Key challenges

Before and during construction

Local residents in the Las Bambas project's area of influence

Xstrata Copper's Las Bambas Project illustrates how the Group manages community impacts prior to the start of its operations.

Las Bambas is a significant copper project with the potential to grow the Xstrata Copper business. In March 2006, an Initial and Inferred Resource Statement was published with a global resource estimate of 300 million tonnes at 1.1% copper. A decision on whether to take up the option to construct a mine will only be made following the initial exploration process.

At Las Bambas, community relations were identified as the key risk facing the potential development of a mine in that area. Local communities in Peru, particularly in poorer and regional areas such as those within the Las Bambas project's area of influence, have historically not benefited from mining operations in the area. Long before exploration started, we established a community relations team headed by Community Relations Manager Raúl Farfan and comprising local people with extensive experience in community consultation. To facilitate effective communication between the local people and the community relations team, Xstrata's team includes two speakers of Quechua, the local dialect. The initial responsibilities of the community relations team were to understand the community decision making processes, build relationships, conduct awareness workshops, commence capacity building programmes to improve the local skills base for project-related work, and establish partnerships with local organisations. This work has been successful to date and we have been able to achieve up to 90% local involvement in community consultation sessions, enabling key development projects to be jointly identified, prioritised and implemented (see the case study).

We have established partnerships with NGOs and other companies operating in the region including Asociacion Sodexho, Caritas, Pro Dialogo, CARE, GRADE and Aid to Artisans and local suppliers such as SENCICO. A code of conduct has also been developed for Xstrata Copper employees and contractors working at Las Bambas in consultation with local communities, in response to community concerns about the social impact of a workforce in the area. During 2005, we formed an independent advisory group (IAG) to help ensure that the Las Bambas project manages the complex social and environmental issues associated with mining operations in a socially acceptable way. The IAG, which comprises people widely experienced in managing these issues in developing countries, will meet at least twice a year to provide recommendations and advice to Xstrata. The IAG will publish an annual statement available from Xstrata's website that will provide a brief overview of the activities of the IAG, including any discussions with third parties, and identify the key sustainability issues facing the Las Bambas project that have been considered by the IAG. Further information about the IAG is available from www.xstrata.com/sustainability.