QUELLAVECO: A SUSTAINABLE PROJECT Tom McCulley, CEO PDAC Toronto, - - PowerPoint PPT Presentation

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QUELLAVECO: A SUSTAINABLE PROJECT

Tom McCulley, CEO PDAC – Toronto, March 2019

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CONTENTS

• 1. Generating trust for a long-term commitment
• 2. Peru: An attractive mining jurisdiction
• 3. Long-term relationship with Peru
• 4. Project location
• 5. Contribution to Peru
• 6. Our Global Sustainability Pillars
• 7. Committed to working with local communities
• 8. Dialogue Table commitment progress
• 9. Major permits in place

10.Local employment and local procurement 11.Social development aligned with Sustainable Development Goals 12.Delivering improved quality and volume of water 13.Quellaveco on track

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GENERATING TRUST FOR A LONG-TERM COMMITMENT

We

1 2 3 4 5 7 6

Innovative and sustainable water strategy for Quellaveco to provide benefit to communities Closely aligned to United Nations Sustainable Development Goals and Global Compact and Voluntary Principles A collaborative and transparent relationship with regional and national Government Safety: Our first priority Established history of respectful and responsible behaviour to communities A strategic partner for the development vision of Moquegua Committed to an impactful and sustainable operation, contributing to a better future for Moquegua and Peru

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PERU – AN ATTRACTIVE MINING JURISDICTION

Quellaveco

The world’s second largest producer of copper, with mining accounting for ~10% of GDP Peru has become increasingly stable over the past two decades

• Strong and sustained economic growth
• Until 2015, gross domestic product

increased on average by 5.3%

• In 2018 gross domestic product is

expected to grow ~4%

• Robust fiscal policy and improved

security

• The mining industry in Peru is well-

established, with a clear policy and regulatory framework

• Peru ranked 14th in Frasier Institute

2018 Investment Attractiveness Index (19th in 2017)

• Major global players have large-scale

investments in Peru, many spanning decades

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PERU – AN ATTRACTIVE MINING JURISDICTION

• Fastest growing copper producing region in Peru
• Hosts many of the world’s foremost mining

companies

• Established infrastructure and skilled workforce
• Clear policy and regulatory framework

Professionalism of Peru’s mining and promotion institutions facilitate investment The south of Peru is an established mining location Central government

• Government supports project

execution, acknowledging importance to national economy

• Legislation supports mining

Regional / Local government

• Expectant with the project
• Continuous engagement

Quellaveco Project supported by Central, Regional and Local government Global mining industry

• Government institutions clearly

understand how volatile the mining industry can be Building trust

• Government institutions

participate actively in dialogue processes with local communities

• Follow-up on commitment

fulfilment Investment promotion

• Investment Tracking Group

reactivated at the Ministry of Finance.

• Key to unlock bottlenecks

Ease of doing business

• Early identification of potential
• bstacles to move forward with

permits and authorisations

• Better planning to improve

deadlines, with the same level of requirements Social issues

• New Mining Management and

Information Committees track commitment fulfilment and help prevent social unrest (due to non- compliance or unattended claims)

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1992

Anglo American purchase of Quellaveco

2012

Mitsubishi acquires 18.1% stake of project from IFC Dialogue Table completed following 18 month process Main permits approved

2015

FS for 127.5ktpd completed. All major permits approved. Independent Project Review completed

2018

FS updated. Investment Assurance review successful Mitsubishi acquires additional 21.9% stake of Quellaveco from AA plc AA plc approves execution of project

LONG-TERM RELATIONSHIP WITH PERU

2010

Pre-FS completed. 1st & 2nd EIA amendments approved. Early-works initiated

Quellaveco: working in Peru for >25 years

2000

First Feasibility Study (FS) for 64ktpd, and Environmental Impact Assessment (EIA) approved

2008

FS revised for 91ktpd. New plant location / water source

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PROJECT LOCATION

Peru Quellaveco Lima

Quellaveco – Key statistics Overview Ownership: 60% 40% Commodities: Copper (molybdenum by-product) Mine: Open-pit, 1.3Bt Reserves, 0.57% TCu1 Workforce: ~9,000 at peak construction ~2,500 steady state operations Construction Construction time: < 4 years from August 2018 Commissioning: First production 2022 Ramp-up during 2023 Permitting: Key construction permits obtained Capex: US$5.0-5.3bn Operation Throughput rate: 127.5ktpd Production: ~330ktpa average first five years ~300ktpa average first 10 years Reserve life: ~30 years

Located at ~3,500m above sea level in south of Peru, 34km from the city of Moquegua

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Quellaveco

Significant investment in water infrastructure

CONTRIBUTION TO PERU

At national and local level

25,000 people to benefit from Development Fund US$0.3bn invested since project approval (Aug-18)

Will deliver average ~300ktpa copper eq. (first 10 years) Canon & royalty income for Moquegua will increase >50%

0.4% GDP growth during 2018 – 2019

Investment US$5.0-5.3bn

>3,800 Moqueguan employees currently working on the project US$11m invested in education, health and productive projects (2017 – 2018)

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OUR GLOBAL SUSTAINABILITY PILLARS

SOCIAL ENVIRONMENTAL GOVERNANCE

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COMMITTED TO WORKING WITH LOCAL COMMUNITIES

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Bodies from 3 different municipalities

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Agreements directly from the Dialogue Table

Water

Supply and optimal use of water resources

Environment

Compliance and monitoring of environmental commitments

Local stakeholders

Sustainable development projects

Dialogue Table focussed on three key areas… …with firm commitments

~$300m

Community investment commitment over next 30 years, besides taxes and royalties

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GOOD PROGRESS BEING MADE AGAINST COMMITMENTS

Water

Supply and optimal use of water resources

Environment

Compliance and monitoring of environmental commitments

Local stakeholders

Sustainable development projects

• No. of

Commitments

Fulfilled

11 11 4

3 4 4

On Track

4 6

• Commitments

During Operation

3 1 1

    

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Major Permits Water Licences

Permits Status Environmental Impact Study Beneficiation Concession Mining Plan Mining Closure Plan Licences Status Construction Water Authorisation Operations Water Licence (grant on start of operations)

ALL MAJOR CONSTRUCTION PERMITS IN PLACE

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LOCAL EMPLOYMENT

95% 3,864 5,371

Recruitment of Moqueguan candidates is prioritised, with all applications channelled through a dedicated regional labour office in Moquegua. 5,371 3,864 Local Non-local 95% 5% Local employment Unskilled labour

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LOCAL PROCUREMENT

1,085

Local businesses have been identified as potential future suppliers

721

Local businesses benefitted from

• ur training

programmes “Progresa Moquegua” and “Emerge Perú”

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Local businesses supplied goods and services to the project in 2018

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• Economic productive development

projects

• Projects to improve agricultural

production

• Projects and programmes to prevent

and reduce anaemia and malnutrition / Food safety

• Projects to improve education quality
• Projects on technology and innovation
• EMERGE Perú – Business

Development Programme

SOCIAL DEVELOPMENT ALIGNED WITH UN’S SUSTAINABLE DEVELOPMENT GOALS

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DELIVERING IMPROVED QUALITY AND VOLUME OF WATER TO LOCAL COMMUNITIES

Water for operational phase to come from two sources in High Mountain region:

• 80% (18Mm3) from Titire River: unfit

for human, livestock or agricultural use

• 20% (4Mm3) from Vizcachas

reservoir:

• 60Mm3 capacity dam and

reservoir under construction

• Operation will use only 4Mm3

p.a.

• Will provide better quality and

volume of water to Moquegua and Tambo regions

• Water for the operation to be

transported to site via 95km water pipeline.

Responsibly sourced water for operations

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QUELLAVECO ON-TRACK

2018 achievements 2019 priorities

• Asana and Vizcachas river diversions

complete

• Asana dam and tunnel complete
• Main access road complete
• Contracts and procurement significantly

progressed

• Earthwork contracts awarded and

progressing on-site

• Substantially complete engineering
• Complete earthworks in concentrator
• First concrete at concentrator
• Progress HME contracts and awards
• Vizcachas dam
• 95km water pipeline construction

Committed to working together to make Peru’s vision for mining a reality by 2030

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PHOTO GALLERY

1.Anglo American - Safety Day 2.Asana Barrier 3.Asana River Tunnel 4.Aerial View - Quellaveco Site 5.Salveani Camp 6.Aerial View - Papajune Plant 7.Aerial View - Vizcachas Dam 8.Water Pond for Construction

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ANGLO AMERICAN - SAFETY DAY

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ASANA BARRIER

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ASANA RIVER TUNNEL

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AERIAL VIEW – QUELLAVECO SITE

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SALVEANI CAMP

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AREAL VIEW – PAPUJUNE PLANT

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AERIAL VIEW – VIZCACHAS DAM

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VIZCACHAS DAM SITE

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WATER POND FOR CONSTRUCTION

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THANK YOU