TIDMANTO
RNS Number : 9735Y
Antofagasta PLC
10 May 2023
NEWS RELEASE, 10 MAY 2023
CHAIRMAN'S COMMENTS AT THE 2023 ANNUAL GENERAL MEETING
Antofagasta plc (the "Company") today released the script to be
used by the Chairman, Jean-Paul Luksic at the Company's Annual
General Meeting that commences at 2:00 pm today.
Good afternoon, ladies and gentlemen.
Welcome to Antofagasta plc's 2023 Annual General Meeting.
It is a pleasure to be here in London to meet with our
shareholders. Thank you for joining us today, be it either in
person or virtually, and I confirm that we have a quorum
present.
The majority of our Directors are here in person today. You will
see that our CEO, Iván Arriagada, is also here along with several
senior members of our executive team who are available to answer
any questions that you may have if they aren't covered in the
meeting. Photos and short biographies of each of our Directors,
including their Board and Committee roles, are set out on pages 13
to 18 of the Notice of Meeting.
There is an important update since we published the Notice of
Meeting - the Board has appointed an additional independent
non-executive director and member of the Company's Audit and Risk
Committee. Please welcome Heather Lawrence to your Board.
Heather has significant experience as a UK non-executive
director. She is currently a non-executive director and Chair of
the audit committee of Melrose Industries plc. Previously, she was
a non-executive director of Coats Group plc, and a non-executive
director and Chair of the audit committee of FlyBe Group plc.
Now, I would like to give you a brief overview of the strategy
and performance of your company and make some comments on the macro
environment in which we are operating. Iván Arriagada will make a
short presentation about our performance in 2022 and then we will
move onto the formal part of the meeting. After that I will open
the floor for questions.
Let me start by saying a few words about how we operate.
I want to take this opportunity to acknowledge the efforts taken
by everyone in the company that resulted in a record safety
performance during 2022. Not only were we fatality free, but we
also lowered the number of high potential incidents and lost time
injury frequency rate to record lows. This achievement requires
vigilance and discipline from everyone at our operations - from the
leadership team to every employee and contractor.
As a Board, we acknowledge these achievements, and the
commitment to operating responsibly and reliably.
Although there were challenges in the operating environment over
the course of last year, production increased quarter on quarter in
line with our plans, with a strong finish to the year. Copper
production for the year totalled 646,000 tonnes, representing a
level below 2021 primarily because of limitations on availability
of water at Los Pelambres. Net cash costs were 1.61 cents per
pound, reflecting lower production and the impact of higher
inflation. Alongside these results, financial performance for the
company remained strong, with revenues of $5.9 billion and EBITDA
of $2.9 billion.
The Board has proposed that the total dividend should be $588
million, the full net earnings for the year. If approved by
shareholders today, the final dividend of 50.5 cents per share will
be paid to shareholders on the 12(th) of May.
Ongoing challenges such as the drought in Central Chile
highlight the importance of planned investments. Our continuing
engagement with local communities and decisions that we have taken
over the years have helped us to become a more resilient business.
The new desalination plant and related water system at Los
Pelambres is expected to start production during the second quarter
of this year, after completing commissioning. Together with the
start-up of this project, we also expect to finalise the permitting
to commence the expansion of the desalination plant to double its
original capacity. Once this expansion is completed, over 95% of
Los Pelambres' water will be either sea or recirculated water.
During 2022, public and private sector decisions to accelerate
the transition to a low-carbon economy continued to gather
strength. The United States passed the Inflation Reduction Act and
the European Union recently announced its Net Zero Industry Act.
Together they promise to spur further investment in the many
copper-intensive products and technologies that are integral to a
net-zero world. In November 2022, COP27 took place in Egypt,
drawing further attention and commitments from governments to a
net-zero future.
In the case of your Company, we are committed to provide the
copper that is required for a low carbon economy, and to continue
to transform how copper is produced to achieve the highest
sustainability standards. No less important than the metal itself
is how we produce it. We view our responsibility as operating
sustainably, reliably and with respect for local communities and
the environment, living up to our Purpose of 'Developing Mining for
a Better Future'.
Lowering emissions and reducing continental water use remain two
key strategic priorities, for which we have board-level focus, and
company-wide initiatives.
By 2025 we expect that 90% of the Group's water usage will
either be from the sea or recirculated water.
By the end of 2022, we exceeded our carbon emissions reduction
target, three years ahead of the originally planned date.
As a result, we are now in the process of defining new emission
reduction targets that will help us to achieve our goal of being
carbon neutral by 2050.
In April 2022, the last of our mining operations moved to 100%
contracted renewable energy, a transformation we committed to
pursue several years ago and which is now fully implemented.
Also, I am proud to share that starting from 2022, all our
mining operations have received The Copper Mark, which is an
independently verified responsible production accreditation
standard.
Environmental and social performance is critical to the
long-term success of our business and the global mining industry.
Therefore, I am pleased to report to you that your company is
taking a leading role in these key areas.
Allow me to say a few words about our future and plans for
growth.
We have several embedded organic growth options within our
portfolio, which stem from our sizeable mineral resources base. We
also have the capability to unlock further growth that will allow
us to continue to develop and grow our production into the
future.
At the grassroots level, we have several exploration projects
that are in different phases of evaluation, which will generate
organic growth for the Company. During 2022, we increased our
mineral resources by over 900 million tonnes of copper ore, with
over half of this increase coming from two recent exploration
discoveries in Chile.
In addition, we have the potential to continue to grow our
existing operations.
In the case of Los Pelambres, the current expansion is nearing
completion, with progress reaching over 96%, and we expect to start
the desalination and concentrator plants this year.
At Centinela, progress continues with the engineering and
pre-investment studies for the Second Concentrator project, which
has a projected investment of close to $ 4 billion and has the
capacity to increase our copper production by 140 thousand tonnes
annually, while also significantly increasing the current
production of gold and molybdenum.
We expect to have a final investment decision on whether to
proceed with this project during the second half of the year, once
there is clarity on the Royalty taxation changes in Chile and
progress on the new Constitution.
In summary, as you can see, our large mineral resource base
gives us options to develop our production at a time when copper
supply is becoming increasingly constrained.
Now, I would like to say a few words about your Board, including
our commitment to diversity and inclusion.
In 2022, our entire board met in person for the first time since
early 2020 due to the pandemic. The directors also made site visits
to at least one of our operations, including projects under
construction.
As explained in the Notice of Meeting and our Annual Report,
Vivianne Blanlot has served on our Board for more than nine years.
She has therefore stepped down from the Nomination and Governance
Committee and Remuneration and Talent Management Committee.
Vivianne has agreed to continue serving as a Director, Chair of our
Sustainability and Stakeholder Management Committee, and member of
the Projects Committee.
Francisca Castro also joined the Nomination and Governance
Committee and Eugenia Parot joined the Remuneration and Talent
Management Committee.
I am very proud to say that today 36% of our directors are
women. With the recent appointment of Heather Lawrence, more than
half of our Board appointments since 2014 have been women. We
continue to aim to increase female representation on our Board and
we are actively working towards meeting the 40% target.
At its core, Antofagasta plc is a long-term business. Our mines
operate on decades-long timelines, and our governance structures
are designed to help us achieve long-term sustainable success.
Now, I would like to briefly address the political situation in
Chile.
In a September referendum, the country rejected a proposed draft
for a new Constitution, reflecting support for a more moderate
approach going forward. A new Constitution will be drafted this
year, with a new referendum scheduled for December. My hope is that
this new Constitution will unite Chileans and provide the clarity
and stability that will help attract investments to Chile and all
the opportunities that flow from them.
Mining is a capital-intensive industry with long-term
commitments and risks, from discovery to production and closure.
Therefore, it is especially important for the future development of
the industry, that the new constitution includes a framework for
mining concessions that will provide the required long-term
certainty and predictability for investment.
After a long period of discussion between Congress, government
and industry, the proposed mining royalty bill is now with the
Senate before moving to the lower house. We remain concerned by the
impact that these proposed changes will have on the competitiveness
of the industry in the long term.
Our focus remains on ensuring that Chile's mining industry,
which accounts for more than 10% of the country's GDP, remains
globally competitive and will continue to further Chile's economic
and social development.
Let me finish with a few comments on the outlook for 2023.
Uncertainty clouds the short-term picture, yet important
features of the long-term are clearer. The world is moving towards
net-zero. That journey will demand more copper, and according to
some forecasters this could even be as high as 6 to 7 million
additional tonnes over the next decade alone. All this at a time
when the global copper supply is constrained by declining resource
quality and long lead times for project development and permitting.
Our focus remains on being a leading, responsible and reliable
producer of copper that the low-carbon world requires.
The International Monetary Fund forecasts that global growth
will slow in 2023 affected by several issues, particularly the war
in Ukraine, the strength and pace of China's recovery, the slowdown
of economic growth in the US and Europe, and the energy crisis.
Against this backdrop, at Antofagasta we have been working hard
over the last few years in several transformations including in the
areas of safety, energy and water supply. We have also focussed on
innovation and cultural change and in developing our future options
through advancing our projects. This makes us more resilient and
better prepared for the challenges ahead.
We know that in any environment, the diversity, safety, and
health of our people matter. So does the strength of our culture
and the discipline with which we operate and manage costs. Such
steps not only strengthen the core of our business but position us
so that 2023 is not defined by the challenges we face, but by our
responses to them.
Finally, I would like to express my special thanks to all our
people, employees and contractors who have contributed to the
continued success of your Company.
Investors Media - London
- London
Rosario Orchard rorchard@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Robert Simmons rsimmons@antofagasta.co.uk
Telephone +44 20 7808 0988
Media - Santiago
Pablo Orozco porozco@aminerals.cl
Carolina cpica@aminerals.cl
Pica
Telephone +56 2 2798 7000
Register on our website to receive our email alerts
http://www.antofagasta.co.uk/investors/email-alerts/
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