SUSTAINABILITY REPORT 2018 Sustainability Report
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SUSTAINABILITY REPORT 2018 Sustainability Report MINSUR FOR SUSTAINABLE MINING (GRI 102-16) Sustainability Policy Our Values Minsur develops individual and organizational actions aiming at protecting life and health, as well as the environment, respecting Safety. Acting safely at all times. Human Rights and generating social value in the communities of the area of influence where our operations are carried out. Responsibility. Acting responsibly in our relationship with society and the environment. Mission Generating value by transforming mineral resources in a Integrity. Acting honestly, with solidarity and transparency. sustainable manner. Commitment. Assuming all challenges as our own. Visión Excellence. Doing things better, always. Developing and operating world-class mining assets, as a benchmark in terms of safety, operational efficiency, socio- Trust. Developing honest, open and respectful relationships. environmental responsibility and the development of people in all countries where we operate. Assurance of our sustainability management We joined the International Council of Minerals and Metals (ICMM) and the Responsible Minerals Initiative (RMI) with the objective of continuously improving our sustainability management. We have ISO 9001, ISO 14001, BASC and OHSAS 18001 certifications. Furthermore, we are in line with System B to improve suppliers’ and contractors’ social and environmental impact. 2 Sustainability Report MESSAGE FROM OUR GENERAL MANAGER (GRI 102-14) For several years, it has been our aim that Minsur becomes a On the economic front, 2018 was a positive year because of our world-class company. Thus, our mining units and projects meet good financial and operational results, led by a larger tin production the highest operational and sustainability standards, which are the at San Rafael mining unit (MU) and a rise in ferroalloys production requirements set forth for mining activities in the modern world. at our subsidiary Taboca, and the lower cost of tin ore treated. We achieved an income of US$108.2 million, exceeding by 35 % what As a token of transparency, I am glad to present our fifth we obtained in 2017, mainly due to excessive taxes paid in 2002. Sustainability Report to let you know our economic, environmental, Furthermore, excluding the exchange difference, the results of social, ethical and good corporate governance performance. subsidiaries and associates and the extraordinary effects in both years, the adjusted net income was US$ 43.7 million, 2% lower as 2018 was very important for us, because we proudly became compared to 201721. the first Peruvian and the third Latin-American mining company -as well as the world’s first tin producer- entering to the Internal Safety is one of our main values and an essential pillar for Council on Mining and Metals (ICMM). ICMM is an organization we sustainability. In 2018, we received several awards, such as the share the same goals and principles with, since sustainability is the John T. Ryan prize and the National Mining Safety award granted main pillar in our business strategy. by ISEM, to San Rafael mining unit and Pucamarca MU. In Brazil, our Pitinga unit received the Brazil Protection award 2018. With the 10 principles of ICMM as our starting point, we strive to take actions and make decisions from a sustainability perspective. That same year we started a complete review of our health Thus, we have developed a strategy that, within a risk-management management system to align it with the highest international culture, allows mitigating our environmental impacts, ensuring our standards, and we strengthened our Health and Hygiene staff by collaborators’ and third parties’ safety, fostering the development incorporating a corporate hygienist engineer, who will coordinate of leaders, promoting a culture of compliance and managing with his/her team to implement the Occupational Health and impacts to our communities. Safety Master Plan and will monitor the actions carried out. In 2018 we sold 40 % of our subsidiary Cumbres Andinas, the We also continued with our social investment programs, such as holding company of Marcobre (owner of Mina Justa copper project), the SAMI initiative for Early Child development in Antauta and to our partner Alxar International SpA (Copec group). Furthermore, we closed Mina Justa financing for USD 900 million, with our Adjusted Net Income = Net income – earnings in Subsidiaries and associates – Exchange difference – extraordinary effects in 2017 (impairment Taboca, Board of Directors approving its participation and entering into appreciation of Marcobre and sale of Rimac shares) and in 2018 (Sunat tax agreements supporting our obligations in the project. refunds) 3 Sustainability Report Ajoyani, which was recognized by the Ministry of Development We are in an ongoing improvement process in each one of our and Social Inclusion (Midis) as one of the 10 successful cases in activities, and on our way of becoming a sustainable company reducing anemia and chronic child malnutrition in the country. committed with its stakeholders. I invite you to learn in greater Regarding our infrastructure investments through the works for detail the progress made and aspects developed in 2018 presented taxes scheme, we funded the project for a greater provision of in this Sustainability Report, pursuant to the Global Reporting utilities in Antauta, Puno and we started the rehabilitation of the Initiative (GRI) and the ICMM principles. sewage and drainage system of Marcona district in Ica. In Minsur, we make businesses with a permanent emphasis on Juan Luis Kruger Sayán environmental care and protection and the mitigation of our General Manager environmental impacts. Thus, in 2018 we measured our carbon footprint , which will serve as a baseline to assess our performance in the next years. Moreover, we conducted environmental control monitoring actions, under the supervision of oversight entities and we found out that we are below maximum permissible limits and we meet the environmental quality standards. It is worth highlighting that, during this period, we were not sanctioned with any penalties for violating any environmental laws or standards.. We will only reach our goal of becoming a world-class mining company if we work hand in hand with our collaborators. Thus, we focus on giving them the possibilities to grow and learn so that they contribute with the success of our company. In 2018 we continued with our talent management programs Supérate and +Líder, and we promoted our staff’s growth with over 149,174 hours of training. Furthermore, we maintained good relationships with our employees that reflected on a year of absolute labor peace, with no strikes or stoppages. 4 Sustainability Report CONTENTS MINSUR IN NUMBERS SUSTAINABILITY IN OUR VALUE SAFE SPACES: OCCUPATIONAL WE ARE ALL COMMUNITY: GOVERNANCE, TRANSPARENCY CHAIN HEALTH AND SAETY (OHS) OUR COMMITMENT TO THE AND ETHICS WHO WE ARE AND WHAT WE COMMUNITIES BELIEVE IN • Our customers • Managing occupational health • Our government structure • Within everybody’s sight: a new • Our OHS performance • Our government structure • Economic Performance • Our projects: where are they paradigm • Economic Performance • We act ethically and with exactly located? • Our suppliers • We act ethically and with integrity • A matter of principles integrity • We respect human rights OUR PEOPLE: HUMAN • We respect human rights • Voluntary Principles on Security MINSUR AND THE ENVIRONMENT MANAGEMENT • Voluntary Principles on Security and Human Rights and Human Rights • Legal compliance management ON THIS SUSTAINABILITY • Water: the beginning of life • Our collaborators in numbers • Legal compliance management REPORT • Housekeeping: effluents and • We prioritize local employment waste management • Development of our • Scope and Boundaries • Tailings and mining waste collaborators ANNEX • Material management • Carbon footprint: a new milestone THE FUTURE IS NOW: MINSUR • Energy management AND SUSTAINABILITY • Biodiversity management • Closure Plans • Admission into the ICMM • Sustainability as a policy • Our risk management 5 Sustainability Report MINSUR IN NUMBERS (GRI 102-7) Graphic. Our numbers in 2018 2018 41 years USD 693.733 USD 86 million USD 2.395 million million in taxes2 in investments for the in sales community 2 Payments to the governments of Peru and Brazil. 56.14 h 0 267,748 tCO2eq 2,690 of training per fatal accident in Carbon footprint collaborators collaborator in average 6 Sustainability Report 1. WHO WE ARE AND WHAT WE BELIEVE IN (GRI 102-1) (GRI 102-2) (GRI 102-3) (GRI 102-4) (GRI 102-5) We are part of the Breca Corporate Group (Breca Group), one of Our projects: where are they exactly located? the main and more diverse business conglomerates in Peru. Breca owns, through Breca Minería S.A.C, 99.99 % of common shares of Minsur S. A’s capital and 6.31 % of its equity stocks. Our origins date back to the beginning of the 20th century. Back then we were known as Lampa Mining Company, and we operated in Santa Barbara and San Rafael deposits. A few years later, in 1966, Minsur Sociedad Limitada was founded, and since 1977 we operate as Minsur S.A. (hereinafter, Minsur and/or the company). We specialize in exploitation, extraction, processing and marketing of minerals, mainly tin and gold. We have operations in Peru and Brazil. In the national territory we have three: San Rafael and Pucamarca mining units (MU), as well as the Smelting Plant and Refinery (SPR) of Pisco. In Brazil we operate Pitinga MU and the SPR of Pirapora. Likewise, one of our main expansion projects is Mina Justa, which construction stage started in 2018 and it is expected to start operating by 2020. Our mining concessions cover in total 248,452 hectares: 223,716 correspond to our operations in Peru and the remaining 25,125 to Operations those in Brazil. Exploration Projects Expansion Projects Projects in closure 7 Sustainability Report Our operations Our expansion projects N° Location Company Unit / Description N° Location Company Unit / Project Description Project Ica, Perú Marcobre Mina Justa Future copper mine with 16 years of mine Puno, Perú Minsur S.A. San Rafael Underground mine producing S.A.C.