Peru Mining Pipeline & the Opportunity for Suppliers

Peru is among the leading producers of metals such as copper, gold, zinc, lead, iron, and tin. Peru’s resource wealth is diverse and demonstrates the importance of mining activity to the Peruvian economy. With many companies in Arequipa for Perumin this week, it is a good time to review the project pipeline and where there is opportunities for mining service and technology providers.

The Peruvian mining industry is not as developed with local suppliers as countries such as Chile. There are significant opportunities for growth in the coming years. Private mining investment has flowed in during the last decade, making Peru the second most popular destination (after Chile) for mining invest- ment in Latin America. The country already has a mining project pipeline of approx. USD$53bn which will continue to grow as more exploration projects advance.

For mining service and technology companies, Peru has a good mixture of underground and open pit mines already in operation. In addition, local mining companies have been investing in new technology over the last few years which has made Peru a very interesting market for companies that can help local operations be more efficient and safer.

• Peru has 43 projects in various stages for a total of USD$53b.
• 91% are greenfield projects at various stages
• 9% are brownfield projects

Technology and Digital Solutions

Like most miners across the world, Peruvian miners are investing heavily in digital solutions, automation, and a range of technologies that will help them maintain productivity and competitiveness by reducing costs and becoming more efficient.

Companies are focused on getting the most out of their equipment and assets. Sensors and software that can improve equipment uptime or throughput are well received. This can include mobile equipment, concentrators, conveyors, crushers, and grinders. Autonomous drilling and trucking are already being implemented in Peru and will surely increase in the years to come. All these solutions require a robust communications network. Communications networks for both underground and open pit mines are critical given the countries mines tend to be in remote locations with minimal infrastructure.

The geology in Peru is often complex so mining software is important for resource estimation, modeling, mine design, planning, and optimization. On the exploration side, there are substantial opportunities with geophysics, mapping, and diamond drilling. Drones and more precision drilling methods are also important.

Safety and Environmental Solutions

The industry is increasingly focused on improving safety and environmental conditions due to new regulations that have been introduced and an overall culture change that is happening within the Peruvian mining industry. Collision avoidance systems, tracking of people and machines underground and across site, remote environment monitoring, dust control, and mine safety training are some of the areas where foreign companies can provide their solutions.

From an environmental perspective, the Peruvian mining industry is trying to improve water usage through recycling and less water intensive processes. Renewable energy such as solar and wind are increasingly becoming part of the energy mix. Solutions around blasting to minimize noise and the effects on local communities are also sought after. Lastly, tailings dams are an important topic, companies are trying to dewater their tailing and put in place better practices around managing thier tailings facilities

Advice for Suppliers

The Peruvian mining industry is going through a transformation similar to mines in other parts of the world. Technology and automation are increasingly critical components of maintaining productivity and competitiveness for Peruvian operations. There are some specific challenges that are unique to Peru such as local community relations, minimal regional infrastructure, employee development and training, and difficult geological conditions which may create opportunities for suppliers to provide solutions that can have a real impact.

The most critical activity a supplier can do is ensure they are visiting the mines and speaking with operational staff about the challenges that they are facing on the ground. It is through these personal contacts and relationships that suppliers can truly understand where their solutions can create the biggest impact while building trust with all stakeholders. It is not enough just to fly in and fly out. Peruvian miners want long term partners who have local staff who can provide training and can provide after-sale support. Mining suppliers who are willing to make the investment to have in-country operations will benefit the most from growth in the Peruvian  mining industry.

Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal