Daniel Malchuk, President, Minerals Americas
Escondida 25 Year Celebration
Escondida, Chile, 7 April 2016
Thank you very much for being here to celebrate Escondida’s 25th anniversary, and the inauguration of its third concentrator plant.
The past 25 years have marked a significant period for all of us who work for this company. I especially want to thank our partners Rio Tinto and the Japanese consortium led by Mitsubishi, who have accompanied us on this journey, one which has been full of both challenges and so much satisfaction.
When I look back, I am amazed at the enormous changes that Escondida has experienced. These are a reflection of the transformations that have occurred throughout the mining industry, and also in the country.
When Escondida began operations, Chile was commencing a new period in its history, and the mining industry embarked on a period of unprecedented investment, which positioned the country as a global leader in copper mining.
BHP Billiton arrived in the country in the 80’s with a vision born from our vast experience as a mining operator in other parts of the world. The practices that have been adopted at Escondida have impacted, positively we hope, the way in which mining is done in Chile.
In safety, for example, incorporating anti-roll bars and now the introduction of 5-Star vehicles, has raised the vehicle safety standard; from the beginning we focused on health care and the well-being of our workers and their families by promoting housing in the city and changing the shift system. And we have supported the creation of organisations such as the CEIM – to train operators in the skills needed by the industry - and Fundación Minera Escondida, one of the first institutions of this type to be formed in the region of Antofagasta.
With great pride, and also with humility, we can say that several aspects of our model have permeated the rest of the industry, and society in general. But as we have introduced changes we have also learned much from other companies and their innovative practices. Our objective is to build a world-class mining industry in Chile, together with our colleagues from other companies.
The changes in scale that have occurred during this period are also amazing; our processing capacity has increased more than 10 times, and our copper production has almost quadrupled since inception. Despite this exponential leap we have never lost the values of respect for individuals and corporate responsibility that have guided us from the very beginning. Our compass is clear.
During this quarter of a century we have also experienced various cycles of the economy and the market. There have been periods of low prices and others of high prices, but we have always tried to ensure that our decisions are not guided solely by those. All public and private players must act with a "mid-cycle" mindset; in other words, avoiding both euphoria at peak times, and also dejection during difficult times.
From this perspective, we have invested US$4.2 billion in this concentrator. And we continue with our investments: in the Kelar gas-fired power plant, and in the Puerto Coloso desalination plant. In addition, we are seriously considering building a concentrator plant at Spence in order to extend the life of the mine by 50 years.
As you can see, we are continuing to work hard and think about the future with optimism.
Going forward, mining will continue to be, without a doubt, important for Chile and we will face new challenges. One of those is the role we play in “converting copper into knowledge”.
We believe every mining operation contributes to the creation of value through technology and innovation. This requires a joint and planned effort with technology-based suppliers and companies. We have already proved this with the World Class Supplier Program, or “Cluster”, which we, together with Codelco, have promoted for almost a decade.
I would like to briefly share two success stories that are examples from this Program:
The first is a company called Bombas Neptuno, from Iquique, who began their work with us in 2009 and have subsequently been recognized twice with the "Technical Innovation of the Year" award, given by England’s Pump Industry, and the Avonni award in 2014.
A second example is the Aguamarina biotechnology company, from Antofagasta, that has placed three technological developments in the market, has raised investment capital, and will soon test its dust suppression technology in a BHP Billiton operation in Australia. This company also received the Avonni award in 2015.
These examples are not acknowledgments of our own work. On the contrary, we are proud to have learned together with these companies participating in the Cluster Program how to grow this joint value creation relationship that allows the development of "Made in Chile from Copper" technology.
Chile has the potential to do much more in this area, and we at BHP Billiton will continue to work on this.
Another area that we are passionate about is maintaining constructive and trusting relationships with communities and with society in general. For almost 20 years we have been promoting and supporting a cultural program to contribute to development and quality of life, and now we want to expand the focus and give more emphasis to integration and diversity.
We want to build trusting relationships with Indigenous peoples. We will ask for the advice of experts from Canada, Australia and other countries that are ahead of us in this area, and of course the communities themselves.
Our goal is to contribute to the economic, social, and cultural empowerment of Indigenous communities in Chile in the long term.
Our plan is to stay in Chile for another 100 years and continue to make a contribution with this long term view.
Finally, I would like to emphasize that none of this would have been possible without the commitment and excellence delivered daily by the workers and employees of Minera Escondida. Many of those who have been working for our company for the entire 25 years are present here today.
I would like to ask for a round of applause in recognition of the women and men who have helped to build this company and this mining operation model, of which we all feel so very proud.
Thank you very much.