Annual Report 2003 - Antofagasta plc

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Corporate Social ResponsibilityGeneral BackgroundThe Group recognises and takes into account the social and environmental impact of its activities in theconduct of its operations. This report sets out the key principles and practices adopted by the Group in theareas of environment, community relations, health and safety, and human resources.The mining, transport and water operations of the Group are subject to a variety of legal and regulatoryrequirements in Chile. The Group’s policy is to meet or exceed the minimum standards imposed, taking intoaccount social or environmental factors specific to each of its operations. Although this is the first reportthe Group has published in the area of corporate social responsibility, it has followed this approach for anumber of years. For example, the Railway has implemented ISO 9001/2000 in the transportation andwarehousing of copper and sulphuric acid, while Los Pelambres has voluntarily created a nature sanctuaryin an area of high environmental interest which it owns.EnvironmentThe Group seeks to minimise the impact of its projects and activities on the environment. It aims to ensurethat environmental considerations are taken into account by all employees as part of its normal operations.Each of the Group’s operations has an environmental management system which takes into account itsparticular circumstances and location, to ensure compliance with its environmental commitments and toenable a process of continuous improvement.Each of the Group’s mining operations has obtained the necessary approvals for their existing operationsfrom the relevant regional environmental authorities. These include both permissions for the original projectat each operation as well as subsequent modifications, for example the expansion of ore treatment atLos Pelambres from the original 85,000 tonnes per day (tpd) level to the current 114,000-120,000 tpd, andthe increase in the capacity of the Quillayes dam, both of which were obtained in 2002.ANTOFAGASTA PLC Annual Report and Financial Statements 200326Monitoring processes are in place at the Group’s operations to ensure compliance with obligations imposedas part of the environmental approval process. These processes are directed towards protection of localflora and fauna, as well as the quality of renewable natural resources, such as water, air and soil. Particularactivities include the satellite monitoring of guanacos in the Andean high plateau where Los Pelambresoperates. In the Los Vilos municipality, the Conchali Lagoon, a wetland of great biodiversity, was declared anature sanctuary. It is protected and financed by Los Pelambres, which organises periodic visits to the areaby community and student groups for scientific interest and study.Results of the monitoring processes are regularly communicated to the relevant environmental authoritiesas well as to local communities. During 2003, there were no environmental incidents recorded by any ofthe Group’s operations which resulted in fines or legal claims for environmental damage.Each of the Group’s mining operations has a formal closure plan, which takes into account the need fordismantling of facilities, site rehabilitation, subsequent environmental monitoring and other obligationseither imposed by the environmental authorities or voluntarily assumed by the Group. The Group accountsfor these closure costs in its financial statements based on the present value of the estimated future costsof such obligations.
As explained in the Chairman’s Review, Los Pelambres submitted an Environmental Impact Assessment (EIA)in May 2003 to the Regional Commission of the Environment (COREMA) for Chile’s Fourth Region. Thissought to increase Los Pelambres’ ore reserves to 2.1 billion tonnes and to allow a potential expansionof its Concentrator from the current 120,000 tpd level up to 175,000 tpd. The EIA included permission tobuild the Mauro tailings dam in place of the alternative dams at Quebrada Seca and Las Lajas, as well aspermission for new waste dumps near the existing site. The EIA formed a critical element of Los Pelambres’development plans.The approval process for the EIA included a detailed 60-day community participation phase, including aseries of well-attended public meetings and publicising information about the EIA through local media andpublications. Los Pelambres also conducted over 40 community meetings in advance of submitting the EIAto ensure concerns and suggestions were taken into account and factored into the process at an early stage.As a result, Los Pelambres responded to over 1,200 technical questions regarding different aspects of itsdevelopment plans.The principal mitigation and compensation measures Los Pelambres has undertaken include:■Transplanting of fertile soil from the proposed waste dump areas;■Designating sites of high environmental interest as nature sanctuaries;■Restoration of affected woodland;■Protection of flora and fauna in the area of the proposed El Mauro tailings dam;■Creation of a park and an exhibition area for local archaeology;■Provision of technical and financial support to the fishing communities in the port area;■Construction of a mining and tourism information centre at Los Vilos, where the port is located;■Implementation of training programmes for local communities; and■Construction of a traffic by-pass at the city of Illapel, including a bridge over the Illapel River.COREMA approved the EIA in March 2004 substantially on the all terms requested by Los Pelambres.Community RelationsThe Group recognises the impact of its activities on neighbouring communities and seeks to ensure thatrelations are on the basis of mutual trust, respect and co-operation. It also seeks to ensure that itscontribution is specific to the area in which each of its companies operate.Michilla and El Tesoro are located in the sparsely-populated area of the Second Region in northern Chile,where local communities are heavily involved in the mining industry. Michilla’s activities are principallyfocused on the smaller independent miners operating in the vicinity, which supply it with part of its orerequirements. El Tesoro provided electricity supply to the nearby town of Sierra Gorda during theconstruction period of the mine.ANTOFAGASTA PLC Annual Report and Financial Statements 200327
Page 1 and 2: Copper 1 a malleable ductile reddis
Page 3 and 4: Highlights 2003Total copper product
Page 5 and 6: Selected Financial and Operating Da
Page 7 and 8: consumption and low interest rates
Page 9 and 10: y an amount equivalent to 16.3 cent
Page 11 and 12: Selected Data for Mining Operations
Page 13 and 14: Exploration Projects - 2004KEYMININ
Page 15 and 16: FCAB Rail NetworkKEY85-90 POUND RAI
Page 17 and 18: Demerger of Quiñenco S.A.Following
Page 19 and 20: Cash Costs and Realised Copper Pric
Page 21 and 22: In 2003, sales of copper concentrat
Page 23 and 24: The Group’s borrowings relate mai
Page 25 and 26: Acquisition of Water ConcessionIn N
Page 27: Balance SheetThe Group’s balance
Page 31 and 32: The Group also commenced a process
Page 33 and 34: Mining Reserves and ResourcesAt 31
Page 35 and 36: DirectorsThe Directors who served d
Page 37 and 38: Special Business at the Annual Gene
Page 39 and 40: Corporate GovernanceThe Board of Di
Page 41 and 42: c) Relations with ShareholdersThe E
Page 43 and 44: Report on Remuneration and Related
Page 45 and 46: Between 8 March 2004 and 30 April 2
Page 47 and 48: In addition, the Group paid Jara de
Page 49 and 50: Basis of Audit OpinionWe conducted
Page 51 and 52: Consolidated Statement of Total Rec
Page 53 and 54: Parent Company Balance SheetAt 31 D
Page 55 and 56: Notes to the Financial Statements1
Page 57 and 58: 1 Accounting Policies (continued)De
Page 59 and 60: 1 Accounting Policies (continued)s)
Page 61 and 62: 2 Segmental Information (continued)
Page 63 and 64: 2 Segmental Information (continued)
Page 65 and 66: 5 Directors’ Remuneration2003 200
Page 67 and 68: 7 Dividends 2003 2003 2002 2002cent
Page 69 and 70: 11 Tangible Fixed AssetsLand Buildi
Page 71 and 72: 12 Investment in Subsidiaries (cont
Page 73 and 74: 14 StocksGroup Group2003 2002US$m U
Page 75 and 76: 17 Loans (continued)b) (continued)U
Page 77 and 78: 18 Financial Instruments and Risk M
Page 79 and 80:
18 Financial Instruments and Risk M
Page 81 and 82:
20 Called Up Share Capital (continu
Page 83 and 84:
22 Notes to the Consolidated Cash F
Page 85 and 86:
23 Acquisition (continued)The asset
Page 87 and 88:
24 Demerger of Andsberg Limited (co
Page 89 and 90:
28 Ultimate Parent CompanyAt 31 Dec
Page 91 and 92:
2003 2002 2001 2000 1999Consolidate
Page 93 and 94:
a) will expire 15 months after the
Page 95 and 96:
f) Article 83 be amended by inserti
Page 97 and 98:
A notice given under this Article 1
Page 99 and 100:
Produced by Royle Financial Print L
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Annual Report 2003 - Antofagasta plc

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