, that it is a wake up call for everyone in poli- JS: We are involved with studies around ways to capture water that will otherwise be lost has not materialized yet. tics. Perhaps the economic model that to evaporation or seepage. Additionally, we are studying water swapping in an effort to Towards the middle of the year, a lot of was implemented to take Chile out of ensure that community water supplies are secure. Evaporation management is an impor- projects started drying up, and we had abject poverty and turn it into a grow- tant focus given the low humidity in most of Chile. There is a clear business case where to restructure Stantec in order to adapt ing economy, which worked very well, using less water means pumping less water, saving energy and resources. To help solve to the new reality. We are fine, but the is outdated. They need to redesign the this issue, we are studying the installation of floating solar panels on water reservoirs both level of competition between the engi- economic model now that Chile is a de- to generate power and to reduce evaporation. Regional Mining Leader, South America neering companies has been fierce as veloped country and a member of the STANTEC the market and the number of projects OECD. People have gotten to the stage What sources of energy are most in demand from miners in Chile? How do you solve declined. People don’t like shedding where they simply cannot pay more for the challenge of energy storage? staff, so instead of laying off workers, basic services. Chile has the best water JS: Energy depends completely on geography. Chile has a robust national grid system, companies lowered their hourly rates treatment plants, electricity plants, and which allows mining companies to source directly from the grid, removing the burden of JS resulting in lower margins. projects for renewable energy, wonder- having to develop and manage their own power supply. ful highways and a nice metro, but that Battery storage is not there yet, but pumped hydro storage is very promising. The How can water management practic- all has a cost, and the model says the pumped hydro storage process uses the sea as the lower reservoir with an upper reservoir es in Chile be improved? people must pay for it. At the same time, constructed on-shore at elevation. Solar or wind energy would supply the power neces- Water management in the Chilean mi- salaries over the last 20 years have not sary to pump seawater to the upper reservoir, where the stored energy is run through a » ning sector is perhaps the most impor- risen at the same rate costs have. When hydroelectric system. Additionally, a desalination plant can be integrated that uses the tant factor for success. It has become a the minimum wage is less that US$500 head pressure already present in the upper reservoir, offsetting the input pressure re- make or break issue, where if you don’t a month it is impossible to live whilst quired for desalination. Pairing desalination with pumped hydro storage and renewables Chile is incredibly stable and has secure the water for your project, the paying for first world infrastructure. So at grid scale allows the production of freshwater at a lower operating cost. We are seeing a very large and sophisticated mine may have to close down or may people start getting into debt at exorbi- interest in these types of hybrid, integrated solutions. mining industry, with hundreds never be built in the first place. Under- tant interest rates that they will never be of billions of dollars invested, ground water in the Atacama does not able to pay back. How has the low copper price affected the demands and actions of clients? employing hundreds of get replenished, so everything taken If they change the system correctly, IH: Clients want more for less, but as the grade of copper reduces, the returns are becom- thousands of people, both out of the ground is not coming back. Chile will come out of this stronger. ing even more modest, compounding pressure. More studies are going on, and miners This is why Escondida spent billions of There is not a single worker at any mine are reluctant to select a single solution very quickly. In today’s market, clients are looking directly and indirectly. The dollars on one of the biggest desalina- in Chile that doesn’t earn double or IH to ensure they are getting the best value for what they can achieve. With this in mind, we industry pays incredibly good tion plants in the world. maybe even triple the minimum wage. are also seeing clients taking time to ensure that projects are fully optimized. salaries. My hope is that the Desalination is expensive to build and The mines are good payers and they current social unrest will result in operate, because you have to push wa- give big bonuses at the end of the year. What are the biggest areas of opportunity for Black & Veatch if the market were a better and more socially aware ter up to five vertical kilometres at a rate Mining is a great industry that people to turn up? Chile and that it is a wake up call of thousands of liters per second. All love, and it supports millions of people JS: Currently, many miners are taking advantage of the industry’s slow progression to the mines that can afford it are going to in Chile. It is the backbone of the Chil- update their prefeasibility/feasibility studies and make progress on permitting, so their for everyone in politics. build desalination plants and that is very ean economy. If anything happened in definition phase timelines have not necessarily been impacted. What has been impacted important. However, equally important the mining sector all Chileans would suf- is the full funds decision timing for these projects. But as trade pressure reduces the cop- is the reuse of water at the mines. Stan- fer the consequences. ■ per price will rebound, the peso will strengthen, and we expect projects to progress with « tec is working with a number of mining full funding approvals. ■ CHILE MINING 2020 60 EXPOMIN Official Investment Guide Global Business Reports 61 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide

<<59 What is the core focus of Ingenalse large international companies. We have The best alternative option has always been desalination, and what services do you bring to the the experience and we are cheaper and but the challenge is pumping water to the mining site can Chilean market? faster. We have integrators that incorpo- sometimes be more costly than the water treatment itself.” We are focused on segmentation, flota- rate the control panels and structural en- In this context, it is essential to get pipeline design right,as tion, filtering and tailings treatment. We gineers who are dedicated specifically to it can lead to significant cost overruns if done poorly. have a specialized team of electronic mining in Chile. That is what sets us apart “Many of the mines in Chile are at 3000-4000 meters of engineers, mechanics and service engi- from other companies. We have a group elevation and around 100-200 kilometers from the sea, so neers. We have two three-year mainte- of engineers who have worked together transporting water via pipeline requires a lot of energy. nance contracts for all of Anglo Ameri- for many years. We have the recogni- These systems must be designed the right way, particu- can’s mineral thickeners in Chile and we tion of the international market and that larly because they are operating at high pressures, so the have an additional contract at Chuqui- is why we are competitive against large design can be very sophisticated. There is significant per- camata for tailings thickeners. Currently, companies. We have also developed and mitting that comes with this process and mistakes can be we are updating and repairing Division patented our own equipment that leads very costly,” said Spenceley of Black & Veatch. Ministro Hales’ thickeners. Ingenalse has to process improvements. Ingenalse has 15 years of experience in the country and a lot of experience in the mining sector we recently opened offices in the south and we have an intimate understanding Reuse Juan of Chile to gain market share in the water of how the mines work. treatment sector. Ingenalse helps mining companies boost Because desalination is exceedingly expensive and logisti- their productivity and lower their costs cally difficult when mines are located in the high Andes, it Alfaro What opportunities are there in Chile because the development time of our is imperative that companies adopt smart reuse policies. regarding tailings? projects is less than with other compa- “Companies may spend billions of USD to build a desali- Ingenalse has been working for 10 years nies. We are experts in our field and we nation plant and spend a fortune on electricity alone. Any at Minera Valle Central, where the tail- deliver improvements in recovery, flota- reuse that you can do at the mine will translate into big ings of El Teniente mine are being tion and the optimization of resources for cost savings. Water is expensive, but for some mines water treated. The fresh tailings that the mine clients. The requirements of each mining is the limiting factor of production. If they don’t get a lot throws away are reprocessed in Minera company are different and engineering of snow in the mountains in winter and it does not melt in Valle Central and the tailings gutter is solutions should not be duplicated. We summer, that is the limiting factor. Ultimately it costs them General Manager squeezed out. provide specialized solutions. in copper production. Desalination and increased reuse is INGENALSE We are participating in mining flotation fundamental to the Chilean mining industry,” said Stan- projects at Chuquicamata and Cande- What is your view on Chile as a mining tec’s Mark Venning. laria and we have just been awarded a jurisdiction today? Another way of limiting water resources is to first have a contract to make improvements in flota- The environment is a key topic in Chile deep understanding of the details of the resource and tion cells at Tranque Las Tortolas by An- today. It has slowed the development how to create the most efficient design to exploit it. Am- glo American. of large projects, and the community is phos 21 is a company that is involved in the process of more aware of the impact of mining ac- providing precise data on the availability of water. Accord- Which of Ingenalse’s services have tivities now. Legislation is slow because ing to CEO Juan Castaño: “The first thing producers need been most in demand in 2019? there are people who want to take ad- to know when starting a project is how much water they » We work with large companies directly. vantage of the natural resources, the have at their disposal and then they must plan an efficient We have repaired Centinela’s thickeners. towns and the people. The environment management strategy that allows for secure and resource- We have also repaired and updated some in Chile is a challenge because the leg- ful consumption. This means clients demand help with the The environment in Chile is a thickeners in Division Ministro Hales. In- islation is not very clear. The govern- construction of new underground wells, defining concep- challenge because the legislation genalse has worked on developing its ment is taking actions to improve the tual models of how groundwater behaves at a mining site is not very clear. The government own thickeners this year and they have environmental impact of mining. Govern- and implementation of numerical models that allow us to is taking actions to improve the already been installed in Chuquicamata. ment Environmental Commissions were predict groundwater flow. The goal is to create a sustain- environmental impact of mining. formed so that Chile will have a clearer able operation that minimizes its impact on groundwater Government Environmental What have the biggest changes been environmental policy within a year. balance.” Commissions were formed so in terms of technology and sustainabil- ity being incorporated into the mines? What are the biggest opportunities to that Chile will have a clearer The big changes have been mostly elec- grow Ingenalse moving forward? Tailings environmental policy within a year. tronic. There have not been many me- Ingenalse’s focus is in the water sector as chanical or structural changes in recent it is very important for mining. Therefore, Mines are the pillar of Chile's economy, but their byprod- years. What was done 30 years ago is still our teams must be able to recover and ucts, which accumulate in ravines, mountain areas, river being done, but the control has been im- reuse more water and it in the process. beds and reservoirs, and which are often used to create proved. We would like to be part of a great com- tailings dams, pose a handful of problems for surround- « pany. The opportunities we have today ing inhabitants. Apart from the environmental threat, the How is being a local company an ad- are very good, but we could grow more if recent collapse of two Brazilian dams that killed hundreds vantage in the Chile? we had more support. This support may of people has triggered renewed concern in Chile. We are a small company competing with come from Chile or other countries. ■ Mine tailings are produced when mined rock is finely 66>> CHILE MINING 2020 62 EXPOMIN Official Investment Guide Global Business Reports 63 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

José María Juan Which of Amphos 21’s services has been most in demand in 2019? The first thing producers need to know Guzmán & Castaño when starting a project, is how much wa- ter they have at their disposal and then Juan Eduardo they must plan an efficient management strategy that allows for responsible and Coeymans secure consumption. For Amphos 21, this CEO means that we have to help and supervise the JMG: Chile Country Manager AMPHOS 21 CHILE construction of new underground wells, define JEC: Business Development Manager JMG JEC conceptual models of how groundwater behaves at a mining site and develop and implement numerical CDM SMITH models that allow us to predict groundwater flow and ground- How is Amphos 21 enhancing water security for its Chilean water chemical behavior. Our purpose is to create a sustain- clients? able operation that minimizes its impact on groundwater bal- Mining in Chile is very water intensive and Amphos 21 offers ance. What specific services does CDM Smith water. The most common water treatment ent properties. It is difficult to align all services that enable efficient consumption and reuse of water. Companies also have also been looking at Amphos 21 to pro- offer to the Chilean mining industry and method used in the mining industry is re- landowners to be part of the project and We provide precise data on the availability of water for our vide sustainable reuse and feasibility analysis of water resour- which of these services are most in de- verse osmosis. this can take a significant amount of time. customers. Whether it be rivers, streams or aquifers, Amphos ces. We are working to implement circular economy param- mand? Another challenge is that there are differ- 21 has the capacity to identify where the water is located and eters and principles in water resources, by reusing water that JEC: CDM Smith offers consulting, engi- In what ways is CDM Smith incorporat- ent projects going on at different times how to best exploit it, while minimizing the environmental im- has already been processed for other purposes of the indus- neering, and construction management ing innovative solutions to help relieve and each has its own independent infra- pacts of mining on water. Additionally, we are able to advise trial/mining operations. One of the objectives of the govern- services. The main mining related projects pressure on the mining industry with structure. Therefore, potential synergies clients on the amount of water needed to carry out their op- ment and of Amphos 21 is the treatment of sulfate contaminat- we are involved with in Chile are related to respect to water consumption? are lost that otherwise could be present if erations and how to size systems in an appropriate manner. ed water to control and minimize sulfates and metal contents tailings dams. JMG: One of the needs in the market is the multiple projects were combined into one in groundwater and surface water so that the quality of the JMG: Chile has multiple tailings dams that reduction of energy consumption when water supply project. environment is preserved. will have to be carefully dealt with when treating water and we provide solutions decommissioning and remediating. CDM to help our clients in this regard. Reuse is Can you elaborate on CDM Smith’s in- What is the opportunity in tailings today and how is Am- Smith is experienced in providing geo- the future of water supply. We’re here to volvement with BHP? phos 21 positioning itself to capitalize on this trend? technical remediation and water recovery help clients conquer the regulatory, opera- JMG: BHP has decided to outsource op- Much progress is being made in minimising the water content services to the market. tional and communication challenges that erational water supply through a BOOT of tailings. The aim is to avoid subsoil contamination due to come with leading the way. Whether we’re (build – own – operate - transfer) contract, leakage / infiltration from tailings, as well as economize the 2019 has been one of the driest years in pioneering technologies to improve per- where a third-party oversees the design, extension occupied by mine tailings. We are also working to Chile on record. How has this put pres- formance or researching comprehensive construction, financing and operation of extract water from tailings and reintroduce it in the process. sure on the mining industry? monitoring approaches, we are commit- the water conveyance system, all the way The Dirección General del Agua de Chile (Directorate-General JMG: Water consumption in the mining ted to achieving water supply innovation from the desalination plant to the mine of Water) is becoming a leader in Latin America in terms of industry was already stressed before the through reuse. site within a certain period. CDM Smith water regulations. Amphos 21 has a deep knowledge of the drought. Most mining operations rely on has supported BHP on the identification regulatory framework in Latin America, as we have developed ground water sources, as many mining In what direction do you see water and evaluation process of world-class joint projects in many countries. The Directorate-General of Wa- sites are located in remote areas at high management policy moving? ventures. We are responsible for the cons- ter regulations encourage companies to use alternatives to altitudes. Because of the draught, the gov- JEC: In terms of water policies, there needs truction management of the 23-million- groundwater, and obtaining groundwater exploitation and us- ernment began to reduce some of the wa- to be a definitive guideline which sets clear gallon-per-day seawater reverse osmosis age permits is increasingly difficult. I am convinced that the ter permits extended to mining operations standards for reuse. The reuse of water is plant, marine works, 95-mile-long desali- use of water is very well regulated by the government in Chile and mining entities had to start looking at a hot topic of discussion and policy mak- nated water conveyance system, and a and mining companies have to make efficient use of water innovative ways to find water. ers should be transparent and clear when power supply system. We have also been MINING SERVICES resources. This has pushed the miners to self-regulate their The best alternative option has always establishing regulations. The government involved in preparations for BHP’s environ- • Water resources studies. use of water. been desalination, but the challenge is should also think about how they can in- mental permit application. • Hydrological and hydrogeological characterization. pumping water to the mining site can centivize the establishment of desalination • Interactions of water and mining facilities. What would Amphos 21 like to achieve for the next few sometimes be more costly than the water plants in Chile. What are CDM Smith’s strategic objec- • Characterization and prediction of acid rock drainage and metal leaching. years? treatment itself. We continue to look at tives moving forward? • Development of conceptual and numerical hydrogeological models. We are very ambitious. This year, we will bring in US$3.5 mil- ways of using water more efficiently in the What logistical and engineering chal- JMG: CDM Smith aims to assist our cli- • Mine closure plans. lion in revenue. We would like to double that figure in the com- mining sector. The reuse of water is also a lenges does pumping water to remote ents in finding new water sources for their • Environmental permitting (EIAs, DIAs, etc.). ing years. We plan to do this by incorporating new services viable option, but one has to keep in mind locations present to the mining indus- projects. Our goal is to expand our ser- • R&D and other services. such as engineering into our business model. This will allow us that the mining industry needs a certain try? vice portfolio in Chile and provide a wider to offer a more complete service portfolio to our clients and quality of water and innovative solutions JMG: Pumping water to mine sites can range of services and solutions to the Chile: +56 (2) 2799 1630 ensuring a responsible use of the water resources as a guaran- must be implemented to ensure that you [email protected] be very challenging as one has to lay a market. We have the objective to continue www.amphos21.com tee for the development of current and future generations. ■ do not lose too much quality when treating pipeline that goes through many differ- growing our company moving forward. ■

CHILE MINING 2020 64 EXPOMIN Official Investment Guide Global Business Reports 65 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

Image courtesy of Gold Fields Can you give a brief overview of Worley and the company’s operations in Chile dewatering costs. However, there are Fernando and Latin America? significant advantages to thickening FG: Worley Chile is part of the Americas region, and we are the largest mining office tailings. Perhaps the most important García & in the region. Since acquiring Jacobs ECR, Worley Parsons has now been rebranded is that higher volumes of water can be as Worley and we have all the capabilities of WorleyParsons and Jacobs ECR. Our recovered and the seepage and evapo- Claudio footprint in Latin America is spread across Chile, Argentina, Colombia, Brazil, Peru ration losses from the tailings storage and Mexico, but only our Chile and Peru offices are focused on mining, whereas the facility can therefore be minimized. Sus- other offices are focused on construction and oil and gas. tainable water use in tailings is becom- Martínez Z. ing increasingly more important and How does Worley provide cost savings for its clients? firms like Ingenalse are able to capital- FG: VP Operations Chile FG: Worley has assisted clients with ore sorting technologies, which can reduce the ize on the trend. The company has two CM: Commercial Director footprint of their processing plants. This innovation does not only significantly re- three year maintenance contracts for all WORLEY duce the amount of energy and water required, but also maximises the efficiency of Anglo American’s mineral thickeners and quality recovery of valuable ores. in Chile and has an additional contract Digitalization is another element that leads to increased productivity and lower op- at Chuquicamata for tailings thickeners. erational costs for our clients. We implement material tracking where clients have The company is also updating and re- traceability of all their materials through the entire process. pairing Division Ministro Hales thicken- ers. “What was done 30 years ago is still Can you elaborate on the permitting process in Chile? being done today, but the oversight has FG: The mining sector in Chile is very cognizant of their social and environmental improved. Thickened tailings and paste responsibilities and takes all steps necessary to comply. Although the permitting solutions are now very much in favor,” FG process takes some time, companies will still follow the right path to start operating said Juan Alfaro, general manager of in the country, usually having higher standards than those requested by the regula- Ingenalse. tor or the communities Companies are now implementing these new solutions into their mines, From a policy perspective, is Chilean law clear enough so that the country will be <<63 not only for safety purposes, but also able to realize its potential as a leading lithium producer? ground and mixed with water and nies are developing solutions that make because they conserve water. Yamana CM: The government has the objective to become a leading lithium producer and sometimes chemicals to separate min- tailings less risky. “Tenova developed Gold, for example, has stated that its CM they have been putting in the effort to reach this goal. The status of lithium has been erals and valuable metals. As more wa- technology to use dry stack tailings and focus at El Peñón is on “increasing re- changed to open and regulations and policies are being revised. ■ ter is needed to process more material it now filters or uses a thickener to fil- use and recycle rates and minimizing just to maintain production rates, the ter and transport by conveyor, so that overall raw water consumption.” To that What is the history of Arcadis and their operations in Chile? challenge of tailings management be- the deposit is close to dry material. This end, the company has implemented a Arcadis is a leading global Design & Consultancy firm for natural and built assets, comes more pressing. Looking at the mitigates the risk of a dam collapse. To- dry stack method of tailings storage at Hugo including mining. Based in the Netherlands, the company was founded in 1888 and two biggest environmental risks, con- day’s market is much more environmen- the mine, which allows 80% of the water currently we are 27,000 people, active in over 70 countries. In Chile the company was tamination of ground water and tailings tally conscious. It is telling companies contained in the tailings to be recov- Andrade founded in 1981 with offices in Santiago and Calama. dam failures are the biggest environ- to not waste water and to not contami- ered. When we started, our initial work in Chile was mainly associated with geotechnical mental hazards associated with mining. nate,” said Christian Cavagnaro, man- At Gold Field’s Salares Norte mine, studies, as Arcadis acquired a Chilean company that was founded by geotechnical Chile has 740 tailings deposits located aging director at TAKRAF Tenova. according to country manager, Max professionals. Today, we work on mining projects to fulfill the needs of our clients in 10 regions, which creates important Companies like Wood are being re- Combes: “A lot of effort and money providing services throughout the entire value chain – from strategic advice, plan- challenges for the mining industry, ac- tained by clients to be the Engineer of was invested into creating a sustainable ning, licensing and permitting, project studies (conceptual, pre-feasibility and fea- cording to the national geology and Record (EoR) for their tailings facilities in design that ensures water use is kept to sibility), detailed design and implementation, through to maintenance, operation, General Manager mining service. Chile and to provide assistance to them a minimum. In terms of tailings, we have optimization and decommissioning. “Throughout the history of mining, in the development of safer operation an environmentally stable design. We ARCADIS CHILE tailings have not been a big focus. Re- protocols and tailings disposal alterna- have introduced filtered tailings that Can you elaborate on some of the projects Arcadis is involved with in Chile? cently there have been very dangerous tives, such as dry stacking and thick- will allow us to recover most of the wa- 80% of Arcadis’s business in Chile is dedicated to the mining industry. Arcadis is examples, such as Brumadinho, which ened tailings. According to Dave Law- ter and produce a dry tailing that will be involved in the key projects of the major players operating in the Chilean mining mar- we cannot repeat. Chile has not had this son, president of mining and minerals moved with trucks to be compacted.” ket such as Codelco, BHP, Anglo American, Antofagasta Minerals and Teck among type of accident and our technicians, at Wood Group: “Globally, the industry Juan Castaño, CEO of Amphos 21, pos- others. We can proudly say that our firm has been involved in many phases of the engineers and geologists say that our has had dam failures, which have raised ited: “Much progress is being made in design and/or operation of more than 70% of the tailings dams of all major mining tailings are very different and safer, but safety issues related to operation and minimizing the water content of tailings. projects in the country. we need to improve our standards even design of tailings facilities and, because The aim is to avoid subsoil contamina- more so that we can give the local com- of this, we are spending a bit of time tion due to leakage and infiltration from How does Arcadis distinguish itself from competitors? munities safety and certainty that an finding solutions for these challenges.” tailings. Companies want to be able to There are many complexities in mining, and we have the full suite of capabilities and accident will not happen,” said Mining One safety measure companies are tak- extract water from tailings and reintro- capacity to combine and consider all factors in delivering a successful project in line Minister Baldo Prokuriça. ing in Chile is to thicken the tailings. duce it in the process. The price and with the clients’ objectives. Our global network enables us to bring our knowledge In response to heightened environmen- Operating costs are higher for thick- the scarcity of water is highlighting the and experience of projects worldwide and apply that expertise to specific local situ- tal concerns regarding tailings, compa- ened disposal due to the associated need for these good practices.” ations and needs duly implemented by industry reputed Chilean professionals. ■

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distribution systems, amongst other proj- Energy and Underground ect requirements. The collapse of the main ramp into the Technology Mining San José mine in 2010 collectively in- stilled in Chilean miners the importance of safety in underground mining. Today When Chuquicamata commenced its un- safety remains paramount. The most ef- derground operation in August, after 104 fective way to reduce risk is by incorpo- years in operation as an open pit mine, rating safety into the design, which is a it represented a paradigm shift. Chile’s large focus of what companies like Stan- transition from open pit to underground tec, Wood Group and JRI Ingeniería do. mining is now fully in progress, as many of the most noteworthy mines and expan- Energy sions are being developed underground. Niches Underground Although open pit mining still yields 90% With ore grades progressively in decline of the country’s copper production, this In addition to engineering firms, Chile’s in Chile, companies now have to extract number will change significantly in the underground developments are attract- large and growing volumes of mineral coming decade as Chuquicamata un- ing contractors and subcontractors with in order to maintain their expected fine derground ramps up production and El experience providing products and copper production levels. This, in turn, Teniente’s new mine level project is ad- construction that make mining safer and means an increase in electricity con- vanced. The expansion of Los Bronces is more efficient. DSI Underground is a Ger- sumption in processes such as crushing also planned to go underground. man company that is providing bolts and and milling. It also necessitates miners Technology Underground mining brings many ben- resins to the Chilean mining market that to dig deeper and, to fuel that effort, efits as it has less impact on the surface. help ensure the safety of workers. Ac- they need vast amounts of energy. Mining companies and contractors Places where there are glaciers or vegeta- cording to Carlos Leigh, the company’s Miners are now switching to renewable have been aided in cost and schedule tion can remain intact and, in addition, it CEO of Latin America: “Any mine that is sources of energy in Chile, where solar forecasting with the evolution of tech- generates less dust. These expansions deep or located in a country with seismic and wind power is becoming more cost nology. The big data, automation and are also a great opportunity to introduce issues, needs bolts and systems with dy- competitive. The country has little in electrification buzz is not just confined technological changes in the field and namic capacities that can absorb energy, the way of fossil fuels, leading it to rely to the operational phase of mining, it have more machinery that is remotely op- not just those that go to the maximum on imports and making electricity there also has relevance in design and build. erated, leading to improvements in safety resistance and break. Therefore, it is im- extremely expensive. In 24 of the last Automation is now considered at all and efficiency. portant to develop products capable of 30 years, the country’s energy prices stages of project development and the The paradigm shift toward underground providing support in those conditions.” were higher than the world average; at productivity and efficiency gains afford- mining presents a big opportunity for DSI has been responding to client needs its peak in 2011, the price per kilowatt- ed by automation and digitization help EPC firms, because the design of the to lower opex by introducing a liquid hour reached US$150.90, almost double de-risk or improve return on invest- mine, equipment and logistics differ sig- resin that allows clients to install and get the global average, stated a Bloomberg ment. Currently, in Chile mines are be- nificantly from open pit mining. Chile al- resistance for bolts in 6 minutes; much report. ing designed to enable advanced data ready has several underground mines, so faster than the 24 hours needed with tra- In response to risks of high energy costs and analytics processes and to facilitate there are firms with expertise. However, ditional cement. and efforts to lower carbon emissions autonomous equipment or a combina- today it is clear that most engineering Another example of a company looking and solidify license to operate, com- tion of manned and autonomous equip- firms are looking to improve their com- to expand their presence in Chile due to panies are now looking to transition ment. petitiveness in the space. the promising future of underground min- to renewable energy to power mining Wood Group sees opportunities to in- Worley is working with two clients on ing is Herrenknecht, a company with ex- operations. In 2019, BHP signed four fluence and design project data with large brownfield and greenfield projects perience in mechanized tunneling. It took renewable energy contracts to sup- recent technology improvements. and its involvement is mostly focused on took its understanding of tunneling for ply all of its Chilean copper operations Wood’s Dave Lawson pointed to a re- underground, processing and infrastruc- civil works and applied it to mining to de- with wind and solar energy beginning in cently awarded PFS contract award with ture development. According to the com- velop innovative machine concepts for a 2021. The company anticipates this will Antofagasta’s Minera Centinela SA di- pany’s commercial director, Claudio Mar- variety of applications underground, such help cut energy costs by 20%. Anglo vision as a good example of how the tínez: “We are seeing big opportunities in as vertical access or production shafts, American also has committed to using company was leveraging these tech- underground mining.” inclined vehicle access ramps, ventilation only renewable power at its mines in nologies. The project will support the Worley is also in the process of complet- shafts and transport routes. “The chal- Chile from 2021 onward. “Compared to studies of centralization of monitoring ing three studies for clients looking to lenge is to design the right equipment 100 years ago, we are consuming dou- and control for its mining operations operate underground. These new mine that meets the clients expectations. With ble the water and about 10 times the in Chile through a technologically ad- developments underground require Chuquicamata and Teniente new mine energy. We can’t continue in this vein. vanced integrated operations center. detailed design for the underground level there is huge potential and greater We have to do something differently,” This includes cloud-based data storage infrastructure, maintenance facilities, need for underground equipment,” said said Aaron Puna CEO of Anglo Ameri- and information management for the dewatering facilities, mine air heating, Michael Weinhold general manager, Latin can Chile. company’s operations. ventilation systems and electrical power American mining at Herrenknecht. Image courtesy of DSI Underground CHILE MINING 2020 68 EXPOMIN Official Investment Guide Global Business Reports 69 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

What is the history of DSI Under- lining of the crisis is that those social issues How has the Instituto de Ingenieros de Minas de Chile evolved over the course ground and what capabilities does the will now find the space to be incorporated of its history? company bring to Chile? into the law. The most important matter it The Institute of Mining Engineers of Chile (IIMCh), is a private nonprofit law corpo- DSI Underground is based in Germany is to implement the critical issues sooner ration that was founded 89 years ago by professionals who led the mining industry. and the company covers four regions – rather than later and we can move forward The purpose of the institute is to strengthen links between mining professionals Europe, Asia Pacific, North America, and as a country. and the related arts and sciences. Latin America. We are involved in mining We provide technical and professional cooperation to any initiative, work or activ- and tunneling. Latin America is especially What are some of the most exciting ity - public and private - that tends to the development and progress of the mining strong in mining. As a system supplier to innovations in underground mining industry. As a group, we are focused on scientific, technological and management the industry, we offer our clients the larg- today? changes in the mining industry and we seek to train and educate members associ- est product range globally available and DSI Underground has developed prod- ated on developments in the market. we offer a team of strong service profes- ucts for dynamic rock conditions or rock We also give technical opinions when there are interesting issues regarding the mi- sionals to meet all customer demands. burst, this is a great opportunity for us and ning industry. Our opinion is not affiliated with any political party, mining company our customers. Any deep mine or mines or particular interest, because technical and academic matters support our actions. What challenges associated with un- located in countries with seismic issues We care about the development and growth of mining in Chile. derground mining can DSI Under- need bolts and systems with dynamic ca- Juan Pablo We have many professionals specialized in a variety of topics and we have been Carlos ground’s products and services solve? pacities that can absorb energy, not just supporting the mining industry since its inception. We host several conferences, The core focus of our products and ser- go to the maximum resistance and break. seminars and courses throughout the year to educate our members. vices are related to safety. We emphasize Therefore, we are very involved in devel- González Leigh safety while improving efficiency in our oping products to support in those con- What are the most important challenges that the mining industry in Chile must client’s operations. Our products help ditions. We have a dynamic product that overcome? speed up production cycles, which leads works with resin and cement and it has The main challenges are environmental and community related. They are a result of to a lot of operational savings We do this been very well received by the market. the bureaucracy of the system. Companies have become more proactive in address- by mechanizing the process in order to ing environmental issues, because of the need to develop the concept called social make the site safer and the production With the price of copper being below license. This means that they must find a new way of connecting with the community faster. expectations, has there been a greater in order to carry out their projects. Regarding the environment, Chile has some of Can you elaborate on DSI Underground’s push towards automation? President CEO of Latin America the highest standards in the world, however the bureaucracy has caused regula- product portfolio? Fluctuations in the commodity price have IIMCH tions to become somewhat burdensome and long, but now government is trying to DSI UNDERGROUND DSI Underground supplies various steel increased demand for automation. Some introduce simplification mechanisms, while still maintaining high standards. products as well as fiber glass solutions. companies have paused or slowed down We supply products such as anchor sys- their operations, but others adopted What initiatives could the government adopt in order to quicken the length of tems, injection resins, pumpable injection technologies and innovations in order to the permitting process? chemicals, fore poling systems, the larg- improve efficiency and productivity. The An internal committee was created within the Ministry of Mining in order to over- est range ground support products in the only way that some companies can deal see the large mining projects in Chile. This serves as a platform to generate better market. in difficult markets is to improve their response times in the processing of permits. Administrative and political issues operational costs and therefore there is must be improved, so that there are no contradictions in the permitting rules. What Where does DSI Underground see the an increased demand for products and I know is that the mechanism and the processing platform are being improved to best opportunity for growth moving services that will assist them in achieving » streamline processes and minimize response times. » forward? these goals. Latin America is a growing region and What are the benefits of underground mines as opposed to open pit mining? there is still significant opportunity for What are DSI Underground’s objec- In the case of Chuquicamata, the ore is very deep, so the mine was deep. This con- growth. We have achieved great success tives moving forward? dition has geo-mechanical and structural complications. It also means high trans- in other regions and aim to do the same in DSI Underground Latin America has a Some projects are going to port costs, because of transport distances are too long. This led to an increase in Latin America. We aim to continue grow- challenging company growth over the increase their production, but I the operational costs. Underground mines can be much more profitable, in this spe- Social demands are being ing our company and market share mov- next three years. We aim to expand our do not think this will be as easy cific case. In general, the underground mines have higher costs, but the difference made and it is giving Chile the ing forward. presence in Latin America, Central Ameri- and fast as they have planned. in transforming an open pit mine to underground is that it opens the possibility of opportunity to solve them and Do you see civil unrest in Chile materially ca and the Caribbean. We would also like mining greater mineral resources and extending the life of mine. affecting project development? to consolidate the efforts we have been Mining projects are long term and move forward. Chile was never It is important to remember that mining in- making in new countries of local operation are taking increasingly long to considered, in our recent history, a Do you think there will be a limit on how much Chile will be able to produce in vestments are very long term, so I believe over the last three years. In some markets develop due to processing issues, the future? populist country and I still believe companies will continue moving forward we are still seeing old methods of un- technical challenges and a difficult There are some mining projects in Chile that only plan to continue producing the it will not become one. with the development of their assets, de- derground support, including wood and environment for financing. same amount of minerals, but other mines plan to expand in the coming years. spite the current unrest. Social demands some mines even less than that. There is a Chile seeks to reach 7 billion mt of copper production. Some projects are going are being made and it is giving Chile the lot of room to improve safety conditions in to increase their production, but I do not think this will be as easy and fast as they opportunity to solve them and move for- underground mines across Latin America have planned. Mining projects are long term and are taking increasingly long to ward. Chile was never considered, in our and DSI Underground wants to be a part develop due to processing issues, technical challenges and a difficult environment recent history, a populist country and I still of making industry safer for workers and « for financing. ■ « believe it will not become one. The silver more efficient for our customers. ■ CHILE MINING 2020 70 EXPOMIN Official Investment Guide Global Business Reports 71 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

a trend away from open-pit mining and towards underground mining. Engineer- Iván ing companies must provide solutions to Dave changing needs. Rayo Another challenge is with industry regu- Lawson lation. There is stricter regulation on What does Wood aim to achieve in Chile tailings and companies must be able to over the next 2-3 years? adapt their operations accordingly. Our vision for the company is to assist cli- ents in two areas. One is in energy transition What are some of JRI’s achievements President Mining & Minerals materials. We want to be involved with any- that you are most proud of? thing dealing with electrification. That means General Manager WOOD GROUP I am most proud of the company’s copper, lithium, nickel, and cobalt and we are JRI growth. We have successfully increased developing our expertise in all of those areas. The our market share and are participating second area is sustainable building, which is about help- in larger and important projects. For ex- ing in water and energy, which are the main building blocks in Can you give us an overview of JRI there was a large market of new mining ample, we are involved in large structural What is the core business of Wood in the mining sector and Chile going forward. and the company’s business offerings projects and the demand for engineer- projects for Codelco. what are your most promising areas for growth? to the Chilean mining industry? ing services were very high. Nowadays, Wood has approximately 1,000 employees here in Chile, with What are your views on the Chilean mining market in JRI is a Chilean engineering company the demand for engineering services has What are some areas of opportunity most of them devoted to mining. In the engineering area, 2020? and has been present in the construction shrunk. It has also meant fiercer competi- for JRI geographically? Wood’s complete services adds value across the mine life I am optimistic about 2020. We have had some troubling times and maintenance of the country’s most tion. Many companies are looking for op- We want to increase our presence in cycle. Wood´s service lines handle mineral resource and proj- in the last few months and I hope that it does not impact the important mining projects, either as the portunities outside of Chile where they Peru. There have been fluctuations in mi- ect evaluations, mine planning and design, mineral processing mining industry in Chile. Chile has been a success story in mi- main contracting company or a sub- can lend their expertise. ning permits and requirements and that and metallurgy, engineering design and project management, ning because it has been a stable and transparent place to do contractor. The company has a market Unlike other companies, JRI business has impacted our ability to penetrate the environmental permitting and water management services, business. We know what to expect in terms of taxes and laws share of approximately 8% of the total model was less reactive to market influ- market. automation and control, and construction. The automation and, as long as those remain stable, then this is a great envi- engineering activity related to mining in ences and therefore it has responded The challenges for mining in Peru and and control group directly supports our clients in leading their ronment. If any of those start to move then people will start the country. more robustly to the changes. It has Chile are different. Mining in Peru tends digital and technological transformation efforts towards oper- thinking twice about their investments. ■ Our company has four main business been increasing its market share in Chile. to be smaller scale and more selective ating the mine of the future. branches: design of underground mine; Since, 2017 we have experienced 20% while Chilean mining is characterized building of treatment plants; design of per annum growth. by large rates of extraction and consid- Can you tell us about the opportunities you see for Wood pipeline systems for water and mineral erably larger mining sites. The location in tailings and your offerings in that area? transportation and the fourth is tailings What are the biggest challenges for of the operations also poses different Wood´s environment and infrastructure group assists our cli- dam design. the Chilean mining industry? challenges. In Chile, the majority of the ents in the tailings area. Wood has been retained by several of The industry is seeing significant changes projects tend to be located in the desert our clients to be the Engineer of Record (EoR) for their tailings How have depreciations in the copper in how mining operations are conducted away from local communities while mi- facilities here in Chile, and we are assisting them in the devel- price affected JRI’s business and the and the challenge lies in adapting to ning in Peru is done in the close vicinity opment of safer operation protocols and tailings disposal al- demand for the company’s services? the technology requirements that come of the inhabitants and far away from the ternatives such as dry stacking and thickened tailings, to lower When the copper price was booming, with them. For example, we are seeing ports. ■ the chances of a dam failure.

Can you elaborate on any lithium projects that Wood is working on? Globally Wood is involved in several lithium projects. In Chile, currently we are working on the La Negra project, located close to Antofagasta. We are executing an EPCM contract for the construction of a lithium carbonate plant that extracts the mineral from the Salar de Atacama. We have a similar lithium project in Australia.

What is the role that automation, data analytics and robot- ics will play in the future of mining? Areas of Expertise Luis Uribe 2343, Ñuñoa, Santiago, Chile. We are working with clients in Latin America to implement new Phone +562 2361 8200 Engineering Mining technological innovation strategies that will allow them to in- corporate big data into their decision making. Currently, we Mineral Processing Calle Dos de Mayo 516, of. 402, Excellence Miraflores, Lima, Perú. are conducting a study for a major mining company in Chile Fluid Transportation Phone +511 717 2029 to build a command center in Antofagasta that will allow them to remotely control their plan operations using artificial intel- Tailings [email protected] | www.jri.cl ligence and automation, thus minimizing their operational cost and increasing their safety.

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Construction and Darío Logistics Barros Izquierdo

General Manager ECHEVERRÍA IZQUIERDO MONTAJES INDUSTRIALES

With mines increasingly moving underground and to high Echeverría Izquierdo is a holding company involved in dif- What is Echeverría Izquierdo’s focus in terms of mining, and Can you elaborate on the size of investments that are cu- altitudes in the Andes, construction and logistics can be ex- ferent stages of construction projects. It works closely with how important is the mining industry to the company’s over- rrently being made in the market? tremely challenging. Both Bertling and Echeverría Izquierdo the engineering teams and develops construction projects all business? Teck is making big investments into its QB2 project, but they are specialized in working at high altitudes, a great advan- and facilities based off of designs. According to Dario Barros Echeverría Izquierdo is a holding composed of nine companies, are in the minority. There are far more small to medium sized tage in Chile because many of the mines are located high up Izquierdo, general manager of Echeverría Izquierdo’s Indus- which are involved in different construction areas. Currently, investments being made than big ones. Small investments are in the Andes mountains. trial Assembly unit, the market for construction is very com- we are operating in Chile and other parts of Latin American not good business for Echeverría Izquierdo because these Bertling, a logistics company dedicated to delivering special- petitive in Chile and therefore, “Keeping costs low is key.” with active participation in the mining, pulp and paper, energy projects are served by small contractors. Medium sized mining ist cargo to challenging and remote locations, went through This can be especially challenging in underground mining. and petrochemical industries. In Chile our focus is mining. It is projects are important, and that is where the development is a difficult period during the downturn as it went from 62 em- Izquierdo continued: “Echeverría Izquierdo has the challenge a very big market and we continuously try to find and develop occurring in Chile. El Espino (Pucobre) and Santo Domingo ployees in 2014 to 10 at the end of 2017. Today, it is back at 50 of constructing and erecting complicated equipment on site new projects. We have been involved in some of the main mi- Project are important medium sized projects. employees and the resurgence in hiring came as a result of a in the underground environment. Surface construction and ning projects in Chile such as Collahuasi, Quebrada Blanca 2 ramp up in projects. These include Teck’s Quebrada Blanca, underground construction are completely different. Under- (QB2) and the Albemarle lithium project. Echeverría Izquierdo What has been Echeverría Izquierdo experience working in BHP’s Spence Growth Option, and a project from Codelco. ground construction can often be more complicated as there is specialized in working at high altitudes, which is a great ad- the lithium space, and what is your view on the potential for As these projects develop, Carlos Reveco, managing direc- might be condition and site access challenges. You can not vantage in Chile because many of the mines are located high Chile to be a top lithium producing country? tor at Bertling, has observed some of the challenges of per- use combustion equipment during underground construc- up in the Andes mountains. Lithium mining in Chile is a good business and the country’s forming logistics for mines in Chile: “The issue we face is that tion and electrical equipment is required.” lithium is high quality and cheap to produce. Construction of a the size of the equipment is growing. Designs for electrical The company is also involved in construction of a lithium fa- What specific services does Echeverría Izquierdo provide to lithium facility is similar to that of a chemical plant. We have to rooms, for example, were 16 meters long in the past and they cility and Izquierdo likens it to that of a chemical plant. “We the mining industry? provide solutions that are tailor made for the lithium business. are now 20 meters long. A lot of manufacturing occurs in San- have to provide solutions that are tailor made for the lithium Echeverría Izquierdo is involved in the different stages of cons- The processing plants for lithium are much smaller compared tiago and moving from Santiago to the north can be difficult business. The processing plants for lithium are much smaller truction projects. We work closely with the engineering teams to copper. There is a significant amount of investment made due to the distance to the mine site. Also, many of the mines compared to copper. There is a significant amount of invest- on projects and we develop construction projects and facilities into the lithium market, which provides great growth opportu- are located at very high altitudes and the maximum height for ment made into the lithium market which provides great according to their engineering designs. nities for Echeverría Izquierdo. transport is 5,000 meters,” growth opportunities,” said Izquierdo. ■ What are the challenges for Echeverría Izquierdo in work- Is Echeverría Izquierdo completely focused on the Chilean ing at high altitudes and how does the company overcome market or is the company looking to expand into other mar- these challenges? kets? It is paramount to find an experienced team that will be able Echeverría Izquierdo is a Chilean company and it is mainly fo- to live and work at high altitudes. Health and safety can some- cused on this market. Approximately four years ago, the com- times be a challenge for this kind of project. Logistics might pany entered the Peruvian market, where we were mainly in- also be a challenge. volved in projects in the energy sector. Our focus will remain in Chile as it is a huge market with a substantial amount of oppor- Does underground mining pose challenges for a construc- tunity. Nonetheless, we will consider expanding into markets Un socio integral tion company such as Echeverría Izquierdo? where we see great potential. PARA LA MINERÍA Echeverría Izquierdo has the challenge of constructing and erecting complicated equipment on site in the underground What are Echeverría Izquierdo’s objectives and vision mov- Echeverría Izquierdo Montajes Industriales environment. Surface construction and underground cons- ing forward? (EIMISA) cuenta con una trayectoria de más truction are completely different. Underground construction Echeverría Izquierdo aims to continue to grow its footprint in de 20 años, donde se ha consolidado como can often be more complicated as there might be condition the Chilean mining market. We want to get involved in all the una de las empresas líderes en su rubro, and site-access challenges. You can also not use combustion major mining projects and want to remain a preferred cons- participando activamente en las industrias equipment during underground construction and electrical truction partner in the market. We are continuously looking minera, energética, celulosa, gas y refinerías. ei.cl equipment is required. Underground mining is the future of for opportunities where we can offer solutions to our custom-

Rosario Norte 532, Piso 7, Las Condes, Santiago - Chile | Tel. +56 2 2757 4800 Chile and Echeverría Izquierdo is focused on finding good so- ers. Echeverría Izquierdo has seen significant growth over the lutions for the challenges this presents. years, and we aim to continue onward. ■

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EQUIPMENT AND TECHNOLOGY

» Adoption of innovation and auto- mation in Chile is a massively important topic. In our research we read a lot about Chile wanting to be lower cost in order to increase competitiveness. When we talk about automation, artificial intelligence, robotics, there really is not an option to not participate. Businesses will have to accept adoption as a cost of being in the marketplace. «

- Chris Knowles, Global Marketing Manager, Maclanahan

Image courtesy of Komatsu EDITORIAL Global Business Reports Industry Explorations

Equipment: Innovation that Offsets

DISRUPTIVE TECHNOLOGIES ARE COMPENSATING FOR DECLINING ORE GRADES

Thanks to George Lucas and his Star ing many challenges and the importance the decade, this began to change but Autonomous Mining and Wars franchise, as a society our most of robotics in mining is now widely un- companies had already signed long term Teleoperation popular image of a robot is R2D2. For a derstood. We need technology in Chile contracts at nearly US$100 per MWh, OEM’s blaze path forward small number of visionary thinkers, how- especially because productivity is low based off of Consejo Minero data. Fur- ever, robots are more than science fic- and production costs are high. Robot- thermore, the cost of labor is on par with It is no longer an uncommon sight to tion; they are a critical enabler for a safer ics can help boost competitiveness, im- the world’s most developed jurisdic- see a mine truck cabin empty as it is be- and more productive mining future. Mar- prove productivity and reduce costs.” tions like Canada, US and Australia, but ing operated remotely or fully autono- co Ruiz, general manager of ENAEX Ro- The company develops robotic applica- productivity is lower. Finally, permitting mously. Trucks that drive themselves botics, is one of the thinkers attempting tions in the concentrate sampling pro- times are long, so there is greater risk of can spend more time working because to bring disruptive change to the mining cess and in the plugging of flash furnac- cost overruns. In order to negate some software does not need to stop for shift industry. He said: “We recognized that es. Its robots are active at Codelco’s El of these risks, particularly associated changes or to take a lunch break. Min- as ore grades decline, there is a need Salvador operation and in the smelters with labor, companies must consider all ers throughout Chile are putting their to facilitate access in difficult to reach at Chuquicamata. options to reduce headcount inside the faith in driverless trucks and unmanned deposits while protecting the safety of Technologies such as this will also have mine and boost efficiency. drilling rigs, while they oversee their operating personnel.” big implications for increasing safety in Technology seems to be the preferred operation from offices thousands of ki- Within the mining industry robotics may the mines. When asked about the big- vehicle to deliver these results. Chris lometers south, in Santiago. According be considered niche and unready to im- gest risks associated with teleoperation Knowles, global marketing manager at to Komatsu Cummins Chile CEO, Darko mediately replace traditional methods, and autonomy, Brian Larocque, general McLanahan, a provider of engineered Louit: “Autonomy is the future of mining but their development and presence is manager of Hard-Line Chile, a leading process solutions for mining, shared his and the future of mining has now arrived. indicative of a broader trend in which supplier of automation, teleoperation view: “We read a lot about Chile want- All major mining operations are consid- companies are investing heavily in tech- and remote control technology, re- ing to be lower cost in order to increase ering automation or autonomous fleets nology. According to a KPMG survey, the sponded: “The most prominent risk is competitiveness. That means lower on the haulage side.” Louit continued: highest level of investment in the mining in companies taking too long to adopt energy, labor and much lower transport “If you think of automation on a scale, technology space is occurring in data the technology available. The pace of costs. This plays into electric instead with 1 being no automation, 5 being fully and analytics tools, autonomous vehicles technological adoption in mining is ac- of diesel trucks, robotics instead of hu- autonomous, the haulage fleet is likely a and robotic process automation. celerating at an unprecedented rate and mans, smart conveyers instead of trains 4-5 in Chile, while other equipment is One local Chilean company that is grow- mining operations must partner with and tracks. They do not have an option still at level 1. The road from 1 to 5 for ing its presence as a regional leader in support companies to ensure the accel- not to go that way,” he said, adding: different families of equipment goes automation for mining is MIRS, a sub- eration in adoption is implemented ef- “We as manufacturers must make sure from assisted operation to semi-auton- sidiary of HighService Corp. Their presi- fectively.” we can deliver as many sensors and as omous operation, to operation not fully dent, Hugo Salamanca, characterized An equally important factor encourag- much condition monitoring technology integrated with the rest of the fleets, to industry enthusiasm for robotics saying: ing companies to adopt new technology as possible to be able to feed that into system-wide automation.” “We believe that the industry is more re- is the relatively high cost of production. the market. They will not want to pay Today, there are several convincing sig- ceptive to technology today than it has Chile had some of the highest energy for this tech but, in order to be glob- nals that automation, remote monitoring been in the past and that presents a big costs of any major metal producer for ally competitive, they will have to adopt and productivity boosting technologies opportunity. The mining industry is fac- much of the 2010’s. Toward the end of these technologies.” are becoming essential to miners in 86>> CHILE MINING 2020 78 EXPOMIN Official Investment Guide Global Business Reports 79 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

Darko Brian Louit Larocque

CEO General Manager, Chile KOMATSU CUMMINS CHILE HARD-LINE

What is the history of Hard-Line in Chile and what capabilities well as in other industries, such as construction and military ord- How has Komatsu’s acquisition of Joy Global helped expand How do you defend your market share in autonomous mining are you providing to the market? nance clean up. The interface that we install on the equipment is its mining capabilities? in Chile? Hard-Line was established in 1996 in Sudbury, Ontario. In 2014, customized to the equipment being operated. It is designed and In 2018, we integrated the management from both companies in If you think of automation on a scale, with 1 being no automation, Hard-Line decided to invest in Chile because it saw opportunity manufactured in Canada and we implement it here on-site with our Chile. There is a great deal of synergy in the support functions 5 being fully autonomous, the haulage fleet is likely a 4-5, while in remote control technology specialized for mining. Since Hard- technical team located in Chile. of the business. We have combined our facilities, all logistics, other equipment is still at level 1. The road from 1 to 5 for differ- Line has opened the company, there has been a lot of technology warehousing operations, transport contracts and services. Joy ent families of equipment goes from assisted operation to semi- development from the line of sight remote control technology to How has demand been for Hard-Line services in 2019? Global is now called Komatsu Mining Corporation (KMC), and in autonomous operation, to operation not fully integrated with the fully automated loaders where we take people completely out of It has been affected by the need to get people away from po- combination with Komatsu we offer more products and services rest of the fleets, to system-wide automation. Komatsu is on a the mine site. Also, in the open pit we can now operate trucks and tentially dangerous environments. Safety has become the most for open pit and also underground mining. journey to advancing to system-wide mine optimization, and au- bulldozers from kilometers away. important concern of our clients. This is even taking precedence We have a trial of our hybrid LHD, a new product for the under- tonomy is a critical building block. over value. ground, and a new market for Komatsu here in Chile. We have What projects are you specifically involved with in Chile? integrated the equipment and diagnostics efforts, and we are How can these new technologies drive environmental sus- Hard-Line is mostly involved in large mining projects in Chile. We One of the challenges with technology in underground mining working heavily on data analytics. Globally, in terms of joint de- tainability and lower energy costs in the mines? did a very large project 4-5 years ago, where we tele-operated is reliable connection. Is this an issue for Hard-Line and what velopment, there is a lot going on in terms of platform develop- In the future, you will have electric machines, hybrid equipment or three trucks, a shovel, bulldozer, wheel dozer and a water truck. solutions can help overcome this challenge? ment for mine optimization. reduced emissions technology applied to all mining equipment, The idea was to test a new mining method using tele remote con- It all depends on the mine. Often IT people want a closed network underground or surface. Likely, there will be alternative fuel us- trol in case of a collapse. Due to rising costs in open pits, the mi- and they don’t want other people to gain access to the informa- How has Komatsu’s investment in remanufacturing added age on large mining machines like hydrogen fuel cell technology. ning industry needs to do more vertical wall mining. tion. We can overcome that by installing our own Backbone Net- value to its Chilean operation? There will be hybrid, trolley assisted, battery-based and more ef- Tele-op LHD was used in an underground application to move work that delivers both power and connectivity to the mine. Komatsu invested US$33 million in a remanufacturing facility in ficient engines. For example, there is something called conten- the production LHDs to the work area through a seismically active Santiago in 2017. It has increased our capacity for remanufactur- tion management. You have many trucks that are running around area. What are the biggest challenges with your business? ing components, applying new technologies, reducing time, and and you know that a truck will reach an intersection, and there is Getting mining companies to understand the need to integrate improving quality control. We recently announced that we will another truck that will also reach that point. What you don’t want Why are expenses rising for miners and how does Hard-Line this technology into their operations is a big challenge, along with build a new remanufacturing facility in La Negra, Antofagasta to have is any of these trucks stopping, it is inefficient in terms technology address this issue? working through the barriers to tech adoption. This goes back to and we are in the process of finalizing the investment of over of energy use, because by starting and stopping, you use more The cost of doing business is on the rise, generally, however the the importance of working as partners to support the process in US$20 million. energy and cycle time increases. If all the machines are autono- most prominent risk is in taking too long to adopt the technology every way to ensure that the shift is effective and efficient in all mous, the system knows where everything is and it can predict available to the industry. The pace of technology adoption in mi- areas of business. How does Komatsu view the trend toward underground mi- when they will reach the intersection. When you have mine-wide ning is accelerating at an unprecedented rate, which increases pro- ning? optimization in real-time, you can dynamically interact with the ductivity and improves safety, both priorities for all mining opera- What metrics can you point to that would convince someone We believe that mining will gradually move to underground in the equipment so that they reduce power and speed to make it a tions. Mining operations and support companies are learning to of the benefits of tele-operation? future. That is one of the reasons why Komatsu invested in Joy more fluent operation. create partnerships to ensure these accelerators are implemented The understanding that this is where the industry is heading is Global. Joy Global is a market leader in soft rock underground, effectively. Hard-Line’s technology addresses the shift towards au- widely accepted. Tele-operation keeps operators out of harm’s and also participates in the hard rock underground market. For How has demand been for Komatsu’s products in 2019? How tomation and tele-operation, but we also strongly believe in the way, it allows continued production during shift change (which can us, Chuquicamata underground and the El Teniente new mine are you projecting 2020 to look? development of strong partnerships with the clients we serve. We account for a significant amount of time, sometimes upwards of level project are huge opportunities in Chile. Our aim in the un- I can say that 2019 has, so far, been in line with our projections. have a highly skilled team in-house to research, develop and im- 6-7 per day), and decreased maintenance costs when utilizing col- derground is to enter the market with new technologies. For ex- 2019 was our second year under joint management of the Komat- plement custom solutions for the unique challenges mining com- lision avoidance. ample, our Hybrid 18 ton LHD is diesel powered, but it has an su and KMC businesses, and we have seen more benefits from the panies are facing. electric drive system. This will reduce emissions inside the mine, integration. We reintroduced P&H drills in Chile and have closed What are the goals of Hard-Line in Chile over the next 2 to 3 while also providing faster acceleration for the machine. We be- some interesting deals with customers for new autonomous How do the services that you offer in open pit differ from years? lieve the future of underground mining is continuous excavation, fleets, while at the same time continued to strengthen our ser- those in the underground? Hard-Line is forecasting continued growth over the next few years with no drill & blast, and relying on fully electric, fully autono- vices operations for mining customers. We are projecting 2020 to Tele-op technology is transferable to a variety of environments. in Chile and our other offices. We continue to develop and improve mous machines. remain stable and similar in volume to 2019 in the mining sector. ■ It has been used for both underground and surface mining, as technology to help mining operations meet their objectives. ■

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Dale Clayton

Managing Director LIEBHERR

How has Liebherr’s business been in Chile since 2017? How far along is Chile in the transition to autonomous Liebherr’s overall Chilean business has remained stable since mining? 2017. Our excavator fleet has grown from 20 to 32 units. Af- At our testing grounds in the United States, we have a truck ter 18 years, we finished our contract with Chuquicamata in running without operators with some advanced features like July 2019 as a result of their transition to underground mi- obstacle detection. We are looking for a partner to start mine ning. However, we are in the process of moving these trucks site trails in 2020 with our trucks or to retrofit an existing Li- to a new project. In 2020, we are involved in the ESTRS trial ebherr truck fleet. at Escondida for BHP that has great growth potential for our Liebherr has chosen an open protocol system that means we business. can use any fleet management system, as we believe the in- Our strategy has been to continue with our maintenance and dustry will look for this flexibility in the future. service contracts while we wait for the market to pick up. Com- panies are extending the life of their assets and eventually that How does Liebherr Chile deal with the challenge of retain- will get to the point where the cost to repair is uneconomical ing talent? and they will have to look for replacement equipment. We still We identify our high potential people and tailor training to want to have our employees in place and develop more talent. that person´s and the company’s goals. We also have a policy As a family company, employees are a huge part of our busi- where when positions become available we try to promote ness and we need to make sure that when the market does internally from our existing staff. For all our employees we pick up we have the people ready so we can react quickly and sponsor further studies where we see a benefit for both the fill our management and supervision positions internally. company and our employees. We also use our affiliate compa- nies and factories for training and experience sharing. In your opinion, how much of the talk about innovation is noise and how much has substance? Is your Chilean office driving expansion elsewhere in If you look at the technology now and the data that is avail- South America? able, from Liebherr’s point of view, it can only get better in Yes. We have a separate management team in Peru, but we providing more information from our machines. Our LNDS are relying heavily on our planning and technical support ex- system allows us to remotely monitor the vital information on perience from Chile for the initial start-up while we develop our trucks and manage the maintenance accordingly. our in company capacity. Another technology development that Liebherr will have for our excavators is our “Assistance Systems”, which allows us What would you like to achieve at Liebherr in Chile by to increase the levels of safety and productivity of our equip- 2022? ment, reducing operating costs, through different tools such We want to expand our excavator and truck fleets and intro- as: the application of a truck loading assistant to continually duce our mining bulldozer range. Chile is an amazing mining measure the bucket payload, a self-diagnostic system, an on- country and we want to continue to be part of the mining in- board system that automatically computes the KPIs about ma- dustry. We also aim for the successful completion of the ES- chine productivity and an application severity detector. This TRS trail at Escondida and expanding our strong relationship aligns with increased safety, productivity and ultimately lower with have with BHP in other regions especially Australia. cost per tonne. We believe that with our flat management structure that al- We believe in terms of mobile mining equipment, there is still lows our customers have direct access to our senior manage- quite a way to go with some very exciting advancements that ment team and our factories is a huge advantage. We are will- we are continuing to develop that will further improve our ing to work with clients directly to provide the solutions they overall equipment performance. need to get maximum production at the lowest TCO. ■

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Charlie What is Emerson’s history in Chile and what capabilities do you bring to the Chilean market? Ekberg & Emerson started operating in Chile six years ago. Prior to the establishment of our mining center here in Santiago, there was no specific focus on mining within the company. However, this office was specifically opened with the intent of growing Rodrigo Izzo our presence in mining. Since arriving, Emerson has developed technology specifi- cally for mining in copper concentrate plants, solvent extraction plants and electro- winning. Our approach was to first listen to the big mining companies operating in CE: General Manager Chile and they stressed to us their need to increase productivity, reduce costs and RI: Business Manager CE RI lessen environmental impacts. Emerson then developed technology and sensors to solve these challenges for them. We were given the opportunity to pilot our techno- EPIROC logy and it proved to be successful. Because of our results in Escondida and Minera Los Pelambres, clients around the world are now interested in the technology we produce here in Santiago. We developed technology for mines in Chile and we are Felipe now selling it all over the world. How has Epiroc’s presence in Chile evolved over time? RI: Real time data is extremely demanding in performance, be- CE: Atlas Copco has been present in Chile for 60 years. In 2017, cause of its transparency. When you have real time info and you What are the biggest benefits of automation for miners in Chile? Epiroc split out as a separate unit to devote itself to mining can send out reports, no one can hide. If operations don’t arrive Cabrera When we talk about automation we are talking about a lot of sensors where every- and civil infrastructure. Now, Epiroc is a completely separate with a drill pattern on time, it will show. In this environment, ev- thing is connected to a control system. Emerson technology covers the full spec- business, with branches in Calama, Copiapo, Antofagasta, and ery area feels they have to step up to the challenge to insure op- trum of client needs in this regard. Automation is the name of the game, because Iquique. timal use and increase the production time for the equipment. sensors are replacing people who otherwise would be exposed to extremely dan- gerous parts of the mine. This has big implications for worker safety. Automation What challenges does Epiroc face that are unique to the What kind of improvements can clients expect by investing can help solve some of the most complex issues in mining today and Emerson tech- Chilean market? in new technology? nology can help companies achieve their goals by enabling the monitoring as well CE: Chile is a very long country, and that puts Epiroc in a chal- CE: In underground mining, the machines clients purchase are as the operation of parts of the mine remotely. We have long term service agree- Country Manager lenging situation in terms of supporting customers whose op- utilized on average 25-30% of the time. These are expensive ments with big miners and that allows us to invest and tailor innovative solutions. erations are far from the capital. For the mines in Chile, the machines, and when customers recognize they are underutiliz- EMERSON challenge is declining in ore grades. For us this is not neces- ing their investment, it is clear how much potential there is to How do you see the future of automation in Chile playing out in terms of adop- sarily negative, but for the customer it means that they need to improve. tion and jobs? be much more productive and efficient to keep their costs in Before these innovations were introduced, in surface opera- There are a lot of risky places in the mine where people are still operating, and we line. That is where we come in, being able to add value with the tions there was one operator per machine. Now you can run up should be replacing them with equipment. There is a common belief that this will machines we are offering. Epiroc’s drills, loading machines and to three machines simultaneously, and the operator is no longer create unemployment, but at the same time, we need people to monitor, maintain, hauling machines are all devoted to boosting efficiency, safety in harms way. This yields higher utilization on the rig, increased configure and program the equipment. It’s a different kind of job, but we need and productivity for the customers. meters and much higher productivity. people to develop skills to fill those jobs. In that regard, universities need to do a Other challenges in Chile include energy, water, and accord- Word of mouth is very important in Chile. When Los Bronces better job at preparing people for the jobs of the future. Today automation is well ing to our customers, time to get mining permits. The lengthy was successful using our equipment people started to ask, hey received in the market. I helped start the movement toward automation in Chile in process means customers have to make big investments before can I do this? Then we got several other big projects. » the 80’s, and back then it was hard to demonstrate the advantages and benefits. they even get the permits. It is nothing new but it seems to be Today that is not the case. The benefits are too obvious and the trend toward au- a really big challenge at the moment to start a new operation. Does Chile have the potential to become an innovation hub Because of our results in Escondida tonomy is unstoppable. for mining? and Minera Los Pelambres, Describe the opportunity that Chuquicamata underground There are several Chilean owned startups developing digital clients around the world are now What goals would Emerson like to achieve in mining over the next 2-3 years? represents? software for handling big data. The challenge for them is how to Emerson customers are all asking us to aid them in their path toward digital trans- interested in the technology we CE: This is one of the biggest underground projects in the become a global player. The knowledge, production and cus- formation. This is because they recognize that they have a lot of data, but are not world and it is going to be extremely important for years to tomers are here, Chileans are very entrepreneurial but funding produce here in Santiago. We using the data in a way that increases productivity. Use of data in a more efficient come. It is also one of Epiroc’s biggest projects and prospects. is likely an issue. It will be interesting to see what they can do. developed technology for mines in way will produce better results and that is why Emerson is focused on becoming a Epiroc is very much focused on being part of Chuquicamata’s Chile and we are now selling it all leader in data analytics. Our digital transformation business unit is devoted to solv- development and it is a wonderful opportunity to display our What is Epiroc’s strategy moving forward? over the world. ing these issues for customers, and we are devoted to growing this unit. capabilities underground. CE: The main cornerstone of our strategy is to convince our Furthermore, our mining center has grown by double digits every year since it was customers that the new technology and products we offer are created and we want to sustain this growth over the next three years. Our other How is data and analytics transforming mining in Chile? going to be good for them. Our vision is to be the best produc- « goal is to expand into the important mining markets globally such as Australia, USA What specific metrics are customers looking for? tive partner. Not just to sell machines and parts; we are selling a and Peru. Emerson already has the technology, solutions and experience. The next CE: Normally what we look at is drill meters per hour, drill me- commitment for the life of the equipment and we want to make phase for us is about convincing the mining community to embrace change. The ters per operator, precision in where you need to drill the hole, sure our machines are delivering what we promise. Today busi- value proposition is very clear. In mining one percent more copper recovery per and fuel consumption, etc. All things that people didn’t really ness can be very focused on the short term, but for customers year equates to millions of dollars. If the equipment fails we loose millions in hours. know previously, and now they can see that these metrics hav- it is about a long-term partnership. Partnership alliances will be Customers are aware of this and are focused on preventing these big failures. Em- ing a big value. even more important in the future. ■ erson has the solution that they are looking for. ■

CHILE MINING 2020 84 EXPOMIN Official Investment Guide Global Business Reports 85 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

example, employs 500 people in Chile, 400 of which are devot- Motion Metrics is using machine learning to help mines im- Pedro ed to aftermarket services. At Komatsu, the company invested plement predictive maintenance for shovels. The company US$33 million in a remanufacturing facility in Santiago in 2017 provides tooth wear monitoring for all mining shovels and Damjanic and is now in the process of finalizing an investment of over excavators so that tooth change-outs can be predicted and US$20 million to build another new remanufacturing facility in scheduled without the need for manual measurements. Worn La Negra, Antofagasta. teeth are inefficient because they require increased cutting forces to penetrate material, which results in lower overall <<79 productivity and increased energy consumption while causing Chile. In 2019, Finning-CAT was awarded a contract by Teck Ancillary Equipment premature wear to other sacrificial components like adapters. Senior Vice President to deliver new equipment and product support to their QB2 According to José Oliva Peralta, general manager of the Chile operation in Northern Chile. Finning will supply an initial fleet FINNING One of the added benefits of the wave of investment into au- office: “Chile was an appealing country to open a satellite of- of Caterpillar 794AC electric drive off-highway trucks and tomation is that it encourages innovation from suppliers. As fice because most mines are concentrated in Atacama region, other large mining machines to the copper mine. In addition, there are several new autonomous and technologically ad- leaving at least 13 possible candidates that could adopt sys- Finning will provide Caterpillar’s 794AC AHS (Autonomous vanced trucks being introduced to the market today, compa- tems.” Haulage Technology) kits and ancillary kits to enable autono- nies such as American Air, which supplies air conditioning, Mo- Today the company has six contracts with miners operating in mous operations as QB2 ramps up to full copper production tion Metrics and even tire manufacturers like Bridgestone and the region. What is Finning’s growth strategy for South America and in 2022. “Prior to the adoption of these new technologies, Michelin are incentivized to tailor innovations to complement Beyond vehicles, there are also autonomous solutions for Chile? the costs and risk were very high. We are now able to dramat- new fleets. According to Joel Araujo Strul, commercial man- other segments of the mining process. Technosteel subsidiary We have three key strategies. First is to focus on new equip- ically reduce the number of people and the amount of risk in ager at American Air: “The challenge (of automation) is that Polimet, for example, has developed a technology that can ment and technology, this includes an autonomy package. The the operations,” said Pedro Damjanic, senior vice president there are not enough qualified people in the industry who are transmit information to a remote operator, which eliminates second strategic point is we are reinforcing our focus on our at Finning. He continued: “The routine and risky processes prepared for this rapid change. We are developing the most the need for inefficient manual inspections. Its other subsid- aftermarket products. We have a new product line that is more will be done by machines and the focus can now turn to plan- automated AC unit on the market and it will require minimum iary, Safedrill, developed a 100% hands-free rod handling comprehensive, so customers can use Finning equipment for ning and new design of the operation. This will aid companies work on installation and maintenance.” operation in drilling. Technologies such as these will have big the full spectrum of their needs. The third aspect of our strategy in capturing ore’s that were previously uneconomical and or Additionally, American Air is developing a predictive mainte- implications for increasing safety in the mines. is service. inaccessible.” nance system for air conditioning units to be launched in 2020. 90>> Epiroc is developing a digital platform alongside Pucobre in How is Finning’s implementation of autonomous mining Copiapó. They have their own control room and are able to beneficial to its customers? monitor their machines in real time. “This is a huge change Our technology and innovation allows our customers to oper- from manual paperwork. Many machines are running in the ate in very high altitude mines. Prior to the adoption of these mine somewhere and, to be able to see where those ma- new technologies, the costs and risk were very high. We are chines are and plan the traffic of those machines, where to DECEMBER 9~11, 2020 now able to dramatically reduce the number of people and the put them, and what is going on with the machine is a big ad- 5th International Conference on Operational Excellence in Mining intercontinental hotel, santiago, chile amount of risk in the operations. vantage for customers,” said Charlie Ekberg, the company’s general manager in Chile. Are you seeing a change in the demographics of the mi- Liebherr is also advancing its technology offerings and is Register Today! plenary presentations ning industry? looking for a partner to start mine site trails in 2020. The com- We have put a lot of emphasis on including women and dis- pany has chosen an open protocol system, which means it iván arriagada manuel novoa abled people in our operations. Unfortunately, numbers have can use any fleet management system. According to manag- Minexcellence is a forum where professionals Chief Executive General Manager, not changed dramatically yet, but this will likely change, be- ing director, Dale Clayton: “Innovation comes in many forms can learn and analyze strategies and tools for the Officer, Antofagasta Cía. Minera Teck Minerals PLC Carmen de Andacollo cause with new technologies, all the planning engineering, pro- and technology is changing the way we manage equipment improvement of the mining business. graming and supply chain logistics will be moved to our Knowl- and our business. If you look at the technology now and the josé miguel berguño katharina jenny The conference chair is Mauricio Larraín, General edge Center in the cities. Additionally, we are working with the data that is available, from Liebherr’s point of view, it can Vice President of General Manager, Manager, Minera Los Pelambres, Antofagasta Minerals. community in Mejillones, where we are training welders and en- only get better in providing more information from our ma- Operations Nitrates Antofagasta to Bolivia Yodo, SQM Railway, Antofagasta Minexcellence will have over 55 presentations by couraging women to join the mining workforce. Recently we re- chines. Our LNDS system allows us to remotely monitor the Minerals PLC ceived “Best Mining Supplier” by the Women In Mining group. vital information on our trucks and manage the maintenance authors from 9 countries and over 40 presentations accordingly.” will be from mining operations. nicolás rivera robert mayne- nicholls How do Finning - CAT’s products help miners operate Since 2017, the company has grown its excavator fleet from General Manager, Chuquicamata Division, Executive Vice President, 20 to 32 units, while its trucks business has remained flat. more efficiently? Codelco Empresa Nacional de The new equipment is faster, safer and operates at a lower cost. This has led Liebherr and nearly all the other OEM’s operat- Minería, ENAMI A large amount of additional ore is accessible for mining be- ing in Chile to prioritize maintenance and service contracts gecamin.com/minexcellence cause of the technological breakthroughs and new equipment while the market continues its slow recuperation. “Compa- performance. We are exploring opportunities in autonomy nies are extending the life of their assets and eventually that organized by main sponsor both for open pit and for underground. One example is our will get to the point where the cost to repair is uneconomical operation of a semi-autonomous model with CODELCO in the and they will have to look for replacement equipment,” said El Teniente mine. With this technology, El Teniente is able to Clayton. access a very high-risk part of the mine and we eliminated the In the meantime, aftermarket service and remanufacturing Sustainable Minerals Institute risk of sending people into a dangerous area. ■ are playing an important strategic role for OEM’s. Epiroc, for

CHILE MINING 2020 86 EXPOMIN Official Investment Guide Global Business Reports 87 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

vehicle market provide new opportuni- How has Michelin’s Fenner acquisition our tires and assist customers in how to ties for American Air? in 2018 impacted operations in South best use their tires. We can improve Joel With the emergence of the electric vehi- America? performance as connect technology cle market, changes are happening quite Michelin’s acquisition of Fenner is part keeps customers constantly informed of Araujo rapidly. The challenge is that there is not of our strategy to diversify our business the position, pressure, temperature and enough qualified people in the industry into new areas such as mining and sus- status of each tire. Sensors fixed inside to be prepared for this rapid change, so tainability. Our company has a 130 year each tire can monitor the tires and give Strul we are developing the most automated history in the tire space, but we feel that precise measurements. AC unit that will require minimum work there are great opportunities for our Michelin’s aim is to excel in the fields of on installation and maintenance. business to expand. innovation, performance, strength and CEO We aim to help mining companies be- longevity. A longer tread life, the tread AMERICAN AIR How do fluctuations in commodity pric- come more productive in their work and pattern and the choice of rubber com- es affect American Air’s ability to price we want to offer services and solutions pounds perfectly suited to mining envi- products? that boost efficiency. Our strategy is to ronments and the speed capacity of our What is the history and mission of What products and services does American Air has good margins on spe- develop high technology materials for tires have a direct impact on the mine’s American Air? American Air provide to the mining in- cific items such as our compressors. This the mining industry, and we are adding productivity and these are big advan- American Air is a family business estab- dustry? is the core of our business. We are thus Guillermo to our capabilities by making strategic tages we have over our competitors. lished approximately 40 years ago. The American Air has a complete line of com- able to absorb some of the fluctuations acquisitions. Fenner has a great pres- Tires used in the mining industry are company specializes in light vehicle, me- pressors, evaporators, condensers, ex- in commodity prices. We source approxi- ence in the mining industry as well as subject to very challenging conditions dium duty and heavy truck air condition- pansion valves, accumulator filters and mately 90% of our products from the US Crevatin good knowledge technology materials. operating in extreme terrain. Through ing systems. Our mission is to provide everything that the industry of mobile air and 10% from Asian countries. We have The acquisition of Fenner will help Mi- innovation, our tires are designed to technical support to our distributors and conditioning needs in one stop. We also very good relationships with our suppliers chelin expand its capabilities to offer the give the highest levels of reliability, safe- service workshops, also making avail- have the components to remanufacture and can use the credit that they extend to best services and solutions to the mining ty and performance. able all the equipment, service tools, and compressors and tailor-made hoses for us instead of using bank credit. market. spare parts they may need. any model of vehicle included in our in- Ore grades in the Chilean mining in- ventory. Also, we develop and build air Do you have a final message for our in- What are the biggest strategic priori- dustry are declining and more mines How did American Air become involved conditioning units for standard and spe- ternational readership? ties for Michelin’s business? are going underground. How is this General Manager Chile, Bolivia and Peru in the mining industry? cial types of duties. We have the highest American Air places emphasis on educa- Sustainability is the core focus of our changing the way Michelin is develop- American Air realized that there was a standards in compressor repair, and we tion and the transference of knowledge. MICHELIN CHILE strategy. We have to innovate in order to ing technologies for the mining indus- lack of local suppliers, knowledge and can guarantee the best reconditioning We believe that the more people we can reduce the amount of material we use to try? expertise with regard to air conditioning service to our customers. OEM parts are, educate, the better it is for the air con- manufacture the same tire with the same Michelin’s product range covers both within the mining industry. Given our staff as a rule, present in our inventory, which ditioning field. Our objective is to keep capacity. Older tires do not necessarily surface and underground mining. Our of qualified technicians, we saw a need in we provide to the automotive and heavy growing our business and continue to be have to go to waste, but can be reused connectivity developments are very im- the mining market and we started supply- machinery sectors. We both distribute the leading supplier within our field. We through regrooving and repairing, to portant especially in the underground ing the industry with our products and af- products and tailor make products our are in the process of developing predic- give more life to the tires. When the life environment. Machines are faced with tersales support. We were one of the first self. tive maintenance systems for air condi- of the tire comes to an end, we have the the most extreme working conditions air conditioning companies to start sup- tioning units and hope to have these sys- responsibility to recycle its materials. in these scenarios. To stand up to fallen plying the mining industry in Chile. Does the emergence of the electric tems built and launched by 2020. ■ We can then renew by reusing recycled rock debris, flooding and heat encoun- » materials in producing new tires. We tered in the extraction of minerals, tires also have to do R&D work to find renew- must be 100% reliable. They also have Michelin’s aim is to excel in the able materials that can be implemented to be able to withstand greater loads to fields of innovation, performance, in new products. We are in a strong po- keep pace with the increased produc- strength and longevity. A longer sition in Chile, because it will be one of tivity demanded. Mindful of these de- the first countries to implement regula- mands, we have developed a hi-tech tire THE tread life, the tread pattern and tions for the recycling of mining tires and range, capable of handling these various the choice of rubber compounds this is well aligned with our strategy. stresses and strains and carrying even AMERICAN AIR perfectly suited to mining more load. environments and the speed Can you elaborate on Michelin’s ef- COOL EXPERIENCE capacity of our tires have a direct forts to introduce innovation and sus- What are Michelin’s objectives and vi- WE HAVE THE MOBILE AIR CONDITIONING SUPPLIES THAT MAKE THE MINING EXPERIENCE COOLER impact on the mine’s productivity. tainability into its tire business? sion moving forward? We aim to make tires lighter by using Michelin aims to provide the best prod- less material. We also have the goal to ucts and services to our customers produce tires that are 100% recyclable so that they can reach success in their and renewable. Michelin continues to projects. Moving forward, our focus will « innovate with regards to the construc- remain on sustainability and efficiency. tion of our tires in order to offer more Our goal is to be the preferred tire and to the client in terms of tire life. We are solutions provider for the mining indus- www.americanair.cl / [email protected] CHILE +56 2 26 46 2500 www.americanair.pe [email protected] / PERÚ +51 9 7934 58 30 developing technologies which improve try worldwide. ■

CHILE MINING 2020 88 EXPOMIN Official Investment Guide Global Business Reports 89 CHILE MINING 2020 EDITORIAL Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

The Future Data and of Labor Analytics

dustry and have caused operations to ning will employ the same amount of <<87 miss production targets in the past. In people but with a different skill set. The Salaries in mining are 70% higher than conversation with Andres Guzman, VP of challenge will be finding and training lo- the country average and mining makes Yamana Gold, he proclaimed: “In Chile, cal communities to take these positions. Coupled with development in autono- tools properly it will increase their bot- ment providers to tailor products that a direct contribution of 3% to Chile’s expectations for benefits sharing as well It is important for companies to look to mous mining, data analytics is also tom line. “ boost efficiency and safety. Chuquica- employment, according to Consejo as local hiring and procurement have in- hire locally in Chile, so we are staring to quickly becoming an essential tool for mata underground, for example, will rely Minero. Mining companies may be keen creased and this sometimes manifests in investigate how we can start in an area operators. Predictive maintenance solu- heavily upon new technology to reduce to implement technologies that lower la- protests that can delay production… Ya- and train a local workforce to support an tions that address problems before they Sanhattan Valley? fuel consumption by 80%, while automa- bor costs, but that does not mean that mana has largely avoided these tensions autonomous fleet. This is good for our occur are one of the biggest benefits tion will increase workers productivity by workers and surrounding communities by engaging respectfully, transparently, social license and that of our client,” said that digital technologies can offer the With so much focus on technology devel- 40% according to Bloomberg reporting. will also embrace changes coming to the and continuously with its community Dale Clayton of Liebherr. mining industry. Maintenance in mining opment in mining, Santiago has become Companies in Chile are swapping diesel industry in Chile. Inevitably, as automa- partners and by investing heavily in local Felipe Cabrera, Emerson’s mining sales often occurs on a time-based schedule, an important regional hub for many of fueled drills, loaders and utility vehicles tion and artificial intelligence become development, quality of life, education director, asserted: “It is a common belief rather than as needed, leading to a lot of the leading global technology firms. Ac- for equipment powered by lithium ion more widely adopted, certain well pay- and culture.” that automation and remote operation wasted time and money. cording to Pascual Veiga, president of batteries. They are looking to reduce ing jobs will cease to exist. Many of the However, it is difficult to imagine a sce- will create unemployment, but at the In Chile, there are several companies that APRIMIN: “Chile is being used as a labo- emissions and eliminate exhaust fumes OEM’s, for example, have remote oper- nario under which unions are not, at least same time, we need people to monitor, specialize in helping customers leverage ratory for experiments with new techno- that pollute the underground air, creat- ated equipment where one person can in some way, part of a conversation to maintain, configure and program the their use of data through software. Al- logy because it offers great diversity and ing health hazards for workers. now operate three rigs simultaneously. help preserve jobs in the face of tech- equipment. It is a different kind of job, though data and analytics tools are still variation in style of operations, height of Beyond vehicles and drills, there are also In the past, the same task would have nological change. The mining industry but we need people to develop skills to in their infancy in Chile, they represent a mines and rock types.” autonomous solutions for other seg- required three people. understands this dilemma and is focused fill those jobs. In that regard, universi- significant opportunity because data has Another reason technology companies ments of the mining process. Normet, Unions already play an important role on new areas in which jobs will be cre- ties need to do a better job preparing the potential to unlock value in nearly ev- find Santiago appealing is because the for example, has developed a smart in the functioning of Chile’s mining in- ated. “We believe that autonomous mi- people for jobs of the future.” ery aspect of the mining process. EY has city has some of the most well educated scan technology. Senior vice president been working closely with the large mi- and well trained workers, an entrepre- of sales, Marcelo Anabalon Del Campo, ning companies in Chile on ways in which neurial culture and a good climate for said: “This improves the quality of the they can better use the vast amounts of investors – characteristics the city shares sprayed concrete, securing the concrete data they collect. In one case the compa- with other international hubs for the de- in the mine, which supports the tunnel ny provided advice that increased recov- velopment of disruptive technology such and therefore mitigates the risk of tunnel ery in the flotation plant simply by using as Silicon Valley. collapse.” data analytics to understand the optimal Because Chile is a country where vast Another area of opportunity is in convey- settings on different pieces of equip- geological potential mixes with a well or belts. TAKRAF Tenova built the world’s ment. These subtle changes boosted educated workforce, it is able to pilot most powerful conveyor belt system for copper recovery by 3%, which translates and test cutting edge technologies in Chuquicamata. The belt system will de- into significant cost savings. its mines. Companies with experience liver copper ore from the underground In underground mining the machines in Chile can then look to apply their mine directly to the concentrator plant that clients purchase are utilized on av- knowledge to other less technologically 13 km away from the mine site. Accord- erage 25-30% of the time, so companies advanced markets. One such company is ing to the company’s managing director, are focused on assisting clients in using Technosteel: “Chile is a mature mining Christian Cavagnaro: “Chuquicamata data more efficiently. “These are ex- market. Therefore, Chilean companies needed the strongest conveyer belt in pensive machines and when customers have an opportunity to contribute in in- the world because in order to move such recognize they are underutilizing their in- troducing world class technologies into large volume and capacity you must have vestment, it is clear how much potential less experienced markets, like Bolivia strong equipment. The mines are get- there is to improve,” said Charlie Ekberg and Panama. The technologies we intro- ting deeper, the ore grades are going general manager of Epiroc. duce are new for them, but have often down and you need large volume, which According to Juan Vega, co-founder of been in use for some time in Chile,” said implies large equipment.” He continued: eBooting, a company with expertise dia- Tomás Buttazzoni general manager of “The advantage of belt conveyors from gramming and integrating data flows: Technosteel. an operational point of view is that it low- “We have access to a significant amount ers opex. The focus in mining generally of data today, but it does not mean any- is capital investment, but today, the chal- thing if there is a ton of data and no way Underground Equipment lenge is opex. The opex in Chile is too of using it to become more productive. high and, to reduce it, companies must We see opportunity in distilling and add- As Chile’s mines increasingly move un- lower energy costs by minimizing the ing context to the vast swaths of data mi- derground there will inevitably be big quantity of energy used by investing in ning businesses collect. If they use these opportunities for technology and equip- more efficient equipment.”

CHILE MINING 2020 90 EXPOMIN Official Investment Guide Global Business Reports 91 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

What value will HighService’s service the mineral is discharged in a liquid form to eliminate manual and visual inspec- division bring to Metso after the acqui- and we develop the method of opening tions. sition? the furnace walls to avoid the risks of ac- Tomás Metso is gaining a business that is a lead- cidents and contamination. The system Are there other markets where you ing company in integral, mechanical, elec- is operating in Codelco Chuquicamata Buttazzoni see opportunity? trical and instrumentation maintenance Smelter and we are working at the en- We already operate steadily in Peru. The services for mining. The company has op- gineering phase for smelters in Europe other markets we are looking at in Latin erations in Chile, Argentina and Brazil, and and Australia. Another example of the America are Bolivia, Colombia and Pan- 1,300 employees. HighService was look- application of robotics is the SAG Mill’s ama. Similar to Chile, Bolivia has been ing for a global partner for its service busi- trommel maintenance, which has totally General Manager developing its mid-size mines. ness because we had reached an impor- innovated the way in which maintenance TECHNOSTEEL tant level of development in Chile. We felt activity is carried out at BHP’s Escondida What are the biggest opportunities that we still had the potential to continue mine. Our robotic arms have benefits for for your business, and where are you growing and we wanted to expand our safety and productivity, because workers growing fastest today? global reach and look for new business are removed from potentially dangerous What is the history of Technosteel, now close to achieving that goal. We are In general, automation of processes and opportunities in other countries. We had situations. and what services do you provide to also focused on reducing the area of the digitalization are the fastest growing ar- Hugo previous experience working with Metso, the market? platform, because today mining compa- eas in mining. We see very good poten- where we carried out the maintenance What are the biggest projects in Chile Technosteel was created from a contract nies are facing increasing challenges for tial of growth driven by the need of tai- of the crushing plant at Minera Gaby in that you participated and are partici- to produce exploration rocks for Atlas space available for exploration. Lastly, lor made solutions for each exploration Salamanca northern Chile. This was a very positive pating in? Copco in the early 2000s. Over the last we have created mud plants that will al- campaign and mining plant, and we are experience and was important in building We worked in Codelco’s Smelter project 10 years, we decided to diversify and, low the recovery of mud and will save up able to efficiently provide for that need. the mutual confidence needed to execute (Ventanas) and Asarco refinery project as a result, we created two companies: to 30% of water consumption on each the acquisition. (Amarillo, Texas), where we made a great Polimet, a company that focuses on the platform. Over the next 2-3 years, what objec- application of a robotic system that allows design and construction of conveyor tives would you like to achieve for What is the strategy for HighService the stripping of copper cathodes. The belt equipment and its components, Does Technosteel have anything cu- Technosteel? Corp´s different businesses? cathodes and starting sheets stripping and SafeDrill, a technology company rrently in its R&D pipeline? Technosteel would like to become an We have three different segments: engi- process requires a lot of effort, that expos- that designs and manufactures equip- At Safedrill, we have recently achieved important player in technology for auto- President neering and construction (HS E&C), robot- es staff to high risk, but we managed to do ment for exploration. We realized that inner tube handling, allowing us reach mation and digitalization in our specific HIGHSERVICE CORP. ics (MIRS) and an incubator of technologi- it with robots. In the coming months we we needed to dramatically increase the 100% hands-free goal in the rod segments and to establish partnerships cal enterprises (HS Tech). Our strategy is will start robotic application tests for mill the safety for operators in exploration handling operation in drilling. Techno- with global companies to become their aimed at developing robotic technology lining replacement. These mills have met- drilling and found that, while the auto- steel is developing a shock absorber for local partner for the South American in mining and the development of robotic al parts that lift the ore and grind them. mated feeding of rods into the platform the blasting and drilling process, which market. We want companies to look applications worldwide. We believe that These must be replaced very often. In or- is a challenge that has been faced by is a new model that will allow mines to to us for customization of drilling plat- the industry is more receptive to techno- der to replace the metal part, the equip- several companies around the globe, no exchange parts of equipment on-site to forms, and rods. We also are looking logy today than it has been in the past ment must be stopped for many hours, one had achieved a 100% hands-free so- streamline the maintenance and repair to potentially become an OEM for big and that presents a big opportunity. The which generates losses. Our proposal is to lution over the entire cycle of rod feed- process. At Polimet, we are working to- brands in the rock drilling segment, in mining industry is facing many challenges robotize this whole process to avoid acci- ing. We took the challenge of creating ward making conveyor belt equipment the drilling equipment segment, and and the importance of robotics in mining dents and reduce maintenance times. This 100% hands-free technology and we are actively send information to an operator with idlers and conveyor belts. ■ is now widely understood. is being implemented in operations like » The other strategic focus we have is to Minera Los Pelambres, BHP’s Escondida STAND EX-B18 strengthen the engineering and construc- mine and CODELCO El Teniente. Expomin 2020 tion company to make it a medium to large company. How is the technical know-how of Chile HighService was looking for a as a country? the evolution of exploration global partner for its service In what ways are robotics being ap- We must build technical capabilities. business because we had plied in the process of mining? There is a good level of technical train- Each day the industry demands higher safety and reached an important level of We develop robotic applications in the ing in the Chilean mining industry, but we environmental standards. This challenge is our motto. development in Chile. We felt concentrate sampling process. The ro- need to develop a better relationship with bot moves through a lineal rail in order the universities so that they train special- Safedrill’s M3 Mud Plant allows you to prepare, store and that we still had the potential to reach every possible sampling area ists in robotics and artificial intelligence. recycle drilling mud making efficient use of the available drilling water and mud additives . to continue growing and we tailored to the customer’s specific re- There are not enough technicians or pro- wanted to expand our global quirements. MI Robotic Sampler is being fessionals who understand how to work Saves up to 30% water on exploration drilling reach and look for new business used in world class operations like Impala with artificial intelligence. We can address opportunities in other countries. Terminals Callao, Glencore Antapaccay & these issues with the support of special- At SAFEDRILL® we are the evolution of exploration. Matarani and Codelco’s El Salvador. We ists from United States and Europe, but it are also focusing on the passage’s tap- is better if Chile is able to develop its own www.safedrill.com ping and plugging for flash furnaces. The local workforce with the capacity to work M3 Mud Plant « melting furnaces have tap holes where in robotics and artificial intelligence. ■ CHILE MINING 2020 92 EXPOMIN Official Investment Guide Global Business Reports 93 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

Marcelo Comminution and Material Anabalón Handling Del Campo

General Manager Chile NORMET

What is the history of Normet and the surface of the tunnel in order to un- have to add mechanizations for certain Until about 1900, nearly all breaking facilities were labor inten- what capabilities does it bring to the derstand the thickness of the concrete. process, like explosive charging. sive. The removal of impurities was done by hand, usually by Chilean market? This new technology has been very well breaker boys between the ages of eight and 12 years old. The Normet started as an equipment and received thus far and has great potential. Is automation and technological mining industry has come a long way over the past century. service supplier in Chile late 2008, and change leading to a change in the Today, advancements in comminution and material handling later added a new business line focused How do these innovations make un- demographics of the mining sector allow miners to process exponentially more complex ores. This on construction chemicals. The success derground mining safer for workers? workforce? is important for Chile because it has been the worlds leading of this business has helped Normet grow Having electric vehicles inside the mine Absolutely, as soon as you start adding copper producer for much of the past two centuries and there- its market share year after year and led creates a healthier environment for new technologies in the mining sector fore, most of the easily accessible, high grade projects have us to open new business opportunities workers because these vehicles do not new skills will be needed. The industry is long been exploited. A decade ago, 10 g of copper were ex- in equipment and service in addition produce harmful emissions, and keep now beginning to create different kinds tracted for every mt of rock processed. Today that average has to construction chemicals. Normet has maintenance cost on lower level as of jobs dealing with data, robotics and fallen to about 6 g/mt of copper according to Consejo Minero brought to the Chilean market strong well. Furthermore, Normet’s smart scan software and in the future you will see figures. This means producers must crush and treat almost support to customers to ensure process technology improves the quality of the far more women working in the sector. double the amount of rock to get the same amount of copper efficiency, especially in sprayed con- sprayed concrete, therefore the risk of they did 10 years ago. crete and scaling. Normet Chile works tunnel collapse is mitigated. What differentiates Normet from its In many cases comminution is not only the largest energy to create a balance between each of our competitors? consumer in mineral processing, it is also the largest capital business lines. How does Normet help its customers Normet’s principal aim is to support expense and operating cost. Today, new deposits are being achieve cost savings? its customer by adding value to their found in more remote areas and are trending toward harder Currently what are the biggest pro- We are not solely focused on selling processes. We have a wide portfolio ores and finely grained minerals. These factors have major im- jects Normet is involved in? equipment or chemicals, but instead not only in equipment, but we are also plications for both capital and operating costs. Add to that At the moment El Teniente, Alto Maipo, we are focused on adding value for very robust in service and construction today's growing concern about the environment on the part of El Peñon, HMC Gold, Santiago Metro our clients on select processes such as chemicals. We are essentially a one- stakeholders, and it explains why companies are focusing their and Chuquicamata are Normet’s big- sprayed concrete, scaling and explosive stop-shop and we can provide a com- investments on technology and equipment that reduces ener- gest projects and they are our biggest charging. We have strong capabilities in plete solution to meet all of our clients gy consumption and leaves a smaller environmental footprint. Image courtesy of Metso Chile focus as well. A new stage of develop- those three processes and we are ready needs. More and more mining contrac- Andrés Costa González, president of the South America divi- ment will begin at Chuquicamata and to support our customers to improve tors are looking for partners to external- sion at FLSmidth, an engineering firm that supplies produc- This is a very good way to grow,” said Eduardo Nilo, general we hope customers will choose us again. their efficiency by adding new tools such ize the more complex processes. This is tivity enhancing equipment, has been observing this influx in manager Metso Chile. We are also supplying new spraying ma- as simulators and process training. where we are most focused on providing investment and is positioning his company to capitalize on the The combination will enable the company to strengthen its ca- chines and concrete transport machines support. trend. He commented: “The future of mining is going to be pabilities in technology and R&D, product and process excel- for the El Teniente project. Normet is Normet is present in both Peru and tough. Deposits are getting deeper and costs are rising. Mi- lence, and increasing its global footprint. Metso’s acquisition involved in is Candelaria. Here we are Chile. How does underground mining What goals does Normet want to ning operators need to maintain productivity in order to be of HighService Service is also important, because it is indica- working very closely with Zublin and differ between countries? achieve over the next two years in competitive. With technologies and technical support, our cli- tive of a broader trend in Chile, wherein companies are very Lundin mining in bolt resin injection. Peruvian and Chilean mining are simi- Chile? ents can offset the degradation of ores and increasing costs.” focused on developing stronger service offerings. As a result, lar. The Chilean mines request more Normet wants to continue penetrating Metso is another company that has been very active in solidi- Metso and FLSmidth are building remote monitoring centers. What are some new technologies safety accessories to the equipment the market with scaling and mechaniza- fying their competitiveness in order to take advantage of op- Metso’s first performance center began its operations in San- Normet is introducing? and demand a higher level of support tion. Today, the industry is still too reli- portunities. In 2019, the company made a series of acquisitions tiago in 2019 and is expected to soon move to new custom- Normet is now promoting our smart from their suppliers. In Peru mines are ant on manual charging processes and of companies such as Outotec and HighService corp’s service ized premises. It employs experts who analyze data and derive drive offering (battery vehicle) and some normally above 4,000 m altitude, which Normet is focused on mechanizing this. division. “Metso is very strong in the process of crushing and insights to help customers optimize their processes remotely. new tools. We have sold our smart scan adds an extra challenge to the work- We also want to introduce our scanning processing of dry minerals and Outotec is more focused on the It uses new remote monitoring capabilities for gearless mill system to a few contractors in El Tenien- ers and equipment. Therefore, under- system on a wider basis than we have wet processing segment of mining. This union makes a lot of drives, obtained as part of Metso’s acquisition of HighService te and this allows the customer to scan ground operations are similar, and both today. ■ sense and it allows us to combine equipment and processes. Service. FLSmidth also has a digital collaboration center in 97>> CHILE MINING 2020 94 EXPOMIN Official Investment Guide Global Business Reports 95 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide EDITORIAL

<<95 Santiago, where it can connect to the mine site and remotely aspects of the industry. Technologies that have long been in assist a customer in performance and predictive maintenance, the works are now available and affordable enough to become Andrés thereby allowing it to improve reliability and availability. “From operational at scale. This transformation is being experienced Santiago we can now address all our customers needs across at varying degrees depending on the producer, but it is with- Costa market in terms of adopting new tech- South America,” said Andrés Costa González. out a doubt happening in Chile. Codelco and Lundin mining nologies. The mining market has always McLanahan, a provider of all equipment for crushing, feeding, are incorporating autonomous fleets into their operations, been conservative and a little reluctant sizing, screening, washing, sampling and water management miners are signing agreements to digitize their operations in González to adapt, but this is changing as mining has had its own service capability in Chile since 2015. Accord- Chile and Antofagasta Minerals is investing US$40 million to companies are starting to realize that ing to Jean Peirre Mery, general manager of McLanahan: “The strengthen its technological platform in the country. As long they will have to adapt in order to sur- President idea is to produce equipment in Chile and that is our main as these investments prove that they are saving money for cli- vive in the future. challenge for the next two years.” His colleague Chris Knowles ents and making the industry safer, businesses will increasingly FLSMIDTH SOUTH AMERICA Today FLSmidth is developing innova- added: “Growing our capability in Chile ultimately gives us a move to adopt technology at an even greater pace in order to tions among our customers. We are de- foothold into the Latin American region from which we could replicate results. veloping technologies that will change potentially expand to other countries.” The technological applications include building a more com- Can you give a brief overview of are increasingly difficult to operate the way we handle materials in the fu- prehensive understanding of the resource base, optimiz- FLSmidth and the company’s opera- in? ture. Currently we are working on flota- ing material and equipment flow, improving anticipation of tions and capabilities in South Amer- We know that the future of mining is tion cells capable of reducing energy Conclusion failures, increasing mechanization through automation and ica? going to be tough. The ore grades consumption by approximately 50% monitoring performance in real time. Alone, each of these Within the mining space, FLSmidth cov- are declining and deposits are getting while also improving recovery. We are The reality in the Chilean mining industry is that, as a result of opportunities has real potential. Together, they represent a ers the entire value chain from in-pit deeper. Mining operators need to main- also jointly developing new ways of de- being the leading copper producer globally for over 30 years, fundamental shift in both potential safety outcomes and how crushing and conveying to tailings man- tain productivity in order to be com- ploying dry tailings. We have an indus- many of its most productive mines are mature. Therefore, in value can be captured. 65% of large mining companies in Chile agement. Our clients have access to a petitive. With technologies and techni- trial operation in Mexico where we are order to spur future growth and maintain production levels, invest in improving what they have, while 21% invest in do- full flowsheet of productivity enhancing, cal support, our clients can make their testing an innovation that has the poten- technology must be implemented and used to its full capabil- ing things differently and 14% in radical changes according to mineral processing and material han- operations more efficient. FLSmidth tial to eliminate the tailings dam. ity. The potential to achieve big breakthroughs is now within Deloitte. These numbers will need to shift if Chile intends to dling technologies and equipment. provides technologies that can increase the industry’s reach and companies have begun to embrace remain the worlds leading producer of copper for another 30 FLSmidth also has digital initiatives that recovery, reduce energy consumption, Do you have a message for our read- digital and technological innovations that are transforming key years. ■ it is inaugurating. We are currently de- make transport systems more efficient, ership? veloping a digital collaboration center and decrease the need for spare parts. It is the industry responsibility to make in Santiago where we can connect to Implementing optimizing technologies people in South America understand the mine site and remotely assist our into the mining process has the poten- that a future is not possible without sus- customer in performance and predic- tial to offset the degradation of ores and tainable mining. FLSmidth is a leading tive maintenance, which allows us to increasing costs. supplier of production facilities, equip- improve reliability and availability. From ment and service solutions, which im- Santiago we can now address all our How willing is the South American proves productivity, drives down costs customers needs across South America. market to adopt new technologies and reduces the environmental impact and innovation? of operations. We see ourselves as a Can you elaborate on FLSmidth’s abil- Over the last two years, FLSmidth has dedicated partner to enhance our cus- ity to provide solutions in areas that noticed a switch in the mindset of the tomers’ productivity. ■

The correct tailings solution for your mine’s requirements

Every mine site has unique characteristics so there The world’s most powerful belt conveyor system! is no easy, one-size-fits-all tailings solution. That’s why you need a complete “evaluation partner” that can Who would you turn to when you need to push the envelope of conveyor technology? determine your best tailings option - and can provide Tenova TAKRAF was entrusted to develop and design the principal ore transportation system for a major underground mine project in complete dewatering, material handling technology Chile. Boasting a total installed drive power of 58 MW (with up to 10,000 KW on a single drive pulley) and advanced gearless conveyor and co-mingling solution. drive technology, this 13 km belt conveyor system achieves a number of world firsts, including the first global application of the newly developed ST 10,000 premier steel cord belt.

flsmidth.com Turn to TAKRAF for all your material handling requirements – big or small, we have the capacity and experience to manage your needs.

TAKRAF Chile Cerro El Plomo N° 5420, Las Condes, Tenova, a Techint Group company, is a worldwide 7550647 Santiago - Chile partner for innovative, reliable and sustainable [email protected] solutions in the mining and metals industries. WE DISCOVER POTENTIAL www.takraf.com www.tenova.com

CHILE MINING 2020 96 EXPOMIN Official Investment Guide Global Business Reports 97 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

How is Tenova structured in Chile and tainability of operations in Chile. What is the core focus of Metso in How do you see the dynamics of the what have been the biggest develop- Chile and what products and services Chilean mining market moving for- ments in Tenova’s business over the How is Tenova contributing to increas- do you provide to the Chilean market? ward? past three years? ing tailings safety? We have strong market share in mills, fil- Metso is closely linked with the mining The Chile office is Tenova and Tenova Tenova developed technology to use tration and crushing products. In terms industry and the region has grown a lot is owned by the Techint group. Tenova dry stack tailing and now we are in a po- of services, we develop tailored engi- in recent years. We have grown every is the process and equipment supplier. sition where we filter or we use a thick- neering for our clients. We opened two year. Our business structure is based Tenova mining has three companies. ener to filter and later on transport by equipment repair centers in Antofagasta on equipment but also on services. Our TAKRAF, which is dedicated to mate- conveyor, so that the deposit is close to and Arequipa a few years ago. There are development in services has been posi- rial handling, Delkor, which specializes dry material. This mitigates the risk of a two plants that manufacture the lining tive and we expect that to continue. We in solid liquid separation, and Tenova dam collapse. Today’s market is much of the machines in the region and all un- made important acquisitions this year Advanced Technology (TAT), which is more environmentally conscious. derground crushing protections are pro- and this has given us strong growth and Israeli and dedicated to process for the vided by Metso. positioned us well for the future. We mining industry. In Chile we have three What are the biggest complications seek to increase and diversify the prod- areas where we provide services, equip- with desalination? How do Metso´s products and services ucts and services we offer. Our growth ment or plants. Some of the major challenges are the help facilitate greater operational ef- plan has exceeded expectations. The ex- Christian One accomplishment we are very proud differences in altitude from the sea up to Eduardo ficiency? pectation next year is also very positive. of at TAKRAF is that we were very suc- Quebrada Blanca, and up to Collahuasi Our clients demand optimization from The mining industry remains very stable. cessful in finalizing Chuquicamata un- the difference is 4,300 meters. Plus you an economic standpoint and from a re- Cavagnaro derground, where we built the largest have to cross the Andes mountains, so Nilo source consumption perspective. The How does the acquisition of Outotec conveyance system in the world. From it is a big investment and the opex is mining industry has increasingly focused improve Metso’s positioning in the a technological point of view, we used huge. There are no other possibilities, on more sustainable and efficient pro- market? gearless technology and the strongest because if you do not have water you jects in terms of energy and cost. We Metso considers this to be a merging belt in the world called ST 10,000. In our cannot operate. take these customer requirements seri- of capabilities more than an acquisition. Delkor segment, we have supplied large ously and develop new technology that Metso is very strong in the process of thickeners for Peruvian operations, and What are some of the clearest ways solves these issues. One example, is our crushing and processing of dry miner- TAT is entering into the lithium business. Tenova helps lower opex for clients? vertical mill, which manages to efficiently als and Outotec is more focused on the Managing Director General Manager Tenova recently finalized the design and In Chile, some decisions are based on process minerals with 25% less energy. wet processing segment of mining. This TAKRAF TENOVA supply of the boro removal plant and site information that will not be made with METSO CHILE Metso has started to implement equip- union makes a lot of sense and it allows services for Albemarle. We developed all the testing needed to make an in- ment that conserves energy and water in us to combine equipment and processes. that in Chile, but we are now designing formed decision. A lot of money gets the filtering process. For this reason, we This is a very good way to grow. We like and providing supplies and site services spent and often companies still do not are developing new roller crusher tech- the natural growth we have had through- for the plants at an Argentinian project reach their desired results. If a compa- nology that increases energy efficiency out the years, but this deal gives Metso which will be one of the biggest lithium ny spends US$2 billion and expects to and serves a double bottom line in that even stronger positioning in the market. projects in the world. Our spectrum as produce 100,000 mt/y of copper, and is has great ecological impact and major a company today is very wide because after a couple of years it only produc- economic value. Optimization processes What does Metso want to achieve in we can go from the pure mining industry es 50,000 mt/y, they end up spending are a critical factor in the price of copper the next two years and what are the as an equipment and service supplier to much more money than anticipated. To- production and generate benefits for biggest challenges you must over- providing process and that is the future. day, the investors analyse carefully all of the entire community. Metso is building come? » the different aspects of an operation. » a performance center that will improve We would like to solidify our positioning Lithium is a developing industry in processes and establish maximum effi- as the number one company in the com- Chile and there is a need for solutions How do community relations differ in ciency through technology. ing years and continue to be validated that use less water. What is your ex- Chile and Peru? We made important acquisitions by our customers. We want to introduce Our spectrum as a company perience working with lithium in Chile? The communities in Chile are not close this year and this has given us When it comes to water and safety, new products with new technology that today is very wide because we To process lithium, you extract the brine, to mine operations. Collahuasi and Que- strong growth and positioned us how does Metso Chile see the oppor- allows us to continue developing our can go from the pure mining put it in a pond, and leave it there while brada Blanca are located at 4,200 me- presence in the region. Chile is one of well for the future. We seek to tunity in resource management? industry as an equipment and the sun evaporates the water. What you ters of elevation and the communities We are going to launch a new filtration the most important mining regions. increase and diversify the products service supplier to providing get is salt, which you later process. That surrounding are close to zero. In Peru, product in Brazil that seeks high effi- One of our biggest challenges is having method requires good radiation and a if you are in Quellaveco, the mine is un- and services we offer. Our growth ciency and greater water reuse. One of the right workforce to sustain the devel- process and that is the future. large area. TAT developed a technology derneath the river, and that river is used plan has exceeded expectations. our challenges is that there is not much opment and growth we are looking for. so that you can get the brine into a plant by farmers downstream. The distance water available at the mines, and water New products require training and we and this plant is not any bigger than 100 between the community and the mine resources in Chile in general are scarce. have a workforce of 3,000 in Chile, so by 100 meters. Therefore, the footprint are much closer and the impact has the Companies have had to start using water we opened a training centre that has al- « that you need is smaller. Secondly, all of potential to be much more severe. If, « desalination and they are looking closer lowed us to develop and train our people the water that is processed in the end is for example, mining activities contami- at optimizing water consumption. Metso locally. We seek the highest safety stan- reinjected into the ground and can be nated the water, it would undoubtedly is looking for alternatives such as the use dards in our factories and in the technical reused. These are the types of innova- affect farmers downstream. This is less of mills that do not need water. personnel in the field and our aim is to tions that are needed to ensure the sus- of an issue in Chile. ■ continue to develop our people. ■

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What is the history of McLanahan in that does not lend itself to large infrastruc- Can you give a brief overview of Motion ents through missing tooth detection pre- Chile? ture. So low cost modular track mounted José Oliva Metrics and the company’s operations venting crusher downtime or damage to Chris CK: We selected Chile because it has a equipment suits smaller players well. in Chile? conveyor belts; optimizing tooth change strong history in mining and minerals, Motion Metrics specializes in developing outs by monitoring tooth wear; prevent- Knowles & good infrastructure and highly technically To what extent would you say Chilean Peralta advanced monitoring solutions designed ing costly equipment collisions with prox- skilled workers. Also, Australia and Chile mining companies are receptive to new to improve safety, efficiency, and pro- imity detection and blind spot reduction share a strong connection through their technology? ductivity in the mining industry. Our Chile technologies; and maximizing productivity Jean Pierre minerals technology, and there is a free CK: Adoption of innovation and auto- branch was Motion Metric’s first satellite with bucket-by-bucket payload monitor- trade agreement, which increases ease mation in Chile is a massively important office and has helped the company to ing. of doing business in the Chilean market. topic. In our research we read a lot about grow significantly. Mery V Growing our capability in Chile ultimately Chile wanting to be lower cost in order to General Manager Which of Motion Metrics’ technologies are Motion Metrics uses artificial neural gives us a foothold into the Latin Ameri- increase competitiveness. When we talk MOTION METRICS best suited for the Chilean market? networks rather than computer vision. can region from which we could poten- about automation, artificial intelligence, Motion Metric’s missing tooth detection Why is this method better for mining? tially expand to other countries. robotics, there really is not an option to system has been in the market for quite Neural networks are algorithms consisting CK: Global Marketing Manager JP: We serve the broader Latin American not participate. Businesses will have to some time, and the product is still in de- of millions of simple processing nodes. To JP: General Manager market. The idea is to produce equipment accept adoption as a cost of being in the mand. We are known as the shovel dentists train a network, each node is initialized to a MCLANAHAN in Chile and that is our main challenge for marketplace. and the system can prevent crusher down- random weight and data is passed through the next two years. Since 2015, having our Looking at the larger picture, the 4th in- time by monitoring shovel teeth. Over the the network in one direction. The network own service capability has meant that we dustrial revolution will be about how we years, we have diversified our product output is then compared to a ground can develop a direct sales model within deliver greater productivity. That means portfolio and today our fragmentation truth, and the weights are adjusted until the country that provides greater support lower energy, labor costs, much lower analysis system which determines blast ef- the network closes the gap. Through this to our customers both in Chile and in the transport. This plays into electric instead fectiveness in real-time is also in demand. process, the network ‘learns’ to correctly broader region. of diesel trucks, robotics instead of hu- label input data. With neural networks, mans, smart conveyers instead of trains How is Motion Metric’s technology cost you don’t have to manually decide which Can you give us an example of how and tracks. That plays right into where effective over time? features are important – the machine does McLanahan’s equipment is suitable for Chile wants to be as a low cost producer. Our solutions can save costs for our cli- the work for you. ■ Chilean mining conditions? They do not have an option not to go that CK: We intend to grow McLanahan’s dry way. Manufacturers must make sure we What specific technologies does Hexa- help companies occupy less machinery processing brand recognition and it will can deliver as many sensors as possible, gon Mining provide? and use it efficiently by making the expe- be supported through low-cost manu- as much condition monitoring techno- Carlos Hexagon has five portfolios of business. rience between operator and technology facturing. Currently there is more oppor- logy as possible to be able to feed that A planning portfolio that focuses on inte- seamless. We deliver solutions that allow tunity in wet processing and our team in into the market. They will not want to pay grated solutions for exploration, model- users to manage and control information, CK Chile has particular expertise in sampling for this tech but, in order to be globally Carmona ing, design and scheduling; an operations which ultimately leads to cost reductions. and wet processing. competitive, they will have to adopt these portfolio focused on fleet management What is driving the demand for McLana- technologies. and machine guidance; a safety portfolio How is Hexagon Mining technology im- han’s sampling systems in South America? with collision avoidance, vehicle interven- proving workers safety? JP: The Chile team also has in-house ca- Do you have a final message for the au- tion and fatigue monitoring technology; We have anti-collision technologies and pability for design and service. Having dience of Global Business Reports and an enterprise portfolio that connects pro- systems that prevent accidents caused General Manager South Cone new focus on engineered for spec sam- Expomin 2020? cesses and converts data into real time in- by operator fatigue. Our technology also pling systems has improved outcomes JP: McLanahan works together with cus- HEXAGON MINING formation to support good decision mak- protects against blind spots and poor vis- for clients. We distinguish ourselves by tomers at the beginning of a project. The ing; and a survey and monitoring portfolio ibility conditions. understanding the clients’ processes and company has extensive international ex- for slope monitoring and measurement understanding the engineering design of perience in servicing the mining market, solutions. In Chile, Hexagon’s biggest fo- What strategic goals does Hexagon Mi- how to put a sampling system together to the best quality tools and equipment, as cus is on fleets of mining equipment be- ning wish to achieve over the next two an iso-spec. well as a competitive price point and top cause that is where the large investments years? quality US and Australian manufacturing in Chile’s mining sector are. We are mainly Hexagon’s regional strategy is aggres- Can you elaborate on McLanahan’s ac- standards. McLanahan needs to build focused on providing smart solutions for sive in terms of its growth targets for the JP quisition of Anaconda? brand recognition in South America. Our trucks and support equipment. coming years. We want to increase sales CK: In minerals, every deposit is unique key focus is to connect the Mclanahan and position ourselves and our products and has a different process to evaluate. brand strongly in Chile with the techno- How does Hexagon Mining technology as industry leaders. We plan to achieve The Anaconda acquisition can be valuable logical capabilities that the group pos- help lower costs and increase productiv- this by consistently demonstrating suc- in places like Peru where you have many sesses. ity? cessful outcomes proving the value of SME’s that don’t have the cash reserves CK: You do not get to stay in this market The difference between Hexagon Mining our technologies. Hexagon also needs to that big players do. They are looking for unless you are capable of collaboration and other applied technology companies educate and develop the skills of those things like in-pit mobile modular systems with your customers, unless you are able is that we are able to increase a compa- in mining so that people understand the that allow them to get into their resource to support them closely, and unless you nies productivity because of our ability importance of technology in improving and deliver cash-flow and value. Or they are bringing the newest and most cutting to integrate a variety of different product an operations productivity, efficiency and have a smaller, more complicated reserve edge technology to the marketplace. ■ suites into one single system. We seek to safety. ■

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DRILLING AND BLASTING

» The focus of the mining market since 2013 has been for majors to move toward improving efficiency and productivity and away from increasing reserves. Further- more, there has been little-to-no capital for greenfield exploration nor any appetite for it from a timeline and permitting perspective. The current trend is for compa- nies to do expansions of their existing operations. One of the ways in which the industry is confronting the problem of permitting and not being able to develop new projects is by drilling deeper at their existing operations. «

- Stephanie Ashton, CFO and Corporate Development, Griffith Drilling

Image courtesy of Ministry of Mining EDITORIAL Global Business Reports EXPOMIN Official Investment Guide INTERVIEW

What is the history of Griffith Drilling and what capabilities does it bring to Drilling the Chilean market? Griffith Drilling was established in 2011 and is a private diamond drilling company based in La Serena, Chile, with a branch in Mendoza, Argentina. Boyd Griffith, my co-founder, has worked in diamond drilling since the early 80s, first in Canada, and since 1991, in Chile . He came to Chile with a company called Connors Drilling. I come from the investment and financial side and have been involved in many junior BUILDING RESILIENT mining companies and exploration operations. The best company I hired for drilling services while in Chile was Connors Drilling, and that is how I met Boyd. When the BUSINESSES THROUGH opportunity presented itself, it was a no brainer for me to invest in forming Griffith TOUGH TIMES Drilling. Griffith has reproduced the Connors business model, which encompasses very high quality diamond drilling services. We are able to provide drilling services where other companies cannot, such as at high altitude, in complicated ground, and to 2300 m depths.

How does Griffith Drilling help companies increase the efficiency and produc- Copper runs through the veins of Chile ers, with 25% headquartered in mining are susceptible to tightened margins, Stephanie tivity of their operations? and cities such as Antofagasta and Cal- regions outside of Santiago. That in- falling utilization rates and less ambi- The focus of the mining market since 2013 has been for majors to move toward ama have risen out of the desert fuelled evitably means regional economic suc- tious planning for greenfield projects. improving efficiency and productivity and away from increasing reserves. Further- by exports of the red metal. Underlying cess is highly correlated with the price According to Stephanie Ashton, CFO of Ashton more, there has been little-to-no capital for greenfield exploration nor any appetite Chile’s success as a leading metals pro- of copper and the performance of the Griffith Drilling, a diamond drilling com- for it from a timeline and permitting perspective. The current trend is for compa- ducer is a robust ecosystem of service industry’s service businesses. In Antofa- pany capable of operating at 2,300m nies to do expansions of their existing operations. One of the ways in which the providers. Drilling contractors are an es- gasta, mining contributes 54% of GDP, depths: “There has been little capital industry is confronting the problem of permitting and not being able to develop sential element of achieving the coun- Tarapacá 37% and Atacama 38%, based for greenfield exploration nor any ap- new projects is by drilling deeper at their existing operations. Griffith Drilling is par- try’s high level of production. Consejo off Chile’s Central Bank data. petite for it from a timeline and permit- ticularly good at assisting clients with hole completion and core recovery, and we Minero estimates show 6,300 compa- Unfortunately, when commodity cycles ting perspective…. The current trend is drill to depths that clients require in order to expand their operations or justify an nies in Chile qualify as mining suppli- are in a down phase, service providers for companies to do expansions of their operation that is being developed. By being able to reach lower depths of explora- CFO and Corporate Development existing operations. One of the ways in tion we expand the life of a project and this creates a better return on investment. which the industry is confronting the GRIFFITH DRILLING problem of permitting and not being Does Griffith Drilling see opportunity in other markets? able to develop new projects is by drill- There is a magic size for us in any one market and, once you get beyond that, you ing deeper at their existing operations.” start losing your marginal benefit of adding more work and people. Our sweet spot Despite the lack of greenfield invest- is between 20 and 25 rigs in any one market. We thus have a plan to expand into ment, Chile’s service sector remains ro- other markets such as Peru, but only if there is a demand for the specific type of bust and continues to appeal to global drilling we specialize in. We also like the North American region; permitting has operators. For example, Master Drill- been streamlined so that has opened up opportunity. ing, a company based in Australia, has been drilling at El Teniente for over 20 Given the current market conditions, how has demand been for diamond drill- years. The company also has contracts ing in Chile? at Chuquicamata underground and, as In 2012, there were approximately 650 rigs in Chile, but this number has significantly of 2019, the company had 14 rigs in op- decreased today. There was a small uptick and then a substantial drop in capital eration in Chile, with a utilization rate investment in 2018 and the demand for drilling has significantly fallen as a result. of 65%. Christoff Janse of invest Chile In 2019, we estimate that approximately 20% of total rigs available were operating pointed out: “Many of the big players in Chile. in the mining sector have operations here and, from a supplier´s perspective, Is Griffith Drilling positive about the future and what is the company’s vision this means relative easy market entry moving forward in Chile? by continuing business relationships al- On the macroeconomic side, I am very optimistic for the future. Electrification of ready established elsewhere with their cars and energy renewable growth is an unstoppable wave and the transition will clients. “ require a lot of metals. On the microeconomic side, there are some regulatory, la- Another positive for the industry is that bor and social challenges, which make operating in Chile more difficult. There is the Chile is upping its potential to become trade war and all of this has contributed to a weak sector in the short term. A project a logistical hub for service drilling. “In- that used to take 10 years from start to finish for a new mine is now taking 20 years, creasingly the country is becoming so we hope to see movement towards an improved streamlining of the process. more connected internationally and Looking toward the future, Griffith Drilling would like to grow to be a 25 rig com- regionally. There has been a sustained pany that provides both surface and underground drilling. We aim to continue de- increase in flights linking Chile to neigh- livering a very high quality of service to our clients and we want to be the drilling boring countries and internally. From a company of choice within the market. ■ 107>> CHILE MINING 2020 104 EXPOMIN Official Investment Guide Global Business Reports 105 CHILE MINING 2020 INTERVIEW Global Business Reports EXPOMIN Official Investment Guide

Image courtesy of Hot Chili Jorge What is the role of Superex and PerfoChile in the Chilean mining industry? Maldonado JM: Superex and PerfoChile are separate companies but work as a team to pro- mote the highest standards of operational excellence, safety and sustainability. We concentrate mostly on greenfield drilling, but we service a mix of different projects. & Osvaldo Superex has a workshop in Coquimbo and PerfoChile has one in Antofagasta. We have worked closely with Anglo American for years here in Chile, along with many other customers, especially mid size companies and juniors. We are small but we are Carmona experts in drilling, so companies want to do business with us.

Morales How have political developments in Chile affected your business? OC: Regulations have hurt business activity in mining. PerfoChile is small but very strong and well managed. We have cash reserves to invest through good and bad economic and political climates. JM: General Manager JM: Four years of Michelle Bachelet was very difficult. During this time, clients left SUPEREX for more business friendly countries. Sometimes Chile forgets how vitally important OC: General Manager a strong mining sector is to the health of its broader economy. PERFOCHILE What are some of the risks to the future growth of mining in Chile? OC: The Bachelet government changed the rules, which had served miners in Chile well in the past. She made Chile a less attractive place for investors because the pol- icy for mining permits became legally ambiguous. This opened the doors for special interest groups to come in and lobby for reinterpretation of laws and some projects never even began. As a result, the uncertainty has been detrimental in attracting foreign investment in Chile. JM: The rules are not clear. We do not have big communities in the north, but a few people are creating big problems for business. If we are giving permits, then the <<104 rules should be clear. Policy uncertainty discourages investment. Companies want logistics point of view it has become at- rigs in Chile, but this number has sig- to invest but the rules are not clear enough and the security situation is worsening. tractive to set up a business here that nificantly decreased today. There was Rules and permits must be clear and not be influenced by politics. Mining is not serves as a hub for providing equipment a small uptick and then a substantial political. and services to the region,” said Janse. drop in capital investment in 2018 and

JM One of the biggest drawbacks for ser- the demand for drilling has significantly How are you leading Superex and PerfoChile into the future? vice providers in Chile is that regula- fallen as a result. Asthon continued: “In OC: PerfoChile has strong expertise in delivering geological samples that allow our tions are too tight and that cuts into 2019, we estimate that approximately clients to clearly analyze the mineral content. This encourages a more sensible strat- profits. According to Jorge Maldonado, 20% of total rigs available were operat- egy for extraction. In the future, regulations will force companies to be smaller in or- general manager of Superex, a provider ing in Chile. Some of the projects we der to become more flexible. More specialization and automation are inevitable and of sonic and diamond drilling solutions: were supposed to be working on have business models need to change along with new technology. We intend to remain “The rules are not clear. We do not have been postponed due to a variety of is- at the cutting edge. big communities in the north, but a few sues including both community and JM: In the past, Chile was very attractive but now it is getting expensive. The future people are creating big problems for market related. We see a lot of requests is unclear and could even be dark if policy does not adjust. I fear policy is becoming business. In Dominga they have not for bidding jobs, but it has yet to take an impediment to growth in the Chilean mining sector. We are considering expan- been able to begin because of environ- off in 2019.” sion into the US, but we will remain well positioned to capitalize on any upturn in the mental regulations and community is- Fortunately for companies like Griffith Chilean mining market. We are confident in our ability to drill in a variety of different sues. If government is granting permits, Drilling, Superex and PerfoChile, they projects. then the rules should be clear.” possess capabilities that allow them to Ashton of Griffith Drilling also pointed operate in many of the difficult, far flung What advice would you give a foreign company coming to Chile to mine? to policy issues complicating opera- areas in which much mining project de- OC JM: There is a light at the end of the tunnel. Companies can still do great with small tions: “From a cost efficiency perspec- velopment is planed over the next de- projects, if they take care of communities and the environment. However, the bigger tive, we have to comply with a signifi- cade. Griffith offers diamond drilling the footprint the bigger the problems. Today, there are few benefits for juniors trying cant number of standards, which has services, where many other companies to explore. That is why the Chilean market is so concentrated toward majors. Hope- increased our operational costs over cannot, such as at high altitude, in com- fully this will change. time. The same amount of work that we plicated ground, and to 2300m depths. OC: Medium size projects have less regulation, so there is an advantage in staying used to perform with three crews now By being able to reach lower depths of small. Chile can be a good place to invest, but companies should be careful with requires four to meet the current labor exploration these companies expand worker safety. Small footprint operations that are well controlled are the future in regulations.” the life of a project and create a better Chile. ■ In 2012, there were approximately 650 return on investment.

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Blasting overall mining cost. In Chile the com- of pollution, a lot of noise and a lot of pany currently has a production plant vibration. Often this can lead to resis- where it manufactures initiation systems tance from communities and the risk of and will soon add bulk explosives. It will a project being blocked.” also finish the construction of a new ma- In order for any new technology to be of the blastholes drilled and the detona- alization in saying: “Great benefits can trix manufacturing plant in 2020. adapted, however, the product must be PRECISION AND tion procedure, companies can make a be obtained by adopting new technolo- Maxam is also investing heavily in new cost effective. Portilla noted that one material difference to their bottom line. gies especially given the increase in the technologies that will optimize the kilogram of plasma is more expensive SUSTAINABILITY DRIVE As energy costs are high in Chile, one cost of labor, inputs and the variability blasting process. The company has per- than one kilogram of explosives. How- THE MARKET way to save energy is by blasting more in the price of commodities.” He con- formed a significant portion of the blast- ever, there are other costs to consider. and crushing and grinding less. Effec- tinued: “There is a huge opportunity to ing at BHP’s Escondida, and recently in- These include community resistance to tive blasting will ultimately lead to re- improve the drilling and fragmentation vested approximately US$30 million in blasting and the high cost of evacuat- ductions in feed size before primary processes, minimize exposure of peo- expanding its capabilities to serve the ing the mining site when blasts occur. crushing, therefore increasing through- ple involved and reduce the amount of Chilean market. In 2019, the company With Plasma 4th technology, only those The market for blasting services is high- put and reducing the energy required equipment used. Optimization of the was selected by Lomas Bayas, an open- within a 150 meter radius of the fracture ly competitive in Chile and this compe- for comminution. Blasting is the most process of blasting, fragmentation, cast copper mine in Chile operated by are required to be evacuated. This guar- tition is producing some of the most cost efficient means for ore size reduc- transport, grinding and supply of the Glencore, to provide its bulk explosive, antees operational continuity and limits cutting edge technology in the busi- tion. If companies design a blast pat- plant can lead to huge cost savings.” Rioflex, along with other solutions. “This downtime. ness. Maxam, Plasma 4th, Enaex, Dyno tern that maximizes the use of cheap This savings opportunity was the driving product is sensitized on site and is flex- Nobel and Orica all are all developing chemical energy in a safe manner, it will force behind the development of Dyno ible enough to be produced in multiple products that make blasting safer, more have significant impact on the electrical Nobel’s differential energy technology, densities, so we are able to adapt blast- Conclusion efficient and more environmentally energy required to complete the size re- which ensures customers deliver the ing solutions to different rock types.” friendly. By investing in the appropriate duction process. right amount of energy to different lay- In addition, Maxam has developed a There is no denying that Chile’s mining blasting modeling and simulation soft- service industry is one of the most dy- explosives,P4TH the - way Expomin these Book explosives horizontal.pdf are Angello 1 09-12-19 Passalacqua, 12:24 businessp.m. manager ers of rock within a blast. This produces positioned and stabilized, the accuracy of Dyno Nobel Chile, sums up this re- better fragmentation, thus reducing the ware, Rioblast. “This is technology namic in the world. The sector is full of that can be integrated with our loading entrepreneurial local businesses com- equipment and allow us to pump the peting with well established global right quantities of product and deliver firms for contracts. The service work- the right blast. Hazards and inaccuracies force is well educated and qualified are therefore minimized,” said Maxam’s and, for these reasons, Chile has been director of Latin America, Diego Rodri- able to reach record production levels, guez Christensen. despite the maturity of its market. 2019 2020 will be an important year for has been a year that began with great blasting companies because there are optimism that new investments would several big tenders on the horizon. Ac- be pushed forward and suppliers would cording to Passalacqua: “There is an benefit from higher margins. However, C opportunity to participate in different uncertainty around the global macro-

M projects that represent more than 20% economic climate and political chaos at of the explosives market. home caused projects to dry up. As a Y result, the market for services remains CM extremely competitive, with companies

MY Beyond Blasting lowering their hourly rates and oper- ating on low margins in order to keep CY While some companies are focused from shedding staff. CMY on optimizing the results of blasting, In spite of this years’ struggles, much

K Plasma 4th, a subsidiary of Enaex, is fo- optimism remains surrounding oppor- cused on eliminating the need for blast- tunities that may come from the coun- ing altogether. Francisco Portilla, gen- try’s substantial project portfolio. There eral manager of Plasma 4th, noted that are still billions of dollars of investments the benefits of plasma are far reaching. coming online in the next few years that Blasting is often unpopular with nearby will keep demand for services strong. communities and is also considered Regardless of fluctuations in markets harmful to the environment. Portilla and politics, Chile’s mining service pro- said: “To develop a project near a com- viders have proven their resilience and munity, you need technologies that are are built to weather turbulent market minimally invasive. Blasting creates a lot conditions. ■

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What is the science behind Plasma which leads to cost savings in the long 4th’s cutting edge technology? term. We are undoubtedly the cheaper Angello Our product is made up of a mix of me- option when you take into consideration tallic salts and the rock fracturing pro- the side effects of blasting. Passalacqua cess is initiated by equipment that ac- cumulates 4,000 volts of electricity. That What is Plasma 4th’s growth strategy? electricity goes into cartridges wherein Currently we are certified as a non- each cartridge has an initiator that cre- explosive product in seven countries: ates a spark, and that spark creates a re- Chile, Peru, Brazil, Colombia, Argentina action. This process is called ionization and most recently India and South Africa. Business Manager and it produces a very high temperature. The next three countries that we initiated Then, because of the high temperature the permitting process in are Mexico, DYNO NOBEL and the expansion of the gases, we are Australia and France. We are prioritiz- able to break the rock. ing countries where ENAEX is already present so we can leverage that position In terms of environmental impact, in order to grow faster and on a bigger What is the history of Dyno Nobel and uct we created and refer to as Delta E. shotfire our electronic detonators Di- Francisco how is Plasma 4th’s non-explosive scale. what capabilities do you bring to the We are currently finishing construction gishot Plus 4G. This technology is being technique an improvement over tradi- Chilean market? on a new explosives manufacturing implemented in Chile and it increases tional blasting methods? How receptive has the Chilean market Dyno Nobel is one of the largest explo- plant and plan to open it in 2020. the programming speed of the deto- Portilla Gas emissions are far less than with nor- been to Plasma 4th’s product? sives companies in the world. We were nators by seven times together with a mal explosives. Also, Plasma 4th techno- In the beginning, it was very difficult, but founded by Alfred Nobel and we have How is Dyno Nobel competing in the friendly operative system. logy produces close to zero waste. Lastly, because strong community relations are a 150 year history of innovation in ex- current market and growing its market In addition, during 2019, Dyno Nobel our technology is 80% quieter than tra- so important to the success of mining plosives. Dyno Nobel has a presence on share? released the EZshot. This Nonel initia- ditional blasting methods. Often mines projects, slowly we have been penetrat- all continents, and currently Chile is our Dyno Nobel has a 15% market share in tion system gives the customer the abil- are located very close to communities, ing the market. Now we are working with hub for Latin America. Dyno Nobel Chile the initiation systems business. We ex- ity to use electronic precision for im- so we offer a solution that can improve Inco, which has one of the biggest mine was acquired by Orica in 2006. Eventu- pect to grow within the next few years proved perimeter control, helping them community relations by lessening the en- expansion projects in Chile, and also General Manager ally in 2010, Dyno Nobel returned to by a constant rate annually in the explo- to increase safety, save even more time vironmental impact of mining. with Amsa, which is another large project Latin American and installed a plant for sives market. We are active participants and lower overall production costs. Fur- PLASMA 4TH To develop a project near a community where our product is being used. They electronic initiation systems in Coqui- in all bidding processes in the explosives thermore, EZshot does not require new you need to use technologies that are chose Plasma 4th specifically because mbo. Dyno Nobel is the only company market today, and the tender of several training, allowing the customer to quick- minimally invasive. If you are blasting they had concerns over their projects be- that offers a full suite of products and mining companies is about to begin, so ly move forward on all projects. near a community it creates a lot of pollu- ing blocked and they knew our product services associated with blasting. Dyno there is an opportunity to participate in tion, a lot of noise and a lot of vibration. would improve their chances of getting Nobel owns several companies, such as different projects that represent more What is the biggest area of opportu- Often this can lead to resistance from co- approval. Tradestar Corporation, which produces than 20% of the explosives market. Our nity for Dyno Nobel today? mmunities and the risk of a project being mobile production equipment; Detnet market share in Chile is around 1% and There is a great opportunity to minimize blocked. With Plasma 4th, anyone more What is Plasma 2.0? How will this South Africa, which participates in the Dyno Nobel is determined to expand environmental impact, improve the drill- that 200 meters away will not even hear phase in your development help Plas- manufacturing of electronic detonators, rapidly moving forward. ing and blasting processes, increase the a blast go off. ma 4th achieve its long-term goals? and DynoConsult that provides techni- safety minimizing the exposure of peo- Plasma 2.0 is the next phase in our de- cal advisory services. Our business is What are Dyno Nobel’s biggest ad- ple on the field and reduce the amount How reliable and cost effective is Plas- velopment and it means that we need devoted to improving efficiency and vancements in innovation today? of equipment used. ma 4th’s product? to develop our technology so that we productivity in all aspects of the blast- The main technology we are working So far, we have three million cubic meters can be helpful in a broader range of ing process for clients. on right now is called Differential En- What goals does Dyno Nobel wish to of experience with no accidents and zero scenarios. Plasma 2.0 is about proving ergy. Delta E ensures customers deliver achieve in the next two years? misfires. We have consistently executed that plasma is a better choice for most What is Dyno Nobel’s strategy for the the right amount of energy to different We seek to implement Differential En- at a very high standard, so Plasma 4th is of the mining tasks that in the past re- Chilean market? layers of rock within a blast, producing ergy Technology and the Digishot Plus proving to be extremely reliable. quired blasting. We want to be involved We work with initiation systems, but we better fragmentation and reducing the 4G Commander System in Chile. In or- In terms of cost effectiveness, a kg of in full production, and for that we need also want to provide blasting services, overall mining cost for the customer. der to achieve that, we have to build the plasma is more expensive than a kg of to be more cost effective. Plasma 4th implement the sale of bulk explosives Customers using Delta E have benefit- trust of our customers and make them explosives. However, companies that has a vision to become the leading rock and grow our technical assistance ca- ed from increased safety, significantly understand that they will see outstand- use our technology don’t just focus on fracture company in the world using pacity in order to optimize processes reduced mining costs, and a reduced ing benefits. Our goal is not to compete the cost per kg. There are other costs to non-explosive technologies. We have a within mining. environmental impact. This product in terms of price, but rather to demon- consider in the equation. These include unique solution for mining and it should Currently we have a production plant also works in a variety of mine condi- strate that our products generate the community resistance due to the nega- be implemented around the world. Our where we manufacture initiation sys- tions: hard rock, soft rock, buffer blast- most value in the short term. Another tive effects of blasting, and the high cost technology is an important part of a mi- tems, and we are planning to add bulk ing, holes with water, dry holes, reactive goal of ours is to continue diversifying of evacuating the mining site when blasts ning future that is more socially and envi- explosives. We also manufacture emul- ground and hot holes. our workforce. Currently women make occur. With Plasma 4th you only evacu- ronmentally sustainable. We can achieve sion to implement new technologies Another one of our technologies is the up 38% of our operations and we intend ate 150 meters. This guarantees opera- this while still remaining cost effective such as differential energy, a new prod- Commander System to program and to continue growing this number. ■ tional continuity and limits downtime, and productive. ■

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need for humans in the field, companies What are the biggest Challenge mining companies face today and how does have the option to operate in new ways, Patricio Orica help solve these challenges? Marco for example the loading of explosives at The mining industry is faced with a number of challenges today such as low com- night. Currently no mine in Chile does Picero modity prices and increased regulation. In the current environment, companies must Ruiz this. However, there is great potential for improve in areas of profitability and efficiency. Orica is helping companies solve some productivity gains if technology can be of these challenges by bringing wireless initiation and automation of drill and blast put to work overnight. Another example to the market. We believe this has the potential to greatly improve safety and profit- Manager is the interoperability with the drilling ability for companies. Orica is also working on an integrated information platform for ENAEX ROBOTICS process. Normally both processes are real time decision making. This allows the entire process of drilling and blasting to be isolated, but technology enables a safe viewed online. and coordinated operation where you General Manager Why was there a need for ENAEX to an automatized MMU (mobile manufac- can work collaboratively and move at a ORICA CHILE How are you innovating? establish a strong robotics presence? turing unit) that could manufactures 20 much quicker pace. Throughout its history, Orica has been a visionary company that has adapted to In 2014, ENAEX saw new challenges in mt of explosives on site, without people changes in the market. We are currently adapting again as we transform ourselves the mining industry where robotics and on board. What is needed in order for robotics from an explosives and mining services company into a leading technological innova- automation were going to play an im- to fundamentally shift the economics tion company. portant role in the future. Increasingly, How far along is Robominer in its de- of mining? mines could not operate in some areas velopment? The biggest challenge is making robots Orica recently introduced BlastIQ and SHOTPlus technology. What are the ben- and were limited in their ability to ex- Robominer is currently being used in mi- more productive than humans and to ac- efits of these products? pand or proceed with operations be- ning operations. In 2019 we performed complish that, we must improve their ef- We have been very successful in the implementation of these technologies. We have cause the environment was deemed too the first fully remote blast in the world fectiveness and speed through automa- incorporated BlastIQ into the process of many of our clients, and feedback from them risky, sensitive or harmful for workers. To in a mine and the system is now fully ap- tion and artificial intelligence. When the has been supportive. BlastIQ is a cloud solution that provides real time information tackle this challenge we partnered with proved and operative. The next phase technology develops to the point where on drilling and blasting. This information allows users to plan, make decisions and institutions like SRI (Stanford Research of development for Robominer is fo- robots can take autonomous decisions monitor the entire process. This integration will generate a lot of value once clients Institute) and together we created Ro- cused on boosting its ability to generate in field it will be extremely beneficial for adopt this system. It has been very well received in Latin America, especially in Chile. bominerR with the skills needed to as- more productive outcomes for clients. improving productivity for a company’s semble the explosives, the Mine-iTruckR Because our technology eliminates the operations. ■ What are Orica´s goals for 2020? Particularly in Chile, Orica wants to maintain and grow its contract base. There are many bidding processes occurring in 2020, so there is ample opportunity to grow. Orica will continue to advance technology. Orica is undergoing a global transforma- tion to standardize our processes, systems and organizational structures in such a way that we are able to deliver the same quality of service globally. ■ From research and analysis to print and digital distribution, GBR acquires, delivers and diffuses Can you give an overview of MAXAM and the services the company offers to Business Diego the Chilean market? MAXAM is a global technology firm which specializes in energetic materials and Intelligence. blasting solutions. The company was founded in 1872 in Spain by Alfred Nobel. Today Rodríguez we have a physical presence in 50 countries and distribute our products to approxi- mately 100 countries worldwide. We have been operating in Chile for approximately MINING AND METALS 10 years, but have significantly expanded our footprint in the country over the last CHEMICALS Christensen three years. Our main customer is Escondida/ BHP. Our Chilean office has grown from OIL AND GAS POWER 50 people to approximately 260 people. The Chile office is our headquarters for Latin PHARMACEUTICALS Director of Latin America America, from which we serve operations in Chile, Peru, Bolivia, and Panama. AEROSPACE MAXAM AUTOMOTIVE MAXAM is known for its innovative technology. Can you give an overview of the company’s key products? New tools backed by emerging digital technologies integrated across the mining process are driving mines to be more sustainable and better able to withstand vola- tile prices while reducing their impact on the environment. Among our portfolio, we account for the highest energy bulk explosive in the market, Rioflex. This product is sensitized on site and is flexible enough to be produced in multiple densities, so we are able to adapt blasting solutions to different rock types. In addition, we have If you are organizing an event or are the leader of a trade association or chamber of commerce, GBR can produce your official, industry-specific report according to the highest standards of quality. developed a blasting modelling and simulation software, Rioblast. This technology Contact [email protected] for more details. gbreports.com can be integrated with our loading equipment and allow us to pump the right quan- tities of product and deliver the right blast. Hazards and inaccuracies are therefore minimized. ■

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"There are many regulations and standards mining companies need to adhere to concerning waste, if they want operational permits. The requirements today are “Copper in Chile is a very important material. However, we must not lose sight much more demanding than what they were in the past, in this day in age the of the opportunity in lithium, because Chile has the largest lithium deposit in the mining industry has to be a lot more sustainable and this poses a great challenge world. Lithium has been in great demand in recent years, and this demand should for the mining industry." grow exponentially as the demand for electric vehicle grows." - Matías Lagos, - Abel Villafuerte Rozas, General Manager, Commercial Manager, Grupo Disal (Chile, Perú, Paraguay) Haug

“We have been based in Australia for 50 years, but South America has amazing potential. We work all over the world, but here the mining market is strong and "In Chile, there is demand for pumps that can tolerate very aggressive fluids and we believe South America offers the greatest opportunities for growth. Within thus special materials are required. We also have the task to make operations Chile specifically, we see a lot of room for growth from traditional minerals such as more efficient and digitized so that the pumps can be remotely controlled from copper.” anywhere. Factories in Chile demand pumps that have a higher head capacity, as mines are deep and need very high heads for pumping." - John Hofmann, Executive Director, - Alejandro Abud, Hofmann Engineering Country Manager Water Solutions, Xylem “The Chilean mining industry is facing many challenges. Production capacity is stagnating, and cost of production is too high, due to different factors such as electricity cost, salaries, work force capabilities, innovations and improvements. “We are generally encouraged to design projects which require less manpower for Industry must work improve quality of life and environment through the use of construction as the high altitudes and complexity of mine sites, make the working technology in energy management.” environment very challenging. Many times, we have to rely on pre-cast solutions where equipment is fabricated on site.” - Raúl Toro, Sales and Marketing Manager, - Víctor Contreras Cordano, Eaton CEO, Pares y Alvarez “We are in the process of defining three scenarios for demand in the future – realistic, pessimistic and optimistic. If the political situation in Chile is solved and stabilized, we will lean more towards our optimistic view, as we believe that “I lived in Peru and my experience was that the environmental regulations and investment into the mining industry will then grow. From a realistic viewpoint, there permitting process is more difficult there than it is in Chile. Because the Chilean are many mining companies that would have to renew their contracts, which will mining industry is starting to move more underground, I believe that environmental lead to new contracts and new sales. My realistic expectation for the future is that problems will be easier to avoid.” we will sell equipment in the mining market , but these sales will be for renewals of brownfield projects, rather than new fleet sales for greenfield projects.” - Fernando Vivanco, General Manager, - Alejandro Miranda, Master Drilling Chile General Manager, Doosan Bobcat Chile

"At Codelco’s El Salvador mine, the main site was expanded and they had to “In times when the commodity price is low, our customers look to us to provide remove and demolish a lot of elements of the mine in order to execute their chemical solutions to improve the efficiency of their process and lower cost of expansion. In Chile there are some very old structures and demolition can pose production. In contrast, when commodity prices are high, that behavior changes, a big safety risk. There aren’t many companies that have the ability to execute and businesses want us to find solutions that increase throughput and production. demolition of these structures with the safety and efficiency." We still try to be as efficient as possible, but the main priority is increasing production.” - Michel Chait, General Manager, - Ricardo Capanema, Flesan Minería Global Marketing Director, Solvay

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COMPANY/ INSTITUTION WEBSITE COMPANY/ INSTITUTION WEBSITE

Abraplata abraplata.com Hot Chili hotchili.net.au Albemarle albemarle.com ICP Ingenieria icpingenieria.cl ALS alsglobal.com IIMCh iimch.cl American Air americanair.cl Ingenalse ingenalse.cl AMPHOS 21 amphos21.com Ingetrol ingetrolcorp.com AngloAmerican angloamerican.com InvestChile investchile.gob.cl Antofagasta Minerals aminerals.cl JRI jri.cl Aprimin aprimin.cl KGHM kghm.com Arcadis arcadis.com Kinross kinros.com Barrick barrick.com Komatsu komatsulatinoamerica.com Becker Mining becker-mining.com Kura Minerals kuraminerals.com Belaz belaz.by Liebherr liebherr.com Bertling bertling.com Los Andes Copper losandescopper.com BHP bhp.com Lundin Mining lundinmining.com Black & Veatch bv.com Mantos Copper mantoscopper.org BOSCH bosch.cl Mas Errázuriz maserrazuriz.cl Bridgestone Mining Solutions bridgestone.com Master Drilling mastedrilling.com CDM SMITH cdmsmith.com Maxam maxamcorp.com COCHILCO cochilco.cl McLanahan Corporation mclanahan.com Codelco codelco.com Metso metso.com Consejo Minero consejominero.cl Michelin michelin.com Coro Mining Corp coromining.com Mineria Activa mineriactiva.com DISAL disal.cl Motion Metrics motionmetrics.com Doosan BobCAT doosanbobcat.com Normet normet.com DSI UNDERGROUND dsiunderground.com OHL ohl.es Dyno nobel dynonobel.com Orica Mining orica.com EATON eaton.com Outotec outotec.com eBooting ebooting.com Páres y Álvarez pya.cl Echeverría Izquierdo ei.cl Perfochile perfochile.cl EMERSON emerson.com Plasma 4th plasma4th.com Enaex Robotics enaex.com POLPAICO polpaico.cl Enngie engie.cl Revelo Resources reveloresources.com Epiroc epiroc.com RIO 2 rio2.com ERAL eralchile.com Rio Tinto riotinto.com EY ey.com Salfa Maquinarias salfa.cl Finning finning.com SimmaTrans S.A simmatrans.cl FLESAN flesan.cl Solvay solvay.com FLSmidth flsmidth.com STANTEC stantec.com Fordia fordia.com Superex superex.cl Freeport-McMoRan fcx.com TAKRAF Tenova takraf.tenova.com Glencore glencore.com Technosteel technosteel.cl Gold Fields goldfields.com Teck teck.com Griffith Drilling griffith-drilling.com Wealth Minerals wealthminerals.com HLS Hard-Line hard-line.com Wood woodplc.com Haug haug.com Worley worleyparsons.com Haver & Boecker haverboecker.com Xylem xylem.com Herrenknecht herrenknecht.com Yamana Gold yamana.com Hexagon Mining hexagonmining.com HighService Corp highservice.com Hofmann Engineering hofmannengineering.com This list intends to include just a representative sample of companies operating in Chile’s mining sector, and as such it should not be considered a guide to take investment decisions.

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EDITORIAL AND MANAGEMENT TEAM

Project Director: Lucrezia Falcidia ([email protected]) Project Journalist: Jason Spizer ([email protected]) Project Coordinator: Mariolga Guyón ([email protected])

Editors: Mungo Smith ([email protected]) and 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]) Managing Director: Alice Pascoletti ([email protected])

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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

CRU www.crugroup.com

GECAMIN www.gecamin.com

CONSEJO MINERO www.consejominero.cl

APRIMIN www.aprimin.cl

IIMC www.iimch.cl

FRANCISCO ACUÑA

CHILE MINING 2020 118 EXPOMIN Official Investment Guide