MINERA ESCONDIDA
ANALYSTS VISIT
April 24th, 2004
Slide 2
Presentation Content
• Escondida Overview• Operations• Financial Overview• Business Strategy• Growth Opportunities• Marketing• Current Activities
Slide 3
Northern Chile’s Atacama Desert,160 km South East of Antofagasta
TATAL
INCA DE ORO
EL SALVADORCHAÑARAL AR
GEN
TIN
A
COLOSO
ANTOFAGASTA
MEJILLONES
ZALDIVARMONTURAQUI
ESCONDIDA
CALAM A
CHUQUICAMATA
CH
ILE
TOCOPILLA
POTRERILLOS
BOLI
VIA
World’s Premium Copper Region
Cerro ColoradoQuebrada BlancaCollahuasi
El AbraChuquicamata
Radomiro Tomic
Michilla Lince
Mantos Blancos
El Tesoro
EscondidaZaldivar
El Sa lvadorManto VerdeLa Candelaria
El IndioAndacollo
Los Pelambres
El Soldado Andina
Los Bronces El Teniente
Lomas Bayas
Spence
Slide 4
Aerial View of MELEscondida
Norte
Oxide Leach Pads
Main Pit
Phase IV Plant site
ZaldivarPit
HamburgoTails
Concentrator
5 kmN
ZaldivarLeach Pads
Slide 5
Facilities Layout
HamburgoWaste Dump
Limit
E. Norte Waste Dump
Limit
Main Pit Ultimate
Limit
E. Norte Pit Ultimate
Limit
Northern Waste
Dump Limit
CMZ Property
Limit
Phase IV Plant
site
5 km
N
Slide 6
Coloso Filter & Port
Coloso Filter & Port Facilities
Slide 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
WorldWorld’’s s Largest Largest
Copper MineCopper Mine
Slide 8
World’s Largest Copper Mine
Source: Brook Hunt & Associates, Estimated year 2003, Escondida FY03 and Escondida Laguna SecaBudget 2004
L ead ing C op per M ine Sites
C o pp er Pro d uction ( Cu Payable '000 to n nes)
E sc ond ida
Los P e lambres
Morenci
E l T en ien te
C huqu icamata
Collahuas i
And ina
B ingham Canyon
Radomiro Tom ic
Batu Hijau
P T Freeport Indones ia
KG HM P o lish Cu
Laguna S eca
- 2 00 40 0 6 00 80 0 1.00 0 1 .2 00Copper Product ion ( Cu Payable '000 tonnes)
Leading Copper Pro ducers C ompanies
S PCC
A nto fag asta plc
M IM Holding s
KGHM P olska Mie dz
An glo Am erica n plc
F-M cM Co ppe r & Gold
Grupo M exic o
Rio Tint o
Ph elps Dod ge
BHP Billiton
E scond ida
Code lc o
0 500 1.000 1.500 2.000
Lag un a S eca
Slide 9
Sponsored By World’s Premier Metals & Mining Houses
BHP Billiton LimitedBHP Billiton Limited100% 100%
BHP BHP EscondidaEscondida Inc Inc 57.5%57.5%
Rio Rio TintoTinto Plc Plc 100%100%
Rio Rio TintoTintoEscondidaEscondida Limited Limited
30%30%
Mitsubishi Corporation 60%Mitsubishi Corporation 60%Mitsubishi Materials Corp 20%Mitsubishi Materials Corp 20%
Nippon Mining & Metals Co Ltd 20%Nippon Mining & Metals Co Ltd 20%
Japan Japan EscondidaEscondidaCorporation Corporation
10%10%
International FinanceInternational FinanceCorporationCorporation
2.5%2.5%
MineraMinera EscondidaEscondida LimitadaLimitada
Owners CouncilOwners Council
Slide 10
Unequalled Copper Resource
Source: Brook Hunt Data for estimated year 2003.Escondida FY03.
Ore Head Grades Against Copper in Concentrate Production
Ok TediCandelaria
PT Freeport
Escondida w ith Cathodes
Escondida
Bingham Canyon
Batu Hijau
High land Valley
Los PelambresCollahuasi
Andina
Los BroncesCuajonesAlumbrera
100
300
500
700
900
1.100
1.300
1.500
1.700
1.900
2.100
0,00 0,50 1,00 1,50 2,00Head Grade (% )
Copp
er in
Con
cent
rate
( Pa
yabl
e in
Mlb
s)
Slide 11
Total Ore Reserves and Mineral Resources:Official declaration at June 30, 2003, JORC Competent Person: Dr J M Gilligan
Ore Tonnes Grade Metal Tonnes Grade MetalType (millions) (%Cu) (mlbs) (millions) (%Cu) (mlbs)
Sulphide 1,514 1.21 34,293 2,121 1.12 52,550 LG Float 570 0.60 6,026 1,396 0.59 18,254
Escondida LG Leach 673 0.43 6,442 Mixed 51 1.04 478 111 0.82 2,013 Oxide 191 0.71 2,617 248 0.65 3,567 Sulphide 502 1.44 13,541 649 1.33 19,014
Escondida Norte LG Float 95 0.61 998 642 0.58 8,190 Mixed 43 0.81 761 Oxide 105 0.77 1,478 142 0.79 2,476
Sub-Totals All Sulphide 2,680 1.10 54,859 5,481 0.86 104,449 Mixed 51 1.04 478 154 0.82 2,775 Oxide 296 0.73 4,094 390 0.70 6,043
TOTAL All Types 3,027 59,431 6,025 113,266
Ore Reserves Mineral Resources
Slide 12
Copper Production & Head Grade
Material Milled, Headgrade and Copper Production
0
200
400
600
800
1,000
1,200
FY91 FY92 FY93 FY94 FY95 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03 FY040.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
Tonnes milled (00 000) Production (Cu Contained) (kt) Headgrade (%)
YTD
Slide 13
Concentrate Grade Long Term:Historic Annual Copper in Concentrate (All Production)
32%
34%
36%
38%
40%
42%
44%
46%
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003Fiscal Years
Conc
entra
te G
rade
(%Tc
u)
Slide 14
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”
Slide 15
Ore-Related Concentrate Grade & Quality Drivers• Copper Mineralogy
– Chalcocite to chalcopyrite ratios decrease with depth• Pyrite Content
– Increasing pyrite content over last several years• Sulfide-Sulfide and Sulfide-Gangue Intergrowths
– Dependent on alteration, lithology, and degree of enrichment• Trace Element Geochemistry
– Zonation of trace and minor elements within ore deposit– Elements such as Ag, As, and Cd contained within copper sulfides,
with high recovery
Slide 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
Slide 17
Phase IV: Laguna Seca Concentrator:Detailed Site Layout
Slide 18
Presentation Content
• Escondida Overview• Operations• Financial Overview• Business Strategy• Growth Opportunities• Marketing• Current Activities
Slide 19
Escondida Organisational Structure
VPExternal & Corporate Affairs
Mauro Valdés
VPHuman Resources
Mark Stone
VPMine
Larry Hartley
VPFinance
Alfredo Atucha
VP (A)Process
Frank Cappelli
VPOperations Services
Jorge Muñoz
ManagerHealth & SafetyHans Sandoval
President (A)MEL
Kevin O'Kane
Slide 20
Employment
•Avg workforce age – 40 years
•Avg length of service – 8 years•Employee turnover – 0.38%•Attendance rates – 96,6%+ •Female employees – 3.9%•Expatr iate employees – 0.53%
Antofagasta Coloso Escondida Santiago Total MelExpatriates 2 0 11 0 13Operators 0 70 1.698 0 1.768Technical & Admin. 21 0 100 0 121Professional/Mgrs 49 17 475 10 551Total 72 87 2.284 10 2.453
Permanent Contractors 2.135
Capital Projects 1.167
Total Contractors 3.302
Note: As at 30 September 2003
Slide 21
Safety – Lost Time Frequency Rate (LTIFR)
1.501.00
2.001.65
3.77
4.54
2.81
3.43
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
1998 1999 2000 2001 2002 2003 2004 YTDA 2004YTDB
Fiscal Years
LTIF
R pe
r mm
h
Slide 22
Minera Escondida Ltda.
Dimensions Now Final
E-W 2.2km 3.5km
N-S 3.2km 4.8kmDepth 465m 750m
Escondida Mine Pit
Slide 23
Escondida Mining Fleet FY-04
• Electric Rope Shovels – Total 14- P&H 4100 XPB (73 yd Dipper) 3- BE 495HR (67 yd Dipper) 1- BE 495 (55 yd Dipper) 9- BE 395 (30 yd Dipper) 1
• Haul Trucks - Total 92- Komatsu 830E (240 mt) 28- CAT 793 B&C (240 mt) 48- CAT 797 (380 mt) 16
• Front End Loaders – Total 3- CAT 994 (23 yd Bucket) 3
• Drills – Total 15- BE 49R R2s (8), IR DMM2s (2), DM45 (2), CM780 (1) & P&H 250XPs (2)
• Auxiliary Equipment – Total 52
Slide 24
Mine Production – ‘000s TPD Ex-Pit
681725
835901
814858
678
0
100
200
300
400
500
600
700
800
900
1000
1998 1999 2000 2001 2002 2003 2004Fiscal Years
'000s
Ton
nes
per D
ay
Histor y YTD
Slide 25
Los Colorados Concentrator
Slide 26
Laguna Seca Production – ‘000s TPD Milled
51.5
95
0
10
20
30
40
50
60
70
80
90
100
2002 2003 2004Fiscal Years
'000s
Ton
nes p
er D
ay
Histor y YTD
Slide 27
Concentrate Grade Ex-Coloso - % Cu Contained
41.4% 39.8% 39.9% 39.8%35.6% 37.3% 34.7%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
1998 1999 2000 2001 2002 2003 2004Fiscal Years
Conc
entra
te G
rade
% C
u
Histor y YTD
Slide 28
Coloso Port – ‘000ts Concentrate Shipped
2,145 2,1051,813 1,682
2,056 1,8532,073
0
500
1000
1500
2000
2500
1998 1999 2000 2001 2002 2003 2004Fiscal Years
'000s
Ton
nes S
hipp
ed
Histor y YTD
Slide 29
Copper Production – ‘000ts Cu Contained in Concentrate
838 845726
611755
641
860
0
100
200
300
400
500
600
700
800
900
1000
1998 1999 2000 2001 2002 2003 2004Fiscal Years
'000s
Ton
nes o
f Cu
Cont
ained
Histor y YTD
Slide 30
Oxide Production – ‘000s Tonnes of Cathodes
56.4
150.7 145.1 150.5136.7
113
0
20
40
60
80
100
120
140
160
1998 1999 2000 2001 2002 2003 2004Fiscal Years
'000s
Ton
nes
Histor y YTD
Slide 31
Copper Production – ‘000ts Cu Contained
838 845726
611755
641
56151
145151
137
113
860
860 894996
871766
892
754
0
200
400
600
800
1000
1200
1998 1999 2000 2001 2002 2003 2004Fiscal Years
'000s
Ton
nes
of C
u Co
ntain
ed
Concentr ate Cathodes Total
Slide 32
Presentation Content
• Escondida Overview• Operations• Financial Overview• Business Strategy• Growth Opportunities• Marketing• Current Activities
Slide 33
C1 Unit Costs in the 1st QuartileEstimated 2003 Brook Hunt, Copper Industry C1 Cost Curve
Esco
ndid
a
0
25
50
75
100
125
0 5000 10000 15000 20000 25000
Cumulative Production (Payable in Mlbs)
C1
Cash
Ope
ratin
g Co
st (U
S c/
lb)
Brook Hunt Estimated 2003, Escondida FY03
Slide 34
C2 Unit CostsEstimated 2003 Brook Hunt, Copper Industry C2 Cost Curve
Esco
ndid
a
0
25
50
75
100
125
150
0 5000 10000 15000 20000 25000
Cumulative Production (Payable in Mlbs)
C2 P
rodu
ctio
n C
ost (
US c
/lb)
Brook Hunt Estimated 2003, Escondida FY03
Slide 35
Only 3 Producers with a Lower C3 Unit Cost
Brook Hunt Estimated 2003, Escondida FY03
Estimated 2003 Brook Hunt, Copper Industry C3 Cost Curve
Esco
ndid
a
0
25
50
75
100
125
150
175
0 5000 10000 15000 20000 25000
Cumulative Production (Payable in Mlbs)
C3
Prod
uctio
n C
ost (
US
c/lb
)
Slide 36
Optimize 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 Six Sigma 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
STRATEGIC KEY ELEMENT NPV
Slide 37
Achieve Maximum Potential with EmployeesWe 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
STRATEGIC KEY ELEMENT PEOPLE
Slide 38
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
– Utilizing the BHP Billiton Base Metals Marketing structure
– Reducing the impact of variable concentrate grades
– Emphazising continuous and proactive interaction between theOperational and Marketing areas
– Maintain status as a quality supplier through producing improved andpredictable levels of Grade A quality cathode
STRATEGIC KEY ELEMENT CUSTOMERS
Slide 39
Presentation Content
• Escondida Overview• Operations• Financial Overview• Business Strategy• Growth Opportunities• Marketing• Current Activities
Slide 40
Sulphide Leach – Project Summary• 1.6 billion t sulphide ore at 0.6%tcu• Current stockpile 100mt• Copper recovery by:
– ROM leaching– Solvent extraction– Electrowinning
• Expected recovery 36%• Approx 50% of Cu is chalcopyrite• Initial copper production 180 ktpa• Increasing to 245 ktpa as ore supply
increases and oxide T/H capacitybecomes available
• Initial capital $ 870M (incl. water supply)• Operating costs < $0.35/lb Cu
Crush & Leach + Sulphide/ROM Leach OperationsEW Copper Production
-
50
100
150
200
250
300
350
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
Fiscal Period
EW C
oppe
r Pr
oduc
tion
- k
t Sulph ide/ROM Leach
Crush Leach
Crush Leach EW Capacity
EW Capacity with ROM Leach
60-100 Mtpa @ 0.6% TCu
Solvent Extraction
Electrowinning
180-245 ktpa cathode
raffinate
Air
Slide 41
Bioleaching Technology• Sulphide leaching requires ferric iron as oxidant• Conversion of ferrous iron to ferric is catalyzed by bacteria
– Without bacteria, leaching is slow due to lack of ferric iron• Main bacteria are mesophiles such as thiobacillus ferrooxidans• Mesophiles occur naturally in ore and thrive in acidic conditions at
temperatures from 20-40C• Bacteria require oxygen as does the oxidation reactions
– Forced aeration is key for high bacterial activity and fast leaching• The process is simple and robust
Slide 42
Presentation Content
• Escondida Overview• Operations• Financial Overview• Business Strategy• Growth Opportunities• Marketing• Current Activities
Slide 43
Diverse Customer BaseCOPPER CONCENTRATE SALES BY DESTINATION - 2003
Japan25.8%
Chile22.1%
South Korea8.9%
Germany8.0%
Other14.3%
Merchants7.3%
China6.1%
Finland0.4%
Iran0.4%
India4.1%
Sweden3.4%
Brazil3.3%
Philippines3.0%
Bulgaria2.7%
South Africa1.6%
Spain2.8%
Slide 44
Diverse Customer BaseCATHODE SALES BY DESTINATION - 2003
France11.8%South Korea
10.8%
Brazil6.7%
Italy5.9%
Canada3.6%
Spain3.0%
UK2.0% Turkey
0.8%
Intermediaries / BMAG21.9%
Japan8.2%
Taiwan8.5%
Germany12.5%
Chile4.2%
Slide 45
Presentation Content
• Escondida Overview• Operations• Financial Overview• Business Strategy• Growth Opportunities• Marketing• Current Activities
Slide 46
What caused the water problem between Novembre 2003 andJanuary 2004:
•Deteriorated water-pulp separation from tailings•Inability to increase fresh water supply to Laguna Seca Concentrator to compensate reduced reclaim water return•Hydraulic restrictions in the tailings transport system did not allowall tailings to report to the impoundment
Water Issue
Slide 47
1. Secured fresh water to the Laguna Seca Concentrator through an additionalwater line
2. Implemented an aggressive maintenance program to restore wells in variouswell fields
3. Identified mineral ore types that cause water-pulp separation problems, allowing the mine to better blend plant feed
4. Identified a flocculant that allows the production of higher underflow densityat lower yield stress and viscosity
5. Will construct a protective wall around the pump barges in the tailingsimpoundment
6. Will embark on an engineering program to eliminate hydraulic problems in the tailings transport system
7. Drilled new wells, allowing MEL to pump up to legal and environmental limits8. Established a water strategy that will secure future water supply to the
operation
Water Issue - How MEL is solving the water problem
Slide 48
Action Plans – HSEC
• Simplification and streamlining proposal of the HSEC systems underthe BHP Billiton Standards
• Employ the Landmark process to engage the workforce and ensuretheir 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
Slide 49
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
Slide 50
• Implementation of an employee climate survey
• Continuous development of a team based work structure
• To build an integrated Performance Management system whichlinks competency development, individual performance on the joband remuneration
• To perform the second teams check-up (HISI)
Action Plans – PEOPLE
Slide 51
• Eliminate backlog of concentrate deliveries arising from Apollo cuts
• Complete Sales Book restructuring
– Reduced sales to Merchants
– Increase sales to emerging smelter markets, eg., India andChina
– Initiate spot sales
• Continue to push transition to global market terms for concentrates
• Close cooperation with Escondida Operations to address concentrategrade reduction and variability issues
Action Plans – CUSTOMERS
Slide 52
Head Grade - % Contained Copper
2.75%2.22%
1.95% 1.89% 1.69% 1.54% 1.37%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
1998 1999 2000 2001 2002 2003 2004Fiscal Years
Head
Gra
de %
Cu
History YT D
Slide 53
ORE PRIMARYCRUSHER
STOCKPILE
AGLOMERATION
CRUSHING &SCREENING
SOLVENTEXTRACTION
ELECTRO-WINNINGRICH ELECTROLYTE
LEAN ELECTROLYTE
RAFFINATE
LEACH PAD
CONVEYING SYSTEM
COPPER CATHODES150.000 TPA
PLS
WASHING
STRIPPING
EXTRACTION
ORGÁNIC
SULFÚRIC ACID
WATER
ORGÁNICRECOVERY
Oxide Flowsheet