“We are seeing a lot more activity in the mass mining space for underground mining. Pits that are approaching the end of their life have very hungry processing plants that need to be fed. In this context, underground mining methods such as long-hole open stoping with large stopes and multiple mining areas, sublevel caving or block caving will be attractive for operators.”

Paul Murphy

MANAGER SOUTH AMERICA, MINING PLUS

February 13, 2019

How did the market behave in 2018?

2018 was a good year for Mining Plus. The second half was better than the first half, and 2019 has continued that positive trend. For us as consultants, studies such as scoping studies, pre-feasibility studies and feasibility studies really came back strongly after the downturn. Companies are not only concentrating on optimization of their current operations, but are also very much looking at greenfield and brownfield projects. Over the past few years, the revenue breakdown was approximately 70% operational work and 30% studies. Now, the overall workload has doubled, and the percentage of studies versus optimizations has reversed. To keep up with the demand, we have doubled the size of the Lima office in the past 12 months, and we will look to continue that expansion throughout 2019.

Our core strength is our local team of qualified persons (QPs) to sign for the various stock exchanges. We always have a core group of QP’s permanently based in Peru: a QP for exploration geology, a QP for resource geology, a QP for open cut mining and a QP for underground mining. This way, there is now no need for listed companies to fly in QPs from Canada or Australia to sign off projects in Latin America, which is a great cost saving for them.

In which particular area of your business are you seeing the most growth?

We are seeing a lot more activity in the mass mining space for underground mining. While this could be the result of our good name in this specific area, underground mass mining studies are becoming more prevalent in Peru and will continue to be in the future. Pits that are approaching the end of their life have very hungry processing plants that need to be fed. In this context, underground mining methods such as long-hole open stoping with large stopes and multiple mining areas, sublevel caving or block caving will be attractive for operators.

Returning to the theme of the large pits reaching the end of their lives, open-cut/underground trade-off studies are also becoming very important and an area in which we are seeing growth. If not planned well in advance, open cut operators can be caught by surprise with this aspect as the pit that delivers the most value to the operation in an open cut/underground scenario may in fact be smaller than the “optimal” open pit considering just the open cut scenario. As such, this study has to be done well in advance to understand where the optimal transition point should be from a value perspective.

We have seen some companies planning to go back to previously mined areas and extract the ore from the pillars. How feasible is this?

It is completely feasible, although not always easy. Mining the primaries (taking some ore and leaving some ore in the pillars) is a very straightforward concept. When you then come back and want to do both primary and secondary mining (where you backfill the primary areas and then mine the secondary areas for total extraction), the mining becomes much more complex. If the planning is not done correctly, you may have periods where you do not have sufficient areas to mine ore (for instance, if you are waiting for the backfill to set). In a global sense it is nothing new, so there is an opportunity for companies within Latin America to look at mines in other parts of the world.

Who are your key clients, and what is your strategy moving forward?

After six years of being permanently based in South America, we have done work for most of the major listed companies operating in Peru, as well as those operating in Colombia, Ecuador, Chile, Brazil and Argentina. Moving forward, we will continue the expansion of the Peru office, although it is unclear where we are with respects to the mining cycle, so we will do so cautiously. In order to maintain stability in the office we will continue to diversify our workbook in terms of commodities, company sizes and types, and also keep the focus on both the operational component of our work as well as the brown and greenfield study work.

We are also working with smaller mining companies currently with the aim to fully run the mining operations, much like a contractor, but for the technical positions rather than just the earthmoving. It is an unusual business model for a consultant, but one that makes perfect sense for both parties. This would provide a stable, long term revenue stream for Mining Plus, providing increased job security for staff, and for the client it is a turnkey solution to an instant technical team.

In consultancy, if you do not have the people, you do not have a business, so attracting and keeping the best people is always the number one priority. With a strong team, satisfied customers soon follow. That has always been our modus operandi and will continue to be.

INTERVIEWS MORE INTERVIEWS

Fermenta Biotech Ltd. (FBL) is one of the top three producers of Vitamin D3 API in the world, as well as a provider of immobilized enzymes and enzyme technologies.
Maccaferri Group highlights trends impacting Africa's mining engineering sector.
Rockwell Automation is a U.S.-based global provider of industrial automation, analytics, machine learning and information technology solutions and services.
AMC Consultants helps mining leaders evaluate opportunities, solve hidden productivity challenges and improve performance across the mining cycle.