PERU MINING 2023 PDAC Pre-Release Edition - Global Business Reports

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PERU MINING 2023 PDAC Pre-Release Edition - Global Business Reports
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Peru’s Economic Engine
Political unrest hinders the mining industry

After 16 months in office and having sur-        As political turmoil hinders mineral
vived two impeachment efforts in eight         production and dampens investors’ sen-
months, the former socialist Peruvian          timent, Boluarte keeps pushing to move
President, Pedro Castillo, was impeached       forward with the elections. Indeed, at
and arrested on December 7th, 2022, after      the beginning of February, she proposed
attempting to dissolve Congress.               a new bill to bring elections to October
   During his speech before his arrest, the    2023, but a congressional commission
then-president stated that “a new Con-         shelved it before it reached debate.
gress with constituent powers to draw up         It remains to be seen how the politi-
a new constitution” would be convened          cal juncture will evolve in the upcoming
within no more than nine months. How-          months and what the direct impact of this
ever, Congress, controlled by parties op-      will be on mining activities and investment.
posed to Castillo, called an emergency
session, and passed Castillo's third im-       Social conflicts worsened by political
peachment and removal with 101 votes in        events
favor, and only six votes against and 10 ab-   Protest and social conflicts are nothing
stentions. As a result, Vice-President Dina    new to the Peruvian mining industry. Con-
Boluarte became the first female presi-        flicts with local communities have been
dent in Peru’s history. She also became        jeopardizing mining operations for a long
the sixth president in the last six years, a   time, but Castillo’s detention triggered an
clear sign of Peruvian politics’ volatility.   uptick that halted the production from
    Castillo’s presidency could be consid-     some mining units.
ered as part of the Latin American shift           According to the Peruvian Office of the
toward leftist governments, a fact that        Ombudsman for the Prevention of Social
has concerned the mining industry and          Conflicts and Governance, by Decem-
investors. In fact, the governments of         ber 2022, there were 221 social conflicts
Mexico, Colombia, Argentina, and Bolivia       and Loreto, Cusco, Apurímac, Áncash,
issued a joint communiqué on Decem-            and Puno are the regions with the most
ber 12th, expressing their deep concerns       incidence. Of the 140 active socio-envi-
over the events taking place in the An-        ronmental conflicts registered during De-
dean country.                                  cember, 67.1% (94 cases) were related to
    Boluarte’s rise to power was not wel-      the mining activity.
comed by specific segments of Peruvian            Mines that share the Southern Mining
society, especially amongst rural areas        Corridor (CMS, from Corredor Minero del
outside Lima. Outraged by the events of        Sur), such as Las Bambas (MMG), Con-
the executive branch, protestors took to       stancia (Hudbay), and Antapaccay (Glen-
streets across the country demanding           core), have been experiencing blockages
Castillo’s release and Boluarte’s depar-       affecting their mineral production over
ture, the closure of congress, new early       the last years. It was not until Anglo Amer-
elections, and a Constituent Assembly.         ican’s Quellaveco was set into production
However, these demands seem unlikely to        in September 2022 that monthly copper
be fulfilled as clashes continue.              production overcame pre-pandemic lev-
   Even though elections were initially        els, but the current situation is having det-
scheduled for 2026, after weeks of nation-     rimental effects on current production.
wide protests, Boluarte urged Congress to         For instance, China-backed MMG’s Las
move elections forward to April 2024. Law-     Bambas in Apurímac is one example of
makers agreed, but Congress continues to       the deep-rooted problem. In 2022, Las
be divided regarding moving the elections      Bambas was paralyzed for more than
even earlier, to late 2023.                    50 days, and on January 30th, 2023, the

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company issued a press release stating                                                                                                                          "We took the leaders of
that the unit was on maintenance due to                      Annual Evolution in Mining Investment in Peru (US$ Billion)                                        Chumbivilcas to Canada
                                                      US$ Billion
community unrest. The disruptions to in-                                                                                                                        to show them how mining
bound and outbound transportation and                                  -9%                                                                                      companies and communities
the shortage of key inputs have forced it             8
                                                                                                                                                                coexist. This allowed them to
to progressively slow down its operation,             7
                                                                                                                                                                return to Peru with renewed
which accounts for around 2% of copper                6
                                                                                                                                    +22%        +2%             foresight into mutually
worldwide.                                            5
                                                                                                                            -27%                                satisfactory relationships."
   Glencore’s Antapaccay, an operation                4                                      -51%

that represented 6.2% of national cop-                3
per production in 2022, is another ex-                                                                                                                          Javier del Río, VP South
ample where political unrest is hindering                                                                                                                       America and US,
mineral production. In January 2023, the                                                                                                                        Hudbay Minerals
                                                      0     8.86       8.08       6.82       3.33   3.98    4.96     5.91    4.32    5.26       5.36
company released a statement declaring
that it had halted operations after an at-                 2013       2014       2015       2016    2017    2018     2019    2020    2021       2022

tack that set on fire a worker’s house area.
                                                  Source: Ministry of Energy and Mines (MINEM)
Before this attack, several protesters had
vandalized Glencore’s water plant and set         communities. If we look at the annual                    ment so Peruvians can understand the di-
the facility on fire and Antapaccay was           evolution of tax revenues from the min-                  rect link between mining investment and
already operating with only 38% of the            ing industry, we can appreciate that it has              national welfare.”
labor force.                                      been on the rise since 2020. Besides, 2022                  Despite social conflicts, the mining in-
   Minsur’s San Rafael has been affected          showed a tax revenue of S/15.8 billion                   dustry continues to work with local com-
as well. The tin producer has been slow-          (around US$3.89 billion), a positive varia-              munities to bridge this gap for a better
ing down its operations and tin produc-           tion of 12.3% compared to 2021, marking                  future where mining and society coexist
tion since the beginning of 2023.                 the second consecutive year that revenue                 harmoniously. Investors do not seem par-             port in February 2022 estimating that only
   Even though Peruvian GDP rebounded             from mining has reached record levels.                   ticularly deterred by the current turmoil            0.28% of the country is being explored
after 2020, according to Scotiabank’s                It seems, however, that large segments                and investment continues to flow into the            and only 1.07% of its territory is under ex-
economic research department, current             of the society do not see any link between               Andean country. Recent Rio Tinto's invest-           ploitation. This provides plenty of space
turmoil might jeopardize GDP growth be-           mining investment and Peru's well-being.                 ment of C$20.5 million (US$15 million) in            for mining companies to develop new
cause of the impact of protest in the south       Mining’s contribution to Peru in terms of                Regulus Resources' AntaKori copper-gold              projects. Moreover, due to the decarbon-
of Peru, an area that accounts for 18% of         GDP and other macroeconomic figures                      project in Cajamarca is proof of this.               ization goals set by the Paris Agreement,
the GDP. The economic department also             are facts that not all social segments can                                                                    the world needs more minerals than ever,
forecasted that 1% of national copper             grasp. In this context, Víctor Gobitz, presi-            Investment Pipeline                                  especially copper, to transition into an
production might be endangered.                   dent of the National Society of Mining,                  Despite the challenging situation, there             electrified world. Analysts state that the
   As protests escalate, one can only             Petroleum, and Energy (SNMPE), stated:                   are multiple reasons to be bullish on                demand for copper will grow to 50 million
wonder what is compounding the gap                “One of Peru's main challenges is main-                  Peru. The Ministry of Foreign Affairs and            tons per year (t/y) by 2035, leading to a po-
between the mining industry and local             taining proper public resource manage-                   the multinational firm EY published a re-            tential supply gap of 9.9 million t/y. Peru,
                                                                                                                                                                with its copper endowment, has a pivotal
                                                                                                                                                                role to play.
                                                                                                                                                                   According to the 2023 Portfolio of Min-
                                                                                                                                                                ing Investment Projects, published in
                                                                                                                                                                January 2023 by the Peruvian Ministry
                                                                                                                                                                of Energy and Mines (MINEM), Peru has a
                                                                                                                                                                pipeline of 47 projects with an overall in-
                                                                                                                                                                vestment value of US$53.7 billion, show-
                                                                                                                                                                ing an increase of 2% compared to the
                                                                                                                                                                previous edition published in 2021.
                                                                                                                                                                   The main developments in the portfo-
                                                                                                                                                                lio are the addition of eight new projects;
                                                                                                                                                                three were withdrawn (American Lithi-
                                                                                                                                                                um’s Falchani and Macusani and former
                                                                                                                                                                Zincore Metals’ AZOD project), and one
                                                                                                                                                                was brought online: Quellaveco.
                                                                                                                                                                    On the one hand, by 2023, it is ex-
                                                                                                                                                                pected that four projects will start con-
                                                                                                                                                                struction, with a combined investment

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of US$2.95 billion: Nexa’s Magistral, Bear
Creek’s Corani, Chungar’s Romina, and
                                                    "The Rio Tinto investment in Regulus was a
                                                    considerable endorsement from one of the                                                                                           Víctor Gobitz                                                                               "The government could learn
                                                                                                                                                                                                                                                                                     from the mining industry's
Antamina’s Reposición Antamina. The                 world’s largest mining companies, not only                                                                                                                                                                                   decades-long planning horizon.
last two are being incorporated into the            for AntaKori and the long-term vision of                                                                                           President,                                                                                   This long- term public policy
pipeline for the first time. On the other           our management group, but also as a vote                                                                                           National Society of Mining,                                                                  planning is needed to bridge
hand, by 2024, the construction of New-             of confidence in Peru."                                                                                                            Petroleum and Energy (SNMPE)                                                                 the gap between society and
mont’s US$2.5 billion Yanacocha Sulfides
project in Cajamarca is expected, and                                                                                                                                                                                                                                                      the mining industry."
                                                    John Black, CEO, Regulus Resources
Teck’s Zafranal project in Arequipa, which
could amount to US$2 billion as the com-                                                                                                                                               What have been the main initiatives of                                                Combined, they could create more signifi-
pany revises upwards the value of the                                                                                                                                                  the SNMPE over the last year?
                                                                               Peru: Copper production and GDP growth                                                                                                                                                        cant synergies with more benefits for the
project. It is noteworthy that Newmont’s
                                                         Copper evolution in million mt                                                 GDP evolution in US$ Billions                  Firstly, as a union, we have been focusing on delivering the          population with lower human development indexes.
mega-project Yanacocha Sulfuros was ex-
                                                         3.5                                                                                                         250               message that the mining industry’s competitiveness depends
pected to start construction in 2022, but                                                     Copper production          GDP
                                                                                                                                                                                       on the taxation regime. Peru competes with other mining ju-           What do you think Peru’s next big project could be?
was delayed due to rising costs and pro-                 3.0
                                                                                                                                                                     200               risdictions worldwide, and an appealing fiscal system is key          Tía María is quite mature, and there should be an agreement
longed supply chain disruptions.                         2.5                                                                                                                           to attracting investment into the country. Secondly, we have          for it to be brought online soon. In the north of Peru, in Caja-
   After the construction of Anglo Ameri-
                                                                                                                                                                     150               been focusing on communicating the positive effects of out-           marca, there are significant projects like Michiquillay, Galeno,
can’s Quellaveco project and its tran-
                                                                                                                                                                                       sourcing and on the flexibility of the business to reduce its         Conga o La Granja, with the capacity to produce more than
sition toward production, the entire                     1.5
Peruvian mining value chain relies on
                                                                                                                                                                     150               vulnerability to fluctuations in metal prices.                        a million tons of fine copper. In the South we find Trapiche,
projects in the investment pipeline to
                                                         1.0                                                                                                                              Finally, we have been addressing the configuration, distri-        Quechuas, and Los Chancas.
                                                                                                                                                                      50               bution, and use of the Canon Minero. In Peru, 20 years ago,              Regarding the mining activity, not only greenfield projects
begin construction and start ramping                     0.5
up operations. Provided the political cli-                                                                                                                                             a regionalization system was established where 50% of the             need monitoring. Peru produces more than 2.5 million t/y
                                                         0                                                                                                              0
mate stabilizes a bit, positive announce-                                                                                                                                              income tax is transferred into the jurisdiction where mines           copper, and to maximize its production, brownfield projects
                                                                2000    2002    2004      2006    2008   2010     2012   2014    2016    2018     2020    2022
ments should be made over the next                                                                                                                                                     operate. However, it is necessary to make territorial planning        need continued investment to extend operation or to expand
couple of years. ■                                  Sources: Ministry of Energy and Mines (MINEM), World Bank, GBR                                                                     efforts to translate these significant revenues into public poli-     production. For example, Antamina, will extend its life with an
                                                                                                                                                                                       cies that impact on communities’ social and economic devel-           investment of around US$2 billion. Its environmental impact
                                                                                                                                                                                       opment in the mining areas.                                           study is expected to be approved soon.
                                                                                                                                                                                                                                                                There is no doubt that greenfield projects broaden pro-
                                                                                                                                                                                       How does mining contribute to Peru’s development?                     duction supply, but the productive dimension that the coun-
                                                                                                                                                                                       Mining activities occur in the high Andean territories, therefore,    try has acquired results in significant investment in existing
                                                                                                                                                                                       the mining industry invests in infrastructure and logistics chains,   brownfield units. Permitting for these projects is simpler; au-
                                                                                                                                                                                       integrating remote areas into national and international mar-         thorities should shorten them and streamline them without
                                                                          16 - 18 MAY 2023                                                                                             kets. These logistic corridors generate opportunities and boost       lowering the standards.
                                                                        29 - 31 AUGUST 2023
                                                                                                         28 - 30 NOVEMBER 2023
                                                                                                                                          25 - 26 APRIL 2023
                                                                                                                                                                                       the economy of remote regions, and generate significant tax
                                                                                                                                                                                       revenue, allowing the use of public funds to bridge social gaps.      What factors do you think will drive copper demand?
                                                                                                                                                                                          Broadly speaking, Peru has robust macroeconomic indica-            Peru has a pipeline of around US$60 billion in its investment
                                                                                                                                                                                       tors. However, Peru still has economic and social disparities,        portfolio, and copper projects account for 70% of the total
                                                                                                                                                                                       so it is essential that tax revenue translates into the develop-      investment. Two main factors will drive copper demand. In
                                                                                                                                                                                       ment of less advanced territories. One of Peru’s main chal-           the short-term, China's gradual easing of its "zero Covid"
                                   MIAMI                                                                                                                                               lenges is maintaining proper public resource management               policies; in the long-term, the world's decision to decrease
                            23 - 24 FEBRUARY 2023
                                                                                                                                                                                       so Peruvians can understand the direct link between mining            fossil fuels consumption. Thus, Peru faces a favorable ex-
                                                                                                                                                                                       investment and national welfare.                                      ternal scenario and has both the mining ecosystem and the
                                                                                                                                                                                                                                                             mineral endowment to meet the international community's
                                                                                                                                                                                       What kind of debate should be addressed today in the                  demand.
      THE NUMBER ONE EVENT                                                                                                                                                             mining industry?
      FOR CAPITAL RAISING AND                                                                                                                                                          It would be ideal to maintain a mature open-dialogue process          What are SNMPE’s goals for 2023?
                                                                                                                                                                                       that includes both the society and the authorities to accord          At SNMPE, we look to promote investments in the entire val-
                                                                                                                                                                                       that the mining industry is one of Peru’s economic pillars.           ue chain of the mining industry. Mining not only invigorates
      Mines and Money is the leading international event series                                                                                                                        This way, we could achieve a national mining policy that tran-        the economy but also grants fiscal stability to Peru. The Gov-
      connecting sophisticated investors from around the world                                                       SYDNEY
      with mining company management teams, both online and in person.                                   31 OCTOBER - 2 NOVEMBER 2023                                                  scends any government.                                                ernment could learn much from the mining industry, which
                                                                                                                                                                                          Today, on the one hand, Peru has a public investment port-         has a decades-long planning horizon due to the size of its
      JOIN US AT AN UPCOMING EVENT MINESANDMONEY.COM                                                                                                                                   folio of around US$100 billion in infrastructure. On the other        projects. This long-term public policy planning is needed to
                                                                                                                                                                                       hand, it has a mining investment portfolio of US$60 billion.          bridge the gap between society and the mining industry. ■

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                                                                                                                                                                                                                               Peru: Mining Production

Mining Production
                                                                                                                                                                Million mt                              Copper                                       Million Oz T                         Gold
                                                                                                                                                                 2.5                                                                        2.44

                                                                                                                                                                                                                                                       6                                                   2021-2022 change (%)
                                                                                                                                                                 2.0                                                       2021-2022 change (%)
                                                                                                                                                                                                                                         +4.84         5

Peru’s copper output remains steady amid                                                                                                                         1.5

instability and market volatility

                                                                                                                                                                 1.0                                                                                   2
                                                                                                                                                                          2006        2008   2010   2012     2014   2016   2018    2020     2022              2006   2008   2010   2012    2014   2016   2018    2020     2022

Few mining jurisdictions host the mineral endowment that                     "Although our copper production is bigger                                          Million Oz T                               Silver                                    Million mt                           Zinc
Peru offers. The Andean country is the second-largest copper                 in Mexico than in Peru, we expect Cuajone's                                        150
                                                                                                                                                                                                                            2021-2022 change (%)
                                                                                                                                                                                                                                                                                                          2021-2022 change (%)
producer after Chile, and stands among the top four produc-                  expansion and the commencement of the other                                                                                                                                                                                                -10.67
ers of silver, lead, zinc, tin, and molybdenum. Mining is also the           projects in the pipeline                                                                                                                                       99.0                                                                         1.37
engine of economic growth and prosperity in the country: min-                will allow us to                                                                     90
ing accounts for nearly 60% of the country's total exports and               produce more in Peru."
almost 10% of the GDP.                                                                                                                                            60                                                                                  1.0
   In hindsight, 2022 was a volatile year for the copper market
as the industry faced a series of challenges: supply shortage in
                                                                             Óscar González                                                                               2006        2008   2010   2012     2014   2016   2018    2020     2022              2006   2008   2010   2012    2014   2016   2018    2020     2022

Europe, political unrest in Peru and Chile —the world’s two larg-            Rocha, Executive                                                                   Thousand mt                                Lead                                      Thousand mt                          Tin
est copper producers—, limited production in China, and high                 President, Southern                                                                350                                                                                   50
                                                                                                                                                                                                                                                                                                         2021-2022 change (%)
inflation rates within the US. In July 2022, copper prices dropped           Copper Corporation                                                                                                                            2021-2022 change (%)
to US$3.22/lb, the lowest since November 2020, as fear over a                                                                                                                                                                                                                                                           28.2
                                                                                                                                                                                                                                          255.3       30
worldwide recession loomed.
   The situation with precious metals was not much different. Sil-                                                                                                                                                                                    20
ver remained below 2021’s price levels. According to the London              er hand, 2022 saw a record annual average gold price of US$1,800
                                                                                                                                                                200                                                                                   10
Bullion Market Association, silver prices averaged US$21.73/oz in            an ounce, closing the year with a marginal gain despite the head-
                                                                                                                                                                          2006        2008   2010   2012     2014   2016   2018    2020     2022              2006   2008   2010   2012    2014   2016   2018    2020     2022
2022, down from 2021’s average price of US$25.14/oz. On the oth-             winds from raising global interest rates and the strong US dollar.
                                                                                                                                                                Thousand mt                         Molybdenum              2021-2022 change (%)     Million mt                           Iron
                                                                             Copper output                                                                       35                                                                        -7.75      15                                                  2021-2022 change (%)
                                                                             Copper presented a steady production in 2022 for a second year                       30
                                                                             in a row, almost equaling pre-pandemic levels (2.44 million t/y                      25                                                                                                                                                    12.94
                                                                             in 2022 vs. 2.45 million t/y in 2019). In 2022, like in 2021, the top                                                                                                     9
                                                                             three copper producers in Peru continued to be Antamina, Cerro                                                                                                            6
                                                                             Verde, and Southern Copper.
                                                                                                                                                                  10                                                                                   3
                                                                                According to MINEM’s figures, Antamina produced around
                                                                             468,000 mt/y, an increase of 1.6% compared to the 460,650 mt/y                                2006       2008   2010   2012     2014   2016   2018    2020      2022             2006   2008   2010   2012    2014   2016   2018    2020     2022

                                                                             produced in 2021. Cerro Verde, operated by Freeport McMoRan,                   Sources: Ministry of Energy and Mines (MINEM), GBR
                                                                             in Arequipa, presented a better performance in terms of year-
                                                                             on-year growth, yielding a production of 459,100 mt/y (+9.7%).
                                                                             Southern Copper came third with a production of around 342,000
                                                                             mt/y, with a decrease of 14.2%, mainly due to the halt of opera-
                                                                             tions at Cuajone and a temporary decline in ore grades.
                                                                                Las Bambas, operated by MMG of China, remained the fourth
                                                                             largest copper producer with almost 255,000 mt/y, but like
                                                                             Southern Copper, also presented a decrease of 12.2% in its
                                                                             year-to-year production, also due to ongoing conflicts with lo-
                                                                             cal communities.
                                                                                After major companies that have been producing for years,
                                                                             it is noteworthy to mention the first copper production from
                                                                             Anglo American's Quellaveco in Moquegua. The long-awaited
                                                                             mining unit started commercial production in September 2022,
                                                                             yielding 94,200 mt.
                                                                                On the other hand, copper prices have been rising in the last
                                                                             months, trading near a seven-month bull run. Several factors con-
                                                                             tributed to this, one of them being the gradual easing of China’s
                                                                             “zero Covid” policy. After a price decrease in the first half of 2022,
                                                                             China’s lifting covid measures fueled optimism on the red metal,

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and it is expected that China’s new policy will help the economy             "For us, having achieved The Copper Mark                                      "Antamina will extend its
normalize and boost demand. Such prices have encouraged Pe-                  enhances our goal                                                            life with an investment of
ruvian copper producers to focus on organic growth by enhanc-                to be a benchmark                                                            around US$2 billion. Its
ing exploration activities and expanding operations around their             company in the                                                               environmental impact study
existing producing mines.                                                    mining industry."                                                            is expected to be approved
   Hudbay Minerals is an example of the organic growth taking                                                                                             soon, enabling it to continue
place in Peru. By consolidating the production of its satellite de-
                                                                             Adolfo Vera,                                                                 production for eight more
posit at Constancia, Pampacancha, Hudbay ramped up produc-
                                                                             President and CEO,                                                           years in the same operational
tion to 86,000 t/d. Moreover, in 2022 Hudbay conducted an explo-
ration campaign at its copper porphyry deposit, Llaguen, located
                                                                             Southern Peaks                                                               footprint."
90 km from Trujillo in northern Peru. The initial mineral resource           Mining
estimate includes includes 271 million metric tons of indicated                                                                                           Víctor Gobitz,
resources at 0.42% of copper equivalent, and this year they will             them how mining and local communities coexist. Through its re-               President, SNMPE;
focus on preliminary technical studies to add to the PEA.                    lationship with the community of Uchucarcco, Hudbay obtained                 President and CEO, Antamina
   According to Javier del Río, Hudbay Minerals’ VP South Amer-              the agreements to advance the exploration permits for the Cabal-
ica and US, at Constancia, Hudbay was able to keep production                lito and María Reyna deposits next to Constancia.
up and reduce costs by innovating in equipment and using ma-                    Also focusing on organic growth is Southern Peaks Mining
chine learning. However, he highlighted the essential support of             (SPM). After expanding its operations capacity to 8,400 mt/d
a strong professional team: “These initiatives can only be profit-           at Condestable, SPM concluded a feasibility study to pursue a
able and favorable if we have a team of professionals who con-               second-stage expansion. It has also undertaken actions to mod-
stantly think about how to optimize work and give us the stability           ify its environmental impact assessment (EIA), which it hopes to
to achieve our goals,” del Río pointed out.                                  achieve by March 2023. “Once approved, we expect to enter into
   Amid social unrest, Javier del Río asserted the importance of             a second stage to ramp up Codestable's production between
the relationship with local communities. In 2022, 45% of Hud-                10,000 mt/d and 12,000 mt/d by 2024 or 2025," stated Adolfo Vera,
bay’s labor force came from local communities and it also took               president and CEO.
the leaders of the Chumbivilcas community to Canada to show                     Another milestone achieved by the company is the transfor-                   Buenaventura, a company that was for
                                                                             mation that it has undergone to meet the guidelines for being                many years Peru’s leading company in
                                                                             granted The Copper Mark. This certification for copper-produc-               precious metals, continues moving for-
                                                                             ing companies demonstrates responsible production practices                  ward with its precious metal and copper
                                                                             aligned with the United Nations Sustainable Development Goals.               assets, and accounts for 4.3% of Peru’s
                                                                             Condestable is the first medium-size and underground mine to                 total gold production, having increased its
                                                                             achieve this certification. “For us, having achieved The Copper              output by 10.2% in 2022. In San Gabriel, it
                                                                             Mark enhances our goal to be a benchmark company in the min-                 has been working non-stop to bring the
                                                                             ing industry,” noted Vera.                                                   project online since it was granted the
                                                                                Despite a declining production in 2022, Óscar González Rocha,             construction permit in March 2022.
                                                                             executive president of Southern Copper Corporation, explained                   Meanwhile, at Uchucchacua, Buenaven-
                                                                             they are working at Cuajone to expand throughput to 108,000 mt/d             tura has been reviewing the mine design
                                                                             instead of 90,000 mt/d: "We expect to bring Cuajone to a produc-             to optimize production and reduce costs:
                                                                             tion level similar to Toquepala, where we process 120,000 mt/d."             “We plan to restart operations at Uchuc-
                                                                                Southern Copper also owns Tía María, one of Peru’s largest                chacua by the end of 2023,” commented
                                                                             projects in the pipeline, which has been in limbo for years, but             Leandro García, CEO of Buenaventura.
                                                                             Óscar Gonzalez Rocha showed optimism, stating that he hopes                     Buenaventura also has Yumpag
                                                                             to bring it online in 2023: "We recently met with the main Peru-             amongst its portfolio of projects, where it
                                                                             vian authorities to continue with the progress of the Tía María              hopes to get the unit ready to start opera-
                                                                             project in the Arequipa region. The project has all the engineering          tions as soon as they are granted the per-
                                                                             ready, and we expect it to come out this year once the political             mits. The company identified an estimat-
                                                                             problems in the country are solved.”                                         ed resource of nearly 200 million ounces
                                                                                                                                                          (oz) of silver, signifying that it could be a
                                                                             Precious Metals                                                              large project. Finally, regarding El Bro-
                                                                             2022 was a challenging year for precious metals in Peru. Accord-             cal, the leading underground copper
                                                                             ing to the latest MINEM figures, production of both gold and silver          mine, they want to ramp up production
                                                                             decreased, by 0.8% and 7.6%, respectively. Lower gold figures are            to 9,000 t/d in 2023: “The medium-term
                                                                             mainly due to the sustainable decrease from Yanacocha, Reta-                 plan is to convert El Brocal into a 100%
                                                                             mas, and Hochschild’s Ares. Minera Poderosa continues to be the              copper mine, with a production ranging
                                                                             largest gold producer, showing an increase of 1.6% in production             from 60,000 to 70,000 mt/y of fine copper,”
                                                                             and accounting for 9.7% of the overall gold output.                          added García. ■

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Executive Insights                                                                                                                                Junior Exploration
A bullish outlook for Peru                                                                                                                        Explorers hopes are undiminished in the Andean Country

"We must work together to recover the stability,                            "In Incimmet we are creating collaborative ecosystems                 Investment in exploration in Peru has          respectively). Even though gold takes the       financing with Vancouver-based Regulus
confidence and predictability needed                                        with universities to develop innovation from which every              been fluctuating throughout the last de-       leading portion of the exploration budget,      Resources for a strategic investment of
to continue attracting investments                                          stakeholder can benefit. We want to                                   cade. The country reached a peak of ap-        most investments are being made by large        C$20.5 million (around US$15 million),
and new projects that promote Peru's                                        generate enthusiasm and optimism
                                                                                                                                                  proximately US$900 million in explora-         copper producers, particularly in brown-        giving Nuton control of over 16.1% of Reg-
development and welfare."                                                   around mining."
                                                                                                                                                  tion investment in 2012, that declined to      field operations, as they seek to take ad-      ulus' common shares.
Leandro García, CEO, Buenaventura                                           Eduardo Cossio Chirinos, CEO,                                         approximately US$216 million in 2020,          vantage of mineral prices. Copper repre-           According to John Black, Regulus' CEO,
                                                                            Incimmet                                                              due to the exceptional pandemic impact.        sents around 72% of the total investment        large copper-gold companies have been
                                                                                                                                                  However, it has been progressively in-         in mining projects.                             monitoring their progress in their copper-
“Peru is a jurisdiction where mines can get built. If we
                                                                                                                                                  creasing from US$327 million in 2021 to                                                        gold AntaKori project in Cajamarca. Now
look at the world’s largest mines that have been brought                    "With its mining potential, Peru allows us to experiment,
online recently, two of them are in Peru;
                                                                                                                                                  US$586 million in 2022.                        Betting on Peru against the odds                that Rio Tinto has a stake in the company,
                                                                            develop and implement new technologies. We see no                        According to MINEM’s 2022 Portfolio         Comparing figures from 2022 and 2021 of         they plan to test Nuton's primary sulfide
Quellaveco and Mina Justa."                                                 regulatory restrictions except those imposed by global                of Mining Exploration Projects, of the 63      the exploration budget, we note a signifi-      leach technology to produce copper cath-
Jay Chmelauskas,                                                            standards. Peru offers favorable conditions for the
                                                                                                                                                  projects located in 17 regions of Peru,        cant rise of 79.2% in investment; evidence      odes on site, using less water and elimi-
President and CEO, Camino Corp.                                             research and development of tailings
                                                                                                                                                  with a global investment of US$586 mil-        that Peru continues to be an attractive         nating tailings, logistics costs, and interac-
                                                                            management technologies."
                                                                                                                                                  lion, 49 are greenfield projects, and 14 are   mining jurisdiction, especially for mid-tier    tion with smelters. "From both an ESG and
"Copper is the one metal needed for all clean energy                        Gustavo Bravo, Mining Director for                                    brownfields. Gold exploration projects         and major companies seeking to grow re-         financial standpoint, it could be quite a
strategies. Peru is in the right spot regarding its copper                  Latin America and the Caribbean, WSP                                  represented 43.4% of the exploration bud-      serves and replace depleting pipelines.         game changer," pointed out Black.
endowment and also in its exploitation aspect, having                                                                                             get, followed by copper, zinc, silver, and       In January 2023, Nuton, a Rio Tinto              Leveraging its team's experience and
the ability to significantly increase its                                                                                                         tin projects (36.1%, 11.2%, 8.3%, and 1%,      company, completed a private placement          knowledge of the geology of the Andean
production in the future."                                                  “In these times of change, there is always a particular
                                                                            market segment that sees opportunities to advance                                                                                                                           Part of CESCO Week
David Kelley, President and CEO,                                                                                                                               21st
                                                                            early-stage projects through the study
Chakana Copper
                                                                            process, as they believe in the long-term

"What we are currently experiencing in Peru has created
                                                                            potential of Peru.”
                                                                            Paul Murphy, Manager - South
                                                                                                                                                                            World Copper Conference 2023
many opportunities for acquisitions,                                        America, Mining Plus
deal negotiations and project re-
                                                                                                                                                                            17-19 April 2023 • Santiago, Chile

                                                                                                                                                        The premier industry event in
                                                                            "Peru has many mining projects in the pipeline in
Patrick Elliott,                                                            different stages that demand various services and
President and CEO, Forte Minerals                                           products according to the level of

"We will continue operating in Peru, because countries
                                                                            mechanization and automation
                                                                            required by their operations."                                              the Copper Calendar
with this kind of geological potential                                      Franklin Pease,
are where the next true world-class                                         General Manager – Peru, Normet
discoveries are most likely to be found."
Peter Dembicki,                                                             "Even though uncertainty prevails in
President and CEO, Tier One Silver                                          Peru, we have learned how to adapt to

                                                                            complex political and social situations."

"With Peru's mining history and the economy's
dependence on mining, we are confident that the current
turmoil will flow through into the future
                                                                            James Valenzuela, CEO, Resemin
                                                                                                                                                              Countries                     C-level &
and Peru will remain an attractive
jurisdiction to explore."
                                                                            "Mining is an important source of
                                                                            income for Peru and therefore continues
                                                                            to be an active industry."
David Fincham, President and CEO,
Highlander Silver                                                           Enrique Sattler, CEO, Robocon                                              Register at:  
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Cordillera, Regulus' thesis is to consolidate                   Camino Corporation is a junior that         María Cecilia, Camino received the permit              being produced to meet future demand.                  advancing projects from target identifica-        been drilling in 2022 and recently granted
its land package with the mine adjacent                      has been working in Peru for a number          to start operations in November 2022. It               According to S&P Global, copper demand                 tion through resource inventory develop-          the DIA that encompasses the Cambaya
to AntaKori: Tantahuatay, an oxide heap-                     of years, and currently has three assets:      plans to drill the central portion to test for         is projected to double from the current 25             ment," he added. By having GlobeTrotters          area where it found signs of copper-por-
leach gold mine operated by Coimloache                       Los Chapitos, an IOCG (iron oxide-copper-      higher grades of copper and extend the                 million metric tons per year (t/y) to about            Resource Group as a strategic                     phyry mineralization.
(JV between Buenaventura, Southern Cop-                      gold) deposit; María Cecilia, a copper-por-    strike of copper mineralization.                       50 million t/y by 2035, leading to a poten-            project-generation partner, Forte Minerals           Finally, Highlander Silver is a silver-
per, and ESPRO) that is expected to run out                  phyry project; and Plata Dorada, an early-        According to Jay Chmelauskas, presi-                tial copper supply gap of around 9.9 mil-              has preferred access to its pipeline of           focused company, currently exploring its
of ore in about four years. AntaKori and                     stage copper-silver exploration project.       dent and CEO of Camino Corporation,                    lion tons.                                             early-stage projects.                             Alta Victoria silver-polymetallic project.
Tantahuatay —“TantaKori”—, share a signif-                   At Los Chapitos, the company envisions         the demand for copper is driven by elec-                   Right now, copper is as strategic as gold             Also leveraging the trend toward elec-         Highlander is encouraged by the results
icant copper-gold sulfide deposit. “We are                   an SX-EW heap-leach copper mine, and           trification and by mines that have been in             is precious, and everybody is bullish on               trification is Tier One Silver. Silver shares     at the Santa Teresita target at Alta Victoria,
in a brownfield setting – it is much easier to               in January 2023, it entered into a letter of   production for decades but are now de-                 the red metal. Copper demand presents                  practical uses with copper, remaining one         where some intercepts are accompanied
develop a mine which is an expansion of an                   intent to partner with Nittetsu Mining Co.     pleting: “To maintain global supply and to             opportunities for both precious metals                 of the best conductors of electricity. “As        by alabandite (manganese sulfide): "We
existing operation – and a combined ‘Tan-                    After completing due diligence, Nittetsu       meet rising demand, the copper industry                producers on the hunt for copper depos-                the world moves towards electrification,          are very encouraged by the results at Santa
taKori’ project would provide long-term                      could earn a 35% interest in the project by    requires more exploration discoveries and              its but also junior companies leveraging               we will witness a rise in silver demand,”         Teresita and some intercepts, for example,
sustainable benefits for communities for                     making a payment of C$10.1 million (US$        higher copper prices to incentivize pro-               Peru's copper endowment.                               stated Peter Dembicki, president and CEO          the hole AV 22-14 with 7.9 meters of just
generations,” concluded Black.                               7.53 million) over three years. Regarding      duction,” he added.                                        At an earlier stage in the value chain,            of Tier One Silver. Despite being a silver-       over 230 g/t of silver equivalent. What we
                                                                                                                                                                   Forte Minerals Corp. is a company develop-             play company, Tier One Silver has a base-         think is exciting is our interpretation of
"Peru's socio-political context is                                                                          Juniors and electrification                            ing copper and gold projects in Peru that              metal story coming to light with high-            where we are in the system." According
delicate, but global trends point to a                                                                      Climate change is a global emergency that              shows particular optimism and considers                grade copper samples and the presence             to David Fincham, president and CEO of
considerable increase in the demand for                                                                     requires international cooperation and                 it is a favorable time to make new acquisi-            of nickel at its Hurricane project.               Highlander Silver, this mineral association
metals, so it is crucial to take advantage                                                                  a strategic and coordinated framework                  tions. With its Pucarini, Esperanza, and Don              The company is leveraging its team’s           is analogous to Buenaventura’s high-grade
of Peru's potential for the medium and                                                                      at all levels. With the signing of the Paris           Gregorio projects in the permitting pro-               track record: it was founded by Ivan Bebek        Uchucchacua mine. The company also
long term."                                                                                                 Agreement in 2015, countries pledged to                cess, and waiting for the green light to start         and Shawn Wallace, who founded Keegan             owns another property called Politunche.
                                                                                                            reduce carbon dioxide and greenhouse                   drilling, Patrick Elliott, president and CEO           Resources in West Africa and then Cayden          In 2022, Highlander purchased Solitario
                                                                                                            emissions, so that the world is expected               of Forte, said that they are focusing on ac-           Resources in Mexico, subsequently ac-             Zinc Corp.’s exploration work and integrat-
Jorge Granda,                                                                                                                                                      quisitions on projects that are already drill-
                                                                                                            to reduce emissions by 45% by 2030, and                                                                       quired by Agnico Eagle in 2014. Dembicki          ed it into its database, helping to point out
COO, AK Drilling                                                                                            reach net zero by 2050.                                permitted to help fast-track the progress.             explained that its silver Curibaya asset re-      new areas where it is conducting geochem-
                                                                                                               To meet these goals, the world needs                "The Company strives for value creation by             mains its focus, where Tier One Silver has        ical samplings and detailed mapping. ■
                                                                                                            a rapid transition toward a low-carbon
                                                                                                            economy, but the main challenge remains                                                                         Metal Prices (yearly averages)
"The mining industry is becoming                                                                            in energy storage, especially in the energy
                                                                                                                                                                                                            Gold                                                                        Silver
increasingly aware of the benefits                                                                          and mobility sectors. The mining industry                  US$/Oz T                                                                    US$/Oz T
of carbon footprint reduction. However,                                                                     is destined to play a significant role in the              2000                                                                          25
companies must start planning this                                                                          decarbonization of the future as we need                                                                                                                                                               21.7

transition now to achieve the proposed                                                                      more minerals in order to stop relying on                  1500
                                                                                                            fossil fuels.                                                                                                                            20
                                                                                                               Several countries have taken action on                  1000
                                                                                                            this matter by securing their mineral supply
Franco Pedraz,                                                                                                                                                                                                                                       15
                                                                                                            chain for critical minerals, such as copper,
Peru Country Manager, Worley                                                                                                                                            500
                                                                                                            lithium, nickel, etc., needed for energy stor-
                                                                                                            age, and particularly electric vehicles (EVs).                  0

                     Annual Exploration Investment in Peru (US$ Million)
                                                                                                            For instance, in August 2022 the US passed
                                                                                                                                                                                2017          2018   2019          2020        2021        2022             2017     2018        2019            2020    2021           2022
    US$ million                                                                                             the Inflation Reduction Act that enables
                                                                                                            businesses to receive tax credits for com-
                                                                                                                                                                                                        Copper                                                                          Zinc
                                                                                                            mercial EVs. Another example is Ontario, in                US$/lb                                                                      US$/lb
                       -14%                                                                                 Canada, which also published its first Criti-               5                                                                            2.0
                                                                                                            cal Minerals Strategy in March 2022. Peru,                                                                          USD/mt 9,315
      700                      -14%
                                                                                                            the second largest copper producer behind                                                                            USD/lb 4.23                                                              USD/mt 2,090
      600                                                                                                                                                                                                                                                                                                  USD/lb 0.95
                                         -16%                                                               Chile, has great potential to play a pivotal                4
      500                                                          -11%                                     role in the trend toward an electrified future.                                                                                          1.5
      400                                                                 -18%
                                                                                        +51%                   Copper is expected to be a cornerstone
      300                                                                        -39%                       for all electricity-related technologies and
      200                                                                                                   a low-carbon future due to its efficiency,
      100     905       776     625      527         377    484    431     355    216     327    586        electrical and thermal conductivity, and                    2
                                                                                                            several other characteristics that turn it
              2012     2013    2014      2015        2016   2017   2018   2019   2020     2021   2022                                                                           2017          2018   2019          2020        2021        2022             2017     2018        2019            2020    2021           2022
                                                                                                            into a critical component in energy appli-
Sources: Ministry of Energy and Mines (MINEM), GBR                                                          cations. However, not enough copper is                 Sources: Kitco, LME, GBR

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Engineering, Consultancy and Contractors                                                                                                            "The current political situation has had
                                                                                                                                                    little impact on our activity since 90%
                                                                                                                                                    of our services are due to sustainability
                                                                                                                                                                                                                                                      Arcadis is a consultancy and engineer-
                                                                                                                                                                                                                                                   ing company that also has experience
                                                                                                                                                                                                                                                   working on tailings. According to Fredy
Going deeper and cleaner                                                                                                                            projects with operating mines."                                                                Alejandro, country manager of the com-
                                                                                                                                                                                                                                                   pany, Arcadis led the engineering of
                                                                                                                                                    Javier Mendoza,                                                                                around 90% of tailings dams in Chile and,
                                                                                                                                                                                                                                                   in Europe, they have been working with
Environmental, Social and Governance              "Brownfield projects allow us to deploy                                                           General Manager,
                                                                                                                                                                                                                                                   renewable energy: “In South America, we
(ESG) factors have become an inherent             our greater capacity because, in                                                                  Anddes                                                                                         have approached local investors to look at
part of the mining industry. Compliance           addition to engineering, they require                                                                                                                                                            potential renewable energy projects ap-
with these standards is not only neces-           modifications to their environmental                                                                                                                                                             plied to operations in the mining industry;
sary to maintain a more sustainable ap-                                                                                                             ESG criteria are of paramount importance.      and construction management consul-             for example, solar panels could be imple-
                                                  impact studies and permits, operational
proach towards the environment and lo-                                                                                                              WSP’s recent acquisition of the Environ-       tancy, agrees that there has been progress      mented in the tailings dam lagoons to pre-
                                                  efficiency, and water optimization."
cal communities, but it is also one of the                                                                                                          ment & Infrastructure business unit of         regarding tailings in Peru. Still, national     vent evaporation,” pointed out Alejandro.
key criteria for shareholders and investors                                                                                                         Wood has strengthened their capabilities       standards remain outdated: "National               Related to its tailings practice, Arcadis
to allocate resources. Therefore, poor per-       Gonzalo Covarrubias,
                                                                                                                                                    in tailings management, design, and the        standards represent a problem for mining        has capabilities in water management,
formance on ESG compliance can result in          General Manager - Peru, WSP                                                                       application of new technologies under          companies when reassessing their units          and is working with Southern Peru on
less investment.                                                                                                                                    ESG criteria. The company, that has been       for a possible sale", stated Mendoza.           the engineering for a treated wastewater
   Worley is a company that offers sustain-                                                                                                         working at Quellaveco, offers co-disposal         Anddes has worked on projects like           pumping system from Ilo city to the tail-
ability-focused services in Peru. Franco Pe-      generation, and green fuels. We have built    ed value for investors and, consequently,           of waste rock with tailings, a technique       Quellaveco and maintains an integrated          ings dam at Toquepala, 120 km apart.
draz, Worley's country manager for Peru,          and designed many hydrogen plants and         an incentive for mining companies to in-            that allows better usage of the geographi-     contract with Las Bambas. Moreover, it             Several companies in the mining indus-
asserted the company's commitment                 water treatment plants." Pedraz believes      vest in sustainable production measures,"           cal space. Continuing with the ESG factors,    developed a technology platform, AUDAS,         try have begun to include the figure of the
to providing decarbonizing solutions              that we might head toward the institution-    he added.                                           Gonzalo Covarrubias, general manager for       which detects and reports earthquakes           Engineer of Record (EoR). The EoR is re-
through its equipment manufacturing di-           alization of incentives like certifications     On the topic of sustainability, accord-           WSP in Peru, added: "ESG criteria require      almost instantaneously, and it is being         sponsible for the design and construction
vision: “At Worley, we have global exper-         for copper production through the use of      ing to Gustavo Bravo, mining director for           a multidisciplinary perspective and a ho-      implemented at Minur, Raura, Marcobre y         phases of a project for tailings facilities.
tise in electrified mining vehicles, power        green energy: "These could generate add-      Latin America and the Caribbean at WSP,             listic view of the problems that in WSP we     Antapaccay.                                     Reflecting on this incorporation into the
                                                                                                                                                    can address."

                                                                                                                                                                                                                         Cradle to Cradle
                                                                                                                                                    Reducing the tailings footprint
                                                                                                                                                    Among environmental concerns, we find
                                                                                                                                                    tailings, a by-product of the metals and
                                                                                                                                                    minerals recovery process, at the fore-
                                                                                                                                                    front. The management of tailings repre-
                                                                                                                                                    sents a long-term responsibility for mining
                                                                                                                                                    companies, and due to its high environ-
                                                                                                                                                    mental footprint, it can hinder the process
                                                                                                                                                    of bringing new projects online.
                                                                                                                                                       Tailings management has not only im-
                                                                                                                                                    proved in Peru but worldwide. The disas-
                                                                                                                                                    ters of Mount Polley (Canada), Samarco
                                                                                                                                                    and Brumadinho (Brazil) served as a re-
                                                                                                                                                    minder that the necessary standards were                             Exploration, feasibility, due diligence, engineering
                                                                                                                                                    not widely in place in the industry. After                           and operations through to mine closure.
                                                                                                                                                    Brumadinho, the International Council
                                                                                                                                                                                                                         Our global experience gives you expert, integrated
                                                                                                                                                    on Mining and Metals (ICMM), together
                                                                                                                                                                                                                         solutions on every phase of your mining project.
                                                                                                                                                    with the United Nations Environment Pro-
                                                                                                                                                    gramme (UNEP) and the Principles for Re-                             Same team –– start to finish.
                                                                                                                                                    sponsible Investment (PRI), established the
                                                                                                                                                    Global Industry Standard on Tailings Man-
                                                                                                                                                    agement (GISTM) in 2020, mandatory for its
                                                                                                                                                    members. Today, several operators in Peru
                                                                                                                                                    are already adapting their facilities to the
                                                                                                                                                                                                                         T: +51 1 206 59 00
                                                                                                                                                    guidelines' recommendations or the ones                              E:
                                                                                                                                                    from the Canadian Dam Association (CDA).
                                                                                                                                                       Javier Mendoza, general manager of
                                                                                                                                                    Anddes, an environmental, engineering

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Peruvian mining industry, Alberto Coya,            "Mine closure was not regulated until the 1990s.                                                     "Attracting high-skilled workers became                                  "The eLION portfolio has great potential due to
Stantec's country manager for Peru and             Thus, many old mines did not consider                                                                challenging: there is a big gap between the                             the trend toward an electrified world, especially
regional lead for Latin America, noted that        certain aspects that today are binding                                                               available talent pool                                                   in underground mining. Electric motors provide
the new guidelines of the ICMM and the             like water management, one of the                                                                    and the demand                                                          ecological and economic
heavy competition for qualified person-            most significant vulnerabilities in                                                                  created by tailings                                                     advantages, as they
nel have widened the talent gap in tailings        mines that have been operating for                                                                   management."                                                            lower ventilation and
engineers: "In some cases, companies de-
                                                   years."                                                                                                                                                                      fuel costs."
mand full-time Engineers of Record, creat-
ing an additional challenge because the
                                                                                                                                                        Alberto Coya,
                                                   Antonio Samaniego, Director,                                                                         Country Manager                                                         Kai Rothgiesser,
EoRs will not be available for other opera-        SRK Consulting Peru
tions," added Coya.                                                                                                                                     Peru & Regional Lead                                                    General Manager -
   SRK Consulting Peru’s director, Antonio                                                                                                              Latam, Stantec                                                          Peru, Bosch Rexroth
Samaniego, agreed with Coya about the              in other mines such as Chuquicamata in          seeking a strategic partner was the best
lack of qualified engineers, stating that          Chile. According to MINEM's figures in its      route," pointed out Gianflavio Carozzi,
legislation has mixed the personal liability       investment 2023 portfolio, underground          AESA’s CEO.                                          Lindo, Condestable and Marcapunta Norte, which is expecting                According to Enrique Sattler, Robocon's CEO, the distance
of the individual with the liability of the        projects represent an overall investment           In 2022, AESA reached an all-time high            to ramp up operations this year. A good portion of these smaller        and depth of Robocon's customers has increased throughout
consulting firm: “Bearing the responsibil-         of US$ 5.7 billion, 10.7% of the entire port-   in sales with 35% growth compared to                 operations are in the hands of Peruvian players. Many executives        the years, leading to the exploitation of narrower veins and the
ity of a potential tailings failure is a burden    folio amount. Buenaventura's San Gabriel        2021. According to Carozzi, in recent years,         believe that the growing importance of underground operations           use of tunnels of just 2.40 meters. These factors led the com-
for the engineers’ career. This has reduced        is the only one that began construction in      mining companies have been trying to                 is unavoidable and that the underground mining landscape in             pany to continuously work on innovation, seeking to maintain
their willingness to take on these types of        2022. The underground development of            consolidate the contracting services in a            Peru is set to change: “In a few years, the situation in Peru will      efficiency and quality. Thus, it manufactured the Technoshot
job positions,” he explained.                      Yanacocha, as the mine transitions from         single operator. Thus, they have been fo-            begin to be similar to Chile: a mining industry with large under-       and Technomix range of mini-robots for shotcrete application
   Samaniego added that at SRK has been            oxides to sulfides, represents one of the       cusing on improving their capabilities to            ground mining projects operated by transnational companies,”            and transportation with a width of 1.60 meters and a height
working with mine closure, a niche that            largest single investments in Peru's min-       offer a better all-round service.                    anticipated Alberto Coya, Stantec’s country manager.                    of 2.20 meters. Moreover, the company has been working on
has been very much in demand as well as            ing industry. Delayed to 2024, it presents         Meanwhile, companies like Pevoex, an-                For Coya, underground operations provide several benefits in         the electrification of its equipment. Sattler commented that it
tailings dams.                                     a capex of US$2.5 billion, and is set to pro-   other Peruvian contractor, had to diversi-           terms of ESG and permitting. These operations require smaller           plans to leverage Bosch Rexroth's eLION portfolio of products
                                                   vide substantial opportunities for under-       fy activities, including additional services         surface areas to develop new mines, and this could streamline           for electrification.
Going underground                                  ground contractors.                             and other sectors. Rómulo Mucho, Pevo-               the permitting processes.
A vast majority of Peru’s mining produc-              Such is the case of AESA, a Peruvian         ex's general manager, commented that                    Paul Murphy, manager of Mining Plus' South American Office,
tion comes from open-pit operations,               underground contractor part of the Breca        they have been working on mine closure               agreed: “Existing open-pit mines are coming to the end of their
such as Antamina, Las Bambas, Cerro                Group, who won a tender for the integral        and environmental remediation services,              lives, but they still have good mineralization beneath them.”
Verde, Toquepala, and now, Quellaveco.             development of the Yanacocha Sulfuros           explaining: "It is an important niche be-               Mining Plus provides geological, mining and geotechnical
However, as open-pit operations be-                project, together with Redpath Mining           cause it is an imminent requirement for              engineering services throughout the entire project lifecycle. Ac-
come very deep, hauling costs make the             of Canada. "The migration projects from         all mines."                                          cording to Murphy, companies come seeking for underground
mineral more expensive to extract, and             open-pit to underground mines are large-           While open-pit operations represent               mass mining studies, methods that are not common in Peru,
this is creating opportunities for some of         scale operations that require experience,       the bulk of Peru’s mineral production,               but it leverages the company’s international expertise in the un-
these massive operations to go under-              which the client often does not have. To        there are very significant medium-size               derground space. However, he highlighted that the Peruvian ex-
ground, a transition already completed             serve this market segment, we thought           underground operations, such as Cerro                pertise in large pits attracts interest from all over the world. “The
                                                                                                                                                        skillset in Pery is truly world-class and something the country
                                                                                                                                                        should be very proud of.”
                                                                                                                                                           One of the main challenges of this transition is the optimal
                                                                                                                                                        timing to switch from an open-pit to an underground operation.
                                                                                                                                                        Murphy stated that the right moment may not be when the mine
                                                                                                                                                        reaches the end of its life and that the two mining methods may
                                                                                                                                                        even work in parallel, adding that mining companies often do not
                                                                                                                                                        consider this switch early enough: “The key is to know early, so
                                                                                                                                                        better decisions can be made, and importantly, so the right data
                                                                                                                                                        can be collected to make those better decisions,” stated Murphy.
                                                                                                                                                                                                                                            Whether we’re improving energy
                                                                                                                                                           As said before, there is a considerable amount of small to                       efficiency or optimizing water use,
                                                                                                                                                        medium-sized underground mines in Peru characterized by nar-                        we’re here to support your journey
                                                                                                                                                        row-vein operations. In this sub-segment of the industry, several                   to Net Zero Mining.
                                                                                                                                                        companies flourish, establishing leading positions in the devel-
                                                                                                                                                        opment of equipment and services for this niche. Robocon pro-             
                                                                                                                                                        vides a full range of services ranging from shotcrete production
                                                                                                                                                        and contracting to slick lines, and has worked with different min-
                                                                                                                                                        ing companies, such as Pan American Silver, Sierra Metals and

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PDAC PRE-RELEASE | PERU MINING 2023                                                                                                                                PERU MINING 2023 | PDAC PRE-RELEASE

                                                                           "As the migration of large
                                                                           mines to underground
                                                                           operations approaches, we
                                                                                                                                Equipment and Services                                                                            "In 2023, we will launch a new
                                                                                                                                                                                                                                  division in Peru called DSD
                                                                                                                                                                                                                                  (Digital Solutions Division),
                                                                           expect AESA Redpath                                  A robust ecosystem leveraging technology                                                          which will coordinate our
                                                                           Mining to be ideally positioned                                                                                                                        suite of products and in-house
                                                                           with proven capabilities and                                                                                                                           digital solutions, and from
                                                                           experience in Peru to                                                                                                                                  recent acquisitions such as
                                                                           work with mines such                                 Although markets are gradually recovering         Greener and autonomous                          Mobilaris or MineRP."
                                                                                                                                from the pandemic, uncertainty has been           From Australia to Chile, open-pit opera-
                                                                           as Antamina or Mina
                                                                                                                                a constant in recent months, both globally        tions have been leveraging automation
                                                                           Justa."                                                                                                                                                Ángel Tobar, General Manager
                                                                                                                                and domestically. Like many other indus-          for several years. It is well-known that
                                                                                                                                tries, the mining industry has been adopt-        Quellaveco is the first 100% digital mine
                                                                           Gianflavio Carozzi,                                  ing new technologies, a process expedited         in Peru, and Epiroc has been playing its        Region,
                                                                           CEO,                                                 by the pandemic, but also by the commit-          part in contributing to this eagerly awaited    Epiroc
                                                                           AESA                                                 ments that policymakers made under the            mine, providing Anglo American with six
                                                                                                                                Paris Agreements to decarbonize the envi-         autonomous Pit Viper PV351 drill rigs and
                                                                                                                                ronment, as well as concerns for workers'         three pre-cutting SmartROC D65 drills. The
                                                                                                                                safety by reducing the need for people in         Pit Vipers can automatically drill while su-
                                                                                                                                risky areas.                                      pervised from a common control room,
                                                                                                                                   The main technological trends shaping          while the SmartROC series allow for visual
                                                                                                                                the Peruvian mining landscape include digi-       remote operation.
                                                                                                                                talization, automation, and the electrification      Besides automation, Epiroc has been
                                                                                                                                of equipment. Thanks to a robust ecosystem        working on decarbonization. Ángel Tobar,        tery-electric machinery portfolio: "Our goal
                                                                                                                                in the Peruvian equipment and components          Epiroc's general manager for the Andean         is to have electric alternatives for all of our
                                                                              Robocon is one of the shotcrete con-              segment, what seemed impossible a few             region, stated that the company has a           underground equipment by 2025, and by
                                                                           tractors affiliated with EFNARC (European            years ago is becoming reality.                    roadmap for the development of its bat-         2030 for the open-pit equipment."
                                                                           Federation for Specialist Construction
                                                                           Chemicals and Concrete Systems). Being
                                                                           a member of this federation allows it to
                                                                           certify its shotcrete operators and break
                                                                           into the European market where this certi-
                                                                           fication is mandatory: "We have increased
                                                                           our interest in Spain, a country with great
                                                                           geological potential and where mining is
                                                                           reviving thanks to technological advances.
                                                                           We believe there could be a boom in un-
                                                                           derground mining there," added Sattler.
                                                                              Like major OEMs, Bosch Rexroth, the
                                                                           German hydraulic specialist, has identi-
                                                                           fied a niche in electrification with its eL-
                                                                           ION technology. This system is an alter-
                                                                           native to combustion engines that can
                                                                           contribute to reducing energy costs. The
                                                                           modular portfolio for the off-highway
                                                                           sector includes inverters, gearboxes, soft-
                                                                           ware, and coordinated hydraulics. On the
                                                                           other hand, Bosch offers BODAS, a digital
                                                                           ecosystem of IoT solutions that enables                      United. Inspired.
                                                                           customers to monitor and control the ma-
                                                                           chine. Kai Rothgiesser, general manager
                                                                           of Bosch Rexroth Peru, revealed that the                     Performance to succeed today.
                                                                           market is asking for open-platform solu-                     Technology to lead tomorrow.
                                                                           tions to integrate equipment from differ-
                                                                           ent service providers: "There is no single
                                                                                                                                        Epiroc is your partner for mining and infrastructure equipment.
                                                                           provider in the market that can simultane-          
                                                                           ously offer all services," he explained. ■

20   Global Business Reports | PERU MINING 2023 PDAC PRE-RELEASE EDITION                                                                                                                                Global Business Reports | PERU MINING 2023 PDAC PRE-RELEASE EDITION   21
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