CARTA DE CODELCO - Expomin · PDF fileFuture Plans of Codelco in China Emerging Markets Office • US$ 50,000,000 Codelco’s operational spend in China through Emerging Markets Office,

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Copyrights © 2010 by CODELCO-CHILE. All Rights Reserved. Copyrights © 2011 CODELCO-CHILE. Todos los Derechos Reservados. Copyrights © 2011 by CODELCO-CHILE. All Rights Reserved.

China: Codelco’s experience

Copyright @ CODELCO Todos Los Derechos Reservados. All Rights Reserved.

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2013

MH

Production*:

160,000 tonnes/year

CAPEX**:

US$ 2,430 million

2019

Andina Phase II

Production*:

306,400 tonnes/year

CAPEX**:

US$ 6,270 million

2018

El Teniente

New Mine Level Production*:

415,000 tonnes/year

CAPEX**:

US$ 3,200 million

2018

Chuqui

Underground Production*:

343,000 tonnes/year

CAPEX**:

US$ 3,830 million

Under Construction In Feasibility

Codelco’s Structural Mining Projects

Past and Future Capex Program Overview**

*: Average production for the first 10 years at regime capacity. Figures updated in August, except RT Sulphides Phase II, in December 2011. Preproduction CAPEX.

**: 2011 Business and Development Plan.

Codelco: An Unprecedented Investment Challenge US$ million, 2011 currency

Annual Average of Investments by Period Total Investments by Period

35 years 12 years

2016

RT Sulphides

Phase II Production*:

345,000 tonnes/year

CAPEX**:

Under study

In Prefeasibility

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Production Forecast

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China, Emerging Market

ost

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Emerging Markets Strategy

Suppliers & Products

Development

Continuous Category Analysis

Supply & Demand

Analysis at Local,

Regional and World Level

Identify trials & testing

opportunities with our end-

users

Business case and Added

Value Proposal

RFI & RFQ processes

Execution plan – trial &

logistic -

Goal

• Identify and development business opportunities in China .

Target

• Take advantage of industrial installed capacity

• Pursue lowest TCO.

Result

• Improve competitiveness throughout a much broader supply base.

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Emerging Markets Team and Project Engagement

Selina Zhang (China)

Maite Chen (China)

Peter Wang (China)

Diego Hu (China)

Infraestructural

Project

Assets:

Chuquicamata

Andina -RT Other Projects

Assets:

Ventanas –

Teniente - MH -

Salvador

Carolina Rocha (Chile) Carolina Conejeros (Chile)

Cathodes & anodes, tyres, conveyor belts, pulleys & idlers, slurry pumps & valves spare parts, chemicals, modular house , Nitrate of Ammonia, compressors, fans, blowers, instruments

Quality Assurance, Quality Control, Inland Logistic, Reporting

Cristhian Allende

Director Emerging Markets (China)

Grinding media, mill liners, refractory bricks & mortars, casting elements, LHD, off road trucks, steel plates, rebars, lighting-bulkhead & flood, cyclones, hydraulic gates, samplers, thickeners, dust extractor.

Flotation cells, crushers, mill, stacker, screen, transformers, steel structure, switchgear , piping, electrical cables, reclaim, feeders, drives.

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Trials: Working Together

Requirement Capture Strategy Definition Contracting Process Execution

• Well prepared Specs/Scope

• Dedicated resources

• Small funds allocated

Opportunity Identification Supplier Selection Sample/Field Trial Contract Execution

Key Differentiators

• Clearly & timely tech. clarifications

• Abilities to analysis the tech. alternative

• Clear sample test procedures

• Advanced plan for field trial

• Inspection plan

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Gerencia de Abastecimiento / VAF

Barriers

Language/

communications

Commercial Terms

Mining Experience

Technical Specifications

Local Chilean Representative

Production Standards

Solutions

Focus on supplier quality

Formal engagement/communication

plan

More technical

specifications details

Clear Testing protocols

Encourage Post Sale Service

In-house QA/QC support

Lessons Learned

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Successful Case: Refractory Bricks

2008 2007 2006 2009 2010 2011

Chinese

Supplier

Main

Supplier

Ending Trial Stage

% Vol Main

Supplier

% Vol Chinese

Supplier

26,19%

73,81%

14,42%

85,58%

49,19%

50,81%

47,16%

52,84%

73,68%

26,32%

84,53%

15,47%

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Successful Case: Tyres

• Codelco awarded in March 2010 to 2 Chinese supplier representatives (3 manufacture plants).

• Annual Spend KUS$ 90.000 all types.

• Awarded KUS$ 4.000 for Chinese suppliers only Giant tyres (57 ring)

"

5 identified Chinese suppliers

2 suppliers fail

Category Description

Desktop Research

RFI & Supplier Site Assessment

Supplier Recommend

-ation

RFQ & Clarificati

on

Contract Negotiation

PO Execution

Engaged 3rd party inspector for Codelco

Process Flow Chart

Done

Current Phase

• August 2011 arriving first Chinese tyres.

• If 49 ring trials are successful, spend could be increased in KUS$1,000.

Project Follow Up

Road Block / Solution

•Tyres performance/Monitoring

•Testing delays / Working closely with suppliers

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Future Plans of Codelco in China

Emerging

Markets Office

• US$ 50,000,000 Codelco’s operational spend in

China through Emerging Markets Office, no

including dealers.

• All selected divisional bidding process engaging

Chinese suppliers

• Identify and development business

opportunities in China market

• Build-up a strong supply base, securing of

supply in view of shortage times.

• Conduct on-site quality assessments and

develop suppliers as needed. On-going

process.

• No Procurement Agent. Being a service

provider for all our assets and projects.

• Work together with EPCM companies based in

China.

2012

Targets in place

Key Activities

Business Model

STRATEGY GOAL

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¡Gracias!

谢谢！

Thank you!

CARTA DE CODELCO - Expomin · PDF fileFuture Plans of Codelco in China Emerging Markets Office • US$ 50,000,000 Codelco’s operational spend in China through Emerging Markets Office,

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