Business Enquirer Issue 114 | Sierra Gorda SCM | Mining | June'23

CHILE’S MINING PIONEERS

SIERRA GORDA SCM

CHILE’S MINING PIONEERS

A union between Poland’s KGHM copper mining company and Australia’s mining and metals company, South32, has seen groundbreaking developments made at Sierra Gorda SCM.

The mine, which is found in Sierra Gorda itself, produces copper and molybdenum concentrate. On a daily basis 115,000 tons of ore are processed, with 108,000 tons of copper and 9,000 tonnes of molybdenum produced per year.

Sierra Gorda SCM is considered pioneers in low grade mining, producing the lowest grade of copper sulphides, with optimisation of resources and the use of new technologies at the core of both its success and vision for the future.

A Meeting of ‘Mines’

Whilst mineralisation of Sierra Gorda was discovered in 2006 and the mine commissioned in 2014, the joint venture between KGHM and South32 at the property dates back just a year.

KGHM International, which owns a 55% share of the joint venture, staked claim to the property in 2011, in a previous joint venture.

The business, which operates six mines in Canada, Chile and the US, is one of the largest companies in Poland. In addition to Sierra Gorda SCM, it has exploration projects: Glogow Glebaki Przemyslowy, Poland, and Victoria and Ajax, Canada.

Announcing its partnership with South32 in February 2022 (and therefore ending its partnership with Sumitomo Metal Mining Co. Ltd and Sumitomo Corporation, Marcin Chludziński commented that the Sierra Gorda mine had needed restructuring and was now beginning to bring profits.

"Sierra Gorda is a demanding but very satisfying project. We have put in a lot of effort and attention to reverse some deep-rooted trends, and the mine's results after three years of our intensive work are impressive," he said.

Australian based South32 is a globally diversified mining and metallurgical company with a wide portfolio of mining projects with manufacturing facilities

SIERRA GORDA SCM

DIRECTED BY: GARY SMITH

ARTICLE

WRITTEN BY: LAURA WATLING

Bailac is a company specialized in OTR Tyres Comprehensive Services and Maintenance for large-scale mining and works with the most important mining companies of the world. Thanks to a proper integration of engineering and technology in its processes, Bailac offers a reliable, efficient, and safe service.

The Chilean company is an expert in retread, repair, maintain, monitor and manage large OTR tyres fleets. Being a century-old company, Bailac is highly experienced and has deep understanding in its field of action, therefore, Bailac puts all its experience available to large-scale mining to help it reach its safety and budget goals.

Bailac has its own R&D area dedicated to explore new technologies that optimizes its services while searching for solutions that promote operational sustainability through the incorporation of

cutting-edge tools. A good example for that is Bailac GTS (Global Tyre Saver), a sensor kit that is installed on OTR tyres and sends, in realtime all sorts of information, such as pressure, temperature, trajectory, velocity, and geographical positioning, which makes it the best monitoring system in the world and unique in the market.

Additionally, Bailac developed PASCUAL ETM Web Software, specifically designed to optimize the management of OTR tyres, rims, chains, sensors and torque tools, which allows the company to keep a complete digital log of the status and activities of these elements, since the moment they arrive at their working sites, until the end of their service lives, with clear real-time information.

www.bailac.com

in Australia, South Africa and South America. South32 is known for producing aluminium, alumina, metallurgical coal, manganese, nickel, silver, lead and zinc.

Driving Innovation for a Sustainable Future

The work at Sierra Gorda SCM is driven by sustainability and innovation, in particular how best to work with the region's natural resources.

Sierra Gorda SCM have made it clear that one of its main objectives has been to minimise any potential impact on communities and the environment.

In January 2023 the business announced its first month operating with 100% renewable electrical energy.

This milestone was achieved thanks to a long-term power purchase agreement with AES Andes, one of the main electric power generators in Chile. Energy from AES Andes is sourced from solar, wind, hydroelectric and battery energy. The agreement is currently in place until December 2039.

Of the achievement, Tomasz Piwowarczyk, interim General Manager, said “Our company shows that it is possible to

do green and efficient mining with a low grade like ours and develop production in a sustainable way. We are happy to share this great news that comes three years after starting our parcelled supply of green energy, and that today already has us with 100% energy from renewable sources. Thanks to this, the copper and molybdenum that we produce is greener, since it contains a smaller carbon footprint.”2

In addition, Sierra Gorda SCM has facilitated the construction of the Mejillones - Sierra Gorda aqueduct. The aqueduct plays an important role in the local environment by recovering wastewater from the cooling of electric turbines. The system operates with a water distribution system, which recovers seawater from the cooling process of a Mejillones thermoelectric plant, reaching expected pumping values above 5,000 m3 per hour.

The business also utilises High Pressure Grinding Roller mills, a crushing technology that minimises energy expenditure and ensures the competitiveness of the copper industry. This innovation is unique in Chile.

Finally, slope angle innovation enables Sierra Gorda SCM to improve its operation by increasing the sterile ore ratio in the

BUSANC

Busanc es una empresa líder en el desarrollo de productos en caucho y poliuretano para la industria minera, tras una trayectoria de más de 45 años en el mercado chileno, ha logrado una mejora continua en el desarrollo de sus productos, llegando a los más altos estándares de calidad, esta mejora continua nos ha posicionado como una empresa estratégica para las industrias mineras en Chile.

Hoy en día Busanc cuenta con diferentes áreas para la fabricación de sus productos, Area de Ingeniería, Maestranza, Laboratorio, Area Comercial, Post Venta y su Area Productiva, con ello Busanc es capaz de entrega un producto 100% desarrollado y fabricado en nuestras instalaciones, este crecimiento conlleva un gran compromiso hacia nuestros Clientes, es por ello que día a día vamos incorporando

nuevas tecnologías, capacitando a las personas y mejorando los procesos productivos, siempre buscando la mejor calidad para entregar a nuestros clientes.

mine. Ultimately, this will result in cost savings and a significant reduction in environmental externalities, benefiting not only the business but also the environment.

In 2012, Sierra Gorda SCM established an air quality and meteorological station in Sierra Gorda. This delivers instant public access data, which can be viewed by anyone who needs to consult it.

As well as this, the business has implemented a waste management system to enhance reuse and recycling, a fauna protection scheme, and a heritage programme. For the latter, the business has committed actions such as registration, audiovisual survey, and rescue and relocation, to protect the archaeological and cultural heritage of the region.

Planned Expansion

Due to complete in the fourth quarter of 2023, in October 2022 Sierra Gorda SCM announced a $400 billion project

to optimise tailings management in its Catabela mine and plant area.

As part of the project, Sierra Gorda SCM plans to increase the area of its tailings deposit by 571ha, boosting the rate of evaporation and minimising the possibility of seepage.

In addition, it aims to make improvements to current thickeners, incorporating a new one, and extending adjoining facilities. With the modifications, the Sierra Gorda mining complex will increase its total span to 3,370ha.

On announcing its partnership with South32, KGHM reported its revised EBITDA for nine months of 2021 was up over €730 million year on year, with special mention to the input of the Sierra Gorda mine.

With a further 10 years of mine life available at the mine, the future looks optimistic for Sierra Gorda SCM and its stakeholders.

www.sgscm.cl/es