Testimony: Charlie Sartain (Xstrata Copper)

"Chile plays an important role for Xstrata because of the conditions it offers for the development of innovative and sustainable projects"

Xstrata Copper is one of the commodity business units of Xstrata plc, a diversified mining group listed on the London and Swiss Stock Exchanges. Its mining and metallurgical operations and projects span eight countries: Argentina, Australia, Canada, Chile, the United States, the Philippines, Papua New Guinea and Peru. They are administered by five separate divisions based close to the mining operations - the North Queensland, Minera Alumbrera, North Chile, Southern Peru and Canada divisions. Xstrata Copper also has a recycling business, Xstrata Recycling, with plants in the United States and offices in Canada and Asia.

Xstrata Copper is the world's fourth copper producer with attributable mined production in 2009 of 907,000 tonnes of copper in cathodes and concentrates. The company is also one of the world's largest producers of smelter and refined copper, including from third party materials. It was in 2006, after Xstrata's acquisition of Canada's Falconbridge that Xstrata Copper emerged as one of the top five copper producers internationally. In Chile, this acquisition gave it control of 100% of the Lomas Bayas mine and the Altonorte smelter in the Antofagasta Region and a 44% stake in the Doña Inés de Collahuasi mine in the Tarapacá Region. "The scale of the deal led us to review all the relevant factors in our decision, with special emphasis on Chile's potential as a platform for the organic growth of our operations and projects," recalls Charlie Sartain, chief executive of Xstrata Copper. "For that reason, a context of fiscal stability was vital as well as a very good track record in attracting foreign investment."

Xstrata Copper has a corporate office in Santiago along with the headquarters of its recently created South American Project Development Division. The offices of its North Chile Division, which manages Lomas Bayas and Altonorte, are located in Antofagasta while the offices of its Energía Austral subsidiary are in the Aysén Region.

According to Charlie Sartain, who also chairs the International Copper Association (ICA), the main international organization for the promotion of copper use, and is a member of the senate of the Sustainable Minerals Institute at the University of Queensland, the company knew Chile well before investing because of the country's mining tradition and its position as the world's largest copper producer. "Chile has the world's most important copper reserves and, today, that is its principal potential," he notes. "Also, the conditions it offers for developing operations and projects within a framework of sustainable development and its economic, political and institutional stability help to create a transparent and optimum business environment."

Chile has become an important growth platform for Xstrata Copper and is necessary for the success of its operations in the region. "Although we have operations around the world, Chile plays an important role for Xstrata Copper precisely because of the conditions it offers for the development of innovative and sustainable projects in which we hope to continue growing," says Sartain. "In fact, Santiago is the base of our South American Project Development Division and that allows us to create synergies with our other operations in the region, taking advantage of growth opportunities through our new copper projects and the expansions already underway at our existing operations in Chile and Peru."

Xstrata Copper's definition of purpose is to maximize its shareholders' investment through the growth and successful management of its operations and projects. The trust they have put in Chile has been of assistance in this regard, maintains Sartain, who is convinced that this purpose will be achieved through genuine alliances with the community, the government, institutions and other stakeholders. "In Chile, we can work with institutions and the authorities as strategic allies, focusing on the management of sustainable development, which requires legal stability in terms of environmental, social and labor issues, and that is not a minor consideration when deciding where to invest."

If a potential foreign investor asked you about Chile, what would you say?

After almost five years in Chile, I can say that our experience has been very positive; we have found favorable conditions for the organic growth of our business as well as professionals who are very technically competent, which is a further encouragement.

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