Antofagasta : Financial Reporting Document

2021 Climate Change Report

Producing Copper Responsibly and Sustainably

2021 Climate Change Report

	MESSAGE	POSITION	CHILE AND	OUR BUSINESS	OUR CLIMATE	PILLAR 1:	PILLAR 2:	PILLAR 3:	PILLAR 4:	PILLAR 5:
CONTENTS	FROM	STATEMENT ON	CLIMATE	CHANGE	GOVERNANCE DEVELOPING CLIMATE	REDUCING GHG	MANAGING STRATEGIC	MANAGING THE ENVIRONMENT	INTEGRATING	NEXT STEPS GLOSSARY
AT A GLANCE
	THE CEO	CLIMATE CHANGE	CHANGE	STRATEGY	CHANGE RESILIENCE	EMISSIONS	RESOURCES	AND BIODIVERSITY	STAKEHOLDERS

2021 Climate Change Report

Sponsors

Vice Presidency of Corporate Affairs and Sustainability

Vice Presidency of Finance

Vice Presidency of Strategy and Innovation

Antofagasta Minerals

Contents

Climate Change Committee

Writing

Ruth Bradley

Corporate Citizenship

Design

www.ngr.design

Contents

• Message from the Chief Executive Officer .	3
• Position Statement on Climate Change.	4
• Chile and Climate Change.	6
• Our Business at a Glance.	8
• Our Climate Change Strategy.	9
• Governance .	11

Pillar 1: Developing Climate Change Resilience.	14
• Adaptation.	17
• Risk identification.	18
• Climate scenario analysis.	23
• Results.	29

Pillar 2: Reducing GHG Emissions.	32
• Scope 1 emissions.	36
• Scope 2 emissions.	38
• Scope 3 emissions.	39
• Internal carbon price.	40

Pillar 3: Managing Strategic Resources .	41
• Water .	43
• Energy.	46

Pillar 4: Managing the Environment and Biodiversity48

• Environmental management .	50
• Biodiversity Standard .	50
• Nature-based Solutions .	51

Pillar 5: Integrating Stakeholders.	54
• Communities .	56
• Suppliers.	58
• Employees .	58
Next Steps.	60
Glossary .	62

December 2021

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	MESSAGE	POSITION	CHILE AND	OUR BUSINESS	OUR CLIMATE	PILLAR 1:	PILLAR 2:	PILLAR 3:	PILLAR 4:	PILLAR 5:
CONTENTS	FROM	STATEMENT ON	CLIMATE	CHANGE	GOVERNANCE DEVELOPING CLIMATE	REDUCING GHG	MANAGING STRATEGIC	MANAGING THE ENVIRONMENT	INTEGRATING	NEXT STEPS GLOSSARY
AT A GLANCE
	THE CEO	CLIMATE CHANGE	CHANGE	STRATEGY	CHANGE RESILIENCE	EMISSIONS	RESOURCES	AND BIODIVERSITY	STAKEHOLDERS

Message from the Chief Executive Officer

The urgency of the threat posed by global warming was recently underscored by the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC). Emphasising the unprecedented scale of the changes taking place in the climate system, it warned of the extent of the reductions in greenhouse gas emissions that will be required to limit global warming to the target of 1.5°C and avert the most devastating effects of climate change.

As a copper producer, Antofagasta has a twofold contribution to make to addressing this challenge. As well as decarbonising our operations - as we are in the process of doing under our Climate Change Strategy - we can also be part of the solution by responsibly and sustainably supplying an input that is critical for the low-carbon technologies - from electromobility to the generation of renewable energy - that will, in turn, be key for reducing global emissions.

Climate change has long been a key consideration in our risk management and operating decisions and we have now gone on to deploy a broad-ranging Climate Change Strategy. Emissions reduction is, of course, central to it but it also focuses on adaptation and seeks to increase the resilience of our operations and the surrounding environment to changes such as declining rainfall and the resulting drought conditions.

Following the Strategy's approval by the Board of Directors in late 2020, we established a special Climate Change Committee and, through a transversal, collaborative and inter-disciplinary process, have made important progress on the different actions envisaged under the Strategy's five pillars: development of climate resilience, emissions reduction, efficient management of strategic resources, management of the environment and biodiversity, and the integration of stakeholders.

We have also set ourselves new and more ambitious climate-related targets. As well as carbon neutrality by 2050 - in line with Chile's national commitment - they include the intermediate target of a 30% reduction in emissions by 2025, compared to 2020. This is supported by the gradual switch of our operations to electricity generated exclusively from renewable sources, which we will complete in 2022.

Water scarcity is also a key concern in the areas where we operate and we are adjusting our sources of supply accordingly. Provided environmental permitting advances as scheduled, we expect that, by 2025, raw or desalinated seawater and reused or recycled water will account for 90% of our consumption. As well as ensuring supply security for our operations, this will help nearby communities by freeing continental water for human and agricultural consumption.

Looking ahead, we are implementing an important Electromobility Plan, focusing on the mine haulage trucks that are our main source of diesel-generated emissions. Our ultimate aim is to eliminate diesel entirely from our operations, replacing it with cleaner fuels such as hydrogen.

In 2019, we committed to implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and have recently published our 2021 TCFD Progress Report. The TCFD framework has proved extremely useful in helping us integrate climate change considerations into our core operating and financial planning cycles.

Our Climate Change Strategy has short, medium and long- term measures defined for each of its pillars. However, it is also a dynamic strategy that we will be adapting in line with changing climate scenarios, regulation and scientific and technological advances, always with the aim of boosting the company's resilience and competitiveness. This is, we believe, the way to fulfil our purpose of developing mining for a better future.

Iván Arriagada

Chief Executive Officer

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	MESSAGE	POSITION	CHILE AND	OUR BUSINESS	OUR CLIMATE	PILLAR 1:	PILLAR 2:	PILLAR 3:	PILLAR 4:	PILLAR 5:
CONTENTS	FROM	STATEMENT ON	CLIMATE	CHANGE	GOVERNANCE DEVELOPING CLIMATE	REDUCING GHG	MANAGING STRATEGIC	MANAGING THE ENVIRONMENT	INTEGRATING	NEXT STEPS GLOSSARY
AT A GLANCE
	THE CEO	CLIMATE CHANGE	CHANGE	STRATEGY	CHANGE RESILIENCE	EMISSIONS	RESOURCES	AND BIODIVERSITY	STAKEHOLDERS

Position Statement on Climate Change

At Antofagasta plc, we recognise that climate change is one of the greatest challenges facing society and our company today. It will not only affect our company, but also society as a whole. Copper, a key metal in low- carbon technologies, is helping to build a better future.

In line with this, we recognise:

• Our role and responsibility in contributing actions to address climate change; consequently, we are working to put climate change at the centre of our business and strengthen the climate resilience of both our operations and the environments and communities in our areas of influence;
• The need to support the goals of the Paris Agreement of reducing GHG emissions in the next decades and reach carbon neutrality by 2050;
• The urgency of reducing emissions, promoting climate resilience throughout our value chain and supporting multi-sector collaboration to accelerate the development and use of low-emission technologies as part of the necessary action for the transition to carbon-neutral mining;
• The importance of protecting the environment and biodiversity as key for enhancing the role of nature- based solutions in mitigating climate change and adapting to it.

In addition, as part of the International Council on Mining and Metals (ICMM), we adhere to its principles and the new Position Statement on Climate Change issued in October 2021.

Our Climate Change Strategy, therefore, seeks to:

Strengthen the Group's capacity to mitigate and adapt to climate change, enabling it to take early action to manage the resulting risks and opportunities in such a way as to mitigate the effects of climate change and have the capacity to adapt to new scenarios.

The five pillars that underpin the climate action envisaged in our Strategy serve as the framework of our roadmap for "developing climate change resilience, reducing GHG emissions, managing strategic resources, managing the environment and biodiversity, and integrating stakeholders".

Milestones

In 2018, we set ourselves the target of reducing our direct (Scope 1) and indirect (Scope 2) greenhouse gas emissions by 300,000 tonnes by 2022. As of end-2020, we had more than met this target, achieving a reduction of over 580,000 tonnes compared to the 2017 baseline.

In 2020, we progressed in our transition to the use of electricity from renewable sources. In July, Zaldívar became our first site to operate exclusively with renewable energy and, by 2022, all our electricity consumption will be renewably generated.

In May 2021, we announced two new emissions targets. In the short term, we aim to reduce our Scope 1 and 2 emissions by 30% by 2025 compared to 2020, equivalent to a reduction of 730,000 tonnes of CO2e. In line with Chile's national commitment, we are committed to achieving carbon neutrality by 2050, or sooner if technology permits.

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	MESSAGE	POSITION	CHILE AND	OUR BUSINESS	OUR CLIMATE	PILLAR 1:	PILLAR 2:	PILLAR 3:	PILLAR 4:	PILLAR 5:
CONTENTS	FROM	STATEMENT ON	CLIMATE	CHANGE	GOVERNANCE DEVELOPING CLIMATE	REDUCING GHG	MANAGING STRATEGIC	MANAGING THE ENVIRONMENT	INTEGRATING	NEXT STEPS GLOSSARY
AT A GLANCE
	THE CEO	CLIMATE CHANGE	CHANGE	STRATEGY	CHANGE RESILIENCE	EMISSIONS	RESOURCES	AND BIODIVERSITY	STAKEHOLDERS

Key initiatives

Under our Electromobility Plan, we are partnering with the Hydra consortium, an initiative that is exploring the use of hydrogen in mine haulage trucks. The aim of this and other projects is to create the conditions for the use of hydrogen in mining and to understand its real potential as a replacement for diesel.

To address water scarcity, we are working to increase the use of seawater in copper production. Today, this accounts for 43% of our water consumption but, as from 2025, providing the required permitting is in place, seawater and reused or recycled water will supply 90% of our consumption.

We have adopted the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) as a means of strengthening our climate resilience, adapting to the current impacts of climate change whilst also mitigating emerging climate risks and taking advantage of the opportunities to decarbonise

Scope 1 emissions

2020 Total

1,144,258 t CO2e

Scopes 1 and 2 target 30% reduction

by 2025 compared to 2020

Scope 2 emissions

2020 Total

1,290,748 t CO2e

Carbon neutrality by 2050 or sooner if technology permits

our business. The TCFD recommendations serve as an appropriate framework for sharing our efforts to combat climate change with our stakeholders and for managing its impacts.

Scope 3

In 2022, bring forward emissions inventory and establish commitments

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