1. WHERE IS MINING HEADING IN LATIN AMERICA: ANALYSIS AND PROJECTIONS Juan Carlos Guajardo B. Executive Director Monday, September 27th., 2010

2.  Cesco is a study center specialized in mining issues founded in Santiago in 1984.  Its members are professionals linked to mining and interested in public policies.  Annually convene the global copper industry in Santiago during the “Cesco Week”. The 2009 Cesco Dinner was attended by 1.700 worldwide leaders.  Cesco obtains 100% of its funding from its activities (Cesco Dinner, Conferences).  Autonomy www.cesco.cl http://blog.cesco.cl

3. Table of Content Latin America and the Mining Industry  Exploration  Production  Investment Trends and Prospects Main Topics of the Mining Development in Latin America  Costs  Water  Energy  Environment and Communities

4. 1. LATIN AMERICA AND THE MINING INDUSTRY

5. 1. a EXPLORATION

6. NonFerrous Exploration Budget 2007 Source: Metals Economics Group.

7. Non Ferrous Exploration Budget 2005-2009 Source: Metals Economics Group.

8. Chile and Peru concentrate 40% of copper mining prospects Source: Cochilco. Period 2009-2020

9. 1. b PRODUCTION

10. 4% 16% 17% 20% 21% 24% 27% 32% 48% 0% 10% 20% 30% 40% 50% 60% Crude steel GoldNickelIronZincAlumina Refined copper BauxiteMolybdenumSilverMine Copper Latin America Mining Production in the world 20 09 Source UNCTAD, Cochilco, World Steel Association.

11. L.A. in the global mining production GOLD 2009 Source: Yearbook 2009, Cochilco. 6° 16° 17° 18° 26° 12° 13°

12. L.A. in the global mining production SILVER 2009 Source: Cámara Minera de México 1° 2° 9° 5°

13. L.A. in the global mining production MINE MOLYBDENUM 2009 Source: World Mineral Production. 3° 4° 5°

14. L.A. in the global mining production NICKEL 2009 6° 7° 10° Source: World Mineral Production.

15. L.A. in the global mining production BAUXITE 2009 Source: British Geological Survey. 2° 7° 10°

16. Source: Global Coal Institute Coal Global Mining Production Colombia: With great potential for new projects, Major Coal Reserves of 17 billion tons.

17. L.A. in the global mining production COPPER 2009 Source: Cochilco Yearbook 2009. 1° 15° 14° 2° 17° Brasil Perú

18. Latin America is by far the region with higher copper production Source: ICSG World Copper Factbook 2009.

19. Chile’s Copper Production by source State (Codelco) and Private 1985-2009 Source: Cochilco Yearbook, 2009.

20. Chile’s Participation in the World Production of Copper Mine (% of world production) 1950-2015 Source: Performed by CESCO Phase IPhase II Real Planned Phase III  Decreasing Production  Enclave Perception  Large quantum leap  Important development of local capabilities with Codelco  Worldwide standards provided by foreign investment  Technological development  Geology and Exploitation  Diversification

21. Participation in the global copper mine production (thousand of M.T.) Fuente: Presentación en Seminario “El Futuro de Codelco”, Brook Hunt e Informe Financiero de la Minería CESCO 1°T 2009. 11,7% 7,8% 6,1% 5,3% 11% 10% 5,6% 5% 11,4% 6,3% 4,4% 4,1% Source : Presentation at the Seminar “ The. Future of Codelco “, Brook Hunt and Financial Report of CESCO Mining 1st.Q. 2009. 18% 7% 5% 6,3% 4,4% 4,1% * Producción atribuible

22. Copper production by company in Chile Annualized Tonnes December 2006 to June 2010 Source: Financial Report 1st. Quarter 2010, CESCO % Chilean Prod 35% 22%

23. % Chilean Prod 9% 11% Source: Financial Report 1st. Quarter 2010, CESCO Copper production by company in Chile Annualized Tonnes December 2006 to June 2010

24. % Prod Chilena 3% 2% 1% Source: Financial Report 1st. Quarter 2010, CESCO Copper production by company in Chile Annualized Tonnes December 2006 to June 2010

25. 1. c INVESTMENT

26. Mining Investment by Countries in Latin America Main countries with largest mining investment Current decade CountryForecasted Total Investment BrazilUS$ 57.000 Million ChileUS$ 50.000 Million PeruUS$ 40.000 Million ColombiaUS$ 24.000 Million MexicoUS$ 21,750 Million ArgentinaUS$ 12,725 Million Source: Performed by CESCO from different sources. Approximately 200 thousand million dollars of investment

27. Chile: I.CODELCO Andina Expansion I.Copper (Cu). US$ 4.800 Million CODELCO II. Pascua-Lama Gold (Au) and Silver (Ag). US$ 3.000 Million Barrick Gold Corp. (Canadá 100%) II. Cerro Casale Gold (Au)and Copper (Cu). US$ 4.200 Million Placer Dome Inc. (Canadá 51%), Arizona Star Resources (Canadá 25%), Bema Gold Corp. (Canadá 24%). III. Escondida Phase VI Cooper (Cu) US$ 4.600 Million BHP Billiton (Australia/Reino Unido, 100%). IV. Los Pelambres Expansion Cooper (Cu). US$ 3. 200Million Antofagasta Minerals (Chile 60%), Japanese Consortium (40%). Perú: I. Las Bambas Copper(Cu), Gold(Au) and Molybdenum. US$ 4200 Million II. Pampa del Pongo Iron(Fe). US$ 3000 Million Nanjinzhao Group Co. Ltd. Zibo III. Toromocho Cooper(Cu). US$ 2200 Million Chinalco IV. Quellaveco Cooper (Cu) and Molybdenum (Mo). US$ 1000 Million Compañía Minera Quellaveco S.A. V. Minas Conga Gold (Au), Cooper (Cu) and Silver (Ag). US$ 900 Million Minera Yanacocha S.A. VI. Tambogrande Gold (Au), Zinc (Zn), Cooper (Cu), Silver (Ag) and Lead (Pb). US$ 400 Million Manhattan Sechura S.A. VII. Alto Chicama Gold (Au), Silver (Ag) and Cooper (Cu). US$ 370 Million Barrick Misquichilca S.A. VIII. San Gregorio Zinc (Zn), Lead (Pb), Silver (Ag), Bismuth (Bi) and Cadmium (Cd). US$ 200 Million Sociedad Minera El Brocal /Cominco. Argentina: I. Río Colorado Potassium Potassium Chloride. US$ 4.500 Rio Tinto IV. Agua Rica Gold (Au) Cooper (Cu) and Molybdenum (Mo). US$ 2500 II. Alumbrera Gold (Au), Cooper (Cu) and Metal Doré. US$ 1275 II. El Pachón Cooper (Cu) US$ 2500 Million. Xstrata. II. Veladero Gold (Au) and Silver (Ag). US$ 100 Million. Homestake Gde Argentina S.A. III. Cerro Vanguardia Gold (Au) and Silver (Ag). US$ 80 Vanguardia S.A. V. Cordón Esquel Gold (Au). Estimated jnvestment of this project is unknown. Investment in Mining Projects Source: www.cochilco.cl, www.minem.gob.pe, www.mineria.gob.ar

28. Colombia: I. Cañón del Río Cauca Gold (Au), Cooper (Cu), Lead (Pb), Zinc (Zn). II. Batolito de Piedrancha-Guachavéz Gold (Au), Cooper (Cu) III. Serranía de Lucas Gold (Au), Silver(Ag), Cooper (Cu). IV. Tararia Gold (Au). V. Batolito de Mandé Cooper (Cu), Gold (Au), Molybdenum (Mo). México: US$ 4.200 Million I. Peñasquito Lead production (Pb), Zinc (Zn), Silver (Ag) and Cooper (Cu). US$ 149 Million This Deposit belongs to Western Silver. II. Mulatos Gold (Au) production. US$ 80 Million Alamos Gold. III. El Chanate Gold (Au) production. US$ 70 Million Capital Gold. IV. Ocampo Gold (Au) and Silver (Ag) production. US$ 220 Million Gammon Lake Resources. V. Ixhuatán Gold (Au) and Silver (Ag)production. Linear Gold Corp. Bolivia: I. Mina Caracoles Tin (Sn). Empresa Minera Caracoles. II. Mina Huanuni Tin (Sn). Corporación Minera de Bolivia. III. La Joya Gold (Au) IV. San Cristóbal Silver (Ag). Minera San Cristóbal S. A. V. Don Mario Cooper (Cu), Gold (Au). VI. Cerro Rico Silver(Ag), Zinc (Zn), Tin (Sn). Invertment in Mining Projects Source: www.economia.gob.mx, www.miningwatch.ca, www.bolivia.com

29. Source: Minem, BCR, APOYO Consultoría & Foreign Investment Committee Chile

30. Start up yearCompanyProjects Investment (Million US$) Region 2015CODELCO Andina Expansion at 230 KTPD (Phase II) 4.800V 2015Kinross, BarrickCerro Casale4.200III 2018BHP BillitonEscondida Phase VI4.600II Post 2011Antofagasta Minerals Los Pelambres Expansion 3.200IV 2015Teck Cominco Quebrada Blanca Expansion 3.000I 2017Teck ComincoRelincho3.000III 2013BarrickPascua-Lama3.000III 2014New Gold (GoldCorp)El Morro2.500III 2015 Anglo American, Xstrata Collahuasi A. Phase II2.450I 2012Anglo AmericanLos Bronces Expansion2.400R.M. 2013CODELCO NorteMina Ministro Hales2.333II 2010Antofagasta MineralsEsperanza2.300II 2013 Pan Pacific Cooper (Lumina Copper) Caserones2.000III 2015BHP BillitonEscondida Phase V2.000II 2018CODELCOChuqui Underground2.000II 2014 Minera Quadra Mining Chile Sierra Gorda1.900II 2017CODELCO Teniente (New Mine Level) 1.533VI -Lundin Mining Chilean-Argentinean Project : Las Flechas 1.500III Main Mining Investment Projects in Chile (Over 1500 million dollars) Source: Cesco

31. Source: based in data of the Foreign Investment Committee Foreign Investment in Chile 1974 -2009 and current decade Million dollars

32. Source: Ibram Mining Investment Projects BRAZIL 2008 - 2012 Total Investment: US$ 57.000 million

33. Mining Investment Projects Argentina 2008 - 2012 Argentina – Mining Projection to 2015 ProjectCompanyRegionInvestment (US$ Million) Cerro Vanguardia (expansion) AngloGold AshantiSanta Cruz80 Sierra GrandeMCC (China Metallurgical Corp.) Río Negro100 NavidadAquilineChubut450 Cerro NegroGoldcorpSanta Cruz400 Veladero (expansion)BarrickSan Juan100 Gualcamayo (expansion)YamanaSan Juan90 Pascua – Lama (25% of capital according to the reserve locations) BarrickIII Region / San Juan675 Potasio Río ColoradoValeMendoza4.500 CasposoTroySan Juan45 Alumbrera Cooper (Cu) Xstrata Hualfín District1.275 El Pachón Cooper (Cu) XstrataSan Juan2.500 Agua Rica Cooper (Cu) YamanaCatamarca2.500 Argentina - Total Mining Investment to 201512.725 Source: Mining Prospect

34. 2.- TRENDS AND PROSPECTS

35. International Context Reactivation of tax debate in many mining countries. China has turned into the second largest economy and the first automobile manufacturer

36. Brasil Iron, nickel and bauxite. (Graphite, manganese, tantalum and niobium) Vale and Petrobras benefit from reforms Brazil produce 46 industrial minerals, 22 metals and 4 hydrocarbons Chile Transition to a mature mining sector Growth of copper mining based on expansions Energy and water shortages Very sharp competitive advantages of copper and non metallic minerals Perú Diversity and growth Communities and environment role México Silver and Copper Growth based on exploitation International Context Consolidated Countries

37. Ecuador Oil High potential of metal mining, Imminent approval of new mining law Possible role of communities Colombia Carbon and nickel High potential, government interest,country risk International Context Internacional Emerging Countries

38. Venezuela, Bolivia and Argentina More difficult situation for mining Governmet intervention without a clear focus to mining International Context Countries with diversed policies

39. 3. MAIN TOPICS MINING DEVELOPMENT IN LATIN AMERICA

40. 3. a COSTS

41. Strong increase in almost all items  Common factors to the entire industry  Special factors in some countries  Energy  Water Prospects :  Slow reversal of upward trend in structural costs  Difficulty in finding world class deposits  Decreasing laws  Cost will tend to be controlled cyclically  Supplies and equipments Costs

42. Source : Mining Council and personal estimates. Purchases of the Mining Companies in Chile and Copper Production Costs duplicate in only four years Costs

43. 3. b WATER

44. Agua Important theme in Northen Chile and Southern Peru  Groundwater resources are limited to support the mining expansions  Water rights are paid up to 200 thousand dollars liter/second  There is a lack of information in water availability Other countries such as Ecuador and North Central Peru: the problem is not the lack of resources, but to demonstrate sustainability in resource management. Prospects: seawater desalination plants, direct use of sea water, increase of recovery techniques. Water

45. Source : Based on Rodolfo Camacho’s presentation (average data for year 2006). Chile: Mining water consumption is under country scale (concentrated in the north) Water

46. 3. c ENERGY

47. Energy Chile: Conversion of the energy matrix to thermal coal and liquefied natural gas plants Diesel has been the alternative, precisely in periods of high cost. Prospects:  Central Interconnected System interconnects south and north of the country.  Development of clean and renewal energies.  Nuclear option should be consider.

48. 3. d ENVIRONMENT AND COMMUNITIES

49. Important topic in investment decisions in Peru, Argentina and Ecuador and increasingly in Chile and Brazil. There is more awareness that is reflected in increased demands on mining. Increasingly complex permits to obtain (delays) Uncertainty in criteria application. Environment

50. International problem: mining faces a scenario of social complexity. Examples:  Peru: social responsibilities, educational, community health policies.  Brazil: mineral deposits in Indian lands  Chile: OIT 169 convention application Prospects:  Improve overall image of mining industry among communities and public opinion.  Corporate Social Responsibility (CSR) Communities

51. WHERE IS MINING HEADING IN LATIN AMERICA: ANALYSIS AND PROJECTIONS Juan Carlos Guajardo B. Executive Director Monday, September 27th., 2010