AGM 2020 Anglo American response to shareholder questions

I note in the Annual Report and Accounts that net debt increased (albeit to a modest level) caused in part by an increase in capex, and in part due to share repurchases. I am very aware that historically the mining industry has run into problems because of excessive uncontrolled capex. Can you please give us some comfort that the increase in capex is well controlled and not reckless? It makes no sense to me to borrow money to buy back shares, what was the average price paid, and how does that compare to the current share price?

Disciplined capital allocation throughout the cycle is critical to protecting and enhancing returns for our shareholders’ invested capital, given the long term and capital-intensive nature of our business. Our aim is to provide a balanced offering of a strong balance sheet, which reduces risk and creates opportunity for counter-cyclical investment, attractive shareholder returns and value-adding disciplined growth. In 2019, following a steady period of capital discipline and deleveraging, coupled with strong performance from our Platinum Group Metals and Bulks businesses, the Company was in a position to enhance returns to shareholders in line with our stated capital allocation framework, whilst at the same time progressing with key growth projects to deliver long term returns to our shareholders. Recent examples of our approach to a balanced, disciplined capital allocation framework include the syndication of the development of the greenfield Quellaveco project as well as the decision to follow a measured development path for the recently-acquired Woodsmith Project.

During the first quarter of 2020 we completed the previously announced $1 billion share buyback programme at an average price paid per share over the programme of £18.96. Whilst this price is higher than the current share price, the objective of the programme was to enhance long term shareholder returns and the price paid should therefore be considered within that context. The Company’s (and the sector’s) recent share price performance is considered to have been primarily reflective of the current heightened global uncertainties as a result of the COVID-19 pandemic. Reducing capital expenditure is one of the levers the company can utilise to protect its balance sheet in these uncertain times and the weakening of the currencies of the countries in which we operate relative to the US dollar will further assist in naturally reducing expenditure in US dollar terms, thereby further offsetting adverse financial impacts as a result of COVID-19.

Looking forward, I can see how metal prices have fallen due to COVID-19 (although copper appears to be bouncing back, and the impact on iron appears modest – nothing like the nightmare oil is facing), how does the company see metal prices for the remainder of the year?

Metals

Price forecasting in the current market is extremely challenging. Metals prices (copper, nickel and PGMs) have recovered slightly from their low point in March when economies around the world started to go into lockdown and demand was impacted, in the case of automotive production very sharply. However, supply has also been hit, including due to a number of mine shutdowns in South Africa, and a semblance of balance has returned. Market participants are also factoring in government stimulus and a gradual return of economic activity during this quarter and next.

We expect demand to recover during the remainder of this year, initially in direct industrial activity as factories reopen, and there is likely to be some bounce supporting short term prices. However, we remain cautious over the underlying strength of demand at the consumer level, and the lost ground is unlikely to be completely recovered quickly. In addition, the return of supply will unlikely be smooth, and this increases any uncertainty in the price outlook.

Bulks

Iron ore has been relatively well supported by a steel industry in China that was less affected than some industrial sectors, with some impacts on supply, and we expect the trend to continue through the rest of 2020. Metallurgical coal prices have reduced so far this year, with demand hit more strongly than supply at this juncture. Lower energy complex prices will likely exert negative pressure on thermal coal in the short term.

The Q1 2020 production numbers were barely impacted by COVID-19. How do you expect to see production impacted in the remainder of the year?

The effects of the COVID-19 pandemic only began to take hold on a broad basis at the end of the quarter and therefore first quarter performance was largely as expected. For our latest guidance on production for 2020, please view our Q1 production report.

The company has elected to hold a closed meeting with shareholders excluded. To my mind this fails to deliver on the fundamental purpose of an AGM (ie it is not a “meeting”). Although what you are doing is sanctioned by the FRC, why did you not choose to engage with shareholders by videoconference (such as that adopted by the Man Group) or audio conference (such as that adopted by Taylor Wimpey)? Both of these meetings featured a management update and live Q&A which are surely essential at this difficult time?

On 23 March 2020, the UK government introduced a restriction on all gatherings of more than two people in public. In the company’s 7 April update to shareholders in relation to the AGM, the Board recognised that the AGM is a valuable forum that provides shareholders with an opportunity to raise questions and comments to the Board. However, the health and safety of the Company's employees, shareholders and wider stakeholders are of paramount importance and the Board fully supports the measures being taken by the UK government.

In order to put in place alternative arrangements for shareholders for the AGM, the Board considered that the most prudent and inclusive option was to encourage shareholder engagement by means of a question registration process, open to all shareholders and without time or other constraints. The Board is pleased that a variety of shareholders submitted their questions, covering a broad range of topics, in fact including more questions than could normally be addressed at a conventional AGM.

Shareholders’ questions have been collated and responded to (whether individually or by topic) by the Chairman, and responses have been published on the Group’s website. Publication of all the responses on the website facilitates transparency by enabling all shareholders and wider stakeholders to refer to the Company’s responses.

We appreciate that there were different options available, but the approach taken by the Board is one that is supported by the Financial Reporting Council and has been adopted by a number of FTSE 100 and other companies.

What plans does Anglo American have to bring the Woodsmith mine into production? To what extent do they mirror and differ from the Sirius Minerals strategy and when is first Polyhalite production?

In the first two years under Anglo American’s ownership, we expect development work to be broadly in line with the revised development plan for the project, although we intend to update the development timeline, optimise mine design and ensure appropriate integration with our own operating standards and practices. During this period and subject to the update, development work of approximately US$300 million per year is expected. We will firm up the mine design and timing as we do our update work and we will provide updates in due course.

Aberdeen Asset Management

While reviewing your AGM papers I note that the gender diversity of your board has fallen from 33% to 27% in recent times. I am aware that Anglo American has a strong track record not just on gender diversity but also on diversity more broadly. Nevertheless, it would be helpful if you could provide some assurance that your board intends to attain the Hampton-Alexander standard again soon.

Yes – that is our intention. The Board is committed to ensuring that it has the right balance of skills, experience and diversity in all its forms, taking into account the targets of the Hampton-Alexander and Parker Reports. At the conclusion of the 2020 AGM, the Board will comprise 11 directors, of whom 27% are female. In terms of nationality, 9 members of the Board have a nationality other than British, with one of them originating from South America and two from South Africa. The Nomination Committee is responsible for ensuring the orderly succession planning of the Board. The Board is committed to its ongoing refreshment programme, which ensures that the skills and experience lost as a result of retirements and resignations are replaced, and to ensure continued gender and ethnic diversity on the Board.

Central Finance Board of the Methodist Church/Climate Action 100+

We welcome the company’s ambition to run carbon neutral operations. By when does the board seek for this to be achieved across the portfolio?

We have set ourselves the target of achieving carbon neutrality across our operations (Scopes 1 and 2) before 2040 and we are aiming to have eight of our assets carbon neutral by 2030. Achieving these targets will be contingent on the efficacy and value creation potential of a number of emerging abatement technologies, including those within our FutureSmart Mining™ programme, and other levers we can pull and how these shape specific emissions reduction pathways for each operation.

Will the company formally commit to a net zero scope 1 and 2 target, and before the next AGM at the latest?

Yes, we have set ourselves the target of achieving carbon neutrality across our operations (Scopes 1 and 2) before 2040 and we are aiming to have eight of our assets carbon neutral by 2030.

Through our FutureSmart Mining™ approach to technology, digitalisation and sustainability, we are developing and deploying a number of step-change technologies (including Bulk Ore Sorting and Coarse Particle Recovery and methane abatement) which are specifically aimed at significantly reducing energy use and our Scope 1 emissions. We are also developing new applications for our metals and minerals that enable lower emissions, both at our operations and globally (e.g. green hydrogen-powered fuel cell transport using PGMs, including for mine haul trucks).

We are taking a two tracked approach to addressing our Scope 2 emissions. Firstly, by reducing our overall energy consumption through the application of our FutureSmart Mining™ technologies. For example, we are deploying energy-recovery applications in ore processing – the most energy-intensive part of mining. Secondly, by increasing the proportion of renewable energy in our mix. About 15% of Anglo American’s energy needs are currently met by renewables. Renewables account for more than 85% of the electricity we use in Brazil - and we aim to increase this to 100% by 2022. In 2019 we signed a contract ensuring that electricity generated exclusively from renewables will power all our managed Chilean operations from 2021. We are actively looking to increase the use of renewables across Anglo American including, where necessary, through the construction of our own renewable power generation capacity.

In the absence of emissions reduction targets for scope 3 product use emissions, when may stakeholders expect to see alternative measurable, time bound and outcomes focused goals for the company’s initiatives related to scope 3 emissions?

Scope 3 emissions are complex to measure, but we have now completed an inventory which provides a detailed estimate across 15 categories covering the full value chain. This is now available at https://www.angloamerican.com/sustainability/environment/climate-change. We have some control over the sources of the emissions of a small number of the categories, and no control and limited influence over many, including the categories where the majority of the emissions sit – the processing and use of our sold products. We cannot, therefore, reduce these emissions without working in partnership with our customers, suppliers, other industry players, and through technological development. We are committed to reducing our Scope 3 emissions and for those categories over which we have some control, such as shipping, we are working with groups such as the Global Maritime Forum’s “Getting to Zero” coalition, aiming to deliver zero carbon shipping by 2050.

In categories over which we have no control and limited influence, our approach has two elements. Firstly, in respect of steel production, we are continuing to provide high quality iron ore and metallurgical coal, contributing to cleaner steel production, relative to lower quality feedstocks. Secondly, and in parallel, we are looking to work in partnership with customers who are committed to transitioning to low carbon steel production, particularly by developing technologies to reduce and/or capture carbon emissions.

How and when will stakeholders be provided with clarity and detail on the company’s approach and pathway to a responsible exit from thermal coal?

Anglo American has been reducing its thermal coal production footprint for some time, more than halving production since 2015 through the sale of our Eskom mines in South Africa and thermal coal assets in Australia. We are continuing along that pathway – ensuring a responsible transition – taking care to consider the needs of our employees, host communities and other stakeholders and to continue to nurture our assets through appropriate investment.

For many countries, particularly in the developing world, access to reliable and affordable energy depends on access to thermal coal. We therefore expect an important ongoing role for responsible thermal coal mining, preferably by companies that recognise society’s needs and environmental expectations and the vital role that many mines play in their local communities.

Our thermal coal operations in South Africa constitute a strong and attractive business with high quality well-located assets and with access to established export infrastructure. The operations provide a wide range of economic and social benefits for host communities and for the country, including significant employment, tax revenues, export earnings, and the provision of many essential community services. There are also significant social, economic and environmental benefits derived from the operations’ approach to land and water stewardship.

Given the significant scale and diversification of Anglo American and the capital allocation options we have across our global portfolio – combined with our overall trajectory towards those products that enable a cleaner, greener, more sustainable world – we believe that the long term prospects of our thermal coal operations in South Africa may be best served under different ownership.

We are therefore working towards a possible demerger of our thermal coal operations in South Africa as our likely preferred exit option, expected in the next two to three years, with a primary listing on the Johannesburg Stock Exchange for the demerged business. We will continue to consider other exit options as we engage with stakeholders as part of our commitment to a responsible transition.

Church of England Pensions Board

When assessed by the Transition Pathway Initiative (TPI)’s Methodology for the diversified mining sector, Anglo American are currently aligned with the Goals of the Paris Agreement. However, in the not too distant future your projections become unaligned. When will Anglo American’s Board agree medium and long targets, covering all their scope 1, 2 and 3 emissions so that Anglo American can become a Net Zero future business?

We have set ourselves the target of achieving carbon neutrality across our operations (Scopes 1 and 2) before 2040 and we are aiming to have eight of our assets carbon neutral by 2030. Achieving these targets will be contingent on the efficacy and value creation potential of a number of emerging abatement technologies, including those within our FutureSmart Mining™ programme, and other levers we can pull and how these shape specific emissions reduction pathways for each operation.

We look forward to the publication of your revised review of industry association memberships and encourage Anglo American to ensure, in real time, that both your direct and indirect advocacy activities are delivered in support of the Paris Goals. If we are to achieve a net zero world and a green post COVID-19 recovery, corporate climate lobbying will play an important role in helping to create the enabling policy environment that is necessary to deliver on your own scope 1 and 2 targets, and those of your clients that contribute to your scope 3. Are you able to share the specific ways in which you intend to practice responsible lobbying in the year ahead and the partnerships that you would seek to support to deliver your climate strategy?

We set out our commitments with regards to Industry Associations in a statement published in December 2019 at: https://www.angloamerican.com/sustainability/environment/climate-change. Accordingly, we will complete the next independent audit of our memberships of industry associations before the Annual General Meeting in 2021. In addition, the detail of all of our Industry Association memberships is now published on the website, including with contact details should any stakeholder wish to raise questions or concerns about those memberships. With regards lobbying, more detail can be found at https://www.angloamerican.com/sustainability/our-sustainable-mining-plan/political-transparency.

Anglo American has played an important and positive role in supporting the development of a Global Tailings Standard, as well as demonstrating best practice on tailings-related disclosures to the new global portal established by the Mining & Tailings Safety Initiative. Acknowledging that we are still to conclude a global standard, will Anglo American commit to continue to play as constructive a role as possible to ensure a Global Standard is agreed? Secondly, when we move to the implementation of a Global Tailings Standard will Anglo American commit to consider working across the mining industry and with the Mining & Tailings Safety initiative to support the creation of an independent 24/7 Global monitoring hub, similar in nature to that deployed for maritime and aviation, that can independently monitor dams and notify governments, regulators, local municipalities and companies when concerns are detected?

The safety of our employees and the communities living close to our operations is our number one priority and anything else that can be done to improve safety is absolutely welcomed by us.

We remain committed to being involved and continuing to play as constructive a role as possible to ensure a Global Standard is agreed as well as working closely across the mining industry and with the Global Tailings Dam Safety initiative on potential next steps ensuring we are playing our part and appropriate governance and oversight processes are in place. In addition, we are also committed to supporting global initiatives that relate to development of new supporting technical guidance and leading practices, as well as being active participants in international forums and research projects that relate to improving tailings dam safety.

We also made available on our website in 2019 the Anglo American Group Technical Standard for managing tailings storage facilities, which currently exceeds ICMM and regulatory requirements in all our jurisdictions, for other mining companies to use, as deemed necessary and appropriate.

Fairshare Educational Foundation

My question today relates to Anglo American’s gender pay gap. Firstly, I would like to thank Anglo American for publishing their gender pay gap this year. As a result of COVID-19 many businesses are facing unprecedented challenges, however the economic impact of the crisis is unlikely to be gender neutral. Therefore, it is important that companies continue to make progress on diversity and inclusion, an issue which in the eyes of investors continues to carry a significant reputational risk if not appropriately addressed. I understand that historically in the mining industry, women have been under-represented at all levels, particularly in senior roles and I was pleased to read ‘gender equality is a business imperative for Anglo American’. I was encouraged to read that Anglo American are progressing towards reaching the target of 33% female representation across the Group’s Executive Committee by 2023. However, there remains a significant pay gap - for UK head office average mean hourly pay gap of 50% and the median hourly pay gap 38%. Beyond a strategy of increasing the number of women in senior management roles can Anglo American give us an update on how it aims to address its gender pay gap? Will the board commit to publishing an action plan with time-bound targets to reduce the pay gap year on year, over the entire business? Furthermore, would Anglo American be willing to meet with ShareAction to discuss the firm’s overall approach to diversity and inclusion in more detail?

We have been working to address the challenges of longstanding gender imbalance within our industry, most evident at senior levels. While we are demonstrating our commitment through the actions we have taken and the improvements made at all levels of our business, both globally and within the UK, we recognise we still have much more to do and we know it will take time.

Our mean UK hourly pay gap of 50% (as at April 2019) is primarily a function of the representation of men in the most senior management roles in our UK head office. On a global basis, our gender pay gap of c.17% reflects the far greater balance across the full breadth of our business activities. We are confident that we do not have an equal-pay issue and are committed to paying our people fairly and competitively.

When we rank Anglo American’s 249 UK employees’ hourly pay from the lowest to the highest, and then split the number of employees into equally sized groups, we are able to see that there has been a large improvement year on year in the upper quartile, where the percentage of women increased from 18% to 34%, reflecting the higher proportion of females in senior roles compared with 2018. However, there remain proportionally more male employees than female employees in the higher pay quartiles.

We strive to create a more inclusive workplace to enable all our colleagues to achieve their full potential. We are adopting new approaches to recruitment, talent development, mentoring, and flexible working; while also focusing on both the psychological, as well as physical, safety of every one of our colleagues – aligned to our Values and guided by our Purpose.

We would welcome an opportunity to discuss our commitment to diversity and inclusion with ShareAction.

London Mining Network

Brazil

What is Anglo American’s position on PL 191/20, which proposes to open up indigenous territories to the exploitation of minerals, water resources and agriculture?

We do not operate in any indigenous territories. We currently have four requests for mineral exploration rights that have small overlaps with indigenous territories. The areas where our exploration rights overlap with these territories would be carved out of the exploration license granted by the National Mining Agency (ANM). Anglo American only carries out mineral exploration activities in authorised tenements.

The PL 191/20, if approved, would remove indigenous peoples’ power of veto. How does the company plan to still abide by the UN Declaration on Indigenous Peoples' right to 'Free, Prior and Informed Consent' and therefore those communities' right to say 'no' to any proposed mining activities on their lands? How does the company plan to carry out local public consultation about the planned operations in indigenous territories?

We do not have any operations in indigenous territories in Brazil. With respect to the UN Declaration on Indigenous Peoples rights to Free, Prior and Informed Consent (FPIC), our position, which is set out publicly on our website, states that: sites shall respect the rights, interests and perspectives of Indigenous Peoples, and take into account their unique and special connections to land, water and other natural resources. When engaging with Indigenous Peoples affected by our activities, the requirements detailed in IFC Performance Standard 7 on Indigenous Peoples and the ICMM Indigenous Peoples and Mining Position Statement shall apply.

Why are families downstream from the Minas Rio tailings dam not being given the same rights by Anglo American as those who were part of the original Land Negotiation Plan? Which are the criteria listed in the adhesion contract of the Optional Negotiation Program? What is the definition of a family/community entitled to resettlement and those that are not?

The communities downstream from the tailings dam are not located in the ADA (Directly Affected Area) and, as a result, were offered a voluntary relocation plan, according to Brazilian legislation. In contrast, communities located in the ADA are required to be relocated.

The voluntary relocation programme (PNO) was developed in 2017 by committees with representatives from the communities located outside the ADA, and is made available to the Água Quente, Beco, Cabeceira do Turco, Passa Sete, Sapo and Turco communities. The PNO is compliant with IFC Performance Standard number 5 and is based on the premises that no one will move to a location that is deemed to be inferior to their original location. There are minimum criteria for rural (3 hectares land) and urban (80 m2 house) relocations. The PNO can be implemented either individually or collectively, depending on the wishes of each family group, and includes all land regularisation and moving expenses, food baskets (24 months), training and livelihood restoration (36 months). Independent technical advice (ITA) is also available, should the family wish to be assisted.

What has Anglo American been doing and what is it planning to do to abide by the commitment to guarantee Independent Technical Advice for the communities in the area at Minas Rio? When does the company foresee the provision of this Independent Technical Advice to local communities?

Anglo American committed to the communities that it would provide independent technical advice (ITA) in 2017, long before it became a legal requirement. Anglo American has provided the funding for an ITA for the Beco, Cabeceira do Turco, Sapo and Turco communities since 2019. Nine additional communities (Água Quente, Córregos, Gondó, Itapanhoacanga, Passa Sete, São Jose do Jassém, São Jose do Arruda, São Jose da Ilha and Taporoco.) have chosen ITAs, who are currently preparing their work plans to submit to the environmental authority (SEMAD-MG) and the state public prosecutor office.

How is Anglo American responding to the lawsuit against Anglo American Minas Rio Mineração? Will Anglo American commit to suspending their operations and not challenging the decision if they are found to indeed be violating the Minas Gerais State Law (Mar de Lama Nunca Mais)? Is Anglo American considering maintaining operations even if it violates a Minas Gerais State Law?

Anglo American does not operate violating any law or regulation. The Minas Gerais State Law is not applicable to the operating licence obtained in 2019, as declared by the relevant state authorities.

Has Anglo American made their shareholders aware that there is a legal challenge to the operating licence at Minas Rio because of the risks to the physical and psychological safety of communities living below the tailings dam? 

Anglo American was granted the next phase of its operating licence for its Minas-Rio tailings facility in Brazil in December 2019, following the work to raise the dam by 9 metres to level 689 metres above sea level (from the previous 680 masl), as part of the Step 3 licence area of the mine. The regulatory authorities in Brazil granted the installation licence for this work in January 2018 and the construction work was completed in accordance with that licence in August 2019. The Attorney General of the State of Minas Gerais understood that the provisions of article 12 of Law 23,291 / 2019 are not applicable to this case and, subsequently, the State Environmental Policy Council voted to grant the licence.

We have at various times received claims against the operating licence for the heightening of the tailings dam wall, arguing the same point of law that was clarified by the Attorney General of the State of Minas Gerais in December 2019, recognising that the provisions of article 12 of Law 23,291 / 2019 are not applicable.

Anglo American has a Voluntary Relocation Programme in place prior to the enactment of State Law 23,291 / 2019, which has already benefited dozens of families in the vicinity of the project. Since its creation, it has included families living downstream from the dam. The program has existed since 2017.

The Minas-Rio tailings dam uses a downstream construction design and is an embankment dam structure, built using compacted imported earth-fill material, with carefully selected granular materials for the drainage and filter zones. Tailings are not used to build the dam, and instead construction materials are placed in controlled layers. This is a conservative and high quality design for a tailings dam, designed and built as a water-retaining type of dam.

Minas Rio: effects of the coronavirus pandemic: When did Anglo American became aware of this Municipal Decree prohibiting of functioning of various activities and businesses? What has Anglo American been doing about this since then?

Anglo American became aware of this decree on 23/03/2020, when it was issued by the Conceição do Mato Dentro municipality. We have adapted our operations to comply with this decree and all other applicable municipal, state and federal legislation. It is important to highlight that federal decree Nº 10.329, issued on 28/04/2020, defines mining as an essential activity, including mineral processing and commercialisation of mineral products.

During the COVID-19 crisis, in order to continue to maintain its social licence to operate, why does the company not prioritise local, national and international health and contribute to increase the funding and massive distribution of health tests in the area?

Society is facing the greatest threat to global health in a century and safety is at the heart of all that we do at Anglo American.

We are doing all that we can to safeguard our people and their families from the spread of COVID-19, while also providing support to our host communities and countries where it’s most needed.

Anglo American has already invested over BRL 15 million purchasing medical equipment, including respirators, PPEs and COVID 19 tests, in Brazil. These supplies are to be used in our operations and have been donated to 15 municipalities in three states where we operate (Goiás, Minas Gerais and Rio de Janeiro).

On page 46 of last year’s Annual Report it is stated that: “Our Minas-Rio iron ore operation in Brazil has continued to incur significant water stress, despite increased rainfall in 2017-18.” In this year’s Annual Report there is no mention of water stress at the Minas Rio iron ore operation in Brazil, despite the ramping up of production and the operation of the pipeline. Does this mean that there was greater rainfall and water availability in the year covered by this year’s Annual Report or does it mean that the issue of water stress at Minas Rio has been permanently resolved?

Minas-Rio experienced higher levels of rainfall last year than in previous years. However, water shortage remains a concern across the world. At Anglo American, our ambition is to eliminate freshwater usage from mining processes – and to eventually achieve a near-waterless mine through our FutureSmart MiningTM programme: combining technology, digitalisation and sustainability to fundamentally change the way we mine, decreasing our environmental and societal footprint.

What is the proportion of water withdrawal from surface water, rainwater harvesting and recycling from tailings dam at present? What is it planned to be in future?

The main Minas-Rio water sources are:

Surface water abstraction - Peixe River (2500 m³/h);
Tailings dam water abstraction (625 m³/h);
Mine dewatering wells (500 m³/h);
Tailings dam recirculation (variable, maximum recirculation rate is 5375 m³/h).

Minas-Rio’s tailings dam also acts as a reservoir, storing rainwater during the rainy season for use during the dry season. For the future, we are conducting hydrological studies and conceptual projects for a new abstraction source and investigating alternatives to reduce water abstraction.

On page 45 of last year’s Annual Report it is stated that: “Regional water balances have been completed for Minas-Rio in Brazil”. Is information about this publicly available?

The Minas-Rio water balance is publicly available information.

Chile

LOS BRONCES:

In 1989, the Chilean authorities demanded that EXXON (previous owner of Los Bronces mine) remove tailings dams in the San Francisco river basin within 25 years. This term expired in 2015. The commitment was transferred to Anglo American, which acquired the Los Bronces mine. However, the removal of all the tailings has not yet been completed. Why did Anglo American has not fulfilled its promise that the Pérez Caldera I and II tailings dams would be moved by 2015?

Since signing the agreement, the company has been working on removing the materials from the Perez Caldera tailings dam. We have already managed to remove about 40% of total volume. However, technical issues and water scarcity have delayed our work programmes. We remain committed to removing the material and are currently working on ways to accelerate the process. This has been communicated to both the communities and the authorities.

How does Anglo American anticipate and recognise the threat involving tailing dams in both the Lo Barnechea and Til-Til sectors? What concrete actions will be taken to safeguard people's lives? What are the specific plans that Anglo American has in case of an emergency?

We have the utmost confidence in the integrity of our managed tailings storage facilities, which are subject to the highest global safety and stewardship standards, using appropriate advanced technologies. We are confident that our tailings storage facilities in Chile are safe and stable. It is important to note that the same safety standards are applied at the Las Tórtolas tailings deposit, currently active, and the tailings deposits located at Lo Barnechea (Perez Caldera 1 ,2 and Copihue), currently not in use.

The company has a multi-level system of controls that allow us to operate responsibly. These measures range from internal controls and checks on a 24/7 basis, to reviews and audits conducted by external, national and international certified companies. Finally, all our tailings deposits are audited by the Chilean National authority, through periodic visits and reviews.

In addition, as part of Anglo American's social strategy, we are in permanent contact with local and national authorities as well as host communities, to respond to questions and concerns. Active engagement sessions are also available where members of the communities can visit the operation, including the tailings deposit.

Four years ago, Anglo American along with the Territorial Committee for Disaster Risk Reduction in the Chacabuco Province (where Las Tortolas tailings storage facility is located), started a process aimed at coordinating the safety efforts of approximately 30 local organisations, such as community organisations, NGOs, local authorities and other businesses., As result of this work, a detailed emergency response plan, co-created with the community, is in an advanced stage of development.

Why has Anglo American presented an environmental impact study to expand its operations in the Los Bronces Integrated project without including any information on the management of the waste related to the Las Tórtolas tailings dam? Is that information available?

The project was submitted for environmental evaluation in July 2019 and is still in the permitting process. It’s an operational continuity project, which seeks to replace low grade ore from some phases with higher grade ore from new phases. It will not imply production increases or changes in the mineral production process. The Las Tortolas tailings dam has enough capacity to contain production up to 2045 at the current production rate, even though its current environmental permit expires in 2036.

91% of glaciers in South America are in Chile and they are the main source of water for our country. Glaciers are highly vulnerable to permanent temperature changes and especially to the current climate emergency. Glaciers are irreplaceable: they cannot increase in size, even with heavy snowfall, nor can they reproduce. All we can do is protect them. What concrete actions is Anglo American taking to guarantee the protection of glaciers and the cryosphere in the areas where it intervenes in Chile and the rest of the world? Are there studies by independent bodies following this matter?

Glaciers are not the main source of water for Chile. The main sources are liquid (rain) and solid (snow) precipitation. Glacier water is used in extreme drought periods but will never replace the contribution of precipitation.

Los Bronces mine in Santiago, Metropolitan Region is located at 3,500 metres above sea level, close to some white glaciers. Los Bronces does not impact or affect any white glaciers. The current pit is not over glaciers and the operating fronts are situated far from rock glaciers. New phases of work under environmental assessment will keep at least 200 metres from rock glaciers.

Since 2012, Anglo American has been carrying out an extensive investigation programme to study glaciers in the vicinity of our Los Bronces Operation. The programme involves internationally acclaimed and independent scientists and experts. All the information collected has been submitted to the authorities and a large proportion of it is available in the Los Bronces Integrated project base line studies.

What guarantees can Anglo American give that it will not impact glaciers with its initiative called “Los Bronces Integrated project”?

We are conscious of the importance of glaciers for the ecosystems and the Los Bronces Integrated Project has been specifically designed so as not impact glaciers. This was one of the main sustainability criteria during the project design. In the area of the existing pit, the new phases to be developed will keep a distance of at least 200m from the rock glaciers in the area. The future underground mine proposes to use the Sub Level Stopping with backfill mining method, which involves extracting the mineral by underground blocks that are then filled with waste rock and aggregate material, thus ensuring ground stability and preventing surface impact, thereby preventing impact on nearby glaciers.

What evidence is there to confirm that the underground phase of the Los Bronces Integrated project will not affect glaciers and that it will be developed in primary rock?

The whole underground mine and its access tunnel will be located in primary rock. Detailed information is provided in the EIA of the Los Bronces Integrated Project.

An extensive study has been carried out, which confirms that the underground phase will not affect glaciers or water sources and will be developed in primary rock. The exhaustive hydrogeological study included:

17 hydrogeological drill holes, 76 hydraulic tests, physiochemical parameter control, water samples, hydrogeological logging, 16 piezometres with 2 to 3 monitoring sensors, geotechnical logging and testing on fractured section
Climatic conditions and official protection on the surface required a drilling campaign from the tunnel and the resolution of technological challenges (positive drilling, control of possible outcrops of water).

The Environmental Impact Study presented in the Los Bronces Integrated project limited the project's area of influence to only three glaciers. The study did not include all the glaciers involved (those that are included in the Yerba Loca Glacier Natural Sanctuary, La Paloma, Olivares and Infiernillo, among others). Why were does glaciers not included in the study?

The Environmental Impact Study for Los Bronces Integrated project did not include glaciers in the Yerba Loca area (La Paloma, Olivares) because there is no impact on them. The Influence Area, according to the law, is defined as: “the geographical area or space, whose attributes, natural or sociocultural elements must be considered in order to define whether the project or activity generates or presents any of the effects, characteristics or circumstances defined by law, or to justify the non-existence of said effects, characteristics or circumstances.”

According to all the information collected, including six years of baseline studies and applying sophisticated models, the Los Bronces Integrated project will not affect those glaciers. The Infiernillo glacier was included in the base line study.

How much water is currently being used by the Los Bronces mine, what is the source of the freshwater being used, and how much would the Los Bronces Integrated project use if approved?

The average water use at Los Bronces operation is 780 l/s. Sources of fresh water are mainly rivers, while other sources include dewatering and industrial waters. The Los Bronces Integrated project will use the same sources of water plus what is called “agua del minero” that may come from excavating tunnels.

In communities such as El Arrayán in Lo Barnechea, directly impacted by the activity of Anglo American's Los Bronces mine, the residents have no water in their wells, and others have had to drill as deep as 100 metres to find it. How will Anglo American recognize communities' fundamental right to water?

Water scarcity is a problem that affects us all, which is why Anglo American has a short- and long-term strategy for community and operational water management.

At the operational level, our effort is focused on being as efficient as possible in our water management, which is why we have a "zero discharge" system that allows Los Bronces to recirculate 80-90% of the water used in mining and processing. We are constantly studying new alternatives to improve our current system in order to reduce freshwater consumption in the mid-long term. In the short term, we are also introducing previously used industrial water into our system in order to reduce water stress in our areas of influence.

At the community level, we have developed a strategy that will allow us to guarantee, in the long term, an autonomous, permanent and sustainable supply of water resources for human consumption in our neighbouring communities.

We have already:

Carried out studies analysing water availability and the demand to determine the state of aquifers and the prioritisation of critical areas,
Developed a programme to increase the capacity for the management of rural drinking water committees and territorial water tables;
Implemented systems and technology that allow us to maximise the use of the existing water resource and collect data for decision making, assisting these organisations that manage water in the communities,
Implemented a support system for small and medium farmers, infrastructure works, technological improvement and the management of public funds.

Our objective is to continue analysing and considering new alternatives for water sources, aiming to generate infrastructure and technological initiatives to ensure water for consumption and irrigation in our neighbouring communities.

Why does Anglo American present environmental impact studies for its Los Bronces Integrated project without including essential geological and seismic hazard studies, which are essential if it is to adopt the necessary mitigation and prevention measures, as well as the contingency plans necessary to evacuate the population in the event of a major earthquake?

Anglo American presented extensive geological and seismic information in its permitting application as well prevention and contingency plans. It includes specific studies on Lithosphere, Geology, Geomorphology, Areas of Geologic and Geomorphologic risks, Vibrations Levels. The details of all these can be found in the Environmental Impact Assessment.

The seismic activity is monitored constantly at site and is a key component of the preparedness and emergency plans.

The project was submitted for environmental approval in July 2019 and is still in process. It is an operational continuity project, which seeks to replace low grade ore from some phases with higher ore grade from new phases. It will not lead to production increases or changes in the production process.

COVID -19 is wreaking havoc on the economy of many countries. The poorest countries will be tempted by new mining projects that would allow them to revive their economy. How does Anglo American ensure respect for the rights of nature and people beyond short-term economist criteria? Are there international rights to which Anglo American adheres beyond the specific laws of each country?

Our priorities are the safety and health of all our people and the continuity of our business during this challenging time. Our response to COVID-19 is led by a designated team within Anglo American, which is continually monitoring the situation across our operating countries and meeting regularly to update our decisions in response to the disease.

To address the situation following the pandemic in Chile we have created the COVID-19 Community Support Plan. This plan has 2 stages, the first focused on emergency issues such as the provision of sanitation kits and food for vulnerable groups and in the long term, to actively participate in economic recovery, making use of our current programmes in each of our areas of influence to support entrepreneurship and employability.

Some media publication (DeSmog) claims that Anglo American's Los Bronces Integrated project would emit 3.5 million tons of greenhouse gases just for its cement production. How can a company listed on the London Stock Exchange, and which declares that it adheres to "sustainability" criteria, accept such a situation? For Anglo American, what does being sustainable mean and what commitments does it imply?

The assumptions used by DeSmog article are incorrect and Anglo American has already responded to these accusations. According to sound technical estimations, in the most intense year of construction, the Los Bronces Integrated project will generate no more than 0.12% of the total emissions in Chile. The effect on glaciers of mining activity is also low and represents less than 10% of the limit established by the Swiss regulation (200mg/m2/day). Anglo American’s commitment to sustainable mining is at the heart of our business, and this will be evidenced in the development of Los Bronces Integrated project.

What is the impact of Los Bronces operations on the water availability for the entire Metropolitan Region, from Farellones, to San Antonio and the capital of Chile with its more than seven million inhabitants?

Los Bronces mine does not discharge any water, as it is designed as a closed loop, so it has no impact on water quality downstream the operation. In terms of water availability, Los Bronces uses 780 l/s on average which is less than 1% of total water of the Maipo Basin. 80% of the water for Santiago inhabitants come from the Maipo river.

EL SOLDADO MINE AND EL TORITO TAILINGS DAM

The community of El Melon, close to El Soldado mine in Chile, believes that Anglo American should fully finance specialist doctors for the treatment of cancer patients, as well as the associated medications to treat the diseases of people that derive from its operations. In addition, can Anglo American finance the development of studies related to the health risks related to mining activity?

Anglo American has monitored and controlled air and water quality levels in its areas of influence which determine that there is no impact on human health. El Soldado has complied with each of the measures requested by the authorities and has regular surveillance by various independent bodies. In addition, all information is reported to the authorities on a permanent basis. This information is available to the public.

The recently approved project "Operational Continuity El Torito Tailings Dam, Operation El Soldado" involves a measure to mitigate the environmental impact seeking to reduce the mobility of contaminants downstream from the dam, through the use of fresh water for injection into the downstream aquifer of the sand wall of the dam. The aim is to create a hydraulic barrier that controls the infiltration of water from the dam. In this context, does the company have tailings leachate infiltration mitigation and containment technology, which does not depend on the extraction of fresh water? Furthermore, will the company consider better design for future expansions or new tailings dams, which optimise the use of water resources, reuse of old deposits, and the use of non-fluidizable tailings in active tailings?

Currently to control infiltrations from the El Torito tailings dam, the environmental approved method is infiltration drains downstream of the wall collecting underground water coming from the tailings dam. That water is returned to the process. Extraction wells downstream of the wall will be installed next year, which will pump up the remaining infiltration that eventually overpass the drains. Water extracted is pumped back to the tailings dam.

No containment measures or technologies are based on or depend on the extraction of fresh water. Currently Anglo American is recirculating between 80 to 85% of the water in its operations of Los Bronces and El Soldado. Additionally, Anglo American is working to develop technologies to further reduce water use in its processes and to reduce the volume of tailings.

Will the company be able to finance an air quality and composition monitoring station? Are there measures to mitigate and compensate for the effects of the PM on the residents of El Melón? On the other hand, the desertification phenomenon causes the increase of suspended particles, due to the low surface humidity, as a result of the reduction of the rock to small fragments. Is it possible for Anglo American to mitigate suspended dust from the El Torito tailings dam?

Anglo American is currently monitoring air quality (PM10, PM 2.5m Meteorology) at its El Soldado operation (Los Caleos station). El Soldado maintains a dust control programme at its operation. The main source of dust is the unpaved road and the open pit, not the tailings dam.

Would it be possible for Anglo American to finance a psychological assessment of the population who live close to El Soldado’s tailings dam about the perception of insecurity due to the dam? Furthermore, we demand an improvement to the emergency plan, updating the population data and considering all the characteristics of the residents.

We have engagement processes in place that allow us to identify the main concerns of our host communities and this has been raised as a concern amongst some members of the community. As a result, we are working with local authorities and emergency agencies, alongside with communities, to develop an emergency coordination plan that is useful not only for response to a potential failure of our tailings dam, but also to respond to any major emergency that may affect the community.

During the development of the Emergency Coordination Plan of El Torito tailings dam, four meeting points were identified as safety zones. The challenge during 2020 is to continue the implementation of the plan, which includes, among other actions, the installation of signals, dissemination of evacuation routes and the undertaking of drills. This plan has measures that will be updated on a permanent basis with participation of emergency agencies, local authorities and host communities as we have been working up to now.

In Anglo American’s 2017 Sustainability Report, “Building on solid foundations, delivering a sustainable future”, the pillars of global sustainability are presented, stating that with regard to water, the vision is to operate mines that do not use water from basins where it is scarce. Is the company committed to enforcing this goal in El Melón? In addition, is it possible to return groundwater, surface water, from collection in streams, to their natural course?

Even though Anglo American owns water rights for 400 l/s, its abstraction cannot exceed 120 l/s according to its permits. That amount is regularly reported to DGA (Water Authority) and SMA (Environmental Authority). The current mega drought affecting the region can’t be attributed to Anglo American operations. Mega drought is a multi-regional phenomenon affecting the whole country and particularly the central part of Chile and it’s mainly due to lack of precipitation.

The company is delivering water to the community for amounts of 235 m3/day (equivalent to 2,7 l/s) by trucks and an average 10 l/s by pipe from our own wells to support APR’s (community water systems).

Anglo American is committed to enforcing all its goals not only in El Melón, but in all its operations in Chile and around the world. Anglo American water abstraction is ¼ of its water rights. As explained above, El Soldado is supporting El Melón community with more than 12 l/s. The best way to improve water availability in the area is to upgrade municipal and APR’s wells and upgrade the water distribution system.

Desertification in the Valparaíso region is a fact. It affects agricultural production processes, increasing temperature variation, therefore generating a negative impact on the population, flora and fauna. Is it possible for Anglo American to take action to combat the effects of the climate and generate plans for reforestation in our region?

Anglo American has committed to replant an area of 700 hectares of native forest plantation in 2020. Additionally, El Soldado manages 1055 ha of protected area, close to the Biodiversity Priority Area of Cordillera de El Melón.

Will Anglo American commit to stop consuming water from the Aconcagua river basin aquifer, and also contribute to its recharge?

The El Soldado operation has undertaken several measures in recent years to reduce the consumption of water, as well as to make a more efficient use of this resource. Water reutilisation is now reaching 85% of total water used in the process. Even though Anglo American owns water rights for 400 l/s, its abstraction cannot exceed 120 l/s according to its permits. This represents 30% of all water rights owned by Anglo American in the area. Most of the water used by the operation actually comes from wells located outside El Melón village. In line with the Group’s global commitment within our Sustainable Mining Plan, our goal is to continue reducing extractions of underground water for the operation.

Taking into account that the company is in the process of changing from the extraction of groundwater to the purchase of water from desalination plants located on the shores of the Pacific Ocean, Is it possible for the El Soldado mine to come together with a commitment to contribute water to the surrounding communities?

The company is implementing a water management strategy aimed at adapting its operations to the challenges imposed by climate change and the drought affecting the country. Using desalinated water is one of future options, together with the implementation of new technologies and use of industrial waters not fit for human consumption. Part of this strategy is to work on collaborative solutions to contribute improving water availability for local communities. The company has been working with the community and local authorities since 2015 on various different projects and initiatives to help provide water to the local community and improve water availability for human consumption. For example, we are working on improving infrastructure and management of community drinking water systems, delivering drinking water to houses by trucks, and supplying an average 10 l/s of water to the municipal water system from our own wells.

Can the company commit to improving the municipal water network of El Melon to guarantee the supply and access of drinking water to the entire population?

This work is already being carried out. Last year the company started working together with the local municipality on improving the infrastructure (extraction and distribution) of the Municipal wells system, and is also supplying water from its own wells to the municipal system -through the connection of two wells to the public network- to improve water availability for human consumption.

If the pandemic continues, how will the loss of local employability, direct contracting and subcontracting be compensated, such as through the injection of resources into the community?

Anglo American has long running and successful programmes in Chile designed to promote entrepreneurship (Emerge) and employability (EmpleaT) programmes. Such programmes will receive additional funding from the US$5m fund, as part of our Chile Community Response Plan for COVID-19. The main focus of Emerge and EmpleaT programmes will be in our Host Communities such as Nogales-El Melón.

Does the company commit to replacing all species in strategic reforestation areas around El Soldado mine with the aim of generating a contribution to the natural hydrological cycle of the basin?

The site was declared Sitio Prioriario (priority site) by the Chilean government. In addition, the United Nations Development Programme has recently released study including that site as well as many more in Chile.

Anglo American, as part of its commitment to return all land to its original state, has replaced every plant or tree and will of course contribute to improve the natural hydrological cycle of the basin.

Colombia

On the restart of operations at Cerrejon following COVID-19 restrictions being lifted: On what medical evidence is the re-opening of operations at Cerrejón based, and what medical advice from scientific experts has Cerrejón taken in relation to protecting local communities from which they are drawing their work force?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. In this context, Cerrejón management has taken the lead in developing Cerrejón’s response to the COVID-19 crisis, with support and advice from the shareholders. In that response, Cerrejón has been extremely conscious of the specific risks of transmission in La Guajira, including amongst the indigenous and Afro-Colombian communities. Anglo American’s priorities are the safety and health of all our people and the continuity of business during this challenging time and we are accordingly supportive of the measures adopted by Cerrejón to achieve these outcomes. Anglo American has referred the question to Cerrejón management for a more comprehensive reply which is set out below:

Following the Colombian President’s decree on 23 March of a mandatory lockdown across the country. Along with other essential services, the mining sector was permitted to continue operating during that time. However, Cerrejón decided to effectively cease non-essential operations and since then, operations have been limited to essential equipment and infrastructure maintenance, compliance with legal requirements on environmental issues, and contractual commitments which needed to be met.

In addition to the National Government’s decree, the Governor of La Guajira has banned travel from other areas into La Guajira. Cerrejón has complied and will continue to comply with this ban.

During that time, Cerrejón has focused on the humanitarian response in La Guajira, helping to supply water to almost 300,000 vulnerable people in La Guajira, using the railway corridor to facilitate access, partnering with the United Nations’ World Food Programme to help tackle the risk of food insecurity. Cerrejón has made contributions of more than US$1.5 million so far to the humanitarian effort in La Guajira. In addition, all Cerrejón staff unable to work at present are on mandatory, paid leave.

Cerrejón has followed the guidelines of the national public health authorities during the COVID-19 crisis and has implemented five health behaviours to reduce the risk of COVID-19 spreading. These are also the pillars for the gradual reestablishment of the operation and must be fulfilled by all the workers of the company: daily verification of the state of health (people with symptoms must remain at home), maintenance of social distance, signs and instructions to avoid crowds, adequate use of personal protection equipment and frequent hand washing, together with the disinfection of equipment and facilities.

Cerrejón has developed a mobile application called Cuídate, Cuídame, which allows Company workers and employees of contractor companies to verify their health conditions related to COVID-19 on a daily basis. This application, which has already been downloaded by more than 1,300 users, allows the company to keep track of the health status of its workforce in real time to protect their health and reduce the risk of contagion.

Minimising the risk of transmission to and within Cerrejón employees and contractors, and between Cerrejón employees, contractors and the local communities has been a central part of that planning. Cerrejón has a sophisticated understanding of the demographics of its workforce and over 1,000 employees have been asked to self-isolate because of they fall into categories which are considered high risk with regards to COVID-19 (age, underlying health conditions). Throughout Cerrejón has drawn on best practice developed in mining around the world, including best practice developed in respect of protecting vulnerable people, including indigenous communities.

The Colombian Constitutional Court ordered the Cerrejón Company to translate into English the decision of the Court so that its investors /shareholders could read the decision. The translation of this decision is essential, for transparency, to provide shareholders with full information about ongoing legal actions against the company, and for the company to be seen to be acting in good faith. Why has Cerrejón chosen to appeal this order of the Court and is it willing to withdraw appealing this order and provide the shareholders with an English version of the Court’s orders?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. We have referred the question to Cerrejón management for a more comprehensive reply which is set out below:

Cerrejón is respectful of the decision of the Constitutional Court, and has (as it was required to do under the terms of the decision) carried out many of the orders handed down already, including supplying the shareholders with an English translation of the court order, implementing additional controls on air quality, cleaning of lagoons, the construction of a canal, further measures to identify and prevent spontaneous combustion, and has attempted to engage in a community cleaning process. The cleaning process has so far been impossible to implement due to an unwillingness on the part of the community to grant access to Cerrejón or their contractors.

Notwithstanding these actions, Cerrejón believes, and Anglo American supports Cerrejón on this point, that there are grounds for an annulment appeal, as the ruling did not consider fully the evidence presented, has created law in a disproportionate manner and contrary to the due administrative and legislative process in Colombia, and result in unequal treatment for Cerrejón.

The resettled community of Nuevo Roche:
The houses and the communal infrastructure are deteriorating very badly because of the condition of the soil on which they were constructed. When will the company resolve these problems? There is practically no productive capacity in Roche. How does Cerrejón plan to re-establish individual and collective productive projects (for which collective lands are needed) for the community of Roche? Regarding water quality in Nuevo Roche: When will the company come to an agreement with the community over a truly independent laboratory for water testing and which they can believe? When will the company come to a definitive agreement with the community about which source of water will be used in the long term? How does Cerrejón plan to come to agreements on all outstanding issues in Roche without dividing the community?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. In this regard, Cerrejón management leads on all aspects of managing resettlements and detailed questions of this type are for Cerrejón management to answer. Anglo American has referred the questions to Cerrejón management for a more comprehensive reply:

Resettlements are complicated but are, on occasion, a necessary part of mining. In the case of the resettlement of the Roche community, since the provision of new housing was completed for all families in 2017, the focus has been on ensuring that those houses were maintained and, where necessary repaired – a process that has been monitored by the Barrancas Mayor’s office since September 2019. Through this process an action plan has been defined, agreed with all parties, and Cerrejón intends to work with the support of the Secretary of Planning to implement that action plan. In addition to housing, the focus has been on establishing water supplies and supporting the community through the livelihood development programmes. There have been successes, including the provision of water for livelihood projects from the Rancheria river, seed capital for 25 community businesses and 25 young people from the community have had access to the educational support programme. However, we are aware that more work is needed to ensure the resettlement is a success.

Provision of water has been a key issue in all of the resettlements conducted by Cerrejón. There have been disagreements between the test results from different laboratories with regard to the water in Roche. In 2019 it was agreed between Cerrejón and the communities to identify and accredit an independent laboratory to carry out the tests. Two laboratories were selected.

Cerrejón management would never aim to create divisions within any of the communities with which they work and through detailed and thoughtful work aims to bring communities together to achieve outcomes that are widely supported. To this end, in 2019, a 26-point agreement was reached between the community and Cerrejón. Part of this agreement included developing working sessions to include all family members, plus the Community Action Board and the Barrancas Mayor’s office. Cerrejón intends to carry on with this new dynamic as soon as the current COVID-19 crisis passes.

Anglo American is supportive of Cerrejón’s management in achieving these outcomes and contributing positively to the relevant communities.

Regarding the disputes over the relocation of the community of Tabaco, what will Anglo American do to ensure that Cerrejón accepts the elected representatives of Tabaco and stops trying to foment division in the community?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. Detailed questions of this type are for Cerrejón management to answer. Anglo American has referred the questions to Cerrejón management for a more comprehensive reply:

It remains a frustration that it has not yet been possible for Cerrejón to carry out fully all of its commitments to the community of Tabaco, due to the issues identified in the question in relation to the delays caused by the municipality.

We note that in recent months the Constitutional Court has ruled on tutela T-329 in relation to Tabaco. This ruling confirmed the different responsibilities in relation to Tabaco and recognised Cerrejón’s compliance in meeting the previous standards. The ruling also called for the creation of a group, the “Tabaco Follow-Up Committee” to consider the outstanding issues. The Committee has concluded that the bottleneck for progress is the uncertainty regarding the number of dwellings to be built and the need for additional studies needed to implement the construction project. The parties have agreed on the need to build a joint action plan and will begin work on this as soon as the current COVID-19 crisis passes. Cerrejón stands ready to play its role in that Committee, including helping with administration as appropriate.

Cerrejón would never aim to create divisions within any of the communities with which they work and through detailed and thoughtful work aims to bring communities together to achieve outcomes that are widely supported. Specifically, on 11 March an assembly meeting of the Tabaco community elected nine new representatives. Cerrejón respects this process and will work with the people defined by the community.

While Anglo American remains supportive of Cerrejón finding a resolution of the issues acceptable to all stakeholders, it is unable to intervene further, given it does not manage the operation.

Regarding the Ruling T698 from the Colombian Constitutional Court about Bruno Creek, why is the company not complying with the ruling and returning the river to its original course until the uncertainties described in the ruling are resolved?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. Detailed questions of this type are for Cerrejón management to answer and accordingly Anglo American has referred the questions to Cerrejón management for a more comprehensive reply which is set out below:

With regard to the long-running judicial processes regarding the Bruno Creek, it is important to be clear on what the courts have and have not ruled. Rules governing the functioning of the inter-institutional roundtable, including the decision-making procedures, were defined by the Court.

Second, the inter-institutional roundtable was asked to consider whether the Bruno Creek should be returned to its original bed, pending the outcome of the process. The table ruled in May 2019 that the creek should not be returned pending the conclusion of the process for a number of reasons, including that this would be more harmful from an ecological perspective. It is not correct to refer to this being a decision of Cerrejón or that Cerrejón has in any way failed to comply with the court rulings or findings of the roundtable.

In the context of COVID-19, where more than ever the communities need to have access to water to comply with the minimum protection such as washing their hands, is the company going to free the Arroyo Bruno from its diversion?

The diversion of the creek continues to function extremely well and is held up as best practice in technical terms by the Colombian Government. The suggestion in the question that the diversion has reduced the access to water for communities meaning that they are unable to fulfil basic means to prevent infection from COVID-19 has no basis in fact.

Cerrejón respected the order of the Governor of La Guajira to remain in quarantine at first, but since the beginning of April the coal train has been passing during the night. The Puerto Bolivar Port is open to ships from around the world. As there is no control in the Port, this flow represents a risk of contamination for all. What is the responsibility of the company in all this? How are you going to prevent the many problems this could create for the Wayuu people and everyone in La Guajira?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. In this context, Cerrejón management have taken the lead in developing Cerrejón’s response to the COVID-19 crisis, with support and advice from the shareholders. In that response, Cerrejón has been extremely conscious of the specific risks of transmission in La Guajira, including amongst the indigenous and Afro-Colombian communities. Anglo American’s priorities are the safety and health of all our people and the continuity of business during this challenging time and we are accordingly supportive of the measures adopted by Cerrejón to achieve these outcomes. Anglo American has referred the question to Cerrejón management for a more comprehensive reply which is set out below:

Following the Colombian President’s decree on 23 March of a mandatory lockdown across the country. Along with other essential services, the mining sector was permitted to continue operating during that time. However, Cerrejón decided to effectively cease non-essential operations and since then, operations have been limited to essential equipment and infrastructure maintenance, compliance with legal requirements on environmental issues, and contractual commitments which needed to be met. The railway has continued to operate at a reduced level, both to deliver coal stocks to the port and to provide humanitarian assistance.

In addition to the National Government’s decree, the Governor of La Guajira has banned travel from other areas into La Guajira. Cerrejón has complied and will continue to comply with this ban.

During that time, Cerrejón has focused on the humanitarian response in La Guajira, helping to supply water to almost 300,000 vulnerable people in La Guajira, using the railway corridor to facilitate access, partnering with the United Nations’ World Food Programme to help tackle the risk of food insecurity. Cerrejón has made contributions of more than US$1.5 million so far to the humanitarian effort in La Guajira. In addition, all Cerrejón staff unable to work at present are on mandatory, paid leave.

Cerrejón has followed the guidelines of the national public health authorities during the COVID-19 crisis and has implemented five health behaviours to reduce the risk of COVID-19 spreading. These are also the pillars for the gradual reestablishment of the operation and must be fulfilled by all the workers of the company: daily verification of the state of health (people with symptoms must remain at home), maintenance of social distance, signs and instructions to avoid crowds, adequate use of personal protection equipment and frequent hand washing, together with the disinfection of equipment and facilities.

Specific to Puerto Bolivar, Cerrejón has adopted strict protocols that apply for Cerrejón staff, contractors, shipping agents and authorities that work on these ships. including wearing PPE (Tivek suits, security googles, masks, gloves), inside the ship the person has several restrictions in order to avoid contagion and once the person exit the ship a cleaning procedure takes place.

Cerrejón has developed a mobile application called Cuídate, Cuídame, which allows Company workers and employees of contractor companies to verify their health conditions related to COVID-19 on a daily basis. This application, which has already been downloaded by more than 1,300 users, allows the company to keep track of the health status of its workforce in real time to protect their health and reduce the risk of contagion.

Minimising the risk of transmission to and within Cerrejón employees and contractors, and between Cerrejón employees, contractors and the local communities has been a central part of that planning. Cerrejón has a sophisticated understanding of the demographics of its workforce and over 1,000 employees have been asked to self-isolate because of they fall into categories which are considered high risk with regards to COVID-19 (age, underlying health conditions). Throughout, Cerrejón has drawn on best practice developed in mining around the world, including best practice developed in respect of protecting vulnerable people, including indigenous communities.

Cerrejón has been covering the cost of the electricity consumed by the community since it was resettled but when Cerrejon ceasing paying, the community will have to assume that cost. Given the relatively low salaries among the community, will Cerrejon look at installing a meter based on readings rather than estimates, with a special rate for indigenous communities?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. Resettlements are managed by Cerrejón and questions of this level of detail and operational information are for Cerrejón to respond to, not the shareholders. We have passed the question on to Cerrejón management with a request that they respond directly on this matter.

This year there have been fires inside the mine on Palmarito Hill and in the pits near the Wayuu Reserves of Provincial and Nuevo Espinal, as well as the African descent Community of Manantialito. The company has not given any explanation and has not explained the measures that it is taking to avoid these kind of fires. What measures is Cerrejón taking in this regard, and when is this information going to be made public?

Cerrejón, is an independently managed and operated joint venture, and the Anglo Ameri-can, BHP and Glencore groups are each-one third shareholders in the joint venture company. Anglo American has referred the question to Cerrejón management for a more comprehensive reply which is set out below:

Cerrejón focuses significant attention on reducing spontaneous combustion, which is a risk in coal mining, and has a major programme of protecting and rehabilitating biodiversity. During the first quarter of 2020, particulate emissions were caused by fires set by communities which traditionally burn land as a method of preparing the land for crop planting. In addition, climatic conditions meant that dust from multiple national and international sources reached La Guajira and the combination of factors created negative air quality conditions. During that period, Cerrejón provided support to local and national authorities to control fires in a region covering over 5,000 hectares.

Cerrejón announced that they would restart their activities fully on 27 April. What are the measures that it is taking to prevent contagion in its areas of operation and the region nearby? Are you going to establish a programme on early detention with laboratory tests to identify COVID-19 cases, given that the Department of La Guajira and the Colombian state do not have the capacity to run such a programme?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. In this context, Cerrejón management have taken the lead in developing Cerrejón’s response to the COVID-19 crisis, with support and advice from the shareholders. In that response, Cerrejón has been extremely conscious of the specific risks of transmission in La Guajira, including amongst the indigenous and Afro-Colombian communities. Anglo American’s priorities are the safety and health of all our people and the continuity of business during this challenging time and we are accordingly supportive of the measures adopted by Cerrejón to achieve these outcomes. Anglo American has referred the question to Cerrejón management for a more comprehensive reply which is set out below:

Following the Colombian President’s decree on 23 March of a mandatory lockdown across the country. Along with other essential services, the mining sector was permitted to continue operating during that time. However, Cerrejón decided to effectively cease non-essential operations and since then, operations have been limited to essential equipment and infrastructure maintenance, compliance with legal requirements on environmental issues, and contractual commitments which needed to be met.

In addition to the National Government’s decree, the Governor of La Guajira has banned travel from other areas into La Guajira. Cerrejón has complied and will continue to comply with this ban.

During that time, Cerrejón has focused on the humanitarian response in La Guajira, helping to supply water to almost 300,000 vulnerable people in La Guajira, using the railway corridor to facilitate access, partnering with the United Nations’ World Food Programme to help tackle the risk of food insecurity. Cerrejón has made contributions of more than US$1.5 million so far to the humanitarian effort in La Guajira. In addition, all Cerrejón staff unable to work at present are on mandatory, paid leave.

Cerrejón has followed the guidelines of the national public health authorities during the COVID-19 crisis and has implemented five health behaviours to reduce the risk of COVID-19 spreading. These are also the pillars for the gradual reestablishment of the operation and must be fulfilled by all the workers of the company: daily verification of the state of health (people with symptoms must remain at home), maintenance of social distance, signs and instructions to avoid crowds, adequate use of personal protection equipment and frequent hand washing, together with the disinfection of equipment and facilities.

Cerrejón has developed a mobile application called Cuídate, Cuídame, which allows Company workers and employees of contractor companies to verify their health conditions related to COVID-19 on a daily basis. This application, which has already been downloaded by more than 1,300 users, allows the company to keep track of the health status of its workforce in real time to protect their health and reduce the risk of contagion.

Minimising the risk of transmission to and within Cerrejón employees and contractors, and between Cerrejón employees, contractors and the local communities has been a central part of that planning. Cerrejón has a sophisticated understanding of the demographics of its workforce and over 1,000 employees have been asked to self-isolate because of they fall into categories which are considered high risk with regards to COVID-19 (age, underlying health conditions). Throughout Cerrejón has drawn on best practice developed in mining around the world, including best practice developed in respect of protecting vulnerable people, including indigenous communities.

We understand that Cerrejón has been making progress with their closure plan. When is this plan going to be public and what are the mechanisms in place to guarantee that the plan is developed with the participation of workers and communities?

Cerrejón, is an independently managed and operated joint venture, and the Anglo Ameri-can, BHP and Glencore groups are each-one third shareholders in the joint venture company. In this context, Cerrejón management are leading operation closure planning, and details can be found in Cerrejón’s annual sustainability report.

Cerrejón sent a letter on 27 December 2019 to the Ministry of Labour about the collective bargaining between mine workers' union Sintracarbon and Cerrejón. The letter mentions the legal actions presented by local affected ethnic communities against the company, reclaiming their right to a healthy environment. Why is this information included in the text about collective bargaining as risks, if the communities are the ones affected by Cerrejón? Is this a strategy to generate distrust between communities and workers? Why is the company not accepting those legal actions as part of its obligation to respond and provide solutions to the communities affected by Cerrejón's operations? Why does Cerrejón say to its workers that the company is having financial problems at the moment and that due to this situation it is shortening the collective agreement with its employees, when the 2019 financial reports from Anglo American, Glencore and BHP show no losses from Cerrejón?

Cerrejón, is an independently managed and operated joint venture, and the Anglo American, BHP and Glencore groups are each-one third shareholders in the joint venture company. In this context, Cerrejón management have responsibility for engaging with the Unions in general and all aspects of collective bargaining. We have passed the question on to Cerrejón management with a request that they respond directly on this matter.

Peru

How is Anglo American preventing any potential adverse social or environmental impacts as a result of the Asana river diversion?

The Quellaveco Project is specifically designed to ensure the effective use of natural resources and to protect the environment. We are dedicated to the protection of the Asana River through complete isolation from our mining operations.

One of the ways we are protecting the Asana river is by building an 8 km long tunnel and the Asana barrier, both of which ensure that the river water does not come into contact with the construction or operational phases of mining. The quality and quantity of river water will be maintained for domestic and agricultural use by the local population.

All Quellaveco’s activities and operations are controlled by modern and efficient environmental engineering controls, which isolate the work zone and the materials used so that they do not come into contact with the environment and, in particular, the river. We are building dams, sloped terraces, ditches, channels and mounds, amongst others.

Participative Environmental Monitoring (MAP) has been part of the Quellaveco Project for over five years, with regular visits and inspections that have continually confirmed that Quellaveco has not had any detrimental effect of any kind on the Asana river, especially during construction.

The quality of the water in the Tumilaca area, where the protests took place in August 2019, corresponds to agricultural use - category 3. This natural characteristic of the river means that it requires treatment before being fit for human consumption. The Central Government has committed to provide the population of Tumilaca with the necessary treatment plant.

How is Anglo American guaranteeing that the use of the Titre River will not affect the hydrological balance of the Tambo basin?

Quellaveco has a sound Water Management Plan, which has been prepared based on extensive hydrological data and approved by the National Water Authority as a guarantee of its feasibility.

This plan details using mainly the water surplus of the Tambo basin during the rainy season, which is not destined for agricultural or domestic use, and would otherwise end up in the ocean. Every year over 500 million cubic metres of water from Tambo basin are lost in the ocean. Most of the water intake will come from the Titire river, which is not suitable for human consumption nor agricultural use. During the dry season, the amount of water taken from Titire river will be replaced by water from the Vizcachas Dam; this dam will collect and impound surplus water in order to maintain the water levels in the Tambo basin. Additionally, the exchange of water from the Titire River for better quality water from the Vizcachas Dam will improve the quality of the Tambo basin waters.

The Project's Water Management Plan is designed in such a way that it does not negatively affect the population living along the Tambo basin, maintaining the same amount of water in the basin during the dry season, and at the same time, improving its quality. The mine operation is located 90km away from the water intake and dam, therefore there is no risk of mining activities affecting the water quality.

In addition, compliance with the Water Management Plan is a regulatory commitment and closely monitored by the competent authorities, ensuring that water users’ rights are not affected.

Anglo American has committed to install flow metres that will be monitored by the water authority and will enable us to demonstrate compliance with the established operating conditions and not impact the availability of water in the Tambo Valley.

How much fresh water are you planning to use in the Quellaveco mine annually and where will it be sourced from?

Thanks to the recirculation and water reuse technologies that will be implemented in Quellaveco, the demand for fresh water for the operation of the mine will be approximately 22 million cubic metres per year.

Fresh water intake for the operation will exclusively come from surface sources: the Titire river as the main source, with an average of 18 million cubic metres of water per year; and the Vizcachas dam as an additional source, with an average intake of 4 million cubic metres of water per year. Fresh water coming from Titire river is not suitable for human consumption or agricultural use, due to its high levels of naturally occurring salt, boron and arsenic.

The runoff water from the Asana River that exists during the rainy season will be used for the Moquegua region, and Anglo American will fund a storage system of up to 2.5 million cubic metres for agricultural purposes.

How did Anglo American ensure that its workers were transported from the Moquegua campsite to Cajamarca during the state of national emergency declared as a result of COVID-19?

When the National Government issued the state of emergency and a quarantine was established, Anglo American stopped all non-essential activity at Quellaveco, only continuing with strictly essential work (authorised by the Government). In line with the new status, all of our contractors (e.g. Sacyr-Ajani) had to immediately implement demobilisation plans, following the regulations issued by the Government. The Government´s decision took place at the peak of construction works, with more than 10,000 workers physically at the site at that moment, many of whom came from different regions across the country. When a large portion of Quellaveco’s workforce was already in transit to their respective homes, some regional governments implemented different controls on top of those established by the National Government (e.g. Supreme Decrees N°044-220-PCM, N° 046-2020-PCM), which were the ones followed for that mobilisation process in the first place.

Given that it is possible that mining activities may restart, what are the health and safety protocols that Anglo American will be putting in place in order to prevent cases of COVID-19 at the mining site? Is Anglo American obtaining test kits to make sure that workers are not carrying the virus in order to protect other workers and their families? What measures will Anglo American take in the event of an outbreak of COVID-19 in the neighbouring communities? Is Anglo American willing to work with the communities that are in their direct area of influence if there is evidence of COVID-19 cases? How will it do so?

Health and safety protocols for Anglo American including pre-boarding controls such as serological tests and health condition checks by a medical team. At site, health controls include daily check of temperature and symptoms for every worker, social distancing measures, de-densification of site areas, mandatory use of respiratory protection, reinforcement of hygiene and cleaning processes and mental health support. All employees have received training on the new health protocols, and hygiene recommendations are displayed on visible areas. In addition to this, high risk personnel are not allowed to go to site.

In Peru, Anglo American is working to identify additional actions to support communities in the response to COVID-19 during lockdown and beyond. Anglo American´s contribution to the COVID-19 response includes the following:

Nutrition:

Distribution of 15,500 non-perishable food packages to vulnerable families in Moquegua, Torata, Samegua, Ilo, El Algarrobal and Sanchez Cerro.
Distribution of breakfast and lunch packs to the police, medical workers and army personnel
Distribution of 3,000 fresh food packages with agricultural products to vulnerable stakeholder groups

Health care support:

Provision of medical PPE such as masks (41,000), disposable gowns (650) and gloves (37,000)
Vehicles to support transport of regional medical staff
Donation of six intensive care units, consisting of: ICU bed, life support ventilator, vital signs monitor, volumetric infusion pump, manual resuscitation pump
Sponsorship of fumigation campaigns in coordination with local fire departments

Shareholders Against Blood Diamonds

What steps will the board of Anglo American take to ensure De Beers Group:

ends the trade in diamonds that fund Israeli human rights violations
and that it abides by the letter and the spirit of the human rights norms which Anglo American claims to uphold and to which the public expect of a global leader in the luxury diamond market to adhere?

What steps will the Board of Anglo American take to make clear to shareholders and customers that, although it describes De Beers and Forevermark diamonds as conflict free, those that have been processed in Israel have helped fund Israel’s violations of international law and Palestinians’ human rights that the International Criminal Court Prosecutor has declared there is a reasonable basis to believe have amounted to war crimes?

All De Beers and Forevermark diamonds are conflict-free. De Beers Group is committed to the United Nations Guiding Principles on Business and Human Rights and takes the commitment to respect human rights seriously. Our due diligence efforts include third party checks on all businesses applying to be a client which include a review of each associated group entity of the potential client and their ethical integrity and probity. The outcome of these checks informs our final admission decision on whether to award an applicant client status, and further, on an ongoing basis, our ability to trade with the client. Failure to demonstrate robust ethical integrity, including in respect of compliance with human rights requirements, will mean that the application will be unsuccessful.

Once a client becomes a trading partner, each of them (including Forevermark Diamantaires) must participate in a comprehensive and holistic due diligence programme on an annual basis that includes ongoing monitoring of every single group entity, key individuals and contractors; and risk based third-party verification by an independent auditor to review compliance against our ethical standards, known as the Best Practice Principles (BPP). All clients, including Forevermark Diamantaires, regardless of their country of operation, undergo the same level of in-depth due diligence and scrutiny on an ongoing basis annually. As is set out clearly in our BPP framework, if a company we do business with were to be found guilty of violations of international law as part of a legitimate judicial process, then De Beers Group would have no hesitation in ending our business relationship. We know of no such ruling and/or conviction against any company we trade with in Israel, and further there is no recognised legal precedent to support the proposed central contention in these questions, i.e. that legitimate companies in Israel who pay taxes that ultimately create revenue for the Government are in effect funding war crimes, and other businesses therefore have a duty not to work with them. By extension, such an argument would imply that every Israeli taxpayer is funding war crimes and would mean that no company could have any business relationship with any Israeli taxpayer.

Regarding the issue of the classification of conflict diamonds, the term “conflict diamond” has a specific-UN-mandated definition. Both through the KP Certification Scheme (KPCS) of the diamonds we mine and through the KP-administered review missions to our operations, diamonds from De Beers Group are recognised to be 100% conflict-free. Therefore, to reiterate, the term ‘conflict-free’ has not been created by the diamond industry; it forms part of the key requirement of the KPCS. The KP website itself refers to how “international shipments of rough diamonds must be accompanied by a KP certificate guaranteeing that they conflict-free” (https://www.kimberleyprocess.com/en/about).

As a shareholder I am concerned of the reputational damage De Beers links to the Israeli blood diamond industry is causing our brand. This February, Positive Luxury on its website removed De Beers from its shortlisting for an environmental award, for a whole week, following a protest outside Positive Luxury's offices. If third parties are so terrified of brand damage by their association with De Beers, due to De Beers links to apartheid Israel, isn't it about time Anglo-American also rethink the costs to its brand by its ongoing complicity in the Israeli diamond industry? Has Anglo American learnt nothing from its dark history that it insists on repeating it?

De Beers Group was not only pleased to have been nominated for Positive Environmental Impact of the Year, but was proud to collect this award at the ceremony in March 2020. This was in recognition of our focus on environmental conservation and the programmes we have established in support of this, and we proudly note the long article on the Positive Luxury website detailing our achievements in our Moving Giants project.

We understand that Positive Luxury temporarily removed Forevermark from their web site as a precaution due to concerns raised as a result of some of the protest tactics, ensuring their duty of care to protect employees. The reference to Forevermark was quickly re-established on the web site and it continues to be one of the companies to have been awarded the Butterfly Mark by Positive Luxury in recognition of the measurable impact and company-wide commitments to sustainability.

AGM 2020 Anglo American response to shareholder questions

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Peru

AGM 2020
Anglo American response to shareholder questions