"When we talk about underground support to improve the production cycles, ventilation is key. The time it takes to remove the dust in the mine makes a big difference to operational efficiency.”

Carlos Leigh

CEO – LATIN AMERICA, DSI UNDERGROUND

January 22, 2021

What is DSI Underground’s presence in Peru and in which sectors does the company operate?

DSI Underground has been in Peru since 2008, and two years ago moved to a new plant in Callao. Peru is one of the most complex and competitive markets in the region. We have an important market share and have a presence in all the country’s mines and tunneling works.

In Chile there has already been a transition to large underground mines, such as Chuquicamata. Do you expect to see a similar transition in Peru in the coming years?

We have been working at Chuquicamata for Codelco and contractors for about 13 years. At the moment, we are seeing some iconic mining projects in Peru that are currently unable to be developed because of social issues. In the short term, we do not envisage a prompt change to this dynamic, but nonetheless we are already prepared for any transition underground. DSI Underground already produces most of its underground products in Peru.

How has COVID-19 impacted the company’s operations in Latin America?

The sudden lockdowns in Peru and Argentina affected our business. Peru has recovered well since lockdown restrictions were lifted, and August was a very good month despite some of the mines remaining closed. In Chile, the lockdown started later, but recovery in September has been positive. Interestingly, Brazil and Mexico, which have had important infection rates, have not been impacted much from a mining standpoint.

On September 1st, 2020, a JV was signed between DSI Underground and ventilation firm, ABC Technology Group, to launch DSI Underground Ventilation Systems. Can you elaborate on this venture?

When we talk about underground support to improve the production cycles, ventilation is particularly key. The time it takes to remove the dust in the mine so work can commence makes a big different to operational efficiency, and the costs of ventilation are also important from an energy standpoint, especially those in high altitudes such as most of the mines in Peru.

The product portfolio of the new joint venture will include FlexLineTM and semi-rigid HardLineTM ducting for positive and negative airflow, high-efficiency Toughvent fans, made in South Africa, which increase pressure with lower diameters, decreasing energy consumption, and other ventilation accessories: curtains and coverings, emergency shelters, inflatable AirStop and repair kits. DSI Underground Ventilation Systems will count with a full engineering and design services, supported by our partners of ABC in Canada.

Do you see new opportunity as operators look to take advantage of high metals prices?

We are seeing a market already eroded by the pandemic. The increase of metal prices has been the solution for some mines to stay open and make all possible efforts to stay in that way, considering health restrictions. Although metals prices have risen, the price of steel – the key commodity DSI Underground uses to produce its products – has also risen sharply. Steel is one of DSI Underground’s biggest costs, and we believe the price could reach record highs over the next months. We normally work with customers on long term contracts, so volatility in metals prices can impact both positively and negatively. Fortunately, we currently have managed healthy inventories due to the drop in consumption during the lockdown. However, DSI Underground’s business model is not predicated on metals prices, and our focus on service remains a priority regardless of market conditions.

It is not only the metals prices which move the industry, but also the importance of mining to countries. In Peru, where mining accounts for over 10% of GDP and 61% of all exports, the sector will play a vital role in economic recovery and employment creation.

How is DSI Underground incorporating digitalization into its processes and products?

Since the beginning, we have been focused on mechanizing our products and systems, to support safety and improve production cycles. In recent years, we have also been embracing the rise of digitalization, for both internal processes and customer support. We have started testing new digital innovations internally and in the field that offers clients full traceability. This helps customers administrate DSI Underground’s underground support products, allowing them a new scale of management in the full process.

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