TIDMANTO
RNS Number : 7213U
Antofagasta PLC
07 April 2021
NEWS RELEASE, 7 APRIL 2021
PUBLICATION OF 2020 ANNUAL REPORT AND 2021 NOTICE OF ANNUAL
GENERAL MEETING AND CLASS MEETINGS
Antofagasta plc (the "Company") has today posted its 2020 Annual
Report and Financial Statements and notice of the Annual General
Meeting and class meetings of the Company (the "2021 Notice of AGM
and Class Meetings") to shareholders.
The 2020 Annual Report and Financial Statements, which were
approved by the Board of Directors on 15 March 2021, constitute the
Company's statutory accounts for the purposes of section 434 of the
Companies Act 2006 and the Annual Financial Report for the purposes
of DTR 4.1.
The Annual General Meeting will be held at the Company's offices
at Cleveland House, 33 King Street, London SW1Y 6RJ on 12 May 2021
from 2 p.m. Separate meetings of the ordinary shareholders and
preference shareholders (the "Class Meetings") will follow directly
after the Annual General Meeting.
Due to the ongoing COVID-19 pandemic, the Board anticipate that
the meetings will go ahead as planned but that shareholders will
not be able to attend in person. A separate RNS announcement,
including details for remote engagement, will be published today in
relation to these arrangements.
In compliance with LR 9.6.1, the Company has submitted to the
Financial Conduct Authority each of the following documents:
-- 2020 Annual Report and Financial Statements
-- 2021 Notice of AGM and Class Meetings
-- Letter to Shareholders regarding Arrangements for the Annual
General Meeting and Class Meetings, which is supplementary to, and
must be read in conjunction with, the 2021 Notice of AGM and Class
Meetings.
-- Form of Proxy for Ordinary Shareholders for Annual General Meeting
-- Form of Proxy for Preference Shareholders for Annual General Meeting
-- Form of Proxy for Ordinary Shareholders for Class Meeting
-- Form of Proxy for Preference Shareholders for Class Meeting
-- Letter to Shareholders regarding Electronic Communications
These documents will shortly be available for inspection via the
National Storage Mechanism,
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism).
In compliance with DTR 6.3.5, the following information is
extracted from the 2020 Annual Report and Financial Statements and
should be read in conjunction with the Company's Preliminary
Results Announcement issued on 16 March 2021. Together, these
constitute the material required by DTR 6.3.5 to be communicated to
the media in full unedited text through a Regulatory Information
Service. This material is not a substitute for reading the full
2020 Annual Report and Financial Statements and page numbers and
cross-references in the extracted information below refer to page
numbers and cross-references in the 2020 Annual Report and
Financial Statements. The full 2020 Annual Report and Financial
Statements and materials relating to the Annual General Meeting and
the Class Meetings are available on the Company's website at
(www.antofagasta.co.uk).
The information contained in this announcement and in the
Preliminary Results Announcement does not constitute the Group's
statutory accounts as defined in section 434 of the Companies Act
2006, but is derived from those accounts. The statutory accounts
for the year ended 31 December 2020 have been approved by the Board
and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting. The auditors have reported on
those accounts and their report was unqualified, with no matters by
way of emphasis, and did not contain statements under section
498(2) of the Companies Act 2006 (regarding adequacy of accounting
records and returns) or under section 498(3) (regarding provision
of necessary information and explanations).
Statement of Directors' Responsibilities
The following information is extracted from page 155 of the 2020
Annual Report and Financial Statements.
"The directors consider that the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the group's
and parent company's position and performance, business model and
strategy.
Each of the directors, whose names and functions are listed in
the Corporate Governance Report, confirm that, to the best of their
knowledge:
-- the group financial statements, which have been prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006 and international
financial reporting standards adopted pursuant to Regulation (EC)
No 1606/2002 as it applies in the European Union, give a true and
fair view of the assets, liabilities, financial position and profit
of the group;
-- the parent company financial statements, which have been
prepared in accordance with United Kingdom Accounting Standards,
comprising FRS 101, give a true and fair view of the assets,
liabilities, financial position and profit of the parent company;
and
-- the Strategic Report includes a fair review of the
development and performance of the business and the position of the
group and parent company, together with a description of the
principal risks and uncertainties that it faces.
By order of the Board
Jean-Paul Luksic, Chairman
Ollie Oliveira, Senior Independent Director "
Principal Risks and Uncertainties
The following description of Principal Risks and Uncertainties
is extracted from pages 25 to 30 of the 2020 Annual Report and
Financial Statements.
"1. Talent management
Managing talent and maintaining a high-quality labour force in a
changing technological and cultural environment is a key priority
for us. Any failures in this respect could have a negative impact
on the performance of the existing operations and prospects for
future growth.
Preventive and mitigation measures
We develop the talents of our employees through training and
career development, invest in initiatives to widen the talent pool
and are committed to our diversity and inclusion policy. Through
these actions we aim to increase employee retention, as well as the
number of women, people with disabilities and employees with
international experience in the workplace.
Our Employee Performance Management System is designed to
attract and retain key employees by creating suitable reward and
remuneration structures and providing personal development
opportunities. We have a talent management system to identify and
develop internal candidates for key management positions, as well
as identifying suitable external candidates when appropriate.
Highlights
During 2020 our Group leadership framework was released, the
diversity and inclusion strategy was strongly promoted and a new
remote working standard was launched.
2. Labour relations
Our highly skilled workforce and experienced management team are
critical to maintaining our current operations, implementing
development projects and achieving long-term growth without major
disruption.
Preventive and mitigation measures
We maintain good relations with our employees and unions, which
are founded on trust, regular dialogue and good working conditions.
We are committed to safety, non-discrimination, diversity and
inclusion, and compliance with Chile's strict labour
regulations.
There are long-term labour agreements in place with all the
unions at our operations, helping to ensure labour stability.
We seek to identify and address labour issues that may arise
throughout the period covered by the labour agreements (usually
three years) and to anticipate any potential issues in good time.
Contractors are an important part of our workforce and under
Chilean law are subject to the same duties and responsibilities as
our own employees. We treat contractors as strategic associates and
build long-term, mutually beneficial relationships with them.
We maintain constructive relationships with our employees and
their unions through regular communication and consultation. Union
representatives are regularly involved in discussions about the
future of the workforce.
Highlights
Ten labour negotiations took place in 2020. In all cases, the
Company and labour representatives successfully reached
agreement.
3. Safety and health
Safety and health incidents could result in harm to our
employees, contractors and local communities. Ensuring their safety
and wellbeing is our ethical obligation and first priority and is
one of our core values. A poor safety record or serious accidents
could have a long-term impact on morale and on Antofagasta's
reputation and production.
Preventive and mitigation measures
We seek to continuously improve our safety and health risk
management procedures, with particular focus on the early
identification of risks and the prevention of fatalities.
The Corporate Safety and Health Department provides a common
strategy for our operations and co-ordinates all safety and health
matters. We have a Significant Incident Report system, which is an
important part of the overall approach to safety.
Our goals of zero serious accidents and fatalities and the
minimising of the number of accidents require all contractors to
comply with our Occupational Safety and Health Plan. This plan is
monitored through monthly audits and is supported by regular
training and awareness campaigns for employees, contractors,
employees' families and local communities, particularly with regard
to road safety. We require all staff in defined safety-critical
roles to satisfy at least the minimum qualifications, to have the
necessary experience for their role and to complete any required
training prior to commencing their work activities.
Critical controls and verification tools are regularly
strengthened through the verification programme and regular audits
of critical controls for potentially high-risk activities.
We continuously seek to incorporate technology and innovation to
reduce workers' exposure to safety and health risks.
Highlights
In 2020 there were no fatal accidents. The COVID-19 outbreak
threatened the health of all employees and contractors, and local
communities. We focused on implementing controls to prevent and
mitigate the impact of infection, prioritising the health of our
employees and contractors while minimising the impact on
operational continuity.
4. Environmental management
An operating incident that damages the environment could affect
both our relationship with local stakeholders and our reputation,
reducing the social value we generate.
We operate in challenging environments, including the largely
agricultural Choapa Valley and the Atacama Desert, where water
scarcity is a key issue.
Preventive and mitigation measures
We have a comprehensive approach to incident prevention.
Relevant risks are assessed, monitored and controlled in order to
achieve our goal of zero incidents with significant environmental
impact. We work to raise awareness among employees and contractors,
providing training to promote operating excellence. The potential
environmental impact of a project is a key consideration when
assessing its viability, and we encourage the integration of
innovative technology in the project design to mitigate such
impacts.
We prioritise the efficient use of natural renewable resources
by using sea water, favouring the use of renewable power sources,
achieving higher rates of reuse and recovery of water through
thickened tailings technology and reducing greenhouse gas
emissions.
We recognise that environmental sustainability is key to our
ability to generate social value and perform regular risk
assessments in order to identify potential impacts and develop
preventive and mitigating strategies.
Each site maintains updated environmental emergency preparedness
and detailed closure plans with appropriate financial provisions to
ensure physical and chemical stability once operations have
ceased.
Highlights
We had no significant environmental incidents during 2020.
We monitored and reinforced our critical controls in line with
our low appetite for environmental risk.
5. Climate change
The effects of climate change have had an increasing impact on
our operations. The drought in the central area of Chile is
affecting water availability, while higher than expected rainfall
in the northern part of the country is impacting the infrastructure
in the region and the increasing severity of sea swells are leading
to delays in the delivery of key supply materials.
We are committed to contributing to the reduction of the global
problem of growing greenhouse gas emissions and water scarcity by
reducing our own emissions. We can do this by increasing the amount
of power and water we obtain from renewable and sustainable
sources.
Preventive and mitigation measures
We recognise that climate change is a threat to human life and
the planet as we know it today.
We measure and report our greenhouse gas emissions and have
committed to reduction targets based on realistic plans.
As regards water scarcity, we are reducing our dependence on
continental water through improved water use efficiency and the
increased use of sea water as a total proportion of our water
consumption. On completion of each phase of the Los Pelambres
desalination plant construction, the proportion of continental
water used will decrease and significantly lower the potential
impact of water scarcity on the Group.
We seek constantly to identify risks associated with climate
change and to implement actions to mitigate and adapt to their
potential impact. For each risk evaluated as "High" or "Extreme" we
define specific action plans and strategies.
As part of our regular communication with local stakeholders we
discuss the material risks and our controls, action plans and
related strategies.
Highlights
In 2020, a Climate Change Strategy was approved by the Board. It
has five pillars: the development of climate change resilience, the
management of GHG emissions, supply security and efficient use of
strategic resources, the management of environmental and
biodiversity, and the integration of stakeholders. While being
committed to reducing GHG emissions we also support local
communities in preparing for the effects of increasing
emissions.
6. Community relations
Failure to identify and manage local concerns and expectations
could negatively impact the Company. Relations with local
communities and stakeholders affect our reputation and our ability
to generate social value and grow.
Preventive and mitigation measures
We have a dedicated team that establishes and maintains
relations with local communities. These relationships are based on
trust and mutual benefit throughout the mining lifecycle, from
exploration to final remediation on closure. We seek to identify
early any potentially negative operating impacts and minimise these
through responsible behaviour. This means acting transparently and
ethically, prioritising the safety and health of our employees and
contractors, avoiding environmental incidents, promoting dialogue,
complying with our commitments to stakeholders and establishing
mechanisms to prevent or address a crisis. These steps are
undertaken in the early stages of each project and continue
throughout the life of each operation.
We contribute to the development of communities in the areas in
which we operate, starting with an assessment of the existing
situation and their specific needs, while looking to develop
long-term, sustainable relations and evaluating the impact of our
contributions. We are also focused on developing the potential of
members of local communities through education, training and
employment.
We work to communicate clearly and transparently with local
communities, in line with our Community Relations Plan. This
includes a grievance management process, local perception surveys,
and local media and community engagement.
Highlights
During the COVID-19 pandemic the Company has worked with the
local and regional government to support local communities,
including establishing a community support fund providing financial
support and PPE and testing equipment.
7. Political, legal and regulatory
Political instability may affect our operations, projects and
exploration activities in the countries in which we operate. Issues
regarding the granting of permits, or amendments to permits already
granted, and changes to the legal environment or regulations, could
also adversely affect our operations and development projects.
Preventive and mitigation measures
Political, legal and regulatory developments affecting our
operations and projects are constantly monitored. We comply fully
with the existing laws, regulations, licences, permits and rights
in each of the countries in which we operate.
We assess political risk as part of our evaluation of potential
projects, including the nature of any foreign investment
agreements.
We monitor proposed changes in government policies and
regulations, particularly in Chile, and belong to several
associations that engage with governments on these matters. This
helps to improve our internal processes and means we are prepared
to meet any new regulatory requirements.
As we have no operations in or material exposure to the UK,
Brexit is not expected to have any appreciable impact on the
Company.
Highlights
Monitoring of possible regulatory changes due to planned
constitutional reform in Chile. We will evaluate the impact of
these changes on our activities and will seek to mitigate any
negative impacts.
8. Corruption
Our operations or projects around the world could be affected by
risks related to corruption or bribery, including operating
disruptions or delays resulting from a refusal to make
"facilitation payments". Such risks depend on the economic or
political stability of the country in which we are operating.
Preventive and mitigation measures
We have a zero-tolerance regime for any activity that would
result in contravening anti-bribery and corruption legislation. A
robust governance regime, including an Ethics Committee, open
channels of communication, training and multiple layers of
controls, are maintained at all our operations, projects and
exploration activities, and in our third-party relationships.
Our Compliance Model seeks to prevent any activity which may
involve us directly or indirectly in any irregular situation, to
detect any potential risk in good time and to act accordingly.
There are control procedures in place that help to prevent
corruption, covering such issues as conflicts of interest,
suitability of suppliers, the receiving and giving of gifts and
hospitality, and facilitation payments.
All our employees receive training on our Compliance Model,
which is subject to external certification.
Highlights
During 2020 new offences were included in the Chilean
anti-bribery and employment protection laws relating to health
measures during emergencies. Accordingly, our crime prevention
model was updated, and related risks re-evaluated. The main risk
identified is a severe transgression of the law, which has been
evaluated as being very unlikely, yet with potentially severe
consequences.
9. Operations
Our operations are subject to a number of circumstances not
wholly within our control. These include damage to or breakdown of
equipment or infrastructure, unexpected geological variations or
technical issues, any of which could adversely affect production
and/or costs.
Preventive and mitigation measures
Key risks relating to each operation are identified as part of
the regular risk review process undertaken by the individual
operations. This process also identifies appropriate mitigation
measures for such risks. Monthly reports to the Board provide
variance analysis of operating and financial performance, allowing
potential issues to be identified in good time and any necessary
monitoring or control activities to be implemented to prevent
unplanned downtime.
Our focus is on maximising the availability of equipment and
infrastructure and ensuring the effective use of our assets, in
line with their nameplate design and technical limits. We keep the
variation of processes within defined tolerance limits.
We have Business Continuity Plans and Disaster Recovery Plans
for all key processes within our operations to mitigate the
consequences of a crisis or natural disaster. We also have property
damage and business interruption insurance to provide protection
from some, although not all, of the costs that may arise from such
events.
Highlights
In 2020 all operational risks were continually and consistently
monitored at all our operations. Common operating models,
preventive maintenance and cost control supported our strong
operating performance during the year, despite the health
restrictions imposed by the government.
10. Tailings storage
Ensuring the stability of our tailings storage facilities (TSFs)
during their entire lifecycle is central to our operations. A
failure or collapse of any of our TSFs could result in fatalities,
damage to the environment, regulatory violations, reputational
damage and the disruption of the quality of life of neighbouring
communities as well as at our operations.
Preventive and mitigation measures
We manage our TSFs in a manner that allows the effectiveness of
their design, operation and closure to be monitored at the highest
level of the Company.
Catastrophic failures of TSFs are unacceptable and their
potential for failure is evaluated and addressed throughout the
life of each facility. Our TSFs are constantly monitored and all
relevant information is provided to the authorities, regulating
bodies and the communities that could be affected.
We manage our TSFs using data, modelling, and construction and
operating methods validated by highly qualified independent
international experts, whose recommendations we implement in order
to strengthen the control environment. Risk management includes
timely risk identification, and control definition and
verification. Controls are based on the consequences of the
potential failure of the tailings facilities.
Highlights
The Global Industry Standard on Tailings Management was adopted
in 2020. In accordance with this new standard, we began to
implement a more detailed risk identification and assessment
methodology focused on failure modes, in order to avoid
catastrophic failures.
11. Strategic resources
Disruption or restrictions to the supply of any of our key
strategic inputs, such as electricity, water, fuel, sulphuric acid
or mining equipment, could negatively impact production.
In the longer term, restrictions to the availability of key
strategic resources such as water and electricity could also affect
our growth opportunities.
Preventive and mitigation measures
In order to maintain our security of supply, contingency plans
are in place to address any short-term disruptions to strategic
resources. We negotiate early with suppliers of key inputs to
ensure continuity. Certain key supplies are purchased from several
sources to mitigate potential disruption arising from exposure to a
single supplier.
To achieve cost competitiveness, we endeavour to buy the highest
possible proportion of our key inputs, such as fuel and tyres, on
as variable a price basis as possible and to link costs to
underlying commodity indices where this option exists.
We are committed to incorporating sustainable technological and
innovative solutions, such as using sea water and renewable power
when economically viable, to mitigate exposure to potentially
scarce resources.
We maintain a rigorous, risk-based supplier management framework
to ensure that we engage solely with reputable product and service
providers and keep in place necessary controls to ensure the
traceability of all supplies (including avoiding any conduct
related to modern slavery).
Highlights
During the health emergency the supply of critical inputs has
been maintained through constant monitoring and the application of
contingency plans.
12. Cyber security
Breaches in, or failures of, our information security management
could adversely impact our business activities. Malicious
interventions (hacking) of our information or operations' networks
could affect our reputation and/or operational continuity.
Preventive and mitigation measures
Our information security management model is designed with
defensive structural controls to prevent cyber risks and mitigate
their effects. It employs a set of rules and procedures, including
a Disaster Recovery Plan, to restore critical IT functions in the
event of an attack.
Our systems are regularly audited to identify any potential
weaknesses or threats to the operations, and specific systems are
in place to protect our assets and data.
Highlights
In 2020 preventive controls and constant communication with
users were reinforced to prevent cyber attacks.
13. Liquidity
Restrictions in financing sources for future growth could
prevent us from taking advantage of growth or other opportunities
available in the market.
Preventive and mitigation measures
Security, liquidity and return represent the order of priorities
for our investment strategy. We maintain a strong and flexible
balance sheet, consistently returning capital to shareholders while
leaving sufficient funds to progress our short-, medium- and
long-term growth plans and maintain the financial flexibility to
take advantage of opportunities as they may arise.
We have a risk-averse investment strategy, managing our
liquidity by maintaining adequate cash reserves and financing
facilities through the periodic review of forecast and actual cash
flows. We choose to hold surplus cash in demand or term deposits or
highly liquid investments.
Highlights
During 2020 the Company launched its inaugural corporate bond,
raising $500 million.
14. Commodity prices and exchange rates
Our results are heavily dependent on commodity prices -
principally copper and, to a lesser extent, gold and molybdenum.
The prices of these commodities are strongly influenced by a
variety of external factors, including world economic growth,
inventory balances, industry demand and supply, possible
substitution, etc.
Our sales are mainly denominated in US dollars, although some of
our operating costs are in Chilean pesos. As a result, the
strengthening of the Chilean peso may negatively affect our
financial results.
Preventive and mitigation measures
We consider exposure to commodity price fluctuations to be an
integral part of our business and our usual policy is to sell our
products at prevailing market prices. We monitor the commodity
markets closely to determine the effect of price fluctuations on
earnings, capital expenditure and cash flows. Very occasionally,
when we feel it is appropriate, we use derivative instruments to
manage our exposure to commodity price fluctuations.
We run our business plans through various commodity price
scenarios and develop contingency plans as required.
As copper exports account for some 50% of Chile's exports, there
is a correlation between the copper price and the US dollar/Chilean
peso exchange rate. This natural hedge partly mitigates our foreign
exchange exposure. However, we monitor the foreign exchange markets
and the macroeconomic variables that affect them and occasionally
we implement a focused currency-hedging programme to reduce
short-term exposure to fluctuations in the US dollar against the
Chilean peso.
Highlights
Some limited copper hedge positions were put in place when
prices fell and the Chilean peso weakened significantly following
the outbreak of COVID-19. However, both had strengthened materially
by the end of the year.
15. Growth of mineral resource base and opportunities
We need to identify new mineral resources to ensure continued
future growth, and we do this through exploration and
acquisition.
We may fail to identify attractive acquisition opportunities or
select inappropriate targets. The long-term commodity price
forecast, and other assumptions used when assessing potential
projects and other investment opportunities, have a significant
influence on the forecast return of investments. If incorrectly
estimated, these could result in poor decision-making.
As regards exploration, there is a risk that we may not identify
sufficient viable mineral resources.
Preventive and mitigation measures
Our exploration and investment strategy prioritises exploration
and investment in the Americas. We focus on growth opportunities in
stable and secure countries in order to reduce our risk
exposure.
We conduct rigorous assessment processes to evaluate and
determine the risks associated with all potential business
acquisitions and strategic exploration alliances, including
conducting stress-test scenarios for sensitivity analysis. Each
assessment includes a country risk analysis (including corruption)
and analysis of our ability to operate in a new jurisdiction.
At the very least, all joint ventures must operate in line with,
or to the equivalent level of, our policies and technical
standards.
Our Business Development Committee reviews potential growth
opportunities and transactions, approving or recommending them
within authority levels set by the Board.
Highlights
During 2020 we reduced the volume of activity during the
COVID-19 pandemic, giving priority to compliance with protocols to
ensure the health of workers.
Our exploration activities continued to be focused mostly on the
Americas and our risk exposure level remained at the same level as
in 2019.
16. Project execution
Failure to effectively manage our development projects could
result in delays to the start of production and cost overruns.
Preventive and mitigation measures
We have a project management system to ensure that best
practices are applied at each phase of a project's development. The
project management system provides a common language and standards
to support the decision-making process by balancing risk with the
benefit of growth. In addition, all geometallurgical models are
reviewed by independent experts.
During the project development lifecycle, quality checks for
each of the standards applied are carried out by a panel of experts
from within the Company. This panel reviews each completed
feasibility study to assess the technical and commercial viability
of the project. It also assesses how the project can be developed
safely and considers any relevant risks or opportunities that could
potentially impact the schedule, cost or future performance of the
project.
Detailed progress reports on ongoing projects are regularly
reviewed and include assessments of progress against key project
milestones and performance against budget.
Project robustness is stress-tested against a range of copper
price scenarios. Joint project/operation teams are established
early in the development project in order to ensure the smooth
transition of the project into operating mode once construction is
completed.
Highlights
The Los Pelambres Expansion project was largely suspended for
some five months following the outbreak of COVID-19. The project
risks are being proactively managed and frequently evaluated by the
project team according to a specific project risk management
procedure.
17. Innovation and digitisation
Our ability to deliver on our strategy and performance targets
may be undermined by missed opportunities or delays in adopting new
technologies or innovations.
Preventive and mitigation measures
We seek value-capturing innovations that realise cost savings
and/or improve the efficiency, reliability and safety of our
processes while supporting our corporate strategic pillars. We
evaluate the potential of all ideas using our stage-gate approval
process and Innovation Board.
We maintain partnerships with academic institutions and
companies specialising in technology and engineering - including
peers where there is no competitive barrier to doing so - in order
to maximise the potential for improvements in our processes and
systems. A dedicated team monitors, identifies and analyses
external innovation trends with potential application to our
business, including in non-operational areas such as product sales
and purchasing. The team also maintains and manages a portfolio of
ongoing innovation projects.
We have a recognition and incentives programme to encourage all
staff to suggest innovations to our day-to-day operating systems.
We also dedicate resources to evaluating and implementing
innovations which have the potential to positively impact our
business and growth options.
Highlights
In 2020 we launched three automation projects: a remote
operations centre in the city of Antofagasta, autonomous drilling
at Los Pelambres and the use of autonomous trucks in a new pit at
Centinela.
18. External risks
We must develop the ability to manage external threats that are
complex to predict and can significantly impact the Group's
strategic objectives and its operational continuity.
Preventive and mitigation measures
We promote the flexibility of our business and our labour force.
We have defined a new structure for working both from home and at
the workplace and have implemented many other measures as part of a
project on new ways of working.
We incorporate lessons learned into our business, maintaining
good practice and including potential improvements learnt from
responses and actions taken during periods of crisis.
We annually challenge the risk strategies associated with each
key risk category, including the diversification of suppliers,
routes, levels of autonomy, etc.
We recognise the volatility of the markets and proactively seek
new business models and work to expand our client base.
We regularly review our Business Continuity Plan.
We conduct scenario analysis to challenge the principles on
which we base our financial planning, identifying potential risks
and cost/benefits of feasible action plans.
Highlights
This new key risk category was included in our risk analysis for
the first time in 2020. The risks in this category cut across the
other key risk categories and high-impact risks were identified,
particularly COVID-19. Control actions were implemented to
guarantee the safety and health of our employees and provide
support to local communities in order to maintain their wellbeing
and the operations' continuity."
Related party transactions
The following description of related party transactions is
extracted from Note 34 on page 210 of the 2020 Annual Report and
Financial Statements. A condensed version of this note was
published in the Preliminary Results Announcement as Note 26.
"Transactions between the Company and its subsidiaries, which
are related parties, have been eliminated on consolidation and are
not disclosed in this note. Transactions between the Group and its
associates and joint ventures are disclosed below.
The transactions which Group companies entered into with related
parties who are not members of the Group are set out below. There
are no guarantees given or received and no provisions for doubtful
debts related to the amount of outstanding balances.
A) Quiñenco SA
Quiñenco SA ("Quiñenco") is a Chilean financial and industrial
conglomerate, the shares of which are traded on the Santiago Stock
Exchange, and in which members of the Luksic family are interested.
Two Directors of the Company, Jean-Paul Luksic and Andrónico
Luksic, are also directors of Quiñenco.
The following transactions took place between the Group and the
Quiñenco group of companies, all of which were on normal commercial
terms at market rates:
-- the Group made purchases of fuel from ENEX SA, a subsidiary
of Quiñenco, of $212.6 million (2019 - $159.3 million). The balance
due to ENEX SA at the end of the year was nil (2019 - nil);
-- the Group earned interest income of $1.7 million (2019 - $4.0
million) during the year on deposits with Banco de Chile SA, a
subsidiary of Quiñenco. Deposit balances at the end of the year
were $nil (2019 - $67.9 million);
-- the Group earned interest income of $0.3 million (2019 - $0.2
million) during the year on investments with BanChile
Administradora General de Fondos SA, a subsidiary of Quiñenco.
Investment balances at the end of the year were nil (2019 - $6.0
million).
-- the Group purchased shipping services from Hapag Lloyd, an
associate of Quiñenco, of $7.0 million (2019 - $1.0 million). The
balance due to Hapag Lloyd at the end of the year was nil (2019 -
nil).
B) Compañía de Inversiones Adriático SA
In 2020, the Group leased office space on normal commercial
terms from Compañía de Inversiones Adriático SA, a company in which
members of the Luksic family are interested, at a cost of $0.7
million (2019 -$0.6 million).
C) Antomin 2 Limited and Antomin Investors Limited
The Group holds a 51% interest in Antomin 2 Limited ("Antomin
2") and Antomin Investors Limited ("Antomin Investors"), which own
a number of copper exploration properties. The Group originally
acquired its 51% interest in these properties for a nominal
consideration from Mineralinvest Establishment, which continues to
hold the remaining 49% of Antomin 2 and Antomin Investors.
Mineralinvest is owned by the E. Abaroa Foundation, in which
members of the Luksic family are interested. During the year ended
31 December 2020 the Group incurred $0.1 million (year ended 31
December 2019 - $0.1 million) of exploration expense at these
properties.
D) Tethyan Copper Company Limited
As explained in Note 18 the Group has a 50% interest in Tethyan
Copper Company Limited ("Tethyan"), which is a joint venture with
Barrick Gold Corporation over Tethyan's mineral interests in
Pakistan. During 2020 the Group contributed $7.2 million (2019 -
$1.8 million) to Tethyan.
E) Compañia Minera Zaldívar SpA
The Group has a 50% interest in Zaldívar (see Note 18), which is
a joint venture with Barrick Gold Corporation. Antofagasta is the
operator of Zaldívar. The balance due from Zaldívar to Group
companies at the end of the year was $0.5million (2019 - $6.0
million). During 2020 the Group has received dividends of $65.0
million from Minera Zaldívar (2019 - 50.0 million).
F) Inversiones Hornitos SA
As explained in Note 18, the Group has a 40% interest in
Inversiones Hornitos SA, which is accounted for as an associate.
The Group paid $128.2 million (year ended 31 December 2019 - $187.7
million) to Inversiones Hornitos in relation to the energy supply
contract at Centinela. During 2020 the Group has not received
dividends from Inversiones Hornitos SA (2019 - $8.0 million).
G) Directors and other key management personnel
Information relating to Directors' remuneration and interests is
given in the Remuneration Report on page 139. Information relating
to the remuneration of key management personnel including the
Directors is given in Note 9."
Investors - London Media - London
Andrew Lindsay alindsay@antofagasta.co.uk Carole Cable antofagasta@brunswickgroup.com
Telephone +44 20 7808 0988 Telephone +44 20 7404 5959
Rosario Orchard rorchard@antofagasta.co.uk
Telephone +44 20 7808 0988
Media - Santiago
Pablo Orozco porozco@aminerals.cl
Carolina Pica cpica@aminerals.cl
Telephone +56 2 2798 7000
Cautionary statement about forward - looking statements
This announcement contains certain forward-looking statements.
All statements other than historical facts are forward-looking
statements. Examples of forward-looking statements include those
regarding the Group's strategy, plans, objectives or future
operating or financial performance; reserve and resource estimates;
commodity demand and trends in commodity prices; growth
opportunities; and any assumptions underlying or relating to any of
the foregoing. Words such as "intend", "aim", "project",
"anticipate", "estimate", "plan", "believe", "expect", "may",
"should", "will", "continue" and similar expressions identify
forward-looking statements.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors that are beyond the
Group's control. Given these risks, uncertainties and assumptions,
actual results could differ materially from any future results
expressed or implied by these forward-looking statements, which
apply only as at the date of this report. Important factors that
could cause actual results to differ from those in the
forward-looking statements include: global economic conditions;
demand, supply and prices for copper and other long-term commodity
price assumptions (as they materially affect the timing and
feasibility of future projects and developments); trends in the
copper mining industry and conditions of the international copper
markets; the effect of currency exchange rates on commodity prices
and operating costs; the availability and costs associated with
mining inputs and labour; operating or technical difficulties in
connection with mining or development activities; employee
relations; litigation; and actions and activities of governmental
authorities, including changes in laws, regulations or taxation.
Except as required by applicable law, rule or regulation, the Group
does not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Past performance cannot be relied on as a guide to future
performance.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
NOAUBASRARUSRAR
(END) Dow Jones Newswires
April 07, 2021 10:46 ET (14:46 GMT)
Antofagasta (LSE:ANTO)
Historical Stock Chart
From Mar 2024 to Apr 2024
Antofagasta (LSE:ANTO)
Historical Stock Chart
From Apr 2023 to Apr 2024