Ricardo Porto, CEO, Nexa Resources Perú

On the future of local and global mining

To what extent are new technologies shaping the mining sector?

RICARDO PORTO: When speaking about technological disruption in mining, it is more a question of changing public perception of the sector, rather than a technological revolution per se. Technology is a means to develop the sector, although not so much is the sense of exploitation and production applications, but rather to cultivate a more positive image. 

The transition from diesel to electric industrial vehicles is not something disruptive in current times, as it has been happening for a while now, but in mining it is necessary for our relationship with the environment. Other technologies could definitely help transform the sector in similar ways, such as improved water treatment processes that reduce consumption and negative externalities for local communities, which usually share freshwater resources with mines. This is in fact more linked to a reduction of the sector’s perceived overall footprint in local communities than a technological disruption, since most of the needed technology is already available. As such, technology can help mining win over any possible rejection that the sector may initially face when projects are planned and later executed. Technological disruption should therefore be implemented as a valuable tool to drive environmental footprint reduction. 

Our society is facing a significant dilemma when it comes to mining. It is clear that global markets will need more metals over the coming years to meet consumption trends, but the general public’s rejection of the sector is high. Consumers around the globe now change smartphone models every year, and in the future the same could happen with electric cars. This increased consumption can only be met with more metals. The sector’s current challenges are related to the way it interacts with the local communities where mines are placed, and showing how mining can help effectively transform local and national economies in a sustainable and long-term manner. In this regard, we are increasingly relying on the internet of things to monitor our equipment and systems, as well as gain support from Peruvian and Brazilian start-ups to bring cutting-edge technological and management solutions.

How is the sector transitioning from a shareholders mentality to that of community builders? 

PORTO: This shift in mentality is the sector’s most critical challenge globally. More specifically, it pertains to how mining companies can guarantee that a fair share of profits make it directly to local communities to ensure they receive a tangible benefit from such large investments. Our shareholders, too, must understand that in order for us to pay dividends off their shares, benefits need to flow to local communities and social development has to be guaranteed wherever mining investments are made. 

The development of truly sustainable projects is a real concern of the industry, particularly as companies approach local communities and governments in the early phases of proposing a mining site. In the past, a simple one-off investment in infrastructure or education seemed to suffice, but nowadays both the company and the community are very much interested in developing a form of organic, sustainable development profitable for both parties in the long run. As such, the development of a project is not so much hampered nowadays by a lack of technology as it is by the local context, and figuring out how to accommodate a new mining site within it. What will happen with local water reserves and how the mine will affect the local economy are some examples of considerations.

In what ways is regulation important to the development of local mining?

PORTO: Peru’s greenfield potential is so enormous it can only be matched by a handful of African countries, where large investments are inconceivable because of the high degree of political instability. In light of this considerable potential, Peru has been making an effort in past years to increase process transparency and reduce the overall timeline of all legal procedures in the area. Mining is a cyclical business, with commodity prices oscillating. Losing an investment opportunity during a high-price cycle may directly translate into a designed or started project not being fully completed. Understandably, a good regulatory environment is fundamental to uncap Peru’s tremendous potential.