Welcome. Latin America Mining Conference January 2015

Transcription

1 Welcome Latin America Mining Conference January 2015

2 Agenda Welcome Overview of Latin America Market insights: Chile, Brazil, Peru What s next? Q&A 2

3 Elements of Bribery under Australian law Under Section 70 of the Australian Criminal Code 1995 Bribery involves: Providing, offering or arranging a benefit The benefit is not legitimately due With an intention to influence a Foreign Public Official (FPO) in their official duties With the motive to gain or retain business or a business advantage 3

4 Overview of Latin America Daniel Havas Trade Commissioner Peru & Latin America Team Leader Mining & Resources

5 Overview Region approaching 600 million people reaching 800 million by 2050 o Middle class grew 50% over past decade and now one third of population o 4th largest economic region with GDP of $6 trillion o Increasingly demanding high quality METS services o Slower deceleration than many markets but not without its challenges 5

6 Rankings Source: Behre & Dolbear

7 Overview: Latin America Mining Latin America is an advanced services & technology play for Australian exporters Despite slowdown, region remains an attractive one for major investors Demand for more sustainable, safer and environmentally friendly projects Positive steps taken by Governments to reduce poverty Community Engagement remains a priority and a challenge 7

8 Country Mining Statistics Country % of GDP % of Exports Major Minerals Investment Pipeline # of Australian Companies # of Australian Companies METS and Juniors* Chile Cu, Li Brazil Fe, Nb, Ni, Peru Cu, Ag, Au US$104b by 2021 US$270b by 2030 US$62b by *Chile: 59 METS and 28 junior miners *Brazil: 30 METS and 20 junior miners *Peru: 60 METS and 20 investors including junior miners 8

9 Market insights: Chile Valeria Ortiz Business Development Manager Austrade Santiago

10 Chile: Market Overview Copper major driver of the economy 1/3 of global copper production 30% of global reserves Current production capacity 5.7m tonnes Concentrated Industry 90% production by just 10 companies 30% production in hands of CODELCO Majority of the mines located in the north and in high altitude Antofagasta region mining hub - 54% of the domestic copper production Operational sites are located in high altitude, 3000m above sea level. 10

11 Chile: Specific Key Issues Lower Ore grades and old deposits (open pit) Water scarcity and high energy costs Increased operational costs Operational continuity Sustainable mining creating higher expectations 11

12 Chile: Policy & Trends Social License Chile is part of the 169 OIT Environmental Submit closure plans and financial guarantees Mine Safety Always FUNDAMENTAL - high standards but also High costs. 12

13 Chile: Potential Opportunities Water & energy scarcity Need for higher energy efficiency Desalination plants Productivity Tele operation Automation & Robotics Training (VET) Remote control Mineral processing Mine Closure Tailing Management After Closure Monitoring Preparation of Chemical and Physical guides 13

14 Chile: Recent Success Stories Immersive Equipment simulators Codelco Recognizes Immersive Technologies for Outstanding Contribution to Training Immersive Technologies exhibited an underground truck module on their Advanced Equipment Simulator, this technology has helped leading mining companies around the world lower their cost per tonne in the safest possible way and transformed the way the mining industry recruits, trains, improves and assesses the risk associated with their equipment operators. Seeing machines Fatigue control Strategic joint venture with Chilean company GTD Ingenieria de Sistemas will form Seeing Machines Latin America.The combination of Seeing Machines' technology with GTD's product knowledge, mining and transport safety experience and extensive regional knowledge and industry relationships will allow the joint venture to provide the highest levels of service to both mining and road transport customers. 14

15 Market insights: Brazil Ana Bonamin Business Development Manager Austrade Sao Paulo

16 Brazil: Market Overview Global Mining Producer (70 minerals) largest producer/exporter of niobium and tantalite 3rd largest producer of iron ore 2nd largest exporter of iron ore, manganese and bauxite The Brazilian mineral sector represents: 4.2% of GDP 20% of total Brazilian exports one million direct jobs 1,862 operational mines US$270 billion investment by 2030 (Brazil s National Mining Plan) Vale dominates the market world s largest producer of iron ore responsible for 63% of market production other players: Samarco, CSN, Anglo American Minas Gerais and the rise of Pará State 16

17 Brazil: Specific Key Issues Doing Business in Brazil Difficult but not an impossible market Complex regulatory framework delay on government approvals of new mining concessions environmental licensing is still a challenge New Mining Code waiting for congress approval Infrastructure bottlenecks major investments in ports and railway required Extend geological knowledge of Brazilian territory vast tracts of unexplored and unmapped areas less than 30% of the Brazilian territory is geologically mapped at 1:100,000 scale 17

18 Brazil: Policy & Trends The New Mining Code proposes concessions will be granted through bidding process change in mining taxes, increase of royalties creation of National Council for Mining Policy New technologies and autonomous operations reduction of costs and higher productivity use of technologies involving re-use of water and alternative energy generation S11D truckless mine 93% less water/ 77% less fuel/ 50% less greenhouse gas emission Sustainable development effort to achieve world-class standard socio-environmental responsibility (safety, health, environment, community) Work safety highly valued component within commercial and technical proposals Innovation and R&D mining research and university collaboration eg. Vale and CSIRO, UQ Vale Technology Institute (ITV) 18

19 Brazil: Potential Opportunities Innovation and R&D Scientific collaboration Development of sustainable technologies Reduction in water and power consumption Reduction in CO2 emissions Reduction in dust emissions Use of lower-grade iron ore Automation Technologies Remote mining Autonomous equipment Driverless trucks and trains Training (VET) Geological services Geophysical scanning Mapping services New drilling players Aero geophysical survey 19

20 Brazil: Recent Success Stories Hedweld maintenance support products and ladder access systems Removal, installation and handling of heavy vehicles Ladder and stair access system Customers Vale and Anglo American Appointed a rep agent in Belo Horizonte Reynold Soil Technologies (RST) dust suppression dust reduction and control in areas of the mining industry, stabilising roads and reducing water usage opened an office in Belo Horizonte customers: Kinross Gold, Vale Bradken wear liner solutions for mills and crushers mineral processing equipment product development and design opened an office in Belo Horizonte 20

21 Market insights: Peru Valeria Beck Business Development Manager Austrade Lima

22 Peru: Market Overview Mining major economic activity: 14% of GDP and 61% of exports. Polymetallic mining industry 3 rd global copper and silver producer 6 th global gold producer Mining units: 80% underground, 20% open pit Mining production: 90% open pit, 10% underground Only 14% of territory under concession - 1.2% under exploration/exploitation Peru attracts 5% (est.) of the world total exploration budget (2013) Major mining players + family owned conglomerates Mining Projects Pipeline

23 Peru: Market Overview Mining Investment Pipeline 54 projects - ( ) US$ 61 billion Mining Projects Pipeline Major projects coming up: Freeport McMoran s Cerro Verde Chinalco - Toromocho MMG Las Bambas SPCC Tia Maria Rio Tinto La Granja EIS approved (construction) EIS under evaluation Exploration Expansion 23

24 BHPB - Antamina Peru: Specific Key Issues Political stability 2015 pre-election year Private investment vs. social license Approval of government permits (bureaucracy around mining concessions and EIS approvals) Illegal and informal mining Infrastructure gaps in the regions (energy transmission) Skill shortage (lack of technical capabilities) Improving safety standards 24

25 Peru: Policy & Trends New environmental regulation for mining (since 93) Creation of National System to evaluate EIS (SEIA) Ventanilla unica concept (one stop shop to expedite approvals) Safety standards have increased New Health and Safety regulation introduced in 2011 Fatalities have dropped significantly 66 reported fatalities in 2012, 53 in 2012 and 31 in Packages to reactivate the economy (late 2014) Reduction of bureaucracy and permits timeframes MINEM + MINAM Incentives for private investment tariffs reduction for capital goods imports Government + industry + academia initiatives Centres of excellence Potential for an FTA and DTA 25

26 Peru: Potential Opportunities Mine Safety Technology / equipment (simulation, fatigue control, slope stability ) Safety supervising and monitoring technology / systems OHS Policy and regulation benchmark for higher safety standards OHS Training at industry and government level Community Relations and Environmental Consulting Benchmark for regulation and best practice for community engagement Training Water Management Land Rehabilitation Underground Capabilities Infrastructure Need for higher efficiency and productivity Automation and robotics Technology (software and comms) 26

27 Peru: Recent Success Stories Ausenco EPCM Hudbay s Constancia Project Ausenco was awarded Hudbay s Constancia EPCM contract to design, construct, and commission a 25 Mt/y concentrator and associated infrastructure. Constancia is a US$1.8b copper moly project located in the Andes in southern Peru at 4,100 asl. Constancia was the first project Ausenco has undertaken with project management and engineering distributed across Australia, Canada and Peru. Project management commenced in Brisbane and was later transferred to Lima. Commissioned in 2011 present (delivery stages as they start production) Austin Engineering Supply contract Las Bambas / Antapaccay Supply trays for high tonnage trucks for both Antapaccay and Las Bambas (before MMG) Contract included upfront payment of US$7.8m for initial order of 60 trays Austin Engineering opened their office in Peru and also set up a facility in Arequipa (assembly and maintenance) 27

28 What s next? Daniel Havas Trade Commissioner Peru

29 Austrade 2015 Event Activities in Latin America Exponor Antofagasta, Chile May Exposibram Belo Horizonte, Brazil September Perumin - Extemin Arequipa, Peru September 29

30 Austrade s great strength is its sustained on-the-ground presence in offshore markets We can identify opportunities for you We can qualify those opportunities We can develop a comprehensive visit/contact program for you We can brief you in-depth on the market and the companies involved We can interpret the business climate and local commercial practice, and provide language support as well We can set up and accompany you on your appointments We can remain your eyes and ears on the ground and provide practical support and on-the-spot assistance in establishing your market presence. 30

31 Questions Contacts in LATAM Daniel Havas Valeria Ortiz Ana Bonamin Valeria Beck Contacts in Australia Nicholas Baker Martin Ferreyra - martin.ferreyra@austrade.gov.au