Industry Q&A: Mining for People
We were delighted to catch up with Daniel Serkovic, Country Manager - Peru, at Deswik to learn more about their collaborative efforts with the University Adolfo Ibáñez, being awarded the Chilean National Prize of Technologic Transfer and what their work in South American means beyond the mine.
In 2017, Deswik’s collaborative efforts with the University Adolfo Ibáñez were awarded the Chilean National Prize of Technologic Transfer. What has this research partnership achieved specifically? How has it benefited the mining industry in Chile?
Through our research partnership with University Adolfo Ibáñez we are jointly developing a strategic design and scheduling tool - Deswik.GO (Global Optimization) - which employs modern and innovative methodologies that go beyond traditional mine planning.
Deswik.GO will provide the mining industry with a unique and powerful planning tool to identify value-creating options to extract, process and transport mineral resources to the market. This development has the potential to benefit the mining industry in Chile by unlocking opportunities that generate increased value through delivering higher revenue products to market at lower costs.
Commercial mining is a complex interplay between stakeholders, governments, the public, and new technologies. How has mining changed in South America during the past decade? To what extent have these changes been affected by software and other digital solutions?
Historically, mining has been driven by price cycles. Mining companies’ strategies normally change depending if prices are up or down. However, as mining deposits are becoming more complex and cost of extraction higher, mining companies have to rely on innovative methods to become more efficient and reduce costs. Technology has been helping them to achieve this. In South America, projects were more competitive because costs were lower compared to Australia or Canada. But nowadays, South America is quite diverse. Chile is becoming a more challenging market where labour, electricity and water costs are rapidly increasing. These factors have pushed Chile to develop its mining technology faster than other South American countries. But in countries like Peru, there is still lot of space to improve. Electricity and labor costs are still low relative to Chile, but they will follow the same trend. Peruvian companies are investing more and more in technology and digitalizing their data to become more competitive.
From your point of view, what are the biggest barriers to the evolution of mining on the South American continent? What has Deswik done to address these barriers, and what does the future hold?
Every country in South America has its own challenges. Peru has some issues with social approval. It has small communities stopping mega-projects because of their fear of pollution and environmental damage. In Chile we have the problem of water scarcity, and higher costs. In Colombia and Bolivia there is some risk of government instability with risks of expropriation. Each country needs to find their own way to solve these challenges. However, mining in South America has coexisted with these issues for hundreds of years but if they don’t become more competitive and provide better options for mining investment, then they will face the risk of projects migrating to other countries such as Mongolia or Russia.
Deswik is helping mining companies to become more efficient and do better and faster mine plans. From Strategic mine planning defining the best area to mine, to short term planning creating practical operational schedules. This will allow mining companies to forecast more accurately yearly productions and cash flows and also analyse different potential scenarios to improve current operations.
Conflicts between mining operators and the public are widespread in South America. Is it possible for mining operators to reach higher levels of environmental responsibility while simultaneously reaching higher levels of profit?
Of course. It is possible, and it is necessary. Mining currently has strong rejection in some regions because of previous companies’ negligence and lack of proper education in what current mining operations are and do. Technology and more specifically, Mine Planning packages, help mining companies to analyse and select better mining methods and more sustainable mining plans. Tools like Deswik also help to develop rehabilitation plans defining final landforms and estimating more accurately costs and evaluating practical challenges that a proper mine closure will face. Analysing multiple options help you to be prepare and not have surprises that will end up being very costly.
What has been the most exciting part of your work in the South American market?
People. Mining has the power to have huge impact on people. Especially, people in far regions of the highlands and very isolated locations. I have a phrase that I like a lot and I hope one day mining companies will follow it…”Mining for people”. Mining is important because it produce every element and material required to have the life-style we currently have, so it is important for everyone. But also allow small mining communities in South America to get access to capital and therefore improve their life-styles. Mining in South America is mainly located on the Highlands where no major activity can be done. Mining sometimes is the only activity that can bring some development, better education, water, electricity and so on to these places. We need to educate people more about what proper responsible mining means and what impact it can has on them and their children.
Is there anything else you'd like to add for our readers, Daniel?
South America is a growing market. It is more stable than ever and the potential for major mining projects is becoming more real every day. People in the region are understanding what mining can do for them and their kids. Mining companies are also understanding that with better technology they can have more efficient processes and increase value. This is opening great opportunities for Services and Technology providers in Australia.