Sustainability Committee 18th May 2015 Case Study: Konkola Copper Mines

1 July 2015

Steven Din

CEO, Konkola Copper Mines


Introduction Konkola Copper Mines - A Major Presence in the Zambian Copperbelt

Konkola Deeps


Nchanga Open Pits

Overview of KCM Assets

Konkola (Chililabombwe)

• Underground mine

• New Concentrator

• Old Concentrator

• Backfill Plant

Nampundwe

• Underground pyrite mine

• Concentrator

Nchanga (Chingola)

• Underground mine with 2 shafts

• Open pit mines (2 operational)

• 2 concentrators (East and West mills)

• Tailings leach plant

• Smelter with acid plant

Nkana (Kitwe)

• Refinery

KCM Group operations

Zambia

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KCM - Zambian Government Relationship



2011 saw the election of the Patriotic Front Government in Zambia, with a pro-poor policy agenda

Policies introduced

• Ceasing VAT refunds
• Dramatic increase in mineral royalties
• Increased power costs

KCM has focussed on increased engagement with Cabinet ministers and Government officials

• Frank private discussions
• Supportive public statements
• Active involvement in industry initiatives to support this approach
• Increased media coverage of positive KCM stories

Significant improvements

• Significant rollback of royalty increases
• Agreement to recommence VAT refunds
• Consultations on power prices

President Edgar Lungu receives a copy of a presentation from Konkola Copper Mines (KCM) CEO Steven Din at State House on February 18, 2015 - Picture by EDDIE MWANALEZA / STATE HOUSE

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KCM - Taxation Transparency KCM was a founding member of the Zambia Extractive Industries Transparency Initiative in 2008

• The company believes that this is an excellent initiative to improve confidence in the revenue system

KCM is committed to transparency in its financial performance and tax compliance. The company:

• Publishes annual financial reports
• Reports all copper exports to the Zambia Revenue Authority
• Submits audited accounts with the Zambian state regulatory authority - PACRA
• Has its accounts audited by an internationally-recognised auditing
firm

KCM's results are consolidated into the Vedanta Resources Plc results and are accordingly subject to LSE listing requirements

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KCM - Health Case Study: HIV Awareness Zambia has been significantly affected by the AIDS epidemic


• Impact of working age population and KCM workforce
• Key priority of the Government
KCM responded by developing a comprehensive programme in its host communities and in the workplace

Programme includes:

• Awareness campaign, voluntary counselling and testing (VCT), condom distribution
• Syndrome treatment, ARV's nutritional supplements distributed to
3,000 people
• Prevention of mother-to-child transmission
• Home-based care, 200 counsellors and peer educators trained

Programme outcome:

• Significant reduction in prevalence, infections and mortality rate
• Dramatic reduction in HIV-related absences in the workplace

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KCM - Safety Case Study: Chachilamo


Chachilamo Safety Campaign was introduced to improve safety performance after 3 fatalities in 2014

Chachilamo means "enough is enough" in the local Bemba language

Chachilamo initiatives:

• 20 of our best people selected as Chachilamo Champions and
taken out of their regular roles
• Each champion mentored 5 "foot soldiers"
• Safety talks are held before the commencement of every meeting at KCM
• Building a culture of self-responsibility on safety by employees

Dramatic improvement in safety performance

• No fatality recorded since campaign
• Best LTI performance in 11 years
KCM won the 2014-15 Vedanta Chairman's safety award

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Thank you
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