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‘Made in China’ Shines over Ore Fields in Peru

Release Time:2017-03-29 11:11:42

Editorial Note: On February 6th, 2017, the important news page in the People’s Daily published the article ‘Running Hierro Peru for 25 Years, the Shougang Group has Purchased Nearly USD 500 Million in Domestic Equipment, Making ‘Made in China’ Shine over the Ore Fields in Peru’, the whole text of which we reprint below. 

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25 years ago, the Shougang Corporation won 98.4% of stock in Hierro Peru S.A.A through bidding, including the permanent mining, prospecting and operation rights of mineral resources in its 670.7 km2 mining rights area, and established Shougang Hierro Peru S.A.A. (‘Shougang Hierro Peru’) for operation. Twenty-five years later, the ore field site Marcona has developed into a prosperous city from a small fishery town. As a pillar enterprise in the City, Shougang has always acted as a go-between for ‘Made in China’ and Peru, and helped many Chinese enterprises develop the market in Latin America through its platform.

Shougang Hierro Peru — Domestic machinery and equipment are our first choice

A set of data witnesses the development of Shougang Hierro Peru: the Shougang Group has made investment of nearly USD 1.5 billion in succession for the equipment renewal, technological innovation, environmental governance, living quarters improvement and expansion of Hierro Peru; Hierro Peru realized an output of 11.12 million tons in 2015 from less than 3 million tons in 1992 when Shougang Corporation first took it over. By the end of September 2016, Shougang Hierro Peru had achieved an output of 166.23 million tons cumulatively and realized sales income of USD 8.16 billion, to which a large amount of ‘Made In China’ equipment has made great contributions. Over the past 25 years, Shougang Hierro Peru has purchased domestic equipment of nearly USD 500 million. When interviewed by our reporter, Shougang Hierro Peru General Manager Kong Aimin said, “In recent years, domestic equipment has become our first choice. As the first Chinese mining enterprise in South America, we would like to serve as an incubator for Chinese enterprises to go global and create conditions for China-Peru cooperation in production capacity.”

The reporter saw that the large mine of Shougang Hierro Peru was running just like a large-scale exhibition of Chinese equipment, including the large electric shovel of Taiyuan Heavy Industry, mining drill of the Hunan Hengyang Machinery Plant, loading machine of Shanghai Zhenhua Port Machinery, ball mill of the Luoyang Heavy Machinery Plant and floatation machine and magnetic separator of the Beijing General Research Institute of Mining & Metallurgy (‘BGRIMM’). Pointing at the ‘giant’ electric shovel, Taiyuan Heavy Industry After-sales Service Engineer Shi Jinbo, told the reporter that since 2008, Shougang Hierro Peru has purchased 6 electric shovels in total, with a total value of about USD 20 million, thereby greatly promoting the equipment export of Taiyuan Heavy Industry.

At present, Shougang Hierro Peru is expanding into new areas, and still adheres to continuously fueling the equipment export of China by following the ideas of high efficiency, energy conservation and environmental protection, and selecting advanced processes and technology. It has imported all the equipment and devices for the desalination of sea water for its new dressing works from famous Chinese manufacturers including CITIC Heavy Industries, BGRIMM, Huaibei Mining Machinery and so on, with a total value of about USD 250 million. The main works in its mining system also use the ‘Made in China’ semi-mobile coarse crushing machine, descending belt conveyor for power generation with drop potential energy, 9-km single unit curved belt conveyor and more.

“Taking advantage of entering Peru for development earlier, the Shougang Group takes Hierro Peru as a window to actively create conditions for the ‘going global’ of the products and enterprises of China,” said Shougang Group Chairman Jin Wei when participating in the APEC Summit for Entrepreneurs in Peru in November 2016.

Chinese enterprises — Win-win cooperation to actively participate in China-Peru cooperation on production capacity

In recent years, the Shougang Group has taken the new approach of ‘introduction, recommendation and cooperation’ to jointly develop resources with other Chinese enterprises. In 2011, on the basis of complementary advantages and win-win cooperation, Shougang Hierro Peru and Baiyin Nonferrous Group Co., Ltd. (‘Baiyin Group’) established Capitel Peru Mining Industry Co., Ltd. in the JV mode to jointly develop the tailing reservoir with copper, iron, gold, silver and cobalt of Hierro Peru. It is expected that the project will be put into production in the first half of this year and annually produce 80,000 tons of copper concentrate powder and 350,000 tons of iron concentrate powder. On the basis of the JV enterprise, the Baiyin Group incorporated the Peruvian Foldonar Company last February to run the trade of nonferrous metal, mineral products and dressing-related technical consulting, and it has experienced booming development.

For Chinese enterprises registered in Peru, Shougang Hierro Peru always offers help whenever necessary. In 2014, Shougang Hierro Peru engaged the China International Water & Electric Corporation’s Peru Company to participate in earthworks and equipment installation in the new area, making the successful entry of the latter to the mineral field in Peru.

Using the regional land and port advantages of Hierro Peru in the mining rights area, the Shougang Group actively participates in China-Peru cooperation in production capacity, driving more Chinese enterprises to develop in Peru. In December 2013, the CHALCO Peru Toromocho Copper Mine Project was launched for trial production. In the beginning, the project’s person in charge paid a special visit to Shougang Hierro Peru to gather ‘experience’, and Shougang Hierro Peru offered everything it could introduce. Today, this copper mine project has become China’s first green mine in Peru. As the largest Chinese copper mine project in a foreign country, it is expected to create about 2,400 jobs and generate gains of over USD 1.5 billion for locals in the next 30 years.

Local residents — ‘Chinese companies have changed our lives’

 

 In terms of production, Shougang Hierro Peru sticks to the ‘Three Principles’. 1. Strict bidding, technologically leading. In order to facilitate ore transportation, Shougang Hierro Peru installed an advanced belt conveying system of 24.89 km in length over the whole ore field, and all its main equipment and devices were ‘Made in China’. Shougang Hierro Peru Vice General Manager Li Baohui gave an introduction to the reasons why the system won the bid: its optical fiber-based signal management, high automation level and a curved belt which is favorable for reducing ore impact frequency and wear. 2. Advancing step by step rather than seeking a once-for-all approach. The 6 electric shovels were purchased in three successive stages on the basis of the needs of the actual situations of the mine and equipment improvement demands. For this purpose, Shougang Hierro Peru and Taiyuan Heavy Industry worked together to carry out the adaptability improvement of the electric shovel again and again according to the characteristics of high grade and hardness of the local iron ore. 3. Real-time recommendations of the advanced equipment and excellent enterprises of China to the enterprises of other countries. With Shougang Hierro Peru’s great support and active recommendations, Taiyuan Heavy Industry successfully established itself in Peru; it later won the grace of relevant enterprises in Chile, and will develop that country’s market very soon.

Shougang Hierro Peru also shares its experience from years of efforts in local areas with other Chinese enterprises to enable them to perform in such local areas. 1. Pay attention to benefiting the local area; by September 2016, Shougang Hierro Peru had paid tax of USD 1.34 billion to the Peruvian Government and directly or indirectly created over 4,500 jobs. Addressing the problem of the heavy pollution of the former Hierro Peru S.A.A, Shougang Hierro Peru made an investment of more than USD 66 million to construct a tailing reservoir, domestic water treatment plant and other environmental facilities, putting an end to the 50-year history of production and domestic sewage and tailings being directly discharged into the sea. 2. Carry out public welfare activities, including providing local residents with such services as water, power and telecommunications; providing teachers, doctors and government personnel with housing; supporting and sponsoring environmental, medical, cultural and sports activities; establishing the first Chinese school in the ore field, open for all citizens of Marcona free of charge; actively participating in rescue operations after such disasters as earthquakes and floods, and so on. Since 2010, Shougang Hierro Peru’s expenditure for performing its social responsibility exceeded USD 10 million in total.

When interviewed by the reporter, González, economist with the University of the Pacific, Peru, pointed out that many measures of the Shougang Group can be rated as ‘pioneering works’ and are helpful for the ‘mental and emotional integration’ between the enterprise and local people.

Sissel who has lived in Marcona for more than 20 years told the reporter, “Chinese companies have changed our lives, not only keeping us far from pollution but also supplying us with power, fresh water, free education and modern housing. I hope that my children will also work for Chinese companies in the future.”


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