"We have very strong environmental and sustainability groups, which have sustained the business during the downturn. We have a superb capability in environmental studies in Peru and world-class capability in Canada around sustainable mining, tailings management, and water and waste management, which we want to start exporting to our clients around the world."

César Inostroza


September 10, 2019

How has SNC-Lavalin restructured its business divisions?

SNC-Lavalin is a Canadian-based company headquartered in Montreal. We have over 50,000 employees worldwide and we work in four main sectors: Engineering, Design & Project Management (EDPM), which was complemented through our acquisition of Atkins in July 2017; Nuclear; Infrastructure; and Resources. Within the latter, we have integrated the Minerals and Metallurgy and the Oil and Gas businesses. We are also a key player in providing turnkey solutions for power projects around the world through Linxon, a joint venture company between ABB and SNC-Lavalin.

The three main regions for Minerals and Metallurgy are South America, North America and the Middle East. We also have a presence in Europe around specialty fertilizers and a smaller presence in Australia. Our vision is to develop our business in Latin America around copper, iron ore and gold. This is a cyclical business, and right now the main driver for us is the market in the Southern hemisphere.

Do you feel the time is coming to focus again on EPCM projects in addition to the typical opex work?

Refocusing the business around opex is fine because it generates a sustainable income at a time when clients have not been awarding Engineering, Procurement and Construction Management (EPCM) projects. Now, however, we see a resurgence in these projects, with a stronger demand for engineering studies. We want to participate in that value chain in order to be well positioned to be selected by clients once the projects move into the execution phase.

Other large engineering players are focusing on the EPC model. What is SNC-Lavalin’s view?

Engineering, Procurement and Construction (EPC) contracts, or more specifically Lump Sum Turn Key (LSTK) contract models, are a form of risk-sharing by the owner to have the contractor assume a large part of the project delivery risk. The owners pay for that, because the prices of EPC/LSTKs are usually higher, but the entities that take on the EPC/LSTK project put their balance sheet on the table, when their core business is not to produce metal or ore. SNC-Lavalin does not want to be in this position; we provide high quality professional and technical services, engineering capabilities and project delivery. Indeed, a while back we announced that we were pulling out of the lump sum EPC work in the Minerals and Metallurgy sector, particularly as a result of developments in a Minerals and Metallurgy project over the last few months. Ultimately, in any case, I do not think that either party obtains the best outcome with the EPC contract model: the owner pays more and the EPC contractor assumes a huge amount of risk. I do not think that is a win-win solution.

New projects, such as Quellaveco in Peru, are being built as fully digital mines. How are new technologies being incorporated at the design stage as well?

We are putting a lot of effort internally to incorporate the latest technologies in plant design and engineering, using tools such as virtual and augmented reality. We have Innovation Centres in Toronto, Peru and Brazil, where we have deployed our ability to do virtual reality analysis on project designs. This means we can take clients through their own plant after we have created a 3D model. We demonstrate to our clients the value of using these tools in the design stage, which is where you can save money and evaluate different options. Once you start constructing, it is more difficult and costly to change things.

Who are your main clients in the Mining and Metals space and what are your core areas of expertise?

Our biggest clients right now are Vale in Brazil and Antamina in Peru. We have over 100 people delivering projects for Antamina, for instance, and our offices in Brazil encompass some 900 people. In North America, we are working with clients in the lithium and sulfuric acid industry, Vale in Sudbury and Newfoundland. We also secured a three-year contract with Emirates Global Aluminium (EGA) in the UAE, which was traditionally a very strong client of ours, and we are growing the team dedicated to deliver projects for them. In Europe and Northern Africa, we are working with OCP in Morocco around phosphates, and we are also working on sulfuric acid projects in Russia. In total, we have approximately 1,500 people in our M&M group.

We have very strong environmental and sustainability groups, which have sustained the business during the downturn. We have a superb capability in environmental studies in Peru and world-class capability in Canada around sustainable mining, tailings management, and water and waste management, which we want to start exporting to our clients around the world. In North America, we have very strong capabilities in sulfuric acid, gold and base metals, and we can cover the whole value chain in Brazil in terms of iron ore operations. Finally, we are reinvigorating our aluminium capabilities, starting with the EGA contract that I mentioned earlier.

What is the Atkins acquisition bringing to the table in the Mining and Metals space?

We acquired Atkins in 2017, and it has been a very fruitful integration with the SNC-Lavalin team. We are working closely and the Atkins teams are involved in our business. For instance, we are supporting a mining client to devise a strategy around asset management on the back of the expertise that our Infrastructure group has in these specialty services. This benefits are clients because we are a complete solution provider that can not only design the concentrator, but also all the associated infrastructure, which can actually represent the largest portion of the cost in a mining project.


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