Chile’s mining industry has been less affected than others amid the COVID-19 pandemic, but restrictions imposed on mining facilities have caused delays in construction and a decline in machine usage.
BNamericas talked with Pedro Damjanic (pictured), senior VP of mining at Finning South America, about the impacts and chances resulting from the pandemic, as well as the challenges the mining sector will face.
BNamericas: How has Finning been impacted by the crisis?
Damjanic: Operational excellence and the quality of those processes have been important to act effectively in this situation. I would say that having our chain associated with operational excellence has allowed us to efficiently deliver pieces, parts, components, and equipment to our clients as planned.
We don’t see a relevant impact in the supply for our customers. We currently work in a collaborative and coordinated way to guarantee operational continuity. On the other hand, a high percentage of our workforce has been working at different mine sites, allowing us to fulfill our commitments.
BNamericas: Did you register a decline in machine utilization hours among your mining customers?
Damjanic: We’ve detected a reduction of 9-18% in usage of our equipment due to COVID-19 restrictions imposed on mining facilities.
BNamericas: And what are you hearing from miners?
Damjanic: Mining companies have taken innovative measures focused on operational continuity and taking care of their people to reduce risks, resulting in a slight production drop. Mine workers currently feel safer in facilities than at home.
Regarding construction projects, things are more difficult because they involve a higher number of people to be mobilized in a short period, and depending on the project’s phase, things must be done differently. The COVID-19 impact has been bigger in construction projects and I think that the restart of works will be slower than planned.
BNamericas: Has the South American market experienced a delay in equipment deliveries? How would that impact operations and development?
Damjanic: We’ve been prepared for this with the required inventory to fulfill our customers’ needs. We currently have 12-15% more inventories than required.
Projects are going well. We haven’t had issues on deliveries, but we do see some delays. Project suspensions were originally set for 15 days, but now they are taking longer. We do have equipment in our inventory, but we can’t deliver it until projects are restarted.
BNamericas: Could bringing supply chains closer to the region reduce risks?
Damjanic: We bring most of the components from the US and Brazil and that makes it difficult to replace equipment from one day to another.
Bringing supply chains closer to reduce exposure from third parties will depend on how the world evolves and what would happen with the biggest economic powers, because they will lead the path. It won’t be a quick process, nor simple, but there are opportunities in there.
BNamericas: What are the biggest operational challenges in the future?
Damjanic: From an operational point of view, I think there is an incredible opportunity for mining companies to reduce costs, but challenges would be how to implement automation, big data analysis, remote work, virtual assistance and how to reduce vulnerability.
We’ve been working on this intensely over the last four years. In Antofagasta region we have an integrated knowledge center and an automation simulation room, where we monitor and train Chilean and foreign companies. Right now, companies with solid platforms are in the best position.
From an investment point of view, closely working with governments is needed.
Honestly, I think this is the right time to generate new projects, to get more mining, more investment, and more high-quality jobs.
The key subject is how to offer legal certainty, speed up project approvals, and how to improve jobs flexibility. We need to rethink how to make more and better mining to benefit everybody.
Photo credit: Finning