TRANSPORT

Our Transport division is known as Ferrocarril de Antofagasta a Bolivia (FCAB) and provides rail and truck services to the mining industry in the Antofagasta Region, including our own mining operations.

Our Transport division is known as Ferrocarril de Antofagasta a Bolivia (FCAB) and provides rail and truck services to the mining industry in the Antofagasta Region, including our own mining operations.

2019 PERFORMANCE

Our Transport division continued to improve its operations through the implementation of its Management Model, which is based on five key pillars: operating continuity, growth, urban development, transformation and community affairs.

As production from existing customers has fallen it has become more important that the division expands its customer base, and two new contracts started during the year, which helped increase transport volumes by 7.7% to 6.5 million tonnes.

Transport volumes growth in 2019 was mainly driven by higher sulphuric acid volumes transported to mining customers.

During 2019, 12 new locomotives were commissioned, replacing older equipment and increasing the fleet’s haulage capacity and efficiency. This new fleet will also be more fuel efficient than the fleet it replaces.

Operating performance

The division’s EBITDA was $80.8 million in 2019, which was 9% lower than the previous year, mainly due to a lower sales mix margin, the impact of adverse weather and the effects of the civil unrest in the Antofagasta Region.

Costs and operating efficiency

Management is focused on optimising the division’s business processes to ensure its long-term competitiveness. The Group´s Cost and Competitiveness Programme (CCP) has been applied at the division to improve its cost structure and operating standards and has achieved benefits of some $3 million. The main areas of improvement were lower material and contract costs, and improved operating and maintenance management.

During the year, with more new locomotives, reliability and availability improved significantly. In addition, the old fleet is also performing better following some engine upgrades and the launch of the Sigma project which standardises and automates maintenance controls and has led to improved availability.

Sustainability

The maturity of the safety processes applied at the division continued to show improvement with no fatalities or accidents with serious consequences to people reported in 2019. The Lost Time Injury Frequency Rate (LTIFR) fell 40% to 4.0 compared with 6.7 in 2018.

During the year, we successfully implemented the Environmental Management Model and launched the Occupational Health Standards for our contractors.

Also, in line with our Diversity and Inclusion Policy, the employment of women and people with disabilities increased to 11% and 1% of the total workforce respectively.

Outlook

Over the coming years the Company will transport an increasing quantity of bulk materials and is currently working on a project to further increase transport volumes, particularly of copper concentrates.

In the shorter term, some of the division’s facilities, trains and trucks are vulnerable to disruptions arising from unrest in the country, which could have a negative impact on the division’s operations.

Sustainability practices are improving with the focus on consolidating various safety, environmental management and community affairs programmes.

The division is also advancing its plans to convert land it has in the centre of the city of Antofagasta from industrial to urban use. We have been consulting with communities and neighbours, and in September submitted the project’s Environmental Impact Assessment.