Part of the team that works in the truck shop at Las Bambas, performing maintenance on dump trucks that load and discharge hundreds of tonnes of earth each and every hour. The team works together to provide the care these specialised vehicles require.
The Cotabambas Auraria company, founded by Nicolás de Piérola and Isaac Alzamora, begins to exploit the Qochasaywas mine in the current province of Grau (then part of Cotabambas).
La Ferrobamba Limited Company empieza a explorar parte de los yacimientos cupríferos que hoy conforman Las Bambas.
Ferrobamba Limited Company begins exploring some of the copper deposits that are now a part of Las Bambas.
This view shows the challenging geography and climate in Apurímac: getting to Las Bambas requires crossing almost all of the Andean ecological zones to arrive at the frigid highlands. Additionally, the technical challenges are considerable - millions of cubic metres of earth are moved every day in the mine.
Copper is the third most widely used metal in the world, after iron and aluminium. It’s one of Peru’s most important exports. At this time, Peru is the world’s second producer behind Chile. Copper’s relationship with Peruvian culture is ancient. The Incas worked mainly with copper, as did the older civilisations of the Tiahuanaco, Mochica, Paracas and Chavín. In the late 19th century, there was a copper boom that led to construction of smelters such as Casapalca in Lima, marking the beginning of modern metallurgy in Peru.
Copper has enormous advantages. It is easily moulded and stretched. It resists corrosion and efficiently conducts heat and electricity. Today, it’s widely used in the construction industry, in the generation and transmission of electricity, in the electronics industry, in industrial machinery and vehicles, and in telecommunications infrastructure. Copper is used in systems that heat and cool houses. The average car contains 1.5 kilometres of copper wiring. Silicon chips are also beginning to use copper. The future of copper is, without doubt, auspicious.
Brothers Augusto and Fernando Wiese buy the Qochasaywas mine, resuming mining work with their Compañía Explotadora de Cotabambas. They also build the airfield at Huanacopampa.
Heavy mining equipment is transported by light aircraft for the first time in Peruvian history. The aircraft land at Huanacopampa and the equipment is subsequently transferred to the Qochasaywas mine.
Ferrobamba Limited Company registers six mines during its existence but eventually abandons the project
Cerro de Pasco Corporation takes over the Ferrobamba and Chalcobamba leases and continues exploration work.
Working together in the Las Bambas truck shop means ensuring compliance with operational and safety requirements.
According to Peruvian law, the mining canon is how local and regional governments share in the revenues the government collects from economic exploitation of mining (metallic and nonmetallic) resources. Since 2003, after collecting and adjusting the annual income tax, the Peruvian government transfers 50 percent of the revenue raised to the areas where mineral resources are exploited. Of the resources that are managed in this way, mining is the most important of the six canons that exist in Peru. (The others are oil, gas, hydroelectric power, forestry and fisheries.)
At times, working at Las Bambas requires temporarily living apart from family, made easier with cellular phones, which have been used in the area since 2010.
Natural outcroppings of copper in Charcascocha mountain in Challhuahuacho
For what are still unknown reasons, the Wiese brothers close the Compañía Explotadora de Cotabambas.
The Cerro de Pasco Corporation conducts the first study on the copper reserves at Las Bambas
The deposits are expropriated from Cerro de Pasco Corporation and are taken over by government-owned Minero Perú.
Minero Perú signs agreements with BHP Tintaya Exploration, Minera Teck Perú, Phelps Dodge and Antacori Corporation to continue exploring and drilling deposits.
Minero Perú merges with governmentowned CENTROMIN.
Working together in the Las Bambas truck shop means ensuring compliance with operational and safety requirements.
Las Bambas is a benchmark for mining investment in Peru. In 2014 alone, its direct economic impact on investments in construction and development was more than US $1.6 billion. It spent US $279 million in local and national purchases. Over US $34 million was destined for social investments — health, education and infrastructure, among others — which benefit the surrounding communities. Additionally, Las Bambas paid more than US $6 million in taxes. Las Bambas helps strengthen project management capacities of municipalities.
Health in Las Bambas is always a concern. Engineering controls and use of safety apparel such as masks, helmets, hearing protection, and other devices minimise exposure to risks.
From its beginning, Las Bambas has worked to empower women. Many women have studied for technical careers, earning university degrees and subsequently joining the workforce in jobs once held by men. In Las Bambas, women work as heavy equipment operators as well as community relations liaisons and superintendents.
CENTROMIN explores to determine amount and variety of minerals in the Las Bambas deposits
Within the framework of the public international bidding process for Las Bambas, the Agency for Promotion of Private Investment in Peru (ProInversión) drills 11 exploratory holes in Ferrobamba and Chalcobamba to provide more information to the 14 pre-qualified bidders. Meetings are held, paving the way to a path for a successful bid. October. Authorities, leaders of farming communities and other organisations from Cotabambas province and the President of the Apurímac region approve the Declaration of Challhuahuacho, supporting the Las Bambas project. It was agreed that the project would consider sustainable development.
Truck shop technicians supervising routine maintenance on the trucks and tractors that are among the largest in the world.
August. Through open international bidding, Xstrata acquires the rights to explore and develop Las Bambas mine.
October. Las Bambas Mining Project Social Contribution Trust Fund is established.
January. Las Bambas Social Fund (FOSBAM) is established. Las Bambas has contributed US $64.5 million.
September. Contract to transfer Las Bambas mining concession ownership signed with the Peruvian government, attended by 200 people from Cotabambas.
March. Following a rigorous citizen participation process with communities in the Las Bambas area of influence, the Peruvian government approves the Environmental Impact Study (EIS).
Among the flora in the Las Bambas area of influence is the Plantago rigida, a species that thrives at 3,500 metres plus above sea level.
October. Construction begins on the Las Bambas concentrator plant.
Glencore buys Xstrata and takes over the Las Bambas project.
Glencore sells its stake in Las Bambas to the joint venture formed by MMG Limited, Guoxin International Investment Co. Ltd. and CITIC Metal Co. Ltd. The resettlement process of the Fuerabamba community takes place.
Las Bambas mine construction completed.
Las Bambas officially begins operations.
Two workers perform morning technical inspections to ensure all equipment functions properly. The stockpile of coarse ore at the end of the overland conveyor is in the background.
Opening new roads for mining exploration at Charcas mountain, one of the copper deposits of Las Bambas in Challhuahuacho.
The concentrator plant under construction. Photo taken from an overflight in October of 2013.
The copper and molybdenum processing plant in its initial stages of construction, October of 2013.
Cotabambas is a province linked to mining for hundreds of years. Today the world’s attention focuses on three deposits with interesting names: Ferrobamba, Chalcobamba and Sulfobamba. Together with the Charcas and Azulccacca communities, these deposits form a “mining district” that also extends into parts of Grau province. This place is known as Las Bambas, and, thanks to the riches found in its soil, it sets a new standard of progress for Peru.
Las Bambas is one of the largest mining operations in Peruvian history.
Las Bambas’ operations are more than 4,400 metres above sea level, covering some 35,000 hectares. Expected to operate for over twenty years, it will cement Peru’s status as the world’s second largest copper producer.
Although the wealth found in Cotabambas and Grau was already known by 1500 BC (tools for working gold have been found along with offerings made from gold and lapis lazuli), modern exploitation started in 1903 by the Cotabambas Auraria company, created with Peruvian capital. Later, the Peruvian government performed several studies that confirmed the importance of this site for its copper reserves, but also found gold, molybdenum and other metals in varying amounts.
On 31 August 2004, when the envelope was opened with the results of the international bidding process, work had already begun to build closer relationships with the locals. By then, ProInversión, the Peruvian government agency in charge of promoting investments, had organised workshops with residents of Cotabambas, Coyllurqui, Mara, Haquira, Tambobamba, Challhuahuacho, Progreso, and other towns. Additionally, a Rural Mothers’ Club was created. The women were given basic tasks and paid to do them. Many of the women involved travelled to Lima to receive training in baking or laundry services at the National Industrial Training Centre (SENATI).
Prior to the bidding process ProInversión requested permission from the farming communities of Huancuire and Fuerabamba to perform diamond drilling, which provides an extremely precise assessment of mineral riches in the earth. The exploration work took place on the mountains of Chalcobamba and Ferrobamba, allowing those involved in the bidding process to rely on updated results.
The winner of the bidding by a wide margin was Xstrata, a Swiss company. Their offer to the Peruvian government was US $121 million, three times more than the base price of US $40 million. After awarding the contract, US $45.5 million was earmarked for the Las Bambas Mining Project Social Contribution Trust Fund.
At the end of 2008, under the legislation in force at the time, the Trust Fund Executive Committee decided to transform its legal structure and organisation, creating the Las Bambas Social Fund (FOSBAM). In the following years, under an agreement signed with the Peruvian government, FOSBAM received additional contributions for US $19 million, for a total of US $64.5 million. These resources have made it possible to carry out several sustainable development projects, directly benefitting Cotabambas and Grau provinces, in the areas of water and sanitation, agriculture and livestock farming, health, education, electricity and transport.
Xstrata was acquired in 2013 by multinational corporation Glencore, who, in 2014, sold its stake in Las Bambas to a joint venture formed by MMG Limited, Guoxin International Investment Co. Ltd. and CITIC Metal Co. Ltd. Today, MMG operates Las Bambas. “The companies have changed, but the vision and the work remain the same,” said Domingo Drago, Vice President of Corporate Affairs for Las Bambas.
Previously, in March of 2011, the Peruvian government had approved an Environmental Impact Study (EIS) of the project, following a rigorous citizen participation process with the communities in the area of influence. As part of this process, in July of 2010, a public hearing was held and more than five thousand attended and expressed their agreement with the project.
In 2012 Las Bambas began work to expand and improve the road that today supports trucks with heavy machinery to reach the project. The highway connects Espinar province in neighbouring Cusco with the mine.
“MMG is aware of the responsibility we’ve accepted with the acquisition of Las Bambas,” said Domingo Drago, adding that before the road was built, it took almost nine hours to travel by land from Cusco to the mine area. “And it was unsafe because there were so many steep cliffs. Those who arrived at the beginning [of the project] slept in tents designed to withstand the cold, and the only hotel that existed then was next to the municipality (in Challhuahuacho district in Cotabambas).”
Some years ago, Challhuahuacho was “just a little village with a few houses,” said Juan Cari, Communications Superintendent at Las Bambas. “There were no cell phones and no electricity either, except in the centre of the village. Basic services were limited,” he says.
MMG is a global resources company based in Melbourne, Australia. Its motto is “We mine for progress.” In addition to exploring, developing and mining base metal deposits around the world, MMG is committed to achieving long-term sustainable growth. This translates to a commitment to the social welfare of its host communities. In the words of Gustavo Gomes, President of Las Bambas, it is “a company with Australian standards of health and environmental safety, backed by the financial strength of China ... so we have the best of both worlds.”
A concentrator plant operator. In Las Bambas, it’s a priority that people work in safe environments and stay healthy. Says Marcelo Bastos, Chief Operating Officer of MMG, “there is no business, firm or company that can do well if safety is not paramount. Everything starts with safety.”
The image that defines Las Bambas is a tribute to the area’s geography — the three mountains where the operation is located: Ferrobamba, Chalcobamba and Sulfobamba — and a hat, a cultural emblem of this region, whose brim represents a river. The concern for nature, the living culture and environmental care has been incorporated with details like these from the very beginning.
MMG is a member of the International Council on Mining and Metals (ICMM), an organisation that advises its member companies to use specific sustainability criteria. The ten fundamental principles of the ICMM cover areas such as ethics, human rights, sustainable development, health, safety, and environmental performance. “We have been directly involved with the local people, sharing and promoting their customs,” says Domingo Drago. “Social issues are very sensitive and important; we have worked on this from the very beginning in a respectful and committed manner, using the required budget resources,” he adds.
“If we look ten, twenty years into the future of Las Bambas, we will have a measure of our success,” says Troy Hey. “If you ask someone from Cotabambas or Apurímac, ‘How different is your life now?’, you’d want to hear something like, I have progressed in my personal and professional life. My children have more opportunity. My family is healthy.”
This illustrates the first axis of what MMG calls “the mission”: “We mine to create wealth for our people, host communities and shareholders,” reads the official text from the company, and the numbers bear this out.
Gustavo Gomes says, “We have already seen a big change in the region over the last years. For example, infant mortality has decreased from 71 of every 1,000 births since the arrival of ProInversión to less than 25 per 1,000 in 2007 - a figure that is now smaller. But that’s just the beginning. Now that we have started production, the [welfare] creating capacity of the people will be even better ... and they will have better education and a better future.”
MMG is a large zinc producer and also produces significant amounts of copper, lead, gold and silver. Taking into consideration all international operations, its workforce is some 15,000 strong. The company belongs to the Minerals Council of Australia, the Mining Association of Canada, the Chamber of Mines of the Democratic Republic of the Congo (DRC) and other regional industry organisations. MMG owns and manages the Century, Golden Grove and Rosebery mines in Australia, and the Kinsevere mine in the DRC. In partnership with the government of Laos, it also owns and manages the LXML Sepon mine.
Among the policies that MMG applies at a global level is hiring labour from areas where projects and operations are developed and to make every work environment a place with zero accidents and free of fatalities.
Andean ducks (Anas puna) in high Andean wetlands, an ecosystem supporting the rich diversity of native plants and animals found in the mountains of Apurímac.
“We saw the company in two regions around the world: the Copper Belt in Central Africa - and the Andes. We’d already spent five years searching for investments in Peru, Colombia and Bolivia. When Las Bambas came up, we thought it was an excellent opportunity.”
Troy Hey, Executive General Manager of Stakeholder Relations for MMG
The corporate members of the International Council on Mining and Metals (ICMM), including MMG, adhere to ten sustainable development principles agreed to in 2003. These ten principles were developed using global standards set by the Rio Declaration on Environment and Development of 1992, and by entities such as the Organisation for Economic Co-operation and Development, the World Bank and the International Labour Organisation. Each principle contains specific goals, including “comply with or exceed the requirements of host-country laws and regulations … ensure fair remuneration and work conditions for all employees and not to use forced, compulsory or child labour … and engage with and respond to stakeholders through open consultation processes …” This philosophy governs the work of Las Bambas.
MMG’s vision is “To build the world’s most respected diversified base metals company.” It’s interesting to note the use of the word “respected”: they know that reputation is important. “Just as there is a New Mining Era, there is also a New China,” says Gustavo Gomes. Domingo Drago adds, “We are committed to the development of the Apurímac region.” He says that Las Bambas has allowed him to see a side of the country that he never knew, and that on a personal level the poverty he saw left a deep impression on him.
MMG’s objective is clear: “To be valued as one of the world’s top, mid-tier miners by 2020.” This isn’t a small goal. People know that Las Bambas is a major operation - in fact, it is the largest of the MMG projects worldwide - and its success will underpin the company’s importance.
“We had to show the communities that this was something positive,” said Troy Hey, referring to the company’s commitment to development and respect for the environment. “Environmental management” is a daily occurrence at MMG. “We like the challenge of mining in developing countries. We’re good at it and it’s where we can have the greatest impact, and where the opportunities are best. So, to operate in Peru is exciting.”
Domingo Drago confirms that many residents in the region have left the subsistence economy behind and have already begun to generate projects beyond those associated directly with the mine. He stresses the importance of the infrastructure attributable to Las Bambas that will help to create a “centre of development.” Apurímac - once the third poorest region in Peru - has become one of the most promising. It is the third fastest growing region in the country with 9.9% expansion in 2014.
Jorge Merino, former minister of Energy and Mines of Peru, believes Las Bambas is of national significance. He said, “It may be important for our political class to realise that what we must do is take care of the environment, care for the poor and have a national plan for copper development in Peru.”
In February of 2015, the government of Laos in southeast Asia announced that the district of Vilabouly had been taken off the list of the 46 poorest districts in the country. The news wouldn’t have been that notable except for the fact that MMG operates in this district, where the Sepon mine is located. “We have seen what the mine can offer,” said Troy Hey, “and this is exactly what we want for Las Bambas and the people of Cotabambas and the Apurímac region at large.”
It’s hoped, therefore, that Las Bambas will mark a clear “before” and “after” in the history of mining in Peru. In fact, the entire operation stands as a model the extractive industry may copy elsewhere around the world. This is what MMG is doing: “We are copying the good experiences of Las Bambas in our operations in other parts of the world,” says Marcelo Bastos, Chief Operating Officer of MMG. “We are exporting the Las Bambas model.”
Because mining, if practiced responsibly, is the driving force behind transformation. Troy Hey concludes, “You cannot build something on the scale of Las Bambas without making positive changes in the lives of people.”
“At the regional level, the people who have worked at Las Bambas for the last five or ten years notice that earlier there were high rates of malnutrition, illiteracy and other enormous problems measured in the Human Development Indices. But everything has changed now. Las Bambas has helped create development and income.”.
Gustavo Gomes, President of Las Bambas
Core or rock samples taken from deep in the earth by diamond drilling. This allows geologists to analyse the geological structure of the deposits in real time and make informed forecasts regarding the constantly changing subsoil.