Group information / Commodity businesses

Xstrata Copper

Overview

Xstrata Copper is headquartered in Brisbane, Australia, with regional offices in Antofagasta and Santiago, Chile; Lima and Arequipa, Peru; Buenos Aires, Argentina; and Toronto, Canada.

Xstrata Copper’s mining and processing operations span regional operating divisions in five countries; in north Queensland, Australia, north Chile, southern Peru, north west Argentina, and in Ontario and Québec in Canada. It also manages a recycling business with plants in Canada, the United States of America and Asia. Xstrata Copper’s operating divisions employ more than 10,600 people.

Xstrata Copper is evaluating and managing a world-leading portfolio of copper development projects including Las Bambas in Peru, El Morro in Chile, El Pachón in Argentina and Frieda River in Papua New Guinea. In addition, on 21 December 2006, Xstrata Copper exercised its option to acquire 62.5% of the Tampakan project in the southern Mindanao region of the Philippines. The completion of the exercise and management handover of the project will occur on 30 March 2007.

Xstrata Copper has rapidly become a major global copper producer, with annual managed production of over one million tonnes of copper and substantial further growth potential. This mix of quality producing assets, development projects and a clear strategy geared towards further dynamic, profitable growth has established Xstrata Copper as an exciting part of the Xstrata plc Group.

Organisational Structure

Strategy

Xstrata Copper’s strategy is to:

Consolidate and build on the dramatic improvements in safety performance in the business with the strategic objective of achieving injury-free, safe work environments.
Demonstrate leadership in environmental performance.
Develop and retain a strong reputation for social responsibility in the broader community.
Maximise the net present value of existing operations through ongoing capital and operating efficiencies, ongoing grade profile optimisation and extensions to mine lives.
Capitalise on operating divisions to strengthen the regional position and develop a solid pipeline of new projects through active project development and business development work.
Implement disciplined cost management programmes to ensure cost competitiveness throughout the commodity cycles.
Attract and retain quality people and, through the implementation of a comprehensive human resources strategy, realise the full potential of our people.
Effective implementation of common business systems and practices.

Additional information

Xstrata Copper has in place policies and systems to ensure the highest standards of health, safety, environmental and community performance. Xstrata Copper is a signatory to the International Council on Mining and Metals’ Sustainable Development principles, and the Minerals Council of Australia’s ‘Enduring Value’ framework for sustainable development. In line with this commitment, annual sustainability reports are produced by each of the operating divisions and site-based community reports are prepared by each of the operating sites.

In Australia, Xstrata supports the activities of the Xstrata Community Partnership Program North Queensland (XCPP NQ), launched in December 2004 and the Xstrata Community Partnership Program Queensland (XCPP Qld), launched in March 2006.

The XCPP NQ will contribute AUD$4 million to community initiatives within the areas of enterprise and job creation, education, environment, social and community development, health, and arts and culture between 2005 and 2007.

From 2006, Xstrata contributed AUD$2.92 million to the XCPP Qld over three years. The program comprises five Queensland partnerships and has been developed on behalf of Xstrata’s three commodity businesses operating in Queensland – Copper, Zinc and Coal. The XCPP Qld focuses on state-wide initiatives in line with three of Xstrata’s six key CSI areas: health, social and community development, and education.

Xstrata Copper’s Minera Alumbrera business in Argentina has a comprehensive CSI Program, with an annual commitment of US$1 million for an extensive set of programs focusing on health, education and sustainable development. Community initiatives funded by the company include innovative agribusiness programs to help provide extra income for local farmers, literacy programs and infrastructure improvements in local schools and improvements to local health services.

During 2005, the Alumbrera social initiatives were significantly extended to include a US$3 million commitment over four years to specified health and education infrastructure works in Catamarca and US$3 million over three years for identified health infrastructure in Tucumán, in both cases through partnerships with the respective provincial governments.

Xstrata Copper’s Las Bambas project illustrates how Xstrata manages community impacts prior to the start of its operations. Long before exploration started, Xstrata established a community relations team with extensive experience in community consultation and including people fluent in the local dialect, Quechua. Through an extensive consultation process with local leaders and open meetings with local communities, the communities’ main needs and challenges and were identified.

Xstrata Copper is addressing these challenges and stimulating the local economy by fostering programs that encourage local employment, improving the skills of local people and working with them on projects to address priority issues identified by each community. In 2005, Xstrata Copper funded major projects in three main categories – health; livestock and pasture enhancement; and enterprise development and job creation, which are helping to improve people’s nutrition levels and animal husbandry skills.

Similar programs will be developed in Xstrata Copper’s newly acquired divisions and development projects as management implement a common approach towards community engagement and support.