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MINERA ESCONDIDA
MERRILL LYNCH INVESTOR VISIT
NOVEMBER 18, 2002
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 2
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 3
Northern Chile’s Atacama Desert,160 km south east of Antofagasta.
TATAL
INCA DE ORO
EL SALVADORCHAÑARAL A
RG
ENTI
NA
COLOSO
ANTOFAGASTA
MEJILLONES
ZALDIVARMONTURAQUI
ESCONDIDA
CALAMA
CHUQUICAMATA
CH
ILE
TOCOPILLA
POTRERILLOS
Cerro ColoradoQuebrada BlancaCollahuasi
El AbraChuquicamata
Radomiro Tomic
Michilla Lince
Mantos Blancos
El Tesoro
EscondidaZaldivar
El SalvadorManto VerdeLa Candelaria
El IndioAndacollo
Los Pelambres
El Soldado Andina
Los Bronces El Teniente
Lomas Bayas
Spence
World’s Premium Copper Region
BO
LIVI
A
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 4
Aerial View of MELEscondida
Norte
Oxide Leach Pads
Main Pit
Phase IV Plant site
ZaldivarPit
HamburgoTails
Concentrator
5 kmN
Zaldivar Leach Pads
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 5
Coloso Filter & Port
Coloso Filter & Port Facilities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 6
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 7
Escondida’s Strategy Builds on its Strengths to Maximize Long Term Value
Strong Cash Flow
Strong Cash Strong Cash FlowFlow
Low Cost ProducerLow Cost Low Cost ProducerProducer
Strong Credit Ratings
Strong Strong Credit Credit RatingsRatings
Stable CountryStable Stable
CountryCountry
Unequalled Resource
Unequalled Unequalled ResourceResource
High Quality ConcentrateHigh Quality High Quality ConcentrateConcentrate
Strong SponsorsStrong Strong
SponsorsSponsors
Ability to Manage
Expansions
Ability to Ability to Manage Manage
ExpansionsExpansions
Diversified Sales BaseDiversified Diversified Sales BaseSales Base
World’s Largest
Copper Mine
World’s World’s Largest Largest
Copper MineCopper Mine
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 8
World’s Largest Copper Mine
Escondida
Phelps Dodge
Ph IV
Leading Copper Mine Sites
0 400 800 1200
OktyabryskiDzhezkazgan
AndinaBingham CanyonLos Pelambres
El TenienteMorenci
CollahuasiChuquicamataFreeport Indonesia
Escondida Ph IV
Copper Production ('000 tonnes)
Leading Copper Producers
0 500 1000 1500
Anglo
KGHM
F-McMoran
BHP Billiton
Rio Tinto
Grupo Mexico
Codelco
Copper Production ('000 tonnes)
Rudna
Cop
per M
ines
Cop
per P
rodu
cing
Com
pani
es
Source: Brook Hunt & Associates, Calendar year 2000, plusEscondida Ph IV 2004 projection.
Note: BHP and Rio Tinto production shares includeshares of Escondida production. Brook Hunt do not rate Escondida as a stand alone company.
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 9
Sponsored By World’s Premier Metals & Mining Houses
BHP Billiton Limited100%
Rio Tinto Plc 100%
Mitsubishi Corporation 60%Mitsubishi Materials Corp 20%
Nippon Mining & Metals Co Ltd 20%
JECO10%
International FinanceCorporation
2.5%
BHP Escondida Inc 57.5%
Rio Tinto Escondida Limited
30%
Owners Council
Minera Escondida Limitada
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 10
Total Ore Reserves and Mineral Resources:Official declaration at June 30, 2002, JORC Competent Person: Dr J M Gilligan
Ore Tonnes Grade Metal Tonnes Grade MetalType (millions) (%Cu) (mlbs) (millions) (%Cu) (mlbs)
Sulphide 1,568 1.24 36,503 2,182 1.14 54,835LG Float 582 0.60 6,157 1,409 0.59 18,421
Escondida LG Leach 658 0.43 6,209Mixed 50 1.02 431 113 0.81 2,023Oxide 208 0.69 2,706 280 0.64 3,935Sulphide 649 1.33 19,014
Escondida Norte LG Float 642 0.58 8,190Mixed 43 0.81 761Oxide 142 0.79 2,476
Sub-Totals All Sulphide 2,149 1.07 42,660 5,540 0.87 106,669Mixed 50 1.02 431 155 0.81 2,784Oxide 208 0.69 2,706 422 0.69 6,411
TOTAL All Types 2,408 45,797 6,117 115,864
Ore Reserves Mineral Resources
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 11
Escondida Schematic Deposit Evolution Profile:Increasingly complex & variable geological conditions
⇐ ⇐ ⇐ ⇓ variability ⇓ ⇒ ⇒ ⇒
py >> cp
cc
cp + py
Cu - Fe Oxides
cc+cv+cp+py
“1991-1997” “1998-2010”
“>2010”
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 12
Copper Production & Head Grade:Incremental Expansion to offset Progressive Reduction in Head Grade with TimeGraphic Represents Mine Capacity, Actual Production Depends on Market Conditions
Production History & Forecast
0
500
1,000
1,500
2,000
2,500
3,000
1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 20140.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
Oxide
Ph. 2
Ph. 1
Ph. 3.5
Copper Productionmillion lb
Phase
3
fine copper production1988 Project Approval
fine copper productionthrough Phase 3.5
sulphide ore gradePhase 4 Expansion
fine copper productionPhase 4 Expansion
Ore Grade
Phase 4 at 110,000 tpd
Original Production ForecastPhase 0
450 ktpa
300 ktpa
Sulphide Ore Grade
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 13
Diverse Customer BaseCY 2001 Concentrate Sales, By Country
Japan34%
Chile14%Germany
10%
China6%
Brazil5%
Philippines5%
South Korea4%
Canada4%
India3%
Spain3%
Sweden2%
Finland2%
Traders5%
Iran1%
Bulgaria2%
CY 2001 Cathode Sales, By Country
France24%
Italy16%
Brazil12%
Holland10%
England10%
USA5%
South Korea5%
China4%
Taiwan4%
Japan3%
Chile2%Spain
2%Indonesia
1%Mexico
2%
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 14
C1 Unit Costs in the 1st QuartileCY01 Brook Hunt, Copper Industry C1 Cost Curve
Esco
ndid
a M
ines
ite
0
20
40
60
80
100
120
140
160
0 5,000 10,000 15,000 20,000 25,000Cumulative Production (Mlbs)
C1
Cas
h O
pera
ting
Cos
t (U
S c/
lb)
Escondida Real Cost and Cooper Industry estimatet
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 15
Only 3 Producers with a Lower C3 Unit CostCY01 Brook Hunt, Copper Industry C3 Cost Curve
Esco
ndid
a M
ines
ite
0
20
40
60
80
100
120
140
160
0 5,000 10,000 15,000 20,000 25,000Cumulative Production (Mlbs)
C3
Prod
ucct
ion
Cos
t (U
S c/
lb)
Escondida Real Cost and Cooper Industry estimated Cost
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 16
Phase IV Expansion Components• An additional mine fleet
– (1) 65 yd3 shovel, (6) 380 st haul trucks, (1) drill– Support equipment and maintenance shop expansion
• In-pit ore crusher and conveyor to Phase IV concentrator– Relocation of existing crushers
• 110,000 tpd Concentrator– 38-ft. SAG mill and (3) 25-ft. Ball mills– Conventional flotation using large cells, regrind, column cells
• Concentrate handling– Slurry pipeline to existing concentrator, then on to the port– Added concentrate filtering and storage capacity– Modifications to port facility
• Laguna Seca Tailings Facility– Tailings disposal for life of mine – both mills– Improved water reclaim to both mills
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 17
Phase IV: Laguna Seca Concentrator:Detailed Site Layout
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 18
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 19
EmploymentAntofagasta Coloso Escondida Santiago Total
Expatriates 3 0 24 2 29Operators 2 70 1627 0 1699Téchnical & Admin 15 1 89 1 106Professional/Mgrs 51 17 426 9 503Total 71 88 2166 12 2337
Permanent Contractors 1770
Projects & Construction 740
Total 4847
• Avg workforce age – 38 years• Avg length of service – 7 years• Employee turnover - 2%• Attendance rates - 97%+ • Female employees - 4%• Expatriate employees – 0.8%
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 20
Safety – Potential or Actual Level 4 Incidents
10
7
1
18
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003Fiscal Years
# of I
ncid
ents
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 21
Escondida Mine Pit
Escondida Mine PitDimensions Now Final
E-W 2.2km 3.5km
N-S 3.2km 4.8km
Depth 465m 750m
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 22
Escondida Mining Fleet FY-02• Electric Rope Shovels – Total 13
– P&H 4100 XPB (73 yd Dipper) 2– BE 495 (55 yd Dipper) 10– BE 395 (30 yd Dipper) 1
• Haul Trucks – Total 89– Komatsu 830E (240 mt) 28– CAT 793 B&C (240 mt) 47– CAT 797 (380 mt) 14
• Front End Loaders – Total 3– CAT 994 (23 yd Bucket) 3
• Drills – Total 12– BE 49R & R2s (8), IR DMM2s (2) & P&H 250XPs (2)
• Auxiliary Equipment – Total 44– Dozers (9-D10s & 4-D11s), Tiger 690s (2), RTDs (13), Graders (5-16Gs & 2-24Hs), Water
Trucks (6-CAT 777s) & Cable Reelers (3-CAT950Fs)
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 23
Mine Production – ‘000s TPD Ex-Pit
681 725835 901 930
841 863 863928
678
0
100
200
300
400
500
600
700
800
900
1000
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Fiscal Years
'000s
Ton
nes p
er D
ay
History Forecast Budget
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 24
Mine Unit Cost – US$/t Mined
0.779 0.736 0.706 0.670 0.641 0.683
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1998 1999 2000 2001 2002 2003Fiscal Years
US$ /
t Min
ed
History Forecast Budget
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 25
Unit Cost & Productivity: MineMines
12345891112
Escondia FY98 13Escondia FY99 14Escondida FY00 15Escondida FY01 16Escondida YTD FY02 17Escondida Budget FY02 18Escondida Budget FY03 19
202122232425262728293031323334
Estimated Brook Hunt 200
202414
27
3031
26 95
19 FY0318
3
1716
28
1
34
415
23229
813
1223
21
33
25
22
11
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
1.10
1.20
1.30
20 30 40 50 60 70 80 90 100 110 120 130
Productivity (ton Mined/Hour)
Uni
t Cos
t US$
/ton
Min
ed
UQ:91,0
LQ:0.60
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 26
Los Colorados Concentrator
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 27
Los Colorados Production – ‘000s TPD Milled
116 125 125 118 118 122 127 122115103
0
20
40
60
80
100
120
140
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Fiscal Years
'000s
Ton
nes p
er D
ay
History Forecast Budget
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 28
Los Colorados Unit Cost – US$/t Milled
4.07 3.91 3.58 3.43 3.42 3.42
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
1998 1999 2000 2001 2002 2003Fiscal Years
US$ /
t Mille
d
History Forecast Budget
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 29
Unit Cost & Productivity: ConcentratorsMills
123456789
Escondida FY98 10Escondida FY99 11Escondida FY00 12Escondida FY01 13Escondida YTD FY02 14Escondida Budget FY02 15Escondida Budget FY03 16
1718192021222324252627
Escondida Laguna Seca 28
Estimated Brook Hunt 200
1011
1214
13
1516 FY03
2
8
26 69
20
27 21
524
19 1723
7 22 25 4 18 31
28 Laguna Seca FY03
0.00
0.40
0.80
1.20
1.60
2.00
2.40
2.80
3.20
3.60
4.00
4.40
4.80
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 105 110
Productivity (ton Milled/Hour)
Uni
t Cos
t (U
S$/to
n M
illed
)
UQ:55,0
LQ:1,96
Laguna Seca including Filter and excluding Overland Conveyors and Camp Cost
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 30
Escondida SX-EW Oxide Plant
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 31
Oxide Production – ‘000s Tonnes of Cathodes
1.4%
1.2%1.1%
1.0% 1.0% 1.0%
0.8% 0.8%0.7%
0
20
40
60
80
100
120
140
160
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Fiscal Years
'000s
Ton
nes
0.0%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
Ore G
rade
Sta
cked
(% C
u)
History Forecast Budget Ore Grade (%)
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 32
Oxide Unit Cost – US$/lb Cathode
0.262 0.250 0.249 0.244 0.256
0.00
0.05
0.10
0.15
0.20
0.25
0.30
1998 1999 2000 2001 2002 2003Fiscal Years
US$ /
lb C
atho
de
History Forecast Budget
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 33
Unit Cost & Productivity: OxideOxide
123456
Escondida FY00 7Escondida FY01 8Escondida YTD FY02 9Budget FY02 10Budget FY03 11
121314151617181920212223
Estimated CRU
23
12
17
1144
19
1822
21520
16
3
65
13
21
711 FY03
10 98
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
55.0
60.0
0 20 40 60 80 100 120 140 160 180 200 220 240
Productivity (Kg-Cu/Hours)
Uni
t Cos
t (cU
S$/L
b)
UQ:135.8
LQ:25.2
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 34
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 35
Head Grade - % Contained Copper
2.75%2.22%
1.95% 1.89% 1.69% 1.65% 1.56% 1.61% 1.53%1.57%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007Fiscal Years
Head
Gra
de %
Cu
History Forecast Budget
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 36
Escondida – Substantial Production Flexibility
Copper Production
-
200
400
600
800
1,000
1,200
1,400
1,600
1,80020
02
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Fiscal Period
Copp
er -
000
's t
Escondida Escondida + Development Projects
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 37
Escondida – Substantial Production Flexibility No Limits
-
200
400
600
800
1,000
1,200
1,400
1,600
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Fiscal Period
Copp
er -
kt
Escondida Base Development Projects
Limited at 1,000 ktpa
-
200
400
600
800
1,000
1,200
1,400
1,600
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Fiscal Period
Copp
er -
kt
Escondida Base Development Projects
Limited at 1,400 ktpa
-
200
400
600
800
1,000
1,200
1,400
1,600
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Fiscal Period
Copp
er -
kt
Escondida Base Development Projects
Limited at 1,200 ktpa
-
200
400
600
800
1,000
1,200
1,400
1,600
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Fiscal Period
Copp
er -
kt
Escondida Base Development Projects
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 38
Historical Global Copper Market Situation
0
2
46
8
10
1214
16
18
1980
1985
1990
1995
2000
Stoc
k/C
onsu
mo
(Sem
anas
de
Dem
anda
al T
érm
ino
del T
rimes
tre)
0
20
40
60
80
100
120
140
160
Prec
io T
rimes
tral d
el C
obre
(U
Sc/lb
)
Strong increase in price when stock levels fell
below 5 weeks of demand
The strong temporary price increase reflects
the influence of speculative agents
Stocks pass over
critical levels and
rising
Market Conditions:
Today worse than 1998 but not so bad as the start of the
’80s
Stock Demand
Copper Price
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 39
Resistance to Closure and Consolidation• Persistent optimism of imminent return of higher prices• Most operations making cash at $0.65/lb
– Higher cost assets have already closed or improved cost competitiveness
• Cross subsidization of asset portfolio• Re-financing opportunities at historically low rates• Country priorities: foreign exchange, employment, basic
services, etc• Lack of feed for integrated smelters• Excessive environmental liabilities associated with many
take-over targets
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 40
The Way Forward• The Project Apollo has been very successful for FY02
– Led to a supply-demand balance in the copper market– Prompted a 7 cent / lb rise in price
• No market commitment beyond Calendar 2002
• Major decision pending in December 2002 with regard to production levels for Calendar 2003
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 41
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 42
Key Business Drivers(Effect of Incremental Movements on EBIT)
• Copper Price 1c/lb = US$21m• C1 Costs 1c/lb = US$21m• Mill Recovery 1% = US$16m• Headgrade 0.01% = US$8.5m• Mill Throughput 1k TPD = US$7.5m• Concentrate Grade 1% = US$7m• TCRC’s 5% change = US$5.5m• Peso FX Rate 10 peso = US$4m• Power 0.1c/kwh = US$2m• Fuel 1c/l = US$1m
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 43
Financial Performance: Strong Cash Despite Poor Global Economic Conditions
(131)111341EBIT SVA (US$m)
16.135.135.8ROE(%)
-480764Dividends(US$m)
6.014.618.5ROC(%)
(383)134456FCF(US$m)
143375481Net Profit(US$m)
FY02FY01FY00Metric
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 44
Controlling Cost (C1) Against a Declining GradeMines
1234589
1112
Escondia FY98 13Escondia FY99 14Escondida FY00 15Escondida FY01 16Escondida FY02 17Escondida Budget FY03 18
192021222324252627282930313233
Estimed Brook Hunt 2001
11
2124
32
20
22
1213 FY988
28
312 15 FY00
4
33
1
27
16 FY0117 FY02
3
18 BFY03
5
9
253029
26
14 FY99
23
19
5
15
25
35
45
55
65
75
85
95
105
0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8Grade Ore (%)
C1
(US
$/P
ay L
b)
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 45
Maintaining C3 Units Costs Below US$0.60/lbMines
1234589
1112
Escondia FY98 13Escondia FY99 14Escondida FY00 15Escondida FY01 16Escondida FY02 17Escondida Budget FY02 18Escondida Budget FY03 19
202122232425262728293031323334
Estimed Brook Hunt 2001
20
24
14 FY99
27
3031 26
9
5
19 BFY03
18 BFY02
3
17 FY0216 FY01
28
1
34
415 FY00
2
32
29
8
13 FY98
12
23
21
33
25
2211
20
30
40
50
60
70
80
90
100
110
0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2.8Grade Ore (%)
C3
(US
$/Pa
y Lb
)
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 46
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 47
Achieve a “Zero Harm” Culture STRATEGIC KEY ELEMENT HSEC
We will achieve our HSEC Zero Harm goals through: – Managing by walking around with a focus on safe behaviours– Simplifying and rationalizating our systems and procedures under the BHP
Billiton Standards– Entrenching Cardinal Rules into our culture– Requiring demonstrated safety performance when considering promotions– Engaging our contractors and subcontractors in the same way that we engage
Escondida’s workforce in our safety program– Being proactive and transparent on environment issues and maintaining our
ISO 14001 accreditation – Directing 1% of our pre-tax profit to activities that will benefit the community– Promoting a culture that actively encourages the social and environmental
responsability of each of our employees
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 48
STRATEGIC KEY ELEMENT NPVOptimize Escondida’s Net Present ValueWe will optimize NPV by:
– Taking a leadership role within the industry and adopting a flexible production profile
– Continually focusing on cost reduction– Leveraging Operational Excellence and the Maintenance Improvent
Programs– Using tollgating to improve our Capital Productivity– Capturing the synergies of both concentrators– Leveraging leach technologies– Taking a leadership position in the responsible management of the
use of fossil water; 10% reduction in water requirements
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 49
STRATEGIC KEY ELEMENT PEOPLE
Achieve Maximum Potential with Employees
We willl ensure Maximum Alignment Among Employees, Organizational Structure & Performance Management Systems by:
– Attracting and retaining high quality employees– Creating a high performance environment– Focusing on the development of technical and people leaders– Ensuring that learning and skills development are applied to everyone in
the organization– Creating a work environment where we have positive, mature, and direct
working relationships
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 50
STRATEGIC KEY ELEMENT CUSTOMERS
To Be The Preferred Supplier of Copper in Concentrate & Cathodes
We will achieve our value proposition to customers through:
– Achieving appropriate geographical and market diversification
– Leveraging the BHP Billiton Base Metals Marketing hub
– Minimizing the impact of variability and low concentrate grades
– Emphazising continuous and proactive interaction between the Operational and Marketing areas
– Maintain status as a quality supplier through producing improvedlevels of Grade A quality cathode
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 51
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 52
Waste Dump
Norte Pit
Escondida Pit
LagunaSeca Conc
Los ColoradosConcentrator
ROM Leach Pads
Facilities
Crusher
CMZ
– Open Pit– Premine 250 MT– Sulphide Ore
– 584 MT @ 1.3 % TCu– Oxide Ore
– 97 MT @ 0.82 % SCu– Sulphide Low grade
– 442 MT @ 0.6 % TCu– 5 Electric Shovel– 39 Haul Trucks– 1 Semi Mobil Crusher– 6 Km Land Conveyors– Maintenance Shop– Capital
– Order of magnitude US$400m (100%) including US$170 pre-strip
Escondida Norte
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 53
Escondida Sulphide Leach Outline
84,000 tpa Cathode84,000 tpa Cathodes
Run of Mine Dump
Sulphide Leach CircuitAcid solution
Solvent Extraction
Electrowinning
Pregnant Solution
Rich ElectrolyteLean Electrolyte
Approx 50 Mtpa @0.5% TCu• 2.3 Billion tonnes sulphide ore at 0.55%TCu• Current stockpile 86Mt• Copper recovery by:
– ROM leaching– Solvent extraction– Electrowinning
• Expected recovery 30-35%• Approx 50% of Cu is chalcopyrite• Tonnage & mineralogy highly variable
• Initial copper production 84 ktpa• Increasing to 234 ktpa as ore supply
increases and oxide T/H capacity becomes available
• Estimated operating cost of <40 cents/lb• Capital – Order of magnitude US$500m
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 54
Presentation Content• Geographical Location• Escondida Strengths• Operations Operview• Production (Including Apollo)• Financials• Business Strategy & Risk Management• Growth Opportunities• Current Activities
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 55
Action Plans – HSEC• Simplification and streamlining proposal of the HSEC
systems under the BHP Billiton Standards• Employ the Landmark process to engage the workforce and
ensure their commitment to a zero harm workplace• Implemention of Cardinal Rules Program• Development of Drug/Alcohol Policy• Alignment of HSEC & RDO• Encourage employee participation in Company sponsored
assistance projects for the community to instill a sense of social responsibility in Escondida’s employees,
• Adoption of Dupont Job Observation methodology
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 56
Action Plans – NPV• Los Colorados Mill improvement program• Mine to mill improvement project• Light dump bodies project• Develop long term water sourcing plan• Inventory reduction program• Flexible production plans• Develop a program for coordinating plants, crushers,
shovels, pipelines, filters shutdowns• Development of an integrated production system
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 57
Action Plans – PEOPLE• Implementation of an employee climate survey
• Continuous development of a team based work structure
• To build an integrated Performance Management system which links competency development, individual performance on the job and remuneration
• To perform the second teams check-up (HISI)
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 58
Action Plans – CUSTOMERS
• Realignment of specifications of concentrate grades in sale contracts
• Develop plan to address concentrate grade reduction and variability issues
• Develop LME average price achievement strategy
• Develop standards for exchange of commercial documentation
Base Metals CSG - Escondida - Merrill Lynch Analysts Andean Adventure18 Nov 2002Page 59
Escondida’s Strengths to Maximize Long Term Value
Strong Cash Flow
Strong Cash Strong Cash FlowFlow
Low Cost ProducerLow Cost Low Cost ProducerProducer
Strong Credit Ratings
Strong Strong Credit Credit RatingsRatings
Stable CountryStable Stable
CountryCountry
Unequalled Resource
Unequalled Unequalled ResourceResource
High Quality ConcentrateHigh Quality High Quality ConcentrateConcentrate
Strong SponsorsStrong Strong
SponsorsSponsors
Ability to Manage
Expansions
Ability to Ability to Manage Manage
ExpansionsExpansions
Diversified Sales BaseDiversified Diversified Sales BaseSales Base
World’s Largest
Copper Mine
World’s World’s Largest Largest
Copper MineCopper Mine