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Las Bambas Project
Joe Albright - Project Director 18 September 2011
Agenda
Project Overview
Highlights
Challenges
Initiatives
Schedule
Site Photographs
Nueva Fuerabamba construction camp
Description Location: Apurimac, Peru Ownership: 100% Mineral Resource: 1.55 Bt @ 0.61% Cu Concentrator: 140ktpd, 2 grinding lines Production: 400ktpa Cu for first five
years, average over LOM 315ktpa Cu Approved capital cost: US$4.23 billion LOM: 18 years
Project Status Project approved by Xstrata August 2010 ESIA approved March 2011 Engineering/Procurement 41% complete Commitments at $ 1.2 billion (on target) Nueva Fuerabamba urbanisation in
construction (earth works) Site early works commenced H1 2011
Project Overview
Copper in resource
Crusher transported to site
0
2
4
6
8
10
2005 2008 2010
Measured Indicated Inferred
Mt Cu
Project location
Project location continued
60% Model Reviews completed
Productivity better than budgeted
Manhours under budget
Power line, Railroad, and Port expansion engineering progressing
Off-Site access roads design complete
Hazard & Operability Reviews (Hazop) on process plant completed
Risk Assessments completed
Engineering highlights
Primary Crusher 3D rendition Hazop
Las Bambas concentrator
Major process plant equipment ordered (approximately 45% of equipment priced and committed)
Structural steel, re-bar, and concentrate pipeline ordered (approximately 45% of bulks priced and committed)
Batch Plant, Overland Conveyor, Truck Shop, Camps quoted and soon to be committed
Access roads, power line, concentrate pipeline construction contracts awarded
Mine fleet and equipment ordered
Significant effort underway to commit majority of equipment and bulks by Q4 2011
Procurement highlights
Ball Mill Shells delivered to storage
Crusher unloaded at site
Earth works underway at Nueva Fuerabamba urbanization (450 homes, schools, medical clinic, police station, recreation facilities)
Off-Site access roads (350 km new and rebuilt heavy haul roads)
Early Works, includes: construction camps, laydown yards, batch plant, roads, power, water and communication
Safety Observation Program
Site manpower at 1,200 people
Construction highlights
Off Site Access Roads Development
HSE Observation Program
0
100
200
300
400
500
NFB Las Bambas Safe Behaviours Risk Behaviours
20% 80% Las Bambas NFB Observations Executed Aug11
Price escalation – Steel (structural, plate and re-bar) – Copper (wire, cable, motors,
transformers) – Petroleum and most related products
such as rubber lining and belting – Labour (engineering and construction)
Resources in Peru – Construction equipment – Skilled labour – Supervision and management
Community interaction with project – Environmental management – Cultural sensitivity – Mining conflicts in other parts of Peru
(eg. Puno)
Typical risks
Concentrate pipe unloaded at port
Local residents support the project
RSI Program (Replication, Synergies, Integration) to help mitigate escalation and save money
– Standard Concentrator, second application
– Master Agreements – rapid procurement
– Extended Project Agreements from Antapaccay
– Accelerated procurement overall
Alliance Agreements provides access to Resources
– World wide access – Skilled team – Construction equipment – Personnel assignments
Proactive mitigation of potential risks
RSI Program
Synergy Processes &
Knowledge
Integration People & Resources
Replication Designs &
Documents
Xstrata Project Guidance
Bechtel Project Management
Graña y Montero Construction
FL Smidth Mechanical Equip
Siemens Electrical Equipment
Suppliers Master Agreements
Consultants Specialist Engineering
Social Programs and Community Interaction
– Employment (37% Locals) – Training – Supplier development (40 local
contractors) – Health, Safety, and Environmental
initiatives
Management Programs and Initiatives – Change Management – Risk Management – Lessons learned from Antapaccay
Project – Heavy mining equipment early
purchase and savings – Build, Own, Operate initiatives – Definitive Estimate H1 2012
Proactive mitigation of potential risks
Assessment of Risks
Ytd total recordable injury frequency rate
1
0
1
2
3
0
1
2
3
ene-
11
feb-
11
mar
-11
abr-
11
may
-11
jun-
11
jul-
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ago-
11
sep-
11
oct-
11
nov-
11
dic-
11
LTIF
R
LTI
Incidents Target Cum TRIFR
1
61% 25%
14%
1-3 4-5 6-7 Risk level
Advancing on schedule
Activity 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 Engineering
Interim engineering Detailed engineering
Procurement Mills and crusher Other equipment
Construction Off–site infrastructure Site establishment Earthworks Plant, equipment and other
Production Pre-stripping Commissioning and ramp-up Full production
Engineering, Procurement, Project Services – Santiago, Chile; Lima, Peru; and New Delhi, India (600+ people)
ESIA approved March 2011 after 9 months Early works commenced in March 11 following ESIA approval Copper production to commence in H2 2014
Construction underway
Mine Area Camp
Nueva Fuerabamba Camp for 2,000 construction workers
Pumamarca Area Camp
Conclusions
Las Bambas is a low-cost, tier-one asset with a long-life and potential for expansion/extension
Production of 400ktpa for first 5 years and 315ktpa average over LOM, plus gold, silver and molybdenum credits
On schedule and budget 29% of budget committed ahead of
construction phase with majority of equipment and bulks to be committed by year-end
Benefits from important synergies with Antapaccay Project
Major equipment, steel, pipeline pipe, and EPC services are committed
– Seeing price escalation in steel, copper, fuel, rubber and labour
Mitigation measures include design reviews, change management control and early procurement initiative
Fiscal stability agreement in place
Grinding area 3D model extract
Las Bambas community support
Questions?
16
Agenda Introduction Copper market update Xstrata Copper overview South American Operations Project Development South America Antamina and Collahuasi expansions
Antapaccay Project Las Bambas Project El Pachón Project Agua Rica Project Conclusions
Coffee break
