Social Impact Economic Contributions

Hudbay strives to create sustainable value for our shareholders while simultaneously contributing to social and economic progress in the regions where we operate.

In 2015, Hudbay provided:

• 1,700 permanent jobs, 200 contractor jobs (full-time equivalent positions based on hours worked) and 57 co-op and summer student jobs
• $189 million in wages and benefits
• $6.8 million in municipal taxes and grants
• $1.5 million in funding to local communities through land use payments (including lump-sum life of mine land acquisition payments), new housing and infrastructure related to resettlements
• $2.8 million in charitable donations and voluntary community investments

In 2015, our net payment to governments related to our projects and mining operations, other than municipal taxes and grants, was a net credit of $34.1 million. In both Canada and Peru, government tax policies create incentives for investments in new mines by reducing tax obligations while the capital investment is recovered. As a result of Hudbay’s substantial investments in the Constancia, Lalor and Reed mines, as well as lower market prices for the metals we produce, our income and mining tax payments to government are relatively low. In addition, during 2015, we received refunds from the Peruvian government of value-added tax paid on construction expenditures on the Constancia project.

Payments to Governments

Hudbay is a supporting company of the Extractive Industries Transparency Initiative (EITI) in its efforts to establish a global standard for transparency regarding the host country governance of natural resources and full disclosure of government revenues from its extractive sector. Our Peruvian subsidiary, Hudbay Peru SAC, as a member of the Peruvian Mining Society, is supporting the EITI process in Peru.

In Canada, the Extractive Sector Transparency Measures Act (ESTMA) was proclaimed into force on June 1, 2015, and requires businesses involved in the resource exploration and extractive sector to file reports on certain types of payments to foreign governments. Hudbay was actively involved in the Resource Revenue Transparency Working Group (RRTWG), a collaboration of Canadian exploration and mining associations and civil society organizations that promoted the need for Canada to adopt such a standard and developed a set of recommendations, to provide Canadian federal and provincial governments with a blueprint for a government payment reporting framework that would serve the needs of both the data’s end-users (such as citizens, governments and investors) and the reporting companies. ESTMA is largely consistent with the recommendations of the RRTWG, and in 2015 the industry and civil society members of the group were heavily engaged with the Government of Canada on the development of guidance that will support companies’ disclosure obligations.