TPR – COMMITTMENTS CLOSURE TABACO PROCESS MAY, 2014

BACKGROUND – PROCESS SEQUENCE 1998 - 2008 Direct negotiations with exresident families from Tabaco; the community did not agree to collective relocation at a new site and families ended scattered in 15 municipalities of La Guajira and some towns in the department of Cesar. Sensitive negotiation period 1998 – 2001. On May 2002, the Justice Supreme Court ruled that the Municipality of Hatonuevo had the obligation of executing the reconstruction of the social fabric of Tabaco and also the initiation of a housing plan for this community. Cerrejón signed in 2008 a transaction agreement with the Social Board of Tabaco and the payment of indemnifications pending from previous negotiations was done.

BACKGROUND – PROCESS SEQUENCE 2007 - 2012 During 2007, with the support of specialized Consultants and the participation of the Community, Cerrejón developed the Tabaco Network. The members of the Tabaco Resettlement Committee (CRT) were not involved in the programs of the Tabaco Network. On April 2008 the TPR gave some recommendations to Cerrejón about the Tabaco process which can be summarized as follows: To continue working with the group of the Tabaco Network and the strengthening of the Development Fund which enabled the beginning of 25 productive projects. The building of the Community Center and/or a church, as agreed with the former residents. To form with the Tabaco ex-resident families a working group (collective) to work a communitary plot.

BACKGROUND – PROCESS SEQUENCE 2012 On November 2008 Cerrejón signed an agreement with the Municipality of Hatonuevo and the Community of Tabaco in which committed to support them in the physical and social reconstruction process of Tabaco. The commitments were: Purchase and deliver to the municipality a plot located at Hatonuevo with the exclusive destination for the physical reconstruction of Tabaco. Building of a Community Center. Preparation of the housing plots and road outline at the place where the new village will be built. Funding of the project with the sum of COP $3.000 million pesos. On May 2011 Cerrejón purchased the La Cruz plot which was chosen by the community for the physical reconstruction of their village. On December 2012 Cerrejón donated to the municipality of Hatonuevo 14 has. of the La Cruz plot in order for the Major´s Office to begin with the preliminary steps towards the construction of the new village of Tabaco.

BACKGROUND – PROCESS SEQUENCE 2013 In 2013, as a result of the technical studies previous to the design and construction of the new village of Tabaco, it was found that the La Cruz plot (including the donated 14 has.) was crossed by an easement associated to a natural gas main pipeline, property of TGI – International Gas Transport. TGI recommended to keep clear a distance of 131 mts. at both sides of the pipeline axis for construction purposes. It was necessary, thus, to donate additional 11 has. so that a total of 15 has. were not restricted by the gas easement and the Mayor´s Office could continue with the design and construction studies of Tabaco. On September 23rd the Mayor announced that he did not agree with the construction of the village on a plot with such linear characteristics, and proposed to ask the community. 4

BACKGROUND – PROCESS SEQUENCE 2013 As a result of supporting the Mayorship of Hatonuevo in the reconstruction process, Cerrejón had the initiative of convening 10 meetings with the participation of community members, the Mayor and his staff, and Cerrejón. A meeting with the Council and Municipal Ombudsman was held where socialization of the process, highlighting the obstacles encountered. The Mayor stated on several occasions his refusal to accept the responsibility of the Municipality to assume the Physical Reconstruction of Tabaco with no engagement with Cerrejón around the subject. 5

THE COMMUNITY´S POSITIONS - 2014 The community is basically divided in three positions: Group No. 1, composed mainly by the elderly exresidents of Tabaco, express their satisfaction about the possibility that the new village be built close to the urban border of Hatonuevo. They argue that if the construction is delayed, they will die and will not enjoy it either living in or renting it. Group No. 2, composed or influenced by former Tabaco leaders, some of them with a sound participation when the signature of the 2008 agreements, others contradictors of such agreements, but all coincide that the new village must keep its rurality (post of corregidor) and defend the alternative that the village should be built at La Cruz plot. Group No. 3., composed by those families doubtful of assuming a position or silent about the process, awaiting the Mayor to convene a meeting and present the new alternative for the construction of the village. It is expected that until then they will express their opinion. 6

CERREJÓN´S POSITION We consider that the long wait of the community of Tabaco to see their new village built has caused a hopelessness feeling among the Tabaco ex-resident families with a right to a new house in the chosen place for the reconstruction of Tabaco. As a result of the direct negotiations, the families located at their will in different places all along La Guajira and others in some villages of the department of Cesar. As time passes by they have been bonding at their places with the consequence of rooting themselves. This issue might generate limitations for the families to make decisions about their immediate future of occupying the houses built at the new place. About changing the reconstruction site proposed by the Mayor, we have informed the Mayor and the families with which we have permanent engagement around dialogue and projects, that the only ones entitled to give their opinion about changing the site is the Community, and it is the role of the Mayorship, as legally responsible of the physical reconstruction of Tabaco, to ASK the Community. 7

CERREJÓN´S COMMITTMENTS Out of the 5 five commitments Cerrejón had accepted in the process: Purchasing and delivering to the Mayorship the plot for the physical reconstruction of Tabaco Outline of the roads in the plot. Fitting of the surface of the plots for housing. Building of the Community Center. (point 1 – 4 worth USD$1.5 million) Creation of a Development Fund, Cerrejón had complied with point one, awaiting for the Administration to begin the reconstruction of Tabaco in order to comply with the rest of the commitments. In addition, USD$1.5 million had been invested on Social Programs since the creation of the Tabaco Network in 2007, with benefits for the families in Education (college scholarships adn support for primary and secondary studies), and in Income generation (funding of 102 ideas of productive projects), and the creation of three collective organizations (Tabaco Women´s Association, The Tabaco Agricultural and Cattle Producers ¨Asored-Tabaco¨, and Tabaco Multiservices S.A.S.). The Social Programs had enabled the restoration of the social fabric among the families. 8

STRATEGY – CLOSURE OF THE AGREEMENT Following the position assumed by the Municipal Administration, of not complying with the mandate of the Supreme Court, Cerrejón proposes to close the agreement signed in 2008 with the Community and the Mayorship, and expose the acquired commitments by the parties involved and announce before the public opinion (community, public and private institutions and NGOs explaining the level of commitment within each one of the subjects. It is proposed that a third party performs the compliance evaluation. As a result, it must be clear before the public opinion that the Hatonuevo Municipal Administration has not comply with the court´s order and that Cerrejón keeps its word of supporting the physical reconstruction process, continuing with the support to the families with the social programs. 9

CLOSURE OF THE AGREEMENT - RISKS Involvement of the Collective of Lawyers NGO, interested in creating confusion in the community, offering money and promoting to open the subject of indemnifications. To suggest that the reconstruction must be performed by Cerrejón, taking into account the other resettlements. 10

INVERSIÓN SOCIAL – PROGRAMA DE EDUCACIÓN TOTAL INVERTIDO $ 972.543.504 11

INVERSIÓN SOCIAL – PROGRAMA DEEMPRENDIMIENTO Inversión Total $ 3.093.817.275 12

SOCIAL INVESTMENT – ENTREPRENEUR PROJECT 12 Fortalecimiento a Gestores 28 Agropecuario 19 Comercio 39 Servicio 5 Semi Industrial Total 103 13

LA CRUZ PLOT 14

LA CRUZ PLOT

THANK YOU