The world is more connected than ever, and mining technology and service companies are no exception. As they expand their reach globally, they need to follow their clients to new markets, from a copper mine high in the Andes to the icey cold winters of Northern Canada. When exploring new markets, it’s the classic “chicken or egg” dilemma: You want to see success before committing to the expenses of a local operation, but as soon as you start generating revenue, the risk of being classified as a PE increases.
METS companies are investing large amounts of capital into new technologies so protecting these investments is critical. Intellectual property often takes a back seat to the commercial terms even though it should be an essential part of the contract review process.
Anglo American has provided an update on its Quellaveco mine in Peru. Construction has proceeded this past year and the project is an important part of the Peruvian mining pipeline.
Mining suppliers may use a local subcontractor for their installations at a mine site or to provide specialty services that are part of a larger contract but outside the suppliers’ core capabilities. The issue is that foreign companies can find themselves in trouble if they do not understand the risks that are particular to Chile and how to manage them when using subcontractors.
Peru already has a project portfolio of 46 projects requiring investment of US$56.2bn. Peru is expecting investments of around US$5.2bn in mining construction this year and a little over US$6 billion for 2022.
It is important for international companies to understand how contracts and specific clauses are dealt with in each country they are operating in. We provide a practical guide to clauses in Peruvian contracts.
Víctor Barrientos, a Mechanical Civil Engineer from the University of Chile, who has worked as a Maintenance Manager with CAP Mining, Anglo American, and SQM, tells us about his experience in the Chilean mining industry.
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