SUSTAINABILITY REPORT 2018 TABLE OF CONTENTS About This Report 4 Chief Executive Officer’s Message 8 Message from MMG’s Executive General Manager, Operations – Americas 10 Performance and Goals 12 Who We Are 15 The Way We Work 27 We Mine For Progress 47 We Minimise Our Impact 59 Feedback Form 67 WE MINE FOR PROGRESS At MMG, we mine to create value for all our stakeholders: shareholders, employees, communities and society as a whole. We have seen our relationship with each of these stakeholders grow and mature, always on the basis of dialogue and mutual respect. Our human rights approach has guided our decision-making and behaviour. We invite you to visit wemineforprogress.com to read the stories that reflect our values, the social contribution of each of our operations and MMG’s commitment to responsible mining. At MMG we build the future by mining for progress. ABOUT THIS REPORT Report Boundary and match the English words. In these The feedback collected during the Scope cases, we have identified that the panels focused on the following items: acronym is based on the Spanish › Government’s management capacity- This sustainability report describes words. building to capitalise on the economic and explains the comprehensive contribution of mining in terms of performance of Las Bambas Mining Materiality Assessment infrastructure and services which, Unit (Las Bambas) for the period Material issues are the economic, social in general, has a positive impact on 1 January to 31 December 2018. and environmental matters that have the quality of life in Challhuahuacho, We have included figures from 2017 the highest priority for our operation Cotabambas and Grau provinces, and for comparison purposes and have and our stakeholders. Material issues the Apurímac region. occasionally referred to events that have take into account the main sustainability taken place after 31 December 2018. indicators of our joint venture leader › The fundamental role of dialogue to strengthen the connection with the The content of this report is the result and operator, MMG, adapted to our community. This is how appropriate of ongoing communication with our context. information channels are generated stakeholders through dialogue panels This report contains nine material and information directly and and information obtained from issues that summarise the priority transparently reaches the largest Las Bambas’ management. sustainability aspects from our number of Apurímac residents. In developing this report, we have standpoint and from the perspective of › The need to promote and taken into account the standards of the our stakeholders. communicate the advantages of the Global Reporting Initiative (GRI). The Our operation introduced dialogue mining industry and its contribution GRI is an organisation that promotes panels as a standard practice in 2010, to the sustainable development the preparation of sustainability due to our interest in listening to the agenda in Apurímac region. We are reports in all types of organisations. Its social agents in our environment. The facing new challenges to socially and standards are principles that address purpose of these panels is to validate institutionally legitimise our operation the economic, environmental and social crucial topics affecting our relationships in a context of ever-increasing social impacts of an organisation, in addition with the stakeholders in our area of and economic expectations. to offering a complete and balanced influence. image of the material topics and their › Expectations about new and implications. Although this is not a GRI In 2018 we held three dialogue panels: greater training and employment report, many of the sections are based one in Lima, one in Abancay province opportunities for the young people of on those standards. and another one in Challhuahuacho Apurímac. district, our area of operations, located The reported figures are expressed in in Cotabambas province, Apurímac US dollars, unless stated otherwise. region, which involved the participation Occasionally within this report there of community leaders and local is an acronym noted after an industry representatives. term or organization that does not Sustainability Report Las Bambas 2018 5 This report contains nine material issues that summarise the priority sustainability aspects from our standpoint. Material Issues PAGE MATERIAL ISSUES SCOPE STAKEHOLDERS REFERENCE WHO WE ARE Employees Describes the characteristics and implications of reaching full production. This includes the use of Operational Excellence and advanced technology and logistics to operate and transport ore to the Port of Matarani, located in Contractors 14 - 25 Continuous Improvement the Arequipa region. Local Communities THE WAY WE WORK Includes the country’s main challenges and risks that have an impact on the business, and the 27 Positive Government strategies to strengthen relationships of trust at various government levels and with the mining Government 34 - 35 Relations industry, within the framework of significant political changes. This also refers to complying with Mining Sector various commitments undertaken with the Peruvian government. 52 Represents the strategies and actions aimed at managing a long-term relationship with the 28 Community Engagement communities (includes the method for receiving and managing grievances). It also emphasises the Local Communities method to protect and transport the concentrate. 36 - 41 Local Communities Media Addresses compliance with standards for responsible behaviour; namely, the regulatory framework Corporate Governance Government Shareholders to which our operation adheres, in line with our corporate values. It also focuses on corporate 27 - 33 and Business Ethics compliance and good corporate government policies. Civil Society Mining Sector Public Opinion Opinion Leaders Corresponds to the management of impacts in terms of human and labour rights within the Local Communities Employees Respect for Human Rights framework of the U.N. Guiding Principles on Business and Human Rights and the Voluntary 30 - 33 Principles on Security and Human Rights. Government Contractors Employees Safety and Health Includes management of fatal risks and prevention of workforce safety and health incidents. 42 - 45 Contractors WE MINE FOR PROGRESS Covers the actions implemented to strengthen joint work and engagement with communities, Local Communities (local, regional and national) governments and other partners that favour the development and Social Development 34 - 35 improvement of the quality of life in the communities. Includes creation of local employment, Government and Investment management of local suppliers, development of regional infrastructure, and investment in the 46 - 57 Contractors development of the social environment. WE MINIMISE OUR IMPACT Water Access and Sustainable Describes the sustainable water management approach, recognising water as a resource with Local Communities 59 - 62 Use of that Resource social, economic and environmental value. Includes water withdrawal and management. Determines the effective management of concessions over the life of the operation, including the Care of Biodiversity initiatives implemented in preparation for closure, which includes biodiversity management and and Management of land rehabilitation. It also explains the management approach to the mine’s main environmental Local Communities 63 - 65 Environmental Impacts impacts and the management of effluents, waste, tailings, energy, greenhouse gas (GHG) emissions and transport. Sustainability Report Las Bambas 2018 7 PAGE MATERIAL ISSUES SCOPE STAKEHOLDERS REFERENCE WHO WE ARE Employees Describes the characteristics and implications of reaching full production. This includes the use of Operational Excellence and advanced technology and logistics to operate and transport ore to the Port of Matarani, located in Contractors 14 - 25 Continuous Improvement the Arequipa region. Local Communities THE WAY WE WORK Includes the country’s main challenges and risks that have an impact on the business, and the 27 Positive Government strategies to strengthen relationships of trust at various government levels and with the mining Government 34 - 35 Relations industry, within the framework of significant political changes. This also refers to complying with Mining Sector various commitments undertaken with the Peruvian government. 52 Represents the strategies and actions aimed at managing a long-term relationship with the 28 Community Engagement communities (includes the method for receiving and managing grievances). It also emphasises the Local Communities method to protect and transport the concentrate. 36 - 41 Local Communities Media Addresses compliance with standards for responsible behaviour; namely, the regulatory framework Corporate Governance Government Shareholders to which our operation adheres, in line with our corporate values. It also focuses on corporate 27 - 33 and Business Ethics compliance and good corporate government policies. Civil Society Mining Sector Public Opinion Opinion Leaders Corresponds to the management of impacts in terms of human and labour rights within the Local Communities Employees Respect for Human Rights framework of the U.N. Guiding Principles on Business and Human Rights and the Voluntary 30 - 33 Principles on Security and Human Rights. Government Contractors Employees Safety and Health Includes management of fatal risks and prevention of workforce safety and health incidents. 42 - 45 Contractors