Ancillary Equipment & Components
A combination of productivity and fuel efficiency is driving the market
Four months of operational paralysis made 2020 a year to forget for Peru’s mining industry, as well as for the construction and ancillary vehicles companies that support mining companies. However, as operations ramped up in Q4 2020 looking to make up for lost time and a surge in metals price in 2021, the context has changed dramatically.
“Today (March 2021), we are invoicing twice as much within our mining operations as we were this time in 2020,” revealed Oscar Jaern, CEO of Scania Peru, attributing the turnaround in fortune in part due to the resumption of mining activity, but also to fleets becoming older and therefore requiring more service.
In 2020, Scania delivered 77 vehicles to the subcontractor Dinet, which operates three underground mines – Nexa’s Cerro Lindo, and Pan American Silver’s Huaron and Morococha.
Discussing how Scania’s solutions contribute to more efficient, sustainable operations, Jaern provided details of the soon-to-be-launched 10 x 4 Heavy Tipper, Scania’s largest vehicle with a gross vehicle weight of 71 tonnes, a payload of 48 tonnes, five axels and a V8 engine. “The V8 engine allows the vehicle to have as quick of a cycle time as smaller vehicles. The high payload and quick cycle time increases operating capacity and reduces the number of vehicles required by the customer, thus cutting on costs.”
“The mining industry is becoming gradually more aware of the importance of how their concentrate is transported to the ports where it is shipped, and how the supplies that mines need to operate, such as lubricants and explosives, are transported into the sites.”
José Antonio Heredia, Manager – Trucks Division, Divemotor
On the aftermarket side, Jaern highlighted the company’s full service contract offering where Scania assumes the risk of anything breaking and gives its customers a 90-97% uptime guarantee. “We are taking the risk out of the contractor’s operation and putting the risk onto us since we believe we are the best at maintaining Scania fleets,” he added.
Another of the Swedish OEMs involved in the space, Volvo, has implemented in-house service agreements with mining companies in Peru that cover qualified labor, spare parts stock, driver training, fleet management, connectivity and lube trucks, detailed Tobias Sigerstad, managing director of Volvo Group Peru. “This portfolio has an entire logistics support platform through our dealers’ network that is strategically located near the mining projects, which allows us to have a timely response from our in-house warehouses installed in the mines,” he said, adding that Volvo also has a platform for the automatic replacement of spare parts.
Sigerstad explained that Volvo’s wide range of construction and ancillary equipment has been customized to Peruvian conditions, including high altitudes, varied temperatures, and corrosive terrain. He also mentioned that in 2021 the company has advanced its development of autonomous vehicles for the long-haul transport segment, and has started to develop fuel hydrogen cells on the path to zero emissions.
José Antonio Heredia, manager of Divemotor’s trucks division, spoke of the company’s decision to standardize its vehicles with superior technologies to those required by Peruvian legislation. “While Peru requires compliance with the Euro 4 set of rules in terms of fuel emissions, we decided to incorporate the Euro 5 regulation in our whole portfolio, including in our Mercedes Benz and Freightliner vehicles, meaning superior fuel efficiency.”
Heredia added that Divemotor has also invested in technology to reduce repair and maintenance time, and has achieved 1,000 hours between intervals of oil and filter changes, allowing for greater vehicle utilization. To illustrate the fuel efficiency of its vehicles, Heredia gave the example of the fleet of 20 trucks with Euro 5 technology that Divemotor provided to logistics operator Ransa. “After two years of operation, the results have been impressive; while we guarantee 5% of fuel savings with respect to the average that they had in their fleet from other brands, they are achieving around 10%.”
Spanish company, Posada, entered the Peruvian market in 2010, and specializes in equipment for earth-moving activities such as excavators. Enrique García Arbulú, Posada’s sales manager for Peru, observed the trend towards more underground mining operations in the country, citing the Yanacocha Sulfides project as an example. “Seeing the growing importance of this sector, Posada recently bought drilling equipment for underground mining works, and we are currently using this equipment in a quarry in Ventanilla, Lima,” he said, adding that the company plans to acquire a more powerful fleet for underground mining operations in preparation for the opportunities ahead.
One of the more recent entrants in Peru that offers a wide range of ancillary equipment is Chinese company, SANY, which entered the Peruvian market in 2020, according to Hernán Talavera, general manager of SANY Peru. Talavera highlighted the company’s focus on R&D, with 5% of its annual sales reinvested in innovation, such as the Rootcloud platform, a remote monitoring system that manages large fleets. “This system calculates hours of operation, provides maintenance alerts, and can notify if there is something about to go wrong in the machine. This way, clients can make informed decision and protect their equipment,” he explained, noting that this translates into greater productivity, cost savings, and less probability of catastrophic failures.
“In comparison to open-pit mining, underground mining needs more hydraulic equipment per tonne produced. This is especially relevant for mobile equipment, such as drilling equipment. Conditions are rough and the service needs are also higher.”
Kai Rothgiesser, General Manager, Bosch Rexroth Peru
In the last five years, new mining operations (including Las Bambas in 2016), expansions (Toquepala in 2018), and developments such as Mina Justa and Quellaveco, have resulted in an expanding fleet of mining vehicles in Peru. This has offered a wealth of opportunities for companies specialized in equipment components.
While the pandemic stunted this growth, pent-up demand and high copper prices have contributed to a strong rebound in 2021. “Mining companies were busy with maintenance operations while they could not produce, which resulted in FUCSA having a backlog of orders when we restarted operations,” related Raúl Ferrero, general manager, of Fundición Chilca (FUCSA), a Peruvian foundry which provides items for both processing plants and mobile equipment.
FUCSA’s portfolio of products includes components for earth moving equipment such as crawler shoes and idler rollers, mill liners, crusher cones and mantles, pump parts and an array of other castings. Ferrero explained how its software allows for maximum production process control and design optimization: “By means of this software, we shape quality and increase efficiency, which defines filling parameters, solidification, residual stress and the metallographic structure.”
Discussing opportunities for suppliers of mining equipment components, Rexroth, a German hydraulic drive specialist that forms part of the Bosch group, sees potential for growth in the underground space, according to Kai Rothgiesser, general manager of Bosch Rexroth Peru. Rexroth currently participates in underground mining operations through contractors such as AESA and INCIMMET, or OEMs such as Resemin, for which it supplies components for mobile transport machines and loaders.
“In comparison to open-pit mining, underground mining needs more hydraulic equipment per tonne produced. This is especially relevant for mobile equipment, such as drilling equipment,” explained Kai Rothgiesser, Bosch Rexroth Peru’s general manager, who added that the service needs are also higher in underground mining because of rough conditions.
Nasdaq-listed Astec Industries is best known as a leading manufacturer of equipment for asphalt road building and aggregate processing, however, the company also supplies a wide range of mining products, including underground equipment, high-frequency screens, cone crushers and jaw crushers. Carlos Fonseca, regional managing director of Astec LatAm, was hired to start the company’s Latin American operations in 2019, where the mining industry accounts for Astec’s biggest client base. Fonseca used to be general manager of Komatsu’s Peru and Colombia mining division, and acknowledged the competitive market for underground equipment. He mentioned the key to success is having robust, well-engineered products, as well as having extensive knowledge on the ground. “For instance, Canadine has been our distributor in Peru for over 30 years, so they have deep knowledge about the products.”
Australian equipment provider, Austin, has seen a promising uptick in mining purchasing power globally in 2021, according to Luis Flores, general manager of Austin Peru. He commented that the company’s Peruvian sales in 2020 and 2021 have been concentrated principally in the southern region, working with clients such as Las Bambas, Southern Copper and Marcobre.
Explaining the ROI customers can expect using Austin’s equipment components, head of business development for Peru, Santiago Guillermo, noted that clients have obtained 12% to 15% more production profit through the use of Austin’s customized truck bodies. Elaborating on how the equipment adds value, he said: “We optimize the weight of the truck bodies in accordance with the requirements of the mine. The key is to develop the specific engineering and build truck bodies that are exclusive for each operation and each client, bearing in mind that climate conditions, density and operators are not the same despite using the similar equipment.”
Guillermo also mentioned the importance of striking a balance between the requirements of the mine’s operations and maintenance.
Image courtesy of Scania Peru