He Wenbo met Peruvian President Kuczynski

New community

New school

Expanding Presence of ProconElectric SAC

A delegation of the Central Government headed by the Minister of Mines of Peru, the Minister of Environment of Peru, the Minister of the Interior of Peru, the Minister of Housing, Construction and Sanitation of Peru and three deputy ministers went to Cotabambas Coyllurqui, Apurimac to talk with relevant community leaders and reached consensus

A delegation of the Central Government headed by the Minister of Mines of Peru, the Minister of Environment of Peru, the Minister of the Interior of Peru, the Minister of Housing, Construction and Sanitation of Peru and three deputy ministers went to Cotabambas Coyllurqui, Apurimac to talk with relevant community leaders and reached consensus

On September 13, Minmetals Chairman and Leading Party Group Secretary He Wenbo was invited to meet Peru’s new President Pedro Pablo Kuczynski who was on a state visit to China. He Wenbo briefed President Kuczynski on the latest progress of Las Bambas Copper Mine. Driven by the production of Las Bambas Copper Mine, Peru has become the world’s second largest copper producer. With a contribution to Peruvian GDP of 1.4 percentage points, Las Bambas Copper Mine has not only created a large number of direct and indirect jobs, but also become the engine of local economic development in Peru. Minmetals will promote its local business and faithfully fulfill its corporate social responsibility as a world-class mining company, and is willing to act as a bridge and messenger for economic and trade exchanges between the two countries and make greater contributions to the further development of China-Peru relations. Kuczynski followed closely the production and operation of Las Bambas Copper Mine and pledged his support and guarantee for the development of the Minmetals North Peru Copper Mine Project.

Chairman He talked of “faithful fulfillment of corporate social responsibility”. What’s its impact on the successful operation of the project of Las Bambas Copper Mine? In fact, the harmonious community program is of great significance to mining development and operation. Here, I would like to introduce in detail how overseas responsibility fulfillment has contributed to the successful operation of the project. Located in the south-central part of Peru, the Las Bambas project is currently the largest copper mine development project in the world. On July 31, 2014, led by MMG Limited, China Reform International Investment Co., Ltd. and CITIC Metal Co., Ltd. formed the “Minmetals Consortium” to complete the equity transfer of Las Bambas Copper Mine Project for USD 7 billion. As of late June 2016, the project had an accumulative total of 87,000 tons of copper concentrates. It is expected that a total of 450,000 tons of copper concentrates will be produced in the first five peak years. The successful operation of Las Bambas Copper Mine marks an important step for Minmetals to become Asia’s largest and one of the world’s top 10 copper producers. It not only can help Minmetals to improve its right to speak in the global metal market, but also will significantly enhance China’s capabilities to secure copper resources.

In the development of the project, following the sustainability philosophy of “cherishing limited resources and pursue sustainable development”, Minmetals has put social responsibility investment first, striven for common development with local communities, and acted as a role model for the performance of corporate social responsibility, laying a solid foundation for the successful operation of the project. In 2015, the project invested USD 53.6 million in community building, in an effort to create the greatest value for shareholders, local communities, localities and the country through current business decisions, cooperation with the localities and strategic investment.

Building New Communities for Mining Area Residents

For the world’s largest copper mine development project, the Las Bambas Mining Area fully analyzed and evaluated the potential impacts of mining development on community residents and made great efforts to minimize community risks and negative impacts of the project. To this end, in 2010, Las Bambas Project company developed the community development and livelihood rehabilitation program, surveyed about 31 surrounding communities, and talked with these communities and made investments in main areas that may impact community reconstruction: family, economic and psychological factors. Through consultations with the local government and community residents, Las Bambas Mining Area developed the new community construction program, and decided to rebuild communities to resettle residents in Nueva Fuerabamba. In 2010, the company signed a cooperation agreement with the local community residents. Through systematic urban planning for housing construction in Nueva Fuerabamba, the Las Bambas Mining Area provided electricity, water and public health services to meet the needs of the residents. In late 2014, the project started to move eligible residents from Fuerabamba Community to the new Nueva Fuerabamba Community. The town is fully equipped with a complete variety of modern amenities, including tap water, sewage collection/treatment, medical, educational and recreational facilities. By the end of 2015, 608 families had been successfully resettled. In 2015, MMG provided the land use compensation in the amount of USD25.4 million, 88% of which was used under the resettlement agreement.

Implementing Life Rehabilitation Program (LRP)

In order to help restore and improve the living standards of the relocated families and their descendants, MMG developed the Life Rehabilitation Program (LRP) to grant the following five priority rights to them: capacity building, income security (employment/business Development), natural resources, health and education. In 2015, a specific development program was developed for the Nueva Fuerabamba community, covering 13 priority areas including health, education, land, livestock, agriculture, employment, economic development, support for vulnerable groups, natural resources, organizational strengthening, capacity Building, education infrastructure and health.

The investment and construction of Nueva Fuerabamba and the proper resettlement of local residents have been hailed as a milestone in the history of Peru's copper mining industry and the best practice case of mutual understanding and support between businesses and communities.

Developing Local Entrepreneurship Development Program

In 2011, Wildor Berrios Carrasco and his brother co-founded “Procon Electric SAC”, an electrical repair company. Previously, he had been involved in the “Local Entrepreneurship Development Program” developed by Las Bambas Project. In the four years of business, ProconElectric SAC increased its number of employees by nearly 10 times and its operating capital by nearly 75 times. Half of Mr. Berrios’s turnover was contributed by Las Bambas Project in 2015. During the cooperation, MMG has always offered management and marketing advice to Mr. Berrios. Such device has not only consolidated his presence in the local area, but also helped him expand his business to neighboring Bolivia. Mr. Berrios also hoped to pass the ISO9001 quality system certification and become the preferred electric contractor in Peru and Bolivia.

Properly Handling Community Protest

In 2015, there was a peripheral community protest against the project. Soon after the event, Minmetals started the rapid response mechanism, set up an emergency working group, and assign top managers to the site for emergency command and coordination. Thanks to the proper handling and fast and timely response of the front team as well as the strong support of the Peruvian government, the event was properly resolved in a short period of time and the normal community relations restored. In the wake of the event, the Las Bambas Project Team established the schedule of dialogue with the Peruvian government and local communities, strengthened communication with local stakeholders and established continuous dialogues. In the face of the emergency, Minmetals has properly handled the event through a fast and efficient response mechanism and timely and correct measures. Minmetals has been affirmed and recognized by the Peruvian government and relevant Chinese ministries and commissions for its powerful crisis management capability and emergency management mechanism for Las Bambas Project.

The building of benign community relations has cleared obstacles for the smooth progress of Las Bambas Project. It entered the phase of trial operation in January 2016. The first batch of 10,000 tons of copper concentrate arrived in China in March; the project was fully put into operation in late June and put into commercial production and entered the phase of smooth operation in July. An article published internally by a national ministry hailed the Las Bambas Project led by Minmetals as “a world leader in the following four aspects”: first, a world leader in single mineral production capacity, making it among the world’s top five copper production projects. Second, a world leader in mine construction standards and management level. In spite of untold difficulties including community resident protests, Minmetals has managed to complete the project on schedule and within the budget. Third, a world leader in operating cost advantages. With a cash cost of only USD 0.8-0.9/lb copper, it is still cost-competitive at a time of low copper prices. Fourth, a world leader in productivity increase efficiency at the phase of trial operation. It achieved the transition from putting into production to reaching the designed production in a short span of less than 6 months.