Minera Escondida

Copper Price
During 2009, the average price per pound of copper in the London Metals Exchange (LME) was US$ 2,34 which is 25,7 % lower than the average US$ 3,15 recorded for 2008.

Production
Copper production at Minera Escondida for 2009 was 1.102.976 metric tons composed by 775.731 metric tons of copper contained in concentrate and 327.245 tons of cathodes. This production is 12% lower compared to the 1.255.019 mt produced during 2008 (997.491 mt of copper contained in concentrate and 257.528 mt of cathodes). The lower production of concentrate is explained by the combined effect of a lower ore head grade, increased hardness of the ore treated (resulting in lower copper recovery at the concentrator plants) and to the failure in the Laguna Seca SAG mill concentrator that required it to operate at a lower than design capacity for 10 months. In July 2009 the SAG mill underwent major repair work that required its full stoppage for 32 days. The repair work was successfully performed and the mill is now operating normally resulting in a production increase during the last quarter. Conversely, the increased cathode production is explained by an improved recovery and an increase in the level of activity and ore accumulation in the process stockpiles.

Sales
Total sales decreased from US$ 8.319,9 million in 2008 to US$ 7.071,0 million for 2009, which represents a decrease of 15%. This is mainly due to a lower price per pound of copper and the lower production of copper compared to 2008. The level of physical sales decreased by 10,3%.
The level of physical sales decreased by 23.4%.

Operational Results and Profits
For the reasons explained above, the company’s operational result decreased from US$ 4.564,0 million in 2008 to US$ 4.091,3 million for 2009, representing a decrease of 10,4 %. Consequently, net profit also decreased from US$ 3.573,1 million in 2008 to US$ 3.199,6 million in 2009, which represents a decrease of 10,5 %.

Taxes
In 2009, Minera Escondida’s Income Tax and Specific Tax on Mining Activities (Royalty) provision amounts to US$ 825,2 million. From that amount, US$ 696,7 million corresponds to 1st Category Tax and US$ 128,5 million to Mining Tax (Royalty).This represents a 10,2% decrease compared to 2008 when it reached US$ 919,4.

Costs
As a consequence of the lower production, the effective C1 unit cost of exploitation per pound of copper sold (payable) increased from 77,1 c/US$ in year 2008 to 83,9 c/US$ in 2009. The C1 cost includes credits for by-products gold and silver that in this period reached an amount of US$ 186,5 million, which represented 7,8 c/US$ credit to unit cost.

Financial Statements
Minera Escondida has decided to present its financial statements to the SVS for the 2009 period and comparable with the 2008 period under the international norms for financial information. This means being a year ahead to its requirement to do it for results for the period 2010.

Safety
Regarding its safety performance, the Lost Time Injury Frequency Rate (LTI FR) during 2009 for staff and contractors was 1.02. This represents a reduction of 29.7% respect to the 1,45 rate registered in 2008.




Minera Escondida is an open pit mine located 170 km southeast of Antofagasta, at 3,100 meters above sea level. Its owners are BHP Billiton (57.5%), Rio Tinto (30%), JECO Corporation (10%) y International Finance Corporation (2.5%). It is operated by BHP Billiton.


www.escondida.cl
www.bhpbilliton.com
www.fme.cl
www.ceim-fee.cl
 

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