CODELCO – CHILE Consolidated Financial Statements as of December 31, 2012 (Translation of consolidated financial statements originally issued in Spanish – see Note I.2) TABLE OF CONTENTS CONSOLIDATED FINANCIAL STATEMENTS (As of and for the years ended as of December 31, 2012) (Translation of consolidated financial statements originally issued in Spanish – see Note I.2) CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ......................................................... 4 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME ................................................ 6 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUATION) ................. 7 CONSOLIDATED STATEMENTS OF CASH FLOWS – DIRECT METHOD ..................................... 8 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY .......................................................... 9 I. GENERAL INFORMATION ....................................................................................................... 11 1. CORPORATE INFORMATION ...................................................................................................... 11 2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS................................ 12 II. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES .......................................................... 13 1. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS ................................... 13 2. SIGNIFICANT ACCOUNTING POLICIES ......................................................................................... 16 3. NEW ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE ...................................................... 32 III. EXPLANATORY NOTES .......................................................................................................... 35 1. CASH AND CASH EQUIVALENTS ................................................................................................. 35 2. TRADE AND OTHER RECEIVABLES ............................................................................................. 35 3. BALANCE AND RELATED PARTY DISCLOSURES ......................................................................... 37 4. INVENTORIES .......................................................................................................................... 44 5. DEFERRED TAXES AND INCOME TAXES ...................................................................................... 45 6. CURRENT TAX ASSETS AND LIABILITIES ..................................................................................... 48 7. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE ............................................................. 49 8. PROPERTY, PLANT AND EQUIPMENT......................................................................................... 50 9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD...................................................... 52 10. SUBSIDIARIES ......................................................................................................................... 63 11. OTHER NON-CURRENT NON-FINANCIAL ASSETS ......................................................................... 63 12. CURRENT AND NON-CURRENT FINANCIAL ASSETS ...................................................................... 64 13. INTEREST-BEARING BORROWINGS ............................................................................................ 66 14. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES ................................................................... 74 15. FAIR VALUE HIERARCHY ........................................................................................................... 74 16. TRADE AND OTHER PAYABLES .................................................................................................. 75 17. OTHER PROVISIONS ................................................................................................................ 76 18. EMPLOYEE BENEFITS ............................................................................................................... 77 19. NET EQUITY ............................................................................................................................ 79 20. OPERATING INCOME ................................................................................................................ 81 21. EXPENSES BY NATURE ............................................................................................................ 81 22. OTHER REVENUES AND EXPENSES BY FUNCTION ....................................................................... 82 23. FINANCE COSTS ...................................................................................................................... 83 24. OPERATING SEGMENTS ........................................................................................................... 83 25. FOREIGN EXCHANGE DIFFERENCES .......................................................................................... 92 26. STATEMENT OF CASH FLOWS ................................................................................................... 92 27. FINANCIAL RISK MANAGEMENT, OBJECTIVES AND POLICIES ........................................................ 94 28. DERIVATIVES CONTRACTS ....................................................................................................... 98 29. CONTINGENCIES AND RESTRICTIONS ...................................................................................... 101 30. GUARANTEES ....................................................................................................................... 107 31. BALANCES IN FOREIGN CURRENCY ......................................................................................... 108 32. SANCTIONS ........................................................................................................................... 114 33. SUBSEQUENT EVENTS ........................................................................................................... 114 34. ENVIRONMENTAL EXPENDITURES ........................................................................................... 114 CORPORACION NACIONAL DEL COBRE DE CHILE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As of December 31, 2012 and 2011 (In thousands of US dollars - ThUS$) (Translation of consolidated financial statements originally issued in Spanish – see Note I.2) Notes 12/31/2012 12/31/2011 Assets Current Assets Cash and cash equivalents 1 1,263,823 1,382,876 Other current financial assets 12 8,709 193,237 24,015 36,413 Other currents non-financial assets Trade and other current receivables 2 2,149,103 1,968,269 Accounts receivables due from related companies, current 3 29,442 56,357 Inventory 4 2,431,965 2,014,838 Current tax assets 6.a 627,570 254,930 Total current assets 6,534,627 5,906,920 Non-current assets Other non-current financial assets 12 133,000 102,593 Other non-current non-financial assets 11 37,677 203,950 Non-current receivables 2 171,699 132,721 Accounts receivables due from related companies, non-current 3 41,305 75,860 Investment accounted for using the equity method 9 7,644,612 945,055 19,178 12,292 Intangible assets other than goodwill Property, Plant and Equipment, net 8 17,044,931 13,437,764 18,004 17,789 Investment property Total non-current assets 25,110,406 14,928,024 Total assets 31,645,033 20,834,944 The accompanying notes form an integral part of these consolidated financial statements. 4 CORPORACION NACIONAL DEL COBRE DE CHILE CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As of December 31, 2012 and 2011 (In thousands of US dollars - ThUS$) (Translation of consolidated financial statements originally issued in Spanish – see Note I.2) 12/31/2012 12/31/2011 Notes Liabilities and Equity Liabilities Current liabilities Other current financial liabilities 13 864,779 1,643,424 Trade and other current payables 16 2,245,592 1,782,459 Accounts payables to related companies, current 3 143,364 126,850 Other current provisions 17 209,895 210,514 Current tax liabilities 6.b 50,205 137,267 Current employee benefit accruals 17 549,975 459,251 75,162 56,317 Other current non- financial liabilities Total current liabilities 4,138,972 4,416,082 Non-current liabilities Other non-current financial liabilities 13 9,262,324 6,395,154 - 319 Other non-current payables Accounts payables to related companies, non-current 3 275,011 308,616 Other non-current provisions and accrued expenses 17 1,554,167 1,013,441 Deferred tax liabilities 5 2,909,095 1,540,242 Non-current employee benefit accruals 17 1,323,294 1,092,966 4,390 3,094 Other non-current non-financial liabilities Total non-current liabilities 15,328,281 10,353,832 Total liabilities 19,467,253 14,769,914 Equity 2,524,423 2,524,423 Issued Capital 4,189,769 1,709,068 Retained earnings Other Reserves 19 3,364,182 1,829,519 Equity attributable to owners of the parent 10,078,374 6,063,010 Non-controlling interests 19 2,099,406 2,020 Total equity 12,177,780 6,065,030 Total liabilities and equity 31,645,033 20,834,944 The accompanying notes form an integral part of these consolidated financial statements. 5 CORPORACION NACIONAL DEL COBRE DE CHILE CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended as of December 31, 2012 and 2011 (In thousands of US dollars - ThUS$) (Translation of consolidated financial statements originally issued in Spanish – see Note I.2) 1/1/2012 1/1/2011 Notes 12/31/2012 12/31/2011 Profit (loss) Revenue 20 15,860,432 17,515,296 (10,851,680) (10,283,026) Cost