Coyhaique, June 9th 2011.

Energía Austral has submitted the Second Addendum for the Cuervo Hydroelectric Plant to answer the 228 questions and observations presented in November last year by government agencies which form part of the Environmental Assessment System.

With this step, Energía Austral is continuing the environmental assessment process for the Cuervo Plant in line with standing legislation and remains available to answer new questions from the evaluating authorities.

The company highlighted that the new Addendum describes in greater detail the mitigations and compensation plan associated to the Cuervo Project.

The company’s Environmental Manager, Cristián Núñez, explained that one of the most important points included in the Addendum is the company’s decision not to use Route X 528 as the access road during the construction stage. “During our dialog with the local community, one of the issues that generated most concern was how the constant flow of vehicles to the construction site would affect the quality of life of the inhabitants of the Lago Los Palos sector. As a result, we have sought to optimize and improve the project’s environmental performance and accepted the community’s demand that we minimize its impact on the community.” said Núñez. The project will use just one access road which will be built on land belonging to the company, from the mouth of the Cuervo River to the dams area.

Compensation Plan

The Environmental Impact Study for the Cuervo Project entered the Environmental Assessment System in August 2009. Since then, the company has continued to optimize and clarify the measures that will mitigate and compensate for impacts caused by the project. Addendum 2 includes greater details about measures, among them:

The creation of a Private Protected Wilderness Area (ASPP, from its initials in Spanish) around Lake Yulton: The ASPP will cover 6,645 hectares and will aim to protect and maintain the ecosystems, biodiversity and natural resources that exist around the future reservoir. According to its current design, it will include areas dedicated to conservation, preservation and public use, representing a new pole for the development of nature tourism in the Region of Aysén. It will also include an environmental education center, picnic areas and 22 kilometers of paths.

The Project also foresees the construction of a wildlife rehabilitation centre which will receive examples of species that live around the Project that require special care. The Region currently lacks a wildlife rehabilitation and/or rescue centre.

Energía Austral will develop a complete reforestation program in the Region aimed at compensating for the surface area affected by the project. The program will include research and monitoring of native species and will create around 100 jobs over a period of at least 20 years.

The mitigation plan includes a number of measures aimed at minimizing the project’s impact on the local community and lifestyle, in line with concerns raised by the community. Among these, the company has planned that during the construction stage, workers from outside the Region will be accommodated in fully-equipped camps located at the construction site in order to minimize the risk of sudden immigration.

In addition, a healthcare system for workers has been designed, consisting of clinics in the camps, which are completely independent of the Puerto Aysén’s existing health system, in order to avoid overwhelming the public health system.

Energía Austral also maintains a cooperation agreement with Mutual de Seguridad to develop a walk-in clinic to attend workers that participate in the construction of the project and their families. This clinic will be built in Puerto Aysén and will provide healthcare services to the community.

“We have carried out the environment assessment process for Cuervo in a transparent manner, informing the community in advance while fully adhering to Chile’s environmental legislation. We believe that we have a very good project to offer the Region of Aysén and the country as we have integrated the particular characteristics of the area where it will be located and observations made by the community into its design,” commented Energía Austral’s general manager, Alberto Quiñones.

Energía Austral Contacts

ABOUT ENERGÍA AUSTRAL (www.energiaaustral.cl)

Energía Austral is a subsidiary of Xstrata Copper which forms part of the Business Development Unit. It is developing the Energía Austral project, which consists of the development of three hydroelectric projects in the Commune of Aysén, Cuervo, Cóndor and Blanco, and a transmission line that will transport the energy generated to the Central Interconnected System. Energía Austral has offices in Puerto Aysén, Coyhaique and Santiago. 

ABOUT XSTRATA COPPER (www.xstratacopper.com)

Xstrata Copper is the fourth largest global copper producer with attributable mined production in 2010 of 913,500 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.

Headquartered in Brisbane, Australia, Xstrata Copper is one of the commodity business units within the major global diversified mining group Xstrata plc. Its mining and metallurgical operations and development projects span eight countries: Argentina, Australia, Canada, Chile, Peru, the Philippines, Papua New Guinea and the USA. Its operations and projects are administered through a regional divisional management structure, which ensures that critical decisions are taken close to the related businesses. It also has a recycling business (Xstrata Recycling) with plants in the United States and offices in Canada and Asia.