"Aside from social conflicts, another big challenge includes finding qualified personnel that know how to operate drilling machines."

Miguel Ángel Arenas

GENERAL MANAGER, GEOTEC

April 16, 2021

How have things improved since the lockdown in 2020, and where does Geotec stand in 2021?

2020 was a complicated year for Peru as the pandemic paralyzed around 90% of mining activity for three months. At Geotec we had to suspend almost all of our operations; the only machines that continued to work during the lockdown were two out of 30 rigs that we had in operation at that time.

However, things started to improve gradually after the lockdown, and between October and December 2020, we had almost recovered the number of rigs that had been out of service. During this period, we also won a tender for Antapaccay, where we sent four drills– two for water wells and two for diamond drilling. Fortunately, as of January 2021, we are back to the same level of activity as in January 2020.

Considering high metals prices, have you seen a greater demand for drilling in 2021?

We are seeing many clients who want to make up for lost production during lockdown. The current high prices in metals have also increased the demand for drilling. However, drilling is facing the challenge of local communities who fear outside workers coming into their villages; mines often mobilize 3,000 to 4,000 people from outside the communities and this is being regarded as a threat due to the health situation.

Can you tell us about some of the key projects Geotec has been working on in Peru, and which equipment has been in high demand?

Geotec’s largest drilling project is currently Las Bambas, where we have 13 rigs working in the Cotabambas region. We also have an important project at Antapaccay, where we have water wells and large rotative drilling equipment, and in Yanacocha, where we have deployed five of our machines. Furthermore, the contract Geotec won to participate in the development of Line 2 of Lima’s Metro, through a program of water wells, has been an important milestone for the company.

Have you noticed an increase in the adoption of automation technology for drilling services?

During Geotec’s almost 60 years of experience, we have been implementing technology that allows the automation of the drilling process, focusing on the safety of our operations and environmental care. In 2017, we implemented more than six teams with Rod Handler technology at two of our main operations.

Our newest acquisitions in technology includes a Canadian Foremost (Model DR24XHD 130K) dual rotary drill rig for water wells drilling, which will be the largest in Peru. It is to be deployed in Antapaccay mine. This rig will allow us to drill 500 meters deep water wells, using the Dual Rotary drilling system with a diameter of 17.5 inches.

What would you say are the biggest challenges and opportunities for drilling contractors in Peru today?

Aside from social conflicts, another big challenge includes finding qualified personnel that know how to operate drilling machines. We have been training workers in this for several years now, but with the increase in demand for drilling we are seeing, it will probably not be enough, so it will become necessary to train more people or start to automatize more processes.

Among the opportunities, there will be a lot of work for drilling companies, as many clients are looking to make up for lost activity in 2020 and take advantage of strong metals prices. Another opportunity includes finding long-term contracts that allow drilling companies to invest in technology and safety. For some time now, mining companies have requested that their contractor complement their proposal with services such as sample logging, directional drilling, core drilling, among others. Geotec has implemented the directional drilling service within its commercial offering since 2019.

What is your strategy to grow Geotec in the coming years?

Geotec's strategy is to become strategic partners of mining companies through long-term contracts that strengthen our relationship and the development of safe and efficient workplaces. We want to train drilling workers and implement automation solutions where we can.

What direction would you like to see Peru’s mining industry heading by 2022?

As an industry, our main hope is to have a government that supports investments and provides stability to the country and its investors. We also hope to improve relations between mining companies and the communities, and to see the Covid-19 crisis get better. If these factors are resolved, or at least improve, the outlook is very positive for the years ahead.

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