SUSTAINABLE DEVELOPMENT REPORT 20 COPPER BUSINESS...
Transcript of SUSTAINABLE DEVELOPMENT REPORT 20 COPPER BUSINESS...
Anglo American Sustainable Development Report 2011 �
SUSTAINABLEDEVELOPMENT REPORT 20��COPPER BUSINESS UNIT
� Anglo American Sustainable Development Report 2011
Anglo American Sustainable Development Report 2011 �
CONTENTS 2 ABOUT THIS REPORT
4 CHIEF EXECUTIVE’S STATEMENT
6 ANGLO AMERICAN
8 World class copper producer
12 Sustainability strategy
16 Our scorecard
19 BEING THE INVESTMENT OF CHOICE
20 Economic performance
24 Investments
26 Corporate governance
30 The Anglo American Sur case
31 BEING THE EMPLOYER OF CHOICE
32 Attracting and retaining talent
38 Healthy and safe people
41 BEING THE PARTNER OF CHOICE
42 What we do today will make the difference tomorrow
54 Growing with our neighbours
64 Commitment to the supply chain
67 APPENDICES
69 Verification report
70 GRI Index
� Anglo American Sustainable Development Report 2011
ABOUTTHIS REPORT
This is Anglo American’s eighth sustainable development report on the economic, environmental and social performance of its copper operations and projects in Chile and Peru for the period from 1 January to 31 December 2011. It reflects the company’s commitment to transparent reporting and communication with its different stakeholders.
The sustainable development report 2011 covers the company’s five operations in Chile, i.e., Los Bronces, Mantos Blancos, El Soldado, Mantoverde and Chagres, along with the Santiago office. It also includes the two projects operated by Anglo American in Peru: Quellaveco and Michiquillay, when deemed material and for which there is reliable information available. Collahuasi’s results were considered in the financial and operating performance items, based on the company’s 44% interest. Collahuasi draws up and reports its own information on sustainable development.
As in previous reports, this sustainable development report includes the 2011 financial statements of the companies operating in Chile, which were audited by Deloitte. To draw up this report, we hired a specialist sustainability consultant. The materiality and content development process is based on the G3.1 guidelines of the Global Reporting Initiative. The indicators of the mining and metals supplement were also included.
Anglo American Sustainable Development Report 2011 �
Should you have any queries, comments or wish further information, please contact: Marcelo Esquivel, communications manager, e-mail: [email protected], telephone: 56 2 230 6000
The process was focused on two sources of information to define content. In-depth interviews were held of four senior company managers: the chief executive of the Copper business unit, the chief executive of Chile, the vice-president of corporate affairs and the vice-president of human resources, with the aim of providing a global perspective of the strategic vision and the company’s sustainability policies. A thorough review of Chilean press articles was then conducted, and the articles were sorted and organised according to the list of material issues and sub-issues identified.
To complement the information gathering process, secondary sources were investigated, like:
The reports of the Socio-Economic Assessment Toolbox (SEAT) II process to detect the priority issues for the communities around operations.Insight studies conducted by Minerobarómetro (Mori, Catholic University), Empresas Verdes (Azerta and the Catholic University) and the Reputation Institute. Strategic company documents, like internal policies, programmes, magazines and communiqués.
The interviews of key players, the press article analysis and the review of secondary sources led to the following prioritisation of the material issues:
RELEVANCEBY CHAPTER MATERIAL ISSUES OF INTEREST
Financial capital Economic performance, investments, commissioning of new projects.
Human capital Strategy for being the employer of choice and attracting talent, six-month postnatal leave.
Social capital Social investment in communities, investment in reconstruction after the earthquake and tsunami, and the Emerge programme.
Natural capital Impact identification and management, use of water, use of non-conventional renewable energy.
Man-made capital Supply chain.
These results led to a new structure proposal with the focus on: the investment, the partner and the employer of choice. The indicators deemed not material in the process were not included in the GRI Index of this report.
All the data for this report was generated and validated by the respective areas that produced it. With regard to the information reported the previous year, there were no significant changes during the reporting period regarding size, structure, or ownership, unless indicated otherwise.
To comply with the verification principle, this year as in previous reports PwC Chile was commissioned to verify the content and indicators of the report. Anglo American rated this sustainable development report as A+, which was ratified by the verification process, and reflects the company’s interest in sharpening reporting transparency, balance, clarity and reliability.
This eighth sustainable development report bears out Anglo American’s commitment to timely inform its stakeholders of its sustainable development strategy and management. 1,000 copies were printed and the report will also be available online in Spanish and English.
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� Anglo American Sustainable Development Report 2011
In November 2011, Anglo American attained a very important milestone in Chile: we launched the commissioning process of the Los Bronces development project. After almost four years of construction, investment of $2.8 billion and the work of thousands of people, the construction stage of this large project was finally completed and it entered the commissioning phase.
I would like to highlight this event because it reflects Anglo American’s commitment to Chile as a key country for the copper business. We have been investing in Chile for over 30 years and we have plans and projects to continue to do so for much longer. An investment of this scale in the development of Los Bronces is a sign of company trust in the future of copper and the stability of Chile as the investee country.
The Los Bronces development project also bears out how we want to make a real difference in mining, striving to design a project that is profitable for our shareholders but which also has high sustainability standards. For example, the fresh water consumption per tonne of copper produced in this project will be lower due to investment in water recirculation.
We continued to make progress with our Michiquillay and Quellaveco projects in Peru, which is another very important country for our Copper business unit. At Quellaveco in the Moquegua region, we also made our way of mining very clear by stopping the development to sit down and talk to the local community and authorities. We are convinced that to make progress we need to have community support which
CHIEF EXECUTIVE’S STATEMENT
Anglo American Sustainable Development Report 2011 �
is why we have taken all the time needed to listen to the different interested parties, explain our project and make progress with joint proposals on the use of water, environmental protection and social development.
In the United States, we are partners in the Pebble project in Alaska. We have worked very hard there to make sure that any mining development will not leave an environmental footprint. In 2011, we submitted a detailed environmental baseline study at a cost of over $100 million, which is probably the most extensive scientific research every made in the area.
These are just some examples of the hard work done in 2011 at our operations and in projects to carry on developing sustainable mining, which generates benefits for the countries and communities where we operate, takes care of the environment and is safe for our employees.
I would also like to dwell on safety, which is a priority for me and Anglo American. Our aim is zero harm. We will not tolerate our employees being injured at work. That is a non-negotiable standard. We therefore deeply regret the accident at Los Bronces, which claimed the life of Marco Muñoz in September 2011. Nothing can make up for the regrettable loss of a life, but our commitment is to prevent accidents from happening again and different measures have therefore been taken to address this. We will continue to insist that safety is non-negotiable. If it is necessary to stop any work because it is unsafe, our employees have the right and duty to do so and not to resume such work until safety has been assured.
In 2011, we were embroiled in a commercial dispute with Codelco that ended up in the courts of justice. Without delving into the details of this conflict, what is important is that at all times Anglo American not only acted pursuant to law and the contracts but also commensurate with the company’s highest ethical standards and guiding values.
Our aim in this eighth sustainable development report is to provide a wide and comprehensive vision of the copper operations and projects managed by Anglo American. You can find a great deal of information in this report on our performance and how we are working to become the leading global mining company. Please review the content and let us know your comments.
John MacKenzieChief Executive
ANGLO AMERICAN
� Anglo American Sustainable Development Report 2011
WORLD CLASSCOPPER PRODUCER
Anglo American’s Copper business unit mines, develops, processes and markets copper cathodes, anodes, blister, and concentrate; molybdenum and sulphuric acid. Its headquarters are in the city of Santiago, Chile where it has six operations: Los Bronces, Mantos Blancos, Mantoverde, El Soldado, Chagres and Collahuasi. It is also the owner of the Quellaveco and Michiquillay projects in Peru and has a 50% interest in The Pebble Partnership in Alaska, United States.
OPERATIONS
Los Bronces Mantos Blancos El Soldado Mantoverde Chagres Collahuasi
Location In the Andes mountains, 3,500 metres above sea level and 65 kilometres from Santiago, Chile.
800 metres above sea level in the Antofagasta region, 45 kilometres northeast of the regional capital of Antofagasta.
In the coastal mountain range, 600 metres above sea level in the district of Nogales, Valparaíso region.
900 metres above sea level in the Atacama region, 56 kilometres from the port of Chañaral.
In the district of Catemu, Valparaíso region, 100 kilometres north of Santiago.
In the Tarapacá region, 185 kilometres southeast of Iquique and at an altitude of 4,400 metres above sea level
Percentage interest 75.5% 100% 75.5% 100% 75.5% 44%
Features It is an open-cut copper mine containing molybdenum. It has two grinding plants to treat sulphide ore and two leaching plants that produce copper cathodes by means of electro-winning. The ore is transported down a 56-kilometre ore slurry pipeline to Las Tórtolas.
It is an open-cut mine with facilities for treating oxide and sulphide ore.
It comprises an open-cut mine, and oxide and sulphide ore treatment plants.
It is an open-cut mine with a crushing plant, a mechanised ore conveyance and stockpiling system, heap leaching and solvent extraction and electro-winning process to process oxide ore.
It smelts the copper concentrates produced at El Soldado and Los Bronces to obtain copper anodes/blister and sulphuric acid. The smelter’s productive process is undertaken using low-emission flash furnace technology.
Open-cut mining of three ore deposits: Rosario, Ujina and Huinquintipa. The concentrator plant is at Ujina, from where ore is transported down a 203-kilometre slurry pipeline to the filtration and shipment facilities at Punta Patache, where the molybdenum plant and port terminal are also located.
Total copper output in 2011
221,800 tonnes of fine copper.
72,100 tonnes of fine copper.
46,900 tonnes of fine copper.
58,700 tonnes of fine copper.
138,204 tonnes of copper anodes. 487,500 tonnes of sulphuric acid.
453,000 tonnes of fine copper
Anglo American: a world class copper producer
Anglo American: a world class copper producer
ANGLO AMERICAN plcAnglo American plc2 is one of the world’s largest mining companies, headquartered in London in the UK and it has operations on the five continents. Its portfolio of mining businesses spans bulk commodities – iron ore and manganese, metallurgical coal and thermal coal; base metals – copper and nickel; and precious metals and minerals – in which it is a global leader in both platinum and diamonds.
It has seven business units: Copper, Nickel and Iron Ore Brazil in South America; Thermal Coal, Kumba Iron Ore and Platinum in South Africa and Metallurgical Coal in Australia.
It is listed on the London stock exchange. It had sales of $36.548 billion and profits of $6.120 billion in 2011.
Anglo American is committed to the highest standards of safety and responsibility across all its businesses and geographies and to making a sustainable difference in the development of the communities around its operations.
The company’s mining operations and growth projects span southern Africa, South America, Australia, North America, Asia and Europe.
Anglo American Sustainable Development Report 2011 �
PROJECTS
QUELLAVECO MICHIQUILLAY THEPEBBLEPARTNERSHIP
Location In the Asana River valley in the district of Moquegua, 1,000 kilometres southeast of Lima, Peru.
In the northern region of Cajamarca in Peru.
In the Bristol Bay region in southwest Alaska, United States.
Percentageinterest 81.9% 100% 50%
Features Typical porphyry copper deposit. It is one of the most important unmined copper deposits in the world. Anglo American acquired this project in 2007 and since then has been working to improve the geological data of the deposit.
It is in a pre-feasibility stage and $120 million have been invested in the most extensive environmental studies ever conducted in Alaska1. The area has one of the largest concentrations of copper, gold, molybdenum and silver in the world.
Anglo American: aworldclasscopperproducer
PEBBLE
COLLAHUASI
MANTOVERDE
EL SOLDADO
LOS BRONCESCHAGRES
MANTOS BLANCOS
MICHIQUILLAY
1 www.pebbleresearch.com2 www.angloamerican.co.uk
QUELLAVECO
2010
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2011
Fine copper productionby operation 2010-2011 (in tonnes)
Collahuasi(44%)MantoverdeElSoldadoMantosBlancosLosBronces
Tonn
es
2010
1,000
2,000
3,000
4,000
2011
Molybdenum production2010-2011 (in tonnes)
Collahuasi(44%)LosBronces
Tonn
es
Years
Percentage of total salesIncludescopperconcentrate,anodesandcathodes
USALatinAmericaEuropeJapanIndiaChinaSoutheasternAsia
221,409
78,58940,45861,058
221,779
221,800
72,10046,90058,700
199,500
1,927
1,970
948
2,930
7%
35%
16%
7%
4%
26%
5%
623,293559,000
Years
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COPPER PRODUCTIONAngloAmericanproduced599,000tonnesoffinecopperin2011,whichwasaslightdecreaseon2010(623,293tonnes),mainlyduetoloweroutputatCollahuasi.Inadditiontoloworegrades,productionwashitbyunseasonalrain,snowandanillegalstrikeinNovember.Theannualproductioncomprises154,000tonnesofcathodes,440,400tonnesofcopperconcentratesand4,600tonnesofcoppersulphates.Chagresproduced138,200tonnesofcopperanodesand487,500tonnesofsulphuricacidbyprocessingconcentratesfromLosBroncesandElSoldado.
COPPER PROJECTSInitsquestforleadership,AngloAmericanisdevelopingnewprojectsandexpandingitscurrentoperations3.ItisworkinginPerutosecurethenecessarypermitsandsubmittheQuellavecoprojectforboardapproval.
TheworksontheinitialphasecontinuedatMichiquillayandgeologicalexplorationdrillingwasresumedafterconcludingtalkswiththelocalcommunities.TheMichiquillayprojectisscheduledtoenterthepre-feasibilitystagewhenthedrillinganalysisandorebodymodellinghavebeencompleted.
ThePebbleprojectinAlaskaintheUnitedStatescontinuedtobefocusedoncompletingthepre-feasibilitystudybylate2012.Governmentagencieswerealsodeliveredanenvironmentalbaselinedocumentwithkeyscientificandsocio-economicdataoftheproject.
MARKETINGThemainmarketsofAngloAmerican’sCopperbusinessunitlieinAsia,theAmericas(SouthAmericaandNorthAmerica)andEuropeinthirdplace.
3,897 3,878
AngloAmerican: a world class copper producer
3Furtherinformationaboutthisissueispresentedinthe“Investment of Choice”chapter.
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EVALUATION OF CHEMICAL SUBSTANCES IN THE PRODUCT
In 2011, Anglo American continued to participate in the classification of copper concentrates to comply with the Globally Harmonised System of Classification and Labelling of Chemicals (GHS4). In 2010, Anglo American met the requirements of the European Chemicals Agency (ECHA5) for metallic copper products. The aim of both initiatives is to raise the supervision and control standards of substances used in productive processes to prevent environmental and health hazards.
Anglo American: aworldclasscopperproducer
4 For more information visit http://www.unece.org/trans/danger/
publi/ghs/ghs_welcome_e.html 5 For more information visit http://www.echa.europa.eu
1� Anglo American Sustainable Development Report 2011
Anglo American sustainabilitystrategy
Anglo American’s mission is to become the leading global mining company, by being the investment, the partner and the employer of choice. To achieve this goal, it embraces the highest standards of operational excellence, safety and sustainability across all its operations, from the first exploration to mine closure. To carry out its mission, Anglo American has a model based on managing and creating value in the following five areas called capital: financial capital, human capital, social capital, natural capital and man-made capital.
SUSTAINABILITYSTRATEGY
STRATEGIC VISION
INVESTMENT OF CHOICE
Showingthatitisnotonlyabusinessbutitisalsosustainable,withgoodfinancialresults,ongoingdialoguewithitsstakeholders,takingcareofitsenvironmentandwithagoodcorporatereputation.
PARTNER OF CHOICE
Facilitatingtransparentdialoguewiththehostcommunitiesarounditsoperations,identifyingtheirneedsandjointlygeneratingbetterdevelopmentopportunities.
EMPLOYER OF CHOICE
Guaranteeingthehealthandsafetyofpeople,andofferingagoodworkenvironmentandattractivedevelopmentopportunitiesnotonlytohireandretainthebestbutalsoattractthebesttalent.
Anglo American’s business conduct is guided by its Good Citizenship Business Principles6 and the following standards, policies and codes of conduct defined to address all the issues of sustainability7
The Anglo American Safety Way.The Anglo American Occupational Health Way.The Anglo American Environment Way.The Anglo American Social Way.Sustainable Development in the Anglo American Supply Chain.Anglo American Supplier Sustainable Development Code.Anglo American Group Human Resources Principles and Policies.Anglo American Human Rights Policy.Anglo American Group HIV/AIDS Policy.Anglo American Business Integrity Policy and Prevention of Corruption Performance Standards.
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BECOMING THE LEADING MINING
COMPANY Investment,partnerand
employerofchoice
INVESTING: Worldclassassetsinthemostattractivecommodities
OPERATING: Safely,sustainablyandresponsibly
ORGANISING:Efficientlyandeffectively
EMPLOYING: Thebestpeople
Guaranteeingthehealthandsafetyofpeople,andofferingagoodworkenvironmentandattractivedevelopmentopportunitiesnotonlytohireandretainthebestbutalsoattractthebesttalent.
6 http://www.angloamerican.com/~/media/Files/A/Anglo-American-Plc/siteware/docs/bus_principles_spanish.pdf
7 http://www.angloamerican.com/development/approach-and-policies/policies-standards-commitments/environment
SAFETYThisisalwaysfirstonouragenda–andwithverygoodreason.WetrulybelievethatALLinjuriesarepreventableandthatbyworkingtogetherwecanmakesafetyawayoflife,insideandoutsidetheworkplace.
CARE AND RESPECT Wealwaystreatpeoplewithrespect,dignityandcommoncourtesy–regardlessoftheirbackground,lifestyleorposition.Andwe’rebuildingtrustthroughopen,two-waycommunicationeverysingleday.
INTEGRITY Thismeanstakinganhonest,fair,ethicalandtransparentapproachineverythingwedo.It’snotaboutbeingpopular;it’saboutalwaysdoingtherightthing.
Anglo American sustainabilitystrategy
ACCOUNTABILITYWetakeownershipofourdecisions,ouractionsandourresults.Wedeliveronourpromisesandacknowledgeourmistakes.Aboveall,weneverpassblame.
COLLABORATIONNoonehereisontheirown.We’reonecompanywithajointambition–allworkingtogethertomakedecisionsandgetthingsdonemoreeffectively.
INNOVATIONChallengingthewaythingshavealwaysbeendoneisakeypriorityforus.Byactivelydevelopingnewsolutions,encouragingnewwaysofthinkingandfindingnewwaysofworking,we’redramaticallyimprovingbusiness.
AngloAmericanSustainableDevelopmentReport2011 ��
GUIDING VALUES
1� Anglo American Sustainable Development Report 2011
COMMITMENT TO STAKEHOLDERSThe Good Citizenship Business Principles set out the standards that guide the company’s conduct with its different stakeholders in the various countries in which it operates. The company has defined that its principal accountability is to enhance the value of Anglo American for its investors, convinced that this is best achieved through an intelligent regard for the expectations of other stakeholders: employees, governmental bodies, communities, business partners and non-governmental organisations.
This document also states that business integrity, safety, sustainable development, employment, labour rights, community development and human rights are issues that generate Anglo American’s bond with all its stakeholders.
ANGLOAMERICAN’SCOMMITMENTSTOITSMAINSTAKEHOLDERS
Stakeholder StakeholderCommitment
Investors We will ensure full compliance with relevant laws and rules.
We will observe high standards of corporate governance and are committed to transparency and fair dealing.Employees We are committed to the safety of our employees and to treating them with care and respect.
We will invest in their development and ensuring that their careers are not constrained by discrimination or other arbitrary barriers to advancement. We recognise the importance of family life and of allowing our employees to achieve a satisfactory work-life balance. We will deal honestly, and maintain regular two-way communication with our workforce.
Governmental bodies We will comply with the laws of our host countries whilst observing, across our activities, the best practice standards developed by the leading inter-governmental organisations. We aim to be an investor and partner of choice.
Communities We aim to create and maintain strong and respectful relationships with the communities of which we are a part.
We will seek regular engagement about issues that may affect them. We aim to contribute to the creation of more prosperous, empowered and adaptable communities. We will regularly assess our operations’ impact upon local social and economic development and report upon it. We will provide local mechanisms for the consideration and resolution of complaints and grievances in a fair, timely and accessible manner.
Business partners We seek mutually beneficial relationships with our customers, contractors, suppliers and other business partners, based on fair and ethical practices, including prompt payment within the negotiated terms. We require our supply chain to strive to meet the standards set out in these principles.
Non-governmental organisations
Civil society can play a crucial role in promoting pluralistic and more adaptable societies.
We aim for constructive relations with relevant non-governmental organisations.
Their input may improve our understanding of society and of host communities.
AWARDS AND ACCOLADES Mantos Blancos received the Annual Safety Award from the National Geology and Mining Survey (SERNAGEOMIN)8, which is given each year to those companies with the lowest accident frequency rate at all their operations. The award also considers the incident severity rate in a 12-month period.Chagres was awarded the John T. Ryan Trophy for its excellent work safety performance, and other company operations received this award many times in previous years. The trophy was presented during the annual dinner of Sociedad Nacional de Minería (SONAMI). Anglo American was distinguished in the raw materials category as the company with the best reputation in the RepTrak™ 9 Pulse study, which is conducted by the Reputation Institute and the Communications Faculty of the Catholic University of Chile.Anglo American’s commitment to sustainability was recognised with the company being added to the FTSE4Good Index10 of those companies that meet a series of stringent standards on corporate responsibility. The index is renowned worldwide and is the basis for a wide range of ethical and sustainable investment funds. Anglo American was included after the half-yearly review of the FTSE4Good Index Series, managed by the index supplier FTSE Group.Anglo American participated in the 2011 ranking of leading companies on climate change, conducted by Fundación Chile11 and Revista Capital, receiving recognition for being one of the 20 companies with the best performance in Chile.
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Anglo American sustainabilitystrategy
8www.sernageomin.cl9 http://com unicaciones.uc.cl/
prontus_fcom site/artic/20111216 asocfile/20111216090100/chile_pulse_2011para_website_facom.pdf
10http://www.ftse.com/Indices FTSE4Good_IBEX_Index/index.jsp
11www.fundacionchile.com
PARTNERSHIPS AND MEMBERSHIPS:As part of its social commitment to its different stakeholders, the company is a member of or has partnerships with the following organisations:
Business Action for Africa12 CARE International13
Extractive Industries Transparency Initiative14 Fauna and Flora International15 Global Business Coalition (GBC Health) on HIV/ AIDS, Tuberculosis and Malaria16 International Business Leaders Forum17 International Council on Mining and Metals18 Investment Climate Facility for Africa (ICF)19 Natural History Museum20 United Nations Global Compact21 Voluntary Principles on Security and Human Rights22 World Business Council for Sustainable Development (WBCSD)23
MEMBERSHIPS IN CHILE:Sociedad Nacional de Minería (SONAMI)24 Consejo Minero de Chile A.G.25
Instituto de Ingenieros de Chile A.G.26 Consejo Nacional de Seguridad de Chile27 Comité Regional de Seguridad Minera (CORESEMIN)28 AcciónRSE29 Cámara Chileno-Norteamericana de Comercio (AMCHAM)30 Cámara Chilena-Sudafricana de Industria y ComercioCámara Chileno-Británica de Comercio A.G. (BRITCHAM)31 Corporación de Desarrollo Productivo de la Región de Antofagasta32 Asociación de Industriales de Antofagasta33 Corporación para el Desarrollo de la Región de Atacama (CORPROA)34
Corporación pro Til Til35 Corporación para el Desarrollo de Colina36 Instituto Libertad y Desarrollo37 Instituto Libertad38 Instituto Chileno de Administración Racional de Empresas (ICARE)39 Centro de Estudios Públicos (CEP)40 UDP-Expansiva41 Corporación de Desarrollo Ciudadano de Chañaral
MEMBERSHIPS IN PERU:Procobre Perú42 Sociedad Nacional de Minería, Petróleo y Energía (SNMPE)43 Cámara Peruano-Británica (BPCC)44 Cámara de Comercio Americana del Perú45 Instituto de Ingenieros de Minas del Perú46
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Anglo American Sustainable Development Report 2011 ��
Anglo American sustainabilitystrategy
12 http://businessactionforafrica.org/ 13 www.careinternational.org.uk 14 http://eiti.org/15 www.fauna-flora.org16 http://www.gbchealth.org/17 www.iblf.org18 www.icmm.com19 www.icfafrica.org20 http://www.nhm.ac.uk/21 www.unglobalcompact.org22 www.voluntaryprinciples.org23 www.wbcsd.org24 www.sonami.cl25 www.consejominero.cl26 www.iing.cl27 www.cnsdechile.cl28 www.coreseminatacama.cl29 www.accionrse.cl30 www.amchamchile.cl31 www.britcham.cl32 www.cdp.cl33 www.aia.cl34 www.corproa.cl35 www.protiltil.cl36 www.procolina.cl37 www.lyd.com38 www.institutolibertad.cl39 www.icare.cl40 www.cepchile.cl41 www.expansiva.cl42 www.procobre.org43 www.snmpe.org.pe44 www.bpcc.org.pe45 www.amcham.org.pe46 www.iimp.org.pe
2011TARGETSTARGET
ACHIEVED2011PERFORMANCE 2012TARGETS
HUMANCAPITAL
SAFETY
Zero loss of life. A worker lost his life in the Los Bronces development project (LBDP).
Zero harm.
100% compliance with the visible felt leadership (VFL) programme targets.
N° of leadership interactions: 8,644. N° of hours scheduled and devoted to this activity: 14,436 man-hours.
100% compliance with the VFL programme targets.
Maintain 100% implementation of The Anglo American Fatal Risk Standards (AFRS).
Investments were made at facilities to comply with the 10 standards.
Maintain 100% implementation of the AFRS.
Train managers and supervisors in risk management.
5,000 people were trained. Train 100% of the workforce that has not been given the course.
Audit the risk management processes at each of the operations.
The first audit of the risk management system was undertaken at all operations.
For 100% of the operations to carry out a risk management system self-assessment process.
Maintain ISO 14001 and OHSAS 18001 certification.
The ISO 14001 and OHSAS 18001 certification was renewed.
Audit certification maintenance.
Draw up a document on the safety and occupational health system for projects.
The document was drafted. Put the system in place in future projects.
OCCUPATIONALHEALTH
Put the new noise and dust standards in place.
There was 72% compliance with the dust standard and 76% with that of noise.
Attain 95% compliance with both standards.
Zero occupational diseases. There was one case of an occupational disease involving hearing loss.
Zero occupational diseases.
Put the fatigue standard (GTS0024) in place.
There was large progress which is expected to continue in 2012.
Audit the fatigue standard and attain 75% compliance.
Fully implement the Anglo American Occupational Health Way.
The average implementation at all mine sites was 90% in 2011.
Continue to implement the Anglo American Occupational Health Way, with the aim of 100% compliance.
NATURALCAPITAL
Maintain ISO 14000 certification The five operations in Chile maintained their ISO 14000 certification.
Maintain ISO 14000 certification.
Complete the activities scheduled for the 2011-2012 cycle regarding compliance with the Anglo American Environment Way standard.
Compliance with the standard was verified, with 84% compliance attained.
Complete the activities scheduled for the 2012-2013 cycle and assess peers to assure that self-assessment is sound and progress is maintained over time.
Reduce water consumption by 7.3%. Complete the Las Tórtolas water recirculation facilities to Los Bronces in September 2011.
The new protocol was issued in 2011 to implement and record water savings. Each division has set a business-as-usual target by 2020.
There is a portfolio (business-as-usual) of 10 projects for savings, highlighting the start-up of the Los Bronces recirculation project in October 2011.
Update the project portfolio of each operation, driving water recirculation at different process points.
Implement the saving measurement and verification protocols pursuant to international standards.
Embrace the international standard on water metering to standardise the internal and external balances and reports.
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OUR SCORECARDAnglo American sustainabilitystrategy
2011 TARGETSTARGET
ACHIEVED2011 PERFORMANCE 2012 TARGETS
NATURAL CAPITAL
Maintain water discharges fully compliant with the quality limits of Supreme Decree Nº90.
Discharges of sewage treated at all operations were within the limits of the standard.
Complete groundwater quality analyses around the company’s tailings dams.
Reduce energy consumption by 5.3%.
Each operation has established a business-as-usual portfolio of projects to reduce energy consumption and emissions to achieve an internal target by 2015. An independent third party is reviewing the savings registries.
Update the project portfolio of each operation and include the emission reduction targets of the Global Energy Initiative (GEI).
Undertake external verification of the carbon footprint.
Implement the measurement and verification protocols pursuant to international standards.
Request an environmental qualification ruling (RCA, as per the acronym in Spanish) based on the results of the particulate matter monitoring to date to eliminate the wetting system requirement for the whole wall slope and the installation of a Rachel mesh on the crest, maintaining crest wetting.
The required mesh and the wetting system for the upper part of the main wall were implemented for the Las Tórtolas tailings dam. An independent stability study was conducted, which advises against wetting the whole slope of the wall. Particulate matter monitoring was undertaken below the dam with no effects. Based on these elements, regularisation of the RCA is being drawn up to be filed to the authorities.
Draw up a set of internal particulate matter control practices to generate best practice on road and dam dust control and primary emission sources and develop pilot projects
Develop a new peer review on biodiversity in partnership with Fauna & Flora International.
SOCIAL CAPITAL
Raise the level of compliance with the Anglo American Social Way, particularly improving contractor management and local procurement strategies for each operation.
The average level of compliance by operations improved. The company worked on involving emergency bodies in the emergency response plans and drawing up local procurement strategies by operation with the supply chain.
Have a level of compliance of or higher than 3 for all the Anglo American Social Way requirements applicable to each operation.
Implement a common grievance and query management process, which guarantees timely investigation, action and response.
The grievance management procedures were analysed, identifying gaps with the requirements of the corresponding SEAT tool, however it was not possible to put a common procedure in place.
Draw up a grievance management procedure that is aligned with the requirements of the new version of the SEAT tool to be released in 2012.
Align social investment project indicators with the UN millennium objectives.
A social investment and donation policy was drawn up, which sets out the objectives, targets and indicators aligned with headquarter requirements for all social initiatives.
Put the social investment and donation policy in place in all countries where there are operations and identify improvements to add them next year.
Develop a social strategy for Anglo American’s Copper business unit and align the 2012 community engagement plans based on this strategy.
A social strategy was designed for Chile and was communicated to all operations, which developed their plans considering this strategy. An organisational structure was established for Anglo American’s Copper business unit, which will address the social challenges and will start to operate as of 2012.
Apply the SEAT in Chile in 2012 and the social requirements of projects in Peru.
Target achieved Target not achieved Continuous improvement
Anglo American Sustainable Development Report 2011 17
Anglo American sustainability strategy
BEING THE INVESTMENT OF CHOICE
�0 Anglo American Sustainable Development Report 2011
Being the investment of choice: economicperformance
One of Anglo American’s strategic challenges is to be the investment of choice, i.e., for investors to have confidence in the company’s management and choose it when investing. In those countries where Anglo American has operations it therefore manages its capital by means of internationally renowned standards, adhering to principles like those of the International Council on Mining and Metals (ICMM)47, the Global Compact48 and the Extractive Industries Transparency Initiative (EITI)49 .
The financial result of Anglo American’s Copper business unit included operations in Chile and the Michiquillay, Quellaveco and Pebble projects; the latter are in a development and non-productive phase.
ECONOMIC PERFORMANCE
The Copper business unit had total profits after tax of $1.926 billion. If the -$43 million from the projects in Peru and the United States are included, it had profits of $1.883 billion. The 17% decrease on 2010 was mainly due to the lower production of copper and higher operating costs, specifically because of high energy and fuel prices. There were also higher logistical costs at Collahuasi due to a failure of the concentrate shiploader at the port of Patache in the first half of 2011.
The annual average copper price was 17% higher than in 2010, with the price dropping in late 2011 to close the year at 343 c/lb50. The realised price was 14% up on that in 2010. The C1 unit cost was $1.47, increasing 32% on 2010.
The copper sales forecast is stable in the medium and long term, as strong demand is expected from emerging economies
OPERATINGANDFINANCIALOVERVIEW(givenin$million) 2009 2010 2011
Anglo American’s revenue 2,555 3,148 3,456
Collahuasi’s revenue (44%) 1,412 1,729 1,688
Totalrevenue(1) 3,967 4,877 5,144
Anglo American’s income tax 157 269 284
Anglo American’s mining royalty 39 67 60
Collahuasi’s income tax (44%) 143 160 184
Collahuasi’s mining royalty (44%) 22 65 61
Profit remittance tax 163 440 177
Other corporate tax 16 43 47
Other tax collected 44 62 130
Other tax collected in Peru 4 3 6
Totaltax 588 1,109 950
Anglo American’s profits 1,037 1,433 1,223
Collahuasi’s profits (44%) 679 889 703
Project profits (Peru and the United States) 0 -65 -43
Totalprofits 1,716 2,257 1,883
Anglo American’s fine copper production (tonnes) 434,039 401,515 399,512
Collahuasi’s fine copper production (44%) (tonnes) 235,775 221,779 199,445
Totalfinecopperproduction(tonnes) 669,814 623,294 598,957
C1 average unit cost ($/lb), (2) 1.04 1.11 1.47
47 http://www.icmm.com/48 http://www.unglobalcompact.org/49 http://eiti.org/ The EITI promotes better governance indexes by disclosing and
verifying payments made by companies, and tax revenue from the oil, gas and mineral industries.
50 US cents per pound.
(1) Only includes operating revenue.(2) C1 cost: mine cost, plant cost, overheads, smelting, refining and freight costs.
Anglo American Sustainable Development Report 2011 2�
Being the investment of choice: economicperformance
ECONOMIC VALUE GENERATED AND DISTRIBUTEDThe economic value generated in 2011 was $5.288 billion, which was an 8% increase on 2010. The economic value distributed amounted to $4.817 billion, with operating costs accounting for $2.705 billion, employee salaries and benefits accounting for $377 million, payment to the government for $950 million, investment in the community for $24 million and to providers of capital for $761 million. The latter item was 64% down on 2010 and explains the 7% decrease in the value distributed compared to 2010.
ECONOMICVALUEGENERATEDANDDISTRIBUTED(Givenin$million)
2009 2010 2011
A) Revenue (1)
Gross sales 3,967 4,877 5,144
Net income from financial investments 3 3 76
Net income from sale of fixed assets and others 36 18 68
Economic value generated �,006 �,�9� 5,���
B) Operating costs 1,543 1,706 2,705
C) Employee salaries and benefits (2) 189 237 377
D) Payment to providers of capital (3) 450 2,116 761
E) Payment to the government (4) 588 1,109 950
F) Investment in the community 12 23 24
Economic value distributed �,7�� 5,191 �,�17
Economic value withheld 1,��� (�93) �71 (1) Includes operating and non-operating revenue.(2) Excludes training as an employee benefit.(3) Considers the interest paid on loans received, minority interest (paid to
minority shareholders) and dividends paid (majority shareholders).(4) Please see the tax table in the operating and financial overview.
PAYMENTS TO AND FROM GOVERNMENTSA fair and transparent fiscal regime is a fundamental aspect of the legislative framework of a country, facilitating the encouragement of a strong, successful and sustainable mining industry which, in turn, brings with it a vital and broader economic contribution to growth. The payments Anglo American makes to governments of those countries in which it operates form a major part of its socio-economic impact, particularly in regions where its absence would mean fewer sources of employment, income and, therefore, tax revenues.
Anglo American’s taxation contribution to the different countries in which it operates includes corporate income tax, a specific mining tax, an additional profit remittance tax, payroll taxes, VAT, inter alia.
The taxes borne by Anglo American’s Copper business unit amounted to $814 million in 2011. Taxes collected by Anglo American’s Copper business unit, including payroll taxes, VAT and other withholdings, amounted to $136 million, giving a total tax footprint for the year of $950 million.
Payments to Anglo American by the Chilean government mainly came from the training grant of the National Training and Employment Department (SENCE) and tax relief for donations.
FINANCIALASSISTANCERECEIVEDFROMTHEGOVERNMENT(1)(givenin$thousand)
Taxcreditsandrebates 2009 2010 2011
SENCE 983 1,090 1,377
Credit and donations 1,105 3,327 2,278
Mining licence, credit against PPM (2) 81 81 114
6% fixed asset credit 116 97 92
Total 2,285 4,595 3,861
(1) Corresponding to the government of Chile(2) Provisional monthly tax payments
Operating costsEmployee salaries and benefitsPayments to providers of capitalPayment to the governmentInvestment in the community
Economic value distributed in 20��(given in $ million)
0.5%
56.2%
7.8%
15.8%
19.7%
�� Anglo American Sustainable Development Report 2011
Being the investment of choice: economicperformance
EXPANSIONPROJECTS(givenin$million)
Country Project Description InvestmentAmount
Chile Mantos Blancos development
The aim is to extend the life of Mantos Blancos to about 2030, increasing its mining capacity and the sulphide plant treatment rate. Other large challenges of this project are to assure the water supply and the tailings dam capacity.
Under study.
Chile Mantoverde sulphides
The objective is to extend the life of Mantoverde beyond the current life of mine (LOM) of 2017 with open-cut mining and treatment of the sulphides underlying the oxide mineralisation, currently treated by SX-EW51, by means of a flotation/concentration process.
Under study.
Chile Chagres modernisation
This will boost the concentrate treatment capacity by 35% to 800,000 tonnes per annum and improve the smelter’s environmental performance by increasing the capture of sulphur, arsenic and particulate matter, keeping a safety margin with respect to the environmental regulation. Chagres will maintain its leadership of being the smelter with the best environmental performance in Chile.
$250-280 million.
Chile Los Bronces area The aim is to mine mineral resources that are in the Los Bronces area and that are not part of the current LOM, making sure it is developed in an environmentally and socially responsible fashion.
Under study.
Chile Collahuasi Phase III The objective is to expand fine copper production by adding new grinding lines, which will raise the plant treatment capacity. The mine extraction rate and all the operation-related infrastructure will also be increased.
Under study.
Chile Mantoverde desalination plant
This will replace the current water supply system from the Copiapó aquifer and will comprise two reverse osmosis units with a total rated capacity of 120 litres/second. The water will be pumped from the plant to Mantoverde along 24” piping. The plant has been designed and will be built to allow for future expansion to 300 litres/second, mainly concerning the sulphide project. This project will enable the Mantoverde operation to be 100% supplied with seawater.
$96.6 million approved for investment.
Chile Los Bronces development project
The aim is to boost the fine copper production to 400,000 tonnes a year. The construction stage was completed in October 2011 and it has entered the ramp-up stage, which will take an estimated 12 months.
$2.8 billion.
American’s Copper business unit makes a difference between investments in expansion projects and those needed for stay-in-business projects for its operations. The aim of the former is to raise the productive capacity. The main expansion projects are outlined below:
INVESTMENTS
�� Anglo American Sustainable Development Report 2011
51Solvent extraction and electro-winning
Being the investment of choice: investments
Anglo American Sustainable Development Report 2011 2�
STAY-IN-BUSINESS PROJECTS$307 million was invested in stay-in-business projects in 2011, which was a 93% increase on the investment in 2010.
INVESTMENTINSTAY-IN-BUSINESSPROJECTS(givenin$million)
2009 2010 2011
Los Bronces 63 101 185
Mantos Blancos 14 19 48
Mantoverde 8 12 24
El Soldado 20 17 39
Chagres 9 7 8
Head office in Chile 5 3 5
Total 119 159 307
The company invested $48 million in Mantos Blancos in projects like:
The construction of a new leaching yard to process the marginal ore that Mantos Blancos disposes in the Mercedes run of mine (ROM) deposit, with known reserves of 44 million tonnes (Mt) with 0.24% of soluble copper and potential reserves of 93 Mt. This will be added to the available copper production using a known process and at a low operating cost.
The expansion of one of the current tailings dam tubs. The project envisages the removal of 3.6 million m3 of material, installation of geosynthetic liners on the walls, tailings disposal and water reclaim system. This project will enable the sulphide plant to operate up to August 2014.
•
•
The company invested $39 million in El Soldado in 2011, highlighting the following:
The purchase, assembly and commissioning of a new concentrate filter, which will screen all the concentrate produced by the operation, generating a product with humidity of or less than 9%.
The purchase of mine equipment. The equipment was needed to attain the movement committed in the LOM I (2011) mine plan, i.e., a mining sequence that extracts the ore to the plant and develops the mine to expose the ore reserves to maintain the feed continuity.
The company invested $185 million in Los Bronces, and the main projects included:
Reimplementation of the raffinate pipeline. The project entails tracing an alternative route to allow for operations up to 2013.
Purchase of transportation equipment.
The company invested $24 million in Mantoverde, and the main projects entailed:
Opening the Montecristo pit to reach resource mining areas that will provide more than 52,000 tonnes of fine copper.
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Being the investment of choice: investments
�6 Anglo American Sustainable Development Report 2011
CORPORATE GOVERNANCE
CONTROL ENVIRONMENT
RISK MANAGEMENT
STATUTORY AND REGULATORY COMPLIANCE
Being the investment of choice:corporategovernance
CORPORATE GOVERNANCEThe Corporate Governance and Compliance Management was established in late 2011 to provide greater support to the control environment management, to risk management and for statutory and regulatory compliance, along with corporate governance issues. Its aim is to manage these accountabilities in the different operations and areas of the Copper business unit, essentially
CORPORATE VALUES/BUSINESS ETHICS
underpinned by Anglo American’s corporate values and its different policies, procedures and standards.
The corporate governance and compliance model is focused on four key areas:
CORPORATE GOVERNANCE AND COMPLIANCE MODEL
Anglo American Sustainable Development Report 2011 27
LEGAL FORMOperations in Chile are organised into two closely-held and operating limited companies: Anglo American Norte S.A., which owns Mantos Blancos and Mantoverde; and Anglo American Sur S.A., which is the owner of Los Bronces, El Soldado and Chagres. There is also the limited partnership Anglo American Chile Ltda, which provides administration services to the operative companies. Its only partners are Anglo American Sur S.A. with a 70% shareholding and Anglo American Norte S.A. with 30%.
The shareholders of Anglo American Sur S.A. for the year ended 31 December 2011 were: Inversiones Anglo American Sur S.A. with a 75.4999% shareholding, Clarent Limitada with 0.000081%, and MC Resource Development Ltd. with 24.5%.
Anglo American Norte S.A. has 58 minority shareholders, who have a 0.03% shareholding. For the year ended 31 December 2011, the majority shareholder was Inversiones Anglo American Norte S.A. with a 99.975% shareholding.
LEGALSTRUCTUREOFPROJECTSINPERU
The Quellaveco project is owned by Anglo American Quellaveco S.A., and its shareholders are Anglo American Quellaveco SARL with an 81.9% shareholding, MCQ Copper Ltd. with 18.1026%, and Inversiones Anglo American Norte S.A. with 0.000000015%.
The Michiquillay project is owned by Anglo American Michiquillay S.A., whose majority shareholder is Anglo American Michiquillay Peru SARL with a 99.9903% shareholding, and Anglo American Exploration Luxembourg with 0.000097%.
MANAGEMENTThe management of Anglo American Sur S.A. is vested in a board comprising three incumbent directors and three deputy directors. The following directors were elected for a three-year term in the Ordinary General Shareholders’ Meeting held on 26 April 2011:
INCUMBENTDIRECTORS DEPUTYDIRECTORS
Miguel Ángel Durán Vergara (chairman)
Marcelo Glavic Ferrada
Alejandro Mena Frau Lorenzo Menéndez Pagliotti
Felipe Purcell Douds Ignacio Quiñones Sotomayor
The following directors were elected for a three-year term in the Ordinary General Shareholders’ Meeting of Anglo American Norte S.A. held on 28 April 2011
INCUMBENTDIRECTORS DEPUTYDIRECTORS
Miguel Ángel Durán Vergara (chairman)
Marcelo Glavic Ferrada
Alejandro Mena Frau Lorenzo Menéndez Pagliotti
Felipe Purcell Douds Ignacio Quiñones Sotomayor
Both boards operate in accordance with the current regulation and what is laid down in their respective articles of association. According to what was agreed on by both Shareholders’ Meetings, the directors are unpaid and there are no directors’ committees as they are closely-held limited companies. Their decisions and all the current company principles and policies are based on the Good Citizenship Business Principles, which also includes strictly complying with current legislation in the case of a conflict of interests of one or more directors. To such effect, it should be noted that all the directors are company executives.
All the companies draw up full accounting, an annual report, balance sheet and financial statements, which are reviewed by external auditors each year. Deloitte was the auditing company in 2011. These financial statements are sent quarterly to the Superintendency of Securities and Insurance (SVS) in accordance with the SVS regulation on the specific mining tax.
Being the investment of choice:corporategovernance
�� Anglo American Sustainable Development Report 2011
JOHN MACKENzIECEO
MIGUEL áNGEL DURAN
CEO Chile
JAMES BEAMS
CFO
BARRY MURPHY
Head of Projects
ALEJANDRO MENA
Head of HR
LUIS MARCHESE
Country managerPeru
SAMUEL RASMUSSEN
GM Los Bronces
FELIPE PURCELL
Head ofCorporate Affairs
CARLOS GIL
Head of Marketing
ALICE FOX
Head of Strategy
LORENzO MENéNDEz
Head of Safety & SD
PAUL HENRY
COO Pebble
EDUARDO MUñOz
Head of BD
MARCELO GLAVIC
Head of Technical
JUAN CARLOS ROMáN
Head of AO
ALEJANDRO VáSQUEz
GM El Soldado
EDGARDO RIFFO
GM Mantoverde
SERGIO PARADA
GM Mantos Blancos
PEDRO REYES
GM Chagres
GIANCARLO BRUNO
GM Collahuasi
GOVERNANCE STRUCTURE ASOF DECEMBER 20��
Being the investment of choice:corporategovernance
Anglo American Sustainable Development Report 2011 2�
STATUTORY AND REGULATORY COMPLIANCESince integrity and accountability are core values for Anglo American, the company is aware that dealing with its stakeholders fairly and ethically is fundamental to earning trust.
To such effect, speakers from London gave presentations in Peru and Chile in 2011, explaining the standards of conduct set out in the Business Integrity Policy. Managers of the respective areas presented the regulations on offences that affect the legal entities of Anglo American in Chile and Peru. Training was given to 105 supervisors in Chile and 32 in Peru. The challenge in 2012 is to hold two mass dissemination events reaching attendance by 220 people, and to have an inventory of state and government bodies with which Anglo American frequently interacts
BUSINESSINTEGRITYPOLICY52
The purpose of this policy is to set out the standards of conduct required at every level within Anglo American,our subsidiaries, joint ventures and associates; on the part of those with whom we do business and those whowork on our behalf, in combating corrupt behaviour of all types.
The prevention standards adopted cover the following areas:Gifts, entertainment and hospitalityConflicts of interestFacilitation paymentsUse of company assets Political donationsInteraction with government officials and lobbying Charitable donationsSocial and community investment and enterprise development activitiesSponsorshipsRetention and payment of intermediariesMergers, acquisitions, joint ventures and associates.
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LawonthecriminalliabilityofbodiescorporateIn 2010, the company started to work on drawing up the offence prevention model laid down in Law 20.393 for the legal entities of Anglo American operating in Chile. Work in 2011 was focused on embedding the programme in the company: 105 supervisors were trained and clauses concerning the law were added to work contracts, purchase orders and all tender contracts. The challenge in 2012 is to put the offence prevention model in place and start certification by an external company in 2013.
RISK MANAGEMENTThe following were the main effective risk management highlights in 2011: the establishment of practices and standards53, whose aim is to integrate risk management to any strategy of the operational processes or investment planning, assuring that the key decisions are based on the risks.
The potential risks were assessed at each of the mine sites of the Copper business unit in 2011 and the mitigating measures and the recovery protocols of the business were determined.
Next year’s challenge will be for each operation to identify the operating risks of all its processes and then put the appropriate control and mitigation measures in place.
ANTI-TRUST COMPLIANCEAnglo American Chile has an Anti-trust Compliance Programme, which is based on the policy and manual drawn up by the company to regulate the commercial practices of all its operations, which it applies and oversees each year.
A total of 88 key people in the organisation participated in the anti-trust compliance programme in 2011, entailing meetings, videoconferences, telephone conference calls and the corporate intranet and they signed the annual self-certification letter on this issue. Work was also done to add clauses to the contracts with goods or service suppliers to prevent and avoid monopoly practice.
SPEAKUPThe confidential telephone and e-mail service called SpeakUp is one of the main tools to supervise adherence to the Business Principles. The aim of this tool, managed by an external company, is to receive reports about conduct on issues like:
Breach of any legal obligation.Abuses or robbery of company resources.Bribery, corruption and fraud.Damage to the environment or injustices with the local communities.Safety and health threats.Conflicts of interest.Improper accounting practices.
SpeakUp has improved internal processes and enhanced the labour and business environment commensurate with Anglo American’s values and principles.
In the period covered by this report, SpeakUp received 13 alerts in Chile and 10 in Peru. With regard to the Business Principles, management has taken disciplinary action against and dismissed employees for breaching the company’s code of conduct and policies.
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52 http://www.angloamerican.com/~/media/Files/A/Anglo-American-Plc/docs/business_integrity.pdf
53 Anglo American has developed the Business Continuity Management and the GTS 2 Integrated Risk Management Standard to integrate risk management to all its operations
Being the investment of choice:corporategovernance
30 Anglo American Sustainable Development Report 2011
The conflict with Codelco was a high-profile issue in 2011. The issue arose from an agreement between Anglo American and Codelco pursuant to which the latter had an option to buy up to 49% of the shares of Anglo American Sur S.A. (AAS), excluding the remaining shares assuring that Anglo American will always have a controlling 51% interest in the company.
The conflict blew up when Codelco tried to prematurely exercise the option in October 2011, disregarding Anglo American’s right to sell to a third party at any time before the option is exercised, which could only take place in a specific 30-day period in January 2012 and every three years thereafter.
Anglo American sued Codelco in the courts for grave breach of contract, claiming compensation for damage and an injunction so Codelco could no longer exercise the option.
Anglo American was reasonable and at all times open to a commercial solution with Codelco that benefitted the shareholders of both companies.
A NEW MINORITY SHAREHOLDERIn November 2011, Anglo American, exercising its rights, sold a 24.5% stake in Anglo American Sur S.A. to an affiliate of Mitsubishi Corporation for $5.39 billion.
This transaction fully complied with what is set forth in the agreement between Anglo American and Codelco. Further to this transaction, Anglo American paid $1.015 billion in tax in Chile
THE ANGLO AMERICAN SURCASE
Being the investment of choice: theAngloAmericanSurcase
Anglo American Sustainable Development Report 2011 ��
BEING THE EMPLOYEROF CHOICE
3� Anglo American Sustainable Development Report 2011
Anglo American’s aim of being the employer of choice is underpinned by the ability to attract, develop and get the buy-in of people and teams of excellence. To such end, the company provides a safe and healthy workplace where it complies with the legal and industrial standards of the countries in which it operates, along with business ethics and a culture in which recognition is given for objective performance.
The vice-presidency of human resources is accountable for putting Anglo American’s policies in place and managing the development of people, a good working environment, training, labour relations, negotiating collective agreements and the administration of benefits.
Being the employer of choice: attractingandretainingtalent
ATTRACTING AND RETAINING TALENT
BUSINESS PRINCIPLESEMPLOYMENT AND LABOUR RIGHTS
We will promote diversity and will not tolerate unfair discrimination or the inhumane treatment of employees including through any form of forced labour, physical punishment or other abuse. Our workforce has the right to work in an environment free from harassment or intimidation.
We aim to create a working environment which encourages innovation and collaboration across our businesses and geographies.
To encourage accountability, a performance culture and the monitoring of individual development needs, an increasing proportion of employees, either individually or as members of a team, will have performance targets which will be regularly reviewed.
LABOUR RIGHTS
We prohibit child labour in our operations. Should we encounter cases in our supply chain, we will develop a responsible approach to ending it that ensures the welfare of the children.
We recognise the right of our employees to freedom of association and to collective bargaining. Our remuneration practices will be determined according to local market conditions and we will strive to ensure that we pay wages that are, as a minimum, adequate to satisfy the basic needs of our employees and their families.
We expect our supply chain to strive to adhere to all of the above employment and labour rights principles.
Anglo American Sustainable Development Report 2011 ��
Being the employer of choice: attractingandretainingtalent
MANAGEMENT FOCUS IN 20��One of the critical people management tasks in 2011 was forming a work team to carry out the Los Bronces development project, along with developing the diversity programme, enhancing the performance evaluation system and the competencies system aimed at company employees and contractors.
The main challenge was the high supervisor turnover of 16% in the year. This reflects a new context characterised by a shortage of professionals for the mining industry due to greater competition driven by economic growth. Attracting and retaining the people needed to achieve the company’s objectives is now a permanent challenge for Anglo American’s Copper business unit.
WORKFORCE INDICATORS
At the close of 2011, Anglo American’s Copper business unit had a workforce of 10,189 people, comprising 3,656 company employees, 3,710 operations contractors and 2,823 project contractors.
The company’s tiers are divided into employees, who accounted for 77% of the total with a turnover of 4%, and supervisors, who accounted for 23% with a turnover of 16% in 2011.
The work absenteeism rate was 3%54, which was lower than the 3.4% in 2010.
EMPLOYMENTGENERATED(1)(for the year ended 31 December 2011)
2009 2010 2011
Operations in Chile and Santiago office 6,741 6,425 7,582
Los Bronces development project 3,329 9,846 1,927
Projects and office in Peru 1,031 635 680
Total 11,101 16,906 10,189
(1) Excludes the data of the Pebble project, which explains the differences of the figures reported in prior years
EEMPLOYMENTBYDEPENDENCE(1) 2009 2010 2011
Company employees 3,179 3,206 3,656
Operations contractors 3,988 2,580 3,710
Project contractors 3,934 11,120 2,823
Totalworkforce 11,101 16,906 10,189
(1) Excludes the data of the Pebble project, which explains the differences of the figures reported in prior years
EMPLOYMENTBYTIERANDTYPEOFCONTRACT 2011
Indefinite Fixed-term
Supervisors 782 41
Employees 2,580 253
TURNOVER55ASANAVERAGEPERCENTAGEOFANGLOAMERICAN’SCOPPERBUSINESSUNITIN201156
Turnoverin2011
Bytier:
Supervisors 16%
Employees 4%
Byage:
30 years or younger 6%
30 to 50 years 7%
Older than 50 years 4%
Bygender:
Male 5%
Female 12%
Bycountry:
Chile 5%
Peru 26%
Annualaverage 6%
54 The work absenteeism rates are only for the operations of Anglo American in Chile.
55 Employee turnover = percentage of employees who have left the company in a given year (employees who have left / employees at the end of the previous year * 100). This excludes employees who have retired or died.
56 The data only concerns 2011 as there were no turnover records for previous years.
3� Anglo American Sustainable Development Report 2011
DIVERSITY AND EQUAL OPPORTUNITYAnglo American has a salary system based on the People Development Way competencies model, which safeguards fairness and transparency and does not discriminate by gender or supervisor or employee level.
To define the salary level, variables like the job position, the degree of responsibility, the person’s competencies to do that job and the performance level are considered. The minimum wage Anglo American paid its employees in Chile was 2.5 times higher than the minimum legal wage in Chile. The wage paid in projects in Peru was 2.1 times the minimum legal wage for the mining sector.
In keeping with the principle of diversity and including the Good Citizenship Business Principles, Anglo American has a gender balance initiative focused on employing more women in the company. There was a large increase in the number of women in the company workforce, which rose from 6.8% in 2010 to 10.2% in 2011. This increase was also evident in senior positions with female vice-presidents increasing from 4 to 8 and female managers from 7 to 18.
WOMEN’SSHAREOFANGLOAMERICAN’SCOPPERBUSINESSUNITWORKFORCE
2010 2011
Area Numberofwomen
Percentageofthetotal
Numberofwomen
Percentageofthetotal
Company workforce 219 6.8% 372 10.2%
Vice-presidents and senior managers 4 4.7% 8 7.4%
Managers 7 6.6% 18 13.2%
Total workforce (including contractors) 925 5.5% 804 7.9%
Anglo American also developed a series of activities to attract and retain women in the workforce. Regarding recruitment, job offerings for women and men were advertised and posted in the social networks and women’s magazines.
Concerning retention, there were special training programmes aimed at women who have six-month postnatal leave with total coverage for them. In June 2011, the Copper business unit applied additional maternity leave of up to six months of the life of the baby and maintaining their salary, which benefits all women employed directly by Anglo American in Chile and Peru. In the case of Chile, this benefit came into effect three months before the enactment of the bill that increased postnatal leave to six months and which is subsidized with a limit of 66 UF57.
Anglo American also drives women’s employment industry-wide, and participates in the Mining Roundtable for Gender58 and in establishing the standard on gender equality and balance of working, family and personal life59. The challenge of the gender balance initiative in the next few years is to safeguard the correct social and cultural integration of men and women to attain a balanced workforce gender.
Outstanding Woman in Mining AwardCecilia Arrué of El Soldado received the 2010 Outstanding Woman in Mining Award, which is given every year by Chile’s Mining Ministry in recognition of a woman’s track record in the mining industry and promotes the employment of women in the industry.
57 Unidad de Fomento. This is a Chilean inflation-indexed unit and 1 UF is currently about Ch$22,645. 58 A public and private forum established in the second half of 2010. It has the participation of the SONAMI,
Mining Council, Mining Ministry, Codelco, Comunidad Mujer, ENAMI, Anglo American, SERNAGEOMIN and SERNAM, among other institutions and companies. Its aim is to encourage the employment and development of women in the mining industry.
59 NCh 3.262 c. 2011.
Being the employer of choice: attractingandretainingtalent
Anglo American Sustainable Development Report 2011 ��
LABOUR BENEFITSAnglo American has taken measures that help to give its employees a better quality of life, focused on wellness and family-work balance. The objective is to attain benefits shared by the company and its employees from the standpoint of productivity, work environment, meeting corporate targets, joint work, commitment to the organisation and strengthening of the internal framework, among other aspects.
The benefits package the company gives its employees is the same as that reported in the 2010 report.
PROGRAMMES FOR TALENTED YOUNGSTERSAnglo American offers different employment programmes for youngsters: apprentices, graduates, undergraduates and professional practice.
The aim of the graduate programme is to attract, develop and retain young professionals who are flagged as potential talent to provide the company with suitable professionals to address the strategic challenges and requirements of the business.
The undergraduate programme is aimed at attracting, developing and retaining students in the penultimate and final years of their university courses that are flagged as potential talent.
The apprentice programme is internship under the guidance of an internal tutor for youngsters of 18 to 21 years, who have left technical schools in the communities around the operations of Anglo American in Chile.
Whilst undertaking their professional practice, talented youngsters can find out about the company’s work and culture and they have the opportunity of joining the company.
PROGRAMME 2009 2010 2011
M W Total M W Total M W Total
Graduates(former trainees) 13 7 20 12 2 14 9 3 12
Undergraduates (former thesis students)
40 16 56 37 7 44 32 14 46
Apprentices 80 51 131 68 59 127 72 58 130
Professional practice 110 35 145 113 23 136 136 47 183
TOTAL 243 109 352 230 91 321 249 122 371
These programmes were delivered to 371 youngsters in 2011, and this initiative has benefitted 1,044 people in the last three years. Investment in 2011 was around $1.6 million.
•
•
•
•
TRAINING AND DEVELOPMENT The aim of the company’s training processes is to be the leading global mining company and employer of choice, and to assure this the continuous development of people and teams across Anglo American is needed. Work in 2011 was focused on embedding the new competencies framework, The People Development Way.
The aim of this new model is to build a framework of common global competencies to attract and give people the behaviours, knowledge, skills, experience and potential needed to grow and make a difference.
Being the employer of choice: attractingandretainingtalent
36 Anglo American Sustainable Development Report 2011
THE PEOPLE DEVELOPMENT WAYThe new performance management model was also implemented with the aim of clearly aligning individual objectives with the functional and business objectives, providing better tools and training to support personal development and continuous performance.
The model was put in place in January 2011 and required all employees to be trained on the process and the skills needed to use it efficiently. Based on this model, each employee, using the business objectives and priorities and those of the individual’s area, draws up personal objectives and shows how he or she will demonstrate the company’s values in their job position, thereby becoming the protagonist in his or her individual development plan, which is reviewed with the supervisor. A performance contract and individual development plan is drawn up from this, which is reviewed twice a year and the final classification is undertaken at the end of the period by line heads. The entire process is boosted with coaching and feedback.
With regard to the ongoing training programmes for operations in Chile, 175,961 man-hours (M-H) of training were given in 2011. Technical competencies accounted for 66% of the hours, the management area for 18% and safety for 12%.
M-HOFTRAININGFOROPERATIONSBYTIER
Year Supervisors Employees Total
2009 30,656 89,160 119,816
2010 29,633 70,437 100,070
2011 31,979 143,982 175,961
M-HOFTRAININGFOROPERATIONSBYGENDER
Year Male Female Total
2009 116,172 3,644 119,816
2010 90,599 9,479 100,070
2011 155,902 20,059 175,961
LABOUR RELATIONSAnglo American recognises the right of its employees to freedom of association and to collective bargaining. It undertakes ongoing interaction with employees and union leaders, including communication meetings to review the results and challenges of the different operations. These meetings are held quarterly, monthly and by work cycle. An extended communication meeting is also held with the organisation’s senior managers and all its union leaders, during which the results in the year, challenges and future projects are reviewed.
THE PEOPLE DEVELOPMENT WAY MODEL
We seek to understand and
realise our...
We are guided by...
Real difference.
We provide...
WeusethisatAngloAmerican
to...
We use these qualities to understand how people can progress and make a contribution to Anglo American now and in the future.
We articulate the experience with the knowledge and skills of each function to define a job and eliminate the gaps that prevent people from working optimally and safely.
We use these qualities to analyse whether we show we have the conduct that will collectively comprise Anglo American’s strategy.
This is what we represent. We live our commitments which in turn shape the company’s culture and reputation.
Ourvalues,ourbrandandourbusinessprinciples
Determiningthestrategy
•Broadvision•Establishingthedirection•Leadingthechange
Experience Skills
Betheleadingglobalminingcompany
Deliveringresults
•Decision-making•Drivingperformance•Businessvision
Motivatingpeople
•Inspiringothers•Collaboration•Impact&influence
Knowledge
Potential
A CB
Being the employer of choice: attractingandretainingtalent
Anglo American Sustainable Development Report 2011 �7
As of December 2011, the company had 11 trade unions at its operations in Chile (two at each operation, except Mantoverde where there are three) with 98% union membership of the company workforce60. Projects in Peru are still in the design and engineering stage and no unions have been formed yet.
The Labour Relations Forum was held in the year, which was attended by all the union leaders, the company CEO, general managers and representatives of the human resources team of all operations. Labour relations challenges were analysed and presentations were given by experts on economic, financial, legal and labour issues, and there were various discussion forums on these issues.
The collective bargaining process with the unions at Chagres, Los Bronces and El Soldado will be undertaken in 2012.
CONTRACTOR RELATIONSAnglo American’s contractor relations adopt the work philosophy of maintaining mutually beneficial relations, based on fair and ethical professional practice and commensurate with the comprehensive management plan for contractor companies, whose aim is to align their management with the company’s standards.
Supervision mechanisms, the conditions of accommodation, food, transportation, equipment and protection have been established for this, which are complemented with a system of financial incentives tied to achieving the individual and collective safety and competency improvement objectives.
60 Excluding supervisors.
During the year, the company continued the programme to certify competencies required for the different tasks of the services provided by external companies. The focus was on safety, technical and behavioural issues related to the different activities undertaken, and this programme was implemented with the support of Fundación Chile.
To reaffirm service company buy-in to complying with labour and social security laws, in 2011 there was a work session with management representatives of the human resources and management areas to review the results of the compliance controls carried out throughout the year. 10 companies that had outstanding results on these issues received awards.
Being the employer of choice: attractingandretainingtalent
SAFETY POLICYWe hold leaders accountable for the safety of our people. We expect our managers and supervisors to provide effective leadership in safety whilst recognising that good safety behaviour is the responsibility of all those who work for us.
Management of every business or operation is responsible for the full implementation of our safety management system (the Anglo American Safety Way), the Anglo American Fatal Risk Standards and the Golden Rules. This requires the allocation of appropriate resources and the provision of training, education, consultation and auditing to ensure compliance.
We commit to open communication with our employees, contractors, suppliers, visitors and other business partners and interested third parties to encourage a safety culture that reflects the intent of this policy.
We will set appropriate objectives and monitor progress against these to ensure continual improvement towards our goal.
3� Anglo American Sustainable Development Report 2011
HEALTHYAND SAFE PEOPLE
Anglo American has developed a work safety management structure, whose core elements are the Anglo American safety principles and the 12 standards of the Anglo American Safety Way. The main objective is to attain zero harm to people.
Despite all the company’s safety efforts, there was a regrettable fatal accident in 2011 costing the life of Marco Muñoz, married, a mechanic and with various years of work experience at Los Bronces. This accident, as is procedure, triggered an investigation and an analysis of the lessons learned. These included risk assessment as an ongoing task, change management applied to repairing components off-site, the effective application of all the current tools to identify hazards and the need of reinforcing the “safe production” message daily.
We believe that all injuries and occupational illnesses are preventable.
We are responsible for preventing and correcting unsafe behaviour or work conditions.
We will adopt a common, simple set of non-negotiable standards and rules throughout the Group.
Divisional line management at all levels has the responsibility of implementing and maintaining the standards and rules.
All unsafe practices and incidents will be investigated to determine what happened and why.
Being the employer of choice: healthyandsafepeople
Anglo American Sustainable Development Report 2011 ��
MANAGEMENT FOCUS IN 20��The safety and occupational health management, which reports to the vice-presidency of safety and sustainable development and depends directly on the Copper CEO, is in charge of driving all the guidelines, principles, procedures and meeting safety and occupational health targets.
The safety management focus was on renewing the current standards and systematically developing other critical standards to achieve targets: a. AngloAmericanFatalRiskStandards(AFRS): this standard
includes the learning from hundreds of fatal accidents at many mining companies worldwide with the aim of reducing accidents and eliminating fatalities at all the company’s operations in all the countries in which it operates. 97% average implementation was attained at all operations.
b. AngloAmericanSafetyImprovementPlan(SIP): this plan, based on seven pillars, aims to make progress with safety issues according to the organisation’s maturity model61. 90% compliance was attained with the roll-out of this plan at all the operations of the Copper business unit.
c. Riskmanagementleadership:5,000 managers and supervisors completed their risk management training. The visible felt leadership (VFL) programme was continued at all operations, totally achieving the targets set, which led to 8,644 leadership interactions, equivalent to 14,436 man-hours.
d. IntegratedManagementSystem: all operations managed to renew OHSAS 18001 certification.
e. Riskmanagementaudits:risk management audits were conducted at all Anglo American’s operations worldwide in 2011, and the Copper business unit achieved an average score of 65% compliance.
f. Occupationalhealthstandards: creation and implementation of new standards on noise, fatigue and dust, which entailed developing important training and audit processes.
SAFETY PERFORMANCEThe accident rates of Anglo American’s Copper business unit continued to drop in 2011. It ended the year with a lost-time injury frequency rate of 0.19 against 0.25 the previous year. The company will continue to drive safety until it achieves its goal of zero harm, which is the only acceptable result.
SAFETYPERFORMANCEINDICATORS(1) �009 (�) �010 �011
Total recordable injury frequency rate (TRIFR)
0.83 0.71 0.65
Lost-time injury frequency rate (LTIFR)
0.17 0.25 0.19
Lost-time injury severity rate (LTISR)
112 148 120
Days lost 1,920 3,844 3,163
Man-hours of health and safety training
220,654 102,727 94,204
(1) Include the operations and projects of the entire Copper business unit.(2) Includes the Los Bronces development project training
In addition to these good results, the Los Bronces development project was completed with a record accident frequency rate of 0.15, which makes it one of the safest projects undertaken in the world. Work will be done in 2012 recording the learning from this project and others of Anglo American as a guide for future investments.
Anglo American includes its contractor companies in the achievement of safety, occupational health and risk management objectives. Audits were conducted in 2011 to verify the legal and internal compliance with Anglo American’s processes.
61 See the Sustainable Development Report 2010 for further details of the plan.
Being the employer of choice: healthyandsafepeople
40 Anglo American Sustainable Development Report 2011
OCCUPATIONAL HEALTH PERFORMANCE To achieve the objective of zero harm and a healthy and productive workforce, Anglo American has developed a management structure and the Anglo American Occupational Health Way management standards62.
Achieving the objective is underpinned by three fundamental principles:
All occupational diseases are preventable.
Learning from the monitoring of exposure and surveillance of disease incidence and using this information to prevent the occurrence of occupational disease.
Consistent application of common, simple and non-negotiable occupational health standards throughout the Group.
In 2011, management in this area was focused on the new standards on noise, dust and fatigue, attaining an implementation level of 72% and 76%, respectively. The drive will continue in 2012 with the development of action plans and assessments to attain total implementation.
The company had a new occupational disease at the Los Bronces operation involving hypoacusia63.
•
•
•
SAFETY MANAGEMENT AWARD Every year Anglo American’s Copper business unit holds a safety meeting with contractor companies, in which the chief executive of the operations in Chile meets the general managers of contractor companies.
The objective of this meeting is to inform the new safety challenges, which is joint work, and give awards to those companies with outstanding safety results.
The prize award is the Anglo American CEO Safety Award, which in 2011 was awarded to Finning Chile S.A. for its risk control through permanent leadership.
OUR OCCUPATIONAL HEALTH POLICYDivisionallinemanagementisresponsibleandwillbeheldaccountablefortheimplementationofthispolicyandweexpectallemployeesandcontractorstocontributetomaintainingaworkingenvironmentthatiswithoutsignificantrisktohealth.
WecommittothereductionofexposureatsourcethroughgoodengineeringpracticeandapplicationoftheALARP64principle;compliancewiththelawwillalwaysbetheminimumstandard.
Wewillprovideappropriateresources,systemsandtrainingtoprotect,maintainandpromotethehealthandworkingcapacityofourpeople.
Wewillsetappropriateobjectivesandmonitorprogressagainstthesetoensurecontinualimprovementtowardsvourgoal.
Thispolicywillbereviewedatappropriateintervalsandrevisedwherenecessarytokeepitcurrent.
Jointmanagement-workercommitteesThe Copper business unit has ten joint management-worker hygiene and safety committees, seven in Chile and three in Peru. Company and worker representatives participate in all of them with the aim of detecting and assessing accident and occupational disease risks in their area of influence pursuant to current legislation. They represent all the workers.
In 2011, a joint management-worker committee forum was held for the first time in Copiapó for all the company’s operations with the objective of sharing results and learning.
Being the employer of choice: healthyandsafepeople
62http://www.angloamerican.com/development/approach-and-policies/policies-standards-commitments/ safety-and-health.
63Partial hearing loss.64As low as reasonably practicable.
OUR OCCUPATIONAL HEALTH POLICYDivisionallinemanagementisresponsibleandwillbeheldaccountablefortheimplementationofthispolicyandweexpectallemployeesandcontractorstocontributetomaintainingaworkingenvironmentthatiswithoutsignificantrisktohealth.
WecommittothereductionofexposureatsourcethroughgoodengineeringpracticeandapplicationoftheALARPprinciple;compliancewiththelawwillalwaysbetheminimumstandard.
Wewillprovideappropriateresources,systemsandtrainingtoprotect,maintainandpromotethehealthandworkingcapacityofourpeople.
Wewillsetappropriateobjectivesandmonitorprogressagainstthesetoensurecontinualimprovementtowardsourgoal.
Thispolicywillbereviewedatappropriateintervalsandrevisedwherenecessarytokeepitcurrent.
BEING THE PARTNEROF CHOICE
In the last few years we have witnessed deep changes to how mining is undertaken. Sustainability is now an aim of society as a whole and not just one of small stakeholders. In all the geographies in which the company operates, regulations are increasingly more stringent, public institutions are getting stronger to fulfil their control and inspection role and communities are demanding their rights.
This context, along with the values guiding Anglo American’s management, has led the company to step up efforts to deliver on its commitments, maintain operational excellence and deploy cutting-edge technology to achieve its objective of operating safely, responsibly and sustainably, minimising its environmental footprint and risks, and leveraging opportunities that generate long-term benefits for its stakeholders.
The Anglo American Environment Way65 (AEW) is the governing framework for environmental management that applies to all the operations managed by the company worldwide. This standard considers variables like social and environmental impact assessment, water, air quality, mineral and non-mineral waste, hazardous substances, biodiversity, rehabilitation and closure plans. They are considered in the design, operation, closure and post-closure of all its projects, as shown in the table below.
WHAT WE DO TODAY WILL MAkE THE DIFFERENCE TOMORROW
65The AEW volume 1 is the company’s environmental management standard. The AEW volume 2 contains new performance standards that are specific for the main sustainability issues.
VARIABLES AND STAGES OF THE ANGLO AMERICAN ENVIRONMENT WAY
LifecycleStages
EM
SS
tand
ard
–V
OL.
1
VOLUME2
PerformanceStandards
S&
EIA
Sta
ndar
d
Wat
er
Air
qual
ity
Min
eral
was
te
Non
-min
eral
was
te
Haz
ardo
us s
ubst
ance
s
Bio
dive
rsity
Reh
abili
tatio
n
Min
e cl
osur
e
OpportunityIdentification Exploration/Prospecting • • • • • • • • •
Evaluation
Acquisitions - Due diligence • • • • • • • • •Projects
Conceptual phase • • • • • • • • •Pre-feasibility phase • • • • • • • • •Feasibility phase • • • • • • • • •
ProjectImplementationDetailed design and procurement • • • • • • • • •Construction and commissioning • • • • • • • •
Operational • • • • • • • • •Closure
Decommissioning • • • • • • • • •Post-closure • • • • • • • • •
• Contains specific requirements • Indirectly covered by general requirements
42 Anglo American Sustainable Development Report 2011
Being the partner of choice: whatwedotodaywillmakethedifferencetomorrow
SUSTAINABILITY MANAGEMENT HIGHLIGHTS IN 2011The management highlights in 2011 were consolidating and advancing the sustainability management framework. The company reviewed its organisational structure and management framework for this to strengthen them to address new challenges.
OrganisationalstructureenhancementThe safety and sustainable development vice-presidency underwent structural changes and two new positions were created: the operations sustainability manager and the projects sustainability manager. The management systems and reporting advisor position was also created.
The operations sustainability management is mainly accountable for ensuring the corporate guidelines on sustainability and the water, energy and emissions reduction programmes are implemented, and following up on and actively participating in industry and mining organisations and in the public and private roundtable discussions on sustainability.
The aim of the Projects Sustainability Management is to embed the sustainability vision in every stage of new projects from the start to closure and post-closure. It must identify the potential hazards and contribute with the project teams to identify and appraise the options that reduce the environmental footprint to comply with the requirements of the Anglo American Environment Way.
At operational level, the environmental and communities management has become the sustainability management, and its support boosted the environmental, community and social development, permits and communications roles.
IntegratedsafetymanagementframeworkupdateWith regard to management, Anglo American updated its integrated safety, occupational health and environment management framework. The new GTS 26-SHE66 Risk Management System Standard includes a clear hierarchy of mandatory requirements and recommended practice. It was drawn up by means of an internal consultation process and with external collaboration and is commensurate with the requirements of the OHSAS 18001: 2007 health and safety management standard and the ISO 14001: 2004 environmental management system standard.
All operations maintained their integrated management system certification pursuant to the ISO 14001 and OHSAS 18001 standards without any major disconformities. Mantos Blancos and Mantoverde maintained ISO 9001 certification.
EMBEDDING THE ANGLO AMERICAN ENVIRONMENT WAY IN THE INTEGRATED MANAGEMENT SYSTEM
One of the highlights in 2011 was the work done at Mantos Blancos to embed the requirements and procedures of the Anglo American Environment Way in the integrated management system of the operation. This integrated approach entailed the environmental challenges being embedded in the business strategy and in the daily operation of each mine site. The environmental performance thereby became the responsibility of each leader in the area and the integrated management system assures methodical monitoring of the progress made and a suitable level of external verification by means of certification audits.
66Safety, Health and Environment.
Anglo American Sustainable Development Report 2011 43
Being the partner of choice: whatwedotodaywillmakethedifferencetomorrow
MANAGEMENT FOCUS IN 2011In 2011, the Copper business unit defined three strategic core aspects underpinning the strategic plan 2012-2015: to reduce the environmental footprint, assure the social licence to operate and actively manage stakeholder relations, and these were developed jointly with sustainability and social development teams.
Out of the various sustainability work areas, priority was given to six to focus on in the short and medium term:
44 Anglo American Sustainable Development Report 2011
AlignmentwiththenewenvironmentalinstitutionalisminChileIn line with the challenges raised by the new environmental institutionalism in Chile, and the establishment of the Superintendency for the Environment and environmental courts, in 2011 a thorough review was made of the degree of compliance with the regulations at all the operations of Anglo American in Chile.
This review identified the main focus of work for operations, and action and rectification plans were drawn up that include administrative proceedings, impact studies, projects and engineering works, among others.
Moreover, work was started to methodically standardise all the environmental qualification rulings (RCAs) for operations in Chile according to the format established by the Superintendency for the Environment for the voluntary adoption of commitments, and 46 projects and over 22,000 commitments were logged.
NewprojectsThe environmental and social assessment standard in the Anglo American Environment Way sets out that all major projects must conduct an environmental and social impact analysis at each stage of their development (conceptual, pre-feasibility, feasibility) for a better understanding of the potential impacts and to develop the mitigation required.
PROJECTSINPERU
In 2011, the Quellaveco project team participated in the roundtable discussion process with representatives from the government and civil society organisations. This process entailed technical discussions on water, the environment and social development, and it helped to create mutual understanding of mining issues and similar, and it established the bases for the successful start of construction. This is a pioneer experience in terms of the early engagement of mining projects with interested parties and enabled improvements to be made to the design of water supply projects and the closure, all of which will lead to more sustainable mine development.
The Michiquillay project has also successful forged work relations with the community to develop an exploration programme that is critical to quantify the resource for which the operation will be designed. The project team has permanent dealings with the local community and is respected for its protection of water and land resources.
In 2011, water supply alternatives and options of sites where the facilities can be located were reviewed, all part of the pre-feasibility study phase investigations.
1.IMPROVEWATERMANAgEMENT(ASSUREThESUPPLY,EFFICIENTUSEANDqUALITYOFWATER)
2.LOWERENERgYCONSUMPTION(RATIONALUSE,ENERgYEFFICIENCY)
3.REDUCEgREENhOUSEgASEMISSIONS
4.IMPROVEWASTEMANAgEMENT(MINERAL,INDUSTRIAL,DOMESTICANDhAzARDOUSWASTE)
5.MINIMISEThEIMPACTONbIODIVERSITY
6.MANAgEREhAbILITATIONOFLANDEFFECTIVELYFORSUSTAINAbLECLOSURE
FOCUS AREAS IN 2011
Being the partner of choice: whatwedotodaywillmakethedifferencetomorrow
Anglo American Sustainable Development Report 2011 45
ProjectsinChileThe following initiatives completed their project stages and were submitted to the environmental impact assessment system (EAS) in Chile:
PROJECTSAPPROVEDINThEEASIN2011 OPERATION SUbMISSIONDATE
qUALIFICATIONDATE
Mercedes project Mantos Blancos 29-09-2010 17-03-2011
Santa Bárbara expansion Mantos Blancos 20-10-2010 03-04-2011
Desalinated water supply for Mantoverde Mantoverde 20-05-2010 11-05-2011
PROJECTSSUbMITTEDFORPROCESSINgIN2011 OPERATION SUbMISSIONDATE STATUS
Fuel station Mantos Blancos 20-04-2011 Approved
Tailings dam Mantos Blancos 23-08-2011 Under qualification
“Pit mining project at point 62 and expansion of the Kuroki and Franko Norte-Sur pits” Mantoverde 18-11-2011 Approved
PROJECTSUSTAINAbILITYVALUATION
This is a methodology that was developed in 2010 and 2011 to add the sustainability value to the review and assessment of options of investment projects exceeding $50 million to help with the decision-making process.
A pilot test was developed in the Copper business unit by reviewing the decision-making process of a previous project. This clearly showed the benefits of the methodology by adding the sustainability value. The challenge in 2012 is to adopt the sustainability valuation methodology for three projects: two in Chile and one in Peru
EnvironmentalinvestmentThe company invested over $15 million in the environment in 2011, on projects like waste treatment and elimination, installing emission control technology, external consultant services, monitoring networks, laboratory services, sourcing monitoring stations/equipment, reforestation programmes, among others.
The following were the main investments made:
ENVIRONMENTALINVESTMENTIN2011
Operation/ProjectInvestmentamount
(in$thousand)
Mantos Blancos: dust control and equipment capsuling programme
806
Mantoverde: fuel tanks standardisation 1,868
Mantoverde: wastewater treatment plant 741
Chagres: improvement of the air quality monitoring network 456
Chagres: Replacement of the cold interchanger to reduce SO2 emissions
919
El Soldado: Buffer land for communities and forestation programmes
525
El Soldado/Los Bronces: update of the hydrogeological models of the dams and monitoring wells (phase 1)
1,775
Los Bronces: acid mist extraction hood at San Francisco 817
Los Bronces: dust extraction cabin 122
Los Bronces: dam dust control – phase II 933
Los Bronces: primary crusher/stockpile dust suppression 233
Note: this table excludes the expenses and investments of the energy efficiency and emission reduction project portfolio
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46 Anglo American Sustainable Development Report 2011
After a thorough review of the environmental compliance level and updating the management framework in 2011, Anglo American established a new strategy for the next few years with a long-term vision. Besides boosting the human teams and environmental management systems, the investment considers a pipeline of projects to achieve the objectives of reducing water, energy and emissions by 2015 and 2020.
SUSTAINABILITY PERFORMANCE OF OPERATIONS
ManagingwaterThe Anglo American Group has established a comprehensive water management policy for all its operations worldwide. Besides assuring the water supply and striving for the maximum efficiency of its use, the company has made a strong commitment to minimise the harmful effects on the environment and of accountability to the communities in which it operates.
A new mandatory standard was approved in 2011 for company-wide operations. Water management standard N°21 sets out the minimum requirements that must be met for the comprehensive plans for water supply and management, balance quality, understanding the conditions of aquifers and users, water assurance quality and the setting of saving targets.
The water efficiency target tool (WETT) was also put in place, which sets out the conditions for reducing fresh water consumption by 2020 against the business-as-usual (BAU) projection and establishes the standards for water-saving records. To such effect, the company drew up the first portfolio of saving projects, including initiatives like water recirculation optimisation from the tailings dam, enhanced tailings treatment efficiency or reduction of the water used to wet mine roads, among others.
The challenges for 2012 are to make progress with studies to assure the long-term supply, improve and standardise the water balances in accordance with international standards embraced in the extractive industry, and launching the efficiency and savings initiatives included in the project portfolio.
WORLDCLASSWATERRECIRCULATIONATLOSbRONCES
One of the most important projects of the Copper business unit is the process water recirculation system of the Los Bronces development project, which will double the ore treatment capacity and significantly reduce new fresh water abstraction. This great feat of engineering, which was commissioned in October 2011, will enable around 20 million m3 a year to be re-used, conveying the water over 52 kilometres and with an altitude difference of 2,500 metres.
WaterconsumptionThe operations of Anglo American’s Copper business unit consumed 28.8 million m3 of fresh water in 2011. The year-on-year increase was mainly due to the commissioning of the Los Bronces development project in October 2011 and to a much lower water recirculation rate from the El Torito tailings dam at El Soldado for operational reasons.
FREShWATERCONSUMPTIONbYOPERATION(inthousandsofm3)
2009 2010 2011
Total 27,821 26,618 28,795
Los Bronces 14,776 14,707 15,079(1)
Mantos Blancos 3,817 3,760 3,616
El Soldado 5,064 4,300 5,902
Mantoverde 2,991 2,661 2,915
Chagres 1,173 1,190 1,283
(1) The water consumption at Los Bronces in 2011 includes the commissioning of the Los Bronces development project.
WATERRE-USEDINMININgPROCESSES(inthousandsofm3)
2009 2010 2011
Total 74,415 67,873 65,098
Los Bronces 58,094 51,062 42,502
Mantos Blancos (1) 3,107 2,792 6,164
El Soldado 12,999 14,012 16,425
Mantoverde (2) 25 - -
Chagres 190 7 7
(1) The difference with that reported in 2010 for Mantos Blancos was due to a correction of the recirculated water metering because of a major improvement in its water balances.(2) No recirculated water metering was undertaken at Mantoverde in 2010 and 2011.
The water abstracted and used in the grinding, flotation, leaching and smelting processes is mainly obtained from surface water and groundwater sources.
WATERAbSTRACTEDbYSOURCE
Waterfromanexternalsource
(thousandsofm3)
groundwaterabstracted(thousands
ofm3)
Surfacewaterabstracted(thousands
ofm3)
Total
Total 3,616 10,725 14,454 28,795
Los Bronces (1) 0 625 14,454 15,079
Mantos Blancos 3,616 0 0 3,616
El Soldado 0 5,902 0 5,902
Mantoverde 0 2,915 0 2,915
Chagres 0 1,283 0 1,283
(1) The water consumption at Los Bronces in 2011 includes the commissioning of the Los Bronces development project.
Being the partner of choice: whatwedotodaywillmakethedifferencetomorrow
Anglo American Sustainable Development Report 2011 47
NEWINVESTMENTSFORRESPONSIbLEWATERMANAgEMENT
Mantoverde has always obtained water from the Copiapó aquifer, where it has groundwater rights. This is a severely stressed aquifer and the situation has got gradually worse.
The construction of a seawater desalination plant with a production rate of 120 liters/second was approved in 2011 at an approximate investment of $100 million. The aim of the project, with start-up scheduled for the second half of 2013, is to meet 100% of the mine’s current water needs, thereby alleviating consumption pressure on the Copiapó aquifer. This will benefit the community, improving the conditions of the aquifer for the drinking water supply to the cities of Copiapó, Caldera and Chañaral.
EnergyandgreenhousegasemissionsmanagementAnglo American has made a continual effort since 2007 to detect and implement energy efficiency opportunities and reduce emissions to mitigate the effects of climate change.
The Copper business unit defined a project portfolio to reduce energy consumption and emissions with regard to business-as-usual (BAU) with evaluation milestones in 2015 and 2020. The project portfolio is updated each year and monitored periodically. Moreover, the new energy and emissions management standard N°23 was issued in 2011 and is mandatory for all Anglo American’s operations. Its aim is to identify the risks and opportunities of the electricity and fuel supply, define the structure and competencies of the technical teams accountable, set suitable targets and measurements, and implement technology to optimise the processes and machinery used. This standard is compatible with the requirements of ISO 50001 on energy management.
ENERgYCONSUMPTIONANgLOAMERICAN’SCOPPERbUSINESSUNIT(2009-2010-2011)
2009 2010 2011
Fuelconsumption
(gJ67)
Electricityconsumption
(gJ)
Totalenergyconsumption
(gJ)
Fuelconsumption
(gJ)
Electricityconsumption
(gJ)
Totalenergyconsumption
(gJ)
Fuelconsumption
(gJ)
Electricityconsumption
(gJ)
Totalenergyconsumption
(gJ)
Total 5,603,970 5,955,981 11,559,951 5,633,148 5,941,849 11,574,997 6,460,948 6,461,775 12,922,724
Los Bronces (1)
1,781,605 2,918,303 4,699,908 1,798,290 2,942,914 4,741,204 2,318,793 3,485,543 5,804,336
El Soldado 1,433,727 911,067 2,344,794 1,349,240 963,347 2,312,587 1,508,953 949,335 2,458,288
Mantos Blancos
1,188,147 912,500 2,100,647 1,248,410 845,090 2,093,500 1,291,827 830,953 2,122,780
Mantoverde 711,319 710,772 1,422,091 733,648 683,076 1,416,724 871,352 684,356 1,555,708
Chagres 489,172 503,339 992,511 503,560 507,422 1,010,982 470,023 511,589 981,612
(1) The energy consumption at Los Bronces in 2011 includes the commissioning of the Los Bronces development project.
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CO2EMISSIONSANDCARbONFOOTPRINTOFANgLOAMERICAN’SCOPPERbUSINESSUNIT(2009-2010-2011)
2009(t) 2010(t) 2011(t)
Total 1,143,295 1,147,792 1,362,601
Los Bronces 365,119 368,756 542,558 (1)
El Soldado 186,433 183,173 222,492
Mantos Blancos 353,023 347,982 307,465
Mantoverde 162,318 171,168 201,648
Chagres 76,402 76,713 88,438
(1) The emissions generated by Los Bronces in 2011 include the commissioning of the Los Bronces development project.
bREAKDOWNbYSCOPE(2011)
SCOPE1 SCOPE2
CO2from
processes(tonnes)
CO2fromfossil
fuels(tonnes)
CO2fromelectricity
purchased(tonnes)
Total 111,726 487,730 763,145
Los Bronces (1) 0 175,608 366,950
El Soldado 7,838 114,710 99,944
Mantos Blancos 39,990 97,130 170,345
Mantoverde 63,898 65,703 72,047
Chagres 0 34,579 53,859
(1) The emissions generated by Los Bronces in 2011 include the commissioning of the Los Bronces development project.
The challenges for 2012 are to consolidate the technical teams and their certifiable competency levels, and to issue measurement and verification standards for the savings and reductions attained in accordance with international standards.
ENERgYSAVINgATLOSbRONCES
One of the main projects to reduce energy consumption and emissions put in place and monitored in 2011 was the modification of the leaching wetting system undertaken at the Los Bronces operation, which has reduced energy consumption and also had positive effects on copper recovery. This initiative has permanently saved 93,900 GJ and 5,000 tonnes of CO2 a year.
Non-conventionalrenewableenergy(NCRE)Anglo American has driven the use of NCRE in its energy grid by buying attributes and facilitating the initiatives of project development specialists in the energy sector.
The company has to date hired virtually all its NCRE needs, set forth in Law 20.257, up to 2020. In 2011, it met the requirement of including 5% of NCRE through the following initiatives:
Contract with Norvind pursuant to which the company purchased NCRE attributes at the Totoral wind farm for an amount equivalent to an injection of 81 GWh.
Contract with Lycan to purchase attributes equivalent to 22 GWh of energy from mini hydroelectric power plants.
Furthermore, in 2011 the energy committee made progress with the analysis of NCRE alternatives, like the design of the wind farm project for Mantos Blancos and the installation of a wind speed measurement tower at Los Bronces to assess the potential of the area and in partnership with Seawind.
AirqualityIn 2011, all Anglo American’s operations delivered on the air quality commitments, monitoring and reporting their emissions to the competent authority. The plans put in place by Chagres and Mantos Blancos should be highlighted, which were a major step towards attaining better air quality performance.
EmissionsmanagementatChagres
ANNUALCONCENTRATIONSIN2011
Station SO2 (ug/m3) PM68 10 (ug/m3)
Romeral 17 -
Santa Margarita 73 -
Catemu 17 71
Lo Campo 31 42
EMISSIONSATChAgRES(t) 2009 2010 2011
Arsenic 16.9 2.69 4.42
Sulphur 7,076 6,932 6,959
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ChAgRESRECEIVESANACCOLADEFORITSENVIRONMENTALPERFORMANCE
Chagres actively participated in work with the authorities of the Environment Ministry and six other smelters in Chile to analyse the technical and economic aspects of the new emissions standard for smelters that is expected to be issued in 2012.
As a result of all these analyses and assessments by the Environment Ministry, the authorities recognised Chagres as the smelter with the best environmental performance in Chile.
DUSTCONTROLATMANTOSbLANCOS
In 2011, Mantos Blancos identified the main sources of emissions, developed an updated baseline of the particulate matter sources and gave priority to drawing up the actions plans for 2011-2012.
Various measures launched in 2010 were maintained, adding new ones in 2011, which included:
Equipment capsuling programme.
Implementation of the industrial cleaning programme at plants and dust suction measures.
Controls of airborne sources of dust on conveyor belts.
These programmes, along with the activities scheduled for 2012, will entail an investment of $8.6 million over five years.
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Mineralandnon-mineralwastemanagementThe waste management of Anglo American’s Copper business unit is governed by the mineral and non-mineral waste performance standard of the Anglo American Environment Way. This policy includes mandatory requirements and recommended practice for the responsible management of mineral and non-mineral waste and hazardous substances.
The total mass mining waste in 2011 was 195 million tonnes. The hazardous industrial waste, mainly solvent extraction (SX) sludge and used oil, accounted for 25,193 tonnes, and was collected, recycled or disposed of by duly authorised external companies.
MASSMINERALWASTE(2009,2010,2011)
2009 2010 2011
Waste and gravel (millions of accumulated tonnes) 1,854 1,995 2,163
Tailings (millions of accumulated tonnes) 504 532 559
MASSMINERALWASTEbYOPERATION(2011)Wasteandgravelwithandwithout
leaching(thousandsoftonnes)
Tailings(thousandsoftonnes)
Slag(thousandsoftonnes)
Total 168,044 27,312 340
Los Bronces 60,017 19,981 0
Mantos Blancos 32,489 294 0
El Soldado 61,206 7,037 0
Mantoverde 14,332 0 0
Chagres 0 0 340
INDUSTRIALWASTEgENERATED(2009-2011)
2009 2010 2011
Hazardous waste (t) 22,758 24,764 25,193
Non-hazardous waste (t) 7,161 9,398 9,175
Recycling (t) 25,094 28,658 27,603
Recycling comprises waste considered to be in the hazardous and non-hazardous waste categories. The difference is mostly waste allocated for final disposal by external companies.
INDUSTRIALWASTEbYOPERATION(2011)
hazardouswaste(t)
Non-hazardouswaste(t)
Total 25,193 9,175
Los Bronces 1,291 5,341
Mantos Blancos 1,487 400
El Soldado 546 2,101
Mantoverde 772 397
Chagres 21,097 935
STRATEGIC RAW MATERIALSThe main raw material of Anglo American’s Copper business unit is the ore extracted from its mines. The total ore dispatched for processing in 2011 was 52.2 million tonnes.
OREDISPATChEDFORPROCESSINg(INThOUSANDSOFTONNES)
2009 2010 2011
Total 47,969 45,146 52,261
Los Bronces 20,512 18,909 23,896
Mantos Blancos 8,609 8,306 9,279
El Soldado 9,172 8,708 9,074
Mantoverde 9,676 9,223 10,012
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CONCENTRATESMELTED(Inthousandsoftonnes)
2009 2010 2011
Chagres 525 529 552
RAWMATERIALS
2009 2010 2011
Lubricating & hydraulic oil (m3) 3,276 2,739 4,810
Explosives (tonnes) 48,429 47,971 53,717
bREAKDOWNbYOPERATION2011
Lubricating&hydraulicoil(m3)
Explosives(tonnes)
Total 4,810 53,717
Los Bronces 1,034 22,300
Mantos Blancos 2,176 8,160
El Soldado 1,255 16,565
Mantoverde 301 6,692
Chagres 43 0
biodiversityandrehabilitationAnglo American’s strategy commits its different operations to use natural resources efficiently, protecting and rehabilitating ecosystems that are affected by operations. The biodiversity performance standard, which is part of the Anglo American Environment Way, establishes a commitment to identify, understand and manage impacts on sites or sensitive species (species, habitat, endangered ecosystem, protected areas). It also establishes the application of a mitigation hierarchy to achieve a zero net loss target for the biodiversity or net positive contribution, considering the risks and opportunities of each case.
In terms of the potential impact on the biodiversity of the operations of Anglo American in Chile, Los Bronces and El Soldado are in sectors near priority biodiversity sites and are therefore the main focus. The Quellaveco and Michiquillay projects in Peru are on lands adjacent to areas of high biodiversity value and this factor is being thoroughly considered in the studies of the different project stages.
Since 2010, the company has made biodiversity risk assessments and peer reviews in partnership with the NGO Fauna & Flora International to continuously improve the biodiversity management performance. The El Soldado operation was distinguished in this process in 2011 for its commitment to an ambitious long-term compensation plan.
The company also continued to put a compensation plan in place to mitigate the effects of the Los Bronces development project and a peer review is envisaged for 2012.
Anglo American’s Copper business unit has 89,004 hectares of land under its management, of which 9,232 hectares have been disturbed by mining operations and mineral waste. To date, 14.4 hectares have been rehabilitated at El Soldado as part of the reforestation plans committed in projects prior to 2008.
ELMELÓNMOUNTAINRANgECONSERVATIONPLAN–ELSOLDADO
As part of the El Melón mountain range conservation plan agreed on with the authorities in 2010, reforestation was started and the scientific research contained in the plan, including the following:
An agreement was reached with the Catholic University of Chile, which will draw up the first study on the biodiversity conservation status of the El Melón mountain range.
Agreement with Instituto de Ecología y Biodiversidad (IEB), which will conduct the first study on restoring native forest in the El Melón mountain range.
Agreement with Universidad Viña del Mar, which is creating a germplasm bank and developing projects for sustainable use of forests
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PARqUEEXPLORADORqUILAPILÚNATLOSbRONCES
Parque Explorador Quilapilún is a heritage rescue project whose aim is the representation, value and appreciation of the native flora of the Metropolitan region in Chile. It is a four-hectare park, with three hectares devoted exclusively to the representation of the native landscape in the region and five theme-related gardens with native flora, including species in danger of extinction, species of domestic use, species with industrial potential, a cactus field and a butterfly garden. The park also has a Native Flora Dissemination Centre with leadership in energy and environmental design (LEED69) certification.
The park has a clear educational purpose, mainly aimed at schoolchildren and university students. Visits to the park will be with a guide by means of coordinated visits for each group according to the academic cycle and the park will be open to the public in the last quarter of 2012..
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CLOSURE PLANSThe closure plans of all the operations of Anglo American’s Copper business unit were updated twice in the year based on the mine closure toolbox which is part of the Anglo American Environment Way. The purpose of this is to extend the closure planning focus from mere financial provisioning for rehabilitation and physical closure of the mine site to planning to assure mine post-closure sustainability, leaving a positive legacy in the areas of influence.
The main benefit of periodical updating is that it enables the applicable regulatory changes, the new environmental qualification rulings, the new facilities or projects undertaken or other pertinent findings to be included in the plan. The closure activity planning is updated with this data, including the pre-closure, closure and post-closure activities to be carried out with their corresponding valuation to increase funding if necessary.
The biggest change in the Copper business unit was the total inclusion of the Los Bronces development project facilities, and an update of the cost estimate to remove the old tailings dams from the basin of the San Francisco river at Los Bronces.
CLOSUREPLANS
Estimatedclosuredate
Los Bronces 2045
Mantos Blancos 2021
El Soldado 2036
Mantoverde 2016
Chagres 2045
According to the latest life of mine (LOM) 2011.
REGULATORY COMPLIANCE Regarding regulatory compliance, action continued in 2011 with two investigation processes started by the environmental authorities at Los Bronces.
In the case of sulphate seepage due to irrigation of the forest at Las Tórtolas, the hydrogeological studies and site tests were completed to propose a technical solution to the authorities, and a meeting was scheduled for March 2012.
With regard to acid drainage from a gravel deposit, the environmental authorities fined the company $37,000 for failure to comply with the regulation. Besides the temporary in situ neutralisation system continuing to operate, studies were conducted for a definitive solution to convey the flows to the process water management systems. A meeting was scheduled for January 2012 to present the progress to the authorities.
There was also an environmental incident at El Soldado which led to the start of a penalty process. Mine operations affected an area of native forest with species with different levels of protection, including Belloto del Norte (Beilschmiedia miersii) and lingue. The company conducted an impact assessment and reported this to the Nogales court and the environmental assessment agency in Valparaíso. Work was started to draw up a redress and compensation plan which will be submitted to the competent authority.
EnvironmentalincidentsEnvironmental incidents are classified according to the seriousness of the environmental impact, for which criteria like the duration of the effect, surface area affected, value of the ecosystems impacted, severity of the impact on the health of people are used, among others. The purpose of determining the seriousness of an incident is to focus the urgency of the response and level of investigation undertaken to learn from the experience and prevent repeats.
Anglo American introduced the following new five-tiered scale in 2011:
Level 1 incident (minor impact)Level 2 incident (low impact)Level 3 incident (medium impact)Level 4 incident (significant impact)Level 5 incident (significant and permanent impact)
NUMbEROFENVIRONMENTALINCIDENTS(2009-2011)(1)
2009 2010 2011
Total 47 44 80
Los Bronces 14 10 5
Mantos Blancos 6 1 1
El Soldado 5 1 2
Mantoverde 7 5 1
Chagres (2) 15 27 71
(1) Includes all the level 1 to 5 incidents.(2) The increase in reporting at Chagres in 2011 was due to the decision to include all the minor incidents according to the new scale.
There was only one level 3 or higher incident in the year involving impact on the native forest at El Soldado
SPILLSOFSUbSTANCESIN2011(m3)
Processwater
Sulphuricacid
solutions
Acid/raffinate
solutionsOil/fuel Slurry/
tailings
Spills of substance m3
0.4 0.2 0 0.705 0
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Anglo American’s approach to social issues is primarily underpinned by two pillars: firstly to forge a trusting relationship with its stakeholders by means of ongoing and transparent dialogue, and secondly to leverage the positive impacts and results of its core business so surrounding communities can experience a lasting benefit.
Anglo American supports the Universal Declaration of Human Rights and strives to respect the rights of host communities, their culture, beliefs and heritage.
Its social approach also includes active stewardship of biodiversity and land, marine and freshwater systems because of their intrinsic environmental value and importance to host communities. The commitment is to open communication and a periodic review of the social expectations.
This vision was embedded in The Anglo American Social Way: Management System Standards70, which sets out the company’s vision, values and policy and outlines the social management system.
GROWING WITHOUR NEIGHBOURS
The vice-president of corporate affairs co-ordinates social and community affairs through the community and social development management, which issues the guidelines for meeting the social requirements and manages partnerships in Chile like Un Techo para Chile (A Roof for Chile), Enseña Chile and Elige Educar, along with the Emerge programme. For operations and projects in Peru, general or project managers report to the CEO on these issues and there is a site team in charge of community relations.
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70http://www.angloamerican.com/development/approach-and-policies/policies-standards-commitments/social
Anglo American Sustainable Development Report 2011 55
VISION,PRINCIPLESANDPOLICY
VisionTo make a lasting positive contribution to the communities associated with our operations, and to be a partner of choice for host governments and communities as well as an employer of choice.
PrinciplesWe will engage respectfully with host communities throughout the project cycle, and be accountable to our stakeholders.
Host communities should experience a lasting benefit from the presence of Anglo American operations and we will seek to maximise the benefits flowing from the operation of our core business in addition to traditional social investment.
All necessary steps will be taken to spread the application of good practice, and to learn from negative social impacts, complaints, incidents, audit findings and other non-conformances to prevent their recurrence. Our businesses will put in place appropriate mechanisms for handling and resolving grievances.
Common, non-negotiable performance standards and procedures shall be applied throughout the Group as a minimum requirement.
Policy:We hold our leaders accountable for managing the social impacts of our activities, including activities undertaken on our behalf by contractors.
We expect our line managers and supervisors to provide effective leadership in the management of social issues whilst recognising that avoiding adverse impacts is the responsibility of all who work for us.
Managers are responsible for the full implementation of the Anglo American Social Way at all managed operations.
Thisrequires:The allocation and efficient management of appropriate resources, including staff, training and assurance resources.
The development, implementation and maintenance of social policies, programmes and procedures.
Effective, proactive social impact identification, assessment and control consistent with the objective of minimising negative, and maximising positive impacts.
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MANAGEMENT FOCUS IN 2011Community relations were focused on four main work areas:
Advancing the requirements of the social management plan of the Anglo American Social Way at operations, but also in exploration activities and development projects.
Managing impacts through the Socio-Economic Assessment Toolbox (SEAT).
Sustainable social investment in the areas of direct influence.
Corporate programmes or national partnerships.
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ANGLO AMERICAN SOCIAL WAYThe Anglo American plc Executive Committee has endorsed and committed to the implementation of the Anglo American Social Way as a governing framework for the management of social impacts. The Board seeks assurance of compliance with the Anglo American Social Way standards through:
The Good Citizenship Business Principles letters of assurance. Regular self-assessments.Peer reviews.Community consultation.Implementation of the Anglo American Socio-Economic Assessment Toolbox (SEAT) process. Third-party audits.
The requirements set out in the Anglo American Social Way concern respect for indigenous peoples, cultural heritage, human resettlement processes and migrant employees. It also establishes that social issues shall be considered during mergers and acquisitions and raises the need of reaching benefit sharing agreements with communities.
The Anglo American Social Way applies to all the development stages of capital projects by complying with the requirements issued by the social and government affairs department. Projects must demonstrate they meet the requirements before the company authorises their transition to the next stage.
COMPLIANCEWIThThEREqUIREMENTSOFThEANgLOAMERICANSOCIALWAY(self-assessmentofoperations)(1)
OperationsinChile 2010Average 2011Average
Los Bronces 3.6 3.8
Mantos Blancos 3.0 3.2
El Soldado 3.2 3.5
Mantoverde 3.2 3.6
Chagres 3.2 3.7
ChileTotal 3.2 3.6
(1) Self-assessment has a score of 0 to 5 for each of the requirements. A score of 3 indicates the requirements were met and a score of 5 is world class practice.
MANAGING IMPACTS WITH SEATAll exploration activities, development projects and operations managed by Anglo American must develop, implement and periodically review a social management plan. In the case of operations, the plan must be based on a thorough study of the Socio-Economic Assessment Toolbox (SEAT), and should include the following:
Sound knowledge of the development nature and needs of the communities.
Inclusive consultation with the complete spectrum of affected and interested parties and the authorities of the communities.
Joint identification of the positive and negative impacts of the operation.
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The operations of Anglo American’s Copper business unit conducted the latest SEAT study in 2008, which will be updated in 2012. Based on this data, each of the operations draws up its social management plan each year. Besides defining social investment projects, it establishes a series of commitments regarding community
concerns about the impacts of the operation and requires ongoing monitoring of these variables, and this is co-ordinated by the respective sustainability managements but with the involvement of the productive areas of each of the operations.
INFLUENCEAREAOFOPERATIONSANDPROJECTSANDMAINCOMMUNITYCONCERNS
Operation Areaofinfluence Mainconcernsdetected
ElSoldado District of Nogales, particularly the following sectors
and towns: Collagüe, Los Caleos, Chamizal, Garretón,
El Melón, Macal and the El Melón mountain range.
Poor contribution to the local economy
Concern about the impact of operations on the
environment.
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Chagres Districts of Catemu, particularly the towns of Santa
Margarita, San José, Chagres and Lo Campo; Llay Llay,
Panquehue and San Felipe.
Concern about the possible impacts of the
operation on the environment and agriculture.
Poor contribution to the economic and social
development of towns.
Low integration of company employees in the
communities where they live.
Lack of work opportunities and for youngsters to
further their studies.
Little community access to social goods.
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Mantosblancos City of Antofagasta, district of Sierra Gorda, particularly
the town of Baquedano.
Negative effects of operations on the environment.
Dust and contamination from haulage.
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Mantoverde Districts of Chañaral and Copiapó, including the towns
of Chañaral, Barquito and El Salado. The districts of
Diego de Almagro and Caldera too.
There are unfulfilled expectations about the
economic impact of the operation.
Negative perception of acid transport by road from
Chañaral.
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Losbronces Districts of Lo Barnechea, Til Til, Colina and Los Andes;
specifically the town of Riecillos.
Employability and training.
Poor access to information, health, culture and
recreation.
Concern about safety and the environmental impact.
Perception of unsafe access road to the mine.
Improvement of the education infrastructure quality.
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quellaveco This includes the districts of Torata, San Cristóbal
Calacoa and Carumas; the farming community
of Tumilacaocata, Coscore and Tala; the farming
community of Asana; the hamlets of Huachunta,
Chilota, the farming community of Aruntaya, the
town of Titire and the city of Ilo (corresponding to the
provinces of Mariscal Nieto and Ilo, department of
Moquegua). The lower valley of Tambo in the province
of Islay (Arequipa) too.
Responsible social and environmental management.
Community resettlement.
Timely project information.
Employment and training for the local community.
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Michiquillay Farming communities of Michiquillay and La Encañada;
districts of La Encañada, Namora, province of Celendín.
High expectations of work and business
opportunities.
Concern about the increase in users due to the
company’s presence. That could have an impact
on drinking water, access roads, housing, electrical
services and noise.
Extend community engagement to the local districts
and make a social investment.
Mitigate the socio-environmental impacts from
exploration, mainly in the Namora basin.
Transparent and timely information on the project
development.
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Anglo American Sustainable Development Report 2011 57
ComplaintsmanagementAnglo American’s Copper business unit is in the process of standardising the community complaints and grievances reception and management procedure at all its operations, which should be completed in 2012.
In 2011, the five operations in Chile had a complaints reception and management procedure, but they only met part of the requirements established in the SEAT guidelines. Los Bronces, El Soldado and Chagres received 25 complaints in the year, mainly concerning operational aspects like the high truck traffic and noise.
OPENDOORPROgRAMME
To maintain its relations with people, communities or the authorities who are interested in finding out about the productive processes of operations, there is an open door programme, and visits are scheduled from March to October each year..
SUSTAINABLE SOCIAL INVESTMENT Anglo American’s social investment is based on detecting the needs and learning about the community around each operation or project. The company invested $5,065,910 in these community engagement plans for operations in Chile in 2011.
SUSTAINAbLEINVESTMENT
2009$thousand
2010$thousand
2011$thousand
El Soldado 575 381 923
Chagres 402 371 332
Mantos Blancos 472 577 307
Mantoverde 252 210 604
Los Bronces 2,320 3,118 2,899
OPERATIONSTOTAL 4,021 4,657 5,065
Totalcorporatesocialinvestment 518 11,760 2,698
TOTALINVESTMENTIN2011 4,539 16,417 7,763
Besides increasing the investment, Anglo American’s Copper business unit has sharpened its focus, giving priority to three main areas:
Quality of life: activities were mainly focused on improving the environment, dignified housing and access to basic utilities.
Enterprise: encouragement of the productive projects of entrepreneurs in the area and which have a community impact, and all based on sustainability and productive growth.
Education: support of improvements to the infrastructure of schools and to generate tools to boost the competencies and skills in the sector, along with support of improving the quality of education in schools near operations, besides generating cultural events in the district.
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MANTOS BLANCOSTalenteducationprogrammeforhigh-riskstudentsAs part of its commitment to education, Mantos Blancos continued to support the Developing and Leading Academic Talent (DeLTA) programme of the Catholic University of the North71. The aim of this programme is to strengthen various competencies in academically talented students from high-risk social and economic backgrounds in the Antofagasta region, specifically from the districts of Antofagasta, Mejillones and Sierra Gorda.
The students selected participate in extracurricular refresher classes which require a high degree of commitment from them and their families. Based on a study conducted by the company in 2011, the following are the main achievements of the programme: participants give more importance to education, the development of social skills that have a major influence on class mates regarding the transfer of academic content, the parents of the students have higher academic expectations for them.
22 students from the Antofagasta region were awarded scholarships during the year. Scholarships of excellence were also given to graduates of the DeLTA programme who entered the Catholic University of the North. The total investment in 2011 was $198,000.
MANTOVERDELocalsocialenterprisefundThe local social enterprise fund arose from a strategic partnership between the Mantoverde operation, Corporación de Desarrollo Chañaral and the Municipality of Chañaral. The objective is to make a contribution to local enterprise and to the economic and productive diversification of the district, and funding was given to innovation-focused projects.
Entrepreneurs are trained to apply and are supervised by an external consultant during the execution of projects.
14 initiatives were developed and financed in 2011, directly and indirectly benefitting over 100 people with funding of over $70,000.
MAIN PROJECTSBY OPERATION
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Ser socio preferido Crecerconnuestrosvecinos
CHAGRESResearch-basedscienceeducationprogramme(ECbI)The aim of the ECBI programme of the University of Chile72 is to improve the quality of science education of primary and kindergarten schoolchildren at two schools in the district of Catemu. Its mission is to give all the children a better understanding of nature, arousing curiosity and raising their scientific skills.
The methodology used is “research-based” and reproduces in the classroom the procedures used by scientists to study the natural world. The programme thereby trains teachers, increasing their science knowledge and skills and favouring a proper approach to sciences.
45 teachers were trained in 2011, which had a positive impact on around 500 pupils. Working groups will be formed in 2012 with the education departments in the districts of Catemu, Panquehue and Llay-Llay to jointly draw up a participative intervention plan. The aim is to extend the programme to all the schools in the district of Catemu and start to implement it in the district of Panquehue.
EL SOLDADOLosCaleosruraldrinkingwatersystemexpansionAs of 2007 and in the interest of contributing to the progress of the communities close to its projects, El Soldado has been committed to developing the “Los Caleos rural drinking water system expansion” project for the people of that town in the district of Nogales.
The project was launched with an investment of $502,000. Due to growth of the population and surface area modifications, it was redesigned to increase the network and modify its distribution, with the final investment amounting to $862,000. The Municipality of Nogales, through the Undersecretariat for Regional Development (SUBDERE73), funded the project with $80,000.
In addition to this funding, Anglo American seconded a professional during the project execution to inspect the works, and he also trained families on good water usage. After five years of work, 49 families in the rural sector are now connected to the drinking water system and a further 200 families will do so in the near future.
LOS BRONCESEnvironmentaleducationprogrammeThe “implementation of the second environmental education programme for municipal schools in the district of Til Til” project is aimed at raising the environmental awareness of pupils, generating action, concern and change that make a contribution to environmental conservation and appreciation. The programme is focused on three areas: environmental education for pupils, on-site teacher training, and promotion of the projects involved.
The programme is undertaken by the municipal social development corporation of Til Til and financed by Anglo American, with investment amounting to $82,085 in 2011. 1,170 pupils have benefitted directly from the programme so far and 4,000 pupils indirectly.
71http://www.deltaucn.cl.72http://www.ecbichile.cl73http://www.sudere.gov.cl
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MICHIQUILLAYbusinessmanagementandfirstaidtrainingSocial investment in the Michiquillay project arose from the agreement reached with the company and the community. With regard to training, the business management programme was given by the partnership between Universidad Privada del Norte and the consulting company Recursos SAC. 75 community entrepreneurs graduated after completing the entire programme, which entailed an individual diagnosis of each company, a business improvement plan, attendance of 19 training modules, compliance with assignments, and attendance of workshops and talks with specialists.
1,000 community members were trained on first aid and safety. The objective was to share Anglo American’s safety policies, principles, values and plans with the communities, and make them aware of the importance of health and safety in activities undertaken.
QUELLAVECOLudotecasforeducationThe Quellaveco project has established engagement with education as one of its main action plans. In 2011, the Ludotecas (learning by playing) programme was launched in the Moquegua region in Peru, whose aim is to make a contribution to the comprehensive development of children of 0 to 3 years in early infancy.
The programme has different partners in the public and private sectors and is run by the Asociación para la Infancia Feliz (AIFE). Ludotecas has two large action areas. Firstly, children have the opportunity of improving their listening and language, fine and gross motor and social and personal skills, with learning sessions conducted by female trainers based on music, games and affection. Secondly, mothers and/or family members can improve their competencies to achieve the comprehensive development of their children’s skills of health, nutrition, education and good manners.
The success of the programme in 2011 resulted in the implementation of five community and two mobile Ludotecas, with the participation of 453 children and 390 mothers and/or family members. $102,459 was invested in the project that will end in mid-2012.
MAIN PROJECTSIN PERU
Being the partner of choice: growingwithourneighbours
62 Anglo American Sustainable Development Report 2011
CORPORATE PROGRAMMESAnglo American’s Copper business unit has some social investment programmes that are managed in a centralised way by its corporate offices as they have a larger reach to the areas of influence of operations in Chile. The managed programmes are: the Emerge programme, No more shanty towns in Santiago, reconstruction, Elige Educar and Enseña Chile. Investment in these programmes in 2011 amounted to $2,698,325.
CORPORATESOCIALINVESTMENT
2009$thousand
2010$thousand
2011$thousand
Investment in programmes 518 3,107 2,116
Investment due to the earthquake 8,653 583
Total 518 11,760 2,698
Reconstruction:housingprojectatCocholgüeThe earthquake in 2010 affected the lives of Chileans. Anglo American therefore decided to provide relief, supporting the reconstruction of 449 definitive houses for families in the town of Cocholgüe in the district of Tomé, Bio-Bío region. By late 2011, 150 houses had been delivered and the rest are in the initial construction phase.
In addition to this, Anglo American donated $235,852 in 2011 to additional works at three of the six modular schools that were built by the company in Constitución, Caleta Tumbes, Quirihue, Yungay and Cocholgüe.
EmergeprogrammeThe main aim of this initiative is to make a contribution to the economic development and well-being of the communities around the company’s operations. It provides support to small- and medium-sized entrepreneurs to generate self-sustainable businesses that make a contribution to the economic development of the towns around mining operations.
The Emerge programme is currently available in Iquique, Antofagasta, Sierra Gorda, Chañaral, Caldera, Copiapó, Nogales, La Calera, La Cruz, Quillota, Hijuelas, Catemu, Llay Llay, Putaendo, Panquehue, San Felipe, Los Andes, Colina, Til Til and Lo Barnechea.
The programme works with two groups of entrepreneurs:
Small-sizedentrepreneurs: in partnership with the non-profit organisation Fondo Esperanza74, business skills education and individual micro-loans are given to entrepreneurs grouped into community banks (groups of 18 to 25 people who live in the same sector and act as co-guarantors). Five years after the partnership was launched, more than 25,000 entrepreneurs have benefitted from the micro-loans.
Empoweryourbusiness: this segment is focused on medium-sized entrepreneurs who are developing and addressing the challenge of growing. They have support with training, commercial assistance to draw up a business plan, financing through a loan for those plans that are profitable and follow-up and implementation of the enterprises financed. To train entrepreneurs, Anglo American has a partnership with the eClass programme of the Adolfo Ibáñez University (UAI)75 business school, which offers a diploma in business development. At the same time as the training process, entrepreneurs draw up a business plan with business advice from professionals of the TechnoServe Foundation.
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74http://http://www.fondoesperanza.cl75http://www.uai.eclass.cl
Being the partner of choice: growingwithourneighbours
Anglo American Sustainable Development Report 2011 63
With regard to the results of this programme, out of the 80 entrepreneurs who embarked on the programme in 2011, 66 graduated with a diploma. Since 2007 to date, there have been over 200 graduates from the programme and more than $2,053,829 has been delivered in soft loans to boost their enterprises. Part of the impact of the programme is evident in the 50% average sales increase of entrepreneurs who entered the programme in 2011.
NomoreshantytownsinSantiagoIn early 2010, Anglo American and the Un Techo Para Chile (A Roof For Chile) Foundation signed the “No more shanty towns in Santiago” agreement, the aim of which is to boost the development of social empowerment and make progress with the eradication of shanty towns in the Metropolitan region. Under this agreement, Anglo American committed to providing financial support for the management of 48 housing projects, which will provide a definitive and dignified solution to 4,535 families living in shanty towns in the region.
As of December 2011, 23 of the 48 projects had been delivered, benefitting more than 2,000 families. Anglo American has donated over $2.5 million to this initiative.
EligeEducarprogramme76This is a project of the faculty of education and public policy centre of the Catholic University of Chile, the aim of which is to give the teaching profession greater value through various advertising campaigns in the media to motivate the most talented youngsters to embark on a teaching career.
The programme has had a high impact so far, with a 30% increase in the number of talented students who read education. In 2011, talks were given to 10,000 pupils at schools in different districts throughout Chile.
EnseñaChileprogramme77
The aim of the programme is to build a movement of professionals of excellence of various disciplines, who make a two-year commitment to transform education through their work in the classroom. Anglo American is a strategic partner of this programme, which it supports with funding and management through its participation in the management council.
The company invested $202,000 in 2011, giving the programme 77 professionals in the Metropolitan, Los Ríos and Araucanía regions. They are teaching at 39 schools and it is estimated that each professional teaches about 164 pupils, reaching around 12,600 students throughout Chile.
76http://www.eligeeducar.cl77http://www.ensenachile.cl
Being the partner of choice: growingwithourneighbours
64 Anglo American Sustainable Development Report 2011
Being the partner of choice: commitmenttothesupplychain
For Anglo American’s Copper business unit, co-operation and joint work with its product and service suppliers78 is essential to fully embed its ˝Sustainable Development in the Supply Chain Policy˝79 and its ˝Business Principles˝80 in the management. Besides striving to assure strict compliance with current legislation, the company encourages suppliers to adopt comprehensive, safe and socially responsible conduct, and to identify mutual sustainable development benefit.
The Procurement and Contracts Management, which reports to the Finance and Administration Vice-Presidency, is in charge of the company’s supplier relations and achieving the objectives in this area.
COMMITMENT TOTHE SUPPLY CHAIN
ANGLO AMERICAN’S COMMITMENT It is the responsibility of all those who engage with suppliers on Anglo American’s behalf to actively promote and implement this policy across the entire supply chain. This requires:
Complying with legislation and subscribing to generally accepted norms that positively promote and enhance good practices across the supply chain.
The development, implementation and maintenance of globally acceptable standards and procedures that are embedded in the supply chain process.
The allocation of appropriate resources and the provision of internal training.
A risk-based approach to segmenting and engaging with our supply base, which includes communication, assessments, audits, corrective action plans and, where appropriate, assisting suppliers to build their capability.
Open and transparent two-way communication.
Working with suppliers to identify opportunities for mutual sustainable development benefit.
Reporting on a regular and consistent basis, both internally and externally, on our sustainable development supply chain journey.
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EXPECTATIONS OF OUR SUPPLIERSThe effective management of safety with a vision of zero harm.
The effective management of occupational health risks with a vision of a healthy and productive workforce.
Upholding fundamental human rights and fair labour practices, in line with internationally recognised standards.
Ensuring that their operations, products and services supplied to Anglo American comply with all national and other applicable laws and regulations. When supplying these on-site, complying with any additional site-specific standards and procedures.
Maintaining and promoting ethical standards, sound business practices and good governance.
Contributing to the economic and social well-being of the communities in which the supplier operates.
Responsible environmental management with a vision to minimise damage to the environment.
Implementing effective management systems and risk-management strategies.
Providing clear, accurate and appropriate reporting on agreed indicators.
Cascading the principles and codes into their supply chain.
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SUSTAINABLE DEVELOPMENT IN THE SUPPLY CHAIN POLICY
78In this report, suppliers include both product and service suppliers, also called contractors.
79www.angloamerican.com/~/media/Files/A/Anglo-American-Plc/siteware/docs/sd_supplychain_spanish2011
80www.angloamerican.com/~/media/Files/A/Anglo-American-Plc/siteware/docs/bus_principles_spanish
Anglo American Sustainable Development Report 2011 65
Being the partner of choice: commitmenttothesupplychain
SUPPLIERS AND HUMAN RIGHTSAnglo American’s Supplier Sustainable Development Code81, released in 2010, was designed to help suppliers understand what is expected of them in regard to sustainable development.
The Code contains standards that Anglo American regards as mandatory as well as standards that are strongly encouraged. The Code includes the following key elements expected of suppliers:
Best practice to protect the safety and health of their workforce.
Commitment to human rights and fair labour practices (this point includes abolition of child labour, forced labour, upholding freedom of association and non-discrimination).
Joining Anglo American in the fight against HIV/AIDS.
Being accountable, ethical and acting with integrity (complying with applicable legislation, working against corruption and being committed to transparency and honesty).
Being good corporate citizens.
Best practice in environmental and material stewardship.
Cascading into their supply chain
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It should be noted that in early 2011 a corruption, fraud and bribery prevention clause was added to all new contracts with suppliers to align the company with Chilean legislation on this issue, specifically Law N°20.393 on the criminal liability of bodies corporate.
MANAGEMENT FOCUS IN 2011In 2011, Anglo American’s Copper business unit focused management on consolidating the set of policies and guidelines the company has issued to manage its supply chain, particularly the roll-out of the sustainable development in the supply chain policy and supplier sustainable development code in 2010. Progress was also made with the new procedures for engaging with suppliers focused on local procurement, an audit plan and a programme that recognises suppliers that add value.
The targets for 2012 will be to approve and implement the local procurement strategy, assure payment to all small- and medium-sized suppliers within 30 days with no exceptions. This will enable operations in Chile to obtain the Propyme82 seal from the Ministry of Economy, Production and Tourism, which encourages better payment conditions for small-sized companies. In 2011, the company made progress with the agreements to get Mantos Blancos on the world class supplier development programme83.
81http://www.angloamerican.com/~/media/Files/A/Anglo-American-Plc/siteware/docs/sd_suppliercode_spanish11
82www.sellopropyme.gob.cl
83The world class supplier development programme, driven by Sofofa, Codelco and BHP Billiton, generates global progress opportunities for Chilean companies. It introduces new learning and innovation mechanisms, which are open to and aligned with the sustainable growth of Chile, and creates investment attraction opportunities and boosts and increases exports of high value-added products and services.
SUPPLIER AWARDSOne management highlight in 2011 was two suppliers of the Copper business unit, ME Elecmetal and Netafim Ltd., being selected among the 15 finalists of the Supplier Awards 2011 programme of Anglo American plc in the innovation category. The award was finally given to ME Elecmetal, a Chilean supplier for the El Soldado and Los Bronces operations.
66 Anglo American Sustainable Development Report 2011
QUELLAVECO PROJECT IN PERU FOSTERING NEW SUPPLIERS
As part of its local spend policy, Anglo American held a series of workshops in June 2011 in the cities of Ilo and Moquegua in Peru on local development opportunities, supported by the respective Chambers of Commerce of those areas.
The company presented the most important aspects of its global local spend development policy and announced the establishment of a $500,000 fund to support new entrepreneurs.
It also announced a supplier training programme, aimed at making them more competitive, which will give them better opportunities of domestic and international growth.
AUDIT PLAN In 2010, Anglo American implemented a global sustainable development audit plan to give its suppliers and contractors an opportunity to assess their performance with regard to the company’s requirements, and to explore possible opportunities of enhancing the health and safety, labour and environmental management systems.
Audits are undertaken with a self-assessment questionnaire, and the answers are verified on-site by an external company. Three suppliers were audited in 2011 in Chile.
LOCAL PROCUREMENTLocal procurement is one of the aims of Anglo American’s policy, whose vision is to create development opportunities for companies around its operations and projects. It is important for a global company to have a positive impact on the country in which it operates, at national and local levels around operations. The local procurement policy84 defines types of suppliers according to location and their relationship with the location of the site receiving the products or services: Nationalsupplier:suppliers registered or located in the same country as the operation.
Regionalsupplier85: suppliers located in the same province/region/state or territory as the operation.
Localsupplier:suppliers registered or located in the immediate area of the operation.
In 2011, the company and the community development area started to define a local procurement strategy for Chile, and Peru’s strategy has already been approved. The strategies will be put in place in both countries in 2012.
LOCALSPENDPERCENTAgEbYTYPEOFSUPPLIER*2009-2011
2009Spend(%) 2010Spend(%) 2011Spend(%)
Local Regional National Local Regional National Local Regional National
8.2% 7.0% 88.5% 5.1% 3.5% 89.9% 5.3% 4.0% 95.7%
* The national percentage includes the regional one and the latter the local one.
SUPPLIER DEVELOPMENT PROGRAMMEAnglo American’s Copper business unit has had a supplier development programme (SDP) at its operations since 2007, whose financing is shared by the respective operation, Chile’s Economic Development Agency (CORFO87) and participating companies.
These initiatives of co-operation and continual improvement have the following general objectives:
To train suppliers in business management areas by means of on-site training workshops.
To generate incentives so participating companies bolster their adherence to and act on the supplier sustainable development code.
To get companies to apply a continual improvement system for quality, safety, labour rights and environmental protection.
The supplier development programmes continued to evolve in 2011. The management difference was embedding these initiatives in the local spend strategies, which will improve management by including compliance indicators. From 2007 to date, 104 suppliers of Anglo American’s operations have joined this programme.
SUPPLIERSINThESDP(2009-2011)
2008 2009 2010
18 15 40
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In 2011, the spend percentage in the immediate area of the operations of Anglo American’s Copper business unit86 accounted for 5.3% of the total spend budget. Chile accounted for 95.7% of the spend with suppliers and the spend with foreign suppliers represented the remaining 4.3%..
84 http://www.angloamerican.com/~/media/Files/A/Anglo-American-Plc/siteware/docs/supplier_procurementspanish.
85 It is important to note that statistically the Metropolitan region was not included in the regional figures so as not to overestimate the regional impact, even though the Los Bronces operation is in such region.
86 Anglo American’s Copper business unit only keeps a record of operations that are in the production stage. Operations in Peru are still in the project stage.
87 www.corfo.cl
Being the partner of choice: commitmenttothesupplychain
APPENDICES
Anglo American Sustainable Development Report 2011 69
Appendices: verificationreport
PricewaterhouseCoopers, Av. Andrés Bello 2711 – Pisos 2, 3, 4 y 5, Las Condes – Santiago, Chile
RUT: 81.513.400-1 – Teléfono: (56) (2) 940 0000 – www.pwc.cl
(A free translation from the original prepared in Spanish)
Santiago, September 14, 2012
Messrs Shareholders and DirectorsAnglo American Copper Business Unit
Independent Limited Assurance Review – 2011 Sustainable Development Report of Anglo AmericanCopper Business Unit
We have been engaged to perform a limited assurance engagement on the 2011 Sustainable Development Report of AngloAmerican Copper Business Unit.
Management’s Responsibility for the Sustainable Development Report
Anglo American Copper Business Unit management is responsible for the preparation and presentation of the 2011Sustainable Development Report in accordance with the Global Reporting Initiative guidelines, G3.1 version (“GRI–G3.1”), and with the mining and metal sector supplement (the “Sector Supplement”) developed jointly with theInternational Council of Mining and Metals (ICMM). This responsibility includes: designing, implementing andmaintaining internal controls for the proper preparation and presentation of the Sustainable Development Report.
Practitioner’s Responsibility
Our responsibility is to express a conclusion on the information disclosed in the 2011 Sustainable Development Reportbased on our work performed.
We conducted our work in accordance with the International Standard on Assurance Engagements (ISAE) 3000. ThisStandard requires that we comply with ethical requirements and plan and perform the assurance engagement to obtainlimited assurance whether any matters come to our attention that causes us to believe that the information disclosed in the2011 Sustainable Development Report does not comply in all material respects with the criteria of the GRI-G3.1, the SectorSupplement and the requirements for the application level A+.
In a limited assurance engagement the evidence-gathering procedures are more limited than for a reasonable assuranceengagement, and therefore less assurance is obtained than in a reasonable assurance engagement. The procedures selecteddepend on the practitioner’s judgment, including the assessment of the risks of material incompliance of the SustainableDevelopment Report with the criteria of the GRI-G3.1 and the Sector Supplement.
Within the scope of our work we performed amongst others the following procedures:planning work according to the relevance and the volume of information presented in the 2011 SustainableDevelopment Report,obtaining an understanding of internal controls,interviews with officials responsible for the information provided for the report,verification, based on evidence, that the data included in the Report are consistent with documentary evidence and/orcome from verifiable supporting information sources,verification that the financial information included in the Sustainable Development Report is derived from accountingrecords or audited financial statements as at December 31, 2011 by another firm of independent auditors,visits to the corporate headquarters of Anglo American Copper Business Unit, and site visits to the operating divisionsLos Bronces, El Soldado, Mantoverde and Chagres.
Our limited verification work also included a confirmation of the application of the requirements set by GRI-G3.1 forsustainability reports with application level A+.
Conclusion
Based on our limited assurance engagement, nothing has come to our attention that causes us to believe that the 2011Sustainable Development Report of Anglo American Copper Business Unit does not comply in all material respects withthe criteria of GRI-G3.1, for application level A+, and the sector supplement.
Mathieu Vallart
70 Anglo American Sustainable Development Report 2011
INDICATOR DESCRIPTION PAGE/COMMENTREPORTING
LEVEL
1.1. Statement from the general manager. 4 & 5
1.2. Description of key impacts, risks and opportunities. 4,12, 20, 32, 38, 42
ORGANISATIONAL PROFILE
2.1. Name of the organisation. 8
2.2. Primary brands, products and/or services. 8 & 10
2.3. Operational structure, including main divisions, operating companies, subsidiaries and joint ventures. 8 & 9
2.4. Location of the organisation’s headquarters. 8
2.5. Number of countries in which the organisation operates. 8 & 9
2.6. Nature of ownership and legal form. 8, 9, 27
2.7. Markets served. 10
2.8. Scale of the reporting organisation. 8 & 9
2.9. Significant changes during the reporting period regarding size, structure, or ownership. 3
2.10. Awards received in the reporting period. 14
REPORT PARAMETRES
REPORT PROFILE
3.1. Reporting period for information provided. 2
3.2. Date of the most recent previous report. 2010 period
3.3. Reporting cycle. Annually
3.4. Contact point for questions related to the report or its content. 3
REPORT SCOPE AND BOUNDARY 3.5. Process for defining report content. 3
3.6. Boundary of the report. 2 & 3
3.7. State specific limitations on the scope or boundary of the report. 2 & 3
3.8. Basis for reporting on joint ventures, subsidiaries, affiliates, leased facilities, outsourced operations and other entities. 2
3.9.Data measurement techniques and the bases for calculations, including assumptions underlying estimations applied to the compilation of the indicator and other information in the report.
The amounts of money are given in US dollars unless indicated otherwise. The data and calculations presented to answer the quantitative indicators were made according to the requirements of the G3.1 version and mining sector supplement, unless indicated otherwise.
3.10. Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement.
To safeguard information comparability, it is clearly indicated in the text whether re-statements of information should be provided with regard to earlier sustainable development reports.
3.11. Significant changes from previous reporting periods in the scope. 3
3.12. GRI content index 68-73
3.13. Verification 69
GRI INDEX REPORTING LEVEL
Fully
Partially
Appendices: GRI Index
Anglo American Sustainable Development Report 2011 71
* Additional indicator
REPORTING LEVEL
Fully
Partially
INDICATOR DESCRIPTION PAGE/COMMENTREPORTING
LEVEL
GOVERNANCE, COMMITMENTS, AND STAKEHOLDER ENGAGEMENT
4.1. Governance structure of the organisation. 27
4.2. Indication of whether the Chair of the highest governance body is also an executive officer. 27
4.3. Unitary board structure. 27
4.4. Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body.
Minority shareholders of Anglo American Sur and Norte attend shareholders’ meetings and have direct communication with the company.
4.5. Linkage between payment for members of the highest governance body, senior managers, executives, and the organisation’s performance. 27
4.6. Procedure in place to avoid conflicts of interests. 29
4.7. Processes for determining the qualifications and expertise of the members of the highest governance body. 27 & 29
4.8. Statement of mission, vision and values. 12 & 13
4.9. Evaluation of the environmental, social and economic performance of the members of the highest governance body. 29, 44, 55
4.10. Processes for evaluating the highest governance body’s own performance. The company does not have these kinds of processes to date.
COMMITMENTS TO EXTERNAL INITIATIVES
4.11. Explanation of whether and how the precautionary approach or principle is addressed by the organisation. 38
4.12. Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or endorses. 51, 57-63, 66
4.13. Memberships in associations and/or national/international organisations supported. 15
STAKEHOLDER ENGAGEMENT
4.14. List of stakeholder groups engaged by the organisation. 3
4.15. Basis for identification and selection of stakeholders with whom to engage. 14, 55, 56
4.16. Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group. 14, 55, 56
4.17. Key topics and concerns that have been raised through stakeholder engagement. 3
ECONOMIC AREA
ECONOMIC PERFORMANCE
EC1 Direct economic value generated and distributed. 20-22
EC2 Financial implications and other risks and opportunities for the organisation’s activities due to climate change. 47
EC3 Coverage of the organisation’s defined benefit plan obligations. 21
EC4 Financial assistance received from government. 22
EC5* Range of ratios of standard entry level wage compared to local minimum wage. 34
MARKET PRESENCE
EC6 Policy, practices and proportion of spending on locally-based suppliers at significant locations of operation. 66
EC7 Procedures for local hiring and proportion of senior management hired from the local community. 27, 34
INDIRECT ECONOMIC IMPACTS
EC8 Development and impact of infrastructure investments and services provided primarily for public benefit, through commercial, in kind, or pro bono engagement. 51, 58-66
EC9* Understanding and describing significant indirect economic impacts, including the extent of impacts. 58-66
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72 Anglo American Sustainable Development Report 2011
* Additional indicator
REPORTING LEVEL
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INDICATOR DESCRIPTION PAGE/COMMENTREPORTING
LEVEL
ENVIRONMENTAL AREA DMA Management Approach 42-44
MATERIALS
EN1 Materials used by weight or volume. 50-52
EN2 Percentage of materials used that are input materials. 50-52
ENERGY
EN3 Direct energy consumption by primary energy source. 47
EN4 Indirect energy consumption by primary source. 47
EN5* Energy saved due to conservation and efficiency improvements. 48
EN6*Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy consumption and in energy requirements as a result of these initiatives.
48
EN7* Initiatives to provide reductions in indirect energy requirements and reductions achieved. 48
WATER
EN8 Total water withdrawal by source. 46
EN9* Water sources and habitats significantly affected by withdrawal of water. 46
EN10* Total percentage and volume of water recycled and reused. 46
BIODIVERSITY
EN11
Description of lands adjacent to, or located in, natural protected areas or areas of high biodiversity outside protected areas. Indicate location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas.
51
EN12 Description of significant impacts of activities, products, and services on biodiversity in and areas of high biodiversity value outside protected areas. 51
EN13* Habitat protected or restored. 51
EN14* Strategy and actions in place and future plans for managing impacts on biodiversity. 51
MM1 Amount of land (owned or leased, and managed for production activities or extractive use) disturbed or rehabilitated. 51
MM2 The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and the number (percentage) of those sites with plans in place. 51
EMISSIONS, EFFLUENTS AND WASTE
EN16 Total direct and indirect greenhouse gas emissions, by weight. 48
EN17 Other indirect greenhouse gas emissions, by weight. 48
EN18* Initiatives to reduce greenhouse gas emissions and reductions achieved. 47 & 48
EN19 Emissions of ozone-depleting substances, by weight. 48
EN20 NOx, SOx, and other significant air emissions, by type and weight. 48 & 50
EN21 Total water discharge by quality and destination.
52The water discharge data is excluded in this report, and is expected to be included in the next report.
EN22 Total weight of waste by type and disposal method. 50
EN23 Total number and volume of significant accidental spills. 52
MM3 Total amounts of overburden, rock, tailings, and sludge and their associated risks. 50
REGULATORY COMPLIANCE
EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations. 52
GENERAL
EN30* Total environmental protection expenditures and investments by type. 45
Appendices: GRI Index
Anglo American Sustainable Development Report 2011 73
REPORTING LEVEL
Fully
Partially
* Additional indicator
INDICATOR DESCRIPTION PAGE/COMMENTREPORTING
LEVEL
SOCIALLabour practices and decent work
DMA Management Approach 32 & 38
EMPLOYMENT
LA1 Total workforce by employment type, employment contract, gender, and region. 33 & 34
LA2 Total number and rate of employee turnover by age group, gender, and region. 33
LA3* Social benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations. 35
LA15 Return to work and retention rates after parental leave, by gender. There is no record of this rate. Anglo American will report this next year.
COMPANY–EMPLOYEE RELATIONSHIP
LA4 Percentage of employees covered by collective bargaining agreements. 37
LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements.
Anglo American does not have these kinds of procedures.
MM4 Number of strikes and lock-outs exceeding one week’s duration, by country. There were no strikes
HEALTH AND SAFETY AT WORK
LA6* Percentage of total workforce represented in formal joint management-worker health and safety committees. 40
LA7 Rates of absenteeism, occupational diseases, lost days, and number of work-related fatalities by region and gender. 4, 33 & 39
LA8 Education programmes in place related to HIV and other serious contagious diseases. 12
TRAINING AND EDUCATION
LA10 Average hours of training per year per employee by gender and employee category. 36
LA11* Programmes for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings. 35 & 36
LA12* Percentage of employees receiving regular performance and career development reviews by gender. 36
DIVERSITY AND EQUAL OPPORTUNITY
LA13Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity.
28, 34
LA14 Ratio of basic salary of men to women by professional category. 34
SOCIALHuman Rights
INVESTMENT AND PROCUREMENT PRACTICES
HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening. 65
HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken. 66
NON-DISCRIMINATION
HR4 Total number of incidents of discrimination and actions taken.32, 35
There were no incidents of this kind in the reporting year.
FREEDOM OF ASSOCIATION AND COLLECTIVE BARGAINING
HR5Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights.
12, 64 & 65There were no incidents of this kind in the reporting year.
CHILD LABOUR
HR6 Operations identified as having significant risk for incidents of child labour, and measures taken to contribute to the elimination of child labour.
12, 64 & 65There were no incidents of this kind in the reporting year.
Appendices: GRI Index
74 Anglo American Sustainable Development Report 2011
REPORTING LEVEL
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Partially
Appendices: GRI Index
INDICATOR DESCRIPTION PAGE/COMMENTREPORTING
LEVEL
SOCIALHuman Rights
FORCED LABOUR
HR7Operations identified as having significant risk for incidents of forced or compulsory labour and measures to contribute to the elimination of forced or compulsory labour.
12
SECURITY PRACTICES
HR8 Percentage of security personnel trained in the organisation’s policies or procedures concerning aspects of human rights that are relevant to operations.
Security guards at operations are trained on the Voluntary Principles on Security and Human Rights.
INDIGENOUS RIGHTS
HR9 Total number of incidents of violations involving rights of indigenous peoples and actions taken. No incidents to report.
MM5Total number of operations taking place in or adjacent to indigenous people’s territories, and number and percentage of operations or sites where there are formal agreements with indigenous people’s communities.
The company has no operations related to indigenous people’s territories.
HR10 Percentage and total number of operations that have been subject to human rights reviews and/or impact assessments. 12, 64, 65
CORRECTIVE MEASURES
HR11 Number of grievances related to human rights filed, addressed and resolved through formal grievance mechanisms.
There were no incidents of this kind during the reporting period.
SOCIALProduct responsibility
CUSTOMER HEALTH & SAFETY
PR1Lifecycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures.
11
MM11 Programmes and progress relating to materials stewardship. 11
SOCIALSociety
DMA Management Approach. 54, 55
COMMUNITY
SO1 Percentage of operations with implemented local community engagement, impact assessments, and development programs. 55-57
MM6 Number and description of significant disputes relating to land use, customary rights of local communities and indigenous peoples.
The company has no operations related to indigenous people’s territories.
MM7The extent to which grievance mechanisms were used to resolve disputes relating to land use, customary rights of local communities and indigenous peoples, and the outcomes.
The company has no operations related to indigenous people’s territories.
SO9 Operations with significant potential or actual negative impacts on local communities. 55-57
SO10 Prevention and mitigation measures implemented in operations with significant potential or actual negative impacts on local communities. 55-57
MM8Number and percentage or company operating sites where artisanal and small-scale mining take place on, or adjacent to, the site; the associated risks and actions taken to manage and mitigate these risks.
Anglo American supports small-scale mining through the Mining Council. In 2011, the Mantoverde operation also trained workers in the Chañaral area to get A4 driving licences.
* Additional indicator
Anglo American Sustainable Development Report 2011 75
Appendices: GRI Index
REPORTING LEVEL
Fully
Partially
INDICATOR DESCRIPTION PAGE/COMMENTREPORTING
LEVEL
SOCIALSociety
MM9 Sites where resettlements took place, the number of households resettled in each, and how their livelihoods were affected in the process.
No resettlements took place in the year.
MM10 Number and percentage of operations with closure plans. 52
CORRUPTION
SO2 Percentage and total number of business units analysed for risks related to corruption. 29
SO3 Percentage of employees trained in the organisation’s anti-corruption policies and procedures. 29
SO4 Actions taken in response to incidents of corruption. 29
PUBLIC POLICY
SO5 Public policy positions and participation in public policy development and lobbying. 29
COMPLIANCE WITH LAWS AND REGULATIONS
SO8Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations related to society engagement (government, community, academic institutions, NGOs, etc.).
There were no incidents of this kind during the reporting period.
* Additional indicator
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PHOTOGRAPHYANGLO AMERICAN ARCHIVE
Av. Pedro de Valdivia 291Cp 750-0524ProvidenciaSantiagoChile
www.angloamerican.com