Agenda
Project Development Division Overview and Team
Project development challenges
Xstrata - Bechtel Strategic Alliance
Standard Concentrator
Other Supplier Alliances
JV Expansions (briefly) – Collahuasi – Antamina
Project Development Division Overview
Project Development South America Region – Antapaccay Project in EPC/EPCM Execution – Las Bambas Project in EPC/EPCM Execution – El Pachon Project in Final Feasibility Study Update – Agua Rica Project in Feasibility Study – Lomas Bayas III Project in Pre-Feasibility Study – Coroccohuayco Project in Scoping Study – JV Support (Antamina Expansion Projects & Collahuasi Phase I, II and
III Projects)
Project Development Asia Pacific Region – Tampakan Project in Interim Engineering Phase – Frieda River Project in Feasibility Study
Project Development South America team
Project Teams in PDSA Antapaccay - Project Director Max
Combes Las Bambas - Project Director Joe
Albright El Pachon - General Manager Xavier
Ochoa Agua Rica - GM Studies Dave Dicaire Antamina and Collahuasi JVs - GM JV
Support Tony Maycock
Core team common support across all projects General Manager Finance Finance Managers Project Services Manager SD Manager HR Manager
Overall organisation led by Bob Drabik, Executive General Manager PDSA
Project development challenges
Xstrata Copper recognized many of the key project development challenges in 2007
– Social licence and community relations – Government relations – Environmental and Social Impact Assessments – Permits to construct and access areas – Remote locations to build in and get people and equipment to – Simultaneous projects in execution – Massive infrastructure development requirements – Availability of sufficient resources to design and build projects – Sufficient project management skills – Availability of materials and equipment to support projects – Cost pressures as global and regional economies heat up causing
general and mining related escalation Created Project Development Division separate from operations Clear division of responsibility and accountability to deal with challenges
Clear division of responsibilities
South American Operations
EISA application and response
Permits
Community relations
Sustainable development
Government interface
Operational readiness
Production ramp-up
Project Development Division
Engineering, Procurement, Construction
Project controls
Traffic and logistics
Change management
Document management
Quality of workmanship
Quality of performance
Xstrata - Bechtel Strategic Alliance
Established in Q4 2007 10 year Alliance for Replicable Copper Concentrators Studies done or underway to date:
– Standard Concentrator Feasibility Study - completed – Antapaccay Feasibility Study – completed – Las Bambas Feasibility Study - completed – Tampakan Feasibility Study - completed – El Pachon Final Feasibility Study Update - underway – Frieda River Pre-Feasibility Study and Feasibility Study – nearing
completion – Loma Bayas III Pre-Feasibility Study – underway
Projects in Execution to date: – Antapaccay Project – Las Bambas Project
Xstrata - Bechtel Strategic Alliance brings benefits in current environment Secures access to large experienced pool of engineering resources and
experienced project management skills Concurrently supports multiple projects at various development stages Retains key staff from project to project and enhances career
opportunities across projects – plus continuity of people Shift resources from one project to next as required – integrates teams Xstrata Copper currently Bechtel’s major client in South America Consistent approach across all projects – many synergies being captured Replication efficiencies and savings both in time and cost
– Engineering – Procurement – Construction – Commissioning, start-up and ramp-up
Apply lessons learned from one project to next – learning curve Key mitigant for some of the risks other projects are experiencing
Project Development South America has the right people
Experience and depth across all projects
Xstrata Copper team has directly relevant project experience – EGM PDSA – 34 years – PD Las Bambas – 38 years – PD Antapaccay – 16 years – GM El Pachon – 15 years – GM Studies – 30 years – GM JV Support – 39 years – Next level of managers (engineering, commercial, business, project
controls, finance, site) – average over 20 years each of project experience
Bechtel team has key management on our projects that average 25 years experience each
Standard Concentrator – Divided into adjustable modules – Primary crusher, grinding area,
flotation area, concentrate and tailings area, re-grind and filter plant
– Truck shop, warehouse, offices, camps – One grinding line or two grinding lines – Enclosed or open air structures
Each mine is unique, each ore is unique, but:
– Standard Concentrator philosophy applied as default case
– Customize only when adds NPV – Look for opportunities to replicate – Apply where it makes sense
Standard Concentrator - First in copper industry
Standard concentrator basic module
Antapaccay – 70 ktpd plant layout
Standard Concentrator applied to Las Bambas modified from Antapaccay – Antapaccay has one SAG mill, two ball mills, one primary crusher – Las Bambas has two SAG mills, two ball mills, two primary crushers – Flotation circuit for Las Bambas is twice Antapaccay’s in capacity
Next applied to El Pachón – Two SAG mill, four ball mills, two primary crushers, concentrator will be
enclosed for high Andes climatic conditions
Standard Concentrator application
Extract from 3D model Las Bambas Las Bambas 140 ktpd plant layout
Other Supplier Alliances
Alliance approach extended to key manufacturers of equipment – Standardizes equipment across multiple projects – Part of Standard Concentrator approach and philosophy – Cost and time savings through replication – Takes equipment off critical path – Xstrata Copper becomes a major customer, therefore important
First Supplier Alliance established with FL Smidth for all SAG mills, ball mills and primary crushers in Q1 2008
Next Alliance established with Siemens for all mill Gearless Motor Drives
Expanded Alliances where possible and created additional Alliances – Metso for Pebble Crushers and Apron Feeders – Siemens for Gas Insulated Switchgear – FL Smidth for Flotation Cells – Thyssen Krupp Robins for Overland Conveyors – Twenty further Alliances created
Conclusions
Xstrata Copper recognized the project challenges, planned well in advance to execute a number of major projects in South America
Assembled experienced teams with right skills to manage and execute the mega-projects
Xstrata - Bechtel Alliance provides overall project management capabilities, track record, experienced people for replicable copper concentrators
Standard Concentrator replication saves time and money
Innovative Supplier Alliances saves time and money
Xstrata also working with Fluor on Agua Rica adjacent to Alumbrera – Fluor designed and constructed Alumbrera in 90’s – Fluor has provided world class materials handling expertise to project
Agenda
Introduction Copper market update Xstrata Copper overview South American Operations Project Development South America Antamina and Collahuasi expansions
Antapaccay Project Las Bambas Project El Pachón Project Agua Rica Project Conclusions
Coffee break
Joint Ventures Ownership of first tier assets
Location Ancash, Peru Tarapaca, Chile
Xstrata ownership 33.75% 44%
Partners BHP (33.75%) Teck (22.5%) Mitsubishi (10%)
Anglo American (44%) Mitsui & Co. (12%)*
Mineral Resources** 1.9 Bt @ 0.84% Cu 7.0 Bt @ 0.81% Cu
Ore Reserves** 822 Mt @0.93% Cu 2.4Bt @ 0.83% Cu
Life of mine 18 years 44 years
2010 Cu Production: - 100% - Attributable
302 kt 102 kt
504 kt 222 kt
* Group of Japanese companies headed by Mitsui & Co. ** 100% basis, Mineral Resources inclusive of Ore Reserves.
Collahuasi Mineral Resources as of 30 June 2010; Antamina Mineral Resources as of 1 January 2011
Joint Ventures Active management of JV interests
Xstrata Copper approach to managing Joint Ventures
2010 Top ten copper producers by mine (kt Cu)
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400
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1200 Both Antamina and Collahuasi are
independently managed joint ventures
Xstrata Copper is represented on the board of both and actively participates in technical and other steering committees
Xstrata Copper has a full-time team dedicated to Antamina and Collahuasi: − Led by Executive General
Manager JV division, Roberto Darouiche
− Based in Santiago/Lima − Recently appointed a GM
Project Development for JVs with 39+ years project experience reporting to EGM PDSA
Description Phase 2 Project increases concentrator
capacity from 150ktpd to 160ktpd through a series of debottlenecking initiatives
20ktpa additional copper production Indicative Capital Cost: $210M Project Status 6% complete Phase II currently in engineering
phase; project target completion Q2 2013
Unlocking potential of our JV assets Collahuasi – expansion projects in execution
Phase 1 Expansion Project Phase 2 Expansion Project
Description Phase 1 Project increases current
concentrator capacity from 140ktpd to 150ktpd
20ktpa additional copper production Indicative capital cost: US$123M Project Status 99% complete Phase I completing Q3 2011
Note: all production and capital cost numbers shown on a 100% basis
Description Addition of 4th or 4th & 5th grinding
lines Concentrate plant capacity expansion
to 270ktpd or 380ktpd Total copper production up to 1Mtpa Status Pre-feasibility study underway,
targeted for completion in Q2 2012 Commissioning targeted for 2017
Unlocking potential of our JV assets Collahuasi – expansion projects in development
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2006 2007 2010
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Copper in resource (100%) Phase 3 Expansion Project
Under construction, expected completion of grinding area Q4 2011
– Mills and gearless motor drives installed as well as mill liners
– Flotation cells installed and majority of structural steel, piping and electrical now in place
66% complete total project (July 2011) Ramping up to full production in 2012
Unlocking potential of our JV assets Antamina – expansion projects in execution
Cu & Zn Floating
Milling
SAG 2 Balls
4
Project scope includes the addition of a second SAG mill and a fourth ball mill to increase throughput
Capacity expanded 38% from current 94ktpd to 130ktpd
Indicative capital cost: US$1.3 billion (100%)
Over 4,900 construction workers on project
Description Project Status
In March 2011, Antamina announced an 18% increase to Mineral Reserves and 44% increase to Mineral Resources
Studies under way for increasing plant capacity further, following completion of 130ktpd expansion project
Initial objective of reaching capacity of over 140ktpd through debottlenecking initiatives
Conceptual study under way for a further major expansion of the existing plant
Unlocking potential of our JV assets Antamina – expansion projects in development
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2007 2010 2011
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Mt
Copper in resource (100%) Future Expansion Potential