Overcoming  challenges

Through our sustainability report, we aim to inform our stakeholders and the general public on an annual basis about our social, environmental and economic performance, and show how we advance in strengthening a mining operation with principles in favor of sustainable development.

This report is in accordance with the ICMM assurance-validation principles, and with the GRI (Global Reporting Initiative) standards and its respective supplement for the Mining and Metals Sector.

In order to guarantee trust in relation to the content of this report among our stakeholders and the general public, we hired a company for the independent verification of the sustainability performance standards, applicable for the 2022 reporting period.

We carry out our productive activities with a focus on protecting people's health and life, respecting the environment, ensuring social commitment, promoting human rights and operational efficiency.

Corporate governance structure

Minera San Cristóbal S.A. is a company incorporated in Bolivia in 2000. From March 2009 until 2022, we were a wholly-owned subsidiary of the Sumitomo Corporation, a multi-sector business conglomerate headquartered in Japan.

Our corporate governance structure is made up of:

Management Model

Our corporate philosophy and strategic plan focus on developing principled mining. i.e. with financial, social and environmental responsibility. This means that sustainability is an inseparable part of our objectives and strategic goals.

Our commitments to sustainability and best practices (GRI, ICMM, SDGs, ISO, etc.) are integrated and implemented through the different processes of the Management System, which has four central components: business management, product realization, services, and continuous improvement.

Our identification and assessment of risks is comprehensive and participatory, both at a strategic and operational level. This way, we can anticipate situations that may threaten the continuity of our activities.

Our sustainability performance in figures

The 2022 goals and achievement thereof are described below:

Our stakeholders

Our stakeholders are made up of the people, groups of people, organizations and public/private institutions that affect or may be affected, positively or negatively, as a result of our activities.

Our stakeholders are:

The figures regarding our economic performance transparently show the positive impact of our company on development and on the local, regional and national economy.

Our net revenues from concentrate sales declined by 23% (US$ 194M) compared to 2021. The primary reason for this was a decrease in the volume of concentrate sold during the last quarter of 2022, which was substantially affected by a fire at the port of Mejillones, Chile, where we operate.

The annual net result was negative in US$ 21M, mainly due to the payment of taxes concerning previous years, the devaluation of fixed assets, the decrease in concentrate sales and the increase in production costs. International conflicts, supply chain bottlenecks and inflation pushed up the cost of supplies.

We seek to benefit local and national suppliers with contracts and purchases in our operations. In 2022, we had a commercial relationship with 1,113 suppliers and we invested an approximate amount of US$ 306.8 million in the combined purchase of goods and services.

We continued with our training program for suppliers and contractors and managed to train 263 workers in human rights issues, such as child labor, forced labor, discrimination, gender and harassment.

Training

The training we develop focuses primarily on topics related to health, safety, environment, and other technical and specific topics, aimed at the proper performance of responsibilities. The man-hours covered by these courses were as follows:

SAFETY

The culture of prevention must be reflected in all actions and in safe behavior, especially in the workplace, but also in the family environment. This way, our personnel adopt this behavior as part of their lives and become agents of change at all times.

We continue conducting performance measurements and continuous evaluations of the activities as provided for in the Risk Management Programs; this is our main mechanism to identify occupational hazards and assess risks periodically.

Thanks to our incident management efforts, we achieved the historically lowest Total Recordable Frequency Rate (TRFR) in the contractors, at 0.56. In our case, the Total Recordable Frequency Rate (TRFR) increased, to 0.35. The Lost Time Incident Frequency Rate (LTFR) increased compared to the year before, reaching 0.33 for MSC and 0.21 for the contractors:

Regrettably, one worker of a contractor passed away following an injury. We have made every effort to investigate the causes of the event and to implement pertinent controls to prevent any recurrence.

Industrial hygiene program

Monitoring and studying physical and chemical agents, we are able to prevent occupational diseases caused by occupational risk agents (ORAs) present in the workplace. In 2022, the number of samples taken of the main agents we monitor was as follows:

Behavioral observation

Behavioral observation in 2022 increased by 15.8% compared to 2021, recording 2,161 reports, i.e. an average of six reports per day. Most observations concerned substandard or unsafe conditions (48%), and 39% concerned unsafe actions. The importance of the STOP program lies in the discussions people have so safe behavior would replace unsafe behavior.

HEALTH

We developed actions to protect the health of our workers and their families, and the contractors working in the area of operations and in the offices of La Paz and Potosí, providing timely and quality services that are constantly being improved.

No occupational illnesses or related deaths were identified in 2022.

The medical care and emergency program, the health prevention and promotion program, and the occupational health program were reactivated. Using a comprehensive approach to worker protection, the latter accomplished the following results in terms of prevention and control:

We have continued to support the strengthening of the productive development projects of the Consultative Council Los Lípez San Cristóbal, in partnership with the Inter-American Development Bank (IDB) and through the Fundación para el Desarrollo Sostenible (FUNDES). This work is part of the project "Expanding opportunities for development and economic growth in communities in the influence area of the mining sector” and supports the marketing of llama meat products.

Community investment

Investments in the communities were mainly allocated to Basic Services, with 70%, followed by investments in Infrastructure Improvement, with 9%, and Community Relations and Mitigation and Resettlement, with 7% of the total.

Social License to Operate (SLO)

This year's average rating was 3.55, which means that we achieved our target of 3.50. Hence, the level of “tolerance” was maintained with our stakeholders.

Compared to the average SLO of the previous year (3.48), the value went up thanks to several relevant events:

• completion of the electrical bay project for rural electrification in Lípez;
• signing of conciliation agreements with the communities of San Cristóbal, Culpina K, Río Grande, Santiago K and Calcha K regarding the use of land for the railway line;
• participation of the community of Culpina K in the Environmental Commission and in the activities to monitor and follow up management of the tailings deposit and to control environmental factors.

Our environmental management system focuses on compliance with current regulations; the care and rational, efficient and sustainable use of natural resources; and the application of good environmental practices.

Water

The industrial water we use in our mineral processing plant comes from the pumping in the well fields. This water is classified as saline and not suitable for human or animal consumption or irrigation. Likewise, the source of groundwater extraction is located in an area where the demand for this resource is low; hence, no water stress is generated. Nevertheless, we maintain a policy of rational use and responsible management of this resource.

We extracted 7.30 million m³ of groundwater from the production wells drilled in the Jaukihua aquifer. In addition, 5.79 million m³ of process water were recovered from the tailings deposit, which accounts for 44.2% of the water used as input in the mineral concentration plant.

Greenhouse gases (GHG)

The increase in the consumption of electricity and fuel in 2022 gave rise to an equivalent increase in total greenhouse gas (GHG) emissions.

The total GHG emission intensity rate is 0.550 t CO₂eq per tonne of concentrate, which is the result of dividing the total emissions, including energy consumption, by the total tonnes of mineral concentrates produced in a year. The total value of the intensity of emissions is composed of the intensity of direct emissions with a value of 0.261 t CO₂eq and an intensity of indirect emissions with a value of 0.289 t CO₂eq.

Waste management

Solid waste management comprises the following stages: classification at source (separation by type of waste); collection and transport; temporary storage; and final disposal. Of the 2,397.77 t of total waste generated, 75.94% was separated for recycling and reuse, and 24.06% was separated for disposal.