WE ARE COMMITTED TO THE DEVELOPMENT OF OUR NEIGHBOURING COMMUNITIES AND THE COUNTRY

We believe that our business should ensure sustainable development in local communities and significantly contribute to the country's long-term development.

WHY ARE NEIGHBOURING COMMUNITIES AND SOCIETY IMPORTANT?

Mining companies have a duty to contribute to the sustainable development of the communities where their operations are located. This includes taking part in open, transparent dialogue in which local stakeholders can discuss the management of shared resources and local development.

The Group is aware that large-scale mining has a major impact and therefore seeks to prevent, mitigate and offset negative effects while increasing the positive effects of economic activity.

Contributing to regional development, and keeping our promises to communities and other stakeholders, is essential if we are to maintain our social licence to operate and ensure that our business is a success.

CONTEXT
Our mining operations are located in two regions of Chile with very different natural environments. Los Pelambres is at the head of the Choapa valley, in a territory shared with over 40 communities. Centinela, Antucoya and Zaldívar are in the middle of the Atacama Desert, a sparsely populated traditional mining area, and one of the driest places in the world.

These geographical factors, in addition to changing social expectations, mean that the challenges of cohabiting with local communities are more complex for Los Pelambres than they are for our operations in the north. We are therefore gradually refocusing our relationships to reflect the differences between the two regions. 

LOCAL COMMUNITIES' MAIN PREOCCUPATIONS
We have implemented various mechanisms to deal with our neighbours' concerns as part of our public relations process. These include public dialogue, roundtables and other meetings, complaint mechanisms and citizen participation. The main concerns expressed by local communities are as follows:

Community relations

  • Direct, formal communication channels between the company and the community with transparent and appropriate responses. 
  • Incorporating concerns during the engineering design stage of projects.

Community development and wellbeing

  • Helping to solve social problems: water shortages, lack of public space, educational issues, health and employment infrastructure and the slow development of other manufacturing sectors.
  • Employment, purchasing and using local suppliers.

Social and environmental impact on communities

  • Social impact when developing projects, of the arrival of outside workers (alcohol, drugs, insecurity).
  • Social impact while projects are being built.
  • Availability and quality of water.
  • Air quality.
  • Road safety.
  • Tailings dam: emergency preparedness.
  • Impact on local biodiversity, marine environment and cultural heritage.

HOW DO WE MANAGE OUR COMMITMENT TO NEIGHBOURING COMMUNITIES AND SOCIETY?

In view of the context of our business and the environment, we have placed a special emphasis on:

In the local area:
I. Listening to and understanding what communities have to say, and helping them to build the area's future. Contributing to initiatives arising from relationship-building that respond to the shared priorities of stakeholders in each region.
II. Contributing to the local economy by providing access to high-quality jobs and business opportunities associated with mining.
III. Preventing and mitigating the negative impact on communities.

In the country:
IV. Actively participating in developing the mining industry of the future and society as a whole.

The Group seeks to generate economic, social and human capital in the areas in which it operates. We want to contribute significantly to the development and well-being of our host communities and provide lasting infrastructure to build on their economy, culture and traditions. We understand that local development is key to our business and that our neighbours' wellbeing is directly relevant to our long-term success.

We also realise that we are only one of many stakeholders in the region, and if we are to contribute effectively to this development and play an active part in its challenges, we must help to find solutions in cooperation with other public- and private-sector players. We therefore aim to build and maintain good relationships with them and develop our ability to listen to, understand and manage their expectations and concerns.

Because of this, we have changed the focus of our interaction with local areas. This new Relationship-building Process aims to develop lasting ties with communities, authorities, and other stakeholders, based on five fundamental principles: dialogue, collaboration, traceability, excellence and transparency.

As part of this process, the Group operates a series of formal communication and feedback mechanisms with different local stakeholders, such as public dialogue, roundtables and other meetings, joint monitoring, community site visits, media, websites and social networks.

We also have a system for following up social and environmental undertakings with the community, and investigating and responding to their complaints.

A major force in the regional economy
Our mining operations play a key part in the economies of the regions where we operate and this imposes responsibilities on us. This is particularly important in the Coquimbo region, where Los Pelambres accounts for 14 percent of GDP and approximately 72% of exports. In the Antofagasta region our three mining operations account for 11% of exports.

Local employment
Antofagasta Minerals participates in initiatives run by the Consejo Minero to improve the qualifications of workers in the industry. It also allocates financial and technical resources to support skills development in local communities by providing training grants for technical and professional education.

Many of our workers are also our neighbours. We provide incentives for access to high-quality jobs at our facilities and with the contractors that provide us with services. In 2017, we provided direct employment to 2,257 people from the Antofagasta and Coquimbo regions, who account for 50 percent of our mining employees1. We are very proud of how many local people we have been able to employ.

As part of our community relations strategy, we encourage local people to gain access to jobs associated directly or indirectly with our business. Los Pelambres has been doing this in collaboration with the four local councils since 2015. As a result, more than 1,500 people working in connected companies come from the province, and 47.16 percent of our own employees are local, well above the 30 percent commitment made to the local communities. The current figures are the result of a joint effort in which men and women have been trained in mining, and non-mining occupations such as welding, machine maintenance, rigging, heavy machinery operation, catering, gas fitting and security.

Since 2015 a job portal has been in operation, enabling would-be employees to find work more quickly. It is currently run by the municipal employment information offices.

Local suppliers
One of our key priorities has always been to use local suppliers where we can and help them to expand so that they can also provide services to other companies.

Los Pelambres and Centinela take part in the CORFO World Class Suppliers Programme, which encourages innovation and globalisation among national suppliers to the mining industry. Centinela also manages a pilot scheme for local suppliers, jointly with the municipality of Sierra Gorda. Both operations have received the Finance Ministry’s SME Seal, awarded to companies that commit to paying small and medium-sized suppliers within 30 calendar days.

In 2017, we spent US$350 million with 688 suppliers in the Antofagasta and Coquimbo regions, equivalent to 14 percent of our total purchases and 24 percent of the total number of suppliers we use.

Support for fishing and farming
The Fundación Los Pelambres provides assistance to small farmers in the Coquimbo region through the use of irrigation technology and helps cooperatives to sell local products more effectively. The company works with small-scale fishermen and women in Los Vilos, supporting fisheries research, protection and development.

Additionally, 171 entrepreneurs in Salamanca have taken part in business skills training provided by the Cosecha programme. This is aimed at rural microbusinesses in the farming, tourism and crafts sectors, and helps them to fulfil their ambitions. The programme is an initiative of Viva Salamanca, supported by Los Pelambres and the municipality of Salamanca as part of the Somos Choapa initiative.

Apprentice training
Ever since each of the Group’s mining operations started they have run operation and maintenance apprenticeship programmes. In 2017, Antucoya took on 24 apprentices from the communities of María Elena and Mejillones, while Centinela provided apprenticeships for 58 young people from the Antofagasta region and Los Pelambres trained 19 individuals from the Choapa valley as heavy goods vehicle drivers.

1 This figure rises to 52 percent if we include our corporate head office.

We identify and manage the risks and social impact of our operations and projects, and seek to allay the community’s legitimate concerns about living near mines and the possibility of emergencies.

Social impact of project construction: During the construction stage, the main social impacts are associated with the arrival of large numbers of temporary workers in small nearby communities, and the increase in vehicle traffic. We mitigate these impacts using a set of minimum standards for the design of mining projects, including specific sections on risk management, safety and health, and social and environmental management. This is known as the Asset Delivery System.

Social and environmental impact of mining operations: During the operating stage, the social impact is mainly local people’s concerns about traffic safety and their perception of the risk of air and water quality issues, the availability of water for irrigation and plant safety in emergency situations.

  • Water quality: This is an area of particular concern in the Choapa valley. In late 2011, we set up a joint water quality monitoring system to make the regulatory monitoring and reporting process more transparent. This involves representatives of the community and Los Pelambres, and the authority responsible for supervising the sampling process, which is carried out by accredited laboratories. There are three teams monitoring the Choapa river, and the Pupío and Camisas streams. The results are published on the Choapa river monitoring body’s website and at community meetings.
  • Water availability: Water resources in Choapa province, where this issue is more critical, are managed by the Choapa river monitoring board, of which Los Pelambres is a member. The board works with groups representing canal users’ and drinking water associations. Los Pelambres has helped to find solutions to this problem by signing the Salamanca Agreement. Water availability was also one of the subjects of the Caimanes Agreement.
  • Air quality: Los Pelambres has agreed with the Cuncumén air quality regulator to take operating measures to reduce particulate emissions from the near-by plant. Monitors from the community evaluate the controls on a daily basis.
  • Traffic safety: We carry out regular prevention and education initiatives in association with the authorities.
  • Emergency preparedness: The Group's tailings dams and other installations are designed to resist extreme weather and severe earthquakes. The Mauro dam at Los Pelambres continued to operate normally after the September 2015 earthquake, measured at 8.5 on the Richter scale, whose epicentre was only 50 kilometres away from the dam.

    As required by law, the emergency procedures of our four mines have been approved by the national mining authority. We have also coordinated response plans with the relevant public services and local authorities. These comprise preventive and corrective measures for each site, including the suspension of operations if necessary.

    Following a consultation with the community of Caimanes, which is near Los Pelambres’ Mauro dam, a contingency plan was drawn up for the community in 2016 to complement the existing emergency procedures. This provides for a new safety zone at Caimanes, and the installation of signage and lighting to improve the community’s access and evacuation routes to this zone in emergencies. It also includes an audio alarm system to notify the community of evacuations and complements the three gabions along the Pupío stream, which were also specified in the agreement. The implementation of the contingency plan is progressing as planned.

As one of the world's ten largest copper producers, and the largest non-State mining company in Chile, we have a responsibility for the current and future development of an efficient, sustainable and inclusive mining industry. For this reason, we play a leading role in:

  • Creating a strategic national agenda for the industry by setting up public-private alliances to implement it, such as the Minería Alta Ley and Alianza Valor Minero programmes1. The national Alta Ley project is a public-private initiative managed by CORFO2 and the Ministry of Mines. Its main objective is to increase productivity, competitiveness and innovation in the industry and among its suppliers, and thus promote the country's development.
  • The debate on future challenges and initiatives in the global mining industry. We take an active part in strategic forums and initiatives, for example, by playing a leading role on the ICMM committee responsible for finding sustainable, innovative mining waste management solutions.
  • Implementing national initiatives on issues where we have experience to offer and/or can identify development opportunities for Chile, such as the Antofagasta Minerals Santiago E-Prix 2018.

1 www.programaaltaley.cl; www.valorminero.cl
2 Government organisation to promote economic growth.

 

MONITORING AND RESULTS

We have formal consultation and feedback mechanisms enabling workers, partners and communities to anonymously express concerns and complaints about our operations.

Three of our five relationship-building principles include adequate monitoring of projects and initiatives undertaken, transparency, and the effective use of resources.

  • TRACEABILITY: Using benchmarks and other tools to evaluate processes and projects and monitor compliance with commitments.
  • TRANSPARENCY: Appropriate access to information, public reporting and the proactive identification of potential conflicts of interest.
  • EXCELLENCE: Incorporate principles into the process, acquiring viable and relevant commitments, and adequate budgetary management.

One challenge we face with respect to our social investment initiatives is measuring the Group's contribution to regional development, the impact of the projects and how they add value to our business. In 2017, we continued to work on defining indicators to measure the progress of Somos Choapa, and creating a participatory process to combine technical expertise with government requirements and beneficiaries' contributions. The indicators must evaluate the impact and effectiveness of each community investment project.

Another set of benchmarks will measure any contribution made by the Somos Choapa project portfolio that results in any improvements in the wellbeing of communities within the parameters of the United Nations Sustainable Development Goals (SDGs). The decision to use SDG benchmarks reflects Antofagasta's desire to find common ground with the authorities concerning sustainable long-term and local development.