Minmetals Resources Limited 2011 Sustainability Report (PDF)

Realising the full value of assetsExtracting the maximum value from our current assetswill be a key driver in delivering sustainable economicperformance.In 2011, our mining assets performed within costguidance for both production and operating costs.Stand-out results were seen at our Sepon copper andgold operation following the completion of the coppercathode expansion project, which has expanded nameplatecapacity from 65,000 to 80,000 tonnes per annum.At Golden Grove, we commenced development of anopen copper pit, above existing underground operations,that will deliver an additional 20,000 tonnes of copper inconcentrate a year from 2012 to 2014.At Rosebery, our exploration programs continued toidentify additional mineral resources and source feed forthe processing plant which this year celebrated 75 yearsof continuous operation. Combined with theestablishment of an innovative sustainable extractionoperation at the nearby South Hercules deposit,Rosebery’s mine life now extends to 2024.While the potential to discover additional discrete-stylemineralisation near our Century mine is effectively testedand current operations are expected to cease in 2016, wecontinue to examine a number of near-mine initiatives foridentification of additional feed for the processing plantfrom smaller vein-style occurrences nearby. The viabilityof using Century infrastructure to exploit the phosphatedeposits that occur on our tenements will be furtherstudied this year. Our aim is to continue to identifyopportunities to unlock the full production potential,and ultimately shareholder value, of our current assets.Product shipping and logisticsAccess to markets for our products is essential tothe sustainability of the business. We work withinfrastructure service providers and regulators toresponsibly maintain access.We use a combination of logistics channels to transportproduct from our mines to customers. This is different ateach site depending on its location and that of its customers.For example, at Century, concentrates are transported inslurry form in a 304-kilometre underground pipeline toour port facility in Karumba, where they are dewatered,loaded onto a barge and transported and transferred todeep-water export vessels at sea. At Sepon, located inLaos, a land-locked country, copper cathode is transportedby truck to customers in Thailand, Vietnam and China.Unique product stewardship and material-handlingchallenges are present along all logistics chains as outlinedin the “Product stewardship” section of this report.CASE STUDY: Acquisition of Anvil MiningOn 19 March 2012 we completed the acquisitionof Anvil Mining Limited (“Anvil”). Anvil’s copperoperations are an excellent fit with our strategy tobuild an upstream base metals company. The key assetacquired is 95% of the Kinsevere copper operation and a70% interest in the Mutoshi development project, bothlocated in the southern Katanga province of theDemocratic Republic of Congo (DRC).Now the acquisition is complete, our immediate focusand challenge is to integrate the Anvil operations intoour business. Integration is a demanding phase for boththe acquirer and the target company. A project team hasbeen deployed to identify, transition and integrate Anvil’sbusiness processes, systems and standards into MMG.Our focus will be to extend MMG’s safety, health,environment and community management systems tothe Anvil operations.Copper cathode production at Kinsevere operationsin the DRC have been impacted by power supply issuescaused by unexpected network outages within theKatanga region. A combination of low water levelsin hydro-electricity systems, infrastructure failure andinability to access power from neighbouring Zambiahas led to an extended period of no, or limited, powerallocation to the Kinsevere site. We continue to workclosely with site management and electricity providers inthe DRC and Zambia to improve the reliability of supply.In addition, plans are under way to provide a level oftemporary on-site generation to ensure that Kinseverecontinues to ramp up effectively.In addition, we recognise that the geopolitical riskspresent in the DRC will be a challenge in the future.Anvil made significant investments in the localcommunity supporting the establishment of schools,local businesses, health programs and other socialinvestment projects. We intend to continue this supportfor the local community to ensure the benefits of themine’s operations flow back to the local community.70