"In new mines that are due to come online, especially Mina Justa and Quellaveco, the large workforces required to run various aspects of the operation also offer opportunities for third part service providers."
To what extent did the Covid-19 pandemic impact Confipetrol Andina’s business in 2020?
2020 was a challenging year due to the pandemic, and in particular the time during the lockdown and obligatory quarantine. We had to reduce our workforce and service level at various operations that were not declared essential. Confipetrol works in the mining, petroleum and energy sectors, and these each had different contexts. The petroleum sector was considered essential and we managed to maintain a large percentage of work in this segment, but many mining operations were not initially considered essential. Fortunately today (January 2021), we are back to a higher percentage of working capacity, but social distancing measures make it difficult to achieve pre-Covid levels. While sales and profit were down between 10 to 15% in 2020, we expect to grow between 10 and 20% in 2021, while maintaining the highest safety and sanitary measures.
What are some of the main clients and mining projects Confipetrol worked on in recent years?
Nexa Resources is one of our biggest clients, and we have worked for them at Atacocha, El Porvenir, Cerro Lindo and the Cajamarca refinery. We have also worked on a plant maintenance project for Yanacocha, as well as Marsa, Minsur, Chinalco, Hudbay, Barrick, Antapaccay, Las Bambas, among others. Our third part services include the operation and maintenance of concentrator plants, open-pit equipment, fleet maintenance and underground mine equipment, and taking care of these concerns for mining companies means they can focus on their core business.
What measures have you taken to prevent contagion?
Since the start of the pandemic we have implemented Plan Covid, outlined by the Peruvian Labor Ministry. Furthermore, we have been working with clients to make sure all standards are met and maintained. The use of PPE, such as masks, is required at all times, as well as distancing and cleaning hands and anyone that feels unwell must report immediately to be tested. Distance between beds at mining camps has been increased and cleaning procedures have been tightened.
What differences have you noticed between the responses of the mining and petroleum industries to the crisis?
Peru is a mining country with a lot of opportunities, but because of the size of the mining industry here there are a lot of regulations and authority involvement. Therefore, sometimes processes can take longer than in industries with less companies involved in the value chain. The petroleum industry suffered a lot in Q2 2020, but has rebounded and is now steady. Confipetrol works more with the petroleum industry in Colombia, and more with the mining industry in Peru. Both industries share high safety standards.
Which markets do you see as having high potential for growth for Confipetrol?
The south of Peru holds a lot of potential, with companies such as Cerro Verde. In new mines that are due to come online, especially Mina Justa and Quellaveco, the large workforces required to run various aspects of the operation also offer opportunities for third part service providers. Looking further ahead, Buenaventura’s San Gabriel and the Yanacocha Sulfides project are other important projects for Peru.
What do you think differentiates Confipetrol in the third part services space?
With the exception of the pandemic year in 2020, Confipetrol Andina has grown 20% per year for four years. The main reason behind this is our team and its dedication to offering the highest quality service supported in asset management, which has helped us establish long term relationships with clients. The other key factor is our safety standards and our behavior-based management system to make sure that employees have a proactive attitude with regard to safety that has resulted in one of the lowest injury frequencies in the industry. Confipetrol has received the ISO 9001 certificate for quality, ISO 14001 for environment and OSHAS 18001 for safety.
Why should a mining company choose Confipetrol as a long term partner?
We work with the same objectives as our clients and want mining companies to see us as the main operation and maintenance contractor that will solve your problems with the highest quality standards, safety and environmentally friendly actions. We also work with and employ Peruvian professionals, which contributes to the development of local communities in the country and ensure the local value chain can support its mining industry to the best capacity.