The CEO's Vision

"We are committed to mining for the future, and we want to lead in safety, innovation and sustainability."

IVÁN ARRIAGADA
CHIEF EXECUTIVE OFFICER

WHAT IS YOUR VISION ABOUT COPPER MINING AND ITS FUTURE CHALLENGES?

Copper mining continues to be a tremendously important industry for development and progress due to the properties of this metal. Over time copper does not corrode and is non-toxic, unlike many other metals, and is fully recyclable. That is why copper is widely used in water installations, heating systems and air conditioning. Also, the ease with which it can form joints and handle heat makes it suitable for transporting different substances, including flammable ones. Thanks to copper's electrical conductivity, it is a key material in electric cables. Without the copper in the electrical and electronic components in cars, it would not be possible to have intelligent engine management, sensors, and information and entertainment systems. A conventional medium-sized car contains up to 22.5kg of copper and an electric vehicle can contain three to four times as much.

All these properties make copper a vital element in daily life, and it is also an essential metal for a more sustainable future, since it plays a significant role in the development of non-conventional renewable energy and the growth of a cleaner, more sustainable electric economy.

Copper mining today faces great challenges. Remaining competitive is difficult as the industry is facing falling grades of deposits, longer haulage distances, impurities in the ore and increased hardness, normally associated with the greater depth of deposits. There are also other challenges such as the use of water and energy, and regulatory and community demands, all of which have been evolving and require the industry to adapt and operate with ever higher levels of excellence.

On the other hand, there has generally been a critical view of extractive activities compared with new industries such as digital, telecommunications and IT, where people do not understand that metals are the great enablers of these industries and the modern world as we know it today. The continuing development of mining is therefore at the heart of creating a more sustainable world. For this reason it is an industry that should be valued, and so another challenge we face is communicating what we do and how we contribute to progress and economic development.

HOW IS THE COMPANY PREPARING FOR THAT FUTURE AND WHAT ARE YOUR CHALLENGES AND PRIORITIES?

Mining has a huge impact on the development of Chile and that is why we are convinced we must have a national perspective to overcome the challenges that we face as a sector. The growth and development of the areas where we conduct our business is essential to achieve the growth and development of the Company.

Therefore, as an industry, we must continue working to overcome the gaps that exist today in terms of productivity, environmental protection, citizen participation and effective relations in the areas where mining takes place. At Antofagasta Minerals, we have taken important steps to advance our vision of creating long-term value through sustainability and the way in which we engage with communities. The agreement we reached with Caimanes is clear proof of this.

After a long period of dialogue, we have established a new relationship model that allowed us to solve a long-running conflict, and enables the operation and development of Los Pelambres. Dialogue and community participation have been fundamental in this model, and our goal is to continue with this shared vision, developing the areas close to our operations and constantly working with the communities, local government and state agencies.

In relation to environmental matters, we must ensure compliance with our commitments and all the impact management measures agreed in the Environmental Qualification Resolutions (RCA) that govern our operations. But beyond this, we are interested in maintaining a system that is fully integrated into the management of our day to day operations ensuring the implementation of critical controls to manage the environmental risks, whether they already exist in the current commitments as is the case for those that are part of the RCAs, or are new, for example those that have arisen from the effects of climate change. That is why we have introduced a new Environmental Management Model which seeks to promote reporting, quality of information and the completion of required corrective actions.

Our goal is that sustainability, which firstly includes the safety and health of our workers, be understood and addressed as a key concern of our business. Nowadays, projects face a greater risk of failing if the areas related to sustainability are not managed proactively.

This change of approach also includes developing a more transparent style of management, which is fundamental to enable growth and to fulfil the current demands of the society in which we operate.

We want to ensure that our business continues to develop in the long term; that the riches of the environment are maintained and generate value for all; that communities empower their productive activities, and their way of life and culture, and therefore improve their wellbeing and quality of life; and that mining continues to be a powerful engine of growth for Chile. Only in this way will we generate the positive changes that the regions, communities, the country and all stakeholders expect from us.

WHAT WERE THE MAIN EVENTS AND THE PROGRESS MADE BY THE COMPANY DURING 2017?

Beyond the fulfilment of our production and financial goals, and the structural changes we made that will contribute to consolidating our development, the most important goal we fulfilled in 2017 was having zero fatalities. At the Group, people are our most valued asset and we are very proud that there were no fatal accidents last year. This is an achievement that we seek to continue in 2018 and beyond.

Moreover we seek to go beyond what is required and this has inspired the development of our Sustainability Policy that we launched in 2017, which promotes the integrated performance of the five crucial areas of our business: people, economic performance, environmental management, social development, and transparency and corporate governance. In each of these areas, we have made significant progress during 2017 and we have new challenges for 2018. One of the most important challenges is to consolidate teams of excellence, which have greater gender diversity and new views and experiences. With this in mind, we designed a Diversity and Inclusion Strategy that was approved by the Board last year. Now we are advancing a plan that will help us to better use everyone’s talents.

One of our goals was the introduction of the Operating Model, which is in the process of being implemented at our mining operations. The competitive advantage it will give us will allow us to be more productive and efficient and in this way, we will be better prepared to utilise all the capabilities we have. The same applies to innovation, a key pillar for mining more complex deposits, in a more demanding environment; and the new Environmental Management Model, which seeks to ensure we comply with the commitments we have undertaken, as well as controlling the main risks in this area.

We completed 2017 with good results, which would not have been possible without the effort and commitment of our employees and the support of our stakeholders. I am very excited about what we can achieve together in the coming years.

Finally, I would like to highlight the performance of our transport division (FCAB), which is also a part of this Group.

In addition to achieving its zero fatalities target, FCAB made significant progress in improving its relations with communities and towards achieving its freight cargo goals and so maintain growth and contribute to the Antofagasta Region's development.

 

IVÁN ARRIAGADA

CHIEF EXECUTIVE OFFICER

Reporting

Annual Report 2017

Leadership

A well-balanced, experienced team