Keep us standing by, and welcome to the MMG Limited 2025 Sustainability Briefing Presentation. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Troy Hay, Executive General Manager, Corporate Relations. Please go ahead.
Hello, and thank you for joining us today for MMG Sustainability Briefing. I'm Troy Hay, Executive General Manager of Corporate Relations, and I welcome all the participants today. Today's presentation will provide an overview of how we operate at MMG, the progress we've made towards achieving our sustainability goals, and the measures we're taking to minimize risks to the safety of our people, communities, heritage, and the environment. We'll discuss how we are meeting stakeholder expectations in these critical areas and, importantly, offer you a chance to ask questions. We have a comprehensive and exciting lineup for today's briefing.
Joining us today is Ivo Zhao, our CEO, along with Leaders from across the business who are responsible for managing some of our key sustainability deliverables. The team and I are looking forward to sharing insights into our journey. I'll now hand over to Ivo to commence the proceedings.
Welcome, everyone, and thank you for joining us for our fourth Sustainability Briefing, and my first as MMG CEO. Before we begin, I'd like to provide some context. At MMG, we're deeply committed to sustainable development and improving operational efficiency, all while prioritizing the safety and well-being of our people and the communities where we operate. With a portfolio that spans Australia, Africa, and South America, MMG is strategically positioned in regions experiencing strong and sustained growth. Our focus remains on unlocking more value from existing operations and maximizing the growth potential of our assets, while actively pursuing opportunities to diversify within known regions and critical commodities.
MMG is strategically positioned to meet the increasing global demand for base metals essential to the low-carbon transition. Our diversified portfolio of high-quality Copper, Zinc, and nickel assets is critical to enabling electric vehicles, renewable energies, and energy storage solutions. These metals also underpin the expansion of global data centers, driving AI and GenAI technologies and support growth across construction sectors. In 2024, we delivered a 15% increase in Copper production and an 8% rise in Zinc output, a clear demonstration of our ability to scale in line with growing market demand. For quarter one this year, we announced a Copper production of just over 118,000 tons, an increase of 76% compared to the same period last year.
Looking ahead, we anticipate further growth with Copper production projected to reach up to 522,000 tons and Zinc-equivalent production up to 340,000 tons in 2025. The support of our major shareholder, China Minmetals Corporation, enables us to pursue growth opportunities and advance towards our goal of becoming a top-10 global Copper producer. I see MMG building a Copper-focused portfolio supported by Minmetals and other strategic partners. Over the past 15 years, MMG has built a solid foundation, and I'm confident we are only just getting started. The next 10 to 15 years will see us ramp up further, and as CEO, I'm excited to Lead MMG into this next chapter.
We also recognize that producing commodities critical for a low-carbon future should be backed by robust sustainability practices. MMG maintains membership with key industry associations, including the International Council on Mining and Metals (ICMM) and the Extractive Industries Transparency Initiative (EITI). By aligning with these organizations, we ensure that our operations adhere to international standards and contribute positively to the communities and environments in which we operate. At MMG, safety is not just a priority. It is at the foundation of everything we do. We are deeply committed to embedding a strong safety mindset across the company.
This means ensuring that Leadership, behaviors, and processes constantly support our safety purpose of significant and ongoing safety and health improvements for our people. To develop a culture focused on safety, we have identified five key elements that guide our efforts. The first, Leadership, ensuring that all sites align with common MMG Leadership attributes. The second, elimination of fatalities, addressing low probability, highly consequent events in line with our Fatal risk standards and site-specific fatal material risks. The third one, prevention of injuries, focusing on high probability events and adhering to our significant events and safety, security, health, and environment SSHE performance standards.
The fourth, application of learning from incidents, using our internal significant events and SSHE performance standards. The fifth, risk management, ensuring the implementation of our risk management processes to ensure risks are understood and well controlled. Safety performance remains a key focus. We continue to acknowledge that there are areas where we need to strengthen our Leadership and systems in order to achieve an ongoing improvement. Year-to-date, at the end of April, our Total recordable injury frequency rate is 2.04 per million hours worked, which represents a decrease from the 2024 full-year outcome of 2.06. Our significant events with energy exchange frequency SEEF for the year-to-date to April was 0.99 per million hours worked,
and our 2024 full-year outcome was 0.78. Sites will continue to prioritize rigorous contractor management, proactive field task observations, and the implementation of critical controls to enhance safety performance. As we continue to strengthen our sustainability efforts, it's important to acknowledge the traditional custodians of the lands and resources where we work. It is a privilege to be guests of these custodians, both past and present, and we extend our sincere respect. At MMG, we take great pride in our commitment to community empowerment and development. In 2024, we invested $47.9 million in social initiatives with a focus on improving infrastructure, healthcare, education, and business opportunities.
One of the key highlights for me has been our work at Las Bambas, where we designed and rolled out the Corazon de Las Bambas program. Through this project, we built a model of engagement based on four key pillars: social development, business growth, social risk management, and community engagement. The success of Corazon de Las Bambas represents a real turning point by partnering closely with our communities, spanning with our local business, increased by 53% year-on-year to 2024, helping them grow, build capacities, and thrive. An area of focus for the team has been the integration of local business into our value chain, boosting the economic activities in the area and creating sustainable opportunities for locals.
It's been incredible to see how this has resulted in both short and long-term benefits for the community. Some examples of value chain integration include earth-moving services, road maintenance along the Southern Road Corridor, and concentrate transportation. The recent contract awarded to the Huancuire Community Company, GORUAN, to transport Copper concentrates from Las Bambas is a powerful example. It has enabled GORUAN to launch a fleet of 30 newly commissioned trucks, creating local jobs, building business capabilities, and delivering long-term economic benefits to the Huancuire community.
This follows the successful implementation of the same model with the Ferrob amba Community Company last year. Together, these partnerships have increased the mines' total permitted transport capacity to 155 trucks, while embedding community participation at the heart of our operations. These are not isolated examples. In the last two years, we have almost doubled to just over 1,000, the number of local companies directly and indirectly contracted by Las Bambas. As you know, these efforts also make a difference to MMG, with stable operation due to reduced road blockades allowing for increased production at our Ferrob amba and Chalcobamba peaks.
Just last week, the team and I were delighted to host a group of investors and analysts at Las Bambas. The group spent time with the Leadership team and deepened their understanding of the operation, including how we are delivering production improvements and cost efficiencies. They also experienced firsthand our community relations program in action with a visit to Choqueca, home to around 240 families. We enjoyed traditional song and dance and learned about projects, including our Greenhouse initiative run by a local woman who is now able to grow and produce to have an income resource. The team and I look forward to hosting future trips.
We are taking our lessons from Las Bambas and applying them to strengthen the partnership and sustainability initiatives at all our operations. This includes everything from employment and training to offering contracts to communal communities to provide critical services. Through these efforts, we are not just building a stronger supply chain, but also a more resilient, economically empowered community. PROMACAL provides an example of this in action. The team regularly engages with locals through traditional councils and stakeholders' meetings. From these discussions, we know that employment opportunities, including mining work experience for graduates and improvement of school facilities, are important.
The team will continue to work closely with their stakeholders to ensure the best support these areas of focus over the coming years. Finally, our community efforts have clearly strengthened our ability to operate in difficult jurisdictions. However, it doesn't mean we won't continue to face challenges along the way. At Las Bambas, as an example, we operate in a highly complex environment. We interact regularly with over 80 communities and a range of stakeholders, all with unique needs and expectations. The difference is our local team has social programs in place, relationships they can leverage, and on-the-ground experience to best navigate these challenges.
I'm so proud of all these achievements we have made as a team in our social performance and the difference it's made. Now, let me hand over to Fiona Sartain, our Head of Sustainability, to take you through our approach to human rights.
Thank you, Ivo. Across MMG, we understand that respect for human rights and social responsibility are at the very core of what we do. We are committed to upholding human rights standards, not just as a requirement, but as a principle that shapes every aspect of our operations. Today, I'm going to take you through our approach to human rights, the work we've done so far, and most importantly, where we are headed in the future to strengthen our commitments. Our commitment to human rights is a cornerstone of MMG's values. We take a comprehensive approach, focusing on the rights of indigenous peoples, local communities, and our workforce.
This includes a dedication to respecting cultural heritage and ensuring our operations do not negatively impact the rights and well-being of those around us. These commitments are embedded in our human rights policy as well as our Social performance standard, which ensure that our operations align with global standards, including the United Nations' guiding principles on business and human rights. In late 2024, MMG began a comprehensive human rights impact assessment, or HRIA, at our Las Bambas operation in Peru. This is a crucial step in identifying and understanding any actual and potential human rights impacts associated with those operations, as well as evaluating the effectiveness of our existing measures.
The HRIA is being carried out by an internationally recognized consultancy to ensure its credibility and independence, with the support of an independent human rights advisory group, which is made up of international experts in the field to help guide the team. The process being undertaken is thorough and is examining not only adverse impacts of the mining activities that may be causing or contributing to, but also the impacts we may be directly linked to through our business relationships, including our suppliers. It also involves comprehensive rights holder engagement to ensure we are taking a people-focused approach. We are looking forward to receiving the results of this HRIA towards the end of third quarter 2025.
After this time, we plan to further engage with rights holders and other stakeholders, analyze the findings, and develop clear action plans to actively address any issues that arise across all levels of our operations. An important part of our human rights strategy is engaging directly with those who may be impacted by our operations. We have a comprehensive and culturally appropriate company-wide Grievance mechanism, which sites then adapt to their own cultural and operational settings to ensure communities have a safe, accessible channel to voice concerns without fear of reprisal. This has been crucial in maintaining transparent and constructive relationships with our stakeholders.
We work hard to ensure our teams receive constant training in how to manage any issues that arise through these site-specific mechanisms in a sensitive and effective manner and regularly update the mechanisms based on feedback from stakeholders. We are deeply committed to strengthening our governance structure, ensuring senior management and the board oversee our human rights approach. To that end, we've implemented training and capacity-building programs to enhance awareness and understanding of human rights issues across our workforce and also among our contractors. It's vital that every member of our team, from the Leadership to those on the ground, understands and upholds these principles.
This is a cultural shift we are fostering, where respect for human rights is embedded in everything we do. Looking ahead, we are committed to building on the lessons that come out of the HRIA process at Las Bambas and applying these insights across all our operations. One of our priorities for 2025 is to continue integrating human rights due diligence into our decision-making processes, ensuring that future projects incorporate human rights considerations from the very beginning. We will also continue refining our engagement with local communities, making sure that the voices of indigenous peoples and other rights holders are heard and respected throughout the lifecycle of our projects.
This means developing tailored social performance models that are sensitive to local contexts and needs, driving further integration of local communities into our value chain. Additionally, MMG is committed to aligning our practices with the evolving expectations of both the global community and our stakeholders. As such, we will continue to enhance our reporting mechanism, sharing insights and progress in future sustainability reports. This will ensure transparency and provide our stakeholders with the confidence that we are holding ourselves accountable and making tangible progress. While we have made significant strides in advancing human rights practices, our work is far from done.
We remain focused on continuously improving our approach, strengthening our relationships with the communities where we operate, and ensuring that we leave a positive legacy wherever we go. We are committed to being a Leader in responsible mining, and our human rights practices will continue to evolve as we work towards a more sustainable future for all. Artisanal and illegal mining is a deeply complex issue that affects not only our business but the mining industry globally. It is a growing challenge in many regions around the world. Informal and illegal mining activities are often driven by poverty, ancestral land claims, and nationalist ideals, and are
increasingly taking place in areas where formal mining companies hold legally granted mineral rights. For MMG, this includes the area earmarked for the future development of our third pit at Sulfobamba. These operations bring serious risks. Without the environmental and safety controls applied by formal mining companies, there is greater potential for land degradation, water contamination, and unsafe working conditions. Artisanal and illegal mining can also present human rights risks, further entrench social inequality and conflict, and deprive countries of taxes and royalty payments that can support the long-term development of regions and countries. The challenges are not only related to environmental social issues.
Artisanal and illegal mining can also present significant commercial and economic risks, both for individual mining operations and the global supply of critical minerals. This includes delays to project development, premature resource depletion, disruption to commodity markets, and an uneven distribution of national mineral wealth. At Las Bambas in Peru, we are facing these challenges directly. At Ferrobamba, in particular, we continue to raise our concerns with the government of Peru, especially considering the sharp rise in illegal mining activity across the country. To date, we have lodged over 100 complaints related to unauthorized activity within our concession.
We are also actively contributing to national-level discussions on long-term solutions. This includes discussions relating to the Rainfall Registry, which supports the formalization of eligible small-scale miners. Alongside these efforts, we remain committed to creating shared value. Since 2016, we have spent over $800 million in Peru with local suppliers. We are also supporting the development and promotion of community-owned businesses and working to integrate local communities into our broader value chain. Mining at Sulfobamba is not expected to begin for another decade, but we are already focusing on building strong, open relationships with all stakeholders.
Las Bambas is a high-quality asset that remains the economic backbone of the Apurimac region, representing approximately 72% of their annual GDP equivalent. We are committed to its long-term success and development while continuing to deliver real and lasting benefits to local communities. Because for mining to be truly sustainable, it must be legal, safe, and inclusive. We believe this can only be achieved through strong partnerships, clear policy, and lasting community trust. Now, let us turn our focus to our natural environment. Nature is essential to the success and sustainability of our business. As a global mining company, we operate in some of the world's most biodiverse regions.
That means we have both a responsibility and an opportunity to manage our impact, protect these ecosystems, and work in true partnership with local communities. In 2024, we undertook a detailed review of our nature-related obligations and opportunities. This work was grounded in the ICMM's Nature Position Statement and aligned with emerging global frameworks, including the Task Force on Nature-related Financial Disclosures, or TNFD. The review led to the development of MMG's first nature strategy, which was approved by our board in March of this year. What's important is that this strategy is not just a top-down document.
This has been designed to be site-focused and site-led, recognizing the distinct ecological and social context of each of our operations. We are setting MMG up for the future by preparing for growing reporting requirements and rising community expectations around nature and biodiversity. This strategy helps us move beyond compliance towards stewardship, regeneration, and long-term value creation. The implementation will be led locally with strong governance through our executive committee. In 2025, each site will complete a LEAP assessment. That stands for Locate, Evaluate, Assess, and Prepare. These assessments will help us understand site-specific dependencies and impacts on nature and guide targeted action.
At its core, our nature strategy is about enhancing ecosystem health, building climate resilience, and strengthening the connection between nature, communities, and our long-term business performance. We are also embedding this work into our broader sustainability framework, so it connects directly with our goals on climate, people, and business as a whole. This integration will help us deliver measurable outcomes and report transparently on our progress over time. I would now like to hand over to Helga Nolasco, our Principal Environment Advisor, to explore further how we are working to prepare for a more sustainable future.
Thank you, Fiona. At MMG, we mine for progress. Today, that progress means enabling the global shift to cleaner energy. The metals we produce are essential to decarbonization. Copper is vital for electrification and transmission infrastructure. Zinc supports a wide range of clean energy technologies, and both nickel and Lead are critical for high-performance batteries and renewable energy storage. It is not only about what we produce. It is also about how we operate. We are actively cutting our own emissions, increasing the use of renewable energy, and building a business that is ready for a low-carbon future. We have already seen strong results.
At Dugald River, the Solar farm delivers a 30% reduction in Scope 2 emissions per year. At Rosebery, the introduction of Diesel electric loaders has reduced fuel use in that fleet by around 40%, while also reducing maintenance costs and lowering the risks associated with diesel particulate matter exposure for our workforce underground. Looking ahead, we are scaling this impact across our business. The solar project at Kinssevere will reduce reliance on intermittent grid electricity and diesel generators to support the site's expansion. At Las Bambas, we are progressing a Green power purchase agreement to decarbonize electricity in our largest operation.
We are also exploring wind energy options at Dugald River and extending the use of diesel electric equipment at Rosebery and potentially Dugald River as well. We are acutely aware of the challenges that are being faced as we seek to decarbonize our operations and move towards a lower carbon economy. Technologies such as zero and low-emission fleets and renewable energy require significant upfront investments, often with uncertain payback periods, especially at remote sites with limited infrastructure and incentives. We are working hard with key strategic partners to identify opportunities to address these challenges, which require company efforts.
Considering these challenges, as well as the recent acquisitions of Khoemacau and the Nickel Brasil operations, we are taking the opportunity to review our climate strategy. This will ensure it is reflective of our diverse and geographically spread operations, adaptive to allow for our future growth plans, and responsive to the changing global landscape. You can expect an update on our review early next year. This work is about preparing MMG for the future. We are committed to being a responsible producer of essential metals and to Leading through practical action and meaningful results. I will now hand over to Funda Guvenbas, our Head of Organizational Development and Talent, who will focus on the people who make this work possible.
Thanks, Helga. Our people remain the foundation of MMG's long-term success. We've seen again this year that when we invest in our people, we build a more resilient, inclusive, and high-performing business. The executive committee and I have been incredibly proud to see the high levels of engagement and commitment reflected in our people and culture survey results. Our teams continue to show strong alignment with MMG's values, particularly in collaboration and responsibility. This year has marked a real step forward in our diversity and inclusion journey. We saw female representation rise to nearly 16% across MMG, with growth in senior Leadership roles, including the board.
Just as importantly, we launched initiatives that go beyond targets, programs that are designed to support and develop our people at every level. This includes our high-performance Leadership program for female Leaders, which combines 360-degree feedback, one-on-one coaching, and virtual learning. Our female support circles and multicultural onboarding programs have also made a real difference on the ground, creating safe, inclusive spaces for our people to learn, grow, and connect. A strong and inclusive culture does not happen by chance. It takes listening, action, and shared accountability.
Through our diversity and inclusion committees, which now operate with every MMG asset and office, we have built a structure that allows us to respond to the things that matter most to our people. We have launched awareness campaigns on disability inclusion. We have rolled out blind CVs to remove bias in recruitment and offering support tailored to the unique needs of our FIFO team. As a result, we have strong engagement in our annual survey, providing feedback that our people feel more valued, more included, and more optimistic about their future at MMG. We are proud of these outcomes, but we know our work is ongoing. Our people are asking for more meaningful development, more inclusive Leadership, and clear pathways to progress.
We'll continue to invest in these areas, guided by the voice of our workforce and grounded in the belief that an inclusive and engaged team drives better outcomes both for our business and for the communities that we serve. I'd like to now hand over to Sandra Guan, our Interim Executive General Manager for Commercial and Development, to take us through MMG's competitive advantage and future-focused areas.
Thank you, Funda. I'm excited to join you all to talk about our strong pipeline of growth projects, our clear commitment to sustainability, and the strategic choices we are making to position the business for the long term. One of the most exciting developments is our acquisition of Nickel Brasil, a major step in diversifying our portfolio and strengthening our exposure to the future-facing commodities. This is MMG's first investment in Brazil, a tier-one mining jurisdiction, and it has two operating assets, Barra Alto and Codamin, producing around 40,000 tons of nickel in fair nickel annually.
These assets operate in the lowest cost quartile globally, with a strong production base and a resource endowment that ranks as the third largest globally for nickel. Importantly, 100% of their power is sourced from renewable energy, aligning strongly with our decarbonization goals. The Barra Alto operation is also the first nickel mine to have received a 75 rating through the Initiative for Responsible Mining Assurance certification, an incredible achievement for the site and one that we will remain committed to supporting once we acquire the asset. We also see significant upside through growth projects like Jacare and Morro Sem Boné, which offer exposure to the Class 1 battery-grade nickel.
This acquisition not only strengthens our financial performance but also reinforces our commitment to responsible growth in a carbon-constrained world. At MMG, we are committed to placing sustainability at the core of everything we do. As part of this commitment, we are working closely with Anglo American to develop a strong business case for transforming Green slag and other on-site waste materials into Fertilizer. While the Fertilizer benefit is clear, the highest potential value of Green slag lies in its role as a carbon abatement offset.
This initiative supports our ambition to reduce waste, lower environmental impacts, and create circular economy opportunities across our operations. While still in early stages, the project has the potential to turn a waste byproduct into a valuable input for agriculture, contributing to broader regional development and land rehabilitation efforts. Looking across our broader portfolio, our Kinssevere expansion project is progressing well and remains a key part of our strategy to increase Copper and cobalt production in a sustainable way. This project will play an important role in meeting the world's growing demand for energy transition metals. As you heard earlier in the presentation, at Las Bambas, we continue to focus on community partnerships and sustainable development.
Through long-term agreements with local communities, we are driving positive outcomes, not just for the operation but for the region more broadly. Through strategic infrastructure projects like the Kutuctay Bridge and education support programs in Cotabambas, we are helping to deliver real lasting value beyond the mine gate. Climaxal is another important growth project for us, and we see strong potential to significantly increase Copper production over the coming years. We've also embedded sustainability principles and key initiatives into the early stages of development, which will help us deliver long-term value while meeting social and environmental expectations.
Meanwhile, at Dugald River and Rosebery, we were investing in innovation to improve environmental performance. All of this speaks to the strength of our strategy. We are growing. We are investing in the right commodities, and we are doing it in a way that is responsible, future-focused, and creates a world-class resources company for a better world. I want to hand over to Troy to conclude our presentation.
Thank you, Sandra, and thank you to all our presenters for their contribution today. Before we open for questions, I want to highlight a few key priorities for the remainder of the year. First and foremost is safety. It remains our top priority and we will keep strengthening our critical controls to protect our people and prevent harm. We are also taking deliberate steps to build a more diverse and inclusive organization. This remains a focus at every level of MMG. Growth for us goes hand in hand with sustainability. We are committed to deepening our partnerships with the community based on respect and shared value. We are focused on real, measurable action to reduce emissions across our operations and our value chain, while also building climate resilience into how we operate and support the communities around us. We will now move to questions, so I will hand back to the moderator. Thank you.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. We will now pause momentarily to allow questions to be registered. Once again, if you wish to ask a question, please press star one on your telephone. Thank you. There are no phone questions at this time. I'll now hand back to Mr. Troy Hay for closing remarks.
Thank you once again, everybody, for joining us today. We're very proud of the progress we've made on our sustainability journey and look forward to continuing to work together to achieve even greater results. If you do have any further questions or you would like information, please don't hesitate to reach out to any member of our team. We're committed to maintaining open and transparent communication as we move forward in our sustainable efforts. Thank you very much for participating today.
That does conclude our conference for today. Thank you for participating. You may now disconnect.