August 16, 2023
Codelco and Epiroc have formed a new alliance to put their heads together and come up with the best ways to tackle the numerous challenges the Chilean company is facing at its giant mining operations. As it invests for another half a century of production, the state-owned company is looking for Epiroc’s input to reduce its environmental impact, automate its operations and mitigate the dangers involved in underground mining. Mining & Construction sat down with Codelco’s Gonzalo Ramírez Troxler, Corporate Innovation Director for Decarbonization of Processes, and Epiroc’s Lars Bergkvist, Customer Success Manager, to discuss how the new partnership could pave the way for the future of mining.
GONZALO RAMIREZ: “We approached Epiroc to explain the challenges we were facing in our mines and invite them to brainstorm together. Epiroc has a very interesting portfolio of products in automation, electrification and digitalization, etc. We have been partners a long time in the sense that we buy and use your products, but now we wanted to think about the future together.”
Which challenges were you thinking about specifically?
GR: “Well, we are looking to fulfil certain milestones in the future in terms of sustainability, and that means electrification. We also want our people out of the risky areas, so automation also. A specific challenge for Codelco is that we want to mine the deeper areas of our mines, which is very challenging because of the geological constraints. So, we want to go a bit beyond that and think together with Epiroc about what the Codelco of the future will look like. How can we align Epiroc’s R&D roadmap with our R&D needs?”
How can Epiroc help?
LARS BERGKVIST: “Codelco has quite an aggressive roadmap to electrify its fleet by 2030, and we believe we are really at the forefront in that area. So, we are in the initial phase of trialling a fully electrical LHD (load, haul, dump) loader at El Teniente. Once we start to see some results, we will be able to discuss the way forward. This is very different from the standard model, where you place an order and get the delivery date and the machine appears. But our investments in automation, electrification and information management require that we understand more about the whole process and how to support change management and implementation. We want to be more and more involved in that part.”
Do you normally work with clients like this?
LB: “Not with everyone. There’s a select group of customers with whom we have strategic partnerships. The Memorandum of Understanding we signed with Codelco provides the guiding principles on where to go. And we really like the approach. This partnership can lead to many collaborative projects.”
GR: “We began the very early conversations a year ago by sharing information. That’s the first step. Where are you? Where do you want to be? What are your needs? And from your side, what do you have to offer, in the short, medium,
and long term? We have already made progress on some specific projects, such as the testing of the LHD loader. That’s a very short-term project, but we are exploring how to build from there or develop new projects involving different areas of Codelco and seeing where there’s a match. Our expectation is to have a rich portfolio of projects that covers the short, medium, and long term.”
LB: “A really important point is the depth of the relationship between Codelco and Epiroc. Long before the MoU, a lot of trust had built up on both sides. And that relationship led to an understanding that our values and vision were aligned in terms of safety and sustainability. But when you do a project like this together, you really stress-test the relationship as well. Can we supply the parts? How do we handle equipment failing? You are putting a lot of trust in us, so you really need to understand how we will ensure that things run smoothly.”
Does this mark a big change in the way Codelco innovates?
GR: “Yes, Codelco has been a very innovative company in the mining business for many years. But before we were very closed and tried to do everything in-house. We would approach the market much later, often to find someone to build what we had already designed. Today we go out with needs, not with fixed solutions, and our main task is to activate the ecosystem to help find solutions for these needs.”
Where do you see the partnership going beyond the aforementioned lhd trial?
LB: “The five key focus areas in the MoU are sustainability, deep mining, electrification, information management and automation. We see that we can be involved in all five. The question is what sort of involvement. Where do we find the synergies? Businesses often talk about finding win-win solutions, but this really is a case of us being better together, right? You influence us, and we can influence you. Sometimes we take it for granted that we have all these products, and our customers know everything about them. Epiroc has many solutions that can solve your problems, but maybe we can be better at showing what benefits and values they can bring to a customer like Codelco. In general, with technology, when you move from one level to another, things get more expensive. But you can’t just look at the item price or cost per ton. You have to put them into the big picture.”
In Focus: Codelco-Chile
Chile’s Corporación Nacional del Cobre (Codelco) is the world’s largest producer of copper, and its El Teniente mine is the world’s largest underground copper mine. After more than a century of continuous operations, Codelco is now investing billions of dollars to extend the life of the mine by another fifty years or more.
• 16 000 direct employees
• Created through the nationalization of US-owned copper mines in 1971
• EBITDA: US$10.4 billion (2021)