The Buried Treasure of the Incas

For centuries, the world has been coming to Peru, drawn to her imposing Pacific plains and cloud-high Andean ranges by an untold wealth of buried treasure – gold, copper, zinc, lead. This is the harsh history of her past, and the promising legacy of her future.

The country we now call Peru once was the heart of the pre-Columbian Inca civilization. At its height, the Inca Empire not only was the largest nation on Earth, but also the covert protector of the planet’s richest metal reserves. The iconic culture expanded throughout South America, and flourished untouched for centuries. But despite the nation’s isolation, explorers from the other side of the world eventually discovered the secret Incan wealth. Soon, invaders descended the long, high arc of the Andes to hold the treasure (aguante el tesoro) for themselves.

In many ways, Peru’s role in the modern industrial world remains as remarkable today as it was in colonial times. It is still home to the world’s richest gold mines, largest copper deposits and deepest reserves of heavy metals. The wealthiest multinational mining conglomerates the world over still are irresistibly drawn to the treasure. But this time, the Peruvians vow to take a much greater role in fulfilling their own destiny.

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Mining the Miners

For Lima businessman and machine shop owner Luis Valenzuela, superlatives like “richest,” “largest” and “wealthiest” suggested a golden opportunity to build his family shop and better the lives of his workers by “holding the treasure” in his own particular way.

Valenzuela’s idea was not to mine the metals, but to mine the miners . . . “to the greater benefit of us all,” he explains, carefully. The concept began modestly, but soon took on a life of its own; and as he had hoped, it changed the lives of everyone involved.

With years of experience as a production manager within the mining industry, Luis Valenzuela brought valuable knowledge to his new enterprise. He knew, quite intimately, the daily problems faced by the operators of large mines.

Peru’s high-altitude mountain mining, often at sites above 14,000 feet, posed a number of special challenges, not the least of which was trying to maintain the complex equipment. The high exposure to ultraviolet light at such altitudes damaged many otherwise durable materials, especially plastics. Many of the modern European mining machines favored by the multinational companies had critical components made of plastic (such as large hydraulic-hose guides) that were unexpectedly disintegrating in the harsh environment.

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In much of the world, this would have been an annoyance; in Peru, it was a catastrophe. The time required to get replacement parts from the factory in Switzerland was woefully long – sometimes months! And every hour of production lost to machine downtime cost the mining companies a staggering sum.

Valenzuela set out to fill this urgent need by producing a nearly universal replacement part that he felt could be made without too much trouble. He designed and machined a multi-piece mould that allowed him to cast a hose guide from liquid polymer; and he built a custom electric oven to achieve a timed, two-temperature curing cycle that would give the plastic the strength it needed. The resulting 1-foot-diameter spools were concentrically trued and faced on a simple lathe, and then delivered to the mines – sometimes still warm.

The success of this initial venture eventually led to a booming new business. Today, Staff Representatives, the modern 5000-square-foot production shop Valenzuela and his family own and operate in Lima, is filled with around 18 engineers, machinists and operators . . . and too many machines to count with one glance. But the arrival of his newest machine, a Haas VF-2 vertical machining centre all the way from America, marks a milestone of sorts.

The Decided Advantage

“We started very small,” recalls Valenzuela, “in a building only as large as this one room. My brother and I began with only one manual machine, but we earned a contract with that first moulded product,” he adds. The idea of relying on the new shop for replacement parts caught on within the burgeoning local mining industry, first with one company, then with more and more.

While the concept of local reparacións (replacement-parts shops) is particularly popular throughout Latin America, Staff Representatives offered clients the advantage of having firsthand production experience in the mining business.

“Everything they brought us,” says Valenzuela, “we were able to do.” Often, in the beginning, the only information to start the job was the remains of the broken part, handed over, dirt and all. Staff had to measure and duplicate the piece exactly, with the right material, the right finish and, often, the right hardening.

In time, work began running the gamut – from guides and drill shafts to hydraulic valves and cylinders, from plastic and steel to aluminum and bronze. Tapered bushings, splined shafts, pinion gears and linear tracks became shop specialties, with tolerances routinely quite demanding. As skills grew, personnel were added, and the business continually expanded. The fact that clients embraced the new machining resource made things easier.

Today, the shop receives a drawing or some kind of production print for the desired part. They have proficient designers and engineers in-house who do all the programming for the CNC machines (the VF-2 and a Haas SL-30 lathe). But now, if the details are incomplete, an engineer is sent to the site to see exactly where and how a specific part will be used. This yields important information regarding material needs and heat treatment, while burnishing the shop’s reputation and increasing the mining industry’s trust in them.

As a result of this well-earned trust, virtually all of Staff’s established customers rely on them for “just-in-time” parts. In today’s environment of lean production, the mines have done away with managing parts inventories altogether. Staff, however, has not. Realizing that certain parts realistically should be considered “consumables,” Valenzuela sometimes produces 50 to 100 copies of a replacement, and keeps them in stock.

Tunneling machines, hydraulic rock-drills and ore-processing equipment all have components that wear quickly. Fortunately, despite multiple countries of manufacture, the mining machines are built to perform essentially the same tasks, so many consumable parts are nearly universal. Since Peru’s mining companies basically all use the same equipment, Valenzuela enjoys a large, ready-made market for his carefully cross-indexed stock.

The Passionate Move

Investing in new equipment is a brave move for any small business, but it takes a much greater leap of faith in a country with a history of political turmoil. Valenzuela, however, remains steadfastly committed to his country, and to what he sees as “the promise of our future,” he says. “From the very beginning, I had a vision to advance this business, and to eventually have the best and most modern technology.”

Immediately after setting up his first manual lathe, he began looking into CNC machines. “There was never a question about investing here, in the future,” he says. Calling distributors for information, Valenzuela soon found himself talking to a local man who felt exactly the same about his new business – Haas Automation distributor Jose Arenas.

Though he initially approached many CNC distributors, Valenzuela specifically kept in touch with Arenas for two more years – “. . . until the decision time came,” he says – relying on him for product information, and sometimes technical advice. “Jose was the only dealer who could answer all our questions,” Valenzuela remembers. “Reading American magazines, I saw that Haas machines were used to make many things involving performance cars and custom motorcycles. I’m a bit of a fanatic on these subjects,” he admits, “but, in the end, the machine’s specifications and Jose’s attentive support meant the most.”

To be sure, Valenzuela pooled his four top employees and involved them in the decision-making process. The fact that Haas Automation was faithfully investing in Peru’s future also made a strong impression on him, and made his final decision to buy Haas machines from Jose “a logical, yet passionate, move.”

The move proved to be a smart one. Valenzuela flatly attributes 30% of his last year’s growth to the Haas SL-30 lathe he purchased. Although Staff Representatives is not a high-volume shop, options such as live tooling, a tool presetter and a parts catcher were selected to speed their work and reduce turnaround time. “When customers came in and saw the new, fully equipped CNC machine,” he says, “they had confidence that we could make any of their parts, and do it quickly. So right away, the number and complexity of our jobs began increasing.”

With the acquisition of his new Haas VF-2 rounding out his CNC capabilities, Valenzuela is projecting a 60% increase in business this year. He’s gained new clients now, including a national dairy and an international wire and cable company; but the mining industry remains the shop’s “second” family. “However,” says Valenzuela, “with the level of support we have received from Haas Automation, we also feel as though we are part of the Haas family.”

The Confident Change

Above the glass-skyscraper city of Lima, old-cadre mines, first plundered by the Conquistadors, are still being worked today. Their tunnel roots, now bored with modern machinery, approach depths of 3 miles, with no discernable end in sight. These perpetuals, as well as virtually all the new major mines developed in the last 70 to 80 years, are unbelievably rich. “I don’t know of one that they think is close to being depleted,” says Valenzuela. As Peru’s treasure is secure, so, he believes, is her future.

The continued success and solid growth of Staff Representatives passes on that security to Valenzuela and his workers. “It renews everyone’s faith in an orderly world,” he says. “My ambición grande – great ambition – is to change this country for the greater benefit of us all. The way I can do that,” Valenzuela says, “is to consider this company as if it were Peru.” With that philosophy in mind, he pays his workers well, he trains them well and he treats them well. In the process, he’s causing a positive change in their perception of themselves and their perception of their country.

“We have the ability; we must build the confidence,” Valenzuela concludes. “The more companies that adopt this philosophy today, the more secure Peru’s future will be tomorrow.”