Antofagasta : Financial Reporting Document

Second

Climate Change

Report

Developing mining for a better future

2023

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Contents

INTRODUCTION	3
Message from the Chief Executive Officer	4
Message from the Vice President of
Corporate Affairs and Sustainability	6
Position statement on climate change	9
Highlights of the last year	10
Copper and the low carbon economy	11
Antofagasta:
Developing mining for a better future	12
International and national context	14
Our Climate Change Strategy	16

1. RESILIENT MANAGEMENT	19
Climate change	20
Risks and opportunities of climate change	23
Risk management	23
Physical risks	24
Transition risks and opportunities	25
Resilience to climate change impacts	26
Climatic scenarios	28
Potential perceived impacts of climate
change on our operations	29
Results of climate scenario analysis	31

2. ACTIONS TO ACHIEVE
CARBON NEUTRALITY	32
Reducing operational emissions	33
Antofagasta emission targets	34
Decarbonisation roadmap	35
Scopes 1 and 2 emissions	36
Electromobility Plan	38
Reducing emissions in the value chain	40
Scope 3 emissions	40
Responsible supply	44
Efficient use of strategic resources	45
Water	45

Energy	47
Biodiversity and nature-based solutions	49
Biodiversity Standard	49
Nature-based solutions	50
Biodiversity protection and management	51
Key biodiversity initiatives	52
Circular economy	53
Stakeholder integration	56
Water management and adaption
from a territorial standpoint	56
Co-construction of supply chain measures	58
Education, training and
activation of stakeholders	59

APPENDICES

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Introduction

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INTRODUCTION / 1 . RESILIENT MANAGEMENT / 2 . ACTIONS TO ACHIEVE CARBON NEUTRALITY / APPENDICES

Message from the Chief Executive Officer

As a society, we are at a turning point in which it is imperative to make transformations that allow us to address climate change. Copper plays an essential role in the solution to this challenge as a key metal for the production of low-carbon technologies that are necessary for the energy transition and climate change mitigation.

As a copper producer, we recognise our commitment to sustainably and responsibly supply this essential metal to achieve carbon neutrality.

Our Climate Change Strategy is integrated into our business strategy and our management. It defines plans and actions around five pillars that enable us to enhance our resilience and competitiveness in the face of this phenomenon. It is a strategy that we update regularly, allowing us to adapt to potential changes in climate scenarios, regulations and scientific and technological advances to respond to the climate crisis. Over the past year, we made important progress in its implementation, advancing our purpose of developing mining for a better future.

We became one of the first mining companies in Chile to complete the transition to power supply contracts based on renewable energy in all our operations. This milestone allowed us to achieve,

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three years early, our goal of reducing greenhouse gas (GHG) emissions by 30% by 2025, thus bringing us closer to our long- term goal: carbon neutrality by 2050.

We continue to evaluate low-carbon alternatives to reduce emissions by replacing diesel in our operations, mainly in our mine haulage trucks. Through initiatives such as Charge On and the Hydra Consortium, we are advancing the development and evaluation of various technologies, powered by cleaner fuels such as electricity and green hydrogen.

Along these lines, our railway freight operation has acquired a locomotive fuelled by green hydrogen, which we expect to begin operating in 2024, becoming the first railway company in Chile to acquire this type of technology.

Reducing Scope 3 emissions continues to be a challenge given the complexity of their measurement and management.

We worked together with other companies in the mining industry worldwide to develop a guide that allows these emissions to be measured and reported.

This document includes the reporting of our Scope 3 emissions, and we are looking forward to establishing objectives that allow their management.

With regards to suppliers, we launched the Suppliers for a Better Future programme through which we support them to achieve higher sustainability standards, in particular, to measure emissions and make commitments to reduce them. Additionally, we apply an internal carbon price and environmental, social and governance (ESG) criteria when evaluating the allocation of contracts.

Through the new Water Policy, Energy Policy and Water Management Standard, we continue to improve the efficient management of our strategic resources, in order to ensure the supply of these resources for our operations and the surrounding area.

Our priority for the coming years will be to continue the implementation of our Climate Change Strategy, advancing the actions established for each of its pillars, working in line with the industry's objectives and national and international agreements.

Iván Arriagada

Chief Executive Officer

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Message from the Vice President of Corporate Affairs and Sustainability

1. How does Antofagasta Minerals address the challenge of climate change?

Firstly, through the implementation of our Climate Change Strategy, we are developing various initiatives for each of its pillars. Its development and implementation are carried out in a comprehensive and transversal manner at all levels of the company, from the Board of Directors to our partner companies. In addition, we have a Climate Change Committee, which is responsible for supporting the implementation, monitoring

and continuous improvement of the Strategy. One of the Committee's objectives is to maximise the participation of the different areas and levels of the organisation.

I would also like to highlight that climate change indicators are included in the performance agreements of all Antofagasta employees through which we seek to promote the alignment of teams and people with our purpose.

As an industry, we have to work collaboratively in order to promote and lead the responsible production of key metals and minerals for the energy transition and sustainable development. In that sense, as members of the International Council on Mining

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and Metals (ICMM) and the International Copper Association (ICA), we actively participate in working groups and activities aligned with our purpose. In Chile, we are part of different associations, such as the Centre of Business Leaders for Climate Action (CLG Chile) and the Chilean Hydrogen Association (H2 Chile), whose missions are in line with our Strategy.

It should also be noted that our Strategy is in line with Chile's commitments established in the Climate Change Framework Law, promulgated in June 2022, which establishes the objective of achieving neutrality in GHG emissions no later than 2050.

2. What progress would you highlight in the Climate Change Strategy during the last year?

First, I would highlight that we managed to meet our Scope 1 and 2 emissions reduction target early, initially established for 2025. This is due to the fact that, since April 2022, all our mining operations' power contracts are from 100% renewable sources. This achievement challenges us to set a new reduction target in 2023.

We also continued to refine our calculation of Scope 3 emissions in order to set in order to set targets as soon as possible. At the same time, we are working together with other ICMM member companies to develop a methodological guide to calculate and report these emissions, with a view to adopting a common standard for defining Scope 3 reduction objectives.

Within the framework of our Electromobility Plan, and with the objective of reducing diesel use at our operations, we are advancing different initiatives such as Charge On, Hydra Consortium and the analysis of pilot electromobility solutions at Antucoya, Los Pelambres and Centinela. It is also worth highlighting the acquisition by our Transport division of a cargo train powered 100% by hydrogen, which is expected to start operations in 2024.

Regarding our management of strategic resources such as water and energy, we understand that it is a challenge to increase our copper production while using these resources efficiently in order to ensure their supply for our operations and the surrounding environment. In 2022, we approved new Water and Energy policies to improve our management, reducing the use of continental

waters, and favouring the efficient use of renewable energy sources and clean fuels.

In December 2022, Centinela ended water withdrawals from wells, corresponding to 13% of operational consumption, and began using 100% sea water. In addition, we aligned our Energy Management System with the requirements of Chile's Energy Efficiency Law.

We also support the communities where our operations are located to adapt to climate change. In this context, it is worth highlighting the Aproxima En Red project, which seeks to gradually digitalise and automate the 80 rural sanitary services that provide drinking water in the Choapa Province to help address the acute drought.

On biodiversity, we updated our Biodiversity Standard, thus deepening the incorporation and management of biodiversity in each phase of the mining cycle. It is also important to note that we continued with the phytostabilisation of Los Pelambres' Quillayes tailings storage facility (TSF). In this way, we continue working to

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increase our knowledge regarding nature-based solutions (NbS) in order to define a future management plan.

In terms of the circular economy, at the end of 2022 we approved our Circular Economy Strategy, with the main objective of linear production processes moving towards a circular model. The Strategy is based on three pillars: reduce resource consumption, extend the useful life of materials and equipment and convert waste into new resources.

Finally, during 2022 we continued to work together with our suppliers. We maintained the implementation of an internal carbon price in tenders for categories intensive in carbon dioxide equivalent (CO2e) emissions and launched our Suppliers for a Better Future programme to support and encourage our suppliers to adopt more sustainable practices.

3. What challenges are identified for the coming years?

An important challenge in the coming years is the reduction of our Scope 1 and 3 emissions. In 2022, we continued to develop our decarbonisation roadmap, which will be completed in 2023,

and will analyse the implementation of new technologies in our operations, such as electric battery-powered trucks, green hydrogen, and/or trolley assist, with the objective of achieving carbon neutrality by 2050. The purpose is to present a decarbonisation plan that identifies intermediate goals and projects on which to base t.

Along these lines, in June 2023 Centinela became the mining company with the largest fleet of electric pick-up trucks in Chile with the arrival of 50 pick-ups that will operate with energy from 100% renewable sources. Eight pieces of electric ancillary mining equipment were also added to the Esperanza Sur autonomous pit.

On Scope 3 emissions, we continue deepen our calculation of these emissions in line with the work of the ICMM and we are establishing targets that will allow us to improve their management. The measures to address Scope 3 emissions reduction depend on joint efforts between producers, suppliers and customers and we will play a leading role in overcoming these challenges, establishing alliances to reduce these emissions throughout the value chain.

Regarding the efficient use of strategic resources, in 2023 we continue to explore new energy efficiency initiatives at our mining operations, with the aim of prioritising and developing implementation plans for initiatives that enable us to reduce our energy intensity in line with the Energy Efficiency Law requirements. In addition, we continue working to progressively reduce the use of continental water for productive purposes and thus meet our goal for sea and recirculated water to represent more than 90% of the total water used by our four operations once the desalinisation plant of Los Pelambres starts operating with its 800l/s capacity.

René Aguilar

Vice President of Corporate Affairs and Sustainability

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Position statement on climate change

At Antofagasta, we are urgently addressing the challenge of climate change, aware of the threat it represents to life and the planet we know today.

Copper is a key metal in the development of low-carbon technologies, which is why its responsible production is necessary to contribute to the challenges of climate change.

In line with science and the Paris Agreement's goals, as a Group we are committed to reducing our greenhouse gas (GHG) emissions in the short and medium term and achieving carbon neutrality by 2050 (or sooner if technology permits).

To meet these commitments, we have integrated climate change as a factor into our risk management and decision-making. Through our Climate Change Strategy, we continually work to strengthen the Group's mitigation and adaptation capacity, assuming the urgency of reducing our emissions, as well as adapting and strengthening the climate resilience of our operations and value chain, supporting multisector collaboration to accelerate the development and use of low- emission technologies.

We recognise that protecting the environment and biodiversity is essential for climate action and emphasise the role of nature-based solutions (NbS) to mitigate climate change and adapt to its impacts.

As members of the ICMM, we adhere to its 10 Mining Principles and Position Statement on Climate Change issued in October 2021.

Our Climate Change Strategy allows us to take early action to manage the risks and opportunities presented by this phenomenon to mitigate its effects and have the capacity to adapt to new scenarios.

Its five pillars serve as the framework of our roadmap for "developing climate resilience, reducing GHG emissions, managing strategic resources efficiently, managing the environment and biodiversity and integrating stakeholders".

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Highlights of the last year

WE MET THE TARGET EARLY OF REDUCING SCOPE 1 AND 2 30% EMISSIONS BY

BY 2025, COMPARED TO 2020, ACHIEVING A 42% REDUCTION IN 2022.

100%

ALL OUR MINING OPERATIONS HAVE POWER SUPPLY CONTRACTS FROM RENEWABLE ENERGY,

REDUCING

OUR SCOPE 2

EMISSIONS BY

90%

COMPARED TO 2021.

WE INCORPORATED AN INTERNAL CARBON PRICE IN TENDERS FOR HIGH CARBON- INTENSITY PRODUCTS AND IN PROJECT EVALUATION.

WE BEGAN WORKING ON A
DECARBONISATION ROADMAP	WE MEASURED OUR 2022	WE APPROVED NEW
FOR ALL OUR OPERATIONS.	SCOPE 3 EMISSIONS.	WATER AND ENERGY
		POLICIES.

CENTINELA BEGAN TO	THE COPPER MARK	WE APPROVED
OPERATE 100% WITH	CERTIFICATION WAS	A CIRCULAR
SEA WATER.	OBTAINED BY OUR FOUR	ECONOMY
	MINING COMPANIES.	STRATEGY.

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