Nexa Resources S.A.

Company Overview

Business Model: Nexa Resources S.A. is an integrated polymetallic producer with over 65 years of operation in Latin America, primarily focused on zinc. The company owns and operates five underground and open-pit polymetallic mines (three in Peru, two in Brazil) and three smelters (two in Brazil, one in Peru). Its core value proposition lies in its large-scale, low-cost production of zinc, copper, lead, silver, and gold, with a significant portion of its mined zinc concentrate processed internally.

Market Position: Nexa Resources S.A. was among the top five global zinc producers and the fifth largest producer of refined zinc globally in 2024, according to Wood Mackenzie. Its smelters are the sole units of their kind in Latin America (excluding Mexico), where it holds an estimated market share of 75.8% in 2024. The company positions itself as a low-cost integrated polymetallic producer.

Recent Strategic Developments:

• Aripuanã Mine: Completed ramp-up in June 2024. A fourth tailings filter is scheduled for delivery and installation in 2025, with commissioning expected in Q1 2026.
• Divestments: Sold the Morro Agudo Complex in Brazil for R$80 million (approximately US$16 million) on July 1, 2024. Also sold non-operational Peruvian subsidiaries Minera Pampa de Cobre S.A.C. and Compañía Minera Cerro Colorado S.A.C. in Q3/Q4 2024, realizing a total gain of US$13,278.
• Cerro Pasco Integration Project: Board approved the first phase (tailings pumping and piping system) in Q4 2024, with construction planned for Q2 2025. Estimated cost is US$85 million to US$90 million (2025-2026), with operations expected in 2027.
• Capital Increase: Nexa's total ownership in Nexa Resources Atacocha S.A.A. increased from 81.78% to approximately 83.00% as of January 15, 2025, following a US$37 million capital increase.
• Tinka Resources Ltd. Investment: Increased ownership in Tinka Resources Ltd. from 18.23% to approximately 19.87% by purchasing 9,859,155 common shares for C$0.10 per share (US$700 thousand) in December 2024. Tinka holds the Ayawilca zinc-silver project in Peru.
• ESG Initiatives: Received Gold Seal from Brazilian GHG Protocol Program (2024). Installed Hydragen technology at Vazante mine (November 2024) to reduce carbon emissions. Reengineered 12 ZnO furnaces at Três Marias smelter to operate using bio-oil (December 2024), expected to reduce annual CO2 emissions by approximately 6.44 thousand tons starting 2025.
• Dividend Policy: Announced a new dividend policy in January 2025, targeting an annual dividend of up to 20% of free cash flow pre-events, with a minimum payment of US$0.08 per common share.
• Debt Management: Concluded a US$600 million bond offering in April 2024 to repurchase 2027 and 2028 notes, repurchasing US$484.5 million of 2027 Notes and US$99.5 million of 2028 Notes. Renegotiated a US$90 million term loan to extend maturity to February 2029.

Geographic Footprint: Nexa Resources S.A. is incorporated in Luxembourg, with its main office outside Luxembourg located in São Paulo, Brazil.

• Mines: Peru (Cerro Lindo, El Porvenir, Atacocha), Brazil (Vazante, Aripuanã).
• Smelters: Peru (Cajamarquilla), Brazil (Três Marias, Juiz de Fora).
• Commercial Offices: Luxembourg, United States (Houston), Brazil (São Paulo), Peru (Lima).
• Greenfield Projects: Peru (Magistral, Hilarión, Florida Canyon Zinc), Namibia.

Cross-Border Operations:

• International Subsidiaries: Operates through subsidiaries in Brazil (Nexa Recursos Minerais S.A., Pollarix S.A., Nexa Energy Comercializadora de Energia Ltda., etc.), Peru (Nexa Resources Cajamarquilla S.A., Nexa Resources Perú S.A.A., Nexa Resources Atacocha S.A.A., Nexa Resources El Porvenir S.A.C.), United States (Nexa Resources US. Inc.), Ecuador (Exploraciones Chimborazo Metals & Mining), Canada (Votorantim Metals Canada Inc.), and United Kingdom (Nexa Resources UK Ltd.).
• Joint Ventures: Participates in the Namibia exploration project with Japan, Oil, Gas and Metals National Corporation (JOGMEC). The Florida Canyon Zinc project is a joint venture where Nexa Peru holds 61.00%.
• Licensing Agreements: Nexa Peru holds a seawater extraction license for Cerro Lindo (3,153,600 m³ per year).

Financial Performance

Revenue Analysis

Profitability Metrics:

• Gross Margin: 19.45%
• Operating Margin: 9.99%
• Net Margin: -7.41%
• Adjusted EBITDA Margin: 25.8% (2024), 15.8% (2023)

Investment in Growth:

• R&D Expenditure (Mineral exploration and project evaluation): $67,976 thousand (2024)
• Capital Expenditures: $264,758 thousand (2024)
• Strategic Investments:
  • Cerro Pasco Integration Project (tailings pumping and piping system): Estimated US$85 million to US$90 million (2025-2026).
  • Aripuanã fourth tailings filter: Delivery and installation in 2025, commissioning Q1 2026.
  • Vazante mine deepening project: US$0.4 million (2024), US$0.3 million (2025 budget).
  • Other Vazante expansion projects: US$1.8 million (2024), US$1.7 million (2025 budget).
  • Magistral project: US$1.7 million (2024).
  • Hilarión project: US$2.0 million (2024), US$1.2 million (2025 budget).
  • Florida Canyon Zinc project: US$2.0 million (2024), US$1.5 million (2025 budget).
  • Namibia project: US$2.0 million (2024).
  • Investment in Tinka Resources Ltd.: US$700 thousand (2024).

Currency Impact Analysis:

• Revenues are primarily in U.S. dollars, while 27.4% of 2024 production costs and operational expenses were in Brazilian reais, and 17.6% in Peruvian soles, creating currency mismatches.
• A 10% appreciation or devaluation of the U.S. dollar against the Brazilian real is estimated to impact 2024 Adjusted EBITDA by US$60 million.
• Nexa Brazil's functional currency is the Brazilian real, leading to exchange gains or losses on U.S. dollar-denominated intercompany loans and foreign currency loans, resulting in a net foreign exchange loss of US$150,679 thousand in 2024.
• Hedging strategies include foreign exchange and metal commodity non-deliverable forwards, average rate (Asian) forwards, collars, and swaps to mitigate volatility. The company's functional currency is the U.S. dollar.

Business Segment Analysis

Mining Segment

Financial Performance:

• Revenue: $1,349,666 thousand (+23.8% YoY)
• Operating Margin: 10.08%
• Adjusted EBITDA: $464.1 million (2024)
• Key Growth Drivers: Higher LME metal prices (except lead), lower treatment charges, and increased sales volumes (except zinc). The Aripuanã mine transitioned to ongoing operation at the end of June 2024.

Product Portfolio:

• Zinc, copper, lead, silver, and gold contained in concentrates.

Market Dynamics:

• 100% of 2024 zinc concentrate production was directed to Nexa's smelters, with a minor portion (0.7%) resold to a third-party due to a swap contract.
• All copper and lead concentrates were sold to third parties.

Geographic Revenue Distribution (Mining Net Revenues):

• Peru: $833.9 million (61.8% of segment revenue)
• Brazil: $601.0 million (39.2% of segment revenue)

Smelting Segment

Financial Performance:

• Revenue: $1,997,341 thousand (+2.6% YoY)
• Operating Margin: 7.03%
• Adjusted EBITDA: $249.6 million (2024)
• Key Growth Drivers: Higher zinc prices and slightly higher sales volumes, partially offset by lower net premium and lower treatment charges.

Product Portfolio:

• Metallic zinc (SHG, CGG jumbos, alloys, Zamac), zinc oxide, and by-products (sulfuric acid, silver concentrate, copper cement, copper sulfate, cadmium, cobalt cement, sulfur dioxide, zinc ash).

Market Dynamics:

• 51.9% of total zinc raw material consumption in smelters was from Nexa's mines in 2024; 48.1% was purchased from third parties or secondary raw materials.
• Market share in Latin America (excluding Mexico) estimated at 75.8% in 2024.
• Sales prices are based on LME plus a negotiable premium. Benchmark treatment charges (TC) decreased from US$274/tonne in 2023 to US$165/tonne in 2024, with spot TCs in China reaching record lows (US$25/tonne in Dec 2024).
• Premiums (2024): Rotterdam US$200/tonne, Singapore US$105/tonne, United States US$386/tonne, Brazilian operations (zinc oxide) US$648/tonne.

Geographic Revenue Distribution (Smelting Sales):

• Latin America (including Mexico): 50.0% of total sales volume (2024)
• Europe: 10.3% (2024)
• United States: 9.1% (2024)
• Africa: 5.3% (2024)
• Asia: 11.4% (2024)
• International traders: 13.9% (2024)

International Operations & Geographic Analysis

Revenue by Geography:

International Business Structure:

• Subsidiaries: Nexa Resources S.A. operates through a network of direct and indirect subsidiaries including Nexa Recursos Minerais S.A. (Brazil, 100%), Nexa Resources Cajamarquilla S.A. (Peru, 99.99%), Nexa Resources US. Inc. (United States, 100%), Exploraciones Chimborazo Metals & Mining (Ecuador, 100%), Votorantim Metals Canada Inc. (Canada, 100%), and Nexa Resources UK Ltd. (United Kingdom, 100%). These subsidiaries manage mining, smelting, trading, and holding activities across their respective jurisdictions.
• Joint Ventures: The company is involved in an exploration project in Namibia with Japan, Oil, Gas and Metals National Corporation (JOGMEC). The Florida Canyon Zinc project is a joint venture where Nexa Peru holds a 61.00% interest.
• Licensing Agreements: Nexa Peru holds a seawater extraction license for its Cerro Lindo mine, allowing for 3,153,600 m³ per year.

Cross-Border Trade:

• Export Markets: Refined zinc and silver concentrate exports are primarily shipped in containers, with 90.0% covered by annual agreements with liner shipping providers. Sulfuric acid from the Cajamarquilla smelter is exported to Chilean ports.
• Import Dependencies: Nexa's smelters rely on third-party zinc concentrate suppliers and secondary raw materials, with 46.4% of zinc concentrate processed in smelters sourced from third parties in 2024.
• Transfer Pricing: Internal transfer prices for concentrates from mines to smelters are calculated on an arm’s length basis, aligning with OECD principles.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: Nexa Resources S.A. did not repurchase any shares in 2024 and has no authorized share buyback programs as of December 31, 2024.
• Dividend Payments: US$13,400 thousand (2024), US$25,000 thousand (2023).
• Dividend Yield: Not explicitly disclosed.
• Future Capital Return Commitments: A new dividend policy, effective January 1, 2025, targets an annual dividend of up to 20% of free cash flow pre-events, with a minimum payment of US$0.08 per common share. The Board proposed a share premium reimbursement of approximately US$13.4 million (US$0.1011 per share) for 2024, subject to shareholder approval on May 8, 2025, and expected around June 24, 2025.

Balance Sheet Position:

• Cash and Equivalents: $620,537 thousand (Dec 31, 2024)
• Total Debt: $1,858,532 thousand (Dec 31, 2024)
• Net Debt: $1,216,818 thousand (Dec 31, 2024)
• Credit Rating: The company aims for a minimum "BBB-" global rating for offshore operations and a minimum "A" local rating (or "AA-" local, "A" global for foreign) for onshore operations.
• Debt Maturity Profile (undiscounted future cash flows as of Dec 31, 2024):
  • Less than 1 year: US$1,017,482 thousand
  • Between 1 and 3 years: US$1,245,465 thousand
  • Between 3 and 5 years: US$1,433,001 thousand
  • Over 5 years: US$3,966,749 thousand
  • Total: US$7,662,697 thousand
• BNDES Loan Covenants: As of December 31, 2024, Nexa did not comply with the capitalization ratio in BNDES loan agreements but secured a waiver from BNDES in February 2025 for the period from December 31, 2024, to December 31, 2025, supported by a bank guarantee.

Cash Flow Generation:

• Operating Cash Flow: $349,720 thousand (2024)
• Free Cash Flow: Not explicitly stated as a single metric, but is a key component of the new dividend policy.
• Cash Conversion Metrics: Not explicitly disclosed.

Currency Management:

• Cash holdings by major currencies (as of Dec 31, 2024): Brazilian real (US$58,279 thousand), Euro (US$3,126 thousand), Peruvian sol (US$34,444 thousand), Canadian dollar (US$694 thousand), Namibian dollar (US$1,593 thousand).
• Natural hedging through operational diversification: The company aims to finance projects and companies in the same currency as their future cash flows to reduce foreign exchange impact.
• Financial hedging instruments and strategies: Uses foreign exchange and metal commodity non-deliverable forwards, average rate (Asian) forwards, collars, swaps, and standard interest rate swaps to manage currency and commodity price volatility.

Operational Excellence

Production & Service Model: Nexa Resources S.A. operates substantially mechanized underground and open-pit mines utilizing rubber-tired equipment. Its smelters employ the Roast-Leach-Electrowinning (RLE) process for metal recovery. The company prioritizes dry stacking and backfill methods for tailings disposal, reducing reliance on traditional dams.

Global Supply Chain Architecture: Key Suppliers & Partners:

• Zinc Concentrate Suppliers: Third-party suppliers for approximately 46.4% of smelter consumption.
• Logistics Providers: Trucking companies, rail transportation providers, and container shipping lines for concentrate and refined metal transport.
• Energy Suppliers: Electroperú S.A., Engie S.A., Kallpa S.A., Pollarix S.A., Enercan, Auren Energia S.A., Furnas Centrais Elétricas S.A., Eneva.

Facility Network:

• Manufacturing:
  • Mines: Cerro Lindo (21,000 tpd ore treatment), Vazante (5,000 tpd), El Porvenir (6,500 tpd), Atacocha (4,500 tpd), Aripuanã (6,300 tpd).
  • Smelters: Cajamarquilla (344,436 tpy metallic zinc), Três Marias (192,199 tpy refined metal), Juiz de Fora (96,923 tpy metallic zinc).
• Research & Development: Exploration activities are conducted for brownfield and greenfield projects.
• Distribution: Concentrates are transported by road and rail to ports (Callao, Rio de Janeiro, Itaguaí, Santos) or directly to smelters. Refined metals are transported by train or truck to terminals for domestic distribution or export.

Operational Metrics:

• Treated Ore: 13,420,966 tonnes (2024)
• Mining Production (Metal Contained in Concentrate):
  • Zinc: 326,995 tonnes (2024)
  • Copper: 35,698 tonnes (2024)
  • Lead: 69,303 tonnes (2024)
  • Silver: 11,694,073 oz (2024)
  • Gold: 36,027 oz (2024)
• Smelting Production (Zinc Metal + Oxide): 594,700 tonnes (2024)
• Zinc Recovery Rate: Cajamarquilla 94.4% (2024), Três Marias 89.2% (2024), Juiz de Fora 93.9% (2024).
• Aripuanã capacity utilization: 67.0% (Q4 2024 average).
• Tailings disposal: 70.5% of all tailings disposal is done through backfill or dry stacking (2019 data, updated with Três Marias dry stacking in 2024). Três Marias dry stacking filtered an average of 92.4% of the operation’s material throughout 2024.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Nexa Resources S.A. utilizes direct sales through its commercial offices located in São Paulo, Lima, Houston, and Luxembourg.
• Channel Partners: Not explicitly detailed beyond international traders.
• Digital Platforms: Not explicitly detailed.

Customer Portfolio: Enterprise Customers:

• Tier 1 Clients: Major enterprise relationships are with end-users in the transport, construction, infrastructure, consumer goods, and industrial machinery industries.
• Strategic Partnerships: An offtake agreement was signed in January 2022 with a BBB-rated international offtaker to sell 100% of Aripuanã copper concentrate for five years (up to 30,810 tons).
• Customer Concentration: In 2024, the top 10 metallic zinc customers represented 57.7% of total sales volume, and the top 10 zinc oxide customers represented 58.5%. The top five concentrate customers represented 84.2% (excluding intercompany sales). Two main customers accounted for 24% of total gross revenues in 2024.
• Customer Diversification: The company sold to more than 339 customers across 49 different countries in 2024.

Regional Market Penetration:

• Latin America (excluding Mexico): Estimated 75.8% market share in 2024.
• Africa: Estimated 24.0% market share in 2024.
• North America: Estimated 4.3% market share in 2024.
• Europe: Estimated 3.2% market share in 2024.
• Asia: Estimated 0.7% market share in 2024.

Competitive Intelligence

Global Market Structure & Dynamics

Industry Characteristics: The zinc market is influenced by demand from construction (50%), transport (21%), and infrastructure (16%) industries. Chinese demand accounted for 49% of global refined zinc demand and 57% of global refined copper demand in 2024. The zinc metal market closed 2024 with a deficit of 391 thousand tonnes, while mine supply decreased 1.8% and refined zinc supply decreased 4% due to lower smelter capacity. The copper market remained balanced, and the lead market faced supply chain disruptions and substitution by lithium-ion batteries.

Competitive Positioning Matrix:

Direct Competitors

Primary competitors are not explicitly detailed in the filing, but Nexa Resources S.A. positions itself among the top global zinc producers.

Regional Competitive Dynamics: Nexa Resources S.A. maintains a strong competitive position in Latin America (excluding Mexico), holding a significant market share in the smelting segment.

Risk Assessment Framework

Strategic & Market Risks

Global Market Dynamics: The company is highly dependent on cyclical and volatile international metal prices (zinc, copper, silver, lead, gold). Adverse economic developments in China, a major consumer of refined zinc and copper, could negatively impact revenues. International trade tensions and global conflicts increase volatility and supply chain disruptions. Technology Disruption: Slower development in technology and innovation could impact costs, productivity, and competitiveness. Customer Concentration: The top 10 metallic zinc customers represented 57.7% of total sales volume in 2024, indicating a degree of customer concentration risk.

Operational & Execution Risks

Global Supply Chain Vulnerabilities: Mining operations are subject to inherent risks such as fires, explosions, cave-ins, rock falls, tailings dam failures, and hazardous substances. Dependence on adequate infrastructure (roads, power, water) and potential shortages of critical supplies (water, explosives, spare parts) pose risks. Regional Disruptions: Political, economic, and social instability in Peru and Brazil, including social unrest, protests, and labor disputes, can disrupt operations. Natural disasters such as mudslides, earthquakes, and extreme weather events (El Niño/La Niña) also present significant risks. Tailings Dam Failures: Nexa Resources S.A. operates 27 tailings dams and other disposal facilities. A provision of US$6.8 million was recognized for restoration obligations related to inactive structures at Juiz de Fora. Supplier Dependency: The company's smelters depend on third-party zinc concentrate suppliers (46.4% of consumption in 2024), and inadequate supply could affect results. Information Technology Systems: Failures, interruptions, or cyber-attacks on IT/OT systems could lead to data loss, operational downtime, and reputational damage.

Financial & Regulatory Risks

Currency & Financial Risks: Revenues are primarily in U.S. dollars, while a significant portion of production costs and operational expenses are in Brazilian reais and Peruvian soles, creating foreign exchange exposure. Approximately 30% of total debt (US$531.5 million) was subject to variable interest rates as of December 31, 2024, exposing the company to interest rate risk. Regulatory & Compliance Risks: Operations are subject to complex Brazilian and Peruvian environmental laws, mining codes, and regulations. New EU Directive (EU 2022/2464) on corporate sustainability reporting (CSRD) will require compliance starting 2026. Brazilian carbon market law was enacted in December 2024. Peruvian Congress is revising laws that could impact mining activities. Tax Regulations: Changes in tax laws in Brazil (new transfer pricing regulations, VAT tax reform), Luxembourg (OECD Pillar Two), and Peru (potential Pillar Two enactment) pose risks. The company faces ongoing tax disputes with SUNAT in Peru regarding Cerro Lindo's stability agreement (US$189.8 million contingency for 2014-2017) and Cajamarquilla's transfer pricing (US$23.9 million for 2017, US$21.4 million for 2018). Capital Expenditures: The business is capital intensive, with US$276.8 million in capital expenditures in 2024 and a budget of US$347.0 million for 2025.

Geopolitical & External Risks

Country-Specific Risks: Political, economic, and social conditions in Peru and Brazil, including political turmoil, inflation, and currency fluctuations, can significantly impact operations. Trade Restrictions: Potential changes to international trade regulations, including tariffs and retaliatory measures, could affect export markets and supply chains. Social Opposition: Disputes with local communities and artisanal mining activities, such as the Joraoniyoc community protest at Atacocha in February 2024, can disrupt operations and lead to social license challenges.

Innovation & Technology Leadership

Research & Development Focus: Global R&D Network: Nexa Resources S.A. is actively developing a corporate strategy for Artificial Intelligence and new technologies. Its R&D efforts include mineral exploration and project evaluation for greenfield and brownfield projects, as well as studies for corporate projects, research, innovation, automation, and IT. Innovation Pipeline: The company is implementing Digital Twin technology and predictive maintenance at Cerro Lindo (2024 pilot project). It runs the Mining Lab Challenge program to invite solutions for decarbonization, circular economy, productivity, and security. Technology Development: Installed Hydragen technology at Vazante mine (November 2024) to reduce carbon emissions and improve fuel efficiency. Completed reengineering of 12 ZnO furnaces at Três Marias smelter to operate using bio-oil (December 2024), expected to reduce annual CO2 emissions by approximately 6.44 thousand tons starting 2025.

Technology Partnerships:

• Strategic Alliances: Partnership with São Paulo University (USP) in Brazil and Sustainable Mining Institute – International Center of Excellence (SMI-ICE-Chile) at the University of Queensland in Peru for the G-MIRM project, focusing on safety culture and risk management.

Leadership & Governance

Executive Leadership Team

International Management Structure: The executive leadership team includes members based in São Paulo, Brazil, and Lima, Peru, reflecting the company's primary operational hubs. José Carlos del Valle, the CFO, also serves as CEO of Nexa Peru, indicating integrated regional leadership.

Board Composition: The Board of Directors comprises 9 members, with 4 independent and 5 non-independent directors. All terms expire at the 2026 AGM, except for one director whose term expires in 2025. Jaime Ardila serves as the non-independent Chair. The Board oversees ESG strategy and operates through several committees: Audit Committee (all independent), Finance Committee, Compensation, Nominating and Governance (CNG) Committee (1 independent), and Sustainability and Capital Projects (SCP) Committee. Edward Ruiz qualifies as an “audit committee financial expert.” Luís Ermírio de Moraes indirectly owns 1.79% of common shares.

Regulatory Environment & Compliance

Multi-Jurisdictional Regulatory Framework: Primary Regulatory Environments:

• Luxembourg: Subject to OECD’s Pillar Two tax reform, effective January 1, 2024, establishing a global minimum effective tax rate of 15%.
• Brazil: Governed by the Brazilian Federal Constitution, Brazilian Mining Code, ANM regulations, and state environmental regulations. New transfer pricing regulations (Law 14.596/2023) effective January 1, 2024, aligning with OECD arm’s length principles. VAT tax reform (December 2023) effective 2026. Brazilian carbon market law enacted in December 2024.
• Peru: Subject to the Peruvian Constitution, General Mining Law, and various Supreme Decrees related to mining, environmental protection, and occupational health and safety. Peruvian Congress is revising a law to prohibit economic activities in headwaters of basins.

Cross-Border Compliance:

• Export Controls: Not explicitly detailed.
• Sanctions Compliance: The company is subject to economic sanctions regulations in various jurisdictions.
• Anti-Corruption: Subject to anti-corruption, anti-bribery, and anti-money laundering laws in Brazil, Peru, Luxembourg, Canada, and the United States.

International Tax Strategy:

• Transfer Pricing: Brazil implemented new transfer pricing regulations effective January 1, 2024, adopting the arm’s length principle similar to OECD guidelines, expected to primarily affect Nexa Brazil. Internal transfer prices from mines to smelters are calculated on an arm’s length basis.
• Tax Treaties: Not explicitly detailed.
• BEPS Compliance: OECD’s Pillar Two tax reform is effective in Luxembourg (January 1, 2024) and Brazil (January 1, 2025). Peru has not yet enacted Pillar Two. Nexa Resources S.A. determined its jurisdictions qualify for transitional safe harbor rules in 2024 and does not expect top-up tax exposure. The company faces ongoing tax-related matters with SUNAT in Peru, including challenges to past hedge transactions (US$37.2 million assessment) and disputes regarding Cerro Lindo’s stability agreement (US$189.8 million contingency for 2014-2017).

Environmental & Social Impact

Global Sustainability Strategy: Environmental Commitments:

• Climate Strategy: Goal to reach net zero by 2050, aligned with the Paris Agreement.
• Carbon Neutrality: Committed to an absolute reduction of Scope 1 emissions by 20% by 2030 (from a 2019 baseline).
• Renewable Energy: 98.4% of the company's energy matrix was renewable in 2024.

Regional Sustainability Initiatives:

• Tailings Management: Implementing the Global Industry Standard Tailings Management (GISTM) at the Vazante unit (2024), with the first Independent Tailings Review Board (ITRB) assessment completed for Vazante.
• Water Resources Management: Target a 10% reduction of specific water consumption in mining and smelting operations by 2030 (from a 2022 baseline). Average consumption in 2024 was 2.26 m³/ton ROM (mining) and 20.64 m³/ton metal (smelting).

Social Impact by Region:

• Community Investment: Supported approximately 30 families in Cerro Pasco with livestock shelters in early 2024. Total contribution to communities was US$14,554 thousand in 2024.
• Labor Standards:
  • Plurality: Targets 30% women in the workforce by 2030 (17.8% as of December 31, 2024) and 30% women in leadership by 2030 (22.9% as of December 31, 2024).
  • Safety: Aims for zero fatalities. Registered three fatalities in 2024 (one at El Porvenir, one at Vazante, one at Cerro Lindo). The Total Recordable Injury Frequency Rate (TRIFR) was 2.36 in 2024. 5% of executive officers' compensation was related to ESG goals in 2024.

Currency Management & Financial Strategy

Multi-Currency Operations: Currency Exposure:

Hedging Strategies:

• Transaction Hedging: Utilizes foreign exchange and metal commodity non-deliverable forwards, average rate (Asian) forwards, collars, and swaps to mitigate short-term foreign exchange and commodity price volatility.
• Translation Hedging: Not explicitly detailed.
• Economic Hedging: Aims to finance projects and companies in the same currency as their future cash flows to reduce long-term foreign exchange impact. The company also occasionally uses floating-to-fixed interest rate swaps to manage interest rate risk. Commodity price hedging strategies include "Customer Hedge" (fixed price sales to floating LME) and "Hedge Book" (quotational period mismatches).