Going underground: Is it a new trend in Latin American mining?

Underground mining is gaining importance in the trend toward greater sustainability and higher safety standards.

Technological advances, automation, remote operations, optimization of ventilation systems and rock fortification today allow copper mines such as Chuquicamata and the future development of Ministro Hales, owned by Chile’s state-owned Codelco, as well as Anglo American’s Los Bronces and possibly BHP's Escondida to reduce environmental impacts and increase production.

BNamericas speaks with Carlos Leigh, CEO for Latin America at mining and tunneling specialists DSI Underground, about innovation in the industry.

DSI belongs to Sweden’s Sandvik and has plants in Chile, Peru, Argentina, Brazil, Mexico and Colombia, among other countries.

BNamericas: Is underground mining a trend in Latin America?

Leigh: We're seeing an acceleration of projects in the region in metals such as gold, silver and copper, and at a global level, a slowdown in zinc and nickel due to market prices. In Chile, as in other seismic countries, reaching deep depths implies a risk in addition to the concentration of energy at such depths, and for this reason, we work with anchoring systems that allow us to address the seismicity that causes the explosion of the rock and absorb the energy that is released in each blast.

BNamericas: What types of explosions occur underground?

Leigh: Great depths aren't necessarily required; explosions also occur at low depths due to pressure and energy can even be released suddenly and without warning. These are the most complex explosions because they not only occur from the roof to the floor but can occur from the sides towards the centers of the tunnels. Defining the systems to use is tremendously important in this.

BNamericas: What types of systems exist?

Leigh: They depend on the volume of energy, the type of rock and other factors. Innovation in the field of rock explosions has evolved quite a bit. Today there are devices that measure convergence, rock movements and energy release, and instruments that measure the behavior of bolts when there is a dynamic requirement. They all provide very valuable information.

Mining companies and contractors usually consult permanently about the areas of explosions or the need for support, for which we offer products and systems that inform and solve each specific purpose, since not all of them work the same for all operations.

BNamericas: What additional risks do seismic countries, like Chile, face?

Leigh: They bring challenges in terms of innovation in technologies to address those problems. Earthquakes also occur in Peru that push us to advance solutions that allow safe work and we've achieved products capable of withstanding the different energy capacities caused by a seismic factor so that mining projects can continue advancing.

BNamericas: How do you guarantee safety in underground work?

Leigh: Keeping people safe is synonymous with business continuity, equipment protection and efficiency. We have mining clients in difficult areas, such as Mexico or Peru, with operations at 4,000 or 5,000 meters above sea level, where there are connection problems and suppliers that don't deliver their materials on time. Therefore, our focus is to be close to guarantee that the operation won't stop and that people will be safe with efficient products for the entire production cycle.

Together with ABC Ventilation Systems we have a joint venture and we deliver ventilation and land recovery systems so people can work with better temperatures and better air quality, because safety isn't just about avoiding accidents.

BNamericas: What does the DSI project portfolio in Latin America look like?

Leigh: We have projects in Chile, including some for Codelco, and in Argentina where a certain financial confidence has been achieved so that operations continue to advance. We’re also in Brazil, Colombia and Mexico with projects that are growing, and from Latin America we've re-entered the US market after having been away for about five years, thanks to the support we have in Canada, Mexico and Chile.

We work a lot with the backups of our production plants in the region, which allows us to provide security in supply and products with competitive prices, since they're all standardized. The product purchased in Canada is the same as that in Chile, Peru or Colombia. This allows us to move inventories and supply new markets in a better way.

BNamericas: What role does Sandvik play in DSI's supply chain?  

Leigh: DSI is a division of Sandvik, an international leader in machinery for mining and construction, among other sectors, with a presence in more than 120 countries. This integration allows us as DSI, or ground support, to go to market with innovative products and machinery that are already tested, executed and designed to complement our own products, and advance improvements for operations and safety, with autonomous, electrical and remote systems.

BNamericas: What percentage does mining occupy in the DSI portfolio?

Leigh: Mining has always been in a 60:40 relationship, but with the pandemic, several civil projects began to be delayed in Latin America and mining has filled those spaces. Today the mining market represents between 80% and 85%, while the civil tunneling market represents 15%, since the latter sector depends greatly on the financing capacity and investment of the countries.

Post-pandemic we had changes in the orientation of civil infrastructure, targeting areas such as subways, roads, tunnels or projects that require anchors such as bridges, unlike the construction of buildings that also require underground anchors, but which depend heavily on the level of investment in the country and isn't as constant as mining.

BNamericas: Is obtaining permits and authorizations to work underground just as complex as developing works above ground?

Leigh: Logic indicates that tunneling projects should have less environmental pressure, since the movement and other aspects aren't visible and don't have the same impacts as surface projects. But, at least in Chile, there are no differences in permitting between an open pit project and an underground one.

In Mexico, what will happen to open pit mining is being reviewed, which is an issue we’re analyzing to see what will happen with the renewal of permits and the years of procedures, since it may affect investment. [Editor’s note: President Andrés López Obrador proposed prohibiting open pit mining to benefit the environment and guarantee the human right to water].

BNamericas: Investors and studies on investment in the Latin American mining industry have warned of a slowdown. Do you agree with that?

Leigh: Indeed. Important projections of investments in mining are seen, but in the end they’re not met on time for reasons such as global situation, permitting, tax issues such as royalties, as well as other legal and social issues in each country.

Recently we had social problems in Peru that hindered mining development, and in Mexico security problems that affected the projects. In general, these issues aren't considered in investment analyses, but they do affect the day-to-day operations of a mining operation. In any case, I think there should be a trend towards increasing the amount of kilometers underground, rather than on the surface.

BNamericas: Is underground mining more sustainable?

Leigh: Depends on the depth of the deposit, since the deeper it is, the more inefficient the operation becomes, and the shallower it is, the environmental component also becomes an important problem.

Underground mining is more expensive at the beginning, but over time it becomes cheaper when comparing costs, especially from the aspect of circularity. We use green steel, for example, which in addition to using recyclable materials, allows traceable control. We've identified that a large part of the recycled steel that reaches our suppliers in Chile is then delivered to the same mining companies from which the material came.

This generates a circularity between the material or scrap that came out of the mining operation and is then transformed into a bolt that re-enters the mine. Likewise, we have autonomous and electrical equipment with very strong sustainability.

BNamericas: What is the maximum depth that the teams can reach?

Leigh: The equipment is developed to adapt to the conditions of the rock, regardless of whether it's at 3km or deeper. They also respond to geological analyses that indicate at what depth the highest-grade ore is or where a greater amount of production per ton can be obtained.

We aren't limited. This involves permanent work in the area of innovation to achieve products with greater performance and safety, especially because mining in Latin America is going increasingly deep.