Hungry to Stay on Top

FM Global recommendation ensures MMG workers cared for at mountaintop copper mine

MMG & FM Global, Peru

MMG & FM Global, Peru

MMG protects its mine site in Peru, along with its supply chain, from unique risks with the help of FM Global.

They say the way to a man's heart is through his stomach.

It's also the way to keep a copper mine operating high in the Andes Mountains.

When Australia-based mining company MMG purchased a mine in Las Bambas, Peru, FM Global made one significant recommendation to defend the massive copper mine from earthquake. 

Protect the mess hall. 

While the mess hall might not seem like one of the most vital structures at an open-pit copper mine, its survival is essential to keeping the mine open following an earthquake. The mine is more than 13,000 feet (4,000 meters) above sea level. It takes several days for workers and visitors to acclimate to the altitude and the easiest way to get there is by helicopter. Without one, it's a 10-hour drive along winding mountain roads through the vast wilderness of the Andes mountain range. And at 600 miles (1,000 km) southeast of the capital of Lima, there's no running out for a quick bite to eat.

"The mess hall really is a crucial building," explains Melanie Morgan, MMG's group manager, insurance. "That is where we feed 1,800 employees every day."

MMG followed the FM Global quake recommendation, installing seismic gas shutoff valves on two main gas lines running to the mess hall. The valves greatly reduce the risk of a fire following an earthquake.

"The mess hall really is a crucial building."

Melanie Morgan, group manager, insurance, MMG

The mess hall recommendation was just one of the ways FM Global has helped MMG mitigate risk since it became a client in 2011. While MMG was already focused on risk mitigation, it become an FM Global client specifically for the engineering expertise FM Global could offer around natural perils like earthquakes and the risks specific to mining.

"When MMG started with us, they were looking to reinforce the engineering piece," says Sean Davidson, FM Global senior account manager. "They saw FM Global as an engineering provider that could dovetail with their own people, to really up the game. Our team of engineers is highly trained. They're specialists. They have to be, because you can't send somebody who doesn't know mining to deal with the very unique challenges of mines."

Never stop improving

For MMG, FM Global added an extra layer of risk expertise to its already robust risk mitigation efforts. Nowhere was that more evident than at Las Bambas. MMG purchased the mine while it was under construction and did all it could to ensure the site was protected from earthquakes. MMG commissioned a seismic study and built the mine to be well above local codes and to the highest quake standard. Despite all that effort, MMG didn't hesitate to install seismic gas shutoff valves, FM Global's only quake recommendation for the site. 

The valves are an important safety feature. The shaking caused by the earthquake trips the valve and automatically cuts off the gas supply to a building. Damaged gas lines and ruptured sprinklers can put quake-damaged buildings in immediate danger of a fire. And at the remote Las Bambas mine, a fire would almost certainly destroy the company's mess hall. While not crippling production, the loss of the mess hall would certainly inhibit MMG's ability to operate the mine at full production.

"We want to do all we can do to reduce the losses from any event that is a possible scenario," Morgan says.

Getting the copper out of Peru 

And the greatest earthquake risk to MMG isn't in Las Bambas, but more than 350 miles (555 km) away in the port of Matarani. Matarani is in a 50-year quake zone, which puts it at the same risk level as quake-prone areas in California (USA) and Japan. MMG doesn't own any facilities in Matarani, but all the copper mined at Las Bambas flows through the port. 

"From an earthquake perspective, that is the highest risk and where we've put most of our focus," Morgan explains. "So, we've worked with FM Global to develop a formalized contingency plan. If the port was inoperable, we would be able to continue operating through another port."

That business continuity planning helps show just how important the Las Bambas mine is to MMG. Las Bambas is one of the top 10 copper mines in the world, producing more than 400,000 metric tons of copper per year. Las Bambas is by far the largest mine in MMG's portfolio. And getting the copper out of Las Bambas is critical.

"There are other competitors that use the port of Matarani as well," Davidson says. "So, in the event of an earthquake, these other mine companies will be scrambling to get copper out of Peru. We worked with MMG to proactively develop a formal business continuity plan, so they now have first dibs on another port. I think it shows you the level of sophistication of MMG's risk management."

“The fascinating aspect of mining is the unique risk.”

Sean Davidson, senior account manager, FM Global

Mitigating mining and traditional risks 

Earthquakes are just one of the many risks facing MMG. The global mining company concentrates on copper and zinc with operations in Australia, Peru and Africa. It also has exploration projects in the Americas, Africa and Australia. The company has been growing rapidly with the goal of becoming one of the top mining companies in the world by 2030.

"The fascinating aspect of mining is the unique risk," Davidson says. "You're talking about underground mines, open-pit mines or strip mining, and there are unique pieces of equipment involved, unique exposures around tailings, dams, pit collapse, underground collapse. And our engineers are trained on all of it." 

And like all companies, MMG is exposed to traditional risks as well.

"From an overall risk perspective, the major risks that we have at MMG are fire and machinery breakdown, which would cause a major business interruption to any of our sites," Morgan adds. "And that's why we brought in FM Global, the leading risk engineering firm and property insurer globally. We are very comfortable with the advice and the recommendations they give and the work that we do together to minimize the risk of those losses occurring."

Watch the video

Related content:

Prevent Earth’s Domino Effect: Watch the 7-minute primer and get resources to protect your facilities before the earth shakes

Is This an Earthquake? Understanding earthquake magnitudes and how often earthquakes happen

 

For more information, download or view:

FM Global’s Emergency Checklist: Earthquake

Protecting Your Facility from the Dangers of Earthquakes

FM Global earthquake resources

 

Contact an FM Global representative.