CORRECTED-Engineering, technology firms see silver lining to copper slump
(In April 7 item, corrects title of Bechtel's Paige Wilson in 8th paragraph)
By Anthony Esposito and Pratima Desai
SANTIAGO, April 7 (Reuters) - Engineering and technology companies servicing the mining industry see a silver lining to the crippling rout in copper prices: new business opportunities have opened up for improving productivity as producers rush to rein in costs.
Delegates at the annual Cesco/CRU gathering of the copper industry in Chile this week concluded that miners will focus on cutting costs to survive low prices, rather than significant output cuts to offset slow demand growth from top consumer China.
During the commodities super-cycle, producers made huge capital expenditures, but "the focus for the industry over the next two years will be on productivity improvement, and all the mining companies trying to reduce their cash costs," said Pertti Korhonen, chief executive of Finnish mining technology company Outotec.
"There is a lot of opportunity to use modern technology, including digitalization and automation," Korhonen told Reuters this week.
Service providers have also suffered during the commodities downturn, forced to lay off workers as a drop in big-spending mining projects hit revenues.
"All engineering companies have needed to adjust themselves in order to get through this rough time ... we're anticipating a difficult market, with no more than 5 to 6 million man hours of engineering for mining during the year," said Juan Rayo, CEO of Chile-based engineering firm JRI.
But with copper prices now hovering around $4,650 a tonne and the $10,000 a tonne prices from February 2011 a fading memory, miners are seeking further savings through operational efficiencies and boosting productivity. Continuación...