QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN

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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
QUELLAVECO:
A SUSTAINABLE PROJECT
Tom McCulley, CEO
PDAC – Toronto, March 2019

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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
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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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
GENERATING TRUST FOR A LONG-TERM COMMITMENT

       1     Safety: Our first priority

              2
                      Innovative and sustainable water strategy for Quellaveco to
                      provide benefit to communities

                  3       A strategic partner for the development vision of Moquegua

                          A collaborative and transparent relationship with regional
                      4
                          and national Government

                          Established history of respectful and responsible behaviour
                  5
                          to communities

                   Closely aligned to United Nations Sustainable Development
              6
                   Goals and Global Compact and Voluntary Principles

We
       7
           Committed to an impactful and sustainable operation, contributing to a
           better future for Moquegua and Peru

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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
PERU – AN ATTRACTIVE MINING JURISDICTION
The world’s second largest producer of copper,   Peru has become increasingly stable over the
  with mining accounting for ~10% of GDP                      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
                   Quellaveco
                                                   investments in Peru, many spanning
                                                   decades
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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
PERU – AN ATTRACTIVE MINING JURISDICTION
Professionalism of Peru’s mining and promotion       Quellaveco Project supported by Central, Regional
       institutions facilitate investment                         and Local government

  Global      • Government institutions clearly
  mining        understand how volatile the                          • Government supports project
 industry       mining industry can be                  Central        execution, acknowledging
                                                      government       importance to national economy
              • Government institutions
                                                                     • Legislation supports mining
                participate actively in dialogue
 Building       processes with local communities
  trust
              • Follow-up on commitment
                fulfilment                             Regional /    • Expectant with the project
                                                         Local
              • Investment Tracking Group                            • Continuous engagement
                                                      government
Investment      reactivated at the Ministry of
 promotion      Finance.
              • Key to unlock bottlenecks
                                                     The south of Peru is an established mining location
              • Early identification of potential
                obstacles to move forward with
  Ease of       permits and authorisations
   doing                                             • Fastest growing copper producing region in Peru
 business     • Better planning to improve
                deadlines, with the same level of    • Hosts many of the world’s foremost mining
                requirements                           companies

              • New Mining Management and            • Established infrastructure and skilled workforce
                Information Committees track         • Clear policy and regulatory framework
  Social
                commitment fulfilment and help
  issues
                prevent social unrest (due to non-
                compliance or unattended claims)                                                           5
QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
LONG-TERM RELATIONSHIP WITH PERU
Quellaveco: working                                                                                   2018
in Peru for >25 years                                                                          FS updated. Investment
                                                   2015                                      Assurance review successful
                                          FS for 127.5ktpd completed.
                                                                                                Mitsubishi acquires
                                          All major permits approved.                         additional 21.9% stake of
                                          Independent Project Review                           Quellaveco from AA plc
                                                  completed                                  AA plc approves execution of
                                                                                                       project
                                                                          2012
                                                                 Mitsubishi acquires 18.1%
                                  2010                           stake of project from IFC
                         Pre-FS completed. 1st & 2nd
                                                                 Dialogue Table completed
                         EIA amendments approved.
                                                                following 18 month process
                            Early-works initiated
                                                                   Main permits approved

                             2008
                   FS revised for 91ktpd. New
                   plant location / water source

                                                   2000
       1992                            First Feasibility Study (FS) for
                                     64ktpd, and Environmental Impact
    Anglo American
                                        Assessment (EIA) approved
purchase of Quellaveco
                                                                                                                          6
QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
PROJECT LOCATION
                Located at ~3,500m above sea level in south of Peru, 34km from the city of Moquegua

                                                                                             Quellaveco – Key statistics

                                                                                                                             60%
                                                                             Ownership:
                                                                                                                             40%
       Peru

                                                              Overview
                                                                                                    Copper
Lima
                                                                             Commodities:
                                                                                                    (molybdenum by-product)

                                                                             Mine:                  Open-pit, 1.3Bt Reserves, 0.57% TCu1
       Quellaveco                                                                                   ~9,000 at peak construction
                                                                             Workforce:
                                                                                                    ~2,500 steady state operations

                                                                             Construction time:     < 4 years from August 2018

                                                              Construction
                                                                                                    First production 2022
                                                                             Commissioning:
                                                                                                    Ramp-up during 2023

                                                                             Permitting:            Key construction permits obtained

                                                                             Capex:                 US$5.0-5.3bn

                                                                             Throughput rate:       127.5ktpd
                                                               Operation

                                                                                                    ~330ktpa average first five years
                                                                             Production:
                                                                                                    ~300ktpa average first 10 years

                                                                             Reserve life:          ~30 years
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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
CONTRIBUTION TO PERU
At national and local level

               Investment
              US$5.0-5.3bn
   25,000 people to           US$0.3bn invested
     benefit from               since project
  Development Fund            approval (Aug-18)

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

                                    Significant
   0.4% GDP growth
                               investment in water
  during 2018 – 2019
                                  infrastructure

   >3,800 Moqueguan            US$11m invested in
  employees currently         education, health and
     working on the            productive projects
                                                      Quellaveco
         project                 (2017 – 2018)
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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
OUR GLOBAL SUSTAINABILITY PILLARS

      SOCIAL                        ENVIRONMENTAL

                  GOVERNANCE

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QUELLAVECO: A SUSTAINABLE PROJECT - TOM MCCULLEY, CEO PDAC - TORONTO, MARCH 2019 - ANGLO AMERICAN
COMMITTED TO WORKING WITH LOCAL COMMUNITIES
Dialogue Table focussed on three key
                                            …with firm commitments
              areas…

Water
Supply and optimal
use of water resources
                                       26
                                       Agreements directly from the Dialogue Table

Environment
Compliance and
monitoring of
environmental
                                       31
                                       Bodies from 3 different municipalities
commitments

Local
stakeholders
Sustainable
                                       ~$300m
                                       Community investment commitment over next
development projects
                                       30 years, besides taxes and royalties

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GOOD PROGRESS BEING MADE AGAINST COMMITMENTS
                                                              Commitments
                            No. of
                                       Fulfilled   On Track     During
                         Commitments                           Operation

Water
Supply and optimal
use of water resources
                             11        4          4             3

Environment
Compliance and
monitoring of
environmental
                             11        4          6             1
commitments

Local
stakeholders
Sustainable
development projects
                              4        3             -           1
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ALL MAJOR CONSTRUCTION PERMITS IN PLACE

                          Major Permits                                   Water Licences

Permits                                   Status   Licences                                Status

          Environmental
          Impact Study
                                                              Construction Water
                                                              Authorisation

          Beneficiation
          Concession

                                                              Operations Water
                                                              Licence (grant on
          Mining Plan                                         start of operations)

          Mining Closure
          Plan

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LOCAL EMPLOYMENT
 Recruitment of Moqueguan candidates is prioritised, with all applications channelled through a
 dedicated regional labour office in Moquegua.

               Local employment                                      Unskilled labour

                              3,864                                      5%
          5,371
                                                                      95%
       3,864

                                    5,371

                                                                              95%

                                            Local    Non-local

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LOCAL PROCUREMENT

                                             1,085
                         721              Local businesses
                                         have been identified
                     Local businesses
                                          as potential future
                       benefitted from
      303                our training
                        programmes
                                              suppliers

  Local businesses
   supplied goods        “Progresa
   and services to   Moquegua” and
    the project in    “Emerge Perú”
        2018

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SOCIAL DEVELOPMENT ALIGNED WITH UN’S SUSTAINABLE
DEVELOPMENT GOALS

                          •   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
                                                                      15
DELIVERING IMPROVED QUALITY AND VOLUME OF WATER
TO LOCAL COMMUNITIES
                       Responsibly sourced water for operations

                                  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.

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QUELLAVECO ON-TRACK
2018 achievements                                 2019 priorities

• Asana and Vizcachas river diversions            • Substantially complete engineering
  complete                                        • Complete earthworks in concentrator
• Asana dam and tunnel complete                   • First concrete at concentrator
• Main access road complete                       • Progress HME contracts and awards
• Contracts and procurement significantly         • Vizcachas dam
  progressed
                                                  • 95km water pipeline construction
• Earthwork contracts awarded and
  progressing on-site

       Committed to working together to make Peru’s vision for mining a reality by 2030   17
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

                                   18
ANGLO AMERICAN - SAFETY DAY

                              19
ASANA BARRIER

                20
ASANA RIVER TUNNEL

                     21
AERIAL VIEW – QUELLAVECO SITE

                                22
SALVEANI CAMP

                23
AREAL VIEW – PAPUJUNE PLANT

                              24
AERIAL VIEW – VIZCACHAS DAM

                              25
VIZCACHAS DAM SITE

                     26
WATER POND FOR CONSTRUCTION

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THANK YOU

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