mining and resources opportunities peru-chile &...
TRANSCRIPT
Mining and Resources Opportunities Peru-Chile & Mexico
22 of July, 2105 - Rockhampton
Latin America Overview
Latin America Overview
Mining Investments in Latin America
Source:
Latin America – Mining and Energy Consensus Forecast
Major Cities: Lima Arequipa, Trujillo, Piura e Cuzco
GDP: USD 200 billion Literacy Rate: 87.7% 29.8 Million 57% Middle Class 26 Median Age 47% Below age of 24 6.8% Unemployment A decade of 6.2% GDP Growth, 5%+ forecast through 2015 USD 8.2 billion in FDI annually 2nd highest credit rating (BBB+) in Latin America behind Chile
Peru at a glance
Peruvian Economy
• The Peruvian economy is among the top performers in Latin America with strong GDP growth.
• The Peruvian government encourages and protects foreign investment.
• Peru continue attracting investment from different countries, China invests 24% (Australia 7%)
Mining in Peru More than 14% of GDP comes from mining.
• Third world producer of copper. 2.8 million tons by 2016.
• More than 61% of the exports are related to mining.
• There are more than 600 active mining sites of which 188 are
underground, and more than 1000 sites under exploration.
• Mining activity is carried out by private companies operating under long-term licences granted by the central government.
• Investment from 2014-2024 – USD 60 billion in copper, gold and silver.
• Copper, gold and iron ore comprise 88% of the production.
Peru - Projects
Companies Projects Commodities
China MinMetals Las Bambas acquisition - US$ 5.1 billion copper
Freeport
McMoRan Cerro Verde - Expansion - US$ 4.6 billion copper and gold
Hudbay Minerals Constancia - Expansion (Ausenco) - US$ 1.7
billion copper and gold
Anglo American Quellaveco - Expansion - US$ 3.3 billion copper, molybdenum,
silver
Southern
Copper Tia Maria - US$ 1.3 billion - Start operations in
2017 copper
Buenaventura Chucapaca - US$ 1.0 billion - Start operations
in 2017 gold
Hochschild
Mining Crespo - US$ 111 million gold and silver
Opportunities for METS in Peru
• Processing plant Equipment
• Mining Equipment
• Exploration
• Exploitation
• Infrastructure
• Preparation
• Training and skilling the work force
• Water and Energy Management
• Community engagement
Main trade shows: Perumin, Sept 2015 (www.convencionminera.com) Arequipa
Expomina, Sept 2016 (www.expominaperu.clom) Lima
• Infrastructure / remote access
• Bureaucratic ineffectiveness, inefficiency & corruption
• Informality
• SUNAT – Customs and Taxes
• Community relations
• Conflicts are linked to use and availability of water or pollution
• Insufficient skilled work force
Challenges
Mining in Chile
• Chile’s mining industry generates large demand for imports.
• Mining industry has been and will continue to be a key driver in the development of Chile.
• Chilean copper reserves represent 25% of world total reserves and produces 34% of copper sold in the world.
• Production of 6 million tons of fine copper/year.
• Chilean mining consists primarily of open pit, hard rock mining.
• Mining Equipment. Total imports: USD 4.2 billion.
• USD 80 billion in new investment over next 10 years.
Chile - Projects
Companies Projects Commodities
Anglo American Los Bronces - 65kms from Santiago - 400.000
tons/year - USD 2.8 billion Copper
Collahuasi Doña Inés de Collahuasi - Tarapaca region Copper
BHP Escondida - Atacama Desert in the North of
Chile – World’s largest copper producer Copper
Pan Pacific
Copper, Mitsui,
SCM Minera Caserones - Located in Copiapo region - USD
4.2 billion Copper
Codelco Chuquicamata underground mine Copper
Codelco New level in El Teniente Mine - Rancagua -
415.000 tons/year - USD 3.5 billion Copper
Antofagasta Antucoya - Construction Copper
Codelco Chuquicamata - Underground expansion Copper
KGHM
International Sierra Gorda - Antofagasta region - USD 3.9
billion Copper
Opportunities for METS in Chile Mining equipment that requires regular replacement (i.e. grinders, off-road trucks (240-440), scoop shovels, excavators, cranes, crushers, etc.), underground mining technology services and engineering services. − Processing plants − Exploration & Exploitation − Infrastructure − Training − Drilling − Water and Energy Management − Community engagement − Air pollution and dust abatement − Mine closure Cooperative Agreement with Asociación de Industriales de Antofagasta (AIA) Main trade shows: Expomin, April 2016 (www.expomin.cl) Santiago
Peru and Chile - Resume
Mexico
Queensland office opened in Houston – March 2014 Houston office and dynamics Sectors of focus :
Oil & Gas – QLD capabilities from CSG and transfer of mining technologies to oil & gas Mining – equipment technology services Agriculture – agricultural technology and food/beverage Infrastructure –
TIQ Presence in Market
Mexico Focus for TIQ
Mining: Existing Operations – major players, Grupo Mexico, Fresnillo, Grupo Del
Focus on technologies to improve productivity/ efficiencies Health, Safety & Environment innovation and capabilities
Projects – major tier one miners are our focus/including brownfield, Expansion and Greenfields,
**Large Canadian presence in exploration and junior miners yet lack of Australian presence
Mexico
Mining and metallurgical production (291.1 mill. Pesos in 2012) represents 4.9 % of Mexico’s Gross Domestic Product. Production values increased 12.5 % in 2012 due to a massive influx of foreign investment, but remained stagnant in 2013 due to decreasing mineral prices (especially prices of metals). Production by Mineral (2012):
Gold (25%) Silver (24 %) Copper (18%) Zinc (6%) Sand (4%)
Mexico
Sonora 24% of Production
Zacatecas 21% “
Chihuahua 17% “
•Mining operators in these states are beginning to coordinate actions through “Mining Clusters,” which also include regional governments. TIQ North America is developing a strategy to develop ties to these clusters.
Mexico
At the end of 2012, there were 285 companies with foreign capital operating 853 mining projects in Mexico. Only 5 were Australian. By Origen:
Canada 71 %
USA 16 %
Australia 5 %
China 3 %
Australian companies in Mexico’s mining include:
Ewrin Resources Corp Global Geoscience Intrepid Mines Auricup Reources
Mexico
At the end of 2012, there were 285 companies with foreign capital operating 853 mining projects in Mexico. Only 5 were Australian. By Origen:
Canada 71 %
USA 16 %
Australia 5 %
China 3 %
Australian companies in Mexico’s mining include:
Ewrin Resources Corp Global Geoscience Intrepid Mines Auricup Reources
Mexico
Pan American Silver (Canada) New Gold (Canada)
Farallon Agnico Eagle (Canada)
Kings Minerals (Canada) Frontera Copper (Canada)
Teck (Canada) Hecla Mining (U.S.)
Gold Corp (Canada) Constellation (U.S.), etc.
•Some of the Largest Foreign Mining Companies in Mexico:
Source: KPMG. Mexico: Country mining guide. Kpmg.com
Mexico Leading Companies/ Projects (bold):
Company Fresnillo PLC Industrias
Peñoles
Grupo México
(Americas Mining
Corporation; Asarco;
Southern Copper
Corporation)
Minera Frisco
Website fresnilloplc.com penoles.com.mx grupomexico.com minerafrisco.com
Locations Mexico Mexico, Chile, Peru Mexico, Argentina, Chile,
Ecuador, Peru, United States
Mexico
Key Assets Underground (Silver):
Fresnillo
Saucito
Ciénaga & San Ramón
(silver, zinc, gold and lead)
Open Pit (Gold):
Herradura
Soledad
Noche Buena
San Julian (2014-15)
Underground (Basic Metals)
Bismark
(zinc, copper)
Naica
(lead; zinc)
Sabinas
(lead, zinc, copper)
Velardeña
(silver, lead, zinc)
Tizapa
(copper, zinc)
Fco. Madero
(zinc)
Milpillas
(copper)
Precious Metals: Operates
through its subsidiary Fresnillo
PLC
Buena Vista
(copper, molybdenum, silver)
El Coronel
(gold, silver)
San Felipe
(gold, silver)
Asientos
(gold, silver, copper,
lead, zinc)
Tayahua
(gold, silver, copper,
lead, zinc)
San Francisco
(gold, silver, copper,
lead, zinc)
Maria
(copper)
Porvenir
(gold, silver)
Concheño
(gold, silver)
Ocampo
(gold, silver)
Mexico
Project Highlights Exploration budget 2015: USD
200 million
Construction/ Redevelopment
2015:
Herradura or Centauro Deep
(Gold Mine Life and Capacity
Expansion. Some exploration
involved. Detailed Engineering –
Expected completion: 2017)
Saucito (Stage II – Expand
Silver/Gold Mine Life and
Capacity - USD 235 million.
Completion in early 2015).
San Julian – (Work started in late
2012. Underground silver and
gold mine scheduled for start-up
in 2Q15 – USD 500 million)
Rey de Plata (USD 268
Million – Expected
Completion: 2016 –
Currently developing
surface instalations.
Construction of poli-
metal mine)
Exploration: Underway
in Milpillas, Los Humos
(Sonora), Herradura,
Fresnillo and
Guanajuato.
Buenavista (largest
copper reserves in the
world): USD 3.4 billion
investment project to
increase copper
production by 175% and
install a new copper
molybdenum
concentrator with
capacity of 188000 tons
(92% completed).
Installation of a crushing,
conveying and spreading
system for leachable ore
pending completion in
2015.
Recent Expansions
(2012-2013):
San Francisco:
Commissioning of a
floatation unit.
San Felipe II:
Mechanical
assembly and
installation of
instruments of
conveyor belts.
El Coronel II:
assembly and
installation of
second crusher and
stock-pile.
Source: Company Websites as of March 2015 / BNA Americas Database / Companies 4Q 2014 Financial Reports.
Leading Companies/ Projects (bold):
Mexico
Given the recent downturn in the prices of most metallic minerals, the margins of mine operators in Mexico have been negatively affected. There is also a strong focus on the development of professional skills. METS with proven capabilities that help control costs and improve the efficiency of mine operations or the development of professional skills may have a niche in Mexico. The opportunities are significant. But this is a competitive market with the active presence of worldwide competitors; especially companies from Canada. Security issues should not be ignored or taken lightly. If you are in the region Visit Acapulco Mining Fair in October 2015 TIQ will advise dates for propose Mission – First Semester 2016
In conclusion:
TIPS for success in Latin America • Identify a local representative
• Personal relationships matter
• Language & translate materials
• Establish your plan for post purchase service
• Capitalize on quality of product
• Work with a legal partner
• Conduct due diligence
• Contact TIQ for help !!!
Pacific Alliance
METS Mission to Peru and Chile
• 21 – 24 September – Companies attending Perumin/Extemin Show in Arequipa – Peru
• 25 – 29 September – Mine Visits
• 30 September – Lima
• 01 – 02 October – Chile (site visits)
• Mission to Mexico (Sonora and Zacatecas State)- Q2/16
Thank you Marco Miranda | Senior Business Development Manager for Latin America
Trade & Investment Queensland
Av. Andrés Bello 2777 – Of. 2002, Las Condes, Santiago, Chile
www.tiq.qld.gov.au
Carlos Perez | Senior Trade Officer Mining and Resources
Level 4, George St – Brisbane, Queensland, Australia
www.tiq.qld.gov.au
Trade and Investment Queensland – Houston Office