Sustainability Performance H2 2021: Transcript

[OFFICIAL]

Sustainability

Performance 2021

October Session

Friday, 29th October 2021

[OFFICIAL]

Sustainability Performance

Friday, 29th October 2021

Sustainability Overview

Mark Cutifani

Chief Executive

Introduction and agenda

Welcome everybody and thank you for joining us today for the second of our sustainability performance updates for 2021. Please read the legal document in your own time.

Health and safety

Dealing with Covid

Let us start with the most important issue we have had to deal with in the course of the last 18 months, obviously Covid, and our WeCare programme. You have heard us talk about the holistic and coordinated programme we have had in place since the outset of the pandemic to protect both lives and livelihoods. In many ways, the pandemic has proven more challenging this year than last, particularly in those countries where vaccination roll-outs have been slow and certainly remain low. Our work this year has been to focus on keeping employers and community members safe. Making sure that people know their status, so they help us keep everyone safe, while at the same time we help each other manage the unintended consequences of the pandemic.

Mental health and gender-based violence programmes have been very important in managing some of these secondary but also very material issues through our communities, another key part of our work has been pushing the longer-term solution around vaccinations, both within our operations and in our communities. In many places, we are actually administering vaccines to both employees and community members, and that has been a very important part of our programme.

At the same time, we need to bring our business back up to capacity. It has been a very important part of a measured and carefully managed process throughout the operations, making sure new protocols protect people while Covid remains an issue in society in the broad sense. It is about making sure that we are also making people aware of the issues, making sure we are tackling complacency between the respective ways and to help people move beyond the many unhelpful mythologies and false information that we have circulating around communities and through social media on vaccines. And that is a very important part of the work we are doing. And in some of our open forums we have been able to debunk some of the stories going round, but there is still a lot of work to be done.

ESG

Portfolio, innovation and people

ESG is at the heart of our strategy. Our purpose guides our strategy and our strategy has three interlocking areas of endeavour: portfolio, innovation and people. It is about making sure we have got the right assets, we are making sure we are bringing those assets to account, and you can only do that if you have got the right people doing the right work at the right time.

2

[OFFICIAL]

Sustainability Performance

Friday, 29th October 2021

FutureSmart MiningTM

Of much relevance to our discussions today and central to our innovation work is FutureSmart MiningTM, which is again our holistic approach to driving competitive transformation. FutureSmart MiningTM is about driving sustainability outcomes through technology and digitalisation, developing and implementing step innovations to transform how we source, how we mine, process, move and market our products to customers. We have been talking about FutureSmart MiningTM and how we are linking all these key elements together since 2015 and certainly it is central to our progress around safety and the reduction of our energy, water, social and physical mining footprints.

Addressing the E, the S and the G

Our sustainable mining plan addresses the E, the S and the G. Although we have our own name for each of those to help bring them to life and drive the change we want to see across the organisation.

The E equals healthy environment, the S equals thriving communities and the G is about being a trusted corporate leader in all of its dimensions. Each term and each conversation has a key set of stretching goals that we set three years ago and as you would expect, as we improve we continue to increase the stretch in these targets. This is about making sure we improve and we are covering the right ground and continuing to improve as part of our culture and as a way of doing things across the organisation.

For our mines to be safe, responsible and productive, they need to operate in areas that are thriving. When we talk about areas, we are talking about within the communities both in the local sense and on a broader scale, whether it is provincial or in regions. This is where our collaborative regional development approach comes in, which is all about creating collaborative mechanisms that drive economic developing that is wholly independent of mining in our host community. We get together with other mining companies, with other businesses, we look at the infrastructure we each need and try and position those infrastructures so the community has access to and gets broader benefits so they can also develop new commercial opportunities. I should also point out again that safety, health, environment and social metrics are embedded in our executive and senior management pay mechanisms, both bonuses and longer-term incentives, including specifically around emissions and off-site job creation.

Safety

On safety, health and environment, we continue to focus on our improvement journey. We have come a long way but we still have more work to do. Looking at safety, while I am pleased with the progress, which reflects the great work of the elimination of fatalities task force, and in fact if we go back to 2013, we have reduced fatal incidents by 93%, but with the sad loss of Carlos Gonzalo Rodriguez at Quellaveco a couple of months ago, it does tell us that there are still things that we can do better and certainly lessons we can learn across the business. We are certainly working hard to get to that zero.

Health

In terms of health cases, ongoing improvements in controls and our focus on the elimination of hazards at source are having a very positive effect and impact across the operations, which

3

[OFFICIAL]

Sustainability Performance

Friday, 29th October 2021

is really important to us. So that is exposure to dust, chemicals, and other environmental hazards that have immediate potential health impacts.

Environment

On the environment, no incidents to date. Again, a good result and that reflects the work we have done to improve our planning and operating disciplines across the business. This chart shows that we have come a long way, we have improved and we have got much more consistency in the operations, but we are still not at that level where we want to be.

Jobs and communities

We have also been improving our performance on a broader front and the pandemic has reinforced to the outside world the importance of a mining company's social performance work. We support over 138,000 enterprise development jobs in our local communities, and it is around 200,000, if you factor in the impacts of our local procurement activities. We have ambitious plans as part of the Sustainable Mining Plan to achieve our 2030 target of supporting five jobs outside the mine gate for every job inside the mine gate. And that talks to future of work and other concepts that we understand and are developing to make sure that our workforce and our communities are connected and we are making a real difference in the communities for the longer term.

And looking at female senior management representation, we are making good progress towards our goal of 33% by 2023. We are at 28%, the direction of travel has been very positive and I certainly expect to get to 33% by 2023.

Social Way 3.0

Finally, last year we launched our new Social Way 3.0 programme and that is our package of social standards and practices. We are working to fully transition to the new, higher bar that we have set, which really is the industry benchmark for community engagement and social performance. In stepping back, you can see our trends of improvement across this range of non-financial metrics and certainly something that we all talk about on a regular basis within the business and it certainly defines the approach, the thinking and how important it is to us from a cultural perspective.

We believe the market recognises these improvements as indicators to how we think and create a resilient and sustainable business.

Sustainable Mining Plan

A quick update on our progress towards Sustainable Mining Plan goals across the board. In some of the more mature areas, such as reducing carbon emissions, we have initiatives up and running. In others, it is strategies and baselining work is where we are focussed at the moment. But on the whole the major goals are on track.

As you would expect, Covid has slowed progress on some interim milestones but the teams are working on ways to catch up and we remain on track in terms of the overall programmes. We are looking at whether there are ways that we can define our goals in a more tailored way to our portfolio as it evolves. This reflects CO2 emissions are addressed globally, but water needs are more local and so we need to think a little more creatively in how we present metrics that represent those local jurisdictional issues in a way that is meaningful to the broader public and our stakeholders.

4

[OFFICIAL]

Sustainability Performance

Friday, 29th October 2021

Drought in Chile

In Chile water scarcity continues to be a major challenge. In the central zone in Chile, where Los Bronces is located, it continues to face unprecedented climate conditions with a continuation of the longest drought ever recorded, and 2021 likely to be the driest year ever recorded. First and foremost, we recognise that freshwater sources must be prioritised for human consumption and so the work around Los Bronces has really been about identifying new water sources, converting what may have been brackish or other types of water sources to sources that we can use, and so there are a whole range of solutions that the team's put together to keep us operating. And we will need to continue on that work to make sure that we have got capacity for the longer term.

It is clear in the longer term we will need enhanced water security that will require the construction of desalination capacity. Our focus at the moment is to work collaboratively with our stakeholders to ensure that whatever solution we proceed with contributes to a better outcome for all. So that is with local businesses where we share water resources, it is local communities and on a broader basis in terms of Chile, and that work is currently underway. It is not currently our intention to construct a desalination facility, as we believe we have appropriate water security, but certainly I think it will remain in the mix as part of the longer- term options that we are looking at.

Our near-term focus is on enhancing water efficiency as well. We recycle about 87% of water used in Los Bronces; and we still think we can squeeze a bit more out of the system. We are also looking at newer technologies and we are trialling these technologies in El Soldado, such as Coarse Particle Recovery and Bulk Ore Sorting, along with other infrastructure investments, and that looks at use of tailings thickness to improve those efficiencies, and that should help continue improve our access to water.

At Collahuasi we are expecting an EIA approval, which will facilitate the construction of a desalination solution and is expected to commence ramp-up by the end of 2024. This timing will enable a significant reduction of water use from continental sources, which will then be incorporated into our expansion programmes for the site for the longer term. Our share of initial investment in Collahuasi is expected to be around $900 million for all desalination pipeline and electricity infrastructure, and importantly it is modular, allowing us to increase water supply over time as the operation grows. The resource has significant potential and the project will provide around 60% of the operation's requirements. Current water recycling rates are around 77%, so we are doing reasonably well but there is more work we can do on the efficiency side.

Overall, we are happy with the progress on the Sustainable Mining Plan; and as mentioned, we are running a process to refresh the plan to stay in line with emerging issues, which we will update you on next year. Some learnings through Covid that we will incorporate into the new plans and we will take another step over the next 12 months in getting better at water right across the business.

Healthy Environment

Looking at the first pillar in our Sustainable Mining Plan, the environment. In April, I said that we were finalising our work on Scope 3 and coinciding with this work is the release of our

5