From labs and chemicals to logistics and infrastructure
The breadth of the mining value chain goes far beyond the EPCM firms and OEMs that receive the headline contracts with major producers. Mature mining jurisdictions, with Chile being a leading example, have fostered an ecosystem of suppliers that add value to operations with a wide array of services, from laboratories and chemicals, to logistics and accommodation. The pandemic has highlighted the critical importance of robust domestic supply chains, and services companies with local capacity are reaping the benefits.
Laboratories and chemicals
SGS, the global leader in testing, inspection and certification (TIC), offers services for the full lifecycle of mining, covering exploration, production, decommissioning and closure. Mauricio Rocha, managing director of SGS Chile, detailed the company’s chain of services starting with ore characterization, to process optimization, through to the certification of final products at the ports ready for shipment. “This is a complete value chain that goes through chemical labs, engineering, metallurgy, geology and plant operations.”
Rocha explained that rather than offer simple services, SGS has large contracts taking on the whole process from pit to port, including with BHP at Escondida, as well as taking on the whole north district for Codelco.
On a global level, laboratory bottlenecks have been a feature of the pandemic, with both producers and juniors commenting on the slow turnaround times for assays. “There was not enough service capacity globally to supply such great demand, and this was compounded by government restrictions,” acknowledged Rocha, who also pointed to the trend of mining companies requiring more analysis and sending more samples as projects are accelerated to take advantage of high metals prices. He added: “SGS is in a better position than most to deal with this, as we have installed capacity and laboratories across Chile; mobile labs as well as regional labs in Peru.”
Elaborating on the lab needs of large operations, Rocha gave the example of BHP’s Spence, which has to calibrate the start of a new concentrator, requiring a whole range of analysis and development: “Those samples go to our commercial labs, and they require in-line analysis because they are calibrating their plant and any deviation is a loss of a lot of money when production magnitudes are huge.”
Rocha noted that this requires labs at the mine site with a capacity to receive and respond in-line, as well as external labs to check and make longer-term analysis.
The chemical industry shares a common struggle of public perception with mining – both sectors are necessary for everyday items we take for granted, but neither are generally thought of in a positive light. In reality, responsible chemical use has a multitude of benefits, from increasing crop production to feed a growing global population, to improving metal recovery or treating water in the case of mining.
Ricardo Capanema, global marketing director mining solutions at Solvay, spoke about Solvay’s global plans to grow in the copper business: “Solvay is evaluating the investment in capacity building to meet increasing demand for flotation chemicals. This is partly driven by the industry’s decarbonization push.”
Capanema expanded on how sustainability is a driving force in R&D, detailing how Solvay’s solutions can help different areas of the mining business: “Additionally, we have developed solutions to help mining companies treat challenging ores that contain problematic penalty elements. We also help companies address their energy and water conservation, especially during the comminution stage.”
“We worked with one company that was using a non-selective commoditized collector to develop a more selective collector for the floatation operation. Even though the per kilo cost of the reagent was higher, the client achieved over 150% return on investment, because of a lower dosage and higher recovery performance.”
Ricardo Capanema, Global Marketing Director – Mining Solutions, Solvay
Infrastructure and logistics
Chile is known for its large-scale mining projects, which offers opportunities for companies involved in the provision of infrastructure and mining camps. Tecno Fast S.A. has worked on many of the emblematic mining developments in recent years, including QB2 for Teck, the camp and auxiliary infrastructure for Gold Fields’ Salares Norte project, and Rajo Inca for Codelco. “We are not just building and renting the camp, but we are operating it, which is an entirely complete service, including administration, maintenance, operation, food and cleaning services,” commented Rodrigo Prado, Tecno Fast’s general manager.
Evaluating Tecno Fast’s potential for growth in the mining market in the coming years, Prado stated he expects a lot of activity, including a camp for Collahuasi of around 6,000 beds, as well as the Centinela project. He added that the company sees opportunities in delivering value-added products: “Not just delivering the camp but also managing, administering, operating it and adding services. This is supported by the digitalization of our processes and the use of data.”
“We expect a lot of activity in the mining market in coming years, including a camp for Collahuasi of around 6,000 beds, as well as the Centinela project. We see opportunities in delivering value-added products – not just delivering the camp but also managing, administering, operating it and adding services.”
Rodrigo Prado, General Manager, Tecno Fast S.A.
One of the most evident themes of 2021 and 2022 has been the rising cost of logistics, ignited by the pandemic and enflamed by rising inflation and fuel costs. Tomás Valenzuela Somerville, mining and energy director of AGUNSA Chile, the multinational logistics company, remarked that while everyone is dealing with this scenario, AGUNSA has tried to be as flexible as possible to search for efficient alternatives. “Logistics companies need to be creative. For example, as the price to send a truck to a mine has gone up, we can offer to do less trips but more efficiently and with a bigger cargo.”
Valenzuela noted that due to AGUNSA’s vertical optimization and network of logistics centers, the company has managed to help mining clients save costs. “We are just in front of Puerto Angamos in Mejillones, and we are considerably more efficient and competitive than other alternatives in the region, so clients can save up to two digits at the best level of quality and compliance in the market.”
Image courtesy of SQM