Mauricio Rocha, Managing Director,
"Mining companies are sending samples every two or three hours to laboratories, and they need quick responses in order to immediately move parameters in the processes."
What are SGS’s main services for the mining industry and standout projects you have been involved in?
Approximately 75% of SGS’s business in Chile is mining, with many of our standout projects related to the testing, inspection and certification (TIC), and modelling of mineral productive processes. We have a chain of services starting from ore characterization, going through optimization of all processes, and ending with the certification of final products at the ports and things related to shipment to the final clients. This is a complete value chain that goes through chemical labs, engineering, metallurgy, geology, plant operations.
Rather than offer simple services, we have integral contracts where we take on the whole process from pit to port. For example, we have a large contract with Escondida, and last year we took almost the whole north district contract for Codelco. This involved process optimization, port services, chemical labs, metallurgy labs and geological testing for all of Codelco’s northern mines.
Global supply chain and logistics delays have impacted the time to receive lab results. How is SGS dealing with these challenges?
Most delays were due to Covid. Laboratories were not at full capacity, and faced complexities in responding to the demand that sometimes increased because of rising metals prices. There was not enough service capacity globally to supply such great demand, and this was compounded by government restrictions.
We have noticed a trend of mining companies requiring more analysis and sending more samples. First, because projects are being accelerated and secondly, since companies are accelerating their projects (some which were delayed due to Covid), the installed capacity of commercial labs does have not the capacity for all the samples they are receiving.
SGS is in a better position than most to deal with this, as we have installed capacity and laboratories across Chile. Here in Chile, we prepare samples for chemical analysis and send them to Peru, where they have a larger capacity.
How can SGS’s mobile laboratories help mining operations situated in remote locations?
In addition to assisting commercial labs, mobile laboratories offer shorter response times. Mining in Chile is practically all low grade, especially with old mines, where the complexity of minerals increases and demands more analysis to better understand minerology and improve processes. For that, labs need to process more samples with faster responses. Mining companies are sending samples every two or three hours to laboratories, and they need quick responses in order to immediately move parameters in the processes.
Operations like BHP’s Spence, which has to calibrate the start of a new and very large concentrator, require a whole world 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. This requires labs in the mine with a capacity to receive and respond in-line, as well as external labs to check and make longer-term, more robust analysis. Every mining company, when starting their projects, needs to have a laboratory nearby.
Considering all this demand, does SGS have plans to expand its capacity in Chile?
Definitely. We have two strategies: the organic one, to increase our capacity and expand our laboratories. SGS’s infrastructure today is already very large; we have more than 3,500 people and provide a full suite of services, but we intend to grow. It is straightforward for us to get approved Capex projects for infrastructure from our parent company in Geneva as they know the return on investment possible. On the other side, inorganic growth is always on the table. We have bought engineering companies like CIMM and Aquatic Health, and would consider further strategic M&A in the future.
Can you elaborate on SGS’s approach and commitment to sustainability?
SGS’s vision has evolved to incorporate sustainability into all aspects of the business, both internally and what we offer clients. The mechanism to face issues of ESG is innovation, including digital and structural transformation. As well as an internal innovation area, SGS has important alliances with universities looking into projects such as green hydrogen, as well as start-ups focused on hyperspectral imageology. Our pipeline of innovation projects related to sustainability has three pillars: risk management, consulting, and innovation. This approach and focus make us a strategic partner to mining which goes beyond just being a service company.