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Copper-mining critical supplies market analysis
16/2016
Intellectual Property Registration N° 270140
Copper-mining critical supplies market analysis
1
Chilean Copper Commission
Executive Summary
Critical supplies are those whose supply situation could be crucial for a mining project or operation
in the mid and long term. The criticality is related to the supply shortage risk, the heavy dependence
on imports, the supply monopoly, and the relative burden of the supply on the cost structure.
This study originates from the application of the Cochilco-developed methodology for identifying
critical supplies in the mining industry. Six relevant supplies are analyzed in the second version of
this study: Quicklime, Grinding Balls, Extraction Trucks, Shovel-Loaders, Off Road Tires and
Flocculants. It must be noted that Cochilco also tracks other relevant mining supplies such as water,
electric power, sulfuric acid and manpower.
The objective of this study is to understand the critical supplies market and focus efforts on tracking
these supplies.
Quicklime
There are two companies manufacturing quicklime for Chile’s mining industry; Inacal comprises 92%
of the nationwide production capacity. The current quicklime stock offer is one million tons and it
could increase to 1.5 million tons depending on the consolidation of the Sopromin Project in
Tocopilla, the startup of the 165 ktpa plant in Atacama region, and the prospective operation of a
project planned for 2020, which is still in the initial stages and its capacity would be around 200,000
tons per year.
During 2015, quicklime imports were near 400 thousand tons, from which Sibelco and Cefas led the
introductions with a combined 72% of the imports.
A reduction is expected on quicklime consumption for the 2016-2025 period, compared to the
projections shown on this study’s first version (-2,060 thousand tons). Taking into account the
current quicklime import-levels and the domestic production capacity, the quicklime supply for
mining and other industries is guaranteed until year 2022. From then on, the supply will depend on
the development of mining projects and the strategy to meet the escalating demand (quicklime
domestic production increase and/or increase in quicklime imports).
The quicklime imports CIF1 value has been continuously increasing since 2009 (+63%).
Grinding Balls
There are three companies manufacturing grinding balls for the mining industry in Chile, Moly-Cop
comprises 80.4% of the installed capacity production. In addition, it is expected that an Aceros Chile
owned new plant will launch production of forged steel balls for mining in 2017 with a
1 Sales clause that includes the merchandise value in the country of origin, freight and insurance coverage up until destination point.
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Chilean Copper Commission
manufacturing capability of 48 thousand tons, which would increase the local production capability
8% (586 to 634 ktpa)
Imports gained relevance from 2010 due to the establishment of a Joint Venture in Chinese by
Elecmetal for the production of grinding balls. In 2015, grinding balls imports reached 157 thousand
tons, 97% of them were the forged grinding ball type. Elecmetal and Codelco are the largest grinding
ball importers, with 66% and 20% of the total imported amounts, respectively.
The demand modeling shows that 466 thousand tons of grinding balls are consumed per year, this
consumption may reach 779 thousand tons by 2025, in the case that the entire mining project
portfolio is implemented. The current installed capacity of grinding balls comfortably meets their
demand in the mining industry. If the entire mining projects portfolio is implemented, the external
supply (imports) would be even more relevant.
The forged grinding balls imports CIF value (with the greatest demand in mining), has fallen from
2012, as well as the CIF value of the steel bars used to manufacture forged balls in Chile.
Extraction trucks
The extraction truck brands with the greatest presence in the Chilean copper mining operations are
Caterpillar, Komatsu and Liebherr.
With respect to the Large Scale Copper Mining, in the 2002-2015 period, 1,132 units of the most
used trucks were imported. The peak of imports was in 2012 (201 units), then it decreased and
reached 24 units in 2015.
Based on the modeling performed for the 2016-2025 period, the Large Scale Mining will require 554
new extraction trucks units and the Medium Scale Mining will require 101 units.
Since 2013 there is a dissimilar price behavior of the high tonnage trucks (some models prices rise
and others decrease). Regarding lower tonnage units, relatively stable prices are observed.
Mining Shovels
The most utilized mining shovels’ brands in Large Scale Copper Mining are P&H, Caterpillar and
Komatsu.
Analyzing a sample of mining operations (75% of the national production), it is observed that the
most utilized are rope shovels (73% of the shovel-loaders units). The average age of the rope shovel
units and hydraulic units samples are 15 and 9 years, respectively.
96 units of the studied shovel-loaders brands were imported in the 2002-2015 period, reaching a
peak in 2012 (18 shovel-loaders), then the imports decreased to just 4 units in 2015.
There is a sustained rise of the CIF value for the imported shovel-loaders until 2013, as after it
started falling.
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Chilean Copper Commission
Off The Road Mining Tires (OTR)
The most important Off The Road tire, OTR, importers (of analyzed sizes) are Bridgestone and
Michellin, that together account for 85% of the imported value in 2015. Off road tires imported
directly by mining companies represent 14%, with Codelco leading and in previous years Minera
Escondida.
There was a constant rise in the OTR tires imports until 2013 (US $351 million CIF). Thenceforth, a
reduction in imports can be observed reaching US$ 209 CIF in 2015 as a result of the mining industry
slowdown.
The tire demand projection for tire-rings sizes 57” and 63”, which is associated only to extraction
trucks with at least a 150-ton capacity, shows that for the 2016-2025 period approximately 50,000
units will be required. This amount considers the tires needed for the current operating truck units
of the models studied in this investigation (Caterpillar 789, 793, 797 and Komatsu 730E, 830E, 930E)
and those projected acquisitions.
In relation to the price for the analyzed period (2005-2015), the larger the tire size, the bigger the
CIF value variation. It was observed a sustained price rise in large-size tires that stopped in 2013.
However, this situation is not as clear for smaller sized tires, where the CIF values present less
significant variations.
Flocculants
The main large copper mining companies use imported flocculants, different commercial brands are
available. The main manufacturers are SNF, Basf, Kemira and Orica.
The suitable flocculants are chosen based on lab test results, therefore, it is unlikely for an
immediate switch to a different brand.
The flocculants consumption for the 2016-2025 period is directly related with the projections of
sulfide ore processed in concentrator plants and could experience a 67% rise until 2025, growing
from the current 9 thousand tons to 15 thousand tons of flocculants per year.
While the analyzed brands differ in their CIF values, some of them obtained their maximum value in
2014, then their values began to drop; others showed a more steady behavior.
Final comment
Critical supplies are relevant to the cost structure in mining operations, and, as a result, their
commercialization produces significant income for the suppliers. In general, it was observed that
the studied markets tend to an oligopolistic structure, and in some cases there is clearly a
predominant supplier.
From the products origin standpoint, except the quicklime and grinding balls production, the rest of
the analyzed supplies (trucks, shovel-loaders, OTR tires and flocculants) are provided by
manufacturers that have their factories outside of Chile, that is to say, those supplies must be
imported. Moreover, in recent years the market share of locally produced goods has been
threatened by imports.
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Index
1. Introduction and objectives ...............................................................................................7 2. Quicklime ..........................................................................................................................8 2.1. Quicklime cycle ......................................................................................................................... 8 2.2. Quicklime uses .......................................................................................................................... 9 2.3. Quicklime supply .....................................................................................................................11 2.3.1. Domestic Production ..............................................................................................................11 2.3.2. Lime imports 13 2.4. Quicklime demand ..................................................................................................................14 2.4.1. Quicklime final use ..................................................................................................................14 2.4.2. Quicklime Consumption in the Copper Mining.......................................................................15 2.5. Quicklime offer and demand ..................................................................................................16 2.6. Quicklime price .......................................................................................................................17 3. Grinding balls .................................................................................................................. 19 3.1. Using grinding balls in copper mining .....................................................................................19 3.1.1. Grinding balls size and filling level ..........................................................................................20 3.2. Grinding balls supply ...............................................................................................................21 3.2.1. Domestic Production ..............................................................................................................21 3.2.2. Grinding balls imports and exports .........................................................................................22 3.3. Grinding balls consumption in the copper mining ..................................................................25 3.4. Grinding balls offer and demand ............................................................................................27 3.5. Grinding balls price .................................................................................................................28 4. Extraction Trucks ............................................................................................................. 30 4.1. Extraction trucks imports ........................................................................................................30 4.2. New trucks demand ................................................................................................................32 4.3. Extraction Trucks Price ............................................................................................................34 5. Mining Shovels ................................................................................................................ 36 5.1. Shovel-loaders supply .............................................................................................................36 5.2. Imported shovel-loaders .........................................................................................................37 5.3. Mining Shovels’ Price ..............................................................................................................38 6. Mining OTR Tires ............................................................................................................. 39 6.1. Tires imports ...........................................................................................................................39 6.2. Tires demand ..........................................................................................................................40 6.3. Tires Price ................................................................................................................................41 7. Flocculants used in the copper mining .............................................................................. 43 8. Bibliography .................................................................................................................... 47
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List of figures
Fig. 1: Quicklime cycle ......................................................................................................................... 9
Fig. 2: Imports distribution by lime type 2015 .................................................................................. 13
Fig. 3: Major importers of quicklime 2005-2015 ............................................................................... 14
Fig. 4: Imports and domestic production capacity of quicklime 2015 .............................................. 14
Fig. 5: Participation (%) by final use of quicklime in Chile ................................................................ 15
Fig. 6: CaO estimated consumption vs 2015 scenario (thousand tons) ............................................ 16
Fig. 7: Offer – Demand of quicklime (2016-2025). Imports not included. ........................................ 17
Fig. 8: Calcium oxide 2005-2015 CIF unit value (US$/ton) ................................................................ 18
Fig. 9: Types of crushing and grinding circuits .................................................................................. 19
Fig. 10: Grinding balls major importers (2005- Mar 2016) ............................................................... 23
Fig. 11: Country of origin of imported grinding balls (2005-2015) ................................................... 24
Fig. 12: Grinding balls imports and exports (thousand ton) ............................................................. 24
Fig. 13: 2016 vs 2015 processed ore Cu projections ......................................................................... 25
Fig. 14: Steel grinding balls consumption projections (2016-2025) .................................................. 26
Fig. 15: Steel grinding balls offer - demand (2016-2025). Imports not included. ............................. 27
Fig. 16: Valor CIF unitario bolas de molienda forjadas 2009-2016 (Mar) ......................................... 28
Fig. 17: Molten grinding balls CIF unit value 2009-2015 ................................................................... 29
Fig. 18: New mining trucks imports, by brand, 2002-2015 ............................................................... 31
Fig. 19: New mining trucks imports, by target market, 2002-2015 .................................................. 31
Fig. 20: New mining trucks imports for the large mining, 2002-2015 .............................................. 32
Fig. 21: Material movement in open pit mining (2016-2025) ........................................................... 33
Fig. 22: Need for new mining trucks (2016-2025) ............................................................................. 34
Fig. 23: CIF value (Million US$/unit) CAEX trucks .............................................................................. 35
Fig. 24: Imported mining shovels units (2005-2015) ........................................................................ 37
Fig. 25: CIF unit value mining shovels 2005-2015 ............................................................................. 38
Fig. 26: Tires imports (millions US$ CIF) ............................................................................................ 39
Fig. 27: Imported tire units by type ................................................................................................... 40
Fig. 28: Large size tires demand (2016-2025) ................................................................................... 41
Fig. 29: CIF unit value tires (US$/unit) .............................................................................................. 42
Fig. 30: Mining flocculants major brands imports (MMUS$ CIF) ...................................................... 44
Fig. 31: Flocculants projected consumption (tons) ........................................................................... 45
Fig. 32: Average CIF unit value of conventional flocculants (US$ CIF/kg) ......................................... 45
Tables index
Table 1: Lime uses (Quicklime, slaked lime and hydraulic) ................................................................. 9
Table 2: Major quicklime producers for mining in Chile ................................................................... 12
Table 3: Filling level ........................................................................................................................... 20
Table 4: Grinding means uses ........................................................................................................... 20
Table 5: Grinding balls production companies .................................................................................. 22
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Table 6: Categorization of off road extraction trucks, by target market .......................................... 30
Table 7: Mining Shovels large copper mining ................................................................................... 36
Table 8: Number of loaders by make, model and type ..................................................................... 37
Table 9: Major brands of flocculants utilized in mining .................................................................... 43
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1. Introduction and objectives
The objectives of this study are:
1. Support the growth of mining activities and investments in our country through the
identification and understanding of the market of the supplies considered as critical.
2. Contribute to the monitoring of public policies aimed at sustainable development of mining
in Chile and consolidate its contribution to the country, by the development of studies that
track or perform a follow up on these critical supplies.
On the first version of the study, a methodology was formulated and applied with the purpose of
identifying in a reasonable manner most of the supplies that are considered critical in the Large
Copper Mining, in both, the operations (OPEX) and capital projects (CAPEX). As a result emerged
the need to follow up on those supplies that are critical for the mining, with the goal of identifying,
understanding and monitoring the main determinants of their markets. On this matter, from a time
ago, Cochilco permanently follows up the high impact critical supplies for the mining such as electric
power, water, sulfuric acid and manpower.
The market of 6 mining supplies were analyzed in the third version of the study:
Quicklime,
Grinding balls,
Flocculants,
Tires for off the road extraction trucks(OTR),
Extraction trucks (CAEX),
Mininig Shovels.
With the purpose of having an expert opinion about the contents of this report, some the
suppliers mentioned on this study were contacted. It is important to note that some of the local
offer values come from estimations based on the information provided by the same companies
and other interviewed sources; meanwhile, the imported offer was obtained from the customs
records. The demand projections are based in Cochilco own estimations.
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2. Quicklime
Quicklime2 is obtained by burning limestone (ore) to the calcium carbonate decomposition
temperature. At this stage it is called quicklime (calcium oxide) and then it is treated with water to
be called later slaked lime (calcium hydroxide). As explained later, the principal use of quicklime in
the mining industry is as a PH regulator in the sulfurized copper and copper auriferous ore flotation
processes.
2.1. Quicklime cycle
It is necessary to know the lime cycle in order to understand the concept of quicklime and slaked
lime.
Calcination
Quicklime is produced from high purity (CaCO3) calcium carbonate (limestone), which are subjected
to a calcination process in vertical or rotary furnace at temperatures ranging between 1.100°C and
1.300°C, allowing its decomposition. The chemical equation that determines the reaction is as
follows:
CaCO3 + heat = CaO (solid) + CO2(gas).
The CaO (solid) is commonly known as quicklime and its main characteristic is that it has high
alkalinity (pH 12) when solubilized with water, this is the reason it is utilized as PH regulator in mining
and industrial processes, where neutralizing, soften and clarifying water is required and for
stabilizing clay soils.
Hydration
Calcium oxide is chemically unstable and when in contact with water in any state (liquid, solid, gas)
the process known as hydration begins and it becomes in calcium hydroxide Ca(OH)2, typically called
slaked lime, air lime or hydrated lime. The hydration process is quick and it produces a lot of heat.
The chemical equation representing this reaction is as follows:
CaO + H2O = Ca(OH)2 + heat
Re carbonation
When slaked lime reacts with the CO2 from the air, process known as re carbonation, calcium
carbonate is formed again acquiring properties originally possessed as rock.
Ca(OH)2 + CO2 + time = CaCO3 + H2O
2 Calcium oxide, CaO.
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Fig. 1: Quicklime cycle
Source: Cochilco
2.2. Quicklime uses
The following table summarizes the countless uses of quicklime:
Table 1: Lime uses (Quicklime, slaked lime and hydraulic)
Trade Use Function
Industrial Organic and inorganic chemistry
Binding agent, collector or precipitant.
Water treatment Coagulant, depressant, purifier and pH regulator.
Water treatment through inverse osmosis
PH regulator.
Paper and pulp Binding agent y basifying.
Food and subproducts Nutrient, coagulant and stabilizer, among other uses.
Sugar production Binder and neutralizer of acidity.
Petroleum Thickener, sealant and pH regulator.
Thermal power stations Sulfur sorbent or detainer, depends on the process.
Construction Silicic and lightweight bricks
Binding agent.
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Trade Use Function
Lightweight concrete Reacting agent.
Mortar Plasticizer and displacer.
Asphalt paving Waterproofing, anti-disintegrant and stabilizer.
Estabilización de suelos Binder and displacer.
Protective coating Paint
Agriculture Soil improvements PH regulator.
Plant nutrient Accelerant
Fertilizer Deodorizer and nutrient.
Insecticide, fungicide Diluent
Diverse Uses Pigments Binder and pH regulator.
Varnish Neutralizer
Rubber Desiccant
Pollution control Absorbent
Mariculture Decontaminant
Farming Germicidal
Metal mining Smelter Acts as flux, binder. Absorbs smoke gases and chimney gases. Bar unmolding, nickel precipitation catalyst, wire production lubricant, and others.
Copper Smelters Flux and cast remover.
Neutralizes the acid effluents generated by the acid plants associated with these smelters.
Cyanidation of auriferous minerals (Au) and argentiferous (Ag)
Besides having a specific role in each cyanidation processes, prevents the generation of hydrocyanic acid in the cyanide hydrolysis. Alkalizing in cyanidation.
Alkaline flotation PH regulator, Pyrite depressant, calcium salts precipitant, linking of the active silica contained in clays, among others.
Leaching gravel Neutralizes the residual acidity and sticks the clays contained in the ore (stabilizer)
Non-metal mining Obtaining all salts and nitrates
PH regulator or precipitant, and others.
Obtaining synthetic colemanite
Linking agent (boric acid production).
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Trade Use Function
Obtaining granulated ulexite (fertilizer)
Binder
Obtaining granulated potassium nitrate
Binder
Obtaining lithium Linking agent and depressant of the magnesium present in the brines containing lithiumo.
Treatment of water or RILES
Neutralizer.
Source: Cochilco based on the book “Quicklime: is a chemical reactive!” (2008)
This investigation’s scope of work is to gain knowledge about the market of quicklime associated
with the copper mining, and related specifically with the flotation process.
2.3. Quicklime supply
2.3.1. Domestic Production
This work estimates the domestic supply of lime in Chile for the mining market, with special interest
in the Calcium Oxide (Cao) or quicklime offer that is used in copper flotation processes, smelters
and gold mining. It must be noted that the major domestic quicklime producers supplying to the
mining industry, don’t publish detailed information showing the bulk quantities for their lime
products. With the purpose of determining the percentage of quicklime production, data based on
the actual dispatched products was utilized, this information was provided by the companies
themselves and for the remaining ones it is assumed that 90% of their production is quicklime.
There are two companies, in the domestic market, leading the lime production (quicklime and slaked
lime) for the mining industry, their capabilities are detailed in the following table:
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Table 2: Major quicklime producers for mining in Chile
Empresa Controller Products Facility Target Market
Maximum Capability
(ktpa)
INACAL Cementos Bío Bío S.A.
Quicklime (granulated and
ground) and hydrated lime
Antofagasta Arica-Parinacota, Tarapacá and Antofagasta regions
650
Copiapó Atacama and Coquimbo regions
550
SOPROCAL Rozas Rodríguez family through La
Tirana Ltda. Investments
Quicklime (granulated and
ground) and hydrated lime
Melipilla Mining operations at central zone
110 (*)
Source: Cochilco based on companies’ information, Annual Reports, Environmental Evaluation and Services
(*) The plant production capability is 165 ktpa. However, due to environmental restrictions it reduced its
production to 110 ktpa.
DIA approved Project and soon to start operations3:
In May 2014, SOPROMIN’s quicklime plant received a favorable rating for the project (RCA N°
0260/2014) that will replace 3 vertical furnaces for 2 horizontal ones. This replacement will increase
the plant’s project treatment capability from 87 to 216 ktpa. The renovation will require a US$ 25
million investment and the construction phase is estimated to last 18 months. Important
negotiations are currently taking place in an engineering, purchasing construction contract (EPC) for
the procurement of the plant out of Chile and that should initiate production in 2018. Owned
limestone reserves allow for a 25-year useful lifetime.
To determine the ability of lime producers to supply the domestic market, the following
assumptions were made:
_ Plant utilization: It is estimated that the effective utilization is 90% of the installed capacity.
_ Distribution of the offered products: The lime manufacturing plants generally produce
calcium oxide. However, some of that product becomes calcium hydroxide, and it is destined
to a different market. Similarly, a part of the calcium oxide produced is for other uses but
mining (between 10% and 20% of the CaO, depending on the company)
3 By the end of this study, there was no information about the conditions of the lime production plant located in the Atacama region (Caldera and Copiapó communes), which has a 165 ktpa quicklime production capacity (aimed at mining and environmental markets) and that was planned to begin operations during second half of 2015. For that reason, it was not considered in the previous table, but it was taken into account for the following years offer-demand balance.
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It is calculated that in 2016 the quicklime offer of domestic production would be around a million
tons. The quicklime offer would increase to 1.5 million tons per year if the Sopromin project is
complete by 2018 and the Atacama based (Caldera and Copiapó communes) quicklime production
plant starts operating, which has a 165 ktpa quicklime capacity.
2.3.2. Lime imports
Three types of lime are imported: Quicklime, Slaked lime and hydraulic lime4. 425.4 tons of lime
were imported during 2015, 90.6% of the total was quicklime
Fig. 2: Imports distribution by lime type 2015
Source: Thompson Reuters (2016) based on Customs information
In CIF terms, US $74.6 were imported, 79% of the imports was quicklime and 21% slaked lime. In
comparison, the hydraulic lime imports are marginal, representing less than 1% of the total.
Just as observed in previous years, in 2015 95% of the total volume of imported quicklime comes
from Argentina.
The largest quicklime imported volume was registered in 2013 with 406 thousand tons. A decreasing
tendency was maintained in 2015 with 376 thousand tons of imported quicklime, which is a 2.3%
reduction compared to the previous period.
SIBELCO Chile remains as the major quicklime importer with volumes representing 54% of the total
imports in 2015. Followed by CEFAS Chile, which has its production plants in Argentina and imported
18% of the total calcium oxide in 2015.
The imports leadership has changed in the last 10 years as it is show below:
4 The difference between hydraulic and hydrated lime is that the first one contains significant amounts of silicon and aluminum. As a reminder, hydraulic lime is used in construction only in hydrated state.
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Fig. 3: Major importers of quicklime 2005-2015
Fuente: Thompson Reuters (2016) based on Customs information
Minera LBE was acquired by Sibelco in Argentina in 2009.
Fig. 4: Imports and domestic production capacity of quicklime 2015
Source: Own collection
Considering the domestic installed quicklime production capacity and the exports for mining
utilization, the quicklime offer for 2015 is approximately 1,341 thousand tons.
2.4. Quicklime demand
2.4.1. Quicklime final use
There are many uses for lime, but there isn’t current public information of the amounts by final
utilization. However, Coloma (2008) provides the following breakdown showing the lime’s final
utilization percentages in the 2000-2010 period:
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Fig. 5: Participation (%) by final use of quicklime in Chile
Source: Cochilco based on the book “Quicklime: is a chemical reactive!” (2008)
80% of the quicklime used between 2007 and 2009 was in flotation processes (associated with the
copper mining). Cyanide by leaching and agitation is used in the gold extraction and it accounted for
13% of the total quicklime utilization nationwide.
2.4.2. Quicklime Consumption in the Copper Mining
The most common use of quicklime in the mining industry is the copper flotation process. In order
to estimate the quicklime demand is necessary to have a daily consumption indicator measured in
quicklime kilograms per ton of processed orel (quicklime Kg/ ore ton). Depending on the ore to be
treated, the quicklime unit consumption value presents significant variation. The quicklime unit
consumption values range from 1.5 to 1.7 kg/ton of processed ore. The first obtained value was the
result of a Cochilco study (2007)7 and it is similar to values of some engineering projects that were
consulted. The second value was estimated by the largest quicklime producer in Chile (INACAL). For
calculation purposes in the offer & demand estimation, the intermediate value of 1.6 kg/ton of
processed ore will be assumed.
When multiplying the quicklime unit consumption value by the copper sulphide ore projection for
2016-2025, the following estimates are obtained:
76%81% 84% 86% 86% 82% 78% 80% 79% 79% 80%
18% 10% 7% 7% 9%11% 15% 12% 13% 13% 13%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Smelter
Chemical
Effluent neutralization
Cyanide (leaching & agitation)
Flotation
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Fig. 6: CaO estimated consumption vs 2015 scenario (thousand tons)
Source: Cochilco
(*) From quicklime consumption estimates in 2015 version of this study, but utilizing the corrected
consumption rate of 1.6 kg of CaO/ton of treated Cu ore.
The “Base”, “Probable”, “Possible” and “Potential” scenarios consider the quicklime consumption
for different copper ore processing scenarios by flotation processes, which depend on the probable
realization of investments in the mining projects portfolio for 2025 (Cochilco). These estimates differ
from the 2015 report projections (dashed line), which demostrates the decrease of the quicklime
expected consumption due to some companies postponing and others cancelling their planned
investments as a result of the deteriorating marked conditions. The new projections, considering a
reduced volume of processed ore, entail the need of a lesser amount of quicklime for their copper
flotation processes for 2016-225 period and estimates -2,060 thousand tons (2015 estimate vs 2016
estimate).
The “CaO for other uses” item represents the estimated consumption of quicklime in smelters,
cyanide (silver extraction) and other applications, which accounts for 25% of the quicklime amount
used in copper flotation processes (Potential scenario consumption excluded).
2.5. Quicklime offer and demand
The following figure shows the domestic offer and demand balance:
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Fig. 7: Offer – Demand of quicklime (2016-2025). Imports not included.
Source: Cochilco
The quicklime demand projections changed (decreased), compared to the first version of this report,
influenced by the market conditions.
For the domestic offer, in addition to the Sorpromin project start up and commencement of
operations of the Atacama region based 165 ktpa plant, it was included the future operation of a
project currently at initial planning stage that should be complete by 2020 and would have a capacity
of 200 thousand tons per year.
In 2015 the quicklime imports reached 377 thousand tons that together with the domestic
production capacity provided ample supply to the mining needs of the product. If the current
importation levels are maintained, the quicklime supply for the mining industry would be ensured
until 2022. From then on, the demand would have to be met by increasing the quicklime imports
(mainly from Argentina) and/or increasing the local production.
2.6. Quicklime price
The unit CIF value for Calcium Oxide imports increased at an annual rate of 7% since 2005, which
created an escalation of 97% of the value between 2005 and 2015.
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Fig. 8: Calcium oxide 2005-2015 CIF unit value (US$/ton)
Source: Thompson Reuters (2016) based on Customs information
The CIF value continued to raise in 2015 to 156.7 US$/ton, which is a 9.9% increase compared to the
previous year.
Something to consider is that almost 99% of the imported quicklime come from Argentina, therefore
there are no import taxes associated, reducing the final cost.
There is the following scenario:
_ The price and volume of imports have been raising.
_ Imported quicklime has taken some of the domestic production market.
_ There are projects for new quicklime production plants in Argentina, specifically in the San
Juan province.
The competition between imports and domestic production will keep the prices relatively stable
until 2022. From then on, the new mining projects start up (possible and potential) could create a
raise in the quicklime price, as long as the quicklime imports don’t increase and/or new quicklime
production projects are made.
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3. Grinding balls
In addition to the copper mining, grinding balls are also utilized in other industries such as cement
and energy generation.
3.1. Using grinding balls in copper mining5
Grinding balls are utilized in all of the mineral grinding processes: conventional, unitary, SAG and
regrinding. Grinding is the procedure that follows the ore crushing and in which the particle
reduction is continued to a maximum size of 180 micron, allowing the separation of the copper
particles.
The grinding process is performed in three different ways: conventional grinding, unitary (with and
without HPGR) and SAG grinding.
Fig. 9: Types of crushing and grinding circuits
Source: Cochilco
Conventional Grinding: Contains two phases, the first one is with rod mills and the second one with
ball mills.
Unitary Grinding (with and without HPGR): This type of grinding utilizes ball mills and may
incorporate unitary grinding with high pressure grinding rolls (HPGR).
5 www.codelcoeduca.cl
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Around 40 to 45% of their interior volume is occupied by 1”-4” diameter steel balls, which are the
grinding media. In a 20-minute long process for each ore particle that has to be ground, 80% of the
mineral is reduced to size of 180 microns or smaller.
SAG Grinding: Utilizes a high capacity mill where the material is deposited right after the primary
crusher and contains steel balls inside; when the mill rotates, the material falls and gets ground by
the impact effect between the balls and the material itself. Most of the material released by this
mill go to the flotation phase where the copper concentrate is obtained. A smaller amount of
material returns to the ball mill for grinding until the required size for the following phase is
achieved.
3.1.1. Grinding balls size and filling level
The filling level depends on the percentage fraction of the total internal volume of the mill loaded
with grinding media (rods, balls).
Table 3: Filling level
Mill type Filling Level
Rods 30-40%
Balls 40-45%
Balls (regrinding) 25-30%
SAG 10-15% Fuente: Cochilco.
The grinding balls size depend on the grinding type as shown on the following table:
Table 4: Grinding means uses
Grinding Type
Balls Size (inches)
SAG 4" - 6"
Balls 1" - 4"
Vertical 0,5" - 1,5"
Ultra fine (ISA) < 0,1" Source: Cochilco based on the presentation Moly-Cop, 2012
Two types of balls are produced in Chile. Forged steel and molten steel.
Despite of their higher price, forged steel balls are 10-15% more efficient than molten steel balls
because they wear less.
Forged steel balls production is limited to a maximum diameter of 4” because they cannot withstand
the strong impacts that are characteristic in Semi Autogenous Grinding (SAG), where larger diameter
balls are required.
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A modern grinding circuit consumes approximately between 30 and 40% large balls (>4”), between
40 and 50% mid-size balls (2” - 3.5”) and the rest small balls (<2”).
3.2. Grinding balls supply
3.2.1. Domestic Production
The Chilean most important manufacturers of grinding balls are Moly-Cop Chile S.A., SK Sabo S.A.
and Proacer S.A.
Moly-Cop Chile S.A. manufactures and distributes Steel balls for grinding; these are utilized in the
extraction of copper, gold and iron. Founded in 1959, their Talcahuano and Mejillones, company
owned plants, have a grinding means rated capacity of 471,000 tons. Moly-Cop is 100% controlled
by Arrium, an Australian firm that acquired Moly-Cop from Anglo American Plc in 2011.
SK Sabo S.A. is a company 99.99% controlled by Magotteaux, a Belgian Enterprise leading in
development, fabrication and commercialization of grinding balls and wear parts (casting). At the
same time, Sigdo Koppers controlls 95% of Magotteaux. SK Sabo S.A. has a plant in Antofagasta,
Chile with a capacity of 55,000 ton/year of forged grinding balls. The major businesses where their
products are commercialized are the mining and cement industries.
Proacer S.A. is another company controlled 100% by Magotteaux, which is at the same time
controlled by Sigdo Koppers S.A. The company has an installed capacity of 60,000 tons of low-
chrome balls.
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Table 5: Grinding balls production companies
Company Plant
Location
Rated Production (ton/ year)
Balls Market
Moly-Cop
Talcahuano 202,000
1" to 6" forged steel grinding balls
The main Chilean clients are the large concentrators like Minera Collahuasi, Codelco, Los Pelambres, Minera Candelaria, Anglo Chile and Alumbrera in Argentina
Mejillones 269,000
SK Sabo S.A. Antofagasta 55,000 Forged steel grinding balls. Clients in Northern Chile
and Peru
Proacer Ltda. Santiago (Til Til)
60,000 2" to 4" molten low-chrome
grinding balls Mining market
Fuente: Cochilco Based on companies’ information, institutional websites and memoires.
When analyzing the three major grinding balls suppliers, it can be observed that Moly-Cop has 80.4%
of the installed capacity and Sigdo Koppers 19.6% through its subsidiaries SK Sabo S.A. and Proacer.
By March 2016, the three major manufacturers’ combined steel balls production installed-capacity
for mining is 586 ktpa.
Approved RCA
_ In October 2014 a R.C.A. (527/2014) was issued approving the construction and operation of
a forged balls manufacturing plant for the large mining. This plant, owned by Aceros Chile S.A.
will be located in the Puente Alto commune. The project’s phase 1, with a 48,000 ton capacity,
started construction in February 2016 and will be in commercial-production conditions in
January 2017. The execution of phases 2 and 3 of the project are subjected to the market’s
demand evolution. The target market is the large mining in Chile, Peru and Argentina, the
same markets where Aceros Chile currently offers molten steel liners for grinding equipment
and crushers.
_ In May 2013 a R.C.A. (54/2013) was issued approving the construction and operation of a
steel forged balls manufacturing plant aimed mainly for the comminution processes (size
reduction) of mining materials. This SK Sabo owned plant will be installed in the Coquimbo
commune with a total rating of 150,000 tons. However, the project’s implementation was not
materialized.
With the Aceros Chile S.A. plant startup, the domestic installed capacity would reach 634 ktpa.
3.2.2. Grinding balls imports and exports
The major grinding balls importers are companies that manufacture and/or supply grinding balls,
mining enterprises, and cement producers.
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Elecmetal induced a powerful effect on the forged balls imports since 2010 as a result of the creation
of “ME Long Teng Grinding Media (Changshu) Co. Ltd.”, a Joint Venture 50/50 established in China
for the fabrication of grinding balls.
In 2015, 97% of grinding balls imported volume for mining were of forged type, the remaining were
molten.
Grinding balls imports evolution is shown on the following figure6 (in thousand tons), but without
considering companies that are not related to the grinding for copper mining such as cement
manufacturers, energy and others.
Fig. 10: Grinding balls major importers (2005- Mar 2016)
Source: Thompson Reuters (2016) based on Customs information
From 2010, Elecmetal became the major grinding balls importer for the mining industry, reaching
66% of 2015 imports. Acording to Elecmetal’s annual report, business areas, the company is
oriented to meet domestic and international demand for grinding balls for SAG and secondary
grinding. Elecmetal imports exclusively forged balls.
Codelco, the second largest importer of grinding balls, accounted for 20% of imports in 2015.
Magotteaux imported only molten balls until 2012. However, in 2015 forged balls represented 67%
of its total imports. An opposite scenario occurs with SK Sabo, which until 2013 imported only forged
grinding balls, and then changed in 2014 when molten grinding balls were 68% of the total imports.
SK Sabo didn’t register any imports of grinding balls in 2015.
Based on the grinding balls country of origin, the following is observed:
6 Considered tariff codes for molten balls: 73259900 and 73259110; Forged balls: 73261110 and 73261190.
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Fig. 11: Country of origin of imported grinding balls (2005-2015)
Fuente: Thompson Reuters (2016) based on Customs information
Chinese forged grinding balls represented 96% of the imported volume in 2015. Followed by
Peruvian with a marginal 3% share.
On the other hand, molten grinding balls imports are led by Peru and China with a 12% and 30%
shares respectively.
In 2015, the imported volume of grinding balls for mining (forged and molten) was approximately
157 thousand tons, which is 27% of the current domestic grinding balls production capacity (for
mining).
Regarding grinding balls exports, 84% of the 142 thousand tons of exports in 2015 were forged balls.
The main destination of exported forged balls in 2015 were Brazil, Argentina and Peru with 53%,
20% and 16% of the totals respectively. At the same time, Moly-Cop’s exports were 89% of the
exported balls in 2015. Proacer was responsible for 99.7% of the molten balls exports in 2015, with
Brazil as the major destination.
The evolution of exports and imports by grinding balls types, in thousand tons is shown below:
Fig. 12: Grinding balls imports and exports (thousand ton)
Source: Thompson Reuters (2016) based on Customs information
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From 2014, the forged grinding balls imports exceeded the exports. The molten grinding balls have
an opposite case scenario.
3.3. Grinding balls consumption in the copper mining
The grinding balls demand in the copper mining is related to the amount of processed ore in the
concentrating plants (the leached ore is not subjected to milling processes).
The contrast between the current and last year’s report (2015) projections for ore processing is
shown on the following figure. These projections are based on the mining companies’ decisions
regarding the realization, delay, restructuration or termination of their investment projects.
Fig. 13: 2016 vs 2015 processed ore Cu projections
Source: Cochilco
The processes ore projections fall (sulfide line) is due to the companies’ decisions for delaying and
in some cases cancelling their investment plans, as a result of the adverse economic scenario that
generated the drop in commodities prices.
A 770 gr/ton of ore unit consumption rate was utilized, this value was obtained from a 2007
Cochilco7 study and it is within the median value range of a succession of analyzed values. The
estimate for industry consumption of grinding balls was calculated with the previously mentioned
unit consumption rate.
7 “Business Opportunities for Providers of Goods, Supplies and Mining Services in Chile”, Cochilco, November 2007.
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Considering the processed copper ore 2016-2025 projections from the latest Mining Projects
Cadastre, the following estimate was obtained for consumption of steel grinding balls, grouped by
probable, possible and potential projects.
Fig. 14: Steel grinding balls consumption projections (2016-2025)
Fuente: Cochilco
According to the estimate, the current yearly consumption is 466,000 tons of grinding balls, with a
possible increase to 779,000 tons in 2025 given the case that all projects in the Cadastre are
implemented (probable, possible and potential mining projects).
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3.4. Grinding balls offer and demand
The following scenario is estimated for the grinding balls offer and demand to 2025:
Fig. 15: Steel grinding balls offer - demand (2016-2025). Imports not included.
Source: Cochilco
For the domestic offer estimate, it was assumed the utilization of 90% of the production plants and
the Aceros Chile S.A. plant startup in 2017.
The current installed capacity of production of grinding balls comfortably meets the demand for
grinding balls in mining. If the investments that have the highest level of uncertainty in their
execution are implemented (possible and potential scenarios), then the domestic production
capacity would be overcome from 2019.
However, the market balance changes when considering the grinding balls imports (mainly forged)
that reached 157 thousand tons in 2015. The grinding balls imports would have more relevance
from 2019 if most of the mining projects portfolio get implemented.
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3.5. Grinding balls price
Forged Balls
The following figure shows the CIF unit prices (US$/ton) from a sample of imported forged grinding
balls for mining uses, and which volume is 79% of the total imported tonnage for this industry in the
2009-2015 period. The considered diameters were: 6.25”, 5.5", 5", 3", 2” 1.5", 1” and 40mm. These
prices were compared with the CIF prices of imported Steel bars utilized for the fabrication of balls8.
Fig. 16: Valor CIF unitario bolas de molienda forjadas 2009-2016 (Mar)
Source: Thompson Reuters (2016) based on Customs information
Molten Balls
A sample was taken from imported molten balls for mining uses, which represent 78% of the total
imported tonnage for the industry in the 2009-2015 period. The following diameters were
considered: 2”, 3”, 40 mm, 30 mm and 50 mm. The prices are compared against the steel spot price
at the London Metal Stock Exchange.
8 Tariff code: 72283000.
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Fig. 17: Molten grinding balls CIF unit value 2009-2015
Source: Thompson Reuters (2016) based on Customs information
There is an evident price drop in the forged grinding balls from 2012, similar to the price of imported
steel bars utilized for balls fabrication.
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4. Extraction Trucks
The analysis was performed on the off the road trucks market, for transportation of extracted
material in copper open pit mining operations, emphasizing on the large scale copper mining.
Extraction trucks mission is to transport the extracted material to a destination point that is defined
by the mining plan. They are the most commonly utilized transportation units in mining and are
specially designed to haul mining heavy loads.
Material transportation is one of the most important aspects in an open pit mining operation, it
signifies around 50% of the operations cost, and in some cases up to 60%.
4.1. Extraction trucks imports
The following analysis is focused in the importation of off the road trucks of the brands with the
most presence in the extraction operations of the Large Scale copper mining: Caterpillar, Komatsu
y Liebherr. The studied models and their target markets are shown below:
Table 6: Categorization of off road extraction trucks, by target market
Target Market Brand Model
Large Mining
Caterpillar 793- 795- 797
Komatsu 830E- 930E- 960E
Liebherr T282
Medium-scale mining Caterpillar 789
Komatsu H785
Small Mining Caterpillar 773-775-777-785
Komatsu HD465- HD605- 730E
Source: Cochilco
In the 2002-2015 period were imported 2,107 brand new truck units. The following figure shown
the trucks imports grouped by brand.
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Fig. 18: New mining trucks imports, by brand, 2002-2015
Source: Thompson Reuters (2016) based on Customs information
84% of the units’ importation was performed by the companies representing the manufacturers in
Chile and 6% was imported directly by the Large Scale copper mining users led by Codelco, Barrick
and Anglo American.
On the other hand, each model has determined commercialization target market (small, median
and large scale mining). When grouping the imported trucks according to their target market, the
following scenario is observed:
Fig. 19: New mining trucks imports, by target market, 2002-2015
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Source: Thompson Reuters (2016) based on Customs information
In the 2002-2015 period 1,132 trucks were imported for the large scale copper mining. However,
due to the global market recession, the truck imports began decreasing in 2012, reaching in 2015
levels observed in 2004. It must be noted that the imports analysis is focused only in those models
of the most utilized brands in the large mining (Komatsu, Caterpillar y Liebherr). Therefore, the
previously shown graphic doesn’t include the imported trucks of other brands that are mainly
destined to the mid-scale and small mining.
Fig. 20: New mining trucks imports for the large mining, 2002-2015
Source: Thompson Reuters (2016) based on Customs information
Komatsu, Caterpillar y Liebherr are the most common brands in the open pit copper large mining.
In the analyzed period 1,132 trucks were imported with a peak in 2012 (201 units).
Komatsu trucks importations raised from 2012 (specifically the 930E model) and on the other hand,
no imports were registered for Liebherr trucks, model T282 since 2013.
4.2. New trucks demand
The demand for trucks is given by the movement of material needs at the operating open pits and
future mining projects. Based on the estimated material movement9 for the 2016-2025 period, it
was obtained an estimate of the truck demand for the following years focused in the large copper
mining operations. The calculation of the number of trucks considers variables such as:
9 Wood Mackenzie, Q2 2016.
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_ Average hauling distance to landfill, piles or plant.
_ Horizontal and slope speed (loaded and unloaded)
_ Trucks’ capacity
_ Availability and effective utilization of trucks
_ Distance increases due to open pits deepening
The volume of material (orel + waste) to be moved in open pit mining in the 2016-2025 period is
shown below:
Fig. 21: Material movement in open pit mining (2016-2025)
Source: Wood Mackenzie (Q2 2016)
The material movement projections indicate that in 2021 and 2022 there will be a peak with 3,100
million tons and then it will slowdown.
There are two factors determining the truck demand for material movement:
_ Need for equipment (trucks) replacement due to end of its useful life.
_ Need for additional equipment (trucks) to meet increased material movement.
Just as in the 2015 version of this study, a projection was made to estimate the number of new
trucks needed to meet the material hauling demand (waste and ore) for the next few years10. The
10 Assumptions:
_ Average speed in slopes and horizontal (loaded and unloaded) = 25 Km/hr.
_ The current truck fleet capacity configuration on each site is maintained (models currently
used).
_ Availability according to the truck’s useful life, which is 86% to 73%.
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graphic below shows the estimated truck demand for the 2015-2025 period, for a group of
operations that represent over 90% of the material movement in open pit mining. The estimated
value corresponds to the average of the projections for scenarios where trucks have different useful
life ranging from 10 years to a maximum of 15 years.
Fig. 22: Need for new mining trucks (2016-2025)
Fuente: Own collection
The estimate assumes that the fleet replacements will take place in 3 years in trucks grouped in two
capacity varieties:
_ Large Mining (Trucks similar to Caterpillar 793-9797 and Komatsu 830E – 930E).
_ Mid-scale mining (Trucks similar to Caterpillar 789).
In the 2016-2025 period, the large-scale mining will require 554 new extraction trucks and the mid-
scale mining 101 trucks.
The demand projection for new trucks considers the replacement of existing equipment fleets as a
result of the end of their useful lives and assumes that the current hauling configurations are
maintained (truck models). The same assumptions were applied for the quantification of the
additional trucks required to meet the increase of material movement in mining operations.
4.3. Extraction Trucks Price
All the extraction trucks are imports. The subsequent figure shows the evolution of the imports CIF
value for the models of trucks with the highest demand of the following brands: Komatsu, Caterpillar
and Liebherr.
_ Trucks’ effective utilization BD (76%)
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Fig. 23: CIF value (Million US$/unit) CAEX trucks
Fuente: Thompson Reuters (2016) based on Customs information
Considering the manufacturer’s load ratings, resemblances in in the prices are found between
models 930E (Komatsu) and 797 (Caterpillar), as well as between models 830E (Komatsu) and
789/793 (Caterpillar).
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5. Mining Shovels
Surface mining couldn’t be feasible without large mining shovel equipment, which are an essential
part of the mining process. Hydraulic and cable (rope) shovels are the most utilized loading
equipment in the copper large-scale open pit mining.
The mining shovels are large pieces of equipment with low unit costs and good maintenance and
support availability. Among their differences between the cable (rope) shovels and the hydraulic
ones is that the first ones have higher load capacity.
5.1. Shovel-loaders supply
The shovel-loaders analysis is focused in the most utilized models in the large-scale copper mining
in Chile, which are:
Table 7: Mining Shovels large copper mining
Brand Series Tipo Capacity11
(yd3)
Caterpillar 7495 (Bucyrus 495 series) Cable 53-73
P&H 4100 Cable 54-76
P&H 2800 Cable 34-46
Komatsu PC 8000 Hydraulic 55
Komatsu PC 5500 Hydraulic 32-37
Source: Cochilco
According to Editec. S.A. (2014)12 publication, in a group of 18 large-scale copper mining operations
that represent 75% of the annual production, the following was observed:
_ 73% of a total of 128 equipment units are electric cable (rope) shovels and the remaining
(27%) are hydraulic shovels. Due to the extraction companies tendency of moving larger
amounts of material (ore and waste), the cable (rope) shovel is the most utilized in open pit
mining thanks to their loading productivity.
_ The average age of the operating cable (rope) shovels and hydraulic shovels of the sample
is approximately 15 and 9 years respective (as of 2015).
_ The shovel-loaders distribution by type and Brand is shown below:
11 The capacity range was obtained from “Mining Equipment Cadastre 2014/2013”, Editec S.A. 12 “Mining Equipment Cadastre 2014/2013”.
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Table 8: Number of loaders by make, model and type
Caterpillar Komatsu P & H
Cable
4100 44
7495 5
2800XP 12
495B 7
495B I 2
495BII 2
495HR 21
Hydraulic
6060 FS 2
PC5500 24
PC8000 7
RH200 2
Total 41 31 56
Source: Based on “Mining Equipment Cadastre 2014/2013”, Editec S.A.
5.2. Imported shovel-loaders
Considering the analyzed models, 96 units were imported in the 2005-2015 period.
Fig. 24: Imported mining shovels units (2005-2015)
Source: Thompson Reuters (2016) based on Customs information
The imports peak was in 2012 (13 units) and then it started to decrease steadily to reach 4 units in
2015.
31
2 23
4 42 2
32
13
4
65
133
4
2
65
1
2
42
13 1
4
3
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
P&H 4100 Cat 7495 (Bucyrus 495hr) Kom PC 5500 Kom PC 8000
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48 units of the bigger models (cable/rope shovels P&H 4100 XPB-XPC and Caterpillar 7495 (Bucyrus
495hr)) were imported on the 2005-2015 period. Almost 100% of the units were imported directly
by the mining companies, the buyers.
A different scenario is observed with Komatsu models PC8000 and PC5500 since only 18% of the
units was imported directly by mining companies. The vast majority (64%), of the imports were
made by the distributor of the brand in Chile
5.3. Mining Shovels’ Price
Likewise to the extraction trucks, 100% of the analyzed brands of mining shovels were imported.
The following figure shows the CIF value evolution of the analyzed mining shovels models.
Fig. 25: CIF unit value mining shovels 2005-2015
Source: Thompson Reuters (2016) based on Customs information
Apparently 2013 marked the end of the shovel-loaders’ price rise. During the last 2 years the models
4100 and PC 5500 present CIF values decline.
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6. Mining OTR Tires
The analysis was focused in tires for the off the road trucks that were studied in the previous chapter
and that correspond to equipment utilized in open pit mines. The analyzed tire sizes are those from
the manufacturers’ specifications for their trucks; these are13:
_ 24.00 R35
_ 27.00 R49
_ 33.00 R51
_ 37.00 R57
_ 42/90 R57
_ 40.00 R57
_ 46/90 R57
_ 53/80 R63
_ 56/80 R63
_ 59/80 R63
6.1. Tires imports
There are no manufacturers in Chile that produce tires of the analyzed sizes, therefore, 100% of
them were imported. The detail of imported volumes is shown below (millions US$ CIF):
Fig. 26: Tires imports (millions US$ CIF)
Source: Thompson Reuters (2016) based on Customs information
Up to 2013 there was a constant increase in the tires imports, which was 29% annually for the 2005-
2013 period. From 2014 a severe drop in imports is observed, resulting from the slowdown in the
mining sector, falling from US$ 351 million in 2013 to $209 million CIF in 2015.
13 RXX where “R” represent the layers run radially across the tire and “XX” is the ring’s diameter in inches.
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Bridgestone and Michelin are the major manufacturers of tires for heavy duty trucks occupied in
open pit mining.
Direct imports of tires managed by the large-scale copper mining companies (operational) account
for 29% of the total imports in the 2005-2015 period, being Minera Escondida and Codelco the most
prominent (24% of the imported volume in the analyzed period). Unlike the rest of the mining
operations, these two companies register steadiness in the tires imports during the last 9 years.
The following figure shows the imported units arranged by their size:
Fig. 27: Imported tire units by type
Source: Thompson Reuters (2016) based on Customs information
Tires importation reached its peak in 2013 and then began declining to the present.
6.2. Tires demand
The analysis considered only sizes 57” and 63”, that correspond to trucks with loading capacity over
150 tons. Therefore, this demand is related to the trucks’ fleet size in operation during the 2016-
202514 period.
14It was assumed the average duration of a tire as 5,000 hours.
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Fig. 28: Large size tires demand (2016-2025)
Source: Own collection
The analyzed tires are those required by trucks of the following models: Caterpillar 789, 793, 797
and Komatsu 730E, 830E, 930E. Tires of these types that are used in other equipment were not
considered in the projection.
6.3. Tires Price
As it has been observed in the rest of the mining supplies, during the last few years, the tires for
mining show a fall in their prices.
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Fig. 29: CIF unit value tires (US$/unit)
Source: Thompson Reuters (2016) based on Customs information
The larger the size of the tire, the higher is the price variation for the analyzed period. Stated
otherwise, the slowdown of mining hit stronger to the prices of larger size tires, especially tires sizes
57” and 63”. Prices started to decrease in 2012. For tires of smaller sizes, perhaps the existence of
a greater number of suppliers / providers explain the lower price variability.
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7. Flocculants used in the copper mining
Conventional flocculants are polymers used in the process of concentration, specifically in the areas
of:
Concentrate thickening (it is a physical, chemical process that allows for the separation of
copper sulfide ore and other elements such as molybdenum from other minerals that make
up most of the original rock) and
Filtration/thickening of tailings (it allows the partial recovery of water used in the grinding and
flotation operations).
Because it is not possible to predict theoretically what is the suitable synthetic flocculants for a
particular suspension, the selection is made based on lab tests and considers factors like the settling
velocity of different polymers having different ionic characteristics, molecular weights, chain
structures, etc. on a representative sample of the material to settle.
According to sources, conventional flocculants occupied by the major large scale copper mining
companies are imported and they are available under different trademarks. Below is a list of some
flocculants used in mining, the information was obtained from the records of imports:
Table 9: Major brands of flocculants utilized in mining 15
Manufacturer Brand
Aguasin Praestol 2620
Basf Magnafloc-1011
Magnafloc-333
Magnafloc-2025
Magnafloc-155
Magnafloc-338
Kemira A-110
Orica AP-2020
NP-9910
Snf TEC-2050
913 SH
SNF923 SH
TEC-228
SNF-103
SNF-670
Source: Cochilco
15 Considered tariff codes: 39089000, 38249099, 39069000, 38089329 and 36069000.
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Note that there may be other imported flocculants’ brands for mining use, however specifications
describing the product does not provide information about their end use.
The imports evolution, in CIF Million Dollars (MM US$), of the most utilized flocculants in mining
processes is:
Fig. 30: Mining flocculants major brands imports (MMUS$ CIF)
Source: Thompson Reuters (2016) based on Customs information
The previous figure considers the imported volumes (MM US$ CIF) by the flocculants manufacturers
of the brands indicated in table 9, and other flocculants’ brands manufactured by BASF, Kemira and
SNF.
In the 2010-2015 period, the market’s percentage share according to the flocculants’ imported
volumes are SNF (63%), Orica (15%), BASF (6%) and Kemira (6%). These shares consider only the
flocculants’ brands shown in table N°9.
Using a unit consumption rate of 15gr/ton of utilized flocculants per tons of processed sulfide ore
(expert’s criteria) the consumption estimate for the next 10 years is obtained.
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Fig. 31: Flocculants projected consumption (tons)
Source: Cochilco
The expected flocculants consumption could significantly increase depending on the
implementation of those projects categorized as “possible” in the mining investments portfolio,
which are those mining investments less likely to materialize in the terms defined by their owners
and the most likely to be affected by changes in market conditions.
Fig. 32: Average CIF unit value of conventional flocculants (US$ CIF/kg)
Source: Thompson Reuters (2016) based on Customs information
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Chilean Copper Commission
During the last two years the flocculants CIF value16 show a decreasing tendency, this situation
continues today.
On the other hand, in the last few years, mining companies are moving toward the increasing of ore
processing, this implies increasing the thickeners utilized for water recycling. Sometimes
conventional flocculants are not the able to maintain their efficiency and cause operational
problems occur (torque increase at raking arms) and transportation of thickened paste. To solve
these problems, a line of polymers have been created, “rheology modifier flocculants” with the goal
of increasing the thickeners’ efficiency.
16 The average unit value considers the flocculants’ brands with continuity and relevance in the
imported volumes in the 2010-2015 period. (Praestol 2620 (Aguasin), Magnafloc 155 (Basf), Magnafloc
2025 (Basf), Magnafloc 333 (Basf), Superfloc A-110 (Kemira), Orifloc AP 2020 (Orica), Orifloc NP 9910 (Orica),
913 SH (Basf) and 923 SH (Basf)).
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Chilean Copper Commission
8. Bibliography
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128479692
(s.f.). Brochure Camiones Caterpillar (773 -775 -777-785-789-793-795-797) (56 ton); Komatsu
(730E- 830E -930E -960E- HD465 - HD605- HD785); Liebherr (T282).
(s.f.). Brochure Palas Mod. Caterpillar (7495); P&H (2800-4100); Komatsu (PC 8000 - PC 5500).
Cementos Bio Bio S.A. (s.f.). Memorias 2010-2015.
Cochilco. (2007). Opotunidades de Negocios para Proveedores de Bienes, Insumos y Servicios
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Cochilco. (2016). Actualizacion de la inversion en la mineria chilena -cartera de proyectos 2016 -
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Coloma Álvarez, G. (2008). La Cal: ¡Es un reactivo químico! Santiago.
Compañía Electro Metaqlúrgica S.A. (s.f.). Memorias Anuales 2010-2015.
Editec S.A. (2014). Catastro de Equipamiento Minero 2013-2014. Santiago: Editec. S.A.
Moly_Cop. (Marzo de 2012). Presentación OneSteel Mining Consumables.
Sigdo Koppers S.A. (s.f.). Memorias 2014-2015.
Soprocal. (s.f.). Memorias 2010-2015.
Sopromin Tocopilla Ltda. (s.f.). Modificación DIA Planta de Cal. Obtenido de Servicio de Evaluación
Ambiental:
http://seia.sea.gob.cl/expediente/ficha/fichaPrincipal.php?modo=ficha&id_expediente=8
332747
Thompson Reuters. (2016). CheckPoint. Base de Datos Exportaciones e Importaciones.
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Chilean Copper Commission
This work was developed in the
Research and Policy Planning Department (Dirección de Estudios y Políticas Públicas) by:
Ronald Monsalve
Mining Market Analyst
Jorge Cantallopts
Director of Research and Policy Planning (Estudios y Políticas Públicas)
August / 2016