Set out below are the Group’s principal risks and related mitigation techniques.

The Group’s highly skilled workforce and experienced management team are critical for maintaining current operations, implementing development projects, achieving long-term growth and pursuing current operations without major disruption. Managing talent and maintaining a high-quality labour force, in a changing technological and cultural environment, is a key priority for the Group. Any failures in this respect could have a negative impact on the performance of the existing operations and future growth.


The Group maintains good relations with its employees and unions founded on trust, continuous dialogue and good working conditions. The Group is committed to safety, non-discrimination, diversity and inclusion and compliance with Chile’s strict labour regulations.

There are long-term labour agreements in place with all 19 unions at the Group’s operations, helping to ensure labour stability.

The Group seeks to identify and address labour issues that may arise throughout the period covered by the labour agreements and to anticipate any potential issues in good time. Contractors are an important part of the Group’s workforce and under Chilean law are subject to the same duties and responsibilities as the Group’s own employees. The Group’s approach is to treat contractors as strategic associates and to build long-term mutually beneficial relationships.

The Group maintains constructive relationships with its employees and their unions through regular communication and consultation. Union representatives are regularly involved in discussions about the future of the workforce.

The Group develops the talents of its employees through training and career development, invests in initiatives to widen the talent pool and is committed to its diversity and inclusion policy. Through these actions the Group aims to increase the number of women, people with disabilities and employees with international experience in the workplace.

The Group’s Employee Performance Management System is designed to attract and retain key employees by creating suitable reward and remuneration structures and providing personal development opportunities. The Group has a talent management system to identify and develop internal candidates for key management positions, as well as identifying suitable external candidates where appropriate.

Safety and health incidents could result in harm to the Group’s employees, contractors or local communities. Ensuring their safety and wellbeing is first and foremost an ethical obligation for the Group and is part of the Group’s core values.

A poor safety record or serious accidents could have a long-term impact on the Group’s morale, reputation and production.


The Group seeks continuous improvement of its safety and health risk management procedures, with particular focus on the early identification of risks and the prevention of fatalities.

The Corporate Safety and Health Department provides a common strategy for the Group’s operations and co-ordinates all safety and health matters. The Group has a Significant Incident Report system, which is an important part of the overall approach to safety.

The Group’s goal of zero serious accidents and fatalities and minimising the number of accidents requires all contractors to comply with its Occupational Safety and Health Plan. This plan is monitored through monthly audits and is supported by regular training and awareness campaigns for employees, contractors, employees’ families and local communities, particularly with regard to road safety. The Group requires all staff in defined safety-critical roles to satisfy at least the minimum qualifications and experience defined for their role and complete any required training prior to commencing their work activities.

Critical controls and verification tools are regularly strengthened through the verification programme and regular audits of critical controls for potentially high-risk activities.

The Group continuously seeks to incorporate technology and innovation to reduce workers’ exposure to safety and health risks.

An operating incident that damages the environment could affect both the Group’s relationship with local stakeholders and its reputation, undermining its social licence to operate and to grow.

The Group operates in challenging environments, including the largely agricultural Choapa Valley, and the Atacama Desert, where water scarcity is a key issue.


The Group has a comprehensive approach to incident prevention. Relevant risks are assessed, monitored and controlled in order to achieve the goal of zero incidents with significant environmental impact. The Group works to raise awareness among employees and contractors, providing training to promote operating excellence. The potential environmental impacts of a project are key considerations when assessing its viability, and the integration of innovative technology in the project design to mitigate such impacts is encouraged.

The Group prioritises the efficient use of natural renewable resources by pioneering the use of sea water, increasing renewable-based power supply, achieving higher rates of reuse and recovery through thickened tailings technology and reducing greenhouse gas emissions through energy efficiency and other measures.

The Group recognises that environmental sustainability is key to its licence to operate and performs regular risk assessments to identify potential impacts and develop preventive and mitigating strategies.

Each site maintains an updated environmental emergency preparedness plan and a detailed closure plan with appropriate financial provisions to ensure physical and chemical stability once operations have ceased.

Failure to identify and manage local concerns and expectations can have a negative impact on the Group. Relations with local communities and stakeholders affect the Group’s reputation and social licence to operate and grow.


The Group has a dedicated team that establishes and maintains relations with local communities. These are based on trust and mutual benefit throughout the mining lifecycle, from exploration to final remediation. The Group seeks to identify early any potentially negative operating impacts and minimise these through responsible behaviour. This means acting transparently and ethically, prioritising the safety and health of its employees and contractors, avoiding environmental incidents, promoting dialogue, complying with its commitments to stakeholders and establishing mechanisms to prevent or address a crisis. These steps are undertaken in the early stages of each project and continue throughout the life of each operation.

The Group contributes to the development of communities in the areas in which it operates, starting with an assessment of the existing situation and the specific needs of surrounding communities, while looking to develop long-term, sustainable relations and evaluating the impact of its contributions. The Group is focused on developing the potential of members of local communities through education, training and employment.

The Group works to communicate clearly and transparently with local communities, in line with the established Community Relations Plan, including the use of a grievance management process, local perception surveys, and local media and community engagement.

The Group’s operations or projects around the world could be affected by risks related to corruption or bribery, including operating disruptions or delays resulting from a refusal to make “facilitation payments”. Such risks depend on the economic or political stability of the country in which the Group is operating.


The Group has a “zero tolerance” regime for any activity that would result in breaking any anti-bribery and corruption legislation. A robust governance regime, including an Ethics Committee, opens channels of communication, training and multiple layers of controls that are maintained across all operations, exploration activities and third-party relationships.

The Group’s compliance model seeks to prevent any activity which may involve directly or indirectly the Group in any irregular situation, to detect any potential risk in good time and to act accordingly. There are control procedures in place that help to prevent corruption, covering such issues as conflicts of interest, suitability of suppliers, the receiving and giving of gifts and hospitality, and facilitation payments.

All employees in the Group receive training on the Group’s Compliance Model, which is subject to external certification.

The Group’s operations are subject to a number of circumstances not wholly within its control. These include damage to or breakdown of equipment or infrastructure, unexpected geological variations or technical issues, extreme weather conditions and natural disasters, any of which could adversely affect production and/or costs.


Key risks relating to each operation are identified as part of the regular risk review process undertaken by the individual operations. This process also identifies appropriate mitigation techniques for such risks. Monthly reports to the Board provide variance analysis of operating and financial performance, allowing potential issues to be identified in good time and any necessary monitoring or control activities to be implemented, preventing unplanned downtime.

The Group’s focus is on maximising the availability of equipment and infrastructure and ensuring effective utilisation of the Group’s assets, in line with the nameplate design and technical limits. The Group keeps the variation of the processes within defined tolerance limits. In the case of the Group’s tailings storage facilities these are monitored constantly and reviewed twice a year by a team of independent experts to ensure compliance with international standards.

The Group has Business Continuity Plans and Disaster Recovery Plans for all key processes within its operations in order to mitigate the consequences of a crisis or natural disaster. The Group also has property damage and business interruption insurance to provide protection from some, although not all, of the costs that may arise from such events.

Disruption to the supply of any of the Group’s key strategic inputs such as electricity, water, fuel, sulphuric acid or mining equipment could have a negative impact on production. Longer term, restrictions on the availability of key strategic resources such as water and electricity could affect the Group’s growth opportunities.

A significant portion of the Group’s input costs are influenced by external market factors.


In order to achieve the Group’s security of supply, contingency plans are in place to address any short-term disruptions to strategic resources. The Group negotiates early with suppliers of key inputs to ensure supply continuity. Certain key supplies are purchased from several sources to mitigate potential disruption arising from exposure to a single supplier.

To achieve cost competitiveness, the Group endeavours to buy the highest possible proportion of its key inputs such as fuel and tyres, on as variable a price basis as possible, and to link costs to underlying commodity indices where this option exists.

The Group is committed to incorporating sustainable technological and innovative solutions, such as using sea water and renewable power when economically viable, to mitigate exposure to potentially scarce resources.

The Group maintains a rigorous, risk-based supplier management framework to ensure that it only engages with reputable product and service providers, and keeps in place the necessary controls to ensure the traceability of all supplies (including avoiding any conduct related to modern slavery).

Breaches in, or failures of, the Group’s information security management could adversely impact its business activities.


The Group’s information security management model is designed with defensive structural controls to prevent and mitigate the effects of computer risks. It employs a set of rules and procedures, including a Disaster Recovery Plan, to restore critical IT functions.

The Group’s IT systems were audited in 2018 to identify any potential threat to the operations and additional systems have been put in place to protect the Group’s assets and data.

Restrictions in financing sources for future growth could prevent the Group from taking advantage of growth or other opportunities available in the market.


Security, liquidity and return represent the order of priorities for the Group’s investment strategy. The Group maintains a strong and flexible balance sheet, consistently returning capital to shareholders while leaving the Group with sufficient funds to progress its short, medium and long-term growth plans and maintain financial flexibility to take advantage of opportunities as they may arise.

The Group has a risk-averse investment strategy, managing its liquidity by maintaining adequate cash reserves and financing facilities through the periodic review of forecast and actual cash flows. It chooses to hold surplus cash in demand or term deposits or highly liquid investments.

The Group’s results are heavily dependent on commodity prices – principally copper and, to a lesser extent, gold and molybdenum. The prices of these commodities are strongly influenced by a variety of external factors, including world economic growth, inventory balances, industry demand and supply, possible substitution, etc.

The Group’s sales are mainly denominated in US dollars, although some of the Group’s operating costs are in Chilean pesos. As a result, the strengthening of the Chilean peso may negatively affect the Group’s financial results.


The Group considers exposure to commodity price fluctuations to be an integral part of its business and its usual policy is to sell its products at prevailing market prices. The Group monitors the commodity markets closely to determine the effect of price fluctuations on earnings, capital expenditure and cash flows. Very occasionally, when it feels appropriate, the Group uses derivative instruments to manage its exposure to commodity price fluctuations.

The Group runs its business plans through various commodity price scenarios and develops contingency plans as required.

As copper exports account for over 50% of Chile’s exports, there is a correlation between the copper price and the US dollar/Chilean peso exchange rate. This natural hedge partly mitigates the Group’s foreign exchange exposure. However, the Group monitors the foreign exchange markets and the macroeconomic variables that affect it and on occasion implements a focused currency-hedging programme to reduce short-term exposure to fluctuations in the US dollar against the Chilean peso.

The Group’s ability to deliver on its strategy and performance targets may be undermined by missed opportunities or delays in adopting new technologies and its ability to innovate.


The Group seeks value-capturing innovations that realise cost savings, improving the efficiency, reliability and safety of its processes and supporting its corporate strategic pillars. It evaluates the potential of all ideas using its stage-gate approval process and Innovation Board.

The Group maintains partnerships with academic institutions and companies specialising in technology and engineering companies, including peers, where there is no competitive barrier to doing so, in order to maximise the potential for improvements in its processes and systems. A dedicated team monitors, identifies and analyses external innovation trends with potential application to the Group’s business, including in non-operational areas such as product sales and purchasing, and maintains and manages a portfolio of ongoing projects.

The Group has a recognition and incentives programme to encourage all staff to suggest innovations to its day-to-day operating systems. It also dedicates resources to test and, if successful, escalate promising innovations with potential positive impact on the business and growth options.

The Group needs to identify new mineral resources to ensure continued future growth and does so through exploration and acquisition.

The Group may fail to identify attractive acquisition opportunities or may select inappropriate targets. The long-term commodity price forecast and other assumptions used when assessing potential projects and other investment opportunities have a significant influence on the forecast return on investment and, if incorrectly estimated, could result in poor decisions.

Regarding exploration activity, there is a risk that the Group may not identify sufficient viable mineral resources.


The Group’s exploration and investment strategy prioritises exploration and investment mostly in the Americas. The Group focuses on growth opportunities in stable and secure countries in order to reduce risk exposure.

A rigorous assessment process evaluates and determines the risks associated with all potential business acquisitions and strategic exploration alliances, including conducting stress-test scenarios for sensitivity analysis. Each assessment includes country risk analysis (including corruption) and analysis of the Group’s ability to operate in a new jurisdiction.

At the very least, all joint ventures must operate in line with, or to an equivalent of, the Group’s policies and technical standards.

The Group’s Business Development Committee reviews potential growth opportunities and transactions, and approves or recommends them within authority levels set by the Board.

Failure to effectively manage the Group’s development projects could result in delays in the start of production and cost overruns.


The Group has a project management system to apply the best practices at each phase of a project’s development. The project management system provides a common language and standards to support the decision-making process by balancing risk with benefit to increase. In addition, all geometallurgical models are reviewed by independent experts.

During the project development lifecycle, quality checks for each of the standards applied are carried out by a panel of experts from within the Group. This panel reviews each completed feasibility study to assess the technical and commercial viability of the project and how it can be safely developed, including any relevant risk or opportunity that could potentially impact the schedule, cost or future performance.

Detailed progress reports on ongoing projects are regularly reviewed and include assessments of progress against key project milestones and performance against budget.

Project robustness is stress-tested against a range of copper price scenarios. Joint project/operation teams are established early in the development project in order to assure smooth transition of the project into operating mode once construction is completed.