Engineering & Mining Journal

SEP 2012

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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APRIMIN Chile's Mining Providers and the Human Resources Puzzle Pascual Veiga, president of Chile's Association of Large Industrial Providers to Mining, discusses the industry's enormous opportunities as well as its challenges— access to people being the key one for providers By Alfonso Tejerina Chile's reign as the world's largest cop- per producer is far from over. While Peru, No. 2 in the ranking, tries to close the gap with an interesting pro- ject pipeline (but with everlasting com- munity issues), Chile is not standing still: it has double the copper reserves of its northern neighbor (27.5% of the world's reserves against Peru's 13%, according to the USGS); and, more importantly, these reserves continue crystallizing into large new projects and mine expansions, enlarging the industry portfolio of investments year after year. The latest estimate of the Chilean Copper Commission (Cochilco) gave a figure of $104 billion worth of invest- ments to be made in Chile's mining industry by 2020. While this significant increase over last year's estimate (+56%) can be partly explained by cost inflation, there are also new projects that have been added to the pipeline. Gold is increasingly important but cop- per makes most of the money: indeed, output of the red metal should increase from 5.3 million metric tons (mt) of fine copper last year to 8.4 million mt by 2020, according to Cochilco. In this context, one can imagine the sheer size of the opportunities available for providers of all sorts, from capital goods to services, but it is impossible not to raise the question of where all the people needed to take these pro- jects to fruition will come from. Pascual Veiga, president of Aprimin, offers some perspective on the challenges associated with human resources and the industry's initiatives to ensure the sustainability of the sector. Aprimin Strikes a Balance The Association of Large Industrial Providers to Mining (Aprimin) was cre- ated in 2003, just a few years after Chile's big mining companies estab- lished their own industry body, the Mining Council. There was, Veiga relates, a need to strike a balance between the large mining corporations and the industry's goods and services providers. The mission was for Aprimin to become a strategic agent within the mining value chain. Aprimin started with 23 companies, and today's membership consists of 78 companies, employing 120,000 people directly and 30,000 people indirectly. These 78 companies are just a tiny pro- portion of Chile's 3,600 mining providers, yet they account for 82% of the revenues coming from the sale of capital goods, spare parts and associat- ed services. Revenues from Aprimin members were $10 billion last year, and the association expects them to reach $12 billion in 2012. Veiga pointed out that the number of member companies has more than dou- bled in the last three years, even though entry requirements are strict. "To be an Aprimin member, a company must have sales of more than $12 million annual- ly to the mining sector; in addition, it must have personnel working directly on mining sites; and obviously it has to comply with a number of ethical and commercial codes," he said. Outsourcing Gains More Traction Pascual Veiga signs the Procomin training agreement in the presence of Hernán de Solminihac, Minister of Mining (first left); Andrés Allamand, Minister of Defense (second left); and Patricio Rey, Intendant of the O'Higgins region (right). 92 E&MJ; • SEPTEMBER 2012 In Chile, unlike in other Latin American countries, the outsourcing of services is already seen as the norm, not the exception, and the industry has experi- enced phenomenal growth. "Twenty- five years ago, the market of service providers to the mining industry was virtually non-existent," Veiga said. "The model was that mining companies were self-sufficient. Today in Chile, for every www.e-mj.com

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