REG - Antofagasta PLC - CHAIRMAN’S COMMENTS AT THE 2024 AGM

AntofagastaAnnouncement

08/05/2024 10:15

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RNS Number : 6056N  Antofagasta PLC  08 May 2024

NEWS RELEASE, 8 MAY 2024

 

CHAIRMAN'S COMMENTS AT THE 2024 ANNUAL GENERAL MEETING

Antofagasta plc (the "Company") hereby releases the script to be used by the
Chairman, Jean-Paul Luksic at the Company's Annual General Meeting, which will
be held at 10:00 am (UK) today.

Good morning, ladies and gentlemen.

Welcome to Antofagasta plc's 2024 Annual General Meeting. It is a pleasure to
be here with you, and I confirm that we have a quorum present. I'm delighted
to have so many of our directors with us today, along with our CEO, Iván
Arriagada, and members of our executive team. If you want to know more about
our board, you'll find biographies of each of our directors, together with
their Board and Committee roles, on pages 12 to 17 of the Notice of Meeting.

I'm going to start with a brief overview of the strategy and performance of
your company. Iván will give you a little more detail and then we shall move
to the formal part of the meeting. After that I will open the floor for
questions.

2023 has been a big year. We achieved some important milestones. We took some
transformative investment decisions.

With those things in mind we are confident as we meet here today that we shall
continue to strengthen our competitive position and deliver profitable growth.

2023 was also the year in which we entered middle age, our 40th year of
operating copper mines. We've come a long way since Michilla mine in northern
Chile, and we are proud to have grown to become one of the world's leading
copper producers.

In all those 40 years, our primary focus hasn't changed. It is on the creation
of enduring value for our stakeholders. Our employees, our local communities,
our partners, our shareholders.

With that in mind, in 2023 we delivered strong operational and financial
performance, underpinned by higher copper production.

And I should say I am just as pleased that we achieved a record year of safety
performance, in which our lost time injury frequency rates fell by 25%, with
no fatalities. That is down to the efforts of our workforce and the safety
first culture that we work every day to maintain.

Despite the recent period of high inflation, we managed to protect our profit
margins with overall operational performance and a cost and competitiveness
programme that generated benefits of $135 million during the year.

We are able, as a result, to recommend to our shareholders a final dividend
for 2023 that exceeds the minimum payout ratio specified in our dividend
policy. The total dividend for the year, which equates to 50% of the Company's
underlying net earnings, reflects our performance in 2023 and our future
investment plans and commitments together with our strong balance sheet and
our overall outlook for copper and our businesses.

I want now to tell you about the exciting investment decisions we have made.
To set them in context, let's look for a moment at the copper market. Despite
the geopolitical uncertainties, the second half of 2023 saw lower volatility
in copper prices. More recently, supply-side disruptions and rising demand
have propelled prices higher.

While it is unclear if the price will stay at these levels in the short term,
we maintain a positive outlook on copper's medium- to long-term fundamentals.
We say that, while recognising the risks surrounding traditional areas of
copper demand, such as the Chinese economy and in particular the property
sector. And we estimate that any supply growth triggered by higher copper
prices will take several years to materialise. It's against that backdrop that
we believe our recent project investment decisions will have a transformative
effect on the Company, and that we will be well positioned to benefit from
future copper demand growth.

Investment is key to our competitiveness.

In 2023, we made strategic investment decisions designed to develop the
potential of our two flagship mining districts - Los Pelambres and Centinela.
Together, these decisions will move us towards our aspiration of producing up
to 900,000 tonnes of copper per year. We expect them to provide enhanced
operational efficiencies, improved returns and create long-term value for all
stakeholders.

First, Los Pelambres. Here, we are doubling the desalination plant's capacity
and building a new concentrate pipeline, following a route that runs along a
less populated area.

Water use is an issue in Central Chile. We have plans to make sure 90 per cent
of the water we use comes from the sea or recycled sources. Last year, thanks
to our investment at Los Pelambres, we got to more than 50 per cent. The
expanded desalination plant and new pipeline will further secure the long-term
future of Los Pelambres. There's more to come, with work to extend the mine's
life to 2050 and possibly longer. The EIA associated to this project should be
submitted to evaluation by the relevant authorities during 2024.

Next, Centinela. We recently announced our decision to advance with the Second
Concentrator Project and expansion of other infrastructure, such as port,
water and tailings, which marks the beginning of a new growth phase for the
Company. This project will significantly increase our production by 170,000
tonnes of copper equivalent per year and will improve Centinela's competitive
positioning on the cost curve, including higher by-product credits and
providing greater operational flexibility.

And finally, separate from those important organic growth projects, we
announced our investment in Compañía de Minas Buenaventura, Peru's largest
publicly traded mining company. This investment, comprising a 19% equity
interest, complements our exploration initiatives, and substantially expands
our exposure to Peru's highly prospective geology.

We remain committed to evaluating opportunities that have the potential to
deliver value to all stakeholders, and continue with our strategy of
prioritising investment in the Americas.

In all we do, and everything that we plan to do, we never lose sight of our
commitment to sustainability.

Environmental and social stewardship, climate change planning and mitigation
and responsible water sourcing are all key elements of our approach to
sustainability.

On environmental stewardship, we work hard to protect the natural habitats
where we operate. Los Pelambres supports biodiversity work to protect an area
more than six times larger than its footprint, including four nature
sanctuaries.

With respect to climate change, in early 2024 we announced a new set of
ambitious targets, aiming for a 50% reduction in Scope 1 and 2 emissions by
2035, all while expanding production. Through collaboration with our suppliers
to drive improvements in their business practices, we also expect to lower our
Scope 3 emissions in our value chain by 10%, a new target.

On responsible water sourcing - 2023 was a pivotal year for us, with water
withdrawals from sea water sources exceeding continental water for the first
time.

We do all this through longstanding relationships with local stakeholders. We
work with communities. We are part of those communities.

Let me just give you some examples. In the Choapa Region where Los Pelambres
is located, we expanded our efforts to ensure continuous availability of water
for human consumption and irrigation in the severely drought-hit local area.

We funded a new family health centre in Chillepín, a collaborative project
between Los Pelambres and local authorities, enhancing access to health for
nearly 7,000 neighbours, which was inaugurated in March 2023.

Our "En Red - Digital Community" programme aims to address the digital
infrastructure and skills deficit in rural and vulnerable communities in the
vicinity of our operations.

We improved management of the 80 Rural Sanitary Services in the Choapa
province with an integrated approach as part of a common water basin.

And we conducted formal assessments of 18 community support programs, all of
which demonstrated a positive social return on investment.

There is a lot going on. If you would like to know more, please read our
Annual and Sustainability Reports.

Of course, none of this would be possible without our workforce. We have over
29,000 people working across our group in our mining operations, transport
division, corporate offices and construction projects. We are proud to have an
engaged, diverse, and inclusive workforce operating within a safe and positive
working environment. We are committed to continuous training, enhancing
diversity, and providing development initiatives. Our efforts in relation to
gender diversity are continuing, and we are working to achieve 30% female
representation across the Group by 2025.

You see your board in front of you. Let me tell you a little more about the
oversight they bring. Our Board is proactive and engaged, and we met 10 times,
as well as Board members visiting our operations and projects throughout the
year. Six of our 11 directors are independent, and we have continued to ensure
that we have the diverse mix of skills and experience on the Board to help
guide the Company's strategy as we enter our next phase of growth and
development.

During the year, we rotated the role of Senior Independent Director to
Francisca Castro, who has been a member of our Board since 2016. I would like
to thank Tony Jensen for his tenure in this role and for his continued service
as a Director and Chair of our Audit and Risk Committee.

At last year's AGM, we introduced Heather Lawrence as a new Independent
Non-Executive Director, following her appointment in April 2023.

In addition, Tracey Kerr joined the Board as an Independent Non-Executive
Director in January 2024. Tracey has extensive global mining experience in
areas including safety, sustainability, operations and exploration.

I would also like to take a moment to thank Jorge Bande for his significant
contribution to the Company's success following his retirement from the Board
at the end of 2023 having served for nine years.

Our recent rotation of Board roles and appointments underscores our commitment
to robust governance practices.

I said at the start that the political environment in Chile has improved. Over
the past year, Chile has concluded key debates on amendments to the mining
royalty tax, and a second proposal for a new constitution. The royalty
discussion has ended. Mining companies are paying more tax. We are doing so
when the mining industry requires additional capital to tackle declining
grades and remain competitive. But we do have some certainty now.

As for changes to the constitution, for those of you outside Chile who may not
have followed the debate, there have been two proposals for change. Both were
voted down by the public. The government has said it will not be seeking a
third process to change the constitution. Now most people in Chile - according
to public opinion polls - want to improve public order and safety, and regain
economic growth, investment and employment.

So to sum up. We look to the year ahead with optimism. We are fully aware of
the execution risks that come with the construction projects in which we are
investing. But we are clear too on the benefits. As a responsible and
profitable operator, we are well-positioned to capitalise on the prevailing
global macroeconomic environment and positive outlook for copper. Antofagasta
has a track record of performance and creating value for all our stakeholders.
We have two world class mining districts, a strong balance sheet and a
dedicated workforce. These are key enablers for achieving our purpose of
developing mining for a better future.

 

 Investors - London                                                                   Media - London
 Rosario Orchard      rorchard@antofagasta.co.uk (mailto:rorchard@antofagasta.co.uk)  Carole Cable   antofagasta@brunswickgroup.com (mailto:antofagasta@brunswickgroup.com)
 Robert Simmons       rsimmons@antofagasta.co.uk (mailto:rsimmons@antofagasta.co.uk)  Telephone      +44 20 7404 5959
 Telephone            +44 20 7808 0988

                                                                                      Media - Santiago
                                                                                      Pablo Orozco   porozco@aminerals.cl (mailto:porozco@aminerals.cl)
                                                                                      Carolina Pica  cpica@aminerals.cl (mailto:cpica@aminerals.cl)
                                                                                      Telephone      +56 2 2798 7000

 

 

 

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_____________________________________________________________________________________________

Cautionary Statement

This announcement contains certain forward-looking statements. All statements
other than historical facts are forward-looking statements. Examples of
forward-looking statements include, without limitation, those regarding the
Group's strategy, plans, objectives or future operating or financial
performance, reserve and resource estimates, commodity demand and trends in
commodity prices, growth opportunities, and any assumptions underlying or
relating to any of the foregoing. Words such as "intend", "aim", "project",
"anticipate", "estimate", "plan", "believe", "expect", "may", "should",
"will", "continue" and similar expressions identify forward-looking
statements.

 

Forward-looking statements involve known and unknown risks, uncertainties,
assumptions and other factors that are beyond the Group's control. Given these
risks, uncertainties and assumptions, actual results, performance or
achievements could differ materially from any future results, performance or
achievements expressed or implied by these forward-looking statements, which
apply only as at the date of this report. These forward-looking statements are
based on numerous assumptions regarding the Group's present and future
business strategies and the environment in which the Group will operate in the
future. Important factors that could cause actual results, performance or
achievements to differ from those in the forward-looking statements include,
but are not limited to: natural events, global economic and financial
conditions (which may affect our business, results of operations or financial
condition); various political, economic, legal, regulatory, social and other
risks and uncertainties across jurisdictions in which the Group operates;
changes to mining concessions or the imposition of new mining royalties, or
changes to existing mining royalties in the jurisdictions in which the Group
operates; the Group's ability to comply with the extensive body of regulations
governing the mining industry, as well as the need to manage relationships
with local communities; the ongoing effects of the global COVID-19 pandemic;
demand, supply and prices for copper and other long-term commodity price
assumptions (as they materially affect the timing and feasibility of future
projects and developments); trends in the copper mining industry and
conditions of the international copper markets; the effect of currency
exchange rates on commodity prices and operating costs; the availability and
costs associated with mining inputs and labour; operating or technical
difficulties in connection with mining or development activities; risks,
hazards and/or events and conditions inherent to the mining industry, which
may affect our operations or facilities; employee relations; climate change as
well as the effects of extreme weather conditions; the outcome of any
litigation arbitration, regulatory or administrative proceedings to which the
Group is and may be subject in the future; and actions and activities of
governmental authorities, including changes to laws, regulations or taxation.

 

Except as required by applicable law, rule or regulation, the Group does not
undertake any obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Past performance cannot be relied on as a guide to future
performance.

 

No statement in this announcement is intended as a profit forecast or estimate
for any period. No statement in this announcement should be interpreted to
indicate a particular level of profit and, as a consequence, it should not be
possible to derive a profit figure for any future period from this report.

 

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