Business Enquirer Issue 114 | Codelco | Mining | June'23

BY THE PEOPLE, FOR THE PEOPLE: TRANSFORMATION FOR THE FUTURE OF CODELCO

CODELCO

BY THE PEOPLE, FOR THE PEOPLE: TRANSFORMATION FOR THE FUTURE OF CODELCO

The transformation, which saw increased success during the Covid pandemic, seeks excellence in operations and projects, aiming to capture increased value from its assets, and a cultural change that promotes new ways of operating.

Over the next 50 years, the Chilean stateowned copper mining company is on a mission to maximise its economic value and its contribution to Chile through copper mining.

Through its transformation, it aims to enhance its surplus by $1 billion per year (from 2021 onwards) whilst ensuring the financing and development of its structural projects.

Important to the future of any modernday mining company, Codelco also aims to become a world standard example in terms of sustainability, transparency and probity, innovation, and people development.

Codelco’s operations focus on seven mining divisions across Chile, with a collective personnel of 14,000. The projects, the oldest of which dates back to 1905, are Chuquicamata, Ministro Hales, Radomiro Tomic, Gabriela Mistral, Salvador, Andina and El Teniente. The projects’ reserves

Starting in 2020, Codelco (the National Copper Corporation of Chile) is on a journey of transformation.

represent 6% of global copper reserves.

In addition, Codelco operates Ventanas Smelter and Refinery refinery which produces more than 400,000 tonnes of cathodes per year.

Leading the Charge

Driving Codelco’s transformation is recently appointed CEO, André Sougarret Larroquete, who took on the role at the end of August 2022.

If André’s name seems recognisable, it's because he gained significant respect and recognition for his outstanding performance in leading the rescue of 33 trapped miners in the San José Mine accident.

"The complexities and urgent tasks that this company must face, but especially the expectations that Chile has of the country's main company, require leadership like André's, which I have no doubt is widely recognised. In addition

CODLCO PROJECT DIRECTED BY: GARY SMITH ARTICLE WRITTEN BY: LAURA WATLING

to his technical capacity, we value his demonstrated ability to empathise with the multiple sensitivities that he must address from his role," said Codelco’s Chairman of the Board, Máximo Pacheco.

André is a well-regarded industry professional, having been awarded "Mining Engineer of the Year 2010" by the Institute of Mining Engineers of Chile (IIMCH), and "Engineer of the Year 2010" by the College of Engineers of Chile for his work during the San José Mine accident.

The perfect candidate to lead Codelco on its upcoming journey, André returned to Codelco at the end of 2020 to take over as Vice President of Northern Operations. He had previously taken on senior roles at Antofagasta Minerals, Enami, and Minera Fresnillo.

Of Codelco’s plans for the coming years, André said:

“Our focus is to solve the challenges of structural projects. They are being reviewed, we are better defining the roles and responsibilities, we will reinforce the teams so that they efficiently solve construction challenges and prepare their implementation. We will also manage the increasingly complex environment around logistics and input prices. At the end of the decade, we want to fulfil the promise of giving our operations 50 more years of life and recovering a production of 1.7 million tons, including our participation in El Abra and Anglo American Sur.”

Transformation in Action

On its journey to transformation, Codelco is investing significantly into its various assets.

Throughout 2021, the mining operations invested $1,226 million, a figure that

STRABAG and ZÜBLIN Chile: Greener Operations For A Better Future.

Determined to leave a better world for future generations, the STRABAG Group has set itself its most ambitious goal to date: to achieve carbon neutrality by 2040.

The company recognises the key role that the construction and mining sectors must play in building an emission-free future by taking active measures to make their vision a reality.

STRABAG and ZÜBLIN’s sustainability strategy in Chile encompasses every aspect of their operations, such as establishing partnerships with eco-conscious suppliers and gradually transitioning to electric machinery. They are also rethinking processes and methods, recycling waste materials and implementing innovative technologies on site. And by extending their expertise in mechanised tunnelling to the mining industry, they are opening the door to cleaner operations, with improved performance and safety.

In addition, as the energy that powers the industry is a major environmental concern, the company intends to participate in many renewable energy projects in the region.

Mario Theurl, Managing Director of STRABAG and ZÜBLIN Chile, emphasizes the significance of green energy in shaping the future. “We are also expanding our services in the renewable energy sector, where there is significant enthusiasm and momentum. We are currently building the concrete foundations for two wind farms in northern Chile, one of which is the largest in Latin America. In this way, we are contributing to Chile’s green future with a solid base, while at the same time providing clean energy to the mining industry, in line with both our sustainability goals and market demand”.

With a clear vision and an unwavering commitment to innovation STRABAG and ZÜBLIN Chile is determined to be a key player in paving the way for a carbon-neutral world.

Rethinking construction.

STRABAG is the strongest motor for building a better future. The STRABAG Group is the leading European-based technology group for construction services and technology, overseeing 12,000 project a year with a workforce of 79,000 employees worldwide. It operates under two brand names in South America: ZÜBLIN, a household name in mining, and STRABAG, specialized in tunnelling and infrastructure

With a 30-year history in Chile, we are positioned at the forefront of the construction and mining industries, where we combine our local experience with the know-how from Austria and Germany. We are committed to working daily with our partners to ensure we deliver excellent service values such as fellowship, sustainability and the innovative spirit that characterizes our work.

www.strabag.cl

Ed. Züblin AG, STRABAG AG Alonso de Córdova 4355 oficina 1001 Vitacura, Santiago

represents 45% of the total investment for the year, in the execution of the structural projects Chuquicamata Subterránea, Teniente Project Portfolio, Andina Transfer and Rajo Inca.

Among the developmental achievements, the advance investments of the Chuquicamata Underground mine stand out, including the "Level 1 continuity infrastructure" and the "Development of mining works".

This structural project at Chuquicamata is transforming the century-old, largest open pit mine, the largest in the world, into a large-scale modern underground operation.

By implementing a block caving method, Codelco is extending the life of the project by at least 40 years.

The project at Chuquicamata began its operation in 2019 and in 2021 more than eight million tons of ore were extracted from the underground mine during its ramp up.

Meanwhile, at El Teniente, which is the largest underground copper deposit on the planet, the business is implementing its recovery plan, which has allowed a sustained increase in the development of Andes Norte, Diamante and Andesita.

Implementing Innovations

Highlighted in its vision, sustainability is high on the agenda for Codelco, and is considered by the business to be fundamental in ensuring it remains viable in the long term.

Codelco has announced its six key initiatives to advance its 2030 sustainable development commitments.

Firstly, it aims to lower its carbon footprint by reducing greenhouse gas emissions by 70%. By innovating, the mining operation aims to replace all production and logistic equipment in underground mines with electrical equipment. It will also actively participate in the search for new clean energy sources such as green hydrogen.

In April 2023, Codelco announced the renewal of its clean energy contract with the Pampa Elvira solar thermal plant.

Currently, the clean energy project with Pampa Elvira enables Codelco to reduce emissions of 15,000 tons of carbon dioxide per year, and save the business more than $2 million dollars a year.

Additionally, it will reduce its water footprint by 60% and its PM10 emissions by 25%. As part of this initiative Codelco will incorporate a desalination plant and plans to reuse water from its reservoirs. The business also plans to implement new technologies in dust suppression and a detection system for adverse weather conditions to control and reduce particulate matter.

Ensuring its role within the circular economy, Codelco intends to recycle 65% of its industrial waste, including 100% of mining tires. Within this initiative it aims to increase the recycling of the main nonhazardous solid industrial waste from its operations and projects.

As part of its sustainability plans, Codelco aims to set a standard in tailings deposits, with world-class sustainability and safety measures. Using innovative systems the business will monitor the physical and chemical stability of the tailings deposits, enabling it to apply infiltration control systems.

Finally, and crucially for a business which is state-owned, Codelco plans to uplift its social value, by increasing its local supply chain by 60%, as well as increasing its local workforce.

“At Codelco we are not sitting idle; we have the resources and capabilities to resume the development path, despite the incidents of these years, and extend the life of our company for 40 or 50 more years. All of us who are part of this company are looking for the best formulas that allow us to ensure the contribution of resources to the country,” said André.

www.codelco.com