At our Constancia operation in Peru, our commitment to transparency, open communications, ongoing and frequent engagement, and addressing concerns in a timely, respectful manner has resulted in strong relationships with local stakeholders – including peasant communities – and it has helped us grow our business through new land agreements.

We have offices open to the public in the two communities in our direct area of influence, and we conduct frequent engagement with the communities and authorities along the 449-kilometre concentrate transportation route between the mine and the port.

Strengthening and Diversifying Local Communities

During the year, we signed two significant community investment agreements. At Chamaca, a district in the Chumbivilcas region, we will invest more than $1 million in sustainable development projects that range from forestation to livestock and dairy production. The agreement establishes a development committee to monitor and evaluate the investments and oversee project funding.

We partnered with the Regional Education Directorate of Cusco (DREC) and Northern College in Timmins, Ontario, to conduct an analysis to establish educational priorities, which will inform a proposal for presentation to the International Cooperation Agencies in Canada.

As part of ongoing efforts to support economic diversification, we joined the mayor of Chamaca for the inauguration of the community’s first liquid nitrogen plant. The facility will strengthen the livelihoods of agrarian producers in Chamaca and the surrounding areas by increasing their meat and dairy production.

We support the Global Indigenous Trust – an organization based in Toronto – and its efforts to build cross-country relationships such as learning exchanges between indigenous leaders in Canada and Peru. During the year, we continued to work with the Trust on its programs in Chumbivilcas, near Constancia.

2017 Performance

Our total payments to local suppliers were $16.7 million, and we invested more than $5.9 million to support a wide range of community programs. Major contributions during the year included:

• In response to the catastrophic flooding that hit Peru during the 2017 rainy season, killing 100 people and causing more than $3 billion in damage, we donated $200,000, delivered two tonnes of humanitarian aid, and together with other sector companies delivered 30,000 rations of donated food.
• Together with the Provincial Municipality of Chumbivilcas, we delivered 120 tons of medical equipment, supplies and medicine to 35 health care facilities around the province. This delivery was part of a larger program that supports construction of new hospitals and health care facilities.
• We committed more than $135,000 and delivered 80 female alpacas to the Municipal District of Condoroma.
• We partnered with Wheaton Precious Metals to develop a $1.7 million project to improve the quality of local milk production. Launched in August 2017, the project aims to enhance income-generation opportunities for four communities.
• To expand the agricultural boundaries in the districts of Velille and Chamaca, we donated tractors.
• We also executed several community development projects in Livitaca, including the construction of track and trails in the district capital and a sanitation project in the community of Huaylla Huaylla.

There were four complaints registered in 2017. While no serious community incidents occurred during the year, due to complaints from Chilloroya community members, we suspended mining at the Cerro Negro quarry and used instead the Tajo 2 quarry located near the Constancia pit. In December, community members from the Coporaque District protested against Hudbay, expressing concerns about when projects outlined in the agreement between the community and the Company would be delivered. Representatives from Hudbay and the community met on the day of the protest, and the Company provided an update on the implementation of the projects. In the Chamaca District, Hudbay and the community have had an overarching agreement related to community investments, jobs and other commitments since 2013, and in May 2017, we entered into a supplemental agreement related to specific public investment projects in the district worth up to nearly $1.1 million. Some members of the community claimed that the district had not received the investments. In response and as part of our commitment to good-faith negotiations, we established a round table to negotiate another specific agreement, which is chaired by representatives from Peru’s Ministry of Energy and Mines (MINEM) and includes members of the community and the Company. As of the publication of this report, negotiations were ongoing.