Statement from the CEO: Las Bambas

MMG CEO, Mr Andrew Michelmore:

Overview

In a relatively short period, the communities on the road to Las Bambas have gone through significant changes with the upgrade of local infrastructure, including roads.

Traffic has increased on these remote roads as production has ramped up to commercial rates during 2016 in a difficult and challenging mountainous region.

Las Bambas has worked for many years with these communities on access and road use agreements and road upgrades. The company has begun asphalting sections within and on either side of communities to further mitigate impacts.

We are also part of a working group led by the Transport Minister, other road users and regional government, discussing how we upgrade and seal the entire road distance – improving access and reducing noise and dust for all users.

We are active and involved in these communities to maintain a dialogue and work with communities along this critical road corridor.

But loss of life should never be part of this journey.

The death of Quintino Cercera has left a wife with no husband, three children with no father and a community of Antuyo in mourning. It has also left around 20 police officers with injuries – officers who were merely doing their duty to maintain peace and access to a public road.

Our collective thoughts must be with the family, friends and colleagues of those affected by these events.

We owe them a duty to ensure that no matter what differences we may have over the development and operation of the road, that we come to solutions via constructive dialogue – not by rocks and guns.

The current situation

At present, local communities are cut off from free movement on roads and supplies for our site will soon run low and almost 5,000 people remain at our Las Bambas site.

While the site remains in operation, storage of finished product is limited. With high current stocks and no trucking, this situation cannot extend much longer.

The current situation may impact shipment timetables at a critical point in Las Bambas early operation that may affect our reputation, and also international investment reputation in Peru.

Las Bambas continues committed to working hand in hand with the Peru government, regional and community leaders and the communities along our transport corridor to keep this important mine in operation.

Shipping concentrate for export

When MMG acquired the Las Bambas mine, there was no solution to move concentrate.

The previous plan involved building part of the operation on the mine site of Antapaccay and joining the two operations by a slurry pipeline.

This solution could never work with different ownership and MMG as the new operator needed to find a solution.

That solution was to locate all plant at Las Bambas and truck concentrates to the closest existing rail line at Pillones, approximately 458 km from the mine site.

Since this decision was made, we have worked to upgrade the road and commission local companies and drivers, wherever possible, to create employment and contracting businesses.

Before the conflict, we had already begun a process of asphalting the roads on either side and through the communities where trucks pass.

The road and rail corridor that starts at Las Bambas, passes important operations such as Antapaccay, Constancia and Cerro Verde on the way to the world’s largest concentrate port at Matarani.

And, I have committed MMG to support the technical work, planning and consultation that is critical to permitting and upgrading this road to a national standard.

The contribution of Las Bambas

A large proportion of Peru’s national wealth – with minerals the largest driver of current growth – passes through these regions of Apurimac and Arequipa.

Las Bambas, MMG and our Joint Venture partners take this obligation to the people of Peru very seriously.

But all Peruvians have a stake in these operations and we must work together to ensure success.

Las Bambas is a force for the development of Peru and is already lifting the region of Apurimac from one of Peru’s poorest, to its fastest growing.

I take strength from the fact that most in the community and all the actors involved in regional progress remain supporters of Las Bambas.

But I am deeply convinced that we must ensure that the solutions created through dialogue are fair and benefit all communities.

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