20130408105755_2013 03 12 - challenges facing the mining industry (chile-denmark) vf

7/29/2019 20130408105755_2013 03 12 - Challenges Facing the Mining Industry (Chile-Denmark) VF

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Chile: A Mining Country

March 12, 2013 - Sustainable Development in the

Chilean Mining Industry, Round Table Chile-Denmark

Challenges facing the

mining industry

Jorge I. Zeballos

Research and Policy Planning Department


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CONTENT

1. Chiles leadership in the mining industry

2. Mining investment and capacity forecast

3. Challenges for the future

4. Final comments


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CONTENT




4. Final comments


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4

Worlds largest

Nitrate producerduring 1900 - 1920

Past1880-1930

Present1930-2012

Worlds largest

Copper producersince 1990

Future2012-

World`s largest

reserves of copper andlithium, and importantpotassium, gold andmolybdenum

A Mining History

1. Chiles leadership in the mining industryA history of success and leadership in mining


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Share of worldreserves

%

Share of worldproduction

%

Worldproduction

ranking

Metals

Copper (MT) 28 32 1

Molybdenum (MT) 21 14 3

Rhenium (MT) 52 52 1

Silver (MT) 14 5 8

Gold (MT) 8 2 14

Industrial minerals

Natural nitrates (MT) 100 100 1

Lithium (MT) 58 35 1

Iodine (MT) 24 61 1

Sources: USGS 2013, Cochilco

1. Chiles leadership in the mining industryGeological potential


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CONTENT




4. Final comments


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2. Mining investment and capacity forecastWhy is Chile attractive for Mining Investment?


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This yearsinvestment

portfolio sets anew record in the

Chilean miningindustry.

0

20

40

60

80

100

120

2008 2009 2010 2011 2012

ThousandsofMillionsUS$

Project portfolio: US$ 104.3 billion

2. Mining investment and capacity forecastInvestment Portfolio over the years


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0

1

2

3

4

5

6

7

8

9

2012 2013 2014 2015 2016 2017 2018 2019 2020

MillionMTCopp

erContent

PREFEASIBILITY

FEASIBILITY

IMPLEMENTATION

OPERATIONS

50%

Source: Chilean Copper Commission

2. Mining investment and capacity forecastForecast: Copper Mine Capacity Production in Chile


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Worlds largest

producer of Nitrateduring 1900 - 1920

Past1880-1930

Present1930-2012

Worlds largest

producer of Coppersince 1990

Future2012-

A Mining History

2. Mining investment and capacity forecast:A history of success and leadership in mining


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What challenges we will

have to overcome in order

to mantain our leadership?


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CONTENT




4. Final comments


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Challenges

1. Geologicalconditions

2. Human

Capital

3. Communities4. Water

management

5. Energy

management

3. Challenges


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Challenges


2. HumanCapital


management

5. Energymanagement

3. Challenges


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3. Challenges:3.1 Geological Conditions

Mines are gettingold

Lower ore grades

Deeper mines

Longer hauling distances


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Challenges


2. HumanCapital


management

5. Energymanagement

3. Challenges


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3. Challenges:3.2 Human Capital

Newprojects

Expansionprojects

Increasein theworkforce

In the year 2020 the large-scale copper mining will

demand 64% more workers

Source: Fundacin Chile


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Challenges


2. HumanCapital


management

5. Energymanagement

3. Challenges


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3. Challenges:3.3 Communities

Chileans are satisfied with

their lives, but critical to

society - UNDP

Environmental awareness


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Challenges


2. HumanCapital


management

5. Energymanagement

3. Challenges


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Direct use of seawater in benefit process

Need of necessary infrastructure to resist the salinity

Pumping infrastructure, high cost of investment and operation

Equipment specialization (economic feasibility)

Benefit processes modification

Depends on mineral characteristics. At old mine sites, its necessary to assess technicaland economic feasibility.

Desalinated water pumping

Transport over long distances

Transport to high altitudes above the sea level

Transportation demands high energy consumption

Environmental problems in the discharge of salt

3. Challenges:3.4 Water management - Use of sea water


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Challanges


2. HumanCapital


management

5. Energymanagement

3. Challenges


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0

1000

2000

3000

4000

5000

6000

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

CopperProduction(KTMF)

EnergyConsumption(TeraJoules)

Consumo de Combustibles Consumo de Energa Elctrica Consumo de Energa Total Produccin Cu finoCopper ProductionFuel Consumption Electricity Consumption Total Energy

Consumption

3. Challenges:3.5 Energy Management - Energy consumption


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0

5

10

15

20

25

30

35

40

45

Energy(TWh

)



Evolution Forecast

39,4

TWh


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0

5

10

15

20

25

30

35

40

45

2012 2013 2014 2015 2016 2017 2018 2019 2020

Energa(TWh)

Desalinizacin e impulsin

Servicios

Refinera

Fundicin

SXEW

Concentradora

Mina

Desalination

Others

Refinery

Smelter

SXEW

Concentrator

Mine


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8 8 8 7 8 7 7 7 7

48 49 50 49 50 50 5255 56

27 25 2421 20

16 1513 12

8 7 7

7 6

6 5 55

2 2 2

1 1

1 1 11

55 5

5 5

4 4 44

3 4 510 10

16 15 15 14

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2016 2017 2018 2019 2020

Desalinizacin e impulsin

Servicios

Refinera

Fundicin

SXEW

Concentradora

Mina

Desalination

Others

Refinery

Smelter

SXEW

Concentrator

Mine


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3. Challenges:3.5 Energy Management Non-Conventional Renewable Energy

Company Project EnergyPower

(MW)

Barrick Punta Colorada Wind 20

Los Pelambres Belt conveyor 22

Codelco-Chuquicamata Photovoltaic solar plant Solar 1

Codelco-Gaby Solar Thermal Solar Thermal 22

Los Pelambres El Arrayn Wind 121


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CONTENT


2. Mining investment and production forecast


4. Final comments


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Final comments:Critical situations

Energy

By the year 2020,the copper miningindustry will needan additionalelectric power of3,000 MW in order

to produce 39.4TWh, 80% morethan in 2010.

Critical factors:Costs, matrixdiversification,

development ofNCRE (Non-ConventionalRenewable Energy)and EnergyEfficiency

Water

Copper miningglobally consumesabout 12,6 m3/secof fresh water.

New projectsdemand more water

in arid areas. Critical factors:

Costs, Diversificationof sources(seawater), Reuse.

Workforce

New projectsdemand morequalified staff in allranks ofqualification.

Critical factors:

Costs, Recruitment,Training andMaintenance


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Despite the delays in energy generation projects,

mining investment portfolio will be developed.

Reasonable and efficient use of water is key to thefuture of mining business.

Desalination appears as an attractive option,already being explored.

main hurdle: energy supply

In the last decade, the mining sector has increasedits energy consumption, a trend that will intensify inthe future by the aging of currently operatingmines.

The aging of mines is a structural issue and verydifficult to reverse.

Theenvironmental awarenessis and will be a bigproblem in the future, specially for the energygeneration projects.

Final comments


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Chile: A Mining Country

March 12, 2013 - Sustainable Development in the

Chilean Mining Industry, Round Table Chile-Denmark

Challenges facing the

mining industry

Jorge I. Zeballos

Research and Policy Planning Department

20130408105755_2013 03 12 - challenges facing the mining industry (chile-denmark) vf

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