Engineering & Mining Journal

AUG 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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78 E&MJ • AUGUST 2018 www.e-mj.com MINING IN PERU causing –again– delays, inefficiencies, and higher costs than originally budgeted. Denys Parra, general manager of Anddes, one of the largest Peruvian engineering firms with a team of 250 people, sees future projects returning to the traditional EPCM approach: "In general, I see the EPCM model coming back, however, low cost will continue to be an obligation moving forward. The only way this will change is if there is a multiplicity of projects that would generate a shortage of engineering capacity." With this in mind, the traditional EPCM players keep their eyes open for potential opportunities as Peru unlocks its invest- ment pipeline over the next couple of years. SNC-Lavalin, a company celebrating its 25th anniversary in the country, expects to grab an EPCM opportunity following a few years where they had to gear more towards environmental, social studies and permitting work. Alexandra Almenara said: "Depending on the specific requirements for the project, we try to find the right experts in SNC-La- valin from around the world. For copper we can bring resources from Chile, for gold from Australia or Canada, and for material han- dling usually from Brazil." Australian company Ausenco, that han- dled the EPCM at Hudbay's Constancia and is in charge of the upcoming Mina Justa proj- ect, is now one of the strongest international engineering players in Lima, with around 400 people. Niresh Deonarain, VP Peru at Ausenco, summarized some of the main fac- tors to be considered for successful project execution: "The only way to understand if there are technical risks is to perform suf- ficient test work and site investigations. That takes time and costs money, but if done thor- oughly you will understand the ore deposit very well." Synergy and M&A Working with synergies became a key con- cept in the downturn as companies and of- The return of the positive cycle does not mean that consultancy firms can relax their focus on tailoring their proposals for the sake of efficiency and cost reduction. In the words of Eduardo Ruiz, general manager of Amphos21, a firm specialized in the water cycle: "A hydrogeological study can cost US$50,000 or US$2 million; at the end of the day, you need to do a study that serves your client's purpose, and often consulting companies are not good at understanding that." The return of EPCM projects Indeed, poor performance in engineering, procurement and construction management (EPCM) projects during the supercycle led to cost overruns and lengthy delays to reach commercial production. This, coupled with the sudden fall in commodity prices, prompt- ed mining operators to look for cheaper alter- natives to carry out their investment projects. In the words of Alexandra Almenara, general manager of SNC-Lavalin: "The downturn in mineral prices in the last few years has taught us lessons as we have had to struggle with less resources to deliver projects." For a while, smaller EPCs became fash- ionable, but the savings of that model were often offset by the lack of integration be- tween the different modules of the project, Alexandra Almenara, general manager, SNC-Lavalin.

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