Sustainable Development & Financial Report 2009
COPPER OPERATIONS IN CHILE 2. 3.
Highlights of the year Anglo American 4 Chief executive’s foreword 6 Committed to the victims of the earthquake Record production and work safety 8 Scope 12 Anglo American plc performance. 16 Anglo American Chile 22 Operations in Chile Anglo American 30 2009 performance and 2010 targets 5,933 small- and medium-sized business entrepreneurs supported by the Emerge programme. mission Financial Capital 34 Economic performance Anglo American aims to be the leading US$584 million paid to the State in tax. global mining company – through the operational excellence of world class Financial Capital Capital Financial US$6.7 million invested in social initiatives and assets in the most attractive commodities the community. and a resolute commitment to safe and sustainable mining. Human Capital 48 Safety and occupational health US$1.7 billion in profit. 56 Our people
invested in the year.
US$926 million Human Capital
Review and relaunch of the Good Citizenship Business Principles. Social Capital 66 Corporate presence in the community 72 Community engagement plans New management systems published for social and environmental performance. Social Capital
REPORT APPLICATION LEVELS Natural Capital C C+ B B+ A A+ 82 Environmental management 84 Energy efficiency programme Self 86 Performance by division Declared 98 Environmental performance indicators
Mandatory Natural Capital Natural Third Party Checked
Optional GRI Manmade Capital 106 Procurement and contracts
Checked Assured Externally Report Assured Externally Report 110 Supplier development programme 112 Lifecycle
Manmade Capital Manmade Capital
Financial Statements For further information, 114 Condensed and audited please contact: financial statements Marcelo Esquivel External Affairs Manager [email protected] Financial Statements Statements Financial
In seeking to mitigate the possible impacts of this process on the environment, this Sustainable Development and Financial Report Appendices 2009 was printed on couché paper made from 146 Appendix 1 100% chemical paste and free of chlorine 147 Appendix 2 and acid, and used vegetable-based dye in 148 Appendix 3 the printing process. The UV varnish used 150 GRI index
does not contain toxic substances, PCP, PVC, Appendices NVP, or heavy metals, such as lead, cadmium, chromium,Anglo American arsenic, / anthin, Copper barium / Chile or Sustainable mercury. Development & Financial Statements Report 2009 4. Chief executive’s foreword 5.
Chief executive’s foreword
Rebuilding a Anglo American better society 2009 will be recalled as a record year for Anglo American Chile. There was record production, investment was 22% up on 2008, important prospects were discovered near Los Bronces and the company attained the best safety result in its history. Moreover, it implemented and sharpened social and environmental management systems and asset optimisation, which bolstered the sustainability strategy and management.
I must start this foreword by touching on the principals and all the players involved to in 2009, in which Chile has become the social and supply chain management. enhancing the quality of life of their families. dramatic consequences of the earthquake provide a quick and efficient response in headquarters of the Copper business unit, Regarding the former two, The Anglo The target is to support a total of 7,000 and tsunami that hit the centre and south of keeping with needs arising. underpins the challenge of making us the Environment Way and Anglo Social Way entrepreneurs in 2010. Chile on 27 February 2010. Like the whole investment, partner and employer of choice. standards were released, which systematise of society, Anglo American’s employees Although there are many months to go before The new structure aims to boost the efficiency the vision, policies and management systems Progressing with transparency and executives were moved by the grief of assessing the impact of our endeavours, of our operations and co-ordination with the underpinning Anglo American’s work in these thousands of families who lost their loved we believe the action we took faithfully company’s other activities worldwide. areas. We are checking all our methodologies Anglo American Chile wanted to make ones and all their personal effects. At the reflects the scope of our philosophy of and and processes at operations in Chile to fully progress with its commitment to same time, we witnessed the strength of commitment to contributing towards the The zero harm goal for safety and occupational migrate to these guidelines. transparency, for which it commissioned our country to get back on its feet and start sustainable development of society and the health is essential for all our activities and PricewaterhouseCoopers to carry out limited reconstruction thanks to the solidarity of the communities with whom we engage. Our operations. The accident rate index was 0.17 Progress continued with embracing the independent verification of this report. The entire society. experience, based on sound methodological (per 200,000 hours worked) in 2009 and our supply chain sustainability focus by means content and information reported by the five criteria, has enabled us to develop capabilities five operations were among the top seven of the Anglo American Supply Chain (AASC) divisions were therefore checked against Anglo American immediately realised that are heavily embedded in our entire with the best safety performance in Chile that programme. This model is driving global the scope outlined in the verification report this disaster was not only a test of the organisation, which we knew how to fully year. management of different procurement and enclosed below. Embracing a new commitment and willingness of companies deploy when the country most needed service categories. Such endeavours, in to contribute to the well-being of their them. In brief, we not only made a donation The challenge for 2010 is to carry on addition to asset optimisation measures, As in all the previous versions, this report corporate structure neighbours and the country in general but and provided money but we also made our disseminating and empowering the safety will generate benefits of US$2 billion for the was drawn up based on the guidelines of the would also measure the ability to manage management capacity and professionals concept in all the company’s areas and Group worldwide in 2011. Global Reporting Initiative (GRI). We also used in 2009, in which resources efficiently to implement solutions available to the community to allow 4,500 functions. Our goal is still zero accidents and, different sources of information, studies and Chile has become with a high social impact. Although no schoolchildren to return to their classes in although we are getting close, we should step With regard to the contribution to generating recommendations to detect those issues of corporate social responsibility model has most record time. up efforts to make this a reality. social capital, we have undertaken the interest to our stakeholders. the headquarters of likely ever been designed to address such a commitment of making a contribution to disaster, we decided to honour our corporate The challenges of a new scenario The progress with the Los Bronces improving the quality of education. Besides Please review the content and let us know the Copper business values and our traditional way of acting with Development Project leads us to foresee sharpening this area in the community your comments and suggestions, which will be people. That was evident in our response to 2009 started out with the great difficulty further challenges for the growth of the scale engagement plans of each division, Anglo very useful to improve the reporting process unit, underpins the provide direct relief to the towns in the area caused by the global financial crisis. The of operations involved in the start-up in 2011. American has embraced high-impact initiatives and our general undertakings. hit most by the disaster, which is outlined copper price plummeted in late 2008 and This scenario will require highly skilled teams, in this area like the Enseña Chile and Elige challenge of making in the first few pages of this report, and in only started to recover as of March 2009. for which reason the company is increasing its Educar programmes. us the investment, donating US$10 million in aid, one of the Nevertheless, as we mentioned in the previous people development, continuous improvement largest donations made in the country. report, this crisis did not entail trimming and internal communication programmes, Moreover, in 2009 we decided to support the partner and employer our contribution to the communities, our aware that without raising our competencies work of Un Techo Para Chile (A Roof for Chile) Our contribution was essentially aimed at environmental endeavours or the focus on the and the ability to attract the most talented to bring an end to the shanty towns that still of choice”. recovering the educational infrastructure by safety of our employees. Quite the contrary, people to the company, it will not be possible exist in the Metropolitan Region and help building and implementing modular schools. Anglo American Chile continued to invest in to suitably respond to this growth of the more than 4,660 families obtain dignified and Miguel Ángel Durán We thereby enabled schoolchildren from its sustainable development projects and had company. definitive housing. Chief Executive badly hit communities like Caleta Tumbes record output and safety performance. (Talcahuano), Quirihue, Constitución, Sustainable management and In the same area, the 2009 result of the Cocholgüe (Tomé) and Yungay to return to Anglo American’s cultural model is a guiding social capital Emerge programme revealed that 5,933 value for embracing common management entrepreneurs received support to develop classes and not lose their school year. This The scope and enhancement of Anglo policies, standards and focuses to attain the small- and medium-sized businesses, which was possible thanks to working closely with American’s sustainable development focus in ambition of being the leading global mining are generating a sustainable income and the authorities of the Ministry of Education, 2009 was also evident in the environmental, the municipalities, the community, school company. Embracing a new corporate structure
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 6. 7.
Committed to the victims of the earthquake Keep going Chile!
Anglo American donated US$10 million, equivalent to over Ch$5 billion, in relief for the people affected by this disaster.
On 27 February 2010, the centre and south machinery to remove debris, one of the most authorities and communities in the area. The of Chile had the fifth largest earthquake in important initial needs according to the local company focused work on helping to rebuild Maule Region VII modern history in terms of its scope (seven authorities. Although work was focused on schools by setting up six modular facilities regions) and size (8.8 on the Richter scale). the Maule and Bío-Bío regions, additional with the same technology used to build mine Bío-Bío Region VIII Although the consequences of this earthquake resources were allocated to support the camps, which are anti-seismic and resistant to and the action taken by Anglo American do central area of the country, specifically the rain and extreme temperatures. This solution not form part of the performance in 2009, communities around the company’s operations benefitted over 4,500 schoolchildren from which is the reason for this report, it is that were also hit. Caleta Tumbes, Constitución, Quirihue, Yungay unquestionable that this event significantly and Cocholgüe. modified the company’s work focus, mainly in Twenty dump trucks, four backhoes, four the social area, and it will be reported in the front loaders and two watering trucks were Anglo American also arranged an internal Sustainability Report 2010. already operative on 7 March 2010, which 1+1 campaign to raise funds provided by the In figures were hired by the company and made available company’s own employees. This effort raised US$10 million donated by Anglo American for reconstruction. Just five days after the tragedy, Anglo to the local authorities in the area hit hardest a sum of Ch$100 million, which was delivered American donated US$10 million, equivalent by the earthquake. A team of company publicly during the national Teletón campaign Ch$100 million raised jointly with company employees in the 1+1 to over Ch$5 billion, in relief for the people executives and engineers also travelled to “Chile ayuda a Chile” (Chile helps Chile). campaign. affected by this disaster. This donation Regions VII and VIII to co-ordinate the relief financed the deployment of heavy-duty effort, establishing direct contact with the Damage caused by the earthquake in the education area: 4,013 schools affected. US$3.015 billion of infrastructure losses.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 8. Scope 9.
To complement this, Anglo American plc The conclusions were used to design a manual analysed the methodology for drawing up its on how to draw up reports and consider the sustainability reports worldwide. This work remarks by these stakeholders to issue Anglo Scope considered: American documents. 10 interviews of stakeholders. Based on this stage, 48 G3 indicators were Content definition 102 surveys of employees. selected for reporting. The ten indicators of To define the content, we hired an expert An external consultant reviewing the the 2009 draft of the Mining and Metals consultant on the implementation of the reporting process. Supplement of the GRI were also answered. GRI, who guided us on the information 15 feedback records included in the materiality process. The first task was to sustainability report. Verification review the indicators that are significant for 54 surveys of business school (MBA) and For the first time we commissioned the company. This was carried out by the environmental science students at the PricewaterhouseCoopers to carry out limited vice president of marketing and corporate Rhodes and KwaZulu-Natal universities in independent verification of our report. The affairs, the vice president of human resources, South Africa. content and information reported by the five the environmental manager, the safety and 36 publications in the formal and informal divisions were therefore checked against occupational health manager, the external media. the scope outlined in the verification report affairs manager, and the procurement and enclosed below. In previous years, reports contracts manager. The entire process was were verified in accordance with the Anglo endorsed by the company CEO. American plc process, in which the Chilean divisions were considered randomly. The report External insights and concerns were gathered Main issues raised by stakeholders Location of the information related obtained an A+ rating. from various sources: to this issue Stakeholders: 20 and 67 The financial statements were audited The final reports of the socio-economic by Deloitte & Touche and both letters are assessment toolbox (SEAT) II process were Outline the company’s relationship with them. enclosed at the end of this report. reviewed to detect the most significant Response to priority issues for them. Identification and classification issues for the communities around method. As in previous years, to guarantee the operations. Corporate governance: 35 principles of information transparency, For the sixth year running, we have drawn up The press articles in the year were balance, clarity and reliability, we have listed reviewed to establish the main issues of Provide more information about the remuneration structure of senior our Sustainable Development Report, which executives and managers and the connection between incentives and all the sources consulted to draw up this reports on the economic, environmental and the mining industry covered by the media. remunerations. report in Appendix 3. This process entailed social performance from 1 January to 31 The comments on improvement made by reviewing 55 documents and 41 people December 2009 at the five divisions the the judges and jury of the AcciónRSE- Human resources: 56 - 63 provided information to issue this report. company owns and operates in Chile, i.e., organised Best Sustainable Development Outline the steps taken to manage the careers of employees and their Los Bronces, Mantos Blancos, El Soldado, Report Contest 2009 were considered. quality of life. Availability Mantoverde, Chagres, and the corporate office
The review report made by AcciónRSE To ensure that people have access to in Santiago. Social performance: 20 and 68 - 79 on the principles and content of the Anglo American Chile’s sixth Sustainable Sustainable Development Report 2008 was Present some SEAT II issues better, like “identifying and assessing The financial and operating performance Development Report, we did the following: appraised. the social and economic impacts of Anglo American’s operations and results of Collahuasi were considered based key development problems and assessing management systems and on Anglo American’s 44% interest in the Two studies made by the Reputation current social investments”. We printed 1,500 copies in Spanish. company to report its real contribution to the Institute5 were considered. One included We printed 300 copies in English. The Sustainability Report quantitative and qualitative assessments Company contribution to community education We published 5,000 summarised versions. country. Other chapters contain no information and development. 2008 won the prize for the about Collahuasi as it draws up its own and the other online surveys to define the We developed an interactive website of Best Description of Economic sustainability reports. perception of the company. Protection of national heritage. the report (www.anglochile.cl). A diagnosis was made of the level of We made a CD with the financial Performance, awarded Donations to reduce poverty. Just as in the last three reports, we have statements accompanying this document by AcciónRSE in its Best knowledge and opinion of Anglo American merged the financial results with the by students on mining-related courses Contribution to the family development of people in the surrounding and this is also available on the corporate Sustainability Report contest. sustainable development indicators into one at universities in the Third, Fifth and communities. website. single document. For this, we used the G3 Metropolitan Regions. guidelines and the latest draft of the Mining 84 - 103 All the PDF files of the reports and annual We reviewed the Chilean mining Environmental performance: and Metals Supplement of the Global Reporting reports published by Anglo American Chile can barometer, released by MORI6, on Chilean Increase the scope of issues regarding climate change. Initiative (GRI)2, published in 2009. We also be downloaded from the corporate website opinion of the mining industry and future considered compliance with the principles of Issues related to water management and biodiversity. www.anglochile.cl The Sustainability Report 2008 expectations. the International Council on Mining and Metals Mine site closure. attained seventh place in the (ICMM)3. Although the company adheres Based on this information, the main opinions integrated report category of the to the Global Compact4 principles, it did not were considered to draw up a matrix of major Contribution to the development of energy efficiency and carbon Corporate Register Reporting present this report as Communication on footprint reduction programmes. issues for the stakeholders. Awards, in which 200 reports Progress (COP), as Anglo American plc does Waste management. worldwide participated.1 this in its own consolidated report, which includes the performance of all its operations. Economic performance: 26 - 29, 37 - 38 and Develop content on the handling of customer relations: customer 42 - 43 The report mentions Anglo American in Chile service, complaint management, product quality and safety, labelling or Anglo American Chile, indistinctly, referring and responsible marketing. to the Chilean operations of the Copper 1 www.corporateregister.com business unit. Assure tax payment. 2 www.globalreporting.org 3 www.icmm.com Greater work opportunities in the local area. 4 www.globalcompact.com 5 www.reputationinstitute.com 6 www.ipsos-mori.com
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 10.
Anglo American
Anglo American plc Restructuring of the organisation. Seven business units. International accolades. Four awards for its track record on transparency and sustainability.
Anglo American Chile 3,143 company employees in 2009. Fine copper output was up 5% reaching a record level. Record safety performance and one of the best in the industry. Profits were 6% up on 2008.
Mantoverde was awarded the John T. Ryan Prize for safety excellence for the fourth time. Mantos Blancos was the runner-up.
Total investment increased by 22% amounting to US$926 million.
The Los Bronces Development Project progressed according to schedule.
Operations in Chile 5 operations. 669,814 tonnes of fine copper. 3,886 tonnes of molybdenum. 457,621 tonnes of sulphuric acid. Anglo American’s ore resources San Enrique Monolito. will increase by 50% due to the Los Sulfatos. discovery of the San Enrique Monolito and Los Sulfatos prospects.
Sustainable development New version of the Good Citizenship focus Business Principles. Publication of Anglo American’s guiding values. Anglo American culture dissemination plan.
t
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 12. 13.
Anglo American plc Anglo American plc Anglo American plc Management closer to the business: HQ & Other Anglo American plc7 is a multinational mining & Industrial Anglo
mining company with headquarters in Anglo American
Consolidating the 01. London, England, and operations on the five continents. It has seven business units and HQ, Base & Coal its shares are mainly traded on the London stock exchange. Anglo American Iron ore Brazil It had sales of US$24.637 billion and Met Coal profits of US$2.569 billion in 2009. Mining Copper Nickel Platinum & Ferrous Kumba, Platinum & operations in Chile accounted for 16% of the culture Thermal Coal revenues and 47% of the Company’s profits. Anglo American aims to be the leading global mining Partnerships and company through world-class assets in the most OLD NEW memberships attractive commodities, operational excellence and a 4 divisions: 7 business units: Anglo American is convinced that the resolute commitment to safe and sustainable mining. Bas Metals and Coal in London. Copper, nickel and iron ore Brazil in South America. success of its operations is based on its Ferrous Metals and Platinum in Johannesburg. Thermal coal, Kumba iron and platinum in South Africa. ability to enter into partnerships with The highlights of 2009 were the restructuring of Metallurgical coal in Australia. public and private institutions and those of the company, the updating of the Good Citizenship Functions distributed in the business units. civil society, which share its concern for More consolidated functions. sustainable development. Business Principles and the publication of The Anglo Social Way and The Anglo Environment Way. Fewer employees at the corporate office. The company belongs to or has partnerships with the following organisations:
Business Action for Africa8 CARE International9 Extractive Industries Transparency Initiative10 Fauna and Flora International11 Global Business Coalition (GBC) on HIV/ AIDS, Tuberculosis and Malaria12 International Business Leaders Forum13 New global structure International Council on Mining and Metals14 Investment Climate Facility for Africa (ICF)15 Natural History Museum16 CEO Platinum SA 17 United Nations Global Compact Neville Nicolau Voluntary Principles on Security and Human 18 Rights Group Finance Director UK CEO Copper CHILE René Médori World Business Council for Sustainable Development (WBCSD)19 John Mackenzie
Group Director of UK CEO UK CEO Nickel BRAZIL Mining & Technology Cynthia Carroll Brian Beamish Walter De Simoni
CEO Kumba Iron Ore Group Director of Business Group Director SA UK UK Performance & Projets Strategy & BD Chris Griffith David Weston Peter Whitcutt
CEO Iron Ore Brazil BRAZIL Anglo American plc has explicitly embraced These guidelines are considered in operations Group Director UK the variables of sustainable development20 as and include project design and assessment, of HR & Communications Stephan Weber part of its operations, and this commitment is mine planning and access to capital to finance Mervyn Walker embodied in the policies, strategies and daily initiatives. CEO Met Coal AUS practices of the Company. Seamus French 7 www.angloamerican.co.uk In late 2009, the company carried out a large 8 www.businessactionforafrica.org Anglo American has strived to integrate organisational change by announcing the This definition implies a group of five 9 www.careinternational.org.uk sustainable development within all aspects of divestment of businesses that are not related directors, with headquarters in the United CEO Thermal Coal SA 10 www.eitransparency.org its business to minimise the negative impact to its core mining business and the creation of Kingdom, is in charge of the corporate 11 www.fauna-flora.org Norman Mbazima 12 www.gbcimpact.org of operations and at the same time maximise seven business units, whose senior executives functions and provides strategic support to the 13 www.iblf.org the positive impacts. The critical factor for the will be based in the most important countries business units to ensure that the synergies 14 Group Director Other Mining UK www.icmm.com success of this strategy is the partnerships for the respective commodity. The aim of this present in the group materialise. Such areas & Industrial 15 www.icfafrica.org with public and private institutions and those structure is to manage the mining portfolio are finance, mining and technology, business Duncan Wanblad 16 www.nhm.com 17 www.unglobalcompact.org with civil society. The company also deems more efficiently, thereby generating savings performance and projects, human resources 18 www.voluntaryprinciples.org that ethics, transparency and corporate and synergies that will add more value to and communications, and business strategy 19 www.wbcsd.org accountability are values that should be part company shareholders. and development. 20 Sustainable development means “to meet the of all the company’s activities and decisions. needs of the present without compromising the ability of future generations to meet their own needs,” according to the definition of the UN’s World Commission on Environment.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 14. 15.
Anglo American plc
Anglo American sustainability highlights 2009
5,700 The global accident rate improved by 27% on 2008. internal leaders attended Anglo American’s The Company’s values were articulated and the Anglo American Way and culture culture workshops. were consolidated worldwide. 61 meetings were held with 5,700 internal leaders in all the countries where it operates.
A new version of the Good Citizenship Business Principles was published. 101,4703.60 The Anglo Social Way was launched, a world-class standard for managing employees community relations. of Anglo American worldwide. The social strategies were reviewed and opportunities for improvement were detected in the volunteer and supplier chain support systems.
The Sustainability Report 2008 reported that to consult opinion leaders worldwide, which Anglo American plc was reviewing the Good shaped a new version that was presented in Citizenship Business Principles, which contain 2009. At the same time, the company’s social the guiding values and standards of how the and environmental management systems, company should act in financial, commercial, known as The Anglo Social Way and The Anglo work and community areas. Due to its Environment Way, were published. importance, this review included mechanisms
Accolades
Anglo American won the following awards for its worldwide commitment to causes like HIV/AIDS, biodiversity, sustainability and transparency:
First place in the Extel Pan-European Survey 2009, for its investor relations in the metals and mining sector21.
Third place in the Good Company Ranking, organised by the German magazine Manager and the consulting company Kirchhoff. Anglo American was the only company to receive this recognition for the third year running for its strategy aligned to social and environmental commitment22.
Excellence in Business Award for the Best Work Programme, awarded by the Global Business Coalition of South Africa, for its HIV/AIDS programme implemented in that country23.
FTSE100 Tax Reporting Award and Human Capital Award, given during the PricewaterhouseCoopers awards ceremony, for creating public trust.
21 The survey reflects the contribution of over 5,000 professionals from the financial sector and investors in around 400 of the largest companies in Europe. The entire methodology and the votes received were reviewed externally by Deloitte & Touche. 22 http://www.kirchhoff.de/en.html 23 The Award for Excellence in Business of the Global Business Coalition of South Africa gives global recognition to the best private sector programmes to combat HIV/AIDS, tuberculosis and malaria: http://www.gbcimpact.org/awards
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 16. 17.
Anglo American Chile Anglo American Chile
Sustainability Anglo American strategy Anglo American aims to be the leading global mining company, which entails becoming the investment, partner and employer of choice. To achieve this goal, it drives high standards of operational excellence, safety and sustainability, thereby boosting its corporate values and policies.
One of the core aspects of Anglo American’s The company of choice corporate strategy is its sustainability model, which is based on managing and creating value The goal of becoming the investment, partner in five areas called capital that are reflected in and employer of choice will be achieved by the structure of this report: managing this capital with internationally renowned standards on sustainability, financial Financial capital and operating issues. To manage these aspects Human capital Anglo American adheres to the principles Social capital of international bodies like the International In 2009, Anglo Natural capital Council on Mining & Metals (ICMM), the Manmade capital Global Compact and the Extractive Industries American constantly Transparency Initiative (EITI), among others.
strived to increase Anglo American’s first challenge is to be the and empower investment of choice, i.e., for investors to have trust in the company’s management. Its adherence to the role in Chile not only entails being profitable but also showing that it is a sustainable The second challenge of being the partner Company’s culture business with good financial results, of choice requires integral and sustainable maintaining a good corporate reputation, management of the natural resources and and values at all ongoing dialogue with all its stakeholders relations with host communities around Anglo and safeguarding the environment. The American’s operations. Anglo American has corporate levels combination of these aspects will enable it to therefore been developing systems for ten maintain its social licence to operate. years to promote transparent dialogue with its and in stakeholder neighbours, detect their needs and give them relations. To assure the permanence of its sustainability growth opportunities by forging partnerships focus in all operations in Chile, the company and teamwork. has management structures like the integrated risk management system, the safety and This area also entails working with all levels sustainable development database, community of government, the media and commercial engagement plans and the integrated health, partners like suppliers, contractors and trade safety and environmental management associations. Anglo American therefore system. These have enabled all the company participates in various trade organisations safeguard the work of company employees, operations to secure and maintain the ISO and issues that allow it to make known and including contractors. Moreover, Anglo 14001 and OHSAS 18001 certification, and promote its best practice24; it maintains a American not only seeks to hire and retain accordance with the ISO 9001 standard at public strategic positioning campaign; and the best professionals but also to attract the Mantos Blancos and Mantoverde. organises informative activities with the media best talent available by means of training and government authorities. programmes, professional practice and dual education. At the same time, it has driven To be the employer of choice, the company partnerships with universities that offer focuses on its current and potential employees mining-related courses and focused resources and university students. The priority is to on educational projects25. guarantee the safety and health of people in their workplace, for which there are policies, programmes, procedures and standards that
24 See partnerships and memberships, page 21 25 See page 58
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 18. 19.
Anglo American Chile
Living our values The activities of development, management Communication and work teams. This activity was reinforced and sharpening of relations in those areas internal dialogue with communication of the key aspects of All Anglo American’s actions are based on where the company operates must comply the model by means of internal publications, 26 the Good Citizenship Business Principles and with the following policies, standards and The “Share the Ambition” programme28 digital media and graphic and audiovisual on the standards and policies developed for 27 sharpens company employee adherence and
codes of conduct : material, to which all the areas and divisions Anglo American each specific issue of sustainability. In 2009, commitment to the corporate culture. had access. after a process of dialogue with stakeholders The Anglo American Safety Way. The practical and behavioural alignment in the countries where operations are located, The Anglo American Occupational Health with the values and global and integrated At the same time, the cultural model and an updated version of these principles called Way. culture was driven in 2009, for which the values were a major topic in the quarterly “Living Our Values” was disseminated. The The Anglo American Environment Way. internal communication and dialogue communication meetings held at the divisions aim was to show the active commitment of The Anglo American Social Way. channels were used. and the corporate office in Santiago. Meetings the entire organisation to society, which is Sustainable Development in the Anglo were also held with women, expatriates, expressed by the daily conduct of each of its American Supply Chain. Supervisor level was established to be the trainee engineers and other groups of employees. Anglo American Supplier Sustainable priority due to its on-site leadership role. employees to promote dialogue on matters of Development Code. Hence, a cycle of workshops was held in the common importance. The new document establishes that corporate Anglo American Group Human Resources year to get participants to commit themselves integrity, safety, sustainable development, Principles and Policies. to the corporate culture and identify daily employment, labour rights, community Anglo American Human Rights Policy. situations in which to apply the principles, development and human rights are issues Anglo American Group HIV/AIDS Policy. and be able to motivate their colleagues and that underpin Anglo American’s bond with Anglo American Business Integrity Policy its stakeholders, i.e., investors, employees, and Prevention of Corruption Performance government bodies, communities, business Standards. Cultural model and values partners and non-governmental organisations. Anglo American Chile has a Sustainability ASPIRATION: to be the leading global mining company Moreover, the company’s model and culture Committee comprising the first line OUR GUIDING VALUES were bolstered during the year, this work of company executives to make sure Investment of Choice Partner of Choice Employer of Choice having started in 2008, and was reported sustainability issues are met and that the Safety on in the previous report. This progress not
decisions made consider these variables. Who only implies a global and integrated focus on operative and commercial activities developed Care & Respect by the Anglo American Group but also ANGLO AMERICAN CULTURE People make the difference in a company that makes the difference enhances the application of its six corporate Integrity values in all areas of activity.
DRIVERS Accountability How
Common Processes & Effective Organisation Operating Excellence Collaboration Systems Make sure it can be done Do it Agree what to do
Innovation
DEVELOP BUILD PRODUCE RESULTS
Anglo American’s guiding values
SAFETY This is always first on our agenda – and with very good reason. We truly believe that ALL injuries are preventable and that by “Share the Ambition” programme 2009 working together we can make safety a way of life, inside and outside the workplace. Place Workshops Number of Attendees CARE We always treat people with respect, dignity and common Los Bronces 1 120 AND RESPECT courtesy – regardless of their background, lifestyle or position. And we’re building trust through open, two-way communication every Mantos Blancos 2 45 single day. El Soldado 2 55 INTEGRITY Mantoverde 3 17 This means taking an honest, fair, ethical and transparent approach in everything we do. It’s not about being popular; it’s Chagres 2 18 about always doing the right thing. Los Bronces 1 40 Development ACCOUNTABILITY We take ownership of our decisions, our actions and our results. Project (LBDP) We deliver on our promises and acknowledge our mistakes. Above all we never pass blame. Santiago 7 110
Total 18 405 COLLABORATION No one here is on their own. We’re one company with a joint ambition – all working together to make decisions and get things done more effectively.
INNOVATION Challenging the way things have always been done is a key 26 The complete version of the Good Citizenship priority for us. By actively developing new solutions, encouraging Business Principles is available at www. new ways of thinking and finding new ways of working, we’re angloamerican.co.uk/aa/about/principles. dramatically improving business. 27 They are available for review at www. angloamerican.co.uk/aa/development/ approach-and-policies 28 This programme is coordinated by the vice-presidency of human resources.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 20. 21.
Anglo American Chile
The Reptrack Pulse Stakeholders The system also makes a deep assessment of the management of relations, communication Chile study, drawn The possibility of generating communication, and on-site participation. This analysis is Partnerships and Gauging the pulse dialogue and partnerships with each Anglo American included in the final SEAT II reports, which in memberships Anglo American undertook two opinion studies up by the Reputation community around the company’s operations 2009 served as the basis for drawing up the Besides adhering to the principles embraced in 2009 to gauge the insight of its major is one of the major benefits of the socio- respective community engagement plans. Institute, ranked Anglo economic assessment toolbox (SEAT)29. by its parent company32, Anglo American Chile stakeholders. The first of these, carried out by has committed to drawing up its sustainable the Reputation Institute, was aimed at opinion th The characteristics and application of this At the same time, in accordance with the American in 38 place development reports pursuant to the guidelines leaders, the informed public in Santiago and methodology, which was implemented for Government Relations Manual, the external the first time in 2002 and updated in 2006, of the Global Reporting Initiative (GRI). the community in general, and entailed 599 of the overall ranking, affairs management mapped stakeholders telephone interviews using a probabilistic and have been reported on in all the sustainable to enhance relations with them. Such It also belongs to national entities that quantitative questionnaire and a further 49 the best ranking development reports of Anglo American segmentation envisages: Chile30. undertake initiatives in the sustainability in-depth interviews. and trade association areas, as it deems of a company in National and local authorities that driving this kind of practice requires the The public opinion study company Datavoz SEAT II, applied in 2008, consists of the socio- MPs co-operation and joint work with public and was commissioned for the second study, the mining sector. economic characterisation of the communities Think tanks private organisations, trade associations and which was aimed at university students around operations, the application of a survey Business leaders civil society at local and international level. on mining-related courses at the main about the perception of the company, the Business and trade associations relationship with it, the main impacts and universities in the country. 650 students were Academics and universities interviewed. mitigation measures appraised, and the Media Industry and trade associations: identification of the impacts of operations and Sociedad Nacional de Minería33. management’s responses. Besides gauging the perception of the work Consejo Minero de Chile A.G.34 done, both studies identified the main Instituto de Ingenieros de Chile A.G.35 Besides including a review of compliance with strengths and weaknesses and were the basis Cámara Chileno – Norteamericana de Comercio issues related to human rights, the current of the communication strategy and action (AMCHAM).36 version has a formal grievance registry to plans in the 2010–2012 period. Cámara Chilena Sudafricana de Comercio. show how the divisions manage community Cámara Chileno Británica de Comercio.37 requirements. In 2009, Anglo American also appeared for Corporación de Desarrollo Productivo de la the first time in two independent corporate Región de Antofagasta.38 The SEAT II process keeps the stakeholder map reputation studies at national level: Asociación de Industriales de Antofagasta.39 updated in each of the divisions. Stakeholders Corporación para el Desarrollo de la Región de were classified in the following categories, Reptrack Pulse Chile, carried out by the Atacama (Corproa).40 in accordance with the methodology used by Reputation Institute and published by the Corporación Pro Til Til. Casa de la Paz31 for this segmentation: Qué Pasa magazine, ranked Anglo American Corporación para el Desarrollo de Colina. in 38th place of the overall ranking, the best Political groups position of a company in the mining sector. Institutional organisations Safety: It was also ranked the sixth company in the corporate social responsibility (CSR) index, Neighbour associations 41 Consejo Nacional de Seguridad de Chile. which includes citizenship, governance and Economic instances Comité Regional de Seguridad Minera Labour bodies workplace. This study entailed 3,226 online (CORESEMIN). surveys to analyse 105 companies, each Environmental bodies Comité Nacional de Seguridad en la Montaña. Project beneficiaries of which was assessed by an average of 100 people. It used the pulse methodology, Sustainable development: i.e., it measured the admiration, trust, good AcciónRSE.42 impression and esteem indexes of companies. Chilean section of the World Business Council for Sustainable Development (WBCSD).43 The second study was the Corporate Reputation Ranking 2009, drawn up by Hill & Other institutions: Knowlton Captiva, La Tercera newspaper and Collect GFK, in which Anglo American was SEAT II process Instituto Libertad y Desarrollo.44 ranked in 66th place for the first time. It was Instituto Libertad.45 undertaken by means of a telephone survey of STEP 1 Draw up a profile of Anglo American’s operations. Instituto Chileno de Administración Racional de 3,500 inhabitants of Santiago, through whom Empresas (ICARE).46 70 companies in 22 industries were evaluated. 29 The SEAT methodology is available to the business community. Centro de Estudios Nueva Minería. Community profile and engagement. 47 30 This document is available at www.anglochile.cl STEP 2 Centro de Estudios Públicos (CEP). 31 Casa de la Paz is a non-governmental UDP – Expansiva organisation (NGO), which seeks to create STEP 3 Identify and assess the social and economic impacts of Anglo collaboration channels between private bodies American’s operations and the key development issues, and and civil society. www.casadelapaz.cl 32 See page 12 evaluate management measures and current social investment. 33 www.sonami.cl 34 www.consejominero.cl 35 www.iing.cl STEP 4 Improve the management of socio-economic impacts and issues 36 www.amchamchile.cl during operation and closure. 37 www.britcham.cl 38 www.cdp.cl 39 www.aia.cl STEP 5 Support community development. 40 www.corproa.cl 41 www.consejonacionaldeseguridaddechile.cl STEP 6 Develop a monitoring and management plan. 42 www.accionrse.cl 43 www.wbcsd.org STEP 7 Draw up a socio-economic report, feedback for the community and 44 www.lyd.com assess the SEAT process. 45 www.institutolibertad.cl 46 www.icare.cl 47 www.cepchile.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 22. 23.
Operations in Chile Operations in Chile
Anglo American Chile is a company Anglo American Prospects Record of the Anglo American Group and depends on the new Copper San Enrique Monolito business unit. At December 2009, it had 10,172 employees, of whom Estimated inferred resources of 900 3,143 are company employees and production and 50 million tonnes of ore, with a 7,029 are contractors . Profit was copper grade of 0.81% US$1.716 billion after tax in 2009 (7.2 million tonnes of copper). and it paid tax of US$584 million.
The exploration target could safety performance Like its parent company, Anglo contain 2.5 to 3.5 billion tonnes American Chile adheres to the of ore, with an average copper grade principles of sustainability in each of 0.65% to 0.75%. of its operations, which include the Drilling will continue in 2010. in 2009 exploration, mining and marketing of copper (cathodes, anodes, blister Los Sulfatos and concentrates), molybdenum Despite the effects of the international crisis, Anglo and sulphuric acid. Its head office Estimated inferred resources of 1.2 American did not trim its sustainable development is in Santiago in the Metropolitan billion tonnes of ore, with an average Region. copper grade of 1.46% (17.5 million agenda, investing in its employees, safety, community tonnes of copper). activities and environmental protection. Anglo American started to operate in Chile in 1980 and is currently the The exploration target could contain third largest copper producer in 4 to 5 billion tonnes of ore with an the country. The company’s legal average copper grade of 0.8% to 1%. The global financial crisis, which started in The management measures adopted and structure has three main business September 2008, had a large influence on the rebound of global markets enabled names: Anglo American Norte S.A. 2009. In the last quarter of the year, the Anglo American to end up 2009 with record (owner of Mantos Blancos and copper price plunged virtually two thirds on production of 669,814 tonnes of fine copper, Mantoverde), Anglo American Sur S.A. previous values, which meant that the price a 5% increase on 2008. The safety drive also (owner of Los Bronces, El Soldado in early 2009 was only US$1.39 per pound reaped rewards, with the accident rate index and Chagres), and Anglo American of metal48. Although the situation gradually 19% down on that in 2008 amounting to Chile Ltda (in charge of providing returned to normal as of March 2009 due to 0.17 lost-time accidents per 200,000 hours administration services to the two higher demand, mainly from China, the annual worked, the best rate in the company’s history former companies). average price of this metal was only US$2.34 and one of the best in the industry. at the close of 2009, 25.7% down on that in the previous year49. Another highlight in the year was the investment in exploration, which led to Anglo American had prepared for a scenario the discovery of two high-quality copper of a drop in the international copper price prospects, San Enrique Monolito and Los after steady increases in the last five-year Sulfatos. They are located near to Los Bronces period. Nevertheless, the severity of the and jointly have inferred resources of 2.1 global financial crisis entailed stepping up cost billion tonnes of ore, which will increase Anglo control measures and watching the financial American Chile’s ore resources by 50%. resources available, due to lower capital flows in the market.
Despite the effects of this economic situation, Anglo American did not trim its sustainable development agenda, and committed to continuing the projects budgeted. This led to a higher social contribution than in 2008, an investment of US$7.5 million to implement the Fatal Risk Control Standards, focus on employee protection and concrete action to control environmental impacts.
48 Price on the London Metal Exchange on 2 January 2009. The lowest copper price in the crisis was 125.65 cents of a dollar on 24 December 2008. 49 COCHILCO, metal price statistics, www.cochilco.cl 50 The total workforce excludes Collahuasi.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 24. 25.
Operations in Chile Anglo American Anglo American is the third largest copper 3,886 tonnes of molybdenum and 457,621 producer in Chile. Its operations entail five tonnes of sulphuric acid in the year. Mining divisions in the north and south of the operations in Chile had a 47% share of the country (Los Bronces, Mantos Blancos, El profits of Anglo American plc. Soldado, Mantoverde and Chagres) and it has a 44% interest in Compañía Minera Anglo American’s operations have a high Los Bronces 2009 2008 2007 El Soldado 2009 2008 2007 Doña Inés de Collahuasi (Tarapacá Region), degree of integration, which allows for 70% of Total copper production (tonnes) 238,423 235,792 231,216 Total copper production (tonnes) 41,365 49,791 72,768 CHILE sharing ownership with the Xstrata plc mining its copper production to be processed in Chile group (44%) and a consortium of Japanese in own or third-party refineries or smelters to Copper concentrate (tonnes) 189,999 190,012 182,894 Copper concentrate (tonnes) 37,148 43,071 65,297 companies led by Mitsui & Co Ltd (12%). produce copper anodes or cathodes. Copper cathodes (tonnes) 45,490 43,679 46,420 Copper cathodes (tonnes) 4,217 6,720 7,471 Molybdenum production (tonnes) 2,768 2,578 2,582 C1 direct cost (USc/lb)* 229.5 173.1 108.2 Total output in 2009 was 669,814 tonnes C1 direct cost (USc/lb)* 82.9 67.2 57.7 of copper51, a 5% increase on 2008, which accounted for 12.36% of the total volume of Note: Los Bronces produced 2,934 tonnes of copper sulphates in 2009 and domestic copper exports52. It also produced 2,101 tonnes of copper sulphates in 2008.
Mantos Blancos 2009 2008 2007 Mantoverde 2009 2008 2007
Total copper production (tonnes) 90,153 87,734 90,630 Copper cathode production (tonnes) 61,515 62,501 61,001 Copper concentrate (tonnes) 43,997 46,820 40,165 C1 direct cost (USc/lb)* 116.1 138.6 91.9 Copper cathodes (tonnes) 46,156 40,914 50,464 C1 direct cost (USc/lb)* 129.7 153.4 121.7 Arica
Iquique
Calama Chagres 2009 2008 2007 Minera Collahuasi** 2009 2008 2007 Antofagasta Copper production (tonnes) 137,652 146,144 164,107 Fine copper production (tonnes) 235,775 204,317 198,899 Acid production (tonnes) 457,621 486,616 493,382 Molybdenum production (tonnes) 1,118 1,087 1,777 Copiapó C1 direct cost (USc/lb)* 9.2 1.1 15.4 C1 direct cost (USc/lb)* 100.3 101.6 71.3
** Corresponde al 44% de la producción que es atribuible a Anglo American La Serena
* C1 Cost: mine cost, plant cost, overheads, smelting, refining and freight cost (in US cents per pound). Valparaíso ** Accounts for 44% of the production that is attributable to Anglo American. Santiago Record fine copper Rancagua Los Bronces production of 669,814 Location: in the Andes mountains, 3,500 metres above sea level and 65 kilometres from tonnes, a 5% increase Santiago in the Metropolitan Region. on 2008. Characteristics: it is an open-cut copper mine containing molybdenum. It has a grinding plant to treat sulphide ore and two leaching plants El Soldado that produce copper cathodes by means of Location: in the coastal mountains, 600 electro-winning. The ore is transported down a metres above sea level in the district of 56-kilometre ore slurry pipeline to Las Tórtolas. Nogales, Valparaíso Region. The Las Tórtolas concentrator plant and the Characteristics: it consists of an open-cut tailings dam are located in Colina, where the mine, an underground mine, and oxide and flotation process is undertaken to obtain copper sulphide ore treatment plants. and molybdenum concentrates. Chagres Mantoverde Location: in the district of Catemu, Valparaíso Mantos Blancos Region, 100 kilometres north of Santiago. Location: 900 metres above sea level in the Location: 800 metres above sea level in the Atacama Region, 56 kilometres from the port Antofagasta Region, 45 kilometres northeast Characteristics: it smelts the copper of Chañaral. of the regional capital. concentrates produced at El Soldado and Los Characteristics: it consists of an open-cut Bronces to obtain copper anodes/blister and Compañía Minera Characteristics: it is an open-cut mine with copper mine, a crushing plant, a mechanised sulphuric acid. Its productive process, based crushing plants, solvent extraction and electro- Doña Inés de Collahuasi ore conveyance and stockpiling system, heap on copper concentrate fusion, is undertaken winning to treat oxide ores. It also has a leaching, and a solvent extraction and electro- by means of a technological process (flash Location: in the Tarapacá Region, 185 kilometres sulphide ore treatment plant. winning process to process oxide ores. furnace) with low emissions, which makes southeast of Iquique and at an average altitude of 4,400 metres above sea level. 51 This includes the 44% interest in Collahuasi Chagres a leading smelter in environmental and 2,583 tonnes of copper anodes produced terms in Chile. at Chagres by processing third-party material. Characteristics: it produces and markets copper 52 Chilean Copper Commission (COCHILCO), concentrate and cathodes and molybdenum monthly newsletter – January 2010. concentrate.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 26. 27.
Operations in Chile
2009 Product Marketing Map
Cathodes Anglo American Anodes Concentrate KME Metals Copper concentrate sales Molybdenum La Farga Group 53 markets 2009 (in DMT) Thyssenkrupp Aurubis 1.18%
1.07% Southwire 25.21% Cobre de México
Furukawa Electric Walsin Lihwa Minchali Minmetals Paranapanema LS Nikko 35.12% Codelco - Ventanas
9.73% Xstrata Codelco - Ventanas
27.69% Molymet
DMT % Chile 162,570 35.12 Brazil 128,187 27.69 China 116,708 25.21 European Union 45,026 9.73 Peru 5,459 1.18 Korea 4,966 1.07 TOTAL 462,916 100.00
* Amounts exclude Collahuasi
Copper anode sales markets 2009 (in MT)54
6.62% Sales markets 2009 (tonnes of copper)
Product marketing value In addition to the two current contracts 23% added with smelters, the company signed copper 8% 44.30% concentrate sales contracts with 13 smelters 35.14% We informed in the 2008 report that the worldwide in 2009. This allows for the joint partners who own Compañía Minera Doña negotiation of the production generated at the 13.94% Inés de Collahuasi (Anglo American, Xstrata Los Bronces, Mantos Blancos and El Soldado plc and a consortium of Japanese companies divisions, and Anglo American’s percentage of led by Mitsui & Co. Ltd) made a decision to Collahuasi’s production, besides the additional 23% be directly in charge of selling the copper and supply that the Los Bronces Development 34% molybdenum production generated by this Project (LBDP) will generate. MT % deposit in the market. This means each of Belgium 61,555 44.30 12% the parties is responsible for selling a portion Based on this model, most of the contracts Chile 48,828 35.14 of Collahuasi’s production equivalent to its for the future copper concentrate production expire and the additional production of the Mexico 19,371 13.94 own shareholding, which in the case of Anglo of the LBDP had been entered into by Los Bronces mine comes on stream from its % Korea 9,194 6.62 American is 44%. December 2009, obtaining very good market development project. Asia 34 TOTAL 138,948 100.00 diversification and Latin America, China, Japan, As of the full start-up of the Los Bronces Chile 23 * Amounts exclude Collahuasi Anglo American Chile also launched a new South Korea, Europe and India accounted marketing model in 2009, which boosted for a large share, i.e., all the major copper expansion and the new negotiation conditions Europe 23 its market position. This is especially due to concentrate sales markets. mentioned above, Anglo American Chile North America 12 the possibility of undertaking co-ordinated forecasts that it will market 2 million tonnes South America 8 operations to market its products from all The amounts sold based on this model will of copper concentrate in 2013 and thereby TOTAL 100.00 its divisions, including the 44% interest in increase steadily in the 2010–2014 period as become one of the top three international Collahuasi. players. 53 the contracts previously signed by Collahuasi Dry metric tonnes (measurement unit used for * Percentages exclude Collahuasi copper concentrate). 54 Metric tonnes.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 28. 29.
Operations in Chile
Sulphuric acid material in Chile’s paper, chemical and mining industries and the remaining 17% was used The Chagres division of Anglo American Chile for internal consumption at the El Soldado and produced 457,621 tonnes of sulphuric acid Los Bronces divisions. in 2009, which was a slight decrease on the Anglo American 486,616 produced in 2008. Marketing of Sulphuric acid is used in the leaching process this product is undertaken according to strict of operations. Sulphuric acid sales to third standards of safety, prevention, protection parties accounted for 0.75% of the company’s of people, communities and the environment. earnings in 2009. Copper cathode sales Further information about how the company’s markets 2009 (in MT) divisions handle sulphuric acid is outlined in the Natural Capital section on page 97.
12.70% 14.35% 60% of the total production was sold by means of traders or swaps with Codelco to 0.23% 0.33% supply Anglo American’s mining operations 15.78% 3.37% in the north of the country; 23% was sold directly to third parties to be used as a raw
16.10%
1.69% 35.39%
MT % China 57,085 35.39 European Union 25,975 16.10 U.S.A. 25,463 15.78 Definitions of product formats Taiwan 23,151 14.35 Korea 20,495 12.70 Anode: this is one of the ways refined copper is moulded. It has purity of around 99.6% of fine copper Mexico 5,446 3.37 and still contains noble metals (gold and silver). It is the raw material used to produce copper cathodes Japan 2,734 1.69 Thailand 540 0.33 from electrolytic refining. Chile 385 0.23 TOTAL 161,274 100.00 Cathode: this is a flat shape of very pure copper obtained by electrolytic refining. It generally has a thickness of approximately five millimetres and a surface area of one square metre.
Blister copper: this is copper from the converter furnaces in the pyrometallurgical copper process. It contains 99.3% of fine copper.
Product revenues 2009 Copper concentrate: this is obtained by means of physical or physical-chemical processes, and its copper grade ranges from 25% to 35%.
Source: COCHILCO (www.cochilco.cl) 2.18%
32.19%
Impact of the global There were no major variations in the financial crisis concentrate and anode segments regarding sales amounts, customers or markets, 30.13% Due to the collapse of global financial markets, as the contractual terms are established as of October 2008 there was a decline in in the long term. copper purchase contracts entered into each 35.50% year; the first quarter of 2009 was the period After the financial uncertainty was over, the of the greatest uncertainty for the company. international copper market tended to recover At the same time, the sharp restrictions as of mid-2009, which was reflected by the on access to financing loans increased the US$ % interest rate situation and access to loans. costs of foreign trade and hampered global Cathodes 852,715,932 35.50 transactions and payments. Anodes/blister 773,253,971 32.19 Concentrates 723,881,493 30.13 This adverse scenario was overcome in Molybdenum 52,380,056 2.18 a short time because of a large increase in TOTAL 2,402,231,452 100.00 demand from the Chinese market. This led
* Amounts exclude Collahuasi to the recovery of the international copper price as of March 2009 and the resumption of production flows.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 30. 31.
2009 performance and 2010 targets 2009 performance Anglo American Compliant The table below shows the degree of compliance with the aspects considered in the Not compliant previous report and the commitments for 2010. In 2009, there was 75.8% compliance and 2010 targets Under development with the targets set for that year.
ISSUE 2009 TARGET COMPLIANT ACTIONS UNDERTAKEN IN 2009 2010 TARGETS HUMAN CAPITAL
Safety Maintain zero fatalities. To comply with the zero harm vision, training programmes were held and conduct observation was reinforced; there was accreditation of Zero fatalities. service company personnel, monitoring, third-party incident analysis, compliance with the Personalised Risk Control Program (PCR), and Visible-Felt Leadership (VFL) with monthly reporting. Although there were no fatalities, there were 23 lost-time accidents. Zero lost-time accidents. Zero lost-time accidents.
All operations must have specific plans to support the implementation of the safety improvement plan of Anglo Make a formal versus continual maturity analysis and update the improvement Operations drew up an annual safety plan, which was monitored monthly by the respective managements. American Base Metals. plans at each operation. Reinforce VFL with two-hour site visits scheduled for every Tuesday and Keep up and strengthen the quality of on-site “Visible-Felt Leadership” of the entire management and There was periodic monitoring of The Anglo Safe standard and monthly reports were issued. Workshops were also held to reinforce the Thursday by all supervisors. supervisor team. objectives and methodologies, using the VFL manual developed by Anglo American Chile as a reference. Implement weekly VFL step compliance controls of 25%, 50%, 75% and 100%. Add new functionalities to The Anglo Safe system that helps to analyse accidents and follow up on the action Disseminate and implement GPA and REPDES. The Action Plan Management (GPA) module and Deviation Reporting (REPDES) were developed and implemented. plans. Develop the navigation system in Documentum. All operations must be 90% compliant with the guidelines defined in the Anglo Fatal Risk Standards (AFRS). 91% average compliance was attained. Attain the 100% target.
The second pilot test was made with the ASTiD fatigue management system. The results were submitted to the corporation and corporate Undertake the second stage of the sleep disorder study and, based on the results, definition is awaited for implementation.. answer the fatigue self-assessment in accordance with corporate guidelines. Implement a “fatigue management system” for truck operators. Work was done in the fatigue continuous improvement team, focusing on the problem from a biopsychosocial angle. A sleep disorder study was undertaken on 115 mine haulage truck operators. Implementation of the fatigue checklist by the supervisor. Implement the Safety The tests were carried out and the use of the Wake-Up device was established for light vehicles that travel to and from Los Bronces. Programme for transportation leaders. Complete the SRMP A3 courses for managers, risk prevention officers of service Complete the risk management retraining programme for the entire supervisor team and start the process at all companies and for staff functions. Ten Safety Risk Management Programme (SRMP) A3 courses were held, attended by 208 managers and superintendents. supervision and worker levels. Launch A2 courses for first line supervisors of Anglo and service companies. Hold the Risk Champions course in Spanish. All operations to undertake a global review of risk inventories in keeping with the methodology established in Align the risk management process with Anglo American’s new corporate The risk inventories (IPER) were updated and the connection with the personalised Risk Control Programmes was improved. the One Anglo risk management programme. guidelines. Undertake a safety environment survey according to the scheme defined by Anglo Base Metals. The survey was not undertaken. Comply according to the guidelines of the Copper business unit.
Maintain ISO 14001 certification and change the OHSAS 18001 certification to the new 2007 version. All operations were re-certified. Maintain certification.
Incidents were posted on the internal portal and supervisors analysed third-party incidents. Align the accident investigation process with Anglo American’s new corporate Raise the quality of investigating accidents and the learning systems from reviewing them. The new risks found in the incident analysis were added to the respective inventories. guidelines (Learning from Incidents). Safety tools continued to be developed, such as PCR, VFL, GPA, REPDES, and corporate meetings such as the safety and occupational Continue work to standardise and share good safety practice as part of the One Anglo programme. Extend the application of management tools to construction projects. health manager committee and the AFRS committee.
Occupational health The epidemiological monitoring programmes were carried out for each occupational risk detected to define exposure levels, based on which Zero people with an occupational disease. Independent consultant diagnosis/ Zero occupational diseases. the different homogeneous risk groups were established, and the respective biological monitoring specific to each agent to assure that our assessment of the effectiveness of the programme. employee health is not impaired. Nevertheless, the company regretted two cases of partial hearing loss. Consolidate The Anglo Health Way system in the OHSAS 18001 integrated management systems. Operations made a self-assessment and there was a periodical review to assess the degree of progress with implementation. 100% implementation of The Anglo Occupational Health Way. The occupational health unit makes periodical and random reviews of service companies to check the development and implementation of Ensure contractor compliance with Anglo American’s occupational health and hygiene guidelines. Achieve a similar level to that of the company workforce. its programmes in line with Anglo’s guidelines, providing advice and training. ENVIRONMENTAL CAPITAL Certifications Maintain ISO 14001 certification. All five divisions were re-certified pursuant to the ISO 14001 standard. Maintain ISO 14001 certification.
Environmental management system Implement the new Anglo Environment Way at the five divisions, identifying existing gaps and drawing up an The five divisions made an analysis to detect gaps with the new Anglo Environment Way standards and action plans were drawn up to be Make progress with attaining 76% compliance with The Anglo Environment Way action plan to rectify them. 100% compliant in a three-year term. standards on average at the five divisions. Alternatives /productive uses of tailings water Maintain the system without dissipation of surplus water until the water recirculation system is expanded to There were no process water discharges. Progress was made with the engineering and construction of the water recirculation system of the Continue the construction of works for start-up scheduled for 2011. Los Bronces. Los Bronces Development Project. Particulate material emissions Extend the wetting system to cover the entire wall slope according to Resolution Nº139 of the National The wetting system was extended to the main wall slope. Maintain the operation of the wetting system. Environmental Agency (CONAMA), dated January 2009. Concentrations of particulate material (PM10) and suspended particulate material (SPM) on the boundary of the property were below the Concentrations of particulate material (PM10) and suspended particulate material For concentrations of particulate material (PM10) and suspended particulate material (SPM) on the boundary of reference levels. (SPM) on the boundary of the property should remain below the reference levels. the property to be below the reference levels. Process water discharges compliant with Supreme Decree Nº90 Maintain discharges fully compliant with the quality standards of Supreme Decree Nº90. The only process water discharge subject to the regulation of Supreme Decree Nº90 is the refrigeration water from the Chagres smelter and Maintain discharges fully compliant with the quality standards of Supreme Decree it is compliant with the limits. Nº90. Energy consumption Undertake/commit new initiatives that align the company with the 2014 targets of Anglo American plc. Energy consumption was 99% based on the adjusted baseline of 2004 and an expected reduction target of 92.5% for 2009, which was Undertake/commit new initiatives that align the company with the 2014 targets therefore a negative difference of 6.5%. Concerning emissions, the result was 97.8% of the adjusted baseline of 2004, or 2.8% non- of Anglo American plc. compliance with the 95% target in the year. In both cases, the targets as of 2010 will be reviewed to adjust them to the current industry reality, and mining in particular. Water consumption Maintain consistency of the unit water consumption of the divisions and alignment with the corporate target. Fresh water consumption in 2009 was 2.6% below the year’s target of 92.5% of the adjusted baseline of 2004. Maintain consistency of the unit water consumption of the divisions and alignment with the corporate target Implementation of key biodiversity action plans Get environmental approval for the Sustainable Operative Continuity Project of El Soldado.
Start the construction of phase I of the Las Tórtolas management plan. Closure plans Review closure plans according to Anglo American’s standards. The closure plans of the five divisions were updated according to the schedule. Undertake the studies identified in the latest update of the closure plans for 2010. SOCIAL CAPITAL Community engagement plans Apply community engagement proposals and plans arising from the application of SEAT II. All the divisions applied the SEAT process and have a community engagement plan. Moreover, in 2009 Anglo American entered into a All the community plans and the management measures to comply with The partnership with Enseña Chile to support education in high-risk schools, and with Elige Educar and Un Techo para Chile to eliminate the Anglo Social Way will be applied in 2010. The plans to be applied in 2011 must shanty towns where 4,660 families live in the Metropolitan Region. also be updated. Continue the “Open Door” programme at all the divisions. The “Open Door” programme continued to be applied at all the divisions, as needed. Continue the “Open Door” programme, as needed.
Publish the fifth Sustainable Development Report. The fifth Sustainable Development Report was released and was awarded the Best Economic Performance award by Acción RSE in its best Publish the sixth Sustainable Development Report. report awards. It was also ranked in seventh place of the Integrated Report category of the Corporate Register awards from among 200 reports worldwide. Support 5,000 small-sized businesses with micro-loans, and 60 with business training. The target was achieved of supporting 5,000 small-sized businesses in the partnership with Fondo Esperanza and 60 new medium-sized Comply with the bicentenary targets of having at least 6,800 small-sized entrepreneurs were given business training. businesses supported with micro-loans and over 200 medium-sized businesses supported with business training. Continue to implement a management system to follow up and assess the impact of social programmes. All the divisions assessed compliance with the social aspect management standards in accordance with the release of The Anglo Social All operations shall have a social and community improvement plan, which Way standard. includes indicators for each social programme and manages the social incident information by means of a management system.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 32. 33.
Financial capital
Transparency and Anti-trust compliance Drawing up of Manual. compliance programme. Update of “significant employees”.
82 executives trained from 2008 to 2009; 42 in 2009.
Creation of the job position In Charge of Prevention of Law Nº 20.393 on penal liability in activities related to asset laundering, bribery and the financing of terrorism. Speakup. 10 complaints received in 2009.
12 employees of Anglo American and contractor companies dismissed for breaching the Good Citizenship Business Principles and the Code of Conduct.
Development of the company integrity policy and conduct standards.
Financial result US$1.716 billion in profits after tax in 2009.
The economic value distributed was 33% down on 2008 due to the lower dividend distribution, the payment of interest and the drop in operating costs.
The contribution to the community increased from 0.15% to 0.3% of the total economic value distributed.
Contribution to the State: US$584 million paid to the State in tax. Collaboration with the Inland Revenue’s Tax Corporate Social Responsibility (TCSR) project. 11% of Anglo American’s suppliers adopted this system.
Investments: US$ 926 million in 2009.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 34. 35.
Economic performance Economic performance
There is also the limited liability company Anglo American Chile Ltda, which provides administration services to the operative companies. Its only partners are Anglo American Sur S.A. holding 70% of the capital Progress with stock and Anglo American Norte S.A. with 30%.
The only shareholders of Anglo American Sur S.A. as of 31 December Both the board’s 2009 were Anglo American Sur S.A. with 99.99% of the capital transparency and stock and Clarent Ltd with the remaining 0.01%, both subsidiaries of decisions and all the Anglo American plc. Its administration is vested in a board comprising three incumbent directors and three deputy directors. The following current principles and directors were elected for a three-year term in the Ordinary General policies are based on compliance Shareholders’ Meeting, held on 18 April 2008: the Good Citizenship Capital Financial Business Principles, In a year marked by the global financial crisis, INCUMBENT DIRECTORS DEPUTY DIRECTORS Anglo American increased production, continued to which includes strictly Miguel Ángel Durán Vergara Noelle Duronea Burgalat improve its work safety indexes, delivered more to the (Chairman) complying with community and sharpened the activities of the Anti- Alejandro Mena Frau (vacant) current legislation in trust Compliance Programme. In 2009, it created the Felipe Purcell Douds Ignacio Quiñones Sotomayor
job position In Charge of Prevention of Law Nº20.393, On 15 July 2008, Alejandro Mena took office as an incumbent director, with the the case of a conflict deputy director position becoming vacant. of interest of one or which regulates the penal liability of corporations for offences of asset laundering, financing terrorism Anglo American Norte S.A. is the only company with minority more directors. and bribery, and the Company Integrity Policy and shareholders, 56 in total, who hold 0.03% of the shareholding. Conduct Standards were developed. As of 31 December 2009, the main owners were: Inversiones Anglo American Norte Limitada with 91.1% of the shares. Anglo American Norte S.A. with 5.41% of the shares (own issue). Corporate governance Anglo American Norte S.A. with 3.46% of the shares. Anglo American Chile was part of the global Minority shareholders attend Ordinary and Extraordinary Shareholders’ restructuring carried out by its parent Company Meetings and can hold direct talks with the company if they have in 2009, which led to the creation of seven queries. The board, elected for three years in the Ordinary General business units with more consolidated and Shareholders’ Meeting held on 29 April 2008, is composed of the closer functions to each of their respective following directors: operations. It therefore became part of the Copper business unit. This modification did not entail any changes to the organisational INCUMBENT DIRECTORS DEPUTY DIRECTORS structure of the company in Chile, which is organised based on two closely-held and operating corporations: Miguel Ángel Durán Vergara Noelle Duronea Burgalat (Chairman) Álvaro Aliaga Jobet Alejandro Mena Frau Anglo American Norte S.A., which owns: Felipe Purcell Douds Ignacio Quiñones Sotomayor The Mantos Blancos division, located in the district of Antofagasta, Antofagasta Both boards operate in accordance with the current regulation and what Region. is laid down in their respective articles of association. According to The Mantoverde division, established in what was agreed on by both Shareholders’ Meetings, the directors are the district of Chañaral, Atacama Region. unpaid and there are no directors’ committees as they are closely-held corporations. Their decisions and all the current company principles and Anglo American Sur S.A. is the owner of: policies are based on the Good Citizenship Business Principles, which also includes strictly complying with current legislation in the case of a The Los Bronces division, located in the conflict of interests of one or more directors. district of Lo Barnechea, Metropolitan Region. All the companies undertake full accounting, an annual report, balance The El Soldado division, located in the sheet and financial statements, which are reviewed by external auditors district of Nogales, Valparaíso Region. each year. Deloitte & Touche was the auditing company in 2009. The Chagres division, in the district of These financial statements are sent quarterly to the Superintendency of Catemu, Valparaíso Region. Securities and Insurance (SVS) in accordance with the SVS regulation on the specific mining tax, article 11 of Decree Law 600 of 1974 and the exempt resolutions issued by the SVS on the obligation of releasing financial statements quarterly and yearly and annual reports with regard to foreign investors subject to the rights set forth in such article of the Foreign Investment Statute.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 36. 37.
Economic performance
The management of Anglo American is vested in a single structure headed by the CEO, who reports to the chief executive of the Copper business unit.
Organisation chart as of December 2009
CEO Anglo American Group Cynthia Carroll
CEO Copper (based in Chile) Capital Financial John Mackenzie
Vice-president CEO Vice-president Vice-president Alaska Peru finance Chile projects strategy James Beams Miguel Ángel Durán Barry Murphy Alice Fox
Senior vice-president Vice-president Vice-president Senior manager technical services marketing & corporate human resources safety and sustainable affairs development Marcelo Glavic Felipe Purcell Alejandro Mena Lorenzo Menéndez
Los Bronces division Mantos Blancos division El Soldado division Mantoverde division Chagres division general manager general manager general manager general manager general manager Álvaro Aliaga Sergio Parada Alejandro Vásquez Juan Carlos Román Pedro Reyes
The main areas of action of the Anti-trust Compliance Programme in Chile were:
The drawing up of a manual related to the programme, outlining objectives, MANAGEMENT APPROACH activities, control and follow-up. VICE-PRESIDENCY/ SENIOR MANAGEMENT AREAS OF RESPONSIBILITY Transparency Who are significant employees? mechanisms Update of the list of company employees who fall into the category Senior Vice-president Technical Services Mining / Geology / Metallurgy / Engineering Anglo American Chile continued to develop • People who, due to their functions, might come into contact with of “significant employees” Operating excellence the Anti-trust Compliance Programme in competitors, distributors or suppliers in a business setting. regarding anti-trust compliance. Maintenance 2009, which is based on the policy and manual drawn up by Anglo American plc to • Marketing, sales and business development staff. Continued development of Vice-president Marketing and Corporate Affairs Marketing regulate the commercial practices of all its Community relations the training and certification operations, which it applies and supervises • People with a supervisory role with regard to the previous categories. programme in this area. Corporate external affairs each year. These guidelines prohibit entering External communications into agreements that might prevent, restrict or distort competition in the domestic or • Senior management. Vice-president Finance and Administration Finance and planning international market, and practices of abuse Controllership from a dominant position in certain activities55. • Anti-trust compliance officials at the company’s divisions. Procurement and contracts Information technology A total of 42 people matching the profile of • In-house lawyers. 82 “significant employee” participated in the executives trained on Vice-president Human Resources Labour relations programme in 2009, entailing meetings, the Anti-trust Compliance Programme Development and leadership videoconferences, telephone conferences and from 2008 to 2009. Collaboration the corporate intranet. Internal communications As a sign of commitment to anti-trust Senior Manager Safety and Sustainable Safety compliance practices, 82 employees who Development Occupational health attended this programme from 2008 to 2009 Environment and regulatory affairs signed the annual self-certification letter on 55 Anglo American’s Anti-trust Compliance is this issue. based on legislation and the regulation in the Energy efficiency European Union (EU), and contains provisions of this kind in all the countries where it has operations.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 38. 39.
Economic performance
New information Speakup challenges The confidential telephone and email service Integrity and accountability regulations Law 20.393 came into force on 2 December called Speakup is one of the main tools to 2009, and it lays down penal liability for supervise adherence to the Good Citizenship In 2009, the Anglo American Group released the Business Integrity Policy and Standards of We will maintain high corporations in offences of asset laundering, Business Principles of Anglo American57. The Conduct. Its aim is to set out guidelines on the conduct needed at all levels of the company, its the financing of terrorism and bribery56. The aim of this tool, managed by an external affiliates, companies with joint control and related companies regarding the following issues: standards of business content of this legislation establishes specific company, is to receive reports about possible guarantees to: identify requirements for Chilean companies. Anglo conduct on issues like: • Gifts, leisure activities and hospitality. American Chile therefore appointed the • Conflicts of interest. Breach of any legal obligation. and monitor material company controller In Charge of Prevention • Facilitation payments. pursuant to Law 20.393, who is drawing up a Abuses or theft of company resources. risks; safeguard our prevention and control model and programme Bribes, corruption and fraud. • Use of the company’s assets. Damage to the environment or injustices that is compliant with the provisions of this • Political donations. Capital Financial assets; and to detect regulation. with the local communities. • Dealings with government officials and lobbying. Safety and health threats. and prevent fraud and The following are the main responsibilities of Conflicts of interest. • Charity donations. corruption”. this job position: Improper accounting practices. • Social and community investment and company development activities. • Sponsorship. Gather information on the activities In 2009, Anglo American Chile promoted knowledge of this tool and its use through • Hiring and payment to intermediaries. Good Citizenship Business Principles. or processes of the entity, be these customary or sporadic, in which context corporate communication channels and • Mergers, acquisitions, companies with shared control and related companies. the risk arises or increases of committing dialogue with its stakeholders. The company the offences set forth in Law 20.393. emphasised that both the telephone line and e-mail58 address are available to all company The content of this policy will be disseminated in 2010. Draw up the specific protocols, rules and and external employees. procedures allowing people to intervene in the activities or processes, be able In the period covered by this report, ten alerts to schedule and carry out their tasks or were received related to issues of potential work to avoid committing the mentioned breaches of labour regulations, poor contractor offences. work practice and dissatisfaction with the development or results of tender processes. Financial result to US$1.04/lb after the by-product credits, With regard to benefit plan liability hedging, i.e., 2% up on the previous year (US$1.02/lb). the company has no special fund for its Identify the administration and auditing The total profits after tax of Anglo American With regard to adherence to the Good employees. procedures of the financial resources in Chile, i.e., own operations plus the 44% Citizenship Business Principles, three company The long-term copper sales outlook is positive. enabling Anglo American to prevent interest in Collahuasi, amounted to US$1.716 employees and nine contractor company Demand from China is expected to increase Nevertheless, as part of a compensation them from being used in the mentioned billion. The operations managed directly by employees were dismissed for breaching the despite government measures to restrict package, the company matches the amount offences. the company generated profits of US$1.037 company’s code of conduct and policies. credit. At the same time, demand from North employees voluntarily deposit in their billion, a 9% decrease on 2008, mainly due America and Europe is showing signs of pension funds, and this amount is deposited Assess the sufficiency of the current to the lower sales volume and the drop in the internal administrative sanctions, and recovery. in the individual capitalisation account of copper price. This was partially offset by the the respective pension fund administration whistle-blowing procedures or the pursuit impact of the lower operating costs and the of pecuniary responsibilities against those company (AFP). The total contribution benefit of the greater weakness of the Chilean made by the company for this was US$3.8 people who violate the offence prevention peso. Profits after tax from Anglo American’s Economic value generated system. and distributed million in 2009, which was 17% down on interest in Collahuasi (44%) were US$678 the US$4.6 million deposited in 2008. Such million, which was a 36% increase on the The distribution of the economic value decrease is explained by the reduction in Detect any needs of modifying the previous year. This was mainly due to the regulations the company already has in generated to the company’s main stakeholders accepting the option of deposits agreed for higher tonnage of copper sold by Collahuasi in is presented based on the G3 guidelines bonds in January/March and the exchange place; work, supplier and service provider 2009 (530,667 tonnes) compared with 2008 contracts. of the GRI. The economic value generated rate difference between both years. There (462,469 tonnes). in 2009 amounted to US$4.006 billion is a similar situation with Collahuasi, except and the economic value distributed was that the benefit is aimed at supervisors. A The system shall be implemented in a second The copper price increased strongly during stage, along with the monitoring, control, US$2.725 billion. Moreover, the economic contribution of 2% of the base salary (with a the year, reflecting the improvement in the 60 communication, training and certification value generated was 1% up on the previous limit of UF 60) was implemented in 2007 global economic conditions, climbing from 132 year and the economic value distributed fell as a voluntary social security contribution for aspects of the issues involved. The US cents/lb in late 2008 to 333 US cents/ Sustainable Development Report 2010 will 33%, mainly because of a 70% decrease all those employees who contribute 1% of lb late in the year. Nevertheless, despite in the distribution of dividends and interest their base salaries. This benefit amounted to report on progress with this process and its this increase, the annual average price was results. payments, and operating costs dipping 8%. US$549,000 in 2009, a 68% increase on the 26% down on 2008. In realised price terms, US$327,000 in 2008. this was only 3% lower than the price of the It should be especially noted that the previous year because of final liquidations in a contribution to the community increased Anglo American also includes a severance burgeoning market. from 0.15% to 0.3% of the total, mainly indemnity liability on its balance sheet, which 56 The complete content of Law 20.393 is due to higher contributions to educational amounted to US$114.3 million as of 31 available on the website www.leychile.cl of the Operating costs benefitted from operating programmes like Enseña Chile, Elige Educar December 2009. In the case of employees, Chilean National Congress Library (BCN). efficiency improvements and the price and the bicentenary programme to eradicate this is higher than the legal requirement of one 57 Complete information on the characteristics, decreases of key raw materials like sulphuric shanty towns in the Metropolitan region jointly month’s salary per year worked, in accordance terms and conditions of operation of Speakup acid and diesel. The drop in transportation 59 can be found on the website with Un Techo para Chile . with what is set forth in the collective www.anglospeakup.com costs was offset by the higher treatment and agreements. 58 The Speakup number is 1230-020-5485, and refining charges. The C1 unit cost amounted the email address is [email protected] 59 See the corporate presence in society from page 66 onwards. 60 1 UF is approximately Ch$21,000 at the current rate.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 40. 41.
Economic performance
2009
ECONOMIC VALUE GENERATED Anglo American Collahuasi CONSOLIDATED (given in millions of US$)* Chile (44% Base) A) Earnings (1) Gross sales 2,555 1,412 3,967 Net income from financial investments 3 0 3 Net income from sales of fixed assets and 0 36 36 others
ECONOMIC VALUE GENERATED 2,558 1,448 4,006 Financial Capital Capital Financial
ECONOMIC VALUE DISTRIBUTED Anglo American Collahuasi CONSOLIDATED (given in millions of US$)* Chile (44% Base) NOTES B) Operating costs (1,070) (425) (1,495) (1) Includes operating and C) Employee salaries and benefits (2) (136) (51) (187) non-operating earnings. (2) Excludes training as an D) Payment to capital suppliers (3) (356) (92) (448) employee benefit. (3) Considers the interest E) Payment to the State (4) (420) (164) (584) paid on loans received, F) Investment in the community (6) (5) (11) minority interest (paid to minority shareholders) and dividends paid (majority ECONOMIC VALUE DISTRIBUTED (1,988) (737) (2,725) shareholders). (4) Please see the tax table in the operating and financial overview. ECONOMIC VALUE WITHHELD 570 711 1,281
* Approximate values
2008 Consolidated economic value Consolidated economic value ECONOMIC VALUE GENERATED Anglo American Collahuasi CONSOLIDATED distributed 2009 distributed 2008 (given in millions of US$)* Chile (44% Base) A) Earnings (1)
4.7% 0.3% Gross sales 2,772 1,135 3,907 4.97% 0.15%
Net income from financial investments 21 3 24 11.2%
Net income from sales of fixed assets and (3) 19 16 18.12% others 14.6% ECONOMIC VALUE GENERATED 2,790 1,157 3,947
39.93% 37.3% 32.0% 36.83% ECONOMIC VALUE DISTRIBUTED Anglo American Collahuasi CONSOLIDATED (given in millions of US$)* Chile (44% Base) NOTES B) Operating costs (1,192) (430) (1,622) (1) Includes operating and C) Employee salaries and benefits (2) (158) (43) (201) non-operating earnings. (2) Excludes training as an % % D) Payment to capital suppliers (3) (932) (564) (1,496) employee benefit. Operating costs 37.3 Operating costs 39.93 E) Payment to the State (4) (582) (154) (736) (3) Considers the interest 2009 2008 paid on loans received, Withheld by the company 32.0 Payment to capital suppliers 36.83 F) Investment in the community (4) (2) (6) minority interest (paid to US$4.006 US$4.061 minority shareholders) and billion Payment to the State 14.6 billion Payment to the State 18.12 dividends paid (majority Payment to capital suppliers 11.2 Employee salaries and benefits 4.97 ECONOMIC VALUE DISTRIBUTED (2,868) (1,193) (4,061) shareholders). (4) Please see the tax table in Employee salaries 4.7 Investment in the community 0.15 the operating and financial Investment in the community 0.3 overview. NOTE: The amount withheld by the company in 2008 was ECONOMIC VALUE WITHHELD (78) (36) (114) negative as it financed its operations with the amount withheld from previous years.
Note: These values are stated in accordance with the company’s reporting standards for its head office in London, and in some cases might differ slightly from the figures stated in the audited financial statements enclosed at the end of this report. Please note that the differences are only due to different ways of presenting the information.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 42. 43.
Economic performance
State contribution Business Principles. This strategy guarantees that there is proper payment of taxes in each Anglo American Chile acknowledges that Case study country where the company operates, based Promoting the use of electronic invoicing timely and proper payment of taxes generates on the principles of EITI61, which promotes social benefits since the State uses money transparency and generates reports on the To encourage the use of electronic invoicing by micro-, small- and from its reserves to provide a better social taxes paid by companies and the countries infrastructure, like the building of schools medium-sized companies that provide products and services to in which each of its members is present. Anglo American Chile, in 2009 the company and a further five and roads, the improvement of utilities, Maintaining a constructive partnership with the and even better environmental conditions. companies signed a collaboration agreement with the Chilean Inland authorities of each country is a priority for the 63 Mining operations also generate other indirect Revenue (SII) to participate in and support the Tax Corporate Social suitable management of this strategy. 64 benefits related to the presence and operation Responsibility (TCSR) project of the SII, launched on its MiPyME portal. of customers and suppliers who also create With regard to State contributions, both Anglo employment and pay taxes. American and Collahuasi mainly receive them Anglo American therefore made a survey of its suppliers and found through credits from the National Training and that around 900 of them are in that category. It carried out four- To such effect, the company has a tax Employment Department (SENCE)62 for training strategy that has been renewed and approved hour training sessions with the SII for its suppliers in Santiago and Capital Financial and credit for donations. Antofagasta to inform them of the benefits of this technology and by the board and is aligned with the long-term business strategy and the Good Citizenship encourage them to use it. The training programme will continue in 2010 to reach 80% to 90% of this group of suppliers.
To contribute to this process, the company will pay the cost of the digital signature certificate needed to undertake this proceeding on the internet for all suppliers that are interested in applying to this FINANCIAL AID RECEIVED FROM THE 2009 2008 system before November 2010. It will also provide support and advice STATE (given in thousands of US$) to suppliers until they are set up and using the electronic invoicing system. Anglo Collahuasi CONSOLIDATED Anglo Collahuasi CONSOLIDATED American (44% Base) American (44% Base) Chile Chile The project challenge is to get at least 20% of Anglo American’s MiPyME suppliers into this system. Tax credits and reduction: SENCE (1) 854 129 983 450 103 553 By the end of 2009, 11% of suppliers were operating with electronic Credit and donations (2) 401 704 1,105 91 326 417 invoicing. Mining licence, credit against PPM (3) 42 39 81 21 33 54 6% fixed assets credit (4) 95 21 116 77 17 94 Electronic invoicing benefits Avoids invoice stamping at the SII offices. Total 1,392 893 2,285 639 479 1,118 Saves printing, post and filing costs. Shorter document processing waiting time. NOTES Higher quality of information in the accounting This information is based on provisional net income. systems. Allows the VAT return and payment to be deferred (1) This amount is 1% of the 2009 remunerations, which is the accounting amount stated; as of the closure of the report, the Intermediate Technical Training th th Bodies (OTIC) had not released the official information. from the 12 to the 20 of each month. (2) This amount is the donations that have tax certification for the year ended 31 December 2009, which might vary when determining the definitive tax result in Reduces the risks of losing documents. April 2010. Improves the customer/supplier relationship. (3) Provisional monthly tax payment. Lower environmental impact. (4) This amount is the 650 UTM (monthly tax unit) limit, with one UTM amounting to Ch$36,863 at 31 December 2009, at a closing exchange rate of Ch$507.10 per US dollar.
US$926 Operating overview division produced 137,652 tonnes of copper construction works at the different sites are on mine. These new copper prospects will jointly million anodes by processing concentrates from the schedule. One major highlight was the opening increase the Group’s copper ore resources by total investment in 2009, 2009 was a positive year for Anglo American Los Bronces and El Soldado divisions. of the tunnel in November 2009 for the 50% (excluding reserves)65. Chile with record copper production in Chile. 22% more than in 2008. conveyor that will convey ore from the mine to This amounted to 669,814 tonnes of fine Total molybdenum production (Los Bronces the grinding plant at Confluencia. copper, with copper cathodes accounting for and Collahuasi) was up 6% and amounted to 176,353 tonnes and copper concentrate for 3,886 tonnes. Production at Los Bronces is expected to 487,944 tonnes. increase to 490,000 tonnes a year in the first Collahuasi had the highest production three years of production (with an average of The Los Bronces division had a production increase and a record of 535,800 tonnes of 400,000 tonnes a year in the first ten years). 27% 3.600 increase achieving a record of 238,423 tonnes fine copper, with Anglo American’s share It is estimated that at peak production it will progress of fine copper, and Mantos Blancos had a of the Los Bronces Development amounting to 235,775 tonnes due to its 44% become the fifth largest copper producer in the 3% performance increase on 2008 producing interest. This record production was attained world, with highly attractive operational costs Project which is on schedule. 90,153 tonnes of fine copper. despite the setback of a fault with the 203 and reserves assuring a life of over 30 years. conveyor, which was inoperative for 44 days. The resource and mineralisation studies made Production at the Mantoverde division was by Anglo American’s technical teams also similar to that in 2008, amounting to 61,515 Moreover, construction of the Los Bronces guarantee potential expansion. tonnes of fine copper cathodes. Output at the Development Project is progressing according 61 www.eitransparency.org. This initiative aims to El Soldado division fell to 41,365 tonnes due to schedule and start-up will be in the last Anglo American also announced two major strengthen company governance by means of to the lower ore grade, which was foreseen greater transparency and rendering of accounts quarter of 2011. The design engineering was high-quality prospects at Los Sulfatos and in the extractive company sector. in the mine development plan. The Chagres substantially completed by late 2009 and San Enrique Monolito near the Los Bronces 62 www.sence.cl 63 www.sii.cl 64 My small- and medium-sized company. 65 See the prospects on page 22.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 44. 45.
Economic performance Major projects in the year Mantos Blancos division Mantoverde division Chagres division Investment in stay-in-business projects The company invested US$14.1 million Mantoverde spent US$11 million on projects The company invested US$9.4 million at the (to maintain the productive capacity) was in Mantos Blancos in projects such as the in the period: Chagres smelter to improve the operating US$115 million in 2009 against the US$170 following: conditions, availability and control of fusion million invested in 2008. This figure excludes The drilling campaign continued; it and the acid and oxygen plant. the additional US$581 million invested in The project involving secondary leaching is necessary for the sulphide project the Los Bronces Development Project, and of launder gravel, entailing a total feasibility study. US$8.7 million has been other expansion studies and projects like the investment of US$15 million, is in the approved for this drilling. Mantoverde sulphide study, which amounted completion stage. to US$4 million. Projects developed by Collahuasi are also excluded. With regard to the conceptual study to extend the life of Mantos Blancos, a new The main projects carried out in the year team was formed to complete this phase included initiatives arising from corporate of the study and submit a business case
strategies of commitment to safety, health in 2010. Capital Financial and the environment amounting to US$8 million. These entailed improvements of the standards to prevent fatalities, the El Soldado division anti-collision systems installed on mining The company invested US$20.6 million in the equipment and enhancements of the fire following projects at El Soldado in 2009: protection systems, among others. Work continued at the El Cobre plant to The execution of projects to save energy, install new crushing, re-grinding, flotation water and reduce CO2 emissions at operations cells and ancillary equipment to expand its is under study and they will be undertaken production capacity and metal recovery to based on Anglo American’s corporate treat around 8.1 million tonnes. The total US$115 commitments. cost of these initiatives will amount to million US$23 million. invested in stay-in-business projects. Due to the normal growth of the El Torito Los Bronces division tailings dam, the following projects The company invested US$58.1 million in were completed entailing US$15 million: stay-in-business projects at Los Bronces in relocation of the recirculation water 2009. The following were the main initiatives: conveyance facilities from the lagoon to US$8 3.600 the El Cobre plant, the construction of a million To withstand the greater demand and new road and contour channel to manage OPERATING AND FINANCIAL OVERVIEW 2009 2008 2007 allocated to safety, health and reliability of the electric power system, the surface water, and the construction of (given in millions of US$) environmental initiatives. a new 66 kV transmission line was a new emergency evacuator to convey the completed from San Francisco to Los surplus clear water flow to the evacuator Anglo American Chile’s earnings 2,555 2,772 3,124 Bronces and the San Francisco and Los tunnel. Detailed engineering also started Collahuasi’s earnings (44%) 1,412 1,135 1,383 Bronces substations were boosted. to relocate the plant-dam tailings piping with its cyclone station. TOTAL EARNINGS (1) 3,967 3,907 4,507 Twenty-six kilometres of 24”-diameter piping of the ore slurry pipeline were Anglo American Chile’s income tax 157 228 266 replaced as they had come to the end Anglo American Chile’s royalty tax 39 55 82 of their life. The spend accumulated in 2009 was US$23 million. The project is Collahuasi’s income tax (44%) 143 126 144 expected to be completed in 2011 at a Collahuasi’s royalty tax (44%) 22 29 40 total investment of US$74 million. This Profit remittance tax paid 163 258 367 initiative was undertaken jointly with the assembly of the Los Bronces Development Other company tax 16 18 12 Project ore slurry pipeline. Other tax collected (2) 44 22 13
The construction of the cyclone system TOTAL TAX 584 736 924 of the western wall and the eastern starter dam of the tailings dam is being Anglo American Chile’s earnings 1,037 1,126 1,697 completed at Las Tórtolas. Improvements are also being made to the tailings launder Collahuasi’s earnings (44%) 679 496 803 to the main wall. These projects entail an TOTAL PROFITS 1,716 1,622 2,500 investment of US$22 million.
Around US$4 million were invested to Anglo American’s fine copper production (tonnes) 434,039 434,475 453,891 NOTES replace the mobile mine equipment. (1) Only includes operating Collahuasi’s fine copper production 235,775 204,317 198,899 earnings. (44%)(tonnes) (2) Other tax collected: this row was inserted to report Total FINE copper 669,814 638,792 652,791 separately the tax that is not a company tax burden production (tonNES) but which it collects and pays to the State. C1 average unit cost (US$/lb) (3) 1.04 1.02 0.82 (3) C1 cost: mine cost, plant costs, overheads, smelting, refining and freights costs.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 46. 47.
Human capital
Safety and occupational Safety. 0.17 lost-time accidents per 200,000 hours health worked in 2009.
US$7.5 million to implement the safety standard.
220,654 man-hours allocated to safety training.
Occupational health. Two new cases of hypoacusis.
People Education, training and 5,229 company employees trained. coaching to develop personal 120,534 man-hours of annual training. and team competencies.
Driving continuous Creation and consolidation of the Global Shared improvement of functions, Services model. operations and systems. Divisional initiatives of continuous improvement.
Establishment of strategic Partnership with the Faculty of Physical Sciences partnerships to generate value shared and Mathematics of the University of Chile. with other players in the industry. 18.8% increase in investment to attract talent amounting to US$1,824,625.
Sharpening of internal Communication meetings with specific internal communication to meet life quality, groups. diversity and work-family conciliation Application of the flexible working day in Santiago. priorities. Participation in the study “Best companies for working parents 2009.”
Empowerment of dialogue and 11 trade unions and 98% of the workers are co-ordination based on the represented by unions. collaborative labour relations model. The early collective bargaining process with the Los Bronces, El Soldado and Chagres unions ended in December 2008.
Trade union leader development and further training initiatives.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 48. 49.
Safety and occupational health Safety and occupational health Record results Systematic work focused on company employees and contractor companies resulted in the best safety index in the company’s history of 0.17 lost-time accidents per 200,000 hours worked in 2009. The five operations were also ranked among the top seven with the best safety performance in Chile during the year. Management approach
Anglo American’s safety, occupational health and environmental management policy establishes that achieving “zero harm” must be underpinned by effective safety management at all operations, considering people as the The work on safety, occupational health One of the main issues in the period was main asset. We believe that and risk management in 2009 was focused the implementation of the Anglo Fatal Risk on sharpening leadership and proactivity Standards (AFRS). The company invested Three safety, occupational health and risk management principles were established for this: people are our main at all corporate levels, on co-operation and US$7.5 million in this programme alone in Human Capital teamwork with contractor companies, and 2009 and expects to invest a similar figure in All accidents and professional and occupational diseases are preventable. asset and we will not on progress with embracing the practices of 2010. excellence required by the Anglo American We will take all the action needed to prevent accidents and diseases and prevent repeats. tolerate them having culture. accidents or injuries Anglo American’s safety policies and standards are applied uniformly to all the company’s operations.
while working for us. The senior safety and sustainable development management reports directly to the CEO and is in charge of driving all programmes that help to adhere to these principles in the organisation, at operations and in All employees have stakeholder relations. The safety and occupational health management reports to the CEO. the right to return home safe and sound at the end of their working day”.
Safety, Occupational Health and Awards and accolades 2009 Environmental Management Policy66.
APRIL MAY JUNE JULY AUGUST NOVEMBER DECEMBER
The electrical Chile’s National Safety The Latin American Chagres received The National Geology and Mining Survey The Workers’ All Anglo American equipment area of Council (CSN)69 awarded Association of an award for its (SERNAGEOMIN)72 awarded Mantoverde Safety Association Chile’s operations the Chagres division Chagres the Risk Occupational accident rate index the Category B Company prize for its safety distinguished the maintained completed 31 years Prevention Excellence, the Safety and Hygiene improvement during performance. plant electrical certification of without any lost-time National Safety Council (ALASEHT)70 the seminar Leadership equipment area their management accidents. and Risk Prevention Effort distinguished and Teamwork in GDA and Logist and Service, contractor companies of El Soldado for system based on the prizes, and Mantoverde Mantoverde for Times of Crisis, at Mantoverde, were distinguished by the completing 20 years OHSAS 18001: 2007 The Work Safety the National Safety Council its accident risk organised by the Workers’ Safety Association for the application without any lost-time standard, after the Institute (IST)67 and Risk Prevention Effort prevention work. Mutual de Seguridad71 and certification of the Competitive Company accidents. internal and external distinguished the prizes. This is one of the (Workers’ Safety Programme. audit processes had company Tranex most prestigious and Association). been completed. Ltda68, which moves Mantos Blancos received a significant awards in Mantoverde was awarded the John T. Ryan Prize earth at the El Mention of Honour in the Latin America. for the fourth time for its excellent work safety Soldado division, for Most Improved Operation performance and Mantos Blancos was the runner- completing four years Award and Chagres Mantoverde’s up. This prize is awarded each year by the Instituto without any lost-time obtained the Outstanding employees and de Ingenieros de Minas de Chile 73, Sociedad accidents. Safety Performance Award those of contractor Nacional de Minería (SONAMI)74, SERNAGEOMIN 66 The content of this policy is available on in the Anglo American companies completed and the Canadian Institute of Mining, Metallurgy 75 the company website at www.anglochile.cl Chief Executive Safety one year without any and Petroleum (CIM) . and was fully reported on in the Sustainable Awards, in which all lost-time accidents. operations worldwide The external service company Sodexo76 completed Development Report 2008. participated. 3 million man-hours without any lost-time 67 www.ist.cl accidents in its catering and maintenance service 68 www.tranex.cl for the Los Bronces division and Los Bronces 69 www.consejonacionaldeseguridaddechile.cl Development Project (LBDP). 70 www.alaseht.com 71 www.mutual.cl 72 www.sernageomin.cl 73 www.iimch.cl 74 www.sonami.cl 75 www.cim.org 76 www.sodexo.com
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 50. 51.
Safety and occupational health Progress with corporate Anglo Fatal Risk Standards (AFRS) Safety risk management standards and programmes programme (SRMP) Four-tier safety risk management focus This programme is essential to establish The safety policies, standards and guidelines effective safety management at all Anglo The aim of the safety risk management established provide incentives so visible-felt American’s business units and operations, programme (SRMP)79 is to teach and commit and responsible leadership, teamwork and including contractors and visitors when they the entire organisation and its external risk management underpin the improvement participate in internal activities. In 2009, partners to the correct identification of ASSESSMENT OF MATERIAL HAZARD RISKS / of the indicators. The traditional preventive BASELINE/ENTIRE SITE D E US$7.5 million were allocated to comply with hazards and risk management, emphasising D E focus is supported by methodologies and the this standard. the importance of leadership in the decision- C RE AS I NG RI embracement of best practice in the industry making process. As of December 2009,
US$7.5 C RE AS I NG RI million invested to consolidate the progress achieved towards Based on the analysis of best practice in senior management, management, executive “zero harm”. the industry and the systematic review of and superintendent levels had completed PROJECT RISK ASSESSMENT/
to comply with the AFRS. S K own incidents, these standards establish the their attendance of the training levels of this CHANGES/ISSUES In accordance with these standards, Anglo minimum safety performance requirements programme (classroom workshops, on line S K American Chile achieved and, in some cases, for light vehicles, the handling of hazardous training, case analysis, etc.). According to exceeded the 2009 targets of the main substances, equipment protection and working the schedule, supervisors and employees will programmes related to sharpening leadership: at altitude, among others78. receive SRMP training in 2010 to attain 100% coverage. ASSESSMENT OF ROUTINE & NON-ROUTINE 18,326 TASK PLANNING RISKS In 2009, Anglo American achieved the annual hours devoted Anglo Safety Way target at all its divisions of 90% compliance by managers and superintendents with the compulsory requirements established to apply the Visible-Felt Leadership According to the results of the internal and in the Anglo Fatal Risk Standards. Los Bronces, methodology in the field in 2009. external audits, all the divisions attained over Mantos Blancos and Chagres exceeded the INDIVIDUAL, ONGOING, “FACE-TO-FACE” 90% compliance with The Anglo Safety Way target. RISK ASSESSMENT standard, with Mantos Blancos achieving Human Capital 100%. Besides progressing towards 100% compliance with the zero harm vision, the main targets The Anglo Safety Way77 sets out the and investments related to the Anglo Fatal 9% conditions for the continuous improvement Risk Standards will in 2010 be focused on NUMBER OF MANHOURS ALLOCATED TO SAFETY TRAINING more man-hours of the safety management at operations, equipment protection, transportation and allocated to training than in 2008. considering issues like leadership, training, prevention management standards, and control Division Manhours / 2009 Manhours / 2008 contractor management, operational control, of employees’ physical and mental fatigue. emergencies and accident investigation, among Los Bronces 65,956 80,252 other issues. Mantos Blancos 112,203 41,696 El Soldado 21,434 35,947 Mantoverde 7,657 11,934 Chagres 13,404 33,507
ANGLO FATAL RISK STANDARDS PERFORMANCE 2009 TOTAL 220,654 203,336
DIVISION COMPLIANCE INVESTMENT LEVEL (IN US$)
Los Bronces 91 1,530,000 Mantos Blancos 91 3,017,000 Risk management stepped up at all operations in 2009 and concepts and definitions in specific risk the effectiveness of risk management was management-related areas (alert systems, El Soldado 90 700,000 leadership supported by: shifts and rest, family relations, among Mantoverde 90 1,377,000 Progress was made in 2009 with improving others). The work on physical and mental Chagres 94 853,000 the supervision quality and strengthening the Cycles of supervisor and contractor training fatigue was defined as a priority for 2009 strategic commitment of contractor companies. on the VFL process and in other areas and 2010. AVERAGE COMPLIANCE / 91 7,477,000 related to exercising effective on-site TOTAL INVESTMENT The application of the Visible-Felt Leadership leadership based on a specific manual (VFL) process at all operations bolsters that was distributed at all the company’s commitment to good practice. This is divisions. underpinned by the assessment, analysis and improvement of the characteristics of a Managers and superintendents allocated specific on-site task carried out by employees, 18,326 hours to apply the VFL and a leader communicating “face-to-face”. It methodology in their daily work (720 more generally takes a few minutes and is focused hours than in 2008). on “recognising and reinforcing conduct and getting a commitment to change improper Systematisation of and periodical reporting conduct”, according to the process support on the information arising in this process, manual. The methodology requires managers so it can be shared among work teams at and superintendents to devote 30 hours a 77 The origin and characteristics of this the divisions and among operations. programme were fully reported on in the Anglo month to really being on site with personal American Sustainable Development Report contact, in which positive employee conduct is Dissemination at supervisor level of 2008. The document is available at reinforced and feedback is given for possible the series of “what you need to know” www.anglochile.cl shortcomings. The use of this practice was 78 Document available at www.angloamerican. leaflets, which provide the fundamental co.uk/aa/development/approach-and-policies 79 The origin and characteristics of this programme were thoroughly informed in the Anglo American Sustainable Development Report 2008. The document is available at www.anglochile.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 52. 53.
Safety and occupational health
Safety performance Anglo American Chile had no fatalities at its operations in 2009, which is a positive The unremitting commitment to achieve sign of the effectiveness of the policies, 2009 LTIFR* LTISR** “zero harm” maintained the downward programmes and practices put in place80. In trend of the accident rate, which reached a September 2009, the company regretted the COMPANY CONTRACTORS Total COMPANY CONTRACTORS Total company record. The consolidated safety index death of the worker Luis Zurita Martel, who EMPLOYEES EMPLOYEES (expressed in lost-time accidents for every died due to a fall of ground during a rain and Los Bronces 0.29 0.24 0.26 199 100 138 To comply with the 200,000 man-hours worked) was 0.17 in wind storm that hit the place where he was 2009 against 0.21 the previous year. The five sleeping on the access road to the Los Bronces Mantos Blancos 0.00 0.09 0.06 0 268 186 operations were among the top seven with the mine site and off the company’s premises. El Soldado 0.11 0.08 0.09 58 53 55 aspects of The Anglo best safety performance in Chile in 2009. The contractor worker was with other people Mantoverde 0.00 0.16 0.10 0 86 51 providing access control services to such mine Safety Way, the safety Chagres 0.00 0.24 0.13 0 197 105 With regard to the company’s lost-time site. Although this was a non-labour case, plans for the activities work accident index, considering company Anglo American Chile supported the family Los Bronces Development Project 0.00 0.23 0.22 0 123 122 employees and contractors, this amounted to of the worker and collaborated with all the of contractors and 1,920 days in 2009 against 2,093 days and institutions who investigated this case. CONSOLIDATED INDEX 0.11 0.19 0.17 72 127 112 related companies 1,138 days in 2007 and 2008, respectively. The severity rate (number of work hours shall include the lost for every 200,000 man-hours worked) identification and increased by 28.7%, from 87 in 2008 to 112 in 2009. This is explained by an increase in 2008 LTIFR LTISR this index at the Los Bronces, Mantos Blancos analysis of hazards, COMPANY CONTRACTORS Total COMPANY CONTRACTORS Total and El Soldado divisions, and in the Los EMPLOYEES EMPLOYEES risk assessment, Bronces Development Project (LBDP).
Los Bronces 0.20 0.23 0.22 150 121 132 Human Capital suitable control Mantos Blancos 0.20 0.17 0.18 125 79 93 measures, emergency El Soldado 0.12 0.07 0.09 139 6 54 Mantoverde 0 0.47 0.28 0 153 93 response manuals, Chagres 0.55 0 0.27 253 0 125 monitoring and Los Bronces Development Project 0 0.37 0.37 0 52 51
reports of the CONSOLIDATED INDEX 0.18 0.23 0.21 124 70 87 safety performance requirements”.
LTIFR LTISR The Anglo Safety Way: a contractor and 2007 related company management standard. COMPANY CONTRACTORS Total COMPANY CONTRACTORS Total EMPLOYEES EMPLOYEES
Los Bronces 0.25 0.38 0.33 431 179 279 Mantos Blancos 0 0.45 0.31 0 445 309 El Soldado 0.14 0.21 0.18 119 79 98 Mantoverde 0.23 0.16 0.19 73 63 67 Chagres 0.55 0.56 0.55 148 142 145
CONSOLIDATED INDEX 0.21 0.34 0.29 203 199 201
*Lost-Time Injury Frequency Rate (LTIFR): Lost-time accidents every 200,000 man-hours of work **Lost-Time Injury Severity Rate (LTISR): Number of work hours lost every 200,000 man-hours worked.
In 2009, Anglo American and its divisions Partnership with protection, which are complemented with particularly focused on extending the use of contractors a system of financial incentives tied to the corporate tools of the Anglo Safe internet achieving the individual and collective safety portal for issues such as safety risk control, Anglo American Chile has a comprehensive and competency improvement objectives. emergency plans and review of third-party management plan for contractor companies, incidents, among others. the objective of which is to boost their Contractors are thereby integrated to Anglo commitment to Anglo American’s values, American’s planning. The work done in the At the same time, it completed work to align policies and programmes. It also sets out the last few years has led to a steady decrease the content and methodologies of the safety conditions for supervision of accommodation, in the performance shortcomings on safety, risk management programme (SRMP) to food, transportation, equipment and occupational health and risk management. include the management and supervisor levels of contractor companies in 2010. Moreover, personnel of these companies participated in training sessions, work meetings, campaigns and programmes to promote the zero harm 80 There were 35 fatalities in the mining industry in 2009, based on the data of SERNAGEOMIN. culture at all operations.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 54. 55.
Safety and occupational health
Disseminating the Anglo Co-ordinated occupational OCCUPATIONAL HEALTH CASE RECORD American culture health work Noise- Pneumoconiosis Chronic Tuberculosis Asthma Hand-arm Others Total 81 induced obstructive vibration (*) There were new resources in 2009 to facilitate The Anglo Occupational Health Way hearing loss airways disease syndrome compliance with the safety, occupational health standards are the company’s roadmap towards (NIHL) (COAD) (HAV) and risk management objectives. In the case of its zero harm objective and establish the focus Anglo Safe, the company designed and added of all the specific work tools and manuals. online work modules regarding: They set out the mechanisms to meet the Nº of employees 1,597 1,274 20 0 0 136 1,746 4,773 corporate commitments to occupational health exposed to risk Action plan management (GPA): and the monitoring, control, assessment and Nº of new cases 2 0 0 0 0 0 0 2 this provides for online supervision and audits of the degree of compliance. In the Nº of current cases 11 0 0 0 0 0 0 11 monitoring of incident analysis processes, case of Anglo American Chile’s operations, Nº of employees 3 0 0 0 0 0 0 3 verification and control to facilitate data the annual assessment mechanisms set a compensated logging and traceability, which are essential 90% degree of compliance on average for for internal and external audits. operations, including contractors. Compensation paid 35 0 0 0 0 0 0 35 (US$000s) Review level and third-party Moreover, the contingency created by the A Nº of occupational 3 0 0 0 0 0 0 3 incident assessment: the aim of (H1N1)82 swine flu pandemic in 2009 made it changes this methodology is for supervisors to necessary to apply a specific protocol, which Nº of deaths 0 0 0 0 0 0 0 0 analyse the cases that have occurred in included monitoring, sanitary control and other divisions and/or companies and promoting self-care and hygiene conduct at all (*) Others: lead, acid rain, body vibration, ion and UV radiation. then to formally answer an assurance operations, in accordance with the guidelines questionnaire. An alert system was added of international and local health authorities. in 2009, which shows the personalised reading frequency and allows cases to be The company continued to apply its HIV/ reviewed in different divisional areas other AIDS83 prevention programme, with a special Human Capital than the specific issue being addressed emphasis on informing of its content at all (blasting, transportation and loading, plant, operations, to sharpen preventive conduct. No operations, etc.). This innovation has on cases of contagion at Anglo American Chile average increased the indicator of new case were notified in 2009. Main activities of the hygiene and safety parity committees (HSPC) assessment by supervisors from 20% to 90%. There were two new cases of hypoacusis Anglo American has seven hygiene and safety parity committees (one per division, plus Santiago and two at El Soldado in 2009. These workers were at Mantoverde), in which company and employee representatives participate, to detect and assess the Anglo American Chile completed the design reassigned new functions and their new risks of accidents and professional diseases in their influence area, pursuant to what is set forth in Law Nº and planning of the communication and training positions were controlled so they are not 16.744. programme of the Learning From Incidents exposed to noise, in accordance with the (LFI) tool, which enhances the instruments internal manual for the procedure in this kind and practices of investigation, analysis and of situation. The professional disease rate was Moreover, Law Nº 20.123 of 2006 lays down the obligation for companies hiring or subcontracting others conduct change based on cases of accidents. 0.0184 in the year. for their operations to safeguard the establishment and operation of the so-called site parity committees. The activities scheduled for this will commence in 2010. The following were the main activities of the Anglo American Chile HSPC in 2009 to support corporate programmes:
• The Santiago HSPC drove first aid, responsible driving and work quality courses given by the Workers’ Safety Association86. Case study Committed to the progress of the industry • The Los Bronces HSPC promoted teamwork and training with the HSPC of contractor companies, and also held investigation workshops on serious and high-potential incidents. Anglo American has promoted teamwork among the different players of the mining industry and other productive areas to share experiences • The Mantos Blancos HSPC developed a cycle of talks on taking care in the home, attended by workers and embrace the best practice on safety, occupational health and risk management. and their families. Issues like healthy food, alcohol, drug prevention and precautions with electricity were addressed. In the case of the safety risk management programme (SRMP), the company has shared its bases and action lines by means of meetings • The El Soldado HSPC helped to develop the workshop Anglo American labour relations model, with other mining companies operating in Chile. Some of them are already attended by 680 employees at the division. applying specific modules of this programme or plan to do so in the short and medium term. 81 Document available at www.angloamerican. • The Mantoverde HSPC participated actively in the practice of the Visible-Felt Leadership methodology co.uk 82 The information about this sanitary emergency At the same time, Anglo American Chile has a work partnership with the applied to the safety area. is available on the World Health Organization Catholic University of the North (UCN)85 so the SRMP training material is (WHO) website www.who.int/csr/disease/ used in training and professional update programmes on risk management. swineflu/en. • The Chagres HSPC supported the showing of the “Always choose safe conduct” video, which 83 Anglo American plc has a specific policy on emphasises respect for rest routines and dialogue in work teams based on specific cases. this issue available on its website www. The company has also contributed to the development of an international angloamerican.co.uk. association of universities, aimed at disseminating the SRMP-related 84 Anglo American does not record this rate but knowledge, investigation and application cases. the quantity of new diseases. Nevertheless, the rate is presented according to the formula of the Workers’ Safety Association, which is As of December 2009, this network comprised seven universities in Australia, the number of professional diseases per month China, South Africa, the United Kingdom, Brazil and Chile (through the UCN) x 200,000 man-hours per the workforce. and institutions in Canada and the United States will also join. 85 www.ucn.cl 86 www.mutual.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 56. 57.
Our People Our People Competency-based The company has driven employee involvement productivity in continuous improvement The focus of work with people in 2009 was on processes. enhancing the education and training programmes. A project was launched for this with Fundación Chile Management approach aimed at employees and contractors. One of the goals of Anglo American is to be the “employer of choice.” To achieve this, it must attract, retain and develop employees and professionals of excellence at all levels of the organisation. Anglo American aims to the “employer of the knowledge, basic skills and abilities for choice”, which is underpinned by the ability professional and technical profiles so it results Related to this, the Good Citizenship Business Principles set out that to attract, develop and get the commitment in an effective quality assurance tool for the company is committed to the adoption of fair labour practices in the of people and teams of excellence. In 2009, people in the organisation. Human Capital workplace and its conditions of service will comply with applicable laws and the main focus of company action in the Our People area was the application and The results of these assessments will detect industry standards. sharpening of programmes and resources gaps that can be overcome by means of for education, training, coaching and the specific education and work training or This focus must become reality to promote practices of equal opportunities 40.5 communication to raise productivity based on coaching programmes developed by Anglo in the workplace, non-discrimination, continuous improvement, freedom hours of supervisor improving competencies. American each year. To such effect, 5,229 of association, collaborative work relations and strengthening of internal communication. training on average. company employees attended further training With regard to this, the company launched programmes in 2009, with a total of 120,534 a project with Fundación Chile87 to design man-hours. The vice-presidency of human resources is in charge of driving the policies, and apply a labour accreditation system programmes and action in this area, with special emphasis on the cohesion of as of 2010, aimed at company employees all people in the organisation. 120,534 and contractors. The objective is to define hours of training in 2009. AVERAGE TRAINING/COACHING HOURS BROKEN DOWN BY WORK LEVELS 2009*
WORK LEVELS AVERAGE ANNUAL HOURS OF TRAINING/COACHING (MAN-HOURS/YEAR) Vice-presidents or senior 43.9 managers Managers 58.9 Supervisors 40.5 Employees 39.4
* Anglo American in Chile obtained the information of this index in 2009 by means of a process of optimising its registry systems, enabling this to be included in this report and starting follow-up on this index for subsequent reports.
ANGLO AMERICAN CHILE WORK TRAINING & COACHING AREA
TRAINING AREA 2009 2008 2007
Manhours Nº of Manhours Nº of Manhours Nº of people people people
Safety, occupational 24,214 1,753 30,676 2,029 16,629 1,736 health, environment and quality. Management 13,905 648 39,411 1,960 37,602 2,052 Technical 75,357 2,147 94,695 3,227 56,976 1,162 Others 7,058 681 3,277 168 9,092 358
Total 120,534 5,229 168,059 7,384 120,299 5,308 87 www.fundacionchile.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 58. 59.
Our People
Continuous improvement system. This tool facilitates the work follow- TRAINEE ENGINEER PROGRAMME up, control and supervision process, which In line with the strategic vision, corporate includes response to self-diagnosis guidelines, Professionals who have just graduated with academic excellence attend an induction, preparation and The copper loss in management must be based on applying assessments by heads and personalised performance cycle in the different corporate areas. An assessment is then made as to whether they common policies, processes and systems feedback interviews. should be invited to join the company. the Chagres process that allow for the continuous improvement of 2009 2008 2007 quality and services and in turn help to reduce The main advantages of this modality are the dropped to less costs. shorter time each stage takes, quick access to Nº of men 13 11 17 than 1%. This was consolidated information and the availability This challenge has been maintained since of databases that provide a higher level of Nº of women 7 7 6 the best continuous 2008 with the steady adoption of Global analysis and conclusion. Shared Services (GSS). This organisation TOTAL TRAINEE ENGINEERS 20 18 23 improvement initiative system optimises internal activities with their centralisation. The first stage has been applied AMOUNT INVOLVED (US$) 825,542 756,092 837,756 in 2009. to the accounting and employee service areas. This has entailed technological innovation, new ways of global collaborative work and the development of training programmes and communications aimed at managing this THESIS STUDENT PROGRAMME change. Anglo American joined this process in University students in the last few years of mining-related careers undertake studies and research 2009 with its professionals and technicians at the company’s operations. participating in international teams in charge of 19% this change. 2009 2008 2007 increase in talent In the specific case of the human resources attraction investment. Nº of men 40 23 25 Human Capital area, the Shared Services Centre helps to prevent the duplicity of functions, simplify Nº of women 16 10 9 the delivery of services and work benefit applications, and quickly and timely answer TOTAL THESIS STUDENTS 56 33 34 26% employee queries via the intranet or by increase in the Apprentice telephone. AMOUNT INVOLVED (US$) 197,120 109,723 101,184 Programme places since 2007. The analysis of training and coaching needs Strategic partnerships and arising from this change was a priority in the programmes year, with the objective of applying specific APPRENTICE PROGRAMME programmes in 2010 that also support the Anglo American has also given priority to company’s migration to deploying the human entering into strategic partnerships with Youngsters of 18 to 21 years old, who have completed their secondary education at technical resources model of the SAP88 management academic institutions that generate shared schools in the communities near Anglo American Chile’s operations undertake an apprenticeship in system. value by supporting applied research, the company under the guidance and supervision of an internal tutor. competency development and productive 2009 2008 2007 From the division standpoint, the company has innovation projects. driven employee involvement in continuous improvement processes. The teams at This teamwork will also enable the company Nº of men 80 104 92 operations frequently apply their on-site to offer professional and specialisation Nº of women 51 11 12 knowledge and experience to attain greater opportunities to outstanding students in fields efficiency of activities and processes. related to mine engineering, metallurgy, and TOTAL APPRENTICES 131 115 104 geology, among others. That was the case of the Mantoverde division AMOUNT INVOLVED (US$) 619,641 488,030 369,074 mine management, which made progress with One of the highlights of the year was the the optimisation of transportation distances, establishment of a partnership with the the performance of the front loader fleet, tyre Faculty of Physical Sciences and Mathematics care and the efficient consumption of water of the University of Chile89 through its mine 90 from the Copiapó wells. At the same time, the engineering department . This agreement PROFESSIONAL PRACTICE PROGRAMME plant management at the division achieved envisages the exchange of technical greater efficiency with the management of information, joint study projects, programmes Youngsters with a good professional projection learn about the work and culture of the company solvents and acid. to train professionals, internships for and have the opportunity of joining it. academics, theses and professional practice, 2009 2008 2007 A multidisciplinary team at the Chagres among other initiatives. division designed and applied a programme Nº of men 110 94 76 to reduce the copper loss in its processes to Anglo American in Chile also increased less than 1%, recovering part of the metal investment in attracting talent (trainee Nº of women 35 35 29 contained in the slag that was previously engineers, thesis students, apprentices shipped to waste dumps. This work received and professional practice) by 19% from TOTAL PRACTICES 145 129 105 corporate acclaim as the best continuous US$1,534,608 in 2008 to US$1,824,625 in 2009. Based on the policy of driving women’s improvement initiative in 2009. With regard AMOUNT INVOLVED (US$) 182,322 180,763 89,390 to employee work, the El Soldado division share of the workforce as a diversity factor, in launched a new online performance appraisal 2009 it also increased the number of women selected in three of these four programmes. In the case of professional practices, the number remained the same as in 2008. 88 The specific benefits of the SAP system in the mining area can be reviewed at www.sap.com 89 www. ingenieria.uchile.cl 90 www.minas.cec.uchile.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 Business sustainability. Management of people. Quality of life. Cultural characteristics of the company.
60. 61.
Our People
Quality of life As a sign of the priority Anglo American Labour relations parties adhering to a labour relations model is giving to making progress with the management underpinned by four areas of dialogue: Monthly meetings to analyse division Besides applying work competency conciliation of work and family life, the results between the management team development and talent attraction company participated in the study “Best As of December 2009, the company had 11 Business sustainability. and union representatives to update programmes, Anglo American has taken companies for working parents 2009,” driven trade unions (two at each division, except Management of people. information on the development of the measures that help to give its employees a by Fundación Chile Unido93, and the YA Mantoverde where there are three) with 98% Quality of life. operation and address important corporate better quality of life, focused on the well- magazine of El Mercurio newspaper, with the union representation of the entire company Cultural characteristics of the company. and labour matters. being and family-work conciliation areas. support of the consultant company Feedback workforce able to belong to a trade union96. The objective is to attain benefits shared Comunicaciones94. As a sign of this commitment, the text of the Half-yearly review and analysis by the company and its internal employees As reported in the Sustainable Development collective agreements contains a statement of process of the remunerations and from the standpoint of productivity, work Although Anglo American was not among Report 2008, the early collective bargaining principles called “Building the vision together incentive systems of other mining environment, meeting corporate targets, the ten companies in the ranking, the results process with the unions of the Los Bronces, of being one of the most valued and respected companies operating in Chile to include joint work, commitment to the organisation are being used to design, prioritise and apply El Soldado and Chagres divisions ended copper operations in the world”, which good practice and promote informed and strengthening of the internal framework, programmes and plans related to the issues in December 2008 with ratification of the declares the need of maintaining the joint labour discussions by management and among other aspects. under assessment95. respective 48-month collective agreements work of the long-term co-operative relations employees. (maximum term laid down by Chilean labour model between both parties, based on mutual The conclusions reached from meetings with legislation). These agreements came into force respect, trust and integrity. Definition of incentives for both specific internal groups were important to on 1 December 2008 and will remain effective company employees and contractors detect and prioritise needs. In the particular until 30 November 2012. In 2009, this vision led to increased teamwork based on the achievement of personal, case of the dialogue with women who work at with the following programmes and co- group and division goals for safety, Anglo American in Chile, it was concluded that With regard to the other divisions, as of ordination activities: occupational health, risk prevention and work flexibility is essential to strengthen the December 2009 collective agreements quality standards. conciliation of work and family life. Progress remained in force at Mantos Blancos and Courses for union leaders at the in this area during the year was that a flexible Mantoverde. After an early collective divisions: employees interested in Development of specific campaigns in working day was introduced in Santiago with bargaining process, such 43-month undertaking union leadership work can significant areas for employees, their Human Capital flexible start and end times for employees. agreements came into force on 1 May 2007 attend training courses and workshops families and the communities around and will last up to 30 November 2010. that address significant issues in the operations. The Hygiene and Safety Parity Due to the special conditions of operations at commercial, labour and human resources Committees (HSPC) play a significant role mine sites, the divisions are analysing flexible The agreement by the company and the areas, among others. The union-defined in these to design, apply and evaluate measures that do not affect the production operations unions to hold these early collective issues are developed by external initiatives97. processes. bargaining processes is based on both specialists. With regard to remuneration, Anglo American The main benefits of programmes of this does not discriminate according to gender or kind are the greater autonomy of people to supervisor or employee level. To define the plan their personal and family activities, the salary level, variables like the job position, reduced travelling times to and from work, its complexity, the degree of responsibility, increased productivity and a better work the person’s competencies to do that job and 91 environment . the performance level, among others, are considered. The minimum salary of company Related to this, besides complying with labour employees was about three times higher than legislation and social security, the collective Case study the legal minimum in Chile (Ch$165,000) as agreements between Anglo American and of December 2009. the various trade unions include additional Employee counselling programme (ECP) benefits such as: The internal communication strategy of the employee counselling programme With regard to contractor personnel, the company established the “Anglo American Financial aid for employees with children (ECP) was sharpened in 2009 to provide professional counselling to employees, their spouses and children for personal and family problems. Mine Site Minimum Monthly Wage” policy in There are at school and/or higher education. July 2008, which applies to any contractor- The counselling system covers the total cost of six consultations a year per dependent worker and/or subcontractors Additional allowances for employees with who provide permanent services at any 11 disabled children. member of the family group. Clinical psychologists working in the individual, family and couple psychotherapy areas are in charge of this service. These of its divisions and at the head office in trade unions Santiago. This monthly net wage was set at at Anglo American Chile. Adjustment of working conditions for professionals, selected by an external company specialising in these kinds of well-being services, work in 11 districts around Anglo American’s divisions or Ch$250,000, to be readjusted according to women with babies, beyond the time of the inflation rate. the postnatal period. in which a large number of employees live.
98 All the stages of the ECP are provided strictly confidentially, which The Carlos Vial Espantoso Foundation Five days more holiday than the legal highlighted the application of Anglo requirement. means Anglo American only has access to information on the number of 91 One of the most recent and significant studies consultations made with the sole objective of paying the professional fees for American’s labour relations model, selecting on this issue is “Flexible working conditions the consultations. it as one of the six finalists in the 2009 and their effects on employee health and Special leave for personal and family award ceremony. The objective of this award well-being” by Clare Bambra, a researcher emergencies. at Durham University (United Kingdom). The The consultation request is made via direct telephone contact by the is to “highlight companies that apply policies conclusions of this research are available at: interested party to one of the 20 specialists of the ECP team. enabling employees to share company profits www.cochrane.org/reviews/en/ab008009.html. Infrastructure availability for sports, in different ways, highlighting the importance 92 Other benefits, included in the collective recreational and cultural activities at all of human capital in business management”. agreements in force as of December 2009, the divisions92. are outlined in the Human Capital section of the Sustainable Development Report 2008, available at www.anglochile.cl 20 specialists. 93 www.chileunido.cl 94 www.feedback.cl 95 The report on the study and its related ranking 1,700 consultations in 2009. is available at www.chileunido.cl/estudios/ opina.html 96 The total percentage of union representation specified excludes the supervisor level. 97 See parity committee initiatives on page 55. 98 www.fundacioncarlosvial.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 62. 63.
Our People
Employment status and Chile’s urban centres were working at the time WOMEN’S SHARE OF THE WORKFORCE 2009 characteristics of the survey”99. AREA NUMBER OF TOTAL The total workforce as of December 2009 The average company workforce age was WOMEN PERCENTAGE amounted to 10,172 employees. Company 43 (one year older than in 2008), and the Total workforce of Anglo American in Chile 545 8.7% employees accounted for 30.9% and average labour turnover rate was 4.81% Company workforce of Anglo American in Chile 187 5.9% contractors in the services, operations and (6.1% in 2008) with figures of 3.18% for 10,172 project areas for the remaining percentage Vice-presidents or senior managers of 3 4.8% people work employees and 1.63% at supervisor level (the Los Bronces Development Project has (4.7% and 11.3% in 2008, respectively). Anglo American in Chile at Anglo American. been the main source of demand in this The absenteeism rate was 2.4% in 2009, the Managers of Anglo American in Chile 8 7.2% segment since it started up in 2007). same as the previous year. Talent attraction programme of Anglo American in Chile 109 30.9% Women’s share of the workforce was up on 100 the previous year in two management levels, “MINE & QUARRY” ACTIVITY AREA IN CHILE 4,570 4.5% i.e., from one to three at vice-president level 3,143 and from two to eight at manager level. Note: This table was drawn up with information gathered during the reporting period. There is no reliable information on this to include previous years. company employees Based on the latest study of ComunidadMujer, The basis used to calculate 8.7% excludes project contractor company personnel and hence considers a total workforce of 6,238 people. at Anglo American. “60.6% of women aged 18 to 65 years in LABOUR TURNOVER BY GENDER, AGE, WORKPLACE AND WORK LEVEL 2009
EMPLOYMENT GENERATED (at 31 December each year) Women account for By gender Men 4.33% BY DIVISION 2009 2008 2007 Women 0.48% (including third parties)
5.9% Human Capital of the total workforce. Los Bronces 1,721 1,712 1,420 By age 30 years old or younger 0.76% Mantos Blancos 1,268 1,337 1,014 31 to 40 years old 1.30% El Soldado 1,599 1,472 1,138 41 to 50 years old 1.03% Mantoverde 797 824 731 51 years old or older 1.73% Chagres Smelter 444 457 461 By workplace Los Bronces division 1.45% Santiago office 409 330 275 El Soldado division 1.00% Project contractors 3,934 3,610 815 Chagres division 0.54% TOTAL WORKFORCE 10,172 9,742* 5,854 Mantos Blancos division 0.97% Mantoverde division 0.45%
* The significant increase in the total workforce is explained by the higher contractor workforce in the Los Bronces Development Project. Santiago office 0.39%
By work level Supervisors 1.63% Employees 3.18% EMPLOYMENT BY DEPENDENCE 2009 2008 2007 AVERAGE LABOUR TURNOVER RATE IN CHILE 2009 4.81% Company employees 3,143 2,973 2,723 Service contractor personnel 810 948 710 Note: This table was drawn up with information gathered during the reporting period. There is no reliable information on this to include previous years. Operations contractor personnel 2,285 2,211 1,606 Project contractor personnel 3,934 3,610 815 BREAKDOWN OF MANAGEMENT POSITIONS 2009 2008 2007
TOTAL WORKFORCE 10,172 9,742* 5,854 Nº of male vice-presidents or senior managers 59 41 39 Nº of female vice-presidents or senior managers 3 1 1 * The significant increase in the total workforce is explained by the higher contractor workforce in the Los Bronces Development Project. Nº OF VICE-PRESIDENTS OR SENIOR 62 42 40 MANAGERS Nº of male managers 102 107 110 Nº of female managers 8 2 0
Nº OF MANAGERS 110 109 110
TYPE OF CONTRACT OF ANGLO INDEFINITE CONTRACT FIXED-TERM CONTRACT AMERICAN CHILE EMPLOYEES – 2009
Supervisors 706 24 Employees 2,277 136 99 Source: Voz de Mujer del Bicentenario: First national survey of women and work in Chile http://www.comunidadmujer.cl/actividades/ Total 2,983 160 lanzamiento_voz_mujer.html 100 Source: National survey on employment by the Note: This table was drawn up with information gathered during the reporting period. There is no reliable information on this to include National Statistics Institute (INE) from October previous years. to December 2009, available at www.ine.cl
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 64. 65.
Social capital
The Anglo Social Way: Standard published in 2009. Management system standards
Corporate social Enseña Chile. In 2010, 12 out of 27 teachers in the programme contributions were working at Colina and Lo Barnechea, where Los Bronces is located.
Elige Educar. US$100,000 for the dissemination campaign in 2009.
Anglo American bursary, 109 university students have benefitted in three Mining of Excellence. years. US$571,000 contribution in three years.
Santiago sin Campamentos 4,660 families benefitted. (No more shanty towns in Santiago).
Emerge programme. 5,933 small-sized businesses benefitted.
64 new entrepreneurs.
52 graduates and 31 with financing.
Investment in the community. US$2.7 million invested in corporate programmes.
Contribution Investment in US$4 million invested in 2009. by the divisions community engagement plans. to their communities
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 66. 67.
Corporate presence in society
Corporate presence in society So the Anglo American culture would be focused on boosting social sustainability, Management approach it published “The Anglo Social Way: Management System Standards”101 in One of the highlights of 2009 was the publication of “The April 2009. These guidelines set out and Anglo Social Way: Management System Standards”, disseminate the company’s vision, values which aims to establish how to address social and The way and policy in this area and also outline its community relations with stakeholders. These guidelines social management system and the standards are based on Anglo American’s values and the Good underpinning it. Citizenship Business Principles.
We recognise that of getting closer The Anglo Social Way defines the roles and The structure of Anglo American Chile establishes that mining involves responsibilities of the strategic community the general managers of the divisions report to the CEO focus, which has two essential functions: on the development of community engagement policies the depletion of a and programmes. Each of the company’s divisions has to the community The corporate function, in consultation a professional in charge of managing relations with the natural resource with internal and external stakeholders, communities around operations, in accordance with the defines requirements in relation to the corporate guidelines. and, therefore, if we vision, principles, policy and standards for Anglo American in Chile has decided to focus its social management and provides tools to At corporate level, the vice-presidency of marketing and are to contribute assist in their implementation. social and community action on creating solutions corporate affairs manages social and community affairs, and issues the guidelines for action taken by the divisions to sustainable and programmes which are sustainable in the The divisional role, which entails and manages the partnerships and agreements of national development we long term and are essentially aimed at developing implementing and incorporating the corporate requirements into specific scope, like the Emerge programme and the partnerships entrepreneurial skills, improving the quality of programmes and working practices. with Un Techo Para Chile, Enseña Chile and Elige Educar. need to enhance the social, human and education and contributing its experience and abilities to enhance the quality of life of people in manmade capital the area where it is present. in the communities around our Strategic community focus operations. I strongly Vision: Social Capital believe that when • To make a lasting positive contribution to the communities associated with our operations, and to be a conducted partner of choice for host governments and communities as well as an employer of choice.
responsibly, mining Principles: • We will engage respectfully with host communities throughout the project cycle, and be accountable to our has the potential to stakeholders. act as a motor for • Host communities should experience a lasting benefit from the presence of Anglo American operations and we will seek to maximise the benefits flowing from the operation of our core business in addition to wider development, traditional social investment. • All necessary steps will be taken to spread the application of good practice, and to learn from negative including poverty social impacts, complaints, incidents, audit findings and other non-conformances to prevent their alleviation”. recurrence. Our businesses will put in place appropriate mechanisms for handling and resolving grievances. • Common, non-negotiable performance standards and procedures shall be applied throughout the Group as a minimum requirement.
Cynthia Carroll, CEO Anglo American plc (April 2009). Policy: • We hold our leaders accountable for managing the social impacts of our activities, including activities undertaken on our behalf by contractors. • We expect our line managers and supervisors to provide effective leadership in the management of social issues whilst recognising that avoiding adverse impacts is the responsibility of all who work for us. • Managers are responsible for the full implementation of The Anglo Social Way at all managed operations.
This requires: • The allocation and efficient management of appropriate resources, including staff, training and assurance resources. • The development, implementation and maintenance of social policies, programmes and procedures. • Effective, proactive social impact identification, assessment and control consistent with the objective of minimising negative, and maximising positive, impacts.
101 This document is available at: www.angloamerican.co.uk.
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Corporate presence in society
Overview 2009 This project is inspired by the educational In the same area, the company has awarded support model developed by Teach For the “Anglo American, Mining of Excellence” Anglo American in Chile aims to make a lasting America106 in the United States and Teach bursary since 2007, which distinguishes the positive impact on the community around First107 in the United Kingdom. best students reading mine civil engineering, its operations and which generates value metallurgy and geology. The 42 students for it. In 2009, it kept up its commitment In 2009, 27 professionals from Enseña Chile chosen in 2009 study at the University to promote entrepreneurship undertakings started teaching at 15 schools located in of Chile, University of Santiago, Catholic by means of the Emerge programme and set the Metropolitan, La Araucanía and Los Ríos University of the North, University of two new challenges: to eradicate the shanty regions. For the 2010-2011 period, 715 Concepción and the Catholic University of In three weeks I realised towns in the Metropolitan Region by means applications were received, from which 76 Valparaíso. that Chile is not Finland of a partnership with Un Techo para Chile and professionals were selected to join the new boost its support for education of excellence project cycle. The aim of this bursary is the comprehensive and that you can’t by partnering with organisations that seek to development of professionals in the mining improve the quality of education, like Enseña Anglo American is on the board of Enseña industry and to create collaboration between 103 104 improve education Chile and Elige Educar . Chile, and therefore takes part in the strategic the company and the universities with which it definitions and implementation of initiatives, has signed the bursary, which includes: overnight, because The company invested US$2.7 million a mainly focused on incorporating these to the year in these three corporate programmes. districts around its operations. In 2010, 12 of Up to US$5,000 a year for the course there are so many Furthermore, investment in the community the 27 professionals of Enseña Chile will work enrolment and fees. problems and very engagement plans almost doubled that at schools in the districts of Colina and Lo of 2008, increasing from US$2.5 million Barnechea, near the Los Bronces division. A computer and accessories to support the few people to solve to US$4 million in 2009. This proves the studies of third-year students. company does not intend to cut back its There is also the Elige Educar initiative, which them. I also realised commitment to the communities where it is co-ordinated by the Faculty of Education Facilities to undertake theses and operates for external reasons, like the financial of the Catholic University of Chile108 and the professional practice in the company. that teachers who crisis from 2008-2009. Centro de Políticas Públicas109. Its objective is to improve the social value of the teaching Visits to the operations of Anglo American are working in tough profession in a five-year term. To achieve this, in Chile. conditions deserve Quality education it is driving a comprehensive communication Providing low-income people with access to strategy (television, internet, public relations, This bursary benefitted 109 university much more respect quality education has become an issue of site activities and events) and is promoting students in the 2007-2009 period with a 110 broad debate in Chilean society. This has plans with social players to motivate the related investment of US$571,000 . than at present”. led to initiatives and partnerships involving proper professional development of teachers. public and private sectors and civil society The outcome of this is that it expects 20% of to help create development and social the best secondary school leavers to choose Social Capital Katerinne Pavez, journalist and participant in a teaching career in 2014. Anglo American the Enseña Chile programme. She works at mobility opportunities by improving teaching and educational standards. In 2009, Anglo donated US$100,000 to this campaign in the commercial high school in Puente Alto, 2009. Metropolitan Region.102 American in Chile embraced programmes to improve education from the teacher, pedagogical and classroom work angle.
Regarding this, it became one of the strategic partners of the Enseña Chile105 programme, whose mission is to select, train and support professionals of excellence, who commit to two years of full-time work as teachers in schools for poor and socially excluded children. Case study Mirador interactive museum (MIM) on site
Anglo American promoted the itinerant show of the educational programme “Phenomena and Mysteries” of the Mirador Interactive Museum (MIM)111 in the districts of Antofagasta, Chañaral, Catemu, Nogales and Colina. This initiative allowed over 12,000 people, especially youngsters and children, to learn about natural phenomena. 102 “The tough task of professionals who choose to be teachers” (La Tercera newspaper, Sunday The interest generated by the exposition is since the inhabitants of 28 March 2010). these districts, who are in the influence areas of all the divisions, 103 www.ensenachile.cl 104 www.eligeeducar.cl value the opportunity of having access to innovative educational 105 Enseña Chile was awarded the 2009 and cultural resources like those promoted by the MIM. bicentenary seal. www.chilebicentenario.cl. The bicentenary seal is awarded each year This initiative was undertaken in partnership with the municipalities by the President of the Republic to those projects which make a significant contribution of the districts visited and particularly benefitted pupils at municipal to national identity and the country’s schools, who also found out more about mining and the copper development. production process in an entertaining way specially designed for 106 www.teachforamerica.org them. 107 www.teachfirst.org.uk 108 www.uc.cl/educacion 109 www.ppuc.lemongroup.cl 110 The bursary amounted to US$132,000 in 2007; US$202,714 in 2008; and US$236,292 in 2009. 111 www.mim.cl
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Corporate presence in society
“No more shanty towns in New work methodologies were added in 2009 Moreover, to support the work of Santiago” to boost this initiative. In the small-sized entrepreneurs, nine mini entrepreneur enterprise area, Fondo Esperanza drove the expositions were held at Anglo American’s Eradicating the shanty towns in the Entrepreneurship School, which uses simple divisions, where the products and services Metropolitan Region by September 2010 and practical tools for issues like personal of the beneficiaries of this initiative were is the commitment Anglo American has development, family relations, community presented and sold. Likewise, space was made undertaken by entering into a partnership ties and business effectiveness. The 5,933 available at the year-end celebrations of the with the organisation Un Techo para Chile112, entrepreneurs in the project participated in this divisions to sell the products of entrepreneurs supporting 4,660 families of 51 shanty towns instance by late 2009. and each family of Anglo American employees We believe it was that still exist in the capital so they can live in received tickets that could be exchanged for essential to achieve definitive housing. It committed US$3 million Medium-sized business empowerment: products. Additionally, the Emerge programme to this which will be delivered over three In addition to the eClass115 programme participated in the “I Believe in Quillota” Fair, a goal like this. We years. of the business school of the Adolfo organised by the municipality of that district. Ibáñez University116, the company Small- and medium-sized entrepreneurs were therefore signed this The agreement “no more shanty towns in supports entrepreneurs who have on ten stands dedicated to the project. Santiago” entails helping and supporting each managed to emerge from poverty but find partnership with Un family in the process of obtaining definitive it difficult to gain access to loans from housing in new sustainable neighbourhoods. the traditional banking sector. Training, Techo para Chile to fulfil Organised based on a social implementation specialised counselling and working capital the dream of a definitive plan, this initiative considers joint work with contributions are the main lines of action neighbours on education, health, libraries, in this area. and good quality home community organisation, entrepreneurship The Emerge programme targets: by means of micro-loans and improvement A new search system was designed for in the Metropolitan of definitive housing. It also envisages entrepreneurs with high development comprehensive advice on the processes of potential in the medium-sized business • Select 80 new medium-sized business entrepreneurs Region, where we are applying to the housing programmes of the tier, based on establishing a public by means of the 2010 public summons for the Emerge Housing Ministry and work with the families summons to apply for the Emerge scholarship. present with our Los and their base organisations throughout the scholarship, and the regulation was Bronces division, the technical processes this change involves. authorised by the Ministry of Education. • Extend the project coverage to the district of Hijuelas, The following are the main strengths of Valparaíso Region. main mining operation this mechanism: in the region”. It enables the company to gain access • Achieve the target of 7,000 entrepreneurs supported to entrepreneurs who are not in by the two-tier Emerge system in 2010.
the databases of municipalities and Social Capital Miguel Ángel Durán, Anglo American Chile productive development centres. CEO (December 2009). It gives the company a large base of applicants from the communities where Emerge is operating. The Case study company received 360 applications Corporate volunteer programme in 2009 and 500 applications are expected in 2010. Volunteer work has traditionally been done at the divisions of Anglo American in Chile, in which work teams support social development It increases the knowledge and projects, albeit not in a systematic way. dissemination of Emerge in the communities around the operations of The corporate volunteer programme was launched to co-ordinate, Anglo American in Chile. empower and bolster these efforts, and the aim of the first stage undertaken in 2009 was for employees to apply for and select Sustainable The following results were attained in 2009: The following results were attained in 2009: those social organisations they will collaborate with at each of the entrepreneurship divisions. A survey was therefore made of the main participation The number of participants increased The company took on 64 new interest of employees. The El Soldado and Mantos Blancos “Thinking small but with large results” was from 2,700 in 2008 to 5,933 in entrepreneurs, who were selected divisions carried out a pilot volunteer programme, in which groups Anglo American’s vision when it established 2009. in a public summons for Anglo of employees participated in activities to support community its first sustainable small- and medium-sized American’s Emerge scholarship. organisations in a planned and co-ordinated system. enterprise development and empowerment The programme was extended to Alto initiative in the communities around its Hospicio, Mejillones, Vallenar and A total of 360 entrepreneurs applied The programme will be launched in 2010 with three areas of action: operations in South Africa in 1989. In the case Tierra Amarilla (in the north) and the for the Emerge scholarship, of whom of Anglo American in Chile, this initiative has coastal area of the fifth region. 322 are from districts with a direct become the Emerge programme113, which has impact from the divisions. Collaboration with the development of small- and medium-sized had a two-tiered approach since 2007: Women accounted for 91% of the businesses empowered by the Emerge programme. participants in 2009, and 52.6% of Fifty-two new entrepreneurs Empowering small-sized enterprises: them are household heads. graduated from the eClass programme Work on initiatives that promote the community relations area of In partnership with the organisation Fondo and 31 of them got approval and each division. Esperanza114, it provides micro-loans to The main business lines are: purchase financing for their business plans. In entrepreneurs who do not have the capital and sale (street vendors, sales from 2008, nine entrepreneurs of the 27 Empowerment of institutions which work in the influence area of to get their projects off the ground. The home and local kiosks), cottage graduates achieved this goal. the company’s operations. beneficiaries are grouped into community industry (cooking, sewing, knitting banks through which they receive and crafts) and services (gardening, 112 www.untechoparachile.cl financing. A coaching and training plan is plumbing and hairdressing). 113 www.programaemerge.cl drawn up and this drives association and 114 www.fondoesperanza.cl the exchange of experiences. 115 www.eclass.cl 116 www.uai.cl
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Community engagement plans Community engagement plans
INFLUENCE AREAS OF THE DIVISIONS
DIVISION DISTRICTS LOCALITIES Accolades Stronger and Los Bronces Lo Barnechea, Til Til, Colina and Los Andes. Corral Quemado, Huertos Familiares, Lo The Mantos Blancos division received Barnechea, Quilapilún Bajo, Reina Norte, Santa recognition from the Corporación Pro Filomena, Villa Peldehue, Esmeralda, and Antofagasta117 for its permanent commitment to the city. more focused Riecillos since 2009. Mantos Blancos Antofagasta and Sierra Gorda. Baquedano. The El Soldado division was awarded the Corporate Social Responsibility Prize by To complement corporate initiatives, each division El Observador newspaper118 of Quillota implements its own community engagement plans, for its contribution to the Valparaíso El Soldado Nogales. Los Caleos, Chamizal, Collahue, El Melón, El Region. which are based on the Good Citizenship Business Garretón and Nogales. Principles and which in 2009 considered the results Mantoverde Chañaral. Barquito, Chañaral and El Salado. of the SEAT II process and the current feedback from Chagres Catemu, Llay Llay, Panquehue and San Felipe. Chagres, Lo Estancilla, Reinoso, San Carlos their surrounding communities. Alto, San José, Santa Isabel, Santa Rosa, Santa Margarita and Villa Lo Campo.
Los Bronces division One of the most significant activities in addictions and support to overcome emotional 2009 was the construction of the Reading and psychological shortcomings. The division The Los Bronces division set the challenges of Centre, which will benefit the Lo Barnechea also supported the reconstruction of the Tres opening up more direct communication with community, estimated to be around 75,000 Ositos crèche which benefitted 119 children the community and bolstering ties with the people. Due to the division’s contribution from the Esmeralda sector. To improve the productive activities carried out in the area to of US$235,314, construction started on a quality of education given to children of four synchronise the local needs with the division’s modern library which will also be a meeting to ten years old at municipal schools in Colina, objectives. The action areas were defined place where cultural events will be held. it implemented eblock tables for language, according to follow-up on the successful mathematics and English. This methodology Social Capital activities undertaken in the past and on the Another prominent initiative in the same entails the use of multi-sensory tools that requirements raised by the community in the district was the First School Cycle Prevention allow children to learn more easily and faster, SEAT II process. The town of Riecillos, in the Project to prevent drug and alcohol attaining the level of a quality school. district of Los Andes, was added to the work consumption by schoolchildren in the first areas. to fourth grade of primary education at In the cultural area, one of the highlights municipal schools. The virtual community of the year was the launch of the study to Lines of action of the community engagement construction and teacher training project restore the large house of Quilapilún in Los plan: was also important, and its aim is to create Andes, which forms part of the national computer literacy to insert and use information cultural heritage for being one of the few Monitoring of social and environmental and communication technologies as tools to reminders of the rural architecture of the 16th management initiatives that can be support the learning process. This initiative to 19th centuries. Los Bronces is part of this intervened. will benefit 3,200 pupils in the municipal initiative, the aim of which is to transform education system and 200 teachers. the large house into an educational cultural Delivery of information to stakeholders centre for the Colina and Til Til community, about social initiatives and the changes There was also construction of a crèche in conserving its heritage value. that might arise. the La Ermita sector in partnership with the Municipality of Lo Barnechea, which seeks to Efficient management of the issues that take 150 kindergarten children free of charge arise in operations and collaboration to and where working mothers can leave them overcome them. without any worry.
Participation in local activities that One of the main projects undertaken in Colina, As of the publication and dissemination of The the final reports of this process119, developed empower solidarity and the corporate another of the division’s influence areas, Anglo Social Way, Anglo American in Chile by Fundación Casa de la Paz120, were borne image of commitment to community was the School Recreation Centre, which is a is reviewing and verifying adherence to its in mind. The objective is for the bonds development. meeting place that complements the sporting standards at corporate level and division-wide, between Anglo American and its community activities carried out by the high schools in the which will fully align its content with local environment to empower the creation of The community engagement plans are focused district and motivates children and youngsters work in the community area. shared value in the economic, social and on four work areas: education, culture, the of five to 19 years old to develop activities environmental areas. environment and social development. In 2009, to occupy their free time and improve their In 2009, this work was focused on bolstering US$2,320,312 was allocated, 97% up on quality of life. It is estimated that 20,706 117 www.corporacionproa.cl the US$1,178,039 in 2008121. 85% of this 118 the community engagement plans at all the youngsters will benefit from this, of whom www.diarioelobservador.cl was focused on educational and academic 119 The SEAT II characteristics, application stages divisions, drawn up based on the application 8,000 are qualified as obese or overweight. and main conclusions were reported on in of the Socio-economic Assessment Toolbox infrastructure initiatives. Complementing the Another initiative in this district was the the Social Capital chapter of the Sustainable (SEAT II). The 2009-2011 challenges raised in contributions made to these programmes, creation of the Therapeutic Rehabilitation Development Report 2008. This document is the division donated US$32,516 to hold Centre for youngsters and/or adolescent available at www.anglochile.cl. celebrations and local processes and support 120 www.casadelapaz.cl mothers. This Centre, the only one of its kind 121 The Los Bronces division’s contribution to the the work of the Fire Department. in Latin America, gives residents treatment for community was US$651,514 in 2007.
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Community engagement plans
OTHER INITIATIVES UNDERTAKEN IN 2009 LO BARNECHEA
COLINA PROGRAMME DESCRIPTION
PROGRAMME DESCRIPTION Purchase of a school bus for the The Farellones school had to increase its enrolment by including Farellones school. pupils living in the Corral Quemado sector, whose families Teacher training on the use of Around 300 municipal education teachers at schools in Colina consider this school offers a better education alternative for interactive whiteboards. will be trained on this programme that aims to prepare these their children. The Los Bronces division provided a new school teachers to use interactive whiteboards and support software bus for transfers from Corral Quemado to the school, which to create content. The idea is for teachers to generate virtual will benefit 90 people. content on interactive whiteboards, raising the interest of pupils and motivating them to learn. Contribution to the Lo Barnechea To promote the district’s social and cultural integration by Corporation (COBA) youth choir means of music and prevent youngsters from consuming drugs Purchase of school buses for Colina has wide geographical dispersion with a mixture of and orchestra. and alcohol, the division benefits 16 choir pupils and 55 pupils municipal schools. urban and rural elements. The optimisation of transport to in the orchestra, who not only learn music but also reaffirm municipal schools is a challenge for the Municipal Corporation their self-esteem and further their talent. of Colina. Los Bronces therefore donated two school buses that will benefit over 400 schoolchildren. This initiative is expected Cuecas Bravas – Rescuing what To support the COBA’s work of promoting and recovering the to provide better access to municipal education, increase is Ours project. non-material heritage of local culture, Los Bronces contributed school enrolment, and reduce the drop-out rate. to the development of this initiative.
Construction of a multicourt at Los Bronces helped to build changing rooms and a multicourt Youth prevention project. The aim of this initiative is to prevent, using a biopsychosocial the Esmeralda technical school. to improve the quality of sports life at this school of 1,293 model, factors related to the abuse of youngsters’ rights in pupils. the Lo Barnechea district by creating work strategies in youth networks that boost the organisation through pupil centres, Construction of a multicourt at The objective of this project was to provide this school with informal and voluntary youth organisations. It is expected the Santa Teresa del Carmelo a modern infrastructure for its outdoor sports, cultural and these activities will benefit 8,500 youngsters. school. recreational activities. It will benefit 800 schoolchildren from kindergarten to eighth grade of primary education in Colina.
Entrepreneurship centre project. The entrepreneurship centre is focused on young students in Colina and aims to support the establishment of micro- businessmen in the district and potential entrepreneurs who can do a paid job that allows them to progress and specialise TIL TIL
in the different areas offered by technical schools in the area. Social Capital This initiative is aimed at pupils in third and fourth grade at PROGRAMME DESCRIPTION technical and professional secondary schools and pupils of the La Puerta education centre, amounting to 1,035 people who benefitted. Construction of a computer The Santa Matilde school has 180 schoolchildren and aims to room, improvement of the improve their degree of computer literacy and its kindergarten Organisation of II Technology The division and the Municipal Social Development Corporation electrical installation and course facilities. Los Bronces therefore provided resources to Show of Colina. of Colina organised the II Technology Show in Colina to equipment of the kindergarten implement a computer room and for the kindergarten teacher promote the use of technological tools to increase the learning level at the Santa Matilde courses. of schoolchildren and youngsters to raise interest in municipal school. education in Colina. This initiative showed parents, guardians and the community the technological resources municipal Annual contribution to the Pro To increase the quantity of beneficiaries of programmes carried schools have in the district, like the eblock tables and Til Til Corporation. out by the Corporation, Los Bronces makes a permanent electronic whiteboards. contribution to it each year.
Annual contribution to the Los Bronces established the Private Corporation of Colina Private Corporation of Colina. 20 years ago to take care of high-risk children in the district of Colina regarding school support and daily life guidance. Case study The support of the division seeks to increase the number of Til Til metal workshop refurbishment children and youngsters who visit the centre. One of the main petitions of the Til Til community is to increase employability, mainly youngsters in the district. It is essential for the Los Bronces division to have skilled technical labour in the metallurgy area in the Metropolitan Region, as the only schools that offer this technical career are in the north of Chile.
By combining these two factors, Los Bronces decided to support the C-82 high school in Til Til to transform its old mining laboratory into a modern metal workshop. This initiative led to the establishment of a specialised school workshop equipped with cutting-edge technology that facilitates pupil learning. It is hoped this will increase the employment percentage of youngsters in the district.
To implement this project, the division entered into a partnership with SGS, a specialist laboratory analysis company, which voluntarily helped to draw up and develop a new curriculum and the refurbishment plan for the new specialised workshop. A five-year tutorship programme was also drawn up to train teachers in the use of the new laboratory technology, and the best pupils of each generation will be awarded professional practice and scholarships.
180 pupils benefitted. The Los Bronces division contributed US$144,000 to the project.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 76. 77.
Community engagement plans
Mantos Blancos promotes entrepreneurship-related values. OTHER INITIATIVES UNDERTAKEN IN 2009 division It also continued to support the astronomy academy of the G-130 school in Baquedano. MANTOS BLANCOS DIVISION The Mantos Blancos division carried out These initiatives arise from the suggestions made in the SEAT II process and are aimed at initiatives to enhance relations with interested PROGRAMME DESCRIPTION parties in its influence area (Antofagasta improving community relations and operating 31% and Sierra Gorda). In partnership with the by means of strategic partnerships with expert increase Asociación de Industriales de Antofagasta organisations in each of the issues addressed. DeLTA – Anglo American This bursary is financed jointly with the Catholic University of the North, which covers up to 50% of the annual fees 122 bursary. of those leaving the DeLTA programme and undertaking higher education studies in that university. In 2009, the in the El Soldado community (AIA) and the Junta Nacional de Jardines Infantiles (JUNJI)123, it therefore drew up a The Mantos Blancos community engagement US$16,000 donation made by the division benefitted nine students from state schools in the district of Antofagasta. engagement plan budget on 2008. systematic work programme with high-risk plans were mainly focused on four work areas Baquedano astronomy project. The division purchased a modern telescope for the astronomy observatory of the G-130 school in Baquedano to crèches in Antofagasta, as this region has a in 2009: education and training, regional drive the development of sciences as part of healthy extracurricular activities, which entailed a contribution of kindergarten education coverage level of less development, community development and US$19,000 in 2009. Work ties are expected to be strengthened even more in the future with this school that takes than 40%, which has consequences for the communication. It allocated US$472,000 60 schoolchildren and pupils. early development of children in the area. This to put them in place, a 3% increase on the 2008 contribution of US$458,000125. 74% US$16,000 initiative will drive kindergarten education in “Each dog with its owner” The Mantos Blancos division launched a campaign with the livestock organic promotion (PROA) corporation and the of this was focused on education and training donated by Mantos Blancos the neediest sectors of the city, and thereby awareness campaign. Municipality of Antofagasta to generate awareness of the responsible ownership of pets, mainly aimed at children. programmes, highlighting the training of 508 to the DeLTA bursary, benefitting nine not only give development opportunities to Various media were used for this, such as radio, television and billboards. The division contributed US$30,000. children but also families, especially mothers new company and external employees in The students. who will have more freedom to enter the Anglo Social Way standard, the increase in Support of the production and The history of Mantos Blancos is a milestone in the development of large-scale private mining in Chile, and this book labour market. The division contributed the bursary fund for outstanding students publishing of the book “Mantos therefore has historical, testimonial and literary value. The author cites testimonies, experiences and anecdotes of US$6,000 in 2009 and directly benefitted leaving the DeLTA programme and supporting Blancos, Historias de Vida” by Mantos Blancos workers, some of whom participated in the establishment of the division or retired after 40 years. 300 children at the Caracolito and Rabito extracurricular activities in the district of the Chilean writer Hernán Rivera crèches in Antofagasta. Antofagasta. The budget includes the donation Letelier. of US$81,200 for other specific community The division also continued its symbolic requirements. projects like the Developing and Leading It also drove two initiatives to bolster Academic Talent (DeLTA) programme and El Soldado division community organisations. It provided the Junior Achievement Programme124 that El Soldado’s strategic objectives were to forge US$18,000 for an agreement of joint work systematic dialogue with the communities, to with the INDAP and the Municipality of share the division’s environmental information Nogales to implement a system of tenderable and raise participation in regional and local funding for farmers of the Agricultura development plans, specifically concerning Familiar Campesina of the local development
planning and strategies regarding the programme (PRODESAL) for the award of Social Capital ecosystem intervened. shared resources to implement productive development projects. It furnished the same Case study It therefore carried out joint work with local amount to implement social tenderable funding Junior achievement programme stakeholders and public and private institutions in partnership with La Semilla Foundation, the to drive initiatives focused on agricultural objective of which is to support ideas raised in The key focus of the Mantos Blancos division’s social contribution was on development and the environment. One of rural organisations that meet the community increasing people’s skills by means of education and on empowering local these was a partnership agreement with needs and have the social support to develop entrepreneurship. In 2009, it stepped up its role in the Junior Achievement the Instituto de Desarrollo Agropecuario them. Programme, the objective of which is to create new and greater opportunities (INDAP)128 to improve the irrigation for human, community and socio-economic development by promoting infrastructure in the productive sector by The El Soldado community engagement entrepreneurship-related values, based on highly efficient international driving the efficient use of water in agriculture plans were focused on four areas: education, pedagogical methodologies like Making Sense and Junior Achievement, by means of lining irrigation channels. This regional development, community development developed by the Harvard and Princeton universities. initiative benefitted 78 plots of land and 400 and, since 2008, entrepreneurship. It allocated hectares of irrigation. US$574,866 to implement them in 2009, Students and teachers participating interact in a practical way with the a 31% increase on the 2008 contribution of knowledge, skills and values inherent to entrepreneurship and innovation US$439,000129. It also made a donation of from an extracurricular angle. Teacher workshops, business games, inter- US$1,000 for a perimeter fence. school debating championships and an entrepreneur forum were organised during the year.
The joint work of the Mantos Blancos division, the Fundación Juventud OTHER INITIATIVES UNDERTAKEN IN 2009 Emprendedora126 and the Corporación Municipal de Desarrollo Social de Antofagasta (CMDS)127, benefitted 83 teachers and 242 alumni from EL SOLDADO DIVISION 16 municipal schools in the district of Antofagasta. It is expected that this programme will lead to behavioural changes in future generations to drive a PROGRAMME DESCRIPTION culture of entrepreneurship that generates wealth and social competencies.
Agreement with the Municipality El Soldado signed an agreement with the municipality to pave rural roads, contributing US$18,000 with the aim of of Nogales to pave rural roads. improving the quality of life of 100 families in Nogales.
122 www.aia.cl 325 beneficiaries. Bursaries for higher education The division awarded 90 bursaries to outstanding and poor students of higher education by means of an agreement 123 National Crèche Board, www.junji.cl. students. with the Municipality of Nogales. The division donated US$26,000. 124 www.juventudemprendedora.cl 125 The Mantos Blancos division’s community contribution amounted to US$285,000 in 2007. Mantos Blancos allocated Everybody’s Paper. This initiative entails a partnership with La Semilla Foundation to promote waste management practices by means of 126 www.ja.org the physical construction of a unit to implement a sustainable paper collection and recycling programme. The division 127 www.cmds.cl 128 Agriculture and Livestock Development US$168,000 contributed US$18,000. Institute, www.indap.gob.cl. to the programme in 2009. 129 The El Soldado division’s community contribution amounted to US$234,027 in 2007.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 78. 79.
Community engagement plans
OTHER INITIATIVES UNDERTAKEN IN 2009 Case study It also signed an agreement with the MANTOVERDE DIVISION ZERI project Municipality of Chañaral and the National Training Institute (INACAP) to give the PROGRAMME DESCRIPTION Mantoverde empowers One of El Soldado’s core initiatives in 2009 was the environmental education complementary training courses (FORCOM) partnership with the Juan Rusque high school in Nogales, the Municipality of “entrepreneurship and personal development” small mining in Atacama Nogales and Fundación Chile. The aim is for the school curriculum to include and “English applied to tourism” to 40 Partnership with EmproArte. The Mantoverde division supported the presentation of artistic the pedagogical content proposed by the Zero Emissions Research and pupils in third and fourth grade of secondary and cultural shows in Chañaral and Copiapó by means of a by means of courses, Initiatives (ZERI)130. education at the Federico Varela high school, partnership with the pro arts organisation EmproArte. This talks on safety and who live in Chañaral, Barquito and El Salado. entailed a contribution of US$10,000 and benefitted 1,700 A practical pupil and teacher learning model was designed to develop people from both cities. funding. abilities to include environmental variables in decision-making by people The Mantoverde division spent US$252,500 and communities. In practice, the knowledge gained was presented in a to implement its community engagement plans Un Techo para Chile Mantoverde donated US$3,200 in construction materials for demonstration by pupils who created, designed and built aeolian and solar in 2009, a 68% increase on the 2008 spend (A Roof for Chile). 20 prefabricated rooms as part of this campaign in Chañaral. devices. The following were some examples: of US$150,000131. Most of this was focused Kitchenware for the Caldereta Kitchenware and materials were donated to repair the dining on community development issues, which dining room in Chañaral. room and kitchen of this centre that takes in extremely poor Demonstration solar collector. accounted for 66% of the spend equivalent to and old people from the city. The company donated US$1,800. Demonstration solar boiler. US$168,500. Demonstration solar distiller. Demonstration aerogenerator. 50-litre portable biodigester stove. Case study A solar oven-type cooker. Chagres division in community development teams in the District tenderable areas of direct influence to focus on projects The Chagres division modified its community to generate training and development tools, funding engagement plans in 2009 due to the above all infrastructure projects. recommendations of the SEAT II report and the In 2009, Chagres focused on assessment of programmes undertaken each The highlights of the year were the formation enhancing the financing and training funding to drive the The division provided year, which envisage the adjustments and of community development teams, which optimisation needed to manage them better. provide training, counselling and financing association capacity and citizen participation in the districts of US$20,500 Such changes include the environmental to undertake self-managed community factor of community insight, and the infrastructure projects in the Catemu and Catemu, Panquehue and Llay for the development Llay. It thereby sought to empower of this project. creation of environmental protection-focused Panquehue localities. A budget of US$11,486 programmes was therefore considered. The was allocated to this programme and its the autonomous development of main initiatives included the empowerment objectives were to get closer to the four local bodies in the area. Social Capital of the environmental monitor programme of districts related to the division and enhance pupils at Catemu and the community benefit projects the skills of neighbouring leaders for local self- This project has training, 200 follow-up and support tools, the Juan Rusque that are still in the feasibility analysis phase. development. high school directly In addition to this and bearing in mind that so that the organisations optimisation of this issue is a long-term The Chagres division’s community engagement participating gain skills to leverage benefitted. process, a communications plan was drawn plans increased from US$295,903 in 2008 various sources of institutional up to enhance the quality of information to US$401,587 in 2009, i.e., 36% up on the strengthening and economic delivered to the internal and external public previous year132. Most of this was focused sustainability. Unlike the traditional about the division’s social and environmental on social development, accounting for 35% methodology of tenderable performance. of the spend equivalent to US$143,504. The funding, this initiative establishes division made donations of US$74,000, which an advisory programme for the Based on the plan defined for 2009, the key were mainly used to improve the infrastructure beneficiary organisations which will be maintained throughout the Mantoverde Division Mantoverde also participated in public and aspects of the community engagement plans of community organisations. private roundtables organised by the provincial were redesigned to simplify and optimise the project, guaranteeing maximum The Mantoverde division defined four strategic government, which are focused on developing work areas. Moreover, donations were limited social profitability of the use of targets for its community engagement plans: entrepreneurship in three strategic areas: and there was a reduction in the investment the resources assigned and fully to establish contacts and meetings with mining, the coastline and tourism. The aim is meeting the objectives defined base organisations to find out their concerns to generate synergies and establish networks in the work proposal. The fund and inform about the division’s activities, to link up activities in this area, thereby supported 31 projects in 2009, disseminate the activities undertaken with improving and diversifying the district’s which will have an impact on the community through the local media, economy. 12,000 people in those three establish support and engagement lines with OTHER INITIATIVES UNDERTAKEN IN 2009 districts. the small mining sector, and make contact With regard to its support of local mining, with the town of Barquito to make known the it held the four-hour course “geology and CHAGRES DIVISION acid handling and transport process from the hydrometallurgy applied to copper ore 31projects terminal. supported. processes”, attended by 15 small miners of PROGRAMME DESCRIPTION the Chañaral Mining Association (ASOMICH). The division stepped up its engagement with It also gave mining safety talks through the Total tenderable Chañaral-based social organisations in 2009 CORESEMIN Atacama training programme and Catemu municipal library The division donated US$12,214 to enhance the municipal funding of to establish community consultation and provided US$4,600 towards the financing of infrastructure enhancement. library. support channels, especially with residents of the infrastructure project “gold ore treatment Catemu Municipality Chagres donated US$15,972 to refurbish the Catemu US$42,685. El Salado. At the same time, it strengthened plant implementation”, which benefitted 35 infrastructure refurbishment. municipal education department and US$43,441 to carry out its partnership with the Chañaral Development small ASOMICH miners. Corporation to empower entrepreneurship, an engineering study for the district’s multi-purpose room and gymnasium. 130 www.zeri.org seeking socio-economic diversification of the 131 The Mantoverde division’s community district. contribution amounted to US$75,000 in 2007. 132 The Chagres division’s community contribution amounted to US$291,582 in 2007.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 80. 81.
Natural capital
Anglo Environment Way 73% compliance with the standard.
Three-year actions plans were drawn up to attain 100% compliance.
Energy efficiency There was a 1.4% energy saving on programme 2004. The target was 7.5%.
Material issues of the Los Bronces A biodiversity action plan was drawn up. divisions The hydrogeological study was made.
The dust control system was reinforced at the Las Tórtolas dam.
Application for sector permits for the Los Bronces Development Project.
Mantos Blancos A water appraisal was made.
El Soldado The tree nursery plan was drawn up.
A voluntary agreement was signed for the sustainable development of the El Melón mountain range.
A water appraisal was made. Mantoverde A water appraisal was made.
A study was made to leave the Copiapó river watershed.
Chagres There were no breaches of the regulation.
A water appraisal was made.
There were no acid transport incidents. The emergency plan was not activated.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 82. 83.
Environmental management Environmental management
Focus on Management approach The final version of The Anglo Environment Way, published in June 2009, is an environmental management system standard and a set of environmental performance standards. This standard is in addition to the principles and local impact environmental framework developed in internal and external consultation, and the integral management systems that were operating at each of the operations in Chile.
An environmental workshop was held for The Anglo Environment Way considers variables like the social and environmental the first time for this report, in which each impact assessment of operations, water, air quality, mining and non-mining waste, division reported on its main environmental hazardous substances, biodiversity, rehabilitation and closure plans. impacts, according to its location and Anglo American Chile attained 73% compliance with this standard in the initial operational characteristics, to draw up a evaluation. All the divisions also maintained their integrated management system certification in accordance with the OHSAS 18001 and ISO 14001 standards with chapter focused on the material local aspects no disconformities. for each operation. A senior environmental manager in charge of environmental performance reports to the senior safety and sustainable development manager. Each operation also has a manager or advisor in charge of environmental management. The energy efficiency programme is run by the energy and climate change manager, who also reports to the senior safety and sustainable development manager. This structure was adopted in January 2010 with the creation of the new job position of senior safety and sustainable development manager, who reports to the company CEO and gives guidelines to the safety and environmental managers and the energy To comply 100% and climate change manager. with The Anglo Environment Way standard, action plans
were drawn up that Besides undertaking audits to verify The table below shows how the environmental significant environmental aspects, the performance standard covers all the management will be put in place in degree of compliance with The Anglo activities of operations by issue: the next three years. Environment Way was assessed in 2009, with 73% average compliance by the five operations. To comply fully with the VOLUME 2
standard, action plans were drawn up that Capital Natural will be put in place in the next three years. Performance Standards All the divisions also reviewed their certification for their integrated Lifecycle Stages
management systems in accordance As the five divisions of Anglo American Environmental with the OHSAS 18001 and ISO 14001 Chile face different realities regarding the management standards, with no disconformities. Mantos environment and impacts, it was decided Blancos and Mantoverde also maintained that for this report the chapter would not Anglo American’s new environmental policy their ISO 9001 quality certification. As S&EIA Standard S&EIA Water Air quality waste Mineral waste Non-mineral Hazardous substances Biodiversity Rehabilitation Mine closure 73% be segmented by issues but by the relative came into force in 2009, containing principles part of this process, each division has 1 – VOL Standard EMS and a management framework with specific Opportunity Exploration / prospecting x x x average importance of the material aspects for each an environmental risk analysis, which Identification standards, and it not only applies to all its compliance with The Anglo operation. A workshop was held for this with considers the impacts, action plans, the environmental heads of the divisions, operations but also all the management controls, results and recommendations Evaluation Acquisitions / due diligence Environment Way standard. stages, like business identification, project in which they established their respective that need to be applied and controlled at Conceptual phase x x priorities. assessment and implementation, operations operations. and mine site closure. This standard, known Projects Pre-feasibility phase x x x x x x x as The Anglo Environment Way, covers This chapter is split into three sections: it With regard to compliance with the Feasibility phase x x x x x x x starts by providing corporate information, key management areas and contains the regulation, there were no environmental mandatory requirements at corporate level. Project Detailed design and procurement x x x x x like the environmental management of the fines, penalties or legal actions at any of Implementation They underpin the vision, principles and the five divisions, compliance with the regulation the divisions in 2009. The approval of and Construction and commissioning x x x x and the energy efficiency programme; it then environmental management policy to assure compliance with over 60 permits and a Operational continues with a divisional focus, and presents that the company will control and mitigate any hundred accreditations have been identified x x x x x x x x x the material issues for each operation; and potential impacts related to its operations. The for the Los Bronces Development Project so Closure Decommissioning x x x concludes with a more technical section, which performance standards also contain suitable that contractors guarantee the work done in Post closure x x x considers all the environmental indicators management guidelines and tools for each each construction stage. presented by division and in consolidated major environmental issue. form. x Contains specific requirements Indirectly covered by general requirements
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 84. 85.
Energy efficiency programme
Energy efficiency programme To guarantee this process, PricewaterhouseCoopers started an audit on the monthly consumption reports broken down by process or footprint. The plan is to certify the emissions and energy and water Slow progress consumption at the five operations to validate the information reported to Anglo American plc and stakeholders. Mantos Blancos was audited Although Anglo American has driven action since in 2009 and this process will be completed at 2004 to achieve the corporate targets of reducing the other divisions in 2010.
emissions, increasing energy and fresh water Moreover, Anglo American has been exploring consumption efficiency, these efforts have not alternative energy sources from renewable and non-conventional resources (ERNC) as reaped the rewards expected. Nevertheless, progress of 2008 to partially supply its operations. was made in 2009 with consolidating the energy Regarding this, it signed a memorandum of understanding with a company to study and consumption information system, adding an external assess the development of wind projects. audit to the monthly reports or footprints. Likewise, to comply with the new electric power generation regulation, which came into force in 2010134, it is evaluating the most favourable conditions with the support of an Case study Anglo American plc Anglo American Chile has made steady The total energy consumed in 2009 was 7% external consultant to attain the 5% ERNC The energy factor in the mining footprint progress since 2004 towards achieving the up on 2008 and amounted to 11,567,417 required by this law. Initiatives include the launched a programme target of its energy efficiency programme. gigajoules (GJ), mainly due to higher fuel signing of an agreement with an electric power The carbon footprint, defined as the measurement of greenhouse gas (GHG) Despite specific achievements like the consumption from the development stage of generating company to re-open the La Ermita emissions directly or indirectly emitted by a person, country, organisation, at all its operations publication of the energy efficiency policy a new phase at one of the mining operations. hydroelectric power plant (9 GW/h) on the manufactured product or service, has become an important indicator so San Francisco river near Los Bronces, and an in 2008 or the implementation of a formal The average performance of the divisions an organisation can analyse its processes and see to what extent its CO2 worldwide in 2004 registry system by process of the monthly was 98.6% with regard to the 2004 adjusted agreement with a mini hydroelectric power discharges exceed the so-called “inevitable emissions,” which are those to improve energy water, energy and emission rates, they have baseline, which was a negative variation of plant (30 GW/h) in the south of the country is needed for its operations. Mitigation strategies can be defined based on that proved to be insufficient to achieve the target 6.1% against the reduction target of 7.5% under evaluation. calculation, which for example include the use of energy sources that replace efficiency by 15% and set for 2014. for 2009. Despite this consolidated result, fossil fuels or subscribing to carbon bonds to compensate for the higher initiatives continued to reduce this gap. As part of the energy efficiency policy, the emission. reduce CO2 emissions With regard to the 2004 adjusted baseline, at company has been promoting the purchase the close of 2009 the company had attained The CO2 equivalent emissions were of hybrid cars as of 2007. With the purchase Although Chile’s carbon footprint is very low in relation to industrialised per unit of production a 1.4% energy efficiency improvement, a long 1,143,878 tonnes in 2009, a 7% increase of two new Toyota Prius hybrid cards, Anglo countries, many national companies are finding it difficult to reduce their American now has four cars of this kind, way off the 7.5% target set for the five-year on the 2004 adjusted baseline based on the CO2 emissions due to the large presence of fossil fuels in electric power by 10%. Anglo period. Despite the action taken in every area, fact that the target in the year was 95%. besides the other ten that employees have generation and the greater use of freight so export products reach their the mining business has had upward energy These emissions were calculated using the bought by making use of the corporate markets. That is the case of copper mining, which emitted 17 million tonnes American Chile also 133 incentive. consumption, mainly due to three factors. The COCHILCO factors as a basis . of CO2 in 2008, which accounted for 24% of the country’s carbon footprint135. added to these targets first is the operation itself, as ore grades drop steadily, transport distances are greater as The emission reduction certification programme Despite individual efforts to reduce GHG emissions in mining, the energy a 15% improvement pits become deeper in relation to the progress is one of the company’s actions to achieve factor will continue to have a bearing on the sector’s carbon footprint while of the operation and rock hardness increases. the target. Although there has been a list it still remains dependent on diesel and coal, as renewable and non- in water consumption The second factor is modernisation as the of certified reductions since 2004, it was conventional energy projects still account for very little of the national energy Capital Natural incorporation of new equipment with better considered necessary to formalise this process grid. efficiency. environmental performance (like sleeve filters even more to generate a unified reporting or other emission control systems, heating system. This analysis makes it possible to improvements, ventilation and lighting, and have a scope 1 and 2 carbon footprint record, the growing recirculation or treatment of which is what has been reported since 2005. water) increases energy consumption per tonne treated. The last aspect is that adding Water consumption El Soldado also achieved 83% of the baseline value to the final product affects specific and Mantos Blancos attained the annual target. Anglo American Chile optimised its water energy consumption when this is measured per Los Bronces reduced fresh water consumption, consumption in 2009 by consuming 26.2 unit of fine copper. mainly due to greater water recirculation from million m3 of fresh water. This was 94% the tailings dam, thereby reversing the upward consumption on the 2004 adjusted baseline, trend of the previous two years. a slightly better result than that of energy and CO2 emissions. The two divisions with the greatest difficulties with water consumption are Mantos Blancos Three scopes were considered to measure, Although there was a large reduction in the 133 The emissions for the years of the report were and Mantoverde, as the scarcity of water in manage and report on the carbon footprint: fresh water used for primary activities, the calculated using the following COCHILCO the north of the country could threaten their factors as a basis: average consumption of the five divisions CO2 SF6 CH4 N2O HFCs PFCs operations. Initiatives are therefore being SIC* SING** was 1.5% higher than the reduction target 2007 344.1 915.1 explored, like the assessment of a seawater set for 2009 of 92.5% of the 2004 adjusted 2008 319.2 953.9 desalination plant to supply operations at baseline. 2009 284.0 911.9 Mantoverde. * Central Interconnected Grid. ** Great North Interconnected Grid. In particular, Chagres continued to reduce its 134 Law Nº20.257 lays down that as of 2010 SCOPE 1 Indirect emissions generated SCOPE 3 consumption, mainly due to better re-use of energy generation must include 5% of SCOPE 2 by burning fuel at the Indirect emissions arising from raw materials renewable and non-conventional energy. This Indirect emissions of CO2 arising from water, achieving 83% of the 2004 adjusted company’s operations, use of purchased, employee business trips, waste disposal, purchasing electricity for own use. percentage will increase to 10% in 2014. own vehicles, etc. contractor vehicles, outsourced activities, use of the baseline and exceeding the year’s target by 135 COCHILCO: “Consumption of energy and product and transportation, etc. This Scope 3 is very 9.5 points. greenhouse gas emissions in Chilean copper difficult to quantify. mining 2008.”
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 86. 87.
Performance of the divisions Performance of the divisions The extraction of water from each of these sources is controlled to verify that Anglo American Chile’s water rights are honoured:
CONSUMPTION RIGHTS WATERSHED Total Main issues (LITRES/SECOND) by operation San Francisco Ortiga Riecillos Permanent 210 0 600 810 Each division undertakes its environmental Possible 500 50 0 550 management based on the characteristics of the Total (l/s) 710 50 600 1,360 environment in which it is located and the type of operations it carries out. Whereas the water quality, biodiversity and particulate material emissions are the major environmental issues to be resolved inform them of its commitment to maintain an As part of this initiative, there are 14 wells Furthermore, the international consulting ecological flow in the riverbed, guaranteeing in the Las Tórtolas area off Anglo American’s company Robertson Consultants was hired in at Los Bronces and El Soldado, the main issue at the community access to water. Such flow property and around the tailings dam. The 2009 to make a hydrogeological study in the the Mantos Blancos and Mantoverde divisions is is higher in the irrigation season due to the monitoring of these external wells arose as sectors of the main wall and western wall of greater needs of neighbours. part of the authority requirements from the the Las Tórtolas dam and in its forestation water management. The material issues at Chagres company by means of operation permits. No area. The work entailed reviewing the water are atmospheric emissions and sulphuric acid The monitoring committee of the first section alterations to the water quality attributable quality database and the mitigation measures of the Aconcagua river also expressed its to the operations at Los Bronces have been applied in the forestation sector, and updating transportation. concern about whether Anglo American detected so far. However, there have been the current hydrogeological model. This will can continue to honour the ecological flow changes to the groundwater quality on the improve knowledge of the area and provide and the limit of its water rights at Riecillos, land of the former Space Studies Centre a more accurate tool to predict possible considering that the division will have greater (currently SSC-Chile), which are being studied contaminant spreading paths to implement the water requirements with the Los Bronces to apply the pertinent mitigation measures. appropriate control measures. Development Project and the commitment of The authority and neighbours affected are Los Bronces also has 16.6 regadores136 in the providing fresh water to Codelco’s Andina being permanently briefed about this situation. Los Bronces division Irrigation Channel Association of the Colina division in compensation for industrial water river for permanent and continual use against The operations of the Los Bronces division that such operation sends to Los Bronces a total of 195 regadores of this association. cover three districts and two regions. They for treatment. They were informed that the WATER CONSUMPTION (GIVEN IN 2007 2008 2009 An average of 8 l/s per regador is estimated 3 start with the pit, grinding plant and cathode Blue Water Treatment Agreement with the THOUSANDS OF M )* plant activities in the mountains in the district for a normal year. Andina division decrees that the water volume Fresh groundwater 326 448 526 of Lo Barnechea in the Metropolitan Region, transferred between both operations must The productive processes of Los Bronces Fresh surface water 16,774 15,846 14,250 and continue with conveying ore down the honour the ecological flow and the limit of consumed 550 l/s in total, which was less slurry pipeline to Las Tórtolas in Colina, where Anglo American’s water rights. Moreover, Water from external water companies 0 0 0 than half the total water rights of the division, the concentrator plant and tailings dam are to use the remaining water rights above the Process-recycled water 66,220 59,715 58,094
considering all the water impounded from the Capital Natural located. Part of its water supply systems is compensation requirements of the blue water, different inlets compared with current water * This table shows the information drawn up in 2010 by the environmental management and the water resource superintendency of Los Bronces, also in the district of Los Andes, Valparaíso Anglo American started to build additional Region. rights. This volume is lower than what this and they identified different criteria concerning the information presented in previous years. To standardise the division’s water consumption mea- impoundment and conveyance works from surement system, they drew up this information that considers the years 2007, 2008 and 2009. division requires for grinding, ore and tailings Riecillos to be used in the expanded operation. The main environmental aspects identified are conveyance, and flotation processes, as the water quality and consumption, atmospheric fresh water consumed is recirculated and emissions, biodiversity, mass mining deposits the maximum possible process and leaching (tailings dams and waste dumps) and energy water volume is re-used, and water is even consumption (outlined on pages 84 and 85). repumped from Las Tórtolas (750 metres Quality monitoring above sea level) to Los Bronces (3,500 There has been a surface water and metres above sea level), approximately 60 Water management groundwater quality monitoring programme kilometres away. Los Bronces gets its water from different at Los Bronces and Las Tórtolas since 1992, which is fully carried out by an independent sources. It obtains fresh water from the Las Tórtolas has a concentrator plant and laboratory, i.e., from the taking of samples to watershed of the San Francisco river in the tailings dam. The fresh water for this facility chemical analyses. SGS Chile is currently the district of Lo Barnechea; from the Riecillos is extracted from groundwater wells in the laboratory in charge of periodically analysing stream, at the first section of the Aconcagua Quilapilún sector of Colina. river in the Valparaíso Region; from the Colina 129 sample points (55 wells at Las Tórtolas and its surroundings, and 74 surface water river in the district of Colina and from seven The Riecillos community has expressed its points, 23 at Las Tórtolas and 51 at Los deep wells in the Quilapilún sector in the concern about having sufficient water for Bronces). Metropolitan Region. It has also constituted irrigation and domestic use. Regarding this, 3,850 l/s of non-consumption water rights in Los Bronces contacted the Riecillos neighbours’ the San Francisco river for hydroelectricity. committee and the municipal authorities to
136 Measure of irrigation water and about 15 litres per second.
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Performance of the divisions Biodiversity Case study The United Nations Environment Programme (UNEP) considers that Chile’s central zone is Environmental management at the Los Bronces one of the 25 biodiversity hotspots137 in the Development Project world, especially for being one of the few Mediterranean ecosystems on the planet. The Los Bronces Development Project envisages environmental factors to These areas are characterised by ecosystem honour the measures proposed in the environmental impact declarations and diversity, the large degree of endemic species studies (EID and EIS, respectively). and the intense pressure of human activity on them. Regarding this, Los Bronces and To draw up the project EIS and electric lines, the flora and fauna species were Las Tórtolas are in sectors defined as priority identified in the sector to be intervened, and applying a micro-routing technique biodiversity sites in the Metropolitan Region. on site for the final route of the tower access paths was postponed to the construction stage. This entails identifying, classifying and protecting each There are four vegetation formations of conservation category species case by case, thereby preventing any effects interest in the Los Bronces area: sub-Andean on the protected flora and fauna of the project land. The micro-routing work is thicket, Andean thicket, high Andean steppe carried out by external zoologists and botanists hired specially for this work. and high Andean grassland. The latter is where wetland systems can be identified. The project construction also considers the intervention of land in sectors that current legislation classifies as “native forest.” The compensation measures The biodiversity action plan was updated in committed in the EIS include reforestation plans at Quilapilún, genetic studies 2009, based on the company’s corporate that will add value to scientific knowledge, mitigation and capture/relocation guidelines. The preliminary stage assessed the of species, and reforestation with xerophytic species. Moreover, a plan will be biodiversity values using cartographical tools implemented to recover tacita stones and other archaeological findings in the and satellite images, leading to the conclusion areas affected, which will be placed in a specially designed showroom. that the areas with the greatest biodiversity value are the high Andean grasslands. The next steps will be to make progress with an on-site verification of the diagnosis results and to propose the corresponding stewardship As part of the update of the hydrogeological affect people’s health and is also one of the measures to protect vulnerable areas. Tailings deposits: There are three inactive Anglo American Chile maintains ongoing model, the need was detected of having nine main air contaminants in the Metropolitan and one active tailings deposits. The former follow-up of the condition of the active and monitoring wells, and a tender process has Region, for which there is a regulation are three old tailings dams in the Los Bronces inactive tailings deposits, and internal and therefore been launched so these works can on the daily concentration allowed area on the San Francisco riverbed, which are external specialists undertake periodical audits be carried out. (150 μg/m3N). The sedimentable particulate Mass mining deposits Copihue, Pérez Caldera 1 and Pérez Caldera 2. and reviews. material is significant from the perspective of The Los Bronces mining operation generates In the late 1980s, an agreement was reached As a result of the action the company natural resources, i.e., the effect this material two types of mass mining waste, i.e., waste to remove the dams located on the San The Las Tórtolas and Pérez Caldera-2 dams committed to with the environmental authority can have on plantations, crops and the soil. and tailings: Francisco river. In accordance with this, the were audited by ATD in 2009. due to the deterioration of the groundwater company started the removal process called quality in the wells around the Las Tórtolas During this monitoring period, there were some Waste deposits: the current ore treatment repulping, which entails conveying the material A new dust control system and a new water forestation area, reported to the National specific breaches of the daily PM10 regulation rate of the grinding plant is approximately to the Las Tórtolas dam. As this process is reclaim pumping station were implemented Environmental Agency (CONAMA) in 2006 at the station closest to the main wall. 58,000 tonnes per day (tpd), which entails subject to operational considerations, it was at the Las Tórtolas dam. As an increase in and mentioned in previous sustainability However, the regulation was complied with stripping around 220,000 tpd of rock made not undertaken in 2009 and maintenance the concentration of sulphates was detected reports, the construction of a pilot clear water at the station located towards the property up of ore and waste. The waste is mainly works started to get the system ready for at the dam lagoon, the effectiveness of the treatment plant was considered. This plant, boundary and in front of neighbours. The same deposited at the San Francisco waste dump138. seepage interception wells and the results resumption of the process in the summer of Capital Natural which started its tests in 2009 and with a situation occurred with SPM, for which Chile By the end of 2009, this deposit had a total 2010–2011. It is estimated that 47 million of the monitoring wells are being studied. treatment capacity of 40 litres per minute, has no standard, and the company therefore of 483 million tonnes accumulated, of which tonnes still need to be removed, which The company commissioned geophysical uses ultrafiltration and reverse osmosis uses the Swiss standard as a reference, which 237 million tonnes are low-grade ore. correspond to the Pérez Caldera 2 and the studies and a hydrogeological model to technology. According to the supplier’s has a limit of 200 mg/mm2/day. remains of Pérez Caldera 1. an international expert. This consultant technical specifications, it can eliminate most The low-grade ore is flushed with a diluted recommended that nine monitoring wells be of the chemicals in the clear water of the Las To reduce dust emissions from the dam wall solution of sulphuric acid to dissolve and drag Tailings comprise the waste from the drilled as of 2010 to increase the knowledge Tórtolas tailings dam, leaving it of suitable even more, windbreak meshes and a wetting the copper sulphides. The final solution is Las Tórtolas concentrator plant, with of the underground flows and determine quality for irrigation or better use. system on the top of the dam wall have been treated at the Lix 2 plant to produce copper approximately 56,000 tpd generated on the action needed to assure the right installed. The latter has proved to be effective, 7 cathodes by means of solvent extraction (SX) a dry basis. These are conveyed along a environmental performance. and a project was launched in 2009 to extend monitoring stations and electro-winning (EW). An equivalent 5.6-kilometre pipeline to the active tailings the wetting coverage of the dam wall, using Atmospheric emissions process is applied to the old waste dump deposit in the Las Tórtolas ravine. This gauge the air quality at large-flow and high-pressure nozzles, which drains in the mine sector, whose solutions deposit has been operating since 1992 and Los Bronces. The main atmospheric emissions are will be operative in 2010. are processed at a smaller SX-EW plant called comprises a main wall and two secondary particulate material (dust), essentially from Lix 1. the Las Tórtolas tailings dam, as its walls are walls, providing a total storage capacity of one billion tonnes of tailings. The walls have base formed from the coarse part of the material Anglo American Chile maintains permanent deposited, which is separate from the water drains and systems and seepage interception control of the stability of its mine gravel mechanisms, which consist of an array of and finer material and is exposed to the action deposits, including high anti-seismic of the wind. As the dam grows, so do the impoundment wells located downstream of standards, with a systematic and periodical the main wall and anti-seepage screens under 137 Hotspots: these are regions with a large walls with a greater surface exposed to the audit programme and the support of national the secondary walls. As of late 2009, 697 diversity of endemic species and which at action of the wind. and foreign consultants, including specialists the same time have been impacted and hectares were occupied with 302 million from the Anglo Technical Division (ATD). altered by the activity of mankind. This In August 2008, the company extended tonnes of tailings. category is designated based on the biological characteristics of the vegetal diversity. A its monitoring network to seven air quality hotspot region must have at least 1,500 stations that gauge the breathable particulate endemic vegetal species. The total surface area material (PM10) and the sedimentable of hotspots covers 2.3% of the earth’s surface. particulate material (SPM). The former can 138 The San Francisco deposit is at the head of the San Francisco valley, and started operations in 1990. It has a capacity of 1.25 billion tonnes.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 90. 91.
Performance of the divisions El Soldado division which are used in the plantations committed in furnish knowledge of the species that form the forest stewardship plans approved by the part of the native forest of the El Melón This division operates an underground mine National Forestry Corporation (CONAF)140 for mountain range. This initiative does not entail and an open-cut mine, crushing plants and El Soldado, or are delivered to institutions and increasing the current mining rate but to About 30,000 native facilities to treat oxide and sulphide ores. private bodies to boost their reforestation in assure the mine’s continuity over time. In 2006, it completed construction of the other places. tree species were extended pit project to prolong the life of the The second area of action includes recovering mine up to 2026. It also continued to work with the NGO and protecting the native forest, for which it produced in 2009 as Corporación Laguna Verde to develop designed a pioneer initiative in Chile to recover part of the native tree Due to its location and relationship with the reforestation programmes in Chile’s central and protect historically degraded forest, environment, the main environmental issues zone, to which it donated US$5,000 in 2009 and it will improve its quality and will add a nursery plan carried are biodiversity, water, and control of spills and over 12,000 native trees from the tree conservation zone which considers areas for and waste. nursery projects. scientific activities. This is an unprecedented out by the El Soldado contribution in the region and envisages 1,055 Biodiversity During the year, it drove the signing of a hectares for conservation, the planting of new division with the voluntary agreement for the sustainable native tree species, recovery and protection El Soldado is in a Mediterranean ecoregion development of the El Melón mountain of the native forest of the El Melón mountain which is only present in five places in the community. range, for which it summoned authorities range, and follow-up of the results over ten world. The division’s land is in the El Melón Mantos Blancos Due to the scarcity of water in the driest and community representatives to form a years. mountain range, which has been classified desert in the world, Mantos Blancos constantly roundtable that resulted in the signing of a division by the National Environmental Agency strives to get the optimal use of this resource. development agreement in December 2009. The Mantos Blancos division is an open-cut For example, it has a plant exclusively to (CONAMA) as top priority for the conservation of the biodiversity of the land ecosystems mine with crushing plants and facilities to reclaim water contained in its tailings, which Moreover, to continue the operations of the El in the fifth region. This importance is due to process sulphide ores by flotation and oxide reclaims around 60% of the fresh water Soldado mine up to at least 2027, the division the presence of large areas of Mediterranean ores by means of leaching, solvent extraction required at the sulphide plant (one of the most submitted an environmental impact study to native forest with high diversity and endemic and electro-winning. Its main environmental efficient systems in Chilean mining). It has develop the sustainable operative continuity flora and fauna species. Native forest issues are water management, dust control, also implemented special systems in all its project. This not only considers extending the accounts for 350 hectares of the total land waste management and energy. The latter two processes to optimise the use of water, such waste deposit areas but also to help recover owned by the division. A survey of the flora 80.6% aspects are addressed in the section Waste as: and protect the biodiversity of the El Melón and fauna species present in the area was of the water Recycling and Energy Efficiency Programme, mountain range, seeking to improve the native Installation of a second hydro run-off device made in 2003. used by Mantos Blancos was respectively. forest in the area to raise its environmental at the sulphide plant. value. Two areas of action were considered recycled. As of that same year, as part of its Water management for this: Optimisation of the leaching heap wetting commitment to biodiversity, El Soldado In 2009, the Mantos Blancos metallurgy has promoted a native tree nursery plan system using water droplets. In the mining area, the current waste deposit superintendency made an internal water with the Christa Mock agricultural high areas will be expanded and a zone will appraisal to assess how the division’s school of Nogales and neighbours of the Road maintenance and repair with be created to develop activities like the water distribution and control system could 139 Collahue and Los Caleos communities. bischofite to avoid using water. construction of service roads, platforms be optimised. This work measured the Around 30,000 native tree species were and exploration drilling. The project will consumption of all the processes and included produced in 2009, like belloto del norte Installation of a plant for wastewater from assume the potential impact caused and will an optimisation study of the internal water (Beilschmiedia miersii), guaiacum (Porlieria offices, changing rooms, the cafeteria, etc. compensate the native forest surface area distribution network. chilensis), naranjillo (Citronella mucronata) lost as a result of expansion. In addition, (all three in conservation status), peumo, Construction of flushing yards for light 100,000 native trees will be produced in a The study revealed that it is necessary to quillay (soapbark), boldo, lingue, pepper tree, vehicles and mine equipment, both with a five-year term, i.e., 20,000 plants a year, and invest US$400,000 to make improvements water reclaim system. lilén, litre and hawthorn. The accumulated scientific research will be promoted by means Capital Natural to the division’s water distribution system, production amounts to around 130,000 trees, of agreements with academic institutions to which considers new distribution lines, storage Paving of the main ponds at oxide plants to deposits and control systems, among other prevent water evaporation. aspects. Tailings filtration plant to reclaim water used Flora at El Soldado Mantos Blancos buys a total of 125 l/s of at the sulphide plant. water from the companies Aguas Antofagasta • Belloto del norte (national monument) (80 l/s), Agua Pura (30 l/s) and Aguas FAB Pumping system at the tailings deposit • Naranjillos (rare) (15 l/s), and it therefore has no water rights to reclaim water and recirculate it to the and does not directly affect neighbouring sulphide plant process. • Guaiacum (vulnerable) watersheds. Water is obtained from piping • Puya berteroniana (vulnerable) near its facilities and controlled by its own • Lingue del norte (Persea lingue) (vulnerable) and supplier meters, which are installed on the • Temo (Blepharocalyx cruckshanksii) (vulnerable) input piping. Water for human consumption is obtained from an internal treatment plant • Puya chilensis (vulnerable) which generates 300 m3 of drinking water a day. Fauna at El Soldado
WATER CONSUMPTION (GIVEN IN 2009 2008 2007 • Culpeo fox (in conservation status) 3 THOUSANDS OF M ) • Chilla fox (in conservation status) Groundwater used. 0 0 0 • Cururo fox (in conservation status) Surface water (includes wetlands, rivers, 0 0 0 • Lemniscata lizard (in conservation status) lakes, oceans). • Condor (in conservation status) Municipal or water utility water supply. 3,817 4,009 3,903 • Ringdove (in conservation status)
139 Bischofite (earth and salt mixture). Water recycled in processes. 3,107 2,862 2,570 140 www.conaf.cl
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Performance of the divisions
water recirculation from the lagoon of the El Torito dam were also calculated, which helped to compare the monthly consumption and identify opportunities of reducing this.
The optimisation of the use of fresh water at operations attained a milestone in 2009, reaching 83% compared with consumption in WATER CONSUMPTION (GIVEN IN 2009 2008 2007 3 2004. This achievement was mainly the result THOUSANDS OF M ) of lower consumption at the SAG mill due to Groundwater used 3,464 3,993 3,204 using reclaimed water from the underground Surface water (includes wetlands, rivers, 0 0 0 mine, water recirculated from the El Torito dam lagoons, oceans) and the enhanced pumping control from the El Municipal or water utility water supply 0 0 0 Melón and Los Litres wells due to optimisation of pump use. Water recycled in processes 12,999 12,088 15,172
SPILLS OF SUBSTANCES (M3) Case study Spills and waste Creating value for the El Melón mountain range There were four environmental incidents at 2009 El Soldado El Soldado in 2009, all related to spills in the The purpose of the voluntary agreement for the sustainable development of plant sector. Two of these were major, as Nº of EVENTS Volume the El Melón mountain range is the harmonious development of the land in this the industrial water or process solution spill area and players who operate in this area. This public-private agreement has reached the El Cobre brook, although it did not Process water 1 100 a board chaired by the head of the regional government and comprises the affect its water quality. Acid / refined solutions 1 10 Quillota provincial governor, the regional director of the CONAMA, the Mayors of Oil / fuel 2 2 Nogales and Hijuelas, the regional ministerial secretary (SEREMI) of agriculture, The first of these was a spill of ten litres of one representative from the Christa Mock agricultural high school, another from diesel due to overloading a transportation the public welfare management board of El Melón, and the El Soldado general truck, which occurred on the main road in the manager. El Cobre sector. All the contaminated material was cleaned up and properly disposed of. The Its objective is to promote activities that make the productive development of second one was caused by a general power the players in the area more dynamic and improve its environmental standards, cut, which led to around 200 litres of process seeking to make productive growth compatible with environmental care. water overflowing from the plant into the El Cobre brook. The water was not affected, The agreement will be focused on three areas of action: according to an analysis made by the company SGS. Development and empowerment of productive activities, driving natural resource management alternatives with a long-term vision. Moreover, a non-identified substance was Development of social initiatives that improve the community development detected at the El Torito dam, which affected conditions and enhance the quality of life. the fauna in the sector. To remedy this, an Conservation and sustainable management of natural resources, with expert carried out a follow-up to survey the initiatives that improve the environmental quality in harmony with other birds in the area and identify changes in their Capital Natural productive activities. population. The operational procedures at the plant were also reviewed and updated to Of the 42,000 hectares of the area classified as a priority in the El Melón anticipate operating situations that might have mountain range, work will be done on those located in the districts of Nogales environmental consequences. and Hijuelas. This initiative is expected to generate a land stewardship model that can then be repeated throughout the area comprising the priority site and in other The division has a hazardous and surrounding areas in the region. non-hazardous waste management plan. Management of this was handed over to a generating points and the waste storage times contractor in 2009, which provides services before final disposal. from waste generating points to the final authorised destination and, if applicable, Recycling campaigns were also launched, Water management El Soldado’s water rights are 395 l/s from delivery to temporary storage. This has which have led to better management of office wells and over 1.3 million m3 at the ravines, considerably reduced the bottlenecks at waste141. All the fresh water for the process mainly from which water can only be extracted from 83% comes from a network of wells in the El Melón May to November. Well extraction amounted optimisation and Los Litres sector (15 kilometres away to 206.6 l/s in 2009, which assures that the from the operation). The water is pumped and of fresh water consumption at watersheds were not affected by operations. recirculated by means of a continuous pumping To guarantee the water quality, there is also a El Soldado compared with 2004. system, which reclaims the water from the network of monthly monitoring of the surface WASTE MANAGEMENT lagoon of the El Torito dam and returns it to water and groundwater. the plant where it is put back into the process. 2009 HAZARDOUS WASTE (TONNES) NON-HAZARDOUS INDUSTRIAL WASTE (TONNES) As an additional measure, water is extracted The operation’s water balance was updated in from the El Infiernillo and Los Coiles ravines in 2009 to improve its management and quantify INTERNAL DISPOSAL EXTERNAL DISPOSAL the El Torito dam sector (winter water flows) all its flows monthly, including primary and and from rainwater and upwelling from the secondary sources. Consumption by general Division RECYCLING FINAL DISPOSAL RECYCLING FINAL DISPOSAL RECYCLING FINAL DISPOSAL underground mine. processes (mine, plant, services) and the El Soldado 437 334 0 0 325 530 141 See information on the El Soldado recycling campaign on page 113.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 94. 95.
Performance of the divisions Mantoverde division The water rights issued for the Copiapó river watershed are 9,230 l/s. Mantoverde uses Mantoverde is an open-cut mine with facilities 52 l/s of these, which accounts for 0.56% to process oxide ores. Due to its location in of all the water rights issued to all users the north of Chile, its priority issues are water, of the watershed. The water rights granted and atmospheric emissions, mainly airborne, throughout the entire Chañaral district amount and energy consumption. The latter issue is to 184 l/s, and Mantoverde uses 6.1 l/s, addressed in the section Energy Efficiency which is equivalent to 3.3% of the water Programme. rights granted to the whole district.
Water management To reduce the impact of water consumption, especially in the Copiapó river watershed, the Mantoverde updated and improved the water volume and quality of the wells are operation’s water balance in 2009 to optimise monitored permanently. Various private and the efficient use of this resource and the government studies concur about the current process. The study included a chemical water shortage in this watershed, mainly characterisation of the water extracted from due to the depletion of the surface flow and wells and detailed monitoring of the flow used groundwater of the river142. They also reveal to determine the losses from spraying and that mining only accounts for 13% of the evaporation and thereby establish the quantity consumption of the river watershed. of water to be replaced in the system. Due to this situation of shortage, Mantoverde SO2 CONCENTRATION (REGULATED BY SUPREME DECREE 113/02 AND SUPREME DECREE 185/91) This analysis led to the optimisation of the Chagres division is seeking operational alternatives to reduce MONITORING STATION PEAK PER HOUR PEAK PER DAY ANNUAL AVERAGE wetting processes, to paving of the water This division undertakes its productive and optimise water consumption. It is also accumulation ponds for the process and to process (copper concentrate fusion) by means REGULATION 1,000 250 80 analysing whether to leave the Copiapó river determining consumption by stages. The of a cutting-edge flash furnace with low watershed and switch to using seawater for Santa Margarita 889 165 62 Mantoverde is system of wetting the leaching heap using emissions, which makes Chagres a leading the process. Lo Campo 456 98 28 sprinklers was changed to water droplets. smelter in environmental terms in Chile. Its seeking operational These actions led to water extraction from main issues are atmospheric emissions, water Catemu 342 57 18 initiatives to reduce the Copiapó river watershed for the mine’s management, sulphuric acid transportation Romeral 666 74 18 processes decreasing from 76% to 59%; the and, to a lower extent, discharges, spills and Note: in the case of the daily and hourly regulation, this is the peak annual value. remaining 41% was obtained from the mine’s waste. and optimise its 3 water extraction process. PM10 CONCENTRATION (ug/m )
water consumption. Atmospheric emissions 24-HOUR PEAK THREE-YEAR MOVING AVERAGE It is also analysing The division manages and controls the 2009 2008 2009 2008 concentration of sulphur dioxide (SO2), REGULATION 150 50 whether to abandon 2009 2008 2007 particulate material (PM10) and arsenic (As) WATER CONSUMPTION (GIVEN IN Lo Campo 86 88 41 40 THOUSANDS OF M3) emissions. Monitoring is carried out at four air the Copiapó river quality stations located at Santa Margarita, Catemu 138 129 63 60 Groundwater used 2,991 2,982 2,849 Romeral, Catemu and Lo Campo. PM10 is also watershed and use Surface water (includes wetlands, rivers, 0 0 0 measured at the latter two stations. lagoons, oceans) seawater for its EMISSIONS 2009 2008 2007 Municipal or water utility water supply 0 0 0 (in tonnes) processes. Water recycled in processes 24.7 21.4 22.8 Yearly arsenic emissions 16.9 8.9 47.5 Natural Capital Natural (regulation: 95 tonnes/year) Yearly sulphur emissions 7,076 5,754 6,854 Atmospheric emissions Water management NUMBER OF SO2 REGULATION BREACHES AT CHAGRES Chagres makes a monthly water balance based Mantoverde accounts for Mantoverde mainly generates fine particulate material or dust from blasting, the movement on ongoing measurement of its consumption 2009 2008 2007 and discharges. Water is extracted from of material and vehicle traffic on unpaved Nº of daily regulation breaches 0 0 0 roads. three deep wells, which have the necessary 0.56% Nº of hourly regulation breaches 0 1* 0 of the total water rights authorisation and controls, with no records of The division has an air quality monitoring water courses being affected, according to the of users of the Copiapó river (*) This breach was due to the anomalous condition of a start-up. system by means of breathable particulate studies made. Extraction, which is lower than watershed. material (PM10) and sedimentable particulate that allowed by the water rights constituted, material (SPM) monitoring stations, and is gauged by flow metres and the pump power measurement is made for a month once a consumption. year. There were no breaches of the regulation in 2009, as the values obtained were similar It also makes periodic water quality controls WATER CONSUMPTION (GIVEN IN 2009 2008 2007 3 142 “Report on fresh water rights, extraction and to those of the baseline measurement and by means of sampling and analysis of the THOUSANDS OF M ) consumption of the mining industry in the were below the limit of the primary air quality physical and chemical parameters. This not Groundwater used 1,173 1,314 1,408 north and centre of Chile,” by the General only records the water extracted from the standard. Surface water (includes wetlands, rivers, 0 0 0 Water Board, and the research “Diagnosis wells but also the water courses upstream and of the water resources of the Copiapó river lagoons, oceans) watershed,” commissioned to the Canadian downstream of the smelter to verify there is consultant Golder Associates S.A. by the no decline in its quality. Municipal or water utility water supply 0 0 0 Association of Agricultural Producers and Water recycled in processes 189.8 6.6 2.2 Exporters of the Copiapó valley, Mantoverde, Minera Candelaria, the monitoring committee of the Copiapó river and its affluents and Sociedad Punta del Cobre S.A., under the co-ordination of Corporación para el Desarrollo de la Región de Atacama (CORPROA).
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Performance of the divisions Discharges Chagres discharges liquid waste into surface water courses, complying with Supreme Decree Nº90 which governs this type of process. The division makes two types of discharges into the Aconcagua river:
From the wastewater treatment plant, with discharge into the river with chlorination in accordance with the None of the discharge permit.
Chagres discharges Draining of smelter refrigeration water, contain hazardous which is authorised and monitored by the Superintendency of Sanitary Services substances. The (SISS), which carries out its own and division has an external monitoring controls. None of the discharges contain hazardous internal and external substances and Chagres has an internal and external control and monitoring system monitoring control guaranteeing the water quality. The internal system guaranteeing system monitors on line the pH, temperature, flow, turbidity and conductivity parameters of the water quality. the water, and the external one is a physical/ chemical monitoring system, and the results are reported directly to the SISS.
WATER DISCHARGES 2009 2008 2007 (GIVEN IN THOUSANDS OF M33) Water discharged into 582 346 485 the river
Waste management Spills Just like the other four divisions, Chagres The most common spills at the Chagres Case study has plans to control and manage waste from smelter involve oils due to mishandling generating points, by segregation at source, hydraulic and fuel systems. The most serious Transportation of sulphuric acid differentiated management of hazardous and incident in 2009 was seepage from a buried Chagres produced 457,621 tonnes of sulphuric acid in 2009. Trucks made 17,100 non-hazardous waste and recycling, whenever diesel oil tank, which led to a leakage of less trips to transport all this to customers and consumption centres. Although there are possible. than 3 m3, which was virtually all recovered. no mitigation measures for crashes these trucks might cause, there are special Subsequent control over a 30-metre perimeter considerations:
It also has a hazardous waste management from the leakage point revealed that the Capital Natural plan, which envisages the necessary incident had not affected surface water or 1. The trucks used to transport acid are hi-tech and are no more than five years old requirements and procedures and the handling groundwater. (internal regulation). of emergencies. The main waste of this kind is acid sludge, materials impregnated with Chagres has emergency procedures for 2. The waste and effluents from transporting materials are handled in accordance with hydrocarbons, filter sleeves and used oil, handling spills, which are applied when the current legal provisions. which are sent for recycling, among others. necessary and for which all its employees are They are sent to Hidronor, a company that is trained. 3. With some exceptions in the year, acid is transported on working days. authorised to process and recycle this kind Transportation at weekends is avoided as far as possible to reduce the risk of road of waste. This management system is fully accidents. compliant with the provisions of Supreme Decree Nº148 with regard to the minimum 4. There is an Emergency Plan and a brigade trained in these procedures to stop or sanitary and safety conditions that hazardous control spills from acid transportation. waste management must consider. 5. A theoretical and practical assessment is made of the suitability of the drivers who transport sulphuric acid, according to their competencies and knowledge of the legal and regulatory provisions on handling them. SPILLS OF SUBSTANCES (m3)
2009 Chagres As the other four divisions use acid in their leaching processes, all operations are subject to special protocols on safety and protection of people, communities and the environment, based on the environmental regulation and the considerations of the Nº of EVENTS VOLUME Anglo Fatal Risk Standards (AFRS).
Process water 2 200 Complementarily, Chagres, El Soldado and Los Bronces have an Emergency and Sulphuric acid / solutions 4 0.5 Co-ordination Plan for sulphuric acid emergencies, which is in addition to the carrier’s Oil / fuel 3 6.5 Emergency Plan.
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Environmental performance indicators Environmental performance indicators Energy and emissions The energy and emission consumption values are delivered by the energy and climate change manager, who is in charge of co-ordinating and implementing the energy efficiency programme.
Assessing SUMMARY OF ENERGY CONSUMPTION & EMISSIONS BY OPERATION 2007–2009143 Gigajoules (Gj) Tonnes of CO2
2009 2008 2007 2009 2008 2007 management Los Bronces 4,699,908 4,462,137 4,700,778 365,119 374,054 410,011 Mantos Blancos 2,100,647 1,965,872 1,936,047 353,023 346,950 342,574 As the company’s environmental management El Soldado 2,344,794 1,906,147 1,847,176 186,433 160,765 160,483 considers all the environmental aspects outlined in Mantoverde 1,422,091 1,444,877 1,434,009 162,318 167,599 170,472 Chagres 992,511 979,850 1,053,948 76,402 80,742 88,833 The Anglo Environment Way, the most significant Santiago 7,466 7,571 7,538 583 662 707 environmental indicators are presented below in a consolidated way and by division. Total 11,567,417 10,766,454 10,979,495 1,143,878 1,130,772 1,173,081
ENERGY CONSUMPTION (GJ)/TONNES OF FINE Cu EMISSIONS OF TONNES OF CO2/TONNES OF FINE Cu
30 3,0 26.81 2.65 2.58 2.60 24.78 25 24.19 2,5 23.11 22.11 21.69 22.05 2.02 2 20 2.0 1.88 1.83
15 1.5
10 1.0
5 0.5
0 0 2003 2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 Natural Capital Natural
ENERGY CONSUMPTION (COMPANY TOTAL)
2009 2008 2007
Oil 6 (tonnes) 8,956 8,905 8,472 Diesel (m3) 141,476 122,997 117,446 Gasoline (kl) 543 628 1,363 Anfo (explosive in tonnes) 48,429 40,838 39,652 Natural gas (m3) 416,435 8,484 1,750,535 Liquefied gas (tonnes) 1,266 1,273 1,448 Electricity (MWh) 1,656,439 1,624,343 1,675,398
SPECIFIC CONSUMPTION/ EMISSIONS
2009 2008 2007
Total energy (GJ) 11,567,417 10,766,454 10,979,495
CO2 emissions (tonnes) 1,143,878 1,130,772 1,173,081 Fine Cu production (tonnes) 431,456 434,475 453,891 143 The CO2 emission figure includes the Fine Cu - GJ/tonne 26.81 24.78 24.19 consumption of fossil fuels, emissions from leaching processes and indirect emissions Fine Cu - CO2/tonne 2.65 2.60 2.58 of CO2 caused by electric power plants that provide energy to operations.
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Environmental performance indicators
Water management COMPANY LANDS All the divisions have closure plans which comply with what is laid down in Mining operations use water in the grinding, DivisiOn TOTAL COMPANY- LANDS USED IN LANDS RESTORED flotation, leaching and smelting processes, CONTROLLED LANDS OPERATIONS OR UNDER Supreme Decree Nº72 of the Mine Safety (HECTARES) (HECTARES) RESTORATION Regulation and the Anglo American Mine mainly in the refrigeration system. (HECTARES) Site Closure Toolbox, which contains social Los Bronces* 35,592 4,710 0 and environmental variables to terminate FRESH WATER CONSUMPTION BY OPERATION (GIVEN IN THOUSANDS OF M3) Mantos Blancos 6,800 1,888 0 activities. DIVISION 2009 2008 2007 El Soldado 8,155 1,091 126 CLOSURE PLANS Mantoverde 3,250 1,557 0 Los Bronces 14,777 16,295 17,100 Chagres 70 46 0.5 DivisiOn POSSIBLE CLOSURE Mantos Blancos 3,817 4,009 3,903 DATE * The Los Bronces Development Project is excluded. El Soldado 3,464 3,993 3,204 Los Bronces 2041 Mantoverde 2,991 2,982 2,849 Mantos Blancos 2014 Chagres 1,173 1,314 1,408 El Soldado 2024 Santiago 7 6 9 Mantoverde 2014 Chagres 2030*
Total 26,229 28,599 28,474 * 2030 is considered as the closure date of the Chagres facilities for the purpose of the Closure Plan requested by the National Geology and Mining Survey (SERNAGEOMIN). WATER CONSUMPTION BY EXTRACTION SOURCE (GIVEN IN THOUSANDS OF M3)
SOURCE 2009 2008 2007 ORE SENT TO PLANTS (IN THOUSANDS OF TONNES) Goundwater 11,979 12,753 11,700 Strategic raw materials Surface water 14,250 15,846 16,774 Anglo American’s main raw material is the DivisiOn 2009 2008 2007 ore extracted from its mines. The total ore Los Bronces 20,512 20,013 21,125 TOTAL 26,229 28,599 28,474 processed by its plants in 2009 was 47.609 CONSUMPTION million tonnes, which was a 2.2% decrease Mantos Blancos 8,609 9,006 8,468 on 2008. El Soldado 9,172 8,002 8,193 Goundwater (%) 46% 45% 41% Mantoverde 9,676 9,557 9,281 Surface water (%) 54% 55% 59% Moreover, the main raw material used by the Chagres smelter is copper concentrate, which TOTAL 47,609 46,578 47,067 is provided by the company’s other divisions and is used to produce metallic copper in the 3 CONCENTRATE SMELTED (IN THOUSANDS OF TONNES) M OF WATER USED/TONNES OF FINE Cu form of anodes and sulphuric acid as a by- 77.17 product. DivisiOn 2009 2008 2007 80 74.80 76.47 74.05 Chagres 524.6 538.2 577.7 70 65.83 62.73 60.79 60 The company uses some strategic raw Mass mining waste Geology and Mining Survey (SERNAGEOMIN) 50 monitors compliance with this regulation. materials to carry out the activities of its The company has three tailings dams in operations. Capital Natural operation, for which it has a management plan Anglo American’s mass mining waste mainly 40 that complies with Supreme Decree Nº248 of STRATEGIC RAW MATERIALS 2009 includes mine gravel or waste material, 2006, which establishes the regulations on low-grade ore that is not processed in plants, 30 the design, construction, operation and closure 2009 UniT QUANTITY tunnel bases, underground excavation, requirements for mining tailings dams and the leaching gravel, tailings and slag. 20 Oil # 6 Tonnes 8,956 layout of their ancillary works to guarantee the safety of people and goods. The National Diesel m3 141,476 10 Gasoline m3 543 MASS MINING WASTE 0 Natural gas m3 416,435 2009 2008 2007 2003 2004 2005 2006 2007 2008 2009 Liquefied gas Tonnes 1,266 Electricity MWh 1,656,439 GRAVEL/LOW-GRADE ORE (in millions of tonnes) Land stewardship Sulphuric acid m3 605,955 Tonnage accumulated in gravel deposits 1,813 1,687 1,408 Generally speaking, the Anglo American Explosives Tonnes 48,429 Tonnage accumulated in leaching 513 469 283 biodiversity strategy commits the divisions to: (Anfo) deposits
Using natural resources (water, energy TAILINGS (in millions of tonnes) and land) efficiently. Tonnage accumulated in active dams 505 479 447 Quantity of active dams 3 3 3 Protecting and rehabilitating ecosystems affected by their intervention. Tonnage accumulated in inactive dams 109 109 109
Quantity of inactive dams 7 7 7 Drawing up proactive action plans on this issue. SLAG (in millions of tonnes) Slag produced in the year 324 337 346
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Environmental performance indicators 60 Waste management Environmental incidents 52 All Anglo American’s divisions have Anglo American classifies its environmental 50 47 management systems for hazardous and non- incidents according to the impact and effect on hazardous waste. The mass mining waste the environment. Forty-seven level 1 incidents 40 includes mine gravel, low-grade ore that is not were recorded in 2009. processed in plants, tunnel bases, underground 30 excavation, leaching gravel, tailings and slag 30 and must be managed and disposed of via Classification of environmental incidents projects and designs approved by the authority 20 case by case, pursuant to current legislation Level 1: Minor impact, short-term effects and international criteria and best practice for Level 2: Moderate impact, medium–term effects. 10 these deposits. Level 3: Major impact, long-term effects. 0 2007 2008 2009 NUMBER OF LEVEL 1 ENVIRONMENTAL INCIDENTS
NON-MINING WASTE MANAGEMENT YEAR Los Bronces Mantos El Soldado Mantoverde Chagres Total Blancos 2009 HAZARDOUS WASTE (TONNES) NON-HAZARDOUS WASTE (TONNES)
DivisiOn INTERNAL MANAGEMENT EXTERNAL MANAGEMENT 2009 14 6 5 7 15 47 2008 2 4 7 3 14 30
RECYCLING FINAL DISPOSAL RECYCLING FINAL DISPOSAL RECYCLING FINAL DISPOSAL 2007 6 1 20 5 20 52
Los Bronces 567 353 0 0 1,341 2,929 SPILLS OF SUBSTANCES (m3) Mantos Blancos 51,2 237 16 0 241 155 El Soldado 437 334 0 0 325 530 2009 Los Bronces Mantos Blancos El Soldado Mantoverde Mantoverde 292 176 0 0 773 80 No VOLUME No VOLUME No VOLUME No VOLUME Chagres 20,621 219 0 0 1,141 173 Process water 3 2.5 3 5.8 2 200 0 0 Sulphuric acid / solutions 0 0 0 0 4 0.5 1 20 Anglo American Chile 21,968.2 1,319 16* 0 3,821 3,867 Acid / refined solutions 0 0 1 2 0 0 3 190 Oil / fuel 2 0.3 1 0.14 3 6.5 0 0 * The 16 tonnes of internal recyling at Mantos Blancos concern the use of metallic scrap for own structures of the operation’s facilities. This was a specific activity and was therefore not recorded as internal recycling in the previous year. Slurry / tailings 0 0 1 1.5 0 0 0 0
2008 HAZARDOUS WASTE (TONNES) NON-HAZARDOUS INDUSTRIAL WASTE (TONNES) 2008 Los Bronces Mantos Blancos El Soldado Mantoverde
DivisiOn INTERNAL EXTERNAL MANAGEMENT No VOLUME No VOLUME No VOLUME No VOLUME MANAGEMENT Process water 0 0 2 1.5 1 900 0 0 RECYCLING FINAL DISPOSAL FINAL DISPOSAL RECYCLING FINAL DISPOSAL Sulphuric acid / solutions 1 0.15 1 1 1 2 3 750
Los Bronces 3,837 449 0 1,304 2,413 Acid / refined solutions 1 3 0 0 0 0 0 0 Capital Natural Mantos Blancos 490 106 278 446 0 Oil / fuel 0 0 1 0.6 3 1 0 0 El Soldado 144 155 0 837 563 Slurry / tailings 0 0 0 0 0 0 0 0 Mantoverde 183 66 203 96 0 Chagres 24,417 314 0 0 181 2007 Los Bronces Mantos Blancos El Soldado Mantoverde
Anglo American Chile 29,071 1,090 481 2,683 3,157 No VOLUME No VOLUME No VOLUME No VOLUME Process water 0 0 0 0 5 202.5 0 0 Sulphuric acid / solutions 0 0 1 5 2 0.5 3 960 Oil / fuel 0 0 0 0 7 0.85 2 0.2 2007 HAZARDOUS WASTE (TONNES) NON-HAZARDOUS INDUSTRIAL WASTE (TONNES) Slurry / tailings 0 0 0 0 1 20 0 0
DivisiOn INTERNAL EXTERNAL MANAGEMENT MANAGEMENT
RECYCLING FINAL DISPOSAL FINAL DISPOSAL RECYCLING FINAL DISPOSAL
Los Bronces 1,070 408 0 1,952 2,014 Mantos Blancos 535 110 8 578 35 El Soldado 286 299 0 720 517 Mantoverde 198 167 0 185 316 Chagres 21,022 0 0 551 131
Anglo American Chile 23,111 984 8 3,986 3,013
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 104. 105.
Manmade capital
Supply chain sustainable Strategic work on Twenty-one categories of goods and services development Anglo American strategic supply. Supply Chain (AASC) categories.
Training: Classroom training Fifteen sessions. Forty-five hours. Supply Chain Academy Ninety-three basic courses. Fifty licenced partners.
Application of supplier 88,5% of domestic suppliers. classification. 11,5% of international suppliers.
Supplier development End of SDP at Mantoverde: programme (SDP) progress. Eighteen months of work. Thirteen companies participated.
Chagres SDP: Eighteen companies participated. 83% satisfactory progress level.
Product registration and The first product and materials characterisation in labelling. Europe will be submitted in the second half of 2010.
Recycling initiatives.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 106. 107.
Procurement and contracts
Procurement and contracts Management approach
The creation of value from manmade capital is one of the five factors of Anglo American’s sustainable development focus. By means of this, the Company seeks to optimise the materials, services and infrastructure management to generate the Supply chain final products sold by it. It is therefore necessary to have a highly developed and efficient supply chain, for which a key aspect is to work with each of the players comprising it, including sustainability suppliers and contractors. The Good Citizenship Business Principles set out that Anglo American should Management of the supply chain has not seek mutually beneficial relationships with its business partners based on “fair and ethical practices, including prompt payment within the negotiated terms”. They only entailed reviewing materials and their also stress that it is necessary to work with them so the sustainable development classification but also undertaking the focus promoted is present in supply chain management. ongoing training of those who work in this The Anglo American culture assumes this vision, seeking to be the “partner area. Classroom training and the Supply Chain of choice” for companies that engage with the company’s operations. Anglo Academy courses have raised knowledge of this American’s sustainable development policy in the supply chain and sustainable development code establish how to achieve this objective. new scenario of materials management. Anglo American There is also the embracement of the content and guidelines set out in the Anglo needs to have a American Supply Chain (AASC) project. Suppliers and customers: This is The sustainable development of the Anglo Based on the new corporate structure of Anglo American, the senior supply chain highly developed related to close work with suppliers and American supply chain is a priority for management of the Copper business unit is in charge of the progress of AASC in customers, measured transparently and and efficient supply embracing the common framework of values Chile’s operations. and standards of the Anglo American culture. consistently, so they show interest in chain. Working with The main characteristics of the Anglo American embracing product and service innovation Supply Chain (AASC) project were presented and developing the respective commercial each of the players in the Sustainable Development Report 2008, agreements. the objective of which is to make supply chain comprising it, management the leader in the industry and a Organisation and personnel: To assure including suppliers global benchmark on creating value, adding a performance-focused culture, based on sustainable development management to excellence, competencies, teamwork and and contractors, is this strategic function. To achieve this, it has accountability, multifunctional work and made progress with continuous improvement integration of business units. hours, according to the topics and practice a key aspect of this. processes, which are based on a balanced Training and coaching involved and they serve as a basis for focus in four areas: In 2009, Anglo American Chile focused on classroom workshops. communication, training and coaching for the Value creation: This entails driving value content, tools, best practice and implications The SCA training platform works by assigning creation in the organisation by means of embracing the AASC in its organisation personal licences to those employees who of process optimisation, commercial and operations. It thereby participated in the head the progress of AASC. From 2007 to and financial risk management, the training and coaching project co-ordinated by 2008, 50 employees received a licence to development of strategic agreements with the AASC regional communications and change progress steadily with this training plan. suppliers and contractors, and systematic support area for South America. and sustainable innovation, related to the The basic SCA modules are focused on supply of goods and services. This programme was developed with the knowledge of the methodology required following methodology: by professionals engaged in category Operational excellence: This includes management, both regarding the tools service delivery, transparency and Classroom training: workshops to required to plan the category and the supply decision-making by means of standardised support the deployment of tools used methodologies used. The optional courses approval processes and structures. by the company to achieve the value address specific issues on the work areas, Manmade Capital It also considers the management of creation targets. Fifteen sessions were which include the function as negotiation, safe, reliable and high quality goods held in Chile in 2009 with a total of 45 supplier relations management, among others. and services, and efficient services and hours. Eighty-six employees from different operations. project-related levels attended for issues like global categories, technological implementation, procurement and contracts, among others.
On-line training: Anglo American developed an e-learning area called the Supply Chain Academy (SCA), which includes 93 basic and optional courses in English and 17 in Spanish. Each of them is completed in 30 minutes to three
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 108. 109.
Procurement and contracts
Supplier classification Even though the definition is based on the address of the head office of the supplier Anglo American Chile has adopted a supplier or contractor, it is wise to include those classification, based on the influence of the cases in which an operative branch is specific operation on the community. The established in the influence area of operations company is thereby able to operate more or projects. In these cases, the operative efficiently to drive sustainable development at branch is considered to be a local supplier to local, regional and national levels. acknowledge the employment and economic development that the operation provides to The following categories were defined: the community.
Local supplier: suppliers and contractors Based on this methodology, it was possible to located in the operation or project establish the percentage of the annual spend influence areas. on suppliers and contractors of operations, broken down by the above-mentioned Regional supplier: suppliers and categories. contractors located in the region of the operation or project.
Domestic supplier: suppliers and Case study contractors located in Chile. Category and value creation focus
The gradual embracement of the Anglo American Supply Chain since April 2008 has required restructuring of the category management and strategic supply teams based on multinational teams, which review and propose value creation plans and strategies with regard to 21 strategic supply categories of goods and services: mining services, construction, equipment for capital projects, equipment for open-cut mining, equipment for underground mining, process materials, transportation and logistics, and utilities, to mention just a few.
For example, in 2008 Anglo American thoroughly analysed the characteristics of its fuel and lubricant supplies, which globally account for an annual spend of approximately US$800 million. The Company’s work teams identified that a large proportion of the value that could be created in this category would not necessarily come from reducing prices but from know-how, technical support and embracing better practice that suppliers could provide mining operations.
Hence, Anglo American negotiated with two international suppliers and entered into global framework agreements (GFAs). In accordance with these, the fuel and lubricant suppliers are working with the Company’s mine teams to extend the life of equipment, reduce maintenance costs and thus optimise the total cost of ownership. Supplier selection requirements 15 Following a similar process for each of the AASC categories, Anglo American training sessions estimates total global value creation equivalent to US$1.1 billion by 2011. By selecting and maintaining suppliers, Anglo American prefers those who show a commitment to sustainable were held in Chile. development and strive to abide by the Sustainable Development Code for Suppliers, including:
• Effective safety management with a zero harm vision. • Effective occupational health risk management with a vision of a healthy and productive workforce. 86 • Defence of essential rights and fair work practices, in accordance with internationally renowned standards.
people Manmade Capital • They assure that their operations and the products and services provided to Anglo American are compliant participated in the AASC classroom training. PERCENTAGE OF SPEND ON SUPPLIERS BY OPERATION AND CATEGORY 2008–2009 with national laws and regulations and others that are applicable. When they are provided at Anglo
SPEND PERCENTAGE (%) American’s mine sites, they assure they meet the specific additional standards and procedures.
Local Regional DOMESTIC • They maintain and promote ethical standards, sound business practice and good governance.
2009 2008 2009 2008 2009 2008 • They contribute to the economic and social well-being of the communities where the supplier operates. Los Bronces 2.7 2.6 Unappraised Unappraised 85.7 86.4 • Responsible environmental management with a vision of minimising the impact on the environment. Mantos Blancos 36.4 23.4 36.8 23.7 97.7 96.9 • They implement effective management systems and risk management strategies. El Soldado 3.0 2.6 3.8 4.6 99.1 97.8 • They deliver clear, precise and appropriate reports on the agreed indicators. Mantoverde 8.7 8.0 8.8 8.0 78.2 67.2 • Inclusion of principles and codes in their supply chains. Chagres 3.4 6.2 10.5 12.2 92.1 94.0 Anglo American 8.2 7.3 7.0 6.4 88.5 87.4 Sustainable Development Policy for the Anglo American Supply Chain144.
144 This document is available at The domestic percentage includes the regional percentage which includes the local percentage. Based on this, Chile accounted for 88.5% of the www.angloamerican.co.uk. supplier spend and foreign suppliers for the remaining 11.5%.
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Supplier development programme Supplier development programme The report by IXC Consultores on the Eighteen small- and medium-sized companies Based on the 2009 progress report issued Mantoverde SDP results concludes that: in the Metropolitan and Valparaíso Regions by Brains Consulting & Research, 83% participated in the Chagres division’s SDP. of the companies participating in the The 13 companies participating attained a The project has the support of the Business Chagres SDP have a “satisfactory” level general compliance level of 78% with the Innovation and Development Centre (CINDE)150 of compliance with the programme’s action plans, management commitments of the Association of Companies in the objectives, and 17% of them attained a Creating and progress assessment included in the Valparaíso Region (ASIVA)151 and the advice of “basic” level. programme. Brains Consulting & Research.
All the companies adopted a service In 2009, the project was focused on creating value management model aligned with the the conditions for participating companies to COMPANIES PARTICIPATING IN THE CHAGRES SDP strategic vision of Anglo American strengthen three strategic objectives: Chile regarding the relationship with its DISTRICT COMPANIES The Mantoverde and Chagres divisions have suppliers. Consolidate a management system implemented supplier development programmes (policy, procedures, controls, costs, labour La Calera Soldesp Besides this achievement, six of obligations) to attain business maturity to Maestranza La Calera since 2007 to attain a continuous improvement these companies adopted the quality certify their operations for quality, safety, De La Paz The supplier scheme in partner company management. Thirty-one management system for small- and occupational health and the environment. medium-sized companies laid down in the Quillota Osorio Hermanos development small- and medium-sized companies have benefitted. Chilean standard NCh 2.909. Participate appropriately in implementing SERMAMIN a co-ordination system between the Villa Alemana Repolmet programme has All the management and executives company supply activities and the Valparaíso Bacigalupo of the companies had a positive view operations of the Chagres division. Til Til Minera San Pedro enabled us to of the work done, identifying the main benefits to be the ordering of the internal Define action plans to improve services Catemu Megall efficiently manage management, the customer focus and supplies. Faena Express resources, work to incorporation and the contribution of the Acor Ingeniería training workshops. Aridos Don Nicasio satisfy our current Llay Llay Seriman and future customers Induzar Manuel Fernández and increase the Pacoll Santiago Supplyline competitiveness of Estin national companies”.
Carlos Torres Rojo (Logistic & Service E.I.R.L.)145 MANTOVERDE DIVISION SDP SUMMARY TABLE 2007-2009
General objective: To improve the business and quality management of the services provided to the Mantoverde division by suppliers participating in the project in the maintenance and project development areas in an 18-month period.
Sustainable development of the supply chain To get companies to apply a continuous entails establishing strategic relations with improvement system on quality, its commercial partners to create value. The safety, labour rights and environmental Diagnosis 1st Development stage: 2nd Development stage: supplier development programmes (SDP)146 protection. Stage Implementation Follow-up driven by the Mantoverde and Chagres Business training workshops. Business model supervision. Anglo American Chile’s Sustainable Immediate improvements. Mobilisation of action plans.
divisions since 2007 have been a work focus Manmade Capital Generation of basic conditions for Analysis of the project economic for Anglo American Chile to make progress Development Reports 2007 and 2008 reported continuous improvement. value added. towards this goal. on the SDP progress in the respective annual periods148. 2 MONTHS 12 MONTHS (December 2007–November 2008) 6 MONTHS (December 2008–May 2009) These initiatives of co-operation and continuous improvement, whose financing With regard to 2009, the SDP at the 145 Source: article “Mine suppliers in Atacama is shared by the respective division, Chile’s Mantoverde Division was completed in May Investment: 1st Stage: Ch$80,100,000 2nd Stage: Ch$42,250,000 improve their business management and Economic Development Agency (CORFO)147 after 18 months of work. This initiative service quality”, published on the institutional and participating companies, have the following was supported by the Atacama Region portal of Chile’s Economic Development Agency general objectives: Development Corporation (CORPROA)149 (CORFO). Participating companies: 146 The specific characteristics of this tool to as the intermediary of the CORFO, and IXC promote the integration of supplier companies To train suppliers in business management Consultores as the company that executed it. Ecocil Friotermica E-Proyects to productive chains are available on the areas by means of on-site training website www.corfo.cl/lineas_de_apoyo. Asmeco Ingeniería Gda Ingelcop 147 www.corfo.cl workshops. Logistic & Service 148 Avances Ingeniería Mpc Anglo American Chile’s Sustainable Cefeba Soinver Development Reports 2007 and 2008 are To generate incentives so participating Constructora Carmona Zepeda y Vecchiola available at www.anglochile.cl. companies bolster their adherence to and 149 www.corproa.cl 150 www.cinde.cl act on the Sustainable Development Code 151 www.asiva.cl for Suppliers.
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Lifecycle
Lifecycle Waste recycling A paper recycling campaign called Importance of copper “Everybody’s Paper”155 was launched in the Waste management not only entails its correct administrative areas of the El Soldado division, in life classification and disposal but also requires for which a partnership was signed with La the right management in each process, which Semilla Foundation, which is in charge of paper means giving it an alternative use, like re- recycling management by holding workshops in Product using or recycling it, thereby reducing the the surrounding communities. quantity of waste generated for final disposal. Copper, which is essential to life according To achieve these objectives, Mantos Blancos Moreover, a pilot recycling and good to the International Copper Association has had a recycling process since 2001, which environmental practice project called the composition, (ICA) and Procobre, is one of the materials is part of its waste management system. “Ecological Office” started up at the offices, used most in the world due to its many This process enables the division to re-use for which separate containers were placed at properties, i.e., durability, heat and its hazardous and non-hazardous waste, such strategic places in the El Soldado building, and electricity conductivity, and that it can be as metallic and plastic drums, conveyor belts this is expected to be extended to the entire registration and recycled. It is present in virtually all aspects and rubber, tyres, batteries, lead sludge, iron operation in 2010. Organic matter will also of people’s lives and in all the productive scrap, piping, used oil, aluminium, shells be added as waste to start the operation of a sectors. and anodes, entering into partnerships with composting plant. specialised companies. labelling Furthermore, copper is the first solid material recognised as an antimicrobial agent in the Moreover, as part of its continuous registry of the US Environmental Protection improvement process, in 2009 the division Anglo American is working hard to assure compliance Agency (EPA). It therefore acknowledges implemented new changes to the waste that copper can eliminate harmful bacteria management system with a specialist with the new European Union (EU) regulation on related to potentially deadly microbial company. This comprehensive system entails chemicals. This is part of the Company’s commitment infections, including the A (H1N1) swine flu the handling, treatment and management virus. No other material has been certified of waste, which includes management of to the lifecycle of its products. with this characteristic. the sanitary landfill, the recycling yard, temporary yards for hazardous waste and the This EPA decision was made after three management to re-use, recycle and sell it. To years of studies with demanding protocols. attain this improvement, it was necessary to The experiments showed that copper and its invest in equipment and devices that helped to alloys eliminate 99.9% of the pathogenic achieve these objectives, such as a new waste bacteria after two hours of exposure and collection truck, new industrial deposits, waste permanently, despite repeated episodes of minimisation systems, a backhoe to work the moisture and contamination. sanitary landfill and nine machines to manage the fluorescent tube waste. The ICA launched a multicentre study at hospitals in 2009 to prove the bactericidal 95% of used oil, 100% of lead sludge and properties of copper and address a problem batteries, 100% of metallic and plastic unresolved anywhere in the world, i.e., drums, all the conveyor belts and 95% of intra-hospital infections. Such study is metallic waste and shells were recycled and about to be successfully completed at seven re-used in 2009. The waste management hospitals in England, the United States, system is expected to be bolstered with the Germany, Japan and Chile. implementation of The Anglo Environment Way (AEW) in 2010. Anglo American is developing a global work In accordance with the requirements of this Research in Chile ended in March 2010 with plan to assure its full commitment to the regulation, in the second half of 2010 the promising data: the methicillin-resistant European Union (EU) Regulation on the Company will submit the first product and Staphylococcus aureus was eliminated Registration, Evaluation and Authorisation of materials characterisation files to the European from elements that are more frequently Chemicals (REACH)152. Chemicals Agency (ECHA)153. contaminated. The bacterial load decreased by 98.5% in bed rails, 97.7% in bed This regulation, which came into force in Although minerals and concentrates are handles, 94.4% in patient tables, and June 2007, raises the supervision and exempt from REACH registration, Anglo 66.7% for monitor styluses. control standards for chemicals used in American is also developing a common productive processes to prevent sanitary and classification system that establishes their environmental risks. specifications, composition and related risk Manmade Capital profile. In 2009, Anglo American Chile participated in corporate information and documentation EU legislation on the classification, labelling exchange forums on the use of chemicals and packaging of chemicals and mixtures also and at the same time worked with contractor lays down standards that have been adjusted companies to develop studies and testing to to those of REACH and to the UN provisions meet the REACH requirements. with international scope on this issue154.
152 www.ec.europa.eu/environment/chemicals/ The report on these activities was sent to the Anglo American is addressing this issue in reach/reach_intro.htm London-based company that Anglo American the same global plan designed for REACH, for 153 www.echa.europa.eu/home_es.asp established specially to co-ordinate and which it uses standard systems and formats 154 Such provision refers to the Globally Harmonised represent the entire company on this issue. that meet all the regulations involved. System of Classification and Labelling of Chemicals, the content of which can be reviewed on the website www.unece.org/trans/danger/ publi/ghs/ghs_welcome_e.html. 155 The Spanish has a double meaning that is impossible to convey in English, i.e., a) Everybody’s Task and b) Everybody’s Paper.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009
114. 115.
Condensed and audited financial statements
Condensed and audited Anglo American Norte S.A. financial statements Anglo American Sur S.A. and Subsidiary
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 116. 117.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A.
Independent auditors’ report Anglo American Norte S.A.
To the Directors and Shareholders of Anglo American Norte S.A.
We have audited, in accordance with auditing standards generally accepted in Chile, the statements of financial position of Anglo American Norte S.A. as of December 31, 2009 and 2008, and the related statements comprehensive income, changes in equity and cash flows for the years then ended (included herein). In our report dated January 16, 2010, we expressed an unqualified opinion on those financial statements, which includes an explanatory paragraph to describe the basis of preparation of the financial statements.
In our opinion, the information set forth in the accompanying condensed financial statements is fairly stated, in all material respects, in relation to the financial statements from which it has been derived. However, as condensed financial statements are presented in considerably less detail than complete financial statements , they should be read in conjunction with the audited financial statements.
The accompanying financial statements have translated into English solely for the convenience of readers outside Chile.
January 16, 2010 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 118. 119.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Norte S.A.
STATEMENTS FINANCIAL POSITION STATEMENTS FINANCIAL POSITION AS AT DECEMBER 31, 2009 AND 2008 AS AT DECEMBER 31, 2009 AND 2008 (In U.S. dollars - US$) (In U.S. dollars - US$)
Notes 2009 US$ 2008 US$ Notes 2009 US$ 2008 US$
ASSETS SHAREHOLDERS’ EQUITY AND LIABILITIES
NON-CURRENT ASSETS: SHAREHOLDERS’ EQUITY: Property, plant and equipment 14 163,113,162 171,070,202 Paid-in capital 156,135,900 156,077,488 Investments in related companies 15 768,167 20,764,665 Retained earnings 326,740,764 108,594,266 Trade and other receivables 17 745,276 928,707 Other reserves (2,396,620) (2,601,633) Deferred tax assets 13d 21,661,047 13,792,972 Provisional dividends (176,099,880) Investment reserves (8,826,040) 17,339,901 Total non-current assets 186,287,652 206,556,546
Equity attributable to equity holders 295,554,124 279,410,022 CURRENT ASSETS: Total shareholders’ equity, net 295,554,124 279,410,022 Inventories 16 39,161,682 54,301,002
Trade and other receivables 17 219,120,300 177,188,002 NON-CURRENT LIABILITIES: Current tax assets 13c 16,888,060 35,998,824 Employee benefits obligations 20 22,452,741 17,534,285 Cash and cash equivalent 24 161,316,250 66,343,868 Provisions 18 54,136,050 34,335,844
Total current assets 436,486,292 333,831,695 Total non-current liabilities 76,588,791 51,870,129
TOTAL ASSETS 622,773,944 540,388,241 CURRENT LIABILITIES: Trade and others payables 19 244,922,187 189,977,398 Provisions 18 5,708,842 19,130,692
Total current liabilties 250,631,029 209,108,090
Total liabilities 327,219,820 260,978,219
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 622,773,944 540,388,241 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 120. 121.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Norte S.A.
STATEMENTS OF INCOME STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 (In U.S. dollars - US$) (In U.S. dollars - US$)
Notes 2009 US$ 2008 US$ Notes 2009 US$ 2008 US$
CONTINUING OPERATIONS CONTINUING OPERATIONS
OPERATING REVENUE 8 1,175,628,198 807,859,592 Net income for the year from continuing operations 298,713,458 278,284,060
OPERATING COST (782,578,920) (555,945,497) Cash flow hedges 4w 182,645,323 Deferred tax recognized in equity 13b (41,990) (30,687,140) OTHER OPERATING INCOME (EXPENSE) NET 9 (23,821,015) (5,605,378) Actuarial gains (losses) on employee benefits 20 247,003 (2,132,731) Result from investments in related companies 15 (903,064) 15,897,800 Other income and expenses in equity 205,013 149,825,452 TOTAL OPERATING REVENUE AND REVENUE FROM INVESTEES 368,325,199 262,206,517 Net comprehensive income for the year from 298,918,471 428,109,512 continuing operations Financial income 10 1,487,600 5,865,112 Other income 12 9,996,804 89,188,490 Financial expense 11 (4,400,640) (4,831,273) Exchange differences 5c (6,988,369) (9,034,721)
Total non-operating income 95,395 81,187,608
INCOME BEFORE INCOME TAX 13a 368,420,594 343,394,125
INCOME TAX EXPENSE 13a (69,707,136) (65,110,065)
NET INCOME FOR THE YEAR 298,713,458 278,284,060
INCOME PER SHARE 1.5809 1.7630
Number of shares 22a 188,948,033 157,847,925 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 122. 123.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Norte S.A.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 (In U.S. dollars - US$) (In U.S. dollars - US$)
Notes Paid-in Retained Other Provisional Investment Total Notes 2009 US$ 2008 US$ capital earnings reserves dividends reserves US$ US$ US$ US$ US$ US$ CASH FLOW FROM OPERATING ACTIVITIES: 23 414,205,085 291,503,435
Balances at January 156,077,488 104,731,052 (152,427,086) 1,097,157 109,478,611 CASH FLOW FROM INVESTING ACTIVITIES: 1, 2008 Loans granted to related companies 22c (505,549,755) Actuarial gains (2,132,730) (289,354) (2,422,084) Reorganization 2,134,298 2,134,298 Collection of loans received from related companies 513,331,692 Dividends paid (260,023,046) (260,023,046) Interest received from other investments 10 491,707 3,603,586 Cash flow hedges 182,645,323 182,645,323 Sales of fixed assets 489,350 Deferred tax 13b (30,687,140) (30,687,140) Purchase of fixed assets 14 (25,140,544) (44,618,170) Net income for the 263,886,260 14,397,800 278,284,060 year Net cash flow used in investing activities (16,866,900) (40,525,234)
Balances at CASH FLOW FROM FINANCING ACTIVITIES: 156,077,488 108,594,266 (2,601,633) - 17,339,901 279,410,022 December 31, 2008 Loans granted by related companies 22c (585,278)
Payment of loans received from related companies 22c 498,232 Balances as at 156,077,488 108,594,266 (2,601,633) 17,339,901 279,410,022 January 1, 2009 Interest paid (365,920) (704,742) Merge 4a 10,182,400 30,572,049 40,754,449 Dividends paid 22c (301,999,883) (260,023,062) Own issued shares (10,123,988) 9,117,930 (19,941,743) (20,947,801) Net cash flow used in financing activities (302,365,803) (260,814,850) Actuarial gains 247,003 (581,134) (334,131)
Dividends paid (125,900,003) (125,900,003) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 94,972,382 (9,836,649) Provisional dividends (176,099,880) (176,099,880) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 66,343,868 76,180,517 Deferred tax 13b (41,990) (41,990) Net income for the 304,356,522 (5,643,064) 298,713,458 year CASH AND CASH EQUIVALENTS AT END OF YEAR 24 161,316,250 66,343,868
Balances at 156,135,900 326,740,764 (2,396,620) (176,099,880) (8,826,040) 295,554,124 December 31, 2009 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 124. 125.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Norte S.A.
NOTES TO THE FINANCIAL STATEMENTS (In United States Dollars - US$)
1. General information Standards - Revised, Amendments and Interpretations Mandatory application date
The Company was incorporated in Santiago in 1955 and since October 1, 2007 the legal name of the Company was changed to New IFRS Anglo American Norte S.A. IFRS 9, Financial Instruments Annual periods beginning on or after 1 January 2013
The Company is currently operating the copper mines and processing plants of Mantos Blancos and Mantoverde which are, located Amendments 45 kilometers North East of Antofagasta, and in the Province of Chañaral, III Region of Atacama, respectively. IFRS 2, Share-based payments Annual periods beginning on or after 1 January 2010 2. Business description IFRS 3 (Revised), Business Combinations Annual periods beginning on or after 1 July 2009 NIC 27 (Revised), Consolidated and Separete Financial Annual periods beginning on or after 1 July 2009 The Company’s business purpose is the exploration, extraction, exploitation, production, smelting and trading of concentrates, Statements precipitate ores, copper bars and all metal and non-metal mineral substances and, in general, all fossil substances and liquid and IAS 32, Financial Instruments: Presentation - gas hydrocarbons, in any form in which they are naturally present, including exploration, operation and use of all sources of natural Annual periods beginning on or after 1 January 2010 Classification of Rights Issues energy susceptible to industrial exploitation and products or by-products obtained from them and, in general, the performance of any other related, connected or complementary activities that the shareholders agree. IAS 39, Financial Instruments: Recognition and Retrospective application for annual periods begining on or after Measurement: Eligible Hedged Items 1 July 2009 The Company’s activities include exploration, mining prospecting and services related to mining. New Interpretations The employees of the Company correspond mainly to operators at the worksites. The executives and supervisors in charge of, IFRIC 17, Distributions of Non-cash Assets to Owners Annual periods beginning on or after 1 July 2009 among other, the financial, operating, tax, legal and human resources issues, are hired by the related company Anglo American Chile IFRIC 19, Extinguishing Financial Liabilities with Equity Ltda. Annual periods beginning on or after 1 July 2010 Instruments 3. Bases of preparation IFRIC 18, Transfer of Assets from Customers Annual periods beginning on or after 1 July 2009
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the Management estimates that these standards, amendments and interpretations described above, will be adopted in the financial interpretations of the International Financial Reporting Interpretations Committee (IFRIC) adopted by the European Union based on the statements starting to January 1, 2010, as applicable, and that adoption of such standards, amendments and interpretations will information submitted by the Company for consolidation purposes with its Parent Company since January 1, 2005, date on which not have a significant impact on financial statements in the exercise of their initial application. it adopted for the first time the International Financial Reporting Standards adopted by the European Union. Also, these financial statements have been prepared under the historical cost convention as, modified by the revaluation of certain financial instruments. The preparation of these financial statements in conformity with International Financial Reporting Standards requires the use of For statutory purposes, Anglo American Norte S.A. used for the preparation of financial statements, General Accepted Accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and Principles in Chile (Chilean GAAP). the income and expense amounts during the informed period. These estimates are based on Management’s best knowledge of the reported amounts, events or actions. General Accepted Accounting Principles in Chile are different, in some respects, with IFRS, thus the local conversion process to Chilean GAAP to IFRS, will result in new adjustments, that could differ from these financial statements. 4. Important issues The detail of the choices made in the conversion of UK GAAP and IFRS were explained in the financial statements of 2005. a) Merger by absorption of Minorco Inversud S.A. The information contained in these financial statements is the responsibility of the Senior Management of the Anglo American Chile Group. An Extraordinary Shareholders’ Meeting was held on 30 April 2009, which approved the merger by absorption of Minorco Inversud S.A. As a result of such merger, Anglo American Norte S.A., as the surviving entity, acquired all the assets and liabilities of Minorco At the date of these financial statements, the following statements have been issued by the IASB, but are effective for initial periods Inversud S.A. at their book value in accordance with the balance sheet and other financial statements for the year ended 31 December after January 1, 2010. 2008, and is its successor for all its rights and obligations.
Due to this merger, all the shareholders’ equity and shares of Minorco Inversud S.A. were incorporated to Anglo American Norte S.A., and the former company was dissolved without it being necessary to liquidate it.
For accounting purposes, the merger was made on basis of the financial statements at April 30, 2009. Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 126. 127.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Norte S.A.
At April 30, 2009, the value of assets, liabilities and shareholders’ equity transferred to Anglo American Norte S.A. was as These estimates are explained in more detail in Note N°6 and refer to: follows: • Useful economics lives of assets and mineral reserve estimates • Impairment of assets 30.04.09 • Restoration and environmental rehabilitation costs US$ • Employee benefit obligations Assets: • Provisions for litigation and other contingencies Current assets 30,180,848 Principal accounting policies Other assets 10,582,021 a. Basis of preparation of the financial statements and period - The financial statements of Anglo American Norte S.A. include Total assets 40,762,869 the statement of financial position, of changes in the shareholders’ equity, income and cash flow for the years ended 31 December 2009 and 2008, and was drawn up pursuant to the International Financial Reporting Standards (“IRFS”) and is the full, explicit and Liabilities: unreserved application of such international standards. Current liabilities 8,420 b. Functional currency - The functional currency of Anglo American Norte S.A. is US Dollars. Total liabilities 8,420 c. Basis of conversion - Assets and liabilities, which are not stated in United States dollars have been converted at the corresponding year-end exchange rate: As of December 31, 2009 the exchange rate of the Chilean peso was Ch$507,10 per 1 US dollar (Ch$636.45 Equity as at December 31, 2008). Paid-in capital 10,182,400 Retained earnings 24,250,851 Variations in the exchange rates in the different currencies, generated a net loss in relation to the US dollar in the amount of US$6,988,369 (2008: loss of US$9,034,721), which is presented in non-operating income in the item “Exchange differences”. Net income for the period 6,321,198 d. Revenue recognition - Revenues are recorded by Anglo American Norte S.A. when rights and obligations have been substantially Total equity, net 40,754,449 transferred to the buyer, in accordance with IAS 18 “Revenue”.
Total equity and liabilities 40,762,869 Concentrate and cathode sales, whose price is undefined up to a pre-established future date, are acknowledged at the provisional market price established at that time. Moreover, as Anglo American Norte S.A. and Minorco Inversud S.A. are the only partners of the limited liability company with the trade name Minera Anglo American Chile Ltda. and, as a result of the merger that was put to the shareholders, all the shareholders’ equity Concentrate sales are stated at the invoice amount, which is net of treatment and refining changes. of Minera Anglo American Chile Ltda. was incorporated to Anglo American Norte S.A., and the former company was dissolved. Revenues from these sales are initially recognized (when the above criteria are met) at market price. The aforementioned capital increases were recorded in accordance with IFRS 3 “Business Combinations” as a business combination according to the interest unification method, and its effects on the accounting value of the investments were recognized in shareholders’ The adjustment of the provisional sales price versus the equivalent price (mark-to-market) in the contract is recognized in equity. income.
b) Ore purchase and sale transactions with the related company Compañía Minera Doña Inés de Collahuasi e. Income tax and deferred taxes - The income tax provision is calculated based on the first category net taxable income, prepared in accordance with current legislation. As of 1 April 2009, the partners of Minera Doña Inés de Collahuasi SCM, in which Anglo American plc has a 44% interest, agreed to take responsibility for the sales of its copper concentrate, copper cathode and molybdenum concentrate products. Deferred taxes arising from temporary differences and other events that create differences between the financial and taxable base of assets and liabilities are recorded according to IAS 12 “Income Taxes”. Copper and molybdenum sales and purchases included in such agreement were added to the items operating revenues and costs of the income statement in 2009. Similarly, the Company records any temporary differences arising between tax and book entries as a result of calculating the Taxable Operating Income in order to calculate the specific tax on mining. 5. Summary of principal accounting policies applied The variations of deferred tax assets or liabilities in the period are stated in the income account or directly in the shareholders’ Accountability for the information and estimates made equity accounts of the statements of financial position, as the case may be.
Estimates were made based on the best information available for the events analyzed, however it is possible that events that might f. P.P. & E - Property, plant and equipment are stated at cost, excluding periodic maintenance costs, less accumulated depreciation, arise in the future make it necessary to modify them (increase or decrease) in the next accounting periods. This will be carried out and less the impairment value loss. pursuant to International Accounting Standard (IAS) 8, which prospectively recognized the effects of the change in estimates on the corresponding profit and loss accounts. The cost of property, plant and equipment includes the acquisition cost plus all the costs directly related to the location of the asset Statements Financial and its operation as forecasted by management and the initial estimate of any cost for the dismantling and removal of the element or rehabilitation of the physical area where it is located.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 128. 129.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Norte S.A.
Moreover, the financing interest costs directly attributable to the acquisition or construction of assets that require a substantial time n. Operations with repurchase agreement - Purchase of financial instruments with repurchase agreement are recorded as a fixed period before being ready for use or sale shall be deemed a property, plant and equipment cost. rate loans and presented in other current assets.
g. Depreciation - Property, plant and equipment depreciate according to the estimated useful life of the goods using the linear o. Mining reserves - The costs related to the Mining Reserves are amortized through the unit of production method, considering method. The depreciation of mine reserves is amortised using the method of units of fine copper produced, considering proven and the proven and probable ore reserves, regarding the useful life of the mine. probable ore reserves regarding the life of mine, as the case may be. p. Mining projects - The disbursements related directly to the exploration of mining properties are charged to income until the start The useful life of property, plant and equipment is reviewed annually and depreciation starts when assets are ready to be used. of the project’s feasibility stage. The disbursements incurred in the feasibility or development stages of the projects are capitalized and amortized based on future production, considering the proven ore reserves. Abandoned projects are charged to income in the Land is stated independently of the buildings or facilities that might be located thereon and is construed to have an indefinite life year in which the decision is made. and is therefore not subject to depreciation. Also, a provision is made for those projects where there is evidence that they will not be executed according to the original plans. At least once a year, the Company assesses whether there is possible impairment of the value of property, plant and equipment assets. q. Personal benefits cost - The Company recognizes the cost of employee benefits according to an actuarial calculation, as required by IAS 19 “Employee benefits”, which includes variables such as the life expectancy, salary increases, etc. To determine such h. Leasing - The rental cost under an operating lease is charged to the statement of income in annual amounts based on the contract calculation a discount rate of 6.23% per annum has been used for 2009 (discount rate of 7.26% in 2008). terms. r. Closure cost provision - The Company recognizes the future costs of mine closures and the abandonment of the sites, at The assets under finance lease are recognized as assets at the beginning of the lease at the lower of the fair market value and the their net present value in conformity with corporate standards and in accordance with IAS 37 “Provisions, Contingent Assets and net present value of the minimum lease payments discountinued using the effective interest rate. Contingent Liabilities”. The provision for this concept is included in the item “Accruals”, within non-current liabilities.
In addition to the lease agreements, other significant agreements are also evaluated in order to determine if they, substantially, are In 2009, the Company updated the provision made for these effects based on a new year-end cost study. This change entailed a lease or contain one. This includes the assessment as to whether the agreement includes the use of a specific asset as well as an increase in the provision made, which is split into two concepts: decommissioning of property, plant and equipment, which the right to use such an asset. generated the recognition of an asset, in the item other fixed assets; and environmental restoration costs, which was deemed to be an administration expense in the period when it was incurred or accrued. i. Mine preparation - Costs for mine preparation incurred with the only purpose of maintaining the current level of production are charged to the cost of production. s. Employee vacations - The provision for vacations is recorded as an expense in the year the employee earns this benefit.
j. Investments in related companies - Investments in related companies are stated at their equity value. t. Statement of cash flows - This includes cash and time deposits, both short-term and highly liquid, which are easily converted into a known amount of money and are subject to an insignificant risk of change in their value. k. Inventories- Inventories have been valued at acquisition cost, using the following methods: u. Financial assets - Financial assets at fair value with changes in income are financial assets held for trading. A financial asset • Finished products and products in process : At the average monthly production cost, including depreciation is classified in this category if it is mainly acquired with the aim of being sold in the short term. of fixed assets. • Trade and accounts receivable - Accounts receivable are unhedged financial assets with fixed or determinable payments • Raw material, supplies and spare parts : At the average purchase cost. and are not traded in an active market. Accounts receivable include trade receivables and other accounts receivable.
• Assets held to maturity - Assets held until their maturity are unhedged assets with fixed or determinable payments and • Ore in stock : At the lower of the average cost of monthly extraction, or the recoverable value. fixed maturity, and the Company’s management has the positive intention and ability to maintain them until their maturity. Should a significant amount of financial assets held until their maturity be sold, the entire category would be classified as available for sale. • Materials in transit : At acquisition cost. • Financial assets available for sale - These are unhedged financial assets that are specifically allocated to this category or which are not classified in any of the other categories. They are included in non-current assets unless management intends The net realizable value is the sales price estimate at the close of the period less all the estimated finishing costs and costs to be to transfer the investment in 12 months after the date of the statements of financial position. incurred in the marketing, sales and distribution process. Impairment of financial assets - Financial assets other than those valued at fair value through income are evaluated as The cost assigned to inventories does not exceed their net realisation value at the 2008 and 2009 year ends. • of the date of each statements of financial position to establish the presence of impairment indicators. Financial assets are impaired when there is objective evidence that, as a result of one or more events occurring after the initial acknowledgement, l. Trade debtors - Shipments of ore are presented at net realizable value based on sales contracts. the estimated future cash flows of the investment have been affected. The Company recognizes a mark to market provision when the sale price of billed shipments, which have not finally priced falls v. Financial liabilities - Financial liabilities of a similar nature are initially acknowledged at their fair value, net of the costs incurred above or below the market price at each year end. Statements Financial in the transaction. m. Time deposits - This item includes capital invested plus accrued interest.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 130. 131.
Financial Statements Anglo American Norte S.A.
Anglo American Norte S.A. Anglo American Sur S.A. and Subsidiary
Independent w. Financial hedging instruments and hedging accounting • Embedded derivatives - Anglo American Norte S.A. assesses the presence of embedded derivatives in financial instrument auditors’ report contracts to determine whether their characteristics and risks are closely related to the main contract, provided that the host is not recorded in the accounts at fair value. Anglo American Sur S.A. and Subsidiary Embedded derivatives are split off from the main contract, which is not measured at fair value through income, when the analysis reveals that the economic characteristics and risks of embedded derivatives are not closely related to the main contract.
• Cash flow hedge - The Company had no hedging contracts for the year ended 31 December 2009. The Company signed forward contracts up to 2008 to hedge its exposure to copper price risks. The Company does not use financial hedging instruments for speculation purposes. To the Directors and Shareholders of Copper sales contracts (normal purchase or sale) that meet the requirements of IAS 39 were acknowledged in income when Anglo American Sur S.A. and Subsidiary physical delivery was made or the ownership risks and benefits had been substantially transferred. We have audited, in accordance with auditing standards generally accepted in Chile, the consolidated statement of financial position of All hedges designated as hedging contracts were classified as current or non-current assets or liabilities, depending on the Anglo American Sur S.A. and Subsidiary as of December 31, 2009 and 2008, and the related consolidated statements of comprehensive hedging maturity date. income, changes in shareholders’ equity and cash flows for the years then ended (included herein). In our report dated January 16, 2010, (except for note 26, whose date is March 15, 2010) we expressed an unqualified opinion on those financial statements, Changes in the fair value of financial hedging instruments that were designated as “effective cash flow hedging contracts” which includes one explanatory paragraph to describe the basis of preparation of the financial statements. were recognized directly in shareholders’ equity. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all x. Reclassifications – The Company has reclassified certain items of the financial statements as at December 31, 2008 to maintain material respects, in relation to the consolidated financial statements from which it has been derived However, as condensed financial consistency. statements are presented in considerably less detail than complete financial statements, they should be read in conjunction with the audited consolidated financial statements.
The accompanying financial statements have been translated into English solely for the convenience of readers outside Chile.
January 16, 2010 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 132. 133.
Financial Statements Anglo American Sur S.A. and Subsidiary
Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2009 AND 2008 AS AT DECEMBER 31, 2009 AND 2008 (In U.S. dollars - US$) (In U.S. dollars - US$)
Notes 2009 US$ 2008 US$ Notes 2009 US$ 2008 US$
ASSETS SHAREHOLDERS’ EQUITY AND LIABILITIES
NON-CURRENT ASSETS SHAREHOLDERS’ EQUITY Property, plant and equipment 12 2,642,947,216 1,975,923,270 Paid-in capital 1,240,735,737 1,240,735,737 Financial hedging instruments 14 34,590,016 Retained earnings 1,333,857,652 975,838,062 Other accounts receivable 22c 1,142,375 Other reserves 2,150,097 (112,626,215) Intangibles 4l 120,000,000 120,000,000 Equity attributable to equity holders 2,576,743,486 2,103,947,584 Total non-current assets 2,797,537,232 2,097,065,645 Minority interest 2,218,170 5,499,188
CURRENT ASSETS Total shareholders’ equity, net 2,578,961,656 2,109,446,772 Inventories 15 69,430,952 95,794,818 NON-CURRENT LIABILITIES Trade and other receivables 16 303,284,352 174,489,430 Trade and other payables 19 2,883,642 4,873,261 Financial hedging instruments 14 61,729,723 Financial hedging instruments 14 56,570,891 Current tax assets 11c 32,682,315 45,766,761 Employee benefit provisions 20 100,637,906 68,737,610 Cash and cash equivalents 24 28,135,143 593,825,385 Deferred tax liabilities 11d 139,522,262 46,376,960 Total current assets 495,262,485 909,876,394 Provisions 17 165,985,389 130,109,428
TOTAL ASSETS 3,292,799,717 3,006,942,039 Total non-current liabilities 409,029,199 306,668,150
CURRENT LIABILITIES Trade and others payables 18 265,406,399 420,309,366 Financial hedging instruments 14 133,258,582 Provisions 17 39,402,463 37,259,169
Total current liabilities 304,808,862 590,827,117
Total liabilities 713,838,061 897,495,267
TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 3,292,799,717 3,006,942,039 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 134. 135.
Financial Statements Anglo American Sur S.A. and Subsidiary
Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary
CONSOLIDATED STATEMENTS OF INCOME CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008 FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 (In U.S. dollars - US$) (In U.S. dollars - US$)
Notes 2009 US$ 2008 US$ Notes 2009 US$ 2008 US$
CONTINUING OPERATIONS CONTINUING OPERATIONS
OPERATING REVENUE 7 1,762,629,323 2,000,343,945 Net income for the year 726,815,185 866,484,407
OPERATING COST (857,741,044) (804,425,423) Cash flow hedges 14 148,266,233 (130,777,419) Deferred taxes recognized in equity 11b (23,508,403) 22,991,091 OTHER OPERATING INCOME AND EXPENSES - NET 8 (55,252,373) (44,205,734) Actuarial losses in employee benefits 20 (9,981,518) (4,464,295)
TOTAL OPERATING REVENUE 849,635,906 1,151,712,788 Other income and expenses in equity 114,776,312 (112,250,623)
Net comprehensive income for the year 841,591,497 754,233,784 Financial income 9 105,516,766 11,398,468 Other income 3,895,251 ATTIBUTABLE TO: Financial expenses 10 (14,420,146) (78,920,680) Exchange differences 4c (25,369,899) (33,278,456) Equity shareholders of the Company 839,515,810 752,189,330
TOTAL NON-OPERATING INCOME (EXPENSE) 65,726,721 (96,905,417) Minority interest 1,459,278 2,333,806
INCOME BEFORE INCOME TAX 11a 915,362,627 1,054,807,371 Net comprehensive income for the year 840,975,088 754,523,136
INCOME TAX EXPENSE 11a (188,547,442) (188,322,964)
INCOME AFTER INCOME TAX 726,815,185 866,484,407
PROFIT FOR THE FINANCIAL YEAR ATTIBUTABLE TO:
EQUITY SHAREHOLDERS OF THE COMPANY 725,355,907 864,150,601
MINORITY INTEREST 1,459,278 2,333,806
PROFIT FOR THE FINANCIAL YEAR 726,815,185 866,484,407
EARNINGS PER SHARE 0.5858 0.6984
Number of shares 22a 1,240,750,565 1,240,750,565 Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 136. 137.
Financial Statements Anglo American Sur S.A. and Subsidiary
Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008 (In U.S. dollars - US$) (In U.S. dollars - US$)
Notes Paid-in Retained Other Minority Total Notes 2009 US$ 2008 US$ capital earnings reserves interest US$ US$ US$ US$ US$ CASH FLOW FROM OPERATING ACTIVITIES: 23 508,417,024 1,105,879,439
Balances at January 1, 2008 1,240,735,737 356,636,240 (375,592) 4,665,579 1,601,661,964 CASH FLOW FROM INVESTING ACTIVITIES: Dividends paid (244,948,779) (1,500,197) (246,448,976) Interest received from other investments 9 1,760,295 11,398,468 Cash flow hedges (130,777,419) (130,777,419) Inter-company interest received 22d 1,756,572 15,799 Actuarial losses 20 (4,464,295) (4,464,295) Purchase of fixed assets 12 (674,310,655) (462,597,064) Deferred tax 11b 22,991,091 22,991,091 Loans granted to related companies 22d (580,000,000) (2,737,077) Net income for the year 864,150,601 2,333,806 866,484,407 Settlement of forward contracts 14 (29,442,867) Balances at December 31, 2008 1,240,735,737 975,838,062 (112,626,215) 5,499,188 2,109,446,772 Net cash flow used in investing activities (1,280,236,655) (453,919,874)
Notes Paid-in Retained Other Minority Total CASH FLOW FROM FINANCING ACTIVITIES: capital earnings reserves interest US$ US$ US$ US$ US$ Loans collected from related companies 22d 580,000,000 Balances at January 1, 2009 1,240,735,737 975,838,062 (112,626,215) 5,499,188 2,109,446,772 Interest paid 10 (1,793,998) (1,383,778)
Dividends paid (367,336,317) (4,740,296) (372,076,613) Dividends paid 22d (372,076,613) (246,448,976) Cash flow hedges 148,266,233 148,266,233 Net cash flow used in financing activities 206,129,389 (247,832,754) Actuarial losses 20 (9,981,518) (9,981,518) Deferred tax 11b (23,508,403) (23,508,403) NET POSITIVE VARIATION OF CASH AND CASH EQUIVALENTS (565,690,242) 404,126,811 Net income for the year 725,355,907 1,459,278 726,815,185 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 593,825,385 189,698,574 Balances at December 31, 2009 1,240,735,737 1,333,857,652 2,150,097 2,218,170 2,578,961,656
CASH AND CASH EQUIVALENTS AT END OF YEAR 24 28,135,143 593,825,385 Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 138. 139.
Financial Statements Anglo American Sur S.A. and Subsidiary
Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (In United States Dollars - US$)
1. General information Standards - Revised, Amendments and Interpretations Mandatory application date
The Company was incorporated by public deed dated September 6, 1916 as a closely held corporation. On November 02, 1998, by New IFRS agreement of the Extraordinary Meeting of Shareholders held on October 09, 1998, the Company became a limited partnership. IFRS 9, Financial Instruments Annual periods beginning on or after 1 January 2013
On July 23, 2007, Inversiones Anglo American Sur Ltda. became Inversiones Anglo American Sur S.A. Subsequently, on July 31, Amendments 2007, by agreement at the Extraordinary Shareholders’ Meeting, the merger was carried out with Minera Sur Andes S.A. (formerly Minera Sur Andes Ltda.) into Anglo American Sur S.A. (formerly Inversiones Anglo American Sur Ltda.), whereby the latter assumed IFRS 2, Share-based payments Annual periods beginning on or after 1 January 2010 all the rights and obligations of the company that was merged. IFRS 3 (Revised), Business Combinations Annual periods beginning on or after 1 July 2009 NIC 27 (Revised), Consolidated and Separete Financial Annual periods beginning on or after 1 July 2009 The merger was completed on the basis of the balance sheets at December 31, 2006. Statements IAS 32, Financial Instruments: Presentation - The Subsidiary Anglo American Chile Ltda. was created on the 14 March, 2003 as a limited liability partnership. Annual periods beginning on or after 1 January 2010 Classification of Rights Issues IAS 39, Financial Instruments: Recognition and Retrospective application for annual periods begining on or after 2. Business description Measurement: Eligible Hedged Items 1 July 2009
The Company’s business purpose is the exploration, extraction, exploitation, production, smelting and trading of concentrates, New Interpretations precipitate ores, copper bars and all metal and non-metal mineral substances and, in general, all fossil substances and liquid and IFRIC 17, Distributions of Non-cash Assets to Owners Annual periods beginning on or after 1 July 2009 gas hydrocarbons, in any form in which they are naturally present, including exploration, operation and use of all sources of natural IFRIC 19, Extinguishing Financial Liabilities with Equity energy susceptible to industrial exploitation and products or by-products obtained from them and, in general, the performance of Annual periods beginning on or after 1 July 2010 any other related, connected or complementary activities that the shareholders agree. Instruments IFRIC 18, Transfer of Assets from Customers Annual periods beginning on or after 1 July 2009 The subsidiary’s objetive is to provide administration, planning and consulting services in various areas such as managerial; financial; treasury; accounting; internal audit; evaluation and control of projects; mining; metallurgy; engineering and maintenance support; Management estimates that these standards, amendments and interpretations described above, will be adopted in the financial insurance administration; acquisition of supplies; materials and equipment; contracting of external services; geology; information statements beginning January 1, 2010, as applicable, and that adoption of such standards, amendments and interpretations will not technology; sales and marketing; safety, health, environment and quality; human resources; and legal, particularly for mining have a significant impact on financial statements as a result of their initial application. activities and specialized in the needs and requirements of this type of company, rendering them by itself or through third parties, coordinating with them on how to perform these services, as well as the performance of the activities directly or indirectly related The preparation of these financial statements in conformity with International Financial Reporting Standards requires the use of with the above mentioned, and others that the partners agree. estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the income and expense amounts during the informed period. These estimates are based on Management’s best knowledge of the The employees of the Company correspond mainly to operators at the worksites. The executives and supervisors in charge of, among reported amounts, events or actions. other, the financial, operating, tax, legal and human resources issues, are hired by its subsidiary Anglo American Chile Ltda.
4. Significant accounting principles 3. Bases of preparation Accountability for the information and estimates made The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) adopted by the European Union Estimates were made based on the best information available for the events analysed; however, it is possible that events that might based on the information submitted by the Company for consolidation purposes with its Parent Company since January 1, 2005, date arise in the future make it necessary to modify them (increase or decrease) in the next accounting periods. This will be carried out on which it adopted for the first time the International Financial Reporting Standards adopted by the European Union. Also, these as indicated in the International Accounting Standard (IAS) 8, which recognized prospectively the effects of the estimate change on financial statements have been prepared under the historical cost convention as, modified by the revaluation of certain financial the corresponding profit and loss accounts. instruments. For statutory purposes, the Company and its subsidiary used for the preparation of financial statements, General Accepted Accounting Principles in Chile (Chilean GAAP). These estimates are explained in more detail in Note No.5 and relate to:
General Accepted Accounting Principles in Chile are different, in some respects, with IFRS, thus the total local conversion process • Useful economics lives of assets and mineral reserve estimates to Chilean GAAP to IFRS, will result in new adjustments, that could differ from these consolidated financial statements. • Impairment of assets • Fair value of derivative instruments The detail of the choices made in the conversion of UK GAAP and IFRS were explained in the financial statements of 2005. • Restoration and environmental rehabilitation costs • Employee benefits obligation The information contained in these financial statements is responsibility of the Senior Management of the Anglo American Chile • Provisions for litigation and other contingencies
Group. Statements Financial Principal accounting policies At the date of these financial statements, the following statements have been issued by the IASB, but are effective for initial periods after January 1, 2010. a. Basis of preparation of the consolidated financial statements - The consolidated financial statements of Anglo American Sur S.A. include the balances of its subsidiary Anglo American Chile Ltda., in which the parent company, has a 70.00% share and control. Balances and transactions with the subsidiary have been eliminated on consolidation and also the elimination of unrealized gains and losses from said transactions has been considered. The participation of the minority investors has been recognized in the minority interest accounts in liabilities and net income.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 140. 141.
Financial Statements Anglo American Sur S.A. and Subsidiary
Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary
These financial statements of Anglo American Sur S.A. and subsidiary include the statements of financial position, changes in the Land is stated independently of the buildings or facilities that might be located thereon and is construed to have an indefinite life shareholders’ equity, income and cash flow for the years ended 31 December 2009 and 2008, and were prepared under International and is therefore not subject to depreciation. Financial Reporting Standards (“IFRS”) and are the full, explicit and unreserved application of such international standards. At least once a year, the Company assesses whether there is a possible impairment of the value of property, plant and equipment b. Functional currency - The Company and its Subsidiary maintain their official accounting records in US Dollars. assets.
c. Basis of conversion - Assets and liabilities, which are not stated in United States dollars, have been converted at the corresponding h. Stripping Ratio - A mine’s surface operations need to strip overburden material and other waste to gain access to the ore to be year-end exchange rate. As of December 31, 2009 the exchange rate of the Chilean peso was of Ch$507.10 per 1 US dollar mined. These stripping costs of the mineralized areas are made before starting production (pre-operation) or when in production, (Ch$636.45 as at December 31, 2008). with their classification varying depending on the stage.
The variations in the exchange rates in the different currencies generated a net loss in relation to the US dollar in the amount of Stripping costs incurred during the production phase to strip additional overburden or waste are deferred and charged to operating US$25,369,899 (2008: net loss of US$ 33,278,456), which is presented in non-operating income (expense) in the item “Exchange costs based on the coefficient of the waste to ore ratio and mine life average (Stripping Ratio) (Note 13). differences”. The stripping costs incurred before starting operations are capitalized as a mine development cost and are taken to income based d. Revenue recognition - Operating revenue is recognized when ownership risks and benefits have been transferred to customers on the mine’s life. and the merchandise has been delivered to a place agreed on by contract. i. Mine preparation - Costs for mine preparation incurred with the sole purpose of maintaining the current level of production are Concentrate and cathode sales, whose price is undefined up to a pre-established future date, are recognized at the provisional market charged to cost of production. price established at that time. j. Leasing - The rental cost under an operating lease is charged to the statement of income in annual amounts based on the contract Concentrates sales are stated at the invoice amount, which is net of treatment and refining changes. terms.
Revenues from these sales are initially recognized (when the above criteria are met) at market price. The assets under financial lease are recognized as assets at the beginning of the lease at the lower of the fair value and the net present value of the minimum lease payments derived when discounting at the implicit interest rate. The adjustment of the provisional sales price versus the equivalent price (mark-to-market) in the contract is recognized in income. In addition to the lease agreements, other significant agreements are also evaluated in order to determine if they, substantially, are a lease or contain one. This includes the assessment as to whether the agreement includes the use of a specific asset as well as e. Income tax and deferred taxes - The income tax provision is calculated based on the first category net taxable income, prepared the right to use such an asset. in accordance with current legislation. k. Goodwill - As at December 31, 2009 and 2008, the Company records US$120,000,000 generated by the payment of a Price Deferred taxes arising from temporary differences and other events that create differences between the book and tax basis of assets Participation, in conformity with the original conditions of the acquisition agreement. Said Goodwill is submitted to an annual and liabilities are recorded in accordance with IAS 12 “Income Taxes”. impairment test in accordance with IAS 36 “Impairment of assets”.
Similarly, the Company has recorded any temporary differences arising between tax and book entries as a result of calculating the l. Impairment of goodwill - Any impairment is recognized immediately in the statement of income. Goodwill impairment is not Taxable Operating Income in order to calculate the specific tax on mining. subsequently reversed. The Company did not acknowledge any impairment of this kind in 2008 and 2009.
The variations of deferred taxes of assets or liabilities in the period are stated in the income account or directly in the shareholders’ m. Inventories - Inventories are stated at cost, using the following methods: equity accounts of the statement of financial position, as the case may be. • Finished products and products in process : At the average monthly production cost, including depreciation f. Property, plant and equipment - Property, plant and equipment are stated at cost, excluding periodic maintenance costs, less of fixed assets. accumulated depreciation, and less the impairment value loss. • Raw material, supplies and spare parts : At the average purchase cost. The cost of property, plant and equipment includes the acquisition cost plus all the costs directly related to the location of the asset and its operation as forecasted by management and the initial estimate of any cost for the dismantling and removal of the element • Ore in piles : At the lower of the average cost of monthly extraction, or the or rehabilitation of the physical area where it is located. recoverable value. Moreover, the financing interest costs directly attributable to the acquisition or construction of assets that require a substantial time • Materials in transit : At acquisition cost. period before being ready for use or sale shall be deemed a property, plant and equipment cost.
g. Depreciation - Property, plant and equipment depreciate according to the estimated life of the goods using the linear method. The net realizable value is the sales price estimate at the close of the period less all the estimated termination costs and costs to The depreciation of mine reserves is amortized using the method of units of fine copper produced, considering proven and probable be incurred in the marketing, sales and distribution process. ore reserves in regard to the life of mine, as the case may be. Financial Statements Financial The cost assigned to inventories did not exceed their net realization value at the 2008 and 2009 year ends. The useful life of property, plant and equipment is reviewed annually and depreciation starts when assets are ready to be used. n. Trade debtors - Shipments of ore are presented at net realizable value based on sales contracts.
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 142. 143.
Financial Statements Anglo American Sur S.A. and Subsidiary
Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary
The Company recognizes a mark to market provision when the sale price of billed shipments, whose final price is still not known, • Impairment of financial assets - Financial assets other than those valued at fair value through income are evaluated as is lower or higher than the market price at the year end. of the date of each statement of financial position to establish the presence of impairment indicators. Financial assets are impaired when there is objective evidence that, as a result of one or more events occurring after the initial recognition, the o. Time deposits - This item includes capital invested plus accrued interest. estimated future cash flows of the investment have been affected.
p. Operations with repurchase agreement - Purchases of financial instruments with repurchase agreement are recorded as a x. Financial liabilities - Financial liabilities of a similar nature are initially recognized at their fair value, net of the costs incurred fixed rate deposit and presented in other current assets. in the transaction.
q. Mining reserves - The costs related to the mining reserves are amortized to income through the unit of production method, y. Derivative financial instruments and hedge accounting - In order to hedge its exposure to exchange rate risks of flows in considering the proven and probable ore reserves, considering the useful life of the mine. dollars committed by the Los Bronces Development Project, the Company entered into forward contracts. Anglo American Sur S.A. and subsidiary do not use derivative financial instruments for speculative purposes. r. Mining projects - The disbursements related directly with the exploration of mining properties are charged to income until the start of the project’s feasibility stage. The disbursements incurred in the feasibility or development stages of the project are capitalized • Embedded derivatives - Anglo American Sur S.A. and subsidiary assess the presence of embedded derivatives in financial and amortized based on future production, considering the proven ore reserves. Abandoned projects are charged to income in the instrument contracts to determine whether their characteristics and risks are closely related to the main contract, provided year in which the decision is made. Also, a provision is made for those projects where there is evidence that they will not be that the host is not recorded in the accounts at fair value. executed according to the original plans. Embedded derivatives are split off from the main contract, which is not measured at fair value through income, when the s. Personal benefits cost - The Company recognizes the cost of employee benefits according to an actuarial calculation, as required analysis reveals that the economic characteristics and risks of embedded derivatives are not closely related to the main by IAS 19 “Employee benefits”, which includes variables such as the life expectancy, salary increases, etc. To determine such contract. calculation a discount rate of 6.23% per annum has been used for 2009 (discount rate of 7.26% in 2008). • Cash flows hedges - Hedging contracts are stated at their fair value on the financial balance sheet in the item Financial t. Mine closure provision - The Company recognizes the future cost of mine closure and the abandonment of the sites, at their net Hedging Instruments. Hedging contracts are stated as current and non-current considering the maturity date of the item present value in conformity with corporate standards and in accordance with IAS 37 “Provisions, Contingent Assets and Contingent hedged or related hedge. Liabilities”. The provision for this concept is included in the item “Accruals”, within non-current liabilities. The actual portion of the changes in the fair value of hedges that are designated and qualify as cash flow hedging is recognized In 2009, the Company updated the provision made for these effects based on a new year-end cost study. This change entailed an in shareholders’ equity by means of the statement of other comprehensive income. The profit or loss of the ineffective increase in the provision made, which is split into two concepts: property, plant and equipment decommissioning, which generated portion is immediately recognized in the statement of comprehensive income. the recognition of an asset, and this amount was presented in the item other property, plant and equipment; and environmental restoration costs, whose amount was deemed to be an administration expense in the period when it was incurred or accrued. The amounts accumulated in net shareholders’ equity are reclassified in the statement of income when the item hedged affects income (for example, when the forecasted hedged sale takes place or the hedged flow is realized). Nevertheless, when the u. Employee vacations - The provision for vacations is recorded as an expense in the year the employee earns this benefit. forecasted hedging transaction leads to the recognition of a non-financial asset (for example, inventories or property, plant and equipment), the gains or losses previously recognized in the net shareholders’ equity are reclassified as part of the initial v. Statement of cash flow - This includes cash and time deposits, both short-term and highly liquid, which are easily converted cost of the asset. The deferred amounts are finally recognized in the depreciation cost. into a known amount of money and are subject to an insignificant risk of change in their value. Hedge accounting is discontinued whenever the instruments expire or are sold, terminated, executed or are no longer classified w. Financial assets - Financial assets at fair value with changes in income are financial assets held for trading. A financial asset as hedging instruments. In such period, any related profit or loss is withheld in shareholders’ equity awaiting the occurrence is classified in this category if it is mainly acquired with the aim of being sold in the short term. of the hedged item. If the hedged item is not expected to occur, any gain or loss previously recognized in shareholders’ equity is included in the statement of comprehensive income in the same period. • Trade and accounts receivable - Accounts receivable are unhedged financial assets with fixed or determinable payments and are not traded in an active market. Accounts receivable include trade receivables and other accounts receivable. z. Reclassifications - The Company has reclassified certain items of the financial statements as at December 31, 2008 for comparative purposes. • Assets held to maturity - Assets kept until their maturity are unhedged assets with fixed or determinable payments and fixed maturity, and the Company’s management has the positive intention and ability to maintain them until their maturity. Should a significant amount of financial assets kept until their maturity be sold, the entire category would classify as available for sale.
• Financial assets available for sale - These are unhedged financial assets that are specifically allocated to this category or which are not classified in any of the other categories. They are included in non-current assets unless management intends to transfer the investment within 12 months of the date of the statement of financial position. Financial Statements Financial
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 144. 145.
Appendices
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 146. 147. Appendix 1 Appendix 2
Legal system and Affiliates and related ownership companies The company Anglo American Sur S.A. was Anglo American Norte S.A. has a stake in established by means of a public deed issued Anglo American Chile Limitada, engaged by the Santiago notary office of Mr. Patricio in providing management, planning and Zaldívar Mackenna, on 31 May 2002. Its consultancy services in various areas. It excerpt was registered on sheet 13.657, holds a 30% stake of the capital stock. Anglo Nº11.320 of the Santiago Commerce Registry American Sur S.A. participates in the same of the Real Estate Registrar of the same year, company, Anglo American Chile Limitada, and an extract was published in the Official holding 70% of the capital stock. State Gazette Nº37.275, on 5 June 2002. Corporate Governance Its current and only shareholders are Anglo Anglo American Chile Ltda. American Sur S.A with 99.99% of the capital stock and Clarent Ltd with the remaining The administration and use of the trade name 0.01%, both subsidiaries of Anglo American Anglo American Chile Ltda. is vested in the plc. partners through the board, comprising three incumbent directors and three deputy directors, Anglo American Norte S.A. was established as who meet as many times as necessary to a corporation by means of a public deed issued evaluate the company’s performance according by the Santiago notary office of Mr. Jaime to the articles of association. All the board García Palazuelos on 19 October 1955, and meetings and decisions are recorded in the an extract of its file was registered on sheet board book. 6.101, Nº3.598 of the Santiago Commerce Registry of 1955. By means of a public deed dated 24 March 2008, issued by the Santiago notary office Its capital stock is divided into 188,948,033 of Mr. Álvaro Bianchi Rosas, both partners registered shares of a single series, of which appointed the following people as directors: approximately 99.98% is held by Anglo American plc’s subsidiary companies called Inversiones Anglo American Norte Limitada, BOARD OF ANGLO AMERICAN CHILE LIMITADA (AS OF 31 DECEMBER 2009) Anglo American Norte S.A. (taxpayer code Nº 81.175.700-4), and Inversiones Minorco INCUMBENT DIRECTORS DEPUTY DIRECTORS Chile S.A. Miguel Ángel Durán Vergara (chairman) Noelle Duronea Burgalat With the aim of using the synergies arising from the work of two copper-producing Alejandro Mena Frau Claus Bunger Timmermann companies with similar products, and Felipe Purcell Douds Luis Ignacio Quiñones Sotomayor especially with human resources that could work in either company, it was decided to form Anglo American Chile Limitada, by means of a public deed, dated 14 March 2003, issued by the Santiago notary office of Mr. Andrés Rubio Flores, whose file was registered on sheet 7.114, Nº5.596 of the Santiago Commerce Registry in the same year. Appendices
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 148. 149.
Sources of Information for the Anglo American DOCUMENTS REVIEWED SOURCE 2. Sustainable Development Code for Suppliers. Appendix 3 Sustainability Report 2009 3. Anglo American’s sustainable development in the supply chain. Anglo Social Way standard. One of the GRI principles is reliability, which can be proved, among other ways, by identifying the original sources of all the information that appears 4. Anglo Environment Way standard. in the report. This appendix therefore lists the written sources that were used to draw up the Sustainability Report and those people who were Anglo American-Copper business unit: year-end sustainable development reporting (December 2009). interviewed or who participated in the process. Anglo American Group Foundation: helping to create opportunities and sustainable livelihoods. 5. Los Bronces SEAT II final result. 6. Mantos Blancos SEAT II final result. GENERAL CONTENT SOURCE 7. El Soldado SEAT II final result. Miguel Ángel Durán, CEO. 8. Mantoverde SEAT II final result. Felipe Purcell, Vice-President Marketing and Corporate Affairs. 9. Chagres SEAT II final result. Marcelo Esquivel, External Affairs Manager. 10. Government relations plan. 11. Supplier development programme presentation – Chagres – October 2009. FINANCIAL CAPITAL 12. REACH update – January 2010. Carlos Gil, Metallic Copper and By-Products Sales Manager. Carolina Musalem, Regional Tax Manager. GUIDING DOCUMENTS Edson Orellana, Chile Tax Manager. 1. Annual sustainable development report. Eric Pivet, Planning and Finance Specialist. Improvement process for drawing up sustainability reports. Hernán Montes, Lawyer. 2. Appendix A – Better practice. Ignacio Quiñones, Corporate Counsel. 3. Appendix B – Insight into Anglo American’s sustainability. 4. Paulina Romo, Supply Chain Analyst of Sulphuric Acid. Appendix C – Anglo American reporting guidelines. 5. Raimundo Díaz, Strategic Supplies Advisor. Press releases. Anglo American continues its global leadership in the fight against HIV/AIDS (December 2009). Roberto Ecclefield, Non-Refined Products Sales Manager. 6. Anglo American announces new Los Sulfatos copper prospect in Chile with inferred resources of 1.2 billion tonnes (July 2009). HUMAN CAPITAL 7. Agreement signed with Un Techo para Chile. Alejandro Mena, Vice-President Human Resources. 8. Partnership with Enseña Chile is signed. Benjamín Galdames, Labour Relations and Effectiveness Manager. 9. Agreement signed with Elige Educar. Carla Bonati, Safety & Occupational Health Analyst. 10. Metallurgy laboratory is inaugurated at Til Til high school – September 2009. Germán Escobillana, Human Resources Area Manager of the Shared Services Centre. 11. Mirador Interactive Museum (MIM) at Nogales – August 2009. Lorenzo Menéndez, Senior Safety and Sustainable Development Manager. 12. Mirador Interactive Museum (MIM) at Catemu – August 2009. María Pía Tejos, Internal Communications Manager. 13. John T. Ryan Prize. Oscar Torres, Human Resources Administration Manager. 14. “Miners for a Day” project. Roberto Martínez, Senior Safety And Occupational Health Manager. 15. Inauguration of the electricity workshop at the Colina high school – November 2009. Rodrigo Cisternas, Senior Human Resources Advisor. 16. Commitment to the sustainable development of the El Melón mountain range is signed – December 2009.
NATURAL CAPITAL 17. Results 2008 – February 2009. 18. Álvaro Canales, Environmental and Community Head, El Soldado. Results 2009 – July 2009. 19. January to December 2009 press reports – 360 press articles in total. Benjamín Andrade, Los Bronces Development Project Environmental Manager. Carlos Salvo, Environmental and Community Advisor, Chagres. CORPORATE BROCHURES Eugenio Labarca, Environmental And Community Manager, Los Bronces. 1. Mantos Blancos. Felipe Moreno, Hydraulic Advisor, Los Bronces. 2. Los Bronces. Ferruccio Medici, Energy and Climate Change Manager. FEEDBACK FROM THE JURY IN THE BEST Fernando Valenzuela, Environmental Manager. SUSTAINABILITY REPORT CONTEST OF ACCIÓNRSE José Campillay, Safety and Occupational Health Advisor, Mantos Blancos. 1. Jury assessment. Ricardo Valero, Senior Environmental and Sustainable Development Advisor, Mantoverde. 2. Sustainability report analysis report. SOCIAL CAPITAL 3. Analysis of the content of Anglo American’s report. Álvaro Canales, Environmental and Community Relations Head, El Soldado. STUDIES Eugenio Labarca, Environmental and Community Manager, Los Bronces. 1. Quantitative study report Jorge Poblete, Anglo American Foundation Manager. - Diagnosis of the degree of knowledge and opinion of Anglo American by university students – Datavoz. Marcelo Glavic, Technical Vice-President (Mantos Blancos). 2. Corporate Reputation Forum – Reptrack – Reputation Institute. Mario Pavón, Business Advisor. 3. Reputation Institute qualitative study. Oriana Ubilla, Community Relations Advisor, Los Bronces. 4. Corporate Reputation tracker - Reputation Institute Pamela Quinteros, Social Development and Community Advisor, Chagres Division. Women and Work Barometer: Why do Chilean women still account for a low share of the workforce? Ricardo Valero, Senior Environmental and Sustainable Development Advisor, Mantoverde. (ComunidadMujer study series, June 2009).
MANMADE CAPITAL PRESENTATIONS Alejandro Iturriaga, Management Control Specialist. 1. Positioning and corporate reputation studies – October 2009. Carlos Cruces, Engineering, Materials, Warehouse and Logistics Manager. Anglo American in Chile: Improving Our Quality of Life (October 2009). Carlos Gil, Metallic Copper & By-Products Sales Manager. 2. Best Companies for Working Parents: 2009 assessment (Fundación Chile Unido, YA magazine of El Mercurio newspaper and Feedback Comunicaciones - September 2009). Fabricia Bernardi, Comms And Change Regional Support South America Aasc Project, Brazil. 3. New Anglo Copper organisation (December 2009). Juan Alberto Ruiz, Senior Procurement And Contracts Copper Supply Chain Manager. 4. Anglo Base Metals – Copper: Unlocking value from a world-class deposit (October 2009). Paulina Rojas, Supply Chain Regional Support Project. Valeria Rojas, Procurement And Contracts Manager. KEYNOTE SPEECHES 1. Cynthia Carroll: “Addressing the mining industry’s challenges” (speech at the XIII annual dinner of Latin American mining, DOCUMENTS REVIEWED Santiago, Chile, 2 April 2009). 1. Anglo American plc: Living Our Values (Good Citizenship Business Principles). Anglo American plc: Anti-trust Compliance Manual. OTHERS Anglo Safety Way. 1. Internal Anglo American magazine Nº25. Anglo Fatal Risk Standards. Anglo Occupational Health Way. 2. Internal Anglo American Magazine Nº26. Anglo American: Visible-Felt Leadership (VFL). 3. 360 national and local press articles. Anglo American Safety Golden Rules. Anglo American: Fatigue Control Manual. Appendices
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 150. 151. Global Reporting Initiative (GRI) Index
Indicator Description Report Global Compact ICMM Principles Page Indicator Description Report Global Compact ICMM Principles Page level Principles level Principles
Strategy and Analysis Report PARAMETRES
Governance, Commitments, and Engagement 1.1 Statement from the most senior decisionmaker P2 4 and 5 of the organisation. 4.1 Governance structure of the organisation. 34 - 36 4.2 1.2 Description of key impacts, risks, and P10 4 and 5 FIndicate whether the Chair of the highest 34 - 36 opportunities. governance body is also an executive officer. 4.3 For organisations that have a unitary board They are all executives of Anglo structure, state the number of members of the American. OrganiSational Profile highest governance body that are independent and/or non-executive members. 4.4 2.1 Name of the organisation. P10 8 Mechanisms for shareholders and employees to 34 - 36 provide recommendations or direction to the highest governance body. 2.2 Primary brands, products, and/or services. 24, 25 4.5 Linkage between compensation for members 34 - 36 2.3 Operational structure of the organisation, 16 - 25 of the highest governance body, senior including main divisions, operating companies, managers, and executives. subsidiaries, and joint ventures. 4.6 PProcesses in place for the highest governance 35 - 38 2.4 Location of organisation’s headquarters. 8, 13 and 23 body to ensure conflicts of interest are avoided.
2.5 Number of countries where the organisation 16 - 28 4.7 Process for determining the qualifications and 34 - 38 operates, and names of countries with either expertise of the members of the highest major operations or that are specifically governance body for guiding the organisation’s relevant to the sustainability issues covered in strategy on economic, environmental, and the report. social topics.
2.6 Nature of ownership and legal form. 34 - 36 and 147 4.8 Internally developed statements of mission 18 - 19 and 34 - 38 or values, codes of conduct, and principles 2.7 Markets served (including geographic 26 - 28 relevant to economic, environmental, and breakdown, sectors served, and types of social performance and the status of their customers/beneficiaries). implementation.
2.8 Scale of the reporting organisation. 23 y 26 - 28 4.9 Procedures of the highest governance body for 34 - 36 overseeing the organisation’s identification and 2.9 Significant changes during the reporting period There were no major changes. management of economic, environmental, and regarding size, structure, or ownership social performance. 4.10 Processes for evaluating the highest It is not assessed due to the 2.10 Awards received in the reporting period. 8, 48, 49 and 72 governance body’s own performance, characteristics of the boards. particularly with respect to economic, environmental, and social performance. Report PARAMETRES Commitments to External Initiatives Report Profile 4.11 Explanation of whether and how the P7 Environmental and Safety Policy. precautionary approach or principle is addressed 3.1 Reporting period (e.g., fiscal/calendar year) for P1 8 by the organisation. information provided. 4.12 Externally developed economic, environmental, 48 - 103 3.2 Date of most recent previous report (if any). P1 8 - 9 and social charters, principles, or other initiatives to which the organisation subscribes or endorses. 3.3 Reporting cycle (annual, biennial, etc.). P1 8 - 9 4.13 Memberships in associations. 12 and 21 3.4 Contact point for questions regarding the report P1 Cover or its contents. Stakeholder Engagement
4.14 List of stakeholder groups engaged by the P10 20 organisation. Report Scope and Boundary 4.15 Basis for identification and selection of P10 20 3.5 Process for defining report content. P1 8 - 9 stakeholders with whom to engage. 3.6 Boundary of the report. P1 8 - 9 4.16 Approaches to stakeholder engagement, P10 20 - 21 including frequency of engagement by type and 3.7 State any specific limitations on the scope or P1 8 - 9 by stakeholder group. boundary of the report. 4.17 Key topics and concerns that have been raised P10 9, 66 - 79 3.8 Basis for reporting on joint ventures, P1 8 - 9 through stakeholder engagement, and how the subsidiaries, leased facilities, outsourced organisation has responded to those key topics operations, and other entities that can and concerns, including through its reporting. significantly affect comparability from period to period and/or between organisations. Economic Performance Indicators
3.9 Data measurement techniques and the bases of 8 - 9 calculations. DMA Disclosure on Management Approach. 36
3.10 Explanation of the effect of any re-statements It is reported when there are Economic Performance of information provided in earlier reports, and changes to the data registry. the reasons for such re-statement. EC1 3.11 Significant changes from previous reporting Reported in footnotes or notes. Direct economic value generated and distributed. P9 39 - 41 periods in the scope, boundary, or measurement methods applied in the report. EC2 Financial implications and other risks and P7 82 - 85 opportunities for the organisation’s activities 3.12 Table identifying the location of the standard 150 - 155 due to climate change. disclosures in the report. EC3 Coverage of the organisation’s defined benefit 39 plan obligations. 3.13 Policy and current practice with regard to P2 8 - 9 and 146 seeking external assurance for the report. EC4 Significant financial assistance received from P9 42 government.
* * Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial. Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial. Appendices
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Global Reporting Initiative Index
Indicator Description Report Global Compact ICMM Principles Page Indicator Description Report Global Compact ICMM Principles Page level Principles level Principles
Market Presence Environmental Performance Indicators
Environmental Performance
EC5* Range of ratios of standard entry level wage P1 61 EN16 Total direct and indirect greenhouse gas P8 P6 84, 85, 95, 99 compared to local minimum wage at emissions by weight. significant locations of operation. EN17 Other relevant indirect greenhouse gas P8 P6 99 EC6 Policy, practices, and proportion of spending P9 106 - 109 emissions by weight. on locally-based suppliers at significant locations of operation. EN18* Initiatives to reduce greenhouse gas P7, P8, P9 P6 84, 85 EC7 Procedures for local hiring and proportion P6 For the first time the CEO is emissions and reductions achieved. of senior management hired from the local Chilean. community at locations of significant operation. EN19 Emissions of ozone-depleting substances by P8 P6 95 weight. Indirect Economic Im pacts EN20 NO, SO, and other significant air emissions by P8 P6 99 type and weight.
EN21 Total water discharge by quality and P8 P6 93, 96, 103 EC8 Development and impact of infrastructure 66 - 79 destination. investments and services provided primarily for public benefit through commercial, inkind, EN22 or pro bono engagement. Total weight of waste by type and disposal P8 89, 93, 101 and 102 method.
EN23 Total number and volume of significant spills. P8 P6 101 and 103
MM3 Total amounts of overburden, rock, tailings, and 89 and 101 sludges presenting potential hazards.
EN28 Monetary value of significant fines and total P8 P6 83 Environmental Performance Indicators number of non-monetary sanctions for noncompliance. DMA Disclosure on Management Approach. 36 and 83 EN29* Significant environmental impacts of P8 97 transporting products and other goods Environmental Performance and materials used for the organisation’s operations, and transporting members of the EN1 Materials used by weight or volume. P8 P6 101 workforce. EN30* Total environmental protection expenditures P7, P8, P9 44 and investments by type. EN2 Percentage of materials used that are recycled P8, P9 P6 102 and 113 input materials.
EN3 Direct energy consumption by primary energy P8 P6 84 and 99 source. Social Performance Indicators EN4 Indirect energy consumption by primary source. P8 P6 99 DMA Disclosure on Management Approach. 36, 49 and 67 EN5* Energy saved due to conservation and P8, P9 84 and 99 Labor Practices and Decent Work efficiency improvements. Performance Indicators
EN8 Total water withdrawal by source. P8 85, 86, 90, 92, 94, 95 and 100 LA1 Total workforce by employment type, P3 62 - 63 employment contract, and region.
LA2 Total number and rate of employee turnover P6 P9 62 - 63 EN9* Water sources significantly affected by P8 85, 86, 90, 92, 94, 95 and 100 by age group, gender, and region. withdrawal of water. LA3* Benefits provided to full-time employees that P9 60 EN10* Percentage and total volume of water P8, P9 85 - 100 are not provided to temporary or part-time recycled and reused. employees, by major operations.
LA4 Percentage of employees covered by P1, P3 P3 61 EN11 Location and size of land owned, leased, P8 P7 89, 91 and 101 collective bargaining agreements. managed in, or adjacent to, protected areas and areas of high biodiversity value outside LA5 Minimum notice period(s) regarding P3 P3 61 protected areas. operational changes, including whether it is specified in collective agreements. EN12 Description of significant impacts of activities, P8 89, 91 and 101 products, and services on biodiversity in MM4 Number of strikes and lockouts exceeding one There were no strikes. protected areas and areas of high biodiversity week’s duration, by country value outside protected areas. LA6* Percentage of total workforce represented in P1 P5 100% EN13* Habitats protected or restored. P8 89, 91 and 101 formal joint management–worker health and 55 safety committees that help monitor and advise EN14* Strategies, current actions, and future plans P8 P7 89, 91 and 101 on occupational health and safety programes. for managing impacts on biodiversity. LA7 Rates of injury, occupational diseases, lost P1 P5 52 - 55 MM1 Amount of land disturbed or rehabilitated. 101 days, and absenteeism, and number of workrelated fatalities by region. MM2 The number and percentage of total sites 89, 91 and 101 identified as requiring biodiversity management LA8 Education, training, counselling, prevention, P1 50 - 55 plans according to stated criteria, and the and risk-control programes in place to assist number (percentage) of those sites with plans workforce members, their families, or in place. community members regarding serious diseases.
* * Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial. Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial. Appendices
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Indicator Description Report Global Compact ICMM Principles Page Indicator Description Report Global Compact ICMM Principles Page level Principles level Principles
Social Performance Indicators Social Performance Indicators
Labor Practices and Decent Work Society Performance Indicators SO5 Public policy positions and participation in P1, P2, P3, P4, P5, There was no lobbying. public policy development and lobbying. LA10 Average hours of training per year per employee 57 P6, P7, P8, P9, P10 by employee category. SO7* LA11* Programes for skills management and 56, 58 Total number of legal actions for 37 lifelong learning that support the continued anticompetitive behaviour, anti-trust, and employability of employees and assist them in monopoly practices and their outcomes. managing career endings. SO8 Monetary value of significant fines and total There were none. LA12* Percentage of employees receiving regular 100% number of non-monetary sanctions for performance and career development reviews. noncompliance with laws and regulations.
LA13 Composition of governance bodies and P1, P6 P3 63 breakdown of employees per category MM7 Number (and percentage) of company operating 78 - 79 according to gender, age group, minority group sites where artisanal and small-scale mining membership, and other indicators of diversity. (ASM) takes place on, or adjacent to, the site; LA14 Ratio of basic salary of men to women by P1, P6 61 describe the associated risks and the actions employee category. taken to manage and mitigate these risks.
MM9 Number and percentage of operations with 101 closure plans. Human Rights MM10 Significant incidents involving communities There were none. HR1 Percentage and total number of significant P1, P2, P3, P4, P3 109 in which grievance mechanisms have been investment agreements that include human P5, P6 rights clauses or that have undergone human invoked to address them together with their rights screening. outcomes. MM11 Number and description of incidents affecting There were none. HR2 Percentage of significant suppliers and P1, P2, P3, P4, P3 109 - 111 employees, communities, or the environment in contractors that have undergone screening P5, P6 which emergency preparedness procedures were on human rights and actions taken. activated. HR4 Total number of incidents of discrimination P1, P2, P6 P3 There were no incidents.
and actions taken. Product Responsibility
HR5 Operations identified in which the right to P1, P2, P3 P3 61 PR1 Life cycle stages in which health and safety P1 112 exercise freedom of association and collective impacts of products and services are bargaining may be at significant risk, and assessed for improvement, and percentage of actions taken to support these rights. significant products and services categories subject to such procedures. HR6 Operations identified as having significant risk P1, P2, P5 P7 18 - 19 for incidents of child labour, and measures PR3 Type of product and service information P1, P8 112 taken to contribute to the elimination of child required by procedures, and percentage of labour. significant products and services subject to such information requirements. HR7 Operations identified as having significant risk P1, P2, P4 P8 18 - 19 PR6 Programes for adherence to laws, standards, 112 for incidents of forced or compulsory labour, and voluntary codes related to marketing and measures to contribute to the elimination communications, including advertising, of forced or compulsory labor. promotion, and sponsorship. HR8* Percentage of security personnel trained P1, P2, Security guards receive training on PR9 Monetary value of significant fines for There were no fines. in the organisation’s policies or procedures the Voluntary Principles on Security noncompliance concerning aspects of human rights that are and Human Rights. with laws and regulations concerning relevant to operations. the provision and use of products and services.
HR9 Total number of incidents of violations involving P2 There were no incidents. MM12 Programmes and progress relating to materials 112 and 113 rights of indigenous people and actions taken. stewardship.
MM5 Total number of operations taking place in or There are no operations adjacent to indigenous people’s territories, and related to indigenous people’s number and percentage of operations or sites territories. where there are formal agreements with indigenous People’s communities. ReportING level
Complete Society Partial
SO1 Nature, scope, and effectiveness of any P1 P4 67 - 79 programes and practices that assess and manage the impacts of operations on communities.
SO2 Percentage and total number of business P10 P1 37 - 38 units analysed for risks related to corruption.
SO3 Percentage of employees trained in P10 P1 18, 38, 39 organisation’s anti-corruption policies and procedures.
SO4 Actions taken in response to incidents of P10 38 corruption.
* * Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial. Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial. Appendices
Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009 Av. Pedro de Valdivia 291 Cp 750 - 0524 Providencia, Santiago Chile
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