2019 Sustainability Performance


Critical to Hudbay’s success is our team of dedicated, experienced professionals who are committed to operating sustainably, as measured by our ability to manage the social, environmental and economic risks, impacts and opportunities associated with our activities. To inform our sustainability programs and improve our performance, we ensure social and environmental risk mitigation programs are integrated throughout the business, establish standards and systems to support decision-making, follow international best practice standards, and participate in industry associations and multi-stakeholder groups.

Sustainability Highlights

Constancia expanded its Behaviour-Based Safety (BBS) program, and recorded nearly 13,000 BBS behavioural observations during the year.

In northern Manitoba and northwest Saskatchewan, Hudbay paid approximately $4.1 million to indigenous-owned businesses.

At the 2019 Manitoba Provincial Mine Rescue Competition, Hudbay’s Flin Flon team came in first place and the Snow Lake team took second place.

Targets and Achievements

Target Achievement Details
Health and Safety
Improve on our current three-year average lost time accident severity of 10.5 Achieved As of December 31, 2019, our three-year average lost time accident severity was 7.0.
Improve on our three-year total recordable injury frequency average of 3.7 Not achieved While we stayed very close to our three-year average, we did not improve on it. As of December 31, 2019, our three-year average total recordable injury frequency was 3.8 (based on the same local regulatory classification criteria used in our historical data).
Fatality prevention – carry out a review of 2018 high-potential incident investigations in order to identify and propose investigation process improvement Partially achieved During the year, we revised our approach and encouraged each business unit to focus on fatality prevention priorities based on local context.
Community
Define a framework for tracking well-being of communities near Hudbay mines Achieved Framework has been defined. Next step will be implementation in site tracking and corporate reporting.
Perform gap assessments and create improvement plans at each main location in order to finalize social risk framework Not achieved Some aspects of the social risk framework have been incorporated in our corporate risk tracking, but a formal gap analysis was not carried out.
Environment
Maintain a score of A or higher in the new MAC TSM Tailings Management protocol guidelines for Manitoba and Peru On track, to be confirmed The TSM scoring assessment is normally completed in the first quarter of the following year; the COVID-19 pandemic has delayed completion of these assessments. Final reporting will be available on the Mining Association of Canada website.
Establish eco-efficiency measures in AFE process Partially achieved Key measures and process to incorporate eco-efficiency measures were agreed upon, but we have not yet updated our process.
Governance
Implement a company-wide Human Resources Information System to support improved human capital management. The 2019 project will establish globally integrated employee information, which is the foundation for developing and assessing our workforce relative to our priority on people, inclusion and talent development. Partially achieved This continues to be a priority; however, due to technical difficulties, Hudbay is experiencing delays in the full rollout.
Implement a revised Performance Effectiveness Process at the manager level in Manitoba and at the superintendent level in Peru. This is the next phase of implementation of this process, emphasizing ongoing coaching, feedback and development in role conversations, which was piloted in the corporate office in 2018. Achieved Manitoba rolled out performance to all the VPs’ direct reports (14 employees in total). Peru rolled it out to supervisors and lower – assistants and some individual contributors.
Financial Excellence/Growth
Maintain our industry-leading low-cost business to continue to generate positive cash flow Achieved The Company’s operations are favourably positioned on the lower end of the global cash cost curves and with cash and cash equivalents of $396.1 million as at December 31, 2019, the Company is well positioned for executing future growth initiatives.
Complete a new reserve and resource estimate for the Snow Lake operations, including our 100% owned Lalor, Pen, Wim and New Britannia properties, and advance plans for the refurbishment of the New Britannia mill Achieved Announced a 35% increase in Snow Lake gold reserves supporting a longer mine life; refurbishment of the New Britannia mill is on track for completion in late 2021.
Begin development of the Pampacancha satellite deposit Partially achieved In Q1 2020, reached a community agreement to acquire Pampacancha surface rights, enabling us to proceed with negotiations with individual land users.
Advance Rosemont through the final stage of permitting and initiate early works activities Not achieved While we did achieve our target of advancing Rosemont through the final stage of permitting and initiating early works activities, this accomplishment was set back in July 2019 when the US District Court for Arizona, in an unprecedented ruling, overturned the permits and approvals for the project.
Test promising exploration targets near Lalor and plan near-term exploration programs in Peru, Chile, British Columbia and Nevada Achieved

2020 Targets

While the COVID-19 pandemic has created levels of uncertainty that make many normal aspects of financial forecasting impractical, we are still maintaining key objectives related to responsible performance.

Health and Safety

  • Match or improve on our current three-year average lost time accident severity of 7.0
  • Match or improve on our two-year total recordable injury frequency average of 1.3 (based on ICMM classification criteria, which we started tracking in 2018 and therefore only have two years of data)

Community

  • Reach agreements with individual community members that currently use portions of the acquired Pampacancha lands
  • Continue to provide local communities with planning information and support for economic transition related to the closure of the 777 mine and metallurgical complex in 2022

Environment

  • Complete the construction of the control berms and initiate phase II Flin Flon Dam legacy upgrades
  • Initiate pilot plant testing for selection of best technology and progress to detailed engineering of the Constancia tailings water treatment facility

Governance

  • Implement revised Long-Term Incentive Plan for executive and employee compensation
  • COVID-19: Effective implementation of corporate and business unit crisis response plans to maintain safe operations and business continuity

Financial Excellence/Growth

  • Subject to maintaining sufficient financial liquidity, and ability to safely carry out exploration and project activities:
    • Progress the refurbishment of the New Britannia mill and pre-development of Lalor copper-gold zones, and drill Lalor gold to add to reserves and extend mine life
    • Continue evaluating Constancia regional exploration targets, and work to identify and unlock future value
  • Advance preliminary economic studies at Mason
  • In conjunction with relevant US federal agencies, will pursue appeal of Rosemont decision through the US Ninth Circuit Court of Appeals
  • Renegotiate debt covenants under revolving credit facility

Our People

Hudbay’s team of experienced and dedicated personnel has a proven record of responsibly exploring, developing, operating and closing mines. To ensure our employees and our organization are positioned for future success in a business environment that is more complex, competitive and ever-changing, we are building new capabilities, creating efficiencies and striving for a healthier and safer workplace.

Hudbay supports the Catalyst Accord and the 30% Club. Female representation on our Board of Directors is currently 30%.

Environment

Our success in developing, operating and closing mines depends on our ability to minimize our environmental impacts, comply with applicable environmental laws and regulations, and apply best practices and innovative approaches.

Reduced our overall consumption of both water (-9.1%) and energy (-1.0%).