First Quantum Minerals Ltd 2013 Greenhouse Gas Report
Table of Contents 1. Introduction 3 2. Greenhouse Gas Reduction Initiatives 3 3. Greenhouse Gas Emissions 4 1. Scope and Approach 4 2. Direct (Scope 1) Emissions 5 3. Indirect (Scope 2) Emissions 7 4. Other Indirect (Scope 3) Emissions 9 5. Emission Intensity 10 6. Emissions by Country 11 7. Supporting Information 12 4. References 13 September 2014 2
1. Introduction This document provides a summary of First Quantum Minerals (referred to as FQM or the Company) greenhouse gas (GHG) emissions from its operations in 2013. This document provides information on just one aspect of our environmental and corporate social responsibility (CSR) programs. For further information on FQM s sustainability programs, including our Annual Sustainability Report, review our web site at www.first-quantum.com This report was prepared internally under the control of the Group Environmental Manager. 2. Greenhouse Gas Reduction Initiatives The company is currently in a significant growth phase as major development projects are underway in Zambia and Panama, and new operations have recently been put on-line in Finland and Australia. FQM acquired Inmet Mining in 2013, adding 3 operating mines in Spain, Finland and Turkey and a large development project in Panama. As a result of our Company s growth, greenhouse gas emissions increased significantly in 2013. Although the total GHG emissions have increased, FQM has implemented many energy saving / greenhouse gas reduction initiatives. We operate under a philosophy of continuous improvement; continually driving operations to improve efficiency - including the use of energy and raw materials. Since most of the Company s energy use is from operating mobile mining equipment (trucks, excavators, etc.) and process equipment (mills, conveyors, etc.), we have focused on these areas for efficiency opportunities, and the associated reductions in our carbon footprint. Some examples are: In 2013, FQM continued the implementation of a trolley assist system at its Kansanshi copper mine in Zambia. Phase 1 of the trolley assist was commissioned in 2012 and Phase 2 was commissioned in 2013. A third phase is planned for 2014. Currently thirty six (36) Hitachi EH 3500 trucks fitted with pentographs are in operation. The haul trucks use the trolley assist to move waste rock and/or copper ore from the open pit under electrical power. The site has also acquired four Liebherr ER 9350 electrically powered shovels replacing some of the diesel powered excavators in the mine. Another major project at Kansanshi is the construction of a copper smelter and acid plant, which are scheduled to be commissioned by the end of 2014. This smelter will process copper concentrate produced at the Kansanshi and Sentinel mines. The sulphur dioxide off gasses will be converted to sulphuric acid in the acid plant and used on site in the oxide leaching process. By September 2014 3
processing the concentrate and producing sulphuric acid on-site, transportation of these materials and the associated GHG generated will be greatly reduced. FQM s new Sentinel copper project in Zambia, scheduled for commissioning in late 2014, will also use electrical mining equipment including three Caterpillar 7495 rope shovels, two Komatsu PC 5500 shovels, 15 Komastu 960E- and 15 Komatsu 860E trucks as well as Caterpillar MD6640 blast hole drill rigs. Three in-pit crushers are also being installed in order to convey ore to the mill and concentrator further reducing diesel fuel use and the associated carbon emissions. These initiatives in Zambia to use electricity instead of diesel fuel significantly reduces our carbon footprint as electricity in Zambia is primarily renewable; generated in hydro-electric power stations. The Company s Kevitsa nickel project in northern Finland began operating in 2012. The site uses electrically powered shovels including one Komatsu PC5500 and one Komatsu PC 8000. In Finland nuclear power generation, which has very little GHG emissions, is a large part of the energy mix. At the Company s Ravensthorpe nickel operation in Western Australia, waste heat from the acid plant is used to generate electricity in three 18.5 MW stream turbines. At full production, the steam turbines are capable of meeting 86% of the operation s power requirements. Diesel generators are available to supply electricity when one or more of the steam turbines are down. Each operating site also has several smaller initiatives to reduce energy use and the associated carbon footprint. One example is the use of solar power for some Company housing and at remote exploration sites. Greenhouse Gas Emissions 3.1. Scope and Approach The identification of greenhouse gas sources, scope of reporting, and calculation of the emissions is based on the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard Revised Edition by World Resources Institute. Specifically, the scope of our reporting includes emissions from: Sites where we have operational control of the project and over 50% ownership. For the sites listed in Table 1, we have 100% ownership, except Kansanshi and Panama (each 80% equity). September 2014 4
Exploration where we control the operations. We have not included exploration activities where we have minor equity involvement. Two airplanes owned and operated by FQM. Activities by FQMO Roads Division (listed separately) as they are managed similarly to an operating mine. The corporate offices, which only generate Scope 2 emissions. Business travel, which is the only Scope 3 emission presented in this report. Internationally recognized calculation tools were used to determine CO2-equivelent emissions from various sources, as follows: Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard Revised Edition by World Resources Institute was used as a guide to calculate CO2 emissions. The Australian Government National Pollution Inventory Emission estimation technique manual - Explosives Detonation was used to determine the nitrous oxide emissions from the use of explosives during mining. The International Energy Agency CO2 Emissions from Combustion 2013, Highlights for Carbon dioxide emissions from fuels and purchased electricity from various countries. National Greenhouse and Energy Reporting System Measurement, Australian government, July 2013 for calculating GHG emissions from limestone use and carbonate leaching. 3.2. Direct (Scope 1) Emissions The main sources of First Quantum s direct GHG emissions are the combustion of fuels by mobile mining equipment and electric generators, the processing of limestone in metallurgical processes, and the reaction of carbonates in the ore from acid leaching. The direct emissions from the past five years are presented in Table 1 and Figure 1. In 2013, the Company s direct CO2 emissions increased by 10%. The increase is primarily related to increases in production at our operating mines. Some specific reasons for the changes are described below (also see Section 3.5 - CO2 Intensity). The 326% emission increase at Sentinel, our large development project, is due to the ramp up of construction and site preparation, and start of mine prestripping. September 2014 5
The 35% increase in direct emissions at Kansanshi was mainly the result of the mine expansion programme, higher stripping ratios and longer haul distances. The 7% increase in emissions at Guelb Moghrein was the result of the mine expansion and increased mining rates. Kevitsa direct emissions rose by 27% as the open pit development accelerated. Global exploration direct emissions increased by 51% due to increased drilling programs. In 2013, FQMO Roads Division continued to expand its operations in Zambia due to mine expansion projects at Kansanshi and Trident project construction. In 2013, the activities at Bwana Mkubwa continued to wind down. Table 1: Scope 1 Direct GHG Emissions (tonnes of CO 2 equivalents) Location 2009 2010 2011 2012 2013 2013 vs. 2012 Bwana Mkubwa, Zambia 1,900 2,200 50,200 2,000 200-90% Çayeli, Turkey^ 4,600 4,400 4,700 5,000 5,500 10% Cobre Las Cruces, Spain^ 27,300 + 39,300 + 40,700 + 72,500 73,000 1% Cobre Panama, Panama^ 3,200 4,300 5,900 14,200 13,000-8% Exploration Global 300 100 6,000 4,100 6,200 51% FQM Airplane 470 300 800 500 500 0% Guelb Moghrein, Mauritania 98,900 116,600 126,700 136,000 146,000 7% Haquira, Peru 0 0 0 500 100-80% Kansanshi, Zambia 102,400 130,800 199,900 294,000 379,000 35% Kevitsa, Finland 0 100 16,600 21,000 26,700 27% Closed Properties, Canada & US^ 16,100 5,800 500 500 900 80% Pyhäsalmi, Finland^ 1,800 1,700 1,800 1,900 1,800-5% Ravensthorpe, Australia 0 7,200 125,400 257,000 248,000-4% Roads Division, Zambia 0 0 200 600 1,600 167% Sentinel, Zambia 0 0 2,100 10,100 43,000 326% FQM Total* 256,900 312,900 581,300 857,000 945,500 10% * For comparison purposes the former Inmet sites are included in the FQM totals for 2009 through 2012 even though the acquisition occurred in 2013. ^ Former Inmet Sites + Does not include CO2 emissions from limestone processing and ore leaching. September 2014 6
Figure 1: Scope 1 Direct GHG Emissions 3.3. Indirect (Scope 2) Emissions The electricity usage for the last two years at each site is provided in Table 2. Two sites, Guelb Moghrein and Ravensthorpe produce their own electricity. The other sites purchase electricity from the local electrical grid. Table 2: Electricity Consumption Location 2012 (MWh s) 2013 (MWh s) Change 2012 to 2013 (%) Bwana Mkubwa, Zambia 72,540 2,730-96% Çayeli, Turkey^ 76,770 77,590 1% Cobre Las Cruces, Spain^ 249,820 249,750 0% Guelb Moghrein, Mauritania 107,790 110,590 3% Kansanshi, Zambia 836,610 896,030 7% Kevitsa, Finland 164,270 289,300 76% Closed Properties, Canada & US^ 4,880 4,940 1% Pyhäsalmi, Finland^ 76,150 76,490 0% Ravensthorpe, Australia 211,510 331,490 57% Offices - Johannesburg, Lima, London, Ndola, Nouakchott, Panama 10,750 10,110-6% City^, Perth, Toronto, Vancouver Total Consumption 1,811,090 2,049,000 13% ^Former Inmet Sites September 2014 7
The indirect emissions from the purchase of electricity from external electricity generating companies over the past five years are presented in Table 3 and Figure 2. Note that Guelb Moghrein and Ravensthorpe are not listed as these sites generate their own power. Table 3: Scope 2 Indirect GHG Emissions (tonnes of CO 2 equivalents) Location 2009 2010 2011 2012 2013 Change 2013 vs. 2012 Bwana Mkubwa, Zambia 50 80 20 200 10-95% Çayeli, Turkey^ 44,000 44,000 46,000 46,000 47,000 2% Cobre Las Cruces, Spain^ 20,000 61,000 78,000 105,000 105,000 0% Kansanshi, Zambia 2,000 2,000 2,400 2,500 2,700 8% Kevitsa, Finland 0 0 20 34,000 60,000 76% Closed Properties, Canada & U.S^ 1600 770 80 20 50 150% Offices - Johannesburg, Lima, London, Ndola, Nouakchott, Panama City^, Perth, Toronto, Vancouver 700 700 700 1,100 700-36% Pyhäsalmi, Finland^ 20,000 24,400 19,100 24,000 21,600-10% FQM Total* 70,300 111,000 129,000 214,000 237,060 11% * For comparison purposes the former Inmet sites are included in the FQM totals for 2009 through 2012 even though the acquisition occurred in 2013. ^ Former Inmet Sites Figure 2 Scope 2 - Indirect GHG Emissions September 2014 8
The electricity consumption (and consequently the indirect GHG emissions) corresponds closely with the amount of ore milled at our operating mines. The increase at Kevitsa in the past year is attributed to the operation reaching nameplate production. Our largest operation, Kansanshi, increased as a result of an additional oxide circuit coming on line, but the GHG emissions increase was relatively small as the site is located in Zambia where a low emission energy source (hydro-electric power) is available. Our largest Scope 2 sources are in countries (like Spain and Turkey) that rely heavily on fossil fuels to generate electricity. In 2013, the Company s indirect CO2 emissions increased by 23,000 t CO2 eq. (11%). 3.4. Other Indirect (Scope 3) Emissions The only Scope 3 GHG emission information provided in this report is for employee business air travel. Travel and the associated emissions decreased significantly at the Toronto office and Cobre Panama project following the FQM acquisition, and at Ravensthorpe as a result of the site transitioning from development to operations. Table 4: CO 2 -eq Emissions from Air Travel (tonnes) Site 2012 2013 Change 2013 vs. 2012 (%) Bwana Mkubwa 4 80 1967 Çayeli 200 250 25 Cobre Las Cruces 74 74 0 Cobre Panama 1200 47-96 Exploration 69 NR NA Guelb Moghrein 2100 890-59 Haquira 240 38-84 Johannesburg Office 440 160-63 Kansanshi 590 810 37 Kevitsa 140 200 38 London Office 330 430 29 Closed Properties, Canada & US 5 3-40 Ndola Office 980 990 1 Perth Office 970 1300 30 Pyhäsalmi 70 28-60 Ravensthorpe 890 160-82 Sentinel NR NR NA Toronto Office 670 270-59 Vancouver Office 0 6 NA Total 9000 5700-37 NR not reported September 2014 9
3.5. Emission Intensity Emission intensity (normalizing emission loading based on key operational parameters) is an important tool to better understand performance. FQM is in a significant growth phase due to acquisitions and development projects. As a result, our absolute emissions are increasing as noted in the discussions above. These absolute changes mask operational improvements that are being implemented at each site. There are many ways to normalize the data, and no one way is always the best to show operational changes. So this sections looks at the emission data by normalizing it for three operating parameters: Milled Ore Metal Production Copper Equivalents By assessing multiple ways to analyse the data, one can often identify specific reasons for changes. These parameters and the resulting data are discussed/presented below: Milled Ore This is a commonly used intensity target in mining. It normalizes the emission data based the amount of ore processed. In this analysis changes in emissions due solely to changes in throughput are discounted. The resulting comparisons often reflect improvements in operating efficiency. CO2-eq intensity values for each operation in 2012 and 2013 are presented in Figure 3. Figure 3. CO 2 -eq Intensity Milled Ore The data shows efficiency improvements at Cobre Las Cruces, Kavitsa and Ravensthorpe as the sites continue to improve operating efficiency in the early years of their life. The low values for Kansanshi reflect the efficiencies obtained due to the high ore throughput. Metal Production This intensity parameter is similar to the previous intensity rate, but factors in the ore grade, process recovery rate, and the multiple metals September 2014 10
recovered. CO2-eq intensity values for each operation in 2012 and 2013 are presented in Figure 4. Figure 4. CO 2 -eq Intensity Metal Production The trends at the site level are similar to the results obtained when normalizing for milled ore, but compared to milled ore, CO2-eq intensity is lower at Cobre Las Cruces and Cayeli due to the higher ore grades. Copper Equivalents This factor adjusts the metal produced for the value of the combined metals and presents it as if the revenue were all due to copper. This intensity reflects the CO2 produced as a function of the revenue created from the mine. CO2-eq intensity values for each operation in 2012 and 2013 are presented in Figure 5. This graph will often reflect the change in commodity pricing of metals relative to the price change in copper. In this case the rate at Guelb Moghrein increased as the amount of gold recovered decreased relative to the amount of copper recovered (thereby increasing the CO2 intensity) Figure 5. CO 2 -eq Intensity Copper Equivalents 3.6. Emissions by Country This section summarizes the direct and indirect emission data by country in Table 5. September 2014 11
Table 5: GHG Emissions Reported by Country in 2013 CO2-eq emissions (tonnes) Country Direct (Scope 1) In-direct (Scope 2) Zambia 430,400^ 2,730 Turkey 5,500 47,000 Spain 73,000 105,000 Panama 13,000 150 Mauritania 146,000 100 Peru 100 20 South Africa - 90 Finland 28,500 81,600 United Kingdom - 60 Canada 900 150 Australia 248,000 160 Botswana 100 - Total 945,500 237,060 ^ includes worldwide Exploration of 6300 tonnes 3.7. Supporting Information Data Accuracy Data in this report on fuel, electricity and material consumption is gathered mainly from the financial accounting systems within the FQM Group, and therefore a high level of confidence is placed in the accuracy of the information used. The calculation methodologies and emission factors used are based on the Greenhouse Gas Protocol and other references which have been verified and internationally accepted for use in calculating carbon emissions. Data gathered for the calculation of nitrous oxide emissions from the use of explosives originate from the compulsory records kept of the quantity of explosives used. Again the financial and regulatory requirements assure a high level of confidence in the data. Air travel data also has a high level of confidence as the flight information is downloaded from financial databases and the emission factors are based on internationally accepted standards. External Verification The 2013 GHG inventory was prepared in-house. No external audit or verification was performed. September 2014 12
Emission Trading No emission trading is being conducted by the Company. 4. References First Quantum Minerals 2013 GHG Report 1. The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard - revised edition, World Resources Institute. 2. Worksheet for estimation of mobile CO2 emissions, World Resources Institute, 2006. 3. Optional Emissions from Commuting, Business Travel and Product Transport; May 2008, US Environmental Protection Agency; EPA430-R-08-006. 4. National Greenhouse Accounts (NGA) Factors Australian Government Department of Climate Change, 2008 - Table 4 5. National Greenhouse and Energy Reporting System Measurement, Australian government, July 2013 6. The International Energy Agency CO2 Emissions from Fuel Combustion Highlights, 2013 7. Annual Reports, First Quantum Minerals Ltd. September 2014 13