Sustainability report 2013

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Sustainability Report. 2013


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Contents

04.Message from the Chairman of the Board 06.Message from the General Manager 08.Our company 10.Mission, vision and values 12.Organizational chart 14.About this report 16.The dilemma of impurities in mining 36.Operations 40.Projects 42.Sustainability performance 44.Economic and social aspects 52.Safety and occupational health 56.Environment 62.GRI Index


Message from the

Chairman of the

Board 4

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Gerhard von Borries

For the third consecutive year, EcoMetales, a subsidiary of Codelco Technologies Ltd., presents a Sustainability Report with information reflecting its performance during the past year. This exercise in transparency is coherent with the Corporation’s policies with respect to supplying verifiable information to all the parties interested in our operations. During 2013, EcoMetales’ work focused mainly on consolidating the Arsenic and Antimony Abatement Process, the company’s main contribution to a more sustainable management of complex residues from the point of view of compliance with the standards and associated costs. At the same time, EcoMetales continues evaluating projects that are consistent with its mission, and we hope that the scope of its work will expand significantly in coming years. For Codelco, it is essential to create technologically innovative alternatives which are viable from a business viewpoint while contributing to solve the challenges that the corporation will face in the future. Among these challenges, two stand out: ensuring the safe management of impurities and increasing efficiency in the recovery of metal values from the large diversity of waste generated in the productive process. In this context, we appreciate EcoMetales’ contribution to the sustainability of our work, and we are pleased to deliver this third Sustainability Report to the national community.


Message from the

General

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Metals are essential materials for human civilization. They are at the base of all technological developments that make up our anthroposphere: construction, connectivity, energy, and communications, among many others. All estimations indicate that society will demand an increasing supply of metals. Although some metals have significant recycling rates (copper, close to 40%), the demand for metals in the markets will not be satisfied only through recycling, and an increasing level of primary production will also be required. In a scenario where the average mineral ore grades are decreasing, the production of a ton of metal will imply not only greater consumptions of very scarce resources, such as water and energy, but also the generation of ever larger volumes of waste. Although some of these wastes have potential commercial value, if they are not treated and/or recovered they may represent a risk for human health or the environment. This is why it is so important to develop new technologies and become aware, as a society, of these challenges. EcoMetales has defined its mission and vision around the search for processes and technologies that allow to disengage economic development from environmental degradation. So far our work has been focused on the treatment of smelter dust and, since 2012, on the stabilization of arsenic and antimony as a non-hazardous waste called scorodite. This is our contribution to deal with the problem of environmental arsenic in Northern Chile, a complex and historic situation representing a unique case in the world due to the high natural levels of this element in the region. In addition I would like to highlight that, in 2013, the company implemented the Crime Prevention Model to mitigate the types of crimes included in Law N° 20393, regarding the penal responsibility of legal entities in asset laundering, financing of terrorism, and bribery of public or foreign officials. The Model was certified by a specialized external company, and included the issuing of the Organization’s Code of Conduct, in accordance with the values of the company, and the implementation of a Reporting Line. We also feel proud to have inaugurated the ALMA room (Spanish acronym for Storage of Maternal Milk) a place where the mothers who work at EcoMetales may store their milk in a private and safe environment to take to their lactating children. With the presentation of this third Sustainability Report, we comply once again with the commitment of informing the community and other stakeholders on our performance regarding economic, working, safety, occupational safety, and environmental aspects.

Iván Valenzuela Rabí


Our company Founded in 2007, EcoMetales (ECL) is a subsidiary of Codelco Technologies Ltd. Its predecessor, Alliance Copper, founded in 2000, was a joint venture between Codelco and BHP Billiton.

The purpose of EcoMetales is to develop environmentally sustainable solutions for the treatment of the different types of waste generated by the mining industry, seeking to recovery metals in order to enhance the activity’s economic viability. To this end, the company focuses on: 1) Services for mining projects. 2) Plant operation. 3) Marketing of products produced by the plants it operates.

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As established in its by-laws, EcoMetales Ltd. is administered by a Board of Directors, comprising six members appointed by Codelco, who do not receive remuneration on this account. No transactions take place between EcoMetales and its directors. The Board receives support from a Management Committee and a Technical Committee whose members, similarly, do not receive remuneration on this account. These Committees are chaired by a company director and comprise one or more directors or the persons they deem appropriate. The Committees are instructed by the Board of Directors to provide the General Manager with advice and 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. The General Manager and EcoMetales’s other executives receive an annual bonus based on compliance with targets and objectives agreed with the company’s administration.

In 2013, EcoMetales processed copper flue dust and other waste from Codelco’s Chuquicamata, Potrerillos and Ventanas smelters. The copper recovered from these materials was piped as a solution (PLS) to the Chuquicamata Division. During 2013, EcoMetales issued a Code of Conduct, a document that seeks to consolidate the values that represent the company in its daily activities. EcoMetales also obtained the certification of its Crime Prevention Model to comply with Law N° 20393. EcoMetales’s center of operations and plants are in the city of Calama in the Antofagasta Region while its administration and engineering team are located in the city of Santiago in the Metropolitan Region.


MISSION

TO BE A WORLD LEADER IN ENVIRONMENTAL SOLUTIONS FOR MINING WASTE, ADDING VALUE TROUGH THE RECOVERY OF METALS.

VISION

TO BECOME ONE OF THE FIVE LEADING COMPANIES IN THE WORLD IN ENVIRONMENTAL SOLUTIONS FOR MINING WITHIN THE NEXT FIVE YEARS.

ECOMETALES AIMS TO DEVELOP A CORPORATE CULTURE CHARACTERIZED BY: · Respect for life · Excellency in work · Innovation · Team work · Sustainability development

VALUES

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Smelter dust is made up of a complex mix of elements: copper, sulfur, iron, arsenic, and antimony, among others. EcoMetales has specialized in their treatment to recover the copper contained in them, in an environmentally safe form.

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Cu Copper

A copper ore deposit with a copper content of 1 percent generates wastes that pose a major challenge for the future of world mining.


Management Committee

Board of Directors

María José Luque . Communications

Iván Valenzuela . General Manager

Technical Committee

Cristián Quinzio . Legal Advisor

2013

Organizational Chart

Senior Management

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Carlos Rebolledo . Business Development

Fernando Navas . Administration and Finance

Jan Smit . Technology

Orlando Fuentes . Projects

Pablo Medina . Plant / Sustainability

Scorodite .

EcoMetales (ECL, for its acronym in Spanish) closes the mining circuit. ECL’s Arsenic and Antimony Abatement Process is designed to stabilize both elements as nonhazardous waste called scorodite.

FeAsO4 . 2H2O

A mineral compound in which arsenic is crystalized in a matrix with iron. It corresponds to the most stable form of this element at an industrial scale.


Report

About this

Yearly since 2011 EcoMetales has presented its Sustainability Report, to provide public information on our performance in sustainability. This 2013 Report provides information on the environmental, economic, and social performance of EcoMetales between January 1st and December 31st of 2013. 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).

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This Report includes information about the operations managed directly by EcoMetales. Under the GRI G3.1 protocols, this Report complies with Application Level B. The table below, published by the GRI, sets out the application level criteria for the different sections of a Sustainability Report: GRI G3.1 Report Application Level

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


The dilemma of impurities in mining

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By nature, Chile is a mining country. The same geological events that make it prone to experience earthquakes of unique force and frequency have left an extraordinary wealth and variety of minerals at the reach of human inventiveness. The majority of the chemical elements in nature are found as minerals on the earth’s crust. Their properties have been used by humans to build civilizations and the world as we know it. A mineral is a natural, solid, and inorganic material, made up by a characteristic combination of chemical elements. The fact that it is natural implies that it is not manufactured by men. The fact that it is inorganic implies that it does not come from a living being. An example of a mineral is chalcopyrite composed, on average, by one part of copper, one part of iron, and two parts of sulfur (CuFeS2). These elements combine in an organized manner called a crystal. This structure creates a metal looking material with variable coloring. In principle, any of the three elements that make up chalcopyrite may be produced in its pure form: copper, iron, or sulfur. In order to do so, the mineral must be submitted, in each case, to a process that separates the other two elements so that the third may be purified. In this commercial scenario, these two elements may be considered impurities, but in another scenario they may be considered resources. This is a simplified but exact description of the challenge of the discipline known as metallurgy. Chalcopyrite is one of the most abundant copper minerals in Chilean mines, and the main source of copper currently extracted in the country. However, to be accurate, metallurgy is not such a simple discipline. The mineral extracted from the Earth is rarely a pure compound, but rather a combination of rocks made up of very heterogeneous mixture of diverse mineral compounds, most of which do not have any economic interest or are found in such small quantities that its purification is not worthwhile. The Table in page 18, shows some typical minerals found in rocks extracted from a copper deposit, and the elements that make it up.

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Sb Antimony

Antimony is part of the waste that ECL stabilizes together with arsenic in the form of scorodite.


Minerals

Component elements

Tennantite Tetrahedrite Pentlandite Pyrargyrite Copper Oxide (II) Famatinite Enargite Arsenopyrite Quartz Galena Chalcocyte Sphalerite

Copper, arsenic, sulfur Copper, iron, antimony and sulfur Iron, nickel and sulfur Silver, antimony and sulfur Copper and oxygen Copper, antimony and sulfur Copper, arsenic and sulfur Iron, arsenic and sulfur Silica and oxygen Lead and sulfur Copper and sulfur Zinc and sulfur

A copper deposit with a 1% ore grade generates wastes that represent a major challenge for the future of world mining: from the point of view of copper extraction, the resource is made of 99 percent of impurities (in fact, a part of the copper is also lost in the waste). Although some of those components have value, their low level in the mineral does not make its extraction profitable. For this reason, two of the great pending challenges in copper mining are how to dispose of the enormous amount of impurities (or waste) and/or how to convert the waste into an economic value, that is, a resource. In the case of copper mining, the technological developments of metallurgy have allowed important advances in both aspects. For example, many copper mines, generate sub-products from some impurities: molybdenum, Chile’s second export, gold, silver, and rhenium, among others.

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Product-waste: Where is the limit? What happens to that 99 percent of the mineral that is necessary to extract to purify the 1 percent of copper? Most of it is discarded in the same mineral form in which it is found in nature, although greatly reduced in size. It constitutes a massive mining waste known as flotation tailings. From every 100 tons of processed copper mineral in a typical copper sulfide mine, approximately 97 percent is eliminated as a thick pulp made of water and ground rock which is deposited in gigantic dams. The remaining 3 percent is the first product of the process, a fraction of mineral with an enriched copper content of close to 30%, the so-called copper concentrates.

mining history of the country, the legacy of these types of dams, which has generated environmental liabilities, constitutes a resource of metal values and a challenge for mining technology.

It is important to highlight that, until this stage, the process has not modified the chemical structure of the minerals, as the enrichment of copper has been achieved exclusively by physical separation methods (differential flotation of minerals rich in copper).

During the smelting, impurities have several possible destinations. A part is eliminated as gas. Although in the past these gases were directly released to the atmosphere, currently there are restriction regarding the amount and the composition of these emissions. For this reason, current smelters have auxiliary installations to abate the impurities from those gases and recover others in a usable chemical form, mainly sulfuric acid. Important residues during this stage are the so-called smelting dusts, solid materials made up of a complex mixture of elements: copper, sulfur, iron, arsenic, and antimony, among others. EcoMetales has specialized in the treatment of these dusts to extract the copper in an environmentally safe form.

The elimination of this important volume of waste in tailing dams has raised and continues to raise challenges for the sustainability of mining. Although engineering and the management of these dams in Chile currently have a high degree of technical development and safety standards, its landscaping impact is undeniable and the communities are increasingly less tolerant of their presence. At the same time, given the long

Once the copper concentrate is obtained, the metallurgic process focuses on the elimination on the remaining 2 percent of waste. The task of separating the copper from the other elements requires an intervention in the chemistry of the minerals. The first step in this stage is the smelting process, whose product is the copper anode, with a purity level exceeding 95 percent.


The current regulations that apply to gas emissions in smelters configure significant commercial limitations to the business of selling copper concentrates. As most smelters operate subject to a limit of arsenic emissions (one of the three metals regulated world-wide) they can only process concentrates whose arsenic contents are below a certain limit. As we shall see further on, this is a critical challenge for many copper mines in Chile. In addition to gas emissions and solid waste produced during the cleaning process, a minor fraction of impurities is also present in the slags, a by-product of the smelting process, which until a few years ago was accumulated as a solid waste; currently, due to technological and management improvements, it has commercial value due to its copper content. When the smelting process is over, a copper anode emerges as a product that may be marketed as such, or taken to the following purification stage, electro-refining, which is capable of generating a premium product in copper metallurgy: the copper cathode which is more than 99 percent pure. The electro-refining process occurs with the anode, the precursor, and the cathode submerged in a liquid medium through which an electric current circulates. In this medium, copper atoms migrate from the anode toward the cathode in formation, while the remaining waste is deposited at the bottom of the pond, creating another important by-product called anode slime. This slime contains the last traces of impurities extracted from the mineral, and its value as a by-product depends on its content of precious or rare metals. In some pro-

cesses, they constitute waste without commercial value, and may represent significant environmental and human health risks when not properly handled.

Complex impurities All chemical elements are part of nature, foundational bricks of the Earth crust, of our atmosphere, and of living beings themselves. However, its abundance in the different parts of our biosphere is very variable. For example, more than 99% of the chemical composition of the human body corresponds to 11 elements out of 92 that make up the periodic table: carbon, oxygen, nitrogen, hydrogen, calcium, sulfur, phosphorus, sodium, potassium, chloride, and magnesium. There are other elements that, although present in negligible quantities in living organisms, are essential for life. They are called micronutrients, for example, copper, zinc, iron, and cobalt. Despite the fact that all elements are part of the natural medium in which life developed, the tolerance of human beings to them is extraordinarily variable. “The doses makes the poison�, stated Paracelsus around the year 1500, implying that any element may be toxic for human beings if administered in excess. And what is excessive varies very much between elements and the species of living beings. The ores where the copper produced by Chile is found contain a great diversity of elements. Some of them, which end up as components of products, by-products, waste, or emissions, are more hazardous than others from the point of view of human health and the environment.

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Arsenic Arsenic is a relatively scarce element in the Earth crust, classified as number 53 in the ranking of abundance, with an average concentration of 1.5 parts per million. Reaffirming Paracelsus’ statement, this element has been used as a medicine and as poison. There is evidence that it is an essential micronutrient for some plants and even some animals, but required in very small quantities (millionths of a gram per day). At the same time, its ingestion over certain levels may be lethal and has been historically used as a poison. Arsenic, as many other elements, is not uniformly distributed throughout the planet. The north of Chile is a region where the natural levels are particularly high. The fact that the most important copper deposits on the planet are found in that area is not a coincidence, as the minerals that contain arsenic usually contain copper too (for example, as enargite). The most common arsenic containing minerals in Chilean deposits are tennantite, enargite, and arsenopyrite.

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As Arsenic

Northern Chile is a region where the natural levels of arsenic are particularly high. This is not a coincidence, as the minerals that contain arsenic, usually contain copper.


Until a few decades ago, arsenic compounds were used in a great variety of applications worldwide, mainly as a biocide (pesticide, herbicide, etc.) but they were mostly discontinued due to concerns regarding its effect on human health. Currently, it is only used in negligible quantities, in micro-electronics. Exposure of people to arsenic is mainly through ingestion and respiration. In terms of ingestion, the main source has been drink water, a very complex problem in certain regions of the planet (among them, Northern Chile). One way to illustrate the natural presence of arsenic in Northern Chile is to consider that the maximum level allowed in drink water according to the Chilean standard and those of other countries, is 10 micrograms of arsenic per liter of water. However, the levels measured in Northern Chile, in places such as Calama, Iquique, and Tocopilla, before water treatment plants were installed, varied between 40 and 60 micrograms per liter. These high arsenic ingestion levels in such a significant population and for such long periods have constituted a unique case study of the consequences of its long term consumption. In fact, several epidemiological studies carried out in the area have found that the frequency of cancer associated to arsenic exposure in these areas is considerably higher than that observed in other regions in the country. It has been estimated that these high levels of the element are a result of natural and anthropogenic causes, although it is difficult to determine the relative contribution of both sources to the arsenic that is present in drink water. Another form of exposure of human beings to arsenic is the air, and if this exposure is continuous, it is also risky. For this reason, companies that manage mixtures with arsenic must permanently monitor the exposure

of the workers to the element, and periodically perform environmental measurements in the work place. At the same time, food is also a source of arsenic ingestion, and the levels in fish and seafood are particularly high in Northern Chile. However, in relative terms, studies indicate that these are the least important sources of risk, with water being responsible for close to 80 percent of the ingestion by human populations in the aforementioned regions. Arsenic is a very versatile chemical element, that is, it may form a diversity of compounds with other elements depending on the chemical characteristics of the environment. This makes its management more complex in terms of toxicity. As a mineral compound with copper, iron, and sulfur, it does not represent a relevant risk, but under determined conditions, mineral arsenic may form various oxides (arsenic complexed with oxygen). There is evidence that long term exposure to these types of oxides produces cancer in human beings. For this reason, the level of the element present in water, air, and food, is regulated, as well as its level in emissions from copper smelters. From an environmental point of view, the critical factor in the management of a material containing arsenic is the capacity to precipitate impurities in the early stages of the process, so as to concentrate it and be able to turn it into a stable form. That is, a form from which arsenic cannot be released easily and react with water, air, or an acid. Scorodite, a mineral compound in which arsenic is crystalized in a matrix with iron, is the most stable form of this element at an industrial scale. In fact, EcoMetales’ Arsenic and Antimony Abatement Process is designed to stabilize arsenic and antimony as scorodite.


Other complex components There are other impurities present in copper minerals which have also become a source of international concern due to their potential effects on human health. Lead is possibly the least prestigious element in the international regulatory environment. It does not have any known biological function, it tends to accumulate in human tissues, and it has been linked to toxicity by ingestion or inhalation, causing sterility and neurological damage. This has led to its progressive elimination from materials used by humans. Together with reducing its use, human exposure to the element has decreased, and as a consequence, the levels of lead measured in bones, hair, and other body tissues has also been reduced. One of the most complex challenges for metal mining is that its presence, albeit it in very minimal quantities, may lead to the classification of the product as a hazardous material. The European Union is considering a reduction in the level of lead from 0.3% to 0.03%, that is, ten times less, to classify a material as hazardous. A 0.03% corresponds to a three-hundreds part per million, a lower level of lead than that contained in alloys that are currently known as ‘lead free’. There are many metal concentrates that exceed that level.

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Mercury is another element that the international regulatory community would like to eliminate from human applications. It is absorbed by people through almost all the possible means of exposure: skin, respiratory system, and digestive system. It tends to accumulate in the tissues and produces a diversity of toxic effects that depend on its chemical form. For centuries, it was widely used in different manufacturing processes, without knowledge of how toxic it was, and there is ample record of industrial poisoning by mercury. In 2013, the Minamata Convention supported by the United Nations sought to reduce or eliminate the flows of mercury in society. Among other things, the convention commits to determine maximum levels of mercury emissions from copper smelters. Although its levels in copper minerals are very low, the requirements of the convention will undoubtedly imply a greater challenge for technologies regarding the abatement of impurities in metal mining. Finally, we will mention cadmium, a metal that the United Nations Environmental Program considers one of the most dangerous contaminants. Together with lead, cadmium will surely be the subject of a coming convention similar to Minamata, seeking a maximum reduction of its levels in the anthroposphere.

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Arsenic in copper mining Arsenic is a particularly complex waste for copper mining in Chile. It is part of the mineral species that are extracted together with copper, and, as seen in the graph, its presence shows a clear historic trend to increase in the processed mineral, while the average ore grade decreases. As the presence of arsenic in the product is undesirable from a commercial and regulatory point of view, this trend implies that the levels of arsenic in waste and emissions have increased.

Copper ore grade Oxides

Sulphides

1.2% 1.1% 1.0% 0.9% 0.8% 0.7% 0.6% 0.5%

Arsenic ore grade 0.24% 0.22% 0.20% 0.18% 0.16% 0.14% 0.12% 0.10%

Source: Codelco


Of the total arsenic contained in copper concentrates, close to 70 percent ends up in the gas emissions from the smelters, which are captured and directed to the acid plants, and close to one half of this percentage is precipitated as smelting dust. The levels of arsenic emitted by the smelters to the atmosphere are regulated in Chile, with the maximum threshold established by the authorities for each smelter. The graph shows the arsenic emissions in the seven copper smelters that operate in Chile and the gaps they will have to close with the entry into operation, in 2013, of a more demanding regulation.

Arsenic emissions in copper smelters

Source: Ministry of the Environment 2013.

The new copper emissions regulation (2013) for smelters, which in the case of Codelco will apply starting in 2016 (Ventanas) and 2018 (all the others), will imply a significant challenge for these smelters which will have to reduce their arsenic emissions by 37 percent in a 3 to 5 year time-frame, all of this in an scenario where arsenic ore grades are increasing. It is estimated that adjusting to this new regulation will imply investments for a total of around USD 1.5 billion.

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The Hazardous Waste Sanitary Regulation (D.S. N° 148/03) establishes, among other things, the criteria that define a waste as hazardous. For mining residues, the criteria is based on the so-called leaching tests, which measure how much of each chemical element component may be released by the action of an acid. If in the test more of the element is released than the threshold established by the regulation, the residue is classified as hazardous and its disposal is subject to extremely onerous requirements. For arsenic, this threshold is of 5 parts per million. Ecometales’ Arsenic and Antimony Abatement Process extracts arsenic from the smelting dust and converts these elements into scorodite. As shown in the attached graph, the leaching of arsenic from the scorodite generated in the process by two different methods, does not reach the threshold of 5 parts per million, justifying the fact that this waste is not classified as hazardous, and may be disposed of safely in a duly authorized waste deposit.

Concentration of As in TCLP (ppm)

Leached arsenic in an acid medium

Limit D.S. NÂş148/03

Source: EcoMetales


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Pb Lead

Lead is possibly the element with the worst reputation in the international regulatory sphere.

Regulatory and commercial barriers Following are some examples of how the presence of some impurities in products and waste may have critical consequences for the metal mining business. • In many countries, the levels of certain metals are already subject to strong restrictions. For example, the European Union’s Directive on Restriction of Hazardous Substances, limits the levels of certain elements, among them lead, in all types of electric and electronic materials. Countries have different levels of fines for noncompliance, but the most significant commercial impact is that importers of raw materials of those countries do not buy metals or alloys whose lead levels exceed the regulatory thresholds. With the arrival of the United Nation’s Globally Harmonized System of Classification and Labelling of Dangerous Chemicals (known as GHS) it

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is very probable that these restrictions will expand and configure significant non-tariff commercial barriers for metal producers. • Many copper smelters around the world do not purchase copper concentrates with arsenic levels exceeding 0.5%, because its processing would imply exceeding the norms regarding arsenic emission to the atmosphere in their countries. The number of copper deposits with high levels of arsenic in Chile has increased in past years. This implies that technological solutions must be found to reduce those levels and dispose of the generated arsenic in a safe manner, or the concentrates will find their markets dramatically reduced. • With the implementation of the GHS in an increasing number of countries, the subject of classifying a products as hazardous (sometimes triggered by impurities at minimum levels) could drastically change the conventional commercial scenario for concentrates and other products of complex composition produced by Chilean mines. Although currently copper concentrates do have different commercial value depending on their level of copper and undesirable impurities, in the future, the range of elements which will determine their commercial viability and price will expand. Put yourself in the place of a purchaser of concentrates who may choose between one that does not classify as hazardous and one that classifies as a hazard for human reproduction.

• Any mining product transported by sea as bulk is already facing scenarios that may significantly affect its competitiveness due to the requirements, based on their chemical composition, of the type of ship that may be used, the safety equipment required onboard, and the procedures for cleaning the ship´s holds. These requirements are defined by the International Maritime Organization as a result of the incorporation of the GHS to its Conventions and Codes. • For wastes, the scenario is even more complex, as the limitations and requirements established in the Basel Convention for their transboundary transportation may expand to several wastes that are currently being transported as non-hazardous. • In many countries, the standards that regulate the maximum levels allowed for chemical elements in the workplace are becoming increasingly demanding, leading to additional production costs associated to the measures that must be adopted to reduce the exposure of workers to such elements. In many cases, older processes will be unfeasible. In summary, the dilemma of impurities configures a scenario that presents clear threats to both the feasibility of the business as well as the sustainability of metal mining, in addition to greater challenges for technological innovation in the sector.


Chile: a technologies laboratory Chile’s condition as a mining country, as well as the characteristics of its ore deposits, may present an exceptional opportunity for the development of sustainable technological solutions for the scenarios outlined above. The country’s growth needs will continue to demand a predominant economic role from the mining sector, which implies dealing with the present and future threats to the viability of its exports. At the same time, the increasing concerns of the communities regarding the quality of the environment that they inhabit, demand regulations that are ever more restrictive as well as stronger demands for clean production processes. Conventional technologies will become less and less sustainable in the Chile of the 21st century. However, Chile also has competitive advantages to address these challenges. The mining and metallurgic sector has a history of more than 100 years at an industrial level, which is reflected in a know-how capital which has very few comparisons world-wide. During this past century, national engineering has successfully faced the challenges presented by a geological offer which is increasingly less generous, and currently it is feasible to exploit deposits that 50 years ago would have not been even considered in a project portfolio. Processes have made important progress in energy efficiency. Smelters have reduced their emissions, although they are still far from OECD standards. The recycling of critical resources, such as water,

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has substantially increased, yet the biggest phantom of the coming decade for Chilean mining continues to be the availability of water. The management of massive industrial waste has progressed together with the management of mine closures and the environmental legacy of mining activity. All this has involved the development and application of technologies based on a profound knowledge of the chemistry and metallurgy of minerals and processes.

example: flotation tailings, leaching waste, slags, and smelting flue dust, among others. This forgotten resource not only contains copper (sometimes with higher ore grades than operating deposits) but also a diversity of scarce elements with a high technological value. Used to exporting copper in quantities that exceed a million tons, the national mining industry usually forgets that there are elements whose price per gram exceeds by several factors the price of the pound of copper.

In addition, the characteristics of the most important national mining area, the Norte Grande, represent a natural laboratory to experiment technological solutions to the problem of wastes. In particular, the high levels of arsenic that characterize the geology of this region constitute both a threat and an opportunity for the Chilean metallurgic talent. Just as the challenge of decreasing copper ore grades has been progressively overcome, we must overcome the problem of more and more waste. The future of the Chilean mining business depends on it.

EcoMetales is a company which has given its first steps in the area of recovery of metal value from mining waste, as well as in the safe disposal of waste generated in the process. Its sphere of operations requires ambitious ideas and, for these to be executed as projects, it is necessary for the national mining industry to be fully aware that the dilemma of impurities may be the key to the future.

It is also important to remember that Chile stores a relevant amount of metal values as mining waste; for

In the context of its mission, to be world leaders in environmental solutions for mining waste adding value through the recovery of metals, EcoMetales sees its potentials framed in the following guidelines.


Development of technology The best example has been the entry into operation of the Arsenic and Antimony Abatement Process in 2012, which enables the removal of significant quantities of arsenic, contained in smelting flue dust and other process waste, and deposit them in a stable form as scorodite. In 2013, the operation of the plant resulted in more than 1,500 tons of arsenic being stabilized and deposited as scorodite. This is a real and quantifiable contribution to reduce the environmental arsenic levels within Codelco’s operations. Joint work with Codelco As a subsidiary of the largest chilean state company, and one of the main producers of copper and molybdenum in the world, EcoMetales seeks to strengthen Codelco’s productivity and sustainability. The diversity of products, by-products, and waste in its different divisions, offers a rich portfolio of technological challenges that will be critical to maintain and increase the contribution of the company to the development of Chile. The subject of arsenic is a main Corporate concern, as reflected in the diverse efforts that Codelco makes every year to reduce occupational exposure to this element. Future prospects are complex due to the levels of arsenic in the mineral to be extracted, particularly in the future underground mining development of the Chuquicamata Division and in the new Ministro Hales Division, where the high levels of the element are posing problems in the marketing and processing of the concentrates produced there. EcoMetales is proud to provide a solution to this problem, and contribute to ensure the sustainability of the Company which belongs to all Chileans.

linked to the processing, recovering, and disposal of waste, providing services to the entire national mining sector. The high levels of arsenic is a reality that many mining companies that operate in the Norte Grande will have to face, and its presence in waste will be an increasing problem for its disposal. Given the high volumes of material involved, there is no solution other than processing this waste at an industrial level and to turn it into an environmentally inert form. In some cases, the only solution to this situation is to dilute the concentrates that are high in arsenic with “clean” concentrates, before their sale or their processing in the smelter. This solution may only be transitory, because both the frequency of concentrates that are high in arsenic, as well the average grade of arsenic are increasing, and, therefore, it is reducing the availability of “clean” concentrate. As stated before, it is increasingly difficult to export concentrates that are high in arsenic, even with the idea that these may be mixed with clean concentrates by traders or smelters abroad. Exporting technology The business of the future is knowledge. Chile is a large exporter of raw materials which are essential for the development of societies. However, the talent and experience that has been gained in the process have

Solution for the national mining activity The dilemma of impurities is a general problem in mining activities and, in Chile, in particular, of metal mining. In the medium term, EcoMetales expects to contribute to the development of environmental solutions

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SUSTAINABILITY REPORT 2013


not translated into technology exports for the sustainable management and recovery of value from waste. EcoMetales is working in the development of such technologies, which may be applied in any mining activity worldwide. The increasing demands for sustainability point towards an increasing efficiency in the processes and management of waste, particularly those classified as hazardous. This configures a great scenario of opportunities for Chile, its mining industry, and for EcoMetales.


Main products and process waste from copper production

Mine Waste rock Ore Concentrator Tailings Effluents

Concentrate

Acid plant

Smelter Sulfide gases

Slag

Copper flue dust

Anodes

Acid sulfuric

Refinery Effluents

Electrorefined cathodes

Copper-rich solution (PLS)

Sulfides - Pyrometallurgical process Products Waste

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SUSTAINABILITY REPORT 2013


Mine Waste rock Ore Leaching Leaching waste rock Concentrate Solvent extraction Effluents

Slag Copper-rich solution (PLS) Electrowinning

Effluents Copper-rich solution (PLS) Electrowinning-obtained cathodes

Oxides - Hydrometallurgical process Products Waste


Copper Flue Dust and Abatement of Arsenic and Antimony Treatment Plant (PTPA, for its acronym in Spanish) So far, EcoMetales’ main business has been the treatment of flue dust for the recovery of the copper contained in it. This dust comes from the cleaning of the gases emitted in the smelting process. They may contain up to 30 percent of copper, but they also present variable levels of other elements, such as arsenic, bismuth, and antimony. Between 2007 and 2013, this plant processed more than 329 thousand tons of smelting flue dust and other solid hazardous waste, and approximately 290 thousand cubic meters of refinery effluents. Of the total waste, close to 60 thousand tons of copper were recovered, with an average efficiency of 92 percent in 2013. In 2012, with the entry into operations of the Arsenic and Antimony Abatement Process (PAAA, for its acronym in Spanish), the plant may also reduce the levels of this waste, stabilize it, and dispose of it in an environmentally safe form.

Operations PRODUCTION In 2013, EcoMetales’ plant processed almost 20 thousand tons of smelting dust and other hazardous waste, and close to 183 thousand cubic meters of refinery effluents. From the total waste, 5,210 tons of fine copper were recovered.

During 2013, the plant processed material generated by the smelters of Chuquicamata, Potrerillos and Ventanas. The PTPA process may be summarized in the following stages: - Powders are leached with acid to generate a copper rich solution (PLS)[1]. This solution is then sent to the Arsenic and Antimony Abatement Process (PAAA).

- Reactors separate the fraction enriched in arsenic and antimony, which is precipitated as scorodite, a stable form of arsenic and antimony.

- In the PAAA[2], the PLS is treated with hydrogen peroxide followed by a treatment with iron sulfate and limestone.

- Arsenic residues stabilized as scorodite are disposed of in a duly authorized deposit, with a capacity to store 1million 320 thousand tons of waste.

Mining Waste Treatment Plant (PTRM, for its acronym in Spanish)

This plant, which recovered copper from DCH tailings, operated until September 2013, when the contract with the Chuquicamata Division expired.

[1] Pending patent, application for Chilean patent N° 207-2012. [2] Patent pending, application for Chilean patent N° 202-2010. 36

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SUSTAINABILITY REPORT 2013



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

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SUSTAINABILITY REPORT 2013


Arsenic and antimony abatement process diagram


Projects Aiming at improving the sustainability of mining operations high in impurities, EcoMetales has an important project portfolio under development. Following is a description of the most advanced projects as well as some selected from the ideas for future projects.

Project to improve the generation, transportation and disposal of arsenic residues from El Teniente Division. This project entered the Environmental Impact Evaluation System in December of 2013. It considers the construction of a new operation for the treatment of the effluents of the acid plants that come from the gas cleaning plants of the Caletones Smelter, and the construction of a new safety deposit for the final disposal of hazardous waste. The project considers an investment of around 70 million dollars. The new plant will help reduce the generation of solid arsenic residues to one fourth of its current amounts, recirculating 100 percent of the treated effluents to the productive processes of the Division. In addition, it will raise the existing occupational health standards even more, by having encapsulated and automated processes that decrease the exposure to risks of workers and collaborators. The new safety deposit for arsenic residues will have a storage capacity of 530 thousand cubic meters and will be located within the industrial area of El Teniente. Its useful life is estimated at 50 years.

Leaching Process of Complex Concentrates (PLCC, for its acronym in Spanish). In November of 2013, Codelco asked EcoMetales to develop the pre-feasibility engineering of this project, whose focus is the treatment of arsenic concentrates coming from Codelco’s deposits in the North District. The concentrate will be treated in this plant, generating a PLS with copper which will be integrated into the existing facilities in the area. Thus, the new installation will complement ECL’s Arsenic and Antimony Abatement Process, enabling the treatment of sulfide compounds which at this time cannot be treated in EcoMetales’ oxide leaching plant. The project should become one of the pillars of the strategy for the management of waste in the North District. The operation of the plant is estimated for 2016.

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SUSTAINABILITY REPORT 2013


Recovery of “special� metals (bismuth, germanium and antimony). EcoMetales has agreed with a third party to develop technology to extract new elements from the waste it is currently processing. The wastes contain interesting levels of elements such as germanium, silver, antimony, bismuth, copper, and lead. Preliminary tests identified an alternative that would allow EcoMetales to value this material as products while, at the same time, reducing the waste. During the present year, options will be explored to prove this technology at a pilot scale.

Recovery of value from smelting slag. Slag is a by-product generated in all copper smelters. Efforts to extract value from it have concentrated until now in the flotation of the remaining copper. At the same time, EcoMetales jointly with the University of Concepcion, are developing a treatment that allows for the recovery of both copper and molybdenum. The profound knowledge obtained from the physical-chemical process has allowed the formulation of an important innovation which is in the process of being patented[3]. In the remaining part of the project, a technical-economic evaluation will be carried out to support a greater development of the technology at a pilot level.

[3] Patent pending, application for Chilean patent N° 3697-2013.


This section describes some of the most important aspects of EcoMetales’s environmental, social and economic performance in accordance with the Global Reporting Initiative (GRI) Sustainability Reporting Guidelines.

Sustainability Performance

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SUSTAINABILITY REPORT 2013


EcoMetales has a Safety, Occupational Health, Environment, and Quality Policy through which it commits to seek environmental solutions for its clients, based on management of excellence regarding safety, occupational health, environment, and quality of its processes. Therefore, no productive goal justifies exposing its workers to uncontrolled risks, and all the activities of the company are carried out in a framework of respect for and protection of the persons and the environment.

makes possible an operation that protects the health and life of individuals as well as the environment.

Since May 2012 EcoMetales has its Standards for the Control of Fatalities, with the objective of eliminating or controlling serious or fatal work related accidents.

The company’s operations have two distinctive characteristics that are important for defining the scope of this Report. Firstly, since its installations are distant from population centers, the company has neither operational impacts nor direct relations with communities 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.

Both the Policy and the Standards constitute essential tools of EcoMetales’ Comprehensive Management System, which

In 2013, EcoMetales received no fines for failure to comply with environmental regulation.

Environmental resolutions EcoMetales obtained two favorable Environmental Rating Resolutions (RCA, for its acronym in Spanish) in 2013, which as of last December added to 191 permits, 169 of them environmental, for the operation, transportation, treatment and disposal of hazardous waste. The new Resolutions correspond to the following projects: 1. Transportation of waste and inputs to the industrial complex EcoMetales Limited. 2. Treatment of the thicker part of the fresh tailings at the Mining Waste Treatment Plant. Environmental permits obtained by EcoMetales until 2013:

Resolution

Approved Material

RCA Nº 149/06

Treatment of Chuquicamata copper flue dust.

RES Nº 205/07

Treatment of Ventanas and Potrerillos copper flue dust.

RCA Nº 086/09

Treatment of El Teniente, Altonorte, Chagres and Paipote copper flue dust.

Precipitation of arsenic and antimony to produce scorodite.

Construction and operation of waste deposit (scorodite).

RCA Nº 050/11

Treatment of hazardous copper-containing waste from Chilean smelters.

Authorization to deposit sludges from leaching of hazardous waste.

RCA Nº 074/12 *

Recovery of molybdenum from PLS generated by treatment of copper flue dust and hazardous waste.

RES Nº 687/12

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

RCA Nº 113/13 *

Transportation of smelting dust and hazardous waste.

RCA Nº 0087/13 *

Treatment of the thicker part of the fresh tailings at the Mining Waste Treatment Plant.

RES Nº 0302/13

Temporary storage of metallurgic dust coming from the Ministro Hales Division.

* RCA to date is not operational.


Economic and Social Aspects

The table shows the GRI economic and social performance indicators applicable to EcoMetales for 2012 and 2013.

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SUSTAINABILITY REPORT 2013


Economic Value (US$)*

Direct Economic Value Generated (EVG)

2012

2013

28,053,850

32,240,699

Economic Value Distributed (EVD) Operating costs Wages and benefits Payments to providers of capital Payments to governments Investment in community

-24,346,005 -6,080,693 -443,966 0 0

-30,756,956 -6,031,473 -517,331 0 0

Valor Económico Retenido (VEG-VED)

-2,816,814

-5,065,060

Incomes

*: Exchange rate used: US$ 1 = $ 524.61 (Chilean pesos).

Labor aspects EcoMetales has a general hiring procedure that is applied uniformly across the company. However, through incentives, it promotes the hiring of persons resident in the region where its operations take place. The remunerations paid by EcoMetales are competitive within the context of the region where it operates, an eminently mining area. Both remunerations and incentives are determined by an employee’s function and the value contributed by his or her performance in terms of meeting the company’s targets. All EcoMetales’s employees earn more than the minimum legal wage in force in Chile. In addition, the company’s workers receive quarterly and annual production-linked bonuses. The table below shows the company’s workforce in 2012 and 2013,by type of contract. As of 31 December 2013, it had 117 direct employees and a further 142 contractors’ employees were working at its operations.

Direct workforce

Type of contract Indefinite Temporary * Total

2012

2013

Men

Women

Total

Men

Women

Total

88 9 97

22 2 24

110 11 121

94 6 100

16 1 17

110 7 117

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


In 2013, 31 direct employees left the company, equivalent to 26,5% of its workforce. In the same period, 27 people joined the company.

Employees leaving ECL in 2013

Women Men Total

Age group < 30

30 - 50

> 50

Total

3 5 8

4 15 19

1 3 4

8 23 31

Employees joining ECL in 2013

Women Men Total

Age group < 30

30 - 50

> 50

Total

0 3 3

1 21 22

0 2 2

1 26 27

20

Ca Calcium

ALMA room

In January 2013, the ALMA room was inaugurated in the Flue Dust and Arsenic and Antimony Abatement Treatment Plant. This is a room in which mothers that work in EcoMetales can store maternal milk in a private and safe environment. The objective of this initiative is to promote milk feeding, as its benefits have been widely demonstrated. The ALMA room is available for all the working mothers of EcoMetales Calama, be they company employees or contractors. In addition, as part of the Comprehensive Management System for Safety, Occupational Health, Environment, and Quality, a Procedure for the Extraction and Storage of Maternal Milk in the Workplace has been established.

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SUSTAINABILITY REPORT 2013



As regards employee benefits, EcoMetales complies with Chilean law and the standards prevailing in the country’s mining sector. Employees, including those with a temporary as well as indefinite contract, receive the following benefits:

Worker benefits 2013

Workers with Indefinite

Contract

Workers with Temporary Contract

Life Insurance YES Health Insurance YES Insurance Against Disablement YES Maternity/Paternity Leave YES Pension Fund Benefits of day care YES Benefits of the ALMA room YES Stock Options NO Others NO

EcoMetales fully respects its workers’ right to freedom of association and collective bargaining. Union membership at EcoMetales is shown in the table below.

YES YES YES YES YES YES NO NO

Union membership, 2013

Nº of unions Nº of unionized workers Union membership (%)

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SUSTAINABILITY REPORT 20132013 REPORTE DE SUSTENTABILIDAD

2 45 41%


EcoMetales’s workers are covered by a collective agreement signed in August in 2010 and valid for almost four years. Under its hiring policy, the company does not discriminate on the grounds of gender, race or membership of minority groups and no incidents related to discrimination of any type have been reported. Similarly, EcoMetales does not differentiate remunerations on the basis of gender. EcoMetales does not employ minors and adheres to national and international labor regulation prohibiting child labor. Similarly, it does not accept forced or compulsory labor which is forbidden by the legislation in force in Chile as well as under International Labour Organization (ILO) recommendations. The tables below show the company’s workforce in 2013 by gender and age group.

Workforce by Gender, 2013

Category

Women

%

Executives 0 Professionals/Technicians 14.5 Operators 0 Total 14.5

Total

%

%

0 17 0 17

6 60.7 18.8 85.5

7 71 22 100

6 75.2 18.8 100

7 88 22 117

Workforce by Age Group, 2013

Category

Men

< 30

30-50

> 50

Total

(% / Nº)

(% / Nº)

(% / Nº)

(% / Nº)

Executives Professionals/Technicians Operators Total

0 / 0 9.4 / 11 2.6 / 3 12 / 14

4.3 / 5 53.8 / 63 14.5 / 17 72.6 / 85

1.7 / 2 12 /14 1.7 /2 15.4 / 18

Absenteeism Rate

Año

[N° of days lost / N° of days worked] * 100

2012 2013

1.9 2.5

6 75.2 18.8 100

7 88 22 117

In 2013, the absenteeism rate was 2,5% which represented an increase of some 32% on the previous year. Out of this total rate, 0,2% corresponded to women and 2,3% to men.


Work Related Fines During 2013, EcoMetales paid a fine associated to non-compliance of labor regulations, as described in the following table. The fine was paid on November 21, 2013, according to Resolution Nº 171/2013 of Calama’s Labor Direction.

Description of the sanction Non-compliance with the delivery of Personal Protection Elements (EPP, for its acronym in Spanish) within the period stipulated in the collective contract subscribed between EcoMetales Ltd. and the Alliance Copper Limited Workers’ Union. The period stipulated for the delivery of EPP is April of each year, and in 2013, the elements were delivered in June. (Fine Resolution Nº1172/13/30).

Non-compliance

Organization that

Amount

with norm or

of fine

commitment unfulfilled

processes the sanction and resolution Nº

Nº 26 of the collective Contract “Working clothes”.

El Loa Provincial Labor Inspection (Calama).

(UTM) 2

Corruption In order to minimize the probability of corruption incidents, the company implemented a Crime Prevention Model (MPD, for its acronym in Spanish) which was certified in December of 2013. The Model seeks to prevent the crimes described in Law N° 20393, regarding the responsibility of legal entities in crimes such as asset laundering, financing of terrorism, and bribery of a national or foreign public employee. The model includes the identification of the risk factors for such crimes, as well as their evaluation and minimization. Also, a Code of Conduct was implemented, communicated, and provided to each worker during 2013, and a public Reporting Line was set up at www.ecometales.cl to receive reports concerning infractions or transgressions of the code, of the values of the company, and crimes under Law N° 20393. The model also considers a communication and training plan for all workers.

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SUSTAINABILITY REPORT 2013


As established in its Code of Conduct, EcoMetales does not make financial or in-kind contributions to political parties or related institutions. No incidents of corruption have ever occurred at EcoMetales.

Training The following table summarizes the training efforts during 2013. In brief, each worker received on average 31.7 hours of training. With respect to 2012, investment in training increased by 135 percent.

Nยบ of Investment Category employees (US$)* Executives

Men

7

Women

Training 2013 Number of courses / Hours per course Participants 1 / 48

6

Average hours per gender (Nยบ hours / Nยบ workers) 6.9

11,082

0

-

0

Total Average hours (Nยบ hours / Nยบ workers)

6.9

0.00

Professionals/ Technicians

Men

71

Women

24 / 2390

45,502

17

137

33.7

7 / 317

26

30.8

18.6

Operators

Men

22

Total

Women

27,001

0 117

* Exchange rate used: US$ 1 = $ 524,61 (Chilean pesos).

9 / 958

83,585

80

43.6

-

0

0.00

41/ 3713

249

31.7

43.6

31.7


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With respect to safety and occupational health, EcoMetales is guided by a series of values known by all its workers. The first summarizes the company’s philosophy regarding this subject: “Personnel safety 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.

Health and safety committees 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.

Safety performance During 2013 there were two accidents with loss of time. One in the company and one in a collaborating company which resulted in an accident severity rate of 9.92, representing a decrease of more than 30 points with respect to the previous period, when the rate reached 40.84. The average for the mining industry was 325.13*. At the same time, the frequency rate increased with respect to the previous year by 0.67 points, although the number of accidents with lost time remained the same. The average for the mining industry in the same period was 2.1*.

*Source: SERNAGEOMIN


Safety performance 2012

Nº of workers Hours Nº of days suffering an accident Workers Gender worked Lost Charge Fatalities LT NLT Own Workers Men 163,984 Women Contractors Men 595,008 Women Total - 758,992

0 0 31 0 31

0 0 0 0 0

0 0 0 0 0

0 0 2 0 2

1 1 7 0 9

Nº of accidents LT NLT 0 0 2 0 2

Frequency Rate

1 0.00 1 7 3.36 0 9 2.64

Severity Rate 0.00 52.10 40.84

Safety performance 2013 Nº of workers Hours Nº of days suffering an accident Workers Gender worked Lost Charge Fatalities LT* NLT* Own Workers Men 234,606 Women Contractors Men 370,492 Women Total - 605,098 * LT: Lost Time

0 1 5 0 6

0 0 0 0 0

0 0 0 0 0

0 1 1 0 2

5 0 9 0 14

Nº of accidents Frequency LT* NLT* Rate 0 1 1 0 2

* NLT: Not Lost Time

In reporting workplace accidents, EcoMetales complies with the corresponding Chilean legislation (Resolution N° 2245 issued by the Health Ministry) which is based on the recommendations of the International Labour Organization (ILO). No employees at EcoMetales’s operations have professional illnesses. In all activities that potentially involve exposure to arsenic, the company’s own employees and those of contractors are tested every three months to determine their possible contamination level. EcoMetales has established a limit of 100 micrograms of arsenic per gram of creatinine in urine as the exposure threshold for triggering corrective action. This compares with the limit of 220 micrograms established by Chilean law.

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SUSTAINABILITY REPORT 2013

5 4.26 0 9 2.70 0 14 3.31

Severity Rate 4.26 13.50 9.92



Environment 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. In the third quarter of 2012, EcoMetales inaugurated the Arsenic and Antimony Abatement Process (PAAA) that uses, as inputs, limestone, hydrogen peroxide and magnetite. Given that the PAAA operated for only four months during 2012 in what is considered the initial stage, it is not possible yet to make comparisons from year to year.

Raw Materials and Inputs: Dust Treatment Plant (tons) Raw Materials 2011 2012

Copper Flue Dust and other Harzadous Wastes

2013

57,202*

35,436*

19,532

-

107,308

182,690

Refinery Effluent (m3) * Corrected data.

Inputs

2011

Sulfuric Acid Limestone Hidrogen Peroxide Magnetite

Energy use

32,599 - - -

2012 16,480 1,518 388 302

Direct Energy Consumption (MWh) Oil and Derivatives Liquefied Gas

2013 10,357 7,508 1,627 2,608

Total

The important increase in fuel con2012 8,292 101 8,393 sumption seen in 2013 27,894 111 27,996 2012 reflects the start of operation of a boiler to generate the steam required by the Arsenic and Antimony Abatement Plant (PAAA) in order to keep the PLS at a high temperature.

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SUSTAINABILITY REPORT 2013



The table aside shows the energy consumed indirectly by EcoMetales through the Northern Interconnected Grid (SING).

Indirect energy consumption (MWh) Electricity

2012

6,012

2013

6,868

The company’s headquarters in Santiago consumed 25,900 kWh of electricity from the Central Interconnected Grid (SIC) in 2013, up by approximately 8% on 2012.

Water use and recycling The table aside shows water use and recycling in different areas of EcoMetales’s operations in 2012 and 2013. The increase in water consumption is basically explained by the fact that during all of 2013 the Arsenic and Anti-

Water reuse and recycling

Type of use

Water Extracted for Process (m3) Drinking water for changing rooms and bathrooms (m ) 3

Total (m ) 3

Reuse/Recycling (m ) 3

% Reuse/Recycling

2012

2013

247,422

373,301

10,636

9,985

258,058

383,286

51,756

56,879

20

15

mony Abatement Process was operational, while in 2012 it only operated during the last four months.

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SUSTAINABILITY REPORT 2013


Definitions for calculating and interpreting Greenhouse Gas (GHG) Emissions Greenhouse Gases (GHGs): The emissions that make the most sig-

nificant 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 CO2eq/litro. (Source: The Carbon Trust; www.carbontrust.co.uk).


Emissions The tables shows the direct and indirect greenhouse gas (GHG) emissions related to EcoMetales’s operations in 2012 and 2013.

Direct GHG Emissions Ton of CO2eq 2012

2013

Diesel

2,090

7,032

21

23

2,111

7,055

Liquefied Gas Total

Indirect GHG Emissions 2012

Quantity (kWh)

2013

6,012,000

6,868,000

Emission Factor (kg CO2eq/kWh)*

0.806

0.811

GHG Emissions (ton CO2eq)

4,846

5,570

*: Emission factors provided by the Chilean Energy Ministry.

In other words, close to 56 percent of the total greenhouse gas emissions of EcoMetales are direct, associated to the use of fuels in the operations, while 44 percent are indirect, and thus associated to the electric energy consumption of the equipment in the plant.

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SUSTAINABILITY REPORT 2013


The increase in emissions was the result of a number of factors: - The start-up of an oil-fired boiler. - Higher overall electricity consumption. - An increase in the unit emissions factor of the Northern Interconnected Grid (SING). In the case of the electricity consumed by the company’s offices in Santiago, this accounted for 11,2 tCO2e of indirect GHG emissions in 2013.

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. The table below shows the solid industrial waste generated by EcoMetales in 2012 and 2013 and the level of hazard it represented.

Solid Industrial Waste (Tonnes) Hazardous Non-hazardous

Total

2012

391

1,929

2,320

2013

317

17,550

17,867

Out of the 17.550 tonnes of non-hazardous waste generated in 2013, 17.369 tonnes (99%) corresponded to scorodite, the environmentally stable form of the arsenic removed at the Arsenic and Antimony Abatement Plant. All the waste generated at EcoMetales’s installations, whether domestic, industrial or hazardous, is disposed of at duly authorized sites. Hazardous waste is, in addition, registered with the Health Ministry’s Hazardous Waste Declaration and Monitoring System (SIDREP).


P: Principal indicators A: Additional indicators

GRI Index

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 / 04 Message from the General Manager / 06

1.2 Description of key impacts, risks and opportunities.

The dilemma of impurities in mining / 16

2. Organizational profile 2.1 Name of the organization.

Our company / 08

2.2 Primary brands, products and/or services.

Our company / 08

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

Our company / 08

2.4 Location of the organization’s headquarters.

Our company / 08

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 / 08

2.6 Nature of ownership and legal form.

Our company / 08

2.7 Markets served.

Our company / 08

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

Our company / 08 Economic and social aspects / 44 Labor aspects / 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 2013, there were no significant changes in the structure and ownership of EcoMetales.

2.10 Awards received in the reporting period.

No awards or distinctions were received in 2013.

3. Report parameters 3.1 Reporting period for information provided.

About this report / 14

3.2 Date of most recent previous report.

About this report / 14

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GRI aspect

Section of report / Page

3.3 Reporting cycle.

About this report / 14

3.4 Contact point for questions regarding the report or its contents.

About this report / 14

3.5 Process for defining report content.

About this report / 14

3.6 Boundary of the report.

About this report / 14

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

About this report / 14

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 / 14

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 2012 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 2012 Report.

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

GRI Index / 62

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

About this report / 14

4. Governance, commitments and engagement 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 / 08

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 / 08

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

Our company / 08

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

Our company / 08

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 /08

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.

Members of the Board of Directors are appointed by Codelco and are subject to its processes for evaluating their 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.


GRI aspect

Section of report / Page

4.14 Stakeholder groups engaged by the organization. 4.15 Basis for identification and selection of stakeholders with whom to engage.

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 2013, no progress was achieved in implementing this commitment.

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.

5. Management approach Disclosure on Sustainability Approach.

Sustainability performance / 42

Performance indicators Economic performance / Economic management 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 / 44

EC3 - P

Coverage of the organization’s defined benefit plan obligations.

Economic and social aspects / 44

EC4 - P

Significant financial assistance received from governments.

In 2013, EcoMetales did not receive financial assistance from the government.

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 / 45

EC7 - P

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

Labor aspects / 45

Environmental performance / Materials EN1-P

Materials used by weight or volume.

Raw materials and inputs / 56

Environmental performance / Energy EN3-P

Direct energy consumption by primary energy source.

Energy use / 56

EN4-P

Indirect energy consumption by primary source.

Energy use / 56

Environmental performance / Water EN8-P

Total water withdrawal by source.

Water use and recycling / 58

EN10-A

Percentage and total volume of water recycled and reused.

Water use and recycling / 58

Environmental performance / Emissions, effluents and waste EN16-P

Total direct and indirect greenhouse gas emissions by weight.

Emissions / 60

EN21-P

Total water discharge by quality and destination.

Industrial waste / 61

EN22-P

Total weight of waste by type and disposal method.

Industrial waste / 61

EN24-A

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.

Industrial waste / 61

64

65

SUSTAINABILITY REPORT 2013


GRI aspect

Section of report / Page

Environmental performance / Products and services EN27-P

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

Sustainability performance / 42

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.

Sustainability performance / 42

Environmental performance / Overall EN30-A

Total environmental protection expenditures and investments by type.

In 2013, 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 / 45

LA2 - P

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

Labor aspects / 45

LA3 - A

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

Labor aspects / 45

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

Percentage of employees covered by collective bargaining agreements.

Labor aspects / 45

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

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

Safety and occupational health / 52

LA7-P

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

Labor aspects / 45 Safety and occupational health / 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 / 42 Safety and occupational health / 52

LA9-A

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

Labor aspects / 45

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

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

Training / 51

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 / 45

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 / 45

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

Total number of incidents of discrimination and actions taken.

Labor aspects / 45


GRI aspect

Section of report / Page

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 / 45

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 child labor.

Labor aspects / 45

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.

Labor aspects / 45

Social performance: society / Corruption SO2-P

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

Corruption / 50

SO3-P

Percentage of employees trained in organization’s anti-corruption policies and procedures.

Corruption / 50

SO4-P

Actions taken in response to incidents of corruption.

Corruption / 50

Social performance: society / Public policy SO6-A

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

Corruption / 50

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.

Fines for non-compliance / 50

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 / 42

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 / 42

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 / 42

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.

66

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

67

SUSTAINABILITY REPORT 2013



Photography/ . Eduardo Cifuentes . EcoMetales Printing/ . Procolor


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