Cost Culture at Antamina

May 2015

3

Cost Culture At Antamina

Permanent ongoing efforts to reduce cost, improve efficiency and generate savings.

Company-wide cost reduction program launched in 2012 and reinforced in 2014

through the 3A program, aiming to reduce costs mainly through:

v' More aggressive negotiation with key suppliers v'

Reduction of non-value added activities

v' Better control of certain expenditures

Key areas leading initiatives: Logistics and Operational Excellence.

Program continues in 2015 (“3A Reloaded”)

Reloaded!

2

3

Main Goals

Saving Ideas

per area

Review of activities that do not add value

Review of: Discretional expenses Rates

Main consumptions

Objective

Permanent

Annual Cost

Reduction

Cost control culture reinforced Improve awareness of cost / benefit in decision making

3

Organization & Program Dynamics

Organization Flow of Ideas

4

Personnel’s Ideas (Ideas con Valor)

Cross M 1 M 2 M 3 M n .... Savings

Working Teams by Area (5-7 people)

Savings Initiatives

Just Do It

Assess ment

Filter:Operational

Committee

Controversial

Rejected

Approved

Approved

Sponsor

Weekly Monitoring

Daily Support

VP Finance

Operational Committee

Operational Excellence Area

Cost Area

Rejected

Approved

Executive Committee

Timeline

March 2014

Program Organization

April 2014

Generation of savings ideas

May 2014

Analysis andevaluation ofideas

2014 and 2015

Implementation and follow up

5

Progress Reports

Ideas from

Program Teams

Approved Ideas 12%

reduction

Ideas from “Ideas con

Valor”

contest*

Monthly progress reviews

6

Antamina: Marco Estratégico

99

Operational Excellence Framework

Define Strategic goals and

KPIs

Identification of critical processes

Strategic Alignment

Continuous Key Process Improvement

4.Control 3. Improve

KPIs, key value drivers

Business review

6Sigma Lean Others

2. Diagnose 1. Mapping

BPM Benchmark

Budget

9

1

11

1 11 1

1 1 1

6

5

4

3

2

UCL=1.287 1.21

1_ X=0.59

0 LCL=-0.107

ene-12 abr-12 jul-12 oct-12 ene-13 abr-13 jul-13 oct-13 ene-14 abr-14 jul-14

Mes

Hora

s /

(Mes-C

am

ion)

Antes Después

Horas de Parada de HT pot Espejo (MAN008)

Parada del Sistema de Chancado por Cambio de Turno (MIN025)

Antes Después

15.0

12.5

1

11

1

Hrs

/mes 10.0

7.5 1

11

1

8.85

UCL=7.17

5.0 _ X=5.25

LCL=3.33

Mes

8

1

UCL=40.66 40

30

26.43

20

_ X=15.67

10

0

LCL=-9.32 -10

Mes

Hr/

Mes

Tiempo de Parada del chancado por Inchancable y Desperdicios (MIN028)

jun-12 sep-12 dic -12 mar-13 jun-13 sep-13 dic -13 mar-14 jun-14 sep-14

Antes Durante Despues

Six Sigma Projects

9

Employee Suggestion Program

Yearly program to capture employee suggestions on a

permanent basis

Communication - Examples

10

Cost Culture at Antamina

May 2015