In its third version, the Ranking of Suppliers of the Chilean Mining Industry study shows which are the most recognised suppliers to the country’s mines. The data and conclusions gathered by the industrial research company Phibrand, with the support of the Mining Ministry, the Association of Large Suppliers of the Mining Industry, the Association of Engineering Consulting Companies of Chile, Expomin 2014, the Mining National Society and the Editorial Group Editec, were presented during the second day of Expomin 2014.

The study, with a level of confidence of 95%, includes the participation of more than 370 professionals of the most important mining companies in the country. It highlights how perception of ‘brand’ and ‘performance’ affect commercial relations from the executives’ point of view, assessing the companies that supply to the industry. The ranking distinguishes the supplier companies with higher and best performance, the most representative of the mining industry and the most successful of every evaluated category.

The ranking awarded the supplier companies that contributed the most to the development of the field, the best evaluated in their performance and the ones that showed most success in management during 2013.

The companies with best performance in 2013 are: Komatsu (12%), Finning CAT (11%) and FLSmidth (7%). The most representative national suppliers are: Enaex (16%), Elecmetal (7%) and JRI (6%).

The study also recognised the brands that have demonstrated best management to improve their productivity. The most successful brands in the various categories in 2013 are:

• Surface Mining Equipment: Komatsu (40%), Finning CAT (38%) and Joy Global (9%)
• Crushing and Grinding: FLSmidth (40%), Metso (40%) and Sandvik (10%)
• Conceptual, Basic and Detailed Engineering: Bechtel (41%), Fluor (17%) and SNC-LAVALIN (11%)
• Control and Automation: ABB (43%), Siemens (25%) and Honeywell (12%)
• Elements of Personal Security: 3M (45%), MSA (41%) and Steelpro (6%).

This year the study distinguished for the first time local suppliers, so in the Local Suppliers with Best Performance category of 2013, the following companies were awarded: Todo Acero (Iquique), JCM Ingeniería (Copiapó) and Neptuno (Iquique). 

Considering reduction of production costs, the study concludes that 62% believe that they can find a better supplier than the one they have and a 37% has been thinking lately of changing their current supplier. Therefore, the study states, “the idea of replacing suppliers and negotiating greater benefits with the current suppliers become two real and substitute alternatives when it comes to accomplishing this goal.”

Also, the study reports that “79% consider that mining costs won’t decrease in the short term; this exposes the benefits, projections and guarantees that the mining industry offers to the labour market, which demonstrates at the same time the productivity need that this industry requires and the standards that are demanded. 51% consider that mining is not entering a process of deceleration and 72% state that mining is a good industry to work in. Both conclusions complement the idea that – despite the variability in the international price of copper – mining is observed as a dynamic industry in the long term, which, with no doubt, must improve substantially the competitiveness by means of reducing production costs. Hence, the sustainability of the business is directly related with: productivity through innovation levels and better human resource; control of production costs derivative of a greater competitiveness in the suppliers’ sector, less energetic and human resource costs; and environmental security and sustainability.

“In regards to national suppliers, who have less visibility and development but make a great portion of the total amount of providers in the present industry, the study concluded that in order to increase their levels of competitiveness they must focus on improving three elements: a better understanding of the client’s needs, support the reduction of production costs in mine workings and improving their services’ specialization. Therefore, it can be remarked in regards to the industry data, that this is a general and transversal issue, where national suppliers, mainly SMEs, have a potentially huge competitive advantage and a disadvantage that they must sort out in order to capitalise it. Specialisation is a disadvantage and the reduction of costs and formation of offers with top value – characteristic of the knowledge of the clients’ specific needs – the potential advantage.

“Nowadays, the main and most transversal value proposition that national suppliers have to place in the market, is to lower their prices. This way, they are directly impacting the profits of the mining companies, ensuring their continuity. Yet, this is the less sustainable path and the most impoverishing way to create value. Because of this and in relation to the data, more levels of specialization are demanded, which would derive – with high probability – in more attractive offers, more productivity and lower costs.

“According to Juan Carlos Olivares, CEO of the Association of Large Suppliers of the Mining Industry, the awarded companies must feel especially proud since the level of the mining suppliers industry in Chile is one of the best and most competitive of the world, therefore, competing in this country is greatly meritorious.

“Phibrand will continue working to achieve a greater accuracy in this instrument that allows us to acknowledge the valuation and positioning of the brand in relation to the market and its competition. Throughout the communication of information, the study gives an added value to the industry by means of improving the competitiveness and contributes mining and suppliers to improve their trade.”