The engineering industry in Peru has witnessed a notable surge in growth, following a trend that began in 2018 and has continued to gain momentum in 2019. Numerous consulting firms in the country are reporting positive developments, largely driven by the mining sector. While this growth is encouraging, industry experts emphasize the importance of maintaining a diversified portfolio to mitigate risks associated with fluctuations in the mining cycle.

Carlos Santa Cruz, President of the board at BISA Ingeniería de Proyectos, a local engineering firm, highlights the outstanding performance of the mining sector in 2018. However, he cautions that firms must maintain a healthy level of industry diversification. After the previous super-cycle, many engineering companies had to downsize and adjust their teams due to excess capacity. Santa Cruz emphasizes that a balanced approach, spanning various sectors, is crucial to avoid overreliance on the mining industry.

Paul Murphy, Manager for South America at Mining Plus, an Australian consultancy firm, notes a significant boost in market dynamics over the past couple of years. He highlights the resurgence of studies such as scoping, pre-feasibility, and feasibility studies, indicating an increasing demand for such services. Previously, operational work accounted for around 70% of the workload, while studies comprised approximately 30%. However, recent trends have seen a doubling of the overall workload, with a reversal in the percentage of studies versus optimizations.

The Peruvian market has witnessed sector consolidation through mergers and acquisitions, leading to the strengthening of several players’ presence in the country. Notable examples include the combination of MWH and Stantec and the series of acquisitions by WSP, including Schlumberger Water Services, POCH, ConCol, and Louis Berger. The acquisition of Amec Foster Wheeler by Wood Group further highlights the industry’s consolidation.

With the acquisition of Amec Foster Wheeler, Wood Group combined its expertise in oil and gas with Amec’s track record in mining, metals, environment, and mine infrastructure. Wood Group now offers a comprehensive range of services, ranging from front-end geology to mine closure. The company also provides advanced automation and control solutions, utilizing artificial intelligence, remote controls, virtual systems, and robotics.

WSP, another major player, has also expanded its services through acquisitions, gaining expertise in water management, engineering, power transmission, and infrastructure projects. The company aims to position itself as a long-term strategic consultant, offering a multidisciplinary approach to support clients throughout the entire project cycle.

While the construction of new mines remains the responsibility of engineering, procurement, and construction management (EPCM) firms, ongoing operations continue to provide significant work opportunities for engineering companies. Operators have focused on maximizing the value from existing mining facilities, resulting in the need for optimization and debottlenecking programs. Consulting firms such as Hatch and Anddes offer specialized services in these areas, acting as external advisors to mining operators.

Peru has predominantly been home to medium and small-scale underground mines. However, the situation is changing as larger underground operations are on the horizon. Glencore’s Coroccohuayco project and Yanacocha’s underground phase represent examples of the industry’s shift towards more extensive underground mining. Experts predict an increase in large underground operations in Peru, necessitating careful planning and transition from open-pit to underground mining methods.

Consultancy firms in Peru also play a vital role in supporting clients with environmental permitting and management processes. While greenfield projects have been relatively limited in recent years, the number of new environmental impact assessments (EIAs) is expected to rise. However, the approval process for these studies remains time-consuming, prompting the need for optimization and more efficient timelines.

Consulting firms like SNC-Lavalin, Anddes, and Walsh are actively involved in environmental permitting, working on multiple EIAs simultaneously. These firms aim to streamline the approval process, share best practices, and ensure effective environmental management plans for mining operations. However, challenges persist, including the need to strike a balance between detailed EIAs and expedited timelines, as well as the significance of quality environmental management for sustainable mining operations.

The engineering sector in Peru continues to thrive, driven primarily by the mining industry. Consulting firms are experiencing growth and diversifying their services to meet the evolving demands of the market. Consolidation through mergers and acquisitions has further strengthened the industry landscape, while optimizing processes, expanding expertise, and addressing environmental challenges remain key priorities. As Peru embraces larger underground mining operations and focuses on sustainable practices, the engineering sector is poised for continued expansion and innovation.