Project Development South America Region
Bob Drabik – EGM PDSA
18 September 2011
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
Overall organisation led by Bob Drabik,
Executive General Manager PDSA
Project Teams in PDSA
 Antapaccay - Project Director Max
Combes
Core team common support
across all projects
 General Manager Finance
 Las Bambas - Project Director Joe
Albright
 Finance Managers
 El Pachon - General Manager Xavier
Ochoa
 SD Manager
 Agua Rica - GM Studies Dave Dicaire
 Antamina and Collahuasi JVs - GM JV
Support Tony Maycock
 Project Services Manager
 HR Manager
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
Project Development Division
EISA application and response
Engineering, Procurement, Construction
Permits
Project controls
Community relations
Traffic and logistics
Sustainable development
Change management
Government interface
Document management
Operational readiness
Quality of workmanship
Production ramp-up
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 First in copper industry

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

Standard concentrator basic module
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
Antapaccay – 70 ktpd plant layout
Standard Concentrator application

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
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
Questions?
Agenda

Introduction

Copper market update

Xstrata Copper overview

South American Operations

Project Development South America

Antamina and Collahuasi expansions
Coffee break

Antapaccay Project

Las Bambas Project

El Pachón Project

Agua Rica Project

Conclusions
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
2010 Top ten copper producers by mine
(kt Cu)
1200
Xstrata Copper approach to managing
Joint Ventures

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:
1000
800
600
400
200
0
− 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
Unlocking potential of our JV assets
Collahuasi – expansion projects in execution
Phase 1 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
Phase 2 Expansion Project
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
Note: all production and capital cost numbers shown on a 100% basis
Unlocking potential of our JV assets
Collahuasi – expansion projects in development
Copper in resource (100%)
60
Mt Cu
Phase 3 Expansion Project
Description
Inferred

Addition of 4th or 4th & 5th grinding
lines

Concentrate plant capacity expansion
to 270ktpd or 380ktpd
30

Total copper production up to 1Mtpa
20
Status
Indicated
50
Measured
40
10
0
2006
2007
2010

Pre-feasibility study underway,
targeted for completion in Q2 2012

Commissioning targeted for 2017
Unlocking potential of our JV assets
Antamina – expansion projects in execution
Description




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
Milling
SA
G2
Balls
4
Cu & Zn
Floating
Project Status

Under construction, expected completion
of grinding area Q4 2011
–
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
–


Mills and gearless motor drives
installed as well as mill liners
Unlocking potential of our JV assets
Antamina – expansion projects in development
Copper in resource (100%)
18
15
Mt
Inferred
Indicated
Measured
Future Expansion Potential

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
12
9
6
3
0
2007
2010
2011
Questions?
Agenda

Introduction

Copper market update

Xstrata Copper overview

South American Operations

Project Development South America

Antamina and Collahuasi expansions
Coffee break

Antapaccay Project

Las Bambas Project

El Pachón Project

Agua Rica Project

Conclusions