Antofagasta : Climate Action Plan

Climate Action Plan

Contents

• 3 Chapter 1:

  Introduction and summary

• 4 Message from the Chief Executive Officer

• 5 Climate change strategy

• 8 Path to carbon neutrality

• 11 Chapter 2:

  Our performance

• 12 Emissions Abatement Curve

• 16 Our position and performance regarding scope 1 and 2 emissions

• 19 Our position and performance regarding scope 3 emissions

  In this document, the terms "Company", "Antofagasta", "Group"1, "we", "us", "our" and "ourselves" are used to refer to Antofagasta plc and, unless the context requires otherwise, its subsidiaries. These terms may be used as collective expressions where general reference is made to the companies in the Group and/or where no useful purpose is served by identify-ing any particular company or companies.

  This document has been developed based on current information, estimates and beliefs, using models, methodologies and standards which are subject to certain assumptions and limitations. As a result, the statements, data, and information contained in this document may change. See the "Disclaimers" on [slide 30] for more information.

• 24 Chapter 3:

  Policies and Governance

• 25 Climate policy engagement

• 27 Decarbonisation governance

  el mauro tailing, minera los pelambres, coquimbo region

• 29 Measuring and reporting standards

Point of contact for questions about the re-port or reported information:investorrelations@antofagasta.co.uk

March 2024

1. FCAB not inlcuded.

Chapter 1

We are pleased to present Antofagasta's Climate Action Plan: Our path to decarbonisation, through which we aim to contribute to the global challenge of transitioning towards a reduction of CO2 emissions to achieve carbon neutrality by 2050 and mitigate the effects of climate change.

Achieving carbon neutrality by the year 2050, or sooner if technology allows, is one of the commitments we have set as a Company, as part of our own climate change strategy. This goal is also aligned with the target set by Chile through its climate change framework Law and with the global objectives of emissions reduction.

Copper is and will continue to be a key input to tackle climate change, due to its intensive use in low-carbon technologies such as the manufacturing of electric ve-hicles and the energy transition towards renewable en-ergies. As one of the leading copper producers in the world, at Antofagasta we are committed to supplying this critical mineral in a responsible and sustainable way and thus, generate value for all our stakeholders.

We seek to facilitate the early management of risks and opportunities to mitigate the effects of climate change and be able to adapt to changing scenarios that allow us to transition towards carbon neutrality.

In this context, one of the goals we have set is to reduce our greenhouse gas (GHG) emissions. We were one of the first mining companies in Chile to make a complete transition to renewable energy supply contracts in all our operations, which allowed us to achieve, by 2022, the target of reducing Scope 1 and 2 emissions by 30% that we had set for 2025.

This Climate Action Plan reflects our ambition to go further in the progress we have made and to meet the new and ambitious medium-term targets that we have set ourselves: to reduce our Scope 1 and 2 emissions by 50% by 2035, with 2020 as baseline, and to reduce Scope 3 emissions by 10% by the year 2030 using 2022

as a baseline for projecting emissions. We hope to achieve this last objective in collaboration with the main actors in our value chain.

We began this Plan with a detailed analysis carried out in 2023 to determine the best technological al-ternatives to begin the journey towards the decar-bonisation of our operations, with a specific focus on replacing diesel fuel in mining haulage trucks and in our support vehicles. We studied different green technologies among which are: dynamic charging solutions, electric batteries, green hy-drogen and e-fuels. After this analysis in which we integrated collaborative projects, such as Charge On and the Hydra Consortium, we concluded that, whilst we will continue to look at all alternative fuel sources and how these develop keeping an open mind, of the available green technologies, elec-trification currently appears to be the best option which may add the most value to our production processes and allow us to advance the decarbon-isation of our Company. The Climate Action Plan has been designed to be updated periodically. It is a flexible Plan that can be adapted to technolog-ical advances and market conditions. Although it currently prioritises electrification, our Company is open to integrating adjustments or other com-patible technologies available in the future.

The Plan detailed here requires certain enablers for us to achieve the goals we have set. On one hand, there must be availability of innovative technolog-ical solutions from the manufacturers; and on the other, there is a need for the development of re-newable energy projects in Chile, both in terms of generation, transmission and storage.

Today, mining is projected to consume between 23% and 33% of the electric energy produced year-ly in Chile until the year 20332. As we already did,

Upon detailing our structured path to decarbonisation, we encounter a multifaceted challenge - maintaining and increasing our production while progressively moving towards carbon neutrality.

mining companies are on the path to transforming their supply contracts to renewable energy. At the same time, the electrification of operations, equip-ment and trucks will require a greater amount of electric energy, which is expected to come from renewable sources. Therefore, the continued de-velopment of the renewable electric energy gen-eration industry is key, as well as ensuring the viability of the transmission projects for this ener-gy. Therefore, public-private collaboration is es-sential to achieve carbon neutrality by 2050 as a country and as a Company.

Upon detailing our structured path to decarbon-isation, we encounter a multifaceted challenge - maintaining and increasing our production while progressively moving towards carbon neutrality. While acknowledging that this endeavour is a chal-lenging one, we also recognise it is an opportunity to redefine what growth means within the realm of sustainable development. As we push the bounda-ries of innovation and efficiency, it becomes evident that our growth and sustainability agendas are notmutually exclusive, but rather, symbiotic in nature. The journey towards decarbonisation may not follow a linear timeline due to the intricate balance of nu-merous factors and influences. However, it is essen-tial to responsibly manage our corporate growth. We lean into delivering our copper production potential to society, and to progress towards an environmen-tally responsible future.

Our ambition for a carbon-neutral future forms the cornerstone of our operations. We recognise the value in embracing innovative practices, relentless pursuit of our goals, and the power of adaptation in a rapidly evolving climate landscape. Together, we aim to forge a resilient, sustainable and prosperous future, defined by the core principles of environmental stewardship and corporate responsibility.

2 Comisión Chilena de Cobre, 2023; "Proyección del consumo de energía eléctrica en la minería del cobre 2022-2033". Gobierno de Chile (Chilean Copper Commission, 2023; 'Projection of Electric Energy Consumption in Copper Mining 2022-2033'. Government of Chile).

Climate Change Strategy

Our Climate Change Strategy propels coherent and systematic ac-tion. Structured around five key pillars - building climate resilience, reducing GHG emissions, efficient use of strategic resources, en-vironmental and biodiversity management, and stakeholder inte-gration - each pillar is supported by concrete actions and specific measures in the short, medium, and long term, enabling proactive responses to an evolving landscape. This document elaborates on pillar 2 of the strategy. For more details on the other pillars, please refer to the Second Climate Change Report.

To meet this commitment, we have integrated climate change as a factor into our risk management and decision-making. Through our Climate Change Strategy, we continually work to strengthen the Group's mitigation and adaptation capacity, setting robust targets to reduce our emissions, as well as adapting and strengthening the climate resilience of our operations and value chain, support-ing multisector collaboration to accelerate the development and use of low emission technologies. Our Climate Change Strategy allows us to take early action to manage the risks and opportuni-ties presented by this phenomenon to mitigate its effects and have the capacity to adapt to new scenarios. For more details on sce-nario analysis, please refer to the Second Climate Change Report.

Leveraging the work we have done to improve our understanding of climate change has enabled us to better integrate climate change factors into our decision-making processes, enriching planning and decision-making across various domains, from strategic planning and investment decisions to contracting processes.

Aligned with the Chilean Climate Change Legislation N° 21,455 goal, carbon neutrality3 by 2050 at the latest, and focused on sus-tainable copper mining, we developed our ambitious Climate Ac-tion Plan in 2023, which was approved by the Board of Directors at the end of the year. We believe that this roadmap, deeply rooted in our Climate Change Strategy, supports our ambition to reduce emissions and positions us at the forefront of adopting clean tech-nologies and sustainable operational practices.

Our plan employs cutting-edge technologies and innovative solu-tions, including transitioning our haul truck fleet to low-emission alternatives. Every innovation proposed to be adopted meets our operational needs forming the foundation for future technological enhancements.

The plan considers the implementation of technologies that have not yet been deployed in our copper mining industry, so all projections made are subject to the success of the implementation and develop-ment of operational trials. The applicability of technologies such as trolleys in copper mining must still be verified, considering their pos-sible operational impacts and assuming technological designs that facilitate their adaptability to the design of the mining plan.

3 That is defined as when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removals over a specified period.

The plan is designed to be flexible and adaptable, recognising that it is an evolving framework rather than a finalised course of action. While the plan currently prioritises electrification as the most prob-able path, we maintain a technology-neutral stance considering that one solution might not fit all processes and operations, we remain open to integrating various economically efficient technologies and regularly updating the plan to reflect market advancements.

In response to evolving climatic scenarios, scientific evidence, the associated physical and transitional risks impacting our opera-tions, changing commercial and economic factors, we remain pre-pared to adjust our roadmap accordingly. Our new medium-term targets will guide our efforts and actions up to 2050, enabling us to transit our progress and supporting our ambition of achieving carbon neutrality. This approach brings agility and responsive-ness, aligning our strategies with emerging technological devel-opments and economic feasibility that we believe will enhance operational efficiency.

Path to Carbon Neutrality

To help us achieve our ambition of carbon neutrality by 2050, Antofagasta has crafted a decar-bonisation plan founded on a structured, action-driven methodological approach. We conducted an analysis with the current information of different technologies that allowed us to project the total cost of ownership (TCO), analysis that allowed us to identify a potential path to continue reducing our carbon footprint while also possibly adding value to the Company.

Concurrently, we are aligning our technological needs with the operational requirements of our mine plan. This includes stra-tegic procurement and replacement of extraction trucks in syn-chrony with our plan's requirements, with a 2035 horizon. The integration of the fleet renewal and the decarbonisation plan presents an opportunity where renewing equipment enables a gradual and cost-efficient transition into electrification.

With a lens focused on long-term viability, we assessed emerging technologies' availability that allows us to solve the challenge of charging the equipment with a substitute for diesel or a battery without generating stoppages or impacts on the availability of that equipment. Among those solutions, we particularly focused on dy-namic charging, which would allow us to electrically charge the truck while moving. Another key factor to consider when choosing technologies is their potential to deliver economic benefits today as well as considering their potential to enable other technologies such fully electric vehicles in the future. This process allows us to select technological solutions that meet immediate needs and are scalable for future enhancements. We have defined clear design principles for the transition, such as introducing dynamic charging onwards and potential upgrades to batteries in vehicles requiring engine rebuild from that date forward.

We have set a baseline for our decarbonisation plan based on a detailed analysis of our Scope 1, 2 and 3 emissions, in line with the Greenhouse Gas Protocol standard and the ICMM's Scope 3 Emissions Accounting and Reporting Guidance. For setting our Scope 3 target, our approach is aligned with the ICMM's Scope 3 Emissions Target Setting Guidance, which emphasises collabora-tion and integrated commitment with suppliers and customers in the supply chains. Furthermore, our target setting approach for Scope 3 aligns with the Business-as-Usual approach, congruently used by the International Copper Association (ICA) when identifying emissions abatement potential towards net zero by 20504.

We have defined clear design principles for the transition, building a flexible and agile updating process, helping prioritise technological selection and key trials to undertake.

The focus for Scope 1 and 2 emissions reductions is on developing the supporting infrastructure, energy efficiency and transitioning to renewable energy sources. For Scope 3 emissions reductions, we will focus on fostering sustainable practices throughout the value chain by collaborating closely with our suppliers and partners.

Antofagasta's commitment to transparency and accountability is echoed in the independent verification of our emissions that we have conducted5, ensuring our stakeholders have accurate infor-mation to assess our sustainability performance.

• 4 Copper - The Pathway to Net Zero, International Copper Association, March 2023.

• 5 See our Second Climate Change Report on our website for further details.

TARGET MET early with a reduction of 581,355 tCO2e.

The target defined in 2018 was to reduce emissions by 300,000 tCO2e in 2022

TARGET MET

The goal of reducing GHG emissions by 30% compared to 2020 was met, before 2025, the date for which the goal was setCARBON PRICE is incorporated selectively into supply chain decision making*

DEFINE NEW MEDIUM-TERM TARGETS

NEW MID-TERM TARGET reducing scope 3 emissions by 10%**

NEW MID-TERM TARGET reducing scope 1 & 2 emissions by 50%***

* See our Second Climate Change Report on our website for further details. ** Against 2022 "no action scenario" projection.

*** Against 2020 baseline.

CARBON NEUTRALITY

Scopes 1 and 2 emissions

Scope 3 emissions

Scopes 1, 2 and 3 emissions

10

Given our ambition of carbon neutrality

by 2050, we have set an ambitious new target for Scope 1 and 2: to reduce emissions by 50% by 2035, using 2020 as baseline.

Following on from our previous target set for 2025 and achieved in 2022, we have set a new target to reduce Scope 1 and 2 emis-sions by 50% by 2035, using 2020 as baseline. For Scope 3, we have set a target, involving a collaborative effort across the val-ue chain, to reduce Scope 3 emissions by 10% against 2022 "no action scenario" projection.

Looking to the future, the Company takes on the challenge of sustainable growth. Our decarbonisation plan includes future expansion projects. A prime example is the Centinela Second Concentrator project. This project not only demonstrates our commitment to responsible growth that embraces decarbonisa-tion, but also underscores our dedication to implementing energy efficient technologies. Our ambition is that mining equipment and processes will be integrated to our decarbonisation plan ensuring that each new initiative harmonises costs and operability with our environmental commitment.

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Antofagasta plc published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 March 2024 12:07:45 UTC.