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Antamina 2004

Como era la mina Antamina el 2004.

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Antamina 2004

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  1. Antamina Antamina two and a half years later… two and a half years later… April 26, 2004 Analysts' Site Visit Slide 1

  2. Agenda Agenda • Introduction • Country Overview • Operations Overview • Environment, Health, Safety & Community • Introduction • Country Overview • Operations Overview • Environment, Health, Safety & Community • Production • Production April 26, 2004 Analysts' Site Visit Slide 2

  3. Country Overview Country Overview April 26, 2004 Analysts' Site Visit Slide 3

  4. Economic Context Economic Context 2003A 4.0% 2004F 4.0% 2.5% 3.50 0.0% 10,300 8,800 2003A 4.0% 2.5% 2.5% 2004F 4.0% 2.5% 3.50 0.0% 10,300 8,800 1.6% 1.6% • GDP Growth • Inflation rate • Exchange rate (end of period) 3.46 • % Devaluation (Appreciation) • Exports (US$ Millions) • Imports (US$ Millions) • GDP Growth • Inflation rate • Exchange rate (end of period) 3.46 • % Devaluation (Appreciation) • Exports (US$ Millions) • Imports (US$ Millions) • Fiscal Deficit (% of GDP) • Fiscal Deficit (% of GDP) -1.4% 8,954 8,244 -1.4% 8,954 8,244 1.9% 1.9% April 26, 2004 Analysts' Site Visit Slide 4

  5. Macroeconomic Situation Macroeconomic Situation • Low and stable inflation interest rates. • Stable exchange rate. • Declining Country risk: 337 basis points • Mining exports leading growth. • Main concerns: – Government debt – Political turmoil • Low and stable inflation interest rates. • Stable exchange rate. • Declining Country risk: 337 basis points • Mining exports leading growth. • Main concerns: – Government debt – Political turmoil – Unrest – Unrest April 26, 2004 Analysts' Site Visit Slide 5

  6. Fiscal Situation Fiscal Situation • Higher spending, higher taxes to lower deficit. • Non flexible public expenses – 86% of public spending on pensions, debt service and payroll • Public debt: – 25% of public spending – 4.8% of GDP • Government requires more revenue to remain solvent • Higher spending, higher taxes to lower deficit. • Non flexible public expenses – 86% of public spending on pensions, debt service and payroll • Public debt: – 25% of public spending – 4.8% of GDP • Government requires more revenue to remain solvent – ITF and other new taxes – ITF and other new taxes April 26, 2004 Analysts' Site Visit Slide 6

  7. Privatization Process Privatization Process • 2003 proceeds: $13.3 million versus budget of $500 million. • Government re-launching privatization: – New head of ProInversion – Budgeted proceeds in 2004: $400 million – Congress not aligned with Government’s strategy to attract investment – Successful privatization of Yuncan hydroelectricity • 2003 proceeds: $13.3 million versus budget of $500 million. • Government re-launching privatization: – New head of ProInversion – Budgeted proceeds in 2004: $400 million – Congress not aligned with Government’s strategy to attract investment – Successful privatization of Yuncan hydroelectricity project. project. April 26, 2004 Analysts' Site Visit Slide 7

  8. Economic Policy Economic Policy • Good external image: – “Peru is doing a lot in macroeconomics but needs more dynamism in microeconomics and labor issues” (The Economist, March 2004) – 63.4% of participants in the Annual Governors Assembly of BID considers that Peru have a positive image for investors • Pro-market economic policy in the MEF: – Inability to fend off political pressures – Has imposed unwise taxes (ITF). • Populism in the Congress: – Mining royalties • Good external image: – “Peru is doing a lot in macroeconomics but needs more dynamism in microeconomics and labor issues” (The Economist, March 2004) – 63.4% of participants in the Annual Governors Assembly of BID considers that Peru have a positive image for investors • Pro-market economic policy in the MEF: – Inability to fend off political pressures – Has imposed unwise taxes (ITF). • Populism in the Congress: – Mining royalties – Changes in labor law – Changes in labor law April 26, 2004 Analysts' Site Visit Slide 8

  9. Political Context Political Context • Halfway through its mandate, the Government is still losing popularity: • Opposition is leading the political debate. • Congress, judiciary and new Regional • Halfway through its mandate, the Government is still losing popularity: • Opposition is leading the political debate. • Congress, judiciary and new Regional Governments are also very unpopular. Governments are also very unpopular. April 26, 2004 Analysts' Site Visit Slide 9

  10. President Toledo’s Popularity President Toledo’s Popularity Do you approve or disapprove the manner in which President Alejandro Do you approve or disapprove the manner in which President Alejandro Toledo manages the country´s affairs? Toledo manages the country´s affairs? NO OPINION 2% APPROVES 9% Source: Apoyo S.A. April 2004 Source: Apoyo S.A. April 2004 DISAPPROVES 89% April 26, 2004 Analysts' Site Visit Slide 10

  11. Will Toledo Finish his Term? Will Toledo Finish his Term? • • Economy: mostly under control. Demonstrations: not many in 2004, so far. Anti-system movement (Antauro Humala): not powerful. Opposition: at the moment, not keen to see the Government fall. Pro Fujimori movement: not powerful alone. Government corruption scandals: • • • • Economy: mostly under control. Demonstrations: not many in 2004, so far. Anti-system movement (Antauro Humala): not powerful. Opposition: at the moment, not keen to see the Government fall. Pro Fujimori movement: not powerful alone. Government corruption scandals: complicated and unpredictable. complicated and unpredictable. • • • • • • April 26, 2004 Analysts' Site Visit Slide 11

  12. General Context for CMA General Context for CMA • Main concerns – Labor relations at a national level; – Difficulties maintaining constructive dialogue; • Main concerns – Labor relations at a national level; – Difficulties maintaining constructive dialogue; – Very low Government approval ratings. – Very low Government approval ratings. April 26, 2004 Analysts' Site Visit Slide 12

  13. CMA Response CMA Response • Remain neutral but engaged. • Aggressive communications effort. • Developing grass-roots support through community development programs. • Remain neutral but engaged. • Aggressive communications effort. • Developing grass-roots support through community development programs. • Well positioned to weather political storms. • Well positioned to weather political storms. April 26, 2004 Analysts' Site Visit Slide 13

  14. Operations Overview Operations Overview April 26, 2004 Analysts' Site Visit Slide 14

  15. Ownership Ownership % BHP Billiton Noranda Inc. Teck Cominco Limited Mitsubishi Corporation 33.75 33.75 22.50 10.00 100.00 April 26, 2004 Analysts' Site Visit Slide 15

  16. Organization Organization Board of Directors Advisory Committee President & CEO Operations EHSC Corporate Affairs & Marketing Marketing Finance & Admin Human Resources April 26, 2004 Analysts' Site Visit Slide 16

  17. Initial Investment Initial Investment (December 31, 2001) (December 31, 2001) Mining equipment and preproduction stripping Concentrator and ancillary facilities Concentrate pipeline Port Infrastructure (road, camp, power) Other Owners Costs 286 771 128 108 128 340 1,761 204 264 2,229 Acquisition, Land, Exploration, Feasibility Financing and working capital April 26, 2004 Analysts' Site Visit Slide 17

  18. “Punta Lobitos” Antamina Location Lima - Mine: Eastern range of the Andes, between 4,200 y 4,700 masl. - Port: Near Huarmey. CMA’s area of CMA’s area of influence influence

  19. Infrastructure Infrastructure • Access Road: – 120 km from Laguna Conococha to mine site. – Upgraded 44 km of existing road. – Built 76 km of new road in very challenging conditions. • Power: – Switching station and 58 km, 220 kV power line to supply 120 MW to mine site. • Access Road: – 120 km from Laguna Conococha to mine site. – Upgraded 44 km of existing road. – Built 76 km of new road in very challenging conditions. • Power: – Switching station and 58 km, 220 kV power line to supply 120 MW to mine site. – 5.5 km, 66 kV power line to supply 3 MW to port. – 5.5 km, 66 kV power line to supply 3 MW to port. April 26, 2004 Analysts' Site Visit Slide 19

  20. Reserves & Resources Reserves & Resources December 31, 2003 December 31, 2003 Million Tonnes Cu % Zn % Ag g/t Mo % Mineral reserve estimate Proven Probable Total 275 226 501 1.27 1.17 1.22 1.01 0.90 0.96 14.1 13.2 13.7 0.03 0.03 0.03 Mineral resource estimate1 Measured Indicated Total 28 31 58 0.50 0.47 0.48 0.20 0.27 0.24 4.9 5.9 5.5 0.03 0.03 0.03 Inferred resource1 28 0.79 0.99 13.0 0.02 1. Does not include any material stated as reserves. April 26, 2004 Analysts' Site Visit Slide 20

  21. Ore Reserves by Ore Type Ore Reserves by Ore Type 5 4 Copper Low Bismuth (M1) Copper High Bismuth (M2) Copper Zinc Low Bismuth (M3) Copper Zinc High Bismuth(M4) Bornite Low Zinc (M5) 24 41 Bornite High Zinc (M6) 10 18 April 26, 2004 Analysts' Site Visit Slide 21

  22. Mining Phases Mining Phases 4815 masl First 2 years of production 4103 masl Deposit outline 3788 masl April 26, 2004 Analysts' Site Visit Slide 22

  23. Major Mining Equipment Major Mining Equipment Bucyrus 49R Drill 5 Bucyrus 495 B Shovel 4 Cat 994 Loader 3 Cat 793 Haul Truck 43 April 26, 2004 Analysts' Site Visit Slide 23

  24. Process Overview Process Overview Run-of-Mine Ore Primary Crushing Coarse Ore Stockpile SAG/Ball Milling Copper (Bulk) Flotation Zinc Flotation Mo/Bi Separation Tails to Impoundment Concentrate Thickening and Storage Mo and Bi Concentrate Mine Site Port Site Concentrate Pipeline Dewatering To Irrigation of Plantation Water Treatment Shiploading April 26, 2004 Analysts' Site Visit Slide 24

  25. Primary Crusher & Stockpiles Primary Crusher & Stockpiles April 26, 2004 Analysts' Site Visit Slide 25

  26. Crushing Crushing • Single 60” by 89” gyratory crusher. • Crushed ore conveyed through 2.7 km tunnel. • Radial stacker loads twin stockpiles each with 50,000 dmt live capacity. • Single 60” by 89” gyratory crusher. • Crushed ore conveyed through 2.7 km tunnel. • Radial stacker loads twin stockpiles each with 50,000 dmt live capacity. • Three feeders under each stockpile. • Three feeders under each stockpile. April 26, 2004 Analysts' Site Visit Slide 26

  27. Concentrator Concentrator • Single 11.6 m by 6.4 m SAG mill. • Three 7.3 m by 11.0 m ball mills. • All mills variable speed direct drive. • Copper flotation circuit. • Zinc flotation circuit. • Single 11.6 m by 6.4 m SAG mill. • Three 7.3 m by 11.0 m ball mills. • All mills variable speed direct drive. • Copper flotation circuit. • Zinc flotation circuit. • Bismuth/moly cleaning circuit. • Bismuth/moly cleaning circuit. April 26, 2004 Analysts' Site Visit Slide 27

  28. Concentrate Pipeline Concentrate Pipeline • 302 km from concentrator to filter plant. • 10” to 8” diameter pipe. • Single pump station at the mine site. • 4 valve stations • Zero problems with multiple concentrates. • 302 km from concentrator to filter plant. • 10” to 8” diameter pipe. • Single pump station at the mine site. • 4 valve stations • Zero problems with multiple concentrates. • Design throughput: 1.8 million dmt/year. • Design throughput: 1.8 million dmt/year. April 26, 2004 Analysts' Site Visit Slide 28

  29. Port Facilities Port Facilities • Concentrate slurry storage tanks. • Filter plant with four pressure filters • Concentrate storage shed: – Capacity: 180,000 wmt of a single product, lower with multiple products. • Pier and ship loader. • Concentrate slurry storage tanks. • Filter plant with four pressure filters • Concentrate storage shed: – Capacity: 180,000 wmt of a single product, lower with multiple products. • Pier and ship loader. • Water treatment facility and tree plantation. • Water treatment facility and tree plantation. April 26, 2004 Analysts' Site Visit Slide 29

  30. Customers Customers April 26, 2004 Analysts' Site Visit Slide 30

  31. Customers Customers • 75% of production is sold under long term contract. – 12 high-quality customers in 9 countries. – Japan, Korea, Canada, Sweden, Finland, Germany, Belgium, Australia, Bulgaria. • Balance of output is sold under spot and short term contracts to smelters and traders: • 75% of production is sold under long term contract. – 12 high-quality customers in 9 countries. – Japan, Korea, Canada, Sweden, Finland, Germany, Belgium, Australia, Bulgaria. • Balance of output is sold under spot and short term contracts to smelters and traders: – Chile, Peru, China, Germany. – Chile, Peru, China, Germany. April 26, 2004 Analysts' Site Visit Slide 31

  32. Human Resources Human Resources National Labour National Staff Expatriate Trainees and Temporary 940 403 28 70 1,441 April 26, 2004 Analysts' Site Visit Slide 32

  33. Environment, Health, Environment, Health, Safety & Community Safety & Community April 26, 2004 Analysts' Site Visit Slide 33

  34. EHS Management System EHS Management System Commitment and Policy Management Review Continuous Improvement Checking and Corrective Action Planning Implementation April 26, 2004 Analysts' Site Visit Slide 34

  35. EHS Audit Program EHS Audit Program • Internal Inspections and Audits. • Internal Inspections and Audits. • Shareholder Audits. • Shareholder Audits. • Lender Oversight • Lender Oversight – World Bank EH&S Guidelines – World Bank EH&S Guidelines • Independent Tailings Review Board. • Independent Tailings Review Board. • Government. • Government. • Stakeholders. • Stakeholders. April 26, 2004 Analysts' Site Visit Slide 35

  36. Environmental Programs Environmental Programs • Permits and Authorizations. • Public consultation. • Monitoring Programs: – Water quality – Aquatic life – Air quality • Erosion Control and Revegetation Program. • Solid and hazardous waste management • Permits and Authorizations. • Public consultation. • Monitoring Programs: – Water quality – Aquatic life – Air quality • Erosion Control and Revegetation Program. • Solid and hazardous waste management program. program. April 26, 2004 Analysts' Site Visit Slide 36

  37. Permits ? Over 300 permits. First experience for many regulatory agencies. Types of permits required : • Construction. • Water discharge. • Operations. • Fuel tanks. April 26, 2004 Analysts' Site Visit Slide 37

  38. Public Consultation Process Public Consultation Process • Public Hearings and Open House in Lima. • Public Meetings in Project Area. • EIA Widely Distributed, placed on Peruvian Mining and Energy Ministry web site. April 26, 2004 Analysts' Site Visit Slide 38

  39. Building a Sustainable Building a Sustainable Culture of Safety Awareness Culture of Safety Awareness • Standards. • Training. • Inspections and audits. • Continuous improvement. April 26, 2004 Analysts' Site Visit Slide 39

  40. Safety Programs Safety Programs • STOP. • ISTEC. • Safety Values. • Senior Management EHS Committee. • Contractor Management. • Inspections and Audits. • Transport Management. • Training. • STOP. • ISTEC. • Safety Values. • Senior Management EHS Committee. • Contractor Management. • Inspections and Audits. • Transport Management. • Training. • Occupational Health. • Occupational Health. April 26, 2004 Analysts' Site Visit Slide 40

  41. Risk Management Risk Management • Risk Assessments. • Action Plans. • Response Plans. • Risk Audits. • Rescue Team. • Risk Assessments. • Action Plans. • Response Plans. • Risk Audits. • Rescue Team. • Transportation Management. • Transportation Management. April 26, 2004 Analysts' Site Visit Slide 41

  42. Stakeholder Programs Stakeholder Programs • Communities. • Environmental Committees. • Government. • NGOs. • Universities. • Municipalities. • Communities. • Environmental Committees. • Government. • NGOs. • Universities. • Municipalities. • Regional working groups. • Regional working groups. April 26, 2004 Analysts' Site Visit Slide 42

  43. Environmental Committees Environmental Committees • Created as an official communication channel between CMA and communities – Provide technical environmental information – Receive a feedback from local residents • Established in: – San Marcos – Ayash Basin – Huarmey • Created as an official communication channel between CMA and communities – Provide technical environmental information – Receive a feedback from local residents • Established in: – San Marcos – Ayash Basin – Huarmey – Huallanca – Huallanca April 26, 2004 Analysts' Site Visit Slide 43

  44. EHS Stakeholder Programs EHS Stakeholder Programs Working Groups Working Groups • Regional working groups consisting of mining companies, communities, government, and NGOs: – Grupo de Trabajo PN Huascarán – Consejo Ambiental Regional (CONAM) – TMI, SPDA, VIDA – TMI, SPDA, VIDA • Regional working groups consisting of mining companies, communities, government, and NGOs: – Grupo de Trabajo PN Huascarán – Consejo Ambiental Regional (CONAM) April 26, 2004 Analysts' Site Visit Slide 44

  45. Community Development Community Development Strategy Strategy • The community leads in planning its development. It is necessary to change attitudes. • Local Development Committee ( Mesa de Concertación ): includes all the stakeholders, CMA acts as a facilitator • The community approves the development plan and budget, and monitors its compliance. • Public consultation used as a tool. • Programs are executed by NGO’s. • Build trust and social capital • Build trust and social capital • The community leads in planning its development. It is necessary to change attitudes. • Local Development Committee ( Mesa de Concertación ): includes all the stakeholders, CMA acts as a facilitator • The community approves the development plan and budget, and monitors its compliance. • Public consultation used as a tool. • Programs are executed by NGO’s. April 26, 2004 Analysts' Site Visit Slide 45

  46. Principles of CD Programs Principles of CD Programs i Avoid paternalism, through promoting i Avoid paternalism, through promoting sustainable development. sustainable development. i Supply tools for individual and collective i Supply tools for individual and collective development. development. i Attract Government and multinational i Attract Government and multinational agencies contributions. agencies contributions. i Complement, not replace, government i Complement, not replace, government responsibilities. responsibilities. i Respect local culture, habits and values. i Respect local culture, habits and values. April 26, 2004 Analysts' Site Visit Slide 46

  47. Objectives of CD Programs Objectives of CD Programs i Upgrade the quality of life by improving i Upgrade the quality of life by improving education and health services. education and health services. i Improve agricultural and livestock-raising i Improve agricultural and livestock-raising practices. practices. i Promotion of small enterprises. i Promotion of small enterprises. i Support cultural activities. i Support cultural activities. April 26, 2004 Analysts' Site Visit Slide 47

  48. Production Production April 26, 2004 Analysts' Site Visit Slide 48

  49. Lake Sediments Lake Sediments • Original schedule was to complete removal of lake sediments by end of Q3 2003. • Fatal accident in November 2002 required new approach to sediment removal: – Long-line excavator added in March 2003; – Long-line effective but sporadic in first six months of use. – Revised schedule developed in October 2003 to complete in June 2004. On track. • Original schedule was to complete removal of lake sediments by end of Q3 2003. • Fatal accident in November 2002 required new approach to sediment removal: – Long-line excavator added in March 2003; – Long-line effective but sporadic in first six months of use. – Revised schedule developed in October 2003 to complete in June 2004. On track. – Lease dragline added in February 2004. – Lease dragline added in February 2004. April 26, 2004 Analysts' Site Visit Slide 49

  50. Mine Production Mine Production 40 Ore rehandle Waste, expense & rehandle Waste mined Ore mined 35 30 25 million dmt 20 15 10 5 0 Q1 02 Q2 02 Q3 02 Q4 02 Q1 03 Q2 03 Q3 03 Q4 03 Q1 04 April 26, 2004 Analysts' Site Visit Slide 50

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