Insight into Glencore’s Technology Push
Written by Cody Mcfarlane
Exponor was an eventful week with mining companies showing off their plans and suppliers demonstrating their latest solutions. One of the presentations that I enjoyed the most was an update from Enrique Caballero, Technology Studies Manager with Glencore, discussing the company’s technology strategy. I highly recommend following him on LinkedIn if you do not already.
Below is a summary of his discussion points because I think it gives a good insight into Glencore’s overall plans. I have provided a few of my own comments throughout to give some insight. This can be particularly useful for service and technology providers who are trying to understand where their solutions can potentially be useful.
Glencore is highly focused on copper. Five of the company’s largest copper projects are in South America – Coroccohuayco: Peru, El Pachón: Argentina, Polymet: USA, Collahuasi Expansion: Chile, Agua Rica (integrated with Alumbrera): Argentina, Mutanda Sulfuros: DRC, Sulfurous Berry hills: Chile.
My take – Glencore has some great assets in Latin America which will surely boost its copper production in the long term. The issue is that some are farther along than others so Glencore’s growth in Latin America will depend heavily on exisiting operations rather then new ones for the short term. Here is a brief overview of the LATAM Projects –
- Very limited public information on El Pachon but from the last updates I seen the project is advancing and should submit its environmental Impact study in 2022.
- The US$2.38bn Mara project (formally Agua Rica) is only 25% owned by Glencore so the upside is limited on this one. With that being said, it will be among the top 25 copper producers in the world when in production, and one of the lowest capital intensities of comparable projects globally. The project is expected to have the environmental and social evaluation ready in late 2022.
- Antapaccay announced in October 2021 that it wasn’t planning to execute the Coroccohuayco project in the short term due to protests from the local community. The most recent news is that the company is negotiating with the local communities. I do not see this project happening any time soon given the overall climate in Peru between mines and local communities but one to keep an eye on.
- Collahuasi Chile’s has its environmental impact study recently approved which will lead to the US$3.2bn expansion project. The project is set to increase processing capacity to 210,000t/d from the current 170,000t/d as well produce cathodes through a bioleaching process rather than regular leaching to process 35,000t/d of mixed sulfide and oxide ore. The initiative, which aims to extend the mine life by 20 years, also involves the construction of a desalination plant as well as a water pumping and transport system.
Innovation and technology are an important part of helping Glencore meet its goals around sustainability. Specifically, autonomy, digitization and the decarbonization of its fleets.
Some of the specific areas pointed out were –
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Remote operations & process automation:
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My take – Glencore is clearly committed to automation. They have recently automated their surface drills at Antapaccay and Lomas Bayas using technology provided by Flanders. Ardvarc, Flanders Solutions, is said to typically lift productivity by up to 30%, provide greater drill accuracy and the ability for one person to operate up to eight drills from its remote command centre. I think we can expect to see more of this in the coming 12 months so keep an eye out as the company makes new announcements. |
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Vehicle interaction at the 10 copper sites (CAS Level 9 and Fatigue Systems):
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My take – Glencore recently announced they deployed Caterpillar’s Smartband at its Lomas Bayas Mine. The Cat Smartband uses Vancouver based Fatigue Science technology to help users understand the connection between operator sleep, fatigue and accident risk on and off the job site. I have also seen that Glencore used Guardvant Technology a few years ago at some of its Australian mines, but it is unclear if the company will use a variety of providers depending on each operations preference or if there will be one provider for all of its global operations. The same with collision avoidance systems. It seems the company over the years has tested a variety of solutions. From my basic research I seen that it has used systems from Newtrax, Hexagon, and more recently Sandvik for some of its Australian operations. I have even seen one new release that stated they were developing their own in-house version but not sure where that stands now. From an outsider’s perspective, it seems that there is still not one solution that stands out so possibly an area of opportunity for suppliers with proven and tested collision avoidance systems and/or fatigue management systems. |
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Decarbonization – Scope 1 (in current and future operations / studies in mining fleets)
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My take – There is a lot of information on Glencore’s focus to decarbonize the business. There is almost no information on any specifics related to the companies fleets. Based on the limited information I have seen; Glencore is assessing fleet electrification opportunities. The company has mentioned looking at converting to battery electric and hydrogen fuel cell as they become commercially available which is most likely towards the end of the decade. One specific example I found was that the company recently announced it would purchase battery-electric support vehicles for its Sudbury Integrated underground Nickel Operation. These support vehicles would include explosives charging, secondary reduction, shotcrete spraying, concrete transport, and utility vehicles. My take is that the company will electrify its underground operations where possible in the short term but its open pit operations will take some time.You possibly might see some trials or projects with trolley support and hybrid trucks. Fully electric and hydrogen are not quite there yet. |
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Digital programs in the 10 copper sites
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My take – There is a lot of digital solutions that could help Glencore improve its processes. The company is clearly looking for technologies that can specifically improve its processes, safety, reduce water use, monitor COS emissions, and have a general impact on productivity. I imagine any companies that have a worthwhile solution that can improve these areas should be reaching out to Glencore operations. |
Finally, the executive emphasized that to follow this path to Digital Mining 4.0, the following are required: Professionals and technicians with the ability to innovate, Suppliers in line with the new needs and with the world, technology services, Studies and Training, with new tools and solutions.
My take – I have been vocal about the need for more training and education that is specifically tailored to “Mining 4.0”. There is a lack of skilled professionals with backgrounds in automation which is creating a bottleneck for the whole industry who are competing for a limited pool of professionals that can support them with their transformations.
Glencore will need to rely on suppliers who are technology savvy to help them move into the next stage of maturity. Many of the challenges that mining companies are going to face will require external support either through the supply of technology or with assisting them to implement it across their operations. This is an area of opportunity for suppliers who can stand out from competitors if they have the right skills and experience.
It is still my opinion that mining companies are not providing enough re-training opportunities to their workers, particularly at the operational end of the work force. The move to automation will create issues in communities if operational staff such as truck drivers, labors, and mechanics are not given opportunities to be re-trained and then re-deployed in areas where technology is creating jobs. I think it will be important for mining companies to be more vocal about what they are doing to support workers transitions.
Conclusion
There are some real opportunities for suppliers if they read between the lines when looking at presentations such as this one. I am by no means an expert but I am relatively good at connecting the dots to find an opportunity.
Glencore has a portfolio of projects that it will look to boost its copper production over the next 10 years. It is my opinion that Glencore will want to incorporate new technology into these new operations from the very beginning, similar to Anglo’s Quellaveco mine, which was designed to be 100% digital.
Suppliers should be focused on introducing their solution not only to operating mines but also looking to push it into mines that will be built over the next decade. There is a big opportunity to grow with Glencore as it looks to grow its copper production and incorporate new technologies.
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 are 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
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