PERU MINING 2023 PDAC Pre-Release Edition - Global Business Reports
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PERU MINING 2023
PDAC
Pre-Release Edition
Global Business Reports
www.gbreports.com PERU MINING 2023 | PDAC PRE-RELEASE
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
9
bound and outbound transportation and -9% companies and communities
the shortage of key inputs have forced it 8
coexist. This allowed them to
-16%
to progressively slow down its operation, 7
return to Peru with renewed
+19%
which accounts for around 2% of copper 6
+25%
+22% +2% foresight into mutually
worldwide. 5
-27% satisfactory relationships."
Glencore’s Antapaccay, an operation 4 -51%
+19%
that represented 6.2% of national cop- 3
per production in 2022, is another ex- Javier del Río, VP South
2
ample where political unrest is hindering America and US,
1
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-
2.0
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
GLOBAL
16 - 18 MAY 2023 kets. These logistic corridors generate opportunities and boost lowering the standards.
29 - 31 AUGUST 2023
LONDON
28 - 30 NOVEMBER 2023
LONDON
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-
MINING INVESTMENT
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
7
6 2021-2022 change (%)
2.0 2021-2022 change (%)
-0.78
+4.84 5
Peru’s copper output remains steady amid 1.5
4
3.11
instability and market volatility
3
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 (%)
2.0
2021-2022 change (%)
-7.61
producer after Chile, and stands among the top four produc- expansion and the commencement of the other -10.67
120
ers of silver, lead, zinc, tin, and molybdenum. Mining is also the projects in the pipeline 99.0 1.37
1.5
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 (%)
40
+4.58
-3.44
300
to US$3.22/lb, the lowest since November 2020, as fear over a 28.2
255.3 30
worldwide recession loomed.
250
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 (%)
+6.48
Copper presented a steady production in 2022 for a second year 30
12
31.5
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
20
three copper producers in Peru continued to be Antamina, Cerro 6
15
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
negotiations."
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
61%
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
35
Countries C-level &
481
Attendees
217
Companies
and Peru will remain an attractive
jurisdiction to explore."
"Mining is an important source of
income for Peru and therefore continues
Director
to be an active industry."
David Fincham, President and CEO,
Highlander Silver Enrique Sattler, CEO, Robocon Register at: www.worldcopperconference.com
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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
1,800.1
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
goals."
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
10
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
1000
businesses to receive tax credits for com-
Copper Zinc
mercial EVs. Another example is Ontario, in US$/lb US$/lb
900
-14% Canada, which also published its first Criti- 5 2.0
800
cal Minerals Strategy in March 2022. Peru, USD/mt 9,315
700 -14%
+79%
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
+28%
500 -11% role in the trend toward an electrified future. 1.5
-28%
400 -18%
+51% Copper is expected to be a cornerstone
3
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
0
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
srk.com
are already adapting their facilities to the
T: +51 1 206 59 00
guidelines' recommendations or the ones E: karindr@srk.com.pe
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
Optimize
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- stantec.com/net-zero-mining
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
Hochschild.
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"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
Andean
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- www.epiroc.com
ously offer all services," he explained. ■
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