CESCO DINNER 2010 SPEECH Jean Paul Luksic CEO of ...

Good evening,
CESCO DINNER 2010 SPEECH
Jean Paul Luksic
CEO of Antofagasta Minerals
1
Santiago, April 8 th, 2010.
I would like to especially express my thanks for the invitation that
Cesco has extended to me to participate as a speaker in the
organization’s fourteenth annual encounter.
A few weeks ago, the majority of Chileans thought that the great
hallmark of the year 2010 would be the celebration of Chile’s
bicentenary as an independent nation. We were arriving to this
landmark date as a vigorous country, full of energy, projects and
with a dynamism that promised to take us soon to the
achievement of the longed for goal of becoming a developed nation.

However, 40 days ago the forces of nature struck us with special
harshness and determined that 2010 is now to go down in the
history of our country, not only for being the bicentenary year, but
also as the year of one of the earthquakes and tsunamis of
greatest magnitude in memory and on record.
I make this reflection for two reasons. This is first of all because I
am Chilean and as such I feel deeply affected by the loss of so
many human lives and the collapse, in the space of just a few
minutes, of so many personal and family projects.
Second, because as a miner I feel committed with the process of
reconstruction, especially because our industry was not directly
affected and we have skills that can be a valuable contribution in
these troubling times.
I have no doubts that mining is destined to be a relevant driver in
the task of reconstructing the country and will have a key
2

presence, as it always has, in contributing to the development of
Chile
Right from the beginning, different mining companies have
supported the regions affected with different initiatives.
In our case, we have decided to participate by contributing our
management and experience as well as financial resources.
After only a few hours had gone by since the earthquake struck on
27 February, we arrived on the scene at Curepto, one of the most
devastated localities of the Maule Region.
In addition, our companies are committed to the support of the
reconstruction of the artisanal fishing sector of the Seventh Region
and to helping out on the development of infrastructure for
tourism, which has been practically nonexistent up until now.
3

I trust that after this bicentenary earthquake, Chile will get back
on its feet as a more prosperous, stronger and more united
country. The mining industry has an important role to fulfil in this
task.
_________________________________________________________________
As we all know, perhaps as a result of the isolated nature of our
activity miners are silent people by nature. We almost always work
far away from the large cities in the high cordillera of the Andes
Mountains or in the desert, where nature takes the upper hand
over man. And maybe that is why we are viewed as being distant.
But mining has forever been strongly intertwined with our
progress: mining has been and will continue being a fundamental
driver to leverage the development of Chile.
4

Chile is a small country in the international concert. We have
barely 0.6% of the world’s land area. We represent only 0.3% of
the world population and merely another 0.3% of global income.
But in terms of mining, ours is a country of gigantic proportions:
we contribute 34% of all world copper production; we have 100%
of all natural nitrates, 60% of all iodine and 62% of all lithium.
Thanks to copper, we have started this century converted into a
strategic actor of the international mining map. A look at the
industry shows figures that clearly disclose our weight in the
destiny of our country.
Copper in 2008 contributed fully 18% of the Chilean GDP, and we
continue being the principal economic activity en Chile, with
investment projects amounting to 45 billion dollars envisioned
between now and 2017.
5

Our industry provides jobs for more than one-hundred thousand
persons, which when added to indirect employment and jobholder
family members, accounts for 15% of the total population of the
country.
We are also the production sector that provides the highest level of
payroll compensation, something which makes possible the fact
that the Antofagasta Region, for example (which is an eminently
mining region) has the highest average income of any region in
Chile.
More than 50% of all ocean freight of Chilean exports consist of
mining products, and copper mining companies are the country’s
main taxpayers, accounting for 25% of all government revenue.
But the development of mining we have achieved has not been a
random occurrence. We are the result of a long history, coloured
by cycles of high and low prices, but in which the efforts expended
6

in prospection and exploration have been continual and
constantly ongoing.
Without mining exploration work this industry cannot continue to
grow. Because of this we need to take care of the discoverers,
those small and medium miners that Chile cannot afford to forget;
quite to the contrary, they need to be incentivized and supported.
As an industry, we have maintained sustainable mining, we have
implemented new technologies and, above all, we have highly
skilled human capital to rely on. It is to be specially noted that
Chilean universities continue preparing professionals for mining
and, although a development going against the current of world
trends, a new school of engineering of mines has even been
opened up by Catholic University of Chile.
As miners, we are proud of the achievements we have made. This
is an activity that is characterized by sizeable investments, high
7

isks and long payback periods. All of these accomplishments
have been possible within the context of a country with a
responsible economic policy, a robust institutional framework, and
a soundly stable democracy. To put it in just a few words: clear,
stable and permanent game rules.
Antofagasta Minerals and its companies faithfully mirror the
successful development of our country, and mining in particular.
Maintaining and increasing the success achieved is our future
challenge.
We enthusiastically undertake the new challenges posed for us by
modernity and the twenty-first century. We shall continue
generating economic, social and environmental value in the areas
where our operations have been materialized. We shall deepen our
relations of trust with nearby communities, indigenous peoples
and society as a whole.
_______________________________________________________________
8

On the international scene, the outlook is promising for the sector.
The large developed economies are showing signs of recovery; in
addition, the world’s new giant economy, China, and the needs of
new emerging nations, enable us to forecast that the demand for
minerals in general will continue being strong, as will the demand
for copper in particular.
We look toward the future with optimism.
All of us who are part of this industry have the task of continuing
the development of innovations and technologies to make
profitable deposits that are increasingly deeper seated and with
lower grades, and where recourses so vital as energy and water
become increasingly scarce.
Added to the above is the challenge of exploring and operating in
countries that do not have any mining history of their own.
9

Many of the new deposits are located in jurisdictions that involve
greater risks and discretionalities, where infrastructure, roads and
ports are lacking for adequately undertaking mining
developments. It is essential for societies and governments to
value the importance of legal, political and economic stability for
investments in general, and especially for investments in mining.
Mining and metals are an essential part of our daily lives.
Finally, as Antofagasta Group, we trust in our capacity to
surmount all of these challenges and because of this we are
embarked on a fascinating process of growth in Chile and
elsewhere, taking on additional explorations and projects in Asia,
Africa and North America.
In the next ten years, we expect to be major actors on the world
large-scale copper mining scene, taking the name of Chile, our
people and our way of doing mining to places overseas.
10

Thank you very much.
11