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3 PORTFOLIO OF MINING CONSTRUCTION PROJECTS SYMBOLOGY AND ABBREVIATIONS Weights and measurement Minerals t Metric ton Ag Silver kt Thousand tons Au Gold Mt Million metric tons Cu Copper ozt Troy ounce (31.1035 g) Fe Iron koz Thousand ounces Mo Molybdenum Moz Million troy ounce Pb Lead lb Pound Zn Zinc Klb Thousand pounds Sn Tin Mlb Million pound U Uranium m Meter Li Lithium km Kilometer P2O5 Phosphate U3O8 Triuranium octoxide FMT Fine metric tons Geographic abbreviations Production g/t Grams per tons m.a.s.l Meters above sea level oz/t Ounces per tons ppm Parts per million Currency tpd Metric tons per day US$ American dollars tpy Metric tons per year MMUS$ Million US dollars Power and Energy Companies MW Megawatts Inc. Incorporated MWA Annual Megawatts Int. International MVA Megavolt-ampere Ltda. Limitada Ltd. Limited S.A. Sociedad Anónima Metallurgical processes S.A.A. Sociedad Anónima Abierta SX Solvent extraction S.R.L. Sociedad de Responsabilidad Limitada EW Electrowinning S.A.C. Sociedad Anónima Cerrada Co. Company Stock Market Lp. Limited Partner NYSE New York Stock Exchange Corp. Corporation LSE London Stock Exchange S.A.B de C.V. Sociedad Anónima Bursátil de Capital Variable TSX Toronto Stock Exchange Entities Instruments for Environmental Management National Environmental Certification SENACE IGA Environmental Management Instruments Service for Sustainable Investment MINEM Ministry of Energy and Mines EIA Environmental Impact Assessment EIAd Detailed Environmental Impact Assessment Semi-detailed Environmental Impact Reserves and Resources EIAsd Assessment Technical Support Report (P&P) Proved and probable TSR Modification to the Environmental Impact MEIA Assessment (M&I) Measured and indicated Modification to the Detailed Environmental MEIAd Impact Assessment Modification to the Semi-detailed MEIAsd Environmental Impact Assessment General Directorate of Mining Promotion and Sustainability 4 PORTFOLIO OF MINING CONSTRUCTION PROJECTS EXECUTIVE OVERVIEW The General Directorate of Mining Promotion and Sustainability is pleased to submit the 2019 Portfolio of Mining Construction Projects that consists in 48 projects with an investment of US$57.8 billion. These investments include new mining construction projects, expansion or replacement of existing mines, and reuse of tailings. This publication includes an analysis of investments according to the main characteristics of the projects. Subsequently, it submits an estimated projection for the investments for the coming years and concludes with the description of the changes concerning the Portfolio from 2018. Additionally, technical sheets have been prepared for each project describing general data, location, investment, technical data, as well as the description of the current situation, among others. Section II contains information on the portfolio of mining projects by year of construction, location, investor's country, progress phase, type of mine, type of mineral to be extracted, among others. This chapter also includes an analysis of water consumption according to the projects source of supply. The main recorded changes regarding the 2018 Portfolio are described in section III. Subsequently, section IV presents the annualized projection of investments in three periods: investments carried out until 2018, investments to be carried out between 2019 and 2022, and investments to be carried out after 2022. In the last section, section V, we present an analysis of the macroeconomic impact for mining projects, as well as an estimate of mining production, mining employment and gross value added by 2022. Finally, the Annexes present the methodological aspects and technical sheets of the projects. General Directorate of Mining Promotion and Sustainability 5 PORTFOLIO OF MINING CONSTRUCTION PROJECTS INDEX EXECUTIVE OVERVIEW ................................................................................................. 4 INDEX ........................................................................................................................... 5 I. INTRODUCTION ..................................................................................................... 6 II. PORTFOLIO OF MINING CONSTRUCTION PROJECTS ......................................... 7 2.1. Start of projects construction .......................................................................... 9 2.2. Investments according to the projects location ............................................. 10 2.3. Investments according to the country of origin of the principal investor ....... 11 2.4. Investments according to type of project ...................................................... 12 2.5. Investments according to the stage of the project ........................................ 13 2.6. Investments according to the situation of the environmental impact assessment ....................................................................................... 14 2.7. Investments according to mining type .......................................................... 16 2.8. Investment according to the mineral to be extracted .................................... 17 III. CHANGES RECORDED IN THE PORTFOLIO ....................................................... 19 IV. ANNUALIZED INVESTMENT PROJECTIONS ....................................................... 22 4.1. Investments executed until 2018 .................................................................. 22 4.2. Investment projection 2019-2022 ................................................................. 23 4.3. Investment projection after 2022 .................................................................. 23 V. MACROECONOMIC IMPACT .................................................................................. 24 ANNEX 1: METHODOLOGY ...................................................................................... 27 ANNEX 2: TECHNICAL SHEET FOR PROJECTS ............................................................ 29 General Directorate of Mining Promotion and Sustainability 6 PORTFOLIO OF MINING CONSTRUCTION PROJECTS I. INTRODUCTION The relevance of mining activity in Peruvian economy has been remarkable in recent years being an undeniable engine for population growth and development. In 2018, mining activity represented 9.4% of national GDP, 60% of the total value of national exports and 10.8% of the income collected by the National Superintendency of Customs and Tax Administration (SUNAT, for its Spanish acronym). The mining sub-sector has still played an important role in generating foreign exchange and employment, as well as contributing to the Peruvian national treasury. Transfers to Regional and Local Governments for mining concepts also benefited the entire national territory, reaching S/ 4.875 billion. This amount represents a substantial increase of 47% compared to the total amount recorded in 2017, being the highest figure in the last 5 years and reflecting the positive performance of mining activities in Peru. Consequently, mining investments are fundamental for the Peruvian economy, because mineral resource exploration and the construction of new projects foster the continuity of mining's contribution to the country's development. It is essential for Peru to have an overview of the potential projects that will contribute to developing this activity in the coming years. General Directorate of Mining Promotion and Sustainability 7 PORTFOLIO OF MINING CONSTRUCTION PROJECTS II. PORTFOLIO OF MINING CONSTRUCTION PROJECTS The 2019 Portfolio of Mining Construction Projects comprises 48 projects with an investment of US$57.8 billion. This portfolio includes projects aiming to build new mines (Greenfield), expand or replace current mines (Brownfield), as well as reuse of tailings projects (Greenfield). Additionally, the aforementioned projects comply with three requirements: i. Investment (CAPEX) over US$70 million. ii. Commencement of operation or commissioning in the next 10 years. iii. As a minimum, they have or are developing their pre-feasibility studies. From the 48 projects in the portfolio, 7 are under construction with a total investment of US$9 billion. Likewise, 3 projects are in the detail engineering stage with an investment of US$4.2 billion, 15 are in the feasibility stage with US$16.2 billion, and 23 remaining projects are in the pre-feasibility stage with an investment of US$28.4 billion. Depending on the mine type, there are 28 open pit projects, 11 underground operations, and 5 combined operations (open pit and underground). In addition, there are 3 projects that have not yet defined the type of mine and 1 project corresponding to the construction of a new tailings treatment benefit plant. Regarding to the supply source for water consumption, 27 projects have a single water source, 6 projects have a mixed source and 15 do not have information available about the definition of its supply source. According to the main mineral to be extracted, 25 are copper projects and represent 71% of the total investments. Likewise, there are 7 gold projects that represent 11% of the total investments. The remaining ones correspond to iron, phosphate, zinc, silver, uranium, lithium and tin projects. Table 1 shows a summary of the main characteristics of the portfolio projects: General Directorate of Mining Promotion and Sustainability 8 PORTFOLIO OF MINING CONSTRUCTION PROJECTS Table 01: Portfolio of Mining Construction Projects (01.09.19) Global Construction Commencement Main Project Operator Region Project Stage investment start of operations