Rs ecometales 2014 inglés ok by LFI Agencia Digital

Sustainability Report 2014

Contents 04 Message from the Chairman of the Board 06 Message from the General Manager 08 Our company 08 Mission, vision and values 10 Organizational chart 12 Sustainability and the future of the mining industry in Chile 36 Operations 40 Projects 42 Sustainability performance 44 Economic and social aspects 52 Safety and occupational health 54 Enviroment 60 GRI index

4 . ecometales . sustainability report 2014

Message from the Chairman of the Board . José Pesce Rosenthal

In this Sustainability Report, the fourth to be published by EcoMetales, the community and other stakeholders can find information about our company’s economic, health, safety and environmental performance. In 2014, EcoMetales continued to consolidate the processes for treating flue dust and refinery effluent and abating this waste’s arsenic and antimony content, which have so far been the company’s principal activities. EcoMetales is aware that mining is a long-term business and, accordingly, continues to explore new projects to further its Mission and Vision as a company that makes the development of a sustainable mining industry viable. I would like to draw attention to one of these projects which fully reflects the social and community responsibility to which EcoMetales is committed – participating in soil remediation projects in the Antofagasta Region, a frequent aspect of mining legacy in the area. The challenges posed by soil remediation are similar to those posed by the treatment of mining waste containing undesirable substances: extracting the contaminating metals and processing them or disposing of them in an environmentally safe manner whilst, at the same time, evaluating the possibility of recovering some residual metallic value from this waste.

sustainability report 2014 . ecometales . 5

In the case of the treatment of impurities and the recovery of value from mining waste, EcoMetales is developing an important portfolio of projects. They include improvement of treatment and disposal of the arsenic waste of Codelcoâ&#x20AC;&#x2122;s El Teniente Division in the Oâ&#x20AC;&#x2122;Higgins Region, the Project for Leaching Complex Concentrates (PLCC) with a high arsenic content in preparation for the start of operation of the underground phase of Codelcoâ&#x20AC;&#x2122;s Chuquicamata Mine and a project to treat sludges and dust from the roaster at the Ministro Hales Division. In a year when prices and costs represented a complex challenge for the mining industry, the importance of technological innovation and new businesses was more than ever apparent to all companies in the sector. And Codelco is no exception. Its commitment to its owners - the Chilean people - is stronger than ever and the treatment of complex waste and the recovery of its residual value are part of that commitment, which Codelco is addressing through its subsidiary, EcoMetales.

6 . ecometales . sustainability report 2014

Message from the General Manager . Iván Valenzuela Rabí

2014 was not a good year for the Chilean mining industry. Economic, environmental and social factors, conflicts with communities, low productivity, low copper prices and the high cost of key inputs, such as energy and water, all contributed to this. It is precisely at such times when we are called on to turn our eyes to the long-term future of the mining business. Many of the factors that affect us and, to some extent, appear to be exogenous should be foreseen, mitigated or resolved. In this context, it is important to read and reflect on the report, Mining: A Platform for the Future of Chile, presented to the President of Chile at the end of 2014 by the Chilean Mining and Development Commission and the National Council for Innovation and Competitiveness. It discusses the challenges we face and the ways in which Chile can develop a virtuous, sustainable and inclusive mining industry. There is, in particular, a serious risk that, without a satisfactory and timely solution, growing conflicts between the industry and different communities could hamper the development of mining in Chile. Given the contribution that the industry makes to the country, this is a truly worrying possibility. A significant number of these conflicts have their root in communities’ fear of pollution of their surroundings by toxic elements contained in mining products and waste. Regardless of the grounds for these fears, it is clear that the recent history of many of these conflicts has not helped to generate the necessary confidence in mining’s potential benefits. In the Antofagasta Region, where the country’s largest mining companies operate, significant discontent has been voiced by the community, despite the industry’s undoubted contribution to the region. The above mentioned report addresses precisely the need for the mining industry to achieve real insertion in neighboring communities on more equitable terms. This insertion must be anchored in constant dialogue about the communities’ aspirations and seek to move away from the current mining camp model. EcoMetales has its operations in the Antofagasta Region and wants to be an integral part of it and its communities, contributing with sustainable technological solutions.

sustainability report 2014 . ecometales . 7

Since starting activities in 2007, EcoMetales has processed over 356,000 tonnes of flue dust and other hazardous solid waste and approximately 532,000 cubic meters of refinery effluent. It has, in addition, disposed of a significant part of this waste in a stable form. We know we can and must do more. Technologies to abate and stabilize metallic pollutants in mining waste such as flue dust can, with expert knowledge and creative talent, also be applied to other materials. It is not difficult to imagine the expansion of processes of this type to the remediation of, for example, contaminated soils. This is an increasingly critical issue in a region with a long history of abandoned waste. EcoMetales is actively exploring projects along these lines. In the case of the more specific milestones of EcoMetales in 2014, I would like to highlight the successful completion of its collective bargaining process and the signing of a new contract with the companyâ&#x20AC;&#x2122;s unions which will remain in force until 2018. The outcome was satisfactory for all the parties. Our employees maintained their benefits, with improvements in some specific areas, and the company obtained the guarantee of a horizon that will allow it to focus on the important challenges it will face in the coming years. I would like to conclude by drawing attention to the two technological patents the company obtained in 2014, allowing it to optimize its processes. In this way, EcoMetales is putting into practice its hallmark innovation, an essential part of its contribution to a more sustainable mining industry.

8 . ecometales . sustainability report 2014

Our company Founded in 2007, EcoMetales (ECL) is a subsidiary of

members appointed by Codelco, who do not receive

Codelco Technologies Ltd. Its predecessor, Alliance

remuneration on this account. No transactions take

Copper, founded in 2000, was a joint venture be-

place between EcoMetales and its directors. The

tween Codelco and BHP Billiton.

Board receives support from a Management Committee and a Technical Committee whose members, sim-

The purpose of EcoMetales is to develop environ-

ilarly, do not receive remuneration on this account.

mentally sustainable solutions for the treatment of

These Committees are chaired by a company director

the different types of waste generated by the mining

and comprise one or more directors or the persons

industry, seeking to recover metals in order to en-

they deem appropriate.

hance the activityâ&#x20AC;&#x2122;s economic viability. To this end, the company focuses on:

The Committees are instructed by the Board of Directors to provide the General Manager with advice and

1) Services for mining projects. 2 Plant operation. 3) Marketing of products produced by the plants it

support on the matters for which they were established. The General Manager is, in turn, charged with administering and representing the company in all types of business and acts.

operates. The General Manager and EcoMetalesâ&#x20AC;&#x2122;s other execuAs established in its by-laws, EcoMetales Ltd. is ad-

tives receive an annual bonus based on compliance

ministered by a Board of Directors, comprising six

with targets and objectives agreed with the companyâ&#x20AC;&#x2122;s administration.

Mission

Vision

To be a leader in environmental solutions for mining waste, making its treatment economically viable through the recovery of metals.

To become one of the five leading companies in the world in environmental solutions within the next five years.

sustainability report 2014 . ecometales . 9

EcoMetales and technological innovation In 2014, EcoMetales processed copper flue dust and

A key part of EcoMetales’ activities is the devel-

other waste from Codelco’s Chuquicamata, Potrerillos

opment of technological innovations that allow

and Ventanas smelters. The copper recovered from

it to both optimize its processes and explore

these materials was piped as a solution (PLS) to the

new treatments through which to expand its

Chuquicamata Division.

portfolio of projects. The company has already obtained two patents

In 2014, EcoMetales patented two industrial process-

and is applying for a third from Chile’s National

es, developed through applied research, while a third

Intellectual Property Institute, which reports to

process is in the process of obtaining its patent in

the Ministry of Economy, Economic Develop-

Chile.

ment and Tourism.

Since 2013, EcoMetales has had in place a Code of

Patent 50505

Conduct and a certified Crime Prevention Model in compliance with Chilean Law Nº 20.393.

“Process for leaching flue dust in order to recover copper and other metals, comprising primary

EcoMetales’s center of operations and plants are in

leaching with recycled, treated and filtered sulfu-

the city of Calama in the Antofagasta Region while its

ric acid and secondary leaching with concentrat-

administration and engineering team are located in

ed treated sulfuric acid, filtering in two sequential

the city of Santiago in the Metropolitan Region.

decanters and recycling of the acid.”

Patent 50423 “Procedure for stabilizing liquids and solid waste with high As and Sb content, comprising leaching of flue dust to obtain a current enriched in copper and As, Sb, Bi and Cd impurities, oxidizing As (III) to form As (V), adjusting the Fe (III) /As (V) ratio to between 1 and 2 and precipitating the enriched current and treated solution.”

Patent application

Values

Process for recovering technical-grade molyb-

EcoMetales aims to develop a corporate culture characterized by:

contain arsenic, comprising putting the solution

· Respect for life and people · Excellency in work · Innovation · Team work · Sustainability development

denum from diluted leaching solutions that in contact with an anionic resin, extracting the molybdenum with a regenerating alkaline ammonia solution, adding magnesium salts and/or sulfuric acid and separating, burning and recovering the ammonia.

10 . ecometales . sustainability report 2014

Organizational 2014 chart

MANAGEMENT COMMITTEE

GENERAL MANAGER

BOARD OF DIRECTORS

IVÁN VALENZUELA

TECHNICAL COMMITTEE

sustainability report 2014 . ecometales . 11

About this report Since 2011, EcoMetales has published an annual Sustainability Report in order to provide information about its environmental, economic and social performance between January 1 and December 31 of the corresponding year. It was prepared in accordance with the protocols of the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI) and the Mining and Metals Sector Supplement (2010). This report includes information about the operations managed directly by EcoMetales. Under the GRI G3.1 protocols, this report complies with Application Level B without extern verification.

PLANT MANAGER GERMÁN PÉREZ COMMUNICATIONS MARÍA JOSÉ LUQUE

TECHNOLOGY MANAGER JAN SMIT PROJECTS MANAGER ORLANDO FUENTES DEVELOPMENT MANAGER CARLOS REBOLLEDO ADMINISTRATION AND FINANCE FERNANDO NAVAS SUSTAINABILITY MANAGER PABLO MEDINA

LEGAL ADVISOR MARCELO OLIVARES

ASSISTANT FINANCE MANAGER HÉCTOR VERA ASSISTANT HUMAN RESOURCES MANAGER ISABEL VALLEJOS

12 . ecometales . sustainability report 2014

Sustainability and the future of the mining industry in Chile In December 2014, the Chilean Mining and Develop-

The next step in this joint initiative will be to appoint

ment Commission and the National Council for Inno-

a public-private committee to study and implement

vation and Competitiveness presented the President of

measures that allow the country to reach an annual

Chile with a report entitled Mining: A Platform for the

copper output of 8.5 million tonnes by 2035, generate

Future of Chile. The purpose of this exercise, carried out

US$10,000 million in exports of mining-related goods

with the participation of key figures related to the min-

and services and develop at least 250 world-class min-

ing industry from both the public and private sectors,

ing suppliers. The goal is, moreover, to achieve this in a

was to map a road for transforming mining into a vir-

context of sustainability in which the industryâ&#x20AC;&#x2122;s relations

tuous, sustainable and inclusive industry over the next

with communities potentially affected by its activities

20 years.

improve significantly.

sustainability report 2014 . ecometales . 13

Inclusive and virtuous mining The proposals put forward by the working At the Chilean Mining Council’s latest annual dinner, President Michelle Bachelet referred explicitly to the spirit of this project. “Developing the mining industry we want for Chile calls for a sense of urgency but also that we work responsibly and thinking about the long

group on inclusive and virtuous mining are organized around three pillars:

Local retribution by the mining industry

term; it is a sustained and transversal effort, without po-

It is widely recognized that, in many cases, lo-

litical color, that we must start on as soon as possible

cal communities do not benefit from the min-

and in which we must all learn lessons,” she said. “The

ing activity that takes place in their area and

contribution that large mining companies can make is

that social investment by mining companies

to commit to new investments, innovation and sustain-

can, in fact, have negative effects by creating

ability and improved ties with communities,” she added.

divisions and inequities within communities. The working group proposed that efforts in this field focus on two strategic areas: · Companies’ social investment in the development of neighboring communities. The document contains a list of standards that should govern this investment including, for example, representativity, transparency and inclusion. · Quality and availability of information about fiscal income from mining and public spending. This seeks to address the lack of confidence of communities and citizens in general in the focus and efficiency of this spending. In this context, the working group proposed specifically that the state generate mechanisms which facilitate the contribution of fiscal income from mining to the creation of regional public goods that build future competitive advantages beyond the exploitation of non-renewable resources.

14 . ecometales . sustainability report 2014

The concept of sustainability is defined in the report. “Sustainable mining is that which incorporates into the design of its operations all the critical variables that affect the socio-environmental system in which they are carried out. In this way, it prevents, avoids, minimizes, mitigates and compensates for its environmental impacts - including ecology, biodiversity and the quality of water and the land - as well as social and cultural impacts over all its life cycle through to the closure and abandonment of projects. The industry operates with verifiable world-class practices, technologies and environmental standards. In this way, it gives priority to the interests and rights of present and future generations. In this context, the state plays a more effective role in the proper protection of the environment through means such as land zoning and the regulation and inspection of the industry’s externalities,” states the report.

ONE OF THE MINING INDUSTRY’S KEY SUSTAINABILITY CHALLENGES, WITH A DIRECT IMPACT ON COMMUNITIES, IS WASTE - HOW AND IN WHAT QUANTITIES IT IS GENERATED, WHAT IT CONTAINS, HOW IT IS DISPOSED OF (...)

sustainability report 2014 . ecometales . 15

It is clear that all the players, both private and public, understand that today’s new times call for companies to act in a new way, particularly as regards their stakeholders in communities or, in other words, as an inclu-

Environment

sive mining industry.

The challenge in this case is how companies

One of the mining industry’s key sustainability challeng-

ability of the areas in which they operate and

es, with a direct impact on communities, is waste - how and in what quantities it is generated, what it contains, how it is disposed of and, critically, what measures are taken to control the risks of a disposal site once it ceases to operate, a matter regulated by Chilean Law N°20.551

can contribute to the environmental sustainthree strategic areas were identified: · Strengthening of the public institutional framework for protection of the environment, including aspects such as the improve-

on mine closure.

ment of regulation and industry practices,

The Vision of EcoMetales points precisely towards re-

independent auditing and land zoning.

solving this challenge by giving waste new value as a resource and seeking technologies that permit its safe disposal. In this way, we hope to contribute to overcoming the enormous challenge that the industry and the government have defined for Chile as a mining country.

increased enforcement and the promotion of

· Implementation and strengthening of environmental management systems in accordance with international standards. One line of action identified is the remediation of environmental liabilities, with the development of a regulatory framework for this remediation that includes quantification of the costs of the environmental liabilities and design of mechanisms to finance their remediation. · Increase in the specific contribution of the mining industry to protection of biodiversity.

Consultation and participation There is increasing demand on the part of both indigenous and non-indigenous communities for participation in decisions that affect their lives. Existing consultation and participation processes are identified as being insufficiently effective, giving rise to uncertainty and dissatisfaction. Two strategic areas were proposed: · Improvement of the quality of participation and consultation processes in a bid to reduce asymmetries in information and capital and

16 . ecometales . sustainability report 2014

1. The challenges of the mining industry in the Antofagasta Region Because of its economy, history and culture, Antofa-

The Tropic of Capricorn crosses the region a few ki-

gasta is essentially a mining region. As a result, the

lometers north of the city of Antofagasta. The region

problems, benefits and uncertainties identified in the

has a predominantly extreme desert climate and

report, Mining: A Platform for the Future of Chile, are

is one of the areas with lowest rainfall in the world.

particularly apparent in this Region, which is where

Paradoxically, however, its river Loa is the longest in

Chileâ&#x20AC;&#x2122;s largest copper and other mines are located.

Chile.

The Antofagasta Region is Chileâ&#x20AC;&#x2122;s third northernmost

The main urban areas are the cities of Antofagasta

region. It has an area of 126,049.1 kmÂ˛ and 613,328 in-

(285,000 inhabitants), Calama (126,000) and Tocopil-

habitants. It comprises the Provinces of Antofagasta,

la (23,000) whose economies rely critically on min-

El Loa and Tocopilla and its capital is Antofagasta.

ing (which accounts for up to 65% of GDP). Fishing

sustainability report 2014 . ecometales . 17

and tourism are the region’s only other significant

those of a cultural nature. Proposals include

economic activities and, in general, all industrial de-

the institutionalization of dialogue in order

velopment is related directly or indirectly to mining.

to ensure participation on equal conditions.

Internationally, the region also stands out for the optimum conditions it offers from astronomy and it is

· Guarantee of full respect for the rights of

home to some of the world’s most important obser-

indigenous peoples where two key problems

vatories.

were identified:

The country’s most important mines, including Es-

- The consultation system’s regulatory frame-

condida, Chuquicamata, Radomiro Tomic, Zaldívar, El

work contains aspects not validated by the

Tesoro and Sierra Gorda, are in the Antofagasta Re-

indigenous peoples.

gion which accounts for an estimated 47% of Chile’s copper reserves1. Given that Chile, in turn, accounts

- The institutional framework for the consul-

for around 27% of the world’s copper reserves (fol-

tation mechanism is inorganic, inefficient

lowed by Australia with just 12.6%), the Antofagasta

and lacks effectiveness.

Region is, in other words, the most important copper region in the world’s most important copper country.

The report concludes by proposing an immediate agenda comprising eleven undertakings beginning in 2015 and five strategic priorities.

Eleven undertakings 1. Complete institutional dialogue. 2. Promote dialogue for a shared vision of the mining industry of the future. 3. Promote research and development initiatives. 4. Promote the development of world-class mining suppliers. 5. Strengthen productivity. 6. Improve the regulatory framework for consultation of indigenous peoples. 7. Foster the availability of geological information and improve access to the mining property. 8. Strengthen environmental institutions. 9. Develop standards of conduct for industry players. 10. Strengthen the capacity for scientific and

technological research in the area.

11. Promote studies of the mining industry’s 1

2013 Sernageomin Annual Report.

energy requirements.

18 . ecometales . sustainability report 2014

The Antofagasta Region has played a key role in the history of copper mining in Chile and continued to do so throughout the twentieth century. Since its development in 1915, Chuquicamata has been one of the worldâ&#x20AC;&#x2122;s largest open-pit mines. The regionâ&#x20AC;&#x2122;s importance is reflected in the figures. It accounts for over

sustainability report 2014 . ecometales . 19

50% of Chile’s copper output and over 15% of world output. It is, in addition, a significant producer of molybdenum, a by-product of copper mining. It is, how-

Five strategic priorities

ever, not only copper mining that characterizes the region; it also produces 100% of Chile’s lithium com-

1. Strengthen productivity and innovation

pounds as well as an important part of its silver, gold,

in the mining industry.

iron and iodine.

2. Create a fund for promotion of citizen participation.

The region’s main mines can be seen in the map below.

3. Strengthen intercultural dialogue. 4. Strengthen the capacity and legitimacy of the environmental institutional framework for the mining industry. 5. Strengthen social inclusion in the public and private use of income from mining.

Antofagasta Region

The report proposes a complex and challenging agenda which, if not addressed successfully, poses a threat to the future of mining in Chile. It is important to understand this challenge in the light of the role that mining plays in the country’s development. It accounts for an estimated 15% of fiscal revenues and over 60% of the country’s exports. Moreover, although mining provides a mere 3% of direct jobs, it is estimated that each direct job in mining creates another three jobs indirectly in other sectors. Similarly, for each dollar invested in mining, a further dollar is invested in another economic sector. In other words, Chile’s longterm development depends on its mining industry being sustainable. As the report correctly concludes, one of the most critical issues we face is how to ensure that the regions where mining takes place receive fair retribution for its negative externalities. In this context, the Antofagasta Region can be considered a representative case for appraising the conflicts and recommendations discussed in the report. The region has, indeed, seen many demonstrations in demand for an increase in the mining industry’s contribution to its economic and social development as well as the mitigation of negative impacts. Similarly, there is demand for the community to be given a greater say in decisions that affect the mining industry and the region.

20 . ecometales . sustainability report 2014

In economic terms, the official figures show that, in re-

considered that the region represents only around 3% of

cent years, mining has accounted for between 60% and

the country’s population.

70% of the Antofagasta Region’s GDP. Similarly, a study by the Chilean Copper Commission (COCHILCO) on

This economic situation is also reflected in the region’s

planned copper mining investment in Chile in 2014-2023

labor market. Almost half of the people working in min-

found that, out of a total of 34 projects representing an

ing in Chile do so in the Antofagasta Region which is, in

investment of over US$80,000 million, 15 were in the An-

other words, an eminently mining region in an eminent-

tofagasta Region and accounted for 30% of the planned

ly mining country.

outlay. These figures are particularly striking when it is

Share of mining in regional employment (%) Region

2010 2011 2012 2013 Average

Arica y Parinacota

5,3 7,0 8,9 8,8 7,5

Tarapacá

6,9 9,2 10,2 8,9 8,8

Antofagasta

22,2 22,7 24,2 21,1 22,5

Atacama

23,2 22,1 19,6 17,7 20,7

Coquimbo

10,2 11,1 12,8 13,3 11,8

Valparaíso

3,4 3,4 3,7 4,3 3,7

Libertador General Bernardo O’Higgins

4,6

Maule

0,5 0,6 1,0 1,2 0,8

Biobío

1,1 1,0 1,5 2,1 1,4

La Araucanía

0,7 0,5 0,5 0,3 0,5

Los Lagos

0,2 0,0 0,1 0,1 0,1

Aysén

2,2 2,1 2,7 3,1 2,5

Magallanes y de la Antártica Chilena

2,5

Metropolitana

0,6 0,7 0,9 0,9 0,8

Los Ríos

0,2 0,3 0,3 0,3 0,3

Total Country

2,8 2,9 3,3 3,2 3,1

4,5

3,5

4,9

4,7

3,9

Taken from Minería en Chile Impacto en Regiones y Desafíos para su Desarrollo, COCHILCO, 2013.

However, the mining industry’s positive economic impact does not have its counterpart in quality of life in the region. An important part of the workforce attracted by the industry is of a temporary nature and many of its employees, particularly professionals and executives, live in other regions that offer better opportunities. As a result, a significant part of the income generated by copper does not remain in the region, creating a vicious circle of a poorer offer of services, a lack of urban planning and low quality of life. In this sense, the historical legacy of being mining region has perpetuated the culture of a camp, a place where people do not stay long and which does not invite them to lay down roots.

sustainability report 2014 . ecometales . 21

The regionâ&#x20AC;&#x2122;s mining history is also reflected in numerous cultural and tourist attractions such as the ruins of the old nitrates towns. Recently, the former Chuquicamata camp was declared a Typical Area and Historical Monument by the Council for National Monuments, a milestone for the citizen groups which had long sought its protection that illustrates how entwined the lives of many people in the region are with the mining industry.

22 . ecometales . sustainability report 2014

2. The mining industry and waste Although economic figures show clearly the importance of the mining industry in the development of the Antofagasta rand of Chile, they say nothing about an environmental legacy that has to do principally with waste. For decades, this was virtually ignored by the authorities and communities which accepted it as a natural and inevitable consequence of the activity. However, in the 1990s, this began to change. In 1994, Chileâ&#x20AC;&#x2122;s Framework Environmental Law came into force and this was followed by a dynamic process of introduction of regulation that sought to protect both the environment and people from contamination and toxic substances, principally those generated by economic activities. Of particular importance for the mining industry was the introduction in 2003 of the Regulation for the Management of Hazardous Waste. Although this regulation makes a special exemption in the case of so-called massive mining waste, this applies only to the extent that the waste does not have hazardous characteristics and, particularly, the so-called extrinsic toxicity or, in other words, the potential to contaminate water bodies near the place where it is deposited.

sustainability report 2014 . ecometales . 23

Simultaneously with this regulatory activity, different

the most controversial from the point of view of com-

steps were taken to survey and quantify the situations

munity relations as highlighted in recent years by differ-

that could pose an environmental risk and, in particu-

ent press and television reports.

lar, those related to past economic activities such as the level of pollution of lakes, rivers and coastal waters, the

In its report on the State of the Environment (2012), the

levels of pollutants in the soil and the location and state

Environment Ministry revealed that the Antofagasta

of mining tailings dams no longer in use.

Region is the destination of over 30% of the countryâ&#x20AC;&#x2122;s hazardous waste, equivalent to some 130,000 tonnes

This environmental x-ray revealed some interesting and

per year. It is also true, however, that most of this waste,

complex issues for the Antofagasta Region. Although

some 115,000 tonnes per year (2011), are generated in

not the only problem, the case of deposits of hazardous

the region itself.

waste is perhaps the most striking and certainly one of

3. Tailings Most of the active, inactive or abandoned tailings dams in Chile correspond to flotation tailings generated by the copper mining industry. These are produced by concentrator plants where flotation is used to treat the finely milled ore rock and obtain copper concentrate (with grades of around 30%) while the remainder of the material is eliminated as a paste of milled mineral and water which is disposed of in tailings dams. Quantitatively, it is easy to see why tailings have such a large impact environmentally. If a copper mine has an ore grade of approximately 1%, over 90 tonnes of tailings are produced in order to obtain one tonne of fine copper in the form of concentrate (and that is without considering the water contained in the tailings). Each year, Chile produces around 6 million tonnes of fine copper2. Although not all this copper is produced using flotation of concentrates, it still implies that hundreds of millions of tonnes of tailings are generated annually and, based on their average density, each 10 million tonnes would occupy a space equivalent to 2,000 Olympic swimming pools. Moreover, in addition to requiring a large amount of space for their disposal and having a visual impact on the landscape, tailings have other environmental disadvantages.

Chilean Copper Commission (COCHILCO).

24 . ecometales . sustainability report 2014

Firstly, tailings dams (the name used to refer to the structure that contains solid material mixed with water) and dry tailings deposits (no longer in use) can pose a significant risk of collapse particularly, but not only, in areas with a high level of seismic activity. In one such event that occurred in the town of El Cobre in the ValparaĂso Region in 1965, over 200 people died, although this was perhaps an extreme event triggered by a combination of an strong earthquake and an inadequate evaluation of the underlying risk of the location of a human settlement in relation to a tailings dam. In addition to the seismic risk, tailings dams are exposed to the risk of landslides caused by anomalous events of high rainfall in areas with little vegetation cover. In these cases, the tailings can be carried over into surrounding areas, leading to soil polution. In Chile, the National Geology and Mining Service (Sernageomin) now applies strict safety requirements for the construction of tailings dams but this was not the case during most of the countryâ&#x20AC;&#x2122;s mining history. A second environmental impact of tailings has to do with the possibility that, through percolation or run-off, they may contaminate underground or surface water with substances that are harmful to humans or the environment. This can be a problem in any waste dump but the risk is particularly acute in the case of tailings dams due to the phenomenon known as acid drainage in which acid waters produced by the action of bacteria on sulfide minerals, particularly pyrite, dissolve metal in the mineral rock and can reach nearby natural water bodies or filter down into groundwater. In the case of other types of mining, such as gold, there can also be a risk of contamination with mercury, cyanide or other reagents used to extract the metal, particularly in the case of waste generated by technologies which are no longer used, precisely because of the risk they represented. Finally, once a tailings dam has dried out, it becomes a potential source of contamination of the surrounding area with wind-borne fine particulate matter, which can affect both the habitat of natural species and nearby human settlements.

sustainability report 2014 . ecometales . 25

In a survey in 2010, Sernageomin identified a total of 449 tailings dams in Chile of which only 125 were active. The largest number corresponded to the Coquimbo Region (205) while, in the Antofagasta Region, there were 21 (13 active and eight inactive). Unfortunately, however, the survey did not include information about the damsâ&#x20AC;&#x2122; size or the area impacted. This is important because a damâ&#x20AC;&#x2122;s dimensions can vary enormously, depending on whether it corresponds to an artisan or largescale mining operation.

26 . ecometales . sustainability report 2014

4. Risks and conflicts In the case of the risks represented by mining oper-

a very preliminary approach whose objective was to

ations, only a partial study exists. Carried out by the

identify priorities for decision- making. At this level of

National Geology and Mining Service (Sernageomin)

analysis, it is not possible to identify the environmental

in 2007, it refers to 213 abandoned mining operations.

risks effectively posed by each of these 213 abandoned

From the point of view of human health, the main risk

operations, with their diversity in terms of, for example,

it identified is that of contamination with particulate

the type of waste dump, the components of the waste

matter.

and its distance from water bodies and human settlements. However, the study represents a valuable first

However, it is important to note that the methodolo-

contribution to Chileâ&#x20AC;&#x2122;s pending task vis-Ă -vis its environ-

gy used by Sernageomin in this study corresponds to

ment and inhabitants.

sustainability report 2014 . ecometales . 27

Regional empowerment: The coexistence of human settlements and mining operations is not easy. The latterâ&#x20AC;&#x2122;s size in terms of their installations, the amount of material handled, the emissions and waste generated and other related impacts tends to impact their neighborsâ&#x20AC;&#x2122; quality of life. In recent decades, communities have become significantly more empowered in demanding a share of the fruits of the investment.

Conflicts and initiatives Calama Plus This public-private consortium is seeking ways to foster sustainable urban development in Calama, drawing on the contribution of all sectors and with a marked emphasis on citizen participation. It is formed by Calamaâ&#x20AC;&#x2122;s Municipal Government, the Antofagasta Regional Government, the El Loa Business Association and the Chilean Chamber of Construction and, as companies, Aramak, Aguas Antofagasta, Enaex and Mall Plaza Calama and the El Abra, Lomas Bayas and Codelco mining companies. The project is open to all those local social organizations interested in participating in this long-term effort. Calama Plus has presented to the community 26 initiatives designed with the participation of organized residents who took part in 28 conferences on different issues and three open public meetings and which are also the result of 120 meetings with functional and territorial organizations, more than 6,000 visits to the Open House installed in the Plaza 23 de Marzo and some 1,500 ideas put forward through social networks.

World-class suppliers This initiative fosters initiatives that favor the development of local capabilities to provide services for the mining industry. It has its origin in a recognition that, despite its history and international leadership as a copper producer, Chile has not developed technologies or innovative solutions that add value to the mining industry.

28 . ecometales . sustainability report 2014

In this, the Antofagasta Region has been no exception. In 2014, it experienced a range of environmental conflicts, characterized by communities’ complaints about the impact of industrial activity on their quality of life. Given the area’s naturally adverse environmental conditions (for example, the high levels of wind-borne particulate matter and high basal levels of arsenic and heavy metals in the soil and water), these conflicts are a very pressing issue. In general, conflicts between the community and industry focus on the population’s exposure to elements, particularly arsenic and lead, that could pose a risk to human health. In certain conditions, mineral concentrates contain traces of an important number of elements, including those which cause most public alarm such as arsenic, lead, mercury and cadmium. In other words, both the mining industry’s products and waste face increasingly complex situations as regards regulation and community relations and there is a clear trend towards the elimination or significant reduction of these elements in the material transported on public roads and waste disposed of in the open air.

sustainability report 2014 . ecometales . 29

Difficulties in relations between the mining industry

The program has identified seven areas of

and communities and the latter’s increasing empow-

challenges - operational efficiency, energy,

erment have been an important driver of the quest

water, suppliers and inputs, innovation, hu-

for solutions to the problems raised as, for example,

man resources and sustainability, and the

in the promotion of initiatives to allow regions and

environment and community relations. Ex-

communities a greater say in the design of policies

amples of the initiatives implemented under

that are conducive to mutual benefit. The issue has,

this program include:

as a result, gained importance in the public agenda with the participation of all the interested parties.

· The Centinela and Escondida mining companies are inviting companies and research centers to present technological solutions to the challenges identified in the fields of operational efficiency and energy. · Codelco is seeking innovative technological companies that can resolve challenging problems through the implementation of a Cluster Project.

The Antofagasta Industrialists’ Association in the national mining program “Mining, a lever for Chile’s Devevelopment”, an initiative led by the government’s Economic Development Agency (CORFO) and the Fundación Chile technology institute, seeks to position Chile as a world leader in mining and technological services for the mining industry. The Antofagasta Industrialists’ Association (AIA) has undertaken to play an active leading role in the program so as to contribute the views of the regions and, particularly, the small and mid-sized suppliers who make up over 80% of its membership.

30 . ecometales . sustainability report 2014

5. The value of waste Chilean regulation defines waste as a “substance, element or object that the party generating it eliminates, plans to eliminate or is obliged to eliminate”. In the productive sector, the decision to eliminate material depends, of course, on its commercial value. In the case of mineral raw materials, the value of a material that contains interesting metals will depend on the cost of obtaining them through some level of refining versus their market price. Both variables have changed significantly over the past hundred years due to factors such as: · The development of more efficient technologies for refining the material and obtaining the metals it contains; · Changes in the availability and cost of energy and other inputs; · Advances in materials science (new materials for equipment and reactors); · Metals which did not have important uses a hundred years ago but have since become very valuable or vice versa. All these changes imply that what was once waste may no longer be so because it has acquired commercial value for the company that generates it or for other companies. Copper is a clear example of this. A hundred years ago, a copper mine with a 2% ore grade was considered relative-

sustainability report 2014 . ecometales . 31

700 people protest against pollution ly poor (for example, the Butte mine in Montana started life in 1899 as a deposit with a 30% copper grade!). To-

For the third consecutive weekend, the in-

day, on the other hand, the industry is working deposits

habitants of Antofagasta have been demand-

with grades as low as 0.5%. In other words, what was

ing solutions to the pollution that affects dif-

waste a century ago may now well be a resource.

ferent parts of the city such as the coastline, where high levels of heavy metals have been

However, the extraction of wasteâ&#x20AC;&#x2122;s metallic value nor-

detected, and the areas around the La Chim-

mally calls for technological developments to make

ba landfill where waste is illegally burned.

exploitation of this resource economically viable. With the increase in norms for protection of the environ-

Although the protest was against pollution

ment and pressure on the management of waste, the

in general, the principal complaint was once

urgency of the need for technology of this type and its

again the presence of heavy metals in urban

economic viability has heightened significantly in re-

areas, a problem related to the transport of

cent decades. This is the road on which EcoMetales has

mining products to the port.

embarked - innovation and the transfer of technology for the safe disposal of waste and, at the same time, the

El Mercurio de Antofagasta, november 17, 2014.

extraction of the residual metallic value of this waste, now transformed into a resource. This two-fold strategy is crucial in order to reconcile environmental sustainability and the mining industryâ&#x20AC;&#x2122;s business of the future. Not to achieve this would be inconceivable in a mining country like Chile or, in other words, to allow mining to lose viability in the face of restrictions on its activities. From this standpoint, the work of EcoMetales in the Antofagasta Region seeks to contribute to the future of the mining industry in a part of the country that not only generates important quantities of waste (potential resources) but is also particularly vulnerable to conflicts between the community and the industry due to the way the latter manages its impacts on the former.

32 . ecometales . sustainability report 2014

6. EcoMetales in the Antofagasta Region EcoMetales is taking its first steps towards a sustainable

challenges, alliances and technological developments

commercial solution to the problem of mining waste.

through which to put its Mission into practice.

Our business has until now focused on processing flue dust and abating its arsenic and antimony content in

Among these challenges, EcoMetales is evaluating with

order to produce cleaner copper and, at the same time,

great interest the possibility of participating in enter-

stable waste for safe disposal. Flue dust is a hazardous

prises that, along with waste processing, contribute to

waste (based on the criterion of extrinsic toxicity) but

the remediation of contaminated sites. Contamination

also contains significant amounts of copper and other

of the soil with metals is one of the most prevalent en-

commercially interesting elements. For EcoMetales, this

vironmental legacies of past mining and it is reasonable

is merely the beginning. The quantity and diversity of

to think that some technologies used to treat mining

mining and industrial waste generated in the region

waste can also be applied to contaminated ground for

represents an extremely rich source of opportunities

both its remediation and the possible recovery of its

for a company that uses this as its raw material. In this

metallic value.

context, EcoMetales continues to actively explore new

sustainability report 2014 . ecometales . 33

At present, EcoMetales is participating in a project, led

mining tailings, effluent from refineries and dust from

by the Regional Government and also including the An-

roasters and electrostatic precipitators as well as con-

tofagasta-based Center for Scientific and Technological

taminated soils.

Research (CICITEM), for the remediation of contaminated soils in the area of Taltal. The project will assess differ-

In this context, EcoMetales is seeking to position itself as

ent alternatives for the remediation of sites declared a

a company which develops sustainable value-creating

priority risk by the Environment Ministry.

solutions for the problem of management of mining waste in the Antofagasta Region and, eventually, all of

The companyâ&#x20AC;&#x2122;s range of options is, however, very broad and, just to name a few, it includes copper and gold

Chile. But we are starting with our region.

34 . ecometales . sustainability report 2014

Main products and process waste from copper production Sulfides - Pyrometallurgical process

Mine Waste rock

Ore

Concentrator Tailings Effluents

Concentrate

Acid plant

Smelter Sulfide gases

Slag

Acid sulfuric

Copper flue dust Anodes

Refinery Arsenic waste to deposit

Effluents

Electrorefined cathodes

Products

Waste

Copper-rich solution (PLS)

sustainability report 2014 . ecometales . 35

Oxides - Hydrometallurgical process

Mine Waste rock

Ore

Leaching Leaching waste rock

Solvent extraction Copper-rich solution (PLS)

Slag

Electrowinninig Copper-rich solution (PLS)

Effluents

Electrowinning-obtained cathodes

Products

Waste

36 . ecometales . sustainability report 2014

Operations 1. Copper Flue Dust Treatment Plant (PTPA) The key business of EcoMetales has until now been the treatment of flue dust in order to recover the copper it contains. This dust comes from the cleaning of the gases emitted during the smelting process and can have up to 30% of copper, although it also contains varying quantities of other elements such as arsenic, bismuth and antimony. Between 2007 and 2014, this plant processed over 356,000 tonnes of flue dust and other hazardous solid waste as well as approximately 532,000 cubic meters of refinery effluent. From all this waste, some 67,000 tonnes of copper were recovered, with an average efficiency of 91.7 in 2014.

OUTPUT IN 2014, ECOMETALESâ&#x20AC;&#x2122; PLANT PROCESSED 26,476 TONNES OF FLUE DUST AND SOME 242,000 CUBIC METERS OF REFINERY EFFLUENT, RECOVERING 7,271 TONNES OF FINE COPPER.

sustainability report 2014 . ecometales . 37

Since the start of operations of the Arsenic and Antimony Abatement Process (PAAA) in 2012, the plant is also able to reduce the levels of these impurities in the recovered copper, stabilize them and dispose of them in an environmentally safe way. The PTPA process can be summarized as follows: 路 The dust is leached with sulfuric acid to produce a solution rich in copper, As and Sb. This solution, known as PLS, is then sent to the PAAA. 路 In the PAAA, the PLS is treated with hydrogen peroxide in order to oxidize the As (III) it contains. 路 Reactors are used to precipitate the As in a stable form such as scorodite, adding ferric sulfate and limestone at atmospheric pressure and high temperature. 路 The stabilized arsenic waste is disposed of in a deposit authorized for this purpose, with a capacity for 1,320,000 tonnes of waste.

38 . ecometales . sustainability report 2014

Phases of copper flue dust treatment: leaching and abatement of arsenic and antimony Copper flue dust treatment plant diagram

Refinery effluent

Dilution water Flue dust

PLS to AAA process

Mixer

Flue dust Water Pulp Refinery effluent PLS

Leach reactor

Thickener

Water Filter press

Leach residue to smelter

sustainability report 2014 . ecometales . 39

Arsenic and antimony abatement process

Limestone Live steam Refinery effluent

Thickener

Magnetite

PLS to DCH

PLS

Storage tank

Oxidation reactor

Precipitation reactor I Precipitation reactor II

H2O2 70% PLS (Solution to treatment) Hydrogen peroxide Pulp Magnetite Limestone Live steam Refinery effluent

OXIDATION PHASE

Storage tank

Arsenic waste to deposit

Water

Filter press

PRECIPITATION PHASE

SOLID/ LIQUID SEPARATION PHASE

DISPOSAL PHASE

40 . ecometales . sustainability report 2014

Projects EcoMetales is developing an important portfolio of projects for the treatment of impurities and the recovery of value from mining waste.

1. Improvement of the generation, transport and disposal of arsenic waste, El Teniente Division This project, which represents an investment of some

waste will have a storage capacity of 530,000 cubic

US$70 million, consists in the construction of a plant

meters and will be located within the industrial area of

to treat the effluent of the Caletones smelter acid plant

the El Teniente mine, avoiding the need for the wasteâ&#x20AC;&#x2122;s

and of a deposit for the final disposal of hazardous

transport along public roads. It will have an estimated

waste.

useful life of 50 years.

With the new plant, it will be possible to reduce the

The project was submitted to the Environmental Im-

generation of solid arsenic waste to a quarter of its cur-

pact Evaluation System in December 2013. An Adden-

rent level, recycling 100% of the treated effluent back

dum NÂ° 1 was prepared in 2014 and approval is expect-

into the production processes. The deposit for arsenic

ed during 2015.

sustainability report 2014 . ecometales . 41

2. Process for Leaching Complex Concentrates (PLCC) The aim of this project is to treat copper concentrates with a high level of arsenic, referred to as complex concentrates, from deposits in Codelcoâ&#x20AC;&#x2122;s Distrito Norte. The Process for Leaching Complex Concentrates (PLCC) should become one of the pillars of Distrito Norteâ&#x20AC;&#x2122;s strategy for handling and managing impurities when the underground Chuquicamata mine starts operation. In November 2013, Codelco commissioned EcoMetales to develop the pre-feasibility engineering for this project which it completed in 2014, with the corresponding metallurgical tests. In 2015, work will take place on the feasibility engineering so as to submit the process for environmental approval.

3. Treatment of roaster sludges and dust EcoMetales invited a number of international companies to develop an economically and environmentally viable process for the recovery of metals from the leaching sludges and dust generated by the roaster at Codelcoâ&#x20AC;&#x2122;s Ministro Hales Division.

42 . ecometales . sustainability report 2014

Sustainability performance This section describes some of the most important as-

In may 2012, EcoMetales implemented Fatality Control

pects of EcoMetales’s environmental, social and econom-

Standards whose objective is to prevent or control se-

ic performance in accordance with the Global Reporting

rious and fatal accidents as a result of work in certain

Initiative (GRI) Sustainability Reporting Guidelines.

conditions.

Under its Safety, Occupational Health, Environment and

Both this Policy and these Standards are essential tools

Quality Policy, EcoMetales undertakes to seek environ-

for the company’s Integrated Management System and

mental solutions for its clients based on excellence in

allow it to conduct its activities in such a way as to pro-

management of the sustainability of its processes. No

tect the health and life of people and the environment.

production target, therefore, justifies the exposure of its personnel to non-controlled risks and all the company’s

The company’s operations have two distinctive charac-

activities take place in a framework of respect for and

teristics that are important for defining the scope of this

protection of people and the environment.

report:

sustainability report 2014 . ecometales . 43

Resolution

Activity approved

RCA Nº 149/06

Treatment of flue dust from the Chuquicamata smelter.

RES Nº 205/07

Treatment of flue dust from the Ventanas and Potrerillos smelters.

RCA Nº 086/09

Treatment of flue dust from the El Teniente, Altonorte, Chagres and Paipote smelters.

Precipitation of arsenic and antimony to obtain scorodite.

Construction and operation of waste deposit (scorodite).

RCA Nº 050/11

Treatment of copper-containing hazardous waste from smelters in Chile.

RCA Nº 074/12 *

Recovery of molybdenum from PLS produced during treatment of flue dust and hazardous

waste. RES Nº 687/12

Treatment of copper-containing hazardous waste from any mining company in Chile.

RCA Nº 113/13 *

Transport of flue dust and hazardous waste.

RCA Nº 0087/13 *

Treatment of coarse part of fresh tailings at mining waste plant.

RCA Nº 569/14

Temporary storage of hazardous waste at EcoMetales’ deposit.

* RCA not currently operative.

The company’s operations have two distinctive characteristics that are important for defining the scope of this report. The company’s installations are located far from populated areas and it does not, therefore, have operational impacts on communities or direct relations with them. And, secondly, its activities do not generate an end product but correspond to an intermediate process required for the cleaner production of refined copper. Moreover, transfer occurs directly through special pipelines and the product is not, therefore, transported by road or other means. In 2014, EcoMetales obtained an Environmental Approval Resolution (RCA) for the temporary storage of dust from the roaster at Codelco’s Ministro Hales Division. The table above shows the environmental permits obtained by EcoMetales through to 2014 for the treatment, transport and disposal of hazardous waste.

44 . ecometales . sustainability report 2014

Economic and social aspects The table shows the GRI economic and social performance indicators applicable to EcoMetales for 2013 and 2014.

Economic value (US$)* Direct Economic Value Generated (EVG)

2013

2014

32,240,699

32,960,908

2013

2014

-30,756,956

-28,809,601

-6,031,473

-5,980,316

-517,331

Payments to governments

Investment in community

-5,065,060

-1,829,009

Income Economic Value Distributed (EVD) Operating costs Wages and benefits Payments to providers of capital

Economic Value Retained (EVG less EVC) * : Exchange rate used: US$ 1 = $ 606,75 (chilean pesos).

sustainability report 2014 . ecometales . 45

1. Labor aspects EcoMetales has a general hiring procedure that is ap-

ing the company’s targets. All EcoMetales’s employees

plied uniformly across the company. However, through

earn more than the minimum legal wage in force in Chile.

incentives, it promotes the hiring of persons resident in the region where its operations take place.

In addition, the company’s workers receive quarterly and annual production-linked bonuses.

The remunerations paid by EcoMetales are competitive within the context of the region where it operates, an em-

The table below shows the company’s workforce in

inently mining area. Both remunerations and incentives

2013 and 2014, by type of contract. As of 31 December

are determined by an employee’s function and the value

2014, it had 283 workers (136 direct employees and a

contributed by his or her performance in terms of meet-

further 147 contractors’ employees).

Direct workforce

Type of contract Type of contract Temporary * Total

2013

2014

Men Women Total Men Women Total 94

110 102 25 127

7 7 2 9

100 17 117 109 27 136

* :Includes temporary contracts and those for specific projects, at December 31, every year.

46 . ecometales . sustainability report 2014

In 2014, 20 direct employees left the company, equivalent to 14,7% of its workforce. In the same period, 39 people joined the company, equivalent to 28,7% of its workforce.

Employees leaving ECL in 2014

Age group < 30

30 - 50

> 50

Total

Women 1 0 1 2 Men 6 8 4 18 Total 7 8 5 20

sustainability report 2014 . ecometales . 47

Employees joining ECL in 2014

Age group < 30

30 - 50

> 50

Total

Women 6 6 0 12 Men 13 11 3 27 Total 19 17 3 39

EcoMetales signs undertaking to promote workplace health Employees spend over a third of the day in the workplace and, given that 11 out of every 100 suffer from illnesses or health problems that are caused or aggravated by their work, this is clearly a strategic place in which to promote a healthy life style. In line with this, EcoMetales has signed an undertaking to obtain certification of its Calama Plant from the Regional Offices of the Health and Labor Ministries as a Health Promoting Workplace (LTPS). The certification process will begin with a voluntary diagnosis of its work environments and continue with improvement programs and a permanent technical advice service. EcoMetales’ Manager for Sustainability, Pablo Medina, recalled that “when they invited us, we saw that we had a basis for undertaking this work, that we can close gaps on some aspects and improve others as well as having a great team of employees and experts that will allow us to comply with this certification.” Isabel Vallejos, Assistant Manager for Human Resources, pointed out that the focus of the program will permit “the training of each one of as employees to take responsibility for our health; for EcoMetales, it is important to be able to provide our employees with these tools so they can take charge of their own health and that of their families and, in this way, we are all going to achieve this as a company but with everyone having to contribute.” The program forms part of the National Health Strategy 2010-2020, implemented by the regional inter-sector working group formed by the Regional Representatives (SEREMIs) of the Health and Labor Ministries, the government’s Directorate for Labor Affairs and the Workplace Safety and Health Insurers (Mutuales). As of the end of 2014, nine companies in the Antofagasta Region had signed this undertaking but only four had obtained certification.

48 . ecometales . sustainability report 2014

As regards employee benefits, EcoMetales complies with Chilean law and the standards prevailing in the country’s mining sector. EcoMetales fully respects its workers’ right to freedom of association and collective bargaining. Union membership at EcoMetales is shown in the table below.

Union membership 2014

Nº of unions

Nº of unionized workers

Union membership (%)

sustainability report 2014 . ecometales . 49

EcoMetales does not have activities in which the

and no incidents related to discrimination of any

right to freedom of association and collective bar-

type have been reported. Similarly, there are no gen-

gaining can be at risk. This is borne out by the fact

der-related pay differences. In 2014, one complaint

that 64 employees belong to one of the company’s

for discrimination was received. In 2013, the com-

two unions.

pany introduced a Code of Conduct and an open Reporting Line for related issues. (For further details,

Since september 2014, EcoMetales’ employees have

see page 51.)

been covered by a collective contract with validity through to 16 September 2018. Represented by their

EcoMetales does not employ minors and adheres to

two unions, the company’s employees negotiated

national and international labor regulation prohib-

collectively, reaching an agreement with the com-

iting child labor. Similarly, it does not accept forced

pany to maintain all the benefits of the previous col-

or compulsory labor which is forbidden by the legis-

lective contract, accompanied by the introduction

lation in force in Chile as well as under International

of a performance-related bonus.

Labour Organization (ILO) recommendations.

EcoMetales does not discriminate on the grounds

The tables below show the company’s workforce in

of gender, race or membership of minority groups

2014 by gender and age group.

Workforce by gender, 2014

category

employees

(US$)*

per course

Men 8 1 / 90 US$ 2,077 Women 1 -

Executives

Professionals/ technicians Operators Total

Men Women

18 / 948 US$ 32,092 23 8 / 238

Men 38 7 / 968 US$ 14,322 Women 3 -

Average hours per

136 US$ 48,491 34 / 2244

* : Exchange rate used: US$ 1 = $ 606,75 (chilean pesos).

gender (Nº hours/ category (Nº hours/ Nº workers)

2 -

11 -

- 142

Average hours

Nº workers)

10 14 24 -

52 . ecometales . sustainability report 2014

Safety and occupational health In the case of safety and occupational health, EcoMetales is guided by values that are known to all its employees. The first of these enshrines the company’s philosophy in this field: “The safety of the company’s personnel is a non-negotiable value”. These values form part of the company’s Internal Order, Hygiene and Safety Regulation, a copy of which is provided to all its workers. This Regulation also includes an Alcohol and Drugs Policy which seeks to protect the physical integrity of the worker in question and other workers as well as the company’s goods and resources by prohibiting coming to or being at work under the influence of alcohol or drugs, in order to ensure the physical integrity of the worker and his or her colleagues, as well as the company’s assets and resources. In accordance with the legislation in force, EcoMetales has three joint management-worker health and safety committees - two for the company and the other for its plant - in which 100% of its workers are represented. These committees have the following members: • Companies committee: six management representatives and six representatives elected by workers. • Plant committee: one representative of ECL and six representatives of contractors.

sustainability report 2014 . ecometales . 53

1. Safety performance In 2014, the company’s accident frequency rate was

On the other hand, the company’s severity rate, at

3.69 points, up by 0.38 points on the previous year,

7.38 points in 2014, represented a drop of 2.54 points

despite a drop in the number of lost time accidents.

on 2013.

This was above the average for the mining industry which, according to the National Geology and Mining

The table below shows the Safety performance 2014.

Service (Sernageomin), reached 2.47 in 2014.

Safety performance 2013 Workers

Gender

Hours

Nº of days

worked

Own

Contractors

234,606 Women

Total

suffering an accident

Lost Fatalities

Men

workers

Nº of workers

Men

LT* NLT*

Nº of accidents Frequency Severity CTP

STP

0 5 0

1 0

1 0 1

4.26 4.26 0 9

5 0

1 9 1

0 0

0 0 0

605,098

6 0

2 14 2 14

rate

0 0

370,492 Women -

rate

2.70 13.50 0 3.31

9.92

Safety performance 2014 Workers

Gender

Nº of days

worked

Own

Men

256,200 Women

workers Contractors

Hours

Total

Men

Nº of workers suffering an accident

Lost Fatalities

NLT

Nº of accidents Frequency Severity CTP

STP

2 3 1

0 0

0 1 0

7.81 15.61 1 4

0 0

0 4 0

0 0

0 3 0

541,987

4 0

2 11 1 11

rate

4 0

285,787 Women -

rate

0.00 0.00 3

* LT: Lost time.

3.69

7.38

* NLT: Non lost time.

In reporting workplace accidents, EcoMetales complies

exposure to arsenic, the company’s own employees and

with the corresponding Chilean legislation (Resolution

those of contractors are tested every three months to

N° 2.245 issued by the Health Ministry) which is based on

determine their possible contamination level. EcoMe-

the recommendations of the International Labour Orga-

tales has established a limit of 100 micrograms of arsenic

nization (ILO).

per gram of creatinine in urine as the exposure threshold for triggering corrective action. This compares with the

No employees at EcoMetales’s operations have profes-

limit of 220 micrograms established by Chilean law until

sional illnesses. In all activities that potentially involve

2014.

54 . ecometales . sustainability report 2014

Environment 1. Raw materials and inputs In the case of the Copper Flue Dust Treatment Plant (PTPA), the principal raw material used is dust, principally from the Chuquicamata Smelter and, to a lesser extent, the Ventanas and Potrerillos Smelters. In 2012, the Plant also began to process effluent from the Chuquicamata refinery.

Raw materials and inputs: Dust Treatment Plant (tons) Raw materials Copper flue dust, arsenic waste and sludges Refinery effluent (m ) 3

2013

2014

19,532

26,476

182,690 241,911

Inputs

2013 2014

Sulfuric acid

10,357

15,886

Limestone

7,508 12,719

Hidrogen peroxide

1,627

Magnetite

2,602 6,182

438

sustainability report 2014 . ecometales . 55

2. Energy use Total energy consumption at EcoMetales reached 45,479 MWh in 2014, representing an increase of 30% on the previous year that was explained by the larger quantity of raw material processed. Direct consumption, related to fuel use, accounted for 82% of the energy used at the plant while the remainder corresponded to indirect consumption in the form of electricity from the Northern Interconnected Grid (SING).

Direct energy consumption (MWh) Year

Oil and derivatives

Liquefied gas

Total

2013

27,894

111

28,005

2014

37,267

105

37,372

Indirect energy consumption (MWh) Year

Electricity

2013

6,868

2014

8,107

The companyâ&#x20AC;&#x2122;s headquarters in Santiago consumed 29,010 kWh of electricity from the Central Interconnected Grid (SIC) in 2014, up by approximately 12% on 2013.

56 . ecometales . sustainability report 2014

3. Water use and recycling In 2014, water consumption increased with respect to the previous year due to the larger quantity of flue dust processed. However, unit consumption (m3 of water/tonne of dust) dropped due to an increase in water recycling and the entry of refinery effluent. The 11% increase in recycling reflected the use of reject water from the Osmosis Plant to prepare milk of lime.

Water reuse and recycling Type of use

2013

Water extracted for process (m3)

2014

373,301 445,931

Drinking water for changing rooms and bathrooms (m )

9,985 8,670

Total (m )

383,286 454,601

Reuse/recycling (m ) 3

56,879

120,144

% Reuse/recycling

4. Emissions Direct GHG Emissions The tables below show the direct and indirect greenhouse gas (GHG) emissions related to the operations of EcoMetales in 2013 and 2014.

Ton of CO2eq

2013 2014

Oil and derivatives

7,032

9,394

Liquefied gas Total

7,055 9,416

Indirect GHG emissions Type of uses Quantity (kWh)

2013

2014

6,868,000

8,107,000

Emission factor (kg CO2e/kWh)*

0,811 0,790

GHG emissions (Ton CO2e)

5,570 6,405

*: Emission factors provided by the Chilean Energy Ministry.

sustainability report 2014 . ecometales . 57

Definitions for calculating and interpreting Greenhouse Gas (GHG) Emissions Greenhouse Gases (GHGs) The emissions that make the most significant contribution to global warming are carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and water vapor. The size of the impact varies with the type of emission. GHG emissions are reported in physical units (k,t) of CO2 equivalent and conversion factors are used to express other emissions in their CO2 equivalent. Direct emissions: these are the GHG emissions generated directly as a result of fuel use in a company’s operations. They correspond to the so-called Scope 1 GHG Emissions Inventory. Indirect emissions: these are the GHG emissions generated by third parties in order to supply the electricity consumed by the company. In the case of EcoMetales, this is supplied from the Northern Interconnected Grid (SING). These emissions correspond to the so-called Scope 2 GHG Emissions Inventory.

Emission factors In this Report, the following conversion factors were used to calculate the company’s direct emissions: · Diesel: 2.672 kg CO2e/liter (Source: The Carbon Trust; www.carbontrust.co.uk). · Liquefied gas: 1.492 kg CO2e/liter (Source: The Carbon Trust; www.carbontrust.co.uk).

In other words, close to 60% of the company’s GHG emissions are direct and the result of fuel use at the plant while over 40% are indirect and correspond to the electricity consumed by the plant’s equipment. Total emissions increased by more than 25% due to higher consumption of fuels and derivatives as well as increased electricity consumption. There was, however, a reduction in the emissions factor of the Northern Interconnected Grid (SING). The electricity consumed by EcoMetales’ offices in Santiago accounted for indirect emissions of 10.4 tonnes of CO2 equivalent in 2014

58 . ecometales . sustainability report 2014

5. Industrial waste The operations of EcoMetales do not generate liquid industrial waste. Since 2011, the company has had a Wastewater Treatment Plant and the treated water is reused for irrigation. In 2014, approval was given for development of the engineering and a tender for construction of a new cell, with the same capacity as the existing cell, at the Arsenic Waste Deposit located in the vicinity of the PTPA plant. The cell will have an area of almost 3 hectares and a capacity to store some 350,000 tonnes of scorodite. The deposit received authorization in 2009 and envisaged the construction of three cells. The first started operation in 2012 when the Arsenic and Antimony Abatement Process (PAAA) was inaugurated and will complete its useful life in the first half of 2016. The construction of the second cell will begin in 2015 and it will start operations in 2016. The table below shows the solid industrial waste generated by EcoMetales in 2013 and 2014 and the level of hazard it represented.

sustainability report 2014 . ecometales . 59

Solid industrial waste (Tonnes)

Hazardous Non-hazardous

Total

2013

317

17,550

17,867

2014

477

29,838

30,315

Out of the 29.838 tonnes of non-hazardous waste generated in 2014, a 99% corresponded to scorodite, the environmentally stable form of the arsenic removed at the Arsenic and Antimony Abatement Plant. All the waste generated at EcoMetalesâ&#x20AC;&#x2122;s installations, whether domestic, industrial or hazardous, is disposed of at duly authorized sites. Hazardous waste is, in addition, registered with the Health Ministryâ&#x20AC;&#x2122;s Hazardous Waste Declaration and Monitoring System (SIDREP).

60 . ecometales . sustainability report 2014

GRI Index P: Principal Indicators

A: Additional Indicators

GRI Aspect

Section of report / Page

1. Strategy and analysis 1.1 Statement from the most senior decision-maker of the organization.

Message from the Chairman of the Board Message from the General Manager

04 06

1.2 Description of key impacts, risks and opportunities.

Sustainability and the future of the mining industry in Chile Sustainability performance

12 42

2. Organizational profile 2.1

Name of the organization.

Our company

2.2

Primary brands, products and/or services.

Our company

2.3

Operational structure of the organization, including main divisions, operating companies, subsidiaries and joint ventures.

Our company

2.4

Location of the organizationâ&#x20AC;&#x2122;s headquarters.

Our company

2.5

Number of countries where the organization operates and names of countries with either significant operations or that are specifically relevant to the sustainability issues covered in the report.

Our company

2.6

Nature of ownership and legal form.

Our company

2.7

Markets served.

Our company

2.8

Scale of the organization, including number of employees, net sales, total market capitalization and quantity of products or services provided.

Our company Economic and social aspects Labor aspects

08 44 45

2.9

Significant changes during the reporting period regarding size, structure or ownership, including location of activities, changes in ownership structure and others.

In 2014, there were no significant changes in the structure and ownership of EcoMetales.

Awards received in the reporting period.

No awards or distinctions were received in 2014.

2.10

3. Report parameters 3.1

Reporting period for information provided.

About this report

3.2

Date of most recent previous report.

About this report

3.3

Reporting cycle.

About this report

3.4

Contact point for questions regarding the report or its contents.

sustainability report 2014 . ecometales . 61

GRI Aspect

Section of report / Page

3.5 Process for defining report content.

About this report

3.6 Boundary of the report.

About this report

3.7 State any limitations to the scope or boundary of the report.

About this report

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations and other entities that can significantly affect comparability from period to period and/or between organizations.

About this report

3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report.

Measurement techniques and bases of calculations are indicated in each section.

3.10 Explanation of the effect of any re-statements of information provided in earlier reports.

This report contains no re-statements of information contained in the 2013 Report.

3.11 Significant changes from previous reporting periods in the scope, boundary or measurement methods applied in the report.

This report contains no significant changes in the scope, boundary or measurement methods applied in the 2013 Report.

3.12 Table identifying the location of the Standard Disclosures in the report.

GRI Index

3.13 Policy and current practice with regard to seeking external assurance for the report.

About this report

4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight.

Our company

4.2 Indicate whether the Chair of the highest governance body is also an executive officer.

The Chairman of the Board does not occupy an executive position in EcoMetales.

4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent or non-executive members.

Our company

4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.

Our company

4.5 Linkage between compensation for members of the highest governance body, senior managers and executives and the organization’s performance.

Our company

4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided.

Members of the Board of Directors are employees of Codelco and subject to all its norms for the avoidance of conflicts of interest.

4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization’s strategy on economic, environmental, and social topics.

Members of the Board of Directors are appointed by Codelco to provide this guidance in accordance with Codelco’s processes to ensure they are qualified to exercise this role.

4.8 Internally developed statements of mission or values, codes of conduct and principles relevant to economic, environmental and social performance and the status of their implementation.

Our company

4. Governance, commitments and engagement

4.9 Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental and social performance, including relevant risks and opportunities.

Members of the Board of Directors are appointed by Codelco and are subject to its processes for exercising these functions.

4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental and social performance. 4.11 Explanation of how the precautionary approach or principle is addressed by the organization.

The organization has not explicitly adopted a precautionary approach or principle.

4.12 Externally developed economic, environmental and social charters, principles or other initiatives to which the organization subscribes or endorses.

The organization has not adopted external social, environmental or economic principles or programs.

4.13 Main associations to which the organization belongs and/or national and international bodies it supports.

EcoMetales does not belong to any associations and/or national and international bodies.

62 . ecometales . sustainability report 2014

GRI Aspect 4.14

Stakeholder groups engaged by the organization.

4.15

Basis for identification and selection of stakeholders with whom to engage.

4.16

Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

4.17

Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting.

Section of report / Page

The safety, occupational health, environment and quality policy, approved in 2011, establishes a commitment to maintain transparent, trustworthy and opportune communication with stakeholders in order to establish mutually beneficial relations of trust. In 2012, no progress was achieved in implementing this commitment.

5. Management approach Disclosure on sustainability approach.

Sustainability performance

EC1-P Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings and payments to capital providers and governments.

Economic and social aspects

EC3-P Coverage of the organizationâ&#x20AC;&#x2122;s defined benefit plan obligations.

Economic and social aspects

EC4-P Significant financial assistance received from governments.

In 2014, EcoMetales did not receive financial assistance from the government.

Performance indicators Economic performance / Economic management

Economic performance / Market presence EC5-A Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation.

Labor aspects

EC7-P Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation.

Labor aspects

Raw materials and inputs

EN3-P Direct energy consumption by primary energy source.

Energy use

EN4-P Indirect energy consumption by primary source.

Energy use

Water use and recycling

Environmental performance / Materials EN1-P Materials used by weight or volume.

Environmental performance / Energy

Environmental performance / Water EN8-P Total water withdrawal by source. EN10-A Percentage and total volume of water recycled and reused.

Environmental performance / Emissions, effluents and waste EN16-P

Total direct and indirect greenhouse gas emissions by weight.

Emissions

EN21-P

Total water discharge by quality and destination.

Industrial waste

EN22-P

Total weight of waste by type and disposal method.

Industrial waste

sustainability report 2014 . ecometales . 63

GRI Aspect

Section of report / Page

EN24-A

Industrial waste

Sustainability performance

Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III and VIII, and percentage of transported waste shipped internationally.

Environmental performance / Products and services EN27-P

Percentage of products sold and their packaging materials that are reclaimed by category.

Environmental performance / Compliance EN28-P

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations.

Environmental performance / Overall EN30-A

Total environmental protection expenditures and investments by type.

In 2014, EcoMetales did not make any environmental investments.

Social performance: labor practices and decent work / Employment LA1-P

Total workforce by employment type, employment contract and region.

Labor aspects

LA2-P

Total number and mean rate of employee turnover by age group, gender and region.

Labor aspects

LA3-A

Benefits provided to full-time employees that are not provided to temporary or parttime employees, by major operations.

Labor aspects

Social performance: labor practices and decent work / Management relations LA4-P

Percentage of employees covered by collective bargaining agreements.

Labor aspects

Social performance: labor practices and decent work / Occupational health and safety LA6-A

Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and give advice on occupational health and safety programs.

Safety and occupational health

LA7-P

Rates of injury, occupational diseases, lost days and absenteeism and number of work-related fatalities by region.

Labor aspects Safety and occupational health

45 52

LA8-P

Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases.

Sustainability performance Safety and occupational health

42 52

LA9-A

Health and safety topics covered in formal agreements with trade unions.

Labor aspects

Social performance: labor practices and decent work / Training and education LA10-P

Average hours of training per year per employee by employee category.

Training

Social performance: labor practices and decent work / Diversity and equal opportunity LA13-P

Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership and other indicators of diversity.

Labor aspects

64 . ecometales . sustainability report 2014

GRI Aspect

Section of report / Page

Social performance: labor practices and decent work / Diversity and equal opportunity LA14-P

Ratio of basic salary of men to women by employee category.

Labor aspects

Social performance: Human rights / Non-discrimination HR4-P

Total number of incidents of discrimination and actions taken.

Social performance: Human rights / Freedom of association and collective bargaining HR5-P

Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.

Labor aspects

Social performance: Human rights / Child labor HR6-P

Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of this practice.

Social performance: Human rights / Forced and compulsory labor HR7-P

Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor.

Social performance: society / Corruption SO2-P

Percentage and total number of business units analyzed for risks related to corruption.

Corruption

SO3-P

Percentage of employees trained in organizationâ&#x20AC;&#x2122;s anti-corruption policies and procedures.

Corruption

SO4-P

Actions taken in response to incidents of corruption.

Corruption

Social performance: society / Public policy SO6-A

Total value of financial and in-kind contributions to political parties, politicians and related institutions by country.

Social performance: society / Compliance SO8-P

Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations.

EcoMetales did not receive any fines related to labor aspects in 2014.

Social performance: product responsibility / Product labeling PR3-P

Type of product and service information required by procedures and percentage of significant products and services subject to such information requirements.

Sustainability performance

PR4-A

Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes.

Sustainability performance

sustainability report 2014 . ecometales . 65

GRI Aspect

Section of report / Page

Social performance: product responsibility / Marketing communications PR6-P

Programs for adherence to laws, standards and voluntary codes related to marketing communications, including advertising, promotion and sponsorship.

Sustainability performance

Social performance: product responsibility / Compliance PR9-P

Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services.

EcoMetales did not receive any fines related to the handling of its products.

For comments and queries about this Report or for further information, please contact: Sustainability Management / EcoMetales Limited. Nueva de Lyon 072, Providencia, Santiago, Chile / Road to Radomiro Tomic, km 16 ½, Calama, Chile. Telephones: (56 - 2) 2378 4100 – (56 – 55) 2320 950 comunicaciones@ecometales.cl / www.ecometales.cl

Photography . Claudio PĂŠrez & EcoMetales photo archives

This is the road on which EcoMetales has embarked: innovation and the transfer of technology for the safe disposal of waste and, at the same time, the extraction of the residual metallic value of this waste.