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Sustainable Development & Financial Report 2009

COPPER OPERATIONS IN CHILE

Anglo American / Copper / Chile Sustainable Development & Financial Statements Report 2009

2. 3.

Anglo American 4 Chief executive’s foreword 6 Committed to the victims of the earthquake 8 Scope12 Anglo American plc 16 Anglo American Chile22 Operations in Chile 30 2009 performance and 2010 targets

Financial Capital 34 Economic performance

Human Capital 48 Safety and occupational health 56 Our people

Social Capital 66 Corporate presence in the community

72 Community engagement plans

Natural Capital 82 Environmental management 84 Energy efficiency programme 86 Performance by division 98 Environmental performance indicators

Manmade Capital 106 Procurement and contracts 110 Supplier development programme 112 Lifecycle

Financial Statements114 Condensed and audited financial statements

Appendices 146 Appendix 1 147 Appendix 2148 Appendix 3 150 GRI index

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mission Anglo American aims to be the leading global mining company – through the operational excellence of world class assets in the most attractive commodities and a resolute commitment to safe and sustainable mining.

For further information, please contact:

Marcelo Esquivel External Affairs [email protected]

In seeking to mitigate the possible impacts of this process on the environment, this Sustainable Development and Financial Report 2009 was printed on couché paper made from 100% chemical paste and free of chlorine and acid, and used vegetable-based dye in the printing process. The UV varnish used does not contain toxic substances, PCP, PVC, NVP, or heavy metals, such as lead, cadmium, chromium, arsenic, anthin, barium or mercury.

Highlights of the year

Record production and work safety performance.

5,933 small- and medium-sized business entrepreneurs supported by the Emerge programme.

US$584 million paid to the State in tax.

US$6.7 million invested in social initiatives and the community.

US$1.7 billion in profit.

US$926 million invested in the year.

Review and relaunch of the Good Citizenship Business Principles.

New management systems published for social and environmental performance.

C C+ B B+ A A+Self

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REPORT APPLICATION LEVELS


4. 5.Chief executive’s foreword

I must start this foreword by touching on the dramatic consequences of the earthquake and tsunami that hit the centre and south of Chile on 27 February 2010. Like the whole of society, Anglo American’s employees and executives were moved by the grief of thousands of families who lost their loved ones and all their personal effects. At the same time, we witnessed the strength of our country to get back on its feet and start reconstruction thanks to the solidarity of the entire society.

Anglo American immediately realised this disaster was not only a test of the commitment and willingness of companies to contribute to the well-being of their neighbours and the country in general but would also measure the ability to manage resources efficiently to implement solutions with a high social impact. Although no corporate social responsibility model has most likely ever been designed to address such a disaster, we decided to honour our corporate values and our traditional way of acting with people. That was evident in our response to provide direct relief to the towns in the area hit most by the disaster, which is outlined in the first few pages of this report, and in donating US$10 million in aid, one of the largest donations made in the country.

Our contribution was essentially aimed at recovering the educational infrastructure by building and implementing modular schools. We thereby enabled schoolchildren from badly hit communities like Caleta Tumbes (Talcahuano), Quirihue, Constitución, Cocholgüe (Tomé) and Yungay to return to classes and not lose their school year. This was possible thanks to working closely with the authorities of the Ministry of Education, the municipalities, the community, school

Rebuilding a better society 2009 will be recalled as a record year for Anglo American Chile. There was record production, investment was 22% up on 2008, important prospects were discovered near Los Bronces and the company attained the best safety result in its history. Moreover, it implemented and sharpened social and environmental management systems and asset optimisation, which bolstered the sustainability strategy and management.

Embracing a new corporate structure in 2009, in which Chile has become the headquarters of the Copper business unit, underpins the challenge of making us the investment, partner and employer of choice”.

Chief executive’s foreword

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principals and all the players involved to provide a quick and efficient response in keeping with needs arising.

Although there are many months to go before assessing the impact of our endeavours, we believe the action we took faithfully reflects the scope of our philosophy of and commitment to contributing towards the sustainable development of society and the communities with whom we engage. Our experience, based on sound methodological criteria, has enabled us to develop capabilities that are heavily embedded in our entire organisation, which we knew how to fully deploy when the country most needed them. In brief, we not only made a donation and provided money but we also made our management capacity and professionals available to the community to allow 4,500 schoolchildren to return to their classes in record time.

The challenges of a new scenario

2009 started out with the great difficulty caused by the global financial crisis. The copper price plummeted in late 2008 and only started to recover as of March 2009. Nevertheless, as we mentioned in the previous report, this crisis did not entail trimming our contribution to the communities, our environmental endeavours or the focus on the safety of our employees. Quite the contrary, Anglo American Chile continued to invest in its sustainable development projects and had record output and safety performance.

Anglo American’s cultural model is a guiding value for embracing common management policies, standards and focuses to attain the ambition of being the leading global mining company. Embracing a new corporate structure

in 2009, in which Chile has become the headquarters of the Copper business unit, underpins the challenge of making us the investment, partner and employer of choice. The new structure aims to boost the efficiency of our operations and co-ordination with the company’s other activities worldwide.

The zero harm goal for safety and occupational health is essential for all our activities and operations. The accident rate index was 0.17 (per 200,000 hours worked) in 2009 and our five operations were among the top seven with the best safety performance in Chile that year.

The challenge for 2010 is to carry on disseminating and empowering the safety concept in all the company’s areas and functions. Our goal is still zero accidents and, although we are getting close, we should step up efforts to make this a reality.

The progress with the Los Bronces Development Project leads us to foresee further challenges for the growth of the scale of operations involved in the start-up in 2011. This scenario will require highly skilled teams, for which reason the company is increasing its people development, continuous improvement and internal communication programmes, aware that without raising our competencies and the ability to attract the most talented people to the company, it will not be possible to suitably respond to this growth of the company.

Sustainable management and social capital

The scope and enhancement of Anglo American’s sustainable development focus in 2009 was also evident in the environmental,

social and supply chain management. Regarding the former two, The Anglo Environment Way and Anglo Social Way standards were released, which systematise the vision, policies and management systems underpinning Anglo American’s work in these areas. We are checking all our methodologies and processes at operations in Chile to fully migrate to these guidelines.

Progress continued with embracing the supply chain sustainability focus by means of the Anglo American Supply Chain (AASC) programme. This model is driving global management of different procurement and service categories. Such endeavours, in addition to asset optimisation measures, will generate benefits of US$2 billion for the Group worldwide in 2011.

With regard to the contribution to generating social capital, we have undertaken the commitment of making a contribution to improving the quality of education. Besides sharpening this area in the community engagement plans of each division, Anglo American has embraced high-impact initiatives in this area like the Enseña Chile and Elige Educar programmes.

Moreover, in 2009 we decided to support the work of Un Techo Para Chile (A Roof for Chile) to bring an end to the shanty towns that still exist in the Metropolitan Region and help more than 4,660 families obtain dignified and definitive housing.

In the same area, the 2009 result of the Emerge programme revealed that 5,933 entrepreneurs received support to develop small- and medium-sized businesses, which are generating a sustainable income and

enhancing the quality of life of their families. The target is to support a total of 7,000 entrepreneurs in 2010.

Progressing with transparency

Anglo American Chile wanted to make progress with its commitment to transparency, for which it commissioned PricewaterhouseCoopers to carry out limited independent verification of this report. The content and information reported by the five divisions were therefore checked against the scope outlined in the verification report enclosed below.

As in all the previous versions, this report was drawn up based on the guidelines of the Global Reporting Initiative (GRI). We also used different sources of information, studies and recommendations to detect those issues of interest to our stakeholders.

Please review the content and let us know your comments and suggestions, which will be very useful to improve the reporting process and our general undertakings.

Miguel Ángel Durán Chief Executive


6. 7.

On 27 February 2010, the centre and south of Chile had the fifth largest earthquake in modern history in terms of its scope (seven regions) and size (8.8 on the Richter scale). Although the consequences of this earthquake and the action taken by Anglo American do not form part of the performance in 2009, which is the reason for this report, it is unquestionable that this event significantly modified the company’s work focus, mainly in the social area, and it will be reported in the Sustainability Report 2010.

Just five days after the tragedy, Anglo American donated US$10 million, equivalent to over Ch$5 billion, in relief for the people affected by this disaster. This donation financed the deployment of heavy-duty

Keep going Chile!

Anglo American donated US$10 million, equivalent to over Ch$5 billion, in relief for the people affected by this disaster.

Committed to the victims of the earthquake

machinery to remove debris, one of the most important initial needs according to the local authorities. Although work was focused on the Maule and Bío-Bío regions, additional resources were allocated to support the central area of the country, specifically the communities around the company’s operations that were also hit.

Twenty dump trucks, four backhoes, four front loaders and two watering trucks were already operative on 7 March 2010, which were hired by the company and made available to the local authorities in the area hit hardest by the earthquake. A team of company executives and engineers also travelled to Regions VII and VIII to co-ordinate the relief effort, establishing direct contact with the

authorities and communities in the area. The company focused work on helping to rebuild schools by setting up six modular facilities with the same technology used to build mine camps, which are anti-seismic and resistant to rain and extreme temperatures. This solution benefitted over 4,500 schoolchildren from Caleta Tumbes, Constitución, Quirihue, Yungay and Cocholgüe.

Anglo American also arranged an internal 1+1 campaign to raise funds provided by the company’s own employees. This effort raised a sum of Ch$100 million, which was delivered publicly during the national Teletón campaign “Chile ayuda a Chile” (Chile helps Chile).

Bío-Bío Region VIII

Maule Region VII

In figures

US$10 million donated by Anglo American for reconstruction.

Ch$100 million raised jointly with company employees in the 1+1 campaign.

Damage caused by the earthquake in the education area:

4,013 schools affected.

US$3.015 billion of infrastructure losses.


8. 9.

The Sustainability Report 2008 won the prize for the Best Description of Economic Performance, awarded by AcciónRSE in its Best Sustainability Report contest.

The Sustainability Report 2008 attained seventh place in the integrated report category of the Corporate Register Reporting Awards, in which 200 reports worldwide participated.1

Scope

For the sixth year running, we have drawn up our Sustainable Development Report, which reports on the economic, environmental and social performance from 1 January to 31 December 2009 at the five divisions the company owns and operates in Chile, i.e., Los Bronces, Mantos Blancos, El Soldado, Mantoverde, Chagres, and the corporate office in Santiago.

The financial and operating performance results of Collahuasi were considered based on Anglo American’s 44% interest in the company to report its real contribution to the country. Other chapters contain no information about Collahuasi as it draws up its own sustainability reports.

Just as in the last three reports, we have merged the financial results with the sustainable development indicators into one single document. For this, we used the G3 guidelines and the latest draft of the Mining and Metals Supplement of the Global Reporting Initiative (GRI)2, published in 2009. We also considered compliance with the principles of the International Council on Mining and Metals (ICMM)3. Although the company adheres to the Global Compact4 principles, it did not present this report as Communication on Progress (COP), as Anglo American plc does this in its own consolidated report, which includes the performance of all its operations.

The report mentions Anglo American in Chile or Anglo American Chile, indistinctly, referring to the Chilean operations of the Copper business unit.

Scope Content definition

To define the content, we hired an expert consultant on the implementation of the GRI, who guided us on the information materiality process. The first task was to review the indicators that are significant for the company. This was carried out by the vice president of marketing and corporate affairs, the vice president of human resources, the environmental manager, the safety and occupational health manager, the external affairs manager, and the procurement and contracts manager. The entire process was endorsed by the company CEO.

External insights and concerns were gathered from various sources:

The final reports of the socio-economic assessment toolbox (SEAT) II process were reviewed to detect the most significant issues for the communities around operations.

The press articles in the year were reviewed to establish the main issues of the mining industry covered by the media.

The comments on improvement made by the judges and jury of the AcciónRSE-organised Best Sustainable Development Report Contest 2009 were considered.

The review report made by AcciónRSE on the principles and content of the Sustainable Development Report 2008 was appraised.

Two studies made by the Reputation Institute5 were considered. One included quantitative and qualitative assessments and the other online surveys to define the perception of the company.

A diagnosis was made of the level of knowledge and opinion of Anglo American by students on mining-related courses at universities in the Third, Fifth and Metropolitan Regions.

We reviewed the Chilean mining barometer, released by MORI6, on Chilean opinion of the mining industry and future expectations.

Based on this information, the main opinions were considered to draw up a matrix of major issues for the stakeholders.

1 www.corporateregister.com2 www.globalreporting.org3 www.icmm.com4 www.globalcompact.com5 www.reputationinstitute.com6 www.ipsos-mori.com

The conclusions were used to design a manual on how to draw up reports and consider the remarks by these stakeholders to issue Anglo American documents.

Based on this stage, 48 G3 indicators were selected for reporting. The ten indicators of the 2009 draft of the Mining and Metals Supplement of the GRI were also answered.

Verification

For the first time we commissioned PricewaterhouseCoopers to carry out limited independent verification of our report. The content and information reported by the five divisions were therefore checked against the scope outlined in the verification report enclosed below. In previous years, reports were verified in accordance with the Anglo American plc process, in which the Chilean divisions were considered randomly. The report obtained an A+ rating.

The financial statements were audited by Deloitte & Touche and both letters are enclosed at the end of this report.

As in previous years, to guarantee the principles of information transparency, balance, clarity and reliability, we have listed all the sources consulted to draw up this report in Appendix 3. This process entailed reviewing 55 documents and 41 people provided information to issue this report.

Availability

To ensure that people have access to Anglo American Chile’s sixth Sustainable Development Report, we did the following:

We printed 1,500 copies in Spanish. We printed 300 copies in English. We published 5,000 summarised versions. We developed an interactive website of

the report (www.anglochile.cl). We made a CD with the financial

statements accompanying this document and this is also available on the corporate website.

All the PDF files of the reports and annual reports published by Anglo American Chile can be downloaded from the corporate website www.anglochile.cl

MAiN iSSueS rAiSeD By StAkeHolDerS loCAtioN oF tHe iNForMAtioN relAteD

to tHiS iSSue

Stakeholders:

Outline the company’s relationship with them.

Response to priority issues for them. Identification and classification method.

20 and 67

Corporate governance:

Provide more information about the remuneration structure of senior executives and managers and the connection between incentives and remunerations.

35

Human resources:

Outline the steps taken to manage the careers of employees and their quality of life.

56 - 63

Social performance:

Present some SEAT II issues better, like “identifying and assessing the social and economic impacts of Anglo American’s operations and key development problems and assessing management systems and current social investments”.

Company contribution to community education and development.

Protection of national heritage.

Donations to reduce poverty.

Contribution to the family development of people in the surrounding communities.

20 and 68 - 79

environmental performance:

Increase the scope of issues regarding climate change.

Issues related to water management and biodiversity.

Mine site closure.

Contribution to the development of energy efficiency and carbon footprint reduction programmes.

Waste management.

84 - 103

economic performance:

Develop content on the handling of customer relations: customer service, complaint management, product quality and safety, labelling and responsible marketing.

Assure tax payment.

Greater work opportunities in the local area.

26 - 29, 37 - 38 and

42 - 43

To complement this, Anglo American plc analysed the methodology for drawing up its sustainability reports worldwide. This work considered:

10 interviews of stakeholders. 102 surveys of employees. An external consultant reviewing the reporting process.

15 feedback records included in the sustainability report.

54 surveys of business school (MBA) and environmental science students at the Rhodes and KwaZulu-Natal universities in South Africa.

36 publications in the formal and informal media.


10.

Anglo American

Anglo American plc Restructuring of the organisation. Seven business units.

International accolades. Four awards for its track record on transparency and sustainability.

Anglo American Chile 3,143 company employees in 2009.

Fine copper output was up 5% reaching a record level.

Record safety performance and one of the best in the industry.

Profits were 6% up on 2008.

Mantoverde was awarded the John T. Ryan Prize for safety excellence for the fourth time. Mantos Blancos was the runner-up.

Total investment increased by 22% amounting to US$926 million.

The Los Bronces Development Project progressed according to schedule.

Operations in Chile 5 operations.

669,814 tonnes of fine copper.

3,886 tonnes of molybdenum.

457,621 tonnes of sulphuric acid.

Anglo American’s ore resources will increase by 50% due to the discovery of the San Enrique Monolito and Los Sulfatos prospects.

San Enrique Monolito.

Los Sulfatos.

Sustainable development focus

New version of the Good Citizenship Business Principles.

Publication of Anglo American’s guiding values.

Anglo American culture dissemination plan.

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12. 13.

Anglo American plc

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Anglo American plc has explicitly embraced the variables of sustainable development20 as part of its operations, and this commitment is embodied in the policies, strategies and daily practices of the Company.

Anglo American has strived to integrate sustainable development within all aspects of its business to minimise the negative impact of operations and at the same time maximise the positive impacts. The critical factor for the success of this strategy is the partnerships with public and private institutions and those with civil society. The company also deems that ethics, transparency and corporate accountability are values that should be part of all the company’s activities and decisions.

Anglo American plcAnglo American plc7 is a multinational mining company with headquarters in

London, England, and operations on the five continents. It has seven business units and

its shares are mainly traded on the London stock exchange.

It had sales of US$24.637 billion and profits of US$2.569 billion in 2009. Mining

operations in Chile accounted for 16% of the revenues and 47% of the

Company’s profits.

Partnerships and memberships

Anglo American is convinced that the success of its operations is based on its

ability to enter into partnerships with public and private institutions and those of

civil society, which share its concern for sustainable development.

The company belongs to or has partnerships with the following organisations:

Business Action for Africa8 CARE International9

Extractive Industries Transparency Initiative10

Fauna and Flora International11

Global Business Coalition (GBC) on HIV/AIDS, Tuberculosis and Malaria12

International Business Leaders Forum13

International Council on Mining and Metals14 Investment Climate Facility for Africa (ICF)15

Natural History Museum16

United Nations Global Compact17 Voluntary Principles on Security and Human

Rights18 World Business Council for Sustainable

Development (WBCSD)19

Consolidating the Anglo American cultureAnglo American aims to be the leading global mining company through world-class assets in the most attractive commodities, operational excellence and a resolute commitment to safe and sustainable mining. The highlights of 2009 were the restructuring of the company, the updating of the Good Citizenship Business Principles and the publication of The Anglo Social Way and The Anglo Environment Way.

Anglo American plc

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These guidelines are considered in operations and include project design and assessment, mine planning and access to capital to finance initiatives.

In late 2009, the company carried out a large organisational change by announcing the divestment of businesses that are not related to its core mining business and the creation of seven business units, whose senior executives will be based in the most important countries for the respective commodity. The aim of this structure is to manage the mining portfolio more efficiently, thereby generating savings and synergies that will add more value to company shareholders.

This definition implies a group of five directors, with headquarters in the United Kingdom, is in charge of the corporate functions and provides strategic support to the business units to ensure that the synergies present in the group materialise. Such areas are finance, mining and technology, business performance and projects, human resources and communications, and business strategy and development.

7 www.angloamerican.co.uk8 www.businessactionforafrica.org9 www.careinternational.org.uk10 www.eitransparency.org11 www.fauna-flora.org12 www.gbcimpact.org13 www.iblf.org14 www.icmm.com15 www.icfafrica.org16 www.nhm.com17 www.unglobalcompact.org18 www.voluntaryprinciples.org19 www.wbcsd.org20 Sustainable development means “to meet the

needs of the present without compromising the ability of future generations to meet their own needs,” according to the definition of the UN’s World Commission on Environment.

OLD

4 divisions: Bas Metals and Coal in London. Ferrous Metals and Platinum in Johannesburg.

Functions distributed in the business units.

Platinum & Ferrous Kumba, Platinum &Thermal Coal

Met Coal

HQ & Other mining & Industrial

HQ, Base& Coal

Copper Nickel

Iron ore Brazil

NEW

7 business units: Copper, nickel and iron ore Brazil in South America. Thermal coal, Kumba iron and platinum in South Africa. Metallurgical coal in Australia.

More consolidated functions.

Fewer employees at the corporate office.

Management closer to the business:

New global structure

Group Finance DirectorRené Médori

UK

CEO Platinum

Neville Nicolau

SA

CEO Copper

John Mackenzie

CHILE

CEO Nickel

Walter De Simoni

BRAZIL

CEO Kumba Iron Ore

Chris Griffith

SA

CEO Iron Ore Brazil

Stephan Weber

BRAZIL

CEO Met Coal

Seamus French

AUS

CEO Thermal Coal

Norman Mbazima

SA

Group Director Other Mining & Industrial

Duncan Wanblad

UK

CEOCynthia Carroll

UKGroup Director of Mining & Technology

Brian Beamish

UK

Group Director of Business Performance & Projets

David Weston

UK Group Director Strategy & BDPeter Whitcutt

UK

Group Director of HR & Communications

Mervyn Walker

UK


14. 15.

Anglo American sustainability highlights 2009

The global accident rate improved by 27% on 2008.

The Company’s values were articulated and the Anglo American Way and culture were consolidated worldwide. 61 meetings were held with 5,700 internal leaders in all the countries where it operates.

A new version of the Good Citizenship Business Principles was published.

The Anglo Social Way was launched, a world-class standard for managing community relations.

The social strategies were reviewed and opportunities for improvement were detected in the volunteer and supplier chain support systems.

Accolades

Anglo American won the following awards for its worldwide commitment to causes like HIV/AIDS, biodiversity, sustainability and transparency:

First place in the Extel Pan-European Survey 2009, for its investor relations in the metals and mining sector21.

Third place in the Good Company Ranking, organised by the German magazine Manager and the consulting company Kirchhoff. Anglo American was the only company to receive this recognition for the third year running for its strategy aligned to social and environmental commitment22.

Excellence in Business Award for the Best Work Programme, awarded by the Global Business Coalition of South Africa, for its HIV/AIDS programme implemented in that country23.

FTSE100 Tax Reporting Award and Human Capital Award, given during the PricewaterhouseCoopers awards ceremony, for creating public trust.

The Sustainability Report 2008 reported that Anglo American plc was reviewing the Good Citizenship Business Principles, which contain the guiding values and standards of how the company should act in financial, commercial, work and community areas. Due to its importance, this review included mechanisms

5,700 internal leaders attended Anglo American’s culture workshops.

101,4703.60employees of Anglo American worldwide.

to consult opinion leaders worldwide, which shaped a new version that was presented in 2009. At the same time, the company’s social and environmental management systems, known as The Anglo Social Way and The Anglo Environment Way, were published.

21 The survey reflects the contribution of over 5,000 professionals from the financial sector and investors in around 400 of the largest companies in Europe. The entire methodology and the votes received were reviewed externally by Deloitte & Touche.

22 http://www.kirchhoff.de/en.html23 The Award for Excellence in Business of the

Global Business Coalition of South Africa gives global recognition to the best private sector programmes to combat HIV/AIDS, tuberculosis and malaria: http://www.gbcimpact.org/awards

Anglo American plc


16. 17.

Anglo American Chile

Sustainability strategy

One of the core aspects of Anglo American’s corporate strategy is its sustainability model, which is based on managing and creating value in five areas called capital that are reflected in the structure of this report:

Financial capital Human capital Social capital Natural capital Manmade capital

24 See partnerships and memberships, page 2125 See page 58

Anglo American aims to be the leading global mining company, which entails becoming the investment, partner and employer of choice. To achieve this goal, it drives high standards of operational excellence, safety and sustainability, thereby boosting its corporate values and policies.


The company of choiceThe goal of becoming the investment, partner and employer of choice will be achieved by managing this capital with internationally renowned standards on sustainability, financial and operating issues. To manage these aspects Anglo American adheres to the principles of international bodies like the International Council on Mining & Metals (ICMM), the Global Compact and the Extractive Industries Transparency Initiative (EITI), among others.

Anglo American’s first challenge is to be the investment of choice, i.e., for investors to have trust in the company’s management. Its role in Chile not only entails being profitable but also showing that it is a sustainable business with good financial results, maintaining a good corporate reputation, ongoing dialogue with all its stakeholders and safeguarding the environment. The combination of these aspects will enable it to maintain its social licence to operate.

To assure the permanence of its sustainability focus in all operations in Chile, the company has management structures like the integrated risk management system, the safety and sustainable development database, community engagement plans and the integrated health, safety and environmental management system. These have enabled all the company operations to secure and maintain the ISO 14001 and OHSAS 18001 certification, and accordance with the ISO 9001 standard at Mantos Blancos and Mantoverde.

In 2009, Anglo American constantly strived to increase and empower adherence to the Company’s culture and values at all corporate levels and in stakeholder relations.

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The second challenge of being the partner of choice requires integral and sustainable management of the natural resources and relations with host communities around Anglo American’s operations. Anglo American has therefore been developing systems for ten years to promote transparent dialogue with its neighbours, detect their needs and give them growth opportunities by forging partnerships and teamwork.

This area also entails working with all levels of government, the media and commercial partners like suppliers, contractors and trade associations. Anglo American therefore participates in various trade organisations and issues that allow it to make known and promote its best practice24; it maintains a public strategic positioning campaign; and organises informative activities with the media and government authorities.

To be the employer of choice, the company focuses on its current and potential employees and university students. The priority is to guarantee the safety and health of people in their workplace, for which there are policies, programmes, procedures and standards that

safeguard the work of company employees, including contractors. Moreover, Anglo American not only seeks to hire and retain the best professionals but also to attract the best talent available by means of training programmes, professional practice and dual education. At the same time, it has driven partnerships with universities that offer mining-related courses and focused resources on educational projects25.


18. 19.


Living our valuesAll Anglo American’s actions are based on the Good Citizenship Business Principles26 and on the standards and policies developed for each specific issue of sustainability. In 2009, after a process of dialogue with stakeholders in the countries where operations are located, an updated version of these principles called “Living Our Values” was disseminated. The aim was to show the active commitment of the entire organisation to society, which is expressed by the daily conduct of each of its employees.

The new document establishes that corporate integrity, safety, sustainable development, employment, labour rights, community development and human rights are issues that underpin Anglo American’s bond with its stakeholders, i.e., investors, employees, government bodies, communities, business partners and non-governmental organisations.

Moreover, the company’s model and culture were bolstered during the year, this work having started in 2008, and was reported on in the previous report. This progress not only implies a global and integrated focus on operative and commercial activities developed by the Anglo American Group but also enhances the application of its six corporate values in all areas of activity.

The activities of development, management and sharpening of relations in those areas where the company operates must comply with the following policies, standards and codes of conduct27:

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.

Anglo American Chile has a Sustainability Committee comprising the first line of company executives to make sure sustainability issues are met and that the decisions made consider these variables.

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26 The complete version of the Good Citizenship Business Principles is available at www.angloamerican.co.uk/aa/about/principles.

27 They are available for review at www.angloamerican.co.uk/aa/development/approach-and-policies

28 This programme is coordinated by the vice-presidency of human resources.

Communication and internal dialogue The “Share the Ambition” programme28 sharpens company employee adherence and commitment to the corporate culture. The practical and behavioural alignment with the values and global and integrated culture was driven in 2009, for which the internal communication and dialogue channels were used.

Supervisor level was established to be the priority due to its on-site leadership role. Hence, a cycle of workshops was held in the year to get participants to commit themselves to the corporate culture and identify daily situations in which to apply the principles, and be able to motivate their colleagues and

work teams. This activity was reinforced with communication of the key aspects of the model by means of internal publications, digital media and graphic and audiovisual material, to which all the areas and divisions had access.

At the same time, the cultural model and values were a major topic in the quarterly communication meetings held at the divisions and the corporate office in Santiago. Meetings were also held with women, expatriates, trainee engineers and other groups of employees to promote dialogue on matters of common importance.

PlACe WorkSHoPS NuMBer oF AtteNDeeS

Los Bronces 1 120

Mantos Blancos 2 45

El Soldado 2 55

Mantoverde 3 17

Chagres 2 18

Los Bronces

Development

Project (LBDP)

1 40

Santiago 7 110

totAl 18 405

“Share the Ambition” programme 2009

Cultural model and values

ASPirAtioN: to be the leading global mining company

DriVerS

ANGlo AMeriCAN CulturePeople make the difference in a company that makes the difference

our GuiDiNG VAlueS

Safety

Care & respect

integrity

Accountability

Collaboration

innovation

Investment of Choice

Common Processes & SystemsAgree what to do

Effective Organisation Make sure it can be done

Operating Excellence Do it

Partner of Choice Employer of Choice

DeVeloP

How

Who

BuilD ProDuCe reSultS

Anglo American’s guiding values

SAFETY This is always first on our agenda – and with very good reason. We truly believe that ALL injuries are preventable and that by working together we can make safety a way of life, inside and outside the workplace.

CARE AND RESPECT

We always treat people with respect, dignity and common courtesy – regardless of their background, lifestyle or position. And we’re building trust through open, two-way communication every single day.

INTEGRITY This means taking an honest, fair, ethical and transparent approach in everything we do. It’s not about being popular; it’s about always doing the right thing.

ACCOUNTABILITY We take ownership of our decisions, our actions and our results. We deliver on our promises and acknowledge our mistakes. Above all we never pass blame.

COLLABORATION No one here is on their own. We’re one company with a joint ambition – all working together to make decisions and get things done more effectively.

INNOVATION Challenging the way things have always been done is a key priority for us. By actively developing new solutions, encouraging new ways of thinking and finding new ways of working, we’re dramatically improving business.


20. 21.


The Reptrack Pulse Chile study, drawn up by the Reputation Institute, ranked Anglo American in 38th place of the overall ranking, the best ranking of a company in the mining sector.

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Stakeholders The possibility of generating communication, dialogue and partnerships with each community around the company’s operations is one of the major benefits of the socio-economic assessment toolbox (SEAT)29. The characteristics and application of this methodology, which was implemented for the first time in 2002 and updated in 2006, have been reported on in all the sustainable development reports of Anglo American Chile30.

SEAT II, applied in 2008, consists of the socio-economic characterisation of the communities around operations, the application of a survey about the perception of the company, the relationship with it, the main impacts and mitigation measures appraised, and the identification of the impacts of operations and management’s responses.

Besides including a review of compliance with issues related to human rights, the current version has a formal grievance registry to show how the divisions manage community requirements.

The SEAT II process keeps the stakeholder map updated in each of the divisions. Stakeholders were classified in the following categories, in accordance with the methodology used by Casa de la Paz31 for this segmentation:

Political groups Institutional organisations Neighbour associations Economic instances Labour bodies Environmental bodies Project beneficiaries

STEP 1 Draw up a profile of Anglo American’s operations.

STEP 2 Community profile and engagement.

STEP 3 Identify and assess the social and economic impacts of Anglo American’s operations and the key development issues, and evaluate management measures and current social investment.

STEP 4 Improve the management of socio-economic impacts and issues during operation and closure.

STEP 5 Support community development.

STEP 6 Develop a monitoring and management plan.

STEP 7 Draw up a socio-economic report, feedback for the community and assess the SEAT process.

SEAT II process

Partnerships and membershipsBesides adhering to the principles embraced by its parent company32, Anglo American Chile has committed to drawing up its sustainable development reports pursuant to the guidelines of the Global Reporting Initiative (GRI).

It also belongs to national entities that undertake initiatives in the sustainability and trade association areas, as it deems that driving this kind of practice requires the co-operation and joint work with public and private organisations, trade associations and civil society at local and international level.

Industry and trade associations:

Sociedad Nacional de Minería33. Consejo Minero de Chile A.G.34 Instituto de Ingenieros de Chile A.G.35 Cámara Chileno – Norteamericana de Comercio (AMCHAM).36

Cámara Chilena Sudafricana de Comercio.Cámara Chileno Británica de Comercio.37

Corporación de Desarrollo Productivo de la Región de Antofagasta.38 Asociación de Industriales de Antofagasta.39 Corporación para el Desarrollo de la Región de Atacama (Corproa).40 Corporación Pro Til Til.Corporación para el Desarrollo de Colina.

Safety:

Consejo Nacional de Seguridad de Chile.41 Comité Regional de Seguridad Minera (CORESEMIN).Comité Nacional de Seguridad en la Montaña.

Sustainable development:

AcciónRSE.42 Chilean section of the World Business Council for Sustainable Development (WBCSD).43

Other institutions:

Instituto Libertad y Desarrollo.44 Instituto Libertad.45 Instituto Chileno de Administración Racional de Empresas (ICARE).46 Centro de Estudios Nueva Minería.Centro de Estudios Públicos (CEP).47 UDP – Expansiva

Gauging the pulse Anglo American undertook two opinion studies in 2009 to gauge the insight of its major stakeholders. The first of these, carried out by the Reputation Institute, was aimed at opinion leaders, the informed public in Santiago and the community in general, and entailed 599 telephone interviews using a probabilistic and quantitative questionnaire and a further 49 in-depth interviews.

The public opinion study company Datavoz was commissioned for the second study, which was aimed at university students on mining-related courses at the main universities in the country. 650 students were interviewed.

Besides gauging the perception of the work done, both studies identified the main strengths and weaknesses and were the basis of the communication strategy and action plans in the 2010–2012 period.

In 2009, Anglo American also appeared for the first time in two independent corporate reputation studies at national level:

Reptrack Pulse Chile, carried out by the Reputation Institute and published by the Qué Pasa magazine, ranked Anglo American in 38th place of the overall ranking, the best position of a company in the mining sector. It was also ranked the sixth company in the corporate social responsibility (CSR) index, which includes citizenship, governance and workplace. This study entailed 3,226 online surveys to analyse 105 companies, each of which was assessed by an average of 100 people. It used the pulse methodology, i.e., it measured the admiration, trust, good impression and esteem indexes of companies.

The second study was the Corporate Reputation Ranking 2009, drawn up by Hill & Knowlton Captiva, La Tercera newspaper and Collect GFK, in which Anglo American was ranked in 66th place for the first time. It was undertaken by means of a telephone survey of 3,500 inhabitants of Santiago, through whom 70 companies in 22 industries were evaluated.

The system also makes a deep assessment of the management of relations, communication and on-site participation. This analysis is included in the final SEAT II reports, which in 2009 served as the basis for drawing up the respective community engagement plans.

At the same time, in accordance with the Government Relations Manual, the external affairs management mapped stakeholders to enhance relations with them. Such segmentation envisages:

National and local authorities MPs Think tanks Business leaders Business and trade associations Academics and universities Media

29 The SEAT methodology is available to the business community.

30 This document is available at www.anglochile.cl31 Casa de la Paz is a non-governmental

organisation (NGO), which seeks to create collaboration channels between private bodies and civil society. www.casadelapaz.cl

32 See page 1233 www.sonami.cl34 www.consejominero.cl35 www.iing.cl36 www.amchamchile.cl37 www.britcham.cl38 www.cdp.cl39 www.aia.cl40 www.corproa.cl41 www.consejonacionaldeseguridaddechile.cl42 www.accionrse.cl43 www.wbcsd.org 44 www.lyd.com45 www.institutolibertad.cl46 www.icare.cl 47 www.cepchile.cl


22. 23.

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Record production and safety performance in 2009

Operations in Chile

Operations in Chile

Despite the effects of the international crisis, Anglo American did not trim its sustainable development agenda, investing in its employees, safety, community activities and environmental protection.

The global financial crisis, which started in September 2008, had a large influence on 2009. In the last quarter of the year, the copper price plunged virtually two thirds on previous values, which meant that the price in early 2009 was only US$1.39 per pound of metal48. Although the situation gradually returned to normal as of March 2009 due to higher demand, mainly from China, the annual average price of this metal was only US$2.34 at the close of 2009, 25.7% down on that in the previous year49.

Anglo American had prepared for a scenario of a drop in the international copper price after steady increases in the last five-year period. Nevertheless, the severity of the global financial crisis entailed stepping up cost control measures and watching the financial resources available, due to lower capital flows in the market.

Despite the effects of this economic situation, Anglo American did not trim its sustainable development agenda, and committed to continuing the projects budgeted. This led to a higher social contribution than in 2008, an investment of US$7.5 million to implement the Fatal Risk Control Standards, focus on employee protection and concrete action to control environmental impacts.

The management measures adopted and the rebound of global markets enabled Anglo American to end up 2009 with record production of 669,814 tonnes of fine copper, a 5% increase on 2008. The safety drive also reaped rewards, with the accident rate index 19% down on that in 2008 amounting to 0.17 lost-time accidents per 200,000 hours worked, the best rate in the company’s history and one of the best in the industry.

Another highlight in the year was the investment in exploration, which led to the discovery of two high-quality copper prospects, San Enrique Monolito and Los Sulfatos. They are located near to Los Bronces and jointly have inferred resources of 2.1 billion tonnes of ore, which will increase Anglo American Chile’s ore resources by 50%.

48 Price on the London Metal Exchange on 2 January 2009. The lowest copper price in the crisis was 125.65 cents of a dollar on 24 December 2008.

49 COCHILCO, metal price statistics, www.cochilco.cl50 The total workforce excludes Collahuasi.

Anglo American Chile is a company of the Anglo American Group and depends on the new Copper business unit. At December 2009, it had 10,172 employees, of whom 3,143 are company employees and 7,029 are contractors50. Profit was US$1.716 billion after tax in 2009 and it paid tax of US$584 million.

Like its parent company, Anglo American Chile adheres to the principles of sustainability in each of its operations, which include the exploration, mining and marketing of copper (cathodes, anodes, blister and concentrates), molybdenum and sulphuric acid. Its head office is in Santiago in the Metropolitan Region.

Anglo American started to operate in Chile in 1980 and is currently the third largest copper producer in the country. The company’s legal structure has three main business names: Anglo American Norte S.A. (owner of Mantos Blancos and Mantoverde), Anglo American Sur S.A. (owner of Los Bronces, El Soldado and Chagres), and Anglo American Chile Ltda (in charge of providing administration services to the two former companies).

Prospects

San Enrique Monolito Estimated inferred resources of 900

million tonnes of ore, with a copper grade of 0.81%

(7.2 million tonnes of copper).

The exploration target could contain 2.5 to 3.5 billion tonnes

of ore, with an average copper grade of 0.65% to 0.75%.

Drilling will continue in 2010.

Los Sulfatos Estimated inferred resources of 1.2

billion tonnes of ore, with an average copper grade of 1.46% (17.5 million

tonnes of copper).

The exploration target could contain 4 to 5 billion tonnes of ore with an

average copper grade of 0.8% to 1%.


24. 25.

Arica

Iquique

Calama

Antofagasta

Copiapó

La Serena

Valparaíso

SantiagoRancagua

CHILE

Los Bronces Location: in the Andes mountains, 3,500 metres above sea level and 65 kilometres from Santiago in the Metropolitan Region.

Characteristics: it is an open-cut copper mine containing molybdenum. It has a grinding plant 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. The Las Tórtolas concentrator plant and the tailings dam are located in Colina, where the flotation process is undertaken to obtain copper and molybdenum concentrates.

Mantos Blancos Location: 800 metres above sea level in the Antofagasta Region, 45 kilometres northeast of the regional capital.

Characteristics: it is an open-cut mine with crushing plants, solvent extraction and electro-winning to treat oxide ores. It also has a sulphide ore treatment plant.

El Soldado Location: in the coastal mountains, 600 metres above sea level in the district of Nogales, Valparaíso Region.

Characteristics: it consists of an open-cut mine, an underground mine, and oxide and sulphide ore treatment plants.

Mantoverde Location: 900 metres above sea level in the Atacama Region, 56 kilometres from the port of Chañaral.

Characteristics: it consists of an open-cut copper mine, a crushing plant, a mechanised ore conveyance and stockpiling system, heap leaching, and a solvent extraction and electro-winning process to process oxide ores.

Chagres Location: in the district of Catemu, Valparaíso Region, 100 kilometres north of Santiago.

Characteristics: it smelts the copper concentrates produced at El Soldado and Los Bronces to obtain copper anodes/blister and sulphuric acid. Its productive process, based on copper concentrate fusion, is undertaken by means of a technological process (flash furnace) with low emissions, which makes Chagres a leading smelter in environmental terms in Chile.

Minera Collahuasi** 2009 2008 2007

Fine copper production (tonnes) 235,775 204,317 198,899

Molybdenum production (tonnes) 1,118 1,087 1,777

C1 direct cost (USc/lb)* 100.3 101.6 71.3

** Corresponde al 44% de la producción que es atribuible a Anglo American

Mantos Blancos 2009 2008 2007

Total copper production (tonnes) 90,153 87,734 90,630

Copper concentrate (tonnes) 43,997 46,820 40,165

Copper cathodes (tonnes) 46,156 40,914 50,464


Mantoverde 2009 2008 2007

Copper cathode production (tonnes) 61,515 62,501 61,001


El Soldado 2009 2008 2007





Chagres 2009 2008 2007

Copper production (tonnes) 137,652 146,144 164,107

Acid production (tonnes) 457,621 486,616 493,382


Los Bronces 2009 2008 2007




Molybdenum production (tonnes) 2,768 2,578 2,582


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Anglo American is the third largest copper producer in Chile. Its operations entail five divisions in the north and south of the country (Los Bronces, Mantos Blancos, El Soldado, Mantoverde and Chagres) and it has a 44% interest in Compañía Minera Doña Inés de Collahuasi (Tarapacá Region), sharing ownership with the Xstrata plc mining group (44%) and a consortium of Japanese companies led by Mitsui & Co Ltd (12%).

Total output in 2009 was 669,814 tonnes of copper51, a 5% increase on 2008, which accounted for 12.36% of the total volume of domestic copper exports52. It also produced

Operations in Chile

3,886 tonnes of molybdenum and 457,621 tonnes of sulphuric acid in the year. Mining operations in Chile had a 47% share of the profits of Anglo American plc.

Anglo American’s operations have a high degree of integration, which allows for 70% of its copper production to be processed in Chile in own or third-party refineries or smelters to produce copper anodes or cathodes.

51 This includes the 44% interest in Collahuasi and 2,583 tonnes of copper anodes produced at Chagres by processing third-party material.

52 Chilean Copper Commission (COCHILCO), monthly newsletter – January 2010.

Record fine copper production of 669,814 tonnes, a 5% increase on 2008.

Compañía Minera Doña Inés de Collahuasi

Location: in the Tarapacá Region, 185 kilometres southeast of Iquique and at an average altitude of 4,400 metres above sea level.

Characteristics: it produces and markets copper concentrate and cathodes and molybdenum concentrate.

* C1 Cost: mine cost, plant cost, overheads, smelting, refining and freight cost (in US cents per pound).** Accounts for 44% of the production that is attributable to Anglo American.

Note: Los Bronces produced 2,934 tonnes of copper sulphates in 2009 and 2,101 tonnes of copper sulphates in 2008.


26. 27.

Operations in Chile

KME Metals La Farga Group Thyssenkrupp Aurubis

Furukawa Electric Walsin Lihwa Minchali Minmetals LS Nikko

Paranapanema Codelco - Ventanas Xstrata Codelco - Ventanas Molymet

Southwire Cobre de México

2009 Product Marketing Map

Cathodes

Anodes

Concentrate

Molybdenum

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Product marketing value added We informed in the 2008 report that the partners who own Compañía Minera Doña Inés de Collahuasi (Anglo American, Xstrata plc and a consortium of Japanese companies led by Mitsui & Co. Ltd) made a decision to be directly in charge of selling the copper and molybdenum production generated by this deposit in the market. This means each of the parties is responsible for selling a portion of Collahuasi’s production equivalent to its own shareholding, which in the case of Anglo American is 44%.

Anglo American Chile also launched a new marketing model in 2009, which boosted its market position. This is especially due to the possibility of undertaking co-ordinated operations to market its products from all its divisions, including the 44% interest in Collahuasi.

In addition to the two current contracts with smelters, the company signed copper concentrate sales contracts with 13 smelters worldwide in 2009. This allows for the joint negotiation of the production generated at the Los Bronces, Mantos Blancos and El Soldado divisions, and Anglo American’s percentage of Collahuasi’s production, besides the additional supply that the Los Bronces Development Project (LBDP) will generate.

Based on this model, most of the contracts for the future copper concentrate production of the LBDP had been entered into by December 2009, obtaining very good market diversification and Latin America, China, Japan, South Korea, Europe and India accounted for a large share, i.e., all the major copper concentrate sales markets.

The amounts sold based on this model will increase steadily in the 2010–2014 period as the contracts previously signed by Collahuasi

expire and the additional production of the Los Bronces mine comes on stream from its development project.

As of the full start-up of the Los Bronces expansion and the new negotiation conditions mentioned above, Anglo American Chile forecasts that it will market 2 million tonnes of copper concentrate in 2013 and thereby become one of the top three international players.

53 Dry metric tonnes (measurement unit used for copper concentrate).

54 Metric tonnes.

Sales markets 2009 (tonnes of copper)

8%

34%

12%

23%

23%

* Percentages exclude Collahuasi

25.21%

9.73%

27.69%

1.07%

1.18%

35.12%

DMt %

Chile 162,570 35.12

Brazil 128,187 27.69

China 116,708 25.21

European Union 45,026 9.73

Peru 5,459 1.18

Korea 4,966 1.07

totAl 462,916 100.00

* Amounts exclude Collahuasi

Copper concentrate sales markets 2009 (in DMT)53


Copper anode sales markets 2009 (in MT)54

35.14%

13.94%

6.62%

44.30%

Mt %

Belgium 61,555 44.30

Chile 48,828 35.14

Mexico 19,371 13.94

Korea 9,194 6.62

totAl 138,948 100.00

%

Asia 34

Chile 23

Europe 23

North America 12

South America 8

totAl 100.00


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Impact of the global financial crisis Due to the collapse of global financial markets, as of October 2008 there was a decline in copper purchase contracts entered into each year; the first quarter of 2009 was the period of the greatest uncertainty for the company. At the same time, the sharp restrictions on access to financing loans increased the costs of foreign trade and hampered global transactions and payments.

This adverse scenario was overcome in a short time because of a large increase in demand from the Chinese market. This led to the recovery of the international copper price as of March 2009 and the resumption of production flows.

Sulphuric acidThe Chagres division of Anglo American Chile produced 457,621 tonnes of sulphuric acid in 2009, which was a slight decrease on the 486,616 produced in 2008. Marketing of this product is undertaken according to strict standards of safety, prevention, protection of people, communities and the environment. Further information about how the company’s divisions handle sulphuric acid is outlined in the Natural Capital section on page 97.

60% of the total production was sold by means of traders or swaps with Codelco to supply Anglo American’s mining operations in the north of the country; 23% was sold directly to third parties to be used as a raw

There were no major variations in the concentrate and anode segments regarding sales amounts, customers or markets, as the contractual terms are established in the long term.

After the financial uncertainty was over, the international copper market tended to recover as of mid-2009, which was reflected by the interest rate situation and access to loans.

Operations in Chile

Definitions of product formats

Anode: this is one of the ways refined copper is moulded. It has purity of around 99.6% of fine copper and still contains noble metals (gold and silver). It is the raw material used to produce copper cathodes from electrolytic refining.

Cathode: this is a flat shape of very pure copper obtained by electrolytic refining. It generally has a thickness of approximately five millimetres and a surface area of one square metre.

Blister copper: this is copper from the converter furnaces in the pyrometallurgical copper process. It contains 99.3% of fine copper.

Copper concentrate: this is obtained by means of physical or physical-chemical processes, and its copper grade ranges from 25% to 35%.

Source: COCHILCO (www.cochilco.cl)

material in Chile’s paper, chemical and mining industries and the remaining 17% was used for internal consumption at the El Soldado and Los Bronces divisions.

Sulphuric acid is used in the leaching process of operations. Sulphuric acid sales to third parties accounted for 0.75% of the company’s earnings in 2009. Copper cathode sales

markets 2009 (in MT)

Mt %

China 57,085 35.39

European Union 25,975 16.10

U.S.A. 25,463 15.78

Taiwan 23,151 14.35

Korea 20,495 12.70

Mexico 5,446 3.37

Japan 2,734 1.69

Thailand 540 0.33

Chile 385 0.23

totAl 161,274 100.00

0.23%

12.70%

15.78%

35.39%

14.35%

1.69%

0.33%

16.10%

3.37%

Product revenues 2009

30.13%

35.50%

2.18%

32.19%

uS$ %

Cathodes 852,715,932 35.50

Anodes/blister 773,253,971 32.19

Concentrates 723,881,493 30.13

Molybdenum 52,380,056 2.18

totAl 2,402,231,452 100.00



30. 31.

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iSSue 2009 tArGet CoMPliANt ACtioNS uNDertAkeN iN 2009 2010 tArGetSHUMAN CAPITAL

Safety

Maintain zero fatalities. To comply with the zero harm vision, training programmes were held and conduct observation was reinforced; there was accreditation of service company personnel, monitoring, third-party incident analysis, compliance with the Personalised Risk Control Program (PCR), and Visible-Felt Leadership (VFL) with monthly reporting. Although there were no fatalities, there were 23 lost-time accidents.

Zero fatalities.

Zero lost-time accidents. Zero lost-time accidents.

All operations must have specific plans to support the implementation of the safety improvement plan of Anglo American Base Metals. Operations drew up an annual safety plan, which was monitored monthly by the respective managements. Make a formal versus continual maturity analysis and update the improvement

plans at each operation.

Keep up and strengthen the quality of on-site “Visible-Felt Leadership” of the entire management and supervisor team.

There was periodic monitoring of The Anglo Safe standard and monthly reports were issued. Workshops were also held to reinforce the objectives and methodologies, using the VFL manual developed by Anglo American Chile as a reference.

Reinforce VFL with two-hour site visits scheduled for every Tuesday and Thursday by all supervisors.

Implement weekly VFL step compliance controls of 25%, 50%, 75% and 100%.

Add new functionalities to The Anglo Safe system that helps to analyse accidents and follow up on the action plans. The Action Plan Management (GPA) module and Deviation Reporting (REPDES) were developed and implemented.

Disseminate and implement GPA and REPDES.

Develop the navigation system in Documentum.

All operations must be 90% compliant with the guidelines defined in the Anglo Fatal Risk Standards (AFRS). 91% average compliance was attained. Attain the 100% target.

Implement a “fatigue management system” for truck operators.

The second pilot test was made with the ASTiD fatigue management system. The results were submitted to the corporation and corporate definition is awaited for implementation..

Work was done in the fatigue continuous improvement team, focusing on the problem from a biopsychosocial angle. A sleep disorder study was undertaken on 115 mine haulage truck operators.

The tests were carried out and the use of the Wake-Up device was established for light vehicles that travel to and from Los Bronces.

Undertake the second stage of the sleep disorder study and, based on the results, answer the fatigue self-assessment in accordance with corporate guidelines.

Implementation of the fatigue checklist by the supervisor. Implement the Safety Programme for transportation leaders.

Complete the risk management retraining programme for the entire supervisor team and start the process at all supervision and worker levels. Ten Safety Risk Management Programme (SRMP) A3 courses were held, attended by 208 managers and superintendents.

Complete the SRMP A3 courses for managers, risk prevention officers of service companies and for staff functions.

Launch A2 courses for first line supervisors of Anglo and service companies. Hold the Risk Champions course in Spanish.

All operations to undertake a global review of risk inventories in keeping with the methodology established in the One Anglo risk management programme. The risk inventories (IPER) were updated and the connection with the personalised Risk Control Programmes was improved. Align the risk management process with Anglo American’s new corporate

guidelines.

Undertake a safety environment survey according to the scheme defined by Anglo Base Metals. The survey was not undertaken. Comply according to the guidelines of the Copper business unit.

Maintain ISO 14001 certification and change the OHSAS 18001 certification to the new 2007 version. All operations were re-certified. Maintain certification.

Raise the quality of investigating accidents and the learning systems from reviewing them.Incidents were posted on the internal portal and supervisors analysed third-party incidents.

The new risks found in the incident analysis were added to the respective inventories.Align the accident investigation process with Anglo American’s new corporate guidelines (Learning from Incidents).

Continue work to standardise and share good safety practice as part of the One Anglo programme. Safety tools continued to be developed, such as PCR, VFL, GPA, REPDES, and corporate meetings such as the safety and occupational health manager committee and the AFRS committee. Extend the application of management tools to construction projects.

occupational health

Zero occupational diseases.The epidemiological monitoring programmes were carried out for each occupational risk detected to define exposure levels, based on which the different homogeneous risk groups were established, and the respective biological monitoring specific to each agent to assure that our employee health is not impaired. Nevertheless, the company regretted two cases of partial hearing loss.

Zero people with an occupational disease. Independent consultant diagnosis/assessment of the effectiveness of the programme.

Consolidate The Anglo Health Way system in the OHSAS 18001 integrated management systems. Operations made a self-assessment and there was a periodical review to assess the degree of progress with implementation. 100% implementation of The Anglo Occupational Health Way.

Ensure contractor compliance with Anglo American’s occupational health and hygiene guidelines. The occupational health unit makes periodical and random reviews of service companies to check the development and implementation of its programmes in line with Anglo’s guidelines, providing advice and training. Achieve a similar level to that of the company workforce.

ENVIRONMENTAL CAPITAL

Certifications Maintain ISO 14001 certification. All five divisions were re-certified pursuant to the ISO 14001 standard. Maintain ISO 14001 certification.

Environmental management system Implement the new Anglo Environment Way at the five divisions, identifying existing gaps and drawing up an action plan to rectify them.

The five divisions made an analysis to detect gaps with the new Anglo Environment Way standards and action plans were drawn up to be 100% compliant in a three-year term.

Make progress with attaining 76% compliance with The Anglo Environment Way standards on average at the five divisions.

Alternatives /productive uses of tailings water Maintain the system without dissipation of surplus water until the water recirculation system is expanded to Los Bronces.

There were no process water discharges. Progress was made with the engineering and construction of the water recirculation system of the Los Bronces Development Project.

Continue the construction of works for start-up scheduled for 2011.

Particulate material emissions Extend the wetting system to cover the entire wall slope according to Resolution Nº139 of the National Environmental Agency (CONAMA), dated January 2009.

For concentrations of particulate material (PM10) and suspended particulate material (SPM) on the boundary of the property to be below the reference levels.

The wetting system was extended to the main wall slope.

Concentrations of particulate material (PM10) and suspended particulate material (SPM) on the boundary of the property were below the reference levels.

Maintain the operation of the wetting system.

Concentrations of particulate material (PM10) and suspended particulate material (SPM) on the boundary of the property should remain below the reference levels.

Process water discharges compliant with Supreme Decree Nº90 Maintain discharges fully compliant with the quality standards of Supreme Decree Nº90. The only process water discharge subject to the regulation of Supreme Decree Nº90 is the refrigeration water from the Chagres smelter and it is compliant with the limits.

Maintain discharges fully compliant with the quality standards of Supreme Decree Nº90.

Energy consumption Undertake/commit new initiatives that align the company with the 2014 targets of Anglo American plc. Energy consumption was 99% based on the adjusted baseline of 2004 and an expected reduction target of 92.5% for 2009, which was therefore a negative difference of 6.5%. Concerning emissions, the result was 97.8% of the adjusted baseline of 2004, or 2.8% non-compliance with the 95% target in the year. In both cases, the targets as of 2010 will be reviewed to adjust them to the current industry reality, and mining in particular.

Undertake/commit new initiatives that align the company with the 2014 targets of Anglo American plc.

Water consumption Maintain consistency of the unit water consumption of the divisions and alignment with the corporate target. Fresh water consumption in 2009 was 2.6% below the year’s target of 92.5% of the adjusted baseline of 2004. Maintain consistency of the unit water consumption of the divisions and alignment with the corporate target

Implementation of key biodiversity action plans Get environmental approval for the Sustainable Operative Continuity Project of El Soldado.

Start the construction of phase I of the Las Tórtolas management plan.Closure plans Review closure plans according to Anglo American’s standards. The closure plans of the five divisions were updated according to the schedule. Undertake the studies identified in the latest update of the closure plans for

2010.

SOCIAL CAPITAL

Community engagement plans Apply community engagement proposals and plans arising from the application of SEAT II. All the divisions applied the SEAT process and have a community engagement plan. Moreover, in 2009 Anglo American entered into a partnership with Enseña Chile to support education in high-risk schools, and with Elige Educar and Un Techo para Chile to eliminate the shanty towns where 4,660 families live in the Metropolitan Region.

All the community plans and the management measures to comply with The Anglo Social Way will be applied in 2010. The plans to be applied in 2011 must also be updated.

Continue the “Open Door” programme at all the divisions. The “Open Door” programme continued to be applied at all the divisions, as needed. Continue the “Open Door” programme, as needed.

Publish the fifth Sustainable Development Report. The fifth Sustainable Development Report was released and was awarded the Best Economic Performance award by Acción RSE in its best report awards. It was also ranked in seventh place of the Integrated Report category of the Corporate Register awards from among 200 reports worldwide.

Publish the sixth Sustainable Development Report.

Support 5,000 small-sized businesses with micro-loans, and 60 with business training. The target was achieved of supporting 5,000 small-sized businesses in the partnership with Fondo Esperanza and 60 new medium-sized entrepreneurs were given business training.

Comply with the bicentenary targets of having at least 6,800 small-sized businesses supported with micro-loans and over 200 medium-sized businesses supported with business training.

Continue to implement a management system to follow up and assess the impact of social programmes. All the divisions assessed compliance with the social aspect management standards in accordance with the release of The Anglo Social Way standard.

All operations shall have a social and community improvement plan, which includes indicators for each social programme and manages the social incident information by means of a management system.

The table below shows the degree of compliance with the aspects considered in the previous report and the commitments for 2010. In 2009, there was 75.8% compliance with the targets set for that year.

Compliant

Not compliant

Under development

2009 performance and 2010 targets

2009 performance and 2010 targets


32. 33.

Financial capital

Transparency and compliance

Anti-trust compliance programme.

Drawing up of Manual.

Update of “significant employees”.

82 executives trained from 2008 to 2009; 42 in 2009.

Creation of the job position In Charge of Prevention of Law Nº 20.393 on penal liability in activities related to asset laundering, bribery andthe financing of terrorism.

Speakup. 10 complaints received in 2009.

12 employees of Anglo American and contractor companies dismissed for breaching the Good Citizenship Business Principles and the Code of Conduct.

Development of the company integrity policy and conduct standards.

Financial result US$1.716 billion in profits after tax in 2009.

The economic value distributed was 33% down on 2008 due to the lower dividend distribution, the payment of interest and the drop in operating costs.

The contribution to the community increased from 0.15% to 0.3% of the total economic value distributed.

Contribution to the State: US$584 million paid to the State in tax.

Collaboration with the Inland Revenue’s Tax Corporate Social Responsibility (TCSR) project.

11% of Anglo American’s suppliers adopted this system.

Investments: US$ 926 million in 2009.


34. 35.

Economic performance

Corporate governanceAnglo American Chile was part of the global restructuring carried out by its parent Company in 2009, which led to the creation of seven business units with more consolidated and closer functions to each of their respective operations. It therefore became part of the Copper business unit. This modification did not entail any changes to the organisational structure of the company in Chile, which is organised based on two closely-held and operating corporations:

Anglo American Norte S.A., which owns: The Mantos Blancos division, located in

the district of Antofagasta, Antofagasta Region.

The Mantoverde division, established in the district of Chañaral, Atacama Region.

Anglo American Sur S.A. is the owner of: The Los Bronces division, located in the

district of Lo Barnechea, Metropolitan Region.

The El Soldado division, located in the district of Nogales, Valparaíso Region.

The Chagres division, in the district of Catemu, Valparaíso Region.

Progress with transparency and compliance In a year marked by the global financial crisis, Anglo American increased production, continued to improve its work safety indexes, delivered more to the community and sharpened the activities of the Anti-trust Compliance Programme. In 2009, it created the job position In Charge of Prevention of Law Nº20.393, which regulates the penal liability of corporations for offences of asset laundering, financing terrorism and bribery, and the Company Integrity Policy and Conduct Standards were developed.


Both the board’s decisions and all the current principles and policies are based on the Good Citizenship Business Principles, which includes strictly complying with current legislation in the case of a conflict of interest of one or more directors.

There is also the limited liability company Anglo American Chile Ltda, which provides administration services to the operative companies. Its only partners are Anglo American Sur S.A. holding 70% of the capital stock and Anglo American Norte S.A. with 30%.

The only shareholders of Anglo American Sur S.A. as of 31 December 2009 were Anglo American Sur S.A. with 99.99% of the capital stock and Clarent Ltd with the remaining 0.01%, both subsidiaries of Anglo American plc. Its administration 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 18 April 2008:

iNCuMBeNt DireCtorS DePuty DireCtorS

Miguel Ángel Durán Vergara

(Chairman)

Noelle Duronea Burgalat

Álvaro Aliaga Jobet Alejandro Mena Frau

Felipe Purcell Douds Ignacio Quiñones Sotomayor

Anglo American Norte S.A. is the only company with minority shareholders, 56 in total, who hold 0.03% of the shareholding.

As of 31 December 2009, the main owners were:

Inversiones Anglo American Norte Limitada with 91.1% of the shares. Anglo American Norte S.A. with 5.41% of the shares

(own issue). Anglo American Norte S.A. with 3.46% of the shares.

Minority shareholders attend Ordinary and Extraordinary Shareholders’ Meetings and can hold direct talks with the company if they have queries. The board, elected for three years in the Ordinary General Shareholders’ Meeting held on 29 April 2008, is composed of the following directors:

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 corporations. 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.

All the companies undertake full accounting, an annual report, balance sheet and financial statements, which are reviewed by external auditors each year. Deloitte & Touche was the auditing company in 2009. 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, article 11 of Decree Law 600 of 1974 and the exempt resolutions issued by the SVS on the obligation of releasing financial statements quarterly and yearly and annual reports with regard to foreign investors subject to the rights set forth in such article of the Foreign Investment Statute.


Miguel Ángel Durán Vergara

(Chairman)

Noelle Duronea Burgalat

Alejandro Mena Frau (vacant)

Felipe Purcell Douds Ignacio Quiñones Sotomayor

On 15 July 2008, Alejandro Mena took office as an incumbent director, with the deputy director position becoming vacant.

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36. 37.


MANAGEMENT APPROACH

ViCe-PreSiDeNCy/ SeNior MANAGeMeNt AreAS oF reSPoNSiBility

Senior Vice-president Technical Services Mining / Geology / Metallurgy / Engineering

Operating excellence

Maintenance

Vice-president Marketing and Corporate Affairs

Marketing

Community relations

Corporate external affairs

External communications

Vice-president Finance and Administration Finance and planning

Controllership

Procurement and contracts

Information technology

Vice-president Human Resources Labour relations

Development and leadership

Collaboration

Internal communications

Senior Manager Safety and Sustainable

Development

Safety

Occupational health

Environment and regulatory affairs

Energy efficiency

Transparency mechanisms Anglo American Chile continued to develop the Anti-trust Compliance Programme in 2009, which is based on the policy and manual drawn up by Anglo American plc to regulate the commercial practices of all its operations, which it applies and supervises each year. These guidelines prohibit entering into agreements that might prevent, restrict or distort competition in the domestic or international market, and practices of abuse from a dominant position in certain activities55.

A total of 42 people matching the profile of “significant employee” participated in the programme in 2009, entailing meetings, videoconferences, telephone conferences and the corporate intranet.

As a sign of commitment to anti-trust compliance practices, 82 employees who attended this programme from 2008 to 2009 signed the annual self-certification letter on this issue.

The main areas of action of the Anti-trust Compliance Programme

in Chile were:

The drawing up of a manual related to the programme, outlining objectives,

activities, control and follow-up.

Update of the list of company employees who fall into the category

of “significant employees” regarding anti-trust compliance.

Continued development of the training and certification

programme in this area.

82 executives trained on the Anti-trust Compliance Programme from 2008 to 2009.

Who are significant employees?

• People who, due to their functions, might come into contact with competitors, distributors or suppliers in a business setting.

• Marketing, sales and business development staff.

• People with a supervisory role with regard to the previous categories.

• Senior management.

• Anti-trust compliance officials at the company’s divisions.

• In-house lawyers.

55 Anglo American’s Anti-trust Compliance is based on legislation and the regulation in the European Union (EU), and contains provisions of this kind in all the countries where it has operations.

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CEOAnglo American Group

Cynthia Carroll

CEO Copper(based in Chile)John Mackenzie

Vice-presidentprojects

Barry Murphy

Vice-president finance

James Beams

Vice-presidentstrategyAlice Fox

Alaska PeruCEOChile

Miguel Ángel Durán

Mantos Blancos divisiongeneral manager

Sergio Parada

El Soldado divisiongeneral manager

Alejandro Vásquez

Mantoverde divisiongeneral manager

Juan Carlos Román

Chagres divisiongeneral manager

Pedro Reyes

Los Bronces divisiongeneral manager

Álvaro Aliaga

Vice-president marketing & corporate

affairs Felipe Purcell

Vice-president human resources

Alejandro Mena

Senior managersafety and sustainable

development Lorenzo Menéndez

Senior vice-presidenttechnical services

Marcelo Glavic

Organisation chart as of December 2009

The management of Anglo American is vested in a single structure headed by the CEO, who reports to the chief executive of the Copper business unit.


38. 39.


56 The complete content of Law 20.393 is available on the website www.leychile.cl of the Chilean National Congress Library (BCN).

57 Complete information on the characteristics, terms and conditions of operation of Speakup can be found on the website

www.anglospeakup.com58 The Speakup number is 1230-020-5485, and

the email address is [email protected] See the corporate presence in society from

page 66 onwards.60 1 UF is approximately Ch$21,000 at the

current rate.

We will maintain high standards of business guarantees to: identify and monitor material risks; safeguard our assets; and to detect and prevent fraud and corruption”.

Good Citizenship Business Principles.

Integrity and accountability regulations

In 2009, the Anglo American Group released the Business Integrity Policy and Standards of Conduct. Its aim is to set out guidelines on the conduct needed at all levels of the company, its affiliates, companies with joint control and related companies regarding the following issues:

• Gifts, leisure activities and hospitality.• Conflicts of interest.• Facilitation payments.• Use of the company’s assets.• Political donations.• Dealings with government officials and lobbying.• Charity donations.• Social and community investment and company development activities.• Sponsorship.• Hiring and payment to intermediaries.• Mergers, acquisitions, companies with shared control and related companies.

The content of this policy will be disseminated in 2010.

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New information challengesLaw 20.393 came into force on 2 December 2009, and it lays down penal liability for corporations in offences of asset laundering, the financing of terrorism and bribery56. The content of this legislation establishes specific requirements for Chilean companies. Anglo American Chile therefore appointed the company controller In Charge of Prevention pursuant to Law 20.393, who is drawing up a prevention and control model and programme that is compliant with the provisions of this regulation.

The following are the main responsibilities of this job position: Gather information on the activities

or processes of the entity, be these customary or sporadic, in which context the risk arises or increases of committing the offences set forth in Law 20.393.

Draw up the specific protocols, rules and procedures allowing people to intervene in the activities or processes, be able to schedule and carry out their tasks or work to avoid committing the mentioned offences.

Identify the administration and auditing procedures of the financial resources enabling Anglo American to prevent them from being used in the mentioned offences.

Assess the sufficiency of the current internal administrative sanctions, and whistle-blowing procedures or the pursuit of pecuniary responsibilities against those people who violate the offence prevention system.

Detect any needs of modifying the regulations the company already has in place; work, supplier and service provider contracts.

The system shall be implemented in a second stage, along with the monitoring, control, communication, training and certification aspects of the issues involved. The Sustainable Development Report 2010 will report on progress with this process and its results.

SpeakupThe confidential telephone and email service called Speakup is one of the main tools to supervise adherence to the Good Citizenship Business Principles of Anglo American57. The aim of this tool, managed by an external company, is to receive reports about possible conduct on issues like:

Breach of any legal obligation. Abuses or theft of company resources. Bribes, corruption and fraud. Damage to the environment or injustices

with the local communities. Safety and health threats. Conflicts of interest. Improper accounting practices.

In 2009, Anglo American Chile promoted knowledge of this tool and its use through corporate communication channels and dialogue with its stakeholders. The company emphasised that both the telephone line and e-mail58 address are available to all company and external employees.

In the period covered by this report, ten alerts were received related to issues of potential breaches of labour regulations, poor contractor work practice and dissatisfaction with the development or results of tender processes.

With regard to adherence to the Good Citizenship Business Principles, three company employees and nine contractor company employees were dismissed for breaching the company’s code of conduct and policies.

Financial resultThe total profits after tax of Anglo American in Chile, i.e., own operations plus the 44% interest in Collahuasi, amounted to US$1.716 billion. The operations managed directly by the company generated profits of US$1.037 billion, a 9% decrease on 2008, mainly due to the lower sales volume and the drop in the copper price. This was partially offset by the impact of the lower operating costs and the benefit of the greater weakness of the Chilean peso. Profits after tax from Anglo American’s interest in Collahuasi (44%) were US$678 million, which was a 36% increase on the previous year. This was mainly due to the higher tonnage of copper sold by Collahuasi in 2009 (530,667 tonnes) compared with 2008 (462,469 tonnes).

The copper price increased strongly during the year, reflecting the improvement in the global economic conditions, climbing from 132 US cents/lb in late 2008 to 333 US cents/lb late in the year. Nevertheless, despite this increase, the annual average price was 26% down on 2008. In realised price terms, this was only 3% lower than the price of the previous year because of final liquidations in a burgeoning market.

Operating costs benefitted from operating efficiency improvements and the price decreases of key raw materials like sulphuric acid and diesel. The drop in transportation costs was offset by the higher treatment and refining charges. The C1 unit cost amounted

to US$1.04/lb after the by-product credits, i.e., 2% up on the previous year (US$1.02/lb).

The long-term copper sales outlook is positive. Demand from China is expected to increase despite government measures to restrict credit. At the same time, demand from North America and Europe is showing signs of recovery.

Economic value generated and distributedThe distribution of the economic value generated to the company’s main stakeholders is presented based on the G3 guidelines of the GRI. The economic value generated in 2009 amounted to US$4.006 billion and the economic value distributed was US$2.725 billion. Moreover, the economic value generated was 1% up on the previous year and the economic value distributed fell 33%, mainly because of a 70% decrease in the distribution of dividends and interest payments, and operating costs dipping 8%.

It should be especially noted that the contribution to the community increased from 0.15% to 0.3% of the total, mainly due to higher contributions to educational programmes like Enseña Chile, Elige Educar and the bicentenary programme to eradicate shanty towns in the Metropolitan region jointly with Un Techo para Chile59.

With regard to benefit plan liability hedging, the company has no special fund for its employees.

Nevertheless, as part of a compensation package, the company matches the amount employees voluntarily deposit in their pension funds, and this amount is deposited in the individual capitalisation account of the respective pension fund administration company (AFP). The total contribution made by the company for this was US$3.8 million in 2009, which was 17% down on the US$4.6 million deposited in 2008. Such decrease is explained by the reduction in accepting the option of deposits agreed for bonds in January/March and the exchange rate difference between both years. There is a similar situation with Collahuasi, except that the benefit is aimed at supervisors. A contribution of 2% of the base salary (with a limit of UF60 60) was implemented in 2007 as a voluntary social security contribution for all those employees who contribute 1% of their base salaries. This benefit amounted to US$549,000 in 2009, a 68% increase on the US$327,000 in 2008.

Anglo American also includes a severance indemnity liability on its balance sheet, which amounted to US$114.3 million as of 31 December 2009. In the case of employees, this is higher than the legal requirement of one month’s salary per year worked, in accordance with what is set forth in the collective agreements.


40. 41.

2009

eCoNoMiC VAlue GeNerAteD (given in millions of US$)*

ANGlo AMeriCAN CHile

CollAHuASi (44% BASe)

CoNSoliDAteD

A) Earnings (1)

Gross sales 2,555 1,412 3,967

Net income from financial investments 3 0 3

Net income from sales of fixed assets and

others

0 36 36

eCoNoMiC VAlue GeNerAteD 2,558 1,448 4,006

eCoNoMiC VAlue DiStriButeD (given in millions of US$)*



CoNSoliDAteD

B) Operating costs (1,070) (425) (1,495)

C) Employee salaries and benefits (2) (136) (51) (187)

D) Payment to capital suppliers (3) (356) (92) (448)

E) Payment to the State (4) (420) (164) (584)

F) Investment in the community (6) (5) (11)

eCoNoMiC VAlue DiStriButeD (1,988) (737) (2,725)

eCoNoMiC VAlue WitHHelD 570 711 1,281

NOTES

(1) Includes operating and non-operating earnings.

(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.

2008

eCoNoMiC VAlue GeNerAteD (given in millions of US$)*



CoNSoliDAteD

A) Earnings (1)

Gross sales 2,772 1,135 3,907

Net income from financial investments 21 3 24

Net income from sales of fixed assets and

others

(3) 19 16

eCoNoMiC VAlue GeNerAteD 2,790 1,157 3,947

eCoNoMiC VAlue DiStriButeD (given in millions of US$)*



CoNSoliDAteD

B) Operating costs (1,192) (430) (1,622)

C) Employee salaries and benefits (2) (158) (43) (201)

D) Payment to capital suppliers (3) (932) (564) (1,496)

E) Payment to the State (4) (582) (154) (736)

F) Investment in the community (4) (2) (6)

eCoNoMiC VAlue DiStriButeD (2,868) (1,193) (4,061)

eCoNoMiC VAlue WitHHelD (78) (36) (114)

NOTES

(1) Includes operating and non-operating earnings.

(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.

* Approximate values

Note: These values are stated in accordance with the company’s reporting standards for its head office in London, and in some cases might differ slightly from the figures stated in the audited financial statements enclosed at the end of this report. Please note that the differences are only due to different ways of presenting the information.

Consolidated economic value distributed 2008

18.12%

36.83%

4.97% 0.15%

39.93%

%

Operating costs 39.93

Payment to capital suppliers 36.83

Payment to the State 18.12

Employee salaries and benefits 4.97

Investment in the community 0.15

NOTE: The amount withheld by the company in 2008 was negative as it financed its operations with the amount withheld from previous years.

2008US$4.061

billion

Consolidated economic value distributed 2009

32.0%

14.6%

11.2%

37.3%

4.7% 0.3%

%

Operating costs 37.3

Withheld by the company 32.0

Payment to the State 14.6

Payment to capital suppliers 11.2

Employee salaries 4.7

Investment in the community 0.3

2009US$4.006

billion


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42. 43.

61 www.eitransparency.org. This initiative aims to strengthen company governance by means of greater transparency and rendering of accounts in the extractive company sector.

62 www.sence.cl 63 www.sii.cl 64 My small- and medium-sized company. 65 See the prospects on page 22.

FiNANCiAl AiD reCeiVeD FroM tHe StAte (given in thousands of US$)

2009 2008

ANGlo AMeriCAN

CHile


CoNSoliDAteD ANGlo AMeriCAN

CHile


CoNSoliDAteD

Tax credits and reduction:

SENCE (1) 854 129 983 450 103 553

Credit and donations (2) 401 704 1,105 91 326 417

Mining licence, credit against PPM (3) 42 39 81 21 33 54

6% fixed assets credit (4) 95 21 116 77 17 94

totAl 1,392 893 2,285 639 479 1,118

NOTESThis information is based on provisional net income.

(1) This amount is 1% of the 2009 remunerations, which is the accounting amount stated; as of the closure of the report, the Intermediate Technical Training Bodies (OTIC) had not released the official information.

(2) This amount is the donations that have tax certification for the year ended 31 December 2009, which might vary when determining the definitive tax result in April 2010.

(3) Provisional monthly tax payment.(4) This amount is the 650 UTM (monthly tax unit) limit, with one UTM amounting to Ch$36,863 at 31 December 2009, at a closing exchange rate of Ch$507.10

per US dollar.

Case studyPromoting the use of electronic invoicing

To encourage the use of electronic invoicing by micro-, small- and medium-sized companies that provide products and services to Anglo American Chile, in 2009 the company and a further five companies signed a collaboration agreement with the Chilean Inland Revenue (SII)63 to participate in and support the Tax Corporate Social Responsibility (TCSR) project of the SII, launched on its MiPyME64 portal.

Anglo American therefore made a survey of its suppliers and found that around 900 of them are in that category. It carried out four-hour training sessions with the SII for its suppliers in Santiago and Antofagasta to inform them of the benefits of this technology and encourage them to use it. The training programme will continue in 2010 to reach 80% to 90% of this group of suppliers.

To contribute to this process, the company will pay the cost of the digital signature certificate needed to undertake this proceeding on the internet for all suppliers that are interested in applying to this system before November 2010. It will also provide support and advice to suppliers until they are set up and using the electronic invoicing system.

The project challenge is to get at least 20% of Anglo American’s MiPyME suppliers into this system.

By the end of 2009, 11% of suppliers were operating with electronic invoicing.

Electronic invoicing benefits Avoids invoice stamping at the SII offices. Saves printing, post and filing costs. Shorter document processing waiting time. Higher quality of information in the accounting

systems. Allows the VAT return and payment to be deferred

from the 12th to the 20th of each month. Reduces the risks of losing documents. Improves the customer/supplier relationship. Lower environmental impact.

US$926 million total investment in 2009, 22% more than in 2008.

27% 3.600progress of the Los Bronces Development Project which is on schedule.


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State contribution Anglo American Chile acknowledges that timely and proper payment of taxes generates social benefits since the State uses money from its reserves to provide a better social infrastructure, like the building of schools and roads, the improvement of utilities, and even better environmental conditions. Mining operations also generate other indirect benefits related to the presence and operation of customers and suppliers who also create employment and pay taxes.

To such effect, the company has a tax strategy that has been renewed and approved by the board and is aligned with the long-term business strategy and the Good Citizenship

Business Principles. This strategy guarantees that there is proper payment of taxes in each country where the company operates, based on the principles of EITI61, which promotes transparency and generates reports on the taxes paid by companies and the countries in which each of its members is present. Maintaining a constructive partnership with the authorities of each country is a priority for the suitable management of this strategy.

With regard to State contributions, both Anglo American and Collahuasi mainly receive them through credits from the National Training and Employment Department (SENCE)62 for training and credit for donations.

Operating overview2009 was a positive year for Anglo American Chile with record copper production in Chile. This amounted to 669,814 tonnes of fine copper, with copper cathodes accounting for 176,353 tonnes and copper concentrate for 487,944 tonnes.

The Los Bronces division had a production increase achieving a record of 238,423 tonnes of fine copper, and Mantos Blancos had a 3% performance increase on 2008 producing 90,153 tonnes of fine copper.

Production at the Mantoverde division was similar to that in 2008, amounting to 61,515 tonnes of fine copper cathodes. Output at the El Soldado division fell to 41,365 tonnes due to the lower ore grade, which was foreseen in the mine development plan. The Chagres

division produced 137,652 tonnes of copper anodes by processing concentrates from the Los Bronces and El Soldado divisions.

Total molybdenum production (Los Bronces and Collahuasi) was up 6% and amounted to 3,886 tonnes.

Collahuasi had the highest production increase and a record of 535,800 tonnes of fine copper, with Anglo American’s share amounting to 235,775 tonnes due to its 44% interest. This record production was attained despite the setback of a fault with the 203 conveyor, which was inoperative for 44 days.

Moreover, construction of the Los Bronces Development Project is progressing according to schedule and start-up will be in the last quarter of 2011. The design engineering was substantially completed by late 2009 and

construction works at the different sites are on schedule. One major highlight was the opening of the tunnel in November 2009 for the conveyor that will convey ore from the mine to the grinding plant at Confluencia.

Production at Los Bronces is expected to increase to 490,000 tonnes a year in the first three years of production (with an average of 400,000 tonnes a year in the first ten years). It is estimated that at peak production it will become the fifth largest copper producer in the world, with highly attractive operational costs and reserves assuring a life of over 30 years. The resource and mineralisation studies made by Anglo American’s technical teams also guarantee potential expansion.

Anglo American also announced two major high-quality prospects at Los Sulfatos and San Enrique Monolito near the Los Bronces

mine. These new copper prospects will jointly increase the Group’s copper ore resources by 50% (excluding reserves)65.


44. 45.

US$115 millioninvested in stay-in-business projects.

US$8 3.600millionallocated to safety, health and environmental initiatives.

oPerAtiNG AND FiNANCiAl oVerVieW (given in millions of US$)

2009 2008 2007

Anglo American Chile’s earnings 2,555 2,772 3,124

Collahuasi’s earnings (44%) 1,412 1,135 1,383

totAl eArNiNGS (1) 3,967 3,907 4,507

Anglo American Chile’s income tax 157 228 266

Anglo American Chile’s royalty tax 39 55 82

Collahuasi’s income tax (44%) 143 126 144

Collahuasi’s royalty tax (44%) 22 29 40

Profit remittance tax paid 163 258 367

Other company tax 16 18 12

Other tax collected (2) 44 22 13

totAl tAX 584 736 924

Anglo American Chile’s earnings 1,037 1,126 1,697

Collahuasi’s earnings (44%) 679 496 803

totAl ProFitS 1,716 1,622 2,500

Anglo American’s fine copper production (tonnes) 434,039 434,475 453,891

Collahuasi’s fine copper production

(44%)(tonnes)

235,775 204,317 198,899

totAl FiNe CoPPer ProDuCtioN (toNNeS)

669,814 638,792 652,791

C1 average unit cost (US$/lb) (3) 1.04 1.02 0.82

NOTES

(1) Only includes operating earnings.

(2) Other tax collected: this row was inserted to report separately the tax that is not a company tax burden but which it collects and pays to the State.

(3) C1 cost: mine cost, plant costs, overheads, smelting, refining and freights costs.


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Major projects in the year Investment in stay-in-business projects (to maintain the productive capacity) was US$115 million in 2009 against the US$170 million invested in 2008. This figure excludes the additional US$581 million invested in the Los Bronces Development Project, and other expansion studies and projects like the Mantoverde sulphide study, which amounted to US$4 million. Projects developed by Collahuasi are also excluded.

The main projects carried out in the year included initiatives arising from corporate strategies of commitment to safety, health and the environment amounting to US$8 million. These entailed improvements of the standards to prevent fatalities, the anti-collision systems installed on mining equipment and enhancements of the fire protection systems, among others.

The execution of projects to save energy, water and reduce CO2 emissions at operations is under study and they will be undertaken based on Anglo American’s corporate commitments.

Los Bronces division

The company invested US$58.1 million in stay-in-business projects at Los Bronces in 2009. The following were the main initiatives:

To withstand the greater demand and reliability of the electric power system, a new 66 kV transmission line was completed from San Francisco to Los Bronces and the San Francisco and Los Bronces substations were boosted.

Twenty-six kilometres of 24”-diameter piping of the ore slurry pipeline were replaced as they had come to the end of their life. The spend accumulated in 2009 was US$23 million. The project is expected to be completed in 2011 at a total investment of US$74 million. This initiative was undertaken jointly with the assembly of the Los Bronces Development Project ore slurry pipeline.

The construction of the cyclone system of the western wall and the eastern starter dam of the tailings dam is being completed at Las Tórtolas. Improvements are also being made to the tailings launder to the main wall. These projects entail an investment of US$22 million.

Around US$4 million were invested to replace the mobile mine equipment.

Mantos Blancos division

The company invested US$14.1 million in Mantos Blancos in projects such as the following:

The project involving secondary leaching of launder gravel, entailing a total investment of US$15 million, is in the completion stage.

With regard to the conceptual study to extend the life of Mantos Blancos, a new team was formed to complete this phase of the study and submit a business case in 2010.

Mantoverde division

Mantoverde spent US$11 million on projects in the period:

The drilling campaign continued; it is necessary for the sulphide project feasibility study. US$8.7 million has been approved for this drilling.

Chagres division

The company invested US$9.4 million at the Chagres smelter to improve the operating conditions, availability and control of fusion and the acid and oxygen plant.

El Soldado division

The company invested US$20.6 million in the following projects at El Soldado in 2009:

Work continued at the El Cobre plant to install new crushing, re-grinding, flotation cells and ancillary equipment to expand its production capacity and metal recovery to treat around 8.1 million tonnes. The total cost of these initiatives will amount to US$23 million.

Due to the normal growth of the El Torito tailings dam, the following projects were completed entailing US$15 million: relocation of the recirculation water conveyance facilities from the lagoon to the El Cobre plant, the construction of a new road and contour channel to manage the surface water, and the construction of a new emergency evacuator to convey the surplus clear water flow to the evacuator tunnel. Detailed engineering also started to relocate the plant-dam tailings piping with its cyclone station.


46. 47.

Human capital

Safety and occupational health

Safety. 0.17 lost-time accidents per 200,000 hours worked in 2009.

US$7.5 million to implement the safety standard.

220,654 man-hours allocated to safety training.

Occupational health. Two new cases of hypoacusis.

People Education, training and coaching to develop personal and team competencies.

5,229 company employees trained.

120,534 man-hours of annual training.

Driving continuous improvement of functions, operations and systems.

Creation and consolidation of the Global Shared Services model.

Divisional initiatives of continuous improvement.

Establishment of strategic partnerships to generate value shared with other players in the industry.

Partnership with the Faculty of Physical Sciences and Mathematics of the University of Chile.

18.8% increase in investment to attract talent amounting to US$1,824,625.

Sharpening of internal communication to meet life quality, diversity and work-family conciliation priorities.

Communication meetings with specific internal groups.

Application of the flexible working day in Santiago.

Participation in the study “Best companies for working parents 2009.”

Empowerment of dialogue and co-ordination based on the collaborative labour relations model.

11 trade unions and 98% of the workers are represented by unions.

The early collective bargaining process with the Los Bronces, El Soldado and Chagres unions ended in December 2008.

Trade union leader development and further training initiatives.


48. 49.


The work on safety, occupational health and risk management in 2009 was focused on sharpening leadership and proactivity at all corporate levels, on co-operation and teamwork with contractor companies, and on progress with embracing the practices of excellence required by the Anglo American culture.

Record resultsSystematic work focused on company employees and contractor companies resulted in the best safety index in the company’s history of 0.17 lost-time accidents per 200,000 hours worked in 2009. The five operations were also ranked among the top seven with the best safety performance in Chile during the year.


We believe that people are our main asset and we will not tolerate them having accidents or injuries while working for us. All employees have the right to return home safe and sound at the end of their working day”.

Safety, Occupational Health and Environmental Management Policy66.

66 The content of this policy is available on the company website at www.anglochile.cl and was fully reported on in the Sustainable Development Report 2008.

67 www.ist.cl68 www.tranex.cl69 www.consejonacionaldeseguridaddechile.cl70 www.alaseht.com71 www.mutual.cl72 www.sernageomin.cl73 www.iimch.cl74 www.sonami.cl75 www.cim.org76 www.sodexo.com

The Latin American Association of Occupational Safety and Hygiene (ALASEHT)70 distinguished Mantoverde for its accident risk prevention work. This is one of the most prestigious and significant awards in Latin America.

Mantoverde’s employees and those of contractor companies completed one year without any lost-time accidents.

All Anglo American Chile’s operations maintained certification of their management system based on the OHSAS 18001: 2007 standard, after the internal and external audit processes had been completed.

APRIL MAY JUNE JULY AUGUST NOVEMBER DECEMBER

The electrical equipment area of the Chagres division completed 31 years without any lost-time accidents.

The Work Safety Institute (IST)67 distinguished the company Tranex Ltda68, which moves earth at the El Soldado division, for completing four years without any lost-time accidents.

The National Geology and Mining Survey (SERNAGEOMIN)72 awarded Mantoverde the Category B Company prize for its safety performance.

GDA and Logist and Service, contractor companies at Mantoverde, were distinguished by the Workers’ Safety Association for the application and certification of the Competitive Company Programme.

Mantoverde was awarded the John T. Ryan Prize for the fourth time for its excellent work safety performance and Mantos Blancos was the runner-up. This prize is awarded each year by the Instituto de Ingenieros de Minas de Chile 73, Sociedad Nacional de Minería (SONAMI)74, SERNAGEOMIN and the Canadian Institute of Mining, Metallurgy and Petroleum (CIM)75.

The external service company Sodexo76 completed 3 million man-hours without any lost-time accidents in its catering and maintenance service for the Los Bronces division and Los Bronces Development Project (LBDP).

Chagres received an award for its accident rate index improvement during the seminar Leadership and Teamwork in Times of Crisis, organised by the Mutual de Seguridad71

(Workers’ Safety Association).

Chile’s National Safety Council (CSN)69 awarded Chagres the Risk Prevention Excellence, the National Safety Council and Risk Prevention Effort prizes, and Mantoverde the National Safety Council and Risk Prevention Effort prizes.

Mantos Blancos received a Mention of Honour in the Most Improved Operation Award and Chagres obtained the Outstanding Safety Performance Award in the Anglo American Chief Executive Safety Awards, in which all operations worldwide participated.

The Workers’ Safety Association distinguished the plant electrical equipment area of El Soldado for completing 20 years without any lost-time accidents.

Awards and accolades 2009

Management approach

Anglo American’s safety, occupational health and environmental management policy establishes that achieving “zero harm” must be underpinned by effective safety management at all operations, considering people as the main asset.

Three safety, occupational health and risk management principles were established for this:

All accidents and professional and occupational diseases are preventable.

We will take all the action needed to prevent accidents and diseases and prevent repeats.

Anglo American’s safety policies and standards are applied uniformly to all the company’s operations.

The senior safety and sustainable development management reports directly to the CEO and is in charge of driving all programmes that help to adhere to these principles in the organisation, at operations and in stakeholder relations. The safety and occupational health management reports to the CEO.

One of the main issues in the period was the implementation of the Anglo Fatal Risk Standards (AFRS). The company invested US$7.5 million in this programme alone in 2009 and expects to invest a similar figure in 2010.

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77 The origin and characteristics of this programme were fully reported on in the Anglo American Sustainable Development Report 2008. The document is available at

www.anglochile.cl 78 Document available at www.angloamerican.

co.uk/aa/development/approach-and-policies79 The origin and characteristics of this

programme were thoroughly informed in the Anglo American Sustainable Development Report 2008. The document is available at www.anglochile.cl

ANGLO FATAL RISK STANDARDS PERFORMANCE 2009

DiViSioN CoMPliANCe leVel

iNVeStMeNt (iN uS$)

Los Bronces 91 1,530,000

Mantos Blancos 91 3,017,000

El Soldado 90 700,000

Mantoverde 90 1,377,000

Chagres 94 853,000

AVerAGe CoMPliANCe / totAl iNVeStMeNt

91 7,477,000

Four-tier safety risk management focus

ASSESSMENT OF MATERIAL HAZARD RISKS /BASELINE/ENTIRE SITE

PROJECT RISK ASSESSMENT/CHANGES/ISSUES

ASSESSMENT OF ROUTINE & NON-ROUTINE TASK PLANNING RISKS

INDIVIDUAL, ONGOING, “FACE-TO-FACE” RISK ASSESSMENT

DeC

reASiN

G riSk

DeC

reASiN

G riSk

NUMBER OF MANHOURS ALLOCATED TO SAFETY TRAINING

DiViSioN MANHourS / 2009 MANHourS / 2008

Los Bronces 65,956 80,252

Mantos Blancos 112,203 41,696

El Soldado 21,434 35,947

Mantoverde 7,657 11,934

Chagres 13,404 33,507

totAl 220,654 203,336

US$7.5 million invested to comply with the AFRS.

18,326 hours devotedby managers and superintendents to apply the Visible-Felt Leadership methodology in the field in 2009.

9% more man-hoursallocated to training than in 2008.


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Progress with corporate standards and programmes The safety policies, standards and guidelines established provide incentives so visible-felt and responsible leadership, teamwork and risk management underpin the improvement of the indicators. The traditional preventive focus is supported by methodologies and the embracement of best practice in the industry to consolidate the progress achieved towards “zero harm”.

In accordance with these standards, Anglo American Chile achieved and, in some cases, exceeded the 2009 targets of the main programmes related to sharpening leadership:

Anglo Safety Way

According to the results of the internal and external audits, all the divisions attained over 90% compliance with The Anglo Safety Way standard, with Mantos Blancos achieving 100%.

The Anglo Safety Way77 sets out the conditions for the continuous improvement of the safety management at operations, considering issues like leadership, training, contractor management, operational control, emergencies and accident investigation, among other issues.

Anglo Fatal Risk Standards (AFRS)

This programme is essential to establish effective safety management at all Anglo American’s business units and operations, including contractors and visitors when they participate in internal activities. In 2009, US$7.5 million were allocated to comply with this standard.

Based on the analysis of best practice in the industry and the systematic review of own incidents, these standards establish the minimum safety performance requirements for light vehicles, the handling of hazardous substances, equipment protection and working at altitude, among others78.

In 2009, Anglo American achieved the annual target at all its divisions of 90% compliance with the compulsory requirements established in the Anglo Fatal Risk Standards. Los Bronces, Mantos Blancos and Chagres exceeded the target.

Besides progressing towards 100% compliance with the zero harm vision, the main targets and investments related to the Anglo Fatal Risk Standards will in 2010 be focused on equipment protection, transportation and prevention management standards, and control of employees’ physical and mental fatigue.

Safety risk management programme (SRMP)

The aim of the safety risk management programme (SRMP)79 is to teach and commit the entire organisation and its external partners to the correct identification of hazards and risk management, emphasising the importance of leadership in the decision-making process. As of December 2009, senior management, management, executive and superintendent levels had completed their attendance of the training levels of this programme (classroom workshops, on line training, case analysis, etc.). According to the schedule, supervisors and employees will receive SRMP training in 2010 to attain 100% coverage.

Risk management leadership Progress was made in 2009 with improving the supervision quality and strengthening the strategic commitment of contractor companies.

The application of the Visible-Felt Leadership (VFL) process at all operations bolsters commitment to good practice. This is underpinned by the assessment, analysis and improvement of the characteristics of a specific on-site task carried out by employees, and a leader communicating “face-to-face”. It generally takes a few minutes and is focused on “recognising and reinforcing conduct and getting a commitment to change improper conduct”, according to the process support manual. The methodology requires managers and superintendents to devote 30 hours a month to really being on site with personal contact, in which positive employee conduct is reinforced and feedback is given for possible shortcomings. The use of this practice was

stepped up at all operations in 2009 and the effectiveness of risk management was supported by:

Cycles of supervisor and contractor training on the VFL process and in other areas related to exercising effective on-site leadership based on a specific manual that was distributed at all the company’s divisions.

Managers and superintendents allocated 18,326 hours to apply the VFL methodology in their daily work (720 more hours than in 2008).

Systematisation of and periodical reporting on the information arising in this process, so it can be shared among work teams at the divisions and among operations.

Dissemination at supervisor level of the series of “what you need to know” leaflets, which provide the fundamental

concepts and definitions in specific risk management-related areas (alert systems, shifts and rest, family relations, among others). The work on physical and mental fatigue was defined as a priority for 2009 and 2010.


52. 53.

To comply with the aspects of The Anglo Safety Way, the safety plans for the activities of contractors and related companies shall include the identification and analysis of hazards, risk assessment, suitable control measures, emergency response manuals, monitoring and reports of the safety performance requirements”.

The Anglo Safety Way: a contractor and related company management standard.

80 There were 35 fatalities in the mining industry in 2009, based on the data of SERNAGEOMIN.


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Safety performance The unremitting commitment to achieve “zero harm” maintained the downward trend of the accident rate, which reached a company record. The consolidated safety index (expressed in lost-time accidents for every 200,000 man-hours worked) was 0.17 in 2009 against 0.21 the previous year. The five operations were among the top seven with the best safety performance in Chile in 2009.

With regard to the company’s lost-time work accident index, considering company employees and contractors, this amounted to 1,920 days in 2009 against 2,093 days and 1,138 days in 2007 and 2008, respectively.

The severity rate (number of work hours lost for every 200,000 man-hours worked) increased by 28.7%, from 87 in 2008 to 112 in 2009. This is explained by an increase in this index at the Los Bronces, Mantos Blancos and El Soldado divisions, and in the Los Bronces Development Project (LBDP).

2007 ltiFr ltiSr

CoMPANy eMPloyeeS

CoNtrACtorS totAl CoMPANy eMPloyeeS

CoNtrACtorS totAl

Los Bronces 0.25 0.38 0.33 431 179 279

Mantos Blancos 0 0.45 0.31 0 445 309

El Soldado 0.14 0.21 0.18 119 79 98

Mantoverde 0.23 0.16 0.19 73 63 67

Chagres 0.55 0.56 0.55 148 142 145

CoNSoliDAteD iNDeX 0.21 0.34 0.29 203 199 201

2008 ltiFr ltiSr

CoMPANy eMPloyeeS


CoNtrACtorS totAl

Los Bronces 0.20 0.23 0.22 150 121 132

Mantos Blancos 0.20 0.17 0.18 125 79 93

El Soldado 0.12 0.07 0.09 139 6 54

Mantoverde 0 0.47 0.28 0 153 93

Chagres 0.55 0 0.27 253 0 125

Los Bronces Development Project 0 0.37 0.37 0 52 51


2009 ltiFr* ltiSr**

CoMPANy eMPloyeeS


CoNtrACtorS totAl

Los Bronces 0.29 0.24 0.26 199 100 138

Mantos Blancos 0.00 0.09 0.06 0 268 186

El Soldado 0.11 0.08 0.09 58 53 55

Mantoverde 0.00 0.16 0.10 0 86 51

Chagres 0.00 0.24 0.13 0 197 105

Los Bronces Development Project 0.00 0.23 0.22 0 123 122


*LOST-TIME INJURY FREQUENCY RATE (LTIFR): Lost-time accidents every 200,000 man-hours of work

**LOST-TIME INJURY SEVERITY RATE (LTISR): Number of work hours lost every 200,000 man-hours worked.

Anglo American Chile had no fatalities at its operations in 2009, which is a positive sign of the effectiveness of the policies, programmes and practices put in place80. In September 2009, the company regretted the death of the worker Luis Zurita Martel, who died due to a fall of ground during a rain and wind storm that hit the place where he was sleeping on the access road to the Los Bronces mine site and off the company’s premises. The contractor worker was with other people providing access control services to such mine site. Although this was a non-labour case, Anglo American Chile supported the family of the worker and collaborated with all the institutions who investigated this case.

Partnership with contractors Anglo American Chile has a comprehensive management plan for contractor companies, the objective of which is to boost their commitment to Anglo American’s values, policies and programmes. It also sets out the conditions for supervision of accommodation, food, transportation, equipment and

protection, which are complemented with a system of financial incentives tied to achieving the individual and collective safety and competency improvement objectives.

Contractors are thereby integrated to Anglo American’s planning. The work done in the last few years has led to a steady decrease in the performance shortcomings on safety, occupational health and risk management.

In 2009, Anglo American and its divisions particularly focused on extending the use of the corporate tools of the Anglo Safe internet portal for issues such as safety risk control, emergency plans and review of third-party incidents, among others.

At the same time, it completed work to align the content and methodologies of the safety risk management programme (SRMP) to include the management and supervisor levels of contractor companies in 2010. Moreover, personnel of these companies participated in training sessions, work meetings, campaigns and programmes to promote the zero harm culture at all operations.


54. 55.

Disseminating the Anglo American culture There were new resources in 2009 to facilitate compliance with the safety, occupational health and risk management objectives. In the case of Anglo Safe, the company designed and added online work modules regarding:

Action plan management (GPA): this provides for online supervision and monitoring of incident analysis processes, verification and control to facilitate data logging and traceability, which are essential for internal and external audits.

review level and third-party incident assessment: the aim of this methodology is for supervisors to analyse the cases that have occurred in other divisions and/or companies and then to formally answer an assurance questionnaire. An alert system was added in 2009, which shows the personalised reading frequency and allows cases to be reviewed in different divisional areas other than the specific issue being addressed (blasting, transportation and loading, plant, operations, etc.). This innovation has on average increased the indicator of new case assessment by supervisors from 20% to 90%.

Anglo American Chile completed the design and planning of the communication and training programme of the Learning From Incidents (LFI) tool, which enhances the instruments and practices of investigation, analysis and conduct change based on cases of accidents. The activities scheduled for this will commence in 2010.

Co-ordinated occupational health work The Anglo Occupational Health Way81 standards are the company’s roadmap towards its zero harm objective and establish the focus of all the specific work tools and manuals. They set out the mechanisms to meet the corporate commitments to occupational health and the monitoring, control, assessment and audits of the degree of compliance. In the case of Anglo American Chile’s operations, the annual assessment mechanisms set a 90% degree of compliance on average for operations, including contractors.

Moreover, the contingency created by the A (H1N1)82 swine flu pandemic in 2009 made it necessary to apply a specific protocol, which included monitoring, sanitary control and promoting self-care and hygiene conduct at all operations, in accordance with the guidelines of international and local health authorities.

The company continued to apply its HIV/AIDS83 prevention programme, with a special emphasis on informing of its content at all operations, to sharpen preventive conduct. No cases of contagion at Anglo American Chile were notified in 2009.

There were two new cases of hypoacusis at El Soldado in 2009. These workers were reassigned new functions and their new positions were controlled so they are not exposed to noise, in accordance with the internal manual for the procedure in this kind of situation. The professional disease rate was 0.0184 in the year.

81 Document available at www.angloamerican.co.uk

82 The information about this sanitary emergency is available on the World Health Organization (WHO) website www.who.int/csr/disease/swineflu/en.

83 Anglo American plc has a specific policy on this issue available on its website www.angloamerican.co.uk.

84 Anglo American does not record this rate but the quantity of new diseases. Nevertheless, the rate is presented according to the formula of the Workers’ Safety Association, which is the number of professional diseases per month x 200,000 man-hours per the workforce.

85 www.ucn.cl86 www.mutual.cl

OCCUPATIONAL HEALTH CASE RECORD

Noise- induced

hearing loss

(NiHl)

Pneumoconiosis Chronic obstructive

airways disease

(CoAD)

tuberculosis Asthma Hand-arm vibration syndrome

(HAV)

others(*)

total

Nº of employees exposed to risk

1,597 1,274 20 0 0 136 1,746 4,773

Nº of new cases 2 0 0 0 0 0 0 2

Nº of current cases 11 0 0 0 0 0 0 11

Nº of employees compensated

3 0 0 0 0 0 0 3

Compensation paid (US$000s)

35 0 0 0 0 0 0 35

Nº of occupational changes

3 0 0 0 0 0 0 3

Nº of deaths 0 0 0 0 0 0 0 0

(*) others: lead, acid rain, body vibration, ion and UV radiation.

Main activities of the hygiene and safety parity committees (HSPC)

Anglo American has seven hygiene and safety parity committees (one per division, plus Santiago and two at Mantoverde), in which company and employee representatives participate, to detect and assess the risks of accidents and professional diseases in their influence area, pursuant to what is set forth in Law Nº 16.744.

Moreover, Law Nº 20.123 of 2006 lays down the obligation for companies hiring or subcontracting others for their operations to safeguard the establishment and operation of the so-called site parity committees.

The following were the main activities of the Anglo American Chile HSPC in 2009 to support corporate programmes:

• The Santiago HSPC drove first aid, responsible driving and work quality courses given by the Workers’ Safety Association86.

• The Los Bronces HSPC promoted teamwork and training with the HSPC of contractor companies, and also held investigation workshops on serious and high-potential incidents.

• The Mantos Blancos HSPC developed a cycle of talks on taking care in the home, attended by workers and their families. Issues like healthy food, alcohol, drug prevention and precautions with electricity were addressed.

• The El Soldado HSPC helped to develop the workshop Anglo American labour relations model, attended by 680 employees at the division.

• The Mantoverde HSPC participated actively in the practice of the Visible-Felt Leadership methodology applied to the safety area.

• The Chagres HSPC supported the showing of the “Always choose safe conduct” video, which emphasises respect for rest routines and dialogue in work teams based on specific cases.

Case studyCommitted to the progress of the industry

Anglo American has promoted teamwork among the different players of the mining industry and other productive areas to share experiences and embrace the best practice on safety, occupational health and risk management.

In the case of the safety risk management programme (SRMP), the company has shared its bases and action lines by means of meetings with other mining companies operating in Chile. Some of them are already applying specific modules of this programme or plan to do so in the short and medium term.

At the same time, Anglo American Chile has a work partnership with the Catholic University of the North (UCN)85 so the SRMP training material is used in training and professional update programmes on risk management.

The company has also contributed to the development of an international association of universities, aimed at disseminating the SRMP-related knowledge, investigation and application cases.

As of December 2009, this network comprised seven universities in Australia, China, South Africa, the United Kingdom, Brazil and Chile (through the UCN) and institutions in Canada and the United States will also join.


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Our People

Anglo American aims to the “employer of choice”, which is underpinned by the ability to attract, develop and get the commitment of people and teams of excellence. In 2009, the main focus of company action in the Our People area was the application and sharpening of programmes and resources for education, training, coaching and communication to raise productivity based on improving competencies.

With regard to this, the company launched a project with Fundación Chile87 to design and apply a labour accreditation system as of 2010, aimed at company employees and contractors. The objective is to define

Competency-based productivity The focus of work with people in 2009 was on enhancing the education and training programmes. A project was launched for this with Fundación Chile aimed at employees and contractors.

Our People

The company has driven employee involvement in continuous improvement processes.

the knowledge, basic skills and abilities for professional and technical profiles so it results in an effective quality assurance tool for people in the organisation.

The results of these assessments will detect gaps that can be overcome by means of the specific education and work training or coaching programmes developed by Anglo American each year. To such effect, 5,229 company employees attended further training programmes in 2009, with a total of 120,534 man-hours.

Management approach

One of the goals of Anglo American is to be the “employer of choice.” To achieve this, it must attract, retain and develop employees and professionals of excellence at all levels of the organisation.

Related to this, the Good Citizenship Business Principles set out that the company is committed to the adoption of fair labour practices in the workplace and its conditions of service will comply with applicable laws and industry standards.

This focus must become reality to promote practices of equal opportunities in the workplace, non-discrimination, continuous improvement, freedom of association, collaborative work relations and strengthening of internal communication.

The vice-presidency of human resources is in charge of driving the policies, programmes and action in this area, with special emphasis on the cohesion of all people in the organisation.

ANGLO AMERICAN CHILE WORK TRAINING & COACHING AREA

trAiNiNG AreA 2009 2008 2007

MANHourS Nº oF PeoPle



Safety, occupational health, environment and quality.

24,214 1,753 30,676 2,029 16,629 1,736

Management 13,905 648 39,411 1,960 37,602 2,052

Technical 75,357 2,147 94,695 3,227 56,976 1,162

Others 7,058 681 3,277 168 9,092 358

totAl 120,534 5,229 168,059 7,384 120,299 5,308

AVERAGE TRAINING/COACHING HOURS BROKEN DOWN BY WORK LEVELS 2009*

Work leVelS AVerAGe ANNuAl HourS oF trAiNiNG/CoACHiNG (MAN-HourS/yeAr)

Vice-presidents or senior managers

43.9

Managers 58.9

Supervisors 40.5

Employees 39.4

87 www.fundacionchile.cl

40.5 hours of supervisor training on average.

120,534hours of training in 2009.

* Anglo American in Chile obtained the information of this index in 2009 by means of a process of optimising its registry systems, enabling this to be included in this report and starting follow-up on this index for subsequent reports.

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Continuous improvement In line with the strategic vision, corporate management must be based on applying common policies, processes and systems that allow for the continuous improvement of quality and services and in turn help to reduce costs.

This challenge has been maintained since 2008 with the steady adoption of Global Shared Services (GSS). This organisation system optimises internal activities with their centralisation. The first stage has been applied to the accounting and employee service areas. This has entailed technological innovation, new ways of global collaborative work and the development of training programmes and communications aimed at managing this change. Anglo American joined this process in 2009 with its professionals and technicians participating in international teams in charge of this change.

In the specific case of the human resources area, the Shared Services Centre helps to prevent the duplicity of functions, simplify the delivery of services and work benefit applications, and quickly and timely answer employee queries via the intranet or by telephone.

The analysis of training and coaching needs arising from this change was a priority in the year, with the objective of applying specific programmes in 2010 that also support the company’s migration to deploying the human resources model of the SAP88 management system.

From the division standpoint, the company has driven employee involvement in continuous improvement processes. The teams at operations frequently apply their on-site knowledge and experience to attain greater efficiency of activities and processes.

That was the case of the Mantoverde division mine management, which made progress with the optimisation of transportation distances, the performance of the front loader fleet, tyre care and the efficient consumption of water from the Copiapó wells. At the same time, the plant management at the division achieved greater efficiency with the management of solvents and acid.

A multidisciplinary team at the Chagres division designed and applied a programme to reduce the copper loss in its processes to less than 1%, recovering part of the metal contained in the slag that was previously shipped to waste dumps. This work received corporate acclaim as the best continuous improvement initiative in 2009. With regard to employee work, the El Soldado division launched a new online performance appraisal

Strategic partnerships and programmes Anglo American has also given priority to entering into strategic partnerships with academic institutions that generate shared value by supporting applied research, competency development and productive innovation projects.

This teamwork will also enable the company to offer professional and specialisation opportunities to outstanding students in fields related to mine engineering, metallurgy, and geology, among others.

One of the highlights of the year was the establishment of a partnership with the Faculty of Physical Sciences and Mathematics of the University of Chile89 through its mine engineering department90. This agreement envisages the exchange of technical information, joint study projects, programmes to train professionals, internships for academics, theses and professional practice, among other initiatives.

Anglo American in Chile also increased investment in attracting talent (trainee engineers, thesis students, apprentices and professional practice) by 19% from US$1,534,608 in 2008 to US$1,824,625 in 2009. Based on the policy of driving women’s share of the workforce as a diversity factor, in 2009 it also increased the number of women selected in three of these four programmes. In the case of professional practices, the number remained the same as in 2008. 88 The specific benefits of the SAP system in the

mining area can be reviewed at www.sap.com89 www. ingenieria.uchile.cl 90 www.minas.cec.uchile.cl

system. This tool facilitates the work follow-up, control and supervision process, which includes response to self-diagnosis guidelines, assessments by heads and personalised feedback interviews.

The main advantages of this modality are the shorter time each stage takes, quick access to consolidated information and the availability of databases that provide a higher level of analysis and conclusion.

trAiNee eNGiNeer ProGrAMMe

Professionals who have just graduated with academic excellence attend an induction, preparation and performance cycle in the different corporate areas. An assessment is then made as to whether they should be invited to join the company.

2009 2008 2007

Nº of men 13 11 17

Nº of women 7 7 6

totAl trAiNee eNGiNeerS 20 18 23

AMouNt iNVolVeD (uS$) 825,542 756,092 837,756

tHeSiS StuDeNt ProGrAMMe

University students in the last few years of mining-related careers undertake studies and research at the company’s operations.

2009 2008 2007

Nº of men 40 23 25

Nº of women 16 10 9

totAl tHeSiS StuDeNtS 56 33 34


APPreNtiCe ProGrAMMe

Youngsters of 18 to 21 years old, who have completed their secondary education at technical schools in the communities near Anglo American Chile’s operations undertake an apprenticeship in the company under the guidance and supervision of an internal tutor.

2009 2008 2007

Nº of men 80 104 92


totAl APPreNtiCeS 131 115 104


ProFeSSioNAl PrACtiCe ProGrAMMe

Youngsters with a good professional projection learn about the work and culture of the company and have the opportunity of joining it.

2009 2008 2007

Nº of men 110 94 76


totAl PrACtiCeS 145 129 105


19% increase in talent attraction investment.

26% increase in the Apprentice Programme places since 2007.

The copper loss in the Chagres process dropped to less than 1%. This was the best continuous improvement initiative in 2009.

Our People

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91 One of the most recent and significant studies on this issue is “Flexible working conditions and their effects on employee health and well-being” by Clare Bambra, a researcher at Durham University (United Kingdom). The conclusions of this research are available at: www.cochrane.org/reviews/en/ab008009.html.

92 Other benefits, included in the collective agreements in force as of December 2009, are outlined in the Human Capital section of the Sustainable Development Report 2008, available at www.anglochile.cl

93 www.chileunido.cl94 www.feedback.cl95 The report on the study and its related ranking

is available at www.chileunido.cl/estudios/opina.html

96 The total percentage of union representation specified excludes the supervisor level.

97 See parity committee initiatives on page 55. 98 www.fundacioncarlosvial.cl

Quality of life Besides applying work competency development and talent attraction programmes, Anglo American has taken measures that help to give its employees a better quality of life, focused on the well-being and family-work conciliation areas. The objective is to attain benefits shared by the company and its internal 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 conclusions reached from meetings with specific internal groups were important to detect and prioritise needs. In the particular case of the dialogue with women who work at Anglo American in Chile, it was concluded that work flexibility is essential to strengthen the conciliation of work and family life. Progress in this area during the year was that a flexible working day was introduced in Santiago with flexible start and end times for employees.

Due to the special conditions of operations at mine sites, the divisions are analysing flexible measures that do not affect the production processes.

The main benefits of programmes of this kind are the greater autonomy of people to plan their personal and family activities, the reduced travelling times to and from work, increased productivity and a better work environment91.

Related to this, besides complying with labour legislation and social security, the collective agreements between Anglo American and the various trade unions include additional benefits such as:

Financial aid for employees with children at school and/or higher education.

Additional allowances for employees with disabled children.

Adjustment of working conditions for women with babies, beyond the time of the postnatal period.

Five days more holiday than the legal requirement.

Special leave for personal and family emergencies.

Infrastructure availability for sports, recreational and cultural activities at all the divisions92.

As a sign of the priority Anglo American is giving to making progress with the conciliation of work and family life, the company participated in the study “Best companies for working parents 2009,” driven by Fundación Chile Unido93, and the YA magazine of El Mercurio newspaper, with the support of the consultant company Feedback Comunicaciones94.

Although Anglo American was not among the ten companies in the ranking, the results are being used to design, prioritise and apply programmes and plans related to the issues under assessment95.

Case studyEmployee counselling programme (ECP)

The internal communication strategy of the employee counselling programme (ECP) was sharpened in 2009 to provide professional counselling to employees, their spouses and children for personal and family problems.

The counselling system covers the total cost of six consultations a year per member of the family group. Clinical psychologists working in the individual, family and couple psychotherapy areas are in charge of this service. These professionals, selected by an external company specialising in these kinds of well-being services, work in 11 districts around Anglo American’s divisions or in which a large number of employees live.

All the stages of the ECP are provided strictly confidentially, which means Anglo American only has access to information on the number of consultations made with the sole objective of paying the professional fees for the consultations.

The consultation request is made via direct telephone contact by the interested party to one of the 20 specialists of the ECP team.

20 specialists.

1,700 consultations in 2009.

There are

11trade unionsat Anglo American Chile.

Labour relations management As of December 2009, the company had 11 trade unions (two at each division, except Mantoverde where there are three) with 98% union representation of the entire company workforce able to belong to a trade union96.

As reported in the Sustainable Development Report 2008, the early collective bargaining process with the unions of the Los Bronces, El Soldado and Chagres divisions ended in December 2008 with ratification of the respective 48-month collective agreements (maximum term laid down by Chilean labour legislation). These agreements came into force on 1 December 2008 and will remain effective until 30 November 2012.

With regard to the other divisions, as of December 2009 collective agreements remained in force at Mantos Blancos and Mantoverde. After an early collective bargaining process, such 43-month agreements came into force on 1 May 2007 and will last up to 30 November 2010.

The agreement by the company and the operations unions to hold these early collective bargaining processes is based on both

parties adhering to a labour relations model underpinned by four areas of dialogue:

Business sustainability. Management of people. Quality of life. Cultural characteristics of the company.

As a sign of this commitment, the text of the collective agreements contains a statement of principles called “Building the vision together of being one of the most valued and respected copper operations in the world”, which declares the need of maintaining the joint work of the long-term co-operative relations model between both parties, based on mutual respect, trust and integrity.

In 2009, this vision led to increased teamwork with the following programmes and co-ordination activities:

Courses for union leaders at the divisions: employees interested in undertaking union leadership work can attend training courses and workshops that address significant issues in the commercial, labour and human resources areas, among others. The union-defined issues are developed by external specialists.

Monthly meetings to analyse division results between the management team and union representatives to update information on the development of the operation and address important corporate and labour matters.

Half-yearly review and analysis process of the remunerations and incentive systems of other mining companies operating in Chile to include good practice and promote informed labour discussions by management and employees.

Definition of incentives for both company employees and contractors based on the achievement of personal, group and division goals for safety, occupational health, risk prevention and quality standards.

Development of specific campaigns in significant areas for employees, their families and the communities around operations. The Hygiene and Safety Parity Committees (HSPC) play a significant role in these to design, apply and evaluate initiatives97.

With regard to remuneration, Anglo American does not discriminate according to gender or supervisor or employee level. To define the salary level, variables like the job position, its complexity, the degree of responsibility, the person’s competencies to do that job and the performance level, among others, are considered. The minimum salary of company employees was about three times higher than the legal minimum in Chile (Ch$165,000) as of December 2009.

With regard to contractor personnel, the company established the “Anglo American Mine Site Minimum Monthly Wage” policy in July 2008, which applies to any contractor-dependent worker and/or subcontractors who provide permanent services at any of its divisions and at the head office in Santiago. This monthly net wage was set at Ch$250,000, to be readjusted according to the inflation rate.

The Carlos Vial Espantoso Foundation98 highlighted the application of Anglo American’s labour relations model, selecting it as one of the six finalists in the 2009 award ceremony. The objective of this award is to “highlight companies that apply policies enabling employees to share company profits in different ways, highlighting the importance of human capital in business management”.

Our People

Business sustainability. Management of people. Quality of life. Cultural characteristics of the

company.

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Our People

99 Source: Voz de Mujer del Bicentenario: First national survey of women and work in Chile http://www.comunidadmujer.cl/actividades/lanzamiento_voz_mujer.html

100 Source: National survey on employment by the National Statistics Institute (INE) from October to December 2009, available at www.ine.cl

Employment status and characteristics The total workforce as of December 2009 amounted to 10,172 employees. Company employees accounted for 30.9% and contractors in the services, operations and project areas for the remaining percentage (the Los Bronces Development Project has been the main source of demand in this segment since it started up in 2007).

Women’s share of the workforce was up on the previous year in two management levels, i.e., from one to three at vice-president level and from two to eight at manager level. Based on the latest study of ComunidadMujer, “60.6% of women aged 18 to 65 years in

Chile’s urban centres were working at the time of the survey”99.

The average company workforce age was 43 (one year older than in 2008), and the average labour turnover rate was 4.81% (6.1% in 2008) with figures of 3.18% for employees and 1.63% at supervisor level (4.7% and 11.3% in 2008, respectively). The absenteeism rate was 2.4% in 2009, the same as the previous year.

EMPLOYMENT GENERATED (at 31 December each year)

By DiViSioN (including third parties)

2009 2008 2007

Los Bronces 1,721 1,712 1,420

Mantos Blancos 1,268 1,337 1,014

El Soldado 1,599 1,472 1,138

Mantoverde 797 824 731

Chagres Smelter 444 457 461

Santiago office 409 330 275

Project contractors 3,934 3,610 815

totAl WorkForCe 10,172 9,742* 5,854

* The significant increase in the total workforce is explained by the higher contractor workforce in the Los Bronces Development Project.

WOMEN’S SHARE OF THE WORKFORCE 2009

AreA NuMBer oF WoMeN

totAl PerCeNtAGe

Total workforce of Anglo American in Chile 545 8.7%

Company workforce of Anglo American in Chile 187 5.9%

Vice-presidents or senior managers of

Anglo American in Chile

3 4.8%

Managers of Anglo American in Chile 8 7.2%

Talent attraction programme of Anglo American in Chile 109 30.9%

“MiNe & QuArry” ACtiVity AreA iN CHile100

4,570 4.5%

LABOUR TURNOVER BY GENDER, AGE, WORKPLACE AND WORK LEVEL 2009

By gender Men 4.33%

Women 0.48%

By age 30 years old or younger 0.76%

31 to 40 years old 1.30%

41 to 50 years old 1.03%

51 years old or older 1.73%

By workplace Los Bronces division 1.45%

El Soldado division 1.00%

Chagres division 0.54%

Mantos Blancos division 0.97%

Mantoverde division 0.45%

Santiago office 0.39%

By work level Supervisors 1.63%

Employees 3.18%

AVerAGe lABour turNoVer rAte iN CHile 2009 4.81%eMPloyMeNt By DePeNDeNCe 2009 2008 2007

Company employees 3,143 2,973 2,723

Service contractor personnel 810 948 710

Operations contractor personnel 2,285 2,211 1,606

Project contractor personnel 3,934 3,610 815

totAl WorkForCe 10,172 9,742* 5,854

* The significant increase in the total workforce is explained by the higher contractor workforce in the Los Bronces Development Project.

BreAkDoWN oF MANAGeMeNt PoSitioNS 2009 2008 2007

Nº of male vice-presidents or senior managers 59 41 39

Nº of female vice-presidents or senior managers 3 1 1

Nº oF ViCe-PreSiDeNtS or SeNior MANAGerS

62 42 40

Nº of male managers 102 107 110

Nº of female managers 8 2 0

Nº oF MANAGerS 110 109 110

tyPe oF CoNtrACt oF ANGlo AMeriCAN CHile eMPloyeeS – 2009

iNDeFiNite CoNtrACt FiXeD-terM CoNtrACt

Supervisors 706 24

Employees 2,277 136

totAl 2,983 160

10,172 people work at Anglo American.

3,143company employeesat Anglo American.

Women account for

5.9% of the total workforce.

Note: This table was drawn up with information gathered during the reporting period. There is no reliable information on this to include previous years. The basis used to calculate 8.7% excludes project contractor company personnel and hence considers a total workforce of 6,238 people.

Note: This table was drawn up with information gathered during the reporting period. There is no reliable information on this to include previous years.

Note: This table was drawn up with information gathered during the reporting period. There is no reliable information on this to include previous years.

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Social capital

The Anglo Social Way: Management system standards

Standard published in 2009.

Corporate social contributions

Enseña Chile.

In 2010, 12 out of 27 teachers in the programme were working at Colina and Lo Barnechea, where Los Bronces is located.

Elige Educar.

US$100,000 for the dissemination campaign in 2009.

Anglo American bursary, Mining of Excellence.

109 university students have benefitted in three years.US$571,000 contribution in three years.

Santiago sin Campamentos (No more shanty towns in Santiago).

4,660 families benefitted.

Emerge programme. 5,933 small-sized businesses benefitted.

64 new entrepreneurs.

52 graduates and 31 with financing.

Investment in the community.

US$2.7 million invested in corporate programmes.

Contribution by the divisionsto their communities

Investment in community engagement plans.

US$4 million invested in 2009.


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So the Anglo American culture would be focused on boosting social sustainability, it published “The Anglo Social Way: Management System Standards”101 in April 2009. These guidelines set out and disseminate the company’s vision, values and policy in this area and also outline its social management system and the standards underpinning it.

The Anglo Social Way defines the roles and responsibilities of the strategic community focus, which has two essential functions:

The corporate function, in consultation with internal and external stakeholders, defines requirements in relation to the vision, principles, policy and standards for social management and provides tools to assist in their implementation.

The divisional role, which entails implementing and incorporating the corporate requirements into specific programmes and working practices.

The way of getting closer to the communityAnglo American in Chile has decided to focus its social and community action on creating solutions and programmes which are sustainable in the long term and are essentially aimed at developing entrepreneurial skills, improving the quality of education and contributing its experience and abilities to enhance the quality of life of people in the area where it is present.

Corporate presence in societyManagement approach

One of the highlights of 2009 was the publication of “The Anglo Social Way: Management System Standards”, which aims to establish how to address social and community relations with stakeholders. These guidelines are based on Anglo American’s values and the Good Citizenship Business Principles.

The structure of Anglo American Chile establishes that the general managers of the divisions report to the CEO on the development of community engagement policies and programmes. Each of the company’s divisions has a professional in charge of managing relations with the communities around operations, in accordance with the corporate guidelines.

At corporate level, the vice-presidency of marketing and corporate affairs manages social and community affairs, and issues the guidelines for action taken by the divisions and manages the partnerships and agreements of national scope, like the Emerge programme and the partnerships with Un Techo Para Chile, Enseña Chile and Elige Educar.

Corporate presence in society

We recognise that mining involves the depletion of a natural resource and, therefore, if we are to contribute to sustainable development we need to enhance the social, human and manmade capital in the communities around our operations. I strongly believe that whenconducted responsibly, mining has the potential to act as a motor for wider development, including poverty alleviation”.

Cynthia Carroll, CEO Anglo American plc (April 2009).

101 This document is available at: www.angloamerican.co.uk.

Strategic community focus

Vision:• To 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. Principles:• We 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 Social Way at all managed operations.

This requires:

• 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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Overview 2009 Anglo American in Chile aims to make a lasting positive impact on the community around its operations and which generates value for it. In 2009, it kept up its commitment to promote entrepreneurship undertakings by means of the Emerge programme and set two new challenges: to eradicate the shanty towns in the Metropolitan Region by means of a partnership with Un Techo para Chile and boost its support for education of excellence by partnering with organisations that seek to improve the quality of education, like Enseña Chile103 and Elige Educar104.

The company invested US$2.7 million a year in these three corporate programmes. Furthermore, investment in the community engagement plans almost doubled that of 2008, increasing from US$2.5 million to US$4 million in 2009. This proves the company does not intend to cut back its commitment to the communities where it operates for external reasons, like the financial crisis from 2008-2009.

Quality education Providing low-income people with access to quality education has become an issue of broad debate in Chilean society. This has led to initiatives and partnerships involving public and private sectors and civil society to help create development and social mobility opportunities by improving teaching and educational standards. In 2009, Anglo American in Chile embraced programmes to improve education from the teacher, pedagogical and classroom work angle.

Regarding this, it became one of the strategic partners of the Enseña Chile105 programme, whose mission is to select, train and support professionals of excellence, who commit to two years of full-time work as teachers in schools for poor and socially excluded children.

102 “The tough task of professionals who choose to be teachers” (La Tercera newspaper, Sunday 28 March 2010).

103 www.ensenachile.cl104 www.eligeeducar.cl105 Enseña Chile was awarded the 2009

bicentenary seal. www.chilebicentenario.cl. The bicentenary seal is awarded each year by the President of the Republic to those projects which make a significant contribution to national identity and the country’s development.

106 www.teachforamerica.org107 www.teachfirst.org.uk108 www.uc.cl/educacion109 www.ppuc.lemongroup.cl110 The bursary amounted to US$132,000 in 2007;

US$202,714 in 2008; and US$236,292 in 2009.

111 www.mim.cl

This project is inspired by the educational support model developed by Teach For America106 in the United States and Teach First107 in the United Kingdom.

In 2009, 27 professionals from Enseña Chile started teaching at 15 schools located in the Metropolitan, La Araucanía and Los Ríos regions. For the 2010-2011 period, 715 applications were received, from which 76 professionals were selected to join the new project cycle.

Anglo American is on the board of Enseña Chile, and therefore takes part in the strategic definitions and implementation of initiatives, mainly focused on incorporating these to the districts around its operations. In 2010, 12 of the 27 professionals of Enseña Chile will work at schools in the districts of Colina and Lo Barnechea, near the Los Bronces division.

There is also the Elige Educar initiative, which is co-ordinated by the Faculty of Education of the Catholic University of Chile108 and the Centro de Políticas Públicas109. Its objective is to improve the social value of the teaching profession in a five-year term. To achieve this, it is driving a comprehensive communication strategy (television, internet, public relations, site activities and events) and is promoting plans with social players to motivate the proper professional development of teachers. The outcome of this is that it expects 20% of the best secondary school leavers to choose a teaching career in 2014. Anglo American donated US$100,000 to this campaign in 2009.

In three weeks I realised that Chile is not Finland and that you can’t improve education overnight, because there are so many problems and very few people to solve them. I also realised that teachers who are working in tough conditions deserve much more respect than at present”.

Katerinne Pavez, journalist and participant in the Enseña Chile programme. She works at the commercial high school in Puente Alto, Metropolitan Region.102

In the same area, the company has awarded the “Anglo American, Mining of Excellence” bursary since 2007, which distinguishes the best students reading mine civil engineering, metallurgy and geology. The 42 students chosen in 2009 study at the University of Chile, University of Santiago, Catholic University of the North, University of Concepción and the Catholic University of Valparaíso.

The aim of this bursary is the comprehensive development of professionals in the mining industry and to create collaboration between the company and the universities with which it has signed the bursary, which includes:

Up to US$5,000 a year for the course enrolment and fees.

A computer and accessories to support the studies of third-year students.

Facilities to undertake theses and professional practice in the company.

Visits to the operations of Anglo American in Chile.

This bursary benefitted 109 university students in the 2007-2009 period with a related investment of US$571,000110.

Case studyMirador interactive museum (MIM) on site

Anglo American promoted the itinerant show of the educational programme “Phenomena and Mysteries” of the Mirador Interactive Museum (MIM)111 in the districts of Antofagasta, Chañaral, Catemu, Nogales and Colina. This initiative allowed over 12,000 people, especially youngsters and children, to learn about natural phenomena.

The interest generated by the exposition is since the inhabitants of these districts, who are in the influence areas of all the divisions, value the opportunity of having access to innovative educational and cultural resources like those promoted by the MIM.

This initiative was undertaken in partnership with the municipalities of the districts visited and particularly benefitted pupils at municipal schools, who also found out more about mining and the copper production process in an entertaining way specially designed for them.

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“No more shanty towns in Santiago” Eradicating the shanty towns in the Metropolitan Region by September 2010 is the commitment Anglo American has undertaken by entering into a partnership with the organisation Un Techo para Chile112, supporting 4,660 families of 51 shanty towns that still exist in the capital so they can live in definitive housing. It committed US$3 million to this which will be delivered over three years.

The agreement “no more shanty towns in Santiago” entails helping and supporting each family in the process of obtaining definitive housing in new sustainable neighbourhoods. Organised based on a social implementation plan, this initiative considers joint work with neighbours on education, health, libraries, community organisation, entrepreneurship by means of micro-loans and improvement of definitive housing. It also envisages comprehensive advice on the processes of applying to the housing programmes of the Housing Ministry and work with the families and their base organisations throughout the technical processes this change involves.

112 www.untechoparachile.cl113 www.programaemerge.cl114 www.fondoesperanza.cl115 www.eclass.cl116 www.uai.cl

We believe it was essential to achieve a goal like this. We therefore signed this partnership with Un Techo para Chile to fulfil the dream of a definitive and good quality home in the Metropolitan Region, where we are present with our Los Bronces division, the main mining operation in the region”.

Miguel Ángel Durán, Anglo American Chile CEO (December 2009).


Sustainable entrepreneurship “Thinking small but with large results” was Anglo American’s vision when it established its first sustainable small- and medium-sized enterprise development and empowerment initiative in the communities around its operations in South Africa in 1989. In the case of Anglo American in Chile, this initiative has become the Emerge programme113, which has had a two-tiered approach since 2007:

empowering small-sized enterprises: In partnership with the organisation Fondo Esperanza114, it provides micro-loans to entrepreneurs who do not have the capital to get their projects off the ground. The beneficiaries are grouped into community banks through which they receive financing. A coaching and training plan is drawn up and this drives association and the exchange of experiences.

New work methodologies were added in 2009 to boost this initiative. In the small-sized enterprise area, Fondo Esperanza drove the Entrepreneurship School, which uses simple and practical tools for issues like personal development, family relations, community ties and business effectiveness. The 5,933 entrepreneurs in the project participated in this instance by late 2009.

Medium-sized business empowerment: In addition to the eClass115 programme

of the business school of the Adolfo Ibáñez University116, the company supports entrepreneurs who have managed to emerge from poverty but find it difficult to gain access to loans from the traditional banking sector. Training, specialised counselling and working capital contributions are the main lines of action in this area.

A new search system was designed for entrepreneurs with high development potential in the medium-sized business tier, based on establishing a public summons to apply for the Emerge scholarship, and the regulation was authorised by the Ministry of Education. The following are the main strengths of this mechanism:

It enables the company to gain access to entrepreneurs who are not in the databases of municipalities and productive development centres.

It gives the company a large base of applicants from the communities where Emerge is operating. The company received 360 applications in 2009 and 500 applications are expected in 2010.

It increases the knowledge and dissemination of Emerge in the communities around the operations of Anglo American in Chile.

The following results were attained in 2009:

The company took on 64 new entrepreneurs, who were selected in a public summons for Anglo American’s Emerge scholarship.

A total of 360 entrepreneurs applied for the Emerge scholarship, of whom 322 are from districts with a direct impact from the divisions.

Fifty-two new entrepreneurs graduated from the eClass programme and 31 of them got approval and financing for their business plans. In 2008, nine entrepreneurs of the 27 graduates achieved this goal.

Moreover, to support the work of entrepreneurs, nine mini entrepreneur expositions were held at Anglo American’s divisions, where the products and services of the beneficiaries of this initiative were presented and sold. Likewise, space was made available at the year-end celebrations of the divisions to sell the products of entrepreneurs and each family of Anglo American employees received tickets that could be exchanged for products. Additionally, the Emerge programme participated in the “I Believe in Quillota” Fair, organised by the municipality of that district. Small- and medium-sized entrepreneurs were on ten stands dedicated to the project.

The following results were attained in 2009:

The number of participants increased from 2,700 in 2008 to 5,933 in 2009.

The programme was extended to Alto Hospicio, Mejillones, Vallenar and Tierra Amarilla (in the north) and the coastal area of the fifth region.

Women accounted for 91% of the participants in 2009, and 52.6% of them are household heads.

The main business lines are: purchase and sale (street vendors, sales from home and local kiosks), cottage industry (cooking, sewing, knitting and crafts) and services (gardening, plumbing and hairdressing).

Case studyCorporate volunteer programme

Volunteer work has traditionally been done at the divisions of Anglo American in Chile, in which work teams support social development projects, albeit not in a systematic way.

The corporate volunteer programme was launched to co-ordinate, empower and bolster these efforts, and the aim of the first stage undertaken in 2009 was for employees to apply for and select those social organisations they will collaborate with at each of the divisions. A survey was therefore made of the main participation interest of employees. The El Soldado and Mantos Blancos divisions carried out a pilot volunteer programme, in which groups of employees participated in activities to support community organisations in a planned and co-ordinated system.

The programme will be launched in 2010 with three areas of action:

Collaboration with the development of small- and medium-sized businesses empowered by the Emerge programme.

Work on initiatives that promote the community relations area of each division.

Empowerment of institutions which work in the influence area of the company’s operations.

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The Emerge programme targets:

• Select 80 new medium-sized business entrepreneurs by means of the 2010 public summons for the Emerge scholarship.

• Extend the project coverage to the district of Hijuelas, Valparaíso Region.

• Achieve the target of 7,000 entrepreneurs supported by the two-tier Emerge system in 2010.


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Stronger and more focused To complement corporate initiatives, each division implements its own community engagement plans, which are based on the Good Citizenship Business Principles and which in 2009 considered the results of the SEAT II process and the current feedback from their surrounding communities.

Community engagement plans


AccoladesThe Mantos Blancos division received recognition from the Corporación Pro

Antofagasta117 for its permanent commitment to the city.

The El Soldado division was awarded the Corporate Social Responsibility Prize by El Observador newspaper118 of Quillota

for its contribution to the Valparaíso Region.

As of the publication and dissemination of The Anglo Social Way, Anglo American in Chile is reviewing and verifying adherence to its standards at corporate level and division-wide, which will fully align its content with local work in the community area.

In 2009, this work was focused on bolstering the community engagement plans at all the divisions, drawn up based on the application of the Socio-economic Assessment Toolbox (SEAT II). The 2009-2011 challenges raised in

117 www.corporacionproa.cl118 www.diarioelobservador.cl 119 The SEAT II characteristics, application stages

and main conclusions were reported on in the Social Capital chapter of the Sustainable Development Report 2008. This document is available at www.anglochile.cl.

120 www.casadelapaz.cl121 The Los Bronces division’s contribution to the

community was US$651,514 in 2007.

INFLUENCE AREAS OF THE DIVISIONS

DiViSioN DiStriCtS loCAlitieS

Los Bronces Lo Barnechea, Til Til, Colina and Los Andes. Corral Quemado, Huertos Familiares, Lo

Barnechea, Quilapilún Bajo, Reina Norte, Santa

Filomena, Villa Peldehue, Esmeralda, and

Riecillos since 2009.

Mantos Blancos

Antofagasta and Sierra Gorda. Baquedano.

El Soldado Nogales. Los Caleos, Chamizal, Collahue, El Melón, El

Garretón and Nogales.

Mantoverde Chañaral. Barquito, Chañaral and El Salado.

Chagres Catemu, Llay Llay, Panquehue and San Felipe. Chagres, Lo Estancilla, Reinoso, San Carlos

Alto, San José, Santa Isabel, Santa Rosa, Santa

Margarita and Villa Lo Campo.

the final reports of this process119, developed by Fundación Casa de la Paz120, were borne in mind. The objective is for the bonds between Anglo American and its community environment to empower the creation of shared value in the economic, social and environmental areas.

Los Bronces divisionThe Los Bronces division set the challenges of opening up more direct communication with the community and bolstering ties with the productive activities carried out in the area to synchronise the local needs with the division’s objectives. The action areas were defined according to follow-up on the successful activities undertaken in the past and on the requirements raised by the community in the SEAT II process. The town of Riecillos, in the district of Los Andes, was added to the work areas.

Lines of action of the community engagement plan:

Monitoring of social and environmental management initiatives that can be intervened.

Delivery of information to stakeholders about social initiatives and the changes that might arise.

Efficient management of the issues that arise in operations and collaboration to overcome them.

Participation in local activities that empower solidarity and the corporate image of commitment to community development.

The community engagement plans are focused on four work areas: education, culture, the environment and social development. In 2009, US$2,320,312 was allocated, 97% up on the US$1,178,039 in 2008121. 85% of this was focused on educational and academic infrastructure initiatives. Complementing the contributions made to these programmes, the division donated US$32,516 to hold celebrations and local processes and support the work of the Fire Department.

One of the most significant activities in 2009 was the construction of the Reading Centre, which will benefit the Lo Barnechea community, estimated to be around 75,000 people. Due to the division’s contribution of US$235,314, construction started on a modern library which will also be a meeting place where cultural events will be held.

Another prominent initiative in the same district was the First School Cycle Prevention Project to prevent drug and alcohol consumption by schoolchildren in the first to fourth grade of primary education at municipal schools. The virtual community construction and teacher training project was also important, and its aim is to create computer literacy to insert and use information and communication technologies as tools to support the learning process. This initiative will benefit 3,200 pupils in the municipal education system and 200 teachers.

There was also construction of a crèche in the La Ermita sector in partnership with the Municipality of Lo Barnechea, which seeks to take 150 kindergarten children free of charge and where working mothers can leave them without any worry.

One of the main projects undertaken in Colina, another of the division’s influence areas, was the School Recreation Centre, which is a meeting place that complements the sporting activities carried out by the high schools in the district and motivates children and youngsters of five to 19 years old to develop activities to occupy their free time and improve their quality of life. It is estimated that 20,706 youngsters will benefit from this, of whom 8,000 are qualified as obese or overweight. Another initiative in this district was the creation of the Therapeutic Rehabilitation Centre for youngsters and/or adolescent mothers. This Centre, the only one of its kind in Latin America, gives residents treatment for

addictions and support to overcome emotional and psychological shortcomings. The division also supported the reconstruction of the Tres Ositos crèche which benefitted 119 children from the Esmeralda sector. To improve the quality of education given to children of four to ten years old at municipal schools in Colina, it implemented eblock tables for language, mathematics and English. This methodology entails the use of multi-sensory tools that allow children to learn more easily and faster, attaining the level of a quality school.

In the cultural area, one of the highlights of the year was the launch of the study to restore the large house of Quilapilún in Los Andes, which forms part of the national cultural heritage for being one of the few reminders of the rural architecture of the 16th to 19th centuries. Los Bronces is part of this initiative, the aim of which is to transform the large house into an educational cultural centre for the Colina and Til Til community, conserving its heritage value.

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lo BArNeCHeA

ProGrAMMe DeSCriPtioN

Purchase of a school bus for the Farellones school.

The Farellones school had to increase its enrolment by including pupils living in the Corral Quemado sector, whose families consider this school offers a better education alternative for their children. The Los Bronces division provided a new school bus for transfers from Corral Quemado to the school, which will benefit 90 people.

Contribution to the Lo Barnechea Corporation (COBA) youth choir and orchestra.

To promote the district’s social and cultural integration by means of music and prevent youngsters from consuming drugs and alcohol, the division benefits 16 choir pupils and 55 pupils in the orchestra, who not only learn music but also reaffirm their self-esteem and further their talent.

Cuecas Bravas – Rescuing what is Ours project.

To support the COBA’s work of promoting and recovering the non-material heritage of local culture, Los Bronces contributed to the development of this initiative.

Youth prevention project. The aim of this initiative is to prevent, using a biopsychosocial model, factors related to the abuse of youngsters’ rights in the Lo Barnechea district by creating work strategies in youth networks that boost the organisation through pupil centres, informal and voluntary youth organisations. It is expected these activities will benefit 8,500 youngsters.

til til


Construction of a computer room, improvement of the electrical installation and equipment of the kindergarten level at the Santa Matilde school.

The Santa Matilde school has 180 schoolchildren and aims to improve their degree of computer literacy and its kindergarten course facilities. Los Bronces therefore provided resources to implement a computer room and for the kindergarten teacher courses.

Annual contribution to the Pro Til Til Corporation.

To increase the quantity of beneficiaries of programmes carried out by the Corporation, Los Bronces makes a permanent contribution to it each year.

OTHER INITIATIVES UNDERTAKEN IN 2009

ColiNA


Teacher training on the use of interactive whiteboards.

Around 300 municipal education teachers at schools in Colina will be trained on this programme that aims to prepare these teachers to use interactive whiteboards and support software to create content. The idea is for teachers to generate virtual content on interactive whiteboards, raising the interest of pupils and motivating them to learn.

Purchase of school buses for municipal schools.

Colina has wide geographical dispersion with a mixture of urban and rural elements. The optimisation of transport to municipal schools is a challenge for the Municipal Corporation of Colina. Los Bronces therefore donated two school buses that will benefit over 400 schoolchildren. This initiative is expected to provide better access to municipal education, increase school enrolment, and reduce the drop-out rate.

Construction of a multicourt at the Esmeralda technical school.

Los Bronces helped to build changing rooms and a multicourt to improve the quality of sports life at this school of 1,293 pupils.

Construction of a multicourt at the Santa Teresa del Carmelo school.

The objective of this project was to provide this school with a modern infrastructure for its outdoor sports, cultural and recreational activities. It will benefit 800 schoolchildren from kindergarten to eighth grade of primary education in Colina.

Entrepreneurship centre project. The entrepreneurship centre is focused on young students in Colina and aims to support the establishment of micro-businessmen in the district and potential entrepreneurs who can do a paid job that allows them to progress and specialise in the different areas offered by technical schools in the area. This initiative is aimed at pupils in third and fourth grade at technical and professional secondary schools and pupils of the La Puerta education centre, amounting to 1,035 people who benefitted.

Organisation of II Technology Show of Colina.

The division and the Municipal Social Development Corporation of Colina organised the II Technology Show in Colina to promote the use of technological tools to increase the learning of schoolchildren and youngsters to raise interest in municipal education in Colina. This initiative showed parents, guardians and the community the technological resources municipal schools have in the district, like the eblock tables and electronic whiteboards.

Annual contribution to the Private Corporation of Colina.

Los Bronces established the Private Corporation of Colina 20 years ago to take care of high-risk children in the district of Colina regarding school support and daily life guidance. The support of the division seeks to increase the number of children and youngsters who visit the centre.

Case studyTil Til metal workshop refurbishment

One of the main petitions of the Til Til community is to increase employability, mainly youngsters in the district. It is essential for the Los Bronces division to have skilled technical labour in the metallurgy area in the Metropolitan Region, as the only schools that offer this technical career are in the north of Chile.

By combining these two factors, Los Bronces decided to support the C-82 high school in Til Til to transform its old mining laboratory into a modern metal workshop. This initiative led to the establishment of a specialised school workshop equipped with cutting-edge technology that facilitates pupil learning. It is hoped this will increase the employment percentage of youngsters in the district.

To implement this project, the division entered into a partnership with SGS, a specialist laboratory analysis company, which voluntarily helped to draw up and develop a new curriculum and the refurbishment plan for the new specialised workshop. A five-year tutorship programme was also drawn up to train teachers in the use of the new laboratory technology, and the best pupils of each generation will be awarded professional practice and scholarships.

180 pupils benefitted.

The Los Bronces division contributed US$144,000 to the project.


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122 www.aia.cl 123 National Crèche Board, www.junji.cl.124 www.juventudemprendedora.cl125 The Mantos Blancos division’s community

contribution amounted to US$285,000 in 2007. 126 www.ja.org 127 www.cmds.cl128 Agriculture and Livestock Development

Institute, www.indap.gob.cl.129 The El Soldado division’s community

contribution amounted to US$234,027 in 2007.

Mantos Blancos divisionThe Mantos Blancos division carried out initiatives to enhance relations with interested parties in its influence area (Antofagasta and Sierra Gorda). In partnership with the Asociación de Industriales de Antofagasta (AIA)122 and the Junta Nacional de Jardines Infantiles (JUNJI)123, it therefore drew up a systematic work programme with high-risk crèches in Antofagasta, as this region has a kindergarten education coverage level of less than 40%, which has consequences for the early development of children in the area. This initiative will drive kindergarten education in the neediest sectors of the city, and thereby not only give development opportunities to children but also families, especially mothers who will have more freedom to enter the labour market. The division contributed US$6,000 in 2009 and directly benefitted 300 children at the Caracolito and Rabito crèches in Antofagasta.

The division also continued its symbolic projects like the Developing and Leading Academic Talent (DeLTA) programme and the Junior Achievement Programme124 that

promotes entrepreneurship-related values. It also continued to support the astronomy academy of the G-130 school in Baquedano. These initiatives arise from the suggestions made in the SEAT II process and are aimed at improving community relations and operating by means of strategic partnerships with expert organisations in each of the issues addressed.

The Mantos Blancos community engagement plans were mainly focused on four work areas in 2009: education and training, regional development, community development and communication. It allocated US$472,000 to put them in place, a 3% increase on the 2008 contribution of US$458,000125. 74% of this was focused on education and training programmes, highlighting the training of 508 new company and external employees in The Anglo Social Way standard, the increase in the bursary fund for outstanding students leaving the DeLTA programme and supporting extracurricular activities in the district of Antofagasta. The budget includes the donation of US$81,200 for other specific community requirements.

Case studyJunior achievement programme

The key focus of the Mantos Blancos division’s social contribution was on increasing people’s skills by means of education and on empowering local entrepreneurship. In 2009, it stepped up its role in the Junior Achievement Programme, the objective of which is to create new and greater opportunities for human, community and socio-economic development by promoting entrepreneurship-related values, based on highly efficient international pedagogical methodologies like Making Sense and Junior Achievement, developed by the Harvard and Princeton universities.

Students and teachers participating interact in a practical way with the knowledge, skills and values inherent to entrepreneurship and innovation from an extracurricular angle. Teacher workshops, business games, inter-school debating championships and an entrepreneur forum were organised during the year.

The joint work of the Mantos Blancos division, the Fundación Juventud Emprendedora126 and the Corporación Municipal de Desarrollo Social de Antofagasta (CMDS)127, benefitted 83 teachers and 242 alumni from 16 municipal schools in the district of Antofagasta. It is expected that this programme will lead to behavioural changes in future generations to drive a culture of entrepreneurship that generates wealth and social competencies.

325 beneficiaries.

Mantos Blancos allocated

US$168,000to the programme in 2009.


MANtoS BlANCoS DiViSioN


DeLTA – Anglo American bursary.

This bursary is financed jointly with the Catholic University of the North, which covers up to 50% of the annual fees of those leaving the DeLTA programme and undertaking higher education studies in that university. In 2009, the US$16,000 donation made by the division benefitted nine students from state schools in the district of Antofagasta.

Baquedano astronomy project. The division purchased a modern telescope for the astronomy observatory of the G-130 school in Baquedano to drive the development of sciences as part of healthy extracurricular activities, which entailed a contribution of US$19,000 in 2009. Work ties are expected to be strengthened even more in the future with this school that takes 60 schoolchildren and pupils.

“Each dog with its owner” awareness campaign.

The Mantos Blancos division launched a campaign with the livestock organic promotion (PROA) corporation and the Municipality of Antofagasta to generate awareness of the responsible ownership of pets, mainly aimed at children. Various media were used for this, such as radio, television and billboards. The division contributed US$30,000.

Support of the production and publishing of the book “Mantos Blancos, Historias de Vida” by the Chilean writer Hernán Rivera Letelier.

The history of Mantos Blancos is a milestone in the development of large-scale private mining in Chile, and this book therefore has historical, testimonial and literary value. The author cites testimonies, experiences and anecdotes of Mantos Blancos workers, some of whom participated in the establishment of the division or retired after 40 years.


el SolDADo DiViSioN


Agreement with the Municipality of Nogales to pave rural roads.

El Soldado signed an agreement with the municipality to pave rural roads, contributing US$18,000 with the aim of improving the quality of life of 100 families in Nogales.

Bursaries for higher education students.

The division awarded 90 bursaries to outstanding and poor students of higher education by means of an agreement with the Municipality of Nogales. The division donated US$26,000.

Everybody’s Paper. This initiative entails a partnership with La Semilla Foundation to promote waste management practices by means of the physical construction of a unit to implement a sustainable paper collection and recycling programme. The division contributed US$18,000.

El Soldado divisionEl Soldado’s strategic objectives were to forge systematic dialogue with the communities, to share the division’s environmental information and raise participation in regional and local development plans, specifically concerning planning and strategies regarding the ecosystem intervened.

It therefore carried out joint work with local stakeholders and public and private institutions to drive initiatives focused on agricultural development and the environment. One of these was a partnership agreement with the Instituto de Desarrollo Agropecuario (INDAP)128 to improve the irrigation infrastructure in the productive sector by driving the efficient use of water in agriculture by means of lining irrigation channels. This initiative benefitted 78 plots of land and 400 hectares of irrigation.

It also drove two initiatives to bolster community organisations. It provided US$18,000 for an agreement of joint work with the INDAP and the Municipality of Nogales to implement a system of tenderable funding for farmers of the Agricultura Familiar Campesina of the local development programme (PRODESAL) for the award of shared resources to implement productive development projects. It furnished the same amount to implement social tenderable funding in partnership with La Semilla Foundation, the objective of which is to support ideas raised in rural organisations that meet the community needs and have the social support to develop them. The El Soldado community engagement plans were focused on four areas: education, regional development, community development and, since 2008, entrepreneurship. It allocated US$574,866 to implement them in 2009, a 31% increase on the 2008 contribution of US$439,000129. It also made a donation of US$1,000 for a perimeter fence.

31% increasein the El Soldado community engagement plan budget on 2008.

US$16,000 donated by Mantos Blancos to the DeLTA bursary, benefitting nine students.

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130 www.zeri.org 131 The Mantoverde division’s community

contribution amounted to US$75,000 in 2007.132 The Chagres division’s community contribution

amounted to US$291,582 in 2007.

Case studyZERI project

One of El Soldado’s core initiatives in 2009 was the environmental education partnership with the Juan Rusque high school in Nogales, the Municipality of Nogales and Fundación Chile. The aim is for the school curriculum to include the pedagogical content proposed by the Zero Emissions Research and Initiatives (ZERI)130.

A practical pupil and teacher learning model was designed to develop abilities to include environmental variables in decision-making by people and communities. In practice, the knowledge gained was presented in a demonstration by pupils who created, designed and built aeolian and solar devices. The following were some examples:

Demonstration solar collector. Demonstration solar boiler. Demonstration solar distiller. Demonstration aerogenerator. 50-litre portable biodigester stove. A solar oven-type cooker.

Mantoverde DivisionThe Mantoverde division defined four strategic targets for its community engagement plans: to establish contacts and meetings with base organisations to find out their concerns and inform about the division’s activities, disseminate the activities undertaken with the community through the local media, establish support and engagement lines with the small mining sector, and make contact with the town of Barquito to make known the acid handling and transport process from the terminal.

The division stepped up its engagement with Chañaral-based social organisations in 2009 to establish community consultation and support channels, especially with residents of El Salado. At the same time, it strengthened its partnership with the Chañaral Development Corporation to empower entrepreneurship, seeking socio-economic diversification of the district.

Mantoverde also participated in public and private roundtables organised by the provincial government, which are focused on developing entrepreneurship in three strategic areas: mining, the coastline and tourism. The aim is to generate synergies and establish networks to link up activities in this area, thereby improving and diversifying the district’s economy.

With regard to its support of local mining, it held the four-hour course “geology and hydrometallurgy applied to copper ore processes”, attended by 15 small miners of the Chañaral Mining Association (ASOMICH). It also gave mining safety talks through the CORESEMIN Atacama training programme and provided US$4,600 towards the financing of the infrastructure project “gold ore treatment plant implementation”, which benefitted 35 small ASOMICH miners.

It also signed an agreement with the Municipality of Chañaral and the National Training Institute (INACAP) to give the complementary training courses (FORCOM) “entrepreneurship and personal development” and “English applied to tourism” to 40 pupils in third and fourth grade of secondary education at the Federico Varela high school, who live in Chañaral, Barquito and El Salado.

The Mantoverde division spent US$252,500 to implement its community engagement plans in 2009, a 68% increase on the 2008 spend of US$150,000131. Most of this was focused on community development issues, which accounted for 66% of the spend equivalent to US$168,500.


MANtoVerDe DiViSioN


Partnership with EmproArte. The Mantoverde division supported the presentation of artistic and cultural shows in Chañaral and Copiapó by means of a partnership with the pro arts organisation EmproArte. This entailed a contribution of US$10,000 and benefitted 1,700 people from both cities.

Un Techo para Chile (A Roof for Chile).

Mantoverde donated US$3,200 in construction materials for 20 prefabricated rooms as part of this campaign in Chañaral.

Kitchenware for the Caldereta dining room in Chañaral.

Kitchenware and materials were donated to repair the dining room and kitchen of this centre that takes in extremely poor and old people from the city. The company donated US$1,800.


CHAGreS DiViSioN


Catemu municipal library infrastructure enhancement.

The division donated US$12,214 to enhance the municipal library.

Catemu Municipality infrastructure refurbishment.

Chagres donated US$15,972 to refurbish the Catemu municipal education department and US$43,441 to carry out an engineering study for the district’s multi-purpose room and gymnasium.

Chagres divisionThe Chagres division modified its community engagement plans in 2009 due to the recommendations of the SEAT II report and the assessment of programmes undertaken each year, which envisage the adjustments and optimisation needed to manage them better. Such changes include the environmental factor of community insight, and the creation of environmental protection-focused programmes was therefore considered. The main initiatives included the empowerment of the environmental monitor programme of Catemu and the community benefit projects that are still in the feasibility analysis phase. In addition to this and bearing in mind that optimisation of this issue is a long-term process, a communications plan was drawn up to enhance the quality of information delivered to the internal and external public about the division’s social and environmental performance.

Based on the plan defined for 2009, the key aspects of the community engagement plans were redesigned to simplify and optimise the work areas. Moreover, donations were limited and there was a reduction in the investment

in community development teams in the areas of direct influence to focus on projects to generate training and development tools, above all infrastructure projects.

The highlights of the year were the formation of community development teams, which provide training, counselling and financing to undertake self-managed community infrastructure projects in the Catemu and Panquehue localities. A budget of US$11,486 was allocated to this programme and its objectives were to get closer to the four districts related to the division and enhance the skills of neighbouring leaders for local self-development.

The Chagres division’s community engagement plans increased from US$295,903 in 2008 to US$401,587 in 2009, i.e., 36% up on the previous year132. Most of this was focused on social development, accounting for 35% of the spend equivalent to US$143,504. The division made donations of US$74,000, which were mainly used to improve the infrastructure of community organisations.

The division provided

US$20,500 for the development of this project.

200 pupils at the Juan Rusque high school directly benefitted.

Case studyDistrict tenderable funding

In 2009, Chagres focused on enhancing the financing and training funding to drive the association capacity and citizen participation in the districts of Catemu, Panquehue and Llay Llay. It thereby sought to empower the autonomous development of local bodies in the area.

This project has training, follow-up and support tools, so that the organisations participating gain skills to leverage various sources of institutional strengthening and economic sustainability. Unlike the traditional methodology of tenderable funding, this initiative establishes an advisory programme for the beneficiary organisations which will be maintained throughout the project, guaranteeing maximum social profitability of the use of the resources assigned and fully meeting the objectives defined in the work proposal. The fund supported 31 projects in 2009, which will have an impact on 12,000 people in those three districts.

31projects supported.

Total tenderable funding of

US$42,685.

Mantoverde empowers small mining in Atacama by means of courses, talks on safety and funding.

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Natural capital

Anglo Environment Way 73% compliance with the standard.

Three-year actions plans were drawn up to attain 100% compliance.

Energy efficiency programme

There was a 1.4% energy saving on 2004. The target was 7.5%.

Material issues of the divisions

Los Bronces A biodiversity action plan was drawn up.

The hydrogeological study was made.

The dust control system was reinforced at the Las Tórtolas dam.

Application for sector permits for the Los Bronces Development Project.

Mantos Blancos A water appraisal was made.

El Soldado The tree nursery plan was drawn up.

A voluntary agreement was signed for the sustainable development of the El Melón mountain range.

A water appraisal was made.

Mantoverde A water appraisal was made.

A study was made to leave the Copiapó river watershed.

Chagres There were no breaches of the regulation.

A water appraisal was made.

There were no acid transport incidents. The emergency plan was not activated.


82. 83.

Environmental management

As the five divisions of Anglo American Chile face different realities regarding the environment and impacts, it was decided that for this report the chapter would not be segmented by issues but by the relative importance of the material aspects for each operation. A workshop was held for this with the environmental heads of the divisions, in which they established their respective priorities.

This chapter is split into three sections: it starts by providing corporate information, like the environmental management of the five divisions, compliance with the regulation and the energy efficiency programme; it then continues with a divisional focus, and presents the material issues for each operation; and concludes with a more technical section, which considers all the environmental indicators presented by division and in consolidated form.

Focus on local impact An environmental workshop was held for the first time for this report, in which each division reported on its main environmental impacts, according to its location and operational characteristics, to draw up a chapter focused on the material local aspects for each operation.

Environmental management

To comply 100% with The Anglo Environment Way standard, action plans were drawn up that will be put in place in the next three years.

Environmental management Anglo American’s new environmental policy came into force in 2009, containing principles and a management framework with specific standards, and it not only applies to all its operations but also all the management stages, like business identification, project assessment and implementation, operations and mine site closure. This standard, known as The Anglo Environment Way, covers key management areas and contains the mandatory requirements at corporate level. They underpin the vision, principles and the environmental management policy to assure that the company will control and mitigate any potential impacts related to its operations. The performance standards also contain suitable management guidelines and tools for each major environmental issue.

Management approach

The final version of The Anglo Environment Way, published in June 2009, is an environmental management system standard and a set of environmental performance standards. This standard is in addition to the principles and environmental framework developed in internal and external consultation, and the integral management systems that were operating at each of the operations in Chile.

The Anglo Environment Way considers variables like the social and environmental impact assessment of operations, water, air quality, mining and non-mining waste, hazardous substances, biodiversity, rehabilitation and closure plans.

Anglo American Chile attained 73% compliance with this standard in the initial evaluation. All the divisions also maintained their integrated management system certification in accordance with the OHSAS 18001 and ISO 14001 standards with no disconformities.

A senior environmental manager in charge of environmental performance reports to the senior safety and sustainable development manager. Each operation also has a manager or advisor in charge of environmental management. The energy efficiency programme is run by the energy and climate change manager, who also reports to the senior safety and sustainable development manager. This structure was adopted in January 2010 with the creation of the new job position of senior safety and sustainable development manager, who reports to the company CEO and gives guidelines to the safety and environmental managers and the energy and climate change manager.

Besides undertaking audits to verify significant environmental aspects, the degree of compliance with The Anglo Environment Way was assessed in 2009, with 73% average compliance by the five operations. To comply fully with the standard, action plans were drawn up that will be put in place in the next three years.

All the divisions also reviewed their certification for their integrated management systems in accordance with the OHSAS 18001 and ISO 14001 standards, with no disconformities. Mantos Blancos and Mantoverde also maintained their ISO 9001 quality certification. As part of this process, each division has an environmental risk analysis, which considers the impacts, action plans, controls, results and recommendations that need to be applied and controlled at operations.

With regard to compliance with the regulation, there were no environmental fines, penalties or legal actions at any of the divisions in 2009. The approval of and compliance with over 60 permits and a hundred accreditations have been identified for the Los Bronces Development Project so that contractors guarantee the work done in each construction stage.

liFeCyCle StAGeS

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VOLUME 2

S&EI

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Performance Standards

Wat

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Air

qual

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Min

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was

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Non

-min

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was

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Haz

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Biod

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Reha

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Min

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OpportunityIdentification

Exploration / prospecting x x x

Evaluation Acquisitions / due diligence

Projects

Conceptual phase x xPre-feasibility phase x x x x x x xFeasibility phase x x x x x x x

ProjectImplementation

Detailed design and procurement x x x x xConstruction and commissioning x x x x

Operational x x x x x x x x xClosure Decommissioning x x x

Post closure x x x

x Contains specific requirements

Indirectly covered by general requirements

73% averagecompliance with The Anglo Environment Way standard.

The table below shows how the environmental performance standard covers all the management activities of operations by issue:

Nat

ural

Cap

ital


84. 85.


Anglo American Chile has made steady progress since 2004 towards achieving the target of its energy efficiency programme. Despite specific achievements like the publication of the energy efficiency policy in 2008 or the implementation of a formal registry system by process of the monthly water, energy and emission rates, they have proved to be insufficient to achieve the target set for 2014.

With regard to the 2004 adjusted baseline, at the close of 2009 the company had attained a 1.4% energy efficiency improvement, a long way off the 7.5% target set for the five-year period. Despite the action taken in every area, the mining business has had upward energy consumption, mainly due to three factors. The first is the operation itself, as ore grades drop steadily, transport distances are greater as pits become deeper in relation to the progress of the operation and rock hardness increases. The second factor is modernisation as the incorporation of new equipment with better environmental performance (like sleeve filters or other emission control systems, heating improvements, ventilation and lighting, and the growing recirculation or treatment of water) increases energy consumption per tonne treated. The last aspect is that adding value to the final product affects specific energy consumption when this is measured per unit of fine copper.

Slow progressAlthough Anglo American has driven action since 2004 to achieve the corporate targets of reducing emissions, increasing energy and fresh water consumption efficiency, these efforts have not reaped the rewards expected. Nevertheless, progress was made in 2009 with consolidating the energy consumption information system, adding an external audit to the monthly reports or footprints.


Anglo American plc launched a programme at all its operations worldwide in 2004 to improve energy efficiency by 15% and reduce CO2 emissions per unit of production by 10%. Anglo American Chile also added to these targets a 15% improvement in water consumption efficiency.

The total energy consumed in 2009 was 7% up on 2008 and amounted to 11,567,417 gigajoules (GJ), mainly due to higher fuel consumption from the development stage of a new phase at one of the mining operations. The average performance of the divisions was 98.6% with regard to the 2004 adjusted baseline, which was a negative variation of 6.1% against the reduction target of 7.5% for 2009. Despite this consolidated result, initiatives continued to reduce this gap.

The CO2 equivalent emissions were 1,143,878 tonnes in 2009, a 7% increase on the 2004 adjusted baseline based on the fact that the target in the year was 95%. These emissions were calculated using the COCHILCO factors as a basis133.

The emission reduction certification programme is one of the company’s actions to achieve the target. Although there has been a list of certified reductions since 2004, it was considered necessary to formalise this process even more to generate a unified reporting system. This analysis makes it possible to have a scope 1 and 2 carbon footprint record, which is what has been reported since 2005.

To guarantee this process, PricewaterhouseCoopers started an audit on the monthly consumption reports broken down by process or footprint. The plan is to certify the emissions and energy and water consumption at the five operations to validate the information reported to Anglo American plc and stakeholders. Mantos Blancos was audited in 2009 and this process will be completed at the other divisions in 2010.

Moreover, Anglo American has been exploring alternative energy sources from renewable and non-conventional resources (ERNC) as of 2008 to partially supply its operations. Regarding this, it signed a memorandum of understanding with a company to study and assess the development of wind projects. Likewise, to comply with the new electric power generation regulation, which came into force in 2010134, it is evaluating the most favourable conditions with the support of an external consultant to attain the 5% ERNC required by this law. Initiatives include the signing of an agreement with an electric power generating company to re-open the La Ermita hydroelectric power plant (9 GW/h) on the San Francisco river near Los Bronces, and an agreement with a mini hydroelectric power plant (30 GW/h) in the south of the country is under evaluation.

As part of the energy efficiency policy, the company has been promoting the purchase of hybrid cars as of 2007. With the purchase of two new Toyota Prius hybrid cards, Anglo American now has four cars of this kind, besides the other ten that employees have bought by making use of the corporate incentive.

Water consumptionAnglo American Chile optimised its water consumption in 2009 by consuming 26.2 million m3 of fresh water. This was 94% consumption on the 2004 adjusted baseline, a slightly better result than that of energy and CO2 emissions.

Although there was a large reduction in the fresh water used for primary activities, the average consumption of the five divisions was 1.5% higher than the reduction target set for 2009 of 92.5% of the 2004 adjusted baseline.

In particular, Chagres continued to reduce its consumption, mainly due to better re-use of water, achieving 83% of the 2004 adjusted baseline and exceeding the year’s target by 9.5 points.

133 The emissions for the years of the report were calculated using the following COCHILCO factors as a basis:

SIC* SING** 2007 344.1 915.1 2008 319.2 953.9 2009 284.0 911.9 * Central Interconnected Grid. ** Great North Interconnected Grid.134 Law Nº20.257 lays down that as of 2010

energy generation must include 5% of renewable and non-conventional energy. This percentage will increase to 10% in 2014.

135 COCHILCO: “Consumption of energy and greenhouse gas emissions in Chilean copper mining 2008.”

Case studyThe energy factor in the mining footprint

The carbon footprint, defined as the measurement of greenhouse gas (GHG) emissions directly or indirectly emitted by a person, country, organisation, manufactured product or service, has become an important indicator so an organisation can analyse its processes and see to what extent its CO2 discharges exceed the so-called “inevitable emissions,” which are those needed for its operations. Mitigation strategies can be defined based on that calculation, which for example include the use of energy sources that replace fossil fuels or subscribing to carbon bonds to compensate for the higher emission.

Although Chile’s carbon footprint is very low in relation to industrialised countries, many national companies are finding it difficult to reduce their CO2 emissions due to the large presence of fossil fuels in electric power generation and the greater use of freight so export products reach their markets. That is the case of copper mining, which emitted 17 million tonnes of CO2 in 2008, which accounted for 24% of the country’s carbon footprint135.

Despite individual efforts to reduce GHG emissions in mining, the energy factor will continue to have a bearing on the sector’s carbon footprint while it still remains dependent on diesel and coal, as renewable and non-conventional energy projects still account for very little of the national energy grid.

SCOPE 1 Indirect emissions generated

by burning fuel at the company’s operations, use of

own vehicles, etc.

SCOPE 2Indirect emissions of CO2 arising from

purchasing electricity for own use.

SCOPE 3 Indirect emissions arising from raw materials

purchased, employee business trips, waste disposal, contractor vehicles, outsourced activities, use of the product and transportation, etc. This Scope 3 is very

difficult to quantify.

CO2 SF6 CH4 N2O HFCs PFCs

El Soldado also achieved 83% of the baseline and Mantos Blancos attained the annual target. Los Bronces reduced fresh water consumption, mainly due to greater water recirculation from the tailings dam, thereby reversing the upward trend of the previous two years.

The two divisions with the greatest difficulties with water consumption are Mantos Blancos and Mantoverde, as the scarcity of water in the north of the country could threaten their operations. Initiatives are therefore being explored, like the assessment of a seawater desalination plant to supply operations at Mantoverde.

Three scopes were considered to measure, manage and report on the carbon footprint:

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Performance of the divisions

Main issues by operation

Each division undertakes its environmental management based on the characteristics of the environment in which it is located and the type of operations it carries out. Whereas the water quality, biodiversity and particulate material emissions are the major environmental issues to be resolved at Los Bronces and El Soldado, the main issue at the Mantos Blancos and Mantoverde divisions is water management. The material issues at Chagres are atmospheric emissions and sulphuric acid transportation.


Los Bronces divisionThe operations of the Los Bronces division cover three districts and two regions. They start with the pit, grinding plant and cathode plant activities in the mountains in the district of Lo Barnechea in the Metropolitan Region, and continue with conveying ore down the slurry pipeline to Las Tórtolas in Colina, where the concentrator plant and tailings dam are located. Part of its water supply systems is also in the district of Los Andes, Valparaíso Region.

The main environmental aspects identified are water quality and consumption, atmospheric emissions, biodiversity, mass mining deposits (tailings dams and waste dumps) and energy consumption (outlined on pages 84 and 85).

Water management Los Bronces gets its water from different sources. It obtains fresh water from the watershed of the San Francisco river in the district of Lo Barnechea; from the Riecillos stream, at the first section of the Aconcagua river in the Valparaíso Region; from the Colina river in the district of Colina and from seven deep wells in the Quilapilún sector in the Metropolitan Region. It has also constituted 3,850 l/s of non-consumption water rights in the San Francisco river for hydroelectricity.

CoNSuMPtioN riGHtS (litreS/SeCoND)

WAterSHeD totAl

SAN FrANCiSCo ortiGA rieCilloS

Permanent 210 0 600 810

Possible 500 50 0 550

totAl (l/s) 710 50 600 1,360

Los Bronces also has 16.6 regadores136 in the Irrigation Channel Association of the Colina river for permanent and continual use against a total of 195 regadores of this association. An average of 8 l/s per regador is estimated for a normal year.

The productive processes of Los Bronces consumed 550 l/s in total, which was less than half the total water rights of the division, considering all the water impounded from the different inlets compared with current water rights. This volume is lower than what this division requires for grinding, ore and tailings conveyance, and flotation processes, as the fresh water consumed is recirculated and the maximum possible process and leaching water volume is re-used, and water is even repumped from Las Tórtolas (750 metres above sea level) to Los Bronces (3,500 metres above sea level), approximately 60 kilometres away.

Las Tórtolas has a concentrator plant and tailings dam. The fresh water for this facility is extracted from groundwater wells in the Quilapilún sector of Colina.

The Riecillos community has expressed its concern about having sufficient water for irrigation and domestic use. Regarding this, Los Bronces contacted the Riecillos neighbours’ committee and the municipal authorities to

The extraction of water from each of these sources is controlled to verify that Anglo American Chile’s water rights are honoured:

inform them of its commitment to maintain an ecological flow in the riverbed, guaranteeing the community access to water. Such flow is higher in the irrigation season due to the greater needs of neighbours.

The monitoring committee of the first section of the Aconcagua river also expressed its concern about whether Anglo American can continue to honour the ecological flow and the limit of its water rights at Riecillos, considering that the division will have greater water requirements with the Los Bronces Development Project and the commitment of providing fresh water to Codelco’s Andina division in compensation for industrial water that such operation sends to Los Bronces for treatment. They were informed that the Blue Water Treatment Agreement with the Andina division decrees that the water volume transferred between both operations must honour the ecological flow and the limit of Anglo American’s water rights. Moreover, to use the remaining water rights above the compensation requirements of the blue water, Anglo American started to build additional impoundment and conveyance works from Riecillos to be used in the expanded operation.

WAter CoNSuMPtioN (GiVeN iN tHouSANDS oF M3)*

2007 2008 2009

Fresh groundwater 326 448 526

Fresh surface water 16,774 15,846 14,250

Water from external water companies 0 0 0

Process-recycled water 66,220 59,715 58,094

* This table shows the information drawn up in 2010 by the environmental management and the water resource superintendency of Los Bronces,

and they identified different criteria concerning the information presented in previous years. To standardise the division’s water consumption mea-

surement system, they drew up this information that considers the years 2007, 2008 and 2009.

Quality monitoring There has been a surface water and groundwater quality monitoring programme at Los Bronces and Las Tórtolas since 1992, which is fully carried out by an independent laboratory, i.e., from the taking of samples to chemical analyses. SGS Chile is currently the laboratory in charge of periodically analysing 129 sample points (55 wells at Las Tórtolas and its surroundings, and 74 surface water points, 23 at Las Tórtolas and 51 at Los Bronces).

As part of this initiative, there are 14 wells in the Las Tórtolas area off Anglo American’s property and around the tailings dam. The monitoring of these external wells arose as part of the authority requirements from the company by means of operation permits. No alterations to the water quality attributable to the operations at Los Bronces have been detected so far. However, there have been changes to the groundwater quality on the land of the former Space Studies Centre (currently SSC-Chile), which are being studied to apply the pertinent mitigation measures. The authority and neighbours affected are being permanently briefed about this situation.

Furthermore, the international consulting company Robertson Consultants was hired in 2009 to make a hydrogeological study in the sectors of the main wall and western wall of the Las Tórtolas dam and in its forestation area. The work entailed reviewing the water quality database and the mitigation measures applied in the forestation sector, and updating the current hydrogeological model. This will improve knowledge of the area and provide a more accurate tool to predict possible contaminant spreading paths to implement the appropriate control measures.

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136 Measure of irrigation water and about 15 litres per second.


88. 89.

137 Hotspots: these are regions with a large diversity of endemic species and which at the same time have been impacted and altered by the activity of mankind. This category is designated based on the biological characteristics of the vegetal diversity. A hotspot region must have at least 1,500 endemic vegetal species. The total surface area of hotspots covers 2.3% of the earth’s surface.

138 The San Francisco deposit is at the head of the San Francisco valley, and started operations in 1990. It has a capacity of 1.25 billion tonnes.

As part of the update of the hydrogeological model, the need was detected of having nine monitoring wells, and a tender process has therefore been launched so these works can be carried out.

As a result of the action the company committed to with the environmental authority due to the deterioration of the groundwater quality in the wells around the Las Tórtolas forestation area, reported to the National Environmental Agency (CONAMA) in 2006 and mentioned in previous sustainability reports, the construction of a pilot clear water treatment plant was considered. This plant, which started its tests in 2009 and with a treatment capacity of 40 litres per minute, uses ultrafiltration and reverse osmosis technology. According to the supplier’s technical specifications, it can eliminate most of the chemicals in the clear water of the Las Tórtolas tailings dam, leaving it of suitable quality for irrigation or better use.

Atmospheric emissions The main atmospheric emissions are particulate material (dust), essentially from the Las Tórtolas tailings dam, as its walls are formed from the coarse part of the material deposited, which is separate from the water and finer material and is exposed to the action of the wind. As the dam grows, so do the walls with a greater surface exposed to the action of the wind.

In August 2008, the company extended its monitoring network to seven air quality stations that gauge the breathable particulate material (PM10) and the sedimentable particulate material (SPM). The former can

Biodiversity The United Nations Environment Programme (UNEP) considers that Chile’s central zone is one of the 25 biodiversity hotspots137 in the world, especially for being one of the few Mediterranean ecosystems on the planet. These areas are characterised by ecosystem diversity, the large degree of endemic species and the intense pressure of human activity on them. Regarding this, Los Bronces and Las Tórtolas are in sectors defined as priority biodiversity sites in the Metropolitan Region.

There are four vegetation formations of interest in the Los Bronces area: sub-Andean thicket, Andean thicket, high Andean steppe and high Andean grassland. The latter is where wetland systems can be identified.

The biodiversity action plan was updated in 2009, based on the company’s corporate guidelines. The preliminary stage assessed the biodiversity values using cartographical tools and satellite images, leading to the conclusion that the areas with the greatest biodiversity value are the high Andean grasslands. The next steps will be to make progress with an on-site verification of the diagnosis results and to propose the corresponding stewardship measures to protect vulnerable areas.

Mass mining deposits The Los Bronces mining operation generates two types of mass mining waste, i.e., waste and tailings:

Waste deposits: the current ore treatment rate of the grinding plant is approximately 58,000 tonnes per day (tpd), which entails stripping around 220,000 tpd of rock made up of ore and waste. The waste is mainly deposited at the San Francisco waste dump138. By the end of 2009, this deposit had a total of 483 million tonnes accumulated, of which 237 million tonnes are low-grade ore.

The low-grade ore is flushed with a diluted solution of sulphuric acid to dissolve and drag the copper sulphides. The final solution is treated at the Lix 2 plant to produce copper cathodes by means of solvent extraction (SX) and electro-winning (EW). An equivalent process is applied to the old waste dump drains in the mine sector, whose solutions are processed at a smaller SX-EW plant called Lix 1.

Anglo American Chile maintains permanent control of the stability of its mine gravel deposits, including high anti-seismic standards, with a systematic and periodical audit programme and the support of national and foreign consultants, including specialists from the Anglo Technical Division (ATD).

tailings deposits: There are three inactive and one active tailings deposits. The former are three old tailings dams in the Los Bronces area on the San Francisco riverbed, which are Copihue, Pérez Caldera 1 and Pérez Caldera 2. In the late 1980s, an agreement was reached to remove the dams located on the San Francisco river. In accordance with this, the company started the removal process called repulping, which entails conveying the material to the Las Tórtolas dam. As this process is subject to operational considerations, it was not undertaken in 2009 and maintenance works started to get the system ready for resumption of the process in the summer of 2010–2011. It is estimated that 47 million tonnes still need to be removed, which correspond to the Pérez Caldera 2 and the remains of Pérez Caldera 1.

Tailings comprise the waste from the Las Tórtolas concentrator plant, with approximately 56,000 tpd generated on a dry basis. These are conveyed along a 5.6-kilometre pipeline to the active tailings deposit in the Las Tórtolas ravine. This deposit has been operating since 1992 and comprises a main wall and two secondary walls, providing a total storage capacity of one billion tonnes of tailings. The walls have base drains and systems and seepage interception mechanisms, which consist of an array of impoundment wells located downstream of the main wall and anti-seepage screens under the secondary walls. As of late 2009, 697 hectares were occupied with 302 million tonnes of tailings.

Anglo American Chile maintains ongoing follow-up of the condition of the active and inactive tailings deposits, and internal and external specialists undertake periodical audits and reviews.

The Las Tórtolas and Pérez Caldera-2 dams were audited by ATD in 2009.

A new dust control system and a new water reclaim pumping station were implemented at the Las Tórtolas dam. As an increase in the concentration of sulphates was detected at the dam lagoon, the effectiveness of the seepage interception wells and the results of the monitoring wells are being studied. The company commissioned geophysical studies and a hydrogeological model to an international expert. This consultant recommended that nine monitoring wells be drilled as of 2010 to increase the knowledge of the underground flows and determine the action needed to assure the right environmental performance.

Case studyEnvironmental management at the Los Bronces Development Project

The Los Bronces Development Project envisages environmental factors to honour the measures proposed in the environmental impact declarations and studies (EID and EIS, respectively).

To draw up the project EIS and electric lines, the flora and fauna species were identified in the sector to be intervened, and applying a micro-routing technique on site for the final route of the tower access paths was postponed to the construction stage. This entails identifying, classifying and protecting each conservation category species case by case, thereby preventing any effects on the protected flora and fauna of the project land. The micro-routing work is carried out by external zoologists and botanists hired specially for this work.

The project construction also considers the intervention of land in sectors that current legislation classifies as “native forest.” The compensation measures committed in the EIS include reforestation plans at Quilapilún, genetic studies that will add value to scientific knowledge, mitigation and capture/relocation of species, and reforestation with xerophytic species. Moreover, a plan will be implemented to recover tacita stones and other archaeological findings in the areas affected, which will be placed in a specially designed showroom.

affect people’s health and is also one of the main air contaminants in the Metropolitan Region, for which there is a regulation on the daily concentration allowed (150 μg/m3N). The sedimentable particulate material is significant from the perspective of natural resources, i.e., the effect this material can have on plantations, crops and the soil.

During this monitoring period, there were some specific breaches of the daily PM10 regulation at the station closest to the main wall. However, the regulation was complied with at the station located towards the property boundary and in front of neighbours. The same situation occurred with SPM, for which Chile has no standard, and the company therefore uses the Swiss standard as a reference, which has a limit of 200 mg/mm2/day.

To reduce dust emissions from the dam wall even more, windbreak meshes and a wetting system on the top of the dam wall have been installed. The latter has proved to be effective, and a project was launched in 2009 to extend the wetting coverage of the dam wall, using large-flow and high-pressure nozzles, which will be operative in 2010.

7 monitoring stationsgauge the air quality at Los Bronces.

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90. 91.

139 Bischofite (earth and salt mixture).140 www.conaf.cl

Mantos Blancos divisionThe Mantos Blancos division is an open-cut mine with crushing plants and facilities to process sulphide ores by flotation and oxide ores by means of leaching, solvent extraction and electro-winning. Its main environmental issues are water management, dust control, waste management and energy. The latter two aspects are addressed in the section Waste Recycling and Energy Efficiency Programme, respectively.

Water management In 2009, the Mantos Blancos metallurgy superintendency made an internal water appraisal to assess how the division’s water distribution and control system could be optimised. This work measured the consumption of all the processes and included an optimisation study of the internal water distribution network.

The study revealed that it is necessary to invest US$400,000 to make improvements to the division’s water distribution system, which considers new distribution lines, storage deposits and control systems, among other aspects.

Mantos Blancos buys a total of 125 l/s of water from the companies Aguas Antofagasta (80 l/s), Agua Pura (30 l/s) and Aguas FAB (15 l/s), and it therefore has no water rights and does not directly affect neighbouring watersheds. Water is obtained from piping near its facilities and controlled by its own and supplier meters, which are installed on the input piping. Water for human consumption is obtained from an internal treatment plant which generates 300 m3 of drinking water a day.

Due to the scarcity of water in the driest desert in the world, Mantos Blancos constantly strives to get the optimal use of this resource. For example, it has a plant exclusively to reclaim water contained in its tailings, which reclaims around 60% of the fresh water required at the sulphide plant (one of the most efficient systems in Chilean mining). It has also implemented special systems in all its processes to optimise the use of water, such as:

Installation of a second hydro run-off device at the sulphide plant.

Optimisation of the leaching heap wetting system using water droplets.

Road maintenance and repair with bischofite139 to avoid using water.

Installation of a plant for wastewater from offices, changing rooms, the cafeteria, etc.

Construction of flushing yards for light vehicles and mine equipment, both with a water reclaim system.

Paving of the main ponds at oxide plants to prevent water evaporation.

Tailings filtration plant to reclaim water used at the sulphide plant.

Pumping system at the tailings deposit to reclaim water and recirculate it to the sulphide plant process.

WAter CoNSuMPtioN (GiVeN iN tHouSANDS oF M3)

2009 2008 2007

Groundwater used. 0 0 0

Surface water (includes wetlands, rivers, lakes, oceans).

0 0 0

Municipal or water utility water supply. 3,817 4,009 3,903

Water recycled in processes. 3,107 2,862 2,570

El Soldado divisionThis division operates an underground mine and an open-cut mine, crushing plants and facilities to treat oxide and sulphide ores. In 2006, it completed construction of the extended pit project to prolong the life of the mine up to 2026.

Due to its location and relationship with the environment, the main environmental issues are biodiversity, water, and control of spills and waste.

Biodiversity El Soldado is in a Mediterranean ecoregion which is only present in five places in the world. The division’s land is in the El Melón mountain range, which has been classified by the National Environmental Agency (CONAMA) as top priority for the conservation of the biodiversity of the land ecosystems in the fifth region. This importance is due to the presence of large areas of Mediterranean native forest with high diversity and endemic flora and fauna species. Native forest accounts for 350 hectares of the total land owned by the division. A survey of the flora and fauna species present in the area was made in 2003.

As of that same year, as part of its commitment to biodiversity, El Soldado has promoted a native tree nursery plan with the Christa Mock agricultural high school of Nogales and neighbours of the Collahue and Los Caleos communities. Around 30,000 native tree species were produced in 2009, like belloto del norte (Beilschmiedia miersii), guaiacum (Porlieria chilensis), naranjillo (Citronella mucronata) (all three in conservation status), peumo, quillay (soapbark), boldo, lingue, pepper tree, lilén, litre and hawthorn. The accumulated production amounts to around 130,000 trees,

which are used in the plantations committed in the forest stewardship plans approved by the National Forestry Corporation (CONAF)140 for El Soldado, or are delivered to institutions and private bodies to boost their reforestation in other places.

It also continued to work with the NGO Corporación Laguna Verde to develop reforestation programmes in Chile’s central zone, to which it donated US$5,000 in 2009 and over 12,000 native trees from the tree nursery projects.

During the year, it drove the signing of a voluntary agreement for the sustainable development of the El Melón mountain range, for which it summoned authorities and community representatives to form a roundtable that resulted in the signing of a development agreement in December 2009.

Moreover, to continue the operations of the El Soldado mine up to at least 2027, the division submitted an environmental impact study to develop the sustainable operative continuity project. This not only considers extending the waste deposit areas but also to help recover and protect the biodiversity of the El Melón mountain range, seeking to improve the native forest in the area to raise its environmental value. Two areas of action were considered for this:

In the mining area, the current waste deposit areas will be expanded and a zone will be created to develop activities like the construction of service roads, platforms and exploration drilling. The project will assume the potential impact caused and will compensate the native forest surface area lost as a result of expansion. In addition, 100,000 native trees will be produced in a five-year term, i.e., 20,000 plants a year, and scientific research will be promoted by means of agreements with academic institutions to

Flora at El Soldado

• Belloto del norte (national monument)• Naranjillos (rare)• Guaiacum (vulnerable)• Puya berteroniana (vulnerable)• Lingue del norte (Persea lingue) (vulnerable)• Temo (Blepharocalyx cruckshanksii) (vulnerable)• Puya chilensis (vulnerable)

Fauna at El Soldado

• Culpeo fox (in conservation status)• Chilla fox (in conservation status)• Cururo fox (in conservation status)• Lemniscata lizard (in conservation status)• Condor (in conservation status)• Ringdove (in conservation status)

furnish knowledge of the species that form part of the native forest of the El Melón mountain range. This initiative does not entail increasing the current mining rate but to assure the mine’s continuity over time.

The second area of action includes recovering and protecting the native forest, for which it designed a pioneer initiative in Chile to recover and protect historically degraded forest, and it will improve its quality and will add a conservation zone which considers areas for scientific activities. This is an unprecedented contribution in the region and envisages 1,055 hectares for conservation, the planting of new native tree species, recovery and protection of the native forest of the El Melón mountain range, and follow-up of the results over ten years.

80.6% of the waterused by Mantos Blancos was recycled.

About 30,000 native tree species were produced in 2009 as part of the native tree nursery plan carried out by the El Soldado division with the community.

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92. 93.

Water management All the fresh water for the process mainly comes from a network of wells in the El Melón and Los Litres sector (15 kilometres away from the operation). The water is pumped and recirculated by means of a continuous pumping system, which reclaims the water from the lagoon of the El Torito dam and returns it to the plant where it is put back into the process. As an additional measure, water is extracted from the El Infiernillo and Los Coiles ravines in the El Torito dam sector (winter water flows) and from rainwater and upwelling from the underground mine.

141 See information on the El Soldado recycling campaign on page 113.

Case studyCreating value for the El Melón mountain range

The purpose of the voluntary agreement for the sustainable development of the El Melón mountain range is the harmonious development of the land in this area and players who operate in this area. This public-private agreement has a board chaired by the head of the regional government and comprises the Quillota provincial governor, the regional director of the CONAMA, the Mayors of Nogales and Hijuelas, the regional ministerial secretary (SEREMI) of agriculture, one representative from the Christa Mock agricultural high school, another from the public welfare management board of El Melón, and the El Soldado general manager.

Its objective is to promote activities that make the productive development of the players in the area more dynamic and improve its environmental standards, seeking to make productive growth compatible with environmental care.

The agreement will be focused on three areas of action:

Development and empowerment of productive activities, driving natural resource management alternatives with a long-term vision.

Development of social initiatives that improve the community development conditions and enhance the quality of life.

Conservation and sustainable management of natural resources, with initiatives that improve the environmental quality in harmony with other productive activities.

Of the 42,000 hectares of the area classified as a priority in the El Melón mountain range, work will be done on those located in the districts of Nogales and Hijuelas. This initiative is expected to generate a land stewardship model that can then be repeated throughout the area comprising the priority site and in other surrounding areas in the region.

El Soldado’s water rights are 395 l/s from wells and over 1.3 million m3 at the ravines, from which water can only be extracted from May to November. Well extraction amounted to 206.6 l/s in 2009, which assures that the watersheds were not affected by operations. To guarantee the water quality, there is also a network of monthly monitoring of the surface water and groundwater.

The operation’s water balance was updated in 2009 to improve its management and quantify all its flows monthly, including primary and secondary sources. Consumption by general processes (mine, plant, services) and the

water recirculation from the lagoon of the El Torito dam were also calculated, which helped to compare the monthly consumption and identify opportunities of reducing this.

The optimisation of the use of fresh water at operations attained a milestone in 2009, reaching 83% compared with consumption in 2004. This achievement was mainly the result of lower consumption at the SAG mill due to using reclaimed water from the underground mine, water recirculated from the El Torito dam and the enhanced pumping control from the El Melón and Los Litres wells due to optimisation of pump use.

Spills and waste There were four environmental incidents at El Soldado in 2009, all related to spills in the plant sector. Two of these were major, as the industrial water or process solution spill reached the El Cobre brook, although it did not affect its water quality.

The first of these was a spill of ten litres of diesel due to overloading a transportation truck, which occurred on the main road in the El Cobre sector. All the contaminated material was cleaned up and properly disposed of. The second one was caused by a general power cut, which led to around 200 litres of process water overflowing from the plant into the El Cobre brook. The water was not affected, according to an analysis made by the company SGS.

Moreover, a non-identified substance was detected at the El Torito dam, which affected the fauna in the sector. To remedy this, an expert carried out a follow-up to survey the birds in the area and identify changes in their population. The operational procedures at the plant were also reviewed and updated to anticipate operating situations that might have environmental consequences.

The division has a hazardous and non-hazardous waste management plan. Management of this was handed over to a contractor in 2009, which provides services from waste generating points to the final authorised destination and, if applicable, delivery to temporary storage. This has considerably reduced the bottlenecks at


2009 2008 2007

Groundwater used 3,464 3,993 3,204

Surface water (includes wetlands, rivers,

lagoons, oceans)

0 0 0

Municipal or water utility water supply 0 0 0

Water recycled in processes 12,999 12,088 15,172

SPILLS OF SUBSTANCES (M3)

2009 el SolDADo

Nº oF eVeNtS VoluMe

Process water 1 100

Acid / refined solutions 1 10

Oil / fuel 2 2

generating points and the waste storage times before final disposal.

Recycling campaigns were also launched, which have led to better management of office waste141. 83%

optimisationof fresh water consumption at El Soldado compared with 2004.

WASTE MANAGEMENT

2009 HAZArDouS WASte (toNNeS) NoN-HAZArDouS iNDuStriAl WASte (toNNeS)

iNterNAl DiSPoSAl eXterNAl DiSPoSAl

DiViSioN reCyCliNG FiNAl DiSPoSAl reCyCliNG FiNAl DiSPoSAl reCyCliNG FiNAl DiSPoSAl

El Soldado 437 334 0 0 325 530

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94. 95.

142 “Report on fresh water rights, extraction and consumption of the mining industry in the north and centre of Chile,” by the General Water Board, and the research “Diagnosis of the water resources of the Copiapó river watershed,” commissioned to the Canadian consultant Golder Associates S.A. by the Association of Agricultural Producers and Exporters of the Copiapó valley, Mantoverde, Minera Candelaria, the monitoring committee of the Copiapó river and its affluents and Sociedad Punta del Cobre S.A., under the

co-ordination of Corporación para el Desarrollo de la Región de Atacama (CORPROA).

Mantoverde division Mantoverde is an open-cut mine with facilities to process oxide ores. Due to its location in the north of Chile, its priority issues are water, and atmospheric emissions, mainly airborne, and energy consumption. The latter issue is addressed in the section Energy Efficiency Programme.

Water managementMantoverde updated and improved the operation’s water balance in 2009 to optimise the efficient use of this resource and the process. The study included a chemical characterisation of the water extracted from wells and detailed monitoring of the flow used to determine the losses from spraying and evaporation and thereby establish the quantity of water to be replaced in the system.

This analysis led to the optimisation of the wetting processes, to paving of the water accumulation ponds for the process and to determining consumption by stages. The system of wetting the leaching heap using sprinklers was changed to water droplets. These actions led to water extraction from the Copiapó river watershed for the mine’s processes decreasing from 76% to 59%; the remaining 41% was obtained from the mine’s water extraction process.

The water rights issued for the Copiapó river watershed are 9,230 l/s. Mantoverde uses 52 l/s of these, which accounts for 0.56% of all the water rights issued to all users of the watershed. The water rights granted throughout the entire Chañaral district amount to 184 l/s, and Mantoverde uses 6.1 l/s, which is equivalent to 3.3% of the water rights granted to the whole district.

To reduce the impact of water consumption, especially in the Copiapó river watershed, the water volume and quality of the wells are monitored permanently. Various private and government studies concur about the current water shortage in this watershed, mainly due to the depletion of the surface flow and groundwater of the river142. They also reveal that mining only accounts for 13% of the consumption of the river watershed.

Due to this situation of shortage, Mantoverde is seeking operational alternatives to reduce and optimise water consumption. It is also analysing whether to leave the Copiapó river watershed and switch to using seawater for the process.


2009 2008 2007



lagoons, oceans)

0 0 0


Water recycled in processes 24.7 21.4 22.8

Atmospheric emissions Mantoverde mainly generates fine particulate material or dust from blasting, the movement of material and vehicle traffic on unpaved roads.

The division has an air quality monitoring system by means of breathable particulate material (PM10) and sedimentable particulate material (SPM) monitoring stations, and measurement is made for a month once a year. There were no breaches of the regulation in 2009, as the values obtained were similar to those of the baseline measurement and were below the limit of the primary air quality standard.

Chagres division This division undertakes its productive process (copper concentrate fusion) by means of a cutting-edge flash furnace with low emissions, which makes Chagres a leading smelter in environmental terms in Chile. Its main issues are atmospheric emissions, water management, sulphuric acid transportation and, to a lower extent, discharges, spills and waste.

Atmospheric emissions The division manages and controls the concentration of sulphur dioxide (SO2), particulate material (PM10) and arsenic (As) emissions. Monitoring is carried out at four air quality stations located at Santa Margarita, Romeral, Catemu and Lo Campo. PM10 is also measured at the latter two stations.

Water managementChagres makes a monthly water balance based on ongoing measurement of its consumption and discharges. Water is extracted from three deep wells, which have the necessary authorisation and controls, with no records of water courses being affected, according to the studies made. Extraction, which is lower than that allowed by the water rights constituted, is gauged by flow metres and the pump power consumption.

It also makes periodic water quality controls by means of sampling and analysis of the physical and chemical parameters. This not only records the water extracted from the wells but also the water courses upstream and downstream of the smelter to verify there is no decline in its quality.

SO2 CONCENTRATION (REGULATED BY SUPREME DECREE 113/02 AND SUPREME DECREE 185/91)

MoNitoriNG StAtioN PeAk Per Hour PeAk Per DAy ANNuAl AVerAGe

reGulAtioN 1,000 250 80

Santa Margarita 889 165 62

Lo Campo 456 98 28

Catemu 342 57 18

Romeral 666 74 18

Note: in the case of the daily and hourly regulation, this is the peak annual value.

PM10 CONCENTRATION (ug/m3)

24-Hour PeAk tHree-yeAr MoViNG AVerAGe

2009 2008 2009 2008

reGulAtioN 150 50

Lo Campo 86 88 41 40

Catemu 138 129 63 60

eMiSSioNS (in tonnes)

2009 2008 2007

Yearly arsenic emissions

(regulation: 95 tonnes/year)

16.9 8.9 47.5

Yearly sulphur emissions 7,076 5,754 6,854

NUMBER OF SO2 REGULATION BREACHES AT CHAGRES

2009 2008 2007

Nº of daily regulation breaches 0 0 0

Nº of hourly regulation breaches 0 1* 0

(*) This breach was due to the anomalous condition of a start-up.


2009 2008 2007



lagoons, oceans)

0 0 0


Water recycled in processes 189.8 6.6 2.2

Mantoverde accounts for

0.56% of the total water rights of users of the Copiapó river watershed.

Mantoverde is seeking operational initiatives to reduce and optimise its water consumption. It is also analysing whether to abandon the Copiapó river watershed and use seawater for its processes. N

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96. 97.

DischargesChagres discharges liquid waste into surface water courses, complying with Supreme Decree Nº90 which governs this type of process. The division makes two types of discharges into the Aconcagua river:

From the wastewater treatment plant, with discharge into the river with chlorination in accordance with the discharge permit.

Draining of smelter refrigeration water, which is authorised and monitored by the Superintendency of Sanitary Services (SISS), which carries out its own and external monitoring controls.

None of the discharges contain hazardous substances and Chagres has an internal and external control and monitoring system guaranteeing the water quality. The internal system monitors on line the pH, temperature, flow, turbidity and conductivity parameters of the water, and the external one is a physical/chemical monitoring system, and the results are reported directly to the SISS.

WAter DiSCHArGeS (GiVeN iN tHouSANDS oF M33)

2009 2008 2007

Water discharged into the river

582 346 485

Waste managementJust like the other four divisions, Chagres has plans to control and manage waste from generating points, by segregation at source, differentiated management of hazardous and non-hazardous waste and recycling, whenever possible.

It also has a hazardous waste management plan, which envisages the necessary requirements and procedures and the handling of emergencies. The main waste of this kind is acid sludge, materials impregnated with hydrocarbons, filter sleeves and used oil, which are sent for recycling, among others. They are sent to Hidronor, a company that is authorised to process and recycle this kind of waste. This management system is fully compliant with the provisions of Supreme Decree Nº148 with regard to the minimum sanitary and safety conditions that hazardous waste management must consider.

Spills The most common spills at the Chagres smelter involve oils due to mishandling hydraulic and fuel systems. The most serious incident in 2009 was seepage from a buried diesel oil tank, which led to a leakage of less than 3 m3, which was virtually all recovered. Subsequent control over a 30-metre perimeter from the leakage point revealed that the incident had not affected surface water or groundwater.

Chagres has emergency procedures for handling spills, which are applied when necessary and for which all its employees are trained.

SPILLS OF SUBSTANCES (M3)

2009 CHAGreS

Nº oF eVeNtS VoluMe

Process water 2 200

Sulphuric acid / solutions 4 0.5

Oil / fuel 3 6.5

Case studyTransportation of sulphuric acid

Chagres produced 457,621 tonnes of sulphuric acid in 2009. Trucks made 17,100 trips to transport all this to customers and consumption centres. Although there are no mitigation measures for crashes these trucks might cause, there are special considerations:

1. The trucks used to transport acid are hi-tech and are no more than five years old (internal regulation).

2. The waste and effluents from transporting materials are handled in accordance with the current legal provisions.

3. With some exceptions in the year, acid is transported on working days. Transportation at weekends is avoided as far as possible to reduce the risk of road accidents.

4. There is an Emergency Plan and a brigade trained in these procedures to stop or control spills from acid transportation.

5. A theoretical and practical assessment is made of the suitability of the drivers who transport sulphuric acid, according to their competencies and knowledge of the legal and regulatory provisions on handling them.

As the other four divisions use acid in their leaching processes, all operations are subject to special protocols on safety and protection of people, communities and the environment, based on the environmental regulation and the considerations of the Anglo Fatal Risk Standards (AFRS).

Complementarily, Chagres, El Soldado and Los Bronces have an Emergency and Co-ordination Plan for sulphuric acid emergencies, which is in addition to the carrier’s Emergency Plan.

None of the Chagres discharges contain hazardous substances. The division has an internal and external monitoring control system guaranteeing the water quality.

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98. 99.

Environmental performance indicators

Assessing management

As the company’s environmental management considers all the environmental aspects outlined in The Anglo Environment Way, the most significant environmental indicators are presented below in a consolidated way and by division.

Environmental performance indicators Energy and emissionsThe energy and emission consumption values are delivered by the energy and climate change manager, who is in charge of co-ordinating and implementing the energy efficiency programme.

SUMMARY OF ENERGY CONSUMPTION & EMISSIONS BY OPERATION 2007–2009143

GiGAjouleS (Gj) toNNeS oF Co2

2009 2008 2007 2009 2008 2007

Los Bronces 4,699,908 4,462,137 4,700,778 365,119 374,054 410,011

Mantos Blancos 2,100,647 1,965,872 1,936,047 353,023 346,950 342,574

El Soldado 2,344,794 1,906,147 1,847,176 186,433 160,765 160,483

Mantoverde 1,422,091 1,444,877 1,434,009 162,318 167,599 170,472

Chagres 992,511 979,850 1,053,948 76,402 80,742 88,833

Santiago 7,466 7,571 7,538 583 662 707

totAl 11,567,417 10,766,454 10,979,495 1,143,878 1,130,772 1,173,081

143 The CO2 emission figure includes the consumption of fossil fuels, emissions from leaching processes and indirect emissions of CO2 caused by electric power plants that provide energy to operations.

ENERGY CONSUMPTION (GJ)/TONNES OF FINE CU EMISSIONS OF TONNES OF CO2/TONNES OF FINE CU

3,0

2,5

2.0

1.5

1.0

0.5

02009200820072006200520042003

1.83

2.021.88

2

2.58 2.60 2.65

30

25

20

15

10

5

0

26.81

2009

24.78

2008

24.19

2007

23.11

2006

22.05

2005

21.69

2004

22.11

2003

Nat

ural

Cap

ital

ENERGY CONSUMPTION (COMPANY TOTAL)

2009 2008 2007

Oil 6 (tonnes) 8,956 8,905 8,472

Diesel (m3) 141,476 122,997 117,446

Gasoline (kl) 543 628 1,363

Anfo (explosive in tonnes) 48,429 40,838 39,652

Natural gas (m3) 416,435 8,484 1,750,535

Liquefied gas (tonnes) 1,266 1,273 1,448

Electricity (MWh) 1,656,439 1,624,343 1,675,398

SPECIFIC CONSUMPTION/ EMISSIONS

2009 2008 2007

Total energy (GJ) 11,567,417 10,766,454 10,979,495

CO2 emissions (tonnes) 1,143,878 1,130,772 1,173,081

Fine Cu production (tonnes) 431,456 434,475 453,891

Fine Cu - GJ/tonne 26.81 24.78 24.19

Fine Cu - CO2/tonne 2.65 2.60 2.58


100. 101.

FRESH WATER CONSUMPTION BY OPERATION (GIVEN IN THOUSANDS OF M3)

DiViSioN 2009 2008 2007

Los Bronces 14,777 16,295 17,100


El Soldado 3,464 3,993 3,204

Mantoverde 2,991 2,982 2,849

Chagres 1,173 1,314 1,408

Santiago 7 6 9

totAl 26,229 28,599 28,474

WATER CONSUMPTION BY EXTRACTION SOURCE (GIVEN IN THOUSANDS OF M3)

SourCe 2009 2008 2007

Goundwater 11,979 12,753 11,700

Surface water 14,250 15,846 16,774

totAl CoNSuMPtioN

26,229 28,599 28,474

Goundwater (%) 46% 45% 41%

Surface water (%) 54% 55% 59%

ORE SENT TO PLANTS (IN THOUSANDS OF TONNES)

DiViSioN 2009 2008 2007

Los Bronces 20,512 20,013 21,125


El Soldado 9,172 8,002 8,193

Mantoverde 9,676 9,557 9,281

totAl 47,609 46,578 47,067

MASS MINING WASTE

2009 2008 2007

GrAVel/loW-GrADe ore (in millions of tonnes)

Tonnage accumulated in gravel deposits 1,813 1,687 1,408

Tonnage accumulated in leaching

deposits

513 469 283

tAiliNGS (in millions of tonnes)

Tonnage accumulated in active dams 505 479 447

Quantity of active dams 3 3 3

Tonnage accumulated in inactive dams 109 109 109

Quantity of inactive dams 7 7 7

SlAG (in millions of tonnes)

Slag produced in the year 324 337 346

CONCENTRATE SMELTED (IN THOUSANDS OF TONNES)

DiViSioN 2009 2008 2007

Chagres 524.6 538.2 577.7

Water managementMining operations use water in the grinding, flotation, leaching and smelting processes, mainly in the refrigeration system.

Land stewardshipGenerally speaking, the Anglo American biodiversity strategy commits the divisions to:

Using natural resources (water, energy and land) efficiently.

Protecting and rehabilitating ecosystems affected by their intervention.

Drawing up proactive action plans on this issue.


COMPANY LANDS

DiViSioN totAl CoMPANy-CoNtrolleD lANDS

(HeCtAreS)

lANDS uSeD iN oPerAtioNS (HeCtAreS)

lANDS reStoreD or uNDer

reStorAtioN (HeCtAreS)

Los Bronces* 35,592 4,710 0

Mantos Blancos 6,800 1,888 0

El Soldado 8,155 1,091 126

Mantoverde 3,250 1,557 0

Chagres 70 46 0.5

* The Los Bronces Development Project is excluded.

All the divisions have closure plans which comply with what is laid down in Supreme Decree Nº72 of the Mine Safety Regulation and the Anglo American Mine Site Closure Toolbox, which contains social and environmental variables to terminate activities.

STRATEGIC RAW MATERIALS 2009

2009 uNit QuANtity

Oil # 6 Tonnes 8,956

Diesel m3 141,476

Gasoline m3 543

Natural gas m3 416,435

Liquefied gas Tonnes 1,266

Electricity MWh 1,656,439

Sulphuric acid m3 605,955

Explosives

(Anfo)

Tonnes 48,429

CLOSURE PLANS

DiViSioN PoSSiBle CloSure DAte

Los Bronces 2041

Mantos Blancos 2014

El Soldado 2024

Mantoverde 2014

Chagres 2030*

* 2030 is considered as the closure date of the Chagres facilities for the purpose of the Closure Plan requested by the National Geology and Mining Survey (SERNAGEOMIN).

Strategic raw materials Anglo American’s main raw material is the ore extracted from its mines. The total ore processed by its plants in 2009 was 47.609 million tonnes, which was a 2.2% decrease on 2008.

Moreover, the main raw material used by the Chagres smelter is copper concentrate, which is provided by the company’s other divisions and is used to produce metallic copper in the form of anodes and sulphuric acid as a by-product.

Mass mining waste The company has three tailings dams in operation, for which it has a management plan that complies with Supreme Decree Nº248 of 2006, which establishes the regulations on the design, construction, operation and closure requirements for mining tailings dams and the layout of their ancillary works to guarantee the safety of people and goods. The National

The company uses some strategic raw materials to carry out the activities of its operations.

Geology and Mining Survey (SERNAGEOMIN) monitors compliance with this regulation.

Anglo American’s mass mining waste mainly includes mine gravel or waste material, low-grade ore that is not processed in plants, tunnel bases, underground excavation, leaching gravel, tailings and slag.

60

70

80

50

40

30

20

10

0

2009200820072006200520042003

60.79

65.8362.73

76.4774.8074.0577.17

M3 OF WATER USED/TONNES OF FINE CU

Nat

ural

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102. 103.

Classification of environmental incidents

level 1: Minor impact, short-term effects

level 2: Moderate impact, medium–term effects.

level 3: Major impact, long-term effects.

NUMBER OF LEVEL 1 ENVIRONMENTAL INCIDENTS

yeAr loS BroNCeS MANtoS BlANCoS

el SolDADo MANtoVerDe CHAGreS totAl

2009 14 6 5 7 15 47

2008 2 4 7 3 14 30

2007 6 1 20 5 20 52

2008 loS BroNCeS MANtoS BlANCoS el SolDADo MANtoVerDe

No VoluMe No VoluMe No VoluMe No VoluMe

Process water 0 0 2 1.5 1 900 0 0

Sulphuric acid / solutions 1 0.15 1 1 1 2 3 750

Acid / refined solutions 1 3 0 0 0 0 0 0

Oil / fuel 0 0 1 0.6 3 1 0 0

Slurry / tailings 0 0 0 0 0 0 0 0

SPILLS OF SUBSTANCES (m3)



Process water 3 2.5 3 5.8 2 200 0 0

Sulphuric acid / solutions 0 0 0 0 4 0.5 1 20

Acid / refined solutions 0 0 1 2 0 0 3 190

Oil / fuel 2 0.3 1 0.14 3 6.5 0 0

Slurry / tailings 0 0 1 1.5 0 0 0 0



Process water 0 0 0 0 5 202.5 0 0

Sulphuric acid / solutions 0 0 1 5 2 0.5 3 960

Oil / fuel 0 0 0 0 7 0.85 2 0.2

Slurry / tailings 0 0 0 0 1 20 0 0


DiViSioN iNterNAl MANAGeMeNt

eXterNAl MANAGeMeNt

reCyCliNG FiNAl DiSPoSAl FiNAl DiSPoSAl reCyCliNG FiNAl DiSPoSAl

Los Bronces 3,837 449 0 1,304 2,413

Mantos Blancos 490 106 278 446 0

El Soldado 144 155 0 837 563

Mantoverde 183 66 203 96 0

Chagres 24,417 314 0 0 181

ANGlo AMeriCAN CHile 29,071 1,090 481 2,683 3,157

NON-MINING WASTE MANAGEMENT

2009 HAZArDouS WASte (toNNeS) NoN-HAZArDouS WASte (toNNeS)

DiViSioN iNterNAl MANAGeMeNt eXterNAl MANAGeMeNt

reCyCliNG FiNAl DiSPoSAl reCyCliNG FiNAl DiSPoSAl reCyCliNG FiNAl DiSPoSAl

Los Bronces 567 353 0 0 1,341 2,929

Mantos Blancos 51,2 237 16 0 241 155

El Soldado 437 334 0 0 325 530

Mantoverde 292 176 0 0 773 80

Chagres 20,621 219 0 0 1,141 173

ANGlo AMeriCAN CHile 21,968.2 1,319 16* 0 3,821 3,867


DiViSioN iNterNAl MANAGeMeNt

eXterNAl MANAGeMeNt

reCyCliNG FiNAl DiSPoSAl FiNAl DiSPoSAl reCyCliNG FiNAl DiSPoSAl

Los Bronces 1,070 408 0 1,952 2,014

Mantos Blancos 535 110 8 578 35

El Soldado 286 299 0 720 517

Mantoverde 198 167 0 185 316

Chagres 21,022 0 0 551 131

ANGlo AMeriCAN CHile 23,111 984 8 3,986 3,013

Waste managementAll Anglo American’s divisions have management systems for hazardous and non- hazardous waste. The mass mining waste includes mine gravel, low-grade ore that is not processed in plants, tunnel bases, underground excavation, leaching gravel, tailings and slag and must be managed and disposed of via projects and designs approved by the authority case by case, pursuant to current legislation and international criteria and best practice for these deposits.

Environmental incidents Anglo American classifies its environmental incidents according to the impact and effect on the environment. Forty-seven level 1 incidents were recorded in 2009.

52

2009

60

30

4750

40

30

20

10

020082007

* The 16 tonnes of internal recyling at Mantos Blancos concern the use of metallic scrap for own structures of the operation’s facilities. This was a specific activity and was therefore not recorded as internal recycling in the previous year.

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104. 105.

Manmade capital

Supply chain sustainable development

Strategic work on Anglo American Supply Chain (AASC)categories.

Twenty-one categories of goods and services strategic supply.

Training:Classroom training

Fifteen sessions.Forty-five hours.

Supply Chain AcademyNinety-three basic courses. Fifty licenced partners.

Application of supplier classification.

88,5% of domestic suppliers.

11,5% of international suppliers.

Supplier development programme (SDP) progress.

End of SDP at Mantoverde:Eighteen months of work.Thirteen companies participated.

Chagres SDP:Eighteen companies participated.83% satisfactory progress level.

Product registration and labelling.

The first product and materials characterisation in Europe will be submitted in the second half of 2010.

Recycling initiatives.


106. 107.


The sustainable development of the Anglo American supply chain is a priority for embracing the common framework of values and standards of the Anglo American culture. The main characteristics of the Anglo American Supply Chain (AASC) project were presented in the Sustainable Development Report 2008, the objective of which is to make supply chain management the leader in the industry and a global benchmark on creating value, adding sustainable development management to this strategic function. To achieve this, it has made progress with continuous improvement processes, which are based on a balanced focus in four areas:

Value creation: This entails driving value creation in the organisation by means of process optimisation, commercial and financial risk management, the development of strategic agreements with suppliers and contractors, and systematic and sustainable innovation, related to the supply of goods and services.

operational excellence: This includes service delivery, transparency and decision-making by means of standardised approval processes and structures. It also considers the management of safe, reliable and high quality goods and services, and efficient services and operations.

Supply chain sustainability

Management of the supply chain has not only entailed reviewing materials and their classification but also undertaking the ongoing training of those who work in this area. Classroom training and the Supply Chain Academy courses have raised knowledge of this new scenario of materials management.


Anglo American needs to have a highly developed and efficient supply chain. Working with each of the players comprising it, including suppliers and contractors, is a key aspect of this.

Management approach

The creation of value from manmade capital is one of the five factors of Anglo American’s sustainable development focus. By means of this, the Company seeks to optimise the materials, services and infrastructure management to generate the final products sold by it.

It is therefore necessary to have a highly developed and efficient supply chain, for which a key aspect is to work with each of the players comprising it, including suppliers and contractors.

The Good Citizenship Business Principles set out that Anglo American should seek mutually beneficial relationships with its business partners based on “fair and ethical practices, including prompt payment within the negotiated terms”. They also stress that it is necessary to work with them so the sustainable development focus promoted is present in supply chain management.

The Anglo American culture assumes this vision, seeking to be the “partner of choice” for companies that engage with the company’s operations. Anglo American’s sustainable development policy in the supply chain and sustainable development code establish how to achieve this objective.

There is also the embracement of the content and guidelines set out in the Anglo American Supply Chain (AASC) project.

Based on the new corporate structure of Anglo American, the senior supply chain management of the Copper business unit is in charge of the progress of AASC in Chile’s operations.

Suppliers and customers: This is related to close work with suppliers and customers, measured transparently and consistently, so they show interest in embracing product and service innovation and developing the respective commercial agreements.

organisation and personnel: To assure a performance-focused culture, based on excellence, competencies, teamwork and accountability, multifunctional work and integration of business units.

Training and coaching In 2009, Anglo American Chile focused on communication, training and coaching for the content, tools, best practice and implications of embracing the AASC in its organisation and operations. It thereby participated in the training and coaching project co-ordinated by the AASC regional communications and change support area for South America.

This programme was developed with the following methodology:

Classroom training: workshops to support the deployment of tools used by the company to achieve the value creation targets. Fifteen sessions were held in Chile in 2009 with a total of 45 hours. Eighty-six employees from different project-related levels attended for issues like global categories, technological implementation, procurement and contracts, among others.

on-line training: Anglo American developed an e-learning area called the Supply Chain Academy (SCA), which includes 93 basic and optional courses in English and 17 in Spanish. Each of them is completed in 30 minutes to three

hours, according to the topics and practice involved and they serve as a basis for classroom workshops.

The SCA training platform works by assigning personal licences to those employees who head the progress of AASC. From 2007 to 2008, 50 employees received a licence to progress steadily with this training plan.

The basic SCA modules are focused on knowledge of the methodology required by professionals engaged in category management, both regarding the tools required to plan the category and the supply methodologies used. The optional courses address specific issues on the work areas, which include the function as negotiation, supplier relations management, among others.

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108. 109.

Supplier selection requirements

By selecting and maintaining suppliers, Anglo American prefers those who show a commitment to sustainable development and strive to abide by the Sustainable Development Code for Suppliers, including:

• Effective safety management with a zero harm vision.

• Effective occupational health risk management with a vision of a healthy and productive workforce.

• Defence of essential rights and fair work practices, in accordance with internationally renowned standards.

• They assure that their operations and the products and services provided to Anglo American are compliant

with national laws and regulations and others that are applicable. When they are provided at Anglo

American’s mine sites, they assure they meet the specific additional standards and procedures.

• They maintain and promote ethical standards, sound business practice and good governance.

• They contribute to the economic and social well-being of the communities where the supplier operates.

• Responsible environmental management with a vision of minimising the impact on the environment.

• They implement effective management systems and risk management strategies.

• They deliver clear, precise and appropriate reports on the agreed indicators.

• Inclusion of principles and codes in their supply chains.

Sustainable Development Policy for the Anglo American Supply Chain144.

Case studyCategory and value creation focus

The gradual embracement of the Anglo American Supply Chain since April 2008 has required restructuring of the category management and strategic supply teams based on multinational teams, which review and propose value creation plans and strategies with regard to 21 strategic supply categories of goods and services: mining services, construction, equipment for capital projects, equipment for open-cut mining, equipment for underground mining, process materials, transportation and logistics, and utilities, to mention just a few.

For example, in 2008 Anglo American thoroughly analysed the characteristics of its fuel and lubricant supplies, which globally account for an annual spend of approximately US$800 million. The Company’s work teams identified that a large proportion of the value that could be created in this category would not necessarily come from reducing prices but from know-how, technical support and embracing better practice that suppliers could provide mining operations.

Hence, Anglo American negotiated with two international suppliers and entered into global framework agreements (GFAs). In accordance with these, the fuel and lubricant suppliers are working with the Company’s mine teams to extend the life of equipment, reduce maintenance costs and thus optimise the total cost of ownership.

Following a similar process for each of the AASC categories, Anglo American estimates total global value creation equivalent to US$1.1 billion by 2011.

15 training sessionswere held in Chile.

86 peopleparticipated in the AASC classroom training.

PERCENTAGE OF SPEND ON SUPPLIERS BY OPERATION AND CATEGORY 2008–2009

SPeND PerCeNtAGe (%)

loCAl reGioNAl DoMeStiC

2009 2008 2009 2008 2009 2008

Los Bronces 2.7 2.6 Unappraised Unappraised 85.7 86.4

Mantos Blancos 36.4 23.4 36.8 23.7 97.7 96.9

El Soldado 3.0 2.6 3.8 4.6 99.1 97.8

Mantoverde 8.7 8.0 8.8 8.0 78.2 67.2

Chagres 3.4 6.2 10.5 12.2 92.1 94.0

Anglo American 8.2 7.3 7.0 6.4 88.5 87.4

The domestic percentage includes the regional percentage which includes the local percentage. Based on this, Chile accounted for 88.5% of the supplier spend and foreign suppliers for the remaining 11.5%.

Supplier classificationAnglo American Chile has adopted a supplier classification, based on the influence of the specific operation on the community. The company is thereby able to operate more efficiently to drive sustainable development at local, regional and national levels.

The following categories were defined:

local supplier: suppliers and contractors located in the operation or project influence areas.

regional supplier: suppliers and contractors located in the region of the operation or project.

Domestic supplier: suppliers and contractors located in Chile.

Even though the definition is based on the address of the head office of the supplier or contractor, it is wise to include those cases in which an operative branch is established in the influence area of operations or projects. In these cases, the operative branch is considered to be a local supplier to acknowledge the employment and economic development that the operation provides to the community.

Based on this methodology, it was possible to establish the percentage of the annual spend on suppliers and contractors of operations, broken down by the above-mentioned categories.


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144 This document is available at www.angloamerican.co.uk.


110. 111.

145 Source: article “Mine suppliers in Atacama improve their business management and service quality”, published on the institutional portal of Chile’s Economic Development Agency (CORFO).

146 The specific characteristics of this tool to promote the integration of supplier companies to productive chains are available on the website www.corfo.cl/lineas_de_apoyo.

147 www.corfo.cl 148 Anglo American Chile’s Sustainable

Development Reports 2007 and 2008 are available at www.anglochile.cl.

149 www.corproa.cl150 www.cinde.cl 151 www.asiva.cl

Creating valueThe Mantoverde and Chagres divisions have implemented supplier development programmes since 2007 to attain a continuous improvement scheme in partner company management. Thirty-one small- and medium-sized companies have benefitted.

Supplier development programme

Sustainable development of the supply chain entails establishing strategic relations with its commercial partners to create value. The supplier development programmes (SDP)146 driven by the Mantoverde and Chagres divisions since 2007 have been a work focus for Anglo American Chile to make progress towards this goal.

These initiatives of co-operation and continuous improvement, whose financing is shared by the respective division, Chile’s Economic Development Agency (CORFO)147 and participating companies, 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 Sustainable Development Code for Suppliers.

To get companies to apply a continuous improvement system on quality, safety, labour rights and environmental protection.

Anglo American Chile’s Sustainable Development Reports 2007 and 2008 reported on the SDP progress in the respective annual periods148.

With regard to 2009, the SDP at the Mantoverde Division was completed in May after 18 months of work. This initiative was supported by the Atacama Region Development Corporation (CORPROA)149 as the intermediary of the CORFO, and IXC Consultores as the company that executed it.

The supplier development programme has enabled us to efficiently manage resources, work to satisfy our current and future customers and increase the competitiveness of national companies”.

Carlos Torres Rojo (Logistic & Service E.I.R.L.)145

The report by IXC Consultores on the Mantoverde SDP results concludes that:

The 13 companies participating attained a general compliance level of 78% with the action plans, management commitments and progress assessment included in the programme.

All the companies adopted a service management model aligned with the strategic vision of Anglo American Chile regarding the relationship with its suppliers.

Besides this achievement, six of these companies adopted the quality management system for small- and medium-sized companies laid down in the Chilean standard NCh 2.909.

All the management and executives of the companies had a positive view of the work done, identifying the main benefits to be the ordering of the internal management, the customer focus incorporation and the contribution of the training workshops.

General objective: To improve the business and quality management of the services provided to the Mantoverde division by suppliers participating in the project in the maintenance and project development areas in an 18-month period.

investment: 1st Stage: Ch$80,100,000 2nd Stage: Ch$42,250,000

DiagnosisStage

2 MONTHS

Participating companies: FriotermicaAsmeco IngenieríaIngelcopAvances IngenieríaCefebaConstructora Carmona

1st Development stage:implementation Business training workshops. Immediate improvements. Generation of basic conditions for

continuous improvement.

12 MONTHS (December 2007–November 2008)

2nd Development stage:Follow-up Business model supervision. Mobilisation of action plans. Analysis of the project economic

value added.

6 MONTHS (December 2008–May 2009)

MANTOVERDE DIVISION SDP SUMMARY TABLE 2007-2009

EcocilE-ProyectsGdaLogistic & ServiceMpc Soinver Zepeda y Vecchiola

Eighteen small- and medium-sized companies in the Metropolitan and Valparaíso Regions participated in the Chagres division’s SDP. The project has the support of the Business Innovation and Development Centre (CINDE)150

of the Association of Companies in the Valparaíso Region (ASIVA)151 and the advice of Brains Consulting & Research.

In 2009, the project was focused on creating the conditions for participating companies to strengthen three strategic objectives:

Consolidate a management system (policy, procedures, controls, costs, labour obligations) to attain business maturity to certify their operations for quality, safety, occupational health and the environment.

Participate appropriately in implementing a co-ordination system between the company supply activities and the operations of the Chagres division.

Define action plans to improve services and supplies.

Based on the 2009 progress report issued by Brains Consulting & Research, 83% of the companies participating in the Chagres SDP have a “satisfactory” level of compliance with the programme’s objectives, and 17% of them attained a “basic” level.

COMPANIES PARTICIPATING IN THE CHAGRES SDP

DiStriCt CoMPANieS

La Calera Soldesp

Maestranza La Calera

De La Paz

Quillota Osorio Hermanos

SERMAMIN

Villa Alemana Repolmet

Valparaíso Bacigalupo

Til Til Minera San Pedro

Catemu Megall

Faena Express

Acor Ingeniería

Aridos Don Nicasio

Llay Llay Seriman

Induzar

Manuel Fernández

Pacoll

Santiago Supplyline

Estin

Supplier development programme

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112. 113.

Lifecycle

152 www.ec.europa.eu/environment/chemicals/reach/reach_intro.htm

153 www.echa.europa.eu/home_es.asp 154 Such provision refers to the Globally Harmonised

System of Classification and Labelling of Chemicals, the content of which can be reviewed on the website www.unece.org/trans/danger/publi/ghs/ghs_welcome_e.html.

155 The Spanish has a double meaning that is impossible to convey in English, i.e., a) Everybody’s Task and b) Everybody’s Paper.

Product composition, registration and labelling Anglo American is working hard to assure compliance with the new European Union (EU) regulation on chemicals. This is part of the Company’s commitment to the lifecycle of its products.

Lifecycle

Anglo American is developing a global work plan to assure its full commitment to the European Union (EU) Regulation on the Registration, Evaluation and Authorisation of Chemicals (REACH)152.

This regulation, which came into force in June 2007, raises the supervision and control standards for chemicals used in productive processes to prevent sanitary and environmental risks.

In 2009, Anglo American Chile participated in corporate information and documentation exchange forums on the use of chemicals and at the same time worked with contractor companies to develop studies and testing to meet the REACH requirements.

The report on these activities was sent to the London-based company that Anglo American established specially to co-ordinate and represent the entire company on this issue.

In accordance with the requirements of this regulation, in the second half of 2010 the Company will submit the first product and materials characterisation files to the European Chemicals Agency (ECHA)153.

Although minerals and concentrates are exempt from REACH registration, Anglo American is also developing a common classification system that establishes their specifications, composition and related risk profile.

EU legislation on the classification, labelling and packaging of chemicals and mixtures also lays down standards that have been adjusted to those of REACH and to the UN provisions with international scope on this issue154.

Anglo American is addressing this issue in the same global plan designed for REACH, for which it uses standard systems and formats that meet all the regulations involved.

Waste recycling Waste management not only entails its correct classification and disposal but also requires the right management in each process, which means giving it an alternative use, like re-using or recycling it, thereby reducing the quantity of waste generated for final disposal. To achieve these objectives, Mantos Blancos has had a recycling process since 2001, which is part of its waste management system. This process enables the division to re-use its hazardous and non-hazardous waste, such as metallic and plastic drums, conveyor belts and rubber, tyres, batteries, lead sludge, iron scrap, piping, used oil, aluminium, shells and anodes, entering into partnerships with specialised companies.

Moreover, as part of its continuous improvement process, in 2009 the division implemented new changes to the waste management system with a specialist company. This comprehensive system entails the handling, treatment and management of waste, which includes management of the sanitary landfill, the recycling yard, temporary yards for hazardous waste and the management to re-use, recycle and sell it. To attain this improvement, it was necessary to invest in equipment and devices that helped to achieve these objectives, such as a new waste collection truck, new industrial deposits, waste minimisation systems, a backhoe to work the sanitary landfill and nine machines to manage the fluorescent tube waste.

95% of used oil, 100% of lead sludge and batteries, 100% of metallic and plastic drums, all the conveyor belts and 95% of metallic waste and shells were recycled and re-used in 2009. The waste management system is expected to be bolstered with the implementation of The Anglo Environment Way (AEW) in 2010.

Importance of copper in life

Copper, which is essential to life according to the International Copper Association (ICA) and Procobre, is one of the materials used most in the world due to its many properties, i.e., durability, heat and electricity conductivity, and that it can be recycled. It is present in virtually all aspects of people’s lives and in all the productive sectors.

Furthermore, copper is the first solid material recognised as an antimicrobial agent in the registry of the US Environmental Protection Agency (EPA). It therefore acknowledges that copper can eliminate harmful bacteria related to potentially deadly microbial infections, including the A (H1N1) swine flu virus. No other material has been certified with this characteristic.

This EPA decision was made after three years of studies with demanding protocols. The experiments showed that copper and its alloys eliminate 99.9% of the pathogenic bacteria after two hours of exposure and permanently, despite repeated episodes of moisture and contamination.

The ICA launched a multicentre study at hospitals in 2009 to prove the bactericidal properties of copper and address a problem unresolved anywhere in the world, i.e., intra-hospital infections. Such study is about to be successfully completed at seven hospitals in England, the United States, Germany, Japan and Chile.

Research in Chile ended in March 2010 with promising data: the methicillin-resistant Staphylococcus aureus was eliminated from elements that are more frequently contaminated. The bacterial load decreased by 98.5% in bed rails, 97.7% in bed handles, 94.4% in patient tables, and 66.7% for monitor styluses.

A paper recycling campaign called “Everybody’s Paper”155 was launched in the administrative areas of the El Soldado division, for which a partnership was signed with La Semilla Foundation, which is in charge of paper recycling management by holding workshops in the surrounding communities.

Moreover, a pilot recycling and good environmental practice project called the “Ecological Office” started up at the offices, for which separate containers were placed at strategic places in the El Soldado building, and this is expected to be extended to the entire operation in 2010. Organic matter will also be added as waste to start the operation of a composting plant.

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Condensed and audited financial statements

Condensed and audited financial statements

Anglo American Norte S.A.

Anglo American Sur S.A. and Subsidiary

Financial Statements Anglo American Norte S.A.


To the Directors and Shareholders of Anglo American Norte S.A.

We have audited, in accordance with auditing standards generally accepted in Chile, the statements of financial position of Anglo American Norte S.A. as of December 31, 2009 and 2008, and the related statements comprehensive income, changes in equity and cash flows for the years then ended (included herein). In our report dated January 16, 2010, we expressed an unqualified opinion on those financial statements, which includes an explanatory paragraph to describe the basis of preparation of the financial statements.

In our opinion, the information set forth in the accompanying condensed financial statements is fairly stated, in all material respects, in relation to the financial statements from which it has been derived. However, as condensed financial statements are presented in considerably less detail than complete financial statements , they should be read in conjunction with the audited financial statements.

The accompanying financial statements have translated into English solely for the convenience of readers outside Chile.

January 16, 2010


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Independent auditors’ reportAnglo American Norte S.A.


Anglo American Norte S.A. Anglo American Norte S.A.

STATEMENTS FINANCIAL POSITIONAS AT DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

Notes 2009 US$ 2008 US$

SHAREHOLDERS’ EQUITY AND LIABILITIES

SHAREHOLDERS’ EQUITY:

Paid-in capital 156,135,900 156,077,488

Retained earnings 326,740,764 108,594,266

Other reserves (2,396,620) (2,601,633)

Provisional dividends (176,099,880)

Investment reserves (8,826,040) 17,339,901

Equity attributable to equity holders 295,554,124 279,410,022

Total shareholders’ equity, net 295,554,124 279,410,022

NON-CURRENT LIABILITIES:

Employee benefits obligations 20 22,452,741 17,534,285

Provisions 18 54,136,050 34,335,844

Total non-current liabilities 76,588,791 51,870,129

CURRENT LIABILITIES:

Trade and others payables 19 244,922,187 189,977,398

Provisions 18 5,708,842 19,130,692

Total current liabilties 250,631,029 209,108,090

Total liabilities 327,219,820 260,978,219

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 622,773,944 540,388,241

STATEMENTS FINANCIAL POSITIONAS AT DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

Notes 2009 US$ 2008 US$

ASSETS

NON-CURRENT ASSETS:

Property, plant and equipment 14 163,113,162 171,070,202

Investments in related companies 15 768,167 20,764,665

Trade and other receivables 17 745,276 928,707

Deferred tax assets 13d 21,661,047 13,792,972

Total non-current assets 186,287,652 206,556,546

CURRENT ASSETS:

Inventories 16 39,161,682 54,301,002

Trade and other receivables 17 219,120,300 177,188,002

Current tax assets 13c 16,888,060 35,998,824

Cash and cash equivalent 24 161,316,250 66,343,868

Total current assets 436,486,292 333,831,695

TOTAL ASSETS 622,773,944 540,388,241


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STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

STATEMENTS OF INCOMEFOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

Notes 2009 US$ 2008 US$

CONTINUING OPERATIONS

OPERATING REVENUE 8 1,175,628,198 807,859,592

OPERATING COST (782,578,920) (555,945,497)

OTHER OPERATING INCOME (EXPENSE) NET 9 (23,821,015) (5,605,378)

Result from investments in related companies 15 (903,064) 15,897,800

TOTAL OPERATING REVENUE AND REVENUE FROM INVESTEES 368,325,199 262,206,517

Financial income 10 1,487,600 5,865,112

Other income 12 9,996,804 89,188,490

Financial expense 11 (4,400,640) (4,831,273)

Exchange differences 5c (6,988,369) (9,034,721)

Total non-operating income 95,395 81,187,608

INCOME BEFORE INCOME TAX 13a 368,420,594 343,394,125

INCOME TAX EXPENSE 13a (69,707,136) (65,110,065)

NET INCOME FOR THE YEAR 298,713,458 278,284,060

INCOME PER SHARE 1.5809 1.7630

NUMBER OF SHARES 22a 188,948,033 157,847,925

Notes 2009 US$ 2008 US$


Net income for the year from continuing operations 298,713,458 278,284,060

Cash flow hedges 4w 182,645,323

Deferred tax recognized in equity 13b (41,990) (30,687,140)

Actuarial gains (losses) on employee benefits 20 247,003 (2,132,731)

Other income and expenses in equity 205,013 149,825,452

NET COMPREHENSIVE INCOME FOR THE YEAR FROM CONTINUING OPERATIONS

298,918,471 428,109,512


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STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

Notes 2009 US$ 2008 US$

CASH FLOW FROM OPERATING ACTIVITIES: 23 414,205,085 291,503,435

CASH FLOW FROM INVESTING ACTIVITIES:

Loans granted to related companies 22c (505,549,755)

Collection of loans received from related companies 513,331,692

Interest received from other investments 10 491,707 3,603,586

Sales of fixed assets 489,350

Purchase of fixed assets 14 (25,140,544) (44,618,170)

Net cash flow used in investing activities (16,866,900) (40,525,234)

CASH FLOW FROM FINANCING ACTIVITIES:

Loans granted by related companies 22c (585,278)

Payment of loans received from related companies 22c 498,232

Interest paid (365,920) (704,742)

Dividends paid 22c (301,999,883) (260,023,062)

Net cash flow used in financing activities (302,365,803) (260,814,850)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 94,972,382 (9,836,649)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 66,343,868 76,180,517

CASH AND CASH EQUIVALENTS AT END OF YEAR 24 161,316,250 66,343,868

STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYFOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

Notes Paid-incapitalUS$

Retainedearnings

US$

Otherreserves

US$

Provisionaldividends

US$

Investmentreserves

US$

TotalUS$

Balances at January 1, 2008

156,077,488 104,731,052 (152,427,086) 1,097,157 109,478,611

Actuarial gains (2,132,730) (289,354) (2,422,084)

Reorganization 2,134,298 2,134,298

Dividends paid (260,023,046) (260,023,046)

Cash flow hedges 182,645,323 182,645,323

Deferred tax 13b (30,687,140) (30,687,140)

Net income for the year

263,886,260 14,397,800 278,284,060

Balances at December 31, 2008

156,077,488 108,594,266 (2,601,633) - 17,339,901 279,410,022

Balances as at January 1, 2009

156,077,488 108,594,266 (2,601,633) 17,339,901 279,410,022

Merge 4a 10,182,400 30,572,049 40,754,449

Own issued shares (10,123,988) 9,117,930 (19,941,743) (20,947,801)

Actuarial gains 247,003 (581,134) (334,131)

Dividends paid (125,900,003) (125,900,003)

Provisional dividends (176,099,880) (176,099,880)

Deferred tax 13b (41,990) (41,990)

Net income for the year

304,356,522 (5,643,064) 298,713,458

Balances at December 31, 2009

156,135,900 326,740,764 (2,396,620) (176,099,880) (8,826,040) 295,554,124


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NOTES TO THE FINANCIAL STATEMENTS(In United States Dollars - US$)


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Standards - Revised, Amendments and Interpretations Mandatory application date

New IFRS

IFRS 9, Financial Instruments Annual periods beginning on or after 1 January 2013

Amendments

IFRS 2, Share-based payments Annual periods beginning on or after 1 January 2010

IFRS 3 (Revised), Business Combinations Annual periods beginning on or after 1 July 2009

NIC 27 (Revised), Consolidated and Separete Financial Statements

Annual periods beginning on or after 1 July 2009

IAS 32, Financial Instruments: Presentation - Classification of Rights Issues

Annual periods beginning on or after 1 January 2010

IAS 39, Financial Instruments: Recognition and Measurement: Eligible Hedged Items

Retrospective application for annual periods begining on or after 1 July 2009

New Interpretations

IFRIC 17, Distributions of Non-cash Assets to Owners Annual periods beginning on or after 1 July 2009

IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments


IFRIC 18, Transfer of Assets from Customers Annual periods beginning on or after 1 July 2009

Management estimates that these standards, amendments and interpretations described above, will be adopted in the financial statements starting to January 1, 2010, as applicable, and that adoption of such standards, amendments and interpretations will not have a significant impact on financial statements in the exercise of their initial application.

The preparation of these financial statements in conformity with International Financial Reporting Standards requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the income and expense amounts during the informed period. These estimates are based on Management’s best knowledge of the reported amounts, events or actions.

Important issues4.

a) Merger by absorption of Minorco Inversud S.A.

An Extraordinary Shareholders’ Meeting was held on 30 April 2009, which approved the merger by absorption of Minorco Inversud S.A. As a result of such merger, Anglo American Norte S.A., as the surviving entity, acquired all the assets and liabilities of Minorco Inversud S.A. at their book value in accordance with the balance sheet and other financial statements for the year ended 31 December 2008, and is its successor for all its rights and obligations.

Due to this merger, all the shareholders’ equity and shares of Minorco Inversud S.A. were incorporated to Anglo American Norte S.A., and the former company was dissolved without it being necessary to liquidate it.

For accounting purposes, the merger was made on basis of the financial statements at April 30, 2009.

General information1.

The Company was incorporated in Santiago in 1955 and since October 1, 2007 the legal name of the Company was changed to Anglo American Norte S.A.

The Company is currently operating the copper mines and processing plants of Mantos Blancos and Mantoverde which are, located 45 kilometers North East of Antofagasta, and in the Province of Chañaral, III Region of Atacama, respectively.

Business description2.

The Company’s business purpose is the exploration, extraction, exploitation, production, smelting and trading of concentrates, precipitate ores, copper bars and all metal and non-metal mineral substances and, in general, all fossil substances and liquid and gas hydrocarbons, in any form in which they are naturally present, including exploration, operation and use of all sources of natural energy susceptible to industrial exploitation and products or by-products obtained from them and, in general, the performance of any other related, connected or complementary activities that the shareholders agree.

The Company’s activities include exploration, mining prospecting and services related to mining.

The employees of the Company correspond mainly to operators at the worksites. The executives and supervisors in charge of, among other, the financial, operating, tax, legal and human resources issues, are hired by the related company Anglo American Chile Ltda.

Bases of preparation3.

The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) adopted by the European Union based on the information submitted by the Company for consolidation purposes with its Parent Company since January 1, 2005, date on which it adopted for the first time the International Financial Reporting Standards adopted by the European Union. Also, these financial statements have been prepared under the historical cost convention as, modified by the revaluation of certain financial instruments. For statutory purposes, Anglo American Norte S.A. used for the preparation of financial statements, General Accepted Accounting Principles in Chile (Chilean GAAP).

General Accepted Accounting Principles in Chile are different, in some respects, with IFRS, thus the local conversion process to Chilean GAAP to IFRS, will result in new adjustments, that could differ from these financial statements.

The detail of the choices made in the conversion of UK GAAP and IFRS were explained in the financial statements of 2005.

The information contained in these financial statements is the responsibility of the Senior Management of the Anglo American Chile Group.

At the date of these financial statements, the following statements have been issued by the IASB, but are effective for initial periods after January 1, 2010.




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These estimates are explained in more detail in Note N°6 and refer to:

Useful economics lives of assets and mineral reserve estimates•Impairment of assets•Restoration and environmental rehabilitation costs•Employee benefit obligations•Provisions for litigation and other contingencies•

Principal accounting policies

a. Basis of preparation of the financial statements and period - The financial statements of Anglo American Norte S.A. include the statement of financial position, of changes in the shareholders’ equity, income and cash flow for the years ended 31 December 2009 and 2008, and was drawn up pursuant to the International Financial Reporting Standards (“IRFS”) and is the full, explicit and unreserved application of such international standards.

b. Functional currency - The functional currency of Anglo American Norte S.A. is US Dollars.

c. Basis of conversion - Assets and liabilities, which are not stated in United States dollars have been converted at the corresponding year-end exchange rate: As of December 31, 2009 the exchange rate of the Chilean peso was Ch$507,10 per 1 US dollar (Ch$636.45 as at December 31, 2008).

Variations in the exchange rates in the different currencies, generated a net loss in relation to the US dollar in the amount of US$6,988,369 (2008: loss of US$9,034,721), which is presented in non-operating income in the item “Exchange differences”.

d. Revenue recognition - Revenues are recorded by Anglo American Norte S.A. when rights and obligations have been substantially transferred to the buyer, in accordance with IAS 18 “Revenue”.

Concentrate and cathode sales, whose price is undefined up to a pre-established future date, are acknowledged at the provisional market price established at that time.

Concentrate sales are stated at the invoice amount, which is net of treatment and refining changes.

Revenues from these sales are initially recognized (when the above criteria are met) at market price.

The adjustment of the provisional sales price versus the equivalent price (mark-to-market) in the contract is recognized in income.

e. Income tax and deferred taxes - The income tax provision is calculated based on the first category net taxable income, prepared in accordance with current legislation.

Deferred taxes arising from temporary differences and other events that create differences between the financial and taxable base of assets and liabilities are recorded according to IAS 12 “Income Taxes”.

Similarly, the Company records any temporary differences arising between tax and book entries as a result of calculating the Taxable Operating Income in order to calculate the specific tax on mining.

The variations of deferred tax assets or liabilities in the period are stated in the income account or directly in the shareholders’ equity accounts of the statements of financial position, as the case may be.

f. P.P. & E - Property, plant and equipment are stated at cost, excluding periodic maintenance costs, less accumulated depreciation, and less the impairment value loss.

The cost of property, plant and equipment includes the acquisition cost plus all the costs directly related to the location of the asset and its operation as forecasted by management and the initial estimate of any cost for the dismantling and removal of the element or rehabilitation of the physical area where it is located.

At April 30, 2009, the value of assets, liabilities and shareholders’ equity transferred to Anglo American Norte S.A. was as follows:

30.04.09

US$

Assets:

Current assets 30,180,848

Other assets 10,582,021

Total assets 40,762,869

Liabilities:

Current liabilities 8,420

Total liabilities 8,420

Equity

Paid-in capital 10,182,400

Retained earnings 24,250,851

Net income for the period 6,321,198

Total equity, net 40,754,449

Total equity and liabilities 40,762,869

Moreover, as Anglo American Norte S.A. and Minorco Inversud S.A. are the only partners of the limited liability company with the trade name Minera Anglo American Chile Ltda. and, as a result of the merger that was put to the shareholders, all the shareholders’ equity of Minera Anglo American Chile Ltda. was incorporated to Anglo American Norte S.A., and the former company was dissolved.

The aforementioned capital increases were recorded in accordance with IFRS 3 “Business Combinations” as a business combination according to the interest unification method, and its effects on the accounting value of the investments were recognized in shareholders’ equity.

b) Ore purchase and sale transactions with the related company Compañía Minera Doña Inés de Collahuasi

As of 1 April 2009, the partners of Minera Doña Inés de Collahuasi SCM, in which Anglo American plc has a 44% interest, agreed to take responsibility for the sales of its copper concentrate, copper cathode and molybdenum concentrate products.

Copper and molybdenum sales and purchases included in such agreement were added to the items operating revenues and costs of the income statement in 2009.

Summary of principal accounting policies applied5.

Accountability for the information and estimates made

Estimates were made based on the best information available for the events analyzed, however it is possible that events that might arise in the future make it necessary to modify them (increase or decrease) in the next accounting periods. This will be carried out pursuant to International Accounting Standard (IAS) 8, which prospectively recognized the effects of the change in estimates on the corresponding profit and loss accounts.




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n. Operations with repurchase agreement - Purchase of financial instruments with repurchase agreement are recorded as a fixed rate loans and presented in other current assets.

o. Mining reserves - The costs related to the Mining Reserves are amortized through the unit of production method, considering the proven and probable ore reserves, regarding the useful life of the mine.

p. Mining projects - The disbursements related directly to the exploration of mining properties are charged to income until the start of the project’s feasibility stage. The disbursements incurred in the feasibility or development stages of the projects are capitalized and amortized based on future production, considering the proven ore reserves. Abandoned projects are charged to income in the year in which the decision is made.

Also, a provision is made for those projects where there is evidence that they will not be executed according to the original plans.

q. Personal benefits cost - The Company recognizes the cost of employee benefits according to an actuarial calculation, as required by IAS 19 “Employee benefits”, which includes variables such as the life expectancy, salary increases, etc. To determine such calculation a discount rate of 6.23% per annum has been used for 2009 (discount rate of 7.26% in 2008).

r. Closure cost provision - The Company recognizes the future costs of mine closures and the abandonment of the sites, at their net present value in conformity with corporate standards and in accordance with IAS 37 “Provisions, Contingent Assets and Contingent Liabilities”. The provision for this concept is included in the item “Accruals”, within non-current liabilities.

In 2009, the Company updated the provision made for these effects based on a new year-end cost study. This change entailed an increase in the provision made, which is split into two concepts: decommissioning of property, plant and equipment, which generated the recognition of an asset, in the item other fixed assets; and environmental restoration costs, which was deemed to be an administration expense in the period when it was incurred or accrued.

s. Employee vacations - The provision for vacations is recorded as an expense in the year the employee earns this benefit.

t. Statement of cash flows - This includes cash and time deposits, both short-term and highly liquid, which are easily converted into a known amount of money and are subject to an insignificant risk of change in their value.

u. Financial assets - Financial assets at fair value with changes in income are financial assets held for trading. A financial asset is classified in this category if it is mainly acquired with the aim of being sold in the short term.

Trade and accounts receivable• - Accounts receivable are unhedged financial assets with fixed or determinable payments and are not traded in an active market. Accounts receivable include trade receivables and other accounts receivable.

Assets held to maturity • - Assets held until their maturity are unhedged assets with fixed or determinable payments and fixed maturity, and the Company’s management has the positive intention and ability to maintain them until their maturity. Should a significant amount of financial assets held until their maturity be sold, the entire category would be classified as available for sale.

Financial assets available for sale• - These are unhedged financial assets that are specifically allocated to this category or which are not classified in any of the other categories. They are included in non-current assets unless management intends to transfer the investment in 12 months after the date of the statements of financial position.

Impairment of financial assets• - Financial assets other than those valued at fair value through income are evaluated as of the date of each statements of financial position to establish the presence of impairment indicators. Financial assets are impaired when there is objective evidence that, as a result of one or more events occurring after the initial acknowledgement, the estimated future cash flows of the investment have been affected.

v. Financial liabilities - Financial liabilities of a similar nature are initially acknowledged at their fair value, net of the costs incurred in the transaction.

Moreover, the financing interest costs directly attributable to the acquisition or construction of assets that require a substantial time period before being ready for use or sale shall be deemed a property, plant and equipment cost.

g. Depreciation - Property, plant and equipment depreciate according to the estimated useful life of the goods using the linear method. The depreciation of mine reserves is amortised using the method of units of fine copper produced, considering proven and probable ore reserves regarding the life of mine, as the case may be.

The useful life of property, plant and equipment is reviewed annually and depreciation starts when assets are ready to be used.

Land is stated independently of the buildings or facilities that might be located thereon and is construed to have an indefinite life and is therefore not subject to depreciation.

At least once a year, the Company assesses whether there is possible impairment of the value of property, plant and equipment assets.

h. Leasing - The rental cost under an operating lease is charged to the statement of income in annual amounts based on the contract terms.

The assets under finance lease are recognized as assets at the beginning of the lease at the lower of the fair market value and the net present value of the minimum lease payments discountinued using the effective interest rate.

In addition to the lease agreements, other significant agreements are also evaluated in order to determine if they, substantially, are a lease or contain one. This includes the assessment as to whether the agreement includes the use of a specific asset as well as the right to use such an asset.

i. Mine preparation - Costs for mine preparation incurred with the only purpose of maintaining the current level of production are charged to the cost of production.

j. Investments in related companies - Investments in related companies are stated at their equity value.

k. Inventories- Inventories have been valued at acquisition cost, using the following methods:

Finished products and products in process• : At the average monthly production cost, including depreciation of fixed assets.

Raw material, supplies and spare parts• : At the average purchase cost.

Ore in stock• : At the lower of the average cost of monthly extraction, or the recoverable value.

Materials in transit• : At acquisition cost.

The net realizable value is the sales price estimate at the close of the period less all the estimated finishing costs and costs to be incurred in the marketing, sales and distribution process.

The cost assigned to inventories does not exceed their net realisation value at the 2008 and 2009 year ends.

l. Trade debtors - Shipments of ore are presented at net realizable value based on sales contracts.

The Company recognizes a mark to market provision when the sale price of billed shipments, which have not finally priced falls above or below the market price at each year end.

m. Time deposits - This item includes capital invested plus accrued interest.




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Anglo American Sur S.A. and Subsidiary

To the Directors and Shareholders of Anglo American Sur S.A. and Subsidiary

We have audited, in accordance with auditing standards generally accepted in Chile, the consolidated statement of financial position of Anglo American Sur S.A. and Subsidiary as of December 31, 2009 and 2008, and the related consolidated statements of comprehensive income, changes in shareholders’ equity and cash flows for the years then ended (included herein). In our report dated January 16, 2010, (except for note 26, whose date is March 15, 2010) we expressed an unqualified opinion on those financial statements, which includes one explanatory paragraph to describe the basis of preparation of the financial statements.

In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated, in all material respects, in relation to the consolidated financial statements from which it has been derived However, as condensed financial statements are presented in considerably less detail than complete financial statements, they should be read in conjunction with the audited consolidated financial statements.

The accompanying financial statements have been translated into English solely for the convenience of readers outside Chile.

January 16, 2010

Independent auditors’ reportAnglo American Sur S.A. and Subsidiary

w. Financial hedging instruments and hedging accounting

Embedded derivatives• - Anglo American Norte S.A. assesses the presence of embedded derivatives in financial instrument contracts to determine whether their characteristics and risks are closely related to the main contract, provided that the host is not recorded in the accounts at fair value.

Embedded derivatives are split off from the main contract, which is not measured at fair value through income, when the analysis reveals that the economic characteristics and risks of embedded derivatives are not closely related to the main contract.

Cash flow hedge• - The Company had no hedging contracts for the year ended 31 December 2009. The Company signed forward contracts up to 2008 to hedge its exposure to copper price risks. The Company does not use financial hedging instruments for speculation purposes.

Copper sales contracts (normal purchase or sale) that meet the requirements of IAS 39 were acknowledged in income when

physical delivery was made or the ownership risks and benefits had been substantially transferred.

All hedges designated as hedging contracts were classified as current or non-current assets or liabilities, depending on the hedging maturity date.

Changes in the fair value of financial hedging instruments that were designated as “effective cash flow hedging contracts” were recognized directly in shareholders’ equity.

x. Reclassifications – The Company has reclassified certain items of the financial statements as at December 31, 2008 to maintain consistency.

Financial Statements Anglo American Sur S.A. and Subsidiary

Anglo American Sur S.A. and Subsidiary Anglo American Sur S.A. and Subsidiary

CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAS AT DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

CONSOLIDATED STATEMENTS OF FINANCIAL POSITIONAS AT DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)


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Notes 2009 US$ 2008 US$

SHAREHOLDERS’ EQUITY AND LIABILITIES

SHAREHOLDERS’ EQUITY

Paid-in capital 1,240,735,737 1,240,735,737

Retained earnings 1,333,857,652 975,838,062

Other reserves 2,150,097 (112,626,215)

Equity attributable to equity holders 2,576,743,486 2,103,947,584

Minority interest 2,218,170 5,499,188

Total shareholders’ equity, net 2,578,961,656 2,109,446,772

NON-CURRENT LIABILITIES

Trade and other payables 19 2,883,642 4,873,261

Financial hedging instruments 14 56,570,891

Employee benefit provisions 20 100,637,906 68,737,610

Deferred tax liabilities 11d 139,522,262 46,376,960

Provisions 17 165,985,389 130,109,428

Total non-current liabilities 409,029,199 306,668,150

CURRENT LIABILITIES

Trade and others payables 18 265,406,399 420,309,366


Provisions 17 39,402,463 37,259,169

Total current liabilities 304,808,862 590,827,117

Total liabilities 713,838,061 897,495,267

TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES 3,292,799,717 3,006,942,039

Notes 2009 US$ 2008 US$

ASSETS

NON-CURRENT ASSETS

Property, plant and equipment 12 2,642,947,216 1,975,923,270


Other accounts receivable 22c 1,142,375

Intangibles 4l 120,000,000 120,000,000

Total non-current assets 2,797,537,232 2,097,065,645

CURRENT ASSETS

Inventories 15 69,430,952 95,794,818

Trade and other receivables 16 303,284,352 174,489,430


Current tax assets 11c 32,682,315 45,766,761

Cash and cash equivalents 24 28,135,143 593,825,385

Total current assets 495,262,485 909,876,394

TOTAL ASSETS 3,292,799,717 3,006,942,039



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008(In U.S. dollars - US$)


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Notes 2009 US$ 2008 US$


OPERATING REVENUE 7 1,762,629,323 2,000,343,945

OPERATING COST (857,741,044) (804,425,423)

OTHER OPERATING INCOME AND EXPENSES - NET 8 (55,252,373) (44,205,734)

TOTAL OPERATING REVENUE 849,635,906 1,151,712,788

Financial income 9 105,516,766 11,398,468

Other income 3,895,251

Financial expenses 10 (14,420,146) (78,920,680)

Exchange differences 4c (25,369,899) (33,278,456)

TOTAL NON-OPERATING INCOME (EXPENSE) 65,726,721 (96,905,417)

INCOME BEFORE INCOME TAX 11a 915,362,627 1,054,807,371

INCOME TAX EXPENSE 11a (188,547,442) (188,322,964)

INCOME AFTER INCOME TAX 726,815,185 866,484,407

PROFIT FOR THE FINANCIAL YEAR ATTIBUTABLE TO:

EQUITY SHAREHOLDERS OF THE COMPANY 725,355,907 864,150,601

MINORITY INTEREST 1,459,278 2,333,806

PROFIT FOR THE FINANCIAL YEAR 726,815,185 866,484,407

EARNINGS PER SHARE 0.5858 0.6984

NUMBER OF SHARES 22a 1,240,750,565 1,240,750,565

Notes 2009 US$ 2008 US$


Net income for the year 726,815,185 866,484,407

Cash flow hedges 14 148,266,233 (130,777,419)

Deferred taxes recognized in equity 11b (23,508,403) 22,991,091

Actuarial losses in employee benefits 20 (9,981,518) (4,464,295)

Other income and expenses in equity 114,776,312 (112,250,623)

Net comprehensive income for the year 841,591,497 754,233,784

ATTIBUTABLE TO:

Equity shareholders of the Company 839,515,810 752,189,330

Minority interest 1,459,278 2,333,806

NET COMPREHENSIVE INCOME FOR THE YEAR 840,975,088 754,523,136



CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYFOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008(In U.S. dollars - US$)


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Notes 2009 US$ 2008 US$

CASH FLOW FROM OPERATING ACTIVITIES: 23 508,417,024 1,105,879,439

CASH FLOW FROM INVESTING ACTIVITIES:

Interest received from other investments 9 1,760,295 11,398,468

Inter-company interest received 22d 1,756,572 15,799

Purchase of fixed assets 12 (674,310,655) (462,597,064)

Loans granted to related companies 22d (580,000,000) (2,737,077)

Settlement of forward contracts 14 (29,442,867)

Net cash flow used in investing activities (1,280,236,655) (453,919,874)

CASH FLOW FROM FINANCING ACTIVITIES:

Loans collected from related companies 22d 580,000,000

Interest paid 10 (1,793,998) (1,383,778)

Dividends paid 22d (372,076,613) (246,448,976)

Net cash flow used in financing activities 206,129,389 (247,832,754)

NET POSITIVE VARIATION OF CASH AND CASH EQUIVALENTS (565,690,242) 404,126,811

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 593,825,385 189,698,574

CASH AND CASH EQUIVALENTS AT END OF YEAR 24 28,135,143 593,825,385


Retainedearnings

US$

Otherreserves

US$

Minorityinterest

US$

TotalUS$

Balances at January 1, 2008 1,240,735,737 356,636,240 (375,592) 4,665,579 1,601,661,964

Dividends paid (244,948,779) (1,500,197) (246,448,976)

Cash flow hedges (130,777,419) (130,777,419)

Actuarial losses 20 (4,464,295) (4,464,295)

Deferred tax 11b 22,991,091 22,991,091

Net income for the year 864,150,601 2,333,806 866,484,407

Balances at December 31, 2008 1,240,735,737 975,838,062 (112,626,215) 5,499,188 2,109,446,772


Retainedearnings

US$

Otherreserves

US$

Minorityinterest

US$

TotalUS$

Balances at January 1, 2009 1,240,735,737 975,838,062 (112,626,215) 5,499,188 2,109,446,772

Dividends paid (367,336,317) (4,740,296) (372,076,613)

Cash flow hedges 148,266,233 148,266,233

Actuarial losses 20 (9,981,518) (9,981,518)

Deferred tax 11b (23,508,403) (23,508,403)

Net income for the year 725,355,907 1,459,278 726,815,185

Balances at December 31, 2009 1,240,735,737 1,333,857,652 2,150,097 2,218,170 2,578,961,656



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS(In United States Dollars - US$)


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Standards - Revised, Amendments and Interpretations Mandatory application date

New IFRS

IFRS 9, Financial Instruments Annual periods beginning on or after 1 January 2013

Amendments

IFRS 2, Share-based payments Annual periods beginning on or after 1 January 2010

IFRS 3 (Revised), Business Combinations Annual periods beginning on or after 1 July 2009

NIC 27 (Revised), Consolidated and Separete Financial Statements


IAS 32, Financial Instruments: Presentation - Classification of Rights Issues

Annual periods beginning on or after 1 January 2010

IAS 39, Financial Instruments: Recognition and Measurement: Eligible Hedged Items

Retrospective application for annual periods begining on or after 1 July 2009

New Interpretations

IFRIC 17, Distributions of Non-cash Assets to Owners Annual periods beginning on or after 1 July 2009

IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments


IFRIC 18, Transfer of Assets from Customers Annual periods beginning on or after 1 July 2009

Management estimates that these standards, amendments and interpretations described above, will be adopted in the financial statements beginning January 1, 2010, as applicable, and that adoption of such standards, amendments and interpretations will not have a significant impact on financial statements as a result of their initial application.

The preparation of these financial statements in conformity with International Financial Reporting Standards requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the income and expense amounts during the informed period. These estimates are based on Management’s best knowledge of the reported amounts, events or actions.

Significant accounting principles4.

Accountability for the information and estimates made

Estimates were made based on the best information available for the events analysed; however, it is possible that events that might arise in the future make it necessary to modify them (increase or decrease) in the next accounting periods. This will be carried out as indicated in the International Accounting Standard (IAS) 8, which recognized prospectively the effects of the estimate change on the corresponding profit and loss accounts.

These estimates are explained in more detail in Note No.5 and relate to:

Useful economics lives of assets and mineral reserve estimates•Impairment of assets•Fair value of derivative instruments•Restoration and environmental rehabilitation costs•Employee benefits obligation•Provisions for litigation and other contingencies•

Principal accounting policies

a. Basis of preparation of the consolidated financial statements - The consolidated financial statements of Anglo American Sur S.A. include the balances of its subsidiary Anglo American Chile Ltda., in which the parent company, has a 70.00% share and control. Balances and transactions with the subsidiary have been eliminated on consolidation and also the elimination of unrealized gains and losses from said transactions has been considered. The participation of the minority investors has been recognized in the minority interest accounts in liabilities and net income.

General information1.

The Company was incorporated by public deed dated September 6, 1916 as a closely held corporation. On November 02, 1998, by agreement of the Extraordinary Meeting of Shareholders held on October 09, 1998, the Company became a limited partnership.

On July 23, 2007, Inversiones Anglo American Sur Ltda. became Inversiones Anglo American Sur S.A. Subsequently, on July 31, 2007, by agreement at the Extraordinary Shareholders’ Meeting, the merger was carried out with Minera Sur Andes S.A. (formerly Minera Sur Andes Ltda.) into Anglo American Sur S.A. (formerly Inversiones Anglo American Sur Ltda.), whereby the latter assumed all the rights and obligations of the company that was merged.

The merger was completed on the basis of the balance sheets at December 31, 2006.

The Subsidiary Anglo American Chile Ltda. was created on the 14 March, 2003 as a limited liability partnership.

Business description2.

The Company’s business purpose is the exploration, extraction, exploitation, production, smelting and trading of concentrates, precipitate ores, copper bars and all metal and non-metal mineral substances and, in general, all fossil substances and liquid and gas hydrocarbons, in any form in which they are naturally present, including exploration, operation and use of all sources of natural energy susceptible to industrial exploitation and products or by-products obtained from them and, in general, the performance of any other related, connected or complementary activities that the shareholders agree.

The subsidiary’s objetive is to provide administration, planning and consulting services in various areas such as managerial; financial; treasury; accounting; internal audit; evaluation and control of projects; mining; metallurgy; engineering and maintenance support; insurance administration; acquisition of supplies; materials and equipment; contracting of external services; geology; information technology; sales and marketing; safety, health, environment and quality; human resources; and legal, particularly for mining activities and specialized in the needs and requirements of this type of company, rendering them by itself or through third parties, coordinating with them on how to perform these services, as well as the performance of the activities directly or indirectly related with the above mentioned, and others that the partners agree.

The employees of the Company correspond mainly to operators at the worksites. The executives and supervisors in charge of, among other, the financial, operating, tax, legal and human resources issues, are hired by its subsidiary Anglo American Chile Ltda.

Bases of preparation3.

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and the interpretations of the International Financial Reporting Interpretations Committee (IFRIC) adopted by the European Union based on the information submitted by the Company for consolidation purposes with its Parent Company since January 1, 2005, date on which it adopted for the first time the International Financial Reporting Standards adopted by the European Union. Also, these financial statements have been prepared under the historical cost convention as, modified by the revaluation of certain financial instruments. For statutory purposes, the Company and its subsidiary used for the preparation of financial statements, General Accepted Accounting Principles in Chile (Chilean GAAP).

General Accepted Accounting Principles in Chile are different, in some respects, with IFRS, thus the total local conversion process to Chilean GAAP to IFRS, will result in new adjustments, that could differ from these consolidated financial statements.

The detail of the choices made in the conversion of UK GAAP and IFRS were explained in the financial statements of 2005.

The information contained in these financial statements is responsibility of the Senior Management of the Anglo American Chile Group.

At the date of these financial statements, the following statements have been issued by the IASB, but are effective for initial periods after January 1, 2010.




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Land is stated independently of the buildings or facilities that might be located thereon and is construed to have an indefinite life and is therefore not subject to depreciation.

At least once a year, the Company assesses whether there is a possible impairment of the value of property, plant and equipment assets.

h. Stripping Ratio - A mine’s surface operations need to strip overburden material and other waste to gain access to the ore to be mined. These stripping costs of the mineralized areas are made before starting production (pre-operation) or when in production, with their classification varying depending on the stage.

Stripping costs incurred during the production phase to strip additional overburden or waste are deferred and charged to operating costs based on the coefficient of the waste to ore ratio and mine life average (Stripping Ratio) (Note 13).

The stripping costs incurred before starting operations are capitalized as a mine development cost and are taken to income based on the mine’s life.

i. Mine preparation - Costs for mine preparation incurred with the sole purpose of maintaining the current level of production are charged to cost of production.

j. Leasing - The rental cost under an operating lease is charged to the statement of income in annual amounts based on the contract terms.

The assets under financial lease are recognized as assets at the beginning of the lease at the lower of the fair value and the net present value of the minimum lease payments derived when discounting at the implicit interest rate.

In addition to the lease agreements, other significant agreements are also evaluated in order to determine if they, substantially, are a lease or contain one. This includes the assessment as to whether the agreement includes the use of a specific asset as well as the right to use such an asset.

k. Goodwill - As at December 31, 2009 and 2008, the Company records US$120,000,000 generated by the payment of a Price Participation, in conformity with the original conditions of the acquisition agreement. Said Goodwill is submitted to an annual impairment test in accordance with IAS 36 “Impairment of assets”.

l. Impairment of goodwill - Any impairment is recognized immediately in the statement of income. Goodwill impairment is not subsequently reversed. The Company did not acknowledge any impairment of this kind in 2008 and 2009.

m. Inventories - Inventories are stated at cost, using the following methods:

Finished products and products in process• : At the average monthly production cost, including depreciation of fixed assets.

Raw material, supplies and spare parts• : At the average purchase cost.

Ore in piles• : At the lower of the average cost of monthly extraction, or the recoverable value.

Materials in transit• : At acquisition cost.

The net realizable value is the sales price estimate at the close of the period less all the estimated termination costs and costs to be incurred in the marketing, sales and distribution process.

The cost assigned to inventories did not exceed their net realization value at the 2008 and 2009 year ends.

n. Trade debtors - Shipments of ore are presented at net realizable value based on sales contracts.

These financial statements of Anglo American Sur S.A. and subsidiary include the statements of financial position, changes in the shareholders’ equity, income and cash flow for the years ended 31 December 2009 and 2008, and were prepared under International Financial Reporting Standards (“IFRS”) and are the full, explicit and unreserved application of such international standards.

b. Functional currency - The Company and its Subsidiary maintain their official accounting records in US Dollars.

c. Basis of conversion - Assets and liabilities, which are not stated in United States dollars, have been converted at the corresponding year-end exchange rate. As of December 31, 2009 the exchange rate of the Chilean peso was of Ch$507.10 per 1 US dollar (Ch$636.45 as at December 31, 2008).

The variations in the exchange rates in the different currencies generated a net loss in relation to the US dollar in the amount of US$25,369,899 (2008: net loss of US$ 33,278,456), which is presented in non-operating income (expense) in the item “Exchange differences”.

d. Revenue recognition - Operating revenue is recognized when ownership risks and benefits have been transferred to customers and the merchandise has been delivered to a place agreed on by contract.

Concentrate and cathode sales, whose price is undefined up to a pre-established future date, are recognized at the provisional market price established at that time.

Concentrates sales are stated at the invoice amount, which is net of treatment and refining changes.

Revenues from these sales are initially recognized (when the above criteria are met) at market price.

The adjustment of the provisional sales price versus the equivalent price (mark-to-market) in the contract is recognized in income.

e. Income tax and deferred taxes - The income tax provision is calculated based on the first category net taxable income, prepared in accordance with current legislation.

Deferred taxes arising from temporary differences and other events that create differences between the book and tax basis of assets and liabilities are recorded in accordance with IAS 12 “Income Taxes”.

Similarly, the Company has recorded any temporary differences arising between tax and book entries as a result of calculating the Taxable Operating Income in order to calculate the specific tax on mining.

The variations of deferred taxes of assets or liabilities in the period are stated in the income account or directly in the shareholders’ equity accounts of the statement of financial position, as the case may be.

f. Property, plant and equipment - Property, plant and equipment are stated at cost, excluding periodic maintenance costs, less accumulated depreciation, and less the impairment value loss.

The cost of property, plant and equipment includes the acquisition cost plus all the costs directly related to the location of the asset and its operation as forecasted by management and the initial estimate of any cost for the dismantling and removal of the element or rehabilitation of the physical area where it is located.

Moreover, the financing interest costs directly attributable to the acquisition or construction of assets that require a substantial time period before being ready for use or sale shall be deemed a property, plant and equipment cost.

g. Depreciation - Property, plant and equipment depreciate according to the estimated life of the goods using the linear method. The depreciation of mine reserves is amortized using the method of units of fine copper produced, considering proven and probable ore reserves in regard to the life of mine, as the case may be.

The useful life of property, plant and equipment is reviewed annually and depreciation starts when assets are ready to be used.




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Impairment of financial assets• - Financial assets other than those valued at fair value through income are evaluated as of the date of each statement of financial position to establish the presence of impairment indicators. Financial assets are impaired when there is objective evidence that, as a result of one or more events occurring after the initial recognition, the estimated future cash flows of the investment have been affected.

x. Financial liabilities - Financial liabilities of a similar nature are initially recognized at their fair value, net of the costs incurred in the transaction.

y. Derivative financial instruments and hedge accounting - In order to hedge its exposure to exchange rate risks of flows in dollars committed by the Los Bronces Development Project, the Company entered into forward contracts. Anglo American Sur S.A. and subsidiary do not use derivative financial instruments for speculative purposes.

Embedded derivatives • - Anglo American Sur S.A. and subsidiary assess the presence of embedded derivatives in financial instrument contracts to determine whether their characteristics and risks are closely related to the main contract, provided that the host is not recorded in the accounts at fair value.

Embedded derivatives are split off from the main contract, which is not measured at fair value through income, when the analysis reveals that the economic characteristics and risks of embedded derivatives are not closely related to the main contract.

Cash flows hedges• - Hedging contracts are stated at their fair value on the financial balance sheet in the item Financial Hedging Instruments. Hedging contracts are stated as current and non-current considering the maturity date of the item hedged or related hedge.

The actual portion of the changes in the fair value of hedges that are designated and qualify as cash flow hedging is recognized in shareholders’ equity by means of the statement of other comprehensive income. The profit or loss of the ineffective portion is immediately recognized in the statement of comprehensive income.

The amounts accumulated in net shareholders’ equity are reclassified in the statement of income when the item hedged affects income (for example, when the forecasted hedged sale takes place or the hedged flow is realized). Nevertheless, when the forecasted hedging transaction leads to the recognition of a non-financial asset (for example, inventories or property, plant and equipment), the gains or losses previously recognized in the net shareholders’ equity are reclassified as part of the initial cost of the asset. The deferred amounts are finally recognized in the depreciation cost.

Hedge accounting is discontinued whenever the instruments expire or are sold, terminated, executed or are no longer classified as hedging instruments. In such period, any related profit or loss is withheld in shareholders’ equity awaiting the occurrence of the hedged item. If the hedged item is not expected to occur, any gain or loss previously recognized in shareholders’ equity is included in the statement of comprehensive income in the same period.

z. Reclassifications - The Company has reclassified certain items of the financial statements as at December 31, 2008 for comparative purposes.

The Company recognizes a mark to market provision when the sale price of billed shipments, whose final price is still not known, is lower or higher than the market price at the year end.

o. Time deposits - This item includes capital invested plus accrued interest.

p. Operations with repurchase agreement - Purchases of financial instruments with repurchase agreement are recorded as a fixed rate deposit and presented in other current assets.

q. Mining reserves - The costs related to the mining reserves are amortized to income through the unit of production method, considering the proven and probable ore reserves, considering the useful life of the mine.

r. Mining projects - The disbursements related directly with the exploration of mining properties are charged to income until the start of the project’s feasibility stage. The disbursements incurred in the feasibility or development stages of the project are capitalized and amortized based on future production, considering the proven ore reserves. Abandoned projects are charged to income in the year in which the decision is made. Also, a provision is made for those projects where there is evidence that they will not be executed according to the original plans.

s. Personal benefits cost - The Company recognizes the cost of employee benefits according to an actuarial calculation, as required by IAS 19 “Employee benefits”, which includes variables such as the life expectancy, salary increases, etc. To determine such calculation a discount rate of 6.23% per annum has been used for 2009 (discount rate of 7.26% in 2008).

t. Mine closure provision - The Company recognizes the future cost of mine closure and the abandonment of the sites, at their net present value in conformity with corporate standards and in accordance with IAS 37 “Provisions, Contingent Assets and Contingent Liabilities”. The provision for this concept is included in the item “Accruals”, within non-current liabilities.

In 2009, the Company updated the provision made for these effects based on a new year-end cost study. This change entailed an increase in the provision made, which is split into two concepts: property, plant and equipment decommissioning, which generated the recognition of an asset, and this amount was presented in the item other property, plant and equipment; and environmental restoration costs, whose amount was deemed to be an administration expense in the period when it was incurred or accrued.

u. Employee vacations - The provision for vacations is recorded as an expense in the year the employee earns this benefit.

v. Statement of cash flow - This includes cash and time deposits, both short-term and highly liquid, which are easily converted into a known amount of money and are subject to an insignificant risk of change in their value.

w. Financial assets - Financial assets at fair value with changes in income are financial assets held for trading. A financial asset is classified in this category if it is mainly acquired with the aim of being sold in the short term.

Trade and accounts receivable• - Accounts receivable are unhedged financial assets with fixed or determinable payments and are not traded in an active market. Accounts receivable include trade receivables and other accounts receivable.

Assets held to maturity• - Assets kept until their maturity are unhedged assets with fixed or determinable payments and fixed maturity, and the Company’s management has the positive intention and ability to maintain them until their maturity. Should a significant amount of financial assets kept until their maturity be sold, the entire category would classify as available for sale.

Financial assets available for sale• - These are unhedged financial assets that are specifically allocated to this category or which are not classified in any of the other categories. They are included in non-current assets unless management intends to transfer the investment within 12 months of the date of the statement of financial position.


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Appendices


146. 147.

Legal system and ownershipThe company Anglo American Sur S.A. was established by means of a public deed issued by the Santiago notary office of Mr. Patricio Zaldívar Mackenna, on 31 May 2002. Its excerpt was registered on sheet 13.657, Nº11.320 of the Santiago Commerce Registry of the Real Estate Registrar of the same year, and an extract was published in the Official State Gazette Nº37.275, on 5 June 2002.

Its current and only shareholders are Anglo American Sur S.A with 99.99% of the capital stock and Clarent Ltd with the remaining 0.01%, both subsidiaries of Anglo American plc. Anglo American Norte S.A. was established as a corporation by means of a public deed issued by the Santiago notary office of Mr. Jaime García Palazuelos on 19 October 1955, and an extract of its file was registered on sheet 6.101, Nº3.598 of the Santiago Commerce Registry of 1955.

Its capital stock is divided into 188,948,033 registered shares of a single series, of which approximately 99.98% is held by Anglo American plc’s subsidiary companies called Inversiones Anglo American Norte Limitada, Anglo American Norte S.A. (taxpayer code Nº 81.175.700-4), and Inversiones Minorco Chile S.A.

With the aim of using the synergies arising from the work of two copper-producing companies with similar products, and especially with human resources that could work in either company, it was decided to form Anglo American Chile Limitada, by means of a public deed, dated 14 March 2003, issued by the Santiago notary office of Mr. Andrés Rubio Flores, whose file was registered on sheet 7.114, Nº5.596 of the Santiago Commerce Registry in the same year.

Affiliates and related companiesAnglo American Norte S.A. has a stake in Anglo American Chile Limitada, engaged in providing management, planning and consultancy services in various areas. It holds a 30% stake of the capital stock. Anglo American Sur S.A. participates in the same company, Anglo American Chile Limitada, holding 70% of the capital stock.

Corporate GovernanceAnglo American Chile Ltda.The administration and use of the trade name Anglo American Chile Ltda. is vested in the partners through the board, comprising three incumbent directors and three deputy directors, who meet as many times as necessary to evaluate the company’s performance according to the articles of association. All the board meetings and decisions are recorded in the board book.

By means of a public deed dated 24 March 2008, issued by the Santiago notary office of Mr. Álvaro Bianchi Rosas, both partners appointed the following people as directors:

BOARD OF ANGLO AMERICAN CHILE LIMITADA (AS OF 31 DECEMBER 2009)


Miguel Ángel Durán Vergara (chairman) Noelle Duronea Burgalat

Alejandro Mena Frau Claus Bunger Timmermann

Felipe Purcell Douds Luis Ignacio Quiñones Sotomayor

Appendix 1

Appendix 2

App

endi

ces


148. 149.

One of the GRI principles is reliability, which can be proved, among other ways, by identifying the original sources of all the information that appears in the report. This appendix therefore lists the written sources that were used to draw up the Sustainability Report and those people who were interviewed or who participated in the process.

GeNerAl CoNteNt SourCe

Miguel Ángel Durán, CEO.

Felipe Purcell, Vice-President Marketing and Corporate Affairs.

Marcelo Esquivel, External Affairs Manager.

FiNANCiAl CAPitAl

Carlos Gil, Metallic Copper and By-Products Sales Manager.

Carolina Musalem, Regional Tax Manager.

Edson Orellana, Chile Tax Manager.

Eric Pivet, Planning and Finance Specialist.

Hernán Montes, Lawyer.

Ignacio Quiñones, Corporate Counsel.

Paulina Romo, Supply Chain Analyst of Sulphuric Acid.

Raimundo Díaz, Strategic Supplies Advisor.

Roberto Ecclefield, Non-Refined Products Sales Manager.

HuMAN CAPitAl

Alejandro Mena, Vice-President Human Resources.

Benjamín Galdames, Labour Relations and Effectiveness Manager.

Carla Bonati, Safety & Occupational Health Analyst.

Germán Escobillana, Human Resources Area Manager of the Shared Services Centre.

Lorenzo Menéndez, Senior Safety and Sustainable Development Manager.

María Pía Tejos, Internal Communications Manager.

Oscar Torres, Human Resources Administration Manager.

Roberto Martínez, Senior Safety And Occupational Health Manager.

Rodrigo Cisternas, Senior Human Resources Advisor.

NAturAl CAPitAl

Álvaro Canales, Environmental and Community Head, El Soldado.

Benjamín Andrade, Los Bronces Development Project Environmental Manager.

Carlos Salvo, Environmental and Community Advisor, Chagres.

Eugenio Labarca, Environmental And Community Manager, Los Bronces.

Felipe Moreno, Hydraulic Advisor, Los Bronces.

Ferruccio Medici, Energy and Climate Change Manager.

Fernando Valenzuela, Environmental Manager.

José Campillay, Safety and Occupational Health Advisor, Mantos Blancos.

Ricardo Valero, Senior Environmental and Sustainable Development Advisor, Mantoverde.

SoCiAl CAPitAl

Álvaro Canales, Environmental and Community Relations Head, El Soldado.

Eugenio Labarca, Environmental and Community Manager, Los Bronces.

Jorge Poblete, Anglo American Foundation Manager.

Marcelo Glavic, Technical Vice-President (Mantos Blancos).

Mario Pavón, Business Advisor.

Oriana Ubilla, Community Relations Advisor, Los Bronces.

Pamela Quinteros, Social Development and Community Advisor, Chagres Division.

Ricardo Valero, Senior Environmental and Sustainable Development Advisor, Mantoverde.

MANMADe CAPitAl

Alejandro Iturriaga, Management Control Specialist.

Carlos Cruces, Engineering, Materials, Warehouse and Logistics Manager.

Carlos Gil, Metallic Copper & By-Products Sales Manager.

Fabricia Bernardi, Comms And Change Regional Support South America Aasc Project, Brazil.

Juan Alberto Ruiz, Senior Procurement And Contracts Copper Supply Chain Manager.

Paulina Rojas, Supply Chain Regional Support Project.

Valeria Rojas, Procurement And Contracts Manager.

DoCuMeNtS reVieWeD

1. Anglo American plc: Living Our Values (Good Citizenship Business Principles).Anglo American plc: Anti-trust Compliance Manual.Anglo Safety Way.Anglo Fatal Risk Standards.Anglo Occupational Health Way.Anglo American: Visible-Felt Leadership (VFL).Anglo American Safety Golden Rules.Anglo American: Fatigue Control Manual.

DoCuMeNtS reVieWeD SourCe

2. Sustainable Development Code for Suppliers.

3. Anglo American’s sustainable development in the supply chain.Anglo Social Way standard.

4. Anglo Environment Way standard.Anglo American-Copper business unit: year-end sustainable development reporting (December 2009).Anglo American Group Foundation: helping to create opportunities and sustainable livelihoods.

5. Los Bronces SEAT II final result.

6. Mantos Blancos SEAT II final result.

7. El Soldado SEAT II final result.

8. Mantoverde SEAT II final result.

9. Chagres SEAT II final result.

10. Government relations plan.

11. Supplier development programme presentation – Chagres – October 2009.

12. REACH update – January 2010.

GuiDiNG DoCuMeNtS

1. Annual sustainable development report.Improvement process for drawing up sustainability reports.

2. Appendix A – Better practice.

3. Appendix B – Insight into Anglo American’s sustainability.

4. Appendix C – Anglo American reporting guidelines.

5. Press releases.Anglo American continues its global leadership in the fight against HIV/AIDS (December 2009).

6. Anglo American announces new Los Sulfatos copper prospect in Chile with inferred resources of 1.2 billion tonnes (July 2009).

7. Agreement signed with Un Techo para Chile.

8. Partnership with Enseña Chile is signed.

9. Agreement signed with Elige Educar.

10. Metallurgy laboratory is inaugurated at Til Til high school – September 2009.

11. Mirador Interactive Museum (MIM) at Nogales – August 2009.

12. Mirador Interactive Museum (MIM) at Catemu – August 2009.

13. John T. Ryan Prize.

14. “Miners for a Day” project.

15. Inauguration of the electricity workshop at the Colina high school – November 2009.

16. Commitment to the sustainable development of the El Melón mountain range is signed – December 2009.

17. Results 2008 – February 2009.

18. Results 2009 – July 2009.

19. January to December 2009 press reports – 360 press articles in total.

CorPorAte BroCHureS

1. Mantos Blancos.

2. Los Bronces.

FeeDBACk FroM tHe jury iN tHe BeSt SuStAiNABility rePort CoNteSt oF ACCiÓNrSe

1. Jury assessment.

2. Sustainability report analysis report.

3. Analysis of the content of Anglo American’s report.

StuDieS

1. Quantitative study report- Diagnosis of the degree of knowledge and opinion of Anglo American by university students – Datavoz.

2. Corporate Reputation Forum – Reptrack – Reputation Institute.

3. Reputation Institute qualitative study.

4. Corporate Reputation tracker - Reputation InstituteWomen and Work Barometer: Why do Chilean women still account for a low share of the workforce?(ComunidadMujer study series, June 2009).

PreSeNtAtioNS

1. Positioning and corporate reputation studies – October 2009.Anglo American in Chile: Improving Our Quality of Life (October 2009).

2. Best Companies for Working Parents: 2009 assessment (Fundación Chile Unido, YA magazine of El Mercurio newspaper and Feedback Comunicaciones - September 2009).

3. New Anglo Copper organisation (December 2009).

4. Anglo Base Metals – Copper: Unlocking value from a world-class deposit (October 2009).

keyNote SPeeCHeS

1. Cynthia Carroll: “Addressing the mining industry’s challenges” (speech at the XIII annual dinner of Latin American mining, Santiago, Chile, 2 April 2009).

otHerS

1. Internal Anglo American magazine Nº25.

2. Internal Anglo American Magazine Nº26.

3. 360 national and local press articles.

Appendix 3 Sources of Information for the Anglo American Sustainability Report 2009

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150. 151.

STRATEGY AND ANALYSIS

1.1 Statement from the most senior decisionmaker of the organisation.

P2 4 and 5

1.2 Description of key impacts, risks, and opportunities.

P10 4 and 5

ORGANISATIONAL PROFILE

2.1 Name of the organisation. P10 8

2.2 Primary brands, products, and/or services. 24, 25

2.3 Operational structure of the organisation,including main divisions, operating companies,subsidiaries, and joint ventures.

16 - 25

2.4 Location of organisation’s headquarters. 8, 13 and 23

2.5 Number of countries where the organisation operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report.

16 - 28

2.6 Nature of ownership and legal form. 34 - 36 and 147

2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries).

26 - 28

2.8 Scale of the reporting organisation. 23 y 26 - 28

2.9 Significant changes during the reporting period regarding size, structure, or ownership

There were no major changes.

2.10 Awards received in the reporting period. 8, 48, 49 and 72

REPORT PARAMETRES

rePort ProFile

3.1 Reporting period (e.g., fiscal/calendar year) for information provided.

P1 8

3.2 Date of most recent previous report (if any). P1 8 - 9

3.3 Reporting cycle (annual, biennial, etc.). P1 8 - 9

3.4 Contact point for questions regarding the report or its contents.

P1 Cover

rePort SCoPe AND BouNDAry

3.5 Process for defining report content. P1 8 - 9

3.6 Boundary of the report. P1 8 - 9

3.7 State any specific limitations on the scope or boundary of the report.

P1 8 - 9

3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organisations.

P1 8 - 9

3.9 Data measurement techniques and the bases of calculations.

8 - 9

3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement.

It is reported when there are changes to the data registry.

3.11 Significant changes from previous reporting periods in the scope, boundary, or measurementmethods applied in the report.

Reported in footnotes or notes.

3.12 Table identifying the location of the standard disclosures in the report.

150 - 155

3.13 Policy and current practice with regard to seeking external assurance for the report.

P2 8 - 9 and 146

REPORT PARAMETRES

GoVerNANCe, CoMMitMeNtS, AND eNGAGeMeNt

4.1 Governance structure of the organisation. 34 - 36

4.2 FIndicate whether the Chair of the highest governance body is also an executive officer.

34 - 36

4.3 For organisations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members.

They are all executives of Anglo American.

4.4 Mechanisms for shareholders and employees toprovide recommendations or direction to thehighest governance body.

34 - 36

4.5 Linkage between compensation for membersof the highest governance body, seniormanagers, and executives.

34 - 36

4.6 PProcesses in place for the highest governancebody to ensure conflicts of interest are avoided.

35 - 38

4.7 Process for determining the qualifications and expertise of the members of the highestgovernance body for guiding the organisation’s strategy on economic, environmental, and social topics.

34 - 38

4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation.

18 - 19 and 34 - 38

4.9 Procedures of the highest governance body for overseeing the organisation’s identification and management of economic, environmental, and social performance.

34 - 36

4.10 Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social performance.

It is not assessed due to the characteristics of the boards.

CoMMitMeNtS to eXterNAl iNitiAtiVeS

4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organisation.

P7 Environmental and Safety Policy.

4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organisation subscribes or endorses.

48 - 103

4.13 Memberships in associations. 12 and 21

StAkeHolDer eNGAGeMeNt

4.14 List of stakeholder groups engaged by the organisation.

P10 20

4.15 Basis for identification and selection of stakeholders with whom to engage.

P10 20

4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group.

P10 20 - 21

4.17 Key topics and concerns that have been raised through stakeholder engagement, and how theorganisation has responded to those key topics and concerns, including through its reporting.

P10 9, 66 - 79

iNDiCAtor DeSCriPtioN rePort leVel

GloBAl CoMPACt PriNCiPleS

iCMM PriNCiPleS PAGe iNDiCAtor DeSCriPtioN rePort leVel


iCMM PriNCiPleS PAGe

Global Reporting Initiative (GRI) Index

ECONOMIC PERFORMANCE INDICATORS

DMA Disclosure on Management Approach. 36

ECONOMIC PERFORMANCE

EC1 Direct economic value generated and distributed. P9 39 - 41

EC2 Financial implications and other risks and opportunities for the organisation’s activitiesdue to climate change.

P7 82 - 85

EC3 Coverage of the organisation’s defined benefit plan obligations.

39

EC4 Significant financial assistance received from government.

P9 42

*Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial.*Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial.

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152. 153.

*Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial.*Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial.

MARKET PRESENCE

EC5* Range of ratios of standard entry level wage compared to local minimum wage atsignificant locations of operation.

P1 61

EC6 Policy, practices, and proportion of spendingon locally-based suppliers at significantlocations of operation.

P9 106 - 109

EC7 Procedures for local hiring and proportionof senior management hired from the local community at locations of significant operation.

P6 For the first time the CEO is Chilean.

INDIRECT ECONOMIC IM PACTS

EC8 Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial, inkind,or pro bono engagement.

66 - 79

ENVIRONMENTAL PERFORMANCE INDICATORS

DMA Disclosure on Management Approach. 36 and 83

eNViroNMeNtAl PerForMANCe

EN1 Materials used by weight or volume. P8 P6 101

EN2 Percentage of materials used that are recycledinput materials.

P8, P9 P6 102 and 113

EN3 Direct energy consumption by primary energysource.

P8 P6 84 and 99

EN4 Indirect energy consumption by primary source. P8 P6 99

EN5* Energy saved due to conservation andefficiency improvements.

P8, P9 84 and 99

EN8 Total water withdrawal by source. P8 85, 86, 90, 92, 94, 95 and 100

EN9* Water sources significantly affected bywithdrawal of water.

P8 85, 86, 90, 92, 94, 95 and 100

EN10* Percentage and total volume of waterrecycled and reused.

P8, P9 85 - 100

EN11 Location and size of land owned, leased,managed in, or adjacent to, protected areasand areas of high biodiversity value outsideprotected areas.

P8 P7 89, 91 and 101

EN12 Description of significant impacts of activities,products, and services on biodiversity inprotected areas and areas of high biodiversityvalue outside protected areas.

P8 89, 91 and 101

EN13* Habitats protected or restored. P8 89, 91 and 101

EN14* Strategies, current actions, and future plansfor managing impacts on biodiversity.

P8 P7 89, 91 and 101

MM1 Amount of land disturbed or rehabilitated. 101

MM2 The number and percentage of total sites identified as requiring biodiversity management plans according to stated criteria, and thenumber (percentage) of those sites with plans in place.

89, 91 and 101

SOCIAL PERFORMANCE INDICATORS

DMA Disclosure on Management Approach. 36, 49 and 67

lABor PrACtiCeS AND DeCeNt Work PerForMANCe iNDiCAtorS

LA1 Total workforce by employment type,employment contract, and region.

P3 62 - 63

LA2 Total number and rate of employee turnoverby age group, gender, and region.

P6 P9 62 - 63

LA3* Benefits provided to full-time employees thatare not provided to temporary or part-timeemployees, by major operations.

P9 60

LA4 Percentage of employees covered bycollective bargaining agreements.

P1, P3 P3 61

LA5 Minimum notice period(s) regardingoperational changes, including whether it isspecified in collective agreements.

P3 P3 61

MM4 Number of strikes and lockouts exceeding one week’s duration, by country

There were no strikes.

LA6* Percentage of total workforce represented informal joint management–worker health andsafety committees that help monitor and adviseon occupational health and safety programes.

P1 P5 100%

55

LA7 Rates of injury, occupational diseases, lostdays, and absenteeism, and number of workrelated fatalities by region.

P1 P5 52 - 55

LA8 Education, training, counselling, prevention,and risk-control programes in place to assistworkforce members, their families, or community members regarding serious diseases.

P1 50 - 55

ENVIRONMENTAL PERFORMANCE INDICATORS

eNViroNMeNtAl PerForMANCe

EN16 Total direct and indirect greenhouse gasemissions by weight.

P8 P6 84, 85, 95, 99

EN17 Other relevant indirect greenhouse gasemissions by weight.

P8 P6 99

EN18* Initiatives to reduce greenhouse gasemissions and reductions achieved.

P7, P8, P9 P6 84, 85

EN19 Emissions of ozone-depleting substances byweight.

P8 P6 95

EN20 NO, SO, and other significant air emissions bytype and weight.

P8 P6 99

EN21 Total water discharge by quality anddestination.

P8 P6 93, 96, 103

EN22 Total weight of waste by type and disposalmethod.

P8 89, 93, 101 and 102

EN23 Total number and volume of significant spills. P8 P6 101 and 103

MM3 Total amounts of overburden, rock, tailings, and sludges presenting potential hazards.

89 and 101

EN28 Monetary value of significant fines and totalnumber of non-monetary sanctions for noncompliance.

P8 P6 83

EN29* Significant environmental impacts oftransporting products and other goodsand materials used for the organisation’soperations, and transporting members of theworkforce.

P8 97

EN30* Total environmental protection expendituresand investments by type.

P7, P8, P9 44

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Global Reporting Initiative Index


154. 155.

Global Reporting Initiative Index

* Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial.*Additional indicator of the G3. The indicators that are not in the index were considered to be immaterial.


lABor PrACtiCeS AND DeCeNt Work PerForMANCe iNDiCAtorS

LA10 Average hours of training per year per employee by employee category.

57

LA11* Programes for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings.

56, 58

LA12* Percentage of employees receiving regularperformance and career development reviews.

100%

LA13 Composition of governance bodies andbreakdown of employees per categoryaccording to gender, age group, minority group membership, and other indicators of diversity.

P1, P6 P3 63

LA14 Ratio of basic salary of men to women by employee category.

P1, P6 61

HuMAN riGHtS

HR1 Percentage and total number of significantinvestment agreements that include humanrights clauses or that have undergone humanrights screening.

P1, P2, P3, P4,

P5, P6

P3 109

HR2 Percentage of significant suppliers andcontractors that have undergone screeningon human rights and actions taken.

P1, P2, P3, P4,

P5, P6

P3 109 - 111

HR4 Total number of incidents of discriminationand actions taken.

P1, P2, P6 P3 There were no incidents.

HR5 Operations identified in which the right toexercise freedom of association and collectivebargaining may be at significant risk, andactions taken to support these rights.

P1, P2, P3 P3 61

HR6 Operations identified as having significant riskfor incidents of child labour, and measures taken to contribute to the elimination of child labour.

P1, P2, P5 P7 18 - 19

HR7 Operations identified as having significant riskfor incidents of forced or compulsory labour,and measures to contribute to the eliminationof forced or compulsory labor.

P1, P2, P4 P8 18 - 19

HR8* Percentage of security personnel trainedin the organisation’s policies or proceduresconcerning aspects of human rights that arerelevant to operations.

P1, P2, Security guards receive training on the Voluntary Principles on Security and Human Rights.

HR9 Total number of incidents of violations involvingrights of indigenous people and actions taken.

P2 There were no incidents.

MM5 Total number of operations taking place in or adjacent to indigenous people’s territories, and number and percentage of operations or siteswhere there are formal agreements with indigenous People’s communities.

There are no operations related to indigenous people’s territories.

ProDuCt reSPoNSiBility

PR1 Life cycle stages in which health and safetyimpacts of products and services areassessed for improvement, and percentage ofsignificant products and services categoriessubject to such procedures.

P1 112

PR3 Type of product and service informationrequired by procedures, and percentage ofsignificant products and services subject tosuch information requirements.

P1, P8 112

PR6 Programes for adherence to laws, standards,and voluntary codes related to marketingcommunications, including advertising,promotion, and sponsorship.

112

PR9 Monetary value of significant fines for noncompliancewith laws and regulations concerningthe provision and use of products and services.

There were no fines.

MM12 Programmes and progress relating to materials stewardship.

112 and 113

SoCiety

SO1 Nature, scope, and effectiveness of anyprogrames and practices that assess andmanage the impacts of operations oncommunities.

P1 P4 67 - 79

SO2 Percentage and total number of businessunits analysed for risks related to corruption.

P10 P1 37 - 38

SO3 Percentage of employees trained inorganisation’s anti-corruption policies andprocedures.

P10 P1 18, 38, 39

SO4 Actions taken in response to incidents ofcorruption.

P10 38


SoCiety

SO5 Public policy positions and participation inpublic policy development and lobbying.

P1, P2, P3, P4, P5,

P6, P7, P8, P9, P10

There was no lobbying.

SO7* Total number of legal actions for anticompetitive behaviour, anti-trust, andmonopoly practices and their outcomes.

37

SO8 Monetary value of significant fines and totalnumber of non-monetary sanctions for noncompliance with laws and regulations.

There were none.

MM7 Number (and percentage) of company operating sites where artisanal and small-scale mining (ASM) takes place on, or adjacent to, the site;describe the associated risks and the actions taken to manage and mitigate these risks.

78 - 79

MM9 Number and percentage of operations with closure plans.

101

MM10 Significant incidents involving communities in which grievance mechanisms have been invoked to address them together with theiroutcomes.

There were none.

MM11 Number and description of incidents affecting employees, communities, or the environment in which emergency preparedness procedures wereactivated.

There were none.

rePortiNG leVel

Complete

Partial

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Av. Pedro de Valdivia 291Cp 750 - 0524Providencia, SantiagoChile

Telephone (56 - 2) 230 6000Fax (56 - 2) 230 6551

www.anglochile.cl

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