La Granja Project Integrated water management – shared benefit

Water Stewardship Conference, Lima April 9, 2014

Other Peruvian projects

2 CONFIDENTIAL

Overview

• Rio Tinto overview;

• La Granja Project;

• Overview;

• Water context;

• RTMP approach;

• Community Partnering;

Concluding

Introduction

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Rio Tinto – a world leader in mining

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Rio Tinto – Global projects & operations

Rio Tinto – Approach to water

• Access to water is critical for mining and processing operations;

• Water risks tend to be location-specific. For instance, we operate in:

Water constrained settings;

Water surplus settings;

Sensitive ecological settings.

• Rio Tinto’s approach to water has three components:

Improving water performance;

Accounting for the value of water;

Engaging with others on water.

La Granja Project - Location

Other Peruvian projects

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La Granja Project: Pacific / Atlantic catchment

Other Peruvian projects

8 CONFIDENTIAL

La Granja Project: Local catchment

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La Granja Project – Community context - water

0 2 4 6 8 10 12 14 16 18 20

Altera costumbres y modo de vida

Manejo y cuidado del agua

Falta de mano de obra

Fondo Social LG

Inseguridad ciudadana

Ruido

Riesgo accidentes

Cumplimiento de compromisos

Desigualdad e inequidad

Corrupción

Pobreza

Empleo

Daño a la agricultura

Daño a la ganadería

Inflación

Enfermedades

Contaminación

Total

N°

de talleres

La Granja Project – Community context - water

Other Peruvian projects

12 CONFIDENTIAL

Overview

• Water access and its management is recognised as a significant project risk by Rio Tinto Minera Peru (RTMP);

• La Granja project not unique in this regard - throughout Peru water access is a sensitive issue;

• Adoption of RT environment, water and community policies, standards, strategies inherent in project design;

• Upholding ICMM commitments;

• Due to the sensitivities about water technical solutions alone will not be sufficient to underpin RTMP’s approach to water;

• Implementation of community acceptance strategy will be critical for success;

• Our progressive approach follows…

La Granja Project: Water context

Improving Performance

Rio Tinto Minera Peru WATER STRATEGY

Our vision for water management at RTMP is for the La Granja project to be recognised by communities, government, non-government organisations and peers as the leader in integrated water management in Peru’s mining industry

Protecting the Environment

Community Participation

Regional Water Management

Long Term Focus

Objectives

Improve our current performance to

lessen our impact, sustain our licence to operate and increase

community confidence in our ability to manage

water

Objectives

Minimise our impact on the natural

environment and downstream

communities and maximise

opportunities to enhance catchment

health

Objectives

To implement a community and

stakeholder participation and

engagement program to build trust and

credibility on water issues

Objectives

Support government partners to improve

the regional management of water to support

improved access and use of water

resources

Objectives

Plan our activities to support long term

operations, community benefit and minimise water

related closure legacies

Building Capacity

Objectives

Ensure that RTMP has the awareness, internal skills and capacity to instil a culture that recognises the importance of water in

business activities

Outcomes

Improved understanding of improvement

opportunities, decreased environmental footprint and increased focus on

water management

Outcomes

Final project plans and designs reflect and

consider the importance of managing water and

natural resources effectively.

Outcomes

Communities and other stakeholders

acknowledge and participate in the efforts

of RTMP to facilitate comprehensive and

transparent engagement

Outcomes

Improved recognition and management of

water resources in the district leading to

improved access and efficiency

Outcomes

Long term water management risks

recognised and evaluated and factored into project designs to

protect the environment and communities

Outcomes

Organisation is equipped to identify and manage water risks, supported by a high level of employee awareness of the importance of managing water

Regional Development

Design & Management

Watershed Protection

Community Participation

La Granja Project – Partnering with stakeholders

• Regional development strategy RTMP:

build trust with communities in the districts, benefits of mine development are understood and welcomed;

solid, transparent and trusting relationship with communities, particularly relating to water;

establish partnerships, leveraging the resources and active participation of communities and other stakeholders of interest;

Work together with farming leaders and district leaders (Ronderos) - strengthen their organizations, seek outcomes which promote the integrated management of water resources;

• Our focus: promoting integrated water resource management through community partnerships

La Granja: Integrated water planning - Querocoto

Irrigation infrastructure

inventory

Irrigation User committees - ALA

Reorganization and creation

Obtaining a permit for water use

Irrigation canals Improvement program

focussed on crucial sections

Rio Tinto - La Granja Social Fund

Creation of a local Integrated Water

Resource Management

Group (IWRMG)

IWRMG promoting integration to the Querocoto district

Coordination Board

Develop IWRMG plan for the Querocoto District -

ALA

Written Acceptance by

User committee

24 users committees

33 irrigation canals

3.5 km of canals

repaired / lined

IWRMG includes representatives of: • Water User committees • Rondas

• Federation • Central Rondas

• Municipality • Technical Education Institute Querocoto • Rio Tinto • Fondo Social La Granja

2013 2012 2014

• 24 water user committees formally recognised and authorized by the Chotano-Llaucano water authority;

• Paperwork filed with water authorities to obtain usage permits for all 24 water user committees;

• 5 water-use permits issued to date;

• Improving capability of water user committees;

• Improvements to crucial sections of existing irrigation canals in conjunction with the La Granja Social Fund;

• Integration of the Integrated Water Resources Management Commission of Querocoto to the District Roundtable:

− Attendees: representatives from the Irrigation user committees, Rondas, Municipality, Rio Tinto and Fondo Social La Granja

Progress – small steps, building trust

Progress – small steps, building trust

Community environmental monitoring committees – Comite Vigilancia Ambiental

• Groups created voluntarily by residents of communities in the area directly affected by the Project;

• Monitoring through community environmental inspection;

• Innovative , gender equality, early warning awareness ;

• Respect of local culture and community structures;

Partnering benefits

• Clear, reliable and harmonious relations among communities and the company;

• Early problem identification;

• Community skills development & training;

• Empowering women and community leadership;

• Active participation in the baseline studies - environmental impact study.

• Zero environmental conflicts to date;

• Develop integrated water management plan for Querocoto;

• More CVAs – downstream;

• Strategic alliances with government to strengthen water management :

Improved irrigation infrastructure;

Detailed water sources inventory establishment;

Further assessment of the quality, quantity and uses of water and water users;

Understand water priorities in the local districts

• Water infrastructure co-funding opportunities;

• Promote the linkages of biodiversity conservation and water;

• Promote co-existence of communities, farming and mining;

• Continue community participation in the EIA process – mesas de trabajo etc

Collaboration of the local water authority at the inauguration of the crucial section of the Succhuran Sigues Canal

Inauguration of work in the crucial section of the Shanquigua canal - User Committee - Rio Tinto

Next steps – Towards long term partnering

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La Granja Project: Concluding

CONFIDENTIAL

• La Granja is a Rio Tinto project – full complement of Rio Tinto expectations and requirements is being implemented;

• Access to and management of water is a project critical risk – La Granja is not alone in that regard;

• Community sensitivities about water are central;

• RTMP approach recognises the importance of water to the communities and the environment – great opportunities exist;

• Community partnering to improve access and management of water – integrated management of water resources;

• Small steps achieving positive outcomes and building trust;

• RTMP confident that communities, agriculture and mining can co-exist

• More work to do…

Thank you