Sebastian Benavides, Exploration Manager, Peru & Ecuador, Anglo American

What footprint does Anglo American have in Ecuador?

Sebastian Benavides: Anglo American started exploration activities in Ecuador in 2017, attracted by the country´s geological potential and prospectivity for new discoveries. We signed a Joint Venture Agreement with Canadian mining company Luminex over the Pegasus project and hold concessions that are distributed in two blocks, one located in Cotopaxi Province, in the Pangua Canton, and the other located in the Bolivar Province in the Guaranda Canton. To date, we continue our exploration activities within the Pegasus project, and we have recently started drilling one of our main targets; this will enable us to test our geological hypotheses and the economic potential of the project.

What does responsible mining mean to Anglo American?

SB: For Anglo American, responsible mining is placing people and the environment at the centre of every decision we make, living to our purpose of re-imagining mining to improve people’s lives. We aim to combine smart innovation with the utmost consideration for our people, their families, local communities, the ecosystem we affect, and our customers to better connect precious resources in the ground to all of us who need and value them.

In Ecuador, given that we are on early exploration stages, we focus on responsible exploration, which can be summarised that if we are unsuccessful in making a discovery and leave the project area, we leave the people and environment in a better situation than how it was prior to our involvement. To achieve this, we must build trust in the communities where we are exploring, making sure we have constant dialogue with them, and slowly building the reputation of Anglo American in the country by engaging at a regional and national level with a diverse pool of stakeholders.

How will Anglo American mitigate the environmental impact of its operations?

SB: As we are in exploration stage, our environmental footprint is limited. However, as a mining company, we know that if we want communities to see our value, we need to move from a limited and controlled environmental impact to one that has, in the foreseeable future, a net positive and sustainable impact on climate change, water and the natural environment. This is relevant everywhere we operate, but more so in Ecuador were biodiversity and nature are top of mind. Most recently, we had an inspection in Pangua that confirmed that our exploration activities were not causing environmental impact, and the findings were backed by the community.

Does Anglo American have a responsible mining track record in Latin America?

SB: Anglo American has operations in Brazil, Chile and in Peru. Our new Quellaveco copper mine in Peru, that started operations in 2022, puts technological and social innovation at the forefront of responsible mining and is the latest example of our evolution. Quellaveco is one of South America’s most technologically advanced mines, with many processes being remotely controlled and automated. The mine is sourced by 100% renewable energy, includes community environmental monitoring – even before the mine was built – and its entire environmental and community approach was co-created from the outset. For example, in Quellaveco, we are ensuring a shared, mutually beneficial, water management approach. We constructed the dam to provide a multi-purpose facility, which in addition to delivering water for Quellaveco, regulates and mitigates seasonal variations in flow and supplies a large irrigation project in the Moquegua region – we estimate that 13,300 farmers will benefit from this.

Perception and reputation of mining around the world is negative. It is low in the UK, and very low in Ecuador. As an industry, we need to collectively do better for this to change.

Furthermore, as a responsible mining company, we need to prove that we are up to par with international best practices. Part of Anglo American´s strategy is for all our operations be third-party audited against recognised responsible mining certification systems by 2025. Most recently, we have adopted the Copper Mark certification at Los Bronces and El Soldado mines in Chile, while they await being assured against the Initiative for Responsible Mining Assurance (IRMA). Our Minas Rio in Brazil also is being assessed by IRMA.

Why do mining companies, both in Ecuador and the UK, have such a bad reputation?

SB: Perception and reputation of mining around the world is negative. It is low in the UK, and very low in Ecuador. As an industry, we need to collectively do better for this to change. We must do what we say we will do and avoid mistakes that affect the whole industry. At a local level, the only way to build trust is to guarantee, to the best of our ability, that our communities see our value in their everyday life. We need to make sure we guarantee the correct management of our impact on host communities to build collectively a better reputation. Large-scale mining has seen an evolution, but we can collectively still do better to bridge that trust and reputation gap. Ecuador has a unique opportunity to incorporate lessons learned and best practices for large-scale mining and thus start with a solid footing that drives forward responsible mining in the country and ultimately changes perceptions and reputation.

What role will mining play in the energy transition?

SB: Many of the metals and minerals we produce are critical to the technologies required to decarbonise the world’s energy and transport systems. Anglo American is a responsible producer of copper, nickel, platinum group metals, and the steel ingredients of iron ore and steelmaking coal. The exit from the last of our thermal coal operations in 2021, the delivery of the Quellaveco copper mine in Peru in 2022, and the ongoing development of our Woodsmith project (Crop Nutrients business) represent the latest phase of our portfolio trajectory towards future-enabling products. As a company, we are also focusing efforts to deliver the full promise of renewable energy and zero emission transport. We are committed to deliver the metals and minerals the world so urgently needs in the cleanest and most socially responsible way possible.

What are Ecuador’s competitive advantages as a mining jurisdiction?

SB: Ecuador has all the potential to be a solid destination for mining. It is an underexplored country with strong geologic potential and is now building a track record that shows it is possible to move into operation. It is starting to build their institutional capacity to be a strong and knowledgeable regulator, with several proposals that will better regulate the industry currently under discussion. It also has a strong civil society that can be an enabler to building trust with communities and keep industry in check. All of these are good indicators. Our focus is, however, on the regulatory and operating environment since it would enable our business, the industry and the growth and success of the country more broadly if done right. Moving forward, re-opening the mining cadastre, and passing a clear and well-regulated mining code and consultation requirements will be extremely relevant for the future of the mining industry in Ecuador.

Ecuador is a new mining country; can it be a leader in responsible mining?

SB: Ecuador does have a history of mining, but not one for responsible, large-scale mining. Understanding that Ecuador is not starting from scratch, but that mining has significant negative connotations for local communities and there is a strong anti-mining movement cannot be ignored. Large- scale miners need to be cognisant that if we are to change current public opinion, we need to do as we say and seek to go beyond. As an industry, we need to aim to always engage proactively, meaningfully, and respectfully with all our stakeholders in relation to impacts and risk and to maximise development opportunities in the communities where we operate. Communities need to see the value of us being there, and that such value brings capabilities and growth opportunities that extend beyond the company´s presence in the area. As I mentioned before, changing public perception by doing better as an industry, as well as having a strong sectoral legal framework and reputable regulatory bodies are key for Ecuador´s mining future.

Social protests often hinder mining projects; how is Anglo American working to establish good community relations in Ecuador?

SB: As a company, our environmental and community approach is to co-create and design from the outset with communities for maximum positive benefit. This has been our approach in Ecuador, however, managing expectations is key during exploration. So much of establishing good relationships is being transparent and accountable. We know that our relationships now will affect operations in the future if exploration is successful, so making sure we have the right people in our team, building strong relationships with the community and following through with our agreements, do go a long way.

Exploration is the first impression, and we need to make sure we make the right one, and that such an impression is consistent with our company’s best practices. For us to do that, we also need to be clear on the benefits and risks, and work together to address them. The licence to operate for mining companies is built on the ground, every day, and can never be taken for granted.

Through our social initiatives in health, education, and local productivity, we aim to connect with all members of the communities where we operate, be it directly or indirectly. Community members get to see how we operate on a daily basis as they benefit from direct jobs within the exploration area and camp. Also, we arrange regular visits for any other community member that wishes to understand our business. Building awareness and knowledge is particularly important for Ecuador, since large-scale mining is just starting to develop.

How far will Anglo American have advanced in Ecuador by 2035?

SB: Our long-term plan for Ecuador is to complete the exploration of all Pegasus targets and build a robust project pipeline through generative processes and evaluation of third-party commercial opportunities. Hopefully by 2035, Anglo American sees Ecuador a destination that contributes to the diversification of our portfolio and has projects in different stages of development. Ecuador has the potential to move from a destination with high potential to a destination that harnesses its natural richness in a way that benefits Ecuadorian society and plays a key role as a provider of critical minerals for the energy transition.