Why it matters

Mining operations can have significant environmental impacts and concern for long-term environmental integrity, including climate change impacts, is high and of increasing public interest. Mining involves the alteration of habitats, the use of water and energy resources, the generation of noise and air emissions and of large quantities of waste-rock, spent ore and tailings. Legal permits, the social licence to operate and good community relations all depend on sound environmental stewardship.

Environmental protection is highly regulated in Chile. Mining projects must undergo a stringent environmental impact assessment, including social and heritage aspects. If the project is approved by the National Agency for Environmental Assessment, its impact prevention, mitigation and compensation measures are included in the Environmental Approval Resolution (“RCA”). They become legally-binding and are subject to review by the Environmental Agency. Non-compliance with RCA commitments can result in fines and eventual revocation of the operational permit. In 2015, the Group submitted the EIA for the construction of the Centinela Second Concentrator project.

Water is a scarce and valuable commodity in the centre and north of Chile, particularly in the Choapa Valley near Los Pelambres, which is a key area for agricultural production. Water availability is increasingly affected by changes in the climate and the prolonged drought in central Chile is an ongoing concern.

The Group’s priority is to ensure that it has sufficient water to operate without compromising the quality or availability of water for the local community.

Antofagasta is always looking at ways to minimise the use of continental water resources through increased efficiency and the use of sea water as it does in its Michilla, Centinela and Antucoya operations.

The Group has achieved high water reuse rates of up to 72% at each operation. The remainder of the water either evaporates or remains in the tailings dam with no discharge to the environment. In 2015, the mining division consumed 45.2 million m3 of water and sea water accounted for 45.6% of it, up from 44.6 million m3 and 44% in 2014.

All of the Group’s mining operations have water management plans and water quality monitoring results are submitted to the Water Bureau and Health Service. Since 2012, the Choapa community has also been actively involved in water quality monitoring. In addition, Los Pelambres provides direct financial support to local farmers in the Choapa valley for water efficiency projects such as large-scale drip irrigation schemes and the lining of irrigation canals.

Large-scale mining operations generate waste rock, spent ore and tailings – the material left over after the process of separating the valuable portion of the ore from the uneconomic portion. Michilla, Antucoya and Centinela Cathodes, which use leaching to produce copper, have fully permitted spent ore dumps. Los Pelambres and Centinela Concentrates, which use flotation, deposit their waste in licensed tailings storage facilities.

Centinela is the first mine in the world to use thickened tailings technology on this scale. It provides many advantages including greater water efficiency and stability and better dust control.

Other solid (non-mining) wastes are segregated and stored prior to final disposal in compliance with Chilean regulations.

The Group has pioneered the use of thickened tailings deposits, which have a lower environmental impact.

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In 2015, energy accounted for approximately 15% of the total operating costs of the mining division. Total energy demand is rising as production grows, transportation distances increase and ore grades decline as the Group’s operations get older. There is also greater use of sea water, which needs to be pumped to the mine sites.

Investment in new and clean energy sources has major commercial as well as environmental benefits.

To date, the Group has secured renewable energy from two principal sources:

  • El Arrayán is the largest wind farm in Chile with an installed capacity of 115MW and is operated by Pattern Energy. El Arrayán provided approximately 20% of Los Pelambres’ energy in 2015 and operates under a long-term PPA; and
  • Javiera solar (photovoltaic) farm in the Atacama Desert is operated by SunEdison. The farm has an installed capacity of 69.5MW covering a site of 180 hectares and supplies Los Pelambres with approximately 10% of its total energy requirement.

By the end of 2015, the Group´s biggest operation, Los Pelambres, was being supplied with 33% of its energy from renewable sources and this is expected to reach 80% by 2019.

With a core focus on resource efficiency, the Group seeks to further reduce energy consumption per unit of production and increase the percentage of total energy generated from renewable sources.

Changes to the climate have a direct impact on the Group’s operations in relation to the availability of water, droughts and other extreme weather events. Chile is a country which is vulnerable to the effects of climate change, reflected in higher temperatures and reduced rainfall in the north and centre of the country. The Chilean government has recently committed to a 30% reduction in GHG emissions below 2007 levels by 2030, despite a global contribution of only 0.2%.

The Group’s approach is to limit contributions to climate change by controlling GHG emissions through improved energy efficiency and to source an increasing proportion of its energy needs from clean energy sources. The Group has reported its Scope 1 and 2 direct and indirect GHG emissions, as defined in the GHG Protocol, to the CDP since 2009. In 2015, it developed its first integrated climate change strategy, which was based on ICMM’s policy recommendations.

The main features of the standard are:

  • identifying the risks and opportunities of climate change impacts on the Group’s operations;
  • encouraging innovation to improve energy efficiency and the use of clean energy;
  • mitigating GHG emissions; and
  • measuring progress and reporting results, including CO2 emissions, in accordance with the Carbon Disclosure Project (“CDP”).

Growth in production will inevitably result in increased GHG emissions. However, the Company will seek to balance this through greater energy efficiency and increased energy supply from non-fossil fuel sources.

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The Group’s targets are zero net loss of biodiversity and to add value to biodiversity wherever possible through direct support for conservation projects and effective private-public partnerships.

The greatest biodiversity challenges for the Group are at Los Pelambres which is located in an agricultural valley.

The Company has voluntarily restored the Laguna Conchali coastal wetlands, near its port facilities, to create a nature sanctuary that has been classified as a Wetland of International Importance under the Ramsar Convention. The Group has also put in place a programme to protect one of the few remaining Chilean palm forests at Monte Aranda and since 2014 has also been protecting Santa Inés, one of the rare relic forests in the region.

Los Pelambres and Centinela monitor their impact on the marine ecosystems at their port facilities in Los Vilos and Caleta Michilla to prevent impacts on the marine environment.

In 2015, the Group worked with the Wildlife Conservation Society to develop a biodiversity standard, aligned with ICMM’s principles, to achieve no net loss of biodiversity across the business through the application of the mitigation hierarchy.

The Group participates in various initiatives to protect and increase public knowledge about local heritage. In 2014, Los Pelambres opened an exhibition hall at Monte Aranda in the Choapa Province focusing on rural life and local customs. Some residents of Caimanes now work there as hosts. In 2016, the Group will open a 25-hectare rock art park, also at Monte Aranda, which will exhibit over 240 petroglyphs recovered from the area where the Mauro Dam was built.

In the Antofagasta Region, the Group is involved in conservation and the enhancement of cultural heritage, supporting local organisations such as the ProLoa and Fundación Chacabuco, which are dedicated to the preservation of regional heritage. It has sponsored a number of books on the archaeological heritage of the Antofagasta and Choapa regions.

Chilean legislation requires that mining operations have comprehensive closure plans approved by the national geology and mining agency SERNAGEOMIN, which defines measures to control risks and demonstrate appropriate funding to implement the closure plans. These plans must be updated every five years and were last updated at Michilla, Los Pelambres and Centinela in 2014.

In November 2014, the Group announced the closure of the Michilla mine, which was acquired by the Company in 1980. The announcement was made 14 months in advance of closure and a comprehensive social closure plan was implemented, which included trying to transfer as many employees as possible from Michilla to other Group operations. For the remainder, generous severance terms, beyond those required by law, were agreed with the mine’s unions. This approach helped to minimise uncertainty and provided enough time for employees to plan ahead.

During the year, the Group began developing corporate closure standards that move beyond those required under Chilean law, and following ICMM best practice that provides guidance for environmental and social issues.

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In addition to naturally occurring dust, mining operations generate particulate emissions from loading and hauling activities. Dust can affect health, particularly through the smaller, ingestible component and is of particular concern at Los Pelambres where the communities are closer to the mine than at some of the Group’s other operations. At Centinela, dust is also an issue as there are several other active mining operations around the town of Sierra Gorda.

Dust levels are monitored across all sites and at nearby communities to ensure compliance with Chilean government standards. The Group uses a preventative approach to manage air quality and limits dust emissions through operational controls like road wetting and covering of conveyors and stockpiles including crushed materials. Key innovations to limit dust include:

  • introduction of a preventive warning system at Los Pelambres and Centinela based on mining operations and weather conditions – in conditions of strong winds, certain operational activities such as blasting may be rescheduled;
  • introduction of a system of mist cannons at Los Pelambres; and
  • working in conjunction with other mine operators, the local authorities and the regional environment agency to diagnose and plan a solution to control the dust in Sierra Gorda.

Antofagasta has no significant gaseous emissions other than GHGs, which are addressed under climate change.