UNCTAD Expert Meeting on FDI IN NATURAL RESOURCES 20-22 November 2006 Health and Safety by Mr. Manfred Lindvall Vice-President, Lundin Mining The views expressed are those of the author and do not necessarily reflect the views of the United Nations
UNCTAD Expert Meeting on FDI in Natural Resources Manfred Lindvall VP Environment, Health and Safety Lundin Mining's mission is to explore for minerals and extract metals in a cost-effective and environmentally responsible manner, with health and safety of its employees as key values. Lundin Mining's vision is to maximise shareholder value through building a mineral exploration and mining company with the aim of growing to become a world leading metal producer. 2
Lundin Mining Zinkgruvan Mine Sweden Galmoy Mine Ireland Storliden Mine Sweden Neves-Corvo Mine Portugal Ozernoe Project Russia Aljustrel Project Portugal Lundin Mining Exploration Lundin Mining Investments Sunridge Gold Corp. Lundin Mining Investments Union Resources 3 A growing producer 2004-2006, Zinc 250 200 Storliden Zinkgruvan Galmoy Neves-Corvo Annual production ( 000 tonnes) 150 100 50 0 South Atlantic Ventures + Zinkgruvan + NAN + LUMI + Galmoy + Neves- Corvo* * at full production 4
A growing producer 2004-2006, Copper 120 100 Storliden Neves-Corvo Annual production ( 000 tonnes) 80 60 40 20 0 South Atlantic Ventures + NAN + LUMI + Neves-Corvo 5 A Premier Base Metal Investment Copper mine Zinc mine Development project Investment 6
Operating Mines Zinkgruvan (Sweden) Estimated LoM: 18 years Production 2005 (tonnes): Ore milled: 803,883t Zinc metal produced: 69,981t Lead metal produced: 36,674t Galmoy (Ireland) Estimated LoM: 5 years Production 2005 (tonnes): Ore milled: 644,058t Zinc metal produced: 74,321t Lead metal produced: 17,284t 7 Operating Mines Storliden (Sweden) Estimated LoM: 2007 Production 2005 (tonnes): Ore milled: 319,411t Zinc metal produced: 32,024t Copper metal produced: 10,839t Neves-Corvo (Portugal) Estimated LoM: 16 years Production 2005 (tonnes): Ore milled: 2.056Mt Zinc metal produced: To start 2006 Copper metal produced: 89,500t 8
Strategic direction Optimizing the performance of the existing mining operations Brownfield exploration near existing mines Greenfield exploration in Sweden, Ireland and Portugal Acquisitions operational mines, development and exploration projects Financial investments in projects Generation of value through a combination of cash flow from producing assets and through exploration leading to increased reserves and resources. 9 EHS programme Objective: To become a world leading mining company Means: Strong management commitment EHS on top of the agenda World class management system Operational Policy (Sustainability Policy) Environment, Health & Safety Standards Proactive auditing programme Emergency Preparedness and Response Plan Training Annual management review Use of networking opportunities 10
Operational Policy 1. The operations of Lundin Mining shall contribute to sustainable development by the production of metals and economic revenue from development of mineral resources. 2. Safety in our workplaces is an uncompromised condition and a mutual and shared responsibility for all our employees. 3. The well-being and health of our employees is a condition for success and we shall work proactively to eliminate health risks and to developoptimise our workplaces environments. 4. We shall design our production facilities to meet world class environmental performance requirements and we shall maintain our operations to minimise environmental impact as far as reasonably and possible. 5. We shall develop and implement plans for land use and reclamation that, as far as possible, returns the land to it s former qualities condition or else to a state acceptable tofor the society. 6. Exploration shall be undertaken with care for the environment and respect for the interest of land - owners and other stakeholders. 7. We shall strive to economise the use and reuse of energy, while prioritising solutions based on renewable and non-emission energy sources. 8. Our dam facilities shall be designed and constructed with the aim of achieving the aiming at highest possible security against disturbances and towards long term stability. 9. We shall work towards continual improvement of all aspects of our operations. 11 Project evaluation Sound business opportunities Robust verification of mineral resources (NI 43-101, JORC code or equal) Preferred cases Greenfield exploration Junior companies or development projects Mature operations without significant liabilities High potential for sustainable development of the local society Refrain from involvement in Complex societal structures Operations involving risks for health and safety Severely polluted areas Corrupted systems 12
Investment criteria Contribution to local and regional sustainable development Provide employment opportunities Promote education Opportunities for local enterprises development Requirements of and opportunities for developing the health care system Generally recognised Corporate Social Responsibility principles Local legal requirements provide only basic criteria Lundin Mining Operational Policy and Standards for EHS apply globally BAT preferred Strong commitment from top management to maintain a world leading position 13 Project development methodology Case specific Assume control Appoint key personnel Interaction with local system Implement LuMi policies and standards Use local resources Implement best practice Sustainable approach Use internationally recognised guidelines Firm position against drugs 14
Investments and Projects Investment: Sunridge Gold Eritrea: Lundin Mining has a 17% ownership of Sunridge Gold, license holders of the Asmara Project (High grade Zn/Au/Cu). Mehidiabad Iran: Lundin Mining has a ~20% ownership of Union Resources, which holds 38% of the Mehidiabad Project, the world s largest known undeveloped resource of zinc. Projects: Aljustrel Portugal: Zinc mine to restart production second half of 2007. Expected life of mine is 10 years. Ozernoe Russia: Lundin Mining holds 49% of the interests of Ozernoe, the world s fourth largest known zinc resource. Ozernoe was discovered and well explored under the Soviet era but was never developed into a mine. Production estimated to start in 2009. 15 The Ozernoe Project Located in the Republic of Buryatia 160km from Trans-Siberian railroad No production has taken place Sparsely populated area Unemployment rate: >30% Agriculture and fishing Average Income: 900 USD/year Lake Baikal - World Heritage Object The initial investment for Lundin Mining will be US$125 M Estimated Indicated resources: 157 million tonnes @ 5.2% Zn and 1.0% Pb 16