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Marcos Lima

In 2000 he was designated by the Copper Club, based in New York, as The Copper Man of the Year, receiving the ANKH award for his contribution to the world's red metal industry.

Marcos Lima

May 30, 2020

In a video interview, Marcos Lima, current director of Pares&Alvarez, talks about the resilience of the miner and the impact that the pandemic and the economic slowdown facing Chile and the world will have on the red metal sector. He is one of the few people in the national scene who brings together his experience and vision, since during his extensive career in mining he has participated in it from different sides: As Executive President (1996-2000) and Director (2010-2015) of Codelco, as an academic at the Catholic and Chilean Universities for more than 40 years and, also, as a director and consultant for various companies.

What effects do you think this health crisis will have on the mining industry?

In the short term, we are seeing a marginal effect on production, because of all the restrictions that this new way of working is causing due to the pandemic. But this way of doing things remotely is also showing us that there is a lot of room to cut corners on the productivity line.

What do you mean?

Having separated the health issue from the economic problems brought about by the pandemic, let’s take a different look at how things are done. I think digitalisation and automation are going to make a giant leap in the medium and long term and that will mean an improvement in productivity in terms of lower manning levels in the mines and a new way of working.

This pandemic may also open up new possibilities for copper due to its fungicidal properties. I mean, for example, surfaces, handles and many things that can start to incorporate copper in their designs because of this biocidal power, i.e. it kills bacteria and germs, and that should be more in demand in the future.

And what effect will this have on the price of copper?

Obviously, the substantial decline in global economic activity that we are facing is affecting mining. Prices are already low, but in the medium term, they should tend to rise.

In recent weeks, inventories on metal exchanges had slowly started to decline, which is a good sign. In addition, the pandemic has forced the closure of mines in some producing countries and fear for the future has put mining projects on hold, so any increase in demand will push prices up. So, postulating a difficult situation for the next few months due to the restrictions required to take care of miners’ health, I see the medium to long term as rather optimistic for the future of mining.

It should not be forgotten that the copper price is a good early indicator that serves to project economic growth. If copper rises, it is because you are going to see higher growth in the economy and, consequently, higher demand. Conversely, if copper falls, it anticipates that there may be a downturn in the world economy. At the slightest sign of recovery in the major economies, copper will move upwards.

What qualities do you think are standing out in Chilean mining in these months?

We are already seeing it, I am referring to the patriotic commitment of our people to keep on working, pulling up and producing. Because just like the people who are working non-stop in food companies or any other basic supply: water, telecommunications, electricity, etc., copper miners are setting an example of how in difficult situations they put their shoulders to the wheel, and this resilience is an outstanding characteristic of Chilean mining. We have seen it in earthquakes, avalanches, heavy snowfalls, and in many natural disasters. It is the certainty that you will have Chilean copper when they need it on the other side of the world.

It is also a time to bring together senior management, leaders and workers. That is to say, it is fundamental that in these difficult times we are all on the same side of the table, and that is an absolutely key issue for the future, because to the extent that we build close relations, especially considering this unprecedented situation for humanity, this is going to help us when things return to a more normal situation. As Chile is the largest copper producer in the world, it is very important to transmit this certainty of supply to international markets.

How will this impact affect companies like Pares&Alvarez?

On the one hand, we will be able to evaluate the capabilities of engineering companies in the use of remote technological means and also to measure the levels of productivity they are achieving with it, which in the medium and long term should allow them to increase their competitive capacity.

On the other hand, the fact that we are a national P&A, whose headquarter is in Chile, allows us to show the value that it means for our clients to have someone who is willing to put 100% at stake, here and now. International analysis shows that, with the closing of borders and the slowing of travel, the speed of globalisation is going to slow down, so we are all more aware of what it means to have a reliable supplier a few blocks away rather than thousands of kilometres away. Now, if large principals, such as forestry or mining companies of national origin do not favour Chilean engineering, of course at equal quality and prices, they are doing themselves a disservice, because from this pandemic, either we all get out together or not at all, and I think it is important that the authorities of these companies become aware of this.

How do you see Pares&Alvarez facing this economic crisis?

The company has a pretty solid backbone, not only from a financial point of view, but also in terms of its image in the market. The crisis caught us with a fairly full pipeline and if the principals keep their commitments, we should come out of the problem without major problems. Now, we don’t know how long this crisis will last, but the company has prepared itself for a desert road, which, although we don’t know how long it is, we are determined to cross it.

More than 25 years in mining

How did your relationship with mining develop?

The relationship with mining began many years ago, when in early 1994 I received a call from Juan Villarzú, who had been appointed Executive President of Codelco by President Eduardo Frei Ruiz-Tagle, asking me to join him as Vice President of Administration and Finance.

During those years, my role focused mainly on the design and implementation of an ambitious strategic plan for Codelco, a project that I undertook, first with Juan and then as Executive Chairman. It was a project that we built together with many other people and which was tremendously successful, where one of its greatest successes was the start-up of the Radomiro Tomic Division, the first world-class mine, developed by Chileans, from start to finish.

Has your relationship with mining continued to this day?

It has continued in various areas of my professional life. First there were the six years at Codelco, then from academia, where I am still teaching future mining engineers at the Catholic University and in a master’s degree for miners at the University of Chile. Since then, I have always been linked to companies in the mining sector, as a director, lecturer and consultant. Since I said yes to Juan, 26 years have passed.