REG - Antofagasta PLC - CHAIRMAN’S COMMENTS AT THE 2023 AGM

AntofagastaAnnouncement

10/05/2023 13:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230510:nRSJ9735Ya&default-theme=true

RNS Number : 9735Y  Antofagasta PLC  10 May 2023

NEWS RELEASE, 10 MAY 2023

 

 

CHAIRMAN'S COMMENTS AT THE 2023 ANNUAL GENERAL MEETING

 

Antofagasta plc (the "Company") today released the script to be used by the
Chairman, Jean-Paul Luksic at the Company's Annual General Meeting that
commences at 2:00 pm today.

 

Good afternoon, ladies and gentlemen.

Welcome to Antofagasta plc's 2023 Annual General Meeting.

It is a pleasure to be here in London to meet with our shareholders. Thank you
for joining us today, be it either in person or virtually, and I confirm that
we have a quorum present.

The majority of our Directors are here in person today. You will see that our
CEO, Iván Arriagada, is also here along with several senior members of our
executive team who are available to answer any questions that you may have if
they aren't covered in the meeting. Photos and short biographies of each of
our Directors, including their Board and Committee roles, are set out on pages
13 to 18 of the Notice of Meeting.

There is an important update since we published the Notice of Meeting - the
Board has appointed an additional independent non-executive director and
member of the Company's Audit and Risk Committee. Please welcome Heather
Lawrence to your Board.

Heather has significant experience as a UK non-executive director. She is
currently a non-executive director and Chair of the audit committee of Melrose
Industries plc. Previously, she was a non-executive director of Coats Group
plc, and a non-executive director and Chair of the audit committee of FlyBe
Group plc.

Now, I would like to give you a brief overview of the strategy and performance
of your company and make some comments on the macro environment in which we
are operating. Iván Arriagada will make a short presentation about our
performance in 2022 and then we will move onto the formal part of the meeting.
After that I will open the floor for questions.

Let me start by saying a few words about how we operate.

I want to take this opportunity to acknowledge the efforts taken by everyone
in the company that resulted in a record safety performance during 2022. Not
only were we fatality free, but we also lowered the number of high potential
incidents and lost time injury frequency rate to record lows. This achievement
requires vigilance and discipline from everyone at our operations - from the
leadership team to every employee and contractor.

As a Board, we acknowledge these achievements, and the commitment to operating
responsibly and reliably.

Although there were challenges in the operating environment over the course of
last year, production increased quarter on quarter in line with our plans,
with a strong finish to the year. Copper production for the year totalled
646,000 tonnes, representing a level below 2021 primarily because of
limitations on availability of water at Los Pelambres. Net cash costs were
1.61 cents per pound, reflecting lower production and the impact of higher
inflation. Alongside these results, financial performance for the company
remained strong, with revenues of $5.9 billion and EBITDA of $2.9 billion.

The Board has proposed that the total dividend should be $588 million, the
full net earnings for the year. If approved by shareholders today, the final
dividend of 50.5 cents per share will be paid to shareholders on the 12(th) of
May.

Ongoing challenges such as the drought in Central Chile highlight the
importance of planned investments. Our continuing engagement with local
communities and decisions that we have taken over the years have helped us to
become a more resilient business. The new desalination plant and related water
system at Los Pelambres is expected to start production during the second
quarter of this year, after completing commissioning. Together with the
start-up of this project, we also expect to finalise the permitting to
commence the expansion of the desalination plant to double its original
capacity. Once this expansion is completed, over 95% of Los Pelambres' water
will be either sea or recirculated water.

During 2022, public and private sector decisions to accelerate the transition
to a low-carbon economy continued to gather strength. The United States passed
the Inflation Reduction Act and the European Union recently announced its Net
Zero Industry Act. Together they promise to spur further investment in the
many copper-intensive products and technologies that are integral to a
net-zero world. In November 2022, COP27 took place in Egypt, drawing further
attention and commitments from governments to a net-zero future.

In the case of your Company, we are committed to provide the copper that is
required for a low carbon economy, and to continue to transform how copper is
produced to achieve the highest sustainability standards. No less important
than the metal itself is how we produce it. We view our responsibility as
operating sustainably, reliably and with respect for local communities and the
environment, living up to our Purpose of 'Developing Mining for a Better
Future'.

Lowering emissions and reducing continental water use remain two key strategic
priorities, for which we have board-level focus, and company-wide initiatives.

By 2025 we expect that 90% of the Group's water usage will either be from the
sea or recirculated water.

By the end of 2022, we exceeded our carbon emissions reduction target, three
years ahead of the originally planned date.

As a result, we are now in the process of defining new emission reduction
targets that will help us to achieve our goal of being carbon neutral by 2050.

In April 2022, the last of our mining operations moved to 100% contracted
renewable energy, a transformation we committed to pursue several years ago
and which is now fully implemented.

Also, I am proud to share that starting from 2022, all our mining operations
have received The Copper Mark, which is an independently verified responsible
production accreditation standard.

Environmental and social performance is critical to the long-term success of
our business and the global mining industry. Therefore, I am pleased to report
to you that your company is taking a leading role in these key areas.

Allow me to say a few words about our future and plans for growth.

We have several embedded organic growth options within our portfolio, which
stem from our sizeable mineral resources base. We also have the capability to
unlock further growth that will allow us to continue to develop and grow our
production into the future.

At the grassroots level, we have several exploration projects that are in
different phases of evaluation, which will generate organic growth for the
Company. During 2022, we increased our mineral resources by over 900 million
tonnes of copper ore, with over half of this increase coming from two recent
exploration discoveries in Chile.

In addition, we have the potential to continue to grow our existing
operations.

In the case of Los Pelambres, the current expansion is nearing completion,
with progress reaching over 96%, and we expect to start the desalination and
concentrator plants this year.

At Centinela, progress continues with the engineering and pre-investment
studies for the Second Concentrator project, which has a projected investment
of close to $ 4 billion and has the capacity to increase our copper production
by 140 thousand tonnes annually, while also significantly increasing the
current production of gold and molybdenum.

We expect to have a final investment decision on whether to proceed with this
project during the second half of the year, once there is clarity on the
Royalty taxation changes in Chile and progress on the new Constitution.

In summary, as you can see, our large mineral resource base gives us options
to develop our production at a time when copper supply is becoming
increasingly constrained.

Now, I would like to say a few words about your Board, including our
commitment to diversity and inclusion.

In 2022, our entire board met in person for the first time since early 2020
due to the pandemic. The directors also made site visits to at least one of
our operations, including projects under construction.

As explained in the Notice of Meeting and our Annual Report, Vivianne Blanlot
has served on our Board for more than nine years. She has therefore stepped
down from the Nomination and Governance Committee and Remuneration and Talent
Management Committee. Vivianne has agreed to continue serving as a Director,
Chair of our Sustainability and Stakeholder Management Committee, and member
of the Projects Committee.

Francisca Castro also joined the Nomination and Governance Committee and
Eugenia Parot joined the Remuneration and Talent Management Committee.

I am very proud to say that today 36% of our directors are women. With the
recent appointment of Heather Lawrence, more than half of our Board
appointments since 2014 have been women. We continue to aim to increase female
representation on our Board and we are actively working towards meeting the
40% target.

At its core, Antofagasta plc is a long-term business. Our mines operate on
decades-long timelines, and our governance structures are designed to help us
achieve long-term sustainable success.

Now, I would like to briefly address the political situation in Chile.

In a September referendum, the country rejected a proposed draft for a new
Constitution, reflecting support for a more moderate approach going forward. A
new Constitution will be drafted this year, with a new referendum scheduled
for December. My hope is that this new Constitution will unite Chileans and
provide the clarity and stability that will help attract investments to Chile
and all the opportunities that flow from them.

Mining is a capital-intensive industry with long-term commitments and risks,
from discovery to production and closure. Therefore, it is especially
important for the future development of the industry, that the new
constitution includes a framework for mining concessions that will provide the
required long-term certainty and predictability for investment.

After a long period of discussion between Congress, government and industry,
the proposed mining royalty bill is now with the Senate before moving to the
lower house. We remain concerned by the impact that these proposed changes
will have on the competitiveness of the industry in the long term.

Our focus remains on ensuring that Chile's mining industry, which accounts for
more than 10% of the country's GDP, remains globally competitive and will
continue to further Chile's economic and social development.

Let me finish with a few comments on the outlook for 2023.

Uncertainty clouds the short-term picture, yet important features of the
long-term are clearer. The world is moving towards net-zero. That journey will
demand more copper, and according to some forecasters this could even be as
high as 6 to 7 million additional tonnes over the next decade alone. All this
at a time when the global copper supply is constrained by declining resource
quality and long lead times for project development and permitting. Our focus
remains on being a leading, responsible and reliable producer of copper that
the low-carbon world requires.

The International Monetary Fund forecasts that global growth will slow in 2023
affected by several issues, particularly the war in Ukraine, the strength and
pace of China's recovery, the slowdown of economic growth in the US and
Europe, and the energy crisis.

Against this backdrop, at Antofagasta we have been working hard over the last
few years in several transformations including in the areas of safety, energy
and water supply. We have also focussed on innovation and cultural change and
in developing our future options through advancing our projects. This makes us
more resilient and better prepared for the challenges ahead.

We know that in any environment, the diversity, safety, and health of our
people matter. So does the strength of our culture and the discipline with
which we operate and manage costs. Such steps not only strengthen the core of
our business but position us so that 2023 is not defined by the challenges we
face, but by our responses to them.

Finally, I would like to express my special thanks to all our people,
employees and contractors who have contributed to the continued success of
your Company.

 

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

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

 

Register on our website to receive our email alerts
http://www.antofagasta.co.uk/investors/email-alerts/
(https://www.antofagasta.co.uk/investors/news/email-alerts/)

   Twitter (https://twitter.com/AntofagastaPLC)    LinkedIn (https://www.linkedin.com/company/antofagasta-plc)

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  AGMAMMMTMTIBBPJ